India and China are widely seen as competitors in Africa. But in a twist to this tale, India?s Bharti Airtel and Chinese telecom equipment vendor Huawei have joined hands to upgrade the former?s telecom network in that continent.
Huawei has won an order from Bharti Airtel for modernising and expanding its 2G and 3G network infrastructure in African countries. Under the agreement, Huawei will design, plan, modernise and expand Bharti Airtel?s networks in Africa, Bharti Airtel said in a statement.
Huawei would also manage infrastructure operations and maintenance, the statement added.
Though no financial details were given, PTI reported a deal size of $400 million, citing unnamed sources.
Bharti had in 2010 completed the acquisition of a large slice of the Africa operations of Kuwait?s Zain Group. The operations were bought for $10.7 billion. Africa will be an important market for Bharti Airtel, as intense competition, wafer-thin margins and low average revenues per user (Arpu) in the Indian market make for tough business.
The company?s Africa arm is expected to make a capital expenditure of $1-1.2 billion.
For the quarter ended March 31, Airtel Africa had a loss of R87.8 crore, while revenues stood at R4,181.5 crore. It has over 44 million customers across 16 African nations, with an Arpu of $7.20 per month.
The agreement will enable Airtel Africa to rapidly expand its mobile services and mobile broadband footprint in the region, the company statement said.
?This partnership will allow us to focus on delivering better customer experience as we leverage the global network management expertise of Huawei. It also lays the foundation for the introduction of 3G HSPA (high-speed packet access) wireless broadband services,? Bharti Airtel CEO (international) and joint managing director Manoj Kohli said in the statement.
Under the agreement, Huawei will deploy its complete GSM and 3G product portfolio, working with GSM and HSPA technologies, which will further be equipped and prepared for Long-term Evolution (LTE). ?We understand Airtel?s strategic requirements and will match their fast development to achieve a win-win business success between both parties,? said Sun Yafang, Huawei chairwoman.
Bharti Airtel has operations in 19 countries across Asia and Africa, with over 223 million customers at the end of April. Huawei?s products and solutions have been deployed in over 100 countries and support the communication needs of one-third of the world?s population.