Wipro guns for IBM in telecom services market

What the Unitech win means, say analysts, is that Wipro’s earlier win was no fluke--that the company has now acquired the expertise to counter the might of Big Blue, as IBM is known.

Wipro Ltd’s win of a $500 million (Rs2,465 crore) strategic outsourcing contract from Unitech Wireless Ltd is seen by analysts as the Bangalore-based company’s emergence as a formidable competitor to International Business Machines Corp. (IBM) in the fast growing Indian telecom services market.

To be sure, this isn’t the first deal that Wipro has won in this space; in January 2008, it won a similar $600 million contract from Aircel Ltd. What the Unitech win means, say analysts, is that Wipro’s earlier win was no fluke—that the company has now acquired the expertise to counter the might of Big Blue, as IBM is known. Until the Aircel deal was won, IBM had a near-stranglehold on the market for outsourced information technology (IT) deals in the telecom sector.

Anil Jain, vice-president, corporate business unit, Wipro Infotech—the division that handles such business—lists three reasons for the company’s recent successes in IT-for-telcos deals: “We have built competencies in the recent past, have deep understanding of the Indian market and have strong relationships with our partners.”

An executive at IBM seemed to suggest that the company had walked away from the deal because it wasn’t worth it in terms of price. “There is good business and not so good business. IBM will do deals where we are confident of meeting our own metrics…,” said Avinash V. Joshi, director of communications sector at IBM India and South Asia. According to Joshi, IBM had “signed off” on the Unitech deal months before it was announced.