Idea Cellular awards Rs 250 cr contract to IBM

Idea Cellular, the Aditya Birla group company, has awarded a Rs 205-250 crore ($50-55 million) contract to International Business Machines (IBM) to deploy and maintain an interactive voice response (IVR) system for the GSM service provider.

This is the second outsourcing agreement between the two companies "" the earlier one being a $600-800 million deal signed in March this year. This also mirrors an increasing trend of outsourcing in telecommunications sector, which was restricted IT, as companies intend to concentrate on their core competencies.

Under the new 10-year contract, IBM will deploy and maintain the Indian GSM major's IVR system, self-service infrastructure and processes.

The company will also help Idea in setting up an Internet Protocol-based IVR system for end-user self service, a source close to the development told Business Standard.

The companies are expected to announce the deal soon.

An Idea spokesperson declined to comment. An IBM spokesperson said: "We do not comment on market speculation."

The global major will also provide consulting services for IVR optimisation, operate and manage the systems, apart from offering continuous upgradation of Idea Cellular's self service system.

IVR allows a computer to detect voice and touch tones using a normal phone. The system responds with pre-recorded or dynamically generated audio and direct callers on how to proceed without the help of operators.

IBM had earlier signed a similar deal with Bharti Airtel, while it have similar pacts across the world such as Vodafone in the US, Hanaro in Korea and Telstra in Australia.

Indian telecommunication majors are increasingly looking at outsourcing their outsourcing network management and rolling out of services to global majors.

This enables them to concentrate on their growth plans, mainly adding more subscribers and expanding footprint across the country.

Earlier, Nokia Siemens Networks - a joint venture between Nokia and Siemens had bagged a $900 million (Rs 3,690 crore) deal from Bharti Airtel for the expansion of wireless and fixed line services.

In February 2004 Bharti signed a $400 million deal with Swedish equipment vendor Ericsson to build and manage networks across 13 circles, which was followed by a $250 million deal in June 2005. Then in August 2006, the Sunil Mittal company signed the biggest deal to date - a $1 billion network expansion - with Ericsson.

It had also signed a three-year deal with Finnish vendor Nokia worth $275 million and later a $125 million three-year agreement in August 2005.

It also signed another deal in October 2006 for the same eight circles for $400 million. BSNL had awarded two hosting agreements to Ericsson for downloads and ringback tones.

Financial terms of these contracts were not divulged.