Source: http://web20.telecomtv.com/pages/?newsid=43000&id=e9381817-0593-417a-8639-c4c53e2a2a10&view=news

IT outsourcing capital India is now re-exporting its services outside the nation, particularly into Egypt. The new phenomenon comes as high-tech spending by both governments and the private sector has exceeded US$1.7 trillion in 2007causing IT services’ demand to exceed the supply of qualified labor in the country’s human resources market, said Business Today Egypt.

India has been dominating international IT outsourcing with a 2/3 share of the industry as India-based companies have been seducing call centers and IT departments away from the West. However, despite local successes, India is now facing talent deficit, forcing Indian IT companies to buy companies in America, Europe and Asia to support their extended operations and cater to more than half of the globe’s high-tech needs.

According to a study by A.T. Kearney, a global management consulting firm, which looked at 50 countries, Egypt has been ranked the thirteenth most attractive destination to set up an offshore service. The study was based on the evaluation of three main factors: financial structure, availability of skilled workers and overall business environment.

“In search of good, quality manpower, we found that Egypt has a large population with a high number of graduates with good computer skills,” said Virender Aggarwal, Satyam’s director and senior vice president for Asia, the Middle East and Africa. “[Egypt] can also serve as a good market for Europe, Africa and the Middle East because of the multilingual capabilities of the Egyptians. Many Egyptians speak French as well as other languages, like German.”

Moreover, the Egyptian government hopes that to transform Egypt’s image in the international IT market and market the country as a popular destination for IT outsourcing. The administration of Prime Minister Ahmed Nazif commitment in developing the ICT sector is said to be a serious one, having hired an international public relations firm to help sharpen its image.

“In terms of having a competitive edge, the main focus will be on both IT service outsourcing and business process outsourcing,” Abdelazim says. “We are implementing the strategy through three main pillars: one is attracting multinational [companies]; two is developing the capacity of the local Egyptian companies; and three is making the talent pool available and ready to serve the first two pillars,” Abdelazim said.

In addition, major companies like Microsoft, Oracle, ALCATEL, Ericsson, Vodafone and Teleperformance have all so far established operations in Egypt. Even Indian IT giants Wipro and Satyam have also come to Egypt.

“We gave them incentives like rental and training subsidies between 85 per cent and 100 per cent. The telecom infrastructures as well as furniture are also subsidized,” Abdelazim said.

There has also been some speculation that Indian companies, with their low-cost services, expertise and economies of scale, will end up dominating the local and regional markets. However, competition is not necessarily over local customers.

In fact, local companies encourage international players to utilise and develop the Egyptian market, which is considered both small and underdeveloped. “It is a difficult market even for the Egyptian players, as there is an [overall] lack of ‘e- readiness’, technology use, and e-literacy,” Amin said. “If the Indian companies are able to come to the market and make it profitable, this will benefit everybody, and raise the market’s level of maturity.”

Source: www.business-standard.com

K Rajani Kanth : Dhanus Technologies Limited, a Chennai-based telecommunications company, is on the verge of acquiring a company each in the US and Europe for a total transaction value of $4 million (approximately Rs 16 crore).

“We are looking at expanding our vehicle tracking system (VTS) business, Fleetrac, to the global level. For this, it is important we have the advantage of not only giving our clients the required equipment but also services. We are in advanced stages of discussions with two companies in the US and Europe, which are into telematics and telecom infrastructure designing, for acquiring 60 per cent stake each.

“Given the volatility in the market, valuations are currently being re-negotiated. We hope to seize the deals by the end of this calendar year,” S Muthukrishnan, vice-chairman, Dhanus Technologies, told Business Standard.

Dhanus went public in October 2007 and raised Rs 113 crore through its initial public offer, 50 per cent of which had been utilised for expanding its VTS business, technology improvements including upgradation of grid and general servers, and research and development.

“We intend to utilise the remaining IPO proceeds, besides relying on internal accruals and partially on debt, to fund the proposed acquisitions,” he added.

The 15-year-old company is slated to complete its first cross-border buyout deal, Borusan Telekom in Turkey, which was acquired for $30 million (Rs 120 crore), in a month.

Borusan is expected to garner revenues worth $140 million (Rs 560 crore) this year, which would be consolidated with Dhanus’ revenues in June 2010.

Borusan is a market leader in the enterprise internet services and fixed voice market among alternative operators.

Muthukrishnan said the company now had an order book of 50,000 subscriptions including 30,000 from the Kerala State Private Bus Operators’ Federation for deploying Fleetrac.

“This, coupled with Mpingi, our international broadband telephony service for residential and business users is expected to fuel our topline to around Rs 180 crore in the current July-June financial year, as against Rs 92 crore last year,” he added. The company is targeting one million customers worldwide from 20,000 now.

At present, Dhanus derives 40 per cent of its revenues from V-Tel, a global calling card aimed at Indians travelling abroad, 30 per cent from VTS and the rest from its business process outsourcing (BPO) and software services.