Reliance, Ericsson sign USD 1 bn contract
New Delhi, Feb 11 : Reliance Communications Limited, India's fully integrated telecommunications service provider, on Monday signed a eight-year full-scope managed services agreement with Ericsson (NASDAQ: ERIC), the world's leading provider of communications technology and services, for USD 1 billion to operate and manage the wireline and wireless networks for Northern and Western states of India.
As per 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 Reliance Communications 2G, CDMA and 3G mobile networks.
This agreement is aimed to meet the fast evolving customer demand for communications applications and services in one of the world's most dynamic telecom markets, said the company.
Reliance Communications said it will benefit from Ericsson's proven world-class processes, methods and tools and the partnership will allow it to free up resources to focus on user experience, as well as improving innovation power, agility and speed across the specified geographies.
Reliance Communications' infrastructure covers 24,000 towns and 600,000 villages in India to which it offers converged services including voice, data and video.
Ericsson will streamline Reliance Communication's operations by bringing all aspects of Fiber, Tower Operations, Wireless Networks and Wireline Access networks to RCOM's wireless and Global Enterprise Business, across differentiated product lines.
Ericsson will also drive a modernization of the tools, processes and best practices that are applied across the business resulting in operational efficiencies by managing cost through consolidation.
Commenting on the agreement, 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."
Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services, Ericsson, said; "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 Reliance will increase focus on their core business and innovation.
"We are pleased to welcome more than 5,000 employees who will join us from Reliance Communications and support our long term commitment to India's ICT market."
This agreement with Ericsson will be driven by defined Service Level Agreement governance. Ericsson will be responsible for improving network performance and ultimately service quality, with the goal of increasing customer satisfaction and retention.
Ericsson will also work closely with Reliance Communications to identify opportunities to introduce new services and expand its existing businesses to help realize the full potential of its network.