Tata group rings in synergy with TCS, Tata Comm

After a series of multi-billion acquisitions and strategic entry into different geographies across the world, the Tata group is planning to synergise operations of its various group companies.

The group is initially planning to combine strengths in its IT and communications ventures to offer global services across emerging markets. This exercise is being carried out in China, South Africa and Latin America.

Group companies TCS and Tata Communications have joined hands to provide communications solutions in China. "We could provide an umbrella of services as a group. We are already working out strategies," said Srinivasa Addeppalli, Corporate Strategy Chief, Tata Communications.

While Tata Communications has bought a 50 per cent stake in Beijing-based IT solutions provider China Enterprise Communications, TCS has major operations in China where it employs 1,200 people. TCS CEO and MD S Ramadorai had said the company would be looking to dovetail its strengths with the other group companies.

TCS is planning to use Tata Communications’ network connectivity in Africa to offer support services for its financial services products in South Africa.

Tata Communications owns the majority stake in South Africa's second national telecom operator, Neotel.

Likewise, TCS has a strong presence in Latin America, from where it provides services to the entire continent. Meanwhile, Tata Communications has significant connectivity across the Pacific and Atlantic. The strategy is in line with group chairman Ratan Tata’s vision. "We want to expand into geographies where, as a group, we can have a meaningful presence," Ratan Tata had told TCS shareholders at last year’s annual general meeting.

IT companies like TCS have been expanding their portfolio of service offerings, tapping new regions and focusing more on high-margin services. "There is a gradual diversification into other areas, such as consulting and remotely managing IT hardware and software, which are high growth areas. They are regularly invited to bid for larger and more complex outsourcing contracts," said Arup Roy, senior research analyst, Gartner.