The country’s top telecom service provider Bharti Airtel on Wednesday said it has signed on IBM to manage its infrastructure and application services in a deal valued at about $700 million.

The deal size was earlier expected to be in the range of $550-600 million but sources told Business Line that it was increased later. The contract is for five years, same as the previous contract which was later extended to five more years. The deal size too was increased from $750 million to $2 billion. It is considered one of the biggest IT deals in recent years.

Sources said the scope of the contract has been kept intact but smaller transformational projects will be given out at a later stage and separate RFPs will be floated for this purpose.

The deal has been done amidst allegation of impropriety in the process followed by some senior Airtel executives in awarding earlier contracts to IBM. While one senior Airtel employee was asked to leave the company, ýit is learnt that no IBM employee has been sacked following an internal investigation.

New model Airtel sources said the fresh deal is based on a new model that allows the telecom company greater control over the IT infrastructure. Under the earlier deal, the entire processes were completely outsourced to IBM.

“The command centre will now reside with Airtel to help us adapt to changing market dynamics in real time.” Airtel is calling it the “Next Generation Sourcing model” under which there will be other vendors in addition to IBM. The entire contract given to IBM concerns the management of IT infrastructure and applications for its operations in India.

The statement from Airtel said the new model offers Airtel greater flexibility to scale services and adapt in real-time to changing market dynamics and offer a differentiated customer experience leveraging IBM’s industry solutions and global experience.

“As we embark on the next phase of Airtel’s growth journey, I am confident that the agreement with IBM will help us offer innovative and cutting edge products and services to our customers, enabling us achieve our vision of being the most loved brand,” Gopal Vittal, Managing Director and CEO, Bharti Airtel (India and South Asia), said.

Vanitha Narayanan, Managing Director, IBM India, said, during the last decade, Bharti’s customer base has increased from a few million to over 285 million.

For long-term strategy “Airtel partnered with IBM to drive this growth, by using technology to respond with intuitive offers for customers, managing service delivery, and improving organisational efficiency. This pioneering partnership will continue to bring innovation to Airtel’s customers, which is the foundation for long-term strategy.”

Airtel and IBM also have partnerships for IT infrastructure and services across Airtel’s international operations spanning 19 countries, including Africa, Sri Lanka and Bangladesh.