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Ericsson and 3 UK’s announced a seven-year managed services deal this week through which Ericsson will manage 3’s 3G mobile network and IT infrastructure. This deal is the largest in Ericsson’s history and includes the transfer of 1,000 employees from 3 to Ericsson UK. Specifics as to the exact dollar value of the deal have not been provided by the companies involved, though Pyramid Research estimates that the contract value is in excess of $2.5bn.
Managed services and network outsourcing is now a key component of equipment vendors portfolio of products and services. Going forward, we expect large-scale, more ambitious deals such as the Ericsson and 3 UK to become the norm. In an increasingly competitive industry, operators are struggling to manage their network costs and quickly launch new, revenue-generating services and technology solutions. Through outsourcing, carriers are able to shift their focus to revenue generating applications and services, increasing the bottom line.
By partnering with their vendor suppliers, operators are able to reduce total cost of ownership (TCO) by as much as 20%, largely through a reduction in network OPEX, while relying on vendors like Ericsson, Lucent, Motorola, and others to manage their network operations and performance. This kind of strategic outsourcing frees up the operator to focus its remaining resources on product development, customer acquisition and retention, and other initiatives that will drive revenue growth.
Contact info@pyr.com to learn more about Pyramid Research's Vendor Services Program.
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