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Telecom IT spending blues affects Indian IT
By siliconindia
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Wednesday, 05 November 2008, 16:44 IST |
2 Comments
Mumbai: The declining IT spending is taking its toll on Indian IT as even the telecom companies have started cutting down their IT spends immensely. Several IT firms have confirmed of constraints in budgets and cost reviews. After the financial services space, it is the telecom industry that generates the highest revenue for Indian IT companies.
"The enterprise segment for telecom companies is under pressure as many corporations have put their telecom modernization plans on hold due to the credit crisis," said Sourabh Kaushal, Industry Manager, ICT Practice, Frost & Sullivan. Moreover, the telecom companies finding it difficult to meet their capex needs are taking a toll on their IT spending. As reported by Business Line, Wipro Chief Financial Officer, Suresh Senapathy, has confirmed of the downturn in the telecom firms, though he expects the situation to get normal within two to three quarters.
Generally, IT companies help maintain and develop the applications portfolio of large carriers, network gear makers (such as Alcatel-Lucent, and Nokia Siemens) and mobile handset makers such as Nokia, and Motorola. Of late, IT companies have also been doing high-end value-added work such as engineering and R&D services.
However, N. Chandrasekaran, Chief Operating Officer and Executive Director of Tata Consultancy Services, does not agree with the fact that the slowdown in the telecom vertical can be attributed to the global credit crunch. "In mature markets, we are seeing fewer opportunities largely due to the strong off-shore leverage that many of the large telcos have. I cannot say that the overall spending of the telecom sector is coming down, but you will have client-specific issues," he said. He also pinpoints that there is a robust growth in the companies.
