As part of a course called strategic leadership, a group of us studied Sunil Bharti Mittal. I was mostly involved in doing research on AirTel’s move of IT outsourcing as well as network outsourcing. You can check out the output of our work here.
Telecommunications products and services are getting more complex every day. Therefore, it is not surprising that the problems faced by telecom customers is increasing as well. If you have ever called up a telco call center when faced with a complex technical problem, you will very well appreciate the horror of the situation.
In most companies, the IT department also handles telcom assets. I also see that most big companies tend to outsource their IT needs. These companies also usually have water-tight SLAs with their service providers. Hence outsourcing merely their telecommunications requirements may not make sense for such companies.
For smaller and medium sized companies, however, outsourcing IT may not be feasible or even necessary. In such situations, does it make sense to outsource the telecom management? Telecom asset management can be a chore for most companies (unless they are service providers). This is not just due to plethora of devices a mid size company would need to service their telecom needs, but also due to the pain of having to keep the devices updated (having to deal software versions of various devices etc.). Given these factors an intermediary like an outsourced telecom management firm akin to outsourced IT firm may be of some value.
How do you make money in power, transport and other such “infrastructure” industries? Most likely, by doing what you have to do most efficiently (i.e., at lowest cost).
The case I am interested in is that of telecom industry. Telecom industry is seeing commoditization of its services. Broadband connections, for example, compete on price per bytes moved. Only the most efficient bit-movers would win such a game. Voice operators compete on price per minute. While this seems a little more flexible than the price per byte owing to the fact that bytes required to carry a minute of voice may vary on quality of service and compression, it seems unlikely that operators aren’t already on efficient horizon in these technical aspects. Only mobile-VAS services seem to escape this price-per-unit of bandwidth paradigm. Mobile VAS in India has so far been a small percentage of operators’ revenues.