Ericsson Signs Major Managed Services Contract in China

(19 Jul 2010, BWCS Staff)

Ericsson has signed a major managed services agreement with a provincial wing of China Mobile, known as China Mobile Hebei. Under the terms of the deal, the Swedish vendor will look after all 22,000 mobile stations in the province of Hebei, in a three year maintenance agreement. Hebei is home to 70 million people, 35 million of whom are subscribers to China Mobile Hebei's services.

Naturally the Stockholm-based Ericsson was quick to point out that the deal marks its largest managed service agreement in China so far. While neither side would release the financial terms of the deal, Ericsson is clearly hopeful that the deal could be extended after three years. The vendor will also be keen to follow it up with other similar managed service agreements in other parts of China. To date, such agreements between Chinese operators and western vendors have been relatively scarce.

China Mobile recently returned to profit following its first quarter of losses since 1999. For the first three months of 2009 its net profit rose by 1.8% to Yuan 83.94 billion (US$12.278 billion). The Beijing-based operator attributed its return to growth to greater penetration in rural areas. A statement at the time said "In the period, we leveraged on competitive advantages, overcame various challenges and continued to maintain favorable growth in the financial results."

China Mobile Hebei, China Mobile's subsidiary in the country's sixth most populated province is one of Ericsson's most important customers and strategic partners. According to Ericsson, the two parties have had a good long-term partnership for more than 23 years.


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