The telecom industry investment in the software-driven fifth generation network and a shift in the communications business with the rising consumption of data are expected to boost up the Tech Mahindra growth in the long term said in a report.
The $5 Billion IT service company, which looks for more than 40% of its revenue from its communication domain has been as of now struggling to grow this business for the past few years due to the concerns with some of the key clients. But it also expects a revival as the telecom industry gradually shifts its focus from the hardware to software with more and more people using the data said in a report.
The implementation of 5G by the mobile service providers would also be going to create multiple opportunities for the IT service providers not only in the telecom sector but also bring in the deal from the industrial, automotive and health care sector, the company revealed in a blog post yesterday.
“Tech Mahindra cited that communication industry is seeing a strong structural shift with the explosion of data consumption,” said Madhu Babu, IT analyst at brokerage firm Prabhudas Lilladher. “Overall Tech Mahindra expects 5G adoption to remain gradual and non-uniform, based on the evolution of the technology.”
“They (Tech Mahindra) have diverse capabilities across the board they will obviously be at the forefront of partaking in the 5G opportunity whenever it picks up, but we are at an early stage,” said Kuldeep Kaul, IT analyst at ICICI Securities. Given the company’s exposure in the communication industry one client’s concerns may have the bigger impact, he said.