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Africa emerges as new El Dorado for Indian IT firms

Wednesday, 12 March 2014 - 6:00am IST | Place: Mumbai | Agency: DNA

After telecom operators, Indian IT firms are seeing big opportunity in the African continent.

Several Indian IT and business process management (BPM) companies are lining up plans to invest and expand in the region as software services demand grows in the region.

A continent comprising 54 countries with a one billion plus population, research firm IDC estimates Africa's IT market to be $26.53 billion this year.

Pradeep Bindal , President - APAC, MEA (RoW). – infrastructure management and transformation services, HCL Technologies, said, "We have seen favourable growth in this region and we are working hard to ensure higher localisation and certifications. Our main strengths of global expertise and domain knowledge and with business focused innovative IT solutions is paying rich dividends. We will continue to invest in this region."

Currently, Africa's contribution to top Indian IT firms' overall revenues is 10% or less, but it is expected to grow exponentially.

Tech Mahindra, which recently expanded its footprint in South Africa as well as eight other African countries, plans to invest more in the continent.

Sandip Sen, global CEO, Aegis, said, "We are looking for an anchor client to expand in Africa, especially South Africa, which holds opportunities for the company in terms of local business and UK business."

Indian IT body, Nasscom is also actively engaging in talks with its counterpart in South Africa to explore business, partnership, and joint venture opportunities between African and Indian companies.

Susir Kumar, CEO of Serco Global, a BPM firm, said, "We are looking for acquisitions mostly in the areas of cloud, big data, analytics, mobility, and social media in new emerging markets like South Africa."

The McKinsey report said, "India can aspire to quadruple its revenues from Africa to $160 billion by 2025 by developing its presence in sectors where it has a unique value proposition in areas such as IT, agriculture, infrastructure, pharmaceuticals and consumer goods."

Ankita Somani, IT analyst with Angel Broking, said, "Growth in IT spending in South Africa has been driven by recovery of the economy, increasing business confidence and MNCs expanding into emerging economies. Discreet managed services rather than traditional information system outsourcing contracts are driving growth, especially in verticals like financial services and government."

Sanjoy Sen, director, Deloitte, said South Africa and India have many similarities in terms of culture, English proficiency and similar time zones. "Thus, despite limited cost advantages as of now, since South Africa can serve as a gateway to Africa, which will continue to emerge as a more prosperous region in the next decade."


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