Datacom shortlists IBM, TCS, Wipro for Rs 3,000-crore deal

Datacom Solutions, the telecom services arm of consumer electronics major Videocon Group, has short-listed four IT majors for supplying technology solutions on a revenue sharing basis. The contract, according to sources, is valued around Rs 3,000 crore spread over a seven-year period.

The company is in the final stages of negotiations with International Business Machines Corporation (IBM), Tata Consultancy Services (TCS), Tech Mahindra and Wipro. Datacom Solutions has dropped HCL Technologies, which had also participated in the bid.

When contacted Datacom Solutions, Chief Executive Officer Ravi Sharma confirmed the development. However, he did not disclose the financial terms and the value of the contract.

Datacom Solutions was looking at outsourcing its technology solutions on a revenue-sharing basis, the first-of-its-kind move in the country.

Telecom major Bharti Airtel had outsourced its network management to Ericsson for $400 million in 2004, and later provided another $1.5 billion contract to the Swedish technology provider.

Telecom giant Vodafone-Essar also outsourced its IT operations to IBM under a five-year contract in 2007 (financial were terms not disclosed), while Aditya Birla group company Idea Cellular has signed a 10-year IT outsourcing deal with IBM. Idea Cellular’s deal was estimated to have been pegged at around $600-800 million.

Datacom Solutions, which is planning to commence network operations from August 15, has floated a request for proposal (RFP) for 70 million lines. It received responses from six major players, Ericsson, Nokia-Siemens, ZTE, Alcatel-Lucent, Huwaei and Nortel.