Editor’s Letter

01 December 2010 | Tim Phillips


Welcome to Capacity Outsourcing and Managed Services Business Briefing. This is the fourth year Capacity has produced such a briefing – testament to the new realism that changing technologies and the tough climate of competition in a globalised environment has brought to wholesale telecoms. There probably isn’t a telecoms operator today whose business model doesn’t account for either contracting part of its operations out to others or for providing a service to other operators.

Economic conditions and changing technologies continue largely to dictate the way carriers view outsourcing opportunities. The last couple of years have been tough for telecoms and while the global economic slowdown may have slowed growth, it hasn’t slowed the need for carriers and operators to make tough decisions on how they create the maximum return on their opportunities. If anything, it has accelerated the emergence of radical new business models.

In the wireless sector, the transition to 4G and LTE is creating a need for operators who can separate the value of a network from the value of the services provided on it – and maybe even operators who prefer to lease only the network capacity they need. For traditional carriers, cloud services look like the services they have been providing for years – but with a new layer of service and support on top.

It isn’t just that the technical challenges involved in creating outsourcing relationships have become more urgent. In times of high unemployment and consumer unease, the politics of outsourcing, which never went away, are back under discussion.

There’s no doubt that those carriers and operators who make the correct strategy decisions are primed for high growth as economies recover around the world. Indeed, some of the emerging economies – which were hit least by the crisis – have resumed strong macroeconomic growth already. And the operators who are making the most of the opportunities which are emerging in these markets are doing so with a lean, pared-down approach to both the services they provide, and to the services they contract to others.

It’s an approach that some of the established carriers in Europe, the US and Asia will follow. The evidence is that many have already taken the best practice from the IT business, where partnership is a necessity in innovation from day one, and are applying the lessons to their own business. Because, as some of the most successful companies in either industry show, outsourcing can accelerate, rather than impede, innovation.