Calming the software storm

Operators can boost efficiency and offset declining ARPU by outsourcing the management of their IT systems.

Tags: Systems integratorTech Mahindra
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Calming the software storm Krishna Gopal sees significant growth potential for outsourced IT services in MEA.
By  Roger Field Published  November 21, 2010

Perhaps the last component of telecoms networks that most people consider is the software that allows all of the services, from operating systems, network management and billing systems, to run seamlessly.

However, it is a vital aspect of telecoms operations and can, if not handled properly, wreak havoc in a network. This lesser considered pillar of the telecoms sector is not only vital for the correct and efficient functioning of an operator, it is also the bread and butter for a number of systems integrators that are making a name for themselves as companies that can help telecom operators raise the bottom line at a time when competition is eroding profits.

Krishna Gopal, VP MEA, sales and global alliances, at Indian systems integrator Tech Mahindra is just one IT specialist with his finger on the pulse. Gopal, who oversees Tech Mahindra’s operations in the Middle East, Africa, Nepal, Bangladesh, Sri Lanka and the Maldives, is optimistic about the potential for growth in the region.

Gopal’s optimism stems from the fact that telcos face a challenge from the growing complexity of their operations, which in turn rely on complex software systems that must work seamlessly together. While Tech Mahindra, which is 31% owned by the UK’s BT Group, faces significant competition from the likes of IBM and Accenture, Gopal says that the firm benefits from being, unlike most of its rivals, dedicated almost exclusively to the telecoms sector.

“We are a 26 year old software services company focused only on telecom,” he says. “We are a joint venture with BT, they hold 31% equity in the company and we have a turnover of about $1 billion, 30,000 people, and we are only in telecoms.”

The company, which has its regional office for the GCC in Dubai, as well as offices in Saudi Arabia and South Africa, sees big potential in the MEA region, although Gopal concedes that its presence is currently relatively small.

Entering MEA

All of Tech Mahindra’s business in the Middle East and Africa is systems integration and consulting, which entails helping customers decide what software products to use in their back-end systems, piecing it all together, configuring it, making it work, and sometimes running it for them.

Gopal adds that when Tech Mahindra starts running the software for an operator, the project becomes a managed service, rather than mere systems integration. “Sometimes, there is also hardware to buy. So we will buy the hardware and software, and then put it all together and make it work,” Gopal says.

Managed services

The software systems that Tech Mahindra deals with can cover the full spectrum of operators’ systems, including billing, CRM, network management software, trouble resolution software and network inventory.

“It is very complicated, because like in banking, telecom is all real-time. To make a call, you need balance, and balance needs to be checked.”

Currently, most of the company’s work in the region is systems integration, although Gopal is keen to increase the number of managed services projects it is involved with, as they would offer a more consistent and ongoing revenue stream.

Managed services does not yet account for a significant proportion of Tech Mahindra’s business in the region, although it does in more mature markets.

Indeed, the systems integration business lacks “stickiness” according to Gopal. “Our core business of systems integration means that we do project after project. There is not that much sticky business, so you do a project for three months to about a year. There might be as many as 10 projects going on at one time. At any one time we have about 230 people in the region,” Krishna says.

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