Telcos explore outsourced models to cut costs, boost quality
LONDON, UNITED KINGDOM — The global telecom industry is facing mounting pressure to cut costs while maintaining quality, pushing smaller and challenger operators to experiment with outsourced and virtualized network models, according to a report from Developing Telecoms.
These approaches, often framed as a means to shift spending from capital expenditure (CapEx) to operational expenditure (OpEx), are reshaping how connectivity is delivered in competitive markets.
Outsourcing to cut capex burden
Deploying mobile networks has traditionally been a capital-heavy exercise, from building base stations to managing costly tower estates. For smaller players, the expense is often unsustainable. This is why models such as Infrastructure-as-a-Service (IaaS), network sharing, and Virtual Radio Access Networks (VRAN) are gaining traction.
South Africa’s Cell C has emerged as a notable case study. The operator, acquired by Blue Label in early 2025, has pivoted towards what it calls an outsourced network model. Its Chief Technology Officer (CTO), Schalk Visser, explained, “We now have access to over 28,000 towers nationwide, a footprint that allows us to deliver consistent, high-quality coverage across South Africa, including in areas where we previously had limited presence.”
Through Multi-Operator Core Network (MOCN) technology, Cell C customers effectively roam on the networks of incumbents MTN and Vodacom while still receiving services under the Cell C brand. This allows the operator to cut back on infrastructure spending while scaling faster and focusing on digital transformation. As Visser put it, the approach “enables us to scale faster, focus our resources on digital transformation, and respond more effectively to changing consumer expectations.”
Risks of reliance on partners
While the model offers cost savings, it also comes with trade-offs. Sam Barker of Juniper Research noted that Cell C is the only operator currently attempting to deliver connectivity entirely through VRAN. He warned that outsourcing means, “the more operators own, the more they control,” adding that as new technologies like 6G emerge, dependence on partners could hinder an operator’s ability to stay competitive.
Still, proponents argue that infrastructure sharing ultimately creates a healthier market. Visser pointed out that in mature markets, only two major players typically invest heavily in infrastructure, while others compete on services. This, he said, maximizes network capacity and gives consumers more choice.
A wider shift in telecom strategy
Cell C’s experiment reflects a broader industry shift. By swapping CapEx for OpEx, operators are attempting to remain lean and adaptable. As Barker cautioned, however, telcos risk becoming “a connectivity pipe” unless they align with enterprise and Internet of Things (IoT) demands. The lesson from Cell C is clear: outsourcing may relieve financial strain, but operators must balance flexibility with long-term control if they want to thrive in the 6G era and beyond.
