India's top mobile phone firm Bharti Airtel said on September 17 it had chosen US computer giant IBM to supply information technology services to drive modernisation of its 16 new African networks.
Bharti Airtel, the world's fifth-largest mobile phone company, completed in June the purchase of Kuwait's Zain's African cellular operations for 10.7 billion dollars, including the assumption of 1.7 billion dollars in debt.
The move marks the first significant step by Bharti Airtel to replicate its business model in sub-Saharan Africa where it aims to nearly triple subscribers from 36 million now to 100 million by 2012-2013.
"There are huge opportunities throughout Africa to transform how people communicate," Bharti Airtel chairman Sunil Bharti Mittal said, announcing the African partnership.
The decade-long tie-up with IBM will allow Bharti Airtel to "deliver innovative and affordable 2G and 3G mobile services across the (African) continent," the New Dehli-based company said in a statement.
Under the agreement, IBM will manage the computing technology, customer and other services underpinning Bharti Airtel's mobile communications network spanning 16 African countries including Nigeria, Uganda and Kenya.
Bharti gave no financial details but analysts have pegged the deal's value at between one and 1.5 billion dollars. The African alliance continues a partnership begun in 2004 when Bharti tapped IBM to run the information technology for its Indian network.
Since then, Bharti has seen its growth explode to over 150 million subscribers from six million to become India's leading mobile provider by customers.
Bharti said the pact is expected to be finalised by year end with IBM, which views Africa as the next big emerging growth market as it diversifies revenues.
The African partnership is "a logical extension" for Bharti as it tackles the competition in Africa, said Romal Shetty, executive director of Indian telecoms at global consultancy KPMG.
"It's key to Bharti's success in Africa, there's a huge amount of knowledge IBM has about Bharti and it's logical for Bharti to take them to Africa," he said.
Bharti is facing a tough challenge from MTN, Africa's largest cellular operator, which "has very strong branding across Africa," added Shetty.