Huawei: Telcos should focus on value creation rather than savings

Huawei is trying to convince communications service providers to shift their managed services goals from simply reducing operating expenditures so they can instead target value creation from new service offerings.

"The opex can only be reduced to a certain point," Leroy Blimegger, global president of assurance and managed services at Huawei Technologies, said last week at a London press event.

While the initial rush of managed services contracts that were signed five to 10 years ago targeted total cost of ownership and opex reductions, the scope of newer contracts is broadening, Blimegger said, according to Total Telecom's coverage of his comments.

Therefore, Huawei is promoting a new approach to managed services--called the "Total Value of Ownership"-- that goes beyond managing day-to-day operations and adds strategic guidance regarding top-line growth, customer experience and improved time to market for new services. "Implementing converged network and IT operations, robust processes, enabled end-to-end service operations and maintaining focus on delivery of new revenue streams are all key to the model's success," Blimegger said.

According to Kris Szaniawski, principal analyst for Informa Telecoms & Media, the need for new revenue streams is pushing telcos to the brink of a revolution in strategic focus. "Business agility, customer experience and new digital service developments will all come to the fore in this increasingly pressurized and competitive industry and managed services are the natural way to implement these changes," he said.

However, not all telcos are ready to shift their managed services focus from basic financial metrics and toward value creation. "Most are still doing it the old way," Blimegger said, though he contends that "a handful" are ready to hop aboard the new model.

For more:
- see this Huawei release
- see this Total Telecom article

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