Network Outsourcing - Choice or Destiny? Andreas Herzog April 2008

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1 - Choice or Destiny? Andreas Herzog April 2008 All Rights Reserved Alcatel-Lucent 2007

2 Sure it is your choice, but there are real good reasons to go for it 2 Poland April 2008

3 Development of Managed Services Telecom Customer s Value Chain Focus of Telecom Customers PAST PRESENT FUTURE Elements Elements Design Design Build Build Operation Operation Coverage Coverage Applis Applis & Services Services Customer Customer Care Care Branding Branding Boxes Boxes Turnkey Turnkey Build Build Solutions Solutions Operations Operations Managed Managed Capacity Capacity Managed Managed & & Hosted Hosted Applis Applis BSS BSS & CRM CRM Solutions Solutions Broadened Offering of Telecom Vendors Alcatel-Lucent s is a long-term partner of operators and enterprises, providing end-to-end solutions supporting their business transformation and allowing them to concentrate on core activities 3 Poland April 2008

4 First Important Choice for Success: The Scope of Work PLANNING, DESIGN & ENGINEERING IMPLEMENTATION OPERATIONS & MAINTENANCE Architecture Planning Vendor Selection Capacity Planning Traffic Engineering Central Activities & Transport Engineering Design & Optimization Laboratories / Testing Interface with Regulator Project Manage Add/ Moves/ Changes OSS Deployment & Integration BSS & CRM & Integration Database Population Training Tier 1 Monitoring / Surveillance Fault Detection Capacity Performance Trunk/ Port/ Path provisioning Troubleshooting Service Resource Dispatch Transport Routine & Preventative Transport Diagnosis & Repair Remote Tech Support OSS Admin & Security Configuration Mgmt. Back-up/ Disaster Recovery Interface with other Operators Interface w/ Authorities Work Force Inventory Spares Inventory Spares Vendor Tools & Test Eqm Vendor Asset Inventory Field Activities Site Surveys Site Design Site Selection & Acquisition Site Construction Site Works Field Provisioning Infrastructure Mgmt On-site Routine & Preventative On-site Diagnosis & Repair Site Maint. & Security Database Back-ups Site Documents Site Inspections Spare, Repair & Return Warehousing Logistics Infrastructure Interfaces 4 Poland April 2008

5 Case Example: Pre and Post Contract Comparison Pre-contract Scope & Responsibility Post-contract Business Strategy & Planning Marketing & Sales, Customer Services, Billing Investment Strategy & Planning Design /Subcontractors /Subcontractors /Subcontractors Engineering & Installation Program & Reporting Operations & Maintenance 3 rd Party Field Force Supply Chain Services /Vendors 5 Poland April 2008

6 Second Important Choice for Success: The right Business Model Combines the full spectrum of Alcatel-Lucent service and product solutions! Business Migration: Solution for customers, who face significant process and organization migration needs and risks due to high-speed deployment of a new technology or network Outsourced Carrier/Enterprise Operations Managed Carrier/Enterprise Operations Hosted/Managed Applications Multivendor Maintenance Managed Security Operations Support Services Increasing Value Added /Strategic Partnership: Take over existing end-to-end processes and associated organizations, deliver KPI and SLA performance against preestablished objectives Build, Operate and Manage: Design operations processes for new operators and/or new technologies. Provide network operation services for a specific or indeterminate period Assistance and Consolidation: Analyze existing processes, propose best in class processes & associated organization structures, manage the change. Provide centralized/service bureau type service to clients to offer the economics of a common platform & operational process efficiency. 6 Poland April 2008

7 Third Important Choice for Success: The Solution covers Managed Services or Engineering & Rollout Run Workforce OPEX related assets Operations Maintenance Spare Parts, Tools Backbone Core Access 7 Poland April 2008

8 Third Important Choice for Success: or Infrastructure plus the Processes to run it Engineering & Rollout Run Workforce OPEX related assets Managed network capacity Operations Maintenance Spare Parts, Tools Backbone Core Access 8 Poland April 2008

9 Scope and Business Model define the Saving Level higher or lower Euros Flat Baseline Saving Level Offered Price Optimized Cost Line Year 1 Year 2 Year 3 Year 4 Year 5 Duration 9 Poland April 2008

10 and finally the Benefits of Managed Services Solutions Improve time-to-market with new services Improve network performance metrics Increase customer satisfaction Mitigate network, technology and subscriber-migration risks Positively impact my top line revenue and profit Develop agility to deliver next-generation services Achieve efficiencies throughout my business & network and provide excellent QoS Simplify organization and processes Reduce network operation costs Share risks, get higher return on assets Make fixed costs variable Improve market capitalization 10 Poland April 2008

11 Several customers have already taken their choice to control their destiny >14 years of experience in Operations & 65+ Managed Services Contracts world-wide (>100 mn Subs) Mobile or Fixed Multi-vendors Fit-for-purpose Business Models 7,000+ people transferred to Alcatel-Lucent Full Operator Field Services Operation Impl./Operation NW Transformation Poland April 2008

12 12 Poland April 2008

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