STOCKHOLM, Sweden — Wireless equipment maker LM Ericsson said Tuesday it signed a seven-year pact valued at more than $1.87 billion to manage and service the mobile network of British operator 3, part of the Hong Kong-based conglomerate Hutchison Whampoa Ltd.
Ericsson said the agreement was the largest managed-services partnership signed by the Swedish company, the world’s largest maker of mobile network equipment. Under the pact, 3 will retain ownership of the network. More than 1,000 employees of 3 will move to Ericsson.
The exact value was not announced, but Ericsson Executive Vice President Hans Vestberg said in a conference call that the deal in Britain was bigger than a similar agreement with 3 in Italy, which was valued at 15 billion kronor ($1.87 billion) over five years.
“This is a part of a trend which we see across the industry that operators in a very significant way are starting to outsource part of their business which normally was considered the core business of a mobile operator,” Copenhagen, Denmark-based telecom analyst John Strand said.
Ericsson already has managed services contracts with 3 in Australia and Italy. The company has signed similar agreements with mobile operators worldwide as it moves from being a pure network infrastructure provider to managing the networks.
“We see a growing trend toward managed services, enabling operators to become more successful in a competitive marketplace,” Ericsson Chief Executive Carl-Henric Svanberg said in a statement.
Bob Fuller, chief executive of 3, said the agreement was part of the company’s strategy to “focus on our core business of providing a convergence of communications, entertainment and information to our customers.”
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