From India Telecom News on June 10, 2009
Sunil Joshi, President, Tata Communications Enterprise Business, Emerging Markets says: “Our business is not a single line of business. We have multiple lines of business to de-risk ourselves in how we engage. We have a voice business which, by virtue of that, we are the world’s largest wholesaler of voice. “
“And about 24 billion minutes of voice run on our backbone. Now what that gives us is steady cash flow to run and operate our business and invest in other areas of growth. Our global data and mobility services business is the next largest business, which is a growth business for us. That has grown 29% year-on-year. ”
The voice business grew 12% year-on-year. This is the last 12 months, the fiscal year ending 31st of March, 2009. Our EBITDA in the last year has grown 53% year-on-year.
So there are two things. You are right about the cost pressures because the deregulation drives prices down. And our legacy organisation was such that they enjoyed the benefit of a really regulated market. But in a competitive world, it does have impact to the prices, which does end up going to the consumer or the business that leverages that service. Then it’s for us to optimise our infrastructure, whether, it’s our IT, our engineering, our procurement. And we’re spending a lot of time in making sure that our costs are managed, while the price points are also seeing pressure to come down in the marketplace. This is within India, specifically.
We also have some growth engines, what we call start-ups, if you like. So our investment in NeoTel in South Africa, we have increased our stake last year from 26% to 56% in NeoTel. NeoTel is the second largest telecommunications company in South Africa. And that’s part of our emerging market strategy. A lot of our enterprise customers are looking at the African continent to now look at also growth, while they’re looking at Asia and some of the other economies.
So to back that up, we are also investing in what we call the [Seacon] cable. Seacon cable is expected to come up in the next month or so. And that will enable connectivity from Mumbai, right across the east coast of Africa, to South Africa. We’ve also announced an investment in [WACS], which is the West Africa Cable System. And that will take the connectivity of South Africa on the west coast of Africa into Europe, thereby connecting what is the other new emerging geography. And you’ll find that that enables us to connect enterprises and carrier customers and continue to drive our revenue [through].
The few other small organisations, like the broadband unit that we have, [TCISL], which is predominantly focused on retail broadband and the growth. And we have about 315,000 subscribers on the retail broadband [shop] and growing. We have investments in other small organisations, an in-house subsidiary called [TCTSL]. It’s Transformation Services Limited. So what that does is, it supports telecommunications organisations and outsources that with the [BSS] infrastructure.
So our business is a bit broader than just providing network or pipes. And with that infrastructure providing value-added services and managed services, it allows us to continue to move up the value chain for our customers. Sorry about the long answer to that.