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January 01, 2007
Outsourcing: Hand it over
(Total Telecom Via Thomson Dialog NewsEdge) Telecoms operators may include some great historic institutions, but some newer businesses are getting radical about how they operate.
Not all service providers think they need to be end-to-end, networks-to-billing operators. Some are outsourcing parts of their network so they can concentrate on developing and marketing new services. Others are going much further and outsourcing everything, effectively operating the brand name only.
All are trying to do the same thing, though: disentangle themselves from product technology, and especially product technology names.
Too many new product lines have substituted for brand, says one brand consultant who asked not to be named, and who is currently working with a major international mobile operator extending into fixed broadband. 3G and DSL have got in the way of the service providers own services.
Some operators are reorganising their sales and marketing businesses as well as network operations in an effort to focus on the brand and its buyer.
We dont have a 3G system, says Eva Lindqvist, senior vice president, corporate marketing, products and services, at TeliaSonera. Its too complicated for subscribers to understand. They just get a new SIM card with data capability. We dont sell them GSM or GPRS or HSDPA.
In fact, what the subscriber is getting is a bundle of wireless access services, which the operator is attempting to make indistinguishable to the end user. The operators job is to keep connections working even as the user moves from one network signal to another.
As long as bandwidth is defined as product, operators will be reluctant to give up control of their network operations. But some are outsourcing network management, and some are prepared to let all of their operations.
This all-out contract model is partly inspired by the virtual network operator (VNO) model, but is different because the operator keeps ownership of the network.
The operator can still keep the reins while he outsources, says Atte Miettinen, managing director of value added services at mobile managed services provider End2End.
Proximus in Belgium and Optimus in Portugal have both outsourced services to End2End, but to quite different degrees. Proximus, ultimately, they decide what goes live and what doesnt go live, says Miettinen. We provide them the recommendation so they can tick the box and say this goes live.
They decide prices, they decide marketing campaigns.
But at Optimus, End2End defines products as well as their pricing.
We decide it all, says Miettinen. We dont ask them anything. We can come in and say we need this type of marketing campaign from you, [for] these types of items and then we just execute them.
In Spain, TeliaSonera has sold its business plan to investorsto launch 3G operator Xfera this yearthrough the promise of extremely low roll-out costs, totalling SEK9 billion (E994 million) over five years.
TeliaSoneras Lindqvist says the low costs have been achieved through outsourcing all parts of the operation, including the network deployment and management as well as CRM systems.
A network management deal with Ericsson is the mainstay of the operationthat and a national roaming deal with Vodafone. Lindqvist hinted that TeliaSonera had secured a low cost deal from Ericsson for the low cost operator, saying it was in Ericssons interest to see the project succeed, too.
The new Spanish mobile operator is offering nationwide coverage with a total staff of just 70 employees, 50 of which are people with local knowledge. The remaining 20 are staff with expertise in setting up new mobile operations.
This, says Lindqvist, allows TeliaSonera to focus on developing the Yoigo brand.
We are going out with an aggressive plan to capture the market. We are prepared for retaliation, says Lindqvist.
Yoigos main proposition is a per-minute tariff at just 12 euro cents. And based on that, Lindqvist says, the Swedish parent company wants a 10% stake of Spains mobile market by 2015.
In other markets, TeliaSonera is only just figuring out bundling and rebadging of its fixed and mobile broadband services.
We are still segmenting domestic markets between mobile consumers, broadband homes, wireless networkers and so on, says Lindqvist. It takes longer than you think to convince people to change or take new services on top of what theyre used to.
Lindqvist says TeliaSonera lets its country managers determine what bundles they want to put together, so vertical segmentation can still be the basis of a bundled services strategy. In most markets we just need to get users to see that the devices they walk around with laptops, mobiles can be used for so many different things.
But TeliaSonera does plan to start offering bundles of equipment and applications services for the digital home, starting in the spring of 2007, as well as new business bundles including more bandwidth and bundled office applications.
Copyright 2007 Terrapinn Ltd
(source: http://www.tmcnet.com/usubmit/2007/01/01/2203801.htm)
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