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Orange’s Belgian unit varies Paris rule
20 May 2010
Management World 2010: Mobistar is part of the Orange group but the CTO of the Belgian operator pursues an independent line on suppliers and product offerings
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Mobistar
Orange
Belgium
NetCracker
Comverse
Voxmobile
Telecoms operators have too many suppliers and insist too much on doing things themselves — or at least picking ‘best of breed’ vendors even when the cost of integration is too much.
Pascal Koster, CTO of Belgian operator Mobistar, believes that service providers should cut drastically the number of products they offer to customers.
“We calculate that 40% of the products we have generate very little ebitda and are responsible for most of the IT complexity,” he said in a briefing at the TMForum’s Management World conference in Nice. “You have to prune your portfolio.”
But Koster admits that his policy raises eyebrows in France Telecom, which owns a 52.9% controlling stake in Mobistar — though the company has never been renamed Orange Belgium. “I’m quite a disruptive guy in the industry,” he said at the Nice briefing.
Mobistar is characteristic of many operators: “Every element is from a different supplier,” said Koster, comparing this strategy with a car buyer who selects body, doors, engine, wheels and tyres from different companies and then tries to integrate them. “People say that the costs are high but they select the best of breed.”
He would prefer to go to one supplier for the transmission network, one for the radio network and so on. “Go for fewer suppliers. Things can be done differently with much less resource.”
Mobistar now follows a policy of buying off-the-shelf products with no more than 4% of development needed. OSS comes from relatively few companies, such as NetCracker — Koster was speaking at a NetCracker-organised briefing — and Comverse.
Operators take too long to change their IT, he warned. “When you change your IT it’s a risk, but you should do it in 18 months. You haven’t time for 24 months — the industry is changing too rapidly. Look, 24 months ago we didn’t have the iPhone.”
But simplification of product line is key, he added — warning that the minority products that generate “1% of ebitda create 80% of complexity”. Mobistar “had 150 main applications and 800 interfaces”, he added. “We’re an operator with 4 million customers and we have 800 interfaces. Just divide that.”
The strategy “needs a bit of courage”, he said. He has already “changed 25% of his personnel” in order to introduce his strategy, but he admits that he still has lively discussions with the group’s senior directors in Paris.
Koster came into Mobistar in May 2007 when it bought Voxmobile, a Luxembourg operator of which he was CEO — and Voxmobile is now Orange Luxembourg. GTB