IT firms hike billing rates

<div class="section1"><div class="Normal">BANGALORE: The buoyant Indian tech sector riding high on the volume growth is now raising its billing rates for both offshore and onsite software project work. There are instances of some companies hiking their billing rates for new offshore projects by about 15 to 20 per cent.<br /><br />A mid-sized Bangalore-based company specialising in telecommunications is learnt to have raised its per hour billing rates for lead engineer to over $30 from the earlier $26, while per hour rates for senior engineer has been increased from $24 to $26.Interestingly, it is almost comparable to the current bill rates quoted by US-based third party providers for similar work.<br /><br />Comments Ganesh Duvvuri, an analyst with Motilal Oswal Securities, an equity research company, "There is a definite case for rate hikes for the Indian tech companies. As volume growth continues, companies will try to pass on the cost pressures in terms of increased compensation for the senior engineers with 5-plus years of experience to the clients."<br /><br />He said there might be cases of rate hikes in special skills area like telecom now, but a secular uptake would happen two quarters down the line after the US elections get over.<br /><br />While top companies like Infosys, Wipro and MphasiS don''t divulge their proposed billing rates for upcoming projects, they, however, saw marginal increase in billing rates over the last six months. "Billing rates have stabilised and we expect these rates to move in a narrow range and would be linked to productivity benefits to the customers," says Anjan Sur of the investor relations team at Wipro. <br /><br />Ravi Ramu, CFO of MphasiS, said there has been a marginal increase in both offshore and onsite software billing rates over the last few quarters.<br /><br />On a year-on-year basis, offshore billing rates of Wipro grew by 4 per cent, while onsite rates increased by around 2 per cent.<br /><br />In the case of Wipro, its average onsite per person month billing rates for the fourth quarter stood at $10,428 as opposed to $10,301 six months back, while its average offshore per person month rate was $4,113 for the last quarter compared to $3,902 six months ago.<br /><br />Says Milind Gandhe, general manager (strategic planning) at Sasken, a growing telecom solutions firm, "Typically, in cases where skills are in short supply, companies can negotiate for better billing rates." He said the high value projects are the ones that involve technical architects who can deliver ready-to-go IPs. <br /><br /><formid=367815></formid=367815></div> </div>