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.

The incredible growth witnessed in the Indian telecom scene in the past few years has propelled the industry to the second spot among the telecom networks in the world. The total subscriber base crossed 670 million by the end of July 2010, pushing the teledensity in the country to above 58 percent, according to telecom regulatory authority of India (Trai).

“’It has been made possible by synergy of conducive government policies and the entrepreneurship zeal of telecom industry,” said telecom minister A Raja at the curtain raiser ceremony of ‘India Telecom 2010’ in New Delhi on Wednesday.

‘India Telecom 2010’ is an international conference on telecom sector that provides a platform for interaction between policy makers, regulators, service providers, manufacturers and content and other accessory providers from across the world, explained Vijay Laxmi K Gupta, member (finance), telecom department. This year’s event with theme ‘Broadband for All’ will be held from 9-11 December at Pragati Maidan, New Delhi. An international telecom exhibition, jointly organized by the Department of Telecom (DoT) and the Federation of Indian Chambers Of Commerce and Industry (FICCI) is also being planned on the same venue.

The last five years has seen teledensity in urban areas jump by leap and bounds from 26 percent to more than 125 percent. Though rural teledensity still lags behind, the percentage of increase is phenomenal. It rose from a mere 1.73 percent to above 27 percent.

With the cut-throat competition in the telecom industry, the tariffs are falling like tenpins. Together with favorable government policies and the proactive role played by the telecom industry, owning a telephone has undergone a sea change from being a luxury to a necessity that is within common man’s reach.

The imminent 3G rollout is expected to bring about a communication revolution in the country. With it, the quality of telecommunication in the country will also go up along with quantity.

Using their cell phones, Bharti Airtel users will be able to make virtual payments at several restaurants and retail outlets.

Airtel, the country’s largest mobile service provides has recently received a go ahead from the Reserve Bank of India that would allow it to collect a maximum of Rs 5000 from its customers. This can be converted into virtual money and saved on the handset and used by the user at outlets that have a tie up with Airtel.

Over the next couple of months several other leading telecom operators are also slated to receive semi closed wallet license.

With over 650 million mobile phone users present in the country, all telecom operates are vying to offer various financial services that can be used to make payments across various sectors. Such services are already prevalent in countries like South Korea, Japan, certain markets of Europe and parts of China.

RBI in its annual monetary policy had announced earlier this year that it was looking to use mobile phones as a great medium for making banking facilities accessible even in remote areas of the country, provided the cellular operators and the telecom companies co operate to make this initiative a success.

In a statement Bharti Airtel said “Semi-closed wallets are prepaid payment instruments that are redeemable at a group of clearly-identified merchant locations/ establishments which contract specifically with the issuer to accept the payment instrument. These instruments do not permit cash withdrawal or redemption by the holder.”

M-money or mobile money payment has already been introduced by Bhutan Telecom which is a one stop shop for making payments.

No timeframe ahs been indicated by the company for launch of these services.

“Currently we are evaluating various options that this license provides to find out how best we can create a value proposition for Airtel customers. It is imperative to design a safe & convenient deployment before we can take to the market,” its statement added.

The telecom minister on Tuesday has stated that India hoped that the ongoing security issue concerning BlackBerry services would be resolved and the government would receive access to the electronic messages.

Meanwhile RIM, Research In Motion’s BlackBerry services is facing flak in other countries, especially in the Middle East too. The governments here fear that consumers might take undue advantage of the secure services provided by blackberry to aid terrorism or peddle pornography.

RIM’s encrypted messaging and mail service has been threatened to be shut down in India, unless the government gained access to it.

Earlier this month, India began accessing some of the traffic carried on this Smartphone device as part of the campaign that unmonitored messaging and mails could put the country’s security at risk.

Telecom Minister Andimuthu Raja told reporters “I do hope it will be resolved.”

On august 30th 2010, RIM had offered several ways in which the authorities could monitor the Blackberry communications, said the Interior Ministry in India. Over the next 60 days, the feasibility of these methods would be checked by the government.

Raja however refused to reveal the solutions offered by RIM and said “We are periodically reviewing.”

However, the encrypted corporate email being at the heart of RIM’s business, RIM has insisted that they would not be able to decode this service.

The company is yet to confirm if India’s security agencies have started accessing Blackberry traffic.

While notices have also been sent to Skype and Google, India is also urging RIM to set up a local server in the country, which would allow the security agencies to monitor the entire web data easily.

The Telecom Commission, Raja has confirmed would also offer bail out options to the new telecom operations who are struggling to stay afloat in the overcrowded 15 player telecom market in India. These companies are facing a lot of issues due to the low tariffs and the high operational costs.

As per the current regulations in India, the telecom operators cannot sell out their operations within three years of their existence. The last batch of telecom operators who received their license in 2008 would have to wait another year to sell out.

Raja also said “In the last operators’ meeting, it was highlighted bailout provisions may be done. It will be discussed in the Telecom Commission”.