XL Axiata Partners with Huawei, Transfers 1200 Employees Across

Several days ago we received a press release stating that Huawei Tech Investment was appointed as a partner of PT XL Axiata to manage its mobile network for the next seven years. The designation is based on Huawei's experience in managing the network and the ability to provide assurance that the XL network services will remain reliable. Mr. Hasnul Suhaimi (President Director of XL) asserted that this step was taken by XL in order to be more focus on core services, namely the network services.

Huawei will manage operation of XL's 2G/3G mobile network services including Network Operations Center (NOC), Field of Operations (FOP), Network Performance Management (NPM) and Spare Parts Management Service that is owned by XL. One of the highlights of cooperation Managed Network Services is the transfer of 1200 XL employees (which I assume most of them are the engineers) becoming an Huawei employees. XL ensures that the rights of employees are still aligned with the regulations, including the same remuneration scheme.

Employees who transferred to Huawei include permanent employees and outsourced employees. The decision to outsource its own employees in the form of assets and to restructure labour division are most likely to minimize the cost incurred for network management. Will this become a trend in the future? We have to wait. Clearly we hope this decision will not be a bad precedent for existing contracts and the network management transition went smoothly to ensure quality service to customers.

We get information from several sources that the collaboration of managing network services like this is also done by Three Indonesia and Huawei (formerly with Nokia Siemens Networks). However, we don't know whether the employee transfer scheme (from operator to vendor) has been done by other operators.

Here is the full press release (translated from the original)

To Improve Network Quality Commitment, XL Appointed Huawei As a Network Management Partner

Jakarta, January 16th, 2012, PT XL Axiata Tbk (XL) is committed to provide a quality cellular service, supported by quality-assured network. For that, XL appointed PT Huawei Tech Investment, a provider of information technology solutions and communication technology (ICT), as the telecommunication network managing partner. This collaboration will last for seven years period starting from April 2012 to April 2019. The signing of the cooperation was done by Mr Hasnul Suhaimi, a President Director of XL and Mr Li Wenzhi, a CEO of Huawei Indonesia on Thursday January 12th, 2012 in Jakarta.

Mr Hasnul Suhaimi (President Director of XL) said, "This collaboration is our main goal, thus XL can be more focus on its core business namely the network services. With more focus on their respective fields according to the competency, we hope to answer the challenges of the industry in the future and to get vital network quality assurance for ensuring the business continuity."

Hasnul added, Huawei appointment is based on the results of tender assessment which also followed by a number of leading networking companies. Huawei was chosen because they meet the various requirements that have been determined by XL. It's including experience in network management and ability to provide a reliable XL network quality thus the quality of telecommunication services provided by XL for the customer can be improved.

Huawei will manage operation of XL's 2G/3G mobile network services including Network Operations Center (NOC), Field of Operations (FOP), Network Performance Management (NPM) and Spare Parts Management Service that is owned by XL.

In the long-term Managed Network Services cooperation will also be accompanied by the transfer of approximately 1,200  XL employees becoming Huawei employees. XL employees are ensured that  their rights are aligned with applicable regulations. XL also guaranteed that employee status doesn't change (it will remain as permanent employee status). For independent contractors/ outsource, hopefully the employment status will change for the better.

In addition, XL also provides long time career achievement bonus for employees  based on the Employment Law regulations No. 13,2003. This long time career achievement bonus is mostly reserved by the company in Q3 2011 and it will be paid on time using internal funds.