A consortium led by Tata Consultancy Services (TCS), the flagship company of the Tata Group, received an advance purchase order (APO) worth over ₹ 15,000 crores from Bharat Sanchar Nigam Ltd. (BSNL), a public sector undertaking for the deployment of a 4G network across India.
The TCS-led consortium includes Tata Group’s telecom gear-making company Tejas Networks and the Centre for Development of Telematics (C-DoT). State-run ITI Ltd. has also been issued advanced purchase orders. As a part of the deal, Tejas Networks will supply and service the Radio Access Network (RAN) equipment to BSNL.
This is the third major deal that the IT leviathan bagged this year and it came at a crucial time when TCS’s major markets such as US and Europe are slowing down. It had signed a $723-million deal with the UK-based Phoenix Group and another one with British retailer Marks and Spencer (M&S) for about $ 1 billion, according to reports.
Tejas Networks gained 4.94% to reach an intraday high of ₹ 674.50 apiece, while ITI rose 5.11% higher to reach an intraday high of ₹ 109.95. TCS gained 1.52% to reach an intraday high of ₹ 3,271.95 apiece.
According to analysts, about 20% of the deal value will go to ITI. They say that while the deal will boost revenue for TCS, it could also be margin dilutive as other players are involved.
The Union Cabinet, in July 2022, had approved a ₹ 1.64 lakh crore revival package for BSNL, which included cash support of ₹ 43,964 crore and non-cash support of ₹ 1.20 lakh crore.
The package had three major elements — improving the quality of BSNL’s services, de-stressing the balance sheet, and expanding the fibre reach through a merger with Bharat Broadband Network Limited (BBNL). The TCS-ITI agreement is probably included in the same package, and 100,000 towers or sites should see the rollout of BSNL’s 4G services.
Written by Simran Bafna
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