The Hindu Business Line : Nokia to manage 10 more Hutchison Essar circles

Nokia is now managing 27 circles in the country, which includes the $400-million deal signed with Bharti Airtel for managing its cellular network in eight circles.

Singapore , June 19

Hutchison Essar has signed a multi-million dollar deal with Finnish equipment manufacturer Nokia for outsourcing its cellular infrastructure requirements across 10 circles. This will mean that Nokia will manage and roll out the mobile network on behalf of Hutch including supply of infrastructure equipment.

Announcing the deal at Nokia Connection 2006, Mr Rajeev Suri, senior Vice-President, Asia Pacific Networks, said, "The deal makes Nokia the number one player in the Indian telecom managed services segment. The extension of the contract with Hutchison Essar will see Nokia run 19 of the operator's 23 circles. The new agreement for managing 10 circles is in addition to the nine circles contract awarded by Hutchion Essar earlier this year and is for a five-year period." Nokia is now managing 27 circles in the country, which includes the $400-million deal signed with Bharti Airtel for managing its cellular network in eight circles. Nokia refused to reveal the size of the contract signed with Hutch due to non-disclosure agreement. Post-the agreement with Hutch to take over network management of its 19 circles, Nokia has shifted 800 Hutch employees to its payrolls.

Of the 10 new circles that Nokia has bagged, seven are greenfield operation. The company is also in discussions with Bharti Airtel for a 60-million line contract.

New trend

Outsourcing network management to equipment providers is a new trend that Indian operators have taken on in a big way. Bharti was the first in the country to adopt this model by outsourcing its network to Swedish major Ericsson.

The model allows operators to focus on marketing and developing innovative packages and services, while the equipment providers provide the technology.

The business model allows operators to reduce costs at a time when the average revenue per user is on the downswing.

For equipment providers, managed network gives them guaranteed business for the contract period even if the core cellular infrastructure has been set up by another equipment vendor.

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