India's top software exporter, Tata Consultancy Services Ltd and number four Satyam Computer Services Ltd said on Thursday a new order from Qantas Airways Ltd was worth about US $145 million.
The contracts with Australia's leading airline to outsource IT support services, which were announced last month, are both for seven years. TCS said its part of the order was worth A$120 million, or US $90 million, while Satyam said its portion of the contract was worth A$71 million (US $55 million).
"The fact that Qantas, which is seen very close to the government, has taken this bold move and gone ahead to outsource to Indian companies is a very positive sign," Virender Aggarwal, Satyam's senior vice president for Asia Pacific, Middle East, India and Africa, told Reuters.
"I think it will open the path for others to go down the similar route." TCS and Satyam said they would provide a range of IT application development and maintenance services to Qantas. Indian software services firms have been thriving on an outsourcing boom as companies world-wide look to cut costs at home to stay competitive.
A large English-speaking engineering workforce and wages at nearly one-fifth of western salaries have helped Indian companies attract outsourcing deals over the past decade. India's software and back-office industry, which gets 90 percent of its revenue from overseas clients, expects exports to rise 27-30 percent tin the year to March 2007 as demand for outsourcing remains strong.
New York-listed Satyam whose customers include General Electric said it expected to see revenue from the Qantas deal from December. It has bid for a bigger deal in Australia, which is its third-largest market after the United States and Britain.
"We are firmly in the large deals space, for which we had formed a special group, and that is bearing fruit for us. That way, our average revenue per client will keep going up which is very good for us," Aggarwal said.
Analysts said the deal underscored Indian IT companies success in winning business beyond the United States, which accounts for at least two-thirds of export revenue in most firms. "This deal again shows that Indian software companies are competing head-on with big global players and winning," Tejas Doshi, an IT analyst with Mumbai brokerage Sushil Finance, said.
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