Wipro Tech looks beyond telecom to spread out risk

WIPRO Technologies is broadening the segment focus of its technology vertical division to minimise the impact of its exposure to the telecom sector. Wipro Technologies, the global IT services arm of Wipro, has been under pressure from the telecom sector due to a wave of consolidation in the global equipment manufacturing companies.

Wipro COO A L Rao said, "We are shifting our focus from pure telecom infrastructure companies to service providers." Wipro Technologies has, under its technology vertical, around 18,000 people with a major focus on the telecom market. The technology vertical currently contributes around 32% of Wipro Technologies' revenue.

The technology vertical includes segments of product engineering services and telecom service providers. Using its existing expertise in the telecom equipment space, the technology division is increasingly focusing on providing its services centred around the network infrastructure to the telecom operators.

Dr Rao said, it has been able to make headway into this segment as it has separated the original equipment manufacturers business from the network-related services. Currently, around 8% of Wipro Technologies revenue is coming from telecom service providers. There has been a wave of consolidation in the telecom equipment market with the merger of Alcatel-Lucent and Nokia-Siemens.

At the same time, Wipro Technologies has been forming either joint ventures or taking over the division of the global telecom giants. It has entered into a joint venture with Motorola to target the global telecom service providers, government and enterprise markets for service delivery.

Wipro Technologies also recently announced the takeover of Nokia Siemens Networks radio access related R&D activities in Berlin, Germany. Dr Rao said such kind of alliances provides it much needed expertise in the telecom segment as well as greater access to markets.

Besides this focus on the telecom segment, Wipro has also expanded its industry verticals such as automotive, industrial automation, defence and aerospace. Dr Rao said, there is enough growth potential in these segments as they are able to get into long term engagements with its customers bringing in steady stream of revenue