How AP is re-writing the IT script
The IT industry, which once used to be the poster boy of the combined Andhra Pradesh, took a beating post bifurcation. Consider this: When AP was bifurcated, IT-related exports from the new Andhra Pradesh was Rs 1,500 crore, while that of Telangana was Rs 60,000 crore. Three years later, the IT exports from Telangana had moved up to Rs one lakh crore while for the sun rise state of Andhra Pradesh it nudged up to about Rs 2,000 crore.
Of this Rs 2,000 crore, a major slice of about 80 per cent comes from Visakhapatnam, considered the IT hub of the State, with the remaining from Kakinada and Tirupathi. No major players had entered the State, with only some 10 to 15 small units coming up in the last three years.
The cardinal reason cited for the stagnation in IT sector has been the failure of the State Government to transfer its IT policy from paper to the ground and lack of proper infrastructure and eco-system.
Having said that there has been a substantial change in the implementation of the IT policies in the past one year and things are looking up.
Big change coming
Big names in the global IT sector are queuing up to sign MoUs with the State Government and office spaces available are fast filling up.
Buoyed by the surge in IT firms looking to open their units in Visakhapatnam, the Andhra Pradesh Electronics and Information Technology (APEITA) has zeroed in on new office spaces to accommodate the new units.
APEITA was established as an Empowered Mission for Electronics & IT Promotion to give fillip to the development of the sector and take faster and agile decisions.
DTP creating World class office spaces
One of the main objectives of the DTP is to create world class office spaces for IT/ITES companies while also expedite their approval process.
On January 18, the agency concluded a MoU with UK-based Black Cactus, a Blockchain firm, which is looking for 56,000 sft with initially 170 employees and later 1000 people. It will be giving the letter of allotment to the company by beginning of February.
Blockchain firms are at present ahead in the race for acquiring office space in the city. These firms essentially provide a digital ledger in which transactions made in bitcoin or another crpto-currency are recorded chronologically and publicly.
Another Bengaluru-based blockchain company One Mini-Tech, which owns the Kissht brand, is also looking for 8,200 sft. “We expect to sign an MoU with this firm very soon,” a senior APEITA official told VIS.
In the next few months, the agency hopes to conclude MoUs with a string of companies, including CES Ltd and IBM, who are looking for 16,000 sft and 38,000 sft respectively.
The agency expects to open up a huge chunk of office space after the Millenium Tower comes up by March end. “The building is ready and we are confident of throwing open the tower for IT firms by March,” the official said.
It has facilitated IT companies to acquire office spaces at various places in the city, including in the VUDA building, atop Pantaloon stores, Quantum House, opposite HSBC and in the Satyam building.
Incubation centres and start-ups are also showing interest to set up units here, with the agency allotting the Rushi Konda Hill No 3 for these firms.
Undersea Cable for Vizag
Encouraged by the response from the IT sector, the State Government is now planning to have its own undersea Internet cables in Visakhapatnam to reduce dependence on the link in Chennai. The Chennai undersea Internet link is becoming increasingly cluttered, affecting the quality at the end point.
At present, there are only three undersea cables in India—Chennai, Mumbai and Kochi. Clearly, it does not make economic sense to access them from Andhra Pradesh. “We have sent a proposal to the Centre and are hopeful of getting its nod,” an official said.
Similarly, to further sharpen focus on this sector, the State Government is planning to have Cloud Economic Zones (CEZs) on the lines of Special Economic Zones. “CEZs can help bring down bandwidth costs, which are high at present, almost eight times higher than in California or Los Angeles,” he pointed out.
Ultimately, the IT sector in the State is slated to employ over one lakh people when the new units start operations.