Monday, July 10, 2006

Pyramid Research: Mobile Operator Network Outsourcing Leads to 20–25% Reduction in Cash Costs

Pyramid Research has issued a new report that finds "as mobile operators watch their bottom line, outsourcing has become a more acceptable approach to increasing profitability, as it offloads the cost burden to the partner firm. Operator savings vary, depending on the scope of the outsourcing relationship, but Pyramid Research estimates that outsourcing can reduce the cash costs of a typical mobile operator by 20–25 percent."

Elizabeth Bramson-Boudreau at Pyramid Research said, “Operator savings stem from reduced CAPEX through network sharing and effective asset management, as well as from OSS and network management outsourcing."

Pyramid Research forecasts that "the total outsourcing opportunity for vendors - US$51.5bn in 2005 - to increase to US$55.3bn by 2010 for a 1% CAGR. However, when the two big slump areas—Network Build and Deploy and Network Design—are taken out, it is clear that the outsourcing opportunity is growing healthily, at an 8% CAGR."