Advertisement Feature: Nokia Siemens Networks
The whole truth about TCO
Total Cost of Ownership, a term of these markets – designing a new ciency approach, where we compare
borrowed from the IT industry, is network and running one already in providers with their peers and uncover
‘holistic’ by definition, covering costs use. But in both cases investments areas of inefficiencies,” he says.
over the entire lifecycle of CAPEX are likely to be made for the long term
and OPEX investments. When it with profits only realised after several Based on the benchmarking results,
comes to the communications years. As this is a time when there many actions can be taken to improve
industry, special rules apply to TCO. has never been more rapid change efficiency, including specific automa-
in technology, applications and social tion and advanced operational support
“The rule of thumb is 80/20,” explains trends, lack of attention to a holistic systems for optimising networks. “And
Jari Paukku from strategic marketing, and flexible TCO model can greatly one area that is not much discussed
Nokia Siemens Networks, “but reduce the chances of success. in TCO is maximising customer experi-
it’s an 80/20 rule with a twist.” ence – churn can be a key driver for
Taking new capital investments first, high OPEX. If you lose customers in
“Capital expenditure accounts for just Paukku says there are four key headings mature markets you have to spend a
20% of TCO, so operations are by far under which TCO should be examined, lot more on sales and marketing to
the main cost driver for communica- and which help to simplify matters. replace them. Customer loyalty has
tions service providers. This is the “Clearly, it starts with the business a big impact on the bottom line.”
key fact that stands out about network case – understanding markets and
TCO – and one that is often overlooked.” users, their behaviour and what role a Resourcing, again with the idea of
service provider wants to play. From that outsourcing certain processes, is
At the same time, the key metrics for you can build a case to understand the also a strong candidate for existing
TCO depend on the market and type opportunity and an idea of the size of network operations, and Paukku adds
of service provider. In mature markets the investment.” Properly analysing the that it is also important to understand
they include the exponential take up of underlying strategy and devising a busi- assets. “A proper end to end inventory
fixed and mobile broadband data and ness transformation plan is an increasing is the foundation for more efficient use
multimedia services, and the chal- part of Nokia Siemens Networks’ of assets, but according to industry
lenges of maintaining profitability as engagement with providers, he adds. analyst, Stratecast Partners, some
users demand flat rate subscriptions. communications service providers report
The Internet provides an indication “Step two is to look at processes – but inventory accuracies as low as 40%.”
of the challenge, with YouTube alone providers often bypass some of this
consuming as much capacity in 2007 stage, which can create problems later Reconfiguring assets for greater cost-
as the entire Internet in 2000*. For on.” Processes crucial to streamlining efficiency, has, he adds, resulted in
communications service providers, the and optimising networks include major improvements for customers
key challenge is how to realise efficien- provisioning, minimising service disrup- of Nokia Siemens Networks in areas
cies to cope with dramatic increases in tion, simplifying customer care and such as reducing dropped calls and
traffic as revenue per megabit declines. creating a unified view of networks network alarms, by figures up to
for better management and control. 70% in some cases, reducing fixed
In developing countries, TCO is driven line revenue leakage and cutting
by the need to build coverage in The final two stages are specifying the base station energy consumption.
rural areas, where users have limited architecture of a network – the sites,
resources to spend on communica- and equipment, where energy efficiency In all these areas, Nokia Siemens
tions. Again, the spotlight is on the is also a key issue – and implementa- Networks is committed to being a trusted
efficiency of operational processes, tion. “Getting the network running fast partner in the drive to get the industry
but also on new equipment. means revenues flow more quickly in great shape. Paukku concludes: ‘We
and also raises a lot of issues about aim to help communications service
Given the huge complexities in resourcing, such as people skills, and providers run efficient networks that
specifying, implementing and running whether it is better to partner with an enable best value end-user services
networks, calculating TCO is no easy outsourcer for some of the operations.” and support revenue growth even
matter. Decisions for investing in new- in the current business climate.” In
build networks or modernising existing Much in these steps also applies a holistic fashion, of course.
ones have major and multiple impacts to the operational costs for existing
on purchasing, processes and people networks, which as Paukku points *Internet Innovation Alliance,
in terms of both capital expenditure out may not have been audited rigor- Daily Telegraph, May 2008
and subsequent operational costs. ously from a TCO point of view since
they were implemented. “We offer a For more information please visit:
It is easy, adds Paukku, to overlook benchmarking and assessment service www.unite.nokiasiemensnetworks.com/
aspects of operational TCO in both as part of our overall TCO and effi- efficiency
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30