3G Heralds Multi-Vendor Shift in India
India's mobile managed services market is edging toward complex multi-vendor deals, with the award of 3G-related agreements set to be the key catalyst for the trend, believes a senior Ericsson AB (Nasdaq: ERIC) executive.
"The Indian market will definitely move toward multi-vendor deals," stated Ericsson's global head of managed services, Valter D'Avino, during a recent interview with Light Reading Asia. "Globally this is happening, and it will happen here also. 3G rollout here [in India] is going to accelerate it," he added. (See Reliance Com Joins India's 3G Club, Bharti Gets a Makeover Before 3G Launch, India's Tata Ready for 3G Launch, and India's 3G Auction Ends, Raises $14.6B.)
Explaining just why 3G rollouts will accelerate the award of multi-vendor managed services deals in India, Girish Kadam, a Global Services Sales vice president at Ericsson, added: "3G is a new technology in India and there are very few people experienced in it. An operator will look for a managed service partner that has experience in this technology and can offer scale at the same time."
And unlike most existing 2G mobile network managed services deals in India, that partner might not be the lead mobile infrastructure supplier. (See Ericsson's India Crown Under Threat.)
Ericsson isn't the only managed services provider geared up for multi-vendor deals in India. While such deals are scarce currently, "if our customers move in that direction, we are ready for it," says Urs Pennanen, the head of India region at Nokia Networks .
In addition, the shift to multi-vendor deals might also give Chinese hopefuls Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) the chance to make an impact on India's managed services market. (See 3G Heralds Managed Services Shift in India.)
However, it could also strengthen the grip of the western vendors on the managed services market. One of the few multi-vendor managed services deals in India currently is at Sistema Shyam TeleServices Ltd. (MTS India). Although Huawei and ZTE are the incumbent CDMA network equipment suppliers, Ericsson is now one of three managed services contractors at the operator, along with the Chinese duo. (See MTS Splits Services Deal 3 Ways.)
This isn't the only example. India's first multi-vendor deal, albeit in the fixed-line market, was between Alcatel-Lucent (NYSE: ALU) and Reliance Communications Ltd. The five-year agreement is valued at US$750 million and is believed to be one of the largest multi-vendor managed services deals in the world. (See NTT Beefs Up in Europe and AlcaLu, Bharti Form Joint Venture.)
— Gagandeep Kaur, India Editor, Light Reading