Indian IT firms vie for $400 Million Loop deal

By SiliconIndia   |    4 Comments
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Bangalore: Loop Telecom has shortlisted Tech Mahindra, Wipro and IBM for an IT outsourcing deal worth $400 million. The 10 year deal will however not include Loop Mobile's operations, reports Economic Times.

The outsourcing deal which is for the company's system integration and maintenance of IT systems across 22 cellular circles, does not include BPO services. Most of its back-end operations are done by Essar Group's Aegis BPO. Loop Telecom recently launched its services, selectively in Tamil Nadu, Orissa, Kerala and Karnataka.

While IBM and Tech Mahindra declined to comment, a Wipro spokesperson said that the company is in talks with a few telecom operators, but declined to comment on specific engagements. A Loop Telecom spokesperson said, "We are constantly exploring ways to enhance our business model, launch plans and operational decisions and regularly engage in dialogue with vendors to help us build a compelling proposition. Nothing has been finalized in terms of partners or the contract amount. An announcement on our IT contract will be made as and when it gets firmed up."

Loop Telecom may be exploring an operating expenditure (opex) model, under which the shortlisted players can take its IT assets on its books. "They could either rent or lease the assets back to the client," said a person familiar with the deal. This model of outsourcing is considered more cost-effective for companies. Loop has already outsourced its network infrastructure to China's ZTE and Huawei Technologies.

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