Managing the 3G Space

The scope for managed services has grown considerably in the last year. From being an option for service providers with extra cash to free up scarce management bandwidth by outsourcing non-core infrastructure activities, so that they can focus better on
subscribers, and with the increase in NGN technologies like 3G and growth in applications as a result, outsourcing managed services business has become crucial for operators, thereby resulting in the mushrooming of IT infrastructure service providers offering a variety of managed services portfolios.
According to Mark Nicholson, CTO, Subex, “The managed services portfolio has taken over our core revenue management solutions business, and we have expanded our scope to managing end-to-end business operations, from our earlier focus on BSS/OSS application management or infrastructure management, as we realized our customers derived far greater value through this approach. Moreover, we have invested significantly in understanding service provider business processes. Thus, for example, using the ROC platform we can predict subscribers who would call the contact center, or are about to churn, present margins per customer or per product, and also predict how a newly launched product or product bundle would perform in the market.”

Outsourcing managed services also provides for greater accountability, since managed services' providers are contracted for stringent SLAs and KPIs, quite often on a risk/reward share model. Besides, there is a better utilization of the
BSS/OSS application, so its investments are recovered faster as well. According to C Kajwadkar, chief architect and VP, availability services, Netmagic Solutions, “We have been strengthening our managed services portfolio by adding managed security services, support services for virtualization platforms, and desktop as service. We see a lot of demand for these services in the Indian market in coming years.” Netmagic recently tied-up with Thomson Reuters, to provide Thomson's Elektron services in India, which is a global, ultra high-speed network, and hosting environment that enables financial firms access to real-time information, cost effectively.

Scope for Managed Services in 3G networks
While Tata Communications recently tied-up with Google Apps to expand its managed services' portfolio offering in India foreseeing the expected increase in 3G powered data traffic, Tatanet also recently partnered with Compuware Corporation to provide end-to-end Application Performance Management (APM) services to its customers-a first-of-its-kind solution, starting from the customer perspective and following through to the back-end data center-giving complete visibility and insight into application performance and business impact. This becomes even more critical in the 3G era

According to Shilpa Phadke, head, center of excellence for new technologies, GTL, “In India, with the onslaught of 3G and BWA, close to thirteen telecom operators shall build or upgrade their networks throwing up immense opportunities throughout the telecom value chain. These networks shall require telecom equipment and software, upgrade in backhauling capacities, passive infrastructure, services in planning, installation, commissioning, optimizing and managing the network, applications, content, and much more. Additionally, all of these networks would then require operating at desired performance levels to meet customers' demand, which is precisely where managed services come in. Thus, in the coming months as operators gear up to build their 3G and BWA networks, we expect to see award of equipment contracts, infrastructure sharing agreements, and managed services deals.”

On another level, the coming in of 3G will also see decrease in operators' margins, including huge capex infusion, ever increasing competition and, in some areas, market saturation, leading operators to look for cost-cutting opportunities, while still improving efficiencies and QoS. As the number of network elements steadily increase, the goal will be to maintain the required skilled manpower as well as end-to-end management of a multi-technology, multi-vendor network. All these factors make managed services more attractive to an operator, as it transfers' the network operating risks associated with the above factors to the MS partner in the form of KPI and SLAs.
According to Kajwadkar, “As telcos have spent huge sums in obtaining 3G licenses, 3G will bring to the customers a lot of interactive content and services being delivered by the third party mobile VAS providers, and this in turn will have to be delivered from a data center and supported by managed services.”
Netmagic offers an end-to-end managed IT hosting services portfolio which will shorten the time-to-market for new services, as well as give the best value for both capex and opex costs related to IT infrastructure roll out to support these services.

Challenges for Telcos
According to Phadke, “The first challenge for the operator is to identify the scope of activities that can be outsourced, which is driven by his overall competitive strategy, or core and non-core activities. Once this is done, the challenge is in selecting a right partner who is not just capable of delivering service, but is sensitive to end customer requirements, taking on the role of pseudo operator and being willing to share the risks that the operator bears, including variation in tariff and operating costs. This can only be achieved by scaling up and scaling down the operations as may be necessary, and movement and cannibalization of resources for optimal performance.”

Another challenge telcos face with respect to managed services, is the provider's ability to offer end-to-end services. Most solution providers offer either application management or infrastructure management, while the actual need for operators is a single point accountability across the delivery chain, which runs from application, infrastructure, implementation, support to business operations. Additionally, every telco has its own culture of business operations, and managed services providers have to be able to fit this bill, as well.

According to Bhaskar Bakthavatsalu, regional director, Check Point Software Technologies, “With 3G rollouts, we will see faster access networks converging into the network cores. These high speed access nodes will be using more and more Internet and web 2.0 applications, and will pose a serious threat to the end users. In such a scenario, every service provider will offer the managed security services to address customer needs and also their own ARPU. There will be a great opportunity for managed CPE services, not only for increased volumes, but also for additional services like managed web 2.0 security, managed parental controls, and managed hosting infrastructure.”

Future Impact on NGN
While 3G will accelerate the overall rate of innovation in the country. telcos will expect BSS/OSS solution providers to collaborate with them on the same. Thus, BSS/OSS business operations would get more creative, and newer business and delivery models would
emerge. In the same vein, new issues like leakages, frauds, partner agreements, would all necessitate a managed services model, which would be ideal for such collaborative innovation, because of the higher level of engagement that's developed in the process.

However, it is not just 3G that is going to change the managed services space. It is imperative for an operator to create a sustainable model with every new network and service introduced. In this context, they would seek strategic partnerships with network service providers and OEMs to share the costs, risks, and revenues. Managed services would be critical to enable service providers to focus on their priorities, while assuring accountable, day-to-day business operations.

With the coming in of NGN technology too, there would be more intelligence being pushed from the core of the network to the CPE. As much of the 'intelligence' gets pushed out to the edges of the network, the services will execute at the end systems. Thus, while current services will remain part of service providers' offerings, as customers' expectations go up they would need to migrate towards more advanced multimedia and data intensive services. Concludes Phadke, “The NGN space is likely to see an integration of competing technologies, and it being all IP standard based, offers a huge potential in the area of telecom infrastructure/equipment sharing. As for managed services, it will be the order of the day regardless of the technology.”

Beryl M
berylm@cybermedia.co.in