As well as providing infrastructure management services, IBM will handle a number of Idea’s internal processes including billing and payments, credit collection, customer relationship management, subscriber management, and fraud management. The overall value of the deal will be between $600m and $800m, depending on Idea’s rate of expansion over the next decade, and will be run on a revenue-sharing basis.
In a statement, IBM said that some members of Idea’s IT department would transfer to IBM, but did not reveal details of how many staff would be affected. It also suggested that there would be no staff cuts at Idea as a result of the agreement, saying that all Idea’s IT department would be involved in the project.
Pune-based Idea is India’s fifth largest mobile operator, with approximately 14 million subscribers. The company, which provides services over the GSM platform, is owned by one of India’s biggest business conglomerates, the Aditya Birla Group.
Three years ago, IBM won a similar outsourcing deal from Idea’s larger rival Bharti Airtel, the mobile services arm of Bharti Enterprises. Under the terms of that contract, estimated to be worth at least $750m over its 10-year duration, IBM agreed to manage Bharti Airtel’s infrastructure and applications, as well as developing telecoms software and services for the Indian market.
IBM’s other recent contract in the global telecommunications space include a seven-year agreement with Vodafone to support its operations in Spain, the Czech Republic, Australia, New Zealand, Portugal, Ireland, Greece, and Italy, and a deal with Deutsche Telekom to upgrade its fixed-line network.
