20 Sep 2010
Bharti Airtel has contracted out its African IT services to IBM in a ten-year contract that could be worth as much as $1.3 billion.
Under deal - announced by IBM chief Sam Palmisano and Bharti Airtel managing director Sunil Mittal in Nairobi on Friday - IBM will consolidate Bharti’s IT systems in 16 countries into a single back-end.
IBM will oversee management of all of the applications, data center operations, servers, storage and desktop services, the companies said.
The firms did not disclose financial details, but Kamlesh Bhatia, principal analyst at Gartner estimated it to be worth between $1 billion and $1.3 billion. “It's a good deal for Bharti, as it needs operational stability when it enters Africa...which is extremely fragmented,” he told the WSJ.
Bharti entered the African market through its $9 billion acquisition of Zain’s string of mobile operators early this year.
The contract replicates the arrangement struck in the Indian market in 2004, where Bharti outsourced all of its IT backend to Big Blue. That ground-breaking deal offered IBM a share of Bharti’s revenue as it grew to become India’s biggest mobile operator by customer numbers.