Key Indian, MNC IT players compete for Bharti Airtel's outsourcing contract in Africa
India’s leading mobile phone firm Bharti Airtel has called for tenders for services related to information technology and the administration as well as up keep of mobile and landline systems in 15 countries in Africa with a view to repeat the company’s success of inexpensive functioning mode in the continent. Bharti Airtel intends to outsource processes to the tune of more that $1 billion for the telecom firm’s assets in Africa that it recently took over from Zain Telecom of Kuwait. The invitation for new bids hints at the fact that India’s largest mobile phone company is seeking superior deals compared to the ones offered by its present partners.
Quoting an executive of the telecom firm who is aware of the developments, but preferred to remain unanimous, a financial website reports that all the three leading Indian IT service providers in terms of export earnings, including Tata Consultancy Services (TCS), Infosys and Wipro, as well as the multi-national IT service vendor IBM are competing for the job put on offer by Bharti Airtel, which is searching for the best deal. According another executive in the industry, it is possible that Bharti Airtel is seeking to spread out is partner base since it would not desire to take a risk by ‘placing all its eggs in a single basket’.
It may be noted here that IBM has been taking care of all IT requirements of Bharti Airtel since 2004 in what may be termed as the maiden deal of its kind worldwide. Interestingly enough while Bharti Airtel’s systems are administered and maintained by major firms like Ericsson and Nokia Siemens by way of contracts worth multi-million dollars, they are not assured of analogous agreements with Zain. According to the company executive, now Ericsson and Nokia Siemens would be required to contend with ZTE and Huawei of China and the tenders have already been invited for the outsourcing job.
Earlier, Bharti Airtel had asserted that it would utilize the services of its partners even in overseas ventures, but, at the same time, said that the company was also open to hiring new service providers who would be offering enhanced deals. For instance, ignoring the claims of Ericsson and Nokia Siemens, the company entered into an agreement with Huawei of China to set up, administer as well as maintain the company’s systems in Sri Lanka. Industry experts predict that the Alcatel-Lucent, the Franco-American telecom gear manufacturers, may also bid for Bharti Airtel’s African venture. In fact, last year Bharti Airtel had granted Alcatel-Lucent a contract worth $500 million to handle its fixed line system in India.
Bharti Airtel was the first to usher in the concept of outsourcing the entire important operating jobs and this proved to be imperative to the company’s economical, but high-usage business mode that has been a roaring success in India. Eventually, this business concept helped Bharti Airtel to create a base of more than 125 million clients in India and become known as the largest mobile phone operator in the country in terms of client base as well as revenues. Reproducing this business model in Africa is expected to be the basis for Zain’s return to prosperity.