10/28/2010 10:56:00 AM
Cuts with a silver lining
Last week’s Comprehensive Spending Review has left a dismal air of cuts and job losses trailing in its wake. The telecoms sector largely stayed clear of the mess, except for ICT staff within central and local government, who will no doubt be under threat.
More pertinent perhaps was Sir Philip Green’s efficiency review of central government unveiled earlier this month. He pointed out that the central government has no less than 68 different mobile phone contracts, 98% of which are with Vodafone.
It does not take a genius to see that procuring 68 different contracts is hardly an efficient way to do business. No blame on Vodafone – it simply took the contracts as and when they came up. Much the same might be said of the Government’s fixed line contracts, which are largely run by BT and Cable & Wireless.
Clearly, these contracts could and should be procured in a much more efficient way. On the face of it, the huge cuts in public sector staff and a rationalisation of telecom contracts might look like being bad news, not just for the incumbent providers, but for the industry as a whole.
Not necessarily. Given that unified communications are a now a reality, there is now an opportunity to bundle all the government’s communications needs into more efficient contracts – maybe even one contract. That would be a massive business deal for whichever telecoms provider won the contract. Vodafone may lose out as its 68 contracts get bundled up, but it and no doubt its rivals, will be eyeing the new opportunities hungrily.
And as Vodafone points out in our story on page 3, there are other opportunities. Green’s review pointed out the huge cost of property within central government. A rationalisation of the estate could see a major rise in mobile working, something that is already happening in local government.
Telecoms providers could see a big opportunity in providing secure mobile communications for lone government workers. Despite the cuts, there could be everything to play for in public sector telecoms in the near future.