Bharti names its 3G suppliers as Uninor sticks to its guns in India
Tuesday, 28 September 2010 12:12 | James Barton
Bharti Airtel has confirmed Ericsson, Nokia Siemens Networks and Huawei as the equipment suppliers for its upcoming 3G network, with the Swedish vendor appearing to have landed the role of main supplier.
India’s telecommunications infrastructure is divided into regions referred to as ‘circles’; Bharti won 3G spectrum for 13 of these circles in this year’s 3G auctions, and has tasked Ericsson with constructing its network in the ‘majority’ of these. NSN meanwhile will manage the network in three circles, and Huawei’s remit remains unconfirmed – although Bharti has referred to the Chinese vendor as a ‘third partner’ in the 3G rollout, suggesting that it will handle a smaller portion of the network than NSN.
The confirmation of Ericsson as a supplier is not surprising given that the vendor had an existing contract for Bharti’s 2G network. Similarly, NSN’s contract builds on a previous agreement.
Bharti has claimed that the new network will be “specifically targeted towards mobile broadband… [and] HSPA+ ready from launch”, as well as capable of supporting “world class user data speeds”.
Bharti’s appointment of Huawei follows on from India’s government giving several operators the green light to import network equipment, quelling fears that harsh security measures would freeze foreign vendors out of the Indian market. Huawei has also won a 3G contract with Tata Teleservices, while Reliance have reportedly awarded fellow Chinese vendor ZTE with a contract.
Meanwhile, the Norwegian operator Telenor has asserted that its startup subsidiary in the Indian mobile market, Uninor, will reach its profitability targets. The new entrant has reportedly had a hard time making headway in the competitive market.
Telenor appears to have a long term plan for Uninor; it has claimed in the past that its Indian subsidiary would not break even in terms of EBITDA until three years had elapsed since its launch, which was in late 2009. Furthermore, Telenor has stated that a further two years would be required for its Indian operations to break even on an operating cash flow level.
Uninor has set itself significant targets in order to achieve this goal, aiming to reduce its opex to 35% of sales in the next three years, and capex to 10% of sales in the same timeframe.
Uninor’s operating losses have reportedly reached NOK3.4 billion (US$556 million), which allegedly prompted investors to call for its withdrawal from the Indian market earlier this month. However, Uninor’s EVP Rajiv Bawa has confirmed that the operator has “no intentions” of pulling out of India, claiming that mergers and acquisitions were the key to gaining a foothold in the market: “Once the dust settles on the M&A front, you will still see Uninor with its fair share of the market.”
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