By Sue Thomas

TORONTO- Nortel Networks Corp. said it had revamped its services business to propel growth as it unveiled a big services contract with Bharti Tele-Ventures, India's largest mobile phone operator.

Nortel, North America's biggest telecommunications equipment provider, said it had signed a five-year deal to provide call center services for Bharti, which has a more than 22 percent market share of the mobile phone market in India.

Nortel would not disclose the terms of the deal, but Curt Hopkins, Nortel's global services vice-president of sales and marketing, described it as "significant. It is quite sizable".

"It illustrates that service is a very strategic and very important part of our growth going forward," he said in an interview with Reuters.

Nortel said it had streamlined its services business, simplifying its offerings and focusing on integration, security, managed services, optimization services and maintenance.

Nortel's services and applications business accounts for less than 20 percent of its revenue now, "and that should be 50 percent to 100 percent higher", Hopkins said.

"It's bringing the services business together, getting it very focused, making it much more strategic and making it a core part of Nortel's growth play," he said of the revamp. "We're really putting a fresh push behind this."

Nortel's new chief executive, Mike Zafirovksi, has said he wants a minimum 20 percent market share in the segments Nortel competes in as he works to turn around a company stung by financial restatements, lawsuits and regulatory and criminal probes.

Scotia Capital analyst Gus Papageorgiou sees the new services strategy as positive for Nortel.

"We believe services represent a significant growth opportunity for Nortel," he wrote in a note, adding that the company had lagged competitors Lucent and Ericsson in offering services to carrier and enterprise partners.

Hopkins said that Nortel, which already does business with Bharti, had beat "the usual suspects" to clinch the deal.

"It was a very hard fought campaign," he told Reuters in an interview. "But at the end of the day what we were able to do for them was really solve their significant business issues, which was handling their huge number of new customers."

Bharti has almost 20 million subscribers, adding 1.05 million users in January, and another 1.07 million last month as phone ownership surges in India, Asia's third-largest economy.

Under the deal, Nortel will create a network operations center in New Delhi and supply network design, integration, support and maintenance services for Bharti's contact center.

Hopkins said Nortel would seek more such deals in India, as well as in North America and Europe, although he declined to give specific details.

"Definitely the Indian market is quite active, it's a real area where call center innovation is happening," he said. "But we see that elsewhere, we see it across Europe and we have seen significant demand across North America."

Nortel also said it had set up a new customer service center in Buenos Aires that will focus on services to help operators around the world design, deploy, support and evolve their networks.

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