Asian telco's next-generation-network partnership approach
Next-generation-networks (NGN) are being deployed by global telcos as a way to reduce costs, increase new service revenues, and retain existing customers in the face of increasing competition and technology changes. They are often also used as a platform to drive transformations to simplify the telco’s future business and operating model, before it is drowned by increasing complexity. However, for the Asian telco, the challenge in deploying NGNs was in striking the right partnership approach with its major network partners. It needed to minimize total ownership costs, mitigate implementation and transition risks, and ensure that knowledge and best practices are effectively transferred to the company.
Challenge
The company wanted to deploy a next-generation-network to stimulate new revenues in the areas of high-speed broadband and enterprise services to counter declining POTS revenues and replace its high-cost legacy network. However, a series of challenges needed to be addressed before any network could be rolled out:
- How to minimize the total-cost-of-ownership of the entire network, balancing heavy NGN capex investment upfront with migration costs from POTS to IP-MSANs and less obvious life-cycle, ownership, and opportunity costs
- How to mitigate various implementation risks, including operational risks such as inability to meet service levels during migration, market risks like slow take-up of new IPTV services, and commercial risks that include inability to achieve estimated cost savings from NGN deployment
- How to leverage partners' global expertise to ensure effective knowledge transfer and to build capability for the company’s technology and business functions
Approach
A.T. Kearney worked closely with the company over several months to develop and implement the NGN partnership approach. Key aspects of the approach included:
- Establishing the strategy — determining the nature of the required partnership, depending on the complexity of the technology, vendor supply market dynamics, and internal capability assessment
- Assessing potential partners — evaluating partners comprehensively through strategic, financial and technical dialogues and challenges, plus on-site assessments of partner performances, best practices exchanges, and complex total cost of ownership (TCO) model analyses
- Striking the deal — crafting and implementing the negotiations strategy
Results
The partnership approach was implemented and achieved significant break-through results:
- Cost savings of more than 30% over comparable benchmarks
- High-quality network with market-leading key performance indicators (KPIs) on deployment, migration, operations, and transfer activities
- Strategic alignment between partners and company on risk-sharing and capability-building
The partnership approach is viewed as a success by both the company and the partners, and has been subsequently rolled out to other networks.
Contact
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Soon Ghee Chua is a principal in A.T. Kearney's Singapore office.
