Growth in the Indian managed services domain
The growth in the Indian Managed services market is thus impressive. A latest Springboard report pegs growth in the Indian between 2009 and 2013 at a whopping 22.8% CAGR. While the market had an estimated size of $1.68 billion in 2009, it is expected to touch $3.8 billion by 2010.
At Amdocs 40% of our fiscal 2009 revenue ($1.15B) has come from managed services arrangements globally.
Driving factors for managed services growth
This impressive growth may be attributed to several factors. The foremost being the current growth in the robust Indian cellular market (around 15 million new subscribers per month in 2009). According to Gartner, the market is expected to grow at a CAGR of 15% between 2009 and 2013, with cellular penetration reaching 73.3% in 2013, from 43.7% at the end of 2009.This growth will bring with it several new operators (such as Sistema Shyam, Loop Mobile, Unitech and Etisalat) and significant investments from overseas carriers. This in turn has created fantastic market opportunities for Managed services providers (MSP). Managed services are beneficial in particular for smaller Indian carriers. Managed Services help smaller service providers compete by helping them to reduce their upfront operating and capital costs and allow them to focus/invest in delivering new and innovative services.
High network and IT operating expenses can significantly impact carrier margins, therefore new carriers will increasingly opt for an OPEX model by outsourcing network and B/OSS and service delivery platform (SDP) elements. For example in 2008, Aircel outsourced their IT functions to Wipro, including retail billing and revenue assurance.
Impact of next generation technology on managed services
The 3G and Broadband Wireless Access (BWA) spectrum and the advent of WiMax and LTE based 4G technologies are expected to play a crucial role in shaping the broadband industry in India. They will drive adoption of Value Added Services (VAS) and enhance data revenues for carriers. According to Frost & Sullivan, the VAS market for 3G in India is expected to be $1.26 billion and will grow at a CAGR of 21.70% during the financial years 2010 - 2016.
As a result, service providers will need to partner with MSPs to leverage enabling B/OSS capabilities and operations expertise to allow them to deploy new 3G/4G infrastructure, support systems and services faster than their competitors. In addition, providers will look to leverage the ongoing R&D/investment that MSPs are making in new technologies and platforms to provide a richer portfolio of applications and enable improvement in data ARPUs