Nedjma – WTA – Qtel
Wataniya Télécom Algérie S.P.A
is the Algerian subsidiary of Qatar Telecom Q.S.C.
operating under the brand name Nedjma.
Our Country – Our Company
• dec 2003 WTA obtains license
• feb 2004 start of deployment
• jul 2004 technical launch
• aug 2004 commercial launch
• dec 2006 all 48 wilayas are covered
• mar 2008 all license coverage obligations fulfilled
• dec 2009 continuous densification and coverage expansion
Surface: 2.381.741 km²
Population: 34.178.188 inhabitants
Climate zones: Mediterranean, mountains, Sahara desert
Road infrastructure: poor
Power supply infrastructure: poor
Security situation: average
The capex-opex reduction myth
« Will my capex and opex spent significantly reduce
by outsourcing certain activities as a managed service ? »
(according to most managed service suppliers)
« You can reduce your cost up to 50% by outsourcing this or
that, a minimum saving of 20 to 30% is a given ! »
Is this so ? Myth or reality ?
First ask yourself
« Do I really know my actual cost ? »
Know your costs !
The cost of a service or an activity has several components:
• direct labour costs of employees performing the service
• direct costs of current subcons performing (part of) the service
• direct costs of materials or parts used in performing the service
but also :
• indirect labour cost of employees performing supporting
services in departments such as purchasing, HR, IT, legal, etc.
• indirect costs of current subcons performing (part of) the
supporting services (transit, transport, customs clearing, etc.)
• personnel related costs such as office space rental and
maintenance, IT equipment, cars, allowances, travel, etc.
• cost of money, warehousing and logistics, continuous
Know your costs, all of them !!
and finally, hidden costs :
• costs due to operational inefficiencies
increased competition, reduction of profit margins, new customers,
new customer’s requirements
in most cases changed the objectives of the company,
new equipment and services were introduced, internal resources
grew, subcontractors were engaged
but internal processes and procedures were not altered or optimised,
trainings not given, etc.
resulting in a not 100% effective and efficient organisation
Know your costs, all of them !!!
and some more hidden costs :
• costs due to suboptimal performance or acceptance of too low
levels of service and performance indicators
resource capacity or resource allocation problems,
employee fatigue, wrong benchmarking,
all lead to missed market and sales opportunities, potential customer
insatisfaction, better perceived value with a competitor’s service,
increased churn and finally to a loss of revenue
Most root causes for both types of hidden costs, also require
too much management attention, leading again to additional
costs and loss of opportunities.
Right scoping is key
For outsourcing to have a positive impact on this cost structure, it is
imperative that :
• the scope of what is being outsourced is well defined (end to end)
• service levels and performance indicators are set to the right levels
• no operational gaps occur due to the outsourcing
• the internal organisational structure and all processes and
procedures are aligned with the outsourcing model
• no double functions or activities survive (what is outsourced needs
no duplication or shadowing within the own organisation)
• the proper governance structures are put in place
This might mean that specialised training needs to be given to those
members of your organisation that will manage the outsourced
services contract, or that additional people need to be hired to
perform new supporting functions.
The capex-opex reduction myth
« So will your capex and opex significantly reduce
by outsourcing certain services or activities
as a managed service ? »
If the actual costs, including direct, indirect and hidden costs of
an activity or service are compared with the costs of the alternative
of performing the same activity or service, trough a well scoped
managed services contract, using the same criteria of
performance, then your costs probably will be less.
If you compare actual costs by using only the direct costs visible in
most accountancy systems, then the outsourcing costs will in most
cases be significantly higher.
The key drivers to decide whether to outsource a certain activity or
service, should in the first place be based on achieving operational
excellence. This means:
• enhancing operational efficiency and effectiveness
• optimising resources and processes
• giving transparency to the « real » actual situation
• becoming the best in class using reliable benchmarking
thus increasing customer satisfaction, revenues and profit levels.
Outsourcing is one of many tools that can be used in such a
business transformation process. Capex and opex reduction is
achieved primarily because of resource and process optimisation
associated with the outsourcing exercise, not because of the
outsourcing as such.
Other key drivers
A number of other drivers that play an important role in deciding to
use a managed service provider to perform certain activities.
• Outsourcing usually reduces the internal resistance to change.
• Stakeholders confide more easily in an international reputed
company to improve strategic or business critical services.
• Upfront capex investments are transformed in gradually spend opex
• A proper construed OMS-contract will introduce the notion of risk
sharing with the service provider (p.e. through service credits in case
of substandard performance).
• Concepts such as « pay as you grow » or « future proofing » your
business are easily managed through a managed service model.
• Outsourcing will help control galloping headcounts.
Emerging market situation
Emerging markets are quite often located in big countries, where a
majority of the population is concentrated in a few geographical
limited areas but where your licence obligations and opportunities for
further growth are spread over a vast territory with poor
infrastructure (roads, transport, power supply) and a potential risk of
elevated security issues.
Potential service providers need to have an in depth knowledge of
this real life situation and need to demonstrate the required
experience in those areas of expertise needed to provide the
Emerging market situation
Fierce operator competition
Areas popular for outsourcing in mature markets, often are key
differentiators in acquiring and retaining clients and revenues in
emerging markets :
• deep indoor coverage
• network availability
• VAS and technology presence
all have a direct impact on the client’s perceived Quality of Service.
When outsourcing activities that have a direct impact on these key
differentiators, the necessary guarantees need to be secured to
maintain this competitive edge.
Emerging market situation
Limited choice of available service providers
Although most multinational service providing companies do have a
presence in most emerging markets, these set-ups are often limited
to a small number of core and commercial functions.
Not all activities or services liable for outsourcing can be properly
addressed by the current local setup of multinational companies or
local service providers within the country.
This implies that the ramp-up phase of an outsourcing exercise will
require a lot of time, management attention, knowledge transfer and
potentially resources transfer from the operator to the OMS-provider.
The key drivers for outsourcing an activity or service should be
based on achieving operational excellence.
The customer should be placed in the centre of any operator’s
strategy and operations. Maximising the customers
experience measured against best in class benchmarks will
assure profitability and market share in the long run.
Outsourcing can be a powerful tool to achieve this objective, it
is not a magic wand that solves all your issues overnight.
Capex and opex reduction, although of prime importance in any
outsourcing exercise, will only be achieved by optimising
resources and processes, not because of the outsourcing as
• Outsourcing a strategic activity has a huge impact on the entire
company, not only on that part of the organisation that is directly
• All stakeholders need to support the outsourcing decision
• C-level support and involvement is needed at all milestones in the
• Communicate in an appropriate way at the appropriate time
• Outside consultancy and coaching throughout the process, as
from the very start, is recommended
• Only a watertight agreement can lead to a real partnership with
the outsourced service provider
• Know what you give, know what to expect
• Be patient, it is a long journey with a lot of surprises