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Telecom Managed Services opportunity pegged at $8-9 bn

Announcement  |  New Delhi 

Managed Services globally has grown to about $190 billion in revenues with an expected growth rate of almost 14% year-on-year for the next couple of years, experts said at the 3rd International conference organised by Bharat Exhibitions on Managed Services.

“In India, the growth is higher - pegged at 19% per annum with revenues at $8-9 billion,” said Arpita Pal Agrawal, Executive Director – Telecom KPMG. India is expected to take up managed services in a much more faster manner than the global average, she said.

Experts at the conference said that it is important to move towards a model where everybody has a managed services partner. Agrawal said that one reason why companies prefer managed services in current scenario is that it helps train and retain capabilities.

HL Gupta, Head – Operations and Deployment (Network Services Group) Bharti Airtel said, “It's not new, almost 7-8 years old. We started with managed capacity and later from active to passive sharing.”

“When we tie up with vendors and convert them into partners, the role is converted from design to plan, build, operate and manage telecom,” he said adding, “always a long term relationship needs to be built with the partners.”

Gupta pointed out few benefits of Managed Services saying that it allows operators to focus on the customer base, core competencies and transfer risk to third party. “There is also increased subscriber revenue through high performing network and enhanced customer. “Functional expertise is the key criteria for selecting vendors and partners,” he said.

Pranay Misra, CTO, MTS South India Hub differing in his view said, “Managed Services in India is yet to go a long way as compared to European and other markets.” 

The major challenges in India, experts said are in terms of high fund requirement. As Agrawal said, “There is also the need for customisation which the vendor partner should be ready for.”

Stating the same fact, Vikram Tiwathia, Senior Director, Cellular Operators Association of India said, “Many operators have common managed services vendor. Now the challenge for these vendors is to gain the trust of the client companies regarding the fact that they are not offering the same solution to any other client.”

S Krishnan, CTO, Videocon Telecommunications said, “The service should provide business value beyond cost reduction and operational efficiency. Pro active problem solving based on mutual understanding and commitment is another factor driving the service' growth.”

“A partnership that works in both good and bad times is what is needed,” he said.

Moreover, all the experts highlighted that companies need a partner and not just an equipment supplier. “There has to be a sense of ownership and partnership,” everyone asserted.

“Managed Services is a fast moving $16-billion industry that is attracting telecom operators in every way by providing them services such as network operator set up, applications, etc. Operators are expanding their network and upgrading their infrastructure constantly to provide more services. In addition to this explosive growth in subscriber numbers and MNP is posing more challenges. To optimise capex and opex more and more operators are now forming strategic partnerships and outsourcing major part of their services to vendors, keeping only the core functions with them,” said Bharat Exhibitions Managing Director Shashi Dharan.

The session concluded with the message that there is a constant hunger for newer services. With MNP rolled out, customer churn and loyalty is going to keep the operators on their toes. Hence, the need for better services and value added services comes in. Keeping this in mind, it is imperative that operators opt for a set up where most of their services are taken care of by their strategic partners. Also, they should think of outsourcing HR management, advertising management, fraud management and customer satisfaction management.

Making it truly global platform to conduct business, Global majors engaged in Managed Services in Telecom sector - Nokia Siemens Networks, Amdocs, Ericsson, Alcatel-Lucent, Shaildhar Telecom, UBIqube & Luminous Teleinfra  participated in the event & shared their plans for India.

Among the senior representatives from the telecom operators – Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance Communications, TATA Teleservices, Sistema Shyam, Etisalat, Videocon Telecommunications and Uninor attended the conference.

First Published: Tue, April 12 2011. 09:34 IST