Infrastructure vendor Alcatel-Lucent has signed a $1bn-plus managed services deal with Indian operator Reliance Communications. The vendor will provide end-to-end network managed services to the operator in Eastern and Southern India until 2020.

Alcatel-Lucent will provide Reliance with services including operations support system (OSS) integration, benchmarking and radio frequency coverage testing and service delivery management. The vendor will also be responsible for improving network performance and service quality. It will also drive the standardisation of the tools, processes and best practices that are applied across Reliance’s businesses.

Alcatel-Lucent added that the agreement will help create a leaner organisation within Reliance, with 4,000 employees moving to the new managed service operation.

“This [partnership] will enable Reliance Communications to take the lead in offering next generation telecom solutions that will meet and exceed the expectations of our customers, and help them to transit from voice-led usage to a seamless data experience across multiple devices and platforms,” said Gurdeep Singh, CEO – wireless business at Reliance Communications.

Rajeev Singh-Molares, president, Asia-Pacific for Alcatel-Lucent  added that the vendor is renewing its focus on managed services as it applies greater selectivity on more value-added contracts.

“The enormous scope of this agreement will bring a wide variety of skills, expertise and hands-on know-how that we can leverage for the benefit of others,” he said.

The deal provides crucial impetus for Alcatel-Lucent; the vendor’s share of the managed services market is currently at seven per cent, according to data from Informa Telecoms & Media, behind rivals Ericsson, IBM, NSN and Huawei. It is forecast to drop to six per cent by 2017. The firm has also seen its number of new managed services and outsourcing contract wins drop from 24 in 2009, to just four in 2011.

“This is a much needed deal for Alcatel Lucent, but I don’t know if it will be enough to make them competitive with the market leaders again, because it has been having a tough time recently,” commented Dimitris Mavrakis, principal analyst at Informa Telecoms & Media.

“In markets where LTE is already deployed, where Alcatel Lucent does not have existing LTE managed services contracts, it will be very difficult for it to replace vendors that are already there.”

“So obviously developing markets is a priority for the company now and this Indian contract will have been very much welcomed by Alcatel-Lucent executives.”