Telcos outsource network management

When Sprint Nextel announced its plans to outsource network services to Ericsson earlier this month, Sprint became the first US telecom provider to contract with a third party for network management, writes Computerworld.

Yet the announcement didn't surprise anyone; rumours of an agreement between US-based Sprint and Swedish telecom equipment provider Ericsson had been circulating throughout the industry, and this transaction came on the heels of similar deals inked by BT, Deutsche Telekom, Vodafone and China Mobile.

Telecom operators worldwide are increasingly considering outsourcing the management of their networks to companies like Nokia, Alcatel-Lucent and Ericsson in order to lower costs, increase capabilities and focus on other strategic imperatives, says Mark Mayo, partner and president of global resources management for outsourcing consultancy TPI.

Outsourcing activity continues to be constrained by difficult macroeconomic conditions, despite its potential to soften the impact of the recession through cost savings and efficiency gains, according to TPI, a sourcing data and advisory firm, says IndustryWeek.

The TPI Index, which measures commercial outsourcing contracts valued at $25 million or more, found that the total number of contract awards fell 7.5% from the first quarter to the second quarter, to 135.

While total contract value rose about 5% sequentially to $20.5 billion, annualised contract value fell 5% from the previous quarter to $3.6 billion. On the bright side, demand for IT outsourcing remained stable both sequentially and year-over-year in the Americas and Asia-Pacific.

IBM has expanded its procurement outsourcing services offering with new strategic sourcing services and new procure-to-pay services, according to Purchasing.com.

While IBM has been providing companies with strategic sourcing services for more than 10 years, the expanded services demonstrate the company's flexibility in the scope of its offering.

Companies can look to IBM for help with strategic sourcing for as few as one or two categories of spending such as IT or temporary labour, for example. Typically companies outsource sourcing of indirect categories, spending they consider to be non-core.