Vodafone Essar, the mobile telecommunications giant’s Indian subsidiary, has signed a five-year IT outsourcing contract extension with IBM that could be worth up to $1 billion, according to a report in India’s Economic Times.

With around 100 million subscribers, Vodafone Essar is India’s second largest mobile telco. The company began life as a division of Hutchison Whampoa, the Hong Kong telecommunications giant that owns 3 in the UK. It grew by buying up regional mobile telcos, and in 2007 Vodafone acquired a majority stake.  

This growth by acquisition meant the company’s IT operations were divided into 23 separate ‘circles’. Shortly after Vodafone took over, it decided to outsource IT to IBM in its entirety. According to the Economic Times, that deal was worth $400 million. 

According to a case study from IT service management software vendor BMC, "since the inception of this partnership between Vodafone India  and IBM, various initiatives were undertaken to streamline and standardize the IT infrastructure, but the company had to face a lot of roadblocks before reaching the desirable outcome."

“Every circle had its own way of managing IT," D.D. Mishra, Vodafone India’s deputy general manager, is quoted as saying. "The major challenges came from disparate processes, approval matrices, and workflows followed by those circles."