Adoption of private network by enterprises in India is happening at a slow pace because it is a price sensitive market and companies will first look at their return on investments (RoI), Amit Chadha, chief executive officer and managing director, L&T Technology Services (LTTS) told FE in an interaction.
“There are signs of growth with regard to take up of private networks and next generation connectivity solutions, but we are cautiously optimistic on the Indian market (for the take up of these solutions) because we have to make sure we’re going to make money,” Chadha said. This is because the market is more price sensitive in nature compared to other markets, he added.
Currently, LTTS is working on a very large private network project. While Chadha did not share much details, he said the company will soon commence the operations, and will operate the project for seven years.
He said that private networks are not restricted to only 5G only, but 4G/LTE and Wi-Fi technologies are also being used by enterprises to carry out their factory operations in-house, thereby not being dependent on the public networks solely.
“With private connectivity networks, we are making a lot of headway with MNCs (multinational companies) in India. There are many use cases that we’ve been able to develop in that area including digital manufacturing, hospitals, oil and gas plants, where we are leveraging some of these connectivity solutions,” Chadha said.
The role of a player like LTTS for implementing next generation connectivity solutions including private networks is significant for equipment deployment, applications, servers, technology and software integration, as well as providing core for the integration of devices/sensors within the customer’s ecosystem. The company recently entered into a strategic partnership with BSNL to work on private 5G network deployments.
Earlier this year, LTTS also acquired Smart World and Communication (SWC) — a connected intelligence solution provider with presence in communications, safe and smart solutions and cybersecurity — from parent L&T in a Rs 800-crore deal.
In the July-September quarter, LTTS won its first large deal of over $10 million, leveraging SWC capabilities in the global market. As part of this deal, the company said it will be helping its global customer in establishing a 5G centre of excellence.
In India too, the company won two large orders – one for setting up an advanced communication system for a metro rail, and the other for implementing a state-wide smart metering system.
For LTTS, the telecom and hitech business grew 8% in the last two years. “I do believe that the business will grow double digits for us in FY25 because of AI, what we are doing in semiconductors, next generation communications, specialised data centre services,” Chadha added.
Currently, telecom and hitech business contributes about 18% to LTTS’ overall revenue and the company expects the vertical to grow faster and contribute a meaningful share towards the $2 billion revenue mark, which it is eyeing.
Even as Chadha did not rule out slowdown owing to uncertain macroeconomic challenges, he expects the situation to improve by 2024, 2025 and beyond for IT engineering services space. Besides the growth in hitech and artificial intelligence space, Chadha said, “there are new plants that continue to be established throughout the world, whether it be the European economy, whether it be the US, parts of Canada, etc. That again, drives more engineering, IT work for people like us”.
On hiring, LTTS said it will continue to onboard 2,000 engineers every year. “There are 180 offers that we still have to honour for the current year and we will onboard those people in December, and that completes our hiring cycle for this fiscal year,” Chadha said, adding that the company requires talent for plant engineering, digital software, digital manufacturing, and software defined vehicles.