Bharti Airtel has shortlisted three multinational firms and two IT majors from India for its billion dollar plus IT outsourcing contract in Africa. IBM, Hewlett Packard and Accenture are among the multinational firms that have been shortlisted. Wipro and Tech Mahindra are the Indian vendors chosen for one of the largest IT deals spread across 15 geographies in Africa.
“Both Infosys and Tata Consultancy Services are no longer in the race,” sources said, it also added that IBM, which was considered as the front-runner for the deal, was now facing stiff competition from the attractive terms and conditions offered by other IT firms in line.
In April-end Bharti Airtel invited Request for Information or RFI to outsource operations worth billions of dollars for African assets that the company acquired from Kuwait’s Zain Telecom. A number of IT firms had made presentations to Bharti Airtel’s management in response to its RFI. Executives said that Bharti had issued a revised tender for its IT contract because of reservations expressed by some vendors regarding a few terms and conditions.
All the vendors are stepping up efforts to woo Bharti for the alluring deal that it has with the African telecommunication carrier acquisition. “Though Bharti may want to de-risk its IT by giving it to a vendor other than IBM, it may find it hard to refuse IBM if it makes a compelling proposition. Bharti is highly leveraged and if IBM makes a good offer, it may go with it,” said an executive from the IT industry, requesting anonymity.
Bharti Airtel’s 10-year deal with IBM was originally estimated to be worth $750 million but it has already crossed $3 billion, souce said. With such a success from a telecommunication company, IBM signed similar outsourcing agreements with Vodafone and Idea Cellular worth $1.2 billion and $900 million, respectively, in 2008. Last year, IBM signed a deal with Malaysia’s Maxis to manage its IT operations.
Executive said that Bharti may explore the option of having different IT vendors for its divisions in Africa, which include Bharti Anglophone (comprising of the English speaking nations), Bharti Francophone (comprising of the French speaking nations) and Nigeria.
Outsourcing all key operational functions is the key to the company’s low-cost high-usage business model that has enabled it to emerge as the country’s largest operator. Experts think that replicating this outsourced model of operations in Africa will help Zain return to profitability.
Source:http://www.technology-digital.com/news/bharti-airtel%E2%80%99s-african-assets/bharti-airtel-ropes-majors-it-industry
