Following the footsteps of Bharti Airtel and Reliance Communications, Idea Cellular too is focusing on expanding its managed services portfolio on a pan-India basis.
As of now, the Aditya Birla flagship company has tried out managed services in Bihar and Mumbai circle. ?We have managed services contract for Bihar and Mumbai circle and we wish to take it forward on our pan-India basis,? Idea Cellular CFO Akshay Moondra told FE .
?In Bihar circle, we have partnered with Nokia Siemens Network for a deal size of $150 million,? he added. The company tried out the concept of managed services by implementing it in these two circles and is interested in expanding it to other circles. The company has a capex guidance of Rs 5,500 crore for FY09-10 but refused to give a break-up of its expenditure plan.
Managed services typically include establishing, operating and managing day-to-day operations of a telecom operator?s network, services and business support systems, while the telecom operators get to focus on their core business of acquiring subscribers and dedicating their efforts to revenue-generating activities.
It is estimated that managed services agreements can typically provide savings of 20% to telecom operators on the opex side. With this partnership, operators secure competitive opex efficiency and capex productivity, since the vendor optimises the total cost of ownership of the entire network.
For Mumbai circle, Idea has partnered with Ericsson but refused to divulge the details of the deal. The company is yet to become a pan-India player. Telecom players like Bharti Airtel and Reliance communications have proactively opted for managed services. These two telecom giants have also formed joint venture with Alcatel Lucent. Managed services providers like Ericsson and Nokia Siemens Network (NSN) see huge opportunity in India. P Balaji, VP-marketing and technical solutions, Ericsson India said, ?On the global basis, we host around 350 million subscribers on our managed services platform. We also manage around 70% of Bharti?s network (15 circles) and its all India prepaid network.?
?We have been constantly in talks with other new players and incumbents for providing managed services to other telecom players as they see significant value in this proposition,? Balaji added. There is a growing need by operators for network optimisation and enhancing end-user experience. Managed services help the operators by predicting the costs, the ability to concentrate on their markets and to grow their customer base and market. Their main criterion is the speed of market entry and thus the balance of expertise shifts to managed service providers.
Ashish Chowdhary, global head of managed services, Nokia Siemens Networks said, ?Our services business accounts for about 45% of our overall sales thus reflecting the growing importance of services in this industry.? ?Looking at the number of deals we have announced globally last year and this year, there is clearly a growing trend towards outsourcing network operations,? added Chowdhary.
