Telenor is reacting to major changes in the telecom services landscape by undertaking a significant transformation of its fixed line operations in Norway, its domestic market.
The operator notes that the demand for its services is changing, and that it needs to be more nimble, so it is "undertaking a long-term effort to modernize and simplify products, processes and related IT systems in the fixed area."
Telenor Group (Nasdaq: TELN) said in a press announcement that the "complexity of internal processes and IT systems slows us. At the same time we experience reduced customer base for traditional fixed line services, while costs do not fall at the same rate."
As part of the deal, which will run until 2018, TCS will deploy its Hosted OSS/BSS Solution (HOBS), a combination of business process and IT services, pre-integrated hardware and OSS/BSS tools, and data center services.
"This is one of the largest change programs in recent history for Telenor Norway," said Telenor Norway CEO Berit Svendsen in the operator's announcement. "Our aim is to provide customers with better experiences, with improved quality and faster deliveries, while reducing costs."
Why this matters
Telenor is one of the most progressive incumbent operators in the world, and is often a trendsetter when it comes to carrier strategy, so any major move is worth noting.
A revamp of fixed line operations isn't revolutionary, but Telenor's approach is broad and includes a wholesale revamp of its back-office processes and capabilities, including migrating to a hosted OSS and BSS suite developed and managed by a trusted partner.
All incumbent operators will be experiencing the same challenges -- lower traditional fixed line revenues, lower margins and static costs. The operator's first-quarter numbers highlighted the issue, with fixed line voice revenues declining by nearly 15% year-on-year to 624 million Norwegian Krone (US$101.6 million) as 28,000 telephony customers stopped taking the service.
Drastic measures are needed to ensure that fixed line operations do not eat away at mobile and enterprise service profits. Telenor will not be the only operator opting for such a transformation.
— Ray Le Maistre, , Editor-in-Chief, Light Reading