Bharti, Alcatel-Lucent in $500-mn outsourcing deal
Friday, May 01, 2009 (08:36:40) Tags: Business, Pact, India
New Delhi: Telecom major Bharti Airtel on Thursday awarded a $500-million deal to Alcatel-Lucent for outsourcing the management and servicing of its broadband and fixed line network for five years.
The deal involves creation of a joint venture with Alcatel Lucent holding 76 percent of the equity, and Bharti having the remainder 24 percent.
"This joint venture will help us accelerate performance as we migrate to the next generation networks for our broadband and telephone customers," said Bharti Airtel's chief executive and joint managing director Manoj Kohli.
The new entity, which is yet to be named, will have about 4,000 employees, with a large chunk migrating from Bharti. The two companies signed a managed services partnership, including all end-to-end activities like service rollout, installation and fault repair and service continuity.
"There were many notable names that were considered for this agreement and we are happy that Alcatel-Lucent was chosen," chief executive of Alcatel-Lucent Ben Verwaayen told reporters.
While both company's official remained tight-lipped about when the new company will begin operations and the investment made into the new entity, Kohli said the joint venture will manage only Bharti's network and not deal with other companies.
"Customers will not be shifted to the joint venture, all customers will remain with brand Airtel," Kohli added.
Alcatel Lucent, however, will be free to pursue other outsourcing deals, though its chief executive refrained from saying whether this model will be emulated with other service providers.
"It is not appropriate to talk about future deals at this moment," said Verwaayen.
Bharti Airtel, which offers broadband services in 95 towns, does not plan to increase its footprint into other towns.
"We have no intentions of going beyond the top 95 towns we are present in. Our objective is to increase our revenue from these towns," Kohli said. (IANS)