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Mobile Operator Network Outsourcing Benefit

As mobile operators watch their bottom line, outsourcing has become a more acceptable approach to increasing profitability, as it offloads the cost burden to the partner firm. Operator savings vary, depending on the scope of the outsourcing relationship, but Pyramid Research estimates that outsourcing can reduce the cash costs of a typical mobile operator by 20�25 percent.

"Operator savings stem from reduced CAPEX through network sharing and effective asset management, as well as from OSS and network management outsourcing," comments report author Elizabeth Bramson-Boudreau.

The report compiles and analyzes numerous in-depth interviews with mobile operator executives worldwide. One executive noted, "The outsourcing deal got us a clear 20 percent saving on manpower costs. With additional immediate OPEX savings, our first year savings were in the region of 35 percent."

Pyramid Research expects mobile operators to increasingly take advantage of outsourcing. Pyramid is forecasting the total outsourcing opportunity for vendors - $51.5 billion in 2005 - to increase to $55.3 billion by 2010 for a 1 percent CAGR. However, when the two big slump areas � Network Build and Deploy and Network Design � are taken out, it is clear that the outsourcing opportunity is growing healthily, at an 8 percent CAGR.

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