Alcatel wins 8-year, US$ 1 b plus contract from Reliance

MUMBAI (Reuters): Franco-American telecoms equipment maker Alcatel-Lucent SA won an eight-year deal valued at more than US$ 1 billion to manage Indian carrier Reliance Communications networks in the east and south of the country.

The network outsourcing contract will cut costs for India’s No. 3 carrier, where 4,000 or about 15% of its employees will move to Alcatel-Lucent as part of the deal, Reliance Communications’ wireless business Chief Executive Gurdeep Singh, told reporters on Wednesday.

Most leading Indian telecommunication carriers have outsourced the management of their networks, to firms including Ericsson, Nokia Siemens Networks and Chinese firms Huawei Technologies and ZTE as they try to lower their costs.

Alcatel and Reliance Communications formed in 2008 a joint venture which was managing the Indian firm’s network in a five-year, US$ 750 million deal.  That joint venture will end after the award of the new contract, Singh said. The new contract covers management of mobile, fixed-line and corporate networks, Reliance Communications said.  Reliance Commu-nications, controlled by billionaire Anil Ambani, had 134 million Indian mobile phone customers as of November, according to data from the sector regulator, ranking third in a market of nearly 900 million mobile users.

The deal is also a boost for loss-making Alcatel-Lucent, which has been hit by competition from low-cost Chinese rivals and lower spending on network gear by global telecoms operators.