Bharti Airtel has temporarily extended its technology outsourcing contract with IBM till January end, and is in talks with the US firm for a new contract after that, which could be narrower in scope and lower in value, at $200-250 million, two people familiar with the matter said.
Tech experts said telcos are increasingly cutting down on their annual technology outsourcing budgets and splitting deals as most are following multi-vendor strategies, amid continuing financial stress in the industry. “Telcos are increasingly cutting down their annual strategic tech outsourcing budgets as most are following multi-vendor strategies, especially since Indian IT service vendors tend to offer lower rates and more flexibility than global players, especially for mainline IT Infrastructure/network management elements and AMS. However, global vendors are likely to cherry pick the more high value elements in a tech outsourcing arrangement such as analytics, AI, network virtualisation to cloud services where the margins tend to be higher, especially at a time when big telcos are busy expanding 4G services and bracing for 5G deployments in the near future,” said Mr Sanchit Gogia, Chief Analyst & CEO, Greyhound Research.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
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