4G Deals Dominate Indian Market in 2016

India's telecom market opened up for equipment vendors following the recent launch of Reliance Jio, a new entrant targeting the 4G opportunity. Most equipment deals have been for expansion or modernization of 4G networks to cope with soaring levels of data traffic. Vendors have also done well out of providing managed services to existing players.

The 4G expansion is hardly a surprise. India's older operators have been in a hurry to launch and expand 4G services ever since Reliance Jio came on to the scene. To address the RJio threat, Bharti Airtel Ltd. (Mumbai: BHARTIARTL), the country's biggest operator, has awarded a 4G network expansion deal in nine telecom circles to Finland's Nokia Corp. (NYSE: NOK).

Meanwhile, Idea Cellular Ltd. , the third-biggest Indian operator, has also handed 4G business to Nokia, awarding it network rollout deals in the circles (service areas) of Kerala, Andhra Pradesh and Haryana. Besides using Nokia, Idea has signed contracts with Ericsson AB (Nasdaq: ERIC) for 4G network deployment in Maharashtra, Madhya Pradesh, the Northeast and Himachal Pradesh. As part of those agreements, Ericsson will transform Idea's radio access and core network infrastructure across nine circles for 2G and five circles for 3G.

Airtel and Vodafone India , India's second-biggest operator, have also concluded deals with Nokia for the introduction of Internet Protocol multimedia system (IMS) technology, aimed at support the rollout of voice-over-LTE (VoLTE) services.

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In the managed services area, perhaps the biggest deal this year was Airtel's agreement with Ericsson. Worth $500 million over three years, that arrangement covered Airtel's 2G, 3G and 4G networks across all 22 circles. It also made Ericsson the only vendor managing two pan-India networks in the country, the Swedish vendor having previously concluded a deal with Reliance Communications Ltd. , India's number-four operator.

Another significant managed services deal was that between Huawei Technologies Co. Ltd. and Vodafone, under which the Chinese vendor is providing support over a three-year period in Kerala, Tamil Nadu and Odisha, replacing Nokia as a managed services supplier to Vodafone in these circles.

Ericsson, meanwhile, was awarded a contract to operate and maintain Vodafone's optical fiber cable network for three years. That deal covers ten circles in East and West India.

So what's next? India's telcos have now started experimenting with carrier aggregation, which combines spectrum channels to boost connection speeds on 4G networks, and activity here is likely to pick up in the months ahead. Airtel, notably, has already deployed carrier aggregation in Kerala. And as operators look to support voice calls on 4G networks, VoLTE will get a boost. There are various indications that VoLTE deployments will grow next year.

— Gagandeep Kaur, contributing editor, special to Light Reading

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