China telcos to invest $3.7B in IT

Summary:By 2017, the Chinese telecom industry is expected to spend 22.8 billion yuan (US$3.7 billion) in IT-related investments, according to IDC, which recommends telcos extract value from existing customers and big data.

China's telecommunications IT solutions market is expected to jump from 13.9 billion yuan (US$2.2 billion) last year to 22.8 billion yuan (US$3.7 billion).

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This growth represents a compound annual growth rate of 10.4 percent over five years to 2017, according to a Sina News report which cited data from research firm IDC.

Titled "China telecom industry IT solution 2013-2017 forecast and analysis", the IDC report attributed the investment growth to steady input from the country's three dominant telecom operators in 2012 as well as the issuance of 4G licenses.

To ensure continuing growth, the market analyst cautioned that Chinese carriers would need to move away from less competitive investments, such as wireless value-added services, and attempt to extract value from existing customers, smart pipeline construction, and big data analysis. It pointed to large-scale IT solutions market trends which indicate investments in BSS (business support systems) and business intelligence, including enterprise data architecture, were expected to maintain steady growth.

Jiang Jialin an analyst at IDC, said telecom operators were confronted with a more complicated market environment in face of the mobile Internet and big data era. OTT (over-the-top) services had further impacted their traditional cashflow generators such as SMS and voice.

Telecom operators must further adjust their development strategies, Jiang advised, as carriers' dominant services were facing great uncertainties. Investments in IT can improve their basic competitive abilities and operational efficiency, which will help maintain steady and fast growth, he said. According to Jiang, IT investments include smart pipelines, Internet traffic management and cloud-based resource management.

Topics: Telcos, China

About

Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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