Vi to renew tech outsourcing deal with IBM for about $1 billion
IBM, for an estimated value of about $1 billion (about '8,330 crore), people familiar with the matter said.
The potential deal is crucial for Vi in its efforts to strengthen IT infrastructure ahead of the planned roll out of 5G services in the country's top 100 cities across its 17 priority markets. Launching 5G services will allow the cash-strapped telco to intensify its competition with bigger — and profitable — rivals Reliance Jio and Bharti Airtel in key markets and arrest customer losses.
«Vi's new, re-negotiated deal with IBM is likely to be finalised soon as the earlier five-year tech outsourcing contract is valid till April 2024,» a person familiar with the discussions told ET.
Renewal of the tech outsourcing deal comes even as Vi's board meets Saturday to consider raising '20,000 crore via a preferential share issue. Earlier this week, Vi's shareholders approved a proposal to raise this capital through equity and equity-linked instruments.
Under the terms of the renewed agreement, IBM is likely to manage, maintain and operate Vi's IT infrastructure and offer tech solutions around cloud computing, customer experience besides undertaking modernisation and intelligent automation of the telco's data centres using AI.
These moves are slated to unlock cost as well as operational efficiencies and boost productivity levels at Vi, said the people cited above.
Portions of the renewed technology outsourcing deal will be based on 'as a service' or 'pay-as-you-go model'. 'As a service', typically, is a
