Indian company taps IBM in outsourcing deal

IBM plans to take over the information technology operations of an Indian telecommunications company, in a deal that could be worth $750 million over 10 years.

Under the arrangement, announced Friday, Bharti Tele-Ventures will outsource all of its hardware, software and services to IBM. Big Blue will take over Bharti's customer-focused activities, such as billing and data warehousing, and internal operations such as e-mail and online collaboration.

IBM said it also will consolidate Bharti's data centers and IT helpdesks and bolster the Indian company's disaster recovery capabilities.

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The deal fits in with Big Blue's plans to push its utility computing services to new markets. This week, the company told CNET News.com that it plans to upgrade its 32 data centers around the world with cutting-edge management software and tools to offer customers a range of a la carte technology services.

The idea behind utility computing, a trend that has captured the attention of technology heavyweights including IBM, Hewlett-Packard and Sun Microsystems, is to allow customers to purchase processing power and access to software as it's needed, much as they do with electricity or water.

IBM and Bharti said they will jointly develop and market IT and telecom products and services targeted at a wide range of businesses in the local market. Bharti will be a preferred supplier of telecom services to IBM India.

"We will enable Bharti Tele-Ventures to adapt to changing market conditions and increase speed to market of new and innovative offerings for customers," Colleen Arnold, general manager of IBM's worldwide communications sector, said in a statement.

Payments to IBM will be based on revenue generated by Bharti and on predefined service-level agreements, Bharti said. Over the first five years, the deal is expected to be worth between $250 million and $275 million, and over 10 years, between $700 million and $750 million.

An unspecified number of Bharti employees involved in the operation and maintenance of the company's IT infrastructure will be transferred to IBM.

Bharti said that at the end of February it had a total of 7 million customers, 6 million of which were using wireless services. The company recently outsourced management of its cellular networks to Ericsson.