Published & Updated as on - 2010-03-12

Blame it on the regional unrest in Andhra Pradesh or the ambition of the companies to grow beyond Hyderabad, it's now Hyderabad versus Vizag in developing IT and ITeS clusters.

According to sources, more than half-a-dozen IT majors have already started evaluating Vizag as their next destination.

Though the companies were worried about the growing regional unrest and frequent interruptions in operations due to the Telangana agitation, the IT honchos argue that the move towards Vizag is only to tap the potential in tier-II cities and has nothing to do with stir.

“IT industry is being promoted in tier-II cities including Vizag for the last five years, and it’s been growing slowly,” M Narsimha Rao, president, IT and ITeS Industry Association of AP, said.

However, industry sources said that the companies were indeed worried about the future and security of their assets in case the Telangana agitation intensifies and Hyderabad too becomes a bone of contention in the statehood issue.

Andhra Pradesh currently has about 1,300 big, medium and small IT and ITeS companies.

About 2.5 lakh professionals are employed in these companies with an estimated 10 lakh employed indirectly.

Interestingly, the firms that are reportedly planning to shift their base to Vizag are not willing to confirm their move at this point.

“None of us came to Hyderabad because it is united Andhra or Hyderabad being in Telangana. We had our own reasons including it being centrally located in the country.

Any destinationin India is about less than two hours away from Hyderabad. But Vizag plans by many companies are as part of preparation to face any situation including carving out of the Telangana state,” a veteran in the state’s IT sector said without willing to be quoted.

For now, not many companies are planning to shift out of Hyderabad.

They are planning to develop their development centres as part of the expansion schemes.

“If something happens contrary to the interests of the IT sector, Vizag would be ready for us to maintain continuity of service by then. If nothing happens, we will still have an additional facility to expand our operations in a new city. This might work as a de-risking strategy,” a CEO of a mid-sized IT company said.

Meanwhile, the state government is finalising the IT policy of the state.

According to IT minister K Venkat Reddy, AP would be one of those few states to include IT and ITeS under Essential Services and Maintenance Act to insulate the sector from protests.

The new policy, according to Reddy, is at a draft stage and would be finalised in about three months.

Source: DNA 13/3/10