Telecom equipment maker Ericsson won a contract worth an estimated $1 billion to expand and upgrade Bharti Airtel’s telecoms network, the two companies said on Thursday.
Indian carriers such as Bharti, CDMA-operator Reliance Communications Ltd. and state-run Bharat Sanchar Nigam Ltd. have annual expansion plans exceeding $1 billion each.
“The three-year services agreement will see Ericsson manage design, development and deployment of Bharti’s network, including capacity and coverage, enabling the operator to expand in rural India and reach out to all towns and cities in 15 regions,” Ericsson said in a statement.
Bharti, India’s most valuable telecoms firm, will raise resources internally to fund the order, company officials said. “This contract will take care of all our roll-out needs in these 15 circles for the next three years,” Manoj Kohli, president for mobility at Bharti, told Reuters.
Ericsson has an existing relationship with New Delhi-based Bharti, which had more than 24 million GSM mobile users at the end of July. That number is growing by more than 1.2 million a month in a 108 million strong market, which substantially exceeds the combined population of Germany and Sweden. In February 2004, Bharti and Ericsson had signed a three-year contract worth more than $400 million.
Ericsson said it would also upgrade the Indian operator’s network with its mobile softswitch system, which will allow Bharti to move toward a low-cost Internet Protocol platform. The Stockholm-based telecommunications equipment provider already manages more than 70 percent of Bharti Airtel’s GSM/GPRS network in 15 of the 23 regions making up India’s telecommunications sector.