Tech Mahindra teams up with Comverse, to take on Israeli engineers

The venture into Israel by Tech Mahindra is the latest sign of booming ties between India and Israel.

April 15, 2015 04:11 pm | Updated 04:11 pm IST - TEL AVIV

Tech Mahindra. Photo: G.Ramakrishna

Tech Mahindra. Photo: G.Ramakrishna

Information technology group Tech Mahindra is partnering with U.S.-Israeli Comverse Inc to set up a research and development centre in Israel.

The two companies did not disclose financial details.

Manish Vyas, president of Tech Mahindra's communications group, told Reuters the deal -- which would bring the Indian company hundreds of engineers -- will help the firm more than double its engineering business revenue within a few years. The company does about $400 million annually in engineering, about half of that is in telecoms.

"Engineering is a very large part of our business but we want to make it even bigger. We believe it can be a billion dollars annually in the next few years," he said. "Given the culture of entrepreneurship in Israel we need to be here."

Under the "strategic relationship", Tech Mahindra will be responsible for R&D and customer services while Comverse will be in charge of product management and sales.

The venture into Israel by Tech Mahindra, which is part of the $16.5 billion Mahindra conglomerate, is the latest sign of booming ties between the countries since Indian Prime Minister Narendra Modi came to power last year.

Tech Mahindra Executive Vice Chairman Vineet Nayyar said the company's global activities will be concentrated in three countries - India, the United States and Israel.

Tech Mahindra, which employees over 98,000 people in 51 countries, will take on about 400 Comverse workers, up to 300 from Israel and the rest mainly from the United States, France, Japan, Bulgaria and India.

Comverse last year began a restructuring that included reducing its workforce by 14 per cent.

"We hope to gain access to world class talent," Vyas said. "We have a big presence in Europe, India and the U.S. (But) Israel was missing from the global footprint in terms of talent."

About half of Tech Mahindra's business is in telecoms with the rest from banking, healthcare and manufacturing.

Tech Mahindra owns Israel's Leadcom, a provider of network services for telecom companies, after it bought Leadcom's parent Lightbridge Communications in February.

Leadcom has about 25 workers in Israel and Vyas said the company is still working out what the relationship will be between Leadcom and the Comverse staff.

He said Israel fits in nicely with the company's long-term strategy, which includes a programme that enable employees to start up their own businesses with equity from Tech Mahindra.

"Given the culture of entrepreneurship in Israel we need to be here," Vyas said.

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