In Short:
Vodafone Idea is likely to renew its $1 billion deal with IBM to manage its IT infrastructure for the next five years. IBM will also provide tech solutions for cloud computing and automation. The partnership will enhance Vi’s IT infra, bring cost efficiencies, and help with network expansion plans, especially for launching 5G in the future. Vi is looking to raise funds and shareholders have approved the plans.
Vodafone Idea to Renew Partnership with IBM for IT Infrastructure Management
Vodafone Idea (Vi), the third-largest telecom operator in the country, is set to renew its agreement with US tech giant IBM for the management of its IT infrastructure. The deal is valued at approximately $1 billion or Rs 8,330 crore and is expected to span over five years. Vi’s existing contract with IBM is set to expire in April 2024, and as reported by ET, Vi has successfully renegotiated a new deal with IBM for the following five years.
Key Highlights of the Partnership
IBM will be responsible for managing and operating Vi’s IT infrastructure. Additionally, IBM is anticipated to provide Vi with technological solutions for cloud computing and the automation of data centers utilizing artificial intelligence (AI).
The renegotiated agreement with IBM is projected to deliver significant value to Vi by enhancing its IT infrastructure and introducing cost efficiencies, as mentioned in the report.
Vi’s Strategic Fundraising Plans and Future 5G Launch
Vi aims to raise Rs 20,000 crore through equity and an additional Rs 25,000 crore through debt. The fundraising proposals have been approved by the telco’s shareholders, with hopes to secure the funds accordingly.
The collaboration with IBM holds strategic importance for Vi, especially as it looks ahead to the introduction of 5G services in the future. While Vi has not heavily invested in 5G due to minimal returns on investments, the company has showcased its 5G capabilities at various events such as the Mobile World Congress (MWC) in 2022 and 2023.
Vi’s unveiling of Vi AirFiber, a 5G fixed-wireless access solution, was a standout moment at MWC 2023. Thus, IBM’s partnership will assist Vi in advancing its network expansion initiatives by managing the IT infrastructure efficiently.
