Wipro Looks To Africa's IT Market


Indian IT services provider Wipro Technologies plans to expand its presence in Africa, following 'good traction' made within its existing nine-market African footprint over the last 24-36 months. The company is considering expanding into unspecified selected East and West African markets, as well as countries that border South Africa. With emerging markets reporting fast-growing demand for IT services, particularly outsourcing for key industry verticals, BMI believes Wipro should be in a strong position by moving in on these greenfield African markets.

Wipro's head of African business development, Shailendra Singh, noted in a statement carried by IT Web that the company is considering tripling its African employee base from the current 600 over the next three years as it seeks to take advantage of growing competition within the telecommunications and financial services sectors. These two sectors, he says, are the fastest growing and most IT-dependent across the continent. In the more diversified South African market, however, Wipro is also looking to address other rapidly growing verticals with high IT requirements, such as energy and utilities.

Emerging Markets Targeted By Wipro
Wipro Q1 FY13 Revenues By Geography

Over the last 18 months, amid increased competition from a wider range of IT service and solutions providers, Wipro has broadened its long-term development strategy to tap the larger growth markets - France, Germany, China, Japan, Australia, New Zealand and the African subcontinent - in recognition of their revenue-generating potential. Singh claims that these growth markets expand three times faster than the global average, about 45% per year.

This is clear from the company's most recent quarterly results. Asia and emerging markets accounted for 10.2% of overall revenues in Q1 FY13 (quarter ended June 2012), up from 9.5% in the preceding quarter and 8.3% a year earlier. Japan also increased its prominence, accounting for 1.3% of global revenues in Q1 FY13, up from 1.1% in the preceding quarter and 1.1% a year earlier. Meanwhile, Europe accounted for 28.1% of revenues, up from 27.7% three months earlier, despite strong competition from well-entrenched European IT service providers and challenging business and macroeconomic environments across the region. Wipro added 2,632 employees - mainly in emerging markets - in Q1 FY13, building on the 4,105 employees added in Q1 FY12.

The latest results also show that energy and utilities are becoming more prominent within Wipro's revenue mix, up from 11.6% of revenues in Q1 FY12 to 14.2% a year later. The company's other industry markets either remained flat y-o-y (retail and transportation, 15.0%) or declined slightly (manufacturing and high technology, 19.4%; financial solutions, 26.4%; media and telecoms, 14.9%). Entering the largely untapped finance and telecoms IT services markets in East and West Africa would help bolster these important product segments for Wipro and give it greater credibility when compared with its peers.

This article is tagged to:
Sector: Oil & Gas, Retail
Geography: Australia, Africa, Australia, China, Germany, France, Japan, New Zealand, South Africa, Africa, Africa, Africa, Africa