IBM, Idea Cellular ink $800 mn outsource deal

Wednesday, 21 March 2007, 05:00 Hrs
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Mumbai: Idea Cellular, one of India leading mobile telephony service providers, will outsource some of its operations to global IT giant IBM in a 10-year $800 million deal.

"The Indian unit of IBM will manage and support Idea's IT infrastructure and other services including billing and customer management on a revenue-sharing basis," Idea Cellular managing director Sanjeev Aga told a news conference.

"We will harness IBM's power to support Idea's explosive growth with robust best-in-the-class solutions. It will give us business focus, apart from containing costs," Aga said without giving any details on the cost savings.

Idea Cellular, part of the Aditya Birla Group, is the country's fifth largest mobile service provider with a subscriber base of 13.6 million at the end of February.

"IBM will bring its deep global expertise in business transformation and innovation to enable Idea to meet its customer value, business growth and productivity objectives," said IBM South Asia and India managing director Shanker Annaswamy.

Asked if IBM would work with the London-based telecom major Vodafone that is acquiring Hutchinson's stake in Idea's competitor Hutch India, IBM's vice-president (communication sector for Asia-Pacific) Ramesh Awtaney said, "Globally, IBM has over 100 telecom clients big and small including Vodafone and Telstra of Australia. IBM is free to strike similar alliances in India."

With Idea, IBM had in 2004 signed a 10-year, $750 million revenue-sharing deal with India's top mobile firm Bharti Airtel to manage its core IT infrastructure.

"That deal is now estimated to have gone up to more than $1.5 billion, helped recent robust growth in Bharti's subscribers base and increasing revenue," an IBM official told IANS.
Source: IANS
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