Bharti-IBM deal: More BPO contracts seen

The telecom sector may attract more outsourcing deals in the near future as Hutch and BPL are looking at offshoring options in India.

"Globally, outsourcing is being accepted as a means to cut costs. In India, most operators have already begun outsourcing parts of their businesses like call centre operations, application-based services and content. Going forward, this may result in bigger deals," Paul Cardoso, former chief executive officer and president, BPL, said.

Increasing pressure to cut costs and create higher levels of efficiency would drive other operators to outsource non-core activities processes to experts.

"Outsourcing does three important things for the operator. It improves the cash flow of the company, it improves efficiency in revenue generation and brings down costs. On the downside, however, if the outsourced function is not taken care of properly, then the reputation of the company is severely affected," Sanjay Mehta, director, Ernst & Young, said.

While operators say large outsourcing deals may not happen just yet, they agree that the business model is viable and allows them to concentrate on their core strengths of customer acquisition, marketing and product pricing.

Bharti Tele-Ventures signed a $750 million outsourcing deal with IBM.

"Bharti Tele-Ventures will be able to take advantage of IBM's innovative technology, coupled with our business expertise in working with telecom service providers throughout the world. We will enable Bharti Tele-Ventures to adapt to changing market conditions and increase speed-to-market of new and innovative offerings for customers," Colleen Arnold, general manager, IBM Communications Sector, Worldwide, said.