AlcaLu Lands $1B Deal from Reliance

Alcatel-Lucent has secured a new seven-year managed services deal with Reliance Communications Ltd. (RCom) worth more than US$1 billion, the companies announced Wednesday. (See AlcaLu Wins Major Reliance Deal.)

The vendor has an existing managed services relationship with the operator, the result of a joint venture deal struck in 2008, but was believed to be under severe competitive pressure to hold onto the engagement. (See AlcaLu, Reliance Form Joint Venture.)

The new contract, which runs until 2020 and covers Eastern and Southern India, involves the creation of a new managed services organization within RCom with 4,000 staff who will run the operator's fixed and wireless networks (previously managed by separate teams).

Part of Alcatel-Lucent's job is to develop standardized "tools, processes and best practices" for both fixed and mobile. To achieve this, the managed services team will implement new OSS systems and real-time network optimization tools with the aim of improving operational performance across RCom's wireless, wireline, long-distance, fiber and utilities architectures. The operator is anticipating "improving network performance and ultimately consistent service quality, with the goal of increasing customer satisfaction and retention" across all types of customers.

The deal comes as Alcatel-Lucent is reassessing many of its managed services deals as part of its restructuring program: The company intends to exit those managed services deals that do not deliver value to the company but clearly the engagement with RCom is the type of long-term, multi-functional deal that the vendor is looking to maintain. (See Alcatel-Lucent Sharpens Its Focus.)

The question that remains, then, is which company will be awarded the RCom managed services deal in Northern and Western India? Previous reports suggest that Ericsson AB, Huawei Technologies Co. Ltd. and ZTE Corp. have been considered as potential managed services partners for the operator. (See IndiaWatch: RCom Shortlists Vendors For Outsourcing.)

Ray Le Maistre, International Managing Editor, Light Reading