In February 2017, Tata Communications completed 15 years of operations in the country. The company, which was founded post the Tata Group’s acquisition of PSU Videsh Sanchar Nigam Limited, has since undergone a significant transformation to become a leading global communication and managed services provider. It currently operates the world’s largest wholly owned subsea fibre cable network, which routes around quarter of all internet traffic globally. Bringing digital value to its customers is a key focus area for the company. To this end, it is constantly modifying its advanced managed services portfolio including internet protocol, cloud enablement and unified communications services. The growing convergence between telecom and information and communication technology (ICT), and the thrust on digital transformation are further opening up opportunities for the company. Sumeet Walia, executive vice-president and head, sales, India and Asia-Pacific, Tata Communications, talks about evolving customer needs and the company’s key focus areas…
How have the communications and IT needs and requirements of Indian enterprises changed over time?
In the ever-evolving digital world, communication and IT needs are never static. There is not only an increasing demand for capacity but also a need for the continuous evolution of delivery mechanisms. This need for evolution will be further augmented as organisations go global or deeper into their existing market segments. Thus, to respond to these needs, companies are not just upgrading, but also consolidating and even outsourcing their IT infrastructure needs. Some are choosing to keep their core IT functions in-house while outsourcing others.
Cloud continues to offer immense potential in this area. However, some of the traditional infrastructure elements are becoming a barrier to – rather than an enabler of – the deployment of new solutions. For instance, the majority of IT leaders have stated that they would be more likely to use hybrid cloud if connections within the publicly used structure are more predictable.
How is Tata Communications helping companies in their digital transformation?
Organisations in India are now moving from “looking digital” to “being digital”. Instead of simply providing a web interface for certain features, digital interfaces are moving across devices/channels to enhance customer experience/productivity. Organisations embarking on the “being digital” journey fundamentally begin with asking themselves questions such as what business are we in? How are we going to make money? What is the source of margin of the value chain that we participate in? Who are the other players? How do we prevent ourselves disintermediation? These are the questions that are preoccupying our customers.
This shift from looking digital to being digital is a huge opportunity for players like us. By 2025, the digital revolution will reshape the economic landscape. At Tata Communications, we focus on powering the platform-driven economy to create digital value for ourselves and others. It starts with infrastructure. We run one of the largest communications networks in the world, beginning with our extensive submarine network – the cornerstone of our strategy. We operate the fifth largest internet backbone and 25 per cent of the world’s internet traffic is carried on it. Our networks connect businesses that together account for 99.7 per cent of the world’s GDP and we connect with 80 per cent of all mobile subscribers around the world. We have security features built into the core network with some of the most sophisticated threats and denial-of-service capabilities. We have inbuilt software features for virtualisation, elasticity, self-service and application programming interface (API) to enable easy integration with customers, partners and suppliers. These APIs allow seamless quoting, ordering, security and trouble ticketing. In addition, we have built real-time communications as service, media and broadcast capabilities, and enabled integration with over 60 per cent of the world’s cloud power for public/private and hybrid cloud. Hence, I think we are uniquely placed to support the digital journey of our customers.
What are the company’s key focus areas in India?
Our traditional services are growing at a steady pace and will continue to do so in the near term. This gives us good operating leverage owing to economies of scale. This, in turn, has allowed us to invest in areas that are offering higher growth prospects and to stay relevant in our customer conversations. Some of these growth service areas are unified communications and collaboration services; cloud and cloud enablement including hosting and security services; software defined wide area network (WAN); and managed security services. The growth in these services is outpacing that in the traditional services segment.
Cross-border mobility, internet of things (IoT) and some other new services are being incubated and will be launched over the next two to three quarters and the impact of those will probably be seen in the following fiscal.
How has the company’s cloud and data centre business performed? What are the key emerging trends in this space?
As stated above, our services, including cloud, are high growth areas in India. We have been able to add some marquee to our cloud and hosting platform. We launched our cloud-enablement platform IZO™ in 2014 to tackle the complications and challenges that businesses face when dealing with cloud. Through this platform, a single provider can offer access to a full ecosystem of network, cloud and data centre connectivity, making it easier for a business to connect and build its cloud in its own way, be it private, hybrid or public.
Tata Communications’ IZO™ network platform currently consists of over 20 service providers covering countries accounting for 85 per cent of the world’s GDP. To meet its customers’ constantly growing demand for cloud connectivity, Tata Communications has deployed 20 new cloud gateways for IZO™ SDWAN, with several more in the pipeline. These gateways offer secure, reliable connectivity to the cloud of companies such as Amazon Web Services, Google Cloud Platform, Microsoft Azure, Office 365 and Sales-force, and a single-pane-of-glass management portal, which enables organisations to virtualise their network with scale while ensuring that the chief information officer has full visibility and control over the network. Tata Communications has also launched Wi-Fi+, a new Wi-Fi® cloud communication solution, which enables mobile network operators to allow their customers to access the internet for calling, messaging and data applications more seamlessly than ever.
“We focus on powering the platform-driven economy to create digital value for ourselves and others.”
What are your views on the adoption of IoT by Indian enterprises? What initiatives has the company taken in this space?
Gartner, Inc. forecasts that the number of connected things worldwide will reach 20.8 billion by 2020. The IoT market is expected to grow to $15 billion by 2020 from $5.6 billion this year, according to a report by Nasscom and Deloitte. This will be driven by the adoption of IoT devices across sectors such as manufacturing, automotives, transportation and logistics.
Tata Communications is building India’s first IoT network in New Delhi, Mumbai and Bengaluru, which is aimed at connecting millions of devices. Once complete, it is expected to be the world’s largest IoT network. We are using low-power WAN, based on long range (LoRa) technology, for connecting devices and IoT applications. The current LoRaWAN-based network allows millions of devices to be connected. We aim to have 200 million connected end-devices by 2019. We have also partnered with Hewlett-Packard Enterprise to become an integral part of the global cellular IoT connectivity services. Through this partnership, we aim to provide domestic and cross-border IoT connectivity and a range of management services, particularly for applications requiring elements of mobility, such as connected cars, and fleet management and transportation services.
“Organisations in India are moving from looking digital to being digital. This shift is a huge opportunity for players like us. By 2025, the digital revolution will reshape the economic landscape.”
What are your growth strategies and focus areas for international markets?
Beyond India, we operate across three major geographies: North America, the UK and Europe, and Asia Pacific. While India is our largest market and we continue to have a leadership presence in the enterprise communications solutions space with over 25 per cent market share, notably, more than 75 per cent of our revenues come from markets outside India. In all our international geographies, we are a market challenger outpacing the industry growth rate significantly.