Mumbai, Feb. 5: Ericsson is outsourcing its network infrastructure services to India.
The company has formed a strategic alliance with GTL, under which the Indian firm will manage the network infrastructure of Ericssons customers in the UK.
GTL is setting up a special purpose vehicle — GTL M&A Services Ltd — in which it plans to invest $100 million. Ericsson will market its services in the UK.
While GTL will provide passive site maintenance, engineering and remote management services to network operators and service providers, Ericsson will handle the sales and marketing, said GTL chairman and managing director Manoj Tirodkar.
This is the first agreement for us in the UK. But we see a trend as other operators are also looking for cost arbitrage and economies of scale, he added.
At present, Ericsson has comprehensive managed service contracts with leading mobile operators in the UK.
The UK is a mature telecom market and very competitive. Eventually, most operators will go in for managed services agreement to cut costs and will need to share both passive and active components of the network. In GTL, we found cost-efficient delivery and competence, said Ericsson managing director Jacqueline Hey.
GTL is targeting revenues of £300 million over the next three years.
Telecom penetration in the UK is almost 100 per cent. Despite this, the migration to 3G technology will require the establishment of new towers.
GTL has a pan-India network of over 3,000 towers and offers ready-to-use passive infrastructure services to wireless telecom companies in India.