Telecom Lead Europe: Mobile telecoms giant VimpelCom has signed a 5-year managed services contract with Ericsson.
Ericsson will manage VimpelCom’s network operations at more than 10,000 sites in 41 cities and oversee more than 10,000 km of optical transport cables and fixed network across Siberia and the Urals in Russia.
As part of Ericsson’s first major managed services contract in Russia, more than 400 VimpelCom employees will join Ericsson.
VimpelCom, as part of its 2013–2015 objectives, will look at operational excellence focusing on cost efficiency programs throughout the entire organization.
Capital efficiency is also a focus area for the mobile giant. It aims to reduce Capex to revenues over time by deploying capital more efficiently through increased network sharing, continued business portfolio optimization and optimizing capital structure.
VimpelCom, which has 212 million customers globally, is looking for improving customer excellence, optimizing distribution and developing superior pricing capabilities by offering smart pricing in bundles, among other strategies.
In Russia, where Ericsson will be executing the managed services deal, VimpelCom posted revenue growth of 7 percent in H1, in part driven by strong mobile data revenue growth of 38 percent. EBITDA in Russia increased 16 percent year-on-year, with an improvement in the EBITDA margin to 43.2 percent.
The company is now planning to launch LTE in Moscow and 6 other regions in 2013.
Anton Kudryashov, general director of VimpelCom, says the agreement meets VimpelCom’s long-term plans in strategic programs to increase operating efficiency. The transfer of network maintenance and support to Ericsson will allow the mobile operator to effectively optimize costs and network management.
This contract will result in a major expansion of Ericsson’s services business in Russia, a country that is of great strategic importance.
Valter D’Avino, head of Managed Services, Ericsson, says VimpelCom will reduce its operational expenditure and focus even more on providing innovative solutions for its customers.
