Ericsson wins China Mobile service contract

Ericsson (ERIC.OMX, ERIC.NASDAQ) has been awarded a three-year service contract from China Mobile (CHL.NYSE, 0941.HK) to maintain 22,000 base stations in Hebei, the Financial Times reported. Ericsson did not disclose financial details of the contract but said it is the largest of its kind awarded by a Chinese operator. Chinese operators have traditionally been reluctant to outsource maintenance and network management. The deal is a breakthrough for Ericsson, which has been trying to reduce its dependence on its Chinese operators’ infrastructure budgets and increase the services side of its business. Managed services has been Ericsson’s most significant source of growth recently, but Asia-Pacific accounted for less than 25% of services sales compared to one-third of network equipment sales.