Huawei will manage the network of the Nigerian telecom giant, Airtel, in a deal worth $400m. This will cover the whole of Airtel African operations. This is part of Airtel continuous strategy to cut cost by all means.
Huawei will design, upgrade and expand Bharti’s 2G and 3g networks besides operations and maintenance. Bharti Airtel, an Indian company, invested $9b for networks that covered about 15 African nations. Right now, it has presence in 16 African nations.
With the landscape becoming very competitive, any cost cut is surely a good thing. Airtel has already outsourced some of its network operations to Ericsson as some of the technical activities are handled by Ericsson.
To remain competitive, any telco must figure out to keep OPEX low. OPEX means the network operating expenditure that directly impacts profits. As the market has shown recently, the best Nigerians can do for these telcos is to purchase value added services. The era of minutes is over. Selling airtime will not keep any of the big giants very profitable. They have to do more and that will mean going into partnerships with developers and distribute other services in their networks.
Another metric that continues to push Airtel to its recent outsourcing of key activities is ARPU (average revenue per user). That means how much they generate from each subscriber. In Nigeria, that is falling. This is not only for Airtel, it is the same for MTN, Etisalat and the the CDMA Starcomms.
So cutting cost by outsourcing services is the way Airtel has taken to improve OPEX.