Analysis of Market Volume for China's Telecom Industry's IT Services in 2004 and Prediction of 2005-2008 Market Volume.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c29617) has announced the addition of China IT Services Market For Telecom Industry Development 2005 to their offering.

Study Subjects

This report mainly studies and solves issues in four aspects as stated:

--Analysis of Market Volume for Telecom Industry's IT Services in 2004 and Prediction of 2005-2008 Market Volume

--Driving and Hindering Factors for Development of Telecom Industry's IT Services

--Demand Trends of Telecom Users for IT Services

--Analysis of Strategies Employed by Telecom Industry's Major IT Services Providers

Findings

Overall Market Characteristics

--The market volumes of the telecom industry's IT services increased from 2.4 billion RMB in 2003 to 3.03 billion RMB in 2004, with an annual growth rate of 26.3%.

--The market volumes of the IT consulting, integration, development and management outsourcing accounted for 350 million RMB, 2.42 billion RMB and 260 million RMB in 2004, with a growth rate of 20.7%, 28.0% and 18.2% in 2003-2004, respectively.

--Of the telecom industry's IT services, integration and development services have dominated the market while IT consulting service and IT management outsourcing represent two emerging service markets.

Demand Trends of Users for Integration and Development Services

--After commercial operation of 3G, fixed network operators probably rebuilt their operation supporting systems. Take the new China Telecom as an example. The "97 Project" implemented by the original China Telecom for several years is the rudiment of BOSS, its main objective is to standardize and boost service approaches and operational modes. With changes in conditions, drawbacks of the "97 Project" began emerging: incapable of multi-service operation, incapable of providing decision-making support, incapable of handling the dramatically increasing number of users, etc.

--After commercial operation of 3G, fixed network operators' new services will keep increasing and operators will establish integration and development companies by incorporating holding subsidiaries to serve the development and management of operators' platform systems.

--After commercial operation of 3G, Unicom will gradually upgrade its operation supporting system to integrate 3G services in the system.

--China Mobile has done the best job in building its operation supporting system and will keep making investments in higher-end business analytics systems such as CRM and BI.

Demand Trends of IT Consultation Service Users

--After commercial operation of 3G, fixed network operators probably rebuild their operation supporting systems, which will directly bring opportunities to IT consultation service providers for pre-stage restructuring of service flows, IT planning consultation and IT implementation consultation. After commercial operation of 3G, services of fixed network operators will become extremely complicated while operators will face greater difficulties in integrating existing and new services. Operators will need IT consultation service providers to fully integrate original and new services in newly built operation supporting systems.

--As a result of operators' recent involvement, competition in the field of mobile operations will become increasingly tougher. The competition for rates and customers is, in the end, a competition for operational efficiency and cost. How to make the fullest use of IT means serving the telecom industry will be one of operators' top focuses. At the same time, IT consultation service providers will benefit from much more opportunities in the new competition situation of mobile operations (IT planning consultation, implementation consultation, restructuring of service flows, etc.).

Demand Trends of IT Management Outsourcing Service Users

--In the short term, operators will only outsource operation/ maintenance of some low-end peripherals. They have already used the outsourcing mode for maintenance of some low-end networks, such as pipeline devices' operation/ maintenance and some other basic networking devices, which is outsourced to local system integrators. Such outsourcing projects are generally limited in contract values.

--In the long term, operators will consider implementing core operation/ maintenance outsourcing in a staged way. With overseas listing, operators will face demand by foreign investors to boost operational efficiency and lowering operational cost. The huge operation/ maintenance teams will become the first target to downsize. The biggest obstacle for operators to implement core operation/ maintenance outsourcing is how to work a new arrangement for their large operation/ maintenance teams. Operators will probably solve the problem through a staged outsourcing mode.

Advantage/Disadvantage Comparison of Domestic and Overseas Vendors

--Overseas vendors' advantages: Overseas vendors usually have capabilities of providing integrated IT services, along with powerful capabilities of integration/ development and implementation consultation as well as an IT management outsourcing team. They also have a perfect IT services management flow, as in the set of rational methodologies already established in IBM ITIL system.

--Overseas vendors' disadvantages: Overseas vendors are usually weaker in terms of accumulated customer relations in the telecom industry.

--Domestic vendors' advantages: Domestic vendors are usually more powerful in a certain area of integration and development and better positioned in terms of accumulated customer relations in the area.

--Domestic vendors' disadvantages: Domestic vendors are usually weaker in terms of IT consulting strength, with far more poorly regulated IT services management flows than overseas vendors'.

Sample Design for this Study

The report mainly uses the qualitative method, with its primary information sources come from the following:

--First-hand information mainly comes from sample surveys conducted by analysts for key vendors, channel distributors and end users.

Major vendors involved in in-depth interviews include:

--Accenture, Bearing Point, IBM, HP, AsiaInfo, Digital China, Lucent, Ericsson

Major telecom operators involved in in-depth interviews include:

--China Telecom, CNC, China Railcom, China Mobile, China Unicom 

The second-hand information is mainly public information that comes from the following sources:

--Information in the public domain of the industry

--Opinions vended by senior industry experts

--Data and information provided by relevant government departments

--Related economic data

--Annual and quarterly reports of enterprises

--Interviews with product users

--Financial analysis and reports by financial analysts

--Information from the Internet 

--Database

For more information visit http://www.researchandmarkets.com/reports/c29617