TCS eyes $2 bn revenue from emerging marts

The emerging markets strategic business unit (SBU) of the country's largest IT services provider Tata Consultancy Services (TCS) aims to touch the revenues of $2 billion by 2011-2012.

The SBU was created earlier this year and has regions such as Eastern Europe, West Asia, South Africa and Latin America under its preview. TCS will commence its Turkey operations by April 1, 2008.

To start with, the SBU headed by Gabriel T Rozman will focus on growth markets such as Russia, Turkey, Hungary, Poland, Brazil, Mexico, and South Africa.

The company is also planning to have strategic development centres that will cater to these regions. Egypt and Russian are two regions where the company is considering to set up its development centres.

"In the next three years, we are planning to spend $50-60 million (Rs 200-240 crore) in setting up these centres in the key geographies," said Rozman.

TCS has spend $60 million (Rs 240 crore) in five years to set up its Latin America operations. While the focus of these centres will be to support existing customers, to provide them near-shore and off-shore capabilities as well as to cater to the local market. Ecuador, for instance, contributes upwards of $30 million to the company's revenue.

Emerging Markets offer a great opportunity for TCS. It is estimated that these regions account for 25.5 per cent of the $730 billion global IT service market, growing at a faster annual rate of 8 per cent versus the developed market growth rate of 6 per cent.