LightReading Insider has recently published a paper on the trend of mobile network operators outsourcing operational tasks to external service companies. This includes maintenance of existing core and radio networks, network monitoring and operation, performance monitoring, capacity management, new network rollouts, introducing and running services and many other things. Very interesting to me, and since LightReading was kind enough to send me a copy, I took a closer look.
LightReading chose the term “Hollow Operator” for their paper. Interesting wording and it makes me wonder about how many operational tasks can be outsourced before the term “operator” no longer applies!? What is a network operator that doesn't operate its network anymore? A network owner?
One of the main reasons for companies to outsource work that is not at the core of their business to reduce cost, which, if it works out, makes them more competitive. Global services companies taking over operational tasks such as Alcatel-Lucent, Ericsson, Nokia Siemens Networks, Huawei and others add to this that their global structure allows them to grow the business by improving net subscriber revenue, making the network more operationally efficient, and can develop the right plan to evolve a network for future consumer demands. And a global structure they truly have. Ericsson states for example […], that they have 37.000 people working for them in their service division, 28.000 close to the customer and an extra 9.000 globally). Many of those people are likely to come from network management deals were network operator staff joined the service company when the contract was signed. From a technical point of view, a big advantage is that information and knowledge on how a network can be operated efficiently can be shared, for example by continuous streamlining of company wide processes as a result of what is learned by operating many networks.
Skeptics argue that outsourcing itself does not improve anything on its own. In the end, funding has a lot to do with how things develop. If not funded appropriately, outsourcing can quickly turn into degrading standards. Also, outsourcing is difficult to reverse in case one day the network owner wants to take back operation. Once employees are gone and operational procedures integrated into a different company, it's difficult to get employees and procedures back in house. Unless of course, the outsourcing contract contains clauses for such a circumstance. Also, outsourcing increases complexity. Any extras that would previously have been handed down the internal hierarchy is now an external business matter between two companies. That means such requests are answered with a quotation as it wasn't included in the original calculation in the contract. That doesn't help to speed things up. On the technical side, there is no network that is like any other. Each network operator has different components in different configurations and uses different software versions. In short, while processes for network management inside a service company are probably similar, each network requires dedicated experts to deal with that configuration which in turn limits to port the lessons learned from one network to another.
Many more things can be added to support and counter network operation outsourcing and I can highly recommend Lightreading's paper for further reading. I'll leave it at that for the moment but please feel free to add your thoughts by leaving a comment below.