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UK Managed Services Market Heats Up As Ericsson Faces Stiff Competition In Upcoming Billion-Pound Contract Renewal
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Tuesday, August 07, 2012:
Mobile service providers in the United Kingdom were among the earliest in the world to embrace the concept of outsourcing network operations, and that market remains one of the biggest and most advanced for managed service opportunities.
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“Some of the biggest multi-year managed services contracts in the UK are expiring this year,” says Jim Eller, principal analyst for mobile networks, “and the fight is on to see who will win these billion-pound opportunities.”
Ericsson has dominated the managed services market in the UK since winning the first contract with 3 in 2005. However, the seven-year contract for managing 3’s core network ends in 2012, and 3 has sent an RFP to several invited vendors. An even bigger opportunity is the managed services contract for Mobile Broadband Network Limited (MBNL), the 3G network sharing joint venture between 3 and T-Mobile. Ericsson has had most of MBNL’s managed services business, but the contract ends this year and MBNL has sent an RFP to several invited vendors.
Aditya Kaul, practice director, mobile networks, says, “Instead of awarding a contract to multiple vendors as is common in some countries, the network operators in the UK will probably award each contract to one main contractor, who will then sub-contract portions of the work scope. Ericsson is in a very strong position based on established relationships with the operators in managed services, but Nokia Siemens Networks (NSN) is well positioned to get a big piece of the business, and it is always possible that a low bid by Huawei might get some consideration from an operator facing cost pressures.” NSN has been the prime contractor for Orange’s managed services in the UK (as part of a global managed services relationship with France Télécom) and provides part of the managed services for MBNL; NSN is also the equipment supplier for MBNL, and has supplied equipment to most of the other UK operators too. Huawei, although a newcomer in the UK managed services business, recently won a five-year managed services contract with Telefónica O2 UK, and is looking for additional opportunities.
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