Nokia Siemens Wins $700 Million Deal From Bharti

Nokia Siemens Networks has won a $700 million contract from Bharti Airtel, the ailing telecom equipment maker’s biggest contract win in seven months.

The order from Bharti includes the expansion and upgrade of GSM networks in eight of its regions and follows a similar size major services deal with Nokia Siemens unveiled last week.

Analysts noted services deals were likely to be more profitable than the supply of kit but said selling the latter was probably key to securing further services business in future.

“Services deals are the key for Nokia Siemens. However, it’s a question how much services can they sell if their equipment is not there,” said Jari Honko, Analyst at Swedbank Markets.

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But the analyst said it was not clear what margin had been secured on the latest deal and said selling cut-priced hardware could impact profitability in the short term.

“Protecting market share with prices could hurt profit plans for 2010,” he said.

Nokia Siemens, which battles for the No 2 spot in the ailing mobile gear market with low-cost rival Huawei, has become more aggressive under its new Chief Executive Rajeev Suri after the venture saw its market share decline fast last year.

The contract with Bharti includes network planning, implementation and project management, handling of local logistics and materials, as well as system integration for the base station sites, the company said in a statement.

Nokia Siemens said it will also ensure that Bharti Airtel’s core and transport network is 3G-ready to enable fast roll-out of 3G services at a later date.

“The two companies will also work together to trial LTE services,” the telecom player said. (Reuters)