Business Transformation

Hey US! Here Comes Tech Mahindra

Many people know the name Tech Mahindra and mainly think of it as one of a handful of major IT and business processing outsourcing companies in India.

But it has always had a strong offering in the telecom sector, developing service provider IT systems and applications for fixed and mobile operators, and helping telcos to build and maintain their networks. So it really knows the ins and outs of networks and, perhaps even more importantly, the back-office systems (OSS and BSS) that are so often the pain points for telcos.

Much of its telecom industry work has been in India and Europe -- it has been a longstanding partner of BT Group plc (NYSE: BT; London: BTA), which used to own a stake in the vendor.

Now, though, Tech Mahindra Ltd. has decided to go global and, in particular, fancies its chances of playing a significant role in the development of North American networks. To achieve that goal, it is acquiring McLean, Virginia-based Lightbridge Communications Corp., at a cost of about US$240 million.

Lightbridge is a network engineering services specialist with more than 5,000 employees in more than 50 countries, annual revenues of more than $400 million and a track record of having helped to build 350 networks and design more than 350,000 cell sites for more than 400 customers worldwide.

Tech Mahindra sees this as a chance to break into a global networking services market that it believes is worth about $80 billion a year, and it sees this market as a significant "growth engine" for the company. It is looking to build a portfolio of managed services for the communications sector, as well as develop products and services for its customers.

Recent contract wins for Lightbridge have included the planning and development of in-building wireless networks and VoLTE readiness service verification services for a Tier 1 US carrier.

For more coverage of the strategic pressures and opportunities facing operators and vendors in the communications market, see our business transformation content channel here on Light Reading.

Even via an acquisition, breaking into North America can be tough for any company. Tech Mahindra, though, has a lot of smart people in its organization that understand telecom software, and as operators look to transform their back offices and introduce more IT-oriented systems and elements into their networks as SDN and NFV become a reality, it's a name that could become a lot more familiar beyond India.

— Ray Le Maistre, Circle me on Google+Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

COMMENTS Add Comment
Kruz 11/29/2014 | 9:22:27 AM
Re: Quality This is not the case everywhere as competition is tough and increasing cost has driven many IT companies to save on salaries this directly impacting the quality of deliverables.
mendyk 11/28/2014 | 9:42:43 AM
Re: Quality A bigger issue, at least one specific to telecom managed services, is that providers have had a very hard time making money. Lots of money coming in, but almost all of it went out just as fast. A handful have succeeded, but many more have simply given up.
SachinEE 11/28/2014 | 8:42:50 AM
Re: Quality @jabailo: But now things are better with IT services, and such standa-alone IT companies only hire the best engineers for better visibility in IT sector.
SachinEE 11/28/2014 | 7:32:27 AM
Re: Price check It has set its first nervous foot into the workings of western IT and telecom, and it is bound to make smaller but profitable in the long run leaps instead of aquiring a huge company.
jabailo 11/23/2014 | 10:55:07 AM
Quality For a while, when capital flowed like water, it seems as if everyone and his brother started an IT Services company or division.   Sadly, there was a lot of poor service, and tons of poorly written code distributed, creating a lot of damage in IT.   At what point is anyone held accountable for quality, delivery and so on, now that the music has stopped.

mendyk 11/21/2014 | 3:22:28 PM
Price check So Tech Mahindra is paying $240 million for a company that does $400 million a year in revenue? That's some deal.
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