Service Bureau based outsourcing – A win win approach for Indian Telecom service providers
Can anyone tell me how many Telecom Service Providers are there in a Circle/State in India as on Date? It is an intricate question to answer given the scale of expansion in the Indian Telecom Market and a new operator being added day on day.
Indian Telecom market is one of the fastest growing markets in the world. The Indian Telecom service providers have come a long way since 1994 when the Telecom sector was liberalized by the government and in 1995 GSM (Global System for Mobile communications) Mobile Telephony entered India. In the last 14 years, the telephone density has soared from a mere 0.8% to above 33% and the total subscriber base has grown to more than 384 million with just the mobile subscriber base being over 346 million. With the increasing adoption of Telecom services, it is imperative that the existing and new Telecom service providers improve their operational efficiency continuously.
Traditionally, Indian Telecom service providers have outsourced the functions like inbound/outbound call centers, managing Order to Cash systems to different third party vendors. Although this has helped the Telecom service providers in managing the complexity of these functions, coordination, control and monitoring of different third party vendors brings with it a new set of challenges. The Indian service providers should concentrate more on their core activities and outsource the rest strategically without any service gaps. Hence, a better model would be to move towards service bureau based outsourcing model where the end to end solution from Customer Service Delivery to Order to Cash processes is hosted by a single vendor. The relationship between the Telecom service provider and the service bureau should be based on feature based/outcome based pricing and governed by detailed SLAs with results measured by Key Performance Indicators (KPIs).
The Service bureau based model would trim down the CAPEX of the Telecom Service Providers to a great Extent. The OPEX will also be well managed and predictable with this model. We feel this is need of the hour for any service provider. With the expected 10+ operator market and 3G,WIMAX entry, it is imperative for the operators to look for an effective model of this sort not affecting the baseline. Moreover the market is heading towards Service consolidation as the new operators are focusing more on Prepaid to penetrate into Rural Markets. This would change the market perspective and the operators will have lot to do on their Core activities and concentrate on Brand building to sustain for long run in the Highly Competitive Market.
Comments
The hidden intention during an Outsourcing deal is to get the work done by creme-de-la-creme staff while reducing the associated cost of operation and hence customer has no choice but to engage multiple vendors. It is this juncture where bureau service may not be entertained but this is not always true. No doubt, CAPEX can be severely downgraded by service bureau type of deals while effort can be made further to even reduce the OPEX but to fill the gap of skilled resource is the much sought after thing and that should guide the flow of this discussion, I presume. We really need to ponder upon certain parameters e.g. how to develop in-house expertise for this and building credential in Telco world. True service bureau can be followed with the BPO arm focussing solely on certain front office operation especially in the Wholesale side and vendor’s in-house talent focussing on the critical back office operations. This will allow TSP to be focussed on their future roadmap plan, strategy and customer progressive growth. Reliability on single vendor will come once it becomes a commercial necessity by providing complete business process management. E.g. new services are rolled out by the carriers and the vendor should be opportunistic at the same time to grab that by providing most preferred solution. This will keep TSP and selected vendor in pace with each other and develop the mutualism. But how to build right resource for right track and keep a mix of talents is the key challenge for vendor getting engaged in service bureau type of deal.
Posted by: Deepak Kumar Jha | July 17, 2009 7:36 AM
Hi Deepak,
I definitely agree upon your point on the skilled resources in the outsourced environment. This is a definite point to note. But now a days even from the service providers, skilled resources are moving to the Vendor companies.
Vendor in a Service Bureau scenario gets to know the best practices with the experience with multiple operators, the key task will be to maintain that Knowledge base and pass it on to all the resources. Training would be a great differentiator as well. Training will need to be not one time during induction but ongoing with the changing trends.
I think this will keep TSP and selected vendors in pace with each other and develop the mutualism.
Posted by: Sripathy | July 17, 2009 10:30 AM
I don't know a whole lot about the call centers and SLAs involving telecom providers in India. But I can say one thing... India has the most affordable Mobile telephone. I guess they must have been pretty operationally efficient to achieve this.
In the US, concept of free incoming does not exist. It is offered as a special deal by a few providers under a special rate plan. In India, it is almost a joke if any provider charges for incoming calls.
Another difference is, most of the mainstream providers bundle a handset with the contract in the US. To me Indian providers are incredibly flexible. You can get your own handset. Change it whenever you want. And if you want to cancel your line, no problem!
Posted by: Jagadesh Veluswammy | July 17, 2009 12:45 PM
Hi Jagadesh,
In terms of affordable mobile telephony, India has gone a long way from the peak Tariff of Rs.32 per minute to the level of 1 paisa per second. On the Handset front, yes we do not have any binding which is a definite advantage but we stand to lose on the subsidized price of handset though few operators provide it in India.
With this low ARPU and low tariff it is imperative for any Indian Operator to efficiently work on the CAPEX and OPEX. The best way to do is to go for the Service Bureau model of Outsourcing.
Posted by: Sripathy | July 20, 2009 5:33 AM