IT Services and Mobile Market- The Growth Story

I just laid my hands on one of my most awaited magazines of the fortnight, Data Quest. And just leafing through it I felt quite elated. Some of the things I read seemed obvious where as some were totally unexpected. Overall it all adds up to a very strong present and a very positive future. Let’s concentrate on two things, one that affects the sector I work in (IT consultancy) and the other that affects us all (mobile market).

The first thing that struck me was that the growth rate of IT domestic market has been higher than exports. For many years one thing that has plagued our country’s economy has been the approach of looking for an export led growth. Though sound economics demands that it should be GDP led exports and not the other way around. Thankfully in one sector we can proudly claim that the growth is leading the exports and that actually points towards a great future for the IT market. But yes, my sincere hope is that this is not a one time aberration in IT market and it spreads to other sectors as well.

What is even more heartening is that within domestic market there are more than half a dozen deals each worth Rs 100 crores or more. Another good thing is that most of these deals are for the Govt and Public sector firms, which implies that we can expect to see better efficiency in services offered by one segment that affects us all, Govt services.

Though the most notable buy out of last year was Wipro buying Infocrossing, there have been many other M&A’s which obviously were not as big as this one but were no less significant. Though what is less surprising is that almost all these deals involve US market, which considering its size and importance seems like the most sensible thing to do.

Above all the sweetest music to our ears i.e. my company (as you know we are IT strategic consultants specializing in IMS), is the fact that within IT services exports the fastest growing segment is Infrastructure Services with a growth rate of more than 125%. But to be honest, having been in the business of offering IT strategic consultancy for 4 years now, for us it’s more like a restatement of a fact that we have been well aware of all along. It’s but obvious that couple of deals in IMS sector have been signed which would be worth more than $1b each.

But something that affects more people, at least directly, and is closer to everyone’s heart is the mobile phones. There also great news awaits the service providers as well as the end users. A survey sometime back showed that when it comes to talking on the phone Indians spend maximum time per month talking on a cell. And the good news for telecoms is that mobile phone penetration has crossed 250mn mark. Just imagine with the number of cells in use and the untapped market still waiting to be explored, when this would combine with the time people spend talking on cell phones where would the profit of telecom firms go!

The good news for users here is that bigger market would throw in more players, better services and better deals for consumers. Also with 3G services expected to be started anytime soon and expected launch of iPhone next week, users can really look forward to an early Diwali.


Written by: Rohit Mishra