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Our Bureau

New Delhi , June 14

BHARTI Tele-ventures has signed a $250 million (Rs 1,075 crore) contract with Swedish telecom equipment maker, Ericsson, to set up and maintain Airtel's cellular network in 3,000 towns and villages across the country.

This is the second major outsourcing deal between the two companies after they signed a $400 million agreement last year for supply of GSM network.

The rollout of the first phase of this ongoing coverage expansion into rural India will start in July. The deal also envisages expanding Bharti's General Packet Radio System network to more locations.

"As part of the agreement Ericsson will manage to supply equipment when and where Bharti requires. As a result, Bharti is free to focus on customers and business development, growing its business and efficiently evolving its network. Fast deployment will allow Bharti to offer services with minimum payback time in rural areas," said a press statement.

Ericsson will also supply its Expander solution for rural coverage to optimise both capital and operational expenditures. Bharti is among the first companies in the world, which has outsourced its mobile network to a second party. Telecom analysts predict that soon more operators are likely to follow this trend as customer acquisition becomes a priority in a competitive market.

Mr Manoj Kohli, Bharti's President, Mobility, said "Ericsson's advanced solutions and services enable us to make this strategic move towards rural areas in India."

Mr Jan Campbell, Managing Director, Ericsson India, said the agreement reinforces Ericsson's position as Bharti's long-term partner." The expansion will allow Bharti to offer new and enhanced services to its customers, as well as cover new and untapped rural areas."

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