Telecoms outsourcing: Virgin on the sensible

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Virgin Media and rival broadcaster BSkyB have resumed high-level talks in an attempt to resolve the dispute that led to Virgin removing Sky channels from its pay-TV platform.

However, a resolution to the dispute looks some way off and the fight for the home TV market looks set to continue into the near future. Given this fierce competition, leading players in the telecommunications industry are desperately looking for ways to tighten their belts in an attempt to gain the upper hand over their rivals.

With this in mind, Virgin’s recent network deal with BT Wholesale suggests that companies are looking to outsourcing both as a way of cost-saving and improving efficiency.

The £98 million network deal between Virgin and BT Wholesale signifies how the telecommunications industry is moving forward. The deal will see BT Wholesale manage the operation and maintenance of Virgin’s fixed-line switching network, along with a number of existing support contracts. 184 Virgin Media staff will be transferred to BT, saving costs in both wages and training.

Outsourcing within the telecommunications industry has traditionally been focused on non-telecoms based companies outsourcing their telecoms needs to companies like BT.

Of course, this outsourcing of telecoms infrastructure and telecoms management continues, because for companies that are not in the telecoms space, this is most certainly not a core competency.

However, the BT-Virgin deal has heralded a new era of telecoms outsourcing as companies within the telecoms industry look to outsource different elements of their service which they do not specialise in – Virgin’s speciality is not in network infrastructure and therefore this outsourcing was a common sense, albeit innovative, decision.