Orange, Vodafone outsource network ops

Annie Turner
19 Mar 2009
00:00

The outsourcing movement is gathering steam, with both Orange and Vodafone announcing network outsourcing deals yesterday.

French telco giant Orange will contract out its mobile and fixed network operations in Spain, and mobile network in the UK to Nokia Siemens Networks (NSN), while Vodafone UK has signed over network maintenance and operations to Ericsson.

Orange’s announcement comes days after it was reported that Vodafone and O2 were to share network resources in the UK, and that the arrangement would probably be expanded to other countries where O2’s parent company, Telefonica, and Vodafone had operations – Spain, Germany, Ireland and Czech Republic.

This left Orange in the UK in somewhat of an awkward situation.

It had agreed to a network sharing deal with Vodafone, that doesn’t appear to have amounted to much - although apparently that is still in place. It’s hard to see how that would work, given the relationship with O2 as well as the fact that the two use different spectrum.

The other two operators in the UK, 3 and T-Mobile, set up a joint company last year – MBNL - to coordinate their network resource sharing.

Ostensibly, it has taken the other sensible (and arguably more sensible) route open to it in the interests of getting operational costs down without sacrificing quality – outsourcing network operations. Time will tell how well the outsourcing deal is executed. However outsourcing networking operations and network sharing partnerships aren’t mutually exclusive (see Vodafone UK, Ericsson story below).

In the UK at least, it is understood that Orange would like to join T-Mobile and 3’s network sharing venture. The outsourcing deal shouldn’t provide a barrier to that move.

Orange Spain has awarded NSN a five-year services contract to manage Orange’s fixed and mobile multivendor networks that cater to more than 11.3 million mobile customers and 1.2 million ADSL customers across Spain.

NSN will implement an end-to-end, managed service for Orange's networks, with the aim of increasing efficiency and reliability of the operator’s mobile and fixed network.

“In an increasingly competitive market, balancing priorities is an ongoing challenge for our customers. They are under continuous pressure to do more for less, create new revenue opportunities, and stay ahead through technology innovation. By providing them with advanced services that address their everyday needs, we help customers focus on their attention on areas that drive their success,” said José Carlos Sampedro, Head of NSN's Customer Team.

In the UK, NSN states it will “manage, plan, expand, optimize and provide maintenance services for the Orange UK 2G/3G mobile network for the next five years”. The deal is designed to deliver improved quality of service and better coverage for Orange UK’s 15.9 million mobile subscribers, while driving operational efficiency.

This includes the entire range of 2G/3G network operations including network planning and optimization, spare parts management and providing turnkey network rollout services. Orange will continue to own and strategically plan its network.

NSN is also finalizing arrangements for a UK sub-contractor to provide first line maintenance services. As part of the mobile network operations outsourcing, there are plans to transfer 470 staff from Orange UK, with approximately 230 joining NSN and the remainder being transferred to a first line maintenance sub-contractor.

No details of the contractor were given.

Separately, Vodafone UK has outsourced maintenance and operations for it 2G and 3G access networks to Ericsson.

The contract includes the transfer of approximately 350 employees from Vodafone to Ericsson, scheduled for the beginning of May.

“We see this as a strategic long-term relationship, offering real operational and financial benefits allowing us, over time, to reinvest savings in delivering new products and services for customers,” said Vodafone UK CTO Jeni Mundy.

“Ericsson is the specialist in this area and will be critical in helping maintain our high quality network.”

It will be interesting to see if this contract is extended to other countries, which does seem to be in vogue right now.

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