TCS gets chunk of $150m Citi deal; Satyam also gets a portion

MUMBAI: Citigroup Inc will enter into a software outsourcing agreement with Hyderabad-based Satyam Computer and Mumbai-based Tata Consultancy Services (TCS).

The deal is estimated to be between $125 million and $150 million on an annualised basis, with a lion’s share going to TCS. On an average split of 30% onsite work and 70% offshore and wages of $10,000 per month onsite and $4,000 per month offshore, the deal is estimated to be around $150 million.

According to Citigroup executive Mitchell Habib, the software-services contract would require 2,200 employees.   

A senior Satyam Computer official told DNA Money that Citibank is already its customer. Satyam may have bagged orders worth $30 million on an annualised basis.

A TCS official said that the deal was structured in such a manner that Citi would pay a certain assured amount to the company, even if TCS did not execute services worth that much. This could be because TCS could be recruiting dedicated staff for Citi.

In his comments to reporters in Mumbai, Habib, who is chief information officer of New York-based Citigroup’s North American consumer business unit, declined to provide the value of the contract or name the companies that would receive the order.

The contract will involve application development, infrastructure management and other services. “We are focusing on excellence in the customer’s business,” TCS chief executive officer S Ramadorai told reporters at a joint briefing with Citigroup.