Embarq’s New Era Begins as Nokia Siemens Takes Command

In his analysis of the Embarq/NSN deal, Price said, “Given the competitive dynamics in the North American communications market, and the focus on cost reduction, IDC believes that service providers will increasingly look at managed services more strategically.”

Hansen agreed. “If you think we’re the only ones, we’re not. There are a lot of companies in my peer group talking about it,” he said.

Price also identified one of the more interesting aspects of this deal besides its occurring in the most reluctant of markets. “NSN was selected as the managed service provider despite having no existing technology relationship with Embarq,” he said.

The Embarq network is built on the hardware of 57 different vendors. NSN is not one of them. Perhaps that is intentional on Embarq’s part to choose a vendor that can be truly neutral. But as Current Analysis’ Marcus pointed out, despite all the positive elements of this deal for both sides, it may raise questions about NSN’s status as a technology supplier.

“Just as NSN announces taking over the carrier’s legacy voice operations, rival Alcatel Lucent has announced a significant infrastructure deal to Embarq involving its next-generation service routing platform. Will Embarq and its service provider peers view NSN as an innovative technology supplier going forward?” Marcus said.

NSN’s Frank is not concerned with that, only intrigued, he said, at how it highlights the company’s Open EMS platform. “That’s right. We don’t have a single piece of equipment in their network. In the grand scheme of things, this is a classic [example] of multivendor network management,” Frank said. “We look at this as a center of excellence for this type of work that we will be able to leverage the knowledge of locally.”

Frank called this “a marquee deal for showing the market is ready to do this type of work.”

He also said it wasn’t a hard sell; it was a long sell, but not difficult because Embarq proactively sought information. “Many senior-level [Embarq] execs had come to believe that given their position in the market, they needed to do some things proactively to free themselves from thinking of themselves as a network company and be more innovative on the customer front,” Frank said. “They did a good job on their own of determining what the options were and where they needed to focus to gain financial and strategic leverage with a partner.”

Keeping Embarq’s employees didn’t hurt NSN’s chances either. “We look at these employees and the NOCs we are taking over as a key asset for us. We are endeavoring to take them on as a core part of this and make them part of the work we will do with other carriers,” Frank said.

However, NSN will be adding some process touches as well. Sue Spradley, president of NSN in North America, to whom Frank reports, said NSN’s global model for managed services relies heavily on remote processes the company uses many times over across its 160 or so contracts around the world.