Telecom networking giant Huawei has entered IT services, a shift from its hardware-focussed strategy which will eat into the marketshare of Indian software exporters, especially in telecom-related projects.
The world’s largest privately held technology company is using its India R&D centre to take up projects involving managing of telecom infrastructure and their networks, thereby treading on the bread-and-butter businesses of Indian IT exporters. When contacted, Wilson Wang confirmed the development and told BusinessLine that engineers from India have started doing projects onsite and offshore for its clients such as China Mobile, China Telecom and others.
“Our 2,700 Indian engineers are paving the way in services, working on areas such as Ring Back Tones, cloud computing and agile software development, which helps telcos to provide different solutions to their customers” he said.
Huawei started off making telecom equipments such as routers and switches for telecom operators globally and within a span of a decade, the company gained significant marketshare from competitors like Cisco and ZTE. This development also underscores the ambition of Huawei, as it branches out into services, especially with global client base, noted Sanchit Vir Gogia, Analyst at Greyhound research.
The company, which started off selling networking equipment to Chinese telcos, now counts Mobily, MegaFon, Etisalat as their customers. “We already have an existing installed base of products that telecom companies use and services is our next frontier,” explained Wang. Also, services an area where Chinese companies have been laggards when compared to their Indian counterparts who have exported $75 billion worth of software in the 2014 fiscal year.
For a decade-and-a-half, Indian IT exporters have been trying to make a mark in the Chinese market, with the likes of TCS, Infosys, Wipro and others have subsidiaries in cities like Shanghai and Shenzen. However, they have not been able to make much inroads and almost all of these companies contribute a fraction of its overall turnover, according to company data. In a bid to spruce up revenues from China, TCS last year, Tata Information Technology was merged into TCS China.
Accroding to analyst data, global telecom outsourcing market is estimated to hit $76 billion by 2016.