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India's Airtel Outsources Again

Airtel adds to its outsourcing deals by signing one with mobile apps specialist Comviva, which will manage its value-added services to set another outsourcing first

June 11, 2009

2 Min Read
India's Airtel Outsources Again

Indian operator Bharti Airtel Ltd. (Mumbai: BHARTIARTL) is claiming a managed services world first after agreeing to a mobile value-added services outsourcing deal with Comviva Technologies Ltd. .

The three-year contract will see Comviva (formerly Bharti Telesoft) manage the entire technical infrastructure associated with Airtel's value-added services, including basic SMS, multimedia messaging, and ringback tones, among others.

The services and the infrastructure are currently managed by Airtel, India's largest mobile operator with about 100 million customers, and are delivered using equipment supplied by a range of vendors. (See India Tops 400M Mobile Subs.)

Comviva will manage more than 2,000 nodes -– including SMSCs (short message service centers), MMSCs (multimedia messaging service centers), and IVR (interactive vocie response) servers -- that deliver Airtel's mobile value-added services, and report to Airtel through a series of "stringent" service level agreements (SLAs).

A Comviva spokesperson confirmed the SLAs will cover metrics such as node downtime, the time it takes to deliver a service, and service completion rates, but said the exact measurements and reporting schedule will be set by Airtel and depend on the specific service.

The operator's value-added service strategy will continue to be set by Airtel, with Comviva responsible for the technical delivery of new services Airtel introduces, the spokesperson confirmed.

The new deal comes only a month after Airtel formed a joint venture with Alcatel-Lucent (NYSE: ALU) to run the telco's fixed network. (See AlcaLu, Bharti Form Joint Venture.)

It also marks another step in the technical outsourcing strategy that has been a cornerstone of Bharti Airtel's business since it first created managed service contracts for its IT and mobile network infrastructure requirements in 2004.

Each of Airtel's previous managed services contracts has been notable for their supporting financial arrangements.

Airtel's IT contract with IBM Corp. (NYSE: IBM) works on a revenue-sharing basis, while the operator's network outsourcing contracts with Ericsson AB (Nasdaq: ERIC) and Nokia Networks introduced a radical financial arrangement whereby Airtel pays for network capacity usage (priced per erlang), and not for the network infrastructure.

Comviva (which changed its name from Bharti Telesoft on April 16 this year) declined to comment on the financial details of its new deal. Airtel had not responded to Light Reading's inquiries as this article was published.

— Catherine Haslam, Asia Editor, Light Reading

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