ICT services show signs of recovery

CALIFORNIA, USA:ICT services revenues increased on a sequential basis to $59.8 billion in the third quarter 09, after declining for the previous six quarters in a row.

Revenues were still down 4.9 per cent year-over-year, but year-over-year growth rates show definite upward trends in all segments, suggesting the worst of the recession impact is over, said a recent report from Ovum, a provider of value-added advisory services and consulting services.

The software and IT services segment had the best results, with revenues down only 1.9 per cent compared to 3Q08. Business process consulting and telecom infrastructure services fell 6.6 per cent and 8.6 per cent respectively.

Broadly defined ICT services revenues of the 24 largest global providers were $59.8 billion in the third quarter of 2009, up 3.6 per cent sequentially, and down 4.9 per cent year-over-year. This represents the first sequential increase since the forth quarter of 2007, and the year-over-year growth of -4.9 per cent was also improved versus rates of -8.1 per cent and -10.2 per cent during the first and second quarters of 2009.

Year to date through the third quarter of 2009, ICT services outperformed ICT hardware and software sales, as services fell 7.8 per cent versus a 17.2 per cent decline in the non-services revenues of the companies tracked, said Ovum. Since the third quarter of 2008, services have grown from 42.9 per cent to 45.2 per cent of aggregate revenues of the top-tier companies.

Software and IT services revenues in the third quarter of 2009 were $28.3 billion, up 6.0 per cent sequentially and down 1.9 per cent versus the third quarter of 2008. This is the best sequential gain since the third quarter of 2007 and the best year-over-year growth since 2008 third quarter.

Fujitsu, HP, and IBM are the three largest players in this segment with a combined rolling four-quarter market share of 68 per cent. Amdocs, BT Global Services, Convergys, Infosys, NEC, T-Systems, and TCS round out the top ten in this segment.

Consulting segment also improves

Business process consulting revenues in the third quarter of 2009 were $18.6 billion, up 2.4 per cent sequentially and down 6.6 per cent versus the third quarter 2008. The year-over-year decline of 6.6 per cent is an improvement over the 12.5 per cent and 12.9 per cent declines seen in the first and second quarters of 2009, respectively.

IBM, Accenture, and CSC hold the top three market share positions respectively in this segment, with a combined market share of 87 per cent.

Telecom infrastructure lags

Telecom infrastructure service revenues in the third quarter of 2009 were $12.8 billion, up 0.6 per cent sequentially and down 8.6 per cent versus the third quarter 2008. Within this segment, product-related services ($3.3 billion) were down 17.7 per cent year-over-year, as a result of depressed telecom equipment spending.

Cisco, Huawei, and Ericsson are first, second, and third in market share in this sub-segment. Network-related services ($9.5 billion) were down only 5.0 per cent versus the third quarter of 2008, buoyed by operator rollouts of new mobile networks and continued outsourcing of network management functions.

T-Systems, NSN, and Ericsson own the first, second, and third place market share spots in this sub-segment, respectively, with Alcatel-Lucent a close fourth.