Stefan Jelvin, Director of Strategic Marketing and Business Intelligence at Ericsson, says the agreement is all about having a close partnership. "In this kind of deal, the negotiation phase typically could last for a year and you turn each other inside-out," he says. "They have gone through our books thoroughly, and we have gone through theirs. Both parties are well aware of the respective benefits of the agreement."
Experts and analyst firms such as IDC and Ovum agree that managed services, often called outsourcing, are becoming increasingly important and that Ericsson now has a good lead on the market.
Ericsson has many advantages in this area, thanks to its long track record, technology know-how and its ability to adapt solutions to help the client's core business. "The type of managed services required differs from operator to operator and from time to time," Jelvin says. "Our concept means they can choose to let us handle only a geographic part of a network, a specific service or, as in this case, almost everything. We work closely with the operators to optimize and update our offering to fit their needs at the right time."
The ability to measure performance is important, with both parties agreeing on different key performance indicators and conditions in a Service Level Agreement. If Ericsson does not fulfill the targets in the agreement, penalties might be incurred. On the other hand, if performance is better than agreed, Ericsson could receive bonuses. This type of agreement shows great trust and confidence between both parties.
Vincenzo Novari, CEO of H3G Italy, says that the agreement allows H3G to increase the value of its network and IT assets, the know-how and the work done on developing 3G so far. "We will also achieve an improved cost structure and better efficiency for generating the resources we need to develop our business, guaranteeing the quality desired by our customers," he says.
The deal also includes the transfer of 760 employees from H3G Italy, which means Ericsson soon will have 2960 employees in Italy. Novari says the transfer means the partnership safeguards the people, the know-how and the competence: "The employees become a part of the global leader in network infrastructure and telecommunication services."
Ericsson has officially announced 42 managed services contracts with operators worldwide since 2002. In all current managed services contracts, excluding hosting, Ericsson is managing networks that together serve over 35 million subscribers worldwide.
For more information on Ericsson managed services offer, please click here
