Alcatel takes on outsourcing market

Johannesburg, 19 Jul 2004

Alcatel is developing a new business focus, looking at value-add services such as outsourcing, and is in discussions with its first African customer.

According to Robert Mainguy, a director of marketing and strategy at Alcatel France, the company views the outsourcing market as a growing one, with a potential value of EUR1.6 billion to the company.

"Major telecom operators are looking to consolidate their businesses and focus on their customers, so they are seeking someone else to manage their networks, which they now view as a non-core activity," says Mainguy.

"Outsourcing provides for new thoughts and ideas, and allows new ways of thinking to develop, since the company that owns the network has a set way of thinking, while the one the work is outsourced to has a better chance of thinking outside the box."

He says the telecoms industry joined the outsourcing bandwagon quite late, and although it is still an embryonic industry, it is developing fast.

"The total value of the outsourcing industry was just EUR300 million in 2001, and this year it is valued at around EUR3 billion. Next year, we anticipate that it will be worth some EUR4.25 billion.

"Alcatel is currently involved in managing the operations and maintenance areas of the business for major operators such as British Telecom, Orange and Vodafone, to name just a few," he says.

"We are also currently in discussions with an operator in Mozambique, and we are hopeful of breaking into the African market with this deal."

Mainguy also says the organisation has reached the point where it is being outsourced to run networks that do not even have any Alcatel equipment within them.

"The need to outsource is driven by a competitive market, as once companies have competition, they realise their core driver is not their backbone, but rather managing their customers, hence the need to outsource their maintenance and operations side," he says.

"It becomes a whole new ball game when the protected environment ends, and while there is still no end to the fixed-line monopoly in the South African market, we are still hopeful of gaining a foothold in the region through providing outsourced services to one of the three mobile operators."