Vodafone Idea (Vi) and IBM, an IT giant, are planning to extend their multi-year technology outsourcing agreement, which is expected to be worth roughly $1 billion (almost Rs 8,330 crore).

 

The proposed purchase is critical for Vi's attempts to upgrade IT infrastructure ahead of the planned rollout of 5G services in the nations's top 100 cities and 17 key areas.  5G service's launch will let the cash-strapped telco to compete with larger - and more profitable - rivals Reliance Jio and Bharti Airtel in key markets, halting subscriber losses.

 

"Vi's new, re-negotiated deal with IBM is likely to be finalised soon as the earlier five-year tech outsourcing contract is valid till April 2024," a person familiar with the discussions added.

 

In addition to modernizing and intelligently automating the telco's data centers using AI, IBM is expected to manage, maintain, and run Vi's IT infrastructure under the conditions of the extended agreement. IBM will also likely provide tech solutions surrounding cloud computing and user experience.

 

The extended technology outsourcing agreement will include certain "as a service" or "pay-as-you-go" components. Generally speaking, "as a service" refers to a subscription-based business model wherein software and other IT services are provided to telco customers online by the IT vendor. This is not the same as the conventional client-server architecture, which uses the computer hardware and software resources of the organization to deliver these services.