Uncommon Wisdom

Jul 10 2009   2:06PM GMT

Outsourcing operations trend appeals to carriers, too

Tom Nolle Tom Nolle Profile: Tom Nolle

Sprint is outsourcing its network operationst o Ericsson, the latest player in a series who have taken this sort of step. Alcatel-Lucent has been the beneficiary of most of these deals recently. One might think the whole of the carrier space is outsourcing network operations, but that’s an oversimplification.

Verizon, for example, says it has no plans for network oursourcing. Most of these deals are for pure “NOC” or operations center outsourcing. For some providers, like wireless carriers, that may be a big chunk of total network operations costs, but for access providers, the physical outside plant maintenance part is the great majority. Therefore, everybody doesn’t save a bundle with this kind of deal. Second, the operators tell us these deals are really seen internally as a kind of extended network integration process.

Operators are finding it harder to acquire and retain skilled network personnel and are concerned about the burdens of moving into new technology areas. In modernization and network enhancement projects they’re turning increasingly to integration deals, and these are extending into ongoing operations. Ericsson is likely hoping to use Sprint to develop some U.S. economy of scale in its outsource operation.

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