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The
past financial year's performance was particularly good for Infosys. In FY
2004—05, Infosys' revenue from telecom vertical witnessed a growth of over
65 percent and moved from Rs 795 crore in FY 2003—04 to Rs 1,319 crore. The
telecom segment, driven by a strong demand from telecom companies-specifically
from international carriers-grew by around 72 percent. This demand had been
increasing for the past two to three years, as carriers were looking at software
companies for a delivery model that they had never looked at in the past.
Infosys' entire revenue in the telecom space comes from overseas. In terms
of geographical break-up, North America contributes the largest whereas Europe
and Asia Pacific would be comparable in revenue terms. In terms of large
clients: British Telecom, Telstra, and telecom service providers in North
America contributed significant revenue to the company. In telecom, OSS/BSS and
customer care were the major revenue earners for Infosys.
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In the telecom vertical, Infosys has been focusing on three areas-IT
systems, network management, and OSS/BSS. In the IT systems, the company focuses
on: building internal IT systems, CRM, software packages for customer care
(which includes customer care and service provisioning), fault tolerance, and
fault management.
For the company investment in growing new services have yielded high returns,
both in items of revenue as well as value differentially. Services such as
undependent validation and infrastructure management continue to demonstrations
healthy growth while system integration continues to deliver higher value
through technology solutions.
In the network management area, Infosys looks after network management,
systems management, managed network for the customer's clients, and client's
networks. OSS/BSS billing fits with network and management systems and therefore
requires lot of investment as it needs frequent changes in terms of
customization. In OSS/BSS, Infosys is a full-service company.
Way ahead of most Indian companies, Infosys feels its biggest competition in
from global giants like Accenture, IBM and Cap Gemini. Its challenge is to
displace incumbents like Accenture, IBM and Cap Gemini from as many positions as
possible. In terms of verticals within telecom, like for instance, billing, it
has competition from companies like Convergys and AMDOCS and in space of
infrastructure management it is HP.
Going ahead, Infosys is investing in the areas of billing, CRM, VoIP, and
testing. Testing is becoming important as many new things are getting built and
testing needs to be undertaken for them at unit level and also at the
integration level.
"Our challenge is to displace incumbents like Accenture, IBM and..."
How did Infosys perform in the telecom space in FY 2004—05?
Last year's performance was pretty good. The telecom segment grew by
around 72 percent. We are seeing strong demand from telecom companies,
specifically from international carriers, and this is increasing from last two
to three years as carriers are looking at software companies for delivery model
that they have never looked at in the past.
In the telecom space, where is Infosys concentrating?
In telecom, we focus on three areas-IT systems, network management, and
OSS/BSS. In IT systems we focus on building internal IT systems, CRM, software
packages for customer care (which includes customer care and service
provisioning), fault tolerance, and fault management. In network management, we
look after: network and systems management, managed networks for the customer's
clients and client's networks. Customer care provides maximum RoI, and in
order to provide a better experience, the company plans to outsource. OSS/BSS
billing fits with network and management system and therefore requires lot of
investment, as it needs frequent changes in terms of customization. In OSS/BSS
we are a full-service company, whereas in IT services we work with third-party
vendors for customization and implementation.
What are the industry and technology trends in telecom software?
In the past few years and years to come, the biggest trend is the
transformation from circuit switch to packet switch in the carrier environment.
This will result in investments and thus provide lot of promise to companies
like Infosys. All this transformation has to happen at three layers-the
hardware, the OSS/BSS, and the services need to be changed. So, network
transformation and convergence is a multi-year phenomenon. Companies are looking
at multiple perspectives to maintain costs, and India has a benefit in terms of
cost expertise in technology.
What are the new investments planned by Infosys for FY 2005—06?
We are investing in areas of billing, CRM, VoIP, and testing. Testing is
becoming important as new things are getting built up and testing needs to be
undertaken at unit level and also at integration level. Testing is also
statutory and mandated by law as penalties are high. So it is a strong focus for
any service provider.
Competitors for Infosys in the telecom space?
In Indian companies we are ahead but in terms of international ones, we get
competition from Accenture, IBM, and Cap Gemini. In terms of strong verticals
within telecom, say billing, we have competition from the likes of Convergys and
AMDOCS, and in space of infrastructure management it is HP.
What is the acquisition strategy for Infosys in telecom space?
We haven't acquired any company and we are not looking at acquiring
either. Our challenge is to displace incumbents like Accenture, IBM, and Cap
Gemini from as many positions as possible.