The Chicago Cubs have the best record in baseball, and now a major U.S. telco is outsourcing management of its voice network operations. All we need is for pigs to fly, and you can pack your bags for Judgment Day.
That is just how unbelievable it seems for Embarq to be outsourcing voice network operations center (NOC) functions to Nokia Siemens Networks. Not that it is a bad idea. In fact, it is a great idea whose time has come. Embarq has just carved a nice place in history for itself as the first major U.S. telco--or at least the first one with a network older than that Miley Cyrus kid--to make such a move, putting all of its faith and all of its reputation for voice quality and reliability (that's "five nines" to you and me) in the hands of a network equipment supplier.
Managed network outsourcing is nothing new itself. Technology companies outsource everything now--IT, manufacturing, product development. Communications networks are just the latest part of that trend, though for the most part, the concept of infrastructure suppliers taking over management of public networks has been limited to the international wireless market. It is a big business, drawing all the big vendor names--not only NSN, but Ericsson, Alcatel-Lucent and others. These deals can vary by size and scope and level of responsibility, but whether you call them managed network projects, managed services project or prime network integrator projects, they represent a growing business opportunity that has galvanized many vendors and changed the way they operate.
For carriers, the benefits include network management cost savings, freedom to focus resources on rapidly-changing core business areas, and the ability to place accountability in the hands of a trusted vendor partner. Perhaps the idea of a telco putting aside responsibility for voice--the original core business--is still a bit shocking, but what is a telco to do when it has to report quarter after quarter that its landline voice business is continuing to decline? Embarq is not getting out of the voice business, but it realizes that innovative measures need to be taken for it to stay competitive in the broader telecom business.
Outsourcing voice management functions is not necessarily a sure thing, not yet. Managed network deals pose challenges for vendors, who often take on carrier employees in the process (NSN is hiring 265 Embarq employees as part of this deal). It makes sense, but it also presents an additional cost for the vendors involved. As for carriers, they still do run the risk of losing their identities a little if they do not make a smooth transition. They need to be energetic about marketing themselves as different kinds of companies, while not looking like they are kicking voice out the door. If either party fails to hold up its end of the proposition, NOC outsourcing could prove to be a fad. Right now, it looks like the future.
- see this story at Telephony