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The Big Deal: New connections

K. VENKATASUBRAMANIAN | Updated on April 09, 2011

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Tech Mahindra has managed to win one of the largest IT deals announced by domestic software players in recent times with its $250-million contract from Vodafone Hutchison Australia (VHA). Spread over five years, the deal would account for around five per cent of Tech Mahindra's annual revenues.

What should be a shot in the arm for the company is the fact that it has managed to pip global players such as IBM, Ericsson, HP and TCS.

VHA has been working towards fixing a single point of interface by reducing the number of vendors it works with. In this process of vendor consolidation, Tech Mahindra will be the lone vendor for tracking the performance and management of VHA's IT systems.

With the potential of offshoring some of this work, Tech Mahindra would be in a position to optimise costs. Such deals also ensure that Tech Mahindra's dependence on British Telecom Global Services keeps reducing substantially. There are also reports that the company is in the race for a $80 million deal from Telstra, one of the largest telecom companies in Australia.

Meanwhile, the company that Tech Mahindra acquired — Satyam Computer Services — has had significant relief from a Supreme Court order on its tax liabilities. The tax department has informed the court of its decision to recall its order demanding Rs 617 crore from Satyam.

The court has informed Satyam that a well-reasoned order would be passed after giving it a full hearing. But the bank account that contains Rs 1,300 crore of Satyam's cash will continue to be frozen till a final order is passed.

Published on April 09, 2011

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