Below is the verbatim transcript of the interview. Also watch the accompanying video.
Q: How big could this order be potentially for the Mahindra Group? Can you put rough numbers to it?
A: It is wrong to call this as an order. The global announcement that we did on Tuesday is about a strategic partnership. In this partnership both the teams have agreed to collaborate and build platforms around smart and connected cities, build platforms around virtual sales experience or virtual dealership. We are also collaborating in the area of sports and entertainment.
Essentially, we will address the needs of a digital consumer - a consumer who wants continuity and connectivity throughout his experience whether he is inside or outside the stadium, whether he is inside or the building. This is a new service offering. At this stage I can only say is that we have a business plan, we plan to achieve and target around that business plan.
Q: How much of this work that you will do jointly will be done by Mahindra Satyam, the listed entity and how much Tech Mahindra?
A: We are working through the details. The way it will work is that the connectivity part would be done by Tech Mahindra and the content part in the application part is likely to be done by Mahindra Satyam. This is because in sports and entertainment particularly, on the back of the FIFA, the most of the competency to handle content lies in Mahindra Satyam.
Q: Cisco India Head indicated that it would imply some kind of revenue potential of between USD 500 million to USD 750 million. How would that breakup then between the two companies in terms of the order break as well that you just detailed?
A: It is the ecosystem which will benefit. Cisco India was right when they projected the volume of business flowing through this ecosystem from USD 500 million to USD 750 million. We basically reiterated one point that it’s a global partnership and the addressable market space is USD 5 billion.
Both the companies are very confident that we can have revenue of almost 15% out of it. I don’t think we have gone into the level of detailing that which one of the listed companies whether it is Tech Mahindra or Mahindra Satyam, how that pie will get divided.
Q: Does it change your volume growth expectations though from Mahindra Satyam for FY12?
A: Last time I had mentioned that we are on the positive track. We clearly believe that over the next five-six quarters we will completely start meeting the growth expectations, profitability expectations and operating metrics expectations of people and the trajectory is right.
Q: What kind of a ramp-up programme can you outline for us on this because this USD 500 million to USD 700 million is spread over five years so is it going to be starting slow and most of the revenues will clock in two-three years from now, back ended in that sense?
A: The prototypes and the proof of concepts are being developed. By next quarter end at least two of the prototypes and proof of concepts would be ready for our customers and prospects.
The pipeline build-up has already started but to build an effective pipeline, it will take four-five quarters. After that this done, many of these industries have their own cyclical patterns for e.g. a virtual dealership is designated more towards retail and some specific segments and I do believe that should be the first one to takeoff.
We would be targeting sports and entertainment towards the later part of the year. Brazil would be doing Olympics and FIFA, the Middle East is spending lot of money on sports and infrastructure. We do believe that we will capture a part of that market as well. You are right in judging that one-two years will be slow ramp-up and the last three years would be more for harvesting.
Q: What could this deal potentially mean in terms of stemming your client attrition which has been coming down over the years but there is still some attrition at the client level. Do you think the formation of a venture with a large reputed name like Cisco will go anyway assuring investors about your brand credibility and that might stem the attrition level somewhat faster?
A: As people say network is business or business is network. In today’s market having an alliance with important technology player like Cisco will clearly show positive indication. Cisco is almost omnipresent in all the enterprises so having a technological relationship with them will definitely reassure the clients that the company is progressive. It is betting on the future and it is investing for future.
Q: Can you give us a status check on the class action suit as well and whether any resolution has been found with Aberdeen?
A: It is still work in progress. All I can say is that we are in the right direction and as soon as we are ready for any further announcement on the class action suit we will come back to you.