Bharti to work with Ericsson, Nokia Siemens on 3G

By Melanie Lee

BOAO, China (BestGrowthStock) – Leading Indian telecommunications carrier Bharti Airtel (BRTI.BO: ) will work with its existing equipment suppliers when it builds its 3G mobile network following a long-delayed auction, a top executive said.

Rajan Bharti Mittal, a director on the company’s board, also said he saw no regulatory obstacles to Bharti Airtel’s pending $9 billion purchase of the African assets of Kuwait’s Zain (ZAIN.KW: ), which would make Bharti one of world’s top five mobile companies by subscribers.

On Friday, India kicked of its long-delayed 3G spectrum auction in which nine carriers are vying for licenses to build third-generation (3G) mobile networks in parts or all of India, touching off a multi-billion-dollar spending spree by the likes of Bharti and Reliance Communications (RLCM.BO: ).

“We have our vendor partners, as you know,” Mittal, sibling of Bharti Airtel’s billionaire founder Sunil Bharti Mittal, told Reuters in an interview on Saturday, on the sidelines of the Boao Forum on southern China’s Hainan island.

Mittal, who is also managing director of the telecom operator’s parent, Bharti Enterprises, named Sweden’s Ericsson (ERICb.ST: ) and Nokia Siemens Networks (NSN.UL: ) as two of Bharti Airtel’s partners.

Ericsson said in March that it had won a $1.3 billion network expansion contract to upgrade Bharti Airtel’s GSM network, while Nokia Siemens in February won a $700 million deal from Bharti.

“For 3G, we will go back to existing relationships and we will have to figure it out,” Mittal said.

“We always have and we like to maintain,” he said, referring to relationships with existing vendors.

3G BECKONS

India’s spectrum auction is expected to take about two weeks to complete, but companies will be allotted spectrum by September, meaning commercial launches of premium services such as faster Internet on mobile phones and video calling will be possible only next year.

Bharti Airtel earlier said it would be able to launch 3G services within six to eight months of receiving spectrum allocation.

“We are quite ready as a company to start the roll out if we have the spectrum,” Mittal said on Saturday. “As the younger generation is getting much more on the data, 3G will help in us bring that (to them).”

Data services account for just over 10 percent of revenue for Indian telecoms providers, according to researcher Gartner, but Bharti Airtel is betting on increased revenue from services such as mobile commerce, as voice prices fall sharply.

“For us, value-added services are a driver and we look forward to (3G) enhancing that,” Mittal said.

ZAIN DEAL ‘WORK IS ON’

Bharti, 32 percent owned by Singapore Telecommunications Ltd (STEL.SI: ), selected Zain as its second choice for building a major presence in Africa, after it twice failed to finalize tie-ups with South Africa’s MTN Group Ltd (MTNJ.J: ), the continent’s biggest operator.

The deal will give Bharti 42 million subscribers in 15 African countries, but must still be cleared by regulators. In late March, the government in one of Zain’s markets weighed in against the deal, but Bharti signed a legally binding agreement with Zain the next day.

“The work is on,” Mittal said of the deal, adding that he did not expect any other major hurdles. “This is pretty much a straight-forward deal.”

“We are now into the next phase with some regulatory approvals that need to take place, so the process has started. I can’t give you a timeframe because these things are evolving,” he said.

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Bharti to work with Ericsson, Nokia Siemens on 3G