Nokia Siemens Networks said Thursday that it had bagged a US$700 million order from Bharti Airtel, India's largest mobile services provider, to increase its network capacity.
The proposed expansion will enable Bharti Airtel to continue to grow its business in rural India, the companies said.
The contract will have a duration of about three years, a spokeswoman for Nokia Siemens said.
The rural market is the next frontier for India's mobile service providers, as demand has reached a plateau in urban markets, according to analysts. Margins are however likely to be lower in these markets, said Kamlesh Bhatia, a principal research analyst at Gartner.
Large operators are also expanding their network ahead of new entrants like the Indian joint ventures of Sistema, Telenor, and Etisalat. Sistema's and Telenor's ventures in India have already started rolling out services in the country.
Nokia Siemens will be expanding and upgrading the operator's 2.5G network to increase network capacity by 50 percent in eight service areas.
This is the second large order that Nokia Siemens has won from Bharti Airtel. The first in 2007 for $900 million also covered the expansion of Bharti Airtel's GSM (Global System for Mobile Communications) network, and its fixed national long distance and international long-distance networks.
There have been other smaller orders from Bharti Airtel, including in the areas of device management, mobile network portability, and an interactive voice response system, the Nokia Siemens spokeswoman said.
The current contract includes network planning, implementation and project management, handling of local logistics and materials, as well as systems integration for the base station sites.
Nokia Siemens said it will ensure that Bharti Airtel's core and transport network is ready for 3G in order to enable the fast rollout of 3G services at a later date.
Bharti Airtel has expressed interest in bidding for India's auction of 3G spectrum which has been postponed since January last year.