Ericsson signs $1 billion managed services deal with India’s Reliance

Ericsson has struck a managed services deal valued at $1 billion with India’s Reliance Communications, covering the management of both fixed-line and mobile networks in the north and west of the country.

The contract is for an eight-year period and will see the Swedish vendor take over responsibility for the field maintenance, network operations and operational planning of Reliance Communications’ 2G, CDMA and 3G mobile networks.

Ericsson has struck a managed services deal valued at $1 billion with India’s Reliance Communications, covering the management of both fixed-line and mobile networks in the north and west of the country.

The contract is for an eight-year period and will see the Swedish vendor take over responsibility for the field maintenance, network operations and operational planning of Reliance Communications’ 2G, CDMA and 3G mobile networks.

The deal also includes oversight of 100,000km of fibre infrastructure owned by the operator, making it “one of the first converged wireless and wireline managed services contracts in India”, according to Ericsson.

As part of the arrangement, some 5,000 employees will join Ericsson (Stockholm, Sweden) from Reliance Communications (Mumbai, India).

“This partnership will enable our enterprise customers to deploy state-of-the-art data services on our integrated network through the global expertise of Ericsson,” said Punit Garg, the chief executive officer for global and enterprise business at Reliance Communications. “This is one of the first times the wireless and wireline enterprise network is being outsourced to deliver world-class service and performance assurance.”

India’s operators have helped to pioneer the outsourcing model, aimed at lowering costs and freeing up resources for service- and marketing-oriented activities, but deals so far have tended to involve mobile operations and networks.

Last month, however, Reliance Communications signed a similar $1 billion deal with Alcatel-Lucent, covering fixed-line and mobile operation in the east and south of India until 2020.

Rival Bharti Airtel (New Delhi, India), meanwhile, has been moving in another direction, recently buying Alcatel-Lucent’s stake in joint venture Alcatel-Lucent Managed Network Service India, which was under contract to manage Bharti Airtel’s fixed-line networks until 2014.

Bharti Airtel aims to set up a fixed-line infrastructure business that replicates Indus Towers (New Delhi, India), its mobile towers venture with Vodafone India (Mumbai, India) and Idea Cellular (Mumbai, India), and will take over the responsibilities previously held by Alcatel-Lucent (Paris, France).