Today's mobile market continues to present good business opportunities, but it's a tough and competitive environment. New mobile services and content promise additional revenues and differentiation, but require investment in new technologies and the ability to manage them effectively in the face of increasing network complexity. Meanwhile, price competition is fiercer than ever, and ARPU continues to fall relentlessly, causing an immense need to reduce operational costs.

Managed services will allow the service providers to have either parts or all of their network operation and management efficiently run by outside organizations with significant cost savings. These agreements can include almost all aspects of an operator's network. The managed services scope typically includes field operations, network availability and performance. However, today, projects increasingly involve a greater degree of financial restructuring while the technical scope is moving from the network level toward value added services. This trend has also brought up the requirement for hosting services, where a hosting provider sells its technology capabilities that offer an alternative business model to operators seeking the benefits of cost management, rapid time to market, and faster service adoption. New concepts like infrastructure sharing are also becoming part of managed service.

Portfolio
Typical managed service portfolio includes: service management for coordination and delivery of all communications activities; help desk management, which help desks perform a number of tasks including user assistance, fault management, configuration, and change management including moves, adds and changes, control of third parties, incident reporting, and resolution. Managed services portfolio also include network management, which helps remote handling of all issues relating to the provision and management of voice, data and converged network infrastructures. Preventive measures are taken to reduce faults and increase uptime, and provide protection for network against hackers and physical sabotage. And, security management is also part of this portfolio.

Advantages
Managing Complexity: The arrival of new technologies and convergence of mobile and fixed telecom environments bring complexity to technology management and create other organizational challenges. This increases the operator's workload, demands new skills and creates pressure to achieve greater efficiency of operations. Managed services can efficiently manage this complexity to free up management resources to focus on core strategic tasks that will improve the operator's business.

Ability to Focus on the Core Business: Outsourcing allows the operator to delegate the day-to-day problems of operation of a technical network to somebody who is specialized in that business. Outsourcing some essential but non-differentiating activities will allow an operator to concentrate its efforts on those areas that are critical to winning and maintaining a growing portfolio of happy subscribers.

Cost Improvement: It is expected that the chosen managed services provider can achieve better cost efficiencies than in-house efforts, thanks to greater economies of scale. A managed services provider can plan its business dimensioning and share resources among several operators to achieve economies of scale and avoid unnecessary resource buffers. Infrastructure sharing will provide savings or will even have a long-term impact on an operator's cost model. Additionally outsourcing transfers certain risks to the outsourcing partner.

Access to World-class Capabilities: With an outsourcing partnership, companies can explore the latest technologies and processes without the pressure to purchase. This reduces the pressure on financial resources of the company.

Managed services are not the only solution to the challenges facing operators, but they are one of the most important options. When well aligned with an operator's business strategy, managed services can benefit a mobile operator through managing complexity, business focus and improved financial performance. All these benefits add up to greater shareholder value.

Nilabh Jha
nilabhj@cybermedia.co.in