International mergers

The world’s telecommunications market with its national fiefdoms, loose market deregulation, over-bearing government regulation and occasional fierce competition lends itself to M&A as a means of growing, and sometimes sustaining revenues, by accessing new markets.
Whilst telcos still have cash they are better positioned to buy in foreign markets as their own markets may see M&A as anti-competition
Tony Poulos
on BillingViews.

Interesting article by Tony Poulos above. He indicates that big telcos are looking beyond their own borders for additional sources of non-organic revenues whilst avoiding anti-competition rules in their local jurisdictions.

Naturally one of the cited benefits of M&A (Mergers and Acquisitions) is the consolidated operations allows for major cost reductions. ICT is one of the first factors identified. OSS / BSS is a big part of telco ICT consolidation so it’s assumed that the two big OSS / BSS suites would roll into one and the rest discarded. Sounds easy enough in theory.

In practice it’s a long way from being easy. Without even considering the technological challenges, there are complexities in cultures, processes, service offerings, reorganisations, terminologies, etc to navigate around.

The most common approach to a merger is for the dominant organisation to keep their OSS / BSS suite and support staff, migrate the other organisation’s data / services across and then power down the other organisation’s OSS / BSS. It’s common to power down the support staff of the other organisation shortly thereafter too.

I wonder instead whether the merger is actually an opportunity to start afresh without the accumulated baggage of two complex, misaligned OSS/BSS suites and associated people, process, technology and services?

This alternate approach would see both suites being run autonomously and separately, whilst preparing a simplified, joint future OSS / BSS state (processes, topologies, applications, requirements, etc). Once the future state is identified, approved and commissioned, then both organisations would migrate their data and services to the future state.

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2 Responses

  1. As there usually one dominant partner in the post merger world, the strong tendacy to believed “ours is best” will discourage adoption of this very plausable option. Nice thought though, I like it.

  2. Hi Laurence,
    Yes, that seems to be the modus operandii of the dominant partner.
    I remember one client where I was doing due diligence – they had been the dominant partner in a takeover some years before and had retained their “comfort-zone” OSS suite. Unfortunately that OSS suite had a few gaps that they were looking to fill. Little did they know that one of the tools that the weaker partner had was actually ideally suited to filling the gaps. The dominant partner had only been using it for order and address management (yes, they were still paying licensing fees on the full functionality believe it or not!). Last I heard, they still weren’t plugging the gaps with that product though… Too far outside their comfort zone, so spreadsheets were sufficing.

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