Mahindra War Room 2019 Tech Mahindra Caselet

“DISRUPTING IT WITH 5G”

LIVE CHALLENGE FROM TECH MAHINDRA BUSINESS

“Digital is the main reason why over half the companies

in the Fortune 500 list have disappeared since 2000.”

Chapter 1: Empathize

The study of human evolution shows how economic prosperity has been closely
linked with technological advances. Just as the invention of fire hastened human
progress, every new technology opens new possibilities of growth and
development. The wave of industrialization that started in the 19th century
enabled the western world to leap forward in prosperity compared to the
traditional economic bastions of the East such as India and China. The wave of
Information Technology which swept the world in the decades starting 1950s
profoundly transformed the way the world lived, played and worked, paving the
way for the Internet wave that started in the 1990s and the Digital wave since the
late 2000s. It is but natural for companies to pursue economic growth by
predicting how the next will pan out, as well as gearing up for the disruptions that
it will bring to their business.

Chapter 2: Design & Ideate

As new cellular technologies started to emerge in the 1970s, Post and Telegraph
organizations around the world felt the need to transform themselves to meet the
disruption ahead. British Telecom was thus born in the early 1980s, as a
transformation of the historic post and telegraph services of England. As the
British Government opened the telecom market to competition, BT felt the need
to partner to provide superior support to their customers, as well as telecom
software. They trusted Mahindra to form Mahindra British Telecom (MBT) in
1986, offering captive telecom technology outsourcing solutions called
Operations Support Systems (OSS) and Business Support Systems (BSS). OSS
referred to services such as Network Inventory, Service Provisioning, Network
Configuration and Fault Management, while BSS referred to services of product,
order, revenue and customer management. While these activities were manual

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before the 1980s, the advent of Unix and C computer languages enabled
software to support these services significantly.

Chapter 3: Prototype & Test

Using the by then established on-shore and offshore models, MBT provided
these services to BT’s primarily United Kingdom based clients. Over time, MBT
developed a reputation for being a very strong telecom software player, with
limited presence in other verticals. In the 1990s, MBT started to take conscious
steps to build a portfolio of verticals beyond telecom. Around the same time,
another company called called Bristlecone was founded in the silicon valley in
1996, to help businesses maximize strategic value of their supply chains using
SAP enterprise software. Over the next decade, Bristlecone expanded its
solution footprint from SAP to other major enterprise solutions such as Oracle,
Kinaxis, Ariba etc, working closely with large enterprises in strategy, business
process consulting, systems implementation, integration and management
services. Who would have realized that Bristlecone’s path would cross
Mahindra’s a decade later?

Chapter 4: Scale Profitably

In 2001, MBT expanded into Germany. In 2004 Mahindra acquired Bristlecone

and further integrated 5 other subsidiaries which were in existence then into it.
Mahindra Consulting Ltd, Mahindra Consulting Singapore, Mahindra Consulting
Germany, Mahindra Consulting USA and Mahindra Intertrade UK amalgamated
to form one unified international entity called Bristlecone Ltd. The deal was
sensible then, as Mahindra’s presence then was mainly in Europe and Asia
Pacific, while Bristlecone had a strong presence in the US too. Also, the deal
allowed Mahindra to expand into Apparel, Footwear, Semiconductors, Consumer
Goods and Oil & Gas Sectors. In 2005, Mahindra acquired Axes Technologies - a
Texas based telecom solutions provider, in an all cash, USD. 54 million deal. The
Axes acquisition helped MBT to grow inorganically into key US markets, acquire
marquee customers such as Alcatel, Motorola & Paradigm, and prepared the
company for listing. In 2006, the company renamed itself “Tech Mahindra”, after
buying out British Telecom’s stake.

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A defining moment in the history of Tech Mahindra came with the Satyam crisis in
early 2009. On a dramatic January morning, the founder of this successful Top 5
IT Services company wrote to Security Exchange Board of India, confessing that
he had been cooking the books of the company for years, overstating revenues
and diverting funds. He admitted to creating over 10,000 fictitious bank accounts
of employees, whose salaries were diverted into his personal account in collusion
with some bank personnel. Satyam expectedly started imploding instantaneously,
and there was widespread concern over the thousands of families that were
rendered jobless, and the collective economic impact of this corporate fraud on
the economy. While many companies could have, they did not choose to step in
and acquire Satyam, mainly owing to fear of the unknown. TechMahindra went in
boldly, treading where none went before, in a deal fraught with uncertainty and
acquired controlling stake in Satyam through a formal public auction organized
by the Government of India, taking over the operations of the company. Around
the same time, Airtel renamed Bharti Telesoft - a company it founded in 1999 to
offer mobile value added services - to ‘Comviva’ and acquired a string of smaller
companies in that space. In 2012, Mahindra Group acquired controlling stake of
Comviva, and partnered with Bharti Airtel to deploy its enterprise communications
platform across 16 countries in Africa. Comviva has significant operations in
Nigeria, with its office based in Lagos. Comviva’s hyperlocal Zerch App, the
mobile recharging Zoto app and mobile payments Terrapay app have found wide
popularity in African countries. In 2013, after years of cultural, strategic and
systemic integration, Tech Mahindra and Satyam merged to form one Tech
Mahindra. The turnaround is considered one of the most dramatic turnaround
stories in Corporate India, propelling Tech Mahindra into the IT Industry, making
up for time lost in the 1980s while it was relegated to a niche player.

Tech Mahindra today clocks over USD. 4.9 billion in revenues, across 90
countries with over 926 customers and over 113,550+ associates. Mahindra
Group’s IT play ranges from OSS, BSS, Network Design & Engineering, Next
Generation Networking, Mobile, Security Consulting, Testing, Application
Development & Management, Product Engineering, Remote Infrastructure
Management, BPO Services, Consulting, Social and Big Data Analytics across
50 countries world-wide, with a rich Fortune 500 clientele. Active forays are also
being assessed in areas such as Internet of Things, Artificial Intelligence, Cloud
and Blockchain based technologies. Tech Mahindra also recently announced

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venture capital investments in promising tech areas, committing upto USD. 1

Billion in 10 startups of 100 million each.

Chapter 5: Design to Disrupt

What is unique about the Internet revolution is the sheer pace of it. Compared to
Radio and Television, Internet has reached several milestones at a significantly
faster rate, enabled by the leap of telecom technology and the smartphone
revolution.

The G in 2G, 3G, 4G and 5G stands for Generation, referring to the consequent
generations of wireless technology. 1G referred to the simple telephony service
offered without data, using Analog Technology (AMPS). 2G was a new paradigm,
transmitting signals in the digital format using GSM and CDMA technologies.
Offering digital signals up to 250kbps speed, 2G supported voice, text and data
services. 3G saw dramatic improvements in the speed of 2G signals, offering up
to 3Mbps speed, while 4G delivers up to 100Mbps for mobile access and 1GBPs
for wireless access. 4G LTE is one of the two standards within 4G, with WiMax
being the other. Each newer generation is faster, more secure and reliable
compared to the previous generation. India partially benefited by being a late
entrant in telecom, by leapfrogging 2G into 3G services to an extent. There are at
least 80 countries around the world which have over 60% penetration with 4G
LTE, with many accounting for over 90% coverage. With over a decade in the
making, 5G technology is now eagerly awaited for its dramatic improvements,
though with some concerns about its impact on the environment. 5G will see
dramatically faster upload and download speeds, supporting 10 times more
devices per square kilometer compared to 4G.

Highly-anticipated major 5G networks are expected to be deployed by 2020, and

will transform a number of industries due to the technology's ability to provide
wider network coverage, more stable internet connections, and faster data
transfer speeds. 5G will also enable the rise in the number of Internet of Things
(IoT) devices, along with the amount of data they generate. While 5G sets the
stage for new opportunities across many fields, it also will bring disruption to
those industries. Thus, the implementation of 5G goes beyond building systems
and networks, into creating robust regulatory framework and policies, trusted

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systems, talent development and innovative use cases. In preparation of this

future, Tech Mahindra has been collaborating with partners around the world, on
a range of 5G related ventures, making significant investments.

In collaboration with Orbic, Tech Mahindra is developing a series of 5G devices

for the global market, including Smartphones, Tablets, Hotspots and Home
routers, set to be launched in the United States and other global markets in 2020.
In collaboration with Rakuten Mobile Network Inc, Tech Mahindra has opened the
Rakuten Cloud Innovation Laboratory, world-class 5G Lab in Tokyo, accelerating
innovation by implementing the world’s first cloud-native fully virtualized software
defined network architecture operations on DevOps principles. Tech Mahindra
has also launched “netOps.ai” - a network automation and managed services
framework based on the continuous integration and continuous deployment
principles. TechMahindra has also invested in Altiostar, a fast-growing player in
the virtualized radio access networks space. 5G use cases for specific industry
verticals are being developed in Bangalore, in a joint lab with Intel.
 
The anticipated 5G revolution is a unique opportunity for TechMahindra, as it is a
telecom technology advancement that is expected to bring widespread disruption
to all other industries. Given its origins from the Telecom business, and its
widespread client base across verticals, the 5G revolution can be a unique
vehicle for TechMahindra to create a disruptive impact across multiple industries.

Given this background, evolve a strategy for Tech Mahindra to be, as well
as position itself as, a global leader in 5G. Leveraging its past core telecom
strengths, which non-telecom sectors (Banking, Finance, Healthcare,
Retail, Manufacturing, Utilities, Mining etc.) should TechMahindra initially
focus on? Where does the biggest market potential for TechMahindra lie,
and why? And how can it harness it, to be a global leader? Which markets
to focus on? What initiatives can TechMahindra take to create the biggest
impact?

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