Ericsson won an exclusive contract with 3 Italia that includes a seven-year agreement to modernize and upgrade the existing WCDMA/HSPA network. Ericsson will modernize and upgrade the existing 3G mobile broadband access and core networks, optical and radio transport, data charging, and consumer-services platforms and systems.
The deal also extends the exclusive managed services contract signed in 2005 for the total management of 3 Italia’s multi-vendor 3G network and telecom IS&IT infrastructure. The prolonged contract runs for five years. It has a reduced financial value compared to the previous contract, as a result of the returning of some third party contracts and the implementation of the new service delivery model, enabling scale and skill synergies in the operations. Also, the optimized network is more efficient and requires less service activities. Transition and transformation costs will put pressure on margins initially but over the total contract period the profitability is satisfactory.
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