Processing .....please wait.. 
The article has been forwarded.... 
Mindtree successfully restructures Wireless business
By siliconindia
|
Monday, 03 January 2011, 15:37 IST
Bangalore: The global IT solutions company, Mindtree had announced in October about its completion of restructuring the wireless product business of its completely owned contributory MindTree Wireless into a design services business. The estimated cost was $3.6- 3.9 million. This step has been taken by the company so as to be at ease while doing business with large global service providers.
When it comes to white-labeled smartphones, the company had already indicated earlier about the strong grip from the global customers. "As ensued, we found that contracting with large global service providers required more commitment and risks in areas such as inventory and marketing than we originally anticipated,"the company said in a statement here.
The company officials had also stated that contracting with large global service providers requires more commitment and risks in areas such as inventory and marketing than they had originally anticipated. This was a major amendment from the market conditions which existed earlier and the new model required significantly higher capitalization. After considering this fact and also the interests of all of their current stakeholders, they decided to make the decision to restructure the wireless business as a design services business.
The restructuring has been completed and also calls for financial implications like the costs to amount upto 3.9 million and will be expensed in the Profit and Loss account for the quarter ending December 31, 2010 where the costs are mainly in the nature of people separation, fees paid to legal advisors, asset write-offs and payments to vendors for cancellation of contracts. Continuing its efforts to monetize the LTE IP & phone design, if successful, Mindtree will help offset the restructuring costs to the extent of value realized.
