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TECHNOLOGY BUSINESS RESEARCH, INC.
TBR’s Telecom & Mobility Vendor BenchmarkResearch Highlights and Outlook
Technology Business Research (TBR) Quarterly Webinar Series
October 11, 2012
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Telecom & Mobility Vendor Benchmark Review: Webinar Presenters
Chris AntlitzNetworking & Mobility Analyst
Email: [email protected]: @chrisNMP
Michael SoperNetworking & Mobility Research Analyst
Email: [email protected]: @MichaelJSoper
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TBR’s Telecom & Mobility Vendor Benchmark reports deliver unique insight and value through in-depth analysis in a concise, consumable format • TBR reports are unique for their deep, holistic
analysis of leading vendors in the telecom and mobility industries.
• Financial modeling and TBR insights help customers gain a better understanding of vendor business models.
• TBR’s quarterly reports and webinars are responsive to client timelines, clear and concise, and provide insights across multiple layers of a vendor’s organization.
• TBR’s strategic assessment provides an impartial check on a vendor’s progress in its strategic objectives.
Telecom & Mobility Vendor Benchmark Review: Webinar Overview
TBR Telecom & Mobility Vendor Benchmark Portfolio
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Applications: Vendors are gearing up for an increase in OSS/BSS modernization and transformation projects
After a weak 2Q12, vendors are positioning themselves to capitalize on operator investments in OSS/BSS, small cells and LTE
Networking & Mobility 2Q12 Research Highlights and 2012 Outlook
Telecom & Mobility Vendor Trends for 2012
Infrastructure: Most vendors continued to experience falling infrastructure sales as operator spend on legacy technologies such as CDMA and GSM slowed dramatically
Services: Ericsson remained well ahead of the competition in 2Q12, while NSN and Alcatel-Lucent’s revenue slumped as they began to exit unprofitable contracts and noncore markets
CEM
BSS
OSS
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Telecom & Mobility Vendor Benchmark 2Q12 Review and 2012 Outlook
With revenues from legacy technologies eroding, infrastructure players are beefing up their small cell solutions
Applications: Vendors are gearing up for an increase in OSS/BSS modernization and transformation projects
Telecom & Mobility Vendor Trends for 2012
Infrastructure: Most vendors continued to experience falling infrastructure sales as operator spend on legacy technologies such as CDMA and GSM slowed dramatically
Services: Ericsson remained well ahead of the competition in 2Q12, while NSN and Alcatel-Lucent’s revenue slumped as they began to exit unprofitable contracts and noncore markets
CEM
BSS
OSS
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Alcatel-Lucent
Cisco
Ericsson
NSN
Samsung
ZTE
Huawei
Juniper
HP
IBM
-40%
-30%
-20%
-10%
0%
10%
20%
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5
Year
-to-
Year
Rev
enue
Gro
wth
Revenue (in $ billions)
INFRASTRUCTURE SEGMENT 2Q12 REVENUE & YEAR-TO-YEAR REVENUE GROWTH
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SOURCE: TBR AND COMPANY DATA
Equipment deals in which Huawei offers a better value proposition than the competition are becoming commonplace
Telecom & Mobility Vendor Benchmark 2Q12 Research Highlights: Key Trends
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Decreased demand for CDMA products in North America is harming sales at Alcatel-Lucent and Ericsson, while Huawei expands further in EMEA
Ericsson• Ericsson will continue to squeeze revenue from
network modernizations in Europe in 2H12.• CDMA sales will fall further in 2H12, but higher LTE
capex outlays will partially offset the decline, as Ericsson is the top LTE vendor in the U.S. with contracts with all four Tier 1s.
Alcatel-Lucent• China’s massive investment in fiber access — called
Broadband China — will be a boon for Alcatel-Lucent starting in 1H13.
• Top-line growth at Alcatel-Lucent in 2012 is looking unattainable as revenues from legacy products such as CDMA and GSM equipment continue to fall.
Huawei• Legacy buildout deals in emerging markets are
leading to upgrades and expansions.• Huawei continues to take market share from rivals by
pursuing its aggressive pricing tactics.
Telecom & Mobility Vendor Benchmark 2Q12 Research Outlook:
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Telecom & Mobility Vendor Trends for 2012
Vendors will seek revenue growth from customer experience management (CEM) and OSS/BSS transformations
Telecom & Mobility Vendor Benchmark Review and 2012 Outlook
CEM
BSS
OSSApplications: Vendors are gearing up for an increase in OSS/BSS modernization and transformation projects
Infrastructure: Most vendors continued to experience falling infrastructure sales as operator spend on legacy technologies such as CDMA and GSM slowed dramatically
Services: Ericsson remained well ahead of the competition in 2Q12, while NSN and Alcatel-Lucent’s revenue slumped as they began to exit unprofitable contracts and noncore markets
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Alcatel-Lucent
Cisco
Ericsson
HP IBMNSNSamsung
ZTE
Huawei
Juniper
-40%
-20%
0%
20%
40%
60%
80%
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70
Year
-to-
Year
Rev
enue
Gro
wth
Revenue (in $ billions)
APPLICATIONS SEGMENT 2Q12 REVENUE & YEAR-TO-YEAR REVENUE GROWTH
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SOURCE: TBR AND COMPANY DATA
Most of Huawei and Ericsson’s applications revenue comes from OSS/BSS, while IBM derives the bulk of revenue from analytics and cloud
Telecom & Mobility Vendor Benchmark 2Q12 Research Highlights: Key Trends
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Vendors are focusing their software efforts on billing and CEM, though both markets will not see rapid growth until 2013
NSN• NSN will differentiate from competitors with its CEM
focus, emphasizing operator accessibility and analytics. • NSN is searching for a buyer for its BSS assets after
placing the unit in “maintenance mode” as part of its 4Q11 restructuring announcement. NSN’s billing assets are an attractive acquisition target to companies like Ericsson or Amdocs.
Ericsson• Support Solutions, formerly Multimedia, is better
positioned to capture opportunities in OSS/BSS following the integration of Telcordia.
• Ericsson, with its new Telcordia assets, is best positioned in the billing systems market to provide BSS transformation to operators.
Alcatel-Lucent• Motive Customer Experience Solutions, or Motive CXS, is
Alcatel-Lucent’s entry in the emerging CEM space• CloudBand became commercially available in May. The
company has secured a trial customer: Texas-based operator Transtelco will offer cloud services to its U.S. and Mexican customers via Alcatel-Lucent’s El Paso data center.
Telecom & Mobility Vendor Benchmark 2Q12 Research Outlook:
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Telecom & Mobility Vendor Benchmark Review and 2012 Outlook
Telecom & Mobility Vendor Trends for 2012
Alcatel-Lucent and NSN’s restructuring programs unlock opportunities for rivals to take market share, particularly Huawei and ZTE
CEM
BSS
OSSApplications: Vendors are gearing up for an increase in OSS/BSS modernization and transformation projects
Infrastructure: Most vendors continued to experience falling infrastructure sales as operator spend on legacy technologies such as CDMA and GSM slowed dramatically
Services: Ericsson remained well ahead of the competition in 2Q12, while NSN and Alcatel-Lucent’s revenue slumped as they began to exit unprofitable contracts and noncore markets
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Accenture
Alcatel-Lucent
Cisco
Ericsson
HP
IBM
NSNSamsung
ZTE
HuaweiJuniper
-20%
-10%
0%
10%
20%
30%
40%
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0
Year
-to-
Year
Rev
enue
Gro
wth
Revenue (in $ billions)
SERVICES SEGMENT 2Q12 REVENUE & YEAR-TO-YEAR REVENUE GROWTH
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SOURCE: TBR AND COMPANY DATA
TIS leaders are challenged by an anemic equipment market and weak margins, necessitating vendors to move up the value chain
Telecom & Mobility Vendor Benchmark 2Q12 Research Highlights: Key Trends
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NSN and Alcatel-Lucent are reducing their exposure to low-margin services
NSN• NSN will continue exiting unprofitable managed
services contracts to boost margins and hone its focus on higher-value services that are not commoditized.
• NSN is focused on leveraging its stable of GNOCs in all deals that include a service component, while reducing its reliance on local delivery resources.
Alcatel-Lucent• Alcatel-Lucent’s evaluation of managed services
contracts for termination or restructuring will negatively impact services revenue in the short term, but will lead to margin gains.
• Similar to NSN, Alcatel-Lucent will concentrate on high-value services, such as consulting.
Ericsson• Ericsson is working to protect its customer base
from Huawei and ZTE.• Ericsson added to its capabilities with the
acquisition of Telcordia. The company views Telcordia’s expertise as a key asset to drive OSS/BSS transformation projects.
Telecom & Mobility Vendor Benchmark 2Q12 Research Outlook:
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Vendors are looking to CEM, small cells, services and backhaul to drive growth in the industry
Telecom & Mobility Vendor Benchmark Research Outlook – 2Q12 Research Highlights
Quarterly Topics TBR Value Proposition Related Reports
Customer Experience Management (CEM)
• Determine which services and software (e.g., OSS/BSS, analytics) telecom infrastructure vendors are including in their CEM solutions.
• Evaluate how vendors are leveraging partnerships with analytics and software players to differentiate CEM offerings.
Alcatel-Lucent, Ericsson, Huawei, IBM, NSN
Wi-Fi/Small Cells
• Determine which vendors are technology leaders.
• Determine in which regions small cells are in highest demand.
• Evaluate how vendors are integrating Wi-Fi with small-cell products (e.g., acquiring the technology, high R&D investment).
Alcatel-Lucent, Cisco, Ericsson, Huawei, NSN
Services
• Anticipate the next services boom following heavy deployment activity in India, the U.S. and Europe.
• Determine to what extent low-cost telecom infrastructure players are gaining traction in services-only deals.
Alcatel-Lucent, Ericsson, Huawei, IBM, NSN
Backhaul
• Track developments in demand for microwave and optical backhaul.
• Analyze new backhaul technologies that are coming to market.
• Analyze which backhaul technologies are best suited for small cells.
Alcatel-Lucent, Cisco, Ericsson, Huawei, NSN
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Questions?
Telecom & Mobility Vendor Benchmark 2Q12 Review and 2012 Outlook
TBR
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For further information, please contact:
Kate PriceDirector, Networking & Mobility Practice
Chris AntlitzNetworking & Mobility Analyst
Email: [email protected]: @chrisNMP
James McIlroyVice President, Sales
Michael SoperNetworking & Mobility Research Analyst
Email: [email protected]: @MichaelJSoper
TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
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