The telecoms software and services (TSS) market grew 1 percent to $66.1 billion in 2018, according to the latest Analysys Mason report.
Nokia is the new leader in the global telecoms software and services market. Nokia has overtaken Huawei to lead the telecoms software and services market.
“Nokia performed well in fast-growing markets such as network orchestration to jump ahead of Huawei as market leader,” Dana Cooperson, research director at Analysys Mason, said in its research report.
Nokia has 7.2 percent share in the telecoms software and services market. Huawei has 7.1 percent share in the telecoms software and services market. Ericsson is the third largest supplier of telecoms software and services with 7 percent share.
Amdocs (5.9 percent share), NEC / Netcracker (4.7 percent), Accenture (3.2 percent) are the other leading suppliers of telecoms software and services market. Accenture has overtaken IBM in the telecoms software and services market.
Nokia performed well in fast-growing markets such as network orchestration and was able to jump ahead of Huawei and claim the top spot overall.
The increase in communications service provider (CSP) spending in 2018 came from AI and analytics (AIA, up 3.7 percent) and network automation and orchestration (NAO, up 13.1 percent); spending in all other segments (customer engagement, service design and orchestration, and video and identity management) was either roughly flat or decreased by more than 1 percent (monetisation platforms and automated assurance).
Spending growth was concentrated in the newer, smaller AIA and NAO segments, but all of the other segments had new pockets of investment for vendors to exploit.
Nokia’s revenue grew by 3 percent in telecoms software and related services. The revenue for Huawei and Ericsson fell by 5 percent and 2 percent, respectively.
Two thirds of telecoms software and services spending went to niche suppliers, each of which had a market share of less than 3 percent. There are hundreds of such suppliers: some of them are telecoms specialists (such as Infinera), while others (such as Amazon Web Services) supply the telecoms vertical as well as many other industries.
Nokia’s performance was strong in growth areas like network orchestration and automation, where it offers a range of products and professional service capabilities to help its customers make the NFV/SDN leap.
Huawei’s business is under pressure due to many factors, including geopolitical issues. Huawei’s carrier business unit, which accounted for 41 percent of its 2018 revenue, posted a revenue decline. Huawei’s TSS revenue drop is a result of its 2017 pull-back from BSS markets. Huawei is less successful than Nokia and Ericsson in turning NFV/SDN opportunities into revenue.
Ericsson’s Digital Services business remained challenged in 2018 (BSS sales dropped by 11 percent), but OSS and cloud core sales grew (not included in our TSS data). Ericsson faltered a bit in product-related revenue, but it remained the leading professional services supplier ahead of Nokia and Huawei.
Amdocs retained strength in service design and orchestration; it led in terms of product-related revenue in this area due to strong business from established customers and new customer wins in segments such as inventory management, engineering systems for LTE and 5G networks and monetisation platforms.
NEC/Netcracker improved more than a revenue share increase of just one percentage point might imply. Netcracker had a strong year in monetisation platform product sales, and registered double-digit revenue growth on the back of multiple new deals and expansions of existing ones. It nearly doubled its network control and orchestration revenue due to almost 160 percent growth in network orchestration revenue.
Accenture overtook IBM to become one of the top-six suppliers in the TSS market. Its core focus area of providing support to CSPs’ BSS operations, particularly for monetisation platforms, has enabled it to become the fourth-largest vendor in terms of professional services revenue.