| Tech Mahindra's move to strength continues |
| Tuesday, 28 July 2009 | |
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Beating stiff competition from IBM (NYSE: IBM) and Wipro Technologies (NYSE: WIT), Tech Mahindra managed to win a deal worth $500 million from Swan Telecom. Emirates Telecommunications (Etisalat) has 45% stake in Swan Telecom, and participated in finalization of the deal. The deal has followed the Etisalat strategy of bundling IT with network equipment contract in most of its greenfield projects. As per reports, the deal with Tech Mahindra spans over 10 years. Tech Mahindra is the fifth largest Indian software company. It was recently voted the country's top telecom software services provider, by Voice and Data, a trade magazine. The company captured nearly 18% of the Indian telecom software services market in 2008-09. This follows a trend in the Indian IT services industry where companies are including the Indian market as part of their long-term strategies, to diversify risks and keep revenues up even during recession. Tech Mahindra: Beyond Satyam Saga Tech Mahindra was established as Mahindra British Telecom, a joint venture between Mahindra & Mahindra Limited (M&M) and British Telecommunications Plc (BT), UK. The company now has presence in more than 10 countries across the globe. After the company's successful takeover of Satyam Technologies in 2009 and formation of the subsidiary Mahindra Satyam, the company is now looking at developing further on BPO skills. Going forward the two entities are likely to merge owing to the synergies. Mr Vineet Nayyar, Vice-Chairman of Tech Mahindra indicated the possibility of congruence and convergence in operations and a common board of governance. In an effort to build up on the BPO services, a 1000-seat facility was set up in Chandigarh in August 2009, in addition to its centers in four Indian and two overseas centers. In an interview, Atul Kanwar, president, European Union, Africa, Middle East, APAC and India markets for Mahindra Satyam said that investments in BPO services, especially in the reconciliation and settlement processes will increase further as these are directly related to the company's ERP and BI applications. Satyam's ERP capabilities will also be leveraged as part of this growth plan. The company has been aggressively trying to increase revenues from clients other than British Telecom as well as different streams. Telecom outsourcing: Lucrative Indian market The telecom sector is abuzz with news of some deals already done, and other potential deals.
According to a recent report released by Ernst & Young, the outsourcing revenues from the telecom sector in India are set to grow at a CAGR of 31% to nearly $2 billion in 2012. The number of new subscribers in the Indian telecom industry is growing by close to 10 million every month to reach 375 million in 2008-09. The telecom outsourcing segment registered about 122,500 employees in BPO firms in 2008. A number of international companies have also entered India to capitalize on this fast growing market. Accenture is in touch with the top telecom companies operating in India to offer then high value services such as consulting and strategic outsourcing. Accenture had earlier aided Virgin Mobile to establish its Indian Mobile Virtual Network Operator (MVNO) service with consultation on strategy. With telecom companies looking to outsource all non-core activities, the Indian market offers huge potential as has been established already. Global companies have found this market lucrative enough and are aiming at acquiring a stake in the billion dollar market. In the foreseeable future the telecom industry will continue to move ahead, which offers a lot of scope for all stake holders. ValueNotes Outsourcing Watch: Insights for Investors is a unique news and analysis service from the ValueNotes Outsourcing Practice, focused entirely on outsourcing; This publication analyses events in outsourcing, outsourcing companies, trends in the sector, impact of global competition from offshoring to established US companies, and emerging investment opportunities. No responsibility is accepted for errors of fact or opinion. Neither the analyst nor ValueNotes has a position in the stocks covered above, or has received any payment in any form for this report. ValueNotes does not own or trade in the stocks of companies under coverage. ValueNotes does not provide investment banking services or investor relations' services to preserve the independence of its research. Neither ValueNotes nor the analyst incurs any liability arising out of use of the above information/ report. Reproduction in whole or in part without written permission is prohibited. ValueNotes is an independent research firm based in India, and provides a range of custom research and business intelligence services, including India-based research outsourcing solutions. Through a constantly evolving range of products and services, the ValueNotes Outsourcing Practice (www.sourcingnotes.com) provides service buyers, vendors, consultants and others in the outsourcing industry with access to in-depth analysis backed by reliable primary intelligence. Both ValueNotes and Investrend Research are members of the First Research Consortium, and participate in the organization's standards development panel for independent research providers located at http://www.firstresearchconsortium.com . For up-to-the-minute news, features and links click on http://www.financialwire.net FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268 |
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