Bharti-Ericsson: Perfect Partnership

Indian telecom is moving at supersonic speed on the mobile front. We have

outgrown China in terms of monthly mobile additions, and currently adding

another 5.9 mn lines and the gap is expected to grow further. All this has

brought good cheer to the mobile operators fraternity in the country, who are

busy planning big, trying to maximize their share of the pie. 

Large operators have mega plans for the next couple of years: Reliance

Infocomm is planning to add 30-40 mn lines; BSNL, 45.5 mn lines; and Bharti, 60

mn lines. And being a leader, Bharti is also #1 in terms of the next phase of

expansion. 

Bharti Airtel, the number one mobile operator (both on the subscriber and

revenue front) in the country is not resting on its laurels. The company has

mega plans and is aspiring for 100 mn customers by 2010, according to Sunil

Bharti Mittal, CMD, Bharti Airtel. And in revenue terms the company is looking

at $7-8 bn, he added.

In terms of coverage, Bharti Airtel still has a long way to go: having

covered around 46% of the geography. Plans are to provide coverage to all towns

and cities with a population of around 5,000 by March 2007. All this means a lot

of business for companies like Ericsson and Nokia, the preferred infrastructure

suppliers for Bharti Airtel.

Recently, Bharti Airtel has awarded Ericsson an estimated $1 bn contract,

including expansion and an upgrade of its GSM/GPRS network and managed services.

In addition, Ericsson will also supply, implement and maintain an Intelligent

Network (IN) for Bharti's pre-paid subscriber base across all of its 23

circles in India.

According to an Ericsson spokesperson, a major portion of the deal is related

to infrastructure expansion and not managed services. The deal also does not

have a 3G component as Bharti is planning for another RFP for 3G infrastructure.

The agreement is valid for three years whereby Ericsson will manage, design,

develop, and deploy Bharti's network, including capacity and coverage in 15

regions.

This deal is also the single largest contract in Indian telecom and signifies

that the telecom industry has matured over the years and is well on the way for

an explosive growth. It is also expected that India will soon witness many such

large deal announcements by other operators like BSNL, Hutchison Essar, Reliance

Communications, and Tata Teleservices.    

The Ericsson deal also has a flexible component as it takes care of the

existing 2G/2.5G infrastructure which can be scaled up for 3G infrastructure in

the future, with the deployment of IP soft switches as a common 2G/3G switching

core, paving way for an all IP network.

“The deal highlights the key partnership role with Bharti Airtel and gives

us a strong foothold in the Indian market. We will continue to share the success

of the Indian mobile revolution, with continued hard work and dedication,”

said Bimal Dayal, key account manager, Bharti Airtel, Ericsson India.

The Win-Win Model



The MCMS (Managed Capacity and Managed Services) model was a unique model

two and a half years back but it has started gaining acceptability worldwide, as

both operators as well as infrastructure providers benefit in the long run. Not

only Bharti, others in the telecom space have also benefited from the whole

exercise creating a win-win framework for both the parties.

It was a new thought process and the focus was to reinvent the

operator-vendor relationship and steer it into a “Strategic Partner”

framework. This model has definitely helped Bharti as well as Ericsson and Nokia

in creating an infrastructure that uses less resources and less amount of time

for deployment. 

The new contract reiterates the success of the MCMS model, and extension of

the Bharti-Ericsson relationship for another three years is an endorsement to

the fact that Ericsson partnership has yielded good results for the company.

The Nextgen Network



The new deal is also unique as it focuses on creating a platform for the

future. This will not only help in delivering innovative products and services

to customers but also help in reducing cost and introducing new services in a

cost efficient way. It also marks Bharti as the first national operator to

embrace mobile soft switch across its national footprint, and paving way for an

all IP network. .

The Bharti-Ericsson combine have shown how future networks will be created

based on convergence. The endorsement of mobile soft switch makes it easier for

operators who are still unclear about their migration path as it helps in

solving lot of technology obsolence problem.

There is an implicit understanding that networks of the future must run on a

common IP-based backbone. This also has larger implications for the IT and

telecom networks, which have been maintained separately in the past. With both

networks converging and 'wireless' offering the benefit of mobility, telecom

service providers such as Ericsson seems to have an

edge vis-a-vis other infrastructure providers.

“This is a landmark contract for the recognition of mobile soft switch

technology in the Indian telecom industry. Ericsson has over 140 soft switch

commercial contracts awarded globally (GSM, WCDMA & fixed networks) with the

first commercial deployment of mobile soft switch going way back to 2003. We

will be leveraging this experience for the benefit of our Indian customers,”

said Mats Granryd, managing director, Ericsson India.

For faster roll-out of services in smaller towns and cities, Ericsson is

planning to deploy some innovative telecom infrastructure products that are

customized for the Indian market. In the past, the M&O (manage &

operate) service delivery team has been responsible for this. In the month of

August, the company rolled out approximately 1,150 BTSes. Recognizing such large

scale roll-out in future, Ericsson has chosen India for a global operational

excellence pilot in the M&O area, and is creating a unified global work

force management system.

It would be interesting to see how infrastructure providers cope up with

rural deployment challenges, a task not easy considering the vast geography of

India. Also, these areas have infrastructure problems and it would not be easy

even to maintain it. But, a service provider, who can administer it well, will

be the winner in the next phase, as real growth is expected to come from these

rural areas.

Pravin Prashant



pravinp@cybermedia.co.in