The announcement comes just one month after Motorola’s network equipment rival Nokia revealed plans to relocate its managed services hub from Finland to India, with both vendors looking to drive down the cost of handling services such as network monitoring and development for their clients.
Wipro and Motorola’s joint venture vehicle will be called WMNetServ, and will provide managed services including planning, deployment, optimization, security, operations, and support services to public and private network customers. It will support functions such as billing and customer relationship management.
WMNetServ will be based in London, UK, but its main delivery center will be in India, where it will also host a Global Network Operation Center that will integrate with Motorola’s existing GNOCs to provide network-monitoring services.
WMNetServ won’t begin operations until August 31, and no details of its financial or headcount targets have been disclosed. Dr A L Rao, Wipro’s COO, told Computer Business Review that his company would own the majority stake in the venture, which will initially draw on resources from Wipro’s 8,000-strong division focused on the telecoms sector.
Like all the big network communications equipment manufacturers, Motorola has been attempting to build a services operation that can meet the demand from under-pressure operators for a third-party company to take on the task of upgrading and operating their complex, heterogeneous network environments. Ericsson, Nokia, and Huawei have secured major managed services deals with the likes of 3, Hutchison, and Vodafone in the last 12 months.
Motorola itself has won recent managed services deals with Wateen Telecom in Pakistan and the Commonwealth of Virginia. But Rao said Motorola decided to team up with Wipro in order to add an offshore delivery capability and improve its scalability, as well as gaining access to our telecoms practice. WMNetServ will initially target clients in Motorola’s pipeline, and Rao said he expects to sign several deals during the calendar year.
Wipro has built up its telecoms unit through a number of recent acquisitions including Finnish mobile software development firm Saraware, and Austrian semiconductor design company NewLogic. These deals helped make it the largest provider of outsourced R&D services in the telecoms sector where it competes against Finland’s TietoEnator.
Mercer Management Consulting estimates that telecoms companies will increase their spending on managed operations from $7.6bn in 2005 to $18.9bn in 2010, with wireless operators being particularly aggressive, notably those in emerging markets such as India where they lack internal resources to support the often complex technical networks. Mercer claims that by 2010, some 60% of wireless operators will be buying some form of managed services.
In June, UK wireless operator Vodafone revealed plans to outsource IT and network functions as part of its program to strip out some 528m pounds ($996m) in annual costs within five years. It currently spends 560m pounds ($1.1bn) on developing and running systems covering systems such as billing and CRM, but hopes to achieve cost savings of between 25% and 30% within three to five years through outsourcing.
