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BT deal hits billion-dollar outsourcing mark

The telecommunications and services giant contracts with India's Tech Mahindra to support global customers and its internal systems.

BT will transfer the support for some of its largest multinational customers to India, in what is believed to be the first billion-dollar outsourcing contract to be awarded to a single Indian company.

The telecommunications and IT services company said it would pay Tech Mahindra over $1 billion (509 million pounds) for a five-year contract to support both its global customers and its own internal systems. BT says it expects to make considerable efficiency gains from the outsourcing.

Shares in Tech Mahindra rocketed 20 percent in trading on the Bombay stock market on Thursday after the deal was announced. It plans to recruit between 3,000 and 4,000 more staff because of the BT contract.

Tech Mahindra is already one of the most successful Indian tech companies. It specializes in IT services and telecoms outsourcing, and boasts American incumbent telco AT&T as a customer. Mahindra already has 15,000 employees, and is starting to rival the scale of companies such as EDS and IBM. It has even set up a software development center in Milton Keynes, England.

BT's group finance director, Hanif Lalani, said: "This is another example of BT sourcing the best skills around the world to deliver outstanding service and value for our customers whilst contributing further to continued operational efficiencies."

The two companies have worked together on projects since the mid-1980s, and BT now owns 35 percent of Tech Mahindra.

Richard Thurston of ZDNet UK reported from London.