Outsourcing: Telecoms Give Their Networks the Boot


"Sprint also had a bad experience with its previous large outsourcing contract ," notes Dawson-a $400 million outsourcing deal with IBM to overhaul its call centers. "That didn't really pan out the way the [two] companies planned, and Sprint ended up bringing a lot of that activity back in-house."

What does this deal mean for customers of Sprint-or others who have announced (or will announce) similar outsourcing pacts? Potential service disruption is possible in the short term. Long term, however, there could be an upside.

"Since Sprint is planning to reinvest the savings in the network and in other areas rather than simply profit taking," says Dawson, "customers may notice indirect improvements which result from the deal."

would be a welcome change for those who've complained about Sprint's poor customer service and network coverage in the past.

What U.S. carrier is next in line to outsource its network is unclear. Number-three Sprint was the ideal candidate for such a deal because it had been suffering from a lack of network scale against its major competitors, needed to cut costs, and maintained a complex set of three networks, says Dawson. Qwest operates at a similar scale and could be eyeing a network services contract, she notes.