Date:25/07/2006 URL: http://www.thehindubusinessline.com/2006/07/25/stories/2006072504320400.htm

TCS wins $33-m project from Saudi Telecom

Our Bureau

To invest $15 m in China along with joint venture partners

TAPPING CHINA POTENTIAL: Mr S. Ramadorai (right), Managing Director & CEO, TCS, and Mr S. Mahalingam, CFO, addressing a press conference in Mumbai on Monday. - Shashi Ashiwal

Mumbai , July 24

Tata Consultancy Services has won a $33-million deal from Saudi Telecom Company for implementing end-to-end billing and customer care systems for its wireless service.

The delivery of this project will be made within 18 months, Mr S. Ramadorai, CEO and Managing Director, TCS, said at a news conference here on Monday.

TCS also said it will invest, with its joint venture partners, almost $15 million in China in what will be China's first industrial scale software company.

Chinese venture

The company, through its subsidiary TCS Asia Pacific Pte, has signed a shareholder-promoters' agreement for this with Beijing Zhongguancun Software Park Development Company, Uniware Co. and Tianjin Huayuan Software Area Construction.

TCS will initially hold 72.22 per cent stake in this venture, while the other partners will hold the rest of the equity of 27.78 per cent. Microsoft is not a partner yet , but will join later with a 10 per cent stake. The other joint venture partners will cede some stake, and TCS' holding will then reduce to around 65 per cent, Mr Ramadorai said.

When TCS' existing operations in China are eventually merged into this venture, its stake will again rise, depending on the valuation of the unit, he said.

The new venture will become operational in September-October of this year and will show profits within the first year of operations. In four years' time it will possibly be ramped up to have 5,000 associates.

Eventually, perhaps, TCS might buy out its joint venture partner, Mr Ramadorai said. Mr Jonathan Lam, will be the CEO of the new joint venture.

The difference between operating through the existing wholly owned subsidiary (a 100 per cent export-oriented unit) and a joint venture is that the latter allows TCS to service the domestic market in China, Mr Ramadorai said. There is enormous potential in China. Already TCS has won a banking customer for its core banking FNS solution, he said.