Business Focus: IT spend in the telecoms sector

Telecoms companies call on IT to meet compliance and consumer demands

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at the telecommunications industry.

Compared with other industries, telecoms is heavily reliant on technology as part of its core business.

This is reflected in the sector's much higher than UK average spend on IT per desktop in both small and large enterprises. Smaller companies spend £2,150 more than the national average of £3,132.

Among large operators the differential is even more marked, with telecoms firms spending nearly double the UK average at £15,683 per desktop per year.

Outside of core, IT-dependent business requirements, telecoms companies are spending more on technology as the industry continues to deal with massive changes driven by compliance demands and the evolution of consumer technology.

Consumer fixed and mobile voice revenues have been squeezed, with customer churn rates of 30%, and the convergence of voice and data on IP-based networks had demanded the wholesale overhauling of network and service infrastructures.

Added to this, many telecoms companies have as many legacy systems as financial services providers for operations such as billing.

They also share with other sectors an ever-increasing regulatory burden as cybercrime and data retention laws are beefed up across Europe.

Larger telecoms firms' spending is above average across all areas of the IT budget, with hardware and software costs both nearly double the UK-wide business average, and spending on IT staff and on IT services about 70% higher than average.

The figures demonstrate that telecoms firms are not only investing heavily in their own internal IT resource but are also heavily reliant on outsourcing to deliver non-critical IT functions.


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