Wipro close to Rs 1,500-crore IT deal with Etisalat

Etisalat DB Telecom India, in which the UAE-based Etisalat holds a 45 per cent stake, is close to signing a Rs 1,500- crore (Rs 15-billion) outsourcing deal with IT major Wipro [ Get Quote ] Technologies.

If the deal goes through, this would be the second largest deal for Wipro in the telecom space. Earlier in April, the IT major bagged a Rs 2,500-crore (Rs 25 billion) contract from another new operator, Unitech Wireless.

Importantly, Wipro will be pipping seven other IT vendors, including IBM and Tech Mahindra [ Get Quote ], who were also in discussions with Etisalat, according to sources.

Under the agreement, Wipro will manage the IT infrastructure and services for Etisalat, including setting up of servers, enterprise resource planning suites and technology, computers and other software required for billing and customer care, among other things.

Etisalat will have to sign the deal much ahead of its equipment order. The company was planning to rollout its services by the end of the year. “The companies are finalising the deal, and would announce it within a month’s time,” the source added.

However, the tenure of the contract the companies were discussing could not be ascertained.

While a Wipro spokesperson declined to comment, an Etisalat spokesperson stated that the company does not comment on speculation.

Etisalat DB Telecom India , a joint venture between Etisalat and Mumbai-based Dynamix Balwas Group, has licence to provide services across 15 circles.

The company had received spectrum to start services across 13 circles in the country and was gearing up for the services.

The telecom companies were increasingly outsourcing their IT infrastructure, as it would enable them to be asset-light and concentrate on their core competencies.

In January 2008, Aircel Cellular had awarded a $600-million deal to Wipro, while Aditya Birla group company Idea Cellular [ Get Quote ] had signed a 10-year IT outsourcing deal with IBM.

Idea Cellular’s deal was estimated to be around $600-800 million.

Earlier, telecom giant Vodafone-Essar had outsourced its IT operations to IBM under a five-year contract in 2007 (financial terms not disclosed). IBM has large outsourcing contracts from Bharti Airtel [ Get Quote ], Vodafone and Idea Cellular.