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IBM chairman, president and chief executive officer Samuel J Palmisano is scheduled to meet Reliance Communications chairman Anil Ambani to pitch for an estimated $1.5 billion (around Rs 6,150 crore) outsourcing deal while on his fifth visit to India on Tuesday. If the deal works out in IBM's favour, this would be the third major contract for the company as the Big Blue had earlier bagged a $800-million outsourcing contract from GSM major Idea Cellular too besides the estimated $1.6 billion (Rs 6,493 crore) Bharti-Airtel ongoing contract.
The $93-billion IBM has a strong presence in India and had recently announced its intention of focusing on IT outsourcing contracts from the country.
It has 53,000 employees in India -- the largest outside the US. Both IBM and Reliance Communications spokespersons declined to comment on the development. The Indian telecommunications major had earlier shortlisted four global IT companies -- IBM, EDS, Accenture and T-Systems -- for its outsourcing contract.
The deal is expected to be a 10-year contract, and a high-level internal committee of RCom is working to shortlist one of the companies. A source close to the development said the company had issued new guidelines for the outsourcing deal. Texas-based Electronics Data Systems, popularly known as EDS, is a market leader in the US and Europe and has been providing IT services and support for the last 40 years.
T-Systems, the subsidiary of German telecom major Deutsche Telekom, is also one of the major players in the IT sector with expertise in managing IT requirements for telecom companies.
RComm's decision to outsource its wireless, enterprise and international business for 10 years to a technology service provider is primarily aimed reducing its projected IT spends 'significantly' and also enable it to remain asset-light. Industry analysts said the company would save around 20 per cent by outsourcing and also enable it to concentrate on its core competencies.
RComm had earlier earmarked a capital expenditure of $2.5 billion (Rs 10,000 crore) for this financial year that would be spread across its three business segments -- personal, enterprise and international. The telecom major has close to 30 million subscribers, growing by over a million every month over the last 10 months.
The company also has a 50 per cent-plus market share in the enterprise market with around 1,000 top corporates as its clients.
Samuel J Palmisano addresses media during a CII-organised CEOs' forum in New Delhi on Tuesday.
Photograph: Manan Vatsyayana/AFP/Getty Images
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