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Telcommunications - Outsourcing upside down
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Elder
#11 Posted : Friday, January 28, 2011 9:02:20 AM
Rank: Elder

Joined: 9/7/2010
Posts: 2,148
Location: elderville
Good post @Muganda more so given the time of the first one. It is interesting that whereas Airtel is clearly cutting down on cost with the aim of being efficient such that even 1 bob a minute calls make money for them we find some of the competitors shouting about how such low calls are not sustainable instead of adjusting their operations and strategy to compete against that move by Airtel. So far it seems only YU has a clue on what Airtel is doing.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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Papa Investor
#12 Posted : Friday, January 28, 2011 9:28:14 AM
Rank: New-farer

Joined: 6/3/2010
Posts: 96
Having worked in western multinationals for a while,....can tell you that mentality is usually empire building (not just MNC's, its the natural human tendency to want to control and everything in house especially if you have the resources to do it)

You have to be brave and a little nuts to hand over what you consider to be the core of your business (for mobile firms, the network is usually treated like the holy grail....). Generally MNC's work on maximing margins based on charging highest possible prices...so lets see how all this plays out.

The only challenge to the model is that the partner ecosystem is not as developed as it is in India...IBM did not even have an office in Kenya, no credible BPO in Kenya....so this is a challenge but also presents a great opportunity for Kenya to jumps start this new knowledge areas of the economy
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VituVingiSana
#13 Posted : Friday, January 28, 2011 9:52:04 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,378
Location: Nairobi
@papainvestor - Well, I hope Airtel business/needs for Africa [well, EAC] forced IBM to set up shop here... Furthermore, I would love to see new or better BPOs setting up shop!

BTW, Airtel has made Kenya the HQ for Anglo Airtel... So it would be a shame/blot if they remained a piddling #2 in Kenya!!!

Apparently India is becoming 'expensive' for many BPOs so look further afield & we have Kenya with an (sorta) educated population & many English speakers. Even the BPOs TRAINED many Indians to speak like Americans/Brits!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Abunuasi
#14 Posted : Friday, January 28, 2011 10:12:57 AM
Rank: New-farer

Joined: 8/25/2010
Posts: 97
Location: Kenya
Low calling rates and outsourcing does not guarantee success. For telecommunications firms to be successful, they need to develop new products and services. This constant need for product innovation is required in order to generate tomorrow’s revenues. With product life cycles for telecommunications products and ser-vices becoming shorter all the time, it is becoming disproportionately critical to success-fully replace revenues generated by today’s products and services with the products and services of tomorrow.
It has often been said that 90% of a product’s success is being first to market.
This is mainly a battle between innovation coupled with diversity against cheaper rates coupled with outsourcing. Time will tell who emerges the winner.

@Kularaha.. My sukuwa wiki seller analogy is a primary business principle just like the law of gravity. If you are disputing that, climp at the top of KICC and jump....
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Elder
#15 Posted : Friday, January 28, 2011 10:24:53 AM
Rank: Elder

Joined: 9/7/2010
Posts: 2,148
Location: elderville
Abunuasi wrote:
Low calling rates and outsourcing does not guarantee success. For telecommunications firms to be successful, they need to develop new products and services. This constant need for product innovation is required in order to generate tomorrow’s revenues. With product life cycles for telecommunications products and ser-vices becoming shorter all the time, it is becoming disproportionately critical to success-fully replace revenues generated by today’s products and services with the products and services of tomorrow.
It has often been said that 90% of a product’s success is being first to market.
This is mainly a battle between innovation coupled with diversity against cheaper rates coupled with outsourcing. Time will tell who emerges the winner.

@Kularaha.. My sukuwa wiki seller analogy is a primary business principle just like the law of gravity. If you are disputing that, climp at the top of KICC and jump....


In your world then one can't have all - innovation coupled with diversity and cheaper rates coupled with outsourcing? It is not an either or situation.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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Abunuasi
#16 Posted : Friday, January 28, 2011 10:28:01 AM
Rank: New-farer

Joined: 8/25/2010
Posts: 97
Location: Kenya
@Elder In your world then one can't have all - innovation coupled with diversity and cheaper rates coupled with outsourcing? It is not an either or situation.

I wonder if your english teacher taught you the bmeaning of the word MAINLY:

My statement clearly reads:
This is mainly a battle between innovation coupled with diversity against cheaper rates coupled with outsourcing. Time will tell who emerges the winner.
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KulaRaha
#17 Posted : Friday, January 28, 2011 10:29:36 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Abunuasi wrote:


@Kularaha.. My sukuwa wiki seller analogy is a primary business principle just like the law of gravity. If you are disputing that, climp at the top of KICC and jump....


I actually wasn't even referring to you, but to another safcom apologist.Dont take it so personally, your sukuma wiki principle is factual.

BUT, there are big successful businesses globally that have "strange" strategies...does not mean they will fold up and close shop tomorrow...wait and watch..............and learn.
Business opportunities are like buses,there's always another one coming
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Much Know
#18 Posted : Friday, January 28, 2011 10:55:11 AM
Rank: Elder

Joined: 12/6/2008
Posts: 3,586
For most there is nothing to learn from a sukumawiki seller who takes a business loan uses it to dole out free sukumawiki(he is currently interested in many sukumawiki takers not profit), no lesson at all!, but some are waiting to learn something, i really wonder what? You have to remember these sub-cost calls are being supported by a USD10Billion loan, if it is not working, then what? and it is not working.
Ras Kienyeji Man
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  | | Edit by user: Friday, January 28, 2011 11:03 AM | Reason: Not specified
selah
#19 Posted : Friday, January 28, 2011 10:58:45 AM
Rank: Elder

Joined: 10/13/2009
Posts: 1,950
Location: in kenya
I think what Airtel has done is an ingenious way of cutting cost but at the same time I think the risk it assumes by this strategy is enormous.

outsourcing ur customer care has been a trend all over but when you outsource the infrastructure that is the back bone of your business that is a risk that needs a sound contingency plan.

Lets look at safaricom its customer care is dead they hav automated it making it moribund and unresponsive to customer needs. so if I was Bob I would partner with a world leader in outsourcing to make that sector of its business competitive and efficient such that they can leverage on it as a profitable BPO.

What I think Airtel has done is separate their business into specialized business units these business units then partner with world players to create an efficient synergistic companies .For instance Airtel has a separate infrastructure company (bharti Infratel Limited) that specializes in building BTS (providers of passive infrastructure services as they call it)

'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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muganda
#20 Posted : Friday, January 28, 2011 11:22:48 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Abunuasi good points, don't loose your nerve.


A classic battle between Innovation v/s Efficiency - we need a strategy missive on this one.

Safaricom is very innovative, there's no need to chase them down this road. But the giant has a weakness, and it is efficiency. Now on this one point Airtel just needs to copy unashamedly all initatives Safricom comes up with and do them much more efficiently.

You tell me what the verdict would be? A slim efficient man begins a 5kms race 2kms behind a fat man who because of innovation started his race early. A friend once told me there are only two types of companies the quick and the dead.

So Safaricom/Orange/YU need to quickly unlearn the bad habits and do better. Heck, see the pace with which KCB/Barclays are chasing efficiency this year.
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