Wholesale telecoms set for growth

Wholesale telecoms set for growth

The global wholesale telecoms market is prospering and set for future growth, according to exclusive research conducted by Capacity and leading independent analyst firm Yankee Group.

The 2010 Smart Wholesale Survey foresees strong ongoing demand for international capacity services, and suggests that carriers are continuing to expand into new service areas and customer segments, notably cloud computing and mobile data.

Eight out of 10 wholesalers questioned for the survey said they expect to achieve positive revenue growth over the next two years, even with the effects of the global economic crisis still lingering.

Far from being an afterthought in telco corporate strategy, wholesale operations appear to represent the central corporate goal of many operators. The evidence of the survey shows that wholesale is expected not only to serve its traditional customer base of other carriers, but also entirely new customer segments with communications-intensive needs.

The strong emergence of cloud computing as a leading source of expected revenue growth is a particularly significant development.

“As Yankee Group has previously asserted in Capacity magazine, telecoms operators own the physical assets and expertise to act as trusted intermediaries for the cloud, securing the sale and delivery of digital assets such as virtual machines,” said Yankee Group vice president and senior research fellow Camille Mendler. “This is a belief that many wholesalers evidently share worldwide, although we’d question whether all their plans are fully baked.”

In mature wholesale markets like western Europe, cloud computing ranks even higher – in second place after international bandwidth – as the primary source of future revenue growth, responses indicate. Western European wholesalers also believe that managed services and outsourcing will also drive revenue growth.

Regionally, Asia leads growth expectations. In second place as a growth region is central and eastern Europe, with the Middle East and to a lesser degree Africa still expanding fast as telecoms hotspots.

More than 40% of the 243 respondents to the 2010 Smart Wholesale Survey were C-level executives and the remainder senior managers.

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