The global telecom consulting revenue is estimated to have reached US$12.97 billion in 2008, representing a 8.2% increase on 2007, according to industry watcher HOT TELECOM’s latest report Global Telecom Consulting Market Report.
“For the next 12 to 18 months, we are likely to see telecom operators across the board tightening their capital and expense budgets with a significant impact on consulting projects and staffing” HOT TELECOM’s President Isabelle Paradis said.
If looking at the worst case scenario, this negative growth could extend into 2010 before the situation stabilizes again in 2011. HOT TELECOM however thinks that this is unlikely and that growth will return toward the second half of 2010 and the telecom consulting market should slowly come back to healthy growth rates in 2011 and 2012. These expectations translate into a CAGR of 4.8% from 2008 to 2012, bringing the sector’s total revenue to US$15.10 billion in 2012.
Global consulting services revenue as a whole increased by 10.7% in 2006 to US$99.3 billion and for the first time in 2007 surpassed the US$100.0 billion mark. With the increasing severity of the global downturn of the world economy in 2008 however, growth of consulting revenues is forecasted to have peaked in 2007. The next two years should be much more difficult for the industry. We can expect significant impact on consulting services revenue from the financial industry’s predicament and the recessions evident in leading industrialised countries. We therefore expect the world consulting services revenue to decrease by 1.7% in 2009 and come back with a growth of 2.3% in 2010.
As it has been the case for the past 4 years, the industries’ top 30 telecom consulting firms continue to control the majority of the customers and revenue. In 2007, telecom consulting revenues from the top 30 players amounted to US$10,030 million and accounted for 83.7% of the industry’s total. In order to support the strong growth years of 2005, 2006, 2007, consulting firms across the board hired extensively. The number of employees in the top 30 telecom consulting firms increased by an estimated 16.5% and 13.9% in 2006 and 2007 respectively.
The unchallenged market leader remains Accenture, with a telecom consulting revenue estimated to have reached US$1,970 million in 2007, representing a market share of 16.4%. IBM follows with an estimated telecom consulting revenue of US$1,443 million and a 12.0% market share.
2009 will be a rocky year for Western Europe with a forecasted decrease of 3.4% in telecom consulting revenue. The region is expected to be the hardest hit by the economic downturn, partly due to the bad economic situation in the UK, which is likely to impact spending.
In North America, the full impact of the financial crisis should take effect starting in 2009 with a forecasted decline in telecom consulting revenues of 1.9%. If the economic crisis evolves as envisaged, telecom consulting revenue should return in the second half of 2010, with a forecasted yearly growth of 2.2% in that year.
Middle East and Africa (MEA) continues to be the world’s smallest, but fastest growing telecom consulting market, with a spend of US$234 million, representing a growth of 18.6% in 2007. The region has enjoyed double-digit growth over the last 5 years with a CAGR of 23.6%. There has been a slight reduction in growth in 2007, compared with the peak of 28.1% in 2006, however the region should be the least impacted when it comes to the current economic downturn.