Mumbai: India's No.3 software services exporter, Wipo Ltd, is planning alliances with Japanese firms in its bid to expand its share in the market there. Wipro said it is weighing plans to tie up with Japanese firms and may also consider acquisitions in that country.

Wipro said it will announce an alliance in Japan next month but declined to give further details.

The software service industry in Japan is dominated by firms such as NTT Data Corp and NEC Corp, which have strong ties with the manufacturing and service sectors in Japan, including banks and the postal system.

The Japanese competitors themselves - NEC, NTT Data -usually join forces to pull together to complete a project.

This leaves little leeway for foreign firms to win any major orders in Japan.

"We have been very successful at acquisitions in the last two years. So we are still open to a similar one in Japan, provided that it will fit our strategic interests," Wipro's chief operating officer AL Rao said.

Wipro, which has been operating in Japan since 1998, bought a wireless design unit of Oki Electric Industry Co Ltd in November last year.

Its expects revenue from Japan to be around 10 billion yen ($92.6 million) in the year ending March, accounting for about 3.5 per cent of its total annual revenue.

Wipro is diversifying the geographic mix of its business in response to the impact of economic problems in the US market, said Hiroshi Alley, head of Wipro's Japan and China operations.

He said Wipro also planned to form alliances with Japanese firms for government projects. 

Last week, Infosys Technologies Ltd, India's second largest IT services company, formed a strategic alliance with Japan's Nihon Unisys Ltd to jointly develop and market new products.

Wipro is also planning big expansion in China in the next two years. The company has about 200 staff working in China and a further 200 working in India supporting its China-based operations, but expects this to rise to 2,000 staff in the next two years, Rao said.

"Our growth strategy in China is to address the requirements of our global clients in the first phase," he said, adding, most of the company's current business in China is done with such companies, helping their local operations rather than dealing with Chinese companies.

"Down the line we would like to see China as another resource for talent and to set up development centers there and maybe go after Chinese clients," he said.

The company is currently pushing expansion in markets outside the US in response to the impact of the subprime mortgage problems in that market.

"Wipro's exposure to the US market is 58 or 59 per cent and we are expanding considerably in other geographies including Europe and Japan. We have been very strong in India, Asia Pacific, and the Middle East and they are growing significantly. We are now diversifying the geographic mix in our business," said Rao.