Radical transformation in managed services deals expected among operators

While efficiency and cost control are still identified as the most important concerns for operators considering managed services, research indicates these same organisations are on the brink of a complete change in strategic focus driven by the need to pursue new revenues.

Research from Informa Telecoms & Media reveals that 85 per cent of operators see the development of new revenue streams as their key objective and by association they expect this from their managed service providers.

Kris Szaniawski, principal analyst at the research firm explained: “Business agility, customer experience and new digital service developments will all come to the fore in this increasingly pressurised and competitive industry and managed services are the natural way to implement these changes,” he said.

“Managed services may not be new to the telecoms industry but what has changed is how operators find value in these services. The research shows that CSPs no longer see managed services as a way to simply save money and create efficiencies, but expect managed services providers to create value in their own right and generate new revenue streams.”

Most, if not all, operators will embark on radical operational transformation projects over the next five years due to declining non-data revenues, increased network and technology complexities and the necessity to evolve into service-driven businesses, according to managed services provider and equipment vendor Huawei.

Huawei said that it developed its “Total Value of Ownership” (TVO) approach to managed services — going beyond managing day-to-day operations to include strategic guidance to CSPs to achieve operations transformation goals — in response to this trend.

“In coming years it will become even more critical for mutually beneficial and collaborative relationships between CSPs and MSPs to deliver the standards of services expected by end-users in an increasingly competitive market place,” said Huawei’s senior VP of Global Technical Service and president of the Assurance & Managed Services Business, Dr. Leroy Blimegger.

But there is still some way to go. Speaking at the Managed Services World Congress event in London this week, Executive Director of Oger Telecom, Fabrizio Mambrini, said that operators should avoid going to one provider for all their managed services needs. But this stance was countered by Ericsson’s global head of IT managed services, Luigi Migliaccio, who said that such an approach was understandable for efficiency and cost control considerations but to derive more value from a managed services deal, the outsourcing provider needs to have a much greater understanding not just of the technology but also of the company’s IT and business processes, which requires more far reaching contracts.