Third-Generation operators rely on outsourcing<\/p>\n
Zatni Arbi, Contributor, Jakarta<\/p>\n
Outsourcing for information technology systems has been around
\nfor several years now, and analysts say the market is growing.<\/p>\n
With multiple benefits to companies, including cost saving,
\nflexibility, accountability, and access to new technologies and
\nskills -- without having to add or retrain existing human
\nresources -- letting another company provide IT services for your
\ncompany can also improve customer satisfaction, and make
\noperational costs more predictable and consistent.<\/p>\n
The most important advantage however, is that it allows
\nbusinesses to focus, not solely on technology, but on the broader
\nobjective of improving productivity and bottom line profits.<\/p>\n
Over the years, outsourcing has penetrated deeper and deeper
\ninto companies' operations. In the IT industry, leaders in
\noutsourcing services include IBM, Hewlett-Packard and Sun
\nMicrosystems. IBM offers a slew of strategic outsourcing services
\nincluding business process outsourcing and business
\ntransformation outsourcing.<\/p>\n
Depending on the need of the outsourcing customer, the
\ncontract may or may not involve transfer of technology and human
\nresource assets.<\/p>\n
HP, for instance, provides an outsourcing service that will
\nfree business organizations from the tasks of managing and
\nmaintaining the health of their PCs. Called \"Management\" the
\nservice will take care of the technical support, the problem of
\nsystem obsolescence and many other problems businesses face.<\/p>\n
A nationwide bank, for example, will no longer have to handle
\nthe logistics of distributing their PCs to its widely scattered
\nbranches. HP will do it for them.<\/p>\n
In the telco industry, outsourcing has also gained a lot of
\nattention. Telecom companies such as Telecom New Zealand have
\nrelied on outsourcing to make sure their networks perform as they
\nshould.<\/p>\n
Telecom New Zealand has chosen Lucent Technologies as the
\noutsourcing provider for its CDMA2000 1xEV-DO network. Other
\noutsourcing providers in the telco industry include Alcatel,
\nEricsson, Motorola, Nokia and Siemens.<\/p>\n
It is also not uncommon for an operator to sign contract with
\ndifferent providers to manage different segments of its networks.<\/p>\n
Telecom New Zealand, for example, has chosen Ericsson as the
\noutsourcing provider for its Time Division Multiple Access (TDMA)
\nnetwork.<\/p>\n
Managed services consist of different tasks, starting from the
\ntraditional repair services and network performance monitoring to
\nmore resource-heavy jobs such as network optimization and service
\ndisruption prevention.<\/p>\n
Managed Services enable the operators to roll out their
\nservices quickly. With these services, they no longer have to
\ninvest in training to develop in-house skill resources. They can
\nconcentrate on more strategic tasks, such as marketing their
\nproducts and services, creating more attractive packages to
\ncapture more subscribers.<\/p>\n
True to their word, outsourcing providers let other external
\nparties do the jobs that fall outside their core competence. \"At
\nEricsson, we even outsource our IT needs,\" said one of the
\ncompany's senior executives recently.<\/p>\n
What about the necessary expertise? The telecoms industry is
\nknown as a multi-vendor environment. Operators usually procure
\ntheir infrastructure hardware and software from more than one
\nvendor, and therefore compatibility becomes a key concern.<\/p>\n
The good news is that telco vendors with the outsourcing
\nservices offerings have worked closely together to share their
\nexpertise. It is a form of cooperation in competition, which has
\nbeen dubbed \"coopetition\".<\/p>\n
In many developed markets, where the telecom business may be
\nreaching its saturation point, the new 3G services are expected
\nto once again jumpstart the mobile industry.<\/p>\n
Clearly, competition will be tougher, and the time to market
\nis short. The aspiring 3G operators, who have pocketed the
\nlicense to use the frequency resources, will not have much time
\nto build their own 3G expertise base and instead will have to
\nrely on external assistance.<\/p>\n
Ericsson is arguably the largest provider of outsourcing
\nservices. It has been offering the services for 10 years, and is
\ncurrently managing the networks that serve almost 40 million
\nsubscribers worldwide.<\/p>\n
In fact, its Managed Services currently contribute almost 26
\npercent of its total revenues.<\/p>\n
The bulk of its 22 managed operation and capacity services
\ncontracts, however, are still in the GSM\/GRPS areas.<\/p>\n
However, Maxis Sdn Bhd of Malaysia has already awarded an 18-
\nmonth managed services contract to Ericsson, which has been and
\nwill be responsible for setting up Maxis' 3G network, operate it
\nand transfer it to Maxis after the contract expires.<\/p>\n
Earlier, the Swedish telco giant signed a managed services
\ncontract with H3G Italy.<\/p>\n
Here in Indonesia, telco outsourcing providers are also vying
\nfor a slice of the business in 3G services that we expect to be
\navailable here soon. Nokia, for example, is running a six-month
\ntrial operation of 3G WCDMA service for Telkomsel, Indonesia's
\nlargest cellular network operator, and it will not be surprising
\nif this Finnish company is also engaged in providing managed
\nservices for new 3G operators.<\/p>\n
Whoever is chosen to provide the managed services, it is
\nhighly likely that our 3G operators will have to rely on
\noutsourcing if they want to launch their services as quickly as
\npossible.<\/p>\n
More importantly, with managed services, 3G operators should
\nbe able to offer affordable rates to their subscribers.<\/p>",
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