Vendor Sourcing: a decade of changes?

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If you fell asleep at MWC in 2004 and woke up in 2014 there is a good chance you would barely recognize the exhibitors; indeed, you might think you were at a different conference altogether. Telcos are still in the same business of operating networks and offering communication services as they were 10 years ago. […]

If you fell asleep at MWC in 2004 and woke up in 2014 there is a good chance you would barely recognize the exhibitors; indeed, you might think you were at a different conference altogether.

Telcos are still in the same business of operating networks and offering communication services as they were 10 years ago. But now they are doing so amid fast-evolving consumer appetite for new applications and services, demanding ever higher bandwidth. Telcos are being driven to invest in service innovation and next-generation networks against a backdrop of falling revenue growth and competitive over-the-top service providers.

As a result, they are having to reassess how they buy and deploy technology. A desire to keep services innovative and cost-effective, and to reduce the complexity of provisioning, means that many are looking to consolidate their partners and platforms. Increasingly, cloud solutions and multi-tenant IT and processes platforms will enable them to scale services cost-effectively and rapidly according to demand.

Greater customer desire for mobility is also driving sourcing trends. According to Infonetics Research, mobile operators globally will spend $79 billion in 2017 on outsourcing network tasks to equipment vendors as they try to keep Opex under control and satisfy end-users. Operations outsourcing is projected to grow at an 8% compound annual growth rate from 2012 to 2017, the highest of any service type.

Telcos need partners who can help them to deliver multiple applications and services to multiple devices across different networks, all the while ensuring quality of service and safeguarding security. Often these services will not even be owned by the Telco, but rather by a third party, so they will need to be able to manage new partnerships, too.

The industry is still working through how best to develop partnerships to harness the benefits of change. Take the right steps now to put the right sourcing and vendor management strategy in place.

For a more detailed discussion please contact me, or for further information on our Global Telecoms Practice, please visit: www.capgemini.com/telecom-media-entertainment

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