Advantage for Tech Mahindra as AT&T looks to stay on digital course

Pune: US telecom carrier AT&T plans to go ahead with its IT modernisation contracts to save costs, a move that would benefit Tech Mahindra which had signed an over $1 billion contract with its largest customer last year.

“We’re not backing off on our cost and efficiency transformation initiatives that remain largely under our control. If anything, we see this as an opportunity to approach all our businesses differently and better align our work with how Covid has reshaped customer behaviours and the economy,” AT&T chief operating officer John Stankey told investors last week. Stankey will take over as AT&T’s CEO effective July 1.

Last year, AT&T committed to cutting costs of over $6 billion over three years, which included modernising its IT infrastructure and migrating applications to the cloud. In September, it said Tech Mahindra would take ownership of many of the applications which supported AT&T’s network and shared systems to execute the contract over six-and-a-half years.

The affirmation from AT&T comes at a time when India’s IT services companies face a slowdown in business due to the Covid-19 pandemic that has led customers to defer decisions.

AT&T expects to roll out 5G network in the first half of 2020 and the bulk of the work on optimising the core operations, modernising internal network applications were being driven by Tech Mahindra. AT&T does not disclose the nature of its vendor and supplier relationships, a spokesperson told ET. Tech Mahindra did not respond till press time Sunday to queries on how the AT&T CEO-designate’s comment would impact its business.

Tech Mahindra will announce its fourth-quarter results on April 30.