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Hutch farms out networks to Ericsson
By Alex Frew McMillan
HONG KONG, China (CNN) -- Hutchison Telecommunications (Australia) said Monday it has inked a seven-year deal with Ericsson's Australian subsidiary to run its networks. The outsourcing arrangement may set a precedent for how Hutchison's parent, Hutchison Whampoa, plans to roll out its third-generation, or 3G, cell-phone services, around the world. Hong Kong-based Hutchison Whampoa owns 58 percent of Hutchison Telecommunications, Australia's fourth-largest cell-phone operator. Hutchison said the deal will save it A$40 million to A$45 million ($22 million to $25 million) over the seven-year period. Transferring workersEricsson Australia will operate Hutchison's paging, CDMA and W-CDMA, or 3G, networks. Hutchison is transferring around 240 technical and information-technology staffers to Ericsson, which is setting up a special unit to handle the business. "We already had a strong partnership with Ericsson ... so it made sense for us to build on that partnership," Hutchison Telecom CEO Kevin Russell said in a statement to the Australian Stock Exchange on Monday. "This initiative will deliver cost efficiencies, without sacrificing Hutchison control and intellectual property," he added. In Sydney, Hutchison Telecom shares leaped 23.3 percent in afternoon trade, to A$0.30, on a flat day for stocks. In Hong Kong, Hutchison Whampoa stock is up 0.91 percent at HK$55.25, in line with a 0.93 percent rise in the benchmark Hang Seng index.
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