Prithvi Information Solutions Limited, a Hyderabad-based software consulting, outsourcing and business solutions company, is in the process of setting up a network operations centre (NOC) to monitor and maintain telecommunications networks of its clients in Brazil, Canada and central American countries from here.
“Earlier, we had a separate team for each geography. Now, we have consolidated our global telecom engineering services (TES) teams into one, which will be running out of Hyderabad with 1,000 people. We are on the verge of signing contracts with OEMs (original equipment manufacturers) like Nokia Siemens Networks (NSN), Alcatel, Ericsson and Huawei. The NOC, which will require an investment of $3 million in the next two years, will be operational from early September, NSN to start with,” Madhavi Vuppalapati, chief executive officer of Prithvi Information, told Business Standard.
Vuppalapati said the company was seeing tremendous progress in terms of IT managed services in the last one year, where it was outsourcing desktop support, Tier-I customer support, customer satisfaction support and quality assurance services for Fortune 500 companies.
“We have also changed our strategy in IT outsourcing and will now focus on mid-Tier customers that are between $1 billion and $10 billion to become their IT outsourcing partners, which will be a very high margin business for us. We are currently in talks with 10 global customers and have already signed two contracts to open dedicated centres (with 50 people each) for them. Our goal is to win all these 10 accounts soon,” she said.
To hire 1100
Vuppalapati said the company was looking at hiring 600 people between IT managed services and telecom engineering services over the next six months and hopefully more by the end of this financial year. For the network operations centre, Prithvi will recruit 500 more during the same timeframe, she said.
FY12 revenues to stay flat
Prithvi Information Solutions, which reported revenues of $422 million in FY10, clocked $341.3 million in FY11. The company expects its revenues to remain flat or grow 2-3 per cent this financial year. While IT contributes 67.25 per cent to the revenues, telecom accounts for the rest.
Vuppalapati said because of the recession in the US, net payment terms had been rapidly growing. “If you take the time value into consideration, we weren't making money on those deals. By design, we wanted to get rid of those contracts and focus on long-term deals. That is the main reason why we are now working on the managed services model, where payment terms are net 10 days to net 30 days,” she added.
“We are taking our focus away from growth in topline to growth in bottom line. We will rather be a half-a-billion dollar company with 20 per cent margins than becoming a $1-billion firm with 8-10 per cent margins. Right now, our margins are between 8 and 10 per cent and our goal is to rapidly grow that to 13-15 per cent in one or one-and-a-half years from now,” Vuppalapati said.
Prithvi’s scrip ended the trade at Rs 27.70 on the BSE on Friday, up 1.65 per cent, over the previous close of Rs 27.25.
