Mumbai, Feb. 11: Telecom service provider Reliance Communications Ltd (R-Com) today entered into a $1-billion deal with Ericsson to operate and manage its wireline and wireless networks in the western and the northern states of India.
The deal comes less than a month after the Anil D. Ambani group company entered into a similar deal worth $1 billion with the Franco-American communications equipment maker Alcatel-Lucent for the eastern and the southern states.
Both these managed service agreements are seen as part of R-Com's efforts to bring down costs.
Under the terms of the contract, Ericsson will manage the day-to-day operations across wireline and wireless networks and will take over responsibility for field maintenance, network operations and operational planning of R-Com's 2G, CDMA and 3G networks. The deal will cover some of R-Com's key telecom circles, including Delhi and Mumbai.
The deal is spread over a period of eight years. Ericsson will absorb close to 5,000 employees of R-Com, thus bringing down the latter's manpower costs. Alcatel-Lucent absorbed around 4,000 employees.
R-Com said in a press statement that it would benefit from Ericsson's processes, methods and tools. The partnership would enable it to free up resources and focus on user experience and improve agility and speed across the specified geographies.
Ericsson will streamline R-Com's operations by bringing all aspects of fibre, tower operations, wireless networks and wireline access networks to R-Com's wireless business. The overseas company will also drive modernisation of the tools, processes and practices that are applied across the business, resulting in operational efficiencies.
It will also be responsible for improving network performance and service quality at R-Com with the goal of increasing customer satisfaction and retention. Ericsson will also work with R-Com to identify opportunities to introduce services.