Tata to aid India's telecoms expansion

India's largest outsourcer Tata Consultancy Services Ltd. has landed a US$140 million contract from India's large state-owned telecommunications services provider, Bharat Sanchar Nigam Ltd., for the deployment of next-generation networks in the country.

The nine-year engagement with BSNL involves TCS setting up complex data networks across BSNL's operations in the north and west of India. The agreement also includes deploying operational support systems and business support systems components such as customer relationship management, billing, mediation, and directory inquiry, among others, TCS said Thursday.

After a systems integration phase of two years, TCS will manage the operations for BSNL over the next seven years, said N. Chandrasekaran, TCS's head of global sales and operations.

The Indian services market is growing, and even though billing rates on outsourcing contracts are lower than in markets in the U.S. and Europe where TCS operates, the costs are also lower, Chandrasekaran said. The contract with a large services provider like BSNL will help the company win systems integration and managed services contracts from telecommunications service providers in other markets, he added.

India emerged in the first half of this year as the largest market for outsourcing services in the Asia-Pacific region, according to sourcing consultancy firm, Technology Partners International Inc. in Houston. TPI tracked contracts valued above $25 million for the survey.

A number of multinational services companies like IBM Corp. and Hewlett-Packard Co. have focused on the Indian market, and won some large contracts.

In the quarter ended June 30, TCS's revenue from the domestic market was only about 9 percent of total revenue but this share is expected to grow, Chandrasekaran said. The U.S. is the largest market for TCS accounting for over 51 percent of revenue, followed by the U.K. at about 21 percent.

Indian outsourcers have typically focused on more lucrative markets in the U.S. and Europe instead of India, research firm Gartner Inc. said earlier this year. The growing Indian market and the appreciation of the Indian rupee against the U.S. dollar are now making domestic contracts more attractive to Indian companies.