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 Home > V & D 100 > V&D 100 - 2004 > ERICSSON: Beyond Selling Networks
  V&D 100 - 2004
ERICSSON: Beyond Selling Networks
Ericsson's outsourcing deal with Bharti heralds a shift from equipment sales to services
Tuesday, June 15, 2004

From state-of-the-art basic telephony equipment, GSM, and now WAP and GPRS, Ericsson has again emerged as one of the top telecom infrastructure companies in India. The company hit an annual turnover of Rs 2475 crore in FY 2003–04, a jump of Rs 1024.7 crore over FY 2002–03, making it the number one company in the telecom infrastructure group.

It could not have been a better year for Ericsson India. The company closed the biggest network outsourcing deal till date, with the Bharati Televentures. Under the three-year, $400-million deal Ericsson will manage, maintain, operate, and optimize Bharti's GSM/GPRS cellular networks.

With this deal, Ericsson gets to manage Bharti's networks in Delhi, Haryana, Punjab, Himachal Pradesh, Uttar Pradesh (west), Andhra Pradesh, Tamil Nadu, Chennai, Karnataka, and Kerala. And, Ericsson will build and manage the three new circles of Rajasthan, Uttar Pradesh (east), and Jammu & Kashmir.

The deal agreement also provides for the takeover of 250 Bharti technical employees by Ericsson. The company is also involved in the conducting the pilot project for Bharti's EDGE plans.

The company also closed the $150-million CDMA wireless infrastructure deal with Tata Teleservices. The contract includes deployment of end-to-end network solutions in the Tamil Nadu and Karnataka circles, and core network equipment in other TTSL circles.

Managing Director: Jan Campbell

Area of operation: GSM and CDMA infrastructure, switching and transmission equipment, IP, datacom
Address: Ericsson India Private Limited, DLF Cyberciti, Sector-25A, Gurgaon - 122 002, Haryana, India
Tel: 0124-2560808, 5080808
Fax: 0124-2565454
Web site: www.ericsson.co.in

V&D estimates

CyberMedia Research

Highlights
Network outsourcing deal with Bharti worth $400 million
CDMA wireless infrastructure deal with TTSL worth $150 million
Bagged DoT IP and datacom order for 11 out of 15 circles
Will implement expansion plans of Bharti, Hutch, Idea, RPG, and BSNL

In FY 2003–04, Ericsson India will be executing switching deals for Reliance Infocomm. The deal is expected to bring in $20 million to the company. The deal involves installing NLD switches on the Reliance network.

The company is also eyeing a big chunk of the network expansion plans of Bharti, Hutch, Idea, and RPG in various circles as demand for more lines arises due to the rapid expansion of cellular-subscriber base. For Hutch, the infrastructure contract covers Karnataka, Andhra Pradesh, and Chennai.

Ericsson has established 19 out of 41 GSM networks in India and has a share of more than 40 percent in GSM infrastructure market. Ericsson's customers in the cellular domain in India include BSNL, Bharti, Idea Cellular, Hexacom, Hutchison, Reliance, and RPG Cellular.

Ericsson also implemented BSNL's plan to expand in north and east zones.

In the switch segment, of the 71 operational networks Ericsson has presence in 36 giving it almost 50 percent of the market share. Similarly in the radio segment, the company is present in 28 networks giving it 40 percent of the market.

Ericsson has also emerged strongly in the area of IP and datacom, having bagged 11 out of 15 circle-wide orders from Department of Telecom, based on the Tigris Multi Service Access Platform. The 11 circles are Punjab, Gujarat, Orissa, UP (east), UP (west), Orissa, Bihar, Madhya Pradesh, Haryana, Himachal Pradesh, and West Bengal.

The company also has installed seven out of 12 switches at VSNL and they handle 75 percent of the international calls made through VSNL's gateway. For the BSNL and MTNL networks, Ericsson has installed over 1.3 million fixed lines. They are also supplying transmission equipment to the railways and defense services. It is the sole supplier of AXE-based trans-local switches for carrying Reliance's backbone traffic.

Headquartered in Gurgaon, Ericsson today has more than 500 employees across 16 offices in the country including R&D centers at Bangalore and Hyderabad. The company has production units at Jaipur and Kukas in Rajasthan.

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