Rupert Murdoch confirms first Sun on Sunday sold 3.26m copies

Rupert Murdoch has confirmed on Twitter that the first Sunday edition ofthe Sun sold 3.26m copies – the biggest sale of a UK newspaper for four years.

“Amazing! The Sun confirmed sale of 3.260,000 copies yesterday,” hetweeted at his official @rupertmurdoch account. “Thanks all readers and advertisers. Sorry if sold out – more next time”.

The 3.26m has not been bettered on a Sunday since the Sun’s now closed sister title News of the World sold 3.37m copies in February 2007. The last time the News of the World equalled 3.26m was in January 2008, according to official figures from the Audit Bureau of Circulations.

Paul Hayes, the managing director of News International‘s commercial operation, said in an email to media agencies that the sales figure was a “testament I’m sure you will agree to the enduring love affair between our newspaper and the British public”.

Media buying agency sources said that the amount of advertising News International’s commercial team was able to secure was impressive at such short notice. The Sun on Sunday had nine pages of colour advertising, versus four in the Mail on Sunday and just one in the Sunday Mirror.

“There was a lot of WPP [clients] in it to be fair,” said one senior media buying agency executive. WPP handles all of the advertising and media buying for News International, as well as the media buying for BSkyB, which is 39% owned by News International’s parent company News Corporation.

“It was launch weekend, there were new introductory offers for advertisers and a week’s worth of PR on the BBC and Sky as well as heavy advertising – it was always going to be big,” added the source. “Still, it is an impressive start but there is caution among advertisers going forward because of the ongoing [Leveson] inquiry.”

Early figures from wholesalers and retailers indicate that sales of the Sun on Sunday’s red-top rivals tumbled by between 15% to 30%, with Trinity Mirror’s Sunday Mirror and People hit hardest by the new launch.

Early estimates indicate that the People could be down as much as 30% week-on-week to a circulation of about 560,000; while the Sunday Mirror is likely to be down by about a quarter to approximately 1.3m. But both levels are still above the amounts the titles sold before the closure of the News of the World last July – which were 474,000 and 1.09m respectively.

The Sunday Mirror was cut from £1 to 50p in the Carlton (London), Meridian (south coast) and Central (Midlands) regions. Stablemate the People was cut from £1 to 50p in the same regions.

Richard Desmond’s Daily Star Sunday, which was cut by 50% to 50p nationally, is on track for a more modest sales decline of the order of 15% to about 550,000. That would leave it almost a quarter of a million ahead of its pre-News of the World closure level, which was 306,000. The Sunday Express looks likely to be down about 10% to approximately 520,000, compared with a circulation of 538,000 before the News of the World closed.

The Mail on Sunday, which maintained its cover price at £1.50, is thought to be on track to report sales up slightly by between 1% and 2%.

The MoS, which ran a major ad campaign over the weekend, cut its price last summer to lure former NoW readers but lost financially when it failed to hold on to temporary sales gains.

Swift May Expel Iran’s Central Bank

 

The financial messaging service for most international money transfers has told U.S. officials it is prepared to cut off Iran’s central bank, according to people involved in the talks, an action that would be a blow to Iran’s already battered economy.

The Society for Worldwide Interbank Financial Telecommunication, known as Swift, dispatched its top lawyer to Washington for discussions this week in response to proposed U.S. legislation targeting Swift and its board, whose chairman is Yawar Shah of Citigroup Inc. and deputy chairman is Stephan Zimmermann of UBS AG.

Swift’s general counsel Blanche Petre said the Belgium- based service is prepared to expel Iranian institutions sanctioned by the European Union as well as Iran’s central bank, according to aides to U.S. lawmakers who met with Petre and spoke on condition of anonymity because of the sensitivity of the issue.

A spokeswoman for Swift, JoAnn Healy, declined to comment on private meetings involving its officials.

Acting against the Iranian institutions would be “a very serious step, disruptive to the users, but also to the financial community as a whole,” Healy said today in an e-mailed response to questions. “It is a complex situation that needs to take into consideration the implications to the functioning of the global payments system, as well as to the continued flow of humanitarian payments to the Iranian people.”

Going Further

The Obama administration, which has imposed more sanctions on Iran than any nation or past U.S. administration, has expressed wariness about the unintended consequences of expelling all Iranian entities from Swift, according to the aides to lawmakers. Treasury Department and White House officials declined to comment on discussions with Swift and EU authorities.

By including Iran’s central bank, Swift’s proposal goes further than lawmakers or the administration sought, and might roil oil markets on concern that buyers will be unable to pay the second-largest producer in the Organization of Petroleum Exporting Countries for its 2.2 million barrels a day of oil exports.

“This is the financial equivalent of warfare,” Avi Jorisch, a former U.S. Treasury official, said in an interview. “The administration is very concerned about anything that would spike oil markets. Cutting off Iran’s central bank from Swift would do just that, but at same time, it would deal a knockout blow to Iran’s ability to use the international financial system.”

‘Need to Choose’

“We need to choose at this point if we want Iran to get a nuclear bomb or take the chance that oil markets will spike,” he said.

Oil climbed for a seventh day, the longest sustained price increase since January 2010, as escalating tension with Iran threatens supplies and on signs of a global economic recovery. Crude oil for April delivery rose 1.8 percent to $109.77 a barrel, the highest settlement on theNew York Mercantile Exchange since May 3.

Following a Nov. 8 report by United Nations inspectors that raised questions about Iran’s nuclear program, the U.S. and EU have imposed an increasingly stringent array of economic penalties on Iran to try to force its leaders to make concessions on their nuclear development. The UN’s International Atomic Energy Agency in Vienna said in an 11-page restricted report obtained today by Bloomberg News that Iran tripled its production of enriched uranium since November and rejected concerns about its possible pursuit of nuclear weapons.

First Expulsion

Iran says its nuclear program is for civilian energy and medical research. Western intelligence agencies say they have evidence suggesting Iran is seeking the capability to make a nuclear bomb.

In its 39 years, Swift has never expelled any institution from the cooperative of 10,000 member banks and organizations in 210 countries. Swift transmits an average of 17 million financial messages a day, facilitating trillions of dollars in cross-border payments, officials said. According to its annual report, 19 Iranian member banks and 25 financial institutions sent and received 2 million messages through Swift in 2010.

Swift authorities said Feb. 17 they were prepared to comply with any new EU regulations instructing them to expel sanctioned Iranian entities. EU officials say regulations for financial messaging services should be ready within weeks. If Swift expels all EU-sanctioned Iranian institutions, the pending U.S. legislation may be amended or shelved, congressional aides said.

Swift Bylaws

Swift doesn’t actually need to wait for the EU to issue new rules. Its own bylaws give it the authority to expel any user who is “subject to sanctions,” or any member whose use may adversely affect Swift’s “reliability” or “reputation.” The European Central Bank’s guidelines for Target2, the system that settles transactions in euros through the Swift gateway, bar access to those engaged in “money laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems.”

Swift officials confirmed its bylaws include multiple provisions permitting expulsion.

“Swift is engaging with U.S. and EU authorities, as well as the G-10 central banks, which oversee Swift, to find the right multilateral legal framework,” Healy said.

Mark Dubowitz, executive director of the Foundation for the Defense of Democracies in Washington, said he believes Swift is seeking “political cover to do something unprecedented” that might set an unwanted example for governments to press for the expulsion of other members.

‘Political Football’

“They want to be able to say, ‘We are governed by European law and only if the Europeans tell us we have to remove these institutions do we comply,’” Dubowitz, who has advised lawmakers and the administration on the implications of a Swift ban on Iran, said in an interview. “Otherwise, they risk becoming a political football if China asks them to expel Taiwanese banks, for example.”

The EU and the U.S. have sanctioned more than 20 Iranian banks or financial institutions for involvement in illicit activities. The EU also froze the EU assets of the Iranian central bank to prevent financing of nuclear activities, while ensuring that legitimate trade can continue under strict conditions, Maja Kocijancic, an EU foreign-policy spokeswoman, said today from Brussels.

Oil Payments

Trevor Houser, an energy analyst and partner at Rhodium Group, a New York-based economic research firm, said in an interview that “expelling Iran’s central bank from Swift would complicate Iran’s ability to receive payment for the crude oil it exports and could accelerate a reduction in Iranian supply more quickly than Western officials would like to see in the interest of keeping oil markets in balance.”

“U.S. and EU officials have a tough needle to thread: They’re trying to reduce Iranian revenue while preventing a spike in global oil prices,” said Houser, a visiting fellow at the Peterson Institute for International Economics in Washington. “Blunt instruments like removing Iran’s central bank from Swift risk making that process even harder to manage than it already is.”

Bank-to-Bank Payments

Houser said Iran would still be able to set up bank accounts at the same financial institutions as oil buyers, allowing them to process payments intra-bank, without the need for a messaging system. Iran might also send messages through Telex or e-mail, or accept payment for oil through other means.

Dubowitz said he is concerned that expelling Iran’s central bank from Swift might complicate legal trade in food, medicine and oil. He recommended EU regulators and Swift work closely with the U.S. to minimize the risk of an oil price spike.

“If the central bank can be expelled from Swift while allowing permitted oil trades to occur through other legal mechanisms, I would fully support its expulsion,” he said.

“There is little point in driving 20 percent reductions in Iranian oil exports if global oil prices then increase by 30 percent,” he said. “That will only enrich Iran’s Supreme Leader Ali Khamenei while plunging the rest of us into an oil- led recession.”

French steel workers occupy ArcelorMittal plant

FLORANGE, France, Feb 20 (Reuters) – Workers at an idled ArcelorMittal steel plant in northeast France occupied the site on Monday, seeking to put their plight on the political map ahead of a presidential election where industrial decline is a central theme.

Some 200 workers invaded management offices at the factory in Florange, in the Moselle region close to Belgium and Germany, after ArcelorMittal announced last week it was prolonging the temporary shutdown of its two blast furnaces.

Unions had announced at the weekend their intention to take action and workers found the offices empty. They plan to install a tent village at the site, imitating the “Occupy” anti-capitalist movement which swept Western nations in the wake of the global financial crisis.

“Our deadline is May 6: the presidential elections,” Jean-Marc Vecrin, a delegate for the CFDT union, told Reuters.

The protest is an embarrassment for President Nicolas Sarkozy, who vowed to revive France’s industrial fortunes but has failed to reverse a decline in competitiveness which has caused a spate of high profile industrial closures in recent months.

With Sarkozy trailing his Socialist challenger Francois Hollande ahead of the two-round election in late April and early May, unions are seeking to capitalise on their campaign focus on France’s industrial fortunes.

The plant’s two blast furnaces were shuttered in July and October 2011 in the face of weaker demand and workers fear that the longer they stay idled, the greater the chance the factory will be permanently closed.

Half the plant’s 5,000 workers are on government-subsidised shortened working weeks.

Florange’s blast furnaces are the last survivors of the once bustling steel region after the neighbouring ArcelorMittal mill of Gandrange was wound down despite Sarkozy’s promise in 2008 to find a way of keeping it going.

Hollande has made much of the closure of industry and relocation of companies during Sarkozy’s five-year term.

France has lost 763,000 industrial jobs in the last 10 years with 355,000 shed since Sarkozy took office in 2007 — something Hollande has dwelt on in his campaign speeches.

Sarkozy, elected on a pledge to return France to full employment and energise its economy, has blamed the global economic crisis for derailing his plans and has placed restoring competitiveness and the fight against unemployment at the heart of his re-election agenda.

Recent opinion polls have indicated a slight narrowing of Hollande’s lead over Sarkozy in the May 6 second round. An Opinionway survey published in the daily Le Figaro on Monday put his lead at 12 percentage points, in line with other polls.

Edouard Martin, CFDT representative on ArcelorMittal’s European corporate board, said the company was choosing not to operate the plant.

“We have enough orders to operate at least one blast furnace. Every month we have between 150,000 and 200,000 tonnes of orders,” he said.

“To increase its profits, ArcelorMittal is transferring Florange’s orders to Dunkirk,” he said, referring to a more modern steel plant the company operates on France’s northeast coast.

News Corp. to Start Sunday Sun This Weekend

Rupert Murdoch’s News Corp. will begin a Sunday edition of British tabloid The Sun this weekend, seven months after shutting another Sunday newspaper rocked by a phone-hacking scandal.

News International, the company’s U.K. publishing arm, plans to publish The Sun on Sunday on Feb. 26, spokeswoman Daisy Dunlop said by telephone. Murdoch will stay in London to oversee the start, News International Chief Executive Officer Tom Mockridge said in an e-mail to staff yesterday.

Murdoch’s announcement may soothe anger in the newsroom after the company’s Management and Standards Committee, formed by News Corp. to assist police in their investigations of phone- hacking and bribery, handed over information to police. It may also spark more clashes with U.K. politicians, with Murdoch announcing the decision before legislators publish a report into why News Corp. (NWSA) executives didn’t stop illegal activities.

News Corp. has “made clear its determination to sort out what has gone wrong in the past and we are fundamentally changing how we operate as a business,” Mockridge said in the e-mail to staff.

During a visit to The Sun’s newsroom on Feb. 17, Murdoch, News Corp.’s chairman and CEO, said he will stay in London for several weeks to give his staff “unwavering support.” He spent two hours talking to journalists on the newsroom floor with son Lachlan, said a person familiar with the matter. James Murdoch, the former CEO of News International and now deputy chief operating officer of New York-based News Corp., didn’t fly to London because he had other commitments, the person said.

‘Just Cynical’

The News of the World was the best-selling Sunday paper in Britain when it was closed last July and its readers have dispersed to competing tabloids or stopped buying Sunday papers altogether. Its circulation reached 2.66 million in May 2011, more than twice its closest competitor in the national Sunday market, the Sunday Mirror, according to media researcher ABC.

The Sun had an 8.7 percent lift in circulation in January as News Corp. sold an average of 2.75 million issues of the tabloid a day, up from 2.53 million a month earlier. Overall daily newspaper sales rose 3 percent, according to the report.

The Sun, whose coverage includes celebrity news and soccer, is still selling fewer copies than a year ago as the industry grapples with readership and advertising declines.

Ethics

Maurice Levy, CEO of the world’s third-biggest advertising company Publicis Groupe SA, said last year that News Corp. may quickly regain advertisers if the company creates “a new News of the World with much more ethical behavior.”

The closing of the News of the World was “just cynical,” said Chris Bryant, a lawmaker from the opposition Labour Party, who had sued the News of the World over phone-hacking.Tom Watson, the lawmaker who is helping prepare the report into News Corp. executives, said “this will not draw a line under the crisis faced by News Corp. in the U.K.”

Following the News of the World’s closure, Murdoch and his son James had to appear before Parliament to explain how much they knew.

In his testimony on July 19, Rupert Murdoch told lawmakers that this is “the most humble day of my life.” He added that he may have “lost sight” of the paper because it was “so small in the general frame of the company.”

The police investigation ultimately widened beyond the News of the World to News Corp.’s other U.K. titles including the Sun and the Times.

Lawmaker Probe

The U.K. lawmakers probing whether News Corp. covered up phone hacking are at least two months behind schedule with their report, as they debate how critical they can be of James Murdoch, two people with knowledge of the panel’s discussions said last week.

The planned launch of The Sun on Sunday is also announced on today’s Sun newspaper.

“The Sun on Sunday has arrived,” it reads. “Next weekend will see the birth of the first ever Sunday edition of your favourite paper.”

“Back in our very first issue on November 17, 1969, we promised to be a ‘young, new, virile, campaigning newspaper,’” it reads. “That is exactly what the Sun on Sunday will be too.”

Calling on staff to “seize the opportunity to pull together and deliver a great new dawn for The Sun on Sunday,” Mockridge said the “commitment of News Corporation to invest in a new edition is the strongest possible message of support we could wish for.”

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

EU carbon targets threaten luxury carmakers

Thinking of buying a Bentley? Best not think too long, because looming European Union carbon emission targets mean the company that makes the gracious luxury car faces, in theory, a penalty of nearly €20,000 for every one it puts on the road.

The situation could be even worse for the Bugatti, according to a study by the European Environment Agency. The car of choice for the super-rich is in line for a €40,000 charge under the EU rules.

More

A Rolls-Royce will potentially incur a €12,500 penalty, a Maserati €18,000 and a Lamborghini €17,000.

It is unclear if the penalties will actually be levied, and doubtful that the well-heeled owners of such cars would flinch if costs were passed on.

But the study casts a fresh light on how the motor industry is responding to one of the EU’s more contentious environmental policies.

The prospect of penalties has been known since late 2007 when Brussels said it would limit the amount of carbon dioxide the bloc’s vehicles could collectively emit.

The EEA is believed to be the first official body to have calculated how close carmakers are to meeting their targets, which are being phased in from this year. The aim is to lower emissions from today’s average rate of 140g of CO2 per kilometre to 130g CO2/km by 2015.

That is less than half the 300g CO2/km some Bentley models belch out, and a quarter of what a Bugatti can produce.

Each EU carmaker has an individual emissions target and in 2012, 65 per cent of its lowest-emitting cars will be counted to see if they meet it. The proportion gradually rises until 100 per cent are counted in 2015.

Most big manufacturers are on track to meet their initial 2012 targets and some, such as Toyota and PSA Peugeot Citroën, are close to their tougher 2015 limits.

But unless the vast majority of carmakers lower emissions further, the sector could collectively face charges totalling €10bn, according to the EEA. “That is obviously a huge amount for any industry,” said Sigrid de Vries of the European Automobile Manufacturers’ Association, adding that no other sector has faced such stringent carbon emission limits.

Some environmentalists disagree, saying manufacturers successfully pushed for easy targets.

“They lobbied very hard,” said Dudley Curtis of the Transport & Environment campaign group in Brussels. The CO2 targets were higher than first planned, he said, and came into force three years later.

Also, manufacturers making fewer than 10,000 cars a year, which includes many luxury carmakers, can apply for lower targets or can pool their emissions with larger companies to avoid penalties.

The pooling option means the emissions of a Bentley, Lamborghini or Bugatti could be added to those of their German parent, Volkswagen, which makes the low-carbon Polo and other more environmentally friendly cars. Similarly, Rolls-Royce and Maserati could pool with their respective owners, BMW and Fiat.

Bentley confirmed that it would pool its emissions with those of its parent, Volkswagen, which also owns Bugatti and Lamborghini. Bentley said it had taken several steps to reduce its cars’ emissions, including a new, more fuel efficient engine unveiled at January’s Detroit Motor Show

However, the environment agency said pooling and other options would not be enough for the industry to avoid penalties: it also had to keep cutting emissions.

“This report is important because it shows the car industry as a whole has to keep making year-on-year efficiency improvements in CO2 emissions by 2015 to comply with the legislation,” said Jacqueline McGlade, EEA executive director.

 

Volkswagen, Peugeot May Tap ECB Rescue Cash

Volkswagen AG (VOW) and PSA Peugeot Citroen (UG) are lining up to tap the cheap European Central Bank loans that are keeping the finance industry afloat.

Financing units of Europe’s biggest carmakers may be able to borrow from the ECB’s longer-term refinancing operation because they have banking licenses. A total of 523 lenders borrowed 489 billion euros ($636 billion) of 1 percent three- year loans under the central bank program in December.

Stefan Rolf, the head of securitization at Volkswagen Bank GmbH, said in an interview today that the Wolfsburg, Germany- based automaker is considering accessing the LTRO. Peugeot’s Banque PSA Finance unit is in talks with the ECB about borrowing money and is offering more than 1 billion euros of collateral, Chief Financial Officer Jean-Baptiste de Chatillon said yesterday.

“The auto industry is a significant provider of credit to the economy and the ECB is keen to get credit flowing where it needs to flow,” said Huw Van Steenis, a bank analyst at Morgan Stanley in London. “If giving loans to car makers helps that process then the central bank may feel it’s a good use of the money.”

Airbus CEO orders probe on A380 cracks

The head of Airbus said he ordered an internal investigation into how the company allowed wing cracks to develop on its flagship A380 passenger jet, acting to draw a line under weeks of embarrassing publicity for the world’s largest planemaker.

Chief Executive Tom Enders reiterated that the world’s largest jetliner was safe to fly as engineers repair hairline cracks in the wings, and he sought to allay any concerns the setback to Europe’s industrial prestige could spread to the future A350.

“We made a little mistake here and we are repairing it as quickly as possible,” Enders told a news conference at the Singapore Airshow on Wednesday. “This plane is absolutely safe to fly.”

“Are we learning from this? Absolutely. We are taking lessons from the A380 program for the A350 program,” he said, referring to the company’s next project, a mid-sized jetliner designed to compete with the Boeing 787 Dreamliner.

“We have a thorough investigation underway on how we could make these mistakes in the first place and to eradicate the sources of the mistakes,” he added.

A drip-feed of disclosures about the cracks, which Airbus and regulators say do not affect parts critical to safety for the time being, has left Airbus red-faced and overshadowed Enders’ appointment to run parent EADS (EAD.PA) from June.

After initially underestimating public concern about teething problems on the double-decker plane, Airbus has progressively laid out detailed information on the parts involved and errors in its UK manufacturing plants.

Airbus has said a combination of design and manufacturing slips put too much stress on a handful of the 2,000 brackets that fix the exterior of each wing to the ribcage beneath, but Enders’ comments indicate he intends to dig deeper.

The German-born reserve paratrooper has a reputation for straight-shooting and people close to the company say he is unlikely to want to allow the episode to haunt his transition to the top role at EADS or spoil the legacy to his successor, current number two, Fabrice Bregier.

As head of Airbus since 2007, Enders led the turnaround of the troubled A400M military transport project, leading to a bailout worth billions of euros by seven European nations, but far less support is likely if major civilian projects founder. Airbus employs some 55,000 people.

European air safety officials extended checks for Airbus A380 wing cracks to the entire superjumbo fleet earlier this month after engineers concluded the problems were structural and widespread.

Enders declined to comment on a German media report that the slip-up could cost Airbus 100 million euros ($131.3 million) to fix, but acknowledged it was likely to be “a bit of money.”

Airbus officials say the cracks affect an average of five out of 2,000 aluminum alloy brackets known as rib feet per wing. Each must be replaced, meaning about 10 per aircraft or 690 for the 69 aircraft now in service have to be refitted.

The process involves taking the giant 525-seat plane out of service for several days, for which Airbus is expected to have to compensate airline customers.

A senior industry official said the cost was likely to be secondary. “Airbus will get this right. It’s not about money. It’s about credibility and confidence.”

BOEING ALSO HIT

The Singapore Airshow is Asia’s largest aviation and arms exhibition and is held every two years. It has been buzzing with talk about mishaps at the world’s dominant planemakers as they pull out all the stops to promote their latest products.

Boeing said this month it found a process called “delamination” on part of the rear fuselage of its carbon-composite 787 Dreamliner, a red flag somewhat akin to the cracking on a metal structure, but harder to detect.

Boeing has said it is carrying out inspections and has worked out how to fix the aircraft waiting to be delivered.

Mark Jenks, vice president of 787-9 development at Boeing Commercial Airplanes, said its customers understood the problem was “straightforward.” “It’s more of a big issue in press conferences,” he told Reuters.

The Dreamliner problems will provide little relief to Airbus as its A350 is also being built of carbon materials.

Modern carbon-fiber aircraft are lighter, which saves fuel. The manufacturers use technology that allows them to weave together strong structures made of carbon fiber. The technology has been in use for some aircraft parts and military airframes for years, but Boeing’s 787 is a first for a large passenger plane’s fuselage.

Fuel is by far the biggest cost for low-cost airlines which have been powering the rapid growth of Asian aviation. Boeing basked in confirmation of a record order for 230 planes from Indonesian low-cost carrier Lion Air in a deal worth $22.4 billion at list prices.

Airbus, meanwhile, moved to meet criticism from airlines over its freight strategy by unveiling a deal with Singapore-based ST Aerospace to convert A330 passenger jets into cargo planes, giving them a second lease of life to tap into expanding trade with countries such as China.

China and other Asia-Pacific nations will take delivery of 9,370 passenger jets over the next 20 years, valued at $1.3 trillion, helping to power the aerospace industry’s growth, Airbus said on Wednesday.

Sales chief John Leahy said the rapid urbanization of Asia’s population and sharp growth in emerging economies compared with the industrialized nations would soon make Asia the busiest market for air travel, displacing the United States.

TCS Bags $100M Deal From Denmark’s TDC

Consolidates position as one of the biggest IT service-providers in Nordic region

Tata Consultancy Services is consolidating its position as one of the biggest IT service-providers in the Nordic region. The company has bagged a multi-year deal from Denmark’s largest telecommunications firm TDC, replacing incumbent CSC. Though the exact value of the deal is not known, it is likely to be worth over $100 million. TDC is one of CSC’s largest private sector clients in the region and its 2008 contract with the telecom firm was worth over $400 million. TCS will provide IT operations and maintenance services to TDC, a person familiar with the matter said. A TCS spokesperson said the company could not comment on client situations, while email queries to CSC and TDC went unanswered. Sources said, the project to manage the DKK 26.17-billion company’s IT services, will go onstream in April.

European companies have traditionally been reluctant to outsource, keeping their IT functions and jobs inhouse despite attempts by Indian IT firms for many years to gain entry. Last year, however, the number of contracts being handed out by large corporates in these countries increased significantly as reducing costs and gaining competitive advantage became crucial in a slowing market. For Indian IT firms, Europe represents the next big opportunity after the US from where they get a majority of their revenues at present. Most Indian firms get 20-30% of their revenues from Europe at present and they have been investing in the region to increase their presence and client engagement.
Industry experts say TDC is likely to have chosen TCS over CSC as the Indian firm has been able to outperform in its Nordic contracts and build a reputation for itself in the region.
“TCS has excellent Nordic client references and the highest customer satisfaction among all IT services firms in the region. Projects with TCS have gone much better than expected in five critical performance dimensions: clients have spent less than budgeted; delivery quality has been better than with previous suppliers; there have been fewer contract disputes and TCS has been able to take on more complex tasks than previous suppliers,” Peter Schumacher, CEO of Germany-based business advisory services provider Value Leadership Group said. As part of the deal, TCS is also likely to taken on some of TDC’s staff. Indian IT firms often take some of the client’s staff as part of European deals.

Moody’s Cuts Europe Sovereigns Including Italy, Spain

Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and revised its outlook on the U.K.’s and France’s top Aaa ratings to “negative,” citing Europe’s debt crisis.

Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta.

“The uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework” and the resources that will be made available to deal with the crisis, are among the main drivers of Moody’s action, the ratings company said.

The euro slipped 0.2 percent to $1.3154, and the pound weakened 0.3 percent to $1.5723.

Standard & Poor’s took away France’s and Austria’s top credit ratings last month in a string of downgrades. Investors poured money into the government bonds of nations such as France and Austria even after the countries lost their AAA ratings at Standard & Poor’s last month.

Moody’s also lowered its outlook on Austria’s Aaa rating today to negative outlook. Malta’s rating was downgraded to A3 from A2 and given a negative outlook, and Slovakia and Slovenia were both downgraded to A2 from A1 and given negative outlooks.

‘Weak’ Prospects

“Europe’s increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness,” are also factors, Moody’s said in a statement. These factors will continue to affect market confidence, “which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.”

French and Austrian securities beat AAA rated company debt since the two nations were deprived of the highest ranking at S&P on Jan. 13. U.S. Treasuries returned three times as much as AAA corporate bonds since the world’s biggest economy was cut by one rank in August.

Finnair in Talks to Form ‘Nordic Partnership’

Finnair Oyj (FIA1S) said it’s in talks to create a joint venture to expand its presence across the Nordic region as part of a push to restore earnings as losses widen.

Finland’s biggest airline has identified potential partners with which to build new bases, it said today in a statement, without identifying the other parties. The fourth-quarter loss widened to 32.6 million euros ($43 million) from 5.7 million euros a year earlier, the Vantaa-based company said.

Finnair, which is building its business around long-haul “Great Circle” routes to China, Japanand Korea, hasn’t posted an annual profit since 2007 as European margins are squeezed by discount carriers including Norwegian Air Shuttle AS. (NAS) The company, which also competes with Stockholm-based SAS Group, last year revealed a 140 million-euro savings plan that includes reducing the narrow-body fleet by four jets this year.

“Candidates that come to mind are Norwegian, Air Berlin, Flybe and maybe Estonian Airlines,” said Jaakko Tyrvainen, an analyst at FIM Bank in Helsinki. “Finnair’s feeder traffic isn’t profitable, and this is could resolve that. Norwegian has a significantly lower cost level when it comes to shorter routes.”

Finnair, which is majority owned by the Finnish government, fell as much as 3 percent and traded 1.9 percent lower at 2.58 euros as of 10:22 a.m. in Helsinki, reducing gains this year to 12 percent and valuing the company at 3330 million euros. The stock slumped 54 percent last year.

“The potential joint venture would expand our home base to cover the entire Nordic region,” Chief Executive Officer Mika Vehvilainen said. “The accord would aim to create “a more cost- competitive business model for our short-haul traffic,” he said.

The average estimate in a Bloomberg survey of four analysts was for a loss of 27.9 million euros. Sales rose 12 percent to 577 million euros, according to the statement.