Alcatel Wins Eight-Year, $1 Billion-Plus Contract From RComm

Franco-American telecoms equipment maker Alcatel-Lucent SA has won an eight-year deal valued at more than $1 billion to manage Indian carrier Reliance Communications Ltd’s networks in the east and south of the country.

The network outsourcing contract will cut costs for India’s No. 3 carrier, where 4,000 - or about 15 percent - of its employees will move to Alcatel-Lucent as part of the deal, Gurdeep Singh, Chief Executive of Reliance Communications’ wireless business, told reporters.

Most leading Indian telecommunication carriers have outsourced the management of their networks to firms including Ericsson, Nokia Siemens Networks and Chinese firms Huawei Technologies Co Ltd and ZTE Corp as they try to lower their costs.

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

Alcatel and Reliance Communications formed in 2008 a joint venture which was managing the Indian firm’s network in a five-year, $750 million deal. That joint venture will end after the award of the new contract, Singh said.

The new contract covers management of mobile, fixed-line and corporate networks, Reliance Communications said.

Reliance Communications, controlled by billionaire Anil Ambani, had 134 million Indian mobile phone customers as of November, according to data from the sector regulator, ranking third in a market of nearly 900 million mobile users.

The deal is also a boost for loss-making Alcatel-Lucent, which has been hit by competition from low-cost Chinese rivals and lower spending on network gear by global telecoms operators.