India's Reliance Awards $1 bn Contract to Ericsson

Indian mobile phone firm Reliance Communications (RCom) on Monday announced it has awarded a $1-billion, eight-year contract to Swedish telecom equipment-maker Ericsson to run some of its networks.

Ericsson will manage the daily operations of RCom's wireline and wireless networks in northern and western India, the companies said in a joint statement.

The awarding of the contract follows a similar RCom deal announced last month with U.S.-French telecom equipment supplier Alcatel-Lucent, to deliver voice and data communication services to RCom's networks in southern and eastern India.

"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," the companies said.

Mumbai-based RCom, part of the Anil Ambani-controlled Reliance Group, is India's third-largest mobile phone company with about 134 million subscribers.

The deal -- aimed at cutting costs for Reliance -- comes at a time when local telecom firms are slowing down investments, amid intense competition and regulatory policy uncertainty in India, a leading global telecoms market.

Over 5,000 RCom employees -- a fifth of its workforce -- will move to Ericsson as part of the project, Ericsson's executive vice president Magnus Mandersson said.

Rcom's rivals such as Bharti Airtel and the local arm of Vodafone have already outsourced their network-management operations to non-Indian partners to help them focus on their core services.

Reliance Communications' infrastructure covers 24,000 towns and 600,000 villages in India, the statement said.