A billion wireless subscribers rely each day on a network operator who never sends them a bill or makes them an offer. Ericsson now manages networks covering a billion people, customers with whom the company has no direct relationship. The world’s top vendor of wireless network equipment now has more than 300 contracts to manage that infrastructure on behalf of carriers.
“It does free up the telecom operator’s time to focus on their customers and that should never be underestimated,” said Bradley Mead, head of Ericsson’s managed network services division. Mead has grown the division from a few hundred thousand subscribers less than ten years ago to a billion people today. A quarter of those subscribers are in Europe, 21% are in the Americas, 21% are in India, 13% are in Asia and the rest are in Africa and the Middle East.
ABI Research estimates that the market for managed services for mobile network operators is currently worth $25 billion. The firm says that IT managed services represent roughly half the market. Top providers include Ericsson, Alcatel-Lucent, Huawei, ZTE and Nokia Siemens Networks.
Mead said carrier migration to LTE can be a driver of new managed services contracts. “If a customer is going through a technology shift, that could be a decision point that could steer them down a managed services path because they could access some skills and competence,” he said.
A new perspective
Like 25,000 other Ericsson employees, Mead came to the company from a telecom operator. He said that the operators he works with now are starting to look at their business in a fresh way, with decisions driven less by technology and more by business strategies based on customer experience.
“[Carriers are] using data services to drive high customer experience and high customer satisfaction,” he said. “The Vodafones, the Telefonicas, the Sprints of the world starting to think that way and make that shift.”
“The foundation for managed services … is to save money and gain efficiencies, but today that is more of a table stake if you like,” said Mead. “Customers are looking for much more than that today. They are entering managed services [contracts] to change their environment.”
Mead offers the example of Three, a European operator that worked with Ericsson to beat its competition to 3G. “As a disruptor coming in they had to keep their costs under control but they had to differentiate themselves in the market,” said Mead. “They were the leaders in 3G, with very advanced thinking around data services and what 3G could mean to consumers.”
The customer is king
Now LTE is offering carriers even more opportunities to enhance their customer offerings. “What’s behind this is the end consumer is driving everything that’s going on in the whole connected world,” said Mead. “If you start to measure consumer services and end consumer experiences you will drive different decision making from a business and operational sense.”
For example, operator approaches to prepaid services are now more focused on what the user experiences. “Each [carrier] customer will have implemented prepaid in a different way in their network, and depending on how they implement it, it will create a certain experience,” said Mead. Implementation, for example, can effect how long it takes the customer to “top up.”
Mead sees the shift to customer-driven business decisions as the evolution of managed services. “We had a vision that managed services was something the industry needed and operators needed. We are going on a similar journey here,” he said. “We have a vision that this whole notion of customer and consumer-centricity and the experience we create together with managed services relationships for telcom operators is going to be important going forward.”
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