KPN has announced a new partnership with Indian ICT services provider Tech Mahindra aimed at improving KPN IT efficiency and effectiveness as well as its operational processes. The partnership will also jointly address strategic growth areas. KPN expects the deal to yield savings of at least EUR 200 million over a five year period. The agreement fits into KPN's 'Strengthen, Simplify and Grow' strategy for 2011- 2015, reducing costs and accelerating the operator's FTE reduction programme. As a first step in this partnership, KPN and Tech Mahindra have signed a five-year contract for the development and support of over 150 applications in the operational IT systems of KPN NetCo segment. As a second step, KPN and Tech Mahindra will explore and determine future projects in the newly set up partnership. A KPN spokesman said that the contract fit within the company's goal of reducing the number of FTE's by 4000-5000 by end 2013, but that there was more to the deal than just outsourcing. "Some IT operations may go to India but some Indian personnel may also come here…Tech Mahindra will help us simplify our processes in order to be more effective, there is a much bigger picture than just an outsourcing deal," the spokesman said. KPN does not plan to scrap more FTE's than its previously stated goal of 4000-5000.
