Who Owns?

A recent New York Times article stunned millions of readers across the world.

It said two European companies that run the biggest wireless networks in the

world with a combined customer base of 355 mn are not top mobile operators such

as Vodafone, Telefonica or Orange. Rather the mighty Ericsson and Nokia Siemens

Networks are running the biggest wireless networks in the world. Cheers to the

two global telecom equipment vendors for grabbing the special attention.

Ericsson and Nokia Siemens Networks, in the past six years, have become the two

largest mobile network operators in the world. They grabbed the top position

after service providers started hiring them to manage services and operate their

networks.

The size of the managed services segment of the telecom sector in India is

around $3 bn. The scope of managed services will further grow considering the

appetite among operators to share base stations and hardware to cut both capital

and operational expenditure during the slowdown. Besides existing operators,

managed services will be a boon for greenfield operators, which are in the

market to battle for their survival and supremacy. Managed services throw open

several opportunities for the operator. As the management of network is passed

over to the equipment vendor, operators can focus on their core business of

providing services to their subscribers.

But can operators trust an external company which may be managing services of

their competitors too? If sharing of infrastructure is happening among rival

operators, why not trust an independent telecom equipment vendor? European

operators have shown the way. Some of the leading Indian operators have done it.

American operators will be gearing up for grabbing the managed services

opportunity. The main challenge for operators in India will be handling their

existing workforce hired to manage their network. Some equipment vendors in

Europe have offered solutions for this issue as well. For instance, Ericsson

will be hiring around 350 employees from Vodafone. Nokia Siemens Networks will

be adding 230 people from Orange. These people will be working with equipment

vendors to manage networks of other operators too. Despite having a workforce of

more than 40,000 employees to run Mumbai and Delhi circles, MTNL has opted for

outsourcing a minor part of its services.

Customers are serviced by operators. They are not bothered about NSN or

Ericsson. Managed services can ensure additional thrust on quality issues faced

by Indian operators. It will help in reducing opex and capex. Considering the

cut-throat competition among operators and the need to cut investments, India

gives hope for managed services players.

Baburajan K



baburajank@cybermedia.co.in