Reliance Expected to Achieve 30% Cost Savings by Outsourcing

According to media sources, Reliance Communications, an Indian telecom operator, is expected to award a 5-year outsourcing contract worth about USD 500 million by the end of August 2007. Several big information technology outsourcing service providers, such as Accenture, EDS, and IBM, are eyeing the contract.

As part of the outsourcing contract, Reliance is expected to outsource its entire infotech and related infrastructure functions including billing, call center operations, customer care management, and data management to one of the successful bidders. The successful bidder is expected to modernize the existing IT infrastructure of Reliance. The company expects to achieve cost savings of about 30 percent by outsourcing such functions.

Once this deal is finalized, it will be the third biggest deal awarded by an Indian telecom company over the last few years. About 3 years ago, Bharti awarded a 10-year, USD 750 million outsourcing deal to IBM covering its infotech infrastructure. A few months back, Idea Cellular awarded a USD 600–800 million deal to IBM covering infotech infrastructure and applications outsourcing.