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On 25 January 2001, Wipro's first European development center opened in Reading, England. The center will start with about 50 employees and will hire locally as demand increases. It will initially provide support to Wipro's major customers in the United Kingdom, such as Thames Water and NTL. Wipro also announced the opening of a new office in Paris.
Wipro has established itself as a leading provider of offshore application design and support services, particularly in North America. It has operated in Europe since 1995 and has a large customer base in the United Kingdom and Scandinavia. Europe contributed 28 percent of Wipro's total IT service revenue of 12.5 billion rupees ($270 million) for the three quarters ended 31 December 2000, and the United Kingdom represents around 50 percent of its European revenue.
Wipro plans to increase its presence in Europe and establish itself as a long-term global player. As the U.S. economy slows, offshore developers will logically target Europe. Opening local offices should help it take advantage of the European market for application outsourcing, which is growing at a compound annual rate of 23 percent. The relaxation of some U.K. immigration restrictions has facilitated Wipro's move. Similar relaxations have occurred in the United States and are proposed in Germany. Other countries will likely take similar action, thereby increasing global competition for mobile IT skills.
The Reading center will provide local consulting and implementation services and undertake complete ownership of specific IT service applications, supported through Wipro's other development centers in India and the United States. This local presence will reduce objections to offshore developments and provide operating advantages in areas such as travel and communications.
Analytical Source: Ian Marriott, External Services Providers Europe
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