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IBM bags $12-mn DTH deals from Sun Direct, Tata Sky
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MUMBAI: IBM has clinched two IT services deals in the direct-to-home (DTH) segment in a deal with Sun Direct and Tata Sky. It will offer customer relationship management (CRM) implementation and services to Sun Direct, a venture promoted by the South-based Sun Network.

In the deal with Tata Sky, a DTH joint venture between Tata Group and Star, IBM will provide storage solutions. Both these deals together are estimated at over $12 million, said an official familiar with the development.

Tony D’silva, COO, Sun Direct confirmed the development. “The current CRM system was unable to handle the fast growing customer information. Hence, we have decided to migrate to Siebel CRM software. IBM will implement and manage the solution for 10 years,” he said.

However, he refused to comment on the size of the deal between his company and IBM. Sun Direct has 3.7 million DTH subscribers and accounts for over 45% of new DTH subscriber additions in the country.

The storage solutions contract with Tata Sky is likely to be for the duration of 3-5 years. Tata Sky has provided 3.5 million DTH connections. The Tata Sky spokesperson could not be reached to comment on the deal.

It is gathered that Tata Sky has opted for a capex model where the DTH operator would bear the cost of the IT assets. Sun Direct has opted for an opex model to execute the project where the cost of hardware and software license will be borne by IBM.

“Sun Direct would make predetermined periodic payments to IBM for 10 years after which the former would own the IT assets,” said Mr D’silva. After winning three major long term deals worth more than $500 million each in the telecom sector, IBM has started looking at opportunities in the entertainment and media sector.

The company has already bagged six deals in this space with an average size of $15 million each in the past year.

“The domestic media and entertainment sector is at the same cusp where the telecom sector was some nine years ago. We are getting a good response from DTH operators since they realise that they need a better insight on customer behaviour,” said IBM director for communications sector (India and South Asia) Avinash Josh. The company is in talks with four other players in this space to provide them with IT services.

IBM was one of the early entrants in the domestic IT services space to provide services with long-term engagements. The company has pioneered the multi-year telecom model together with Bharti Airtel, the country’s biggest telecom operator in 2004. “IBM has joined forces with numerous clients in the communications sector to make business smarter. IBM is helping to create new markets and deliver real business value to clients,” said Tim Greisinger, vice president, communications sector, growth markets, IBM.

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