International BusinessTech Mahindra wins $400 mn outsourcing deal from Etisalat
New telecom licensee Etisalat DB Telecom has awarded a $400 million (around Rs 2,000 crore) IT applications and infrastructure outsourcing contract to Tech Mahindra. The contract is spread over a 10-year period.
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Etisalat DB Telecom is a joint venture between the UAE-based Etisalat group (holds 45 per cent stake) and India’s Dynamix Balwas Group.
Business Standard was the first to report the story on August 23, 2009.
Under the agreement, Etisalat DB Telecom and its subsidiary Allianz Infratec have outsourced IT application system and system integration across 15 circles to Tech Mahindra. The prime IT applications involve components in Business Support System (BSS) and Operating Support System (OSS) domain, Etisalat DB Telecom said in a release here today.
Allianz Infratec holds licences and spectrum for Madhya Pradesh and Bihar, while the remaining 13 circles is held through Etisalat DB.
“Tech Mahindra has the required domain and process expertise with a proven track record as part of Etisalat’s launch of operations in Egypt. We are confident that Tech Mahindra’s exhaustive pool of IT skills and innovative delivery models will assist us in the forthcoming roll-out of service in India and delivering the best services & customer experience in the market,” a spokesperson of Etisalat DB said.
The association with Tech Mahindra would provide speed to market and cost efficiencies for Etisalat DB’s greenfield venture, the release added.
Indian telecom providers have been increasingly outsourcing their IT infrastructure, as it would enable them to be asset-light and concentrate on their core competencies.
While the trend was started by Bharti-Airtel’s deal with IBM which has now risen to over $2 billion, most of the telecom players have opted for outsourcing.
Recently, Wipro won a Rs 2,500-crore deal from Unitech Wireless.
In January 2008, Aircel Cellular had awarded a $600-million deal to Wipro, while Aditya Birla group company Idea Cellular had signed a 10-year IT outsourcing deal with IBM. Idea Cellular’s deal was estimated to be around $600-800 million.