Will Alcatel-Lucent lose managed services deal with Reliance Communications?

Telecom Lead India: Will Alcatel-Lucent lose managed services deal with mobile operator Reliance Communications?

Aditya Kaul, practice director, mobile networks at ABI Research, indicates that Alcatel-Lucent is in a vulnerable position of losing business with their Reliance Communications contract.

Reliance Communications is yet to finalize its new telecom supplier though discussions are on for a while.

Recently, Alcatel-Lucent said it will exit from non-viable markets and managed services deals.

Telecom analyst firm TBR predicted that Alcatel-Lucent may exit from some of the deals with telecom operators in the Middle East.

In another report, TBR said the global telecom managed services grew 8 percent year-to-year in second quarter. The Telecom Infrastructure Services market grew 3.2 percent in second quarter. Strong momentum in managed services and LTE deployments contributed to the growth.

According to ABI Research, as the Indian market is expected to experiment consolidation in the next few years some vendors — Ericsson, Nokia Siemens, Alcatel-Lucent, Huawei, and ZTE — are likely to get squeezed out in the process.

“Within the next two to three years we are likely to only have room for three managed services vendors in India, as consolidation takes place. Beyond Ericsson, NSN, and possibly a third vendor we don’t really see a scenario for anyone having a profitable managed services business,” said Aditya Kaul, practice director, mobile networks at ABI Research.

Due to the 2G scam and Supreme Court cancelling 122 mobile licenses, foreign operator partners like Etisalat, S Tel, Batelco, and probably Telenor are expected to leave the market.

Huawei and ZTE are amongst the vendors who won managed services deals with many of the operators that have had their licenses cancelled.

Latest indications suggest that the re-auction of the 2G spectrum waves is expected to take place in 2013. Large portions of the re-auctioned spectrum are expected to be gorged up by the large operators, and possibly by Mukesh Ambani-promoted Reliance Industries.

“Ericsson and NSN will see increases in their market shares, as the traditional large operators will most likely continue their managed services relationships. There is always a chance of Huawei and ZTE competing on price, and while Ericsson and NSN might only see a squeeze in profit margins,” Kaul added.

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