Accenture, EDS eye Rel Comm's outsourcing deal

Accenture and EDS are leading the race for a $500 million outsourcing deal from Reliance Communications, according to sources. IBM may also join the race for the contract. The deal is likely to be announced this month.

The world's information technology biggies are hovering around Indian telecom companies for infotech infrastructure contracts. After Bharti and Idea, India's second-largest telecom operator, Reliance Communications, is planning to outsource its infotech and related infrastructure facilities.

The proposed outsourcing deal is expected to reduce the operational cost for Reliance Communications by about 30 per cent. The successful bidder will undertake all infotech infrastructure functions like billing, call-centre operations, customer care management and data management. A Reliance Communications spokesperson said the company was evaluating various proposals but nothing had been finalised.

The deal will include upgradation of existing infrastructure as well as for the future requirements. "It will be a five-year contract. The deal will cover all infotech equipment and services for the telecom business," investment banking sources said, adding that the deal would be announced in two to three weeks.

Reliance Communications will be the third Indian telecom company to outsource its infotech infrastructure facilities. About three years ago, India's largest telecom company, Bharti, had signed a 10-year contract worth $750 million with IBM to outsource its entire infotech infrastructure. Idea Cellular also signed a $600-800 million deal with IBM for infotech infrastructure and applications outsourcing.

Reliance Communications is planning to expand its presence to 23,000 towns by the end of this year. The network now covers 60 per cent of India's population in more than 10,000 towns and 300,000 villages. The company has lined up a Rs 20,000 crore capital expenditure programme for 2007-08.