Wednesday, July 27, 2011

Telecom Vertical Integration : Ericsson's interest in acquiring a telecom operator

I wrote about the emerging trend of vertical integration across technology industries

Similar to that thought, interesting developments are happening in telecom sector

Telecom equipment providers ( Ericsson, Nokia Siemens, Alcatel Lucent, Huawei, ZTE and others) are slowly moving up the value chain and increasing their scope of offerings to operators.
Earlier telecom equipment providers used to supply only the equipments but now they are offering services also along with the equipments, thus taking over some of the activities which telecom operators used to perform in house ( Managed Services)

Now Ericsson is moving one step ahead and along with a partner is bidding for a telecom operator in Nigeria

Should telecom operators of the world need to worry ?

Larger implications for firms is that their outsourcing vendor can be their competitor in future. Imagine a technology provider to a bank (such as IBM or Accenture) in future shows interest in acquiring that bank !! This is extreme danger of outsourcing !!