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'Bangalore not vying with Hyderabad'

Syed Amin Jafri in Hyderabad

Officials from STPI Bangalore and Karnataka IT Department on Thursday dismissed reports about "growing rivalry and fierce competition" between the two cities as untrue and claimed that there is enough business opportunity in the IT field for every Indian city to attract more and more players.

Responding to queries at a media conference, Karnataka IT secretary Vivek Kulkarni quipped, "actually, the competition is primarily in the media. We have internal coordination with our counterparts in Andhra Pradesh. We discuss things too often."

"There is enough opportunity in the information technology, particularly IT-enabled services sector, for every (Indian) city. There is enough business opportunity for every IT company to locate its activities in various cities. We (at Bangalore) have not tried ever to denigrate any city or to compete with any other city. There is need for healthy competition among cities since India accounts for hardly 1.5 per cent share of the world IT market and huge potential exists for everyone," Kulkarni said.

STPI (Software Technology Park of India) Bangalore director B V Naidu said that the city logged IT exports of Rs 100 billion last year and though the target for this year was yet to be finalised, the IT exports are expected to grow to Rs 140 billion. Out of 1,100 companies registered with STPI, Bangalore, as many as 860 were operational and doing brisk export business.

Asked about Nasscom's latest study rating Hyderabad as the favourite among "Super Nine" Indian ITES destinations, Kulkarni said that he had not seen the full report of Nasscom study, which ranked Bangalore as the sixth favoured destination.

"I don't know the basis for ranking Hyderabad on top. It is also not clear how Kochi can be ranked No 2 destination, over and above Chennai. Kochi has not a single major ITES player. Perhaps the fact that three submarine cables land at Kochi must be the reason," he observed.

He was at a loss to understand how Ahmedabad figured at the 5th place, above Bangalore. Apart from Bangalore, two other cities in Karnataka -- Mangalore and Mysore -- were also doing well in the IT sector. In fact, the software exports from Mangalore alone were three times of that from the entire Gujarat, he pointed out.

Stating that the business turnover in the Business Process Outsourcing sector in India was not even 0.001 per cent of the global market at present, he said that lot of business would come all the Indian cities.

"They (the foreign companies) are bound to come to all major cities because India has unique advantages in BPO. In fact, a company like GE Capital stands to save $1 million a day by shifting some of its operations to India. As a united front, we must get the foreign companies first. Then, they may set up operations in one or more cities," the IT secretary explained.

In the 104 weeks since the first Bangalore IT.Com was conceived in the year 2000, Bangalore has attracted at least one foreign company a week, Kulkarni said. Naidu also pointed out that in the last six months, Bangalore has surged forward in the ITES segment.

"Bangalore has taken a path of spearheading technology growth in the IT sector. It has started late in the ITES segment but it is catching up fast," he pointed out.

Besides GE Capital, which has set up operations in a big way in Bangalore, HSBC has also acquired 160,000 sq feet for its operations. Several other leading companies have leased space ranging from 15,000 to 65,000 sq feet for their BPO operations. Stating that in a study by Gartner, Bangalore figured on top as ITES destination, Naidu quipped, "let us see how it figures out this year and next year."

Naidu was responding to queries about Bangalore's growth in ITES segment, especially when Hyderabad has overtaken that city last year, with a 323 per cent annual growth, compared to 120 per cent recorded by Bangalore. Hyderabad's ITES segment accounted for business of Rs 6.9 billion as against Bangalore's turnover of Rs 4.95 billion in this segment in the year 2001-02.

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