STOCKHOLM, Sweden-L.M. Ericsson said it won a seven-year contract to manage wireless operator 3’s network and IT infrastructure in the United Kingdom. The deal is worth an estimated $1.9 billion.
Ericsson said the deal calls for 3 to retain ownership of and be responsible for the strategic direction of the network and IT assets, while Ericsson will be responsible for the management, operation, performance and expansion of the network and IT infrastructure.
Ericsson explained that a supply of equipment, additional technology and related services is part of the future relationship, and that this is the largest managed-services partnership contract it has signed to date-as well as one of the largest ever signed in the industry.
“We see a growing trend towards managed services, enabling operators to become more successful in a very competitive marketplace,” said Carl-Henric Svanberg, president and chief executive of Ericsson.
Ericsson said it’s also responsible for ongoing radio network rollouts and the maintenance of 6,300 existing radio sites. Additionally, Ericsson noted that more than 1,000 of 3’s employees from the carrier’s network and IT operations would be transferred to Ericsson.
Ericsson also has managed-services contracts with 3 in Australia, Italy and Sweden. Interestingly, the deal between Ericsson and 3 in Italy, worth $1.9 billion over 5 years, involves Ericsson managing a network supplied mostly by rivals Nokia Corp. and NEC Corp. In the U.K., 3’s network has been primarily supplied by Ericsson.
“This is an important step in the implementation of our strategy and means we can focus on our core business of providing a convergence of communications, entertainment and information to our customers,” said Bob Fuller, chief executive of 3 U.K.
Fuller added that 3 will continue to focus on developing 3G services. As part of Hong Kong-based conglomerate Hutchison Whampoa Co., 3 was Europe’s first operator to launch an all-W-CDMA network.
News of the agreement drove Ericsson’s stock up 4.1 percent in trading.
