The document discusses outsourcing network operations for a telecom company. It analyzes the client's network processes and technology using frameworks to identify gaps. It proposes outsourcing models and benefits, including reduced costs and improved focus on core business. Key steps outlined include defining scope, identifying stakeholders, developing service level agreements, and establishing performance metrics and charging methodologies.

1. MBA Summer Internship Project
WIRELESS TELECOM NETWORK
OPERATIONS | CHANGING NEEDS
Prepared & Presented by:
Vaibhav Misra
MBA-1 yr.(System & Finance),
Symbiosis,Pune
Email: misra.vaibhav@gmail.com

2. Objective
 Analyze & evaluate Client’s Telecom network operation Process.
Perform Client’s Technology evaluation as per network architecture
requirement
Propose benefits of Outsourcing and help the Client structure it.

3. Are you a TELCO and feeling Heat of Challenge?
•Are you currently looking at cutting operating costs of support functions?
•Do you want to focus on your core business and remain competitive at all times?
•Are you looking at reducing capital expenditure in process and technology?
•Are you looking at business transformation through innovation? & more
If your answers to any of the above questions are YES then pl. go on…..
The Telco's under pressure
“We think that the days have gone where services providers can
consider themselves the integrators, the jacks of all trades, as we
say in New Zealand, thinking that they can pull this together all.”
--
Simon Moutter, Chief Operating Office (COO),
Telecom New Zealand.

4. Industry Expert Feed
This is what an OEM has
to say about
Service Provider’s
Operations!!!
The large number of network maintenance engineers, with their associated
compensation and benefits in the European market, has greatly impacted
operators' HR costs. In fact, comparative HR costs are usually several times
lower in regions such as Asia and Africa. European operators realized that
network operation and maintenance have increasingly become non-core
services but they account for a large portion of the OPEX.
# Source: Huwaei Telecom

5. Telco’s Network Operation -Challenges
Process Risk Technology Risk
o Higher Operational Cost o Not Abreast with Technology-
o Poor Network Management Obsolescence
o Slow Pace of Change o Poor Vendor Management
o Need of Expertise o Less Technical Expertise
o Competitor Threat o More Cost-TCO
& Many More….. to name a few…..
Benefits to Telco:
 Stay a ahead in Business of Network Operation
 Overcome Process Risk in Rational & Make Strategic way
 Better Mechanize the Process vis-à-vis Business Goal
 Overcome Technology Risk by Industry Insight & best Practices
 Better creation of Network Technology and thus Business Drivers.
With us fasten your loose end & Achieve the best in
Industry in most optimize way & a lot more……….

6. Scope of Work
Analyze Client‟s Telecom Network Operation; Evaluate Process by the
means of Client tailored Framework-Analysis Tool.
 Find gaps on the basis of an exhaustive Service Level Management design
 Find risks & losses
 Propose alternatives to mitigate risk & control losses.
Analyze Client‟s Technology as per network architecture requirement;
Evaluate by the means of Industry Benchmarking-Evaluation Criteria
& product metrics kit.
 Find obsolescence (if any) and possible upgrades,
 Find existing vendor products & services,
 Find Propose best fit solution to stay ahead with vendor technology and services.
Propose benefits of Outsourcing and help Client deal with it.
 Structuring network outsourcing capabilities & its features.
 Possible and prevalent outsourcing models and their payment models.
 Gauging mechanism and further improvements.

7. Methodology-How do we go About It
Identifying Drivers of Wireless Telco Network Operation
Area of Concern | PPT (People-Process-Technology)
Analysis
Process Framework
Network Operations
GAPS
Feasible
Models
Outsourcing
Technology Industry Benchmarks Alternatives
GAPS Available
Analysis

8. Telecom Network | Operation Chain
Conceptualize
Vision, Purpose, High Level Project Plan, Critical Success Factor.
Design
Business Model, Scope, Project Map, Architecture, Approach.
Execute
Implement, Test, Analyze, Process, Delivery, Operate.
Support
Monitor, Analyze, Enhance, Optimize and Trouble Shoot.

9. Processes Featured | Deliverable
Network Strategic Network Planning
NOC-Centralized Planning (New)- (Existing)-Optimization
Monitoring Expansion & Network & Scaling
Roll Out
O&M Circle Level Performance
Service Assurance Management
Regulatory Compliance
QoS Measure Parameters
Cost Element-Technology
Other Parameters

10. Telco Network Operations-Process
(Framework-Analysis Methodology)| Deliverable
Framework-Analysis Methodology
Process SLM Framework

11. Telco Network Operations-Process
(Framework-Analysis Methodology)| Deliverable
Process SLM Framework

12. Telco Network Operations | Regulator’s Say
Regulators‟ Say: TRAI-India
Regulator #
TRAI-India KPI.doc
Regulators‟ Say:
International Regulators #
International KPI
# Source: TRAI

13. Telco Network Operations | Challenges
Where are we?
Where are we up to?
Problems Faced:
•Changing Service Requirements
•New Technology Barriers-Multivendor Scenario.
•Competition
•Non-Traditional Techno-Commercial Model.
Many More…..
"Measure what can be measured, and make
measurable what cannot be measured."
--Galileo Galilei

14. Telco Network Operations | Challenges
What's Needed?
Actionable Business Intelligence to Address :
•Evolution
•Key Strategic Planning
•Network Optimization
•Profitability
•Vendor/Supplier/Self Gauging for better Management
Solution:
Lean Operation….May be! Performance Gauge…..
•Drive Down Cost: Reduce Manpower, Simplify Process, New ways of doing things, Improve
Supplier Relationship
•Drive Up Revenue: Service Innovation, Reduce Time Market, Reduce Time Cash.
•Drive Up Business Agility: Fast Reactions, Business Process Improvements.
•Drive Up Customer Loyalty: Improving Quality and Service by reducing Lead time and
•Increasing Response Time, Increase Customer Satisfaction, Achieved Customer Excellence.

15. Actionable Business Measure
#Source: Booz Allen & Hamilton
The Solution for Actionable Business Intelligence is:
Service Level Management (SLM)

16. What is SLM?
 Service Level Agreement (SLA) is a formal negotiated agreement between
a service provider and a customer.
 The service level management (SLM) is the integrated management of all
functionalities in the SLA life cycle.
Business Level Management
 Business Level Management
 Service Level Management Service Level Management
Customer Interface Management
SLA contract:
•SLA Creation SLA Creation SLA Assessment
•SLA Negotiation
Customer
•SLA Provisioning SLA Negotiation SLA Reporting
•SLA Assessment
•SLA Reporting SLA Provisioning SLA Maintenance
•SLA Maintenance
SLA Monitoring
Network Level Management

17. SLM Monitoring System Architecture
SLA monitoring:
•Qos Parameter
•Problem Notification
•Performance Data
•Network Level
Management
#Source: White Paper by-Distributed Processing & Network Management Lab. & Network Technology
Research Lab., ETRI, Daejeon Korea

18. Telco Network Operations | Delivery Model

Network Chain Service Chain
Network
Network Service
Planning Service
Implementation Planning
& Design Implementation
& Design
Network
Service
Business Goal Monitoring
Business Goal Monitoring
& Control
& Control
Network
Service
Optimization
Optimization

19. Telco Network Operations | Performance Measure
Difference between KPI/KQI
KPI (Key Performance KQI (Key Performance
Indicator) Indicator)
Network Performance Based End to End Service Delivery
that network Supports
Traditional Approach Modern Approach
Network Focused Customer Focused
Difference between QoS / QoE
QoS (Quality of Service) QoE (Quality of Experience)
Finds Places in Contract Needs to be seen while
Management contracting
Cause-Effect Analysis Perception Based Analysis
Based upon Machine Factor Based upon Human Factor
“A new, dynamic “business control layer” should be capable of dynamically adapting
network or service behavior at the customer level to improve operators‟ transaction
revenue and – at the same time – customers‟ experiences.” – Yankee Group

20. Telco Network Operations | Performance Measure
Case Study– Resolving a High Rate of Prepaid Call Failures
Problem
A wireless service provider received complaints from prepaid subscribers concerning originated calls
that would not complete.
Solution
On examining the call completion report from an integrated monitoring system (in this case, Tekelec's
Integrated Applications Solution [IAS]), the service provider was able to quickly identify the cause as a
prepaid Service Control Point (SCP) issue. A deeper analysis of the KPI information indicated that the
prepaid transactions were timing out due to SCP overload. Examining the same call completion report
over a three week period, the operator saw a pattern that showed the SCP had abnormal activity
several times between 5PM and 8PM on weekdays and was dangerously close to engineered
transaction capacity.
Based on this information, the operator added capacity to the SCP to alleviate the problem. The
diverse reporting capability of the Tekelec IAS system enabled the service provider to quickly gain
visibility into the problem and take corrective action, which resulted in improved service quality and
fewer customer complaints.
“Bharti holds its strategic partners accountable by linking
payments to KPIs,” says Mr. Norman Donald Price, CTO and director of Bharti
Cellular Limited. “Successful managed services typically require an all or nothing
approach. We believe that the probability of.” success is heavily dependent
on the clear definition of responsibilities and processes”.

21. Technology Featured:
Radio & Core| Deliverable
CDMA2000 Base Station CDMA2000 Mobile
CDMA2000 Base Stations
Controllers Switching Centers
CDMA2000 Packet GSM Base Station
GSM Base Stations
Network PDSNs Controllers
UMTS Radio Network UMTS Node B Base
GSM/UMTS Mobile Stations
Controllers
Switching Centers
IP Data Gateways

22. Technology Featured:
Transmission | Deliverable
Metro Access Metro Edge
Metro Core/Regional
Optical Switching WAN DWDM

23. Telco Network Operations-Technology
(Industry Benchmarks Analysis Methodology)| Deliverable
Industry Benchmarks Analysis Methodology

25. Solution: Involvement of an EXPERT
But Who?
 The one who understands & has answers to…
Works out Optimum Ways
 And Allows you to Concentrate:
‘On Your Core’
If you deprive yourself of outsourcing
and your competitors do not, you're
putting yourself out of business.
Lee Kuan Yew ,Former PM, Singapore

26. Outsourcing BUZZ
Outsource !!!
Offshore delivery capabilities have evolved significantly over the
last five years with India emerging as a leading destination.
–AT Kearney Report On Network Operation Outsourcing.
Some Industry Experts even go to extent :-
“Outsource everything except your Soul”
– Tom Peters, Business Management Guru
Crux: Outsource, Need of Hour

27. Telco Network Operations | Outsourcing BUZZ
Now we are here

28. Market Vectors
# Source: Joint Report „Market Vista,2009‟ of SSON & Everest Research Institute

29. Some Benefits….
√ Increase stakeholders‟ value √ Increase sales
√ Reduce costs-TCO √ Improve service
√ Reduce inventory
√ Improve operations
√ Increase inventory velocity and turns
√ Overcome lack of internal capabilities
√ Mitigate capital investment
√ Keep up with competitors
√ Improve cash flow
√ Gain competitive advantage √ Turn fixed costs into variable costs and
other benefits both tangible and intangible.
√ Improve capabilities
…the list is more.
√ Avoid Vendor Lock-in
√ Benefits Of SEZs
√ Increased ISV‟s Role

30. Tracking benefits | Bharti case
Outsourcing as a driver for operating cost reduction –
Bharti Airtel#
2005 2006 2007
Outsource Network IT support Call center Network General
activity management outsourcing deal functions management pressures on
part outsourced part outsourced marketing costs
outsourced
Observed Network Personnel costs: Personnel Network costs: Marketing
annual impact costs: fell by 22% costs: fell by 0.5% costs:
on operating fell by 13% fell by 9% fell by 21%
expenditure per
subscriber
 Bharti Airtel‟s operating costs per subscriber fell by 25% (2004-2007). Costs were
reduced in networks, personnel, sales and marketing, and administration
 A number of significant vendor deals have underpinned these outcomes, with key
areas being the outsourcing of network expansion, network management and IT.
#Source: Company website; annual report; Ernst & Young analysis

31. Industry Trends
Managed and Advisory services | A Growth Avenue
Changing Outlook of Industry : Growth : Lesser Control on Non-Core
Source: http://www.oliverwyman.com

32. Industry Forecast
CSPs will spend US $145
billion on third-party
services during the next five
years. The richness of
services available means
that CSPs could become
almost entirely virtual–
externalizing infrastructure.
- Yankee Group
Source: IBM Institute for Business Value and Economist Intelligence Telecom Industry

33. Challenges of Outsourcing
Consumer Protection/Consumer Enforcement
Government Securities or Foreign Control
Worker Protection
Environmental Impact of Management
Globalization & The extended Enterprise Approach
Some Other Risks Involved
Business Process Re-engineering
Competitive Pricing
Performance Management/Service Guarantees
Financial Management & Further Master Service Agreement
Process Management
Risk Management in Contract/Contingencies
Relationship Management
Human Resource Planning
Legal Risk Management & Tax Planning

34. Some Processes in Place
 Operations & Maintenance
 NOC Operations
 Billing
 Supply Chain
 Data Center Operations
 Network Integration
 Change Management
 Network Expenditure Analysis
 Revenue Analysis
 Optimization Techniques
 Service Delivery
 Enterprise Business
 Managed Services
 Utilities Management & others. Use of IP-NGN Networks will scale convergence
further and thus centralize process which is an Art
that enables Outsourcing.

35. Way Forward
Step 1
Scope Definition-RFI/RFP
Step 2
Identification of stake holders
Develop independent reference checks
Step 3
Business Transition/Transformation-Hurdles & Challenges identification (Self BCP Plan)
Step 4
Single/Multi-vendor scenario-& Challenges identification
Step 5
Identification of Parameters: Service Level Management & Charging Methodology.
Step 6
Categorization of services into logical modules----Escalation Levels---Charging Basis----Affects on
Step 7 SLA---Charging Reference
Step 8
Cap on amount of Risk to Service Credit on periodic basis/Appreciation on better performance-
Credit basis.
Step 9 Future change control mechanism-Agreement /Disagreement
Step 10 If multiple geographies, vendors must take into account to consider jurisdiction in different
locations.
…contd.

36. Way Forward
Step 11
Ease of provisioning & Termination of services.
Step 12
Report and Consent from Affected Parties.
Devising a Charging Method: Cited in Detail Further.
Step 13
Supplier‟s propriety to be maintained for Payment of Taxes etc.
Step 14
Benchmark of industry to be looked in long term
Step 15
Both Parties to retain ownership of their Pre-existing material .
Step 16
Reporting methodology-Formal Reports: Accessing scope in changing trends / Further change
Step 17 reqd. /Audits etc.
Step 18
Termination assistance (Period includes Procurement ,Transition e.g. KT etc.) to keep business As-
Is
Step 19 In Case of some Process-IPR not part of Customer contour, the Supplier must agree to sell it.
Parties have to agree to pay back to other in case of End of Period of termination of services from
Step 20 opposite side.

37. Out-Sourcing Scenario Our Major
Focus
Source: IBM Institute for Business Value and Economist Intelligence Telecom Industry

38. Different Out-Sourcing Models
•Free Standing Simple Captive Model
•Virtual Captives
•Acquiring a Captive Over Time: Build-Operate-Transfer (BOT)
•Divestiture or Spin-off of a Captive
•Jointly-Owned Captive

39. Some Out-Sourcing Charging Models
Monetizing Outsourcing Decision !
•Per Minutes of Usage payment Model-Revenue Share/Fixed Payment
•Per Erlang-B based payment Model- Based upon Blocking probability.
•Per Erlang-C based payment Model- Based upon Waiting, Queuing Probability, Infinite
Samples
•Per Engset formula based Payment Model- Based upon Waiting, Queuing Probability,
Finite Samples
•Payment for Data Based on Per bits based Model in case of Services like GPRS/PDSN
•Payment for Radio Based on Spectrum utilization efficiency
•Payment Based upon Coverage Model for Wi-Max
•Payment based upon Capacity Model for Wi-Max
•Payment based upon per new activation or Avg. Retention of Users on Fixed Pricing
Model
•Payment based upon Fixed Basis minus Network Failure Report or SLA Breach
•Payment Based upon Performance based upon Industry Present Benchmarks.
•Payment Based Upon Per Line Basis-Revenue Share/Fixed Payment
…Contd.

40. Some Out-Sourcing Charging Models
•Payment Based Upon Revenue Share/Fixed Payment on ARPU
•Time & Material Based and T&M not to exceed Clause
•Fixed Price Project Model
•Mile-Stone Based Model Payment Schedule-Remote Development Project
•Monthly Resource based Payment
•Pure Revenue Share basis much similar to JV.
•Revenue per Employee Model
•Operational Expense per Employee Model
•Revenue per Man-hour Model
•Operational Expense per Man-Hour Model
Other Possible Models:
•Hybrid Cost Proxy Model-USO-Portugal Telecom
•Probability Cost Model (PCM)-Monte Carlo Simulation
•Toll Model
•3rd Party Conduit Model
The above models need consideration of
several factors like Value Chain etc. Some
may be hypothetical and yet to be
introduced industry

41. Re-Course

42. Limitations
 Non availability of data from a primary source especially for operational
metrics
 Key Performance Indicators and Parameters of QoS are as per Benchmarks
set by Conventional Practices.
 Parameters mapped to KPI are Telco Specific, may differ from operator to
operator
 Some Out-Sourcing Charging Models have been selected on hypothetical
basis fitting with Telecom Business.
 The scope is limited to Wireless Mobile Operations in core technical
functions-Transmission, Core and Radio.
 Further Financial & Business logics & strategies is required to choose
Outsourcing as significant Operating Alternative.
 Certain challenges were faced because of the scope of study which is
strategic to any organization and not disclosed.
 Limited time & disclosure of project.

43. Leverages to Telcos
„Wireless Telecom Network Operations‟ project makes org.,with prior
vast experience in Telecom cater the needs of larger audience-Old &
New.
Though other models for instance eTOM are available, still challenges
about business decision making were needed to be addressed.
In this economic recessionary period, rising customer expectation
and demand for robust telecom network model businesses requires to
be done in optimized way.
Industry buzz-Outsourcing in Telecom Operation is new so rules are to
be still to be set.
According to a recent Gartner survey,
more than 60 percent of companies do
not do any security risk mitigation when
outsourcing development.

44. Incase of further query feel free to right me:
misra.vaibhav@gmail.com
http://in.linkedin.com/in/vaibhavmisraindia
Disclaimer: Information contained in the report has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Neither
representatives nor any of its data or content providers shall be liable for any errors or for any actions taken in reliance thereon