Wipro's alternate to Bangalore

BANGALORE: Indian IT products and services major, Wipro Limited, has announced that it is planning to grow outside Bangalore and set up operations in cities like Kochi and Kolkata. While announcing the company's Q1 results, the company's Chairman, Azim Premji cited the reasons behind the move as being high attrition rates, high wage structure and poor infrastructure prevalent in Bangalore, dubbed as the `Silicon Valley of India.'

Currently Wipro, the third largest software services exporter in India, employs 11,000 professionals in Bangalore. When asked about the company's alternative destinations Premji said, "Wipro will go wherever there is good talent and infrastructure." The company plans to move some of its existing client projects to Kolkata and Kochi.

Wipro, Vice Chairman, Vivek Paul declined to comment on the investment that would go into the expansion plans, but said that the company would invest in people and facilities. When urged to make a comment on Bangalore's state of infrastructure, Premji declined to comment saying that everybody knew about it.

The company exceeded its Q1 revenue forecast by $ eight million and closed revenues at $300 million for the period ending June 30, 2004. Premji said that every single vertical, geography and service witnessed robust growth. "Our sequential revenue growth of 8.4 percent in dollar terms was the result of 10.5 percent growth in our enterprise business and 7.1 percent growth in our R&D business."

On the issue of pricing pressures in the IT industry, Paul said that they are on the wane. As a consequence, the company had improved its operating margins for the fourth consecutive quarter, he informed.

Wipro's BPO arm -Wipro Spectramind witnessed subdued growth during the quarter. However, the company is optimistic that it would have better growth rates in the current quarter and grow ahead of the industry. The division's Chairman, Raman Roy said that the price pressures in the industry had come down in the last few quarters. "These days, clients look for value rather than cost," he said.