Wipro revamps telecom biz to focus on services

Indian IT giant changes strategy from product engineering to services to buffer against slowdown in spending from Europe--home to some of its biggest customers, reports say.
Written by Jamie Yap, Contributor

Indian IT giant Wipro Technologies is restructuring its billion-dollar telecom business, shifting from telecom products to services even as the global telecom equipment market sees a slowdown in demand.

The Economic Times reported Tuesday Wipro has traditionally focused on product engineering for telecom equipment vendors, but it now plans to focus on servicing customers such as telecom operators. This means offering services on mobile broadband, telecom analytics, customer experience management, system integration, network optimization, and making hardware interoperable across platforms, it added.

"Earlier, 100 percent of our revenues came from selling boxes. But a shift is now happening from products to services. Services now constitute about 25 percent of our business," Jayanta Dey, global head of consulting, solution and practice unit, telecom equipment vendor vertical at Wipro Technologies, told the news agency.

He added that for some clients, about 40 to 50 percent of its business come from services. This is because customers are not increasing their budgets and want to make sure the research and development (R&D) dollars they had invested continues to give them returns, Dey explained.

Citing figures from Gartner, the Economic Times said the global telecom equipment market is seeing a slowdown, growing at 6.9 percent this year compared to 7.2 percent in 2011. Another analyst firm Frost & Sullivan said several vendors are either losing money or quitting the business, it added.

A separate report by Forbes on Tuesday said Wipro's strategy shift was a move to buffer itself against the crisis in Europe, which is home to some of its biggest network customers including Ericsson, Nokia Siemens Networks (NSN), and Siemens.

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