December 22, 2006 8:38 AM PST

BT deal hits billion-dollar outsourcing mark

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 telecommunications and IT services company said it would pay Tech Mahindra over $1 billion (509 million pounds) 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 outsourcing.

Shares in Tech Mahindra rocketed 20 percent in trading on the Bombay stock market on Thursday after the deal was announced. It 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 specializes in IT services and telecoms outsourcing, and boasts American incumbent telco AT&T as a customer. Mahindra already has 15,000 employees, and is starting to rival the scale of companies such as EDS and IBM. It has even set up a software development center in Milton Keynes, England.

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.

Richard Thurston of ZDNet UK reported from London.

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outsourcing, British Telecommunications, IT services, telecommunications, India

4 comments

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Great
Well, I'm sure BT is saving lots of money and passing those saving on to the customer. But seriously: There's few things more frustrating than dealing with a poorly-trained customer support person who doesn't speak English.
Posted by 60AmpRelay (17 comments )
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you can expect...
someone you can't understand, poor quality of work and service. Bravo. All in the name of saving a buck. So much for quality.
Posted by dondarko (261 comments )
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What jobs will remain in US/UK etc ?
Inspite of the 'quality' problems ( like lack of
American accent with Indian english speakers ),
the outsourcing to India is booming.
Posted by pokiri (98 comments )
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Right it's Amazing the West is Lazy
They may have communication problems, but they will at least treat customers with respect and try and help unlike most customer service people in the US & UK.
Posted by sfrank212 (12 comments )
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