India's position as a global centre for high technology has received another boost with news that its third-largest software company is planning to buy a chunk of Swedish mobile network giant Ericsson.

The deal sees Wipro - take over Ericsson's research and development units in Hyderabad, New Delhi, and Bangalore, India's main centre for hi-tech.

Wipro will then run the whole concern under an outsourcing contract, in effect taking responsibility for running a sizable portion of the Swedish company's software research team.

Wipro is already doing about $5m of business each quarter with Ericsson, and should pick up more as a result of the deal.

The news - announced after the stock market in Bombay had closed on Monday - triggered demand for the company's shares, pushing them up 1.2% on Tuesday in a generally declining market.

Necessity

The scale of the deal has not yet been made clear, either in a financial sense or in terms of how many people are involved.

But with a letter of intent signed, the final details are expected to be wrapped up by November.

Ericsson has been in financial difficulties for some months, as world spending on telecoms has stalled.

Offloading some of its units to free up cash has formed a central arm of its strategy.