Ericsson to manage 3's network

U.K. mobile carrier 3 has become the latest network operator to hand over operation and management of its home region network to vendor giant Ericsson under a seven-year agreement, the companies announced today.

The deal with 3 is the largest such deal for Ericsson thus far, said Hans Vestberg, executive vice president and general manager of the vendor's Global Services business unit. He said 3 and Ericsson agreed not to disclose the total financial value of the contract, but Vestberg told Telephony that it is larger in value and scale than the $2.4 billion, five-year agreement that Ericsson announced last January with 3 Italy, a subidiary of the U.K. carrier.

The new deal also is most recent in a string of managed services wins for Ericsson, some of which cover hosting and management of specific service and application, while others extend to the comprehensive management of a carrier's network. The new agreement with 3 puts Ericsson in charge of the carrier's entire U.K. network, all the more significant because 3's network currently doesn't have any Ericsson equipment in it.

This deal likely will provide a Ericsson a supply pipeline into 3's network, but Vestberg insisted that is not the vendor's ultimate aim. "That is not a goal," he said. "We do not make the technology choices." The aggreement does allow Ericsson to take over management, maintenance and expansion of 3's network and IT infrastructure, including the maintenance of the 6300 existing cell sites and the management of the carrier's core network and operations center.

Also, more than 1000 employees from 3's network and IT departments will be transferred to Ericsson, a large hiring commitment atypical of such managed services deals. As part of previous managed services agreements, Ericsson has deployed its own employees on-site with carriers, but Vestberg said the larger size and scope of this agreement will require "more manpower," and that the 3 employees joining Ericsson have the most experience in working with the network.

Bob Fuller, CEO of 3, said in a statement, "This agreement is not just the most efficient way to own and manage infrastructure of this kind, but also the way to deliver the best possible service to our growing customer base." He added that outsourcing management of its network would allow 3 to focus "our core business of providing a convergence of communications, entertainment and information to our customers."

Vestberg said Ericsson and 3 had been intensely discussing the managed services contract for the last six months.