Tuesday, June 23, 2009

Who’s My Mobile Network Provider?

Managed Mobile Networks has changed the landscape for all communication, inside and outside.

Just recently, both Ericsson and Nokia Siemens Networks (NSN) announced monster service deals in Asia, Europe and in North America. With “monster deals” I mean any deal over $250M. Most of the larger deals extend over period of 3 to 5 years and thus the contract can be worth Billions.

In a previous post “Managing our Future” (April 20), I highlighted the tremendous growth we have seen for mobile managed services just since 2004 (5 years). The growth will continue to the point where more subscribers are indeed managed by vendors than operators. An article in NY Times last April did indeed put this into perspective highlighting that “a combined 355 million customers” are indeed networked managed by Ericsson and Nokia Siemens Networks even though their subscriptions are with T-Mobile, Vodafone, etc.

Recent reference points (June 2009) re: this trend:

NSN Sees Managed Services as $277B Market

AlcaLu, HP Combine on IT

Ericsson exclusive contract with 3 Italia

From what I’ve been able to gather, managed network services continue to extend into North America. Though all details are not available, it’s expected that Sprint will continue to “sell off” its network to Ericsson and NSN (which begs the question: "for how much longer will Sprint as a brand be around?"). In fact, hundreds of Sprint employees will soon wear Ericsson badges and manage Sprint subscribers as part of an outsourcing deal between Sprint and Ericsson. Why stop there? Soon, NSN, Ericsson and ALU (and now with support from HP Global Services) will manage majority of network assets which change everything for box and software vendors alike. Who do you sell to when the network is managed by someone else? Is the operator in charge or is it the SI or the company who manage the network? Also, the services organizations from these larger OEMs may indeed send out cost competitive bids to its former competitors to get the best price for the network.

Even though the following ‘scenario’ would appear unlikely, it’s indeed feasible (an example).

Ericsson needs to expand and improve network services (capacity and # of subscribers to total 300M) for its Western Europe network where it serves T-Mobile, Vodafone, Telefonica, etc.


Core routers/security by Cisco

BTS (Macrocells) and Metro Picocells by Ericsson

Femto AP and SGSN/GGSN/gateways by ALU and NSN

Installations: IBM Global Services + Ericsson

So, the day will come where an operator no longer can demand that ONLY “operator A’s traffic traverses the network managed by the Mobile Network Service Provider (MNSP). Much like Sprint is providing wholesale access to its CDMA network in North America, NSN and Ericsson (soon Huawei and ALU as well) will start to do the same.

The MNSPs will provide wholesale access to small and large operators who are willing to pay for per-subscriber or per Gb of traffic over its network. That’s right, “its network.”

The total market for mobile managed services will double from $250B to $500B within 2-3 years. In a previous post, I stated that the market will reach $1 Trillion by 2015. That’s not so far-fetched just a couple of months later is it?

I am now more convinced than ever before that the landscape for network services is changing forever. Network providers (will) hold the key and mobile operators become “marketing brands” to the consumers.

Who’s My Mobile Network Provider? Will we see NSN, Ericsson and ALU branded phones and services one day? You betcha!


No comments:

Post a Comment