The Hindu Business Line : $142-m Qantas Airways deal for TCS, Satyam

Software majors Tata Consultancy Services and Satyam Computer Services have bagged contracts worth $142 million (Rs 645 crore) from Qantas Airways of Australia.

The contracts for providing IT support services are for seven years. While the TCS deal is worth $90 million (Rs 402 crore), Satyam's is valued at $55 million (Rs 243 crore). According to TCS officials, the company will assume responsibility for more than 75 per cent of Qantas' Applications Services & Transformation (AST) outsourcing program. Qantas will shift its application development and maintenance work to TCS to save about $100 million in legacy costs.

It will also have access to TCS' new Innovation Lab for Travel and Hospitality, located in Chennai, said TCS officials at a press conference in Mumbai on Thursday.

"TCS plans to ramp up its headcount by 250 to facilitate operations," said Mr S. Ramadorai, Managing Director and CEO.

The company expects to generate $500 million (Rs 2,250 crore) in sales from its travel and hospitality segment over the next three years, said Mr N. Chandrasekaran, Vice President, Global Sales, TCS. Revenues from this segment were $80 million in the last fiscal.

"The order from Qantas will start generating revenues by the fourth quarter of 2006-07," Mr Ramadorai added.

The company's shares were trading at Rs 1,064.90, up by 0.25 per cent at the BSE.

The Satyam agreement covers application development and maintenance services. This deal follows a recent Oracle e-Business suite contract announced in August between Satyam and Qantas for the latter's e-Business systems.

The Chief Executive Officer of Satyam, Mr B. Rama Raju, told Business Line that this is a vindication of the growing presence of the company in the Asia Pacific region, and in Australia in particular, where it hosts about 1,000 people and of them about 600 resources in Melbourne.

The present deal could open up more work for Satyam, though this cannot be quantified as yet.

The company expects to set up a dedicated centre and would initially deploy about 100 people on the project and gradually ramp it up. About 70 per cent of the work would be handled offshore, he explained.

Satyam is engaged with four leading banks in Australia and has stepped up its presence there over the years. The deal is part of its Travel and Transportation practice and would potentially also open up prospects for other airlines.

Satyam shares ended higher at Rs 427.95 at the BSE today as against previous close of Rs 415.20.

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IT majors in race for `big' Qantas deal

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