Telecom (MBT) - a joint venture company between the Mahindra
group, Indias 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
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."