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Guest View: No Service Provider is an Island – Predictions for 2014

Michal Harris, Director, Market Insight & Strategy at Amdocs | Jan. 17, 2014
Expect to see plenty of mergers and acquisitions in 2014 as the industry continues to evolve and service providers consolidate to embrace new challenges.

In 2014, we will see a greater focus and more implementations of NFV and SDNs. Both concepts create a virtual control layer for the network, allowing service providers to save costs and to manage their networks more efficiently. But that's not all they can do...

A consensus is growing that the more significant impact of virtualization going forward is helping service providers to drive new revenue streams and improve the profitability of old streams. SDN and NFV will enable services that require guaranteed, optimized, end-to-end quality of service (QoS), along with high and elastic bandwidth.

Enterprise and Small-to-Medium Business (SMB) Won't Be Small

Don't look now, but the enterprise and small-to-medium business (SMB) sector is becoming indispensable. The worldwide market for enterprise cloud-based services will grow to $31.9 billion USD in 2017, according to Analysys Mason, and by then service providers will be responsible for 18 percent of that worldwide revenue, via services like fixed-mobile convergence, enterprise communications and advanced video services.

In 2014, service providers will increasingly merge network and IT to provide their SMB and enterprise customers with complex, cloud-enabled services, moving from being a network solution provider to a true ICT palyer providing more cloud based, M2M and software service on top of network and mobile access., where the service provider takes on the role of one-stop-shop for all telecom and IT needs.

Informa estimates that connectivity alone might already account for 15 percent of an enterprise's total information and communication technologies (ICT) budget. But with cloud-managed applications and device and computing services, up to 80 percent of the enterprise ICT budget will soon be in play, and it will happen sooner rather than later.  

Many service providers - such as Telefonica, Vodafone, SingTel, Telstra and AT&T - are restructuring and engaging in acquisitions to capture an increased share of this emerging opportunity.

5G is the New 4G

4G/LTE was successfully rolled out in many countries in 2013 and will continue apace in 2014. Service providers are focusing on optimization and monetization of their new networks, meanwhile the development of a standard for 5G is heating up - trials have already started!

All for One, and One for All

Hopefully, these predictions encouraged you - there will certainly be some great opportunities in 2014.

But taking advantage of all these opportunities, and succeeding in the realms of omni-channel, big data, virtualization and enterprise, isn't going to be a walk in the park. Expect to see plenty of mergers and acquisitions in 2014 as the industry continues to evolve and service providers consolidate to embrace new challenges. 



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