Putting the trust into transformation

Being a successful operator used to depend largely on managing the network, but today it’s about managing customer relationships. Transforming from operator to service provider demands new business models.

At some time or other, most industry sectors have undergone a period of profound and rapid change, forcing companies to transform their entire business. Currently, it's the turn of the communications industry.

The rise of modern communications as a force for economic good is creating spectacular growth. The sheer pace of social, economic and technological change is generating business opportunities everywhere.

The phenomenon of social networking; the convergence of telecoms and media; accelerating innovation in content and applications; hundreds of millions of new subscribers in new growth markets; and the bundling of mobile, fixed, cable and TV services are all helping to create an insatiable hunger for communications from us all.

Yet such opportunities are also opening up the market. Operators face intense new competition, not just from conventional industry competitors, but also from new entrants and existing companies extending into new areas. With the rise of the Internet, boundaries are blurring, leading to many new providers, partnerships and business models.


Efficient innovation is essential

To survive and thrive, service providers are becoming more innovative, developing fresh services while also improving their operational efficiency. Running at odds with the cost-cutting pressures is the need to invest across a landscape painted by increasing technological complexity. Shortening technology lifecycles leave little room for error.

"Multiple forces are reshaping end-user expectations," explains Kai Konola, Head of Strategy and Planning, Nokia Siemens Networks. "The past 15 years has been a period of great success for communications, even when the Internet bubble burst. But now, we all need to change radically. New laws of nature apply."

Konola himself has been charged with seeing through a radical transformation within Nokia Siemens Networks, a process that is affecting everyone in the company and all its business operations.

"We have been working to create a whole new set of capabilities to help the industry reinvent the connected world. We have invested heavily in services, creating global capabilities and changing our organization to better fit the needs of our customers. We are driving ourselves to become the service provider's trusted partner, offering better products and services, and being more proactive," says Konola.

Different regions, different challenges

The key demand for service providers in new growth markets is managing their own operations to cope with the rapid growth of lower-ARPU (Average Revenue per User) subscribers, while still achieving profitability, says Konola: "They need new ways to run their businesses in extreme conditions. Fortunately, most are not weighed down by the need to change established processes put in place during decades of operating their own networks."

In mature markets, service providers are experiencing slowing growth and many are looking to find the next engine of expansion. Innovative services are the answer but can entail long development and adoption cycles. Meanwhile, the market demand for improved customer experience means that investments are needed in network operations, customer care, processes and branding.

Redistributing roles and responsibilities

The solution to these challenges lies in finding new ways to share the responsibilities of network and business operation, taking on partners with the insight and skills to help win more value from local markets. It's about sweeping away complexity to produce a more flexible business model.

The communications industry is starting to embrace outsourcing widely, a business model well-proven in other industries. The banking industry outsources its entire ATM network, while most major corporations outsource their IT systems.

"As a partner, we offer a long history of success in transformational outsourcing, bringing best practices, established processes and proven contractual frameworks from around the globe," says Konola. "One key consideration in outsourcing decisions is to manage risk. The greater the experience and the wider the capabilities of the vendor, the less risk there is likely to be."

Managing risk is at the heart of the decision to adopt a new business model for many service providers. "They need to be sure that handing over network operations to a partner will not reduce service levels for their customers," comments Konola. "Yet far from lowering the quality of service, we find we can improve the level of end-user service substantially."


A convincing story

A proven track record is vital for any vendor offering itself as a business partner, agrees Rajeev Suri, Head of Services, Nokia Siemens Networks.

"We are running many managed services projects globally and can show in great detail our methodology, how we have saved resources and costs for the service provider, and how we are able to ramp up operations smoothly."

"We also bring huge benefit of scale with more than 20,000 services professionals and worldwide coverage that allow us to find synergies and take away costs from service providers' operations," says Suri.

Today, the need for transformation has never been greater for operators. From helping to define commercial and technological strategies, to major managed services projects, Nokia Siemens Networks is well placed to be the transformation partner of choice for service providers in all markets.

Konola concludes: "Our message to service providers is to be open to the kind of innovation that we can bring and which will help you to reinvent your business success."