Ericsson signs key deal with 3 UK

Mobile phone equipment giant Ericsson said yesterday that it had signed its biggest ever managed services deal with operator 3 UK, owned by Hutchison Whampoa.

It did not give a value for the deal, but a spokesman said it was worth more than a similar contract to run 3's network in Italy, which it won in January.

The spokesman said the value of that deal "had been indicated" at £1.4 billion. Ericsson shares were suspended before the news and rose 4.1 per cent to 27.9 crowns after trade resumed.

Managed services, where Ericsson runs the network on behalf of operators, is seen by the Swedish company as a key growth area, alongside its traditional business of selling radio and transmission equipment to operators.

"This is the largest managed services partnership contract signed by Ericsson to date and one of the largest ever signed in the industry," Ericsson said in a statement.

Ericsson said it would take charge of the management, maintenance and expansion of 3's network and IT infrastructure as well as ongoing radio network rollout.

It would also ensure the maintenance of the existing 6,300 radio sites and the management of the core network and operations centre.

"Over one thousand 3 employees from the network and IT functions will be transferred to Ericsson," it said.