Indian telecom service provider Bharti Airtel will share the IT outsourcing deal with TCS, Tech Mahindra and IBM.
According to media reports, IBM will get $500 million – spread over the next five years – to jointly manage the IT outsourcing.
IT vendor IBM and Airtel pioneered the IT outsourcing in India in 2004 and showed how it can be done cost effectively to the global telecom markets.
Also read: Can IBM retain Airtel IT deal worth $2 billion?
Telecom industry analysts are considering this as a big blow to IBM since IBM’s share in the $2 billion landmark IT outsourcing deal will come down significantly.
Business Standard reported that IBM may get about $500 million worth of IT outsourcing contract from Airtel. The report says Airtel has already signed the deal.
As per the new IT deal, share of IBM has come down to $100-125 million per year from $250-300 million per year earlier. Airtel has also slashed the tenure of the deal to five years, instead of the earlier 10 years.
There is no official confirmation.
In the renewed contract, the key areas of work for IBM would be data services and increasing cost efficiency.
In 2014, the size of the IBM-Bharti deal was $750 million. The deal size kept on going up as Bharti-Airtel customer grew. In 2004, when the first contract between IBM and Airtel was signed, Airtel had around 4 million subscribers, and now Airtel has more than 200 million users.
Also read: IBM assists Idea Cellular to transform postpaid business
IBM contract with Idea Cellular worth $800-900 million comes up for renewal in 2019-20. The size of IBM deal with Vodafone is worth $1 billion.
Despite challenging times in India and global telecom markets, IBM is continuing its innovation to bag more projects.
Also read: IBM to assist telecoms to improve Internet speeds to 400 Gbps at low power
Last month, IBM said its innovation will assist the telecom industry to improve Internet speeds to 200 – 400 Gigabits per second (Gbps) at low power. IBM said the improvement in Internet speed is based on a device that can be used to improve transferring Big Data between clouds and data centers four times faster than current technology.
Also read: IBM steps up focus on telecoms with cloud, analytics innovations
IBM India last week said innovations — cloud, analytics, mobile and social technologies – will assist telecoms to improve customer engagement and monetize.
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