Rising concerns over network quality, performance and customer experience are compelling Mobile Network Operators (MNOs) in Africa enter into shared services contracts worth millions of dollars with experts, who now assume responsibility for activities such as designing, building, operating and managing day-to-day network operations, said Jean-Claude Geha, vice president, Ericsson, at the Mobile World Congress (MWC) holding in Barcelona, Spain.
For quite some time, mobile operators in Nigeria have been bogged down by the country’s harsh operating environment, as well as intense pressure from the telecommunications regulator to enhance Quality of Service (QoS) levels.
Earlier this week, the Nigerian Communications Commission (NCC), asked India’s Airtel, South Africa’s MTN and national carrier, Globacom, to pay a cumulative N647.5 million as fine for failing to meet the Key Performance Indicators (KPIs), for QoS in the month of January 2014.
The three companies were also barred from selling Subscriber Identity Module (SIM) cards, with effect from 1st till 31st of March 2014, until KPIs improved. In view of this, operators are under pressure to differentiate themselves in a highly competitive environment – a trend that is driving the adoption of managed services in Africa.
According to Geha, a network performance expert, customer experience has become the critical differentiator for operators looking to reduce the churn, keep and grow marketshare. “Years ago, when mobile telephony emerged, people settled for certain quality, they accepted drop calls and accepted average data transmission and coverage. That’s not the case anymore.
“ With rising smartphone penetration, there is a greater customer expectation for better service”, said Geha in an interview with BusinessDay on Wednesday. Managed service is the practice of outsourcing day-to-day management responsibilities as a strategic method for improving operations and cutting expenses.
This can include outsourcing HR-activities, Production Support and lifecycle build/maintenance activities. The person or organisation that owns or has direct oversight of the organisation or system being managed, is referred to as the offerer, client or customer. The person or organisation that accepts and provides the managed service is regarded as the service provider or MSP. Typically, the offerer remains accountable for the functionality and performance of managed service and does not relinquish the overall management responsibility of the organisation or system.
According to the Ericsson VP, operators are turning to managed services and outsourcing not only to reduce their operating costs, but also to free up requisite resources for service and marketing oriented activities and transform business models to further compete more effectively.
“Today, the driver is not cost; one of the drivers is cost. It is more about competence, knowledge sharing, and taking advantage of the latest technologies.
“It is about improving customer experience, in order to grow market share”, he stated. Just seven days ago, MTN Nigeria, signed a five year managed services contract with Ericsson. MTN is the largest mobile operator in Nigeria and West Africa, with over 45 million subscribers.
“This agreement not only extends Ericsson’s managed services leadership across Africa, but makes Ericsson MTN’s largest managed services partner on the continent. Under the contract, Ericsson will assume full responsibility of the management, optimisation and field maintenance of MTN’s network infrastructure in Lagos, Abuja, Enugu, Port Harcourt and Asaba, which represents 75 percent of the network.
With Ericsson taking over the day-to-day operations of the network, MTN is able to focus even more on its core business; providing a superior customer experience across all its network offerings.
“This engagement with Ericsson is a logical step forward in our strategy execution and is consistent with our commitment to deliver a bold new digital world to our customers across Nigeria”, said Michael Ikpoki, chief executive officer, MTN Nigeria.
According to him, leaving the management and maintenance of the company’s infrastructure to Ericsson will allow it to focus even more on adding value to the customer experience on its network.
“We consider this partnership a joint investment in the growth of the telecommunications industry in Nigeria and a great opportunity to strengthen ICT knowledge and specialisation locally. Ericsson is the global leader in the managed services space and the right partner for us”, said Ikpoki in a statement.
Recently, Chinese firm, Huawei announced that it has been awarded a new managed services contract by Etisalat Nigeria, covering an expanded maintenance scope for both passive infrastructure and active infrastructure (SDH/PDH nodes).
According to the firm, the five-year deal also includes site physical services, passive maintenance of core infrastructure and maintenance of both Huawei and third-party SDH/PDH nodes in all areas where the vendor’s radio access infrastructure is deployed.
By: Ben Uzor Jr