Strategic Outsourcing

of Bharti Airtel Limited

Group 3
Naveed

PGP/19/150

Ramkumar D

PGP/19/219

Sohom Karmakar PGP/19/231

Sumanraj E

PGP/19/232

Prakash R

PGP/19/158

Airtel- Ericsson Bilateral Contracts Grammar (Ex

Objective of clause
Strategic
Coordination
Technical
Organizational
Governance
Coordination
Operational
Coordination
Credible
Commitments
Enforcement
mode
Supervision
Mechanisms
Remuneration
and Risk
Sharing

Remuneration
Systems

Routine (A1)
Routine (B1)
Routine (C1)
No CC (D1)
Self-enforcement
(E1)
Marginal
Productivity (F1)

Contract
Contract
DurationGrammar : A1-B2-C3-D1-E4-F4-G2
Spot Contract (G1)
Duration

Ante)

Clause alternatives
Centralized
Decentralized Authority
Authority (A2)
(A3)
Centralized
Decentralized Authority
Authority (B2)
(B3)
Centralized
Decentralized Authority
Authority (C2)
(C3)
Unilateral hostage
Bilateral hostage (D3)
(D2)
Contractor
Specialized
Non-Specialized
Supervisor
Supervisor
Supervisor (E2)
(E3)
(E4)
Fixed Sharing (F2) Flat rate (F3)
Short Term (G2)

Intensity of
Use (F4)

Long Term (G3)

Airtel- Ericsson Bilateral Contracts Grammar (Ex

Ante)

Strategic Coordination Routine (A1)

The objective of the contract is well defined and is ex ante
Organizational Coordination - Centralized Authority (B2)
Bharti Airtel provides requirement to the Ericsson and it may change based on the increased customer demand
Operational Coordination - Decentralized Authority (C3)
Ericson- Responsible for maintaining the network in good working condition
Bharti Airtel Responsible for the selection of areas/regions to be covered in ongoing expansion
Credible Commitments No Credible Commitments (D1)
On behalf of Airtel, Ericsson has to make investments in the network equipment and they have to absorb airtel employees

Supervision Mechanisms Specialized Supervisor (E4)

Penalties and Rewards are linked to quality achieved as per the service level agreement (SLAs)
Remuneration and Risk Sharing Intensity of Use (F4)
Payment will be made only when the capacity is up and running, used by Airtel customers and total fee will be based on the
amount of earlang capacity installed

Duration Short Term (G2)

Valid for the initial period of 3 years and subject to renewal by mutual agreement in future and ownership of assets remain with
Airtel.

Airtel- Ericsson Bilateral Contracts Grammar (Ex

Objective of clause
Strategic
Coordination
Technical
Organizational
Governance
Coordination
Operational
Coordination
Credible
Commitments
Enforcement
mode
Supervision
Mechanisms
Remuneration
and Risk
Sharing

Remuneration
Systems

Routine (A1)
Routine (B1)
Routine (C1)
No CC (D1)
Self-enforcement
(E1)
Marginal
Productivity (F1)

Contract
Contract
DurationGrammar : A1-B2-C3-D3-E4-F4-G2
Spot Contract (G1)
Duration

Post)

Clause alternatives
Centralized
Decentralized Authority
Authority (A2)
(A3)
Centralized
Decentralized Authority
Authority (B2)
(B3)
Centralized
Decentralized Authority
Authority (C2)
(C3)
Unilateral hostage
Bilateral hostage (D3)
(D2)
Contractor
Specialized
Non-Specialized
Supervisor
Supervisor
Supervisor (E2)
(E3)
(E4)
Fixed Sharing (F2) Flat rate (F3)
Short Term (G2)

Intensity of
Use (F4)

Long Term (G3)

Airtel- Ericsson Bilateral Contracts Grammar (Ex

Post)

Strategic Coordination Routine (A1)

The objective of the contract is well defined and is ex ante

Organizational Coordination - Centralized Authority (B3)

Bharti Airtel provides requirement to the Ericsson and it may change based on the increased customer demand
Operational Coordination - Decentralized Authority (C3)
Ericson- Responsible for maintaining the network in good working condition. New Clause Redeployment or payment for
unused capacity over a period of time
Bharti Airtel Responsible for the selection of areas/regions to be covered in ongoing expansion
Credible Commitments Bilateral Hostage (D3)
Investment in the network equipment and installation by Ericsson
Investment in passive infrastructure such as towers, air conditioners and generators by Airtel

Supervision Mechanisms Specialized Supervisor (E4)

Penalties and Rewards are linked to quality achieved as per the service level agreement (SLAs)
Remuneration and Risk Sharing Intensity of Use (F4)
Payment will be made only when the capacity is up and running, used by Airtel customers and total fee will be based on the
amount of earlang capacity installed

Duration Short Term (G2)

Valid for the initial period of 3 years and subject to renewal by mutual agreement in future and
ownership of assets remain with Airtel.

Airtel- IBM Bilateral Contracts Grammar (Ex

Objective of clause
Strategic
Coordination
Technical
Organizational
Governance
Coordination
Operational
Coordination
Credible
Commitments
Enforcement
mode
Supervision
Mechanisms
Remuneration
and Risk
Sharing

Remuneration
Systems

Routine (A1)
Routine (B1)
Routine (C1)
No CC (D1)
Self-enforcement
(E1)
Marginal
Productivity (F1)

Contract
Contract
DurationGrammar : A1-B2-C2-D3-E4-F2-G3
Spot Contract (G1)
Duration

Ante)

Clause alternatives
Centralized
Decentralized Authority
Authority (A2)
(A3)
Centralized
Decentralized Authority
Authority (B2)
(B3)
Centralized
Decentralized Authority
Authority (C2)
(C3)
Unilateral hostage
Bilateral hostage (D3)
(D2)
Contractor
Specialized
Non-Specialized
Supervisor
Supervisor
Supervisor (E2)
(E3)
(E4)
Fixed Sharing (F2) Flat rate (F3)
Short Term (G2)

Intensity of
Use (F4)

Long Term (G3)

Airtel- IBM Bilateral Contracts Grammar (Ex

Ante)

Strategic Coordination Routine (A1)

The objective of the contract is well defined and is ex ante

Organizational Coordination - Centralized Authority (B2)

IBM will provide entire IT infrastructure facilities to Airtel

Operational Coordination - Centralized Authority (C2)

IBM has the control over the entire IT operations and deals with third party vendors on behalf of Airtel
Credible Commitments Bilateral hostage (D3)
On behalf of IBM, they will make IT investments and Airtels core business depends on this contract. Hence
both of them share risk in this contract

Supervision Mechanisms Specialized Supervisor (E4)

Penalties and Rewards are linked to quality achieved as per the service level agreement (SLAs)
Remuneration and Risk Sharing Fixed Sharing (F2)
IBM will get 10 percent of the Bharti Airtels revenue and share will get reduced if Airtels revenue increases
Duration LongTerm (G3)
Duration of the contract is for 5 years and it can be renewed. During this period IBM can change characteristics of the asset

Airtel- IBM Bilateral Contracts Grammar (Ex

Objective of clause
Strategic
Coordination
Technical
Organizational
Governance
Coordination
Operational
Coordination
Credible
Commitments
Enforcement
mode
Supervision
Mechanisms
Remuneration
and Risk
Sharing

Remuneration
Systems

Routine (A1)
Routine (B1)
Routine (C1)
No CC (D1)
Self-enforcement
(E1)
Marginal
Productivity (F1)

Contract
Contract
DurationGrammar : A1-B2-C3-D3-E4-F2-G3
Spot Contract (G1)
Duration

Post)

Clause alternatives
Centralized
Decentralized Authority
Authority (A2)
(A3)
Centralized
Decentralized Authority
Authority (B2)
(B3)
Centralized
Decentralized Authority
Authority (C2)
(C3)
Unilateral hostage
Bilateral hostage (D3)
(D2)
Contractor
Specialized
Non-Specialized
Supervisor
Supervisor
Supervisor (E2)
(E3)
(E4)
Fixed Sharing (F2) Flat rate (F3)
Short Term (G2)

Intensity of
Use (F4)

Long Term (G3)

Airtel- IBM Bilateral Contracts Grammar (Ex

Post)

Strategic Coordination Routine (A1)

The objective of the contract is well defined and is ex ante

Organizational Coordination - Centralized Authority (B2)

IBM will provide entire IT infrastructure facilities to Airtel
Operational Coordination - Decentralized Authority (C3)
IBM has the control over the entire IT operations and deals with third party vendors on behalf of Airtel and provision for Airtel employees
to join back within 2 years.

Credible Commitments Bilateral hostage (D3)

On behalf of Airtel, IBM will make IT investments and Airtels core business depends on this contract .
Hence both of them share risk in this contract

Supervision Mechanisms Specialized Supervisor (E4)

Penalties and Rewards are linked to quality achieved as per the service level agreement (SLAs)
Remuneration and Risk Sharing Fixed Sharing (F2)
IBM will get 10 percent of the Bharti Airtels revenue and share will get reduced if Airtels revenue increases
Duration LongTerm (G3)
Duration of the contract is for 5 years and it can be renewed. During this period IBM can change characteristics of the asset