TCS Secures INR 15,000-Crore BSNL Deal for Nationwide 4G Network Deployment
Written by Sanjay Kumar
| Tata Consultancy Services | Bharat Sanchar Nigam Limited |
| Founders: Faquir Chand Kohli, J. R. D. Tata | Founder: Government of India |
| CEO: Rajesh Gopinathan (21 Feb 2017–) | Founded: 15 September 2000 |
| Founded: 1 April 1968 | Headquarters: New Delhi |
| Headquarters: Mumbai | Divisions: Bharat Fiber; BSNL Broadband; BSNL Mobile; Bharat Net; BSNL Towers Limited; |
| Number of employees: 614,795 (March 2023) | Number of employees: 63,966 (1 June 2021) |
| Parent: Tata Group | Owner: Department of Telecommunications, Ministry of Communications, Government of India |
| Subsidiaries: TRDDC | Subsidiaries: Mahanagar Telephone Nigam Limited; |
On May 22, Tata Consultancy Services (TCS) and its consortium announced that they had received an Advance Purchase Order (APO) worth over INR 15,000 crore (approximately $1.8 billion) from Bharat Sanchar Nigam Limited (BSNL), a government-owned telecommunications company. This deal comes as a much-needed boost for TCS, India’s largest software exporter, especially considering the slowdown in its major markets like the US and Europe.
According to the regulatory filings on the Bombay Stock Exchange (BSE), TCS will be responsible for deploying a 4G network nationwide for BSNL. Tejas Networks, a telecom gear manufacturing company owned by the Tata Group, will be in charge of supplying and servicing the Radio Access Networks (RAN) equipment as part of the consortium.
Apart from TCS, the APO was also issued to ITI Ltd, a state-run company specializing in information technology. Analysts estimate that ITI will receive about 20 percent of the total deal value.
While this deal is expected to increase TCS’s revenue, it may have a margin dilutive effect due to the involvement of other players. However, Pareekh Jain, the Founder and CEO of EIIRTrend, suggests that since Tejas Networks will handle the manufacturing of the required equipment and hardware, the overall margin dilution will be less significant as no external third-party player is 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 agreement marks TCS’s third major deal in 2023, following a $723-million deal with the UK-based Phoenix Group and another deal with British retailer Marks and Spencer (M&S), the exact size of which was undisclosed but estimated to be worth $1 billion.
The discussions for this BSNL deal had been ongoing since September of the previous year.
In July 2022, the Union Cabinet approved a revival package of Rs 1.64 lakh crore for BSNL, including cash support of Rs 43,964 crore and non-cash support of Rs 1.20 lakh crore. The package aimed to enhance the quality of BSNL services, improve the company’s financial position, and expand the reach of its fiber network through a merger with Bharat Broadband Network Limited (BBNL).
It is likely that this TCS-ITI deal is part of the same revival package. The rollout of BSNL’s 4G services is anticipated to cover approximately 100,000 towers or sites.
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