IBM Rings up Outourcing Business with Indian Telecoms

Ann All

As U.S. demand for outsourcing softens, Indian service providers like Wipro and Infosys are looking to Europe and other markets to boost their business.


Oddly enough, they may be missing a significant opportunity that is much closer to home. I blogged back in April about India's fast-growing IT market and Indian companies' desire to sign services deals with domestic companies. Yet they seem to be having a tough time of it, at least in the telecommunications sector, where IBM has nabbed several plum contracts.


According to The Economic Times, Big Blue last week won the business of Vodafone Essar in a five-year IT outsourcing deal that experts estimate could be worth up to $1.5 billion. Earlier this year, IBM closed a 10-year contract with Idea Cellular.


An executive from another prominent Indian telecom, Bharti Airtel, tells the newspaper that IBM's heavy commitment to India, especially in R&D spending; expertise in the telecom sector; and willingness to enter into a long-term agreement were the deciding factors in his company's decision to choose IBM over a local services provider. The worth of that deal, signed in 2004, has grown from $750 million to more than $1 billion.


As I blogged in May, IBM is investing a hefty $6 billion over the next three years to further raise its profile in India, and CEO Sam Palmisano has traveled to the country to visit with government officials and business leaders.

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