Three firms in race for RComm's $1.5 bn deal

Telephony major Reliance Communications is believed to have short-listed three global IT companies – IBM, EDS and T-Systems – for its $1.5 billion outsourcing contract.

A high-level internal committee of the Anil Ambani group company is expected to finalise one of the vendors for the 10-year deal in 6-8 weeks, sources close to the development said today. A RComm spokesperson refused to divulge the names of the short-listed vendors. He, however, admitted that the company was in talks with leading IT services vendors, which include large global players.

US IT major IBM has a strong presence in India and had recently announced its intention of focusing on IT outsourcing contracts from the country. If finalised, this would be the second major contract for the company as the Big Blue had earlier bagged a $800-million outsourcing contract from GSM major Idea Cellular.

Texas-based Electronics Data Systems, popularly known as EDS, is a market leader in the US and Europe and has been providing IT services and support for the last 40 years. T-Systems, the subsidiary of German telecom major Deutsche Telekom, is also one of the major players in the IT sector with expertise in managing IT requirements for telecom companies.

Earlier, RComm’s Internal Committee had decided to outsource its information technology requirements for 10 years to a technology service provider. The company was planning to outsource its wireless, enterprise and international business, under a $1.5 billion deal that was considered as one of the biggest in the Indian telecom outsourcing sector.

The move is expected to reduce the company’s projected IT spends “significantly” and also enable it to remain asset light. Industry analysts opined that the company would save 20 per cent by outsourcing and would also enable it to concentrate on its core competencies.

RComm had earlier earmarked a capital expenditure of $2.5 billion for this financial year that would be spread across its three business segments – personal, enterprise and international.

RComm’s mobile business has a subscriber base of close to 30 million, growing by over a million subscribers every month for the last 10 months. The company also has a 50 per cent plus market share in the enterprise market with around 1,000 top corporates in its client list.