NEC's transformative move in US telecom

NEC, a Tokyo-based IT and network solutions provider, announced the acquisition of CSG Systems International for USD 2.9bn, funded by cash and new borrowings. This strategic US expansion aims to integrate CSG's telecom customer base with NEC's portfolio, boosting earnings. NEC reported steady revenue and EBIT growth from FY 22-25, outperforming local peer Fujitsu. NEC's stock delivered 123.2% returns over the past year, with analysts maintaining a positive outlook. However, potential risks include quality control, cybersecurity, and human capital retention challenges.