CASE STUDY MARKET: SERVICE PROVIDERS REGION: EUROPE With more than 14 million subscribers as of September 2007, E-Plus Mobilfunk GmbH & Co. KG is the third-largest mobile communications provider in Germany. Profitable growth is central to the company, which consistently gears its activities according to its operating results. E-Plus, located in Düsseldorf, has significantly increased its market share since mid-2005, experiencing the fastest and most profitable growth of the providers present on the German market. With the launch of new brands and products such as BASE, simyo, AY YILDIZ and vybemobile in 2005, the company has evolved into a brand group. Since mid-2005, these new initiatives have brought nearly 6 million users to the E-Plus fold. Seeking greater control over costs while maintaining its focus on quality, E-Plus Mobilfunk finds that Alcatel-Lucent delivers the right combination of technical expertise and proven experience in network operations outsourcing. The payoff? Increased competitiveness, better network performance, and a growing number of satisfied subscribers. E-Plus Mobilfunk Selects Alcatel-Lucent as Strategic Partner in Managing Germany’s Third-Largest Cellular Network
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CASE STUDY MARKET: SERVICE PROVIDERS REGION: EUROPE
With more than 14 million subscribers as of September 2007, E-Plus MobilfunkGmbH & Co. KG is the third-largest mobile communications provider inGermany. Profitable growth is central to the company, which consistently gears its activities according to its operating results. E-Plus, located in Düsseldorf,has significantly increased its market share since mid-2005, experiencing thefastest and most profitable growth of the providers present on the Germanmarket. With the launch of new brands and products such as BASE, simyo, AY YILDIZ and vybemobile in 2005, the company has evolved into a brandgroup. Since mid-2005, these new initiatives have brought nearly 6 million users to the E-Plus fold.
Seeking greater control over costs while maintaining its focus on quality,E-Plus Mobilfunk finds that Alcatel-Lucent delivers the right combination oftechnical expertise and proven experience in network operations outsourcing.The payoff? Increased competitiveness, better network performance, and agrowing number of satisfied subscribers.
Alcatel-Lucent | Case Study | Client Name 2Alcatel-Lucent | Case Study | E-PLus
“With our partner, we are able to meet future network construction and maintenancerequirements with greater speed, flexibility and cost synergies than we could alone.” ELMAR GRASSER, CHIEF TECHNICAL OFFICER,
E-PLUS MOBILFUNK GMBH & CO KG
The ChallengeMobile network providers are under constant pressure tokeep pace with the competition, and E-Plus MobilfunkGmbH & Co. KG is no exception. As the third-largestcellular provider in Germany, it faces a challenge familiar tocarriers of all kinds: Keep operating expenses under controlwhile ensuring the highest possible quality of service.
But for E-Plus, whose core business is its focus on thecustomer, meeting this challenge was particularly important.In order to keep rolling out the new offerings its customerswanted—and to enhance its competitiveness in theprocess—it made the strategic decision to outsource theoperations, maintenance and deployment of its cellularnetwork.
By doing so, E-Plus hoped to apply even greater energy toservice quality and customer attention, whilesimultaneously improving network quality.
Why Alcatel-Lucent?While E-Plus evaluated several other potential outsourcingpartners—including the vendors of the equipmentunderpinning its cellular network—the provider wasultimately convinced that Alcatel-Lucent was best qualifiedin helping it meet its business goals, and that it was the best fit in terms of price and service offering.
For one thing, Alcatel-Lucent has a proven track record ofsuccessfully operating, deploying, and maintaining complexcarrier networks. In managing more than 60 networkssupporting more than 90 million subscribers around theworld, Alcatel-Lucent brought the breadth and depth ofexperience E-Plus was seeking in a strategic partner.
For another, Alcatel-Lucent has demonstrated expertise inhandling a variety of technologies in end-to-end multi-vendor environments, which also has helped in fine-tuningthe comprehensive set of operational processes that it bringsto every project. This was critical for E-Plus, whose networkis composed entirely of third-party equipment.
Finally, Alcatel-Lucent delivers a single-sourced global
C H A L L E N G E S
• Improve competitiveness by reducing operatingexpenses
• Apply greater energy to focusing on customers
• Increase network quality
• Speed delivery of new services in respond todemand
S O L U T I O N
• Establish strategic partnership withAlcatel-Lucent for outsourcing of operations,maintenance and deployment of cellularnetwork
• Retain responsibility for strategic networkplanning and development, including selectionof mobile communications locations andequipment
B E N E F I T S
• Reduction of operating expenses helps E-Plusimprove competitiveness
• Greater focus on core business allows E-Plus todeliver innovative services for clearly definedcustomer segments at sensible prices
• Improved efficiency and network flexibilitycontributes to continued profitable growth
Alcatel-Lucent | Case Study | E-PLus 3
solution that simplifies contact points and provides clearaccountability at all stages of the project. It backs this up with 10 Global Network Operating Centers and more than 15Data Centers providing 24X7 support anywhere in the world.
“Our decision to enter a strategic partnership with Alcatel-Lucent was designed to guarantee our subscribers a network ofconstantly increasing quality over the long term,” Grasser says.“It put us in a position to focus even more attention on thedevelopment of simple, cost-effective mobile communicationssolutions for clearly defined customer segments.”
The SolutionE-Plus engaged Alcatel-Lucent as its strategic outsourcingpartner at the end of January 2007. Key to the arrangement was its desire to retain responsibility for strategic networkplanning and development, including the selection of mobilecommunications locations and equipment. In this way, E-Plus felt it could meet its goal of focusing on customersand service quality.
But E-Plus entrusted everything else to Alcatel-Lucent.This included the transfer of the business divisionsresponsible for the operation, maintenance and deploymentof the cellular network.
Specifically, Alcatel-Lucent now handles the following:• Equipment, including installation, commissioning and documentation
• Network rollout, including construction planning, site acquisition and communicating with local authorities and contractors
• Network operations, including supervision, service provisioning and network provisioning
• Network maintenance, including field staff dispatching and tools management
• Facility management, including management of facility contractors and local power suppliers
• Spares management, including repairs, logistics and inventory management
“I see Alcatel-Lucent as an expert on construction,operation and maintenance,” Grasser says. “That helps me
keep my people even more focused on creating a high-quality network while still keeping costs under control.”
The Added ValueE-Plus knew that Alcatel-Lucent delivered an unmatchedmix of technical expertise and managed service experience.It also learned how well its new partner could meet adifferent kind of challenge: The smooth transfer ofhundreds of personnel.
A key part of the outsourcing agreement called for 750employees to be moved from E-Plus to Alcatel-Lucent,where they would still be responsible for the operation,maintenance and deployment of the cellular network.Given the importance of these employees to the continuedsuccess of E-Plus, Alcatel-Lucent made sure to address theirconcerns about the move—and win their trust as well as the trust of E-Plus’s top management.
Just as important for E-Plus was the speed with whichAlcatel-Lucent could meet the initial targets of thecontract. The original terms called for Alcatel-Lucent to move from the RFP stage in September 2006 to thetransition stage within six months. But Alcatel-Lucent metthis goal in just five months—assuring E-Plus it could bedepended on to handle aggressive timelines going forward.
This was a critical concern for the cellular provider, whichas part of its combined focus on competitiveness and servicewas looking to ensure faster rollouts of new offerings inresponse to customer demand. Consequently, E-Plusrecently moved to extend the outsourcing contract withAlcatel-Lucent from three years to five years—a sign of the trust it’s placing in its new partner.
“We were very satisfied with the performance of Alcatel-Lucent during the first months,” Grasser says.“Thanks to their well-coordinated team and experiencewith other international outsourcing projects, the transitionphase went smoothly and was managed professionally.”
Next StepsWith the partnership between E-Plus and Alcatel-Lucentnow solidly in place, E-Plus is planning to devote evenmore of its attention to ensuring quality of service for itscustomers. In fact, with its ability to focus on networkdesign, strategic planning and development, E-Plus hasalready seen a 16% increase in its subscriber base and a 3%increase in its service revenues—bucking the trend amongcellular providers in Germany, which are struggling withdecreasing revenue streams.
“We’re the strongest growing in terms of revenue,” Grassernotes, with service revenues in the third quarter of 2007having reached an all-time hight of 735 million Euro(US$1.08 billion) and earnings up by 17% year-over-year.He adds that by retaining control over networkdevelopment and planning—while Alcatel-Lucent handlesoperation and maintenance—E-Plus can concentratefurther on keeping costs in check, helping it become even more competitive in Germany’s cellular market.
An independent evaluation by the German telecompublication Connect bears this out. In announcing testresults in its October 2007 issue, Connect notes that E-Plusnow matches market leaders Vodafone and T-Mobile on keyquality metrics. “Due to relatively low operation expenses,[E-Plus] offers attractive tariffs,” Connect also points out.“This was rendered possible by the outsourcing of itsnetwork operations.”
SummaryIn selecting Alcatel-Lucent as its strategic partner, E-Plushas met the key business imperatives it defined when itdecided to outsource the operation, maintenance anddeployment of its cellular network. It has achieved thereductions in operating costs it sought; brought the focusback to customer service and network quality; and improvedits position in the competitive German cellular market.
“For us, it’s always the same two things,” Grasser says. “Keepincreasing quality for our customers, and keep costs undercontrol. Alcatel-Lucent helps us do that.”
