The deals between Telefonica and Ooredoo, and China Mobile and Bharti Airtel will put extra pressure on telecom network vendors such as Ericsson, Nokia Networks, Alcatel-Lucent, ZTE and Huawei.
Catch the live action at Mobile World Congress (MWC 2015)
The main focus of these two deals – announced at the Mobile World Congress (MWC 2015) — is to share their expertise and look for cost efficiency in network purchases.
Global telecom operators seek to cut down Capex (capital spending) at a time when there’s a pressure on their voice revenue.
Mobile operators Capex up 9% to $216 billion in 2014: GSMA
GSMA, a telecom industry association, said that mobile operators Capex increased 9 percent to $216 billion in 2014. Capex investment will reach a cumulative $1.4 trillion in the six years from 2015 through to 2020.
OTT is yet another challenge for telecoms. In a 2nd March 2015 note, ABI Research said the struggles of mobile operators will become more intense, as worldwide capital expenditure and operating expenditure grow due to 4G services while average revenue per user (ARPU) is in continual decline.
Lian Jye Su, research associate at ABI Research, suggests that telecoms should focus on digital content, M2M, mobile money, big data monetization, advertising, and enterprise cloud solutions to improve revenue streams.
China Mobile and Bharti Airtel on Tuesday said they aim to bring in cost efficiencies by driving synergies in their procurement strategies.
Telefonica and Ooredoo will work together to capture synergies in procurement. Both groups will focus on leveraging the economies of scale and the experience in centralized procurement of Telefonica.
“The aim of this collaboration will be the optimization of Ooredoo’s purchasing costs in selected types of network and customer equipment. Both groups will work towards coordinating selected purchases end to end, including technical alignment of specifications, selection of vendors and synchronized negotiations,” said Ooredoo.
Bharti Airtel and China Mobile will work towards shaping up a joint strategy for procurement of devices that include Mifi, smart phones, data cards, LTE CPEs and USIM.
Sunil Mittal, chairman of Airtel, said: “India and China account for nearly third of all the mobile subscribers globally and this partnership will provide a major platform for development and deployment of 4G and future mobile technology standards.”
Baburajan K
editor@telecomlead.com
