A new report from TBR predicts a steady decline in North America infrastructure spending through 2021 as carriers turn to SDN and NFV
As telecom operators continue to migrate parts of their networks to software control using software-defined networking and network functions virtualization, the traditional infrastructure market is set to feel the financial burden.
According to a recent report from Technology Business Research, the North American telecom infrastructure market is set to drop from $30.4 billion in 2015, to $27.4 billion in 2021, with the impact coming from operators shifting their focus from “network coverage build outs and redistribute spend from legacy technologies to software-mediated networks, specifically orchestration, automation, SDN and NFV.”
TBR notes a majority of LTE coverage was completed by 2014, with current plans focused more on densification efforts that typically don’t require the same level of service to deploy. The next move toward “5G” technologies is not expected to ramp up until the 2020 timeframe, though those deployments are expected to initially be more use-case driven instead of focused on broad coverage.
“The deployment and maintenance services that make up the product-attached services market will bear the brunt of the decline in the overall TIS market, as these areas will suffer the most during the transition from LTE coverage to densification deployments, the decommissioning of legacy infrastructure and the use of open-source software across commoditized hardware,” said TBR telecom senior analyst Chris Antlitz. “On a net basis, the TIS market in North America has a downward trajectory now that LTE investment is post-peak and operators are shifting focus to software-mediated and digital transformation and building out relatively new business models, particularly around video and [internet of things].”
Equipment vendors are also expected to see a hit to their traditional service contracts as software-based deployments will not require the same level of vendor upkeep.
“De-emphasizing legacy causes attrition with newly deployed gear, which is often more efficient and requires a lower support services load,” the report noted. “This coupled with the accelerated trend toward SDN, NFV and cloud will result in substantial downward pressure on the maintenance market through 2021.”
Bored? Why not follow me on Twitter
