Bharti Airtel renews IBM outsourcing contract for five years

Bangalore/Singapore: Bharti Airtel Ltd, India’s largest telecom services provider, has renewed its outsourcing contract with International Business Machines Corp. (IBM) for five years, reducing the order by more than half the size of the one that expired at the end of MarchAlthough neither US-based IBM nor Bharti Airtel disclosed the financial terms, the deal is estimated to be valued at around $500 million, according to three people familiar with the development. One of them is a Bharti Airtel executive.IBM is the sole vendor on this contract and the final terms of the deal were signed late on Tuesday night, the people said, requesting anonymity. IBM will manage Bharti Airtel’s infrastructure and application services in India for the next five years.

IBM’s share of business from the Bharti Airtel contract will fall to roughly $100 million a year, down from the $250-300 million it was generating from the original $2.5-3 billion, 10-year agreement it had signed in 2004. The earlier contract ended on 31 March.

pratima kumari

pgdm 2nd sem