What criteria are operators looking for when shopping for a managed services partner?
They look for someone who can run the network the same as or better than themselves, who can provide global scale, provide global benchmarks, has a proven track record and help them reduce their costs. Lower opex is a driver for most operators around the world, though the reasons for doing it vary. In Europe it’s a case of finding ways to accelerate transformation of the organization as they become more data-centric, and move to things like cloud services and working with OTT players, which is not an easy transition for them. In Asia, operators tend to be more concerned with improving process efficiency and implementing best-in-class tools.
What does Ericsson bring to the managed services game that the competition doesn’t?
We have the global scale, and we have the credibility of running multi-vendor networks in more than 55 countries, supporting more than 800 million subscribers. We understand the complexity of the network better than anyone else in the industry. We have been in this business for over ten years now. And we’ve invested over $1 billion in developing best-in-class tools and processes that deliver the best performance even in multi-vendor networks, whether there is Ericsson equipment or not.
The people aspect is important too – you need people who can interact well with the operators, and we have over 20,000 people in Ericsson doing managed services who were in-sourced from operators around the world. That’s important for operators because they want to work with partners who understand the business and the culture. That's why we're the world leader in this space. We signed 54 managed services contracts in 2010, and in June we were named Telecom Managed Service Provider of the Year by Frost & Sullivan. And in Q1 this year alone, we signed nine managed services contracts, five of which are extensions and expansions
What are Ericsson’s plans to further develop its managed services portfolio?
Well, managed services is no longer just limited to telecoms operators as such. We are diversifying, and taking our learning from pure telecoms networks into other areas. Apart from things like data centers and the cloud, which I mentioned, we’re moving into areas such as broadcast media. For example we have a contract with MediaCorp of Singapore, and we are running TV4, a TV station in Sweden. And that diversification will continue to grow as we expand into other areas, such as SaaS, for example.