Zain Nigeria inks outsourcing deal with Ericsson

Operator aims to boost efficiency after signing five year outsourcing deal

Tags: KuwaitTelefonaktiebolaget L. M. Ericsson - SwedenZain - Nigeria
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By  Roger Field Published  June 9, 2009

Telecom operator Zain has signed a deal with Ericsson to outsource the management of its network and field operations in Nigeria for a five year term, in a bid to improve its operations in the country.

Zain, which has about 15 million active customers in Nigeria, said that Ericsson will be responsible for managing most of the network and field operations for its wireless networks and operational support systems, serving almost 4,000 sites across the country.

The deal is intended to allow Zain and Ericsson to each concentrate on their specialist areas, with Zain focusing on strategy and customer service.

As part of the agreement, about 450 employees will be transferred from Zain Nigeria to Ericsson under their existing terms and conditions of service. Zain said these staff will “undergo further development in the latest wireless technologies.”

Chris Gabriel, CEO of Zain Africa, said the agreement “fits perfectly” with Zain’s plan to improve the efficiency and quality of its operations. “We will be in a far stronger position to dedicate resources and assets to our core business operations, continuing to improve customer support, developing and launching new products, services and mobile applications,” he said.

Lars Lindén, president, Ericsson sub-Saharan Africa, said that such outsourcing deals are one of the fastest-growing areas in telecoms. “The synergies between the two companies will ensure best-in-class network stability and market support,” he said.

But while outsourcing of network operations is a growing trend in telecoms, the benefits should not be taken for granted, according to Mauricio Franca, a partner at telecoms consultancy Delta Partners.

In particular, Franca said that operators entering outsourcing deals must ensure the operation is properly managed and that incentives between the two parties are aligned. “If you have someone who is paid by transaction or every time there is a network issue, they don’t have a big incentive to reduce the number of network transactions,” he said.

“You have to be very careful when you do your due diligence to select your provider to get all the guarantees that they are really going to do what they are supposed to do.”

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