Global telco IT spending to reach US$60b by 2017: Ovum

Continuing growth in Asia-Pacific will be main driver for global IT spending over next few years

Telecoms technology spending is forecast to grow modestly at a 0.6 per cent compound annual growth rate (CAGR) from 2013 to 2017, reaching US$60 billion by 2017, according to analyst firm Ovum.

The analyst firm said continuing growth in the Asia-Pacific region – along with the Middle East and Africa and South and Central America – will be the main driver for global IT spending over the next few years.

Ovum forecasts package software spending will grow at the highest CAGR of 1.6 per cent, reaching US$9.6 billion by 2017. Internal IT – the largest category for IT telco spending – is forecast to be worth US$116.1 billion by 2017, followed by system hardware at US$14.2 billion, systems integration at US$7.8, outsourcing at US$7.4 billion and professional services at US$5.4 billion.

Ovum’s analyst for Telecoms Technology, Shagun Bali, said the addressable market for vendors will increase.

“Although overall telco IT spending will grow modestly, the trend is for telcos to reduce internal IT spending and increase spending on external IT projects,” said Bali.

“To control costs, telcos are outsourcing the maintenance of legacy IT and turning to trusted partners, both to implement unified and standards-based systems and software and to provide skills such as those of data scientists for big data analytics projects.

“Consequently, the overall addressable market for vendors will increase.”

In July, analyst firm Gartner predicted that IT services and telecommunications would comprise most of the IT spending in Australia this year, with $28.7 billion on IT and $26.7 billion on telecom. Gartner forecast a total IT spending to reach $75.3 billion in Australia this year, a 2.9 per cent increase from last year.

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