Tech Mahindra is going big on 5G solutions — its next growth charter. The IT services major’s revenue from 5G solutions grew from $125 million in FY21 to over $600 million in FY22, a jump of nearly five times. It has invested more than $300 million in developing its 5G capabilities over the last two years.
The company closed two major deals in the 5G space last year. Tech Mahindra’s offerings in this sector caters to the telecom and enterprise segments, but most of its business comes from its 5G for Enterprise suite of solutions.
Speaking to BusinessLine, Manish Vyas, President, Communications, Media and Entertainment Business, and CEO, Network Services, Tech Mahindra, said: “5G for us is not a one-trick pony. It’s three things. Telcos where we integrate network, platforms and systems and manage the 5G infrastructure as well. Second, for the ecosystem, hundreds of companies are innovating right now, some are making devices, some are working on 5G orchestration software. We do a lot for development, engineering and integration for them.”
He added: “Third is 5G for enterprise. It is the next growth charter for us. The world has still not seen enough growth of 5G for enterprise — that will start changing soon. We are already doing multiple pilots on it across the world. From a revenue standpoint, that will be the next big thing, but that revenue might not be from 5G for telecom, instead it will be for 5G from enterprise.”
So far, the demand has been led by the US and Europe markets, along with parts of Asia-Pacific. This year, as the company evolves, 5G will become a secular theme across the world for Tech Mahindra.
Tech Mahindra has also been investing in setting up R&D centres and making acquisitions to boost capabilities in the 5G space. So far, it has set up more than 11 R&D centres for 5G globally, and plans to add several more this year.
“A lot of innovations need to happen every day and we are working with our customers. We have already put up 11 labs globally. Over the last two years, our investments in 5G- and 5G-related, including acquisitions, our total investment would be in excess of $300 million. I think now the model we are in is we’ll continue to invest, but our previous investments will start paying from this year onwards,” said Vyas.
Vyas noted several use cases the company has developed or is currently working on. 5G technology being used in the manufacturing, health tech, and oil and gas sectors, to name a few.
“We are currently working across multiple industry verticals. There are use cases in manufacturing in terms of smart factories, managing equipment on the shop floor, managing post sales services for the same companies. In health tech, we are talking to some very remarkable medical electronics and tech companies, in creating and embedding our IG solutions inside in creating next generation of diagnostic solutions. And also very basic use cases around telemedicine, remote healthcare. In the oil and gas sector, we are talking about asset management, repair work, trouble-to-repair processes that we are solving for like oil rigs etc. Inventory management,” he said.
“Overall, we have had the best ever business for CME vertical over the last 12 months. In terms of growth rate, we have grown 17.2 per cent. Volumes-wise we have grown the fastest. We are the fastest-growing company in the telecom sector across our domestic and international peers,” he added separately.