Tejas Networks will use Tata Group’s backing and financial resources to locally design and manufacture the gamut of 4G and 5G wireless gear, a move that would directly pit it against the likes of global vendors Nokia, Ericsson, Huawei and Samsung.
The homegrown networking equipment maker will also expand its telecom products portfolio and explore acquisitions to fill any gaps in its portfolio and research and development capabilities, Tejas Networks CEO Sanjay Nayak said at the first investor call after Tata Sons last week announced plans to buy a controlling stake in the firm. “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,” he said at the recent investor call. “To make this happen, the company will beef up R&D capacity and evaluate the existing telecom assets and technology capabilities across Tata group firms such as Tata Communications, Tata Teleservices and TCS for potential synergies.” Tata Sons subsidiary Panatone Finvest had last week inked a binding agreement to buy a 43.35% stake in Tejas. The deal will trigger an open offer to buy a further 26% from the public.
Nayak said the deal will boost Tejas’ 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. A wider telecom products portfolio would also allow company “to take more benefits from the PLI (production-linked incentive) scheme”, for which it has recently applied, he said. Nayak said though Tejas always had good products, a big handicap was the lack of a globally acceptable brand that denied it access to 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.”