In the last two years, the telecom software scene in India has changed drastically. Both qualitatively and quantitatively.

The Numbers

The total size of the telecom software industry in India recorded touched Rs 4,100 crore in 2000-01. This includes the export of telecom software as well as the domestic sales. However, while the export revenue includes embedded and system software, domestic sales means only the software sold to Indian service providers, like OSS/BSS and network management.

The size of the Indian telecom software market was Rs 66 crore. That is about 1.6 percent of the total industry sales.

The lion’s share of the total sales of course, was exports. Exports accounted for as much as 98.4 percent of all telecom software sales. Total revenue from exports touched Rs 4,034 crore in 2000-01, thus registering a growth of 90.64 percent in rupee terms over the previous year’s sales of Rs 2,116 crore. This was close to NASSCOM’s projection of $900 million.

This was roughly 2.1 percent of the telecom software sales globally. By 2003, this figure is likely to go up to 3.6 percent. This is calculated on the basis of NASSCOM’s estimates for the telecom software exports from India in that year. The apex software industry body puts it at $2.5 billion.

In 2000-01, the V&D100 companies accounted for as much as 72.8 percent of the total industry sales. The No. 1 company, Wipro itself accounted for 18 percent of the total sales.

The telecom software exports as a percentage of total software exports, was 14.23 percent. Again, this was extremely close to NASSCOM’s earlier projection of 14.4 percent. This is a growth in telecom software’s share. In 1999-2000, telecom software accounted for about 11.5 percent of the total exports. By 2003, telecom software will account for almost one-fourth of India’s software exports.

What is also important is that the shares of telecom software in the exports pie of big Indian software houses are higher than the industry average. TCS, Wipro and Infosys got 19, 42, and 17.7 percent of their revenue respectively from telecom software. This shows that telecom is higher on the value chain than other areas.

Expectedly, services accounted for as much as 96-97 percent of the total telecom software exports. However, there is a mix in the type of service provided by different companies. While services in telecom vertical was a healthy contributor for companies like TCS, Infosys and Cognizant; Wipro Technologies got its entire revenue (almost) from its R&D services, with telecom service practice contributing in a very small way.

Pure-play companies like Subex and Usha Communication Technologies got almost 100 percent of their revenue from their products, and services centered around the products. Wipro also got some (though a much smaller) part of its revenue from its products. TCS launched a few products for service providers in 1999 but continued to get the almost the entire the revenue from services.