John Strand, CEO of Strand Consult, a consultancy firm that specializes in the mobile sector, looks at the logical consequences of mobile operators increasing trend towards outsourcing non-core operations

Down the years, there have been many discussions about what the mobile operators core business should be and what a real mobile operator should look like.
Somewhat simplified, one could say that mobile operators purchased technology, services etc., packaged them up, marketed them and sold them to their customers. If you were to compare a traditional mobile operator to a supermarket, it would correspond to a supermarket owning their own dairies, butcheries and wine castles!
The number of operators that are handing larger or smaller parts of their business to various sub-contractors is, however, increasing, and we are seeing more operators choosing to discontinue handling the daily operation and servicing of their own networks and leaving these tasks to players like Ericsson, Alcatel Lucent, Nokia Siemens Networks, etc.
One question that springs to mind is whether in the future, we will see some operators that consider themselves to be intelligent bitpipes, where their core business is limited to a mobile licence and a billing system, and all other functions are handled by various sub-contractors or partners that only have one goal – to create as much traffic as possible on the operators billing system.

Quality control
An intelligent bitpipe operator will need to focus on three critical areas. Firstly, quality control of the services being outsourced, including network and partner production, and the end user customer service given by the partners. Secondly, the development of new business models, making it attractive to create traffic in the operators network and on its billing system – this should be good business for all parties; having many strong partners will strengthen the operator. And thirdly, having a strong business intelligence unit that monitors the market and sees how the operators partners services and products fit into the market, while simultaneously searching for new partners that can create traffic in the operators network.
In other words, the dream of the intelligent bitpipe is that of creating a dream team of people that, via a number of partnership agreements, can cover a whole market. The partnership agreements will in practice mean that the operator has a minimal CAPEX and that their costs will mostly relate to the cash flow being generated on the mobile network.
We have no doubt that we will see operators using this strategy. The question is, how far each individual operator will go, and whether they will be consequent in all areas and shave their business down to a minimum, or whether they will continue to have business areas where they purchase, manufacture, market and sell various services themselves.