Telecommunication service providers will start to spend
money on more advanced packet-based services, pushing the market to
recovery and double-digit growth perhaps as soon as the end of this
year, a Siemens executive said.
At a briefing by Siemens' Information and Communication Networks
(ICN) division, Thomas Ganswindt said capital expenditure and
operating expenses seem to dominate the service provider market
today, but added that operators will need to start investing again,
particularly in new services that generate revenue.
While users of telecoms services may be glad that service
providers are cleaning up their act after burning billions on pricy
fibre networks and wireless licences, he acknowledged that they
cannot be excited to see carriers shrink budgets for developing and
delivering innovative services or retaining skilled people to
provide maintenance and support.
Siemens has been hard hit by the dramatic drop in sales to
network operators. Ganswindt predicted that the industry would
bounce back to double-digit growth, with the first signs of
recovery possibly toward the end of this year.
Carriers that are able to provide advanced voice, data and video
services over packet-based networks will benefit in the coming
years from companies seeking to outsource certain areas of their
businesses, such as CRM and SCM.
"Service providers with advanced IP networks will have an edge,"
Ganswindt said. "We see opportunities in providing carriers with
that technology."
Siemens added it had no intention of abandoning its optics
division and will continue to invest substantially in
next-generation optical networking technology, which will serve as
the foundation for new broadband services.
Software will continue to be a growth area. "We definitely see
ourselves becoming more of a software company than a hardware
company," Ganswindt said. "This is a transition in the industry as
a whole, as is the move to provide more services involving
software."