TCS bags Rs 3,810 cr UK BPO contract

GE outbid for 12-year Pearl Group deal.

Tata Consultancy Services, the country's largest information technology company, today said it had bagged a 12-year contract, valued at £486 million (about Rs 3,810 crore), from the UK-based Pearl Group. TCS said it outbid the world's largest BPO and IT services provider, GE Capital International Services.

The contract, which can be extended if both the parties agree to do so, comes within a month of TCS winning a $250-million outsourcing contract from ABN Amro.

Under the contract, TCS and Pearl Group will set up a joint venture firm at Peterborough, near London. The new firm will take on board Pearl Group's 950 employees out of a staff of 1,100.

It will function as a subsidiary of TCS, while Pearl Group will have a minority stake in the firm. The TCS subsidiary will specialise in BPO for life and pension businesses, starting with Pearl Group's portfolio. It will also focus on offering similar services to other life insurance companies.

The company, which already has a 1,700-seat facility in Peterborough, plans to scale up the facility to meet the growth in business.

TCS Executive Vice-President and Global Head of Corporate Affairs Phiroz Vandrevala, addressing the media through a videoconference from London, said, "TCS received the contract due to its track record of working for five of the top 10 British insurance companies as well as for our 14-year relationship with Pearl."

The name of the new subsidiary and investments are yet to be finalised. However, Pearl has committed an investment of £50 million (nearly Rs 394 crore), which will be adjusted against the total value of the contract.

In a recorded message, TCS Chief Executive Officer S Ramadorai said, "This deal validates our strategy of pioneering the next generation of BPO opportunities. This will also help us emerge as a significant player in life assurance and pension administration services."

TCS Chief Financial Officer S Mahalingam, who was in Mumbai, said the company would receive 60 per cent of revenue in the first six years and the remaining in the next six years.

TCS' RECENT DEALS

Oct 18: 12-year £486 million contract from the UK-based Pearl Group

Sept 29: Rs 1,000 crore outsourcing deal with Tata Teleservices

Sept 1: $260 million share of a five-year $2.2 billion contract from ABN AMRO