Wireless carries are predicted to outsource as much $1.4 trillion in operational expenses in the next five years. Outsourcing cuts cost for Western companies by relocating operations to countries were labor is many times cheaper. With the wireless industry becoming more competitive and products decreasing in profit margins, carriers are forced to ship operations to other countries. Both wireline and wireless companies will have spent over $198 billion dollars by the end of 2007. According to an Insight market report with lowering VoIP costs, companies will have no choice but to see outsourcing as part of their long-term strategy, not merely as a tactical means of lowering costs. Says Robert Rosenberg, President of Insight: Before the advent of VoIP, outsourcing was used by carriers to gain incremental cost improvements in the 10- to 20-percent range. However, the lower margins associated with IP communications as well as increasing competition are forcing carriers to rethink their entire strategy. Carriers are unbundling their value-chain and using outsourcing as a transformational strategy to achieve cost savings between 30 and 60 percent.The study covered eight wireless carriers in eight regions. Billing, training, directory services, operator services, network management, customer care, SS#7 interconnection, and OSS interconnection are the most commonly outsourced functions.
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