“If you look at communications [vertical] clearly we have a full service offering today. So, there are no obvious gaps to be plugged, but if I look at areas like media and entertainment, we would be looking at augmenting capabilities through potential M&As as in when they come along,” Manoj Bhat<\/a>, chief financial officer, told ET in an interaction.
On telecom sector, Bhat said that the company’s M&A<\/a> strategy is not going to be large scale, rather it will be focused on augmenting capabilities and create opportunities.
Tech Mahindra had last year bought 17.5% stake in US-headquartered telecom software development firm Altiostar Networks Inc. for $15 million (nearly Rs 95 crore). In March this year, it said that it will acquire Japan-based mobile network solution firm K-Vision for USD 1.5 million in an all-cash deal to support 4G and 5G telecom network rollout in Japan.
On the 5G side, Bhat said that the company has already done a significant amount of organic investments. “We have our own framework, it is called VNF…we have our own partners…we have a part stake small stake in Altiostar which is one of the emerging alternate network vendors. So, we have done a lot of investments,” he added.
The company’s communications vertical grew 10 percent in April-June quarter on a yearly basis in constant currency terms. The executive said that companies are spending on the modernization of technology and the move towards digital is one key factor for Tech Mahindra.
In India, Bhat said that the 5G technology will open new areas of opportunities. “It is not just about communication business, it is about enterprise solutions that 5G has radically changed some of the ways services are delivered.”
He, however, added that there is extreme pressure on pricing in India’s telecom sector. “They [telcos] will obviously have to take a call on the when is the right time to do that [5G] investment.”
“To me even if the 5G auction happens there is going to be a set period of time where they [telcos] will look to roll out, that will create a lot of spends, which we would be hoping to address in some form or fashion,” Bhat added.
Tech Mahindra is currently working at a larger scale with Japan-based Rakuten Mobile Network to build a greenfield network similar to what Reliance Jio did in India. Both company recently set up a testing facility for the software-defined network in Tokyo.
The company is also investing in the field of emerging technologies like blockchain. The executive said that under the TechM next strategy, the company is putting together solutions through its start-up ecosystem partners.
ET previously reported that Tech Mahindra deployed its blockchain solution for Reliance Jio in the country to protect mobile phone subscribers from unsolicited Commercial Communication (UCC) or spam call.
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