BT: Has outsourced its global voice network and traffic to Tata Communications for US$ 1 billion

[economic times] British Telecom group has signed a five-year, $1 billion voice outsouring deal with Tata Communications. BT will outsource its entire international voice traffic to TCOM.

TCOM will offer voice carriage and termination services to BT for various destinations. "TCOM will become BT’s primary supplier of International Direct Dial and other voice termination services outside BT’s own footprint countries and BT will become TCOM’s main distribution channel for its traffic into the UK, expanding into other markets across Europe as the relationship matures," TCOM said in a statement in Mumbai.

Back of the envelope calculations show TCOM could earn around $1 billion from the deal. The company reported 24 billion minutes of traffic last year, which brought in around $1.2 billion. The current agreement could likely bring in approximately 6 billion minutes for TCOM, a company official told ET.

Over a five-year period, and factoring in fluctuations in traffic and rates, a total of 24 billion minutes can be estimated for the current deal, which could bring in around $1 billion for TCOM.

"We are proud to become BT’s primary supplier of international voice termination services. The agreement will increase both partners’ competitiveness and will enhance our respective service offerings," TCOM president of global voice solutions Michel Guyot said.

The relationship will allow BT and TCOM to benefit from their respective extensive global networks and advantageous cost structures. BT will also have access to Tata Communications' world-class routing capabilities and on-line management systems providing greater economies of scale that will improve BT’s competitiveness in the international calls market, the statement said.

"TCOM is a leader in the international wholesale voice business, making them a perfect partner to help us achieve additional economies of scale to those of our own," BT wholesale markets MD Brian Fitzpatrick said.

Tata Communications, British Telecom sign $1 bn deal