Alcatel-Lucent

HCL signs $400 million deal with Alcatel-Lucent

 

 

 

 

 

 

 

BANGALORE: HCL Technologies has bagged a $400 million (Rs 2,400 crore) deal from French telecommunications giant Alcatel Lucent for rolling out 2G/3G support services and R&D development.

The seven-year deal is part of the French company's ambitious 'Shift Plan' that was announced last year to reposition itself from a telecommunications equipment provider to a specialist provider of IP networking and ultra-broadband access.

"In conjunction with the targeted cost savings of our Shift Plan, we entered into a 7-year master service agreement with HCL Technologies regarding the transfer of a part of our R&D department for certain legacy technologies," Alcatel said in its half yearly report.

For HCL, the deal comes on the heels of two other massive deals it signed in the past few months -- a $400 million contract from Norway's DNB Bank to manage IT infrastructure and application operations for all DNB businesses across Norway and its key international locations, and a $500 million contract from food and beverage giant Pepsi.

Alcatel-Lucent's Shift Plan is betting big on IP networking and ultra-broadband access that would represent 85% of R&D investment in 2015. Alcatel has set a target to reduce 1 billion euros in the group's fixed cost structure by bringing down sales, general and administrative (SG&A) expenses, refocusing on R&D, and improving operational efficiencies.

"As part of an initial three year transition and transformation phase, we are committed to restructuring those activities, which is estimated to cost 29 million. Overall, Alcatel-Lucent is committed, under this agreement, to purchase approximately 297 million (about $400 million) of HCL services until 2021," the French telecom giant said in its report.

HCL has won major contracts from Europe, indicating a growing appetite for offshoring there. Competitive and cost pressures look to be forcing a change in the continent, which in the past tended to be inward looking.