Telcos worldwide spent nearly a half-billion ($488 million U.S.) dollars on network planning and optimization software in 2011 – and there's reason to be confident about the future.
Research firm Analysys Mason predicts the market will grow at a 7 percent CAGR (compound annual growth rate) between 2011 and 2016. That growth – more than three times the CAGR of operator revenue from telecoms services – is being driven by the explosion of data use around the globe. Chalk it up to video streaming, the introduction of LTE technologies, the increasing complexity of networks that include Wi-Fi and small-cell solutions, and the increased focus of operators on improving the customer experience.
Analysys Mason's new report, "Network planning and optimisation outlook 2012," analyzes where the growth will come from by service segment and region, and why.
Of the four service segments examined [mobile, public switched telephone networks (PSTN), business, and residential broadband], spending on software for mobile services is predicted to grow at a CAGR of 8.4 percent between 2011 and 2016, while PSTN is predicted to grow by just 3.3 percent during the same period.
“Spending on network planning and optimization software will increase dramatically, particularly in the data services segment, and this will continue with the transition to the 4G technology of LTE," explained Mark Mortensen, prinicpal analyst, lead author of the report and lead analyst of Analysys Mason’s service fulfillment and customer care research programs. “Complex heterogeneous mobile network architecture is making sophisticated planning and optimisation systems necessary for operators, as is a renewed focus on customer satisfaction as a competitive advantage."
The Caribbean and Latin America (CALA) is the region that is predicted to have the highest CAGR (12 percent) in spending in the network planning and optimization software market during the forecast period, while growth in Europe, the Middle East and Africa (EMEA) is predicted to be less than half that – 5.2 percent.
The report also includes a range of key recommendations for operators and vendors. Operators’ budgets are not limitless, so it is crucial for them to understand where and how to invest limited financial resources, Analysys Mason said. The report suggests that operators must focus on integrating network planning and optimization software into their operations. Additionally, fixed operators that are introducing new video services should look to the market-driven integrated operation support systems (OSS) approach to planning, optimization and software, rather than the traditional tools approach.
The study says that AIRCOM International retained its place as the leading independent global player in this growing market, claiming an 18 percent share, valued at $275 million.