Bharti, Nokia in $400 mn network outsourcing deal

Bharti Airtel will outsource a part of its mobile phone network management services to Nokia in a three-year deal worth $400 million.

The deal, the sixth such for Bharti, is expected to result in the country's largest private cellular operator saving a major part of its network-related expenditure.

According to the contract, Nokia will provide managed services and expand Bharti's networks to cover all towns and cities in the eight telecom circles of Mumbai, Maharashtra and Goa, Gujarat, Bihar (including Jharkhand), Orissa, Kolkata, West Bengal and Madhya Pradesh (including Chhattisgarh).

The network monitoring operations will be carried out from Nokia's global network services centre in Chennai.

The move forms a part of the company's strategy to outsource all peripheral activities like customer management and telecom network operation. According to Bharti executives, the company will outsource only those activities that are not key to its core strength.

About 70 per cent of Bharti's network is managed by Ericsson and the rest by Nokia. Besides, the company also has an agreement with IBM to offer network platforms.

"Our partnership with Nokia will provide us the latest technology and expertise to drive growth in east India and rapidly expand our coverage in the west," Bharti Airtel President Manoj Kohli said.

Bharti had signed a $275 million deal with Nokia in 2004, which was extended by another $125 million last year.

The company also extended its deal with Ericsson for another three more years for an estimated $1 billion to design, plan, supply and commission its networks in 15 circles. Bharti also signed a $400 million contract in 2004 with Ericsson to manage services, which was extended by another $250 million in 2005.

The deal with Nokia is expected to help Bharti to concentrate on its core mobile services.

Nokia will also deploy its wireless application protocol solution across Bharti's national network to enhance its network capabilities.

It will also provide consulting services and integrate the wireless application protocol gateway into a multi-vendor environment.

The company will deploy the latest radio and core network equipment, including softswitch, flexi-base stations and mini-Ultrasite base stations, and provide services based on Bharti's capacity requirements, delivering a cost-efficient rollout of on-demand capacity.