Given the high costs to build, customize and maintain a fail-proof telecommunications infrastructure, some Communication Service Providers (CSPs) started to evaluate the total outsourcing of their networks to Network Equipments Providers (NEPs). Considering this business model, the CSP no longer has the strategic or daily control of operations and maintenance. Therefore, the NEPs are challenged to clearly demonstrate technology expertise, scale, breath and multi-vendor equipment expertise in order to convince the CSP that it can perform this activity at the highest standards.
Nokia Siemens Networks (NSN) presented the best results compared to its competitors in several criteria used to identify the leaders in this market. Cost reduction is one of the key decision drivers to a CSP adopting a total outsourcing of its network. Nokia Siemens has reached, for example, 30% of OPEX reduction at the total outsourcing of one of the most important wireless telecommunication operators in Latin America. As main sources of reduction, we can mention human resources expenditures, global monitoring centers, proactive care (anticipate potential issues) and higher energy efficiency.
Another important factor is the increased efficiency obtained on a total outsourcing contract. Nokia Siemens Network has a strong track record implementing total outsourcing agreements in Latin America, handling the largest agreement to date in the region, executing continuous upgrades on its network and a redesign of critical process, obtaining a better performance.
Managing networks designed with multi vendor equipments is also considered a true key challenge to successfully implementing a total outsourcing agreement. "It is highly complex when the CSP consciously choose one technology as a key differentiator of its business model, leaving no option for a change." Says Cristiano Zaroni, Consulting Manager for Frost & Sullivan. "For one of their biggest outsourcing agreements, Nokia Siemens Networks had the challenge to manage a network with a very unique technology, with all network elements supplied by other vendor, not NSN. Nokia Siemens had to incorporate this technology from point zero, developing expertise and capabilities, while maintaining the day-to-day operations running smoothly," mentions Zaroni.
Increasing customer satisfaction through a superior service experience is critical to telecom operators wanting to grow its market share in the marketplace. Therefore, a good Quality of Service (QoS) is critical to maintain subscriber churn at controlled levels. Again, Nokia Siemens Networks was able to improve QoS of one of its key clients in Latin America, keeping, or even decreasing subscriber churn at important markets within the region.
A key benefit from a total outsourcing agreement is that the CSP gets to free up resources to focus on core activities such as product launches, new services among other marketing activities. One of Nokia Siemens Networks client was able generate 28% more revenue, reaching over 8 million subscribers in the region. Such a complex arrangement, in a critical process for the CSP, requires extensive due diligence process and careful selection of a close-knit partner, which Nokia Siemens clearly demonstrated to be through a solid and substantial track record of successful agreements on network outsourcing across Latin America.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.
About Nokia Siemens Networks
With more than 60,000 people in over 150 countries, Nokia Siemens Networks is one of the largest telecommunications hardware, software and services companies in the world. We are committed to innovation and sustainability and offer a complete portfolio of mobile, fixed and converged network technologies as well as professional services including consulting and systems integration, network implementation, maintenance and care, and managed services.