Tech Mahindra, the 5th largest Information Technology in India, is looking for aggressive expansion in the telecom infrastructure equipment manufacturing sector as the government has put severe restriction on Chinese majors- Huawei and ZTE.
Last week, BSNL cancelled the tender to upgrade its 4G network across 47,000 sites and built new capacity in Delhi and Mumbai for Mahanagar Telephone Nigam Limited (MTNL). As the government has a banned the state run companies from sourcing telecom infrastructure equipment from Chinese players, BSNL will release a revised tender for the 9,000 crore rupees project and Tech Mahindra has decided to bid for it.
“We’re ready to build the digital highway for 4G or 5G. I believe that the technology is mature and we can do the transition in the network and create enough bandwidth,” said Tech M CEO C P Gurnani.
Last month, the company signed a deal with government owned Indian Telephone Industries (ITI) Limited in order to jointly manufacture 4G equipment and to build capabilities for India’s 5G infrastructure project.
Tech Mahindra is among the most respected companies of the world with total annual revenue above 5.2 billion dollars, half of which comes from servicing telecom companies like AT&T and BT Plc, largest telecom companies in the United States and the United Kingdom respectively. The company would offer virtualized network, a field it specializes, to companies in India.
“India has its capabilities but we haven’t used it in a big format. I hope with this new focus, some of the Indian companies will get a chance to show their prowess,” said Gurnani on the government’s move to encourage domestic industrialists to participate in tender.
So far, Indian companies lag behind in use of virtualized network, while the telecom majors in western countries have already started adopting the advanced system. “Both core network and radio network could be virtualized,” said Gurnani. “While 70% of the component could be virtualized; 30% will still remain in the hardware (to be manufactured by ITI).”
If the plan with BSNL succeeds, the company would expand to international market and provide virtualized network in countries around the world. “We’re waiting for the new tender and this partnership is for the domestic market. We will also try to globalise the solution for the international markets,” said Gurnani.
As of now, among the 9 major 5G radio hardware and 5G systems for carriers- Altiostar, Cisco Systems, Datang Telecom/Fiberhome, Ericsson, Huawei, Nokia, Qualcomm, Samsung, and ZTE– three are Chinese, three are American, two European and one South Korean. No Indian company provides equipment for 4G/5G infrastructure, and therefore, all the telecom majors are forced to import telecom infrastructure equipment.
Vodafone and Airtel use telecom infrastructure equipment of Chinese (Huawei and ZTE) and European (Nokia and Ericsson) companies, while Jio allied with South Korean major Samsung for its 4G infrastructure. Lack of a homegrown telecom infrastructure major means India gives business worth billions of dollars and thousands of jobs to foreign companies.
With the renewed call for “Make in India” through Atmanirbhar Bharat, the government is encouraging the domestic players to move in these industries. In 2018, Tech Mahindra invested in Altiostar, the American major which develops software for virtualization of 4G/5G infrastructure through end-to-end web-scale cloud native networks. Bharti Airtel has already deployed Altiostar’s solution in India.
Tech Mahindra, in collaboration with Indian Telephone Industries Limited- which will manufacture 30 percent necessary hardware equipment- could become for major Indian player in 4G/5G infrastructure market.