Anand Mahindra has long been the face of Indian capitalism, lauded by Forbes, Fortune Magazine and The Economist for his stewardship of the Mahindra Group, a sprawling €20 billion Indian conglomerate with operations in 100 countries and 250,0000 employees.

Educated in Harvard, Mahindra joined the family business in 1981 and has led it since 2012, driving the group – and its network of 150 companies – into new markets and new territories.

One of those territories has been in Ireland, though its technology offshoot Tech Mahindra. It first arrived on Irish shores in 2015, opening a 300-seater delivery centre in Waterford to service Irish telcos Eir and Three Ireland.

The move was, in essence, an onshoring of outsourcing. Many companies turn to Indian outsourcers to cut costs and reduce headcount. To ease the process, Tech Mahindra came to Ireland. Two years later, it expanded its operation, opening a new centre of excellence in the Citywest campus in west Dublin.

At the launch, the company promised the creation of 150 new jobs and highlighted the strength of the relationship with one of its customers – Eir. The firm’s then chief executive Richard Moat was even quoted in the press release, outlining how the new centre underlined the growing relationship between the two companies.

“Our goal is to seamlessly provide new and innovative products and services to our customers and Tech Mahindra assists us in the very competitive Irish telecommunications market,” Moat said.

It was part of a strategy to reduce costs across the company – customer care was outsourced to HCL, while warehousing and logistics operation were also outsourced.

Three years on, Moat has moved to French multinational Technicolor, replaced by the savvy and personable Carolan Lennon. Eir, meanwhile, is now under the control of the charismatic French billionaire Xavier Niel.

And, it has now emerged, the relationship between the company and its Indian partner Mahindra is showing signs of tension.

In recent days, Eir has notified the High Court of an intended action against Tech Mahindra. Papers were filed with the court on Friday by Eir’s in-house legal department.

The case relates to the terms of the contract between the parties, and the level of service mandated under the contract.

For both sides, it is an unwelcome distraction during a global crisis. But, with billionaires on either side of the table, it could potentially be a significant courtroom tussle – and one that would shine a light on the inner working of one of Ireland’s most recognisable brands.

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The French billionaire Xavier Niel.

To understand why outsourcing matters to Eir, you have to look at the radical restructuring that has been pushed through in recent years – some before Niel took control, but much of it after.

This is hardly surprising – with increased competition and changing consumer dynamics, traditional revenues have been under strain. In May, Eir announced that third-quarter revenues to the end of March 2020 had fallen by 1 per cent, or €3 million year-on-year. This was in line with expectations and with previous results – its half-year results, issued three months before, revealed that revenues had fallen by €17 million to €617 million. To put this in context, the revenues recorded for the same period two years earlier was €617 million. In blunt terms: Eir has ben a shrinking business.

To combat this, it has entered into a string of new business lines. It has launched GoMo, a new online mobile service aimed at younger users, offering voice, texts and data for a flat fee of €3.99 a month. This came soon after the purchase of a controlling interest by Niel, who made his name by disrupting the French market with €2-a-month mobile plans under the Free brand.

Eir has also linked up with Apple TV to rake the multinational tech giant’s set-top boxes, and also announced plans to roll out a 5G network to 10 towns and cities around the country.

However, a key part of the strategy has been on the cost side. And savings have been weighty – some €287 million, or 8 per cent of costs, was stripped out of the business between the middle of last year and the end of March 2020.

There have been deep staff cuts (more than 800 people have been removed from the payroll), media buying agencies have been ditched and it has moved to cheaper offices.

So, even with falling re revenues, this has allowed the company to increase earnings – up €15 million, or 4 per cent for the period.

In May, it sold its mast infrastructure subsidiary to US group, Phoenix Tower International, for €300 million.

The sale of Emerald Tower encompasses steel and concrete elements, with Eir and its affiliates to retain ownership of the base stations, antennae and all telecom-related equipment, including fibre. “This transaction allows us to accelerate the roll-out of our expanded 4G and 5G networks and increases Eir’s capacity to further invest in our mobile network,” Lennon said at the time.

It has been a delicate balancing act – cut non-core costs, sell off non-core assets and invest in critical capital expenditure. Indeed, unlike some of the private equity owners of the past, Niel, a telecoms magnate, has agreed to spend on capital infrastructure approving a €500 million investment in fibre-to-the-home broadband, within weeks of acquiring the business in 2017 through his holding companies NJJ Capital and Iliad.

Eir has also moved to insource some of its functions, including some tech and customer care functions.

The full details of the action with Mahindra will emerge when the matter comes before the courts in the coming weeks. For now, a spokesman for Eir said it the company does not comment on legal actions.