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London-listed media company awards five-year, infrastructure and application management deal to Indian offshore provider

Mecom Group, a London-listed media company with operations in the Netherlands, Denmark, Norway and Poland, has awarded a €90 million, five-year IT outsourcing deal to Indian company HCL.

HCL will provide IT infrastructure management services, as well as some application management services, starting in the first half of next year.

The company expects to incur €19 million in up front cash costs and €12 million in "outsourcing-related capital costs" as a result of the deal, but predicts it will provide an annual profit improvement of €12 million.

Mecom's chief operating officer Keith Allen commented that the deal will support the company's transition from a publisher focused on paper-based products to a "multi-platform consumer content business".

"This agreement will not just be financially attractive but it will also provide us with consistent IT development across our different divisions," he said.

In its latest financial year, Mecom reported a 2% decline in overall revenues to €1.4 billion, as advertising sales dropped 4%. 

HCL claims to have four of the world's five biggest publishing companies among its customers. News International counts among its media customers, a connection that lead to the HCL's name being mentioned during a recent emergency debate on the phone hacking scandal in the House of Commons.

"I believe that the police should ask [News International chariman] Mr James Murdoch and [former News of the World editor] Rebekah Brooks whether they know of the attempted destruction of data at the HCL storage facility in Chennai, India," remarked MP Tom Watson.

However, HCL denied any involvement in the incident, saying that it does not store any of its customers' data, anywhere in the world.