Traditionally, Wipro has been focused on product engineering for telecom equipment vendors.
"Earlier 100% of our revenues came from products that are selling boxes. But a shift is now happening from product into services.
Services now constitute about 25% part of our business," Jayanta Dey, global head of consulting, solution and practice unit, telecom equipment vendor vertical, Wipro Technologies, told ET.
According to Frost and Sullivan, the global telecom equipment market is seeing a slowdown with many 'vendors seem to be either losing money or quitting the business'.
"Clients are making sure that whatever R&D dollars they invest in, it gives them return. Their budgets are not increasing. For some clients, services constitute about 40-50% of the business we get from them," added Dey.
The worldwide telecom equipment market is likely to grow slower at 6.9% this year from 7.2% last year to $472 billion, according to Gartner Inc. As a result, Wipro Technologies is focusing on telecom analytics, customer experience management, making hardware interoperable across platforms, system integration and optimising network services.
Wipro Technologies has large telecom network clients such as Ericsson, Nokia Siemens Networks and Siemens.
Finnish player NSN has seen some ramp down in existing projects, as telecom network rollouts remain slow, according to sources.
Dey denied to comment on specific client business, but said that Wipro's new telecom strategy is to focus on mobile broadband and services around it.
"Globally telecom data traffic is expected to grow 18 times in five years, whereas revenues are expected to only double. Thus we will need more efficient telecom networks to cater to the traffic," he added.
Wipro is building LTE (4G) 'small cells', which are mini base stations which can be hung from electric poles or lamp posts.
The LTE small cells have a radius of 500 m to 2 km, and can support a secure mobile broadband network, useful in areas of defence and utilities.
The company has about 10,000 employees working in its global media and telecom business.
Revenues from Wipro's 'global media and telecom' vertical grew about 4% in FY12 to $1.1 billion.
But contribution of the telecom vertical fell marginally from 18% in 2011 to 16% in 2012 to Wipro's IT revenues, owing to a global slowdown.
Telecom is third largest business vertical for Wipro after financial services which contributes about 25% and manufacturing which contributes about 20%.
In India, Wipro has telecom clients such as Airtel, Vodafone and Aircel. Investments in its deal with telco Uninor has been on a freeze, since its licence cancellation.
Besides, Wipro other IT services providers are also seeing slowness in telecom as spends of global telecom operators are also under pressure.
Infosys' revenues from telecom and utilities sector fell from 26% in FY2010 to 24% in FY2012.
Tech Mahindra suffered a 2% drop in its revenues last quarter due to the shutdown of operations of its two Indian telecom clients Etisalat DB and STel, as their 2G licences were cancelled.
Tech Mahindra counts British Telecom, Motorola, Alcatel Lucent as clients, some of which have ramped down projects.
HCL Technologies has also seen a reduction in business from British Telecom in last 12 months, said IT industry analysts.
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