Ericsson in $1B Bharti Expansion

Ericsson awarded monster contract to expand and upgrade Bharti Airtel's network across India

August 24, 2006

1 Min Read
Ericsson in $1B Bharti Expansion

With its mobile subscriber base growing at more than 1 million new signups every month, Bharti Airtel Ltd. (Mumbai: BHARTIARTL) has awarded Ericsson AB (Nasdaq: ERIC) a monster $1 billion network expansion contract. (See Ericsson Wins $1B Bharti Contract.)

Under the three-year deal, Ericsson will design, deploy, and manage additional network capacity across 15 regions for India's largest wireless carrier. The expansion will allow Bharti to boost its coverage in rural areas as it works toward its goal of reaching all major towns in India by next March.

The deal stems from a $400 million managed services contract Bharti awarded Ericsson in 2004 that covers more than 70 percent of the operator's network. (See Ericsson Networks Bharti and Ericsson Expands Bharti.)

That contract runs until 2007, but Bharti's network has had to accommodate several million new customers since the deal was signed. The carrier added 1.26 million mobile subscribers in July alone, bringing the total to 24.34 million.

Ericsson will also upgrade Bharti's network with its mobile softswitch, media gateway, and MSC servers, enabling the carrier to cut operational costs and introduce new services. Bharti its kitting itself out for an advanced IP network, signing a deal with IBM for a service delivery platform. (See IBM to Manage SDP for Bharti .)

Outsourcing network management to an equipment supplier is becoming de rigeur for mobile carriers, particularly in emerging markets where operators prefer to focus on managing their rapidly expanding customer bases. (See Indian Operator Outsources to Finland.)

Bharti has signed deals with Nokia Corp. (NYSE: NOK) to manage the areas of its network not handled by Ericsson. (See Nokia Wins $125M Bharti Deal and Nokia Expands Bharti.)

— Nicole Willing, Reporter, Light Reading

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