Telcos to spend $145b on outsourcing

Operators worldwide will spend $145 billion on outsourcing and managed services in the next five years, telecom analysts the Yankee Group said.

Asia-Pacific will contribute to 26% of the global outsourcing and managed services spend during this period, the analysts added. This puts the region behind Europe, which will contribute 40%, but ahead of North America, at 24%.

Rapid subscriber growth in EMEA will push its contribution from 7% today to 9% by 2013, while supplier distrust will keep the Latin American market small, growing just 1% to reach 4% by 2013.

But operators should not expect outsourcing to cure all the problems they currently face, the Yankee Group warned.

The services available are so rich that operators could become almost entirely virtual, externalizing infrastructure, systems and applications, Yankee Group vice president Camille Mendler said.

"The downturn is forcing tough decisions about what remains core, but [telcos] should not get carried away," Mendler said.

"Outsourcing can bring rapid balance sheet results, but that doesn't automatically translate into long-term business value. There's a vast difference between externalizing for financial re-engineering versus business transformation."