Ericsson expands services contract with Bharti Airtel

Swedish infrastructure and services provider Ericsson has announced an extension of its managed services deal with Indian carrier Bharti Airtel. The new, five-year deal will see Ericsson manage Airtel’s multi-vendor, multi-technology network across 15 Indian telecom circles, which together account for 70 per cent of Airtel’s Indian network.

Ericsson will also assume operational responsibility for the Intelligent Network that manages Airtel’s prepaid customer base of more than 170 million users.

The deal is an extension of a five year managed services contract between Ericsson and Bharti for the operator’s African operations. Ericsson is managing and optimising Airtel’s mobile networks across 16 countries in the region, freeing up Airtel to focus on its core operations.

Commenting on this latest move, Airtel’s CEO for India and South Asia, Sanjay Kapoor, described the deal as a “unique partnership” and said it would lay the ground for the carrier’s third and fourth generation plays in the future.

Meanwhile Ericsson also announced a change of leadership at its loss-making chipset joint venture ST-Ericsson (STE), Didier Lamouche, currently the COO of Ericsson’s partner in the JV, STMicroelectronics, will replace Gilles Delfassy as CEO and president at ST-Ericsson on December 1.

Ericsson reiterated its commitment to the venture, but the appointment of STM’s leader to the top of the ranks will encourage speculation that Ericsson is looking to exit STE in a move similar to that recently announced with Sony Ericsson. STE’s ongoing financial struggles – the firm recorded a net loss of $211m in Q3 2011, compared to $121m in the same quarter last year, and $221m in the second quarter this year – remain a likely obstacle to any withdrawal, however.

The 15 telecom Circles under the scope of the Airtel partnership include, Delhi, Jammu and Kashmir, Haryana, Punjab, Himachal Pradesh, UP(W), UP(E), Rajasthan, North Eastern states, Assam, Karnataka, Andhra Pradesh, Tamil Nadu, Chennai and Kerala.