0		Managed, services, India, far

Telecom outsourcing and managed services market is estimated to be at $277 bn per year. Of this 25% will come from Asia. Airtel’s recent outsourcing spree is a good indication of this.

What exactly are these managed services?

The telecom providers like Airtel, BSNL or Reliance have to take care of lot of things for making your mobile calls possible. That includes laying out networks, telecom towers, software, maintenance, billing, support and customer care.

Managed services can be split into 3 categories :

1. Network : The key piece in the telecom ecosystem. Most of the major operators and many of the new operators have chosen to outsource laying out the network to 3rd party companies. Divesting telecom tower companies or using other provider’s telecom towers is the latest trend which falls under managed services.
2. Hosted services : Delivering the value added services to the customers. This is typically not outsourced or have not been outsourced so far except for Airtel which recently outsourced this to Comviva signaling many more to come from other operators.
3. Information Technoloy : This includes billing, support, customer and many other things. Companies are aggressively outsourcing these and Indian IT companies are vying for this pie but, IBM leads this race.

These activities look like core competencies of the telecom companies. If they outsource all these things what will the telecom companies actually do?

image from Tonse Telecom’s managed services report.

Strategic decisions, license, spectrum, marketing and branding are the things which will be taken care of by telecom operators.

Let us take a look at the managed services or outsourcing deals done in India so far :

1. Airtel chose Nokia-Siemens network as a managed service partner for expanding its GSM network in 8 circles. The deal is valued at $900 million
2. Airtel chose Huawei Technologies to manage Airtel’s core network, Node-B, BTS and end-to-end 2G/3G network.
3. Airtel chose Ericsson to design, plan, deploy and optimize Airtel’s GSM network across 15 cities. The deal value is $2bn.
4. BSNL chose Ericsson for laying out its 3G network.
5. Tata Teleservices Limited chose Nokia Siemens Networks for its GSM roll-out across the country and managing it for 5 years.
6. BPL Mobile chose Huawei Technologies for GSM base stations and other equipment for $20 million.
7. Reliance Communications chose Alcatel-Lucent to manage Reliance’s CDMA and GSM networks. They also have a joint venture to to provide managed services globally.  There is also $500 million outsourcing deal which Alcatel is in talks with Reliance.
8. Airtel chose Comviva for managing its value added services. Comviva will manage more than 2000 VAS nodes of Airtel.

Airtel clearly leads the outsourcing pack with BSNL and Reliance following up. Most of the new entrants are also choosing to outsourcing their network rollout’s. Nokia Siemens Network, Huawei Technologies, Ericsson and Alcatel-Lucent are the big international players taking care of managed services pie in India and also across the globe.

If there is a problem with your call then blame it on the network guys, any problem with the SMS blame the SMS guys and any call drops blame it on DoT for the lack of spectrum. If you don’t like the ads then may be (technically the ad folks should be blamed) you can blame it on the actual telecom operators.

Suggested Reading : 6 outsourcing deals in India Telecom