IBM, International Business Machines Corp., and Bharti Airtel have entered into a in-principle agreement, where IBM would mange the telecom operators IT operations in the 16 African countries.
This 10 year contract that has been estimated at a more than $1 billion by an analyst, will see IBM consolidate the IT operations of the telecom major in 16 African countries and present it in one integrated system.
The IT company will also be responsible for overseeing the desktop services, data center operations, technology applications, servers and storage, the company has said in a joint statement.
They also said that this contract would be finalized in the fourth quarter.
Principal analyst at research firm Gartner Inc, Kamlesh Bhatia has said “The deal is estimated to be anywhere between $1.00 billion and $1.30 billion. It’s a good deal for Bharti, as it needs operational stability when it enters Africa…which is extremely fragmented.”
Bharti Airtel and IBM are already working together in India where the telecom major has more than 140 million subscribers. The telecom major is looking to duplicate its expertise in India, in squeezing profits from telephone calls charges as low as 1 cent a minute.
The entry barrier is being lowered by Airtel for African people; so that they are encourage to own a mobile phone, the company said in a statement.
A $9 billion acquisition of Mobile Telecommunications Co.’s assets has allowed the telecom major to enter the African market. This move was taken in an attempt to expand its business and compensate the effects of cut throat competition back in India.
In Africa where the mobile phone penetration is much lower than India, Bharti Airtel has close to 45 million subscribers and it operates across the African countries such as Madagascar, Chad, Malwai, Kenya, Ghana, Congo, Gabon, Zambia, Burkina Faso, Ugnada, Niger, Seychelles, Tanzania and Sierra Leone.


