Swedish telecom equipment major LM Ericsson Telephone Co. (ERIC) announced Monday that it has signed an eight-year managed services contract valued $1 billion, with India's telecom service provider Reliance Communications Ltd.
As per the deal, Ericsson will manage day-to-day operations across wireline and wireless networks and will account for field maintenance, network operations and operational planning of Reliance Communications 2G, CDMA and 3G mobile networks.
"This is one of the first times that wireless and wireline enterprise network is being outsourced to deliver world-class service and performance assurance, said Punit Garg, chief executive officer, Global and Enterprise Business, Reliance Communications.
The contract will cover 100 thousand kilometers of fiber and mobile infrastructure in 11 telecom circles, across North and West of India, including Delhi and Mumbai. The integration is expected to bringing in operational efficiencies and cost optimization.
Ericsson will be responsible for enhancing network performance and service quality, and will work with Reliance Communications to expand its existing businesses and identify opportunities to launch new services.
According to Ericsson, about 5,000 employees from Reliance Communications will be moved to Ericsson, which is said to provide them with global opportunities.
Commenting on the deal, Gurdeep Singh, chief executive officer - Wireless Business, Reliance Communications said, "...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."
In Stockholm, Ericsson is currently trading at 76 Swedish kronor, while ERIC ended on Friday at $12.10 on the Nasdaq.
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