Introduction...... Managing Services in the Telecom Industry

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The continuous change in consumer demands for new technology options and the increase in competitiveness between Telecom operators within the same market have forced those operators to think about having partnerships with other specialist operators to help them not just in operating their businesses in order to follow the fast development in the market but also to reduce costs and improve operational efficiencies.

Those services providers are responsible for managing processes, by taking a full or part of the responsibility according to the agreement with the operator and functions them in the most effective way that will bring the operator the maximum return in terms of the reduction of costs and increase in the effectiveness of these processes. However, selection of those service providers who will be considered as suppliers or partners is very important in any industry as it affects the whole business in terms of what is delivered to the market, customer satisfaction and the profit generated.

This partnership has been developing due to the need to improve the network performance in order to follow the market and also to provide new options for customers in the most efficient way that will put the operator’s company in the front among other competitors.

This kind of partnership has to be based on bringing the best options for end users (customers), through a win-win relationship, where operators will be able to achieve their goals (includes decrease of end-user tariffs and improvement in the cash flow) by the support of those managed services providers who have to be chosen based on good knowledge of the market demands and the capabilities that operators have.

This partnership has been growing very fast, which made the competition between service providers more challenging to provide better options for their customers (telecom operators), and find better ways to reduce costs. This encouraged operators to handle more responsibilities to those providers and helped them to focus more on specific and narrow areas regarding customer care and marketing and sales branding, keeping in mind that services providers will do their job in the right way. However, the growth in these partnerships is shown in the shift in operating functions which were widen to include billing, network operation center field operations and network build, while it was more concerned with the research design and manufacture.

This is accompanied with the involvement of customers in the creation process to ensure better satisfaction, improve the value chain that focuses on continuous value exchange, meeting customers’ expectation by working with them and widen the design process to be co-created with customers to ensure loyalty, maximized profit and continuity in the market.

“It is estimated that Managed Services agreements can typically provide savings of 20 percent of telecom operators”

References:

[1] Normann, Richard and Rafael Ramirez, From Value Chain to Value Constellation: Designing Interactive Strategy, Harvard Business Review, 71 (1993) 65.

[2] Stephen L. Vargo and Robert F. Lusch, Evolving to a new dominant logic for marketing, Journal of Marketing, 68 (2004) 1.

[3] Ericson, Managed Services’ Impact on the Telecom Industry, 2007.

[4] Robert F. Lusch, Stephen L. Vargo and Mathew O Berien, Competing through service: Insights from service-dominant logic, Journal of Retailing, 83 (2007) 5

[5] Xiang Zhang and Rongqiu Chen, Examining the mechanisem of the value co-creation with customers, Int. J. Production Economics, 116 (2008).

[6] Chickery J. Kasouf, Jenny Darroch, Clase M. Hultman and Morgan P. Miles, Service dominant logic: Implications at the marketing/entrepreneurship interface, Journal of Research in Marketing and Entrepreneurship, 10 (2008) 57.

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