Network Outsourcing Deals

Australia's 3rd largest mobile operator VHA - a 50:50 joint-venture between Vodafone and Hutchison - is to outsource its network operations to Nokia Siemens Networks (NSN) in a seven-year deal expected to be worth hundreds of millions of dollars. The contract includes service management for a number of key parts of VHA’s mobile network - core, transmission and radio networks - and equipment supply for its core network. The deal was VHA’s "first major network contract” since the company’s formation.


A similar, but much larger, deal was done by the US's 3rd largest mobile operator Sprint and the world's largest network equipment supplier Ericsson in July 2009, worth up to $US 5 billion over the seven-year term of contract. Around 6,000 of Sprint employees were transferred to Ericsson. Ericsson assumes responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks, while Sprint retains technology and vendor selections.

Outsourcing network operation strategy seems to be an option for operators, especially the non-leading ones, who wish to focus more on marketing and business strategies, and leave the technical resolutions to the expertise of its supplier partner.