VHA inks seven-year network outsourcing deal

UPDATE: Ericsson kit to be removed before end-of-life.

Vodafone Hutchison Australia has outsourced its service management for key parts of its mobile network to Nokia-Siemens Networks in a seven-year deal announced today.

The deal will see NSN consolidate the core networks of Vodafone and Hutchison 3 into one - ripping out the Ericsson kit that backed Hutchison's 3G network in the process.

"It's a consolidation. We're not waiting until the end-of-life [of the Ericsson kit]," NSN spokesman Phil Ore told iTnews.

"The consolidation will be done in a well-planned way."

NSN's A/NZ head Kalevi Kostiainen said the contract would create jobs.

"This is a growth engine for us," he said. "We're hiring up to 100 new jobs because of the deal."

NSN beat off rivals Ericsson and Huawei to secure the contract.

Ericsson had held the managed services contract covering Hutchison's core network since 2002.

Ericsson hangs onto IT

Although it had now lost this business, a spokesman for Ericsson told iTnews it had held onto a separate managed services contract that covered Hutchison's IT systems - at least for now.

"Ericsson currently continues to provide service management for Hutchison's IT systems," the spokesman said.

"The IT component comprises billing, provisioning and service applications.

"The core network managed service [awarded to NSN] represents one component only of the overall scope, which is the component that will be now transitioned to another vendor."

A VHA spokesman confirmed with iTnews that Ericsson's IT managed service arrangements with Hutchison were ongoing but said "that scope of work is currently under review."

No timeline had been set on when the IT managed services contract was likely to be put out to tender.

Ericsson declined to comment further.

NSN's deal

The deal announced today covered service management for the core, transmission and radio networks and equipment supply for the core network.

NSN said it would combine Vodafone and Hutchison 3's two existing operations organisations and consolidate the two core networks.

It would also manage "a number of VHA's third-party providers".

NSN said it would provide its Flexi Network Gateway packet core platform to "boost network capacity to efficiently handle the growing demand for high speed mobile data services from smart devices."

"As part of the consolidation, Nokia Siemens Networks will [also] expand the mobile softswitch (MSS) and home location register (HLR) - enabling VHA to evolve towards a single database for all its subscriber information," the vendor said.

Vodafone's urban 3G network runs on NSN kit, according to TelecomAsia. Ericsson was Hutchison's main network supplier, and also provided kit for Vodafone's 2G and regional 3G networks.

"Simplifying our core networks and streamlining our overall network management is key to delivering a superior customer experience while achieving greater operational efficiencies," said Andy Reeves, chief technology officer at VHA in a statement.

Transformation ASAP

NSN spokesman Phil Ore told iTnews the "majority of the transformation would be done at the early stages" of the seven-year agreement.

Kostiainen agreed: "The plan is to transform the core networks into one [network] as soon as possible.

"The [existing Ericsson kit] will be taken out of the network."

He said trust played a big part in NSN winning the seven-year deal.

Kostiainen also doused speculation that Huawei's invitation to bid had exerted downward pressure on the value of the deal.

"This is a very competitive market - and we don't feel bad about that," he said.

"I don't think any vendor [in the process] in particular increased that situation any more."

NSN said they could not disclose how much the deal was worth. It has been rumoured to go into the several hundreds of millions of dollars.