TCS bags order of ₹15,000 cr from BSNL for 4G deployment

New Delhi, May 22: A consortium led by Tata Consultancy Services (TCS) on May 22 announced that it received an Advance Purchase Order (APO) valued at over Rs 15,000 crore (around $1.8 billion) from government-owned telco Bharat Sanchar Nigam Limited (BSNL). This deal will be a shot in the arm for India's largest software exporter coming at a time when its major markets such as US and Europe are slowing down.

 

 

 

With this, TCS will be undertaking deployment of a 4G network across India for BSNL, the company confirmed in regulatory filings on BSE. The consortium includes Tata Group's telecom gear-making company Tejas Networks, which will be responsible for supplying and servicing the Radio Access Networks (RAN) equipment.

 

 

 

Along with TCS, the APO was also issued to state-run ITI Ltd for this project. According to analysts, about 20 percent of the deal value will go to ITI. While the deal is revenue boosting for TCS, it could also be margin dilutive with other players being involved. But according to Pareekh Jain, Founder, and CEO, EIIRTrend, with Tejas Networks taking over manufacturing of the equipment and hardware needed, margin dilution would be less overall as no other third-party player is getting involved outside the consortium. "The TCS-led consortium includes Tejas Networks and C-DOT. The billing for the other two consortium partners will be done directly to them in this deal. So, it won't be that margin dilutive for TCS, but its standalone revenue could come down,” he added. This will be the IT services behemoth's third major deal in 2023, following a $723-million deal from UK-based Phoenix Group and another one with British retailer Marks and Spencer (M&S). Though the exact deal size was not disclosed, according to reports, the M&S deal was worth $1 billion. This deal was in talks since September last year. In July 2022, the Union Cabinet approved a Rs 1.64 lakh crore revival package for BSNL, which included cash support of Rs 43,964 crore and non-cash support of Rs 1.20 lakh crore. The package had three main elements - improving the quality of BSNL services, de-stressing the balance sheet, and expanding the fiber reach through a merger with Bharat Broadband Network Limited (BBNL).

 

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This TCS-ITI deal is likely to be a part of the same package. BSNL's 4G services are expected to be rolled out across 100,000 towers or sites.