Tech Mahindra beefs up 5G play with strategic stake in US startup

Tech Mahindra, an Indian IT and outsourcing player with a special focus on telecom and media, said it will invest up to $1.25 mln (Rs 8.8 cr) to secure a 13.8% stake in a US startup specializing in 5G and related technologies.

“The investment will help Tech Mahindra develop new offerings in its loT/SG capabilities by opening up a strong ecosystem of partners with specialization in SG/loT technology,” the company siad, referring to internet of things or machine-to-machine interactions and communications.

Incorporated in 2021, AustinGiS is a IoT/5G services provider that specializes in providing a “wholistic IaaS solution offering”, said the Indian company.

The US company is likely to report revenue of around $28 million (around Rs 200 cr) this calendar year, according to Tech Mahindra.

Despite the small ticket size, the deal could prove to be important to TechM as the Indian company is vying for lucrative contracts from telecom service providers.

It is hoping that telcos, such as Bharti Airtel and Vodafone Idea, will choose it as their partner of choice for implementing next-generation telecom technology, particularly Open RAN-based 5G networking.

Open RAN refers to a new, open source software platform that can be used to create a fully functional, 5G high-speed telecom network using off-the-shelf components and downloadable software.

It is believed that Open RAN may lead to the opening up of the lucrative telecom vendor market that is currently in the hands of half a dozen behemoths like Ericsson, Nokia, Huawei, ZTE and Samsung.

Many companies from the IT side of the business, such as TechM, Wipro, Cisco and others, are keen to get a bite of this lucrative market as telcos switch from closed source technologies such as 4G to more opensource-friendly iterations like 5G.