Taking the cricket analogy a little further, if BFSI was the Rahul Dravid of domestic Indian IT, the IT spending pattern of the telecom sector could be best compared to Virender Sehwag. A debonair dasher who runs up high volumes some time and often follows it with a lull. The year 2005-06 was one such for telecom; after the stupendous 54% growth recorded the previous fiscal, this year the growth tapered to a moderate 5% to reach Rs 6,998 crore. This was primarily owing to the fact, that no telecom service provider, barring Tata Teleservices, signed any major IT outsourcing deal this year; and, even for TTSL, a full year billing on the contract would start only from next year. Plus, most telecom service providers like banks were already in mature state of IT adoption; but unlike banks, number of telecom service providers was limited to a handful.

The Bharti Inspiration
Though the Bharti IT outsourcing deal with IBM entered its fourth year during 2005-06, it still remained the landmark for the telecom sector. Though initally hopes were raised that other telecom service providers would follow suit with contracts of similar magnitude and scopes of engagements, but till TTSL inked the contract with TCS in FY 2006 the hope had remained a mirage only. This deal proved that no two companies could sustain an outsourcing deal unless they generated value mutually. Apart from a fixed component, rest of IBM's revenues from this arrangement are linked to Bharti's performance. The formula took into account the percentage of revenues generated by Bharti as well as pre-defined SlAs. Payment over the year gone by was in the range of $200 mn to $250 mn, but it is expected to top out between $700 mn to $750 mn after a decade.

Another major milestone achieved through this contract during the year was the DR capability IBM built for Bharti supporting all its revenue applications. It was in the process of re-architecting all new applications on an EAI framework-the messaging layer of this framework was getting deployed. It also completed the Intranet employee portal as well as an Executive Information System for internal management. The central theme of IBM's management of Bharti's IT infrastructure has been to bring about a homogenous entity. This was achieved by having a single billing engine, a common CRM application and pervasive BI tools across all of Bharti's business lines. While Bharti had some applications developed in-house in areas like provisioning, mediation, revenue assurance, analytics, fraud management, these were gradually being replaced and management taken over by IBM.

Growth

The highlight of 2005-06 was the deal estimated at over Rs 1,000 crore and spread over five years whereby TCS was given the responsibility of managing the IT infrastructure of both TTSL and Tata Teleservices Maharashtra. The scope of the engagement included management of all IT related activities including implementation, application development and maintenance as well as change management across the enterprise. In addition, management of data centers, information security management, training end users on new applications, disaster recovery and business continuity were also the responsibilities of TCS as a part of the strategic engagement.

Application Thrust, BI Way
Though major IT outsourcing deals like Bharti or Tata Teleservices were not easily coming in the telecom sector, deployment of enterprise applications, particularly business intelligence (BI) was quite prevalent during the year. In their bid to answer business related questions and to provide greater insight into business issues and pains faced by them, service providers used BI widely. The Indian service providers faced a tough challenge of availability of trustworthy data. During 2005-06, data integrity and quality were the major issues with BI deployment in the telecom sector.

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