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What SPs really, really want

Ovum has gone for five key trends to watch in 2014. The general theme is around service providers seeking a better balance between cost and revenue - a popular thread elsewhere we’ve noticed. Ovum’s developments will all, in one way or another, get them there - small cell adoption; data and customer experience management; software-centric networks; increased optical network capacity in the metro; and changes in the infrastructure value chain.

• Ovum forecasts low single-digit revenue growth for communications service providers through 2018. The outlook is for single digit growth to 2018. The villains are the over-the-top players, changes in subscriber behaviours, and regulatory policies which are all squeezing CSP revenues. Investments in higher-growth revenue opportunities, for example Big Data-related infrastructure and services, LTE, 100G, and the like, will allow vendors to outpace the general market.

Ovum’s trends are:

• The big boom in small cells deployments won't happen in 2014, but indications are clear that interest in small cells is growing. For 2014, small cell solutions for indoor spaces will be hot.

• Video analytics and optimization in particular will prove crucial. Improved customer experience and network asset management will increasingly require sophisticated, realtime policy-controlled traffic management and data analytics, especially for mobile networks.

• Telcos will gain confidence to expand software-defined networking (SDN), network virtualization, and network functions virtualization (NFV) trials and early deployments. In 2014, new and revised standards and specifications related to software-defined networking (SDN), network virtualization, and network functions virtualization (NFV) will bring the industry closer to consensus.

• Lower-cost coherent optical metro solutions will hit the market in 2014. Network value will increasingly be driven by software-tunable capabilities, allowing new possibilities for transport network optimization and monetization.

• In 2014, the equipment value chain will continue shifting to benefit application software and chips. For NEPs, the response is vertical integration to include more chip design. For merchant chip suppliers and innovative NEPs, over-the-top (OTT) operators tantalize with a shortened technology adoption cycle.

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