The Hindu Business Line : 460 tech firms out of Hyderabad software park list

A WHOPPING 460 technology firms have been taken off the list of companies registered with the Software Technology Parks of India - Hyderabad (STPI-H) during fiscal 2004. The steep dip has brought the number of registered firms down to 1,060 as at March 31, 2004 from a high of 1,520 last year.

STPI-H decided to take such a step - that it calls delisting - since these companies have not been operational.

This development marks a significant change from the upbeat scenario during the years 2002 and 2003, when Hyderabad had the highest number of registered units at a single centre in the country.

The STPI-H, however, does not appear unduly worried. Says Col M. Vijay Kumar its Director, "We are not too worried about this development. Such churning is good for the industry and more serious players would now be left in the fray".

"Of those units left in the list, about 860 are operating units and the remaining 200 are either under gestation or are not operational ", Mr. Kumar told Business Line recently on the sidelines of a recent STPI meet.

Significantly, existing players such as Oracle, Microsoft, GE and Computer Associates are all expanding their facilities in the city. "For every four global IT companies, three choose to come to Hyderabad. That itself speaks volumes about the infrastructure and the manpower availability here," he said.

HSBC is expanding and is all set to commission its new centre in Visakhapatnam, Mr Kumar explained.

Mr Kumar said, "After the Union Government announced sops to the IT sector in 2000, STPI-Hyderabad witnessed rapid enrolment. We saw about 50 per cent increase in overall numbers of companies registering with the STPI, which would enable them to benefit from tax sops. Since these units did not take off, we decided to delist them."

He also commented on the volatile mood in the IT sector. Citing statistics, he pointed out that in fiscal 2004, 119 units were enlisted while in fiscal 2003 about 81 companies enlisted.

"Though the number of units added is relatively smaller in comparison to previous years, we see a pattern where more serious players are entering the fray. For instance, this fiscal about 19 more units have enlisted as on May 31."

"The industry is now in a phase of consolidation, just as it was after the dotcom bust, 9/11 developments and issues such as SARS. This augurs well for a healthy industry. It appears that we have put behind us all those non-performing units," he said. Asked to comment on the State witnessing faster growth in IT enabled services compared to software services , Mr Kumar said that both sectors saw comparable growth in number of registered units.

He added, "Often, there is this notion that ITES involves low-end work. This is far from the truth . In fact, what started as basic support and call centre work a few years ago has become increasingly specialised.

While existing companies have expanded in numbers, they have also enhanced their services portfolio to cover high-end work including technical help desk."