• Monday, April 15, 2024
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BusinessDay

Telcos’ focus on QoE set to drive new managed service deals

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Mobile Network Operators (MNOs) are beginning to channel requisite resources towards improving the Quality of Experience (QoE), directly perceptible and felt by the mobile user, market observers have said. With the extensive use of new connected devices and the arrival of new technologies, mobile operators are facing higher expectation of end-users in terms of network quality and QoE.

In view of this, a fresh wave of outsourcing and managed services deals is expected to be consummated by mobile operators and telecommunication equipment vendors to enable the former meet customer demands.

According to the market observers, QoE has become a critical differentiator for telecoms companies, as they look to reduce churn and grow marketshare. This is even as revenues from voice services continually decline year-on-year due to regulatory and competitive pressures.

Average Revenue Per User (ARPU) for voice services is expected to decline steeply by around $5 per month over the next five years, down from $6-$7 in April 2013 and $10 in 2008. “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,” said Jean-Claude Geha, vice president of Ericsson.

“With rising smartphone and tablet penetration, there is a greater customer expectation for better service experience,” said Geha in an interview with BusinessDay. QoE is a measure of a customer’s experiences with a service (web browsing, phone call, TV broadcast, call to a Call Centre).

For quite some time, mobile operators in Nigeria have been bogged down by intense pressure from the telecoms regulator to enhance Quality of Service (QoS) levels. Earlier in the year, the Nigerian Communications Commission (NCC) had 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.

In a bid to achieve higher operational efficiency and boost network quality, Airtel, MTN and Etisalat all embark on innovative network optimisation initiatives. In the first half this year, the three operators were all involved in tower management deals in Nigeria – in a development that indicates the adoption of a business model predicated on reducing operational costs to free up requisite resources for service and marketing oriented activities, to further compete more effectively.

Etisalat Nigeria, last week, renewed its managed services contract with Nokia Networks for three more years with expanded services scope. Market observers are of the view that Etisalat’s move would open the flood gates for more managed service deals in the industry as operators strive to boost QoE.

Under the contract, Nokia Networks will manage the operator’s 3G and GSM networks and improve network efficiency, ensuring the best possible mobile broadband service experience for end users. Nokia Networks has been providing managed services to Etisalat Nigeria since 2008.

With Nigeria and Etisalat being a main focus in Nokia Networks’ strategy in Middle East and Africa (MEA), the telecoms company says it is committed to helping the telecoms operator provide world class mobile broadband services.

“This deal hits a large number of evolving managed services sweet spots, including the need for strong service performance, customer experience, security and optimisation in what is an increasingly multi-vendor and multi-technology environment,” said Kris Szaniawski, lead analyst, Intelligent Networks, Ovum, leading research company.

“As the telecoms network services industry experiences a second wave of managed services contracts, we see increased pressure on existing managed services relationships to become more customer-focused and deliver improved service quality,” he added.

As a consequence, Szaniawski further explained that “there are significant opportunities for telecommunications equipment vendors to deepen and strengthen their relationships with service providers in the country, and position themselves as close strategic partners.”

Matthew Wilsher, chief executive officer, Etisalat Nigeria, however said that the deal is in line with the company’s strategy to be the best QoS operator in Nigeria and to improve the operational efficiency.

“Compared to the previous managed service model, the new agreement covers end-to-end operations and maintenance management for all network elements at Etisalat sites.

“It has also improved Network Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) according to global best in class standards. Nokia Networks has met our requirements with its delivery capability to achieve our strategy; therefore we have renewed the contract with the company”, he added.

“Renewal of this contract underlines Etisalat’s confidence in our managed service capabilities in ensuring smooth network operations and maintenance,” said Igor Leprince, senior vice president and Head of MEA, Nokia Networks.

“Our strength in the global scale and expertise to manage complex networks will continue to help Etisalat Nigeria provide the best service experience for its customers,” he further explained.

Ben Uzor