Telefonica names Alcatel-Lucent as its OSS partner

Telefonica (NYSE: TEF) on Friday appointed Alcatel-Lucent's (NYSE: ALU) professional services division to consolidate its diverse set of network management and back office systems onto a common platform.

As a service provider that operates in multiple countries, Spain-based Telefonica has two main challenges: Not only are its operational processes different in each country, but they also use a number of different software platforms.  

To simplify the telco's overall operations systems, Alcatel-Lucent's professional services group will combine the network management systems into one common software platform. This platform will be integrated with the remaining element of Telefonica's network operations without any impact on existing customers.  

Upon completion, Telefonica will have what it says is a more efficient way to conduct network monitoring and management to more rapidly resolve network problems that arise on its wireline and wireless network assets.

Besides providing necessary software, Alcatel-Lucent's professional services group will help the telco create a set of best practices and operating procedures. It will also oversee the platform for the next few years.

By making this move, Telefonica said it will be able to achieve three goals: streamline operations, improve service quality, and optimize costs.

"Together, over the course of the next few years, we will achieve a new level of harmony and consistency that will make us more agile and efficient in managing our networks to respond to our customers' needs, to improve service quality and offer the highest availability with customer-focused, integrated processes," said Enrique Blanco, Telefónica's Global Chief Technology Officer, in statement.

With the European economy is in transition, a factor that's made service providers delay spending on new equipment, this deal is significant for Alcatel-Lucent as it looks to turn around the company and fight off hungry service rivals like Ericsson (Nasdaq: ERIC).

During the second quarter, the vendor was forced to cut 5,000 jobs across all of its regions as part of a company-wide restructuring process after reporting a Q2 loss amid slow telecom equipment sales.

Despite the losses, the services sector overall has been a growth magnet for the Franco-American vendor. While Q2 revenues for its S3 (Software, Services and Solutions) declined 1.7 percent to €1.05 million ($1.38 million) year-over-year, on a sequential basis they rose 8.7 percent to €969 million ($1.27 billion).

For more:
- see the release

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