First of its kind: Bharti outsourced fixed line network to Alcatel for $500mln

Bharti, Alcatel in $500 mn fixed line network venture

Bharti Airtel, India’s largest telecom service provider, on Thursday announced it is outsourcing its fixedline network to Alcatel Lucent for five years in a $500 million deal.

This is the first deal of its kind in the telecom segment for outsourcing fixedline network to any equipment major.

Bharti Airtel can be termed pioneers of outsourcing networks to vendors. The company has already outsourced management of its mobile networks to Ericsson and Nokia Siemens Network (NSN). Its IT infrastructure is managed by IBM.

The company on Thursday formed a joint venture with global equipment major Alcatel-Lucent to manage Bharti Airtel’s broadband and landline services. “The services would be managed by a joint venture in which Alcatel Lucent would hold 74 per cent, while the remaining 26 per cent would be held by Airtel,” said Manoj Kohli, chief executive officer (CEO) of Bharti Airtel.

The JV would be run by Alcatel Lucent with 4,000 employees, some of whom would come from the network management firm. Employees of Bharti Airtel’s fixed line setup would be transferred to the new JV company.
“It will also help us accelerate performances as we migrate to Next Generation Networks for our broadband and telephone customers, opening the door to advanced services and applications,” said Kohli.

Bharti has over 2.7 million landline users. It operates services in 95 cities. Though, this number is very small compared to its 93 million subscribers of mobile services, the average revenue per user (ARPU) of landline subscribers is very high. For broadband services, it is 21 USD per month compared to ARPU of 6 USD per month for mobile users.