Consultancy purchase continues transformation of Ericsson
Paolo Corella: There is a growing opportunity driving
Ericson’s latest acquisition in the consultancy
business is the sixth in little over five years, and is
designed to give the group significant advantages in the
consolidation of telecoms operators that is about to take place
throughout the fixed and mobile business.
The 1,000 staff of Pride, an Italian consulting and systems
integration company, joined Ericsson’s 10,000
existing staff in this field at the start of February
— adding to a portfolio of Australian, French,
Spanish, Swedish and Turkish acquisitions in a process that has
continued since September 2004.
"We see an industry that is experiencing a fast pace of
transformation," says Paolo Corella, head of consulting and
systems integration at Ericsson in Stockholm.
Top of the list of drivers is consolidation in both mature and
emerging markets, he says. "Look at India, where there are 12
mobile operators, but the government is offering four 3G
licences. This will drive consolidation there and this change
process is happening among all mobile and fixed players."
Behind this is a change in attitude among operators, which for
years added new operations and even businesses without thinking
of the extra costs involved.
"During the fast-growing phase of the market operators built
separate silos," says Corella. "For example they added new
network operations centres and put on lost of extra cost. But
now they’re looking at all the business processes
and are simplifying operations in order to reduce costs."
These silos are "a fundamental obstacle to innovative business
models", he adds. Compare the competitive companies that have
taken steps to understand their customer needs, he says: Apple
and Google. "They have implemented services that take advantage
of network innovations."
It’s up to operators to get more value from the
service chain, he adds. "We see a fundamental opportunity from
the business point of view. There is a growing opportunity
driving complex projects."
Which is where, he says, Ericsson can come in, to advise
operators. "We have been investing in software, in OSS and BSS.
We have hired people from the market and we are growing young
talent in the company."
And Ericsson’s managed services contracts enable
the company to bring in talent from operators with which the
company has deals — companies such as Sprint in the US
and Hutchison in Europe. "They have brought a big injection of
IT skills," he says.
In addition, there have been the acquisitions of systems
integrators and consultancies, of which Milan-based Pride,
announced in January 2010 and completed in February, was the
largest. "It has a very strong focus on OSS/BSS, with
multi-vendor expertise," says Corella. The deal — for
no price has been quoted — strengthens
Ericsson’s consultancy operations in the
"Pride’s core focus is in telecoms, but the
company also has interests in energy, utilities and
government," he adds. "That gives us a change to look at those
But transformation in telecoms is the main driver, though
customers vary in their needs. "Some want to run the
transformation themselves, and some want a full service from
us," Corella explains. "We are not prescriptive. Some of our
customers are keen to retain critical parts of their technology
in-house." Others are happy to let a managed service company
run the radio access network or other parts of the system. "We
can be a project partner or we can run the full programme as a
managed services provider."
He cites one operator which provides fixed and mobile services
as well as broadband, but all in separate silos. "We are
working to transfer the whole operation to one network
operations centre," says Corella. "That will release a huge
part of the cost."
Before all that came a "technology and business process
assessment" when Ericsson "redesigned the system", he adds:
"It’s very much something we have developed over
time, based on our managed services experience. We can improve
performance, bring in synergies and methodologies and tools."
Technologies come from Ericsson’s own portfolio,
supported by its research and development, or from the open
market, he says. "The customer can choose, especially because
there are some very strong and established players and the
customer may already have made investments. That’s
why we are not prescriptive."
There has to be an open approach, he emphasises:
Ericsson’s own global NOCs are equipped with
This wide portfolio is necessary when companies consolidate, he
points out. They will want to create a single portfolio of
services, with a single billing system, but typically will have
inherited a number of billing and other systems. They have to
be consolidated, "otherwise they won’t achieve
Even without consolidation of separate companies, there is
scope for consolidation of separate units in a company
— units that exist because they date back to the
profligate days when the business was expanding rapidly into
"I wouldn’t say it was bad practice," says
Corella. "It was the market dynamics of the time, and the speed
the business has evolved over the past 15 years. Then, all that
mattered was to get new customers in." Speed of implementation
was the key; efficient re-use of software came second.
Now, the priority is to deliver more to the customer for less
cost. The change is starting, he warns. Ericsson, at least, is
ensuring it is prepared. GTB