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Voda-Idea, IBM sign Rs 5600 crore 5-year IT-outsourcing deal

Vodafone Idea (VIL) has inked a new Rs 4900–5600 crore (USD 700–800 million) 5-year technology outsourcing contract with IBM that is expected to contribute a major part to the Rs 8400-crore annual OpEx savings the telecom market leader has set out to achieve by FY21. The IT-outsourcing contract comes a few months after VIL inked network equipment supply contracts with the likes of Nokia, Ericsson, Huawei, and ZTE for a common network aimed to save cost as well as expand 4G coverage, which is critical in its battle for subscribers.

The new re-negotiated deal value proportionately takes into account residual elements of IBM’s two earlier outsourcing contracts with erstwhile Vodafone India and Idea Cellular that merged last August to create Vodafone Idea. IBM’s near USD 500-million IT outsourcing deal with Idea expired on March 31 this year, while its near USD 800 million contract with Vodafone India is valid till March 2021.

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