Date:04/03/2008 URL: http://www.thehindubusinessline.com/2008/03/04/stories/2008030451921700.htm

TCS -Nokia Siemens Networks deal

Signifies climb-up in value chain

BL Research Bureau

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TCS’ multi-million euro deal with Nokia Siemens Networks indicates a very significant climb up the IT service delivery value chain for the former. The deal envisages transfer of high-end services such as product engineering, R&D and parts of operations and business software unit’s activities from Nokia Siemens Networks to TCS.

The Nokia Siemens Networks development centre in Düsseldorf, Germany was carrying out these services. The deal includes transfer of 90 employees to TCS.

This engagement may hold many promises for TCS. Germany is considered a strong telecom market in Europe. Many advanced telecom services are expected to be provided there over the next few years. Nokia Siemens already has a strong working relationship with several telecom operators in Germany and many countries in Europe. This deal may open a new revenue streams for TCS, and help enhanced client mining. Nokia Siemens Networks also has been winning several network infrastructure deals in India consistently over the past year with operators such as Bharti Airtel and Idea Cellular.

With an ever-growing mobile telephony market and with the soon-to-be-announced 3G policy, network technology upgrade will become very important for operators. In this regard, this deal may help create a reasonable domestic footprint for TCS. The deal being non-US, non-BFSI and non-dollar denominated, is devoid of most of the IT pressure points and is likely to be viewed positively by the stock market.