Abstract
Operators are signing large network outsourcing deals with increasing frequency lately. In fact, there are more than one hundred major network operators - both mobile and wireline - that have outsourced at least part of their networks to one of the major telecommunications equipment suppliers, including market leaders Ericsson, Alcatel-Lucent, and Nokia Siemens Networks. Only a couple of years ago, all but a very few operators expressed no interest in outsourcing, claiming that they would never surrender control of their network ' crown jewels' . Today many of these same companies are signing multi-million dollar, multi-year contracts to turn over responsibility for the network to their equipment supplier partners.
So what explains this shift? Quite simply, significant financial, operational and strategic pressures are forcing operators to reconsider outsourcing. This report provides an overview of the network outsourcing business model, explains its key financial, strategic, and operational benefits. The report also analyzes the profiles of the companies that have decided to outsource as well as their equipment supplier partners. Finally, the report assesses the global market opportunity for network outsourcing and draws out the prospects for future development of the industry.
Network Outsourcing in brief
- Network outsourcing breakdown & business models
- Financial, operational, and strategic impact on operators
- Analysis of 145 contracts to provide insight into who does this, and why
- Market forecasts through 2010, including sources of growth
- Major player strategies & positioning
- Future industry outlook
- Tier-one global operators
- Mobile market leaders
- Wireline market leaders
- Mobile attackers
- Wireline attackers
- Emerging Markets
Operators mentioned in the report:
- 3 Italy
- 3 UK
- 3GIS
- AIS
- Alltel
- BASE
- Bharti
- Brasil Telecom
- BT Global Services
- du
- E-Plus
- Eurotel
- Hutchison Essar
- Hutchison Hong Kong
- KPN
- Maxis
- Midwest Wireless
- Mobistar
- MoviStar Puerto Rico
- Netia
- ONE
- Orange Netherlands
- Rural Cellular
- tele.ring
- Telecom New Zealand
- Telefonica
- Telemar
- Telkomsel
- T-Mobile Netherlands
- Virgin Mobile
- Vodafone Australia
- Vodafone Netherlands
- Western Wireless
Key questions
- What is network outsourcing?
- How does it benefit operators? What are the financial implications of network outsourcing? What are the strategic and operational benefits of outsourcing?
- Which operators have signed outsourcing and managed services deals? Are there certain countries or regions where operators have more fully embraced outsourcing than others? Why?
- How big is the outsourcing opportunity?
- Which companies are pursuing this business? How do they compete amongst each other? How do they differentiate themselves?
- How will network outsourcing shape the telecommunications industry overall? If more operators outsource their networks, how will the future look?
Who should read this report?
- Telecom operators
- Assess the impact of network outsourcing on their own businesses
- Gain insights into how operator choices will impact the nature of competition and the development of the industry
- Equipment suppliers
- Find out how operators perceive benefits and risks of network outsourcing
- Analyze competitor positioning in market
- Telecom regulators and administrations
- Gain insights into a trend that is transforming the industry
- Analyze future actions required of regulators
- Investors and analysts
- Find out how network outsourcing will change operators' cost structures
- Gain insights into the transformation of equipment manufacturers into service providers
Table of Contents
1. The who, what, why and how of network outsourcing
- 1.1. What is network outsourcing?
- 1.2. Who is outsourcing its network?
- 1.3. How do operators outsource their network?
- 1.3.1. Field maintenance outsourcing
- 1.3.2. Network operations and maintenance outsourcing
- 1.3.3. Full network outsourcing
- 1.4. Why do operators decide to outsource their network?
- 1.4.1. The market drivers
- 1.4.2. The cost benefits
- 1.4.3. The other benefits
2. The network outsourcing market opportunity for infrastructure vendors
- 2.1. Infrastructure service market overview
- 2.2. Positioning of vendors on network outsourcing
- 2.3. Positioning of vendors on network outsourcing
3. Network outsourcing market size, potential and future outlook
- 3.1. Market size and forecasts
- 3.2. Growth drivers
- 3.3. Future outlook
4. Network outsourcing contracts (2004-2007)
List of Tables
- Table 1: Major network outsourcing contracts
- Table 2: "Average" allocation of OPEX for a mobile operator
- Table 3: Comparison of top four network equipment providers
List of Figures
- Figure 1: Number of network outsourcing contracts, by operator type
- Figure 2: Number of network outsourcing contracts, by geography
- Figure 3: Network outsourcing deal evolution pattern
- Figure 4: European network outsourcing deals evolution, 2002-2007
- Figure 5: Field maintenance outsourcing scope
- Figure 6: Network operations and maintenance outsourcing scope
- Figure 7: Full network outsourcing scope
- Figure 8: Managed services drivers and number of announced managed services deals, by region
- Figure 9: The outsourcing cost model
- Figure 10: Full network outsourcing impact on cost base
- Figure 11: Compared impact on total cost base of network outsourcing and other operational levers
- Figure 12: Example of network performance improvement brought about by NOC outsourcing
- Figure 13: YoY Worldwide telecom capex growth
- Figure 14: Infrastructure equipment and service segment market size, 2005-2006
- Figure 15: Compared worldwide growth of telecom infrastructure market segments, 2005-2006
- Figure 16: 2006 revenue market share of telecom equipment suppliers by infrastructure segment
- Figure 17: 2004-2007 infrastructure service revenue evolution of major equipment suppliers
- Figure 18: Network outsourcing market shares of major telecom equipment suppliers
- Figure 19: Network outsourcing market shares of major telecom equipment suppliers per carrier customer type
- Figure 20: Network outsourcing market shares of major telecom equipment suppliers per geography30
- Figure 21: Network outsourcing addressable opportunity and market size, 2006-2010
- Figure 22: Carrier model transformation framework
List of Exhibits
- Exhibit 1: The cost structure of a mobile operator
- Exhibit 2: Operator reactions to projected cost savings
