· Outsourced delivery: service is rendered by an external party, often the original equipment supplier, but potentially also by a 3rd party provider; build-operate-transfer agreements also fall under this category; the external party typically enjoys freedom to use resources across multiple contracts with operations having the same footprint, and therefore – apart from the common claim of better process know-how – objectively can achieve economies of scale superior to those available to the single tenant even in the best case.

· Multi-vendor manages services: service is rendered by an external party, where this party takes under the contract scope typically all network portions reasonably expected to contribute positive economies of scale, including equipment supplied by other vendors.

Impact analysis focuses on strategic aspects

Key economic goal of modifying the delivery strategies is the sustainable reduction of network operation expenses. This can be achieved through process improvements and through economies of scale due to better utilization of resources, either across different country operations belonging to the same shareholder, or by serving multiple networks with overlapping footprint (in the case of an external party with non-exclusive service provisioning agreements).

Apart from cost considerations, strategic aspects focus on the technical suitability of a solution, expressed in terms of availability (little down-time), redundancy (risk mitigation), and high quality-of-service levels, combined with the goal of maintaining the ultimate control of critical assets and activities, and higher entrepreneurial flexibility (avoidance of fixed costs, better cost predictability, sharing of risks, access to skills, and a better focus on the operator’s critical, market-side success factors).

Quantitative approaches evaluate economic impacts   

While the strategic aspects are highly qualitative by nature, quantitative approaches are the method of choice to evaluate the economic impacts of various management decision alternatives. Such quantitative methods can be broadly clustered into to-down and bottom-up approaches.

Top-down approaches yield budgetary (indicative) results for forecasting cost reductions, when only little information is available. They are based on benchmarking; differences in scale are eliminated by using only relative, no absolute values.