will use the Tata group’s backing and financial resources to expand its telecom products-portfolio and locally design/manufacture the gamut of 4G and 5G wireless gear, moves that would directly pit it against the likes of global vendors Nokia, Ericsson, Huawei and Samsung.
At a recent investor call, Tejas Networks CEO Sanjay Nayak said access to the Tata group’s financial resources would also equip the company to explore acquisitions to fill any gaps in its telecom products portfolio and R&D capabilities. The call was the first after Tata Sons announced plans last week to buy a controlling stake in the homegrown telecom equipment maker.
“Tejas will expand its products portfolio to 100% locally design and manufacture both wireline and the full stack of 4G/5G wireless network gear in India…to make this happen, the company will beef up R&D capacity and evaluate the existing telecom assets and technology capabilities across Tata group companies such as
, Tata Teleservices and TCS for potential synergies,” Nayak said.
Last week, Tata Sons unit Panatone Finvest inked a binding agreement to buy a 43.35% stake in Tejas. The deal will trigger an open offer from the Tata unit to buy a further 26% in Tejas from the public.
Nayak said the deal would boost Tejas’s balance sheet strength and equip it to manufacture base stations, core networks, switching and transport systems and slug it out with the biggest global vendors for high-value, multi-year 5G gear contracts from Tier-1 telcos in a $150 billion global networks gear market.
He added that a wider telecom products portfolio would also allow the company “to take more benefits from the PLI (production-linked incentive) scheme,” for which it has recently applied.
Separately, the Tejas board, he said, would discuss the pros and cons of renaming the company to underline the Tata ownership and brand, post-deal closure. Tejas shares were up almost 5% to Rs 329.50 on BSE in Friday early afternoon trade.
The company’s moves come with the government set to auction 5G airwaves early next year and looks to also reduce India’s dependence on foreign gear suppliers in deploying nextgen wireless broadband networks.
Nayak said that though Tejas always had good products, a big handicap was the lack of a globally acceptable brand that denied it access to the tier-1 global telcos when it came to pitching for large network gear contracts.
“Access to Tata group’s resources, relationships, global connections and its brand will help Tejas overcome those challenges, and equip it to execute high-value international network contracts over 5-to-10-year spans,” he added.
Entry into the Tata fold, he said, would also make Tejas a marquee brand in the tech jobs market and enable it to attract top grade engineering talent even as it prepares to expand its telecom products portfolio and R&D capacities.
( Originally published on Aug 06, 2021 )