Tech Mahindra rejigs telecom strategy

By Shivani Shinde Nadhe , Business Standard, Pune | In Digital | September 29, 2016
In its Comms 3.0 plan, company has created a three-pronged strategy--Run better, Change faster and Grow greater.

Tech Mahindra, the fifth largest IT services provider, unveiled a new strategy for its network services business, this not only reiterated the firms bet on the telecom vertical but also hints towards growth getting back into the telecom sector. For Tech Mahindra, telecom contributes 49 per cent of its revenue.

Manish Vyas, CEO-Network Services and president communication business, Tech Mahindra said that the company has created a three-pronged strategy--Run better, Change faster and Grow greater-which also forms its Comms 3.0 plan.

"Since 2004-05 we have been stating that telecom will be our focus area, but we also said that we will diversify within this and not just relegate ourselves to IT services work. This strategy reiterates that focus and will allow our clients to run their operation better, help them transform their technology adoption and grow better," he added.

The new strategy also kicks in at a time when the integration of LCC, a US-based network services provider acquired for $240 million, gets completed. "With LCC integration completed this strategy is akin to a product launch. This is the launch of our restructure portfolio of services. We have taken our bets. We are saying that we have three pronged strategies-run, change and grow. Within that four in Run, seven in Change and one in Grow. Each of these will be clearly built around product excellence and CoE," said he.

Vyas added that to be able to come with this the company has also trained hundreds and thousands of its employee to think different, work on new technology and disrupt. "Other than this we have also set up innovation centres across geographies where Tech Mahindra has a critical mass. From a customer standpoint we are asking ourselves what we disrupt first and offer them," he said.

For Tech Mahindra the new strategy will also see the amalgamation of all the major acquisitions that it has done in the telecom space. This includes Comviva, that gave the company presence and platform in the value added services space, the BPO business of Hutchison and finally LCC, which gave the company presence in 60 countries with feet-on-street capability.

"All these acquisitions have been phenomenal for us in terms of the direction we want to go. We will continue to look at acquisitions too. We will look for acquisition in areas cloud, IoT, network, and Open source," said Vyas.

He also said that one important focus of this new strategy will be to create eco-system of partners, especially working with disruptors. Vyas said that this eco-system creation could be either through a joint venture, acquisition or even co-investing with other partners.

From a revenue growth aspect Vyas is confident that telecom business will grow and will keep pace with industry growth rates. "Today we work with almost all the players in the telecom space. In North America I would not have been able to say this two years back, but today we work with all the telecom services players there, same for Europe. Now with this strategy we want to go deeper into client accounts," added Vyas.

While Vyas did not divulge what will be the growth rate for the telecom business he said that network services by 2020 should be 30-35 per cent of their communications, and media portfolio from the present 20 per cent. Similarly, digital will be 30-35 per cent from the current 22 per cent.