Alcatel to run Bulgarian telecoms network
Credit: Reuters
* BTC to cut operating expenses by 20 percent-source
* No price disclosed for five-year deal
(Adds details, background)
SOFIA, Feb 16 (Reuters) - Bulgaria's dominant telecoms operator BTC BTCC.BB will outsource its fixed-line and mobile phone network operations to French-American group Alcatel-Lucent (ALUA.PA) to cut costs, BTC said on Tuesday.
BTC, controlled by U.S. insurer AIG (AIG.N), did not disclose the value of the five-year deal under which it will outsource the network's technical and operational management to Alcatel as of March 1.
The company, operating under the brand name of Vivacom, said in a statement it will also transfer around 3,000 jobs, or almost half of its staff, to Alcatel under the deal and people would keep their current contracts and social benefits.
"The selection of Alcatel-Lucent will enable Vivacom to lower its operating expenses and ensures that its customers will receive services of top quality," said Andy Williams, President of Alcatel-Lucent's services business.
"This is the most important managed services contract we have signed in Eastern Europe," he said.
A source familiar with the deal said it will allow BTC to reduce its operational expenses by 20 percent a year.
The telecoms firm merged its mobile and fixed services businesses last year.
It has a 12 percent share of the mobile market, where it competes with Telekom Austria's (TELA.VI) Mobiltel and Greek OTE's (OTEr.AT) Globul. BTC controls 95 percent of the fixed-line services in Bulgaria.
In September, AIG signed a deal to sell part of its asset management unit, which includes BTC, to Hong Kong tycoon Richard Li's Pacific Century Group. It is not clear whether the deal has been finalised.
BTC's net profit rose 85.12 million levs in 2009, compared with 36.92 million a year ago, the company consolidated report showed.
(Reporting by Tsvetelia Tsolova)
((tsvetelia.tsolova@thomsonreuters.com; +359-2-939-97-31; Reuters Messaging: tsvetelia.tsolova.reuters.com@reuters.net)) Keywords: ALCATEL BTC/
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