Ericsson (ERIC) inked its first pan-India managed services deal to strengthen its reach across all the 22 circles in the country. In particular, the company has penned a seven-year nationwide managed services contract with Reliance Communications Limited – one of the leading telecom operators of India – to enhance its wireline and wireless networks operations in the nation.
As per the deal, Ericsson will manage the network operations, field maintenance and operational planning of 2G, CDMA and 3G mobile networks of Reliance. Ericsson will basically reorganize the operations of Reliance with the addition of varied features of fiber, mobile and wireline access networks to the wireless and Global Enterprise Business of the latter. This business collaboration has come into effect since Dec1, 2014.
Notably, Reliance Communications' infrastructure covers more than 150,000 km of fiber, 2G/3G/CDMA mobile network, wireline access and enterprise network across 22 telecom circles in India. This geographical reach comprises 21,000 towns and 400,000 villages, which are offered converged services including voice, data and video.
Moreover, to further business expansion and new services introduction, this leading communications solutions provider along with Reliance Communications will explore new opportunities in India.
Our View
Amid increasing use of technologies, Ericsson’s services are in high demand among operators for the enhancement of network coverage and upgrades for better speed and capacity. Further, to maintain a superior performance with increasing traffic, there is a pressing need for network tuning and optimization. Many of the telecom giants across the world have inked contracts with Ericsson to either upgrade networks or establish an advanced network operations to boost customer experience.
We view the above-mentioned deal as strategic fit for Ericsson as it is in line with the company’s long-term objective of expanding its base and operations in the emerging markets. Moreover, the strengthening of ties between Ericsson and Reliance is encouraging.
Ericsson currently carries a Zacks Rank #3 (Hold). Some better-ranked companies in the sector include Aruba Networks, Inc. (ARUN), InterDigital, Inc. (IDCC) and ViaSat Inc. (VSAT). All three sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment