Tech Mahindra bags $350 mn BT deal

Telecom IT solutions and service provider Tech Mahindra has signed a five-year deal with British Telecom (BT) valued in excess of $350 million (around Rs 1,400 crore).

Tech Mahindra will provide maintenance and support services to BT for business critical BSS (business support system) and OSS (operating support system) applications and platforms.

The payment will be made evenly over five years. These services will be delivered from Tech Mahindra's centres of excellence (CoE) facilities in India and a new facility being set up in the UK to monitor BT's core business processes.

Clive Selley, managing director, wholesale service design for BT, said, "This deal is different. Earlier, we would give out contracts on a quarterly or annual basis, but this time it's a five-year deal. This also gives Tech Mahindra certainty of volume of work."

Selley also said that the deal was one of the few, yet to be announced, multi-million dollar deals that BT plans to give out to vendors. "We also see more work moving to India. We are now looking at transformational deals rather than those traditional deals," added Selley.

He also added that despite the slowdown in the US markets, outsourcing was a good option. "It still makes sense. It's just that the deals have to be structured well," added Selley.

Sanjay Kalra, president, Tech Mahindra, said, "Since, the deal is spread over five years, we have an option to make it non-linear. We will make investments in automating some of the processes." Tech Mahindra has two centres in the UK"� Belfast and Milton Keynes.

Kalra also believes that the deal will also put to rest concerns among the analysts community about the company's over-dependence on one client.

"This deal reaffirms our business strategy. Now we don't have to bid for BT projects on an annual basis," he said. BT is an existing client of Tech Mahindra. There are almost 9,000 Tech Mahindra employees working for British Telecom Global Services (BTGS) with 2,000 working onsite.