Mahindra British Telecom (MBT) - a joint venture company between the Mahindra group, India’s leading private sector group with interests in automobiles and agricultural tractors, and the British telecommunications giant, British Telecom (BT) -- has received a commitment of assured business of Rs 725 crore from its British partner. This business is to be spread over the next three years.

It is understood that, an agreement between the company and its British parent was signed recently, under which, BT has guaranteed MBT business worth at least Rs 235 crore each year, from the period beginning current fiscal upto March 31, 2003. This represents an increase of 66 per cent over the business BT did with MBT during the last three years. The increased business will come largely from organic growth in IT services, already being rendered by MBT to its parent company, which continues to accelerate outsourcing of work for its offshore operations and end-to-end program management.

In consideration of assured business commitment, MBT is to allot 5.05 million shares of Rs 2 each to BT, thus taking its stake in the Indian company up by three per cent - from 40 per cent to 43 per cent. The price at which the shares will be allotted will depend upon the guidelines applicable to such issues. With this allotment, the shareholding of the Mahindra Group is to come down from its existing 60 per cent to 57 per cent.

MBT has been providing BT and its affiliates, such as BT Syncordia Solutions, BT Cellnet and Syntegra, advanced communications engineering and information system engineering services. It is currently executing a customer service system for BT, which includes end-to-end responsibility of development to deployment of the system. The system, which manages order handling, provisioning and billing for British Telecom''s public switch telephone network, or PSTN, customers, will contribute as much as 70 per cent of British Telecom''s revenues.

Commenting on the development Mr. David Chaplin, a BT director on the board of MBT said, "MBT was BT''s first joint venture in the Indian sub-continent and we are tremendously proud of being a part of its success in the last 13 years. It is very fitting that this relationship has grown and flowered and today as we move one step closer we look forward to a very strong future together".

Mr Ulhas N Yargop, president IT sector Mahindra Group said, "This landmark achievement for MBT, the flagship company in our IT sector, further cements the strong ties between BT and the Mahindra Group and will create substantial value for the shareholders of MBT."

Mr Kiran Deshpande, chief executive officer and managing director MBT had similar views when he said, "We are delighted to play an increasingly important role as a preferred supplier in BT''s global IT outsourcing strategy. This agreement is an indication of our success in executing mission-critical assignments for BT."