Top Indian, MNC tech firms eyeing NZ’s top telco deal worth $1 billion
Top two IT and BPO services providers in India – Wipro and Tech Mahindra (formerly Satyam) along with their multinational competitors HP and IBM are vying for an approximately $1 billion deal with Telecom Corp., the largest telephone company in New Zealand. The telecom firm indents to reduce costs as well as enhance profitability by means of outsourcing its non-core information technology work. In addition, the company is reported to shift around 400 jobs overseas with a view to cut operational costs.
In 1999, Telecom Corp. had entered into a $1.5 billion deal with EDS (presently owned by HP) for IT infrastructure management. As the contract is scheduled to expire this year, experts in the industry are of the view that the deal is among a few of the major outsourcing renewals that is being eyed by most top tech firms globally. Quoting an individual, who is familiar with the talks between Telecom Corp. and the IT vendors, a business daily reports that the present vendors of the company are under strain to contend with the new bidders, as they are prepared to offer more for less.
TPI, an outsourcing consultancy firm, says that annual contracts to the tune of $10 billion and $12 billion will be expiring in 2010 and fresh negotiations will begin for their renewal. Although Telecom Corp. is yet to float an official tender for these contracts, it has been learnt that a number of IT and ITeS vendors, such as Wipro, Tech Mahindra, IBM and HP, are already in discussion with the telecom firm. This was confirmed by Ian Bonnar, a spokesperson of Telecom Corp., but he refused to divulge further details.
According to Bonnar, since they are in the preliminary stage of assess their collaboration agreements, they have asked different IT service providers to make their respective presentations for review. At the same time, he said that the company has not disclosed the identity of the vendors who are in talks for the contracts as this was a very sensitive issue from the commercial point of view.
Meanwhile, industry experts in India who are following the developments said that the Indian IT service providers had a good prospect to bag a part of the contract involving application development and maintenance that is said to be worth around $400 million. On the other hand, although IBM and HP-EDS combine are basically contending for the IT infrastructure management deal, but are also making combined offers with a view to ward off their Indian rivals