Reliance Communications Limited, India's fully integrated telecommunications service provider, today signed an eight-year full-scope managed services agreement with Ericsson (NASDAQ: ERIC) for USD 1 billion to operate and manage the wireline and wireless networks in the 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.
Reliance Communications will benefit from Ericsson's proven world-class processes, methods and tools and the partnership will allow Reliance Communications 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.
This is one of the first converged wireless and wireline managed services contract in India, and one of only a handful in the world. Ericsson will streamline Reliance Communications' operations by bringing all aspects of fiber, tower operations, wireless networks and wireline access networks to Reliance Communications' 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, "We are happy to announce our partnership with Ericsson to manage our wireline and wireless network enabling us to provide a higher level of customer experience in terms of network and services. 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. We are confident that they will exceed the expectations of our customers through optimization of resources and provide us cost effective solutions."
Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services, Ericsson, said; "We are excited to partner with Reliance Communications for this strategic multi-technology managed services deal. 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 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.
"This partnership will enable our enterprise customers to deploy state-of-the-art data services on our integrated network through the global expertise of Ericsson. This is one of the first times that wireless and wireline enterprise network is being outsourced to deliver world-class service and performance assurance," added Punit Garg, Chief Executive Officer, Global and Enterprise Business, Reliance Communications.
Reliance Communications will benefit from Ericsson's proven world-class processes, methods and tools and the partnership will allow Reliance Communications to free up resources to focus on user experience, as well as improving innovation power, agility and speed across the specified geographies.