Ericsson and 3G Operator 3's Deal Only a Precursor

US Mass. : Ericsson and 3 UK announced a seven-year managed services deal through which Ericsson will manage 3's 3G mobile network and IT infrastructure.

Inset is Elizabeth Bramson-Boudreau quoted below.

his deal is the largest in Ericsson's history and includes the transfer of 1,000 employees from 3 to Ericsson UK. Specifics as to the exact dollar value of the deal were not provided by the companies involved, though Pyramid Research estimates that the contract value is in excess of $2.5bn.

Since Pyramid Research began analyzing the managed services and outsourcing market four years ago, their analysts have predicted that larger-scale, more ambitious deals such as this would become the norm. Pyramid Research's Elizabeth Bramson-Boudreau explains, "Operators in an increasingly competitive industry are struggling to manage their network costs and quickly launch new, revenue-generating services and technology solutions. Through outsourcing, carriers are able to focus on increasing the bottom line."

By partnering with their vendor suppliers, operators are able to reduce total cost of ownership (TCO) by as much as 20%, largely through a reduction in network OPEX, while relying on vendors like Ericsson, Lucent, Motorola, and others to manage their network operations and performance. This kind of strategic outsourcing frees up the operator to focus its remaining resources on product development, customer acquisition and retention, and other initiatives that will drive revenue growth.

About Pyramid Research's Vendor Services Program

Pyramid Research's unique expertise in the area of network OPEX is derived from ongoing interviews and direct contact with key industry players. Their market-leading Vendor Services Program offers critical insight into the priorities fueling operator decision making, and helps vendors position themselves to attract network outsourcing and application hosting and development contracts from operators worldwide. The program segments market demand for outsourced and hosted services at the regional level, projecting the most lucrative opportunities, and provides vendors with direct feedback from their operator customers.

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