Insight Research doubles outlook on OSS spending

With carrier revenue growth rooted in reality, Insight Research’s new analysis puts OSS spending at $63 billion

The telecommunications industry has put its troubles behind it, according to Brenda Belkin, senior analyst at Insight Research. Consequently, carrier confidence is on the rise along with revenue, and spending is keeping pace. A new report titled Operations Support Systems 2007-2012, authored by Belkin and available later this week, says spending for operations and business support systems will climb from $42 billion in 2007 to $63 billion by 2012.

The new forecasted spending growth rate is double that made in the firm’s 2005 report. Systems that directly reduce capital expenditures, such as automated online billing, network asset management, configuration management and automated provisioning, will generate the most interest, according to the report.

Although service providers have expressed a willingness and a need to invest in OSS, Belkin said they have learned a few lessons from previous investments and are being more cautious.

“Revenue growth is back on track,” she said. “In fact, it is better than any time in the last five to seven years, but they are investing more wisely. It is all ROI-driven. They are interested in taking advantage of software platforms that can address as many of their services as possible. That’s where they justify their business case.”

Insight Research defined OSS as systems software or applications that provide system functionality such as customer care and billing or network equipment surveillance and control; platforms that run this application software, including operating systems and middleware; computer hardware and OSS software and maintenance; and professional services.

Not surprisingly, Insight Research expects wireless service revenue to grow at a compound annual growth rate of 13.2%, while wireline services grow only at 2.6%. The CAGR for OSS sales to support this growth will be 8.2%.

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