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Tech Mahindra awaits official word from Etisalat on cancellation of outsourcing contract
Tech Mahindra Ltd is awaiting "official communication" from Etisalat , the company said, after a media report that the carrier has cancelled its outsourcing contract with the provider as it shuts down its India network.
"We await official communication from them on the decision about cessation of operations. We will have discussion with them subsequently," Tech Mahindra said in a statement on Thursday. It did not elaborate.
Etisalat said on Wednesday its Indian joint venture Etisalat DB will shut down the operations of its Indian joint venture, after an Indian court ordered cancellation of the local affiliate's licence amid a corruption probe.
Financial news website moneycontrol.com reported earlier on Thursday Etisalat DB's outsourcing contract to Tech Mahindra, valued at $400 million over 10 years, had been cancelled, citing sources it didn't name.
The report quoted sources as saying that Tech Mahindra will likely invoke a bank guarantee of up to 5 billion rupees.
"They are a global company, and we believe they will take care of their contractual obligations," Tech Mahindra's chief executive Vineet Nayyar told Reuters, declining to give details.
Tech Mahindra provides IT services to the telecom sector and counts London-listed BT Group and Vodafone, U.S.-based AT&T and Motorola, and France's Alcatel-Lucent among its clients.
Shares in Tech Mahindra, a unit of tractor and utility vehicle maker Mahindra & Mahindra, fell as much as 3.4 percent on Thursday to their lowest level in nearly a month. The broader Mumbai market was down 0.3 percent
Source : ET
