Airtel signs five-year deal with IBM for IT infrastructure

Bharti Airtel has extended a contract with IBM to manage its IT infrastructure and application services in the country for five years, scaling down the deal with the US company as it embarks on the next phase of growth.

Airtel said it will build in-house capabilities and indicated that it might bring in more partners for its IT needs.

"As part of the new vision, Airtel is also building in-house capabilities and a strong partner eco-system, and has selected IBM to manage the IT infrastructure and applications for its operations in India," the company said in a statement.

IBM managed all of Airtel's information technology (IT) services for the past 10 years and the contract has now been restructured and extended for five years.

The earlier agreement was based on revenue sharing and was worth USD 2 billion but now, sources said, the value of the deal is USD 500-USD 550 million. The company refused to comment on financial details of the accord.

"As we embark on the next phase of Airtel's growth journey, I am confident that the agreement with IBM will help us offer innovative and cutting edge products and services to our customers," Bharti Airtel Managing Director and Chief Executive Officer (India and South Asia) Gopal Vittal said.

According to the statement, the new model offers Airtel greater flexibility to scale services and adapt in real-time to changing market dynamics.

"IBM's global expertise to manage large infrastructure operations and application management, coupled with the new IT capabilities we are developing in-house, is the latest milestone in our strategy to build a world-class IT services platform," Airtel Chief Information Officer Harmeen Mehta said.

Airtel and IBM have partnerships for IT infrastructure and services across Airtel's international operations spanning 19 countries, including Africa, Sri Lanka and Bangladesh.