3G may open new biz stream for IT cos

Jessica Mehroin Irani & Ranjit Shinde
MUMBAI

IF third generation (3G) is the next big opportunity for the domestic telecom operators, it is also expected to open a whole new business stream for IT companies. 3G integrates voice, data and video on a single platform, which in turn allows video downloads and other applications that require high speed connectivity.
IT industry trackers believe that 3G will see a slew of orders for IT companies in key areas such as integration with operational systems and their linkage to internal networks. “With the advent of 3G, there will be large use of data services on both voice and video. The IT infrastructure such as data centres will play an important role,” said Gartner principal research analyst Nareshchandra Singh. As the telcos will want to outsource data centre management, this will provide opportunities for the IT vendors.
Managed services and platform solutions are the two major areas of 3G deliverables for the IT players. Vendors including IBM, Wipro and Tech Mahindra already provide end-to-end IT services to telcos and are expected to be the major beneficiaries. “IBM has a service delivery platform to efficiently launch these new 3G/data services and link them to underlying network capabilities,” said IBM VP communications (growth markets) Tim Greisinger. It has also built capabilities to integrate mobile internet services with the telecom operators’ existing operational systems, including billing, provisioning and CRM.
The 3G and broadband opportunities in the Indian telecom space have also attracted IT players such as Patni Computer Systems, which have been providing 3G related services to global telecom operators. “We have technological frameworks built for 3G and broadband to provide services in areas of service fulfilment, revenue assurance and billing,” said Patni Computers VP Siddhartha Kataki.
While the exact size of 3G opportunity for IT vendors is still not clear as it largely depends on the scope and approach of service providers, Mr. Kataki says that it could be at least 10% of the total proposed capital expenditure by telecom operators. Motilal Oswal, in a recent report, has estimated Reliance Communications’ 3G capex (including spectrum and rollout) to be Rs 7,000 crore.
IBM expects the contract size to be large, depending on the telecom provider. “Contract sizes range from tens of thousands of US dollars to multiple millions, depending on the scope of decisions and the extent to which the service provider relies upon and shares risks,” said Mr Greisinger.