26 Nov 2009

Cost-efficiency and outsourcing major focus for operators in 2009-2010

Zain’s announcement this week that it is to outsource its East African networks (in Kenya, Tanzania and Uganda) to Nokia-Siemens Networks is not surprising considering the focus of the company on cost-efficiency. Chris Gabriel, CEO of Zain Africa, said in a statement that the outsourcing agreement was part of Zain’s Drive11 strategy of improving efficiency and network quality and that it will enable the operator to focus on its customers.
Mr Gabriel gave the opening keynote speech at the AfricaCom congress held earlier this month in Cape Town, and dedicated a large part of the presentation to the subject of outsourcing, a change from last year’s speech which focused heavily on the power of the brand. This year’s message resonated heavily with the audience and other speakers, as African operators are facing declining ARPU levels and looking at cost-efficiency strategies. The AfricaCom event was a great place to discuss them, with sessions on managed services, infrastructure sharing, call centre outsourcing, network deployment and sustainable solutions, as well as a number of companies promoting their products in the adjacent exhibition. Among them were the aforementioned NSN and its close rivals Ericsson, Huawei , ZTE, but also companies specialising on aspects of outsourcing such as call centre company PCCI, tower sharing solutions vendor Turkkule and more.
Gabriel and other speakers advocated new partnership models between operators and their vendors, and he is certainly making this a priority for the group as other deals have been announced in the last few months in its African operations (a five-year managed services deal with Ericsson in Nigeria announced in June for instance).
This will certainly be a major topic of discussion in the coming year: Informa Telecoms & Media predicted in their end-of-year Industry Outlook event in London today that network sharing and outsourcing was going to be one of the Top Ten major issues for operators in 2010. Informa’s top analysts announced that the telecoms industry should “expect further infrastructure sharing announcements during 2010 as operators attempt to extend coverage and reduce costs. Both network sharing and outsourcing will continue to gain momentum as mobile operators seek to reduce their capex and opex burden. Each of these individually is already an established trend but we can also expect to see more variations on a theme where the two approaches are combined.”
Cost efficiency will be one of the key topics discussed at events in the Com World Series in 2010, as well as broadband developments (with LTE gaining interest in emerging markets), value-added services (with mobile banking still a major issue, but also more on data), marketing and customer relations and more. I am currently working on the programme for our next West & Central Africa Com event, which will be held in Dakar, Senegal. If you want to be involved in the programme or send suggestions of topics and speakers to include, don’t hesitate to get in touch!