1 - 15 August, 2003

Strategies & Consulting (IT)
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Global Telecomm Carriers Rule the NSP Market

Global telecommunications carriers dominate the revenue of the network service provider (NSP) space of the xSP spectrum, to the tune of more than 70% in 2001, shrinking in share slightly to 66% by 2006, a study by IDC shows.

Several years ago, carriers began joint ventures with each other, which should have given them the ability to leverage the disparate regional networks. However, these partnerships have not done so well. Both Global One and Concert are dead and Asia-based Reach is floundering, a sad testimony to just how difficult joint ventures are, especially when they involve large, international companies struggling with the cultural, regional, and technical challenges of integrating their service offerings.

Carriers try to focus on what sort of services they can bring to these MNCs at the best prices that can be offered and yet not undercut their revenue to the point of being unable to maintain and upgrade their networks for continued service improvement.

Many carriers (such as Equant) are looking to add more traditional consulting, such as return on investment (ROI) analysis, network integration, and technical support, to name a few. However, in order to deliver such services effectively, it is wise for carriers to partner with companies that are already skilled and experienced in delivering those services to customers. This would bring back into play the required partnerships that carriers will need to have, but it also offers them many challenges in the long run.

The next couple of years will be telling for the carriers. They have to learn to work in partnerships at new levels. They still need to maintain, manage, and integrate new networks and upgrade old ones, all the while promising superior service level agreements (SLAs). We will probably see fewer of them five years from now. And while a few may have an edge, it is yet unclear as to whether they will keep it.



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