Outsourcing Network Support Services: Advantages for Carriers 1

Outsourcing Network Support Services: Advantages for Carriers By Jennifer Marron

Marketing & Communications Specialist WireIE Holdings International Inc. April 2010

Outsourcing Network Support Services: Advantages for Carriers 2

Outsourcing Network Support Services: Advantages for Carriers By Jennifer Marron

Marketing & Communications Specialist

WireIE Holdings International Inc.

T oday, many wireless carriers are

making the decision to outsource their network maintenance and support operations. In doing so, carriers are able to focus on their core business of delivering high quality services. Outsourcing simply means that another company is contracted with the responsibility of managing and maintaining certain network assets that cost money to operate on an ongoing basis. This allows wireless operators to focus on building their business instead of managing daily, resource-intensive tasks associated with operating their network. Companies that provide outsourcing services are specialists in those areas and can offer peace of mind to their clients, often at a lower cost.

What is it? Network maintenance and support services can be obtained from a Network Support Services (NSS) provider. The NSS provider manages the network elements such as switches, base stations, backhaul, and messaging systems based on the Service Level Agreement (SLA) with the network operator.

The fact is that outsourcing is becoming a global reality and its challenging ingrained perceptions of what is core and non-core to a network operator’s business activity. With NSS outsourcing, operators may focus their attention on expanding coverage, improving the quality of the network, and in the process, bringing in new open devices and applications that enhance the client experience.

Outsourcing Benefits Outsourcing is a great solution as it reduces costs and manages operational risk. The main goal of an outsourcing agreement is to produce cost savings that operators can then reinvest in their network(s). It is simply that it costs less for outsourcing companies to handle operations instead of keeping them in-house and taking up valuable resources. Labour costs are diminished and staff can focus on the tasks at hand – which mean generating more revenue by increased client numbers and devices. NSS providers offer service assurance and are focused on client Key Performance Indicators (KPI’s) as defined by the operator. Outsourcing network support also allows a company to focus on keeping clients by using valuable resources in an effective

Outsourcing Network Support Services: Advantages for Carriers 3

way. By retaining clients, churn is reduced, thus managing Average Revenue Per User (ARPU). From here, more marketing dollars can be spent in order to focus on acquiring more clients. An audit is typically conducted in order to assess the business value of outsourcing and to justify it to the operator. It would need to be determined what in fact needs to be outsourced, and then partnership arrangements are set up in order to repair network elements that are near end-of-life. In such instances where vendor support no longer exists, a company still needs to support their client’s experiences and expectations. Instead of managing multiple vendors, they have a single point of contact for all network issues, resulting in less interfacing with vendors and agreements to manage. Again, this affords the operator the flexibility to contemplate future applications. A Caribbean-based example of this would be for a wireless operator to continually monitor and support a 2G network and its clients, while on the path to developing a 3G network or new technology. Outsourcing keeps the company moving forward as technology evolves.

The Ericsson/Sprint Example A prominent North American example is Ericsson’s 7-year NSS agreement with Sprint announced in July 2009, worth up to $5 Billion, and affecting 6,000 employees.

Under the agreement, Ericsson assumes responsibility for the day-to-day services, provisioning, and maintenance of Sprint's CDMA, iDEN and wireline networks. This therefore allows Sprint to retain full ownership and control of its network assets, and solely own the network strategy and investment decisions. This agreement is very influential as it opened the door for US operators to follow the lead of Europe, Asia, and the emerging

markets in handing over the day-to-day operations of its network to an outsider, while they focus on service. The Sprint contract is the first where a major nationwide operator has been willing to turn the entirety of its

network management and operations to a third party vendor such as Ericsson. Due to the scale of this deal, it garnered attention from North American network operators who were perhaps skeptical and unwilling to outsource their network functions elsewhere.

What about smaller operators? While Sprint is a large American network operator, smaller operators would be even more likely to benefit from an outsourcing arrangement. Additionally, the outsourcing will free valued resources as the company can now concentrate on innovation and development rather than investing in network technology, maintenance and upgrades. WireIE realizes the value of key resources and manages network elements from our facilities, thus managing

Outsourcing keeps the company moving

forward as technology evolves

Outsourcing Network Support Services: Advantages for Carriers 4

operational costs (on-site service is provided only as required).

So why do it? So why outsource NSS and managed services? In short, it provides improved effectiveness and efficiency of operations. Skills and knowledge may not reside within the client’s organization and will only be available through a Managed Services Provider (MSP). Clients are able to be advised on important business and network technology decisions through outsourcing. They are the client’s trusted advisor on both business and technology decisions – both present & future. They also have a ‘going-in’ advantage in advising and then subsequently designing,

deploying, and ultimately managing new technologies for the client. Outsourcing provides customer peace of mind to operators, and they are able to hand off network performance processes, and the MSP handles performance monitoring and ensures preemptive steps are taken to identify issues and maintain service levels. Outsourcing companies convert one’s business drivers into network reality and are typically vendor agnostic – meaning the client does not need to contort their network (or business requirements) to suit a manufacturer. Therefore, outsourcing network maintenance and support avoid costs of building and staffing a wireless carrier’s own management and reporting systems, and contributes to lower total cost ownership.

Outsourcing Network Support Services: Advantages for Carriers 5

What can we do for you? At WireIE, we have the expertise to identify and understand your unique challenges. We have

the knowledge, experience and resources to create, build, deploy and maintain the latest in

wireless network solutions. We are the industry's brightest and best and we're prepared to

ensure success in your Next Generation Network solution. Let's start the conversation.

Rob Barlow President and CEO WireIE rob.barlow@wireie.com Tel: +1.905.882.4660 Fax: +1.905.882.0223 www.WireIE.com

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