Managed success

Rising client demand for improved levels of service and cutting-edge technology offerings is leading many telecoms operators to outsource network management responsibilities to third parties in a bid to drive efficiencies. CommsMEA analyses the trend.

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By  Administrator Published  October 29, 2007

A recent report published by analyst house ABI Research revealed that expenditure on outsourced telecommunications network management has increased dramatically in 2007.

Entitled Managed Services for Mobile Networks, the report asserts that operators are more eager than ever to offload network operation tasks to third parties.

Telco service providers must focus on maximising profits and reducing costs, rather than just securing as many new service subscribers as possible.

Operators are analysing their business management and operations, realising that competent external managed services providers can boost efficiency and correct problems regarding network operation, the report states.

"Service providers are facing pressure from several sectors," says ABI Research director Lance Wilson. "They must focus on maximising profits and reducing costs, rather than just securing as many new service subscribers as possible."

Faced with 125% subscriber penetration and the loss of its monopoly in Qatar, Qtel recently unveiled its "aggressive" three-pillar expansion strategy. One of the notable aspects of this approach was the company's commitment to managed data services.

The company holds a 38% stake in US-based managed data services provider NavLink, making it an equal partner in the company with US telco giant AT&T.

"We are planning to aggressively target the Middle East market. Through NavLink, Qtel provides its top-end customers with network solutions in the enterprise data market," says Dr Nasser Marafih, CEO of Qtel.

In early 2006, Qtel set up the Qatar Data Centre, which hosts the region's first AT&T global node, providing multinational companies (MNC) with global connectivity.

The Doha node is not only the first AT&T Global Network (AGN) to be deployed in the Middle East but it is also the first AGN node to be owned by a foreign operator (Qtel), reflecting the favourable business proposition of managed network services.

With additional AGN nodes in the UAE and Saudi Arabia, work is now underway to deploy an additional node in Kuwait. NavLink is also eyeing similar opportunities in Morocco, Egypt and Bahrain.

"We are focusing on the Middle East because the region has potential for growth and we know the risk profile. Our regional ambitions are focused on, but not limited to, Asia and the Middle East and North African (MENA) regions," states Marafih.

Similarly, Orange Business Services, the B2B arm of France Telecom Group (FTG), aims to leverage its worldwide experience to promote its business in this region.

The company has paired with regional telco operators, including Etisalat, Batelco, Jordan Telecom and STC, to promote the trend towards "global connectivity".

"Historically, the Middle East has been what we'd call a remote site but over the last two or three years we have seen a rising demand for network hubs in the region," says Philippe Koebel, senior vice president of Orange Business Services in Europe, the Middle East and Africa.

"This is reflected by the trend toward many Middle Eastern companies buying large stakes in such MNCs," he adds.

Koebel says that managed networks currently account for the vast majority of the company's annual global revenue.

He also notes that the Middle East market for managed network services is unique, being heavily influenced by the ongoing construction boom and the ongoing uptake of IP-based communications technology.

"Communications services are now beginning to converge around IP-technology and we plan to provide fully integrated global telecommunications services for the mass of new real estate projects in the region," says Koebel, who also argues for a renewed focus on regulatory issues to account for advancements in technology.

"You can no longer separate a voice network from a data network as the emergence of IP technology is blurring the frontiers. It's more logical to have VoIP deregulated, as end-users will benefit from an all-encompassing network architecture combining data and voice services."

Orange officials claim that the company's ‘Solutions for Operators' proposition has proven so popular with Middle East city planners and service providers that it expects to double its revenues in the region by 2010.

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