Tech Mahindra has divested its minority stake in Altiostar Networks to Rakuten for $45 million
Tech Mahindra Americas Inc, the US subsidiary, held this minority stake holding around 18 million shares in Altiostar Networks. In May 2019, Altiostar closed a $114-million Series C round of financing, which involved Tech Mahindra investing $15 million for a 17.5 per cent stake.
New generation network
Along with divesting its stake, this deal involves Tech Mahindra in developing, deploying, providing IT managed services and will also act as a reseller of Rakuten’s Communication Platform. This platform was launched in April this year. RCP is a cloud-native platform for telecom service providers to build open and secure mobile networks quickly and at low costs. It is based on a new generation mobile network in Japan which combines technologies such as virtualisation and automation. Tech Mahindra on its part will develop and deploy these technologies.
CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said, “This collaboration with Rakuten Mobile not only strengthens our existing partnership with them, but will also enable us to drive innovation in the telecom space, provide enhanced customer experience and lead the transformation in mobile network technology from the forefront.”
Mickey Mikitani, Chairman, President and CEO, Rakuten is of the view that this is a new approach towards designing future telecom networks and since its launch in April, the company has signed up 1 million subscribers in Japan.
Industry estimates peg 5G market to hit around $600 billion by 2026. Tech Mahindra shares were trading at ₹786.40, down 1.76 per cent.