re: EMC on MMSC Replacement Contracts (?)
>> Are Recent Global MMS Agreements Multi-Vendor Or Replacement Contracts?
EMC World Cellular
February 10, 2002
The recent signing of a global framework agreement for MMS infrastructure, between Ericsson and Telenor Mobile, has raised a key, yet not much discussed issue. Is the market beginning to see the first MMSC replacement contracts or, is this merely a multi-vendor contract? Under the terms of the agreement, which involves all Telenor Mobile operations in Europe and Asia, Ericsson will provide the MMSC platform and related systems, as well as network integration services. However, it is as yet not clear what implications this contract with Ericsson will have for Telenor Mobile's (domestic operation) existing relationship with CMG, whose MMSC platform, Telenor Mobil currently has in deployment. The two likely scenarios are that, this new contract could be a replacement contract, where Ericsson's MMSC platform will be deployed to replace the current CMG platform or it could be a multi-vendor agreement, where both platforms from CMG and Ericsson will run side by side.
Other than confirming that it has signed a contract with Ericsson, Telenor Mobile has declined to give any further comment surrounding the agreement, nor as to specifically which of its operations in Europe and Asia the framework agreement will apply to. The operator will only state that its intention is to see the Ericsson MMSC platform deployed across its operations in Europe and Asia over time. Looking across Telenor Mobile's portfolio across Europe and Asia, it is reasonable to assume the agreement will definitely apply to the operations, in which Telenor Mobile holds a controlling stake. However, some of these operators, with the exception of DiGi.Com, have already launched MMS with infrastructure supplied by other competing vendors.
Country Operator MMSC supplier
Thailand TAC Nokia
Sweden Sonofon Openwave
Hungary Pannon Nokia
In November 2002, the Telecom Italia Group, also awarded a global agreement to CMG to supply wireless messaging solutions across the 15 divisions of the Telecom Italia Group in South America and Europe. The agreement included delivery of both MMSC's and SMSC's. Given its scope, the award of the contract is significant, but likewise the situation with Telenor Mobile, what has draws attention is the consequence it will have for the groups domestic operations, TIM. TIM, in which Telecom Italia Group holds a 55.3% controlling stake, already has a MMSC in deployment (May 2002), with the platform supplied by both Ericsson and Nokia. The contract, signed in early 2002, was then the first MMSC multi-vendor contract to be awarded.
Many industry observers that EMC has spoken to are of the opinion, that the recent contract with CMG is a replacement contract, citing that the early decisions taken by operators regarding choice of MMSC vendors, are now being questioned as performance problems start to emerge. EMC has, however, not been able to confirm these speculations. The reluctance or inability of both operators and vendors in these particular cases, to implicitly make clear the state of affairs, as to how these current agreements will affect the existing supplier relations, has not helped clarify matters either.
Multi-vendor agreements for the supply of infrastructure, are not new or surprising. As MMS traffic volumes grows, the need to increase capacity will see operators entering into further agreements to acquire hardware, but not necessarily with their current suppliers. The issue here though is that MMS deployment is still in an immature phase, and we are yet to see the growth that will warrant these capacity upgrades. Short of seeing this as an investment in future projected growth (difficult to justify in a climate of capital constraint which has been marked by operators deferral of long-term investments), one is more inclined to view the recent spate of global agreements, where the operators already have existing prior agreements, as replacement contracts. The reluctance of both network operators and the vendors to comment only serves to reinforce this. <<
- Eric - |
