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Company Interview Excerpt
VINOD KUMAR TATA COMMUNICATIONS LIMITED (TCL)


Full article published: 01/26/2009


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TWST: We'd like to begin with a brief historical sketch of the company and a picture of the things you're doing at the present time.
Mr. Kumar: As a company we've been in existence for over 130 years, but our real transformation and journey as Tata Communications started about seven years ago in early 2002 when the Tata Group acquired controlling interest from the government of India in the erstwhile organization called VSNL. We actually changed our name from VSNL to Tata Communications in February 2008. We are a global provider of communication solutions to both enterprises and to wholesale customers. In doing so, we serve both the business market as well as other telecommunication carriers. We offer a whole range of services that span various forms of network connectivity services including security, hosting, storage and various other data center services. Additionally Tata Communications offers applications that are focused on communication and collaboration, both of which are very important in the very distributed and globalized environment that businesses operate in today. Our reach is global. We have key strength in certain areas, but we operate today after significant amounts of investments in organic and inorganic activities over the last several years on a global basis.

TWST: How would you describe the competitive landscape and your competitive advantages?
Mr. Kumar: Our strategy is focused on a couple of things. One, is establishing competencies and leadership in the emerging markets and we're already the leader as far as data communication services is concerned in the Indian market; however we're extending that to other markets through joint ventures and local investments in facilities-based licenses in markets like South Africa as well as in China for VPN services. The second aspect of our strategy relates to being an integrated global wholesale provider. We have taken a contrarian view compared to several others in the industry by building a global wholesale capability that spans voice over IP, submarine cables and signaling services for mobile operators. Our view is that taking an integrated view of wholesale can actually be quite a profitable business. More important, wholesale also gives us the reach and a cost structure that allows us then to compete effectively in the enterprise space serving multinational customers that need large networks on a global basis that span all the continents. The third pillar of our strategy is that through offering converged communication and IT related services on an IP-based network so the IP technology is a boon for relatively new players like us in the global space, we have a legacy-free network that allows us to carry all kinds of traffic for our business customers over an integrated network, which essentially offers a very competitive cost and therefore pricing capability as well as the ease of manageability of our services and the ease of use for the end customer. Back to the question on competition our competition really varies by market segment. If you look at the services that we provide domestically in India with players like Bharati and Reliance, our advantage there is that we have the experience of having been in the market for longer than them and operating capabilities that we've built over the years really puts us in good stead and that's why as far as international data connectivity is concerned, we still maintain upward of 60% market share. Also, the very fact that we are a more global business than either of our competitors allows us to leverage global expertise when it comes to engineering product management and so on and so forth. When you look at markets outside India, our aspiration and where we're targeting our services is at the largest multinational customers that have focused on growing their businesses in the emerging markets. In that space we compete directly with the likes of AT&T, Verizon, Orange Business Services and players of that magnitude. Increasingly we're gaining market share by being a more flexible and agile provider of services. When it comes to wholesale, we provide turnkey services to many of the customers that we even compete with directly because we're the largest owner of submarine cable capacity in the world, and we're also the largest wholesale voice provider, both CDMA as well as VoiP. In the wholesale space, the competition is with carriers like FLAG, Apollo BACnet, SingTel and Epsilon in Asia.

 

Tickers included in this excerpt: TCL

 

For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.