RCom awards $200 mn contract to Huawei

Reliance Communications, telecommunications and internet major, has awarded $200 million (Rs 800 crore) network expansion contract to Chinese equipment vendor Huawei Technologies.

The agreement follows a $400 million (Rs 1,600 crore) outsourcing contract Reliance Communications signed with the Nasdaq-listed Alcatel-Lucent on Wednesday.

The new contract is for expansion of Reliance Communications' CDMA, GSM and next generation telecommunications networks in the country. At present, the Anil Ambani company is on a network expansion project to extend its services to over 20,000 towns and 600,000 villages.

"We have chosen Huawei based on its established credentials as a global company producing high quality products and solutions. The relationship with Huawei will help us maintain and strengthen our leadership in India, the world's fastest growing telecommunications market," Reliance Communications Chairman Anil Ambani said in a release here today.

Under the agreement, Huawei will supply and provide deployment services for CDMA and GSM base stations, and help in creating an Internet protocol next generation network infrastructure. Reliance Communications expects this to enhance its competitive advantage in attracting new subscribers.

According to Huawei Technologies chairperson Sun Yafang, who is on a visit to India, "We are extremely proud and happy to partner with Reliance Communications which has contributed immensely to the growth of the telecom sector in India and has always led from the front in expanding the domestic market. It is, in no small measure, a credit to Reliance Communications that India is today the fastest growing telecom market in the world".

Indian telecommunication majors are increasingly looking at outsourcing their outsourcing network management and rolling out of services to global majors. This enables them to concentrate on their growth plans, mainly adding more subscribers and expanding footprint across the country.

On Wednesday, the Aditya Birla group company Idea Cellular has awarded a Rs 220-crore ($53 million) contract to IBM, the world's largest computer-services provider, to deploy and maintain interactive voice response (IVR) system.

On the same day, Reliance Communications has awarded $400 million network expansion contract to global service provider Alcatel-Lucent to provide a comprehensive suite of network integration services, including network optimisation, system support and general project management among others.

Earlier, Nokia Siemens Networks - a joint venture between Nokia and Siemens had bagged a $900 million (Rs 3,690 crore) deal from Bharti Airtel for the expansion of wireless and fixed line services.

In February 2004, Bharti signed a $400 million deal with Swedish equipment vendor Ericsson to build and manage networks across 13 circles, which was followed by a $250 million deal in June 2005. Then in August 2006, the Sunil Mittal company signed the biggest deal to date - a $1 billion network expansion - with Ericsson.

It had also signed a three-year deal with Finnish vendor Nokia worth $275 million and later a $125 million three-year agreement in August 2005. It also signed another deal in October 2006 for the same eight circles for $400 million. BSNL had awarded two hosting agreements to Ericsson for downloads and ringback tones. Financial terms of these contracts were not divulged.