Vodafone India has a new ally in IBM for a whopping $1 bn deal

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Vodafone India has a new ally in IBM for a whopping $1 bn deal Vodafone, one of India’s top telecom operators, is now in talks with the software major IBM for the renewal of a $1 billion outsourcing contract that will expire in June next year.
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The mobile network operator outsources services like management of application development and the network services in the IT sector. IBM, which is trying to retain the deal, is also planning to sell its data analytics solutions to Vodafone, as published in an Economic Times report, adding that companies like Wipro, TCS, Infosys and Tech Mahindra are also under consideration for the deal.

Requesting anonymity, one of the two people familiar with the development said, "It hasn't given out the request for proposals to these vendors as of now. But they will in coming months gauge their capabilities and decide whether any of them can provide best value for money and could deliver end-to-end services, besides taking Vodafone IT to the next level." However, there was no response from Vodafone in this regards.

As per the industry experts, Vodafone will prefer to renew the entire deal with IBM, but it is evaluating all options as the company is not in a situation to chop-up the agreement the way Bharti Airtel recently did.

Sanchit Vir Gogia, chief analyst & CEO at Greyhound Research, said, "Bharti Airtel is leveraging these newer delivery models to better manage cost and time spent on servicing existing infrastructure and applications. Telcos globally are exploring, so should Vodafone."

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For IBM, the Airtel contract was a landmark deal in terms of size and was also the first IT outsourcing order from India's telecom sector. Apart from Vodafone, IBM will be trying to renew an outsourcing deal worth $800 million-$900 million with India's third-ranked telco Idea Cellular, which comes up for renewal in 2019-20.
Image; thinkstock