India's competitive managed services market is expected to undergo consolidation, leaving space for just a handful of players, according to an ABI Research report.
Currently, the market is dominated by Ericsson and NSN, followed by Alcatel-Lucent, Huawei, and ZTE, noted the ABI Research study Managed Services in the India.
"Beyond Ericsson, NSN, and possibly a third vendor, we don't really see a scenario for anyone having a profitable managed services business," says Aditya Kaul, practice director, mobile networks at ABI Research.
The Indian mobile market is unique with around 17 operators operating across 22 circles, with some circles having as many as 14 operators. Due to the recent scandal emerging around 2G spectrum auctions, 122 licences were cancelled with several operators losing their licences completely. As a result, foreign operator partners like Etisalat, S Tel, Batelco, and probably Telenor are expected to leave the market.
Huawei and ZTE are among the vendors who won managed services deals with many of the operators that have had their licences cancelled. Latest indications suggest that the re-auction of the 2G spectrum waves is expected to take place in 2013. Large portions of the re-auctioned spectrum are expected to be gorged up by the large operators, and possibly by newcomer RIL.
"Ericsson and NSN will see increases in their market shares, as the traditional large operators will most likely continue their managed services relationships. There is always a chance of Huawei and ZTE competing on price, and while Ericsson and NSN might only see a squeeze in profit margins, Alcatel-Lucent is in a vulnerable position of losing business with their Reliance contract," added Kaul.
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