The survey by The Global IT Association for Telecommunications (ETIS) and The Boston Consulting Group (BCG) got responses from a mix of integrated, fixed and mobile operators from emerging and mature markets in Europe. It revealed that these operators are continuing to shift from IT cost reduction to focused IT investments in areas that can drive competitive advantage. Overall, IT capital expenditures rose 3.4 percent for survey participants, and, on average, respondents steered nearly one-third of their investment budgets to their top three initiatives — projects heavily skewed toward improvements in the network and the customer experience.
Of particular note, the study’s authors said, is that even as participants’ IT capital expenditures increased, they managed their IT operating expenses in line with their revenue decline — something that telcos have historically been unable to do.
“The idea that telcos can boost their IT investments yet at the same time lower their IT operating expenses is a powerful – and previously unobtainable – notion,” said Frank Felden, a BCG partner and co-author of the report. “It means they would be able, in effect, to have their cake and eat it, too — spending to foster novel new offerings yet controlling costs. But to do that on a sustainable basis, they will need to find a good mix of innovation-focused and efficiency-focused investments. That is the hard part, but this year’s results indicate that it may indeed be possible.”
The report’s findings on outsourcing were also interesting. It now accounts for 26 percent of study participants’ total IT spending (up from 23 percent in the 2013 survey). For the first time, this annual study did not find a direct linear correlation between a high degree of outsourcing and high IT spending.