HCLI Targets Middle East Expansion


HCL Infosystems , a subsidiary of India-based HCL , has said that it plans to commit a significant amount of investments to expand in the Middle East. Key countries identified are the UAE, Qatar, Kuwait, Saudi Arabia, Egypt and Oman, and HCL Infosystems is looking to seek revenue opportunities in a diverse range of sectors. BMI believes that the region harbours strong growth potential in light of positive factors such as oil-rich countries trying to diversify their economies as well as strong public and private spending .

HCL Infosystems Eyeing The Potential
IT Markets (US$mn), 2009-2016

HCL Infosystems has been expanding its presence in the region in the last two years, with some high-profile activities announced most recently . In April, the company ventured into the Qatari market after forming a strategic partnership with business consultancy Dyarco International . The collaboration will see the two offering a range of ICT products such as data storage, security and networking. HCL Infosystems also partnered Consolidated Gulf (CGC) in July to distribute the former ' s hardware (notebooks, desktops and tablet computers) in Qatar. CGC would be an authorised distributor, catering to the corporate, project and retail business market s , and provide after-sales service through its service centres. Additionally, HCL Infosystems bought out Dubai-based NTS ' 40% stake in HCL Infosystems MEA in August in order to strengthen its presence in the region. Finally in October, HCL Infosystems launched a range of tablets, which are available in Qatar, Oman, Kuwait and Egypt.

Notable growth drivers for IT services in the Middle East and Africa ( MEA ) include governments' economic diversification efforts and the increasing integration of IT services with other industry verticals. In the consumer segment, rising income levels and improvement in literacy rates are also potential growth drivers . We note that demand for consumer electronics such as audio video devices, mobile handsets and tablets is strong in countries such as the UAE. Additionally, although there are heightened concerns surrounding the ongoing eurozone crisis and sharp slowdown in Chinese economic activity , the outlook for countries in the MEA region such as Kuwait and Oman remains robust heading into 2013 ( see our online service, August 24 , GCC: Macro Backdrop Remains Robust ) .

BMI believes that HCL Infosystems ' multi-pronged approach, which involves partnerships, acquisitions, distribution channel expansion , and product and service launches, will help the company to capitalise on the diverse opportunities. Most countries in the region are investing into the underlying network infrastructure, and this will provide the growth foundation for HLC Infosystems ' products and services, particularly those that are more sophisticated and of higher value. BMI forecasts the combined value of the IT markets of the UAE, Qatar, Kuwait, Oman, Egypt and Saudi Arabia to reach US$16.2bn in 2016, up by 53% from the estimated US$10.6bn in 2011.

This article is tagged to:
Sector: Telecommunications, Consumer Electronics
Geography: Middle East