Snail's Pace

The blue-chip company, Infosys Technologies, continues to be on the growth
curve with its telecom revenue growth at 8.9%; growing to Rs 3,926 crore in FY
2008-09 from Rs 3,600 crore in FY 2007-08. Realizing the growth opportunities
and potentials in the booming Indian telecom sector, software companies have, in
the last few years, increased their focus on this sector. Infosys was not an
exception either, and telecom contributed 18.1% to the company's overall
business of Rs 21,693 crore for the year ended March 31, 2009. The overall
revenue recorded 30% y-o-y growth in FY 2008-09. But compared to FY 2007-08, the
revenue growth in its telecom business declined drastically, thanks to the
global economic meltdown. In fact, for all IT companies, their telecom sector
revenue performed far below their expectations in FY 2008-09.

Infosys is focusing on providing services to telecom players to effectively
transform their legacy systems, processes, and launch converged services based
on VoIP, IPTV, IMS, etc.

For helping SP's foray into IPTV, it focuses on new developments such as
micro-targeting, customer value analysis and segmentation in addition to
proactively building out advertising value chain solutions to help SPs tap new
revenue streams of advertising and interactive services. Compelling content
being essential for increasing customer loyalty, Infosys helps SPs deliver
compelling content that integrates with the lifestyle of customers. And its
Field Optimization Solution is targeted to help SPs to serve their customers
better. One of its important deals signed in the last fiscal was with Bharti
Airtel to deliver next-generation interactivity on service provider's DTH
services by offering its digital convergence platform on Airtel digital TV.

10 Infosys

One of the reasons for the decline in growth is that British Telecom Global
Services, a major outsourcer to domestic IT companies, did not ink any deals in
the last two quarters, affecting IT companies' revenues including that of
Infosys. This would continue in the near future as well because BT plans to
rightsize its workforce and reduce capex in the ongoing fiscal. And, Nortel
Networks filing for bankruptcy was not good news for Infosys either, though its
revenue from Nortel is less than half a percent only. Intended capex reductions
by handset biggies like Sony Ericsson, Motorola and Nokia, and by telecom
equipment vendors, has hit business prospects of IT companies like Infosys too.

The global economic meltdown forced Infosys for the first time in its
28-year-old history to forecast a revenue decline in the range of -6.7 to -3.1%
for FY 2009-10. The tough times are also forcing the company to not hire any
fresh employees in the ongoing fiscal. To manage the slide in growth, the
company in its overall strategy pursues its long-term goal of delivering
enhanced value to its clients and increases focus on new engagement models.