[Ercisson to manage daily network operations and build-out of Hutchison's 2G and 3G networks in Australia.]

Ericsson and Hutchison have signed a seven-year agreement to implement an innovative services business model that will deliver increased efficiency and significant cost savings. The initiative sets a benchmark for telecommunications networks and associated services in mobile communications, including the technologically sophisticated multimedia services environment of 3G. To date, this signifies the most extensive Managed Services agreement in the industry.

Under the agreement Ericsson will take care of build-out and day-to-day network operations, operating Hutchison's 2G (CDMA), 3G (WCDMA) and paging networks, as well as the services platforms. Hutchison will retain ownership and full control of its network assets and continue to have responsibility for strategic design and planning, as well as equipment purchasing decisions.

"The increased technical challenges of 3G called for a new approach to managing service delivery," said Kevin Russell, Hutchison Telecoms Chief Executive, Australia." We already had a strong partnership with Ericsson -- a world leader in network technology -- so it made sense for us to build on that partnership." "This initiative will deliver cost efficiencies, without sacrificing Hutchison control and intellectual property," Mr Russell said.

Along with increased efficiency, Hutchison will realize significant cost savings by leveraging the world's largest telecom services organization.

"The agreement with Hutchison is pushing the frontiers of the concept of managed services," said Kurt Hellstrom, CEO Ericsson. "Ericsson's unique experience and knowledge in integrating and implementing telecom equipment in all major technologies reinforces the company's multi-vendor, multi technology services capabilities."

About 240 Hutchison technical and IT staff will be transferred to Ericsson, to complement the existing Ericsson staff currently devoted to Hutchison business in Australia.

This is the third major Managed Services agreement announced by Ericsson this year. To date Ericsson has signed more than 35 Managed Services contracts, far more than any other vendor. Ericsson's Global Services is a quickly growing business and with its 17 000 employees, it represents an important part of Ericsson and is the largest service business in the telecom industry.

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