Reliance Communications (RCOM) will expand its voice and data communications for many of its customers in India under a new, historic agreement with Alcatel-Lucent (News - Alert). The eight-year, network managed services contract is valued at over $1 billion. It is aimed at improving network performance and providing next generation services in a wide part of the telecom market in India. Both companies said the new agreement – which builds on existing operations between the two – is reportedly the first of its kind managed services contract, and will involve diverse devices and platforms.
The network upgrade will mostly impact customers in eastern and southern India. Beyond the benefits seen for both customers and the two companies, the contract is also important because it comes at a time when makers of telecom equipment “are facing a major challenge in India, as local telecom operators have slowed down investment,” according to a report from The Wall Street Journal.
Under the agreement, Alcatel-Lucent will set up and operate next-generation operations support systems for Reliance, as it outsources the management of its fixed-line and wireless operations. Tools will also be provided to upgrade network performance across Reliance’s wireless, wireline, long-distance, fiber and utilities’ functions as part of the contract.
“We are happy to announce our new partnership with Alcatel-Lucent, which is a transformative leap from the limited scope and vision of traditional outsourcing of services,” Gurdeep Singh, CEO, Wireless Business, Reliance Communications (News - Alert), said in the announcement of the unique agreement. “This will enable Reliance Communications to take the lead in offering next generation telecom solutions that will meet and exceed the expectations of our customers, and help them to transit from voice-led usage to a seamless data experience across multiple devices and platforms.”
Among the new or improved services will be:
- Radio frequency coverage testing
- Service delivery management.
In addition, Reliance Communication will see streamlining of its operations, with independent wireless and fixed-line offerings combined.
As part of the contract, some 4,000 Reliance Communications employees will be reassigned to Alcatel-Lucent.
“This business association is an extension of our long-standing relationship with Reliance Communications, and our commitment to India. It also demonstrates our renewed focus on managed services as we apply greater selectivity on more value-added contracts,” Rajeev Singh-Molares, president, Asia-Pacific, Alcatel-Lucent, said in the statement. “The enormous scope of this agreement will bring a wide variety of skills, expertise and hands-on know-how that we can leverage for the benefit of others.”
Punit Garg, CEO, Global and Enterprise Business, Reliance Communications also noted that, “This is first time that National Long Distance network and Access network (Enterprise) is being outsourced to deliver world-class service delivery and assurance performance. Our enterprise customers will be able to deploy state-of-the-art data services with high confidence underpinned by our integrated network and expertise of ALU.”
To say the least this is a big deal because of the size of Reliance Communications which has a customer base of about 130 million, including over 2.5 million individual overseas retail customers. It also has over 35,000 Indian and multinational corporations including small- and medium-sized enterprises and over 800 global, regional and domestic carriers. It is also significant because it is one of the largest of its kind in terms of outsourcing, and obviously is a feather in Alcatel-Lucent’s cap.
In fact, Munish Seth, president and managing director, Alcatel-Lucent India, highlighted this by stating, “We believe that our extensive experience with Reliance Communications has played a major part in the expansion of our existing relationship, and the awarding of what is one of the largest and most strategic contracts for us to date.,” He added that, “This is a significant milestone for Alcatel-Lucent in India.”
This may be the first of such moves by Reliance who is expected to make an announcement about the management of telecom networks in western and northern India in the not too distant future.
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Edited by Peter Bernstein