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Achieving successful network sharing and managed network services

Mobile network operators continually strive to generate innovative ideas to excite consumers and fuel growth in usage and revenues. However, operators face significant challenges in maintaining their growth and margins. Rapid growth in data traffic, technological change, new forms of competition, regulatory pressure and smart devices all act to challenge the status quo.

Sharing a network with another operator or outsourcing it to a Managed Service Provider are two approaches an operator may employ to manage its costs to better enable it to meet these challenges. Typically, network outsourcing can reduce costs by up to 20%, with network sharing delivering even larger savings.

Network sharing

However, attempts to share networks often break down during negotiations or fail to deliver the desired benefit - even when the shared network is then outsourced. This observation is reinforced by our network sourcing survey researches operators' experiences of network outsourcing and sharing.

To develop successful network sharing arrangements, mobile operators most consider a number of key questions:

  • Feasibility: Would a network share erode the network as source of innovation and competitive advantage?

  • Scope: Does a full national RAN share give away all sources of differentiation? Or is the cost of doing so far outweighed by the benefits?

  • Delivery vehicle: Will a joint venture suit both partners?

  • Governance and charging arrangements: If partners have different requirements for service roll-out or service levels, what governance and charging arrangements will be needed?

  • Asymmetric asset contribution or traffic projections: how should this be catered for in the ownership structure or financial settlement arrangements?

  • Current vendor relationships: how will the network share leverage the parent company relationships?

Sourcing of Managed network services

Many operators have outsourced limited functional areas to Managed Service Providers.  The trend is to greatly increase the scope of these deals such that most future network procurement will come in the form of wide-ranging managed service deals.

Many operators are however not satisfied with how things have worked out. For example, many network vendors are still product and not service oriented, contracts include painful cost triggers for operators and governance does not keep up with changing requirements.

In the last five years, PA Consulting Group has completed over 20 successful network sourcing and sharing projects. Our network sharing experience includes helping two Irish operators share their networks and deliver substantial savings.

Our work spans the network sourcing life cycle, from initial strategy, through contract negotiation and supplier selection, to transition and transformation. We adapt our working style to suit yours and the situation you face. For example, we can work with your staff in an integrated team or, at the other extreme, act as an independent auditor of your managed service deal or as a broker to make network sharing deals happen.

To speak to one of experts about how you can achieve successful network sourcing and sharing, please contact us now.

Contact the telecommunications team

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