Embarq Takes a Bold Step with Outsourcing Deal

The Outsourced Network Operations Center Deal

Nokia Siemens Networks will assume operational responsibility under the agreement at the start of the fourth quarter of this year. At that time, those Embarq employees involved in the agreement will become employees of Nokia Siemens Networks. Their responsibilities will remain the same and are expected to expand to cover other networks and technologies supported by Nokia Siemens Networks.

“I think those employees will have more opportunity to be in a growing business,” Hansen said. “By using our employees, Nokia Siemens could build the business by making similar pitches to other businesses.”

NSN will take over existing surveillance and NOC-related systems. After nine months, they will be free to invest or consolidate as they see fit for their business. However, Hansen said he does expect some of the NOC locations will be long-term sites.

“We believe that the North American marketplace holds tremendous opportunity, and this investment demonstrates our commitment to grow our business and have the industry’s best service capabilities for communications companies,” said Sue Spradley, head of North America, Nokia Siemens Networks. She added that this agreement is a significant step forward in establishing Nokia Siemens Networks’ managed services capabilities in North America.

Embarq’s goal was to reduce operational expenses for voice traffic monitoring and technical support of its network operations and it did not want to make the large investment necessary to achieve the scale of management it could get with NSN. Hansen said the company was facing a major investment in its operations support systems and because traditional voice services are in decline, the company could not justify the investment.

“This is a huge money saver,” Hansen said. “Besides, our focus needs to be on where we are going, not where we’ve been. And our strategy going forward is that partnerships will be key and we think Nokia Siemens Networks is a great potential partner.”

Hansen said where Embarq is going is toward revenue-generating data and content services, which require a strong focus on quality of service and customer interaction. However, if Nokia Siemens Networks does well with the original outsourcing agreement for the voice network, the company would consider outsourcing the data network operations centers as well. “We’d have to take it in chunks. But it is too early to make that call,” Hansen said.

Hansen is aware of unsuccessful outsourcing initiatives, such as when his company was still Sprint and outsourced some operations to IBM. The project lacked certain oversight so Embarq created a team to manage the relationship that was made up of the deal’s key negotiators, people who understand the intricacies and expectations of the contract, Hansen said.