RCom may outsource network management

RCom may outsource network management

Dylan Bushell-Embling  |   February 22, 2012
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.
Dylan Bushell-Embling
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