IBM grabs $80M outsourcing deal in Bangladesh
If sources are to be believed, International Business Machines Corp. (IBM) has received a contract worth $80 million from India’s Bharti Airtel Ltd. to manage the telecommunications services provider’s technology operations in Bangladesh.
According to sources, under the 10-year contract, the U.S. software maker will manage Bharti Airtel’s information technology and data center operations, as well as look after the security of the Indian company’s network in Bangladesh. The deal also involves transferring employees and technology from Bharti Airtel’s in-house technology team in Bangladesh to IBM.
Bharti Airtel, India’s largest by subscribers, entered the Bangladesh market in January this year by acquiring a 70% stake in Warid Telecom International Ltd. for $300 million from United Arab Emirates-based Abu Dhabi Group. Bharti has more than 194 million subscribers across 19 countries, including Bangladesh.
Warid Telecom offers mobile services in all of Bangladesh’s 64 districts and has 3.6 million users as of September.
Bharti to award vendor contracts in Africa
Bharti Airtel is reportedly set to award contracts to build-out its new African networks to the same three vendors it has appointed to rollout its 3G network in India: Ericsson, Nokia Siemens Networks (NSN) and Huawei.
According to reports citing comments from an unnamed executive close to the deal, the contracts will last for five years and will be worth upwards of US$3 billion. Bharti currently has a little over 40 million customers in Africa across 16 markets following its acquisition of Zain Africa earlier this year. But it is looking to grow its African customer base to 100 million by 2012 by expanding its networks and services. Sources claims that the network contracts will see a significant number of Bharti’s employees in Africa move to the payrolls of the three vendors.
As per the report, this will be the third outsourcing contract that Bharti has awarded in Africa since acquiring the assets. Last month, Bharti announced that it was awarding its call centre contracts for its African operations to IBM, Tech Mahindra and Spanco, while in September it awarded a US$1.5 billion contract to IBM to manage its IT needs across the 16 markets.
The outsourcing model has been pioneered by Bharti in India, which has allowed it to operate a low-cost, high-volume business model and it is hoping to replicate this in Africa. Bharti’s African businesses accounted for 25.6% of total revenue and 21% of mobile subscribers in its latest financial quarter.
Airtel to set up headquarters in Nairobi (Kenya)
Bharti Airtel has been allotted five acres of prime land valued at US$6.87 million in Nairobi to build its headquarters in Africa. The land was previously owned by the Postal Corporation of Kenya.
According to Prime Minister Raila Odinga, the government had approved the request by Bharti Airtel to acquire land for their headquarters.
According to Information ministry PS Bitange Ndemo, the company will pay for the value of the land and any other taxes. The government has sold the parcel to a single buyer to speed up their construction process. The request was made to President Kibaki in June when Bharti announced it would be investing US$149.90 million in the next 18 months in Kenya. The company has since revised the investment upwards to US$299.80 million.
Airtel intends to expand its network to reach more rural areas and create 7,000 jobs by 2013. Through partners: IBM, Tech Mahindra, and Spanco — it has outsourced its back office operations such as a Business Process Outsourcing (BPO) and IT operations.
As per Dr Ndemo, the caliber of Bharti’s partners would attract other international companies to set up operations in Kenya. Every job they create will yield three more in the informal sector, while the government will benefit from tax revenues.
According to Airtel Kenya managing director Rene Meza, Bharti Group doubled the amount they intend to invest in Kenya to increase the capacity on its 2G network to accommodate other operators, under site sharing agreements.
Connectiva may ink software deal with Bharti
Connectiva Systems, which sells software solutions to help mobile phone companies plug revenue leakages and track customer preferences, has hinted that it will ink a multi-year revenue management software deal with Bharti Airtel for its African operations, spanning 16 countries.
If the deal goes through, Connectiva Systems will deliver a mix of fraud control, revenue assurance and customer experience management solutions to Bharti.
The company has in the past delivered telecom software solutions to Kuwait’s Zain. Zain’s African assets were acquired by Bharti Airtel earlier this year. The revenue management software vendor will also work closely with IBM, which recently inked a $1.5-billion outsourcing deal to manage Airtel’s IT requirements in Africa.
According to Connectiva Systems founder Avi Basu, Connectiva Systems is in advanced talks with Bharti Airtel. Since the company has an existing relationship with Zain, they have a broad understanding of their worldwide telecom networks. They are also looking forward to work closely with IBM, which is one of existing strategic partners.
Connectiva is owned by key US VCs like Ovation Capital, Carthage, Vinod Dham’s Indo-US Ventures and IFC-Washington.
The company’s objective would be to optimize the revenue management of Bharti’s African operations. They are also looking at customer experience management software modules that can help mobile phone companies track high-end customer’s VAS/data service preferences in a 3G scenario, he added
Operators foray into outsourcing
Mobile operators now days have joined the race of opening BPOs to help their customers. Last week two telecommunications operators, MTN Nigeria and Bharti Airtel trading with the brand name, Zain Nigeria signed different Business Process Outsourcing deal with some companies.
MTN tied knots with Communications Network Support Services (CNSS) to run and manage its Jos Customer Assistance Centre. Bharti Airtel entered into a strategic BPO partnership with IBM, Tech Mahindra and Spanco.
Outsourcing is being pursued as an active business strategy in the current economic scenario, since it enables a firm to focus on its core-competency area. It also releases the firm from resources and labour intensive functions, which are now performed by trained personnel at much lower costs.
The processes or activities that are being outsourced by telecommunications operators could range from customer care centres to information technology management, market research and even financial portfolio management among others.
Telecommunications operators in the country have been bedevilled with a lot of operational challenges that have hindered operators from delivery quality services. When operators in the space launched service over nine years, little did they know that their infrastructure they use to deliver services believed to be a source of joy and enhancement of the people’s socio-economic life will be object of attack by armed robbers and miscreants.
Operators have lot generators, diesel, air conditioners, live of security men at base stations among other valuables to armed robbery, which led to them conceiving the idea of outsourcing the management of base station to some infrastructure building companies, such as Helios towers, Swap Technologies, IHS among others.
Subsequently, Zain last year had signed a five year network management contract with Ericsson, that allows Ericsson manage Zain’s network operations, field operations including optimization, third-party vendor management for Zain’s GSM/WCDMA networks, and business support system.
MTN and CNSS Deal
As per MNT, the outsourcing of its Jos Customer care to CNSS is in line with the plans communicated by the company in 2009 to enhance the breadth and depth of its customer service towards increasing its capacity to respond promptly to over 35 million MTN customers.
According to Akin Braithwaite, Customer Relations Executive, MTN, their ultimate goal is to ensure a significant reduction in the waiting time for a customer to speak with a customer representative and get his issues resolved.
The customer assistance centre, more popularly known as call centre, took off on a temporary site at Rayfield, Jos in July, operating four shifts of customer care representatives in a day. It complements existing customer support infrastructure that is currently the biggest in the industry.
The 650-man customer assistance centre, installed with cutting-edge technology is being run in partnership with CNSSL Contact Centre, a Call Centre outsource company based in Nigeria and managed by Nigerians.
Gbenga Adebayo, chief executive officer, CNSSL Nigeria, a telecoms support services company and Founder of CNSSL Contact centre spoke with excitement about the expansion of the Jos call centre.
He added that the permanent site and expanded call centre should be ready by November and will employ an additional 1, 500 Nigerians. They will receive world-class customer service training provided by experts from MTN”. The ultimate recruitment plan for the centre according to him is staff strength of about 2,200 by the end of the first quarter of 2011.
The Jos call centre also demonstrates MTN’s overarching strategy to contribute to socio-economic development in Nigeria. According to Wale Goodluck, Corporate Services Executive, MTN. “It is a strategy deliberately designed to both improve the quality of customer support available to our esteemed customers and also add value to the local communities by creating employment opportunities for Nigerians.â€
The recent upheavals in Jos further underscore MTN’s commitment to impacting Nigerian society through its operations and services. While businesses and individuals were known to leave the city, MTN made a strategic decision to go into Jos metropolis and create jobs and opportunities for its residents. Currently, 70% of staff at the Jos call centre are from Plateau state with the remaining 30% made up of youths from all over Nigeria.
Bharti Airtel BPO Deal
Under the agreement Bharti Airtel, which owns and currently operates the ‘Zain’ brand in 16 countries across Africa, will outsource core customer service functions like call centres and back office as it prepares for significant growth in the region. The mobile telecommunications operator currently has over 40 million customers across its African operations and is targeting to achieve 100 million by 2013.
The selection of world class partners like IBM, Tech Mahindra and Spanco will enable Bharti Airtel’s mobile customers to enjoy world class customer service with the partners introducing quality best practices based on their experiences of working with international organisations in the telecommunications, banking, finance, insurance and retail sectors.
The widespread adoption of the BPO model by Bharti Airtel across its operations will also have tangible benefits for development of the sector in each country, create additional job opportunities and develop local talent. The partners will provide services in each market which will sustain and build skills, capabilities and resources
The outsourcing of customer service operations will play a key role in making Bharti Airtel competitive in Africa as it focuses on making mobile communications affordable and available to everyone across its 16 markets of operation.
According to Manoj Kohli, CEO (International) and Joint Managing Director, Bharti Airtel, their partnership with IBM, Tech Mahindra and Spanco is aimed at redefining and providing a world class and seamless customer experience in all 16 countries. The BPO model has significant benefits for their customers, the countries in which they operate and their economies. Partnering with world class organisations on such a massive scale will galvanise the BPO sector in Africa and be a catalyst for growth in the sector. These partnerships will offer career enhancement opportunities to their team in this specialist field as they will now get exposure to global best practices and the latest technologies.
This is the second major partnership announcement from Bharti Airtel on the African subcontinent. In September this year Bharti selected IBM to build and manage IT systems to power the mobile communications network across 16 African countries.
According to John Lutz, general manager, IBM Managed Business Process Services,”IBM’s strategic relationship with Bharti Airtel illustrates its focus on emerging markets like Africa. IBM’s business process outsourcing unit helps clients manage functions like customer care so that they are able to channel critical resources to essential growth activities such as product design and marketing.
According to a Deloitte report for the GSMA, the mobile communications industry association, less than 40% of Africans has access to a mobile phone. However, demand is growing at an average rate of 25% annually, and a 10% rise in mobile penetration could increase gross domestic product by 1.2% in developing markets.
According to Vineet Nayyar, Vice Chairman, Tech Mahindra, practically, there are three major benefits to Bharti Airtel from outsourcing its customer service functions. It can scale quickly to manage its expected growth, customers will receive first class service to global standards, and each market will benefit from talent training and development.
By seeding the African BPO market with these three world class partnerships, Bharti Airtel is effectively kick-starting the onshore business process outsourcing sector across Africa. The three partners collectively employ over 90,000 people for providing BPO services in more than 100 countries.
With MTN and Bharti Airtel leading other operators in adoption of outsourcing business model, it is expected that other operators will follow as well.
Bharti Airtel to bring jobs at African call centers
Bharti Airtel has announced to bring call center jobs to Africa after buying out a major mobile phone provider on the continent.
According to Manoj Kohli, partnerships with IBM, Tech Mahindra and SPANCO will bring outsourced support jobs to Nigeria and other nations to bolster its recently purchased Zain network. Kohli declined to offer a value on the deal.
Company officials estimated several thousand call center jobs would start immediately, with more in the future.
Bharti has 183.4 million customers across 19 countries, making it the world’s fifth largest telecommunications company. Bharti closed a US$10.7 billion deal in June with Kuwait-based Zain to take over its holdings in Nigeria and 14 other African nations.
AT&T records gain in Q3 with iPhone
AT&T, the exclusive network provider for the iPhone in the US is flying high in third quarter as the increasing demand for Apple’s iPhone fuelled record sales of the popular device, helping the company nearly quadruple its profits from a year ago.
According to AT&T, it had activated 5.2 million iPhones on its network in the three months to the end of September, up 62% from the previous quarter.
According to Randall Stephenson, AT&T’s chief executive, these trends add to the company’s momentum and confidence. Mobile broadband is the industry’s most powerful growth driver, and demand is in its early stages in both the consumer and business segments.
AT&T’s results come in the middle of growing speculation that Apple will end its exclusivity arrangement and begin selling iPhones that operate on Verizon’s wireless network next year.
Since becoming the exclusive US provider of the first iPhones in 2007, AT&T has become heavily reliant on the device. Nearly a quarter of the new iPhone activations in the third quarter were new customers to AT&T, helping the company add a net 2.6 million wireless subscribers during the quarter.
Net income at AT&T was US$12.3billion, up from US$3.2billion last year. Revenues rose by 2.8% to US$31.6billion. Profits also boosted by the completion of AT&T’s sale of Sterling Commerce, which makes software to help companies transfer electronic documents to IBM for US$1.4 billion in cash.
According to Craig Moffett, an analyst at Bernstein Research, AT&T is trying to inoculate itself for the day when other carriers can offer the iPhone by pushing upgrades to existing users that tie them to new two-year contracts. The cost of this strategy, of course, is subsidies.
According to Rick Lindner, AT&T’s chief financial officer, capital expenditures, which were up 55% year-on-year in the wireless business, could continue to grow next year as it deploys its faster Long Term Evolution network.
Bharti to outsource customer support for African operations
Bharti Airtel who in recent times outsourced the IT supplies for its Africa operations to IBM, is now close to finalize a deal to outsource its customer support services.
According to sources, if this deal takes place it could be a landmark in the African continent, where customers support is limited and rarely outsourced. Some of Bharti’s existing back-office suppliers in India as well as IT biggies such as Tech Mahindra and IBM are opposing for the contract.
Bharti’s back-office suppliers in India are Firstsource, Aegis and IBM.
According to another source, the bids for back-office services were requested for 15 countries from Firstsource, Aegis, Spanco, IBM and Tech Mahindra. The deal was to be finalized last week but has been delayed. The outsourcing of the back-office operations along with IT will play a key role in making Bharti competitive in Africa, where it has already adopted aggressive customer-acquisition strategies such as lowering of tariffs.
The contract value is expected to be small to start off with — around US$100 to US$ 150 million — and will gradually grow, along with Bharti’s own growth in the African market.
The contract for customer services will be the first of its kind in the African continent where the back-office processing industry is still in the early stages of evolution. In many African countries, the concept of customer service itself is non-existent.
According to an executive with one of the bidders, the Mobile phone penetration in Africa is higher than in India but even in the telecom segment subscribers usually have to go to an outlet if they have query or complaint.
As per the sources, there are no African companies in the fray for Bharti’s contract because the players do not have the scale that Bharti wants. But Bharti is likely to have more than one provider for its back office services similar to what it has in India.
The challenge for the service providers bidding for Bharti’s contract would be a highly fragmented African market and limited knowledge of local market conditions.
IBM to manage Bharti Airtel’s IT operations in Africa
Bharti Airtel and IBM have joined hands to renovate the budding African mobile communications market and increase the economic development athwart the continent.IBM has bagged a 10-year agreement in principle will extend innovative relationship that began in 2004. IBM will handle IT for Bharti Airtel’s 16 operations in Africa.
The deal will enable Bharti Airtel to provide innovative and affordable 2G and 3G mobile services across the continent.
According to Sunil Bharti Mittal, chairman and managing director, Bharti Airtel, there are huge opportunities throughout Africa to transform how people communicate and how communities interact. Delivering on that opportunity through affordable mobile communications for everyone is our focus. The company is delighted to extend the successful relationship with IBM in South Asia to Africa. This transformational business delivery model, which will be a first in Africa’s telecom industry, will bring enhanced efficiencies to the company’s operations and help the company to deliver world-class mobile services to the customers.
According to a Deloitte report commissioned by the mobile communications industry association GSMA, only 40 out of every 100 Africans have a mobile phone. However, demand is growing at an average rate of 25% annually, and a % rise in mobile penetration could increase gross domestic product by 1.2% in developing markets. The partnership will enable the telecom operator to expand its network and systems to cater to more than 100 million African customers by 2012.
Once the deal is done, IBM will handle customer service for Bharti and provide the hardware, software and services to run everything from billing and call-traffic management to delivering new services like music and video.
According to Samuel J Palmisano, Chairman, President and Chief Executive Officer, IBM, the company has achieved great success together in India, and now we are bringing that model to Africa. By building a 21st century telecommunications infrastructure for the continent in effect, treating all of Africa as a system of systems the company expects to help spark transformation not just in communications but across all sectors of society empowering businesses, governments and individual citizens to connect, innovate and achieve economic growth.
Bharti to outsource operations; TCS, Infosys, Wipro, IBM in race
www.WirelessFederation.com/news: Bids have been invited by Bharti Airtel to outsource operations worth over a billion dollars for African assets it recently acquired from Kuwait’s Zain Telecom. This indicates that the company is looking for better deals than those being offered by its existing partners. Bids have been invited for IT-related services as well as the management and maintenance of mobile and landline networks in 15 nations.
TCS, Infosys and Wipro along with IBM are in the race as Bharti Airtel is looking for the best deal. Nokia Siemens and Ericsson which maintain and manage Bharti Airtel’s networks in India through multi-billion-dollar contracts will have to compete with China’s ZTE and Huawei and bids have already been called for.
Alcatel-Lucent has also been posed as a potential bidder for the African deal.
