Tech Mahindra Ltd (TML), the IT solutions provider, is looking to diversify its business and cater to the network and value-added services (VAS) needs of non-telecom companies through some of its recent partnerships and acquisitions.
Currently, UK-based giant British Telecom (BT) is the company’s largest client, contributing 60% (or Rs 2,600 crore in FY08) to its revenues. US telecom major AT&T is Tech Mahindra’s second largest client, with Motorola and Alcatel-Lucent being others in its top five clients’ list.
Sanjay Kalra, president (strategic initiatives), Tech Mahindra, said that the company has gained expertise through its long association with BT. “Besides, some of the partnerships that we entered into give us scope to look not just at telecom but other sectors too,” he said.
In August, Tech Mahindra partnered with UK-based IT systems integrator Servista, which provides customer care, billing, operational workflow and testing systems to telecom and utility companies. For a share in the emerging VAS market, the company joined hands with FRiENDi, a mobile virtual network operator in the Middle East and will offer the latter’s mobile ERP, business process automation, reporting and web selfcare systems, as well as VAS.
Tech Mahindra is now scouting for more acquisitions in the US and UK to beef up its capabilities in operational and business support systems and business process outsourcing (BPO). “We are evaluating 3-4 firms every week for acquisitions to gain new capabilities, including global delivery capability, and to get access to the target firm’s clients,” said Kalra.
The acquisitions and the non-telecom focus are expected to increase the revenue share of the company’s telecom equipment makers (TEM) segment. Kalra did not provide growth figures for the segment due to regulatory reasons. Asked about the amount the company is looking at spending on the acquisition, he said, “We are looking for the right fit given the economic scenario.”
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