Nortel files for bankruptcy: Impact on Indian IT, telecom

CNBC-TV18's Raja Rajeshwari reports on what its impact will be on Indian IT companies. Also watch the accompanying video.

Nortel is a major player, which gives accounts to major IT players. When contacted for Nortel's impact on the company, IT major TCS declined to offer comment, and reports are mixed on whether TCS's exposure to Nortel is minimal or big.

From the bankruptcy documents, however, we understand that the company's receivables to Infosys stand at USD 2.9 million; to TCS , it stands at USD 2.9 million while it is USD 3.1 million to Wipro .

Wipro's relationship with Nortel started in 1991. 10-11% of its revenues come from the telecom OEM space. Wipro said that Nortel contributes to close to USD 25 million of annual revenues, but it's close to 1-2% of the quarterly run rate. In that division, Wipro employs close to 400-500 employees and added that since it runs mission-critical projects with them, there could be some impact.

The general sense while talking to Infosys was that it knew Nortel had been an ailing company for a year and they had been trying to trim down their exposure. So it's not a substantial hit for them.

Sasken is going to be hit. The management spoke to us and said Nortel was one of their top-five clients and the exposure is less than 10%. They did not comment on how the guidance is likely to pan out but one key thing is: Sasken had substantially cut down on its guidance in Q2 - from 25% to 10% - owing to the telecom and semi-conductor space dragging on its performance. Sasken says they have to Nortel and for now, it's business as usual.