Tata Consultancy Services bags USD 2.25-billion deal from Nielsen

MUMBAI:  Christmas has come early for Tata Consultancy Services (TCS), the country’s largest software services exporter. The city-based IT major has won a new outsourcing deal from its existing customer Nielsen worth $2.25 billion. The deal, largest-ever secured by an Indian IT firm in the recent past, will complement its current contract until 2025. The deal comes as a major boost for Rajesh Gopinathan, CEO and managing director of TCS, who replaced N Chandrasekaran as the CEO last year. Currently, digital accounts for about 20 per cent of TCS’ revenue, which Gopinath intends to increase multi-fold over the next few years. 

As per the new deal with the television ratings firm, the terms of the agreement have been extended for an additional five years so as to expire on December 31, 2025, with three one-year renewal options granted to Nielsen, the media research firm said in a regulatory filing to the US SEC. “Nielsen has committed to purchase services from TCS from the effective date through the remaining term of the Agreement (the ‘Minimum Commitment’) in the amount of $2.25 billion, including a commitment to purchase at least $320 million in services per year from 2017 through 2020, $186 million in services per year from 2021 through 2024, and $139.5 million in services in 2025,” it added. 

It added that the Mumbai-based firm will globally provide Nielsen with professional services relating to IT - including application development and maintenance - BPO, client service knowledge process outsourcing, management sciences, analytics and financial planning. 

It may be noted that the US-based consumer research firm had first awarded a $1.2 billion contract to the Mumbai-based company in 2007 for 10-year period. In 2013, Nielsen extended its ongoing contract with TCS by three years until 2020 and more than doubled the value to $2.5 billion. During the second quarter, TCS generated 51.9 per cent business from North America, followed by Europe and Asia-Pacific. India accounted for 6.3 per cent. Banking, financial services and insurance was the largest vertical with 33 per cent business, followed by retail and consumer packaged goods.