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AlcaLu strikes $1B RCom managed services deal


Tim Ferguson

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Infrastructure vendor Alcatel-Lucent has struck a $1 billion managed services deal with India’s third largest operator, Reliance Communications.

The deal runs until 2020, covering Eastern and Southern India, and is the first end-to-end managed services contract in India and one of the largest in the world. It extends an existing relationship between the companies.

The French vendor will help Reliance provide “world-class, seamless voice and data communications services” to customers and improve cost effectiveness.

Alcatel-Lucent will combine the Reliance wireless and fixed teams to create a single network management group, allowing for a leaner organisation. There will also be standardisation of tools, processes and best practices with pre-defined costs reducing investment risk.

Alcatel-Lucent’s Asia-Pacific president Rajeev Singh-Molares said the deal demonstrates the company’s “renewed focus on managed services as we apply greater selectivity on more value-added contracts”.

Alcatel-Lucent has been struggling in recent years due to declining demand for infrastructure equipment and increased competition from Chinese vendors Huawei and ZTE, which have led to a run of loss-making quarters.

The company has been conducting a cost saving and restructuring programme including the announcement in July 2012 that it planned to cut more than 5,000 jobs. There has been speculation that the company could sell business units, swap debt for equity and sell patents in order to improve its financial position.

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