IBM signs deal with Indian telco to “transform” Africa

IBM is to integrate the IT infrastructure of Indian mobile telco Bharti Airtel’s African operations, in a deal the computing giant hopes will help “radically jumpstart” its own business on the continent.

Bharti Airtel, India’s largest mobile telco, has been aggressively investing in the African market recently. Earlier this year, it acquired the African operations of Kuwaiti telecom provider Zain for $10.7 billion, and today it operates in 16 African countries including Nigeria, the Democratic Republic of Cogno and Kenya.

Under the ten-year deal IBM, which already supports Bharti Airtel’s IT infrastructure in India, will integrate and manage a single, “21st century” telecommunications infrastructure for all of Bharti’s African divisions.

In announcing the deal, IBM CEO Sam Palmisano spoke of the supposed benefits of improved mobile telecommunications to African society. “We expect [this] to help spark transformation not just in communications but across all sectors of society – empowering businesses, governments and individual citizens to connect, innovate and achieve economic growth."

The company cited research conducted by accounting giant Deloitte in 2007 that claimed “every 10 percent jump in mobile penetration is estimated to drive a 1.2 percent gain in gross domestic product (GDP)”.

"The impact that mobile phones have on the developing world is as revolutionary as roads, railways and ports, increasing social cohesion and releasing the entrepreneurial spirit that stimulates trade and creates jobs," said Professor Leonard Waverman of the London Business School when that research was published.

The positive impact of mobile telecommunications is expected to be especially potent in Africa, where fixed-line infrastructure is scarce.

Clearly, however, IBM’s principal motivation is to capitalise on a market that has the potential for rapid growth. The company has invested $120 million in its operations in Africa over the last two years, according to a report in South African IT site TechCentral.

Last year, IBM announced that it was to develop a low-cost laptop for the African market, in partnership with open source software vendor Canonical (founded in South Africa).     

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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