 "TCS, Tata Consultancy Services")
Tata Consultancy Services (TCS) announced on Wednesday that it had received an add-on advance purchase order (APO) for around ₹2,903 crore, inclusive of taxes, from Bharat Sanchar Nigam Ltd (BSNL) for planning, engineering, supply, installation, testing, commissioning and annual maintenance of 4G mobile network.
In a filing, TCS said detailed purchase orders would be issued by the state-run telecom company in due course, subject to fulfilment of terms, conditions and documentation as mentioned in the APO. The work order is across 18,685 BSNL sites.
TCS already has a ₹15,000 crore deal with BSNL which involves building data centres and 4G sites across India, along with laying the groundwork for 5G infrastructure. The new order comes as revenue from the previous order is tapering down, causing headwinds for TCS as growth in its major markets has been strained.
“BSNL revenue replacement could definitely be a headwind, but we know that we will be able to replace most of it. We are hoping that we will be able to compensate the BSNL revenue in multiple other ways both internationally and domestically,” TCS Chief Executive Officer K Krithivasan had said in a post-earnings conference call with analysts in January.
He had also cautioned that 70 per cent of the earlier BSNL project had been completed, which meant revenue from that business would slowly start drying up. “It should start tapering off either in Q4 or Q1, but I would expect some tapering off starting Q4 itself,” he had said.
BSNL is aiming to deploy 100,000 4G towers across India by June, as it looks to reclaim some ground in the telecom market, which was ceded over the years to Vodafone Idea, Bharti Airtel and Reliance Jio.
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TCS Chief Financial Officer Samir Seksaria had told analysts in January that BSNL had floated a request for proposal (RFP) for 5G upgrade. “We qualify for that, given that we have successfully executed on the 4G opportunity. We will be participating in the new RFP,” he had said.
Tejas Networks Ltd (TNL), a subsidiary of the Tata group, also said in a separate filing that it would supply radio access network (RAN) and other equipment to TCS — worth ₹1,525.23 crore exclusive of taxes — related to the project. Shares of the company, where Panatone Finvest, a subsidiary of Tata Sons, is a majority shareholder, rose about 3.16 per cent to close at ₹746.50 on the BSE.
TNL designs and manufactures wireline and wireless networking products, with a focus on technology, innovation, and research & development. Its carrier-class products are used by telecom service providers, utilities, governments, and defence networks in more than 75 countries.
