Ericsson to manage RCom networks in $1-billion deal

Mumbai: Reliance Communications (RCom) has awarded a $1-billion outsourcing contract to Swedish telecom equipment-maker Ericsson, spread over an eight-year period, to manage its networks across the northern and western regions.

The company, controlled by billionaire Anil Ambani, would also shift about 5,000 personnel to the Swedish telecom equipment vendor as part of the deal.

Managing Networks
Under the contract, Ericsson will operate and manage RCom’s both wired and wireless networks, covering one lakh km across 11 telecom circles that includes Delhi and Mumbai.

“Given the complexity of network increasing with platforms, technologies and application offerings, we are banking on the experience, innovation and technical expertise of Ericsson to improve the productivity of our network and ensure that it delivers to its full potential.

“We are confident that they will exceed the expectations of our customers through optimisation of resources and provide us cost-effective solutions,” RCom Chief Executive Officer (Wireless Business) Gurdeep Singh said. This will enable RCom to provide a higher level of customer experience in terms of network and services, he added.

Ericsson will also take over field maintenance, network operations and operational planning for RCom’s 2G, CDMA and 3G mobile networks. The Swedish firm will also streamline RCom’s operations, apart from bringing in modernisation processes.

“The increasing uptake of new technologies requires an increased focus on customer experience management in the hyper competitive and highly-dynamic Indian telecom market. With this partnership, RCom will increase focus on its core business and innovation,” Ericsson Executive Vice-President and Head of Business Unit Global Services Magnus Mandersson said.

Fredrik Jejdling, Head of Region India, Ericsson ,said that Reliance employees will be integrated into the company’s local and global services organisation.

Similar Deal
In January, RCom awarded a similar $1-billion network outsourcing contract to telecom equipment manufacturer Alcatel-Lucent.

Under the eight-year deal, Paris-headquartered Alcatel-Lucent would manage RCom’s entire network — wireless, fixed line and data — in eastern and southern India, till 2020. About 4,000 people, or roughly 15 per cent of RCom’s total manpower, would be shifted to Alcatel-Lucent as part of the deal. In 2008, the companies had entered into a five-year, $750-million network outsourcing deal.

As of November, RCom had about 134 million subscribers. The Indian company’s share prices closed almost flat at Rs 75, while the BSE, the 30-index main bourse, also ended flat on Monday.