New Outsourcing Model

In a first of its kind business proposition in India, Datacom Solutions, the telecom services arm of the Videocon group, has floated the idea of outsourcing its IT solutions on a revenue sharing basis. Datacom has received participation proposals from five top IT services companies IBM, TCS, Wipro, Tech Mahindra and HCL Technologies to outsource services, which, industry sources say, could be worth about Rs 3,000 crore over a 7 to 10 year period.

Usually, though telecom companies outsource their IT services to companies with domain knowledge, revenue sharing has never been the norm in India. Confirming the move, Datacom CEO Ravi Sharma told that the company has received very enthusiastic response from the five IT majors. Now we are in the process of evaluating the technical bids. Financial proposals from the five companies should come in soon and in about four weeks we will take a final decision on outsourcing our IT requirement, Sharma said. However, he declined to comment on the revenue that could possibly accrue to the selected vendor. Datacom was one of the five new panIndia GSM players licensed by the government earlier this year. Other players are ADAGs Swan Telecom, Shyam Telecom, STel and the telecom arm of realty major Unitech.

Videocon group company has permission to start telecom operations in all the 23 telecom circles.
Datacom plans to use the Videocon groups country wide presence through its network of distributors and retailers of electronic goods, numbering around 60,000. The company plans to launch its full fledged telecom operations be the end of the year.

Datacom looks to get about 25 million customers in the first three years of its operations and another 25 million in the next two. Going by interest shown by the IT vendors, they also feel the customer numbers and revenues projected by the company could be achieved, Sharma said.
The company has received bids from six global telecom networking majors Nokia, Nortel, Alcatel, Ericsson, ZTE and Huwaei. The final call on this tender is awaited.