Indian information technology (IT) services biggies Infosys, Wipro and IBM are in discussion with tower infrastructure company Indus Tower for a contract, potentially in the range of $500-600 million (Rs 2,430-2,916 crore).
Sources close to the development confirmed the tower infrastructure company had been evaluating IT services vendors. “So far, Wipro, Infosys and IBM have responded to the request for proposals (RFPs). The contract will be for eight to 10 years,” said a senior executive of a company familiar with the details.
Indus Tower is a joint venture between Bharti Group, Idea Cellular and Vodafone Essar. It owns 110,000 towers and has operations in 16 of the 22 telecom circles.
Indus Towers is looking for a partner to provide end-to-end IT solutions. This will cover areas such as infrastructure management, application development and other related managed services.
“Discussions are on. They are looking at several options. They are yet to decide whether they want to go in for a complete end-to-end outsourcing deal or go in for infrastructure outsourcing and even application development maintenance services. Or, go in a phased manner,” said another senior executive in the know.
Emails to Indus Tower and Wipro did not elicit any response. When contacted, a Infosys spokesperson said, “We do not comment on market speculation.”
Analysts tracking the industry said if the deal goes through, it will yet again set industry standards. “Like the Bharti-IBM deal, which was a trend-setter, this deal, too, has potential to do that. This will be a significant deal, as Indus is one of the largest players in Indian telecom space,” said Alok Shende, founder director at Ascentius Consulting.
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In June, IBM had signed a five-year integrated managed services (IMS) agreement with Viom (earlier known as Quippo-WTTIL), a joint venture between the tower arm of Tata Teleservices and Srei group’s Quippo. While financial details of the deal were not disclosed, IBM was to provide technical support system to revamp Viom's IT infrastructure for its operations through India.
IBM in 2009, had also managed to bag Bharti Airtel’s IT requirement for its tower company, Bharti Infratel.
The only other winner of big deals in the Indian telecom space has been Bangalore-based Wipro. In 2009, its India business, Wipro Infotech, had managed to bag a $500-million strategic outsourcing contract from Uninor. Before that, in 2008, Wipro had also managed to bag a $600-million deal from Aircel.