NTT Data is checking out Vietnam, Brazil

PUNE: NTT Data Corp., a subsidiary of Nippon Telegraph and Telephone Corp. (NTT), also the largest IT services company in Japan, is checking out new geographies like Vietnam and Brazil, while accentuating its work out of India.

The shift apparently comes out of the increasing country risk posed in China, which currently commands 90 percent of the company’s work.

Dr. Itsukazu Nakamura, head, Software Business Planning Section at NTT Data told CyberMedia News that the company is looking for partners in Vietnam. "This would be from the point of view of delivery to the Japanese market. Additionally, Brazil could be an ideal candidate for future expansion. But nothing concrete has happened on the talks yet."

Incidentally, parent company NTT DoCoMo has, this September, established an office in Hanoi, Vietnam. Also, reportedly, NTT DoCoMo showed interest to bid $1 billion for a stake in Vietnam’s mobile phone carrier MobiFone, along with eyeing investments in other Asian countries, like India, Indonesia, Thailand, and Malaysia.

Nakamura added that over the next three years, NTT Data wants to increase its outsourcing work from $30 million to $100 million. While most of it will continue to go to China, almost 10 percent of the rest may come to India. "We plan to reduce our over-dependence on China. There are issues of country risk, forex factors, shortage of requisite manpower, etc., and we also want to tap the talent pool available in India," he explained.

Vertex to handle NTT Data’s work
Work in India, would in future add embedded applications as well as support to Japanese companies operating out of India. This would be primarily handled by Pune based Vertex Software Pvt. Ltd in which the company recently acquired a majority stake. Vertex too would expand ahead as it is mulling a center in another Indian city, besides Pune, in addition to a small set-up in China as well as a new marketing presence in Tokyo.

The company currently 5 percent of its revenues from the $8.6-billion Japanese major and aims to increase that to 33 percent over the next few years. Vertex’s last year revenues were $5.3 million. This year, it expects to clock $8 million and aims for $32 million in next four years, according to Nitin Datar, president, Japan Operations.

As per the deal with Vertex, NTT Data will now acquire 68.7 percent of outstanding equity and the balance will remain with the founders and senior executives of Vertex. Mitsui & Co. Ltd of Japan and Logicsoft Inc. of USA, the companies that had initially invested in Vertex, will now transfer their shares to NTT Data.

The completion of regulatory approvals and equity transfer process is likely to materialize by December 11, 2007. Though Vertex would continue to operate independently, it would be positioned as an ‘NTT Data Group Company’, said CEO of Vertex, Ajit Patil.