Economy & Business 

IT companies building new capabilities

What is India News Service, June 24, 2004, 1630 hrs

Top IT services providers are building up capabilities in new domains. Indian cellphone subscribers are riding a wave of high-end applications. US-based auction firm eBay has agreed to buy India's auction site Baazee.com for about Rs 230 crore.

Increasing pressure from three big global majors -- IBM, Accenture and EDS -- have led Indian firms to expand their services. Top guns like Infosys, Wipro, TCS and Satyam are in the process of building capabilities in new domains. They are trying to position themselves distinct from the global three. This means these firms will move from a piecemeal approach to integrated services.

Indian cellular subscribers can look forward to enjoying a host of benefits unavailable before, thanks to General Packet Radio System. GPRS enables video downloads and huge data transfer. It is prompting both business class and young users to hook on to new technology. There has been a tenfold growth in the numbers of GPRS users in Karnataka, Maharashtra and Delhi.

US-based auction firm eBay has agreed to buy out Baazee.com for Rs 230 crore. The acquisition will end by September 2004. This will give eBay a straight entry into the India market. The acquisition will retain the original management team of over a hundred employees. Currently the site has over 50,000 auction listings.

IMF economists say the Indian corporate sector is being short sighted. In a 2004 report, it has pointed out that Indian firms rely heavily on external sources of finance. This could lead them into bad debt. India Inc is facing rising interest payments on debt. This rise has not been matched by an increase in overall profitability.

Overall:



Indian IT firms diversifying: Under pressure from global majors, Infosys, Wipro, TCS and Satyam are building capabilities in new domains.

GPRS taking over cell domain: Over the last year, GPRS users in Karnataka, Maharashtra and Delhi have grown ten fold.

eBay bought baazee.com : They closed the deal for Rs 230 crore. 

IMF cautions India Inc: Its economists said since Indian firms rely heavily on external sources of finance, they will find it difficult to fulfill their debt obligations.