RCom may outsource network management

Dylan Bushell-Embling
22 Feb 2012
Daily News

India's Reliance Communications is reportedly in talks for a $3 billion deal to outsource the management of its mobile networks.

The company is negotiating with Ericsson, Alcatel-Lucent, ZTE and Huawei, and plans to finalize a contract with one vendor in around 4-6 weeks, a source told the Wall Street Journal.

According to the source, RCom plans to transfer around 15,000 of its employees to the winner, in a bid to cut its operating costs by around one fifth.

RCom's networks are currently managed through a 50:50 joint venture between the operator and Alcatel-Lucent, but the report states that RCom may sell out of this venture if its partner does not win the outsourcing deal.

Network outsourcing is a popular model in India, with Bharti Airtel and Vodafone also contracting out the job to multiple vendors.

RCom is also rumored to be close to a deal to sell off its tower assets, and then lease back capacity from the buyer. The company was forced to call off a deal thought to be worth around $9 billion to merge its tower assets to GTL Infrastructure in 2010.

The company is struggling with mounting debt accumulated from the expensive 3G and BWA auctions of that year.

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