Tech Mahindra Collaborates with Rakuten Mobile to Strengthen the RAN, Sells Stake in Altiostar to Rakuten for $45 Million

Tech Mahindra, the IT services major has sold its entire stake in US-based Altiostar Networks to Rakuten for $45 million (about 331 crore), making the Japanese company a majority shareholder in the virtualised radio access network (RAN) technology firm, according to a BSE filing. Tech Mahindra has also inked an agreement with Rakuten Mobile, under which the Indian tech firm will be a preferred partner and provide technologies as well as software capabilities to support the development and deployment of mobile networks for global customers of Rakuten Communications Platform (RCP). In a regulatory filing, Tech Mahindra said its subsidiary Tech Mahindra (Americas) Inc has divested its holding of 18,518,518 C1 preferred shares in Altiostar Networks. ‘The buyer is Rakuten USA, Inc,’ the filing said, adding the consideration received from the sale is $45 million.

In 2018, Tech Mahindra had acquired 17.5 percent stake in the US-based telecom software development company Altiostar Networks for $15 million. Rakuten now owns majority stake in Altiostar.

C P Gurnani, Managing Director & CEO, Tech Mahindra said in the early part of the year that the company has launched a 4G network that was cloud native with Rakuten in Japan. “Very soon, you will see the first 5G network, which is again software defined and cloud native. And we believe that our commitment to Rakuten and to Altiostar continues to drive open and virtualise radio access networks,” he stated to the reporters in a virtual briefing. He added that Tech Mahindra, with its large footprint and strong relationship with telcom firms around the world, would become a preferred partner.

Mickey Mikitani, Chairman, President & CEO, Rakuten Inc, stated “With a common vision for digital transformation of the telecommunications industry, the company is very excited about the potential of the partnership with Tech Mahindra in bringing more agile, responsive and efficient services to customers around the world”.

“The partnership with RCP presents a brilliant opportunity for an Indo-Japanese collaboration in creating technologies that not only can serve the Indian and global markets but can also enhance and speed up the ability of the Indian engineering power and innovation. He added that a significant part of the R&D for RCP and technologies, including Altiostar, is happening in India,” asserted Manish Vyas, President (communications, media & entertainment business) and CEO Network Services at Tech Mahindra. “So this partnership is a massive endorsement of the collaboration that can happen between India, Japan and the US,” he further adds.

C P Gurnani said the 5G market presents an opportunity worth a few hundred billion dollars. The company has divided the 5G ecosystem into three parts - mobile service providers or various devices that are 5G enabled; 5G for communication service providers (telcos) trying to launch these services; and 5G for enterprises. Through the agreement with Rakuten, Tech Mahindra will also provide managed IT, security and network services to Rakuten Mobile. There are also plans to designate Tech Mahindra as an official reseller of RCP.

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