Vodafone Renews IT Deal With IBM For 5 Years

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According to Greyhound Research estimates, the deal has been signed in the range of $750-850 million. Telecom giant Vodafone has renewed its multi-million dollar engagement with IBM to manage IT services support for its India arm for another five years.

Below are excerpts from a Greyhound Research Freemium Research Note. The complete Research Note is available here.

According to Greyhound Research estimates, the deal has been signed in the range of USD 750-850 million and can be expected to cross USD 1 billion by 2023.

“It is critical to note the current contract is 25 per cent bigger compared to the first one signed in 2007 (USD 600 million) – but there’s more to it. In 2007, the value of USD 600 million stood at INR 2,364 crore (calculated using the rate of USD 1 = INR 39.4). Per current exchange rate, USD 750 million stands at INR 5,000 crore (calculated using the exchange rate of USD 1 = INR 66.7). Popular perceptions aside, Vodafone has chosen to play a safe bet,” it said in a research note.

Greyhound Research said the ‘hybrid cloud strategy’ will benefit Vodafone on multiple accounts, including improved customer experience and cost optimisation.

“We believe IBM will be expected to take ownership in aspects like number of tickets raised and turn-around time for resolution. Furthermore, the vendor can be expected to offer an outcome-based model (with OPEX payments) to make this engagement a true win-win. Also, two key pillars of this deal are automation and analytics,” Greyhound Research said.

As part of the deal, IBM India can well be expected to help automate the data-intensive processes for such systems and reduce (if not eliminate) human dependence, it added.

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