Vodafone Outsources Spare-Parts Contract to Ericsson

Vodafone has selected Ericsson to manage the supply and distribution of spare parts for its mobile networks across several of its major European operating companies including Germany, Spain and Portugal.

Under the multi-million Euro deal, Ericsson will assume responsibility for the logistics, warehousing, repair and replacement of multi-vendor spare parts in the selected operating companies. This is expected to deliver greater cost efficiencies to Vodafone through lower average prices for the management process of spares, as well as enhanced service levels.

The agreement will cover the end-to-end management of spare parts for 2G, 3G and transmission equipment in the selected European operating companies.

The initiative forms part of Vodafone's cost reduction strategy as each Vodafone operating company currently runs its own spare parts operation.

Other benefits to Vodafone include the harmonization of the spare parts supply process, greater price transparency for the provision of services, as well as removing the need for further investment in stocks of spare parts for the future.

The agreement is also expected to deliver greater savings by channeling spare part purchases in all participating operating companies through a single supplier.

The deal will be effective from April 2007 and the service will be implemented in the participating Vodafone operating companies in the course of this year. During that time, Vodafone will also have the option to further extend the agreement to additional operating companies.

Hans Vestberg, Executive Vice President and Head of Business Unit Global Services, Ericsson, said: "This is an evolution of Ericsson's managed services capabilities, enabling operators to outsource their entire supply chain of spare parts. This is also to date one of the biggest contracts for multi-vendor spare parts management."

Posted to the site on 10th April 2007