BT Awards $1 Billion Offshoring Contract

In what may be the biggest outsourcing deal for a single Indian company, Tech Mahindra will give IT support to the British telecom and its customers for five years

By Richard Thurston

BT will transfer the support for some of its largest multinational customers to India, in what is believed to be the first billion-dollar outsourcing contract to be awarded to a single Indian company.

The telco said it would pay Tech Mahindra over $1bn for a five-year contract to support both its global customers and its own internal systems. BT says it expects to make considerable efficiency gains from the deal.

Shares in Tech Mahindra rose 20 per cent in trading on the Bombay stock market on Thursday, after the deal was announced. The Indian IT services company plans to recruit between 3,000 and 4,000 more staff because of the BT contract.

Tech Mahindra is already one of the most successful Indian tech companies. It specialises in IT services and telecoms outsourcing, and boasts US telco AT&T as a customer. Mahindra already has 15,000 employees, and is starting to rival the scale of global services leaders such as EDS and IBM. It has even set up a software development centre in Milton Keynes.

BT's group finance director, Hanif Lalani, said: "This is another example of BT sourcing the best skills around the world to deliver outstanding service and value for our customers whilst contributing further to continued operational efficiencies."

The two companies have worked together on projects since the mid-1980s, and BT now owns 35 percent of Tech Mahindra.

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