The Hindu : Business : Ericsson bags $2 b Bharti Airtel order

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Thursday, Jul 19, 2007
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Ericsson bags $2 b Bharti Airtel order

Special Correspondent

The equipment supplier will manage Bharti’s GSM network across 15 circles

— Photo: S. Subramanium

LEVERAGING EXPERTISE: Mats Granryd (left), Managing Director, Ericsson India, and Sanjay Kapoor (right), President, Bharti Airtel, Mobile Services, signing documents at a press conference in New Delhi on Wednesday.

NEW DELHI: Swedish telecom equipment supplier Ericsson on Wednesday announced that it had bagged a Rs. 8,000-crore ($2 billion) order from India’s largest mobile operator Bharti Airtel.

“We are honoured that Bharti has chosen to partner with us in this grand venture that underpins our strategy of providing communication for all through sustainable and innovative solution,” Ericsson India Managing Director Mats Granryd told newsmen here following formal signing of the memorandum of understanding.

Hailing it as the largest ever expansion deal Bharti signed, Bharti Airtel Joint Managing Director Akhil Gupta commented that this was perhaps the largest deal in the Indian telecom sector.

Incidentally, this is Bharti’s second outsourcing deal in a month after it gave a $900 million contract to Nokia-Siemens for network expansion and managing services across eight circles. The two-year deal is one of the biggest contracts for Ericsson too. The last deal Ericsson had with Bharti was for $400 million in 2004.

The Bharti-Ericsson deal envisages that the equipment supplier would design, plan, deploy, optimise and manage Bharti Airtel’s GSM network across 15 circles in India as well as for its pan-India prepaid platform across 23 circles.

Under deal, Ericsson would provide 2G/3G core based mobile soft switch for data services and a pan-India prepaid platform using Intelligent Network technology for better service quality to prepaid users. It also covers the core network part of 3G but for starting 3G services the company would have to float another tender for radio enable network.

“This contract is an important part of realising Bharti’s vision of a converged network and of expanding coverage in rural India to launch innovative voice and data services for Indian consumers,” Mr. Granryd said.

Bharti Airtel claims to have 40.74 million mobile users and is adding close to two million new subscribers every month.

The current deal would allow Bharti to expand into rural areas further consolidating its leadership position.

Commenting on the deal, Bharti Airtel CEO Manoj Kohli said: “Our partnership with Ericsson allows us to focus and delivering a better customer experience leveraging Ericsson’s global expertise to enhance our networks.”

Ericsson is managing networks that serve more than 65 million subscribers worldwide.

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