IBM inks $83 million deal with Digicable

US-based computer maker IBM said today that it has signed a 10-year outsourcing deal with Indian cable and broadband distribution firm, under which Digicable will make an initial payment of $83 million to IBM.

IBM already has contracts with Indian media companies Sun TV and Tata Sky. K S Raghunandan, its director of solutions for India and South Asia, told reporters in New Delhi that expected significant growth in deals in the sector.

"This is the minimum commitment. As Digicable grows, there is significant potential for this to grow," he said of the Digicable deal. IBM has annual revenue of $2 billion globally from the media and entertainment industry, he added.

Digicable, in which British investment firm Ashmore owns a 49 per cent stake, has more than eight million subscribers in 70 cities of India.

IBM will support the integration of the Indian firm's digital media content delivery and value-added services such as video-on-demand, interactive TV and internet services on TV, IBM said in a statement. 

Jagjit Singh Kohli, managing director and chief executive of Digicable, said the business landscape is changing continuously and customer demands are increasing exponentially. 

"It is hence imperative to differentiate ourselves by constantly evolving new and exciting service offerings to attract and retain customers, ably supported by a partner who understands our business and provides significant value-add. IBM has a strong track record in the media and entertainment space and we are confident that this agreement will enable us to accelerate growth, while ensuring utmost customer satisfaction," he said.