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Jun 8, 2009

3G to ring in bonanza for IT cos

If third generation (3G) is the next big opportunity for domestic telecom operators, it is also expected to open a whole new business st
ream 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 like integration with various operational systems and linking to them to internal networks.

“With the advent of 3G, there will be large use of data services on both voice and video. IT infrastructure like data centers will play an important role,” said Gartner principal research analyst Nareshchandra Singh.

This will provide opportunities for IT vendors, as telcos will want to outsource their data centre management. Managed services and platform solutions are the two major areas of 3G deliverables for IT players.

Vendors including IBM, Wipro, and Tech Mahindra that already provide end-to-end IT services to telcos are expected to be major beneficiaries of this. “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 existing operational systems of the telecom operators including billing, provisioning and CRM. The 3G and broadband opportunities in the Indian telecom space has also attracted IT players like Patni Computer Systems, which have been providing 3G related services to global telecom operators.

“We have technological frameworks built for 3G and broadband services to provide services in areas of service fulfillment, revenue assurance, and billing,” said Patni Computers VP Siddhartha Kataki.

While the exact size of 3G opportunity for IT vendors is still not clear since it largely depends upon the scope and the approach taken by service providers, Kataki says that it could be at least 10 per cent of the total proposed capital expenditure by telecom operators.

Motilal Oswal, in a recent report, has estimated that a large player like Reliance Communications’ 3G capex (including spectrum and rollout) will 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 as well as the extent to which the service provider relies upon and shares risks,” said Greisinger.

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