Selective outsourcing

26 Apr 2006

Nick Pilbeam, Motorola's MD of professional services for Asia Pacific, questions the long-tem viability of network outsourcing but sees opportunity is highly specialized services and a move toward asset optimization

Wireless Asia: What is your take on the push to outsource network services‾

Nick Pilbeam: The jury is still out on if wholesale outsourcing is cost-effective. Once an operator finds that a vendor has certain skills, the vendor is then locked into that operator as if it is part of that operator's business. Then you don't have the ability to redeploy those skills elsewhere. So it is an interesting, obscure movement from the operator world to the vendor world - once it's been commercially moved, it physically just goes back to where it came from, especially the highly-skilled competencies.

There are cases where an operator, which will remain nameless, has outsourced but after two years realized they lost control of a lot of their business operations, so they took it back in-house. It will be interesting to see how many customers do that, especially if there is a change in some issues around services deployment and they integrate certain IP features with certain SS7 elements. As the sophistication goes up, the ability to just ride that network changes because of all the things we do these days - it's no longer just a voice circuit and SS7s.

What is Motorola's approach‾

We are not pushing [outsourcing] and are being very selective and are very focused around core competencies. We see opportunity in outsourcing certain parts that have technical aspects, such as security as it become more complex as well as optimization.

How big is the opportunity‾

I think there is a large opportunity, but is it a sustainable opportunity is the question.

But operators are certainly showing interest these days.

There is dependence today I think for raw talent and raw ability to service customers, and customers aren't finding it any easier. So for things like security, and it's not just ourselves, we will have a specialist group - the network security group, the optimization group, the IP group. But you'll also see I would suggest some very specialist companies over time, where those skills come to migrate forward, because people are saying, 'hey we don't have to do this in a big environment, we can do this as a highly specialized service.' For example, things like SS7 in terms of networks. We know it's been around 30 years, but it's difficult to find highly skill engineers. And once you get a hold of them, you've hold to keep hold of them because they can make an enormous difference to network performance.

Where do you see the potential‾

There are a lot of platforms available on the market that can actually change the dynamic of the use of that infrastructure. For example, an operator can upgrade an existing switch with a software-based HLR, which will provide many business management functions not possible with a switch-based HLR. This kind of upgrade allows a whole different range of control over the network operation in SIM management, subscriber management, number portability, fraud detection and a whole raft of in-house controls that would actually better utilize the assets.

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