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Telecom Services V&D 100

Top10: TCS: Relying On Overseas Boom

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Voice&Data Bureau
New Update

It was an eventful year for TCS. The company not only
managed to reach almost $3 bn revenue mark but also expanded its portfolio
through acquisitions especially in BPO segment. Telecom has slowly and steadily
started making significant contribution in TCS' bottom line. This year,
telecom was the third biggest contributor to TCS' revenues after BFSI and
retail. For FY 2005-06, TCS' telecom revenue was to the tune of Rs 2,001 crore,
a growth of 25% y-o-y. The contribution from telecom software segment alone was
Rs 1,802 crore.

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The telecom industry practice is the second-largest
industry practice of TCS. The company has more than 7,500 consultants on roll
for this practice alone. It covers the entire pyramid of the telecom operations
framework.

TCS

Area of Operations:
Telecom Software

Address: Air India Building, 11th Floor, Nariman Point, Mumbai 400 021

Tel: 022 56689999

Fax: 022 56689455

Website: www.tcs.com 

The major revenue generator for TCS continued to be its
international operations. Around 95% of its telecom revenue comes from
international market. The company last year executed some large international
projects for BT, Motorola, Verizon etc. Recently, Tata Teleservices (TTSL) has
tied-up with TCS to bid for Goa Government's project to wire around 2 lakh
houses in the state, providing them with end-to-end communications solutions.

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TCS is also working in conjunction with VSNL in South
Africa and in other geographies. This synergy has given an opportunity to both
the companies to provide value-added services, rather than the run-of-the-mill
maintenance or support of networks to service providers outside the country.

HIGHLIGHTS
  • Rs 10 bn outsourcing deal from TTSL
  • Tie-up with AT&T for MPLS based
    global communication system
  • 95% revenue comes from software
    exports

This year, some one of the biggest deals for TCS in telecom
vertical included TTSL's outsourcing contract wherein TCS will manage the IT
infrastructure of TTSL and Tata Teleservices Maharashtra. The deal is estimated
at over Rs 10 bn, spanning more than five years. The year also saw TCS grabbing
some major deals internationally. It concluded a $35 mn deal with a European
telecom service provider.

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'We
provide a competitive edge to Tata group of companies'

How
much did telecom contribute to the pie of TCS' overall growth?

Telecom has contributed around 15.1% in terms of revenue to the
overall TCS topline, which is around 23% y-o-y growth for Telecom
Practice. TCS has completed FY 2005-06 with $2.97 bn in revenues.

Global
Head, Telecom Practice, TCS

N Sivasamban

What
were the drivers of growth?

TCS has seen increased demand from customers for system re-engineering and
system replacements. Also, there has been demand for new systems that
focus on providing next generation services and content management and
delivery.

What
were your focus areas last year?

Last year, new revenue drives and cost management were the main focus
areas. This has translated into increased focus on convergence, content
and broadband.

How
active is TCS on domestic front in telecom vertical? How was the
performance last year?

TCS is one of India's largest domestic IT services firm for the telecom
industry. We have several big clients including Bharti, TTSL and VSNL. Our
contributions from the domestic services rendered are approximately 5% of
the total telecom revenue. International clients were the major
contributors to the revenue and we did exceptionally well in the
international market.

How
many employees does TCS have for Telecom Practice? What value-add does TCS
provide to other Tata companies?

TCS' Telecom Practice has approximately 7500-plus employees. They have
extensive experience of serving global telecom firms. This enables TCS to
provide state-of-the-art services and best in class solutions to the Tata
group telecom companies to give them strategic competitive advantage in
terms of cost management, operational efficiency and width and breadth of
service offerings.

Is TCS looking at enhancing its telecom portfolio through acquisitions?

TCS is open to inorganic growth through acquisitions. TCS has a dedicated
team that looks into such opportunities and also looks at firms that
provide services to the telecom industry from time-to-time to complement
our services and offerings. Last year, we acquired and integrated Tata
Infotech and CMC into our firm. They have given us a strategic advantage
in the market space, both from an offerings perspective and from a
clientele base perspective. Today, TCS is well positioned to offer
solutions to the telecom industry from service providers, content
operators, equipment vendors to enterprise customers.

What
were some of the big telecom projects that TCS did last year?

Some of the large projects executed by TCS were for clients such as BT,
Qwest. Cingular Wireless, Hutchison, Verizon, Cable and Wireless,
Motorola, Tata Tele Services and Nokia.
These included OSS/BSS re-engineering, Be-Spoke development,
broadband/content solutions, testing and self-care.

The telecom operations of TCS have four layers that include
business, service, network, and element. Through business layer, TCS supports
several key business systems for many of its major customers. These involvements
range from an individual resource standpoint to SLA driven ownership model. The
service layer comprises all services that the telecom provider would give to its
customers and the system that maintain or manage them. These include telecom
billing, customer care and order management, among others. TCS provides support
to all of the divisions under the service layer in different levels of
engagements with different customers. The network layer constitutes network
related provisioning, mediation, inventory and management systems, while the
element layer constitutes device level programming and development.

Most of TCS' telecom work has been carried out of its
Telecom Centre of Excellence (Telecom CoE). It was setup to research and develop
consulting and implementation offerings for the telecom industry, in line with
the emerging standards, such as enhanced Telecom Operations Map (eTOM) in
different areas. The Innova lab is a key component of the CoE's innovative
capabilities. It provides a customer with a reality experience in trying out the
new methodologies, products and services.