Tata Communications Q3 consolidated EBITDA up by 61% YoY
Strong revenue growth maintained across operations. Gross revenues increase 19% YoY
- Core Business remains profitable
- Neotel sees further enhancement in operating profitability
- Focused cash management program on track
- Capex programme is aligned to demand and is pursuing predictable & strategic growth-oriented opportunities
Tata Communications announced its financial results for the quarter ended December 31, 2011. Consolidated gross revenues were at Rs. 36,041 million in the quarter ended December 31, 2011 as against Rs. 33,736 million in the previous sequential quarter and Rs. 30,180 million in the same quarter last year. The Core Business accounted for Rs. 31,648 million as against Rs. 29,079 million in Q2 FY2012 and Rs. 28,535 million in Q3FY2011. The Startup Business, primarily Neotel, posted revenues of Rs. 4,394 million in the quarter ended December 31, 2012 as against Rs. 4,657 million in Q2 FY2012 and Rs. 1,645 million in Q3 FY2011.
Tata Communications’ leadership in Global Voice Services continued. This business contributed 55% to Core Business revenues in the period as compared to 54% in Q2 FY2012. The total voice minutes registered on the network were at 13.4 bn minutes as against 13.1 bn minutes in Q2 FY2012.
Tata Communications’ Global Data Services contributed 45% to the Core Business revenues in the quarter under review. The data portfolio continued expanding and witnessed introductions of new products and technologies; InstaHCM was launched under Cloud Computing business and the IPX+ framework was announced to enable mobile broadband solutions.
The Startup Business, reflecting largely Neotel’s performance, reported healthy revenues of Rs. 4,394 million in Q3 FY2012 as compared to Rs. 4,657 million in the sequentially preceding quarter (remaining almost flat in local currency terms). Neotel has continued to witness improved resource utilization and show better productivity; its operating profitability which turned positive in Q2 FY2012 saw further improvement.
Commenting on the performance of Q3 FY2012, Mr. Vinod Kumar, CEO and MD, Tata Communications, said, “We are very pleased to report a healthy improvement in the operating performance of the business. Global voice has demonstrated continued improvement in volumes and revenues. The company’s global data business is scaling up as planned. Complementing our leadership in the enterprise data segment within India, we have been growing our international revenues as reflected in the enhanced uptake of our customised offerings and managed services.”
“Neotel, the company’s South African subsidiary has grown its revenues by 22% year on year in local currency terms. Several strategic initiatives over the past year have begun to yield results with the operating and financial performance of this business reporting visible improvement. Optimum asset utilisation and higher productivity levels elevated margins on a yearly as well as sequential basis. We are confident of leveraging our proficiency to capitalise on the tremendous opportunities available in Africa.”
“Over the last several years, we have worked towards changing our business mix towards data and managed services and enterprise segment. Having achieved this shift, it is our intention to grow all our business segments faster than the growth in respective markets.”
Tata Communications launched mobile broadband solutions enabled by IPX+ framework and 70 mobile network operators (MNOs) around the world signed up for the new service. With mobile data volume growing nearly threefold annually and close to 50% of that predicted to come from mobile video, the demands on mobile broadband solutions and services are set to increase dramatically. Tata Communications' new framework provides a converged interconnect platform, enabling end-to-end management across mobile networks for the delivery of multiple services over IP.
Neotel connected COP 17 at South Africa to the rest of the world via Tata Communications. Neotel enabled WiFi access for the entire conference and along with Cisco and Dimension Data, provided Telepresence rooms for public usage. Both these services were based on connectivity solutions provided by Tata Communications on its advanced global network.
Tata Communications further expanded its cloud portfolio with the launch of InstaHCM; in partnership with SuccessFactors, Inc. –a global leader in cloud-based business execution software. This is the first SaaS-based Human Capital Management application of its kind to be launched in India.
Tata Communications’ subsidiary BitGravity entered into a strategic agreement with Juniper in the Content Delivery Network technology space. Juniper acquired rights to the service management layer of BitGravity technology, thus validating our product and service deployment vision. The agreement allows Juniper to offer the BitGravity platform as a leading standard and paves the way for Tata Communications to grow its managed and communication services to the carrier industry.
Awards and Recognition
Tata Communications won the Best Global Wholesale Offering Award, the third year in a row, at the 2011 Capacity Awards.
Tata Communications won two awards at the MEF Carrier Ethernet Service Provider Awards 2011; The Best Business Ethernet Service award in 2011 (an Enterprise Service award) and the other for the Best Ethernet Service Provider in APAC in 2011 for the second year in a row. The MEF Carrier Ethernet Service Provider Awards recognise excellence and leadership in the development, marketing and delivery of Carrier Ethernet services.
Tata Communications also won the coveted award for “Data Value Best-in-Class at PTC '12 in Honolulu, Hawaii. ATLANTIC-ACM, a leading telecommunications and information industry research firm, delivered its 2012 Awards for Global Wholesale Excellence based on a market-wide customer feedback study built from over 1,300 carrier ratings from 300 global wholesale customers.
A presentation providing the definitions and a detailed analysis of the results for the quarter ended December 31, 2011 has been uploaded on the Tata Communications website and can be accessed at:
Forward-looking and cautionary statements
Certain words and statements in this release concerning Tata Communications and its prospects, and other statements, including those relating to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations, and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results, performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, failure to increase the volume of traffic on Tata Communications’ network; failure to develop new products and services that meet customer demands and generate acceptable margins; failure to successfully complete commercial testing of new technology and information systems to support new products and services, including voice transmission services; failure to stabilize or reduce the rate of price compression on certain of the company’s communications services; failure to integrate strategic acquisitions and changes in government policies or regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry; and, in general, the economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in Tata Communications’ various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. Tata Communications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.
About Tata Communications
Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.
The Tata Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and collocation space worldwide.
Tata Communications' depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services, leadership in global international voice, and strategic investments in South Africa (Neotel), Sri Lanka (Tata Communications Lanka Limited) and Nepal (United Telecom Limited).
Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and its ADRs are listed on the New York Stock Exchange (NYSE: TCL).