Reliance to award $1 billion contract to Alcatel-Lucent

Indian mobile phone company Reliance Communications will award a $1-billion, eight-year contract to US-French telecom equipment supplier Alcatel-Lucent, the companies said Wednesday.

The contract plans to deliver voice and data communication services to RCom's networks in southern and eastern India, they said in a statement.

"Our existing joint venture is getting a new shape, which we are expanding into a multi-year contract," Alcatel-Lucent's Asia-Pacific president Rajeev Singh-Molares told reporters in Mumbai.

Alcatel-Lucent plans to enhance RCom's operations and combine previously independent wireless and wireline teams into a single network management organisation, which would help the Indian firm to focus on growing its business.

The deal comes at a time when local telecom firms have been slowing down investments, amid intense competition and regulatory policy uncertainty in India, one of the world's largest telecom markets.

Mumbai-based RCom, part of the Anil Ambani-controlled Reliance Group, is India's third-largest mobile phone company with about 134 million subscribers.

Nearly 4,000 RCom employees 15 percent of its workforce will move to Alcatel as part of the project, Reliance's chief executive Gurdeep Singh said.

RCom shares slid 3.78 percent to 82.8 rupees at the Bombay Stock Exchange after the announcement.

The new contract covers management of mobile, fixed-line and corporate networks, the firms said.

"India is one of the most important markets in the world. We have seen challenges in the market but believe that they are coming to an end," Singh-Molares said.

"We believe in India as a market and as a country and our deal is a manifestation of that."