OREANDA-NEWS. Leading mobile operator MegaFon announces the completion of a tender for the supply of telecommunications equipment. Several partners were chosen including the leading global ICT Company Huawei.

The contract between MegaFon and Huawei is signed for 7 years, which is an unprecedented case in the history of the Russian telecommunications market. Volume of the contract amounts to dozens of billions of rubles.

The contract covers the supply of equipment for the construction and modernization of 2G/3G/LTE networks, as well as necessary software and maintenance. This approach is common practice, as the installation of equipment is always followed by its integration into the operator's existing infrastructure. An additional advantage is that Huawei's equipment has already been widely used on MegaFon's networks.

The tender for equipment supply held by MegaFon fully complies with international standards of transparency and efficiency. MegaFon evaluates providers' proposals not simply on the basis of the equipment price, but also based on total cost of ownership for the equipment and subsequent software during the entire period of useful life. The tender for radio access network allows MegaFon not only to optimize the Company's capital expenditures in terms of equipment and software, but also to reduce significantly its operating expenses for network repair and maintenance. MegaFon started to use first results of the tender process in terms of price optimization in 2013 that allowed the Company to preserve its leading market position with reasonable investments into network development. The full effect of TCO (Total Cost of Ownership) reduction in terms of CapEx and OpEx is to be realized from 2014.

“We are sincerely pleased to sign a contract with Huawei. During longtime partnership, this company proved itself as a reliable supplier of the most innovative technological developments. The seven-year contract is an unprecedented case for the Russian business environment, as similar agreements in the market are generally limited to three years”, - says CEO of MegaFon, Ivan Tavrin. - “Summing up tender results, we focused on the interests of our customers and economic feasibility. It is highly important for us that Huawei can not only provide best supply conditions but also guarantee stable long term cooperation.”

Wan Biao, President of Huawei Russia, said: “The Russian market is one of the most promising for Huawei, that is why long-term cooperation with such company as MegaFon is of great importance for us. We are pleased that the interest of Russian partners in our services is growing rapidly and we expect that our cooperation will be successful and mutually beneficial”.

MegaFon set a course on improving procurement efficiency in 2012. Initiatives were firstly focused on centralization of procurement, strengthening of procurement team, implementation of international best practices in procurement and supply chain management and knowledge sharing with partner' telecom operators.