Telecom Lead India: IT major Wipro Technologies has
revised strategies to enhance focus on telecom business.
Wipro’s telecom vertical will strengthen focus on areas
like telecom analytics and mobile broadband, customer experience management,
making hardware interoperable across platforms, system integration and
optimizing network services.
The IT major is revising its strategies as the company is
experiencing reduced spending from struggling telecom equipment vendors on
R&D.
Focus on areas like telecom analytics and mobile
broadband will enable Wipro to target telecom operators.
Traditionally, Wipro has focused on product engineering for telecom equipment
vendors.
Wipro 2011-12 revenue from media and telecom units down to 15.7%
Media and telecom business contribution to Wipro revenue
in 2011-12 declined to 15.7 percent from 17 percent in 2010-11. Financial
solutions market is the main contributor with 26.9 percent in both fiscals.
Wipro said its IT services revenue was $5.92 billion, up
13.4 percent y-o-y. Total revenues were $7.37 billion, an increase of 21
percent y-o-y. Net income was $1.1 billion, up 5 percent y-o-y. IT services
revenue in Q4 was $1.53 billion, an increase of 9.7 percent. Total revenues in
fourth quarter were $1.94 billion, an increase of 19 percent.
“Earlier 100 percent of our revenues came from products that are selling
boxes. But a shift is now happening from product into services. Services now
constitute about 25 percent part of our business,” Jayanta Dey, global
head of consulting, solution and practice unit, telecom equipment vendor
vertical, Wipro Technologies, told Economic Times.
According to Gartner, telecom equipment market is likely to grow slower at 6.9
percent this year from 7.2 percent last year to $472 billion.
Wipro Technologies has large telecom network clients such
as Ericsson, Nokia Siemens Networks and Siemens.
Globally telecom data traffic is expected to grow 18 times in five years,
whereas revenues are expected to only double. Thus we will need more efficient
telecom networks to cater to the traffic.
Wipro has about 10,000 employees working in its global
media and telecom business.
Revenues from Wipro’s global media and telecom vertical grew about 4 percent in
FY12 to $1.1 billion.
But contribution of the telecom vertical fell marginally from 18 percent in
2011 to 16 percent in 2012 to Wipro’s IT revenues, owing to a global slowdown.
Telecom is third largest business vertical for Wipro after financial services
which contributes about 25 percent and manufacturing which contributes about 20
percent.
In India, Wipro has telecom clients such as Airtel, Vodafone and Aircel. Besides, Wipro other IT services providers are also seeing slowness in telecom
as spends of global telecom operators are also under pressure.
Infosys’ revenues from telecom and utilities sector fell from 26 percent in
FY2010 to 24 percent in FY2012.
Tech Mahindra suffered a 2 percent drop in its revenues last quarter due to the
shutdown of operations of its two Indian telecom clients Etisalat DB and STel,
as their 2G licences were cancelled.
