Managed services in telecom -- $4.2 billion business opportunity

NEW DELHI, INDIA: Managed services in the fast paced telecom revolution would be a 4.2 billion dollar business opportunity by 2014, according to experts at a conference held recently. Department of Telecom Secretary P. J. Thomas said Managed Services was emerging as a new science. “This is a great development in the great telecom story” he added, inaugurating the event.

“Telecom sells like fish” but the operators have found that it is more cost beneficial to employ fishermen to catch the fish and for them to focus on marketing it, said Bharti Airtel senior VP for Networks Shyam Prabhakar Mardikar.

Telecom customers doubled in the last two years from 300 million to 600 million but the average revenue per user has exactly halved from Rs 280 to Rs 140, the Airtel executive pointed out. So the operators of the telecom service are making the same amount of money as before despite the doubling of the customer base.

This “is the great growth paradox in telecom” and the focus now was on breaking through the constant level of 400 minutes per user, as the operators wrestle with fast changing technology and explosive scale of growth of network connectivity and look to rural expansion as the next big step for them.

Outsourcing jobs to those who know them best and concentrating on making services as user friendly as possible was helping operators to cuts costs, Mardikar said. “We now sell value added services” and networks were being managed without the operators owning them."

Setting the road ahead for the new growth industry of managed services, Comviva CEO Manoranjan Mohapatra claimed that India “is the pioneer in manages services in telecom”.

This new opportunity was largest in network, then in IT and yet to grow in value added services even where alone it would rise to $400 million business by 2014, the Comviva chief executive predicted. As the number of operators was crowding into the telecom service operation, service differentiation was becoming critical while value added services, a complex area of management was promising the maximum addition of revenue growth. Interdependency of VAS applications was set to form a service.

Mohapatra also predicted a bright future for managed services in the country as the operators were seeking to drive revenues along with the expansion in their customer base breaking the paradox of falling per user revenues in telecom development.

The public sector telecom service providers in the country were also now considering moving towards outsourcing non-core services in place of their current position as integrated service providers setting up networks and managing everything from networks to customer end services, said R. K. Aggarwal, director (consumer mobility), BSNL.

However, he conceded that the public sector units had their own problems in making this move needed to compete with the private sector operators. He dwelt on the problems of this necessary shift in his presentation at the conference, pointing out that winning over the staff in effecting this necessary change was critical.

Describing managed services as an “end to end partnership” between the service operator and the many entities managing their side of the entire service, Vikas Arya, network operations director of Sistema Shyam Teleservices suggested operators should take to “creating modeling” and “thinking outside the box” to overcome the enormous problems of integrating the work of these different partners. Mallikarjuna Rao , chief technology officer of Aircel, also analyzed the challenges in moving over to a fully managed services model of proving telecom services.

Urs Pennanen, Head of India region, Nokia Siemens Networks, added: “We are privileged to be part of this unique platform to share our experience and thought leadership in Managed Services, built through 230 MS contracts and more than 80 multi-vendor MS operations globally. Being the number one managed services provider in India for wireless networks, managing 140 million subscribers for top seven private operators every day and every night, Nokia Siemens Networks is pleased to provide an insight into this global trend that is now catching up across multi-vendor, multi-technology, multi-layer networks as well.”

The experts conclusion was that managed services in India was emerging as a new network driver in the exploding telecom market in the country that is moving to a billion customer base in the near future, as Shashi Dharan, managing director of Bharat Exhibitions, organizers of the conference, said.