ETTelecom Interviews: TechM’s Manish Vyas on telecom growth, M&A and 6G focus – ET Telecom

Indian IT services firm Tech Mahindra said developing 5G use cases will be a long journey for Indian telcos. It will require a lot of experimentation and pilots for enterprises as the networks get deployed. In an interaction with ET’s Danish Khan, Manish Vyas, president, communications, media and entertainment business, and CEO of network services, talks about the company’s telecom vertical and focus on the 5G business. He also highlighted Tech Mahindra’s work in the 6G domain. Edited excerptsHow has the telecom business performed for Tech Mahindra?

It’s been a great year. We hit the billion-dollar run rate we had promised sometime in early March. It’s been a record-breaking year in that regard, as far as 5G is concerned.

We bought LCC, and I’ve always called it the most beautiful mistake we have made. Because we bought a company that didn’t do very well in the short term. But because we bought that company, we invested in the network business. The network services business is now 5G, and fibre and 4G, OSS automation, everything combined. That has also done close to a billion-dollar business this year. It has grown very well to almost 19 to 20% yearly. It bodes well for the future because these are great foundations for subsequent growth.

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What sort of growth is expected this year for Tech Mahindra?

Our telecom business has grown by almost 13.5% over the last 12 months.

As far as that growth rate going forward, we’ll have to see how the macro-level situation emerges with all the headwinds in the industry, economically speaking. But the good news is that our engagements in the telecom industry remain as best as they have ever been. They are very positive and robust. There is enough in that funnel to believe that we will continue to grow steadily in the long run.

We have had 12 consecutive quarter-on-quarter growth quarters in telecom. One quarter never defines a business that is almost three decades old. But over the long run, I believe this will remain very growth-oriented.

Which is going to be the growth drivers this year for the company for your 5G business?

We’ve been clear about three things we will do in 5G and telecom in general. First is a simplification of the operation. That’s a growth area for us. A lot of AI is going to be infused into AI automation. The second one is modernising the 5G network using 5G and cloud technologies, digital and analytics. The third piece is working with enterprises on monetising 5G. Sometimes, one train runs faster than the other train, but all three trains will run towards growth. So all three continue to remain growth-oriented for us.

How do you now see the Indian market with the 5G rollout by Jio and Airtel as they look to monetise their investments?

The opportunities are already there and will be next year and years to come. We are already engaged with the telcos. It will take a couple of years for a lot of experimentation and pilots for enterprises to come to play with the technology in India as the networks get deployed. Still, case studies worldwide started emerging and becoming more mainstream as India’s industrialisation happens. As India’s industrialisation continues to pick up even at more incredible speed, there is no reason why this will not grow as well.

Airtel’s CEO recently said that 5G is a supercomputer without apps. Your views?

The fact that we call them use cases and not products means they need to be applied to a specific need. The use cases that work internationally, conceptually, indeed will work for India… many of them, but not all. Yet, there will be a lot of specifications that we will need to do when we apply these use cases to India. We are just at the first station of this journey. It’s a long positive journey.

What kind of work is Tech Mahindra doing in the 6G space?

I created my Task Force on 6G about 14 months ago. It’s a group of engineers and analysts working with different bodies worldwide, from Nordics in Europe, the US, and India. Most of the work that we are doing is strictly confidential and private. But we believe connectivity is at the heart of every transformation you see in enterprise and consumer segments. Hence, I think a constant evolution of generational technology, as far as telecom is concerned, is the only way to go.

Are you actively participating in the standardisation process of 6G?

Yes, we are actively contributing.

Are you open to M&A to fill gaps within your portfolio for the telecom business?

We last made acquisitions in the telco space almost three years ago. From a capability standpoint, I’m not saying we are all-encompassing, but I think we are pretty comprehensive in our capabilities.

But yes, I mean, if there is something that we suddenly find a gap and we find something attractive, we may be opportunistic and look at it. But that is not part of the strategy to actively hunt for any acquisition.

We are focused on building relationships and investing in our tech beds.

Is the opportunity in the private 5G segment premature?

Private 5G is immature in India, even globally. There is more work that has happened in 2022 than in 2021. I also believe there will be more work in 2023. So year on year, there is growth, but remember, when the base is zero, it will take some time… the hockey stick growth will happen only much later. So it’s still early.

Could you share India’s contribution towards overall telecom revenues?

In terms of revenues, more than 50% comes from America, about 30% from Europe and less than 20% from Asia, which includes India.

How is your work in OpenRAN processing?

We are partners with both open-network technologies and traditional vendors. Our job is a system integrator job. We are probably one of the only companies engaged globally with all three significant greenfield 5G launches.

Do you have any last comments?

One key area we continue to invest and spend much time on is customer experience. What we have done over the years is the relationship between a telecom service provider and their customers, be they enterprises or consumers, in terms of that engagement, will continue to evolve and improve and become better. And there’s a significant role that technology can play there.

From design to process, technology to productization to the back office, that’s been a big theme for us regarding discussion and growth. We call it the human-centred experience.