Product Type: Market Research Report
Published by: Analysys Mason
Published: January 2006
Product Code: R51-196Description Over the last three or four years there has been steady growth in the number of telecoms operators outsourcing specific business activities and, in some cases, the entire operation of their networks. Although failed outsourcing contracts generate tremendous amounts of adverse publicity and, even worse, damage prospects for success, there is evidence that outsourcing has been beneficial for many of the telecoms operators that have embraced it as a viable strategy.
Outsourcing can be a powerful strategic and competitive weapon. Operators need to understand the benefits they can realise through outsourcing, but must also view any benefits in the context of their own market positioning and of the level of strategic risk they would be accepting by taking this course. Meanwhile, providers of outsourcing services need to understand which types of operator are likely to be receptive to such service propositions and how their own market positioning compares with that of their rivals.
Outsourcing by telecoms operators: strategic and commercial options takes a detailed look at the strategic and commercial options available to telecoms operators and provides a framework for their analysis. It assesses the probable evolution of the market for outsourcing by telecoms operators. The report also:
- reviews the various activities undertaken by typical fixed and mobile network operators
- analyses the relative strategic importance of those activities for different types of operator
- considers the strategic risk of outsourcing those activities for different types of operator
- identifies the cost, revenue and flexibility benefits of outsourcing
- includes case studies of telecoms operators that have turned to outsourcing
- analyses the types of outsourcing service provider that operators can turn to
- compares the market positioning of the leading outsourcing service providers
- reveals which activities operators should consider outsourcing
- identifies key success factors for outsourcing
- provides forecasts of the market for outsourcing by telecoms operators
Outsourcing by telecoms operators: strategic and commercial options answers your key questions:
- Is outsourcing a good idea for telecoms operators?
- How can outsourcing deliver competitive advantage?
- Which business activities should telecoms operators outsource?
- Which types of operator should outsource?
- Which outsourcing service providers can an operator turn to?
- If an operator does outsource, what safeguards must it put in place?
- How will the market for outsourcing by telecoms operators evolve?
The report provides forecasts of the market for outsourcing by telecoms operators in Europe broken down by:
Geographic area: France, Germany, Italy, Spain, Sweden, the UK, Western Europe as a whole and Eastern Europe as a whole
It also provides forecasts for the Western European market broken down by:
Operator type: alternative fixed operators,alternative mobile operators and former monopoly operators
Forecasts for the Western European market are also broken down by:
Activity outsourced: billing and OSS (including content and application platforms), call centres, field operations, IT services, logistics, network operation and management.Table of Contents - 0 Summary
- 1 Operators must reconsider their outsourcing strategies
- 2 Outsourcing of certain functions is already common
- 2.1 Outsourcing is reaching further into network operations than ever before
- 2.2 Now operators are even handing over complete responsibility for management of the entire network
- 3 Operators can turn to a growing number of large service providers
- 4 Further outsourcing can deliver more cost savings
- 4.1 Third parties can achieve efficiency savings in a number of ways
- 4.2 Evidence suggests that operators can enjoy substantial opex reductions for certain business activities
- 4.3 Project and vendor overheads limit the overall savings a network operator can realise
- 4.4 Despite the overheads savings across key areas could still cut as much as 9% off total operating expenditure
- 5 More outsourcing can speed response to market changes
- 5.1 Outsourcing can provide skills and resources to improve speed and flexibility
- 5.2 Speed to market can have a dramatic impact on business performance
- 5.3 Short-term flexibility must be balanced against potential longer-term inflexibility
- 6 The risks of outsourcing can be managed
- 7 Network functions must be viewed from a fresh perspective
- 7.1 Market changes mean operators must re-evaluate which activities are strategically important
- 7.2 Operators must also re-evaluate the potential benefits of outsourcing different activities
- 7.3 Combining strategic value with outsourcing potential identifies some activities as clear outsourcing targets
- 7.4 Operators must assess the strategic risk of outsourcing against any potential gains
- 8 Outsourcing may mean the difference between keeping up with rivals and being left behind
- 8.1 Outsourcers have reduced operational costs more than Non-outsourcers
- 8.2 Competitive pressure will continue to push operators to outsource
- 8.3 Outsourcing of technology and customer services by Western European network operators was a multi-billion-euro market in 2005
- 8.4 The Western European market for entire network outsourcing is expected to reach EUR1.1 billion by 2010
- 8.5 The UK market for outsourcing by network operators will be the biggest in Europe Actions
- Companies discussed in this report
- 3 UK
- AAPT
- Accenture
- Alcatel
- ATOS origin
- Auna
- BASE
- Bharti Tele-Ventures
- BT
- Cable & Wireless
- EDS
- End2End Mobile
- Ericsson
- H3G Italy
- HP
- Hutchison
- IBM
- Intec Telecom Systems
- KPN
- LogicaCMG
- Lucent
- Nokia
- 02 Germany
- ONE
- ONI Telecom
- Priority Telecom
- Redstone
- Retevisión
- Siemens
- sunrise
- TDC
- Telecom Italia
- Telecom New Zealand
- Telefónica
- Telereal
- Telewest
- Telfort
- TeliaSonera
- T-Mobile
- Vodafone
- Figures and tables
- Figure 2.1: Outsourcing of business activities by telecoms network operators
- Table 2.1: Examples of outsourcing contracts
- Table 2.2: Contracts to outsource network management
- Figure 3.1: Typical market positioning of leading outsourcing service provider groups
- Table 4.1: Savings claimed as a result of outsourcing
- Figure 4.1: Assumed in-house costs for call-centre outsourcing scenario
- Figure 4.2: Comparative outsourcing costs for call-centre outsourcing scenario
- Figure 4.3: Annual savings compared to an in-house team for call-centre outsourcing scenario
- Figure 4.4: Cumulative savings compared to an in-house team for call-centre outsourcing scenario
- Table 4.2: Typical ranges for operating spend on different business activities
- Figure 5.1: Impact of accelerated delivery: service revenues
- Figure 5.2: Impact of accelerated delivery: cumulative service profitability
- Figure 7.1: Strategic importance of the telecoms operator’s various activities
- Figure 7.2: Relative potential benefits of outsourcing different activities
- Figure 7.3: Matrix of outsourcing benefit versus competitive importance for a mobile operator
- Figure 7.4: Matrix of outsourcing benefit versus competitive importance for an incumbent
- Table 7.1: Outsourcing risk analysis
- Figure 8.1: Comparison of revenue between Outsourcers and Non-outsourcers
- Figure 8.2: Comparison of opex between Outsourcers and Non-outsourcers
- Figure 8.3: Opex as a proportion of revenues for Outsourcers and Non-outsourcers
- Figure 8.4: Index of opex as a proportion of revenues for Outsourcers and Non-outsourcers
- Figure 8.5: The projected value of contracts outsourced by Western European telecoms operators 2005-10
- Figure 8.6: The projected value of contracts outsourced by Western European telecoms operators by activity
- Figure 8.7: Distribution of spend on different categories
- Figure 8.8: The projected value of contracts outsourced by European telecoms operators by geographical region
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