Outsourcing opportunities in global telecom industry
The AirTel Story
“When the proposal to outsource technology was originally put on the table most of our board members' jaws dropped, and they thought we had gone crazy." A statement given by Bharti Mittal ,CEO of Bharti Airtel which showed the world the effectiveness of outsourcing with its business model “Pay as you grow”.In this model,the network and other utilities are managed by reputed companies which ensures a high quality to the customers. This has enabled Bharti to convert its fixed costs involved with capital expenditure to the variable cost on the rate of usage. This Indian Telecom giant with a limited expertise on technology ...view middle of the document...
V are vying for contracts from telcos .Others like Alcatel Lucent, Huawei Technologies Co. Ltd., Juniper Networks Inc., Motorola Inc., Nortel Networks Corp., Tellabs Inc., and UTStarcom have also started operations in this domain.This business model has realized cost savings to the tune of 20% for the telecom companies.The telcos have found solace from investing huge amounts in improving infrastructure and upgradation of technology.This ideological shift from “Network is their business” to “Let us take care of the sim and them of the network” speaks volumes of the technological advancement brought in by the injection of managed services.
The Big One
The implementation of RFID(Radio frequency identification) in Supply chain technology has grown in the past years.It is a very promising area of telecom outsourcing with sophisticated wireless communication technology and GPS,with expertise provided by prominent players for the installation and maintenance of systems. Still in a nascent stage, this technology has been adopted by a lot of companies with the technical know-how provided by small and large technological firms.In the embryonic stages it was dominated by HP,IBM,SAP and others but due to a second wave of technology this segment was opened up by new players like Savi, Intellefex and others .This encouraged many companies to adopt this technology which had few chances due to the proprietary behaviour shown by the big firms.Retail gaints like Walmart and even defense organizations have shown confidence in these suppliers and this has increased competition in this domain.
Clouds are remote servers tht host data storage and applications which can be accessed by users on pay-as-you-go basis without the capital expenditure on IT assests.The efficiency, convenience and pay-per-use models from geographically independent third –party suppliers have attracted Telcos. Huge investments have been made by Orange Telecom(France),Telstra(Australia) and Telenor(Norway) to enhance their cloud computing capabilities. The outsourcing opportunities are huge as players like Ericsson, Wipro, Verizon and others have already spent billions to gain technological expertise. Investment in cloud computing has been predicted to increase from US$55 billion in 2011 to US$130 billion in 2015.
As providers of cloud services, telecom operators can manage connectivity, deliver cloud capabilities, and leverage network assets to enhance cloud offerings, deliver on-demand applications and computing capacity either through partnerships or on their own infrastructure .They can also benefit from cloud computing as users by transferring selected business functions to the cloud to realize flexibility and time savings with operational as well as cost efficiencies . For companies building cloud infrastructure, they can become their own customers by migrating their existing services and support functions onto the shared infrastructure, thus reducing their total cost of...