Ericsson continues to win deals in the unglamorous but fast-growing managed services space, building on Friday’s contract announcement with 3 Italia with news today that it has won its first major deal in Africa via Zain Nigeria. Under the five-year deal, Ericsson will operate Zain’s nationwide GSM and WCDMA networks in the country, which include more than 4,000 base station sites. About 450 employees will be transferred from Zain to Ericsson. According to a statement, Ericsson will be responsible for “the network operations, field operations including optimisation, third-party vendor management… and business support systems.” Zain said that the managed services agreement will help drive its goal of becoming a top-ten global mobile operator by 2011, primarily by improving network availability and capacity, and reducing operating costs.
Ericsson’s latest win comes amid a growing interest from operators in outsourcing the management of their networks. “We are seeing… huge interest from all operators when it comes to managed services,” Ericsson’s head of managed services, Valter D’Avino, told Dow Jones Newswires last week. The same report cites Bernstein analyst Pierre Ferragu as predicting that the market for managed services will grow significantly, especially in the mobile sector, from an estimated US$15 billion to US$20 billion last year. In March, Ericsson won a seven-year deal with Vodafone UK and was also linked to a potential US$2 billion deal with US operator Sprint. The world’s largest mobile infrastructure vendor has announced more than 100 managed services contracts since 2002 and leads the market in operator outsourcing. For the full-year 2008, Ericsson reported a 17 percent growth in sales of managed services, contributing SEK14.3 billion (US$1.8 billion) of sales to its total Professional Services revenue base.