TATA Communications

Tata Communications Limited, together with its Tata Communications subsidiary, is a

global provider of managed communications services to multi-national enterprises
and service providers.

The companys global infrastructure includes subsea and terrestrial communications

networks, a global Tier-1 network, and collocation and data centres. The subsea
fibre optic cable network is the worlds largest, and includes the worlds only, wholly
owned, complete cable ring around the world. The subsea and terrestrial networks
combined stretch 700,000 kilometers. The global Tier-1 IP network provides
connectivity to more than 200 countries and territories across 400 Points of
Presence (PoPs). The companys data centre infrastructure consists of 44 centres
with a total of more than 1,000,000 square feet of space. The companys largest data
centre is located in Pune, India and covers 54,520 square feet.

Tata Communication Limited also provides managed enterprise services. They

include high speed network connections, global MPLS virtual private networks
(VPNs), the worlds largest network of telepresence services, the worlds most
extensive DDoS mitigation and detection service, content delivery networks, and
cloud enablement solutions.

In addition to serving established global markets, the company is a major provider of

international voice communications in emerging markets. Its presence in these
markets includes Neotel in South Africa, Tata Communications Lanka Limited in Sri
Lanka, and United Telecom Limited in Nepal.

Tata Communications is a leading global provider of telecommunications

solutions serving the voice, data and next-generation service needs of carriers,
enterprises and consumers across the world.
Earlier known as Videsh Sanchar Nigam, the company became a part of the Tata
group in 2002. In 2008, VSNL, VSNL International, Teleglobe, Tata Indicom
Enterprise Business Unit, VGSL and CIPRIS were brought under one global brand
name Tata Communications. The company is now the number one global
international wholesale voice operator and India's largest provider of international
long distance, enterprise data and internet services in India.
Tatas global network spans five continents and comprises major ownership in over
200,000 km of territorial network fibre and subsea cable capacity. The company has
a trans-Atlantic and trans-Pacific data transfer capacity of 1 trillion bits per second, a
global MPLS network and the worlds largest VoIP network.
Diversification of Tata Telecommunications:
The diversification of TATA is totally unrelated; It has many new businesses which
has no obvious relationship with any area of existing business. It is very superior in
internal governance which includes Place business units in self-contained
divisions,Manage divisions in a decentralized manner,Link performance to incentive
pay. The value was created through diversification bylowering the cost of value
creation activities in the diversified businesses, Creates opportunities for
differentiation and premium pricing value creation activities, Adds value where
commonalities important to competitive advantage exist, Creates value by applying
skills for one business opportunity and applying them to another. The Acquisition and
restructuring strategy is creating value through diversification, some of the strategies
includes Replace nonperforming top management team, dispose of unproductive
assets, establish performance goals requiring significant improvements in operating
efficiency.
Compelling Reason for Tata to go for Acquisition:

There are many reasons for TATA Tele Communications to go for a joint
venture with DoCoMo, some of the reasons include:
Access to new markets and distribution networks.
Increased capacity.
Sharing of risks and costs with a partner.
Access to greater resources, including specialised staff, technology and
finance.
The reasons for DoCoMo to go for a Joint Venture are,
To enter into the fastest growing markets like India.
To access in to new markets.
Businesses of any size can use joint ventures to strengthen long-term relationships
or to collaborate on short-term projects. A joint venture can help your business grow
faster, increase productivity and generate greater profits.Joint ventures often enable
growth without having to borrow funds or look for outside investors. You may be able
to use your joint venture partner's customer database to market your product, or offer
your partner's services and products to your existing customers. Joint venture
partners also benefit from being able to join forces in purchasing, research and
development.A joint venture can also be very flexible. For example, a joint venture
can have a limited life span and only cover part of what you do, thus limiting the
commitment for both parties and the business' exposure.
Business Model for Tata Telecommunications and DoCoMo:
Tata Communications called itself a telecom service provider. No longer. It now offers
cable connectivity across the globe along with massive data centres that provide
customers with the entire spectrum of ICT solutions from voice solutions and
mobility and data services to virtualisation services, hosted services and cloud-based
computing applications.

There was also a time when Tata Communications could accurately be

defined as an Indian company. That too has changed. Today, the $2.45 billion
enterprise has offices in 48 countries across the globe, 65 per cent of its revenues
coming from non-India operations, and its top 50 managers sitting in 12 cities in Asia,
Europe and North America.
The transformation of Tata Communications has been rapid and all pervasive. We
still function with the aggressive and flexible mindset of a start-up, even though we
are a $2 billion plus, 6,500-people strong company, says Vinod Kumar, chief
operating officer, Tata Communications. Start-up is not an inaccurate way of putting it
the company entered the Tata stable just eight years ago; in its earlier avatar as
the government-owned Videsh Sanchar Nigam, it was an entity that Indians
recognised mainly for its international calling facilities.
In revenue terms, Tata Communications is still relatively small in the telecom
industry, but in some ways the company is already a part of the big league for
instance, it is the worlds number one provider of wholesale voice, mobility and data
services, implying that the company carries the largest share of the worlds
communication data over its networks.
Today, with its growth figures hovering around 9 per cent a year at a time when the
global telecom industry is more or less in limbo, Tata Communications is confidently
heading for its goal that of being one of the top three ICT companies in the world.
Business Model of DoCoMo:
DoCoMo i-mode has been extraordinarily successful in Japan. This is because of its
outstanding convenience and it's unique business model. Its reliance on this system
offers an innovative approach to the mobile service value chain and to wireless
service / Internet relationships.
We collaborate closely with equipment manufacturers, content providers, and other
platforms to ensure that wireless technology, content quality, and user experience
evolve jointly. This synchronization guarantees that customers, partners and
shareholders share interests with end-user's, thus enabling all parties to maximize

value and to continue to improve the quality of products and services connected with
i-mode.
Moreover, it has been our mission to make i-mode operationally as simple as
possible. By adopting an HTML subset we have made the creation of sites
exceptionally simple. We have also enabled the compatibility of many other
standards including: GIF, Java, MIDI, Macromedia Flash, and HTTP.

Advantages for TATA Communications and DoCoMo:

NTT DoCoMo, the largest mobile telecom company in Japan, entered into a
joint venture (JV) with Tata Tele Services Ltd (TTSL), the fifth largest mobile telecom
company in India. The two partners had come together because both had
recognized that they could put complementary capabilities into play. NTT DoCoMo
could build on TTSL's knowledge of the local market and ownership of telecom
licence (given by the federal government only to domestic firms). TTSL could gain
access to NTT DoCoMo's core competence in 3G technology, which was soon being
rolled out in India through spectrum auction. As part of signing the deal, the two

partners had to deal with issues other than business synergies - like the percentage
of equity holding of each partner in the JV, the price at which NTT DoCoMo would
buy its stake to be offloaded by TTSL and the provision for veto rights that could
make up for a minority holding. The case study helps students understand the
dynamics of the formation of an international JV. It also highlights the unique
advantages of a JV over other forms of international collaboration, such as
technology licensing and agency distribution.
Success or Failure?
Its a very big success story, Tata Teleservices Limited has also become the
first Indian private telecom operator to launch 3G services in India under the brand
name Tata DOCOMO, with its recent launch in all the nine telecom Circles where it
bagged the 3G license. In association with its partner NTT DOCOMO, the Company
finds itself favorably positioned to leverage this first-mover advantage. With 3G, Tata
DOCOMO stands to redefine the very face of telecoms in India. Tokyo-based NTT
DOCOMO is one of the world's leading mobile operatorsin Japan, the company is
the clear market leader, used by nearly 55 per cent of the country's mobile phone
users.
Tata Teleservices Limited also has a significant presence in the GSM space, through
its joint venture with NTT DOCOMO of Japan, and offers differentiated products and
services under the Tata DOCOMO brand name. Tata DOCOMO arises out of the
Tata Group's strategic alliance with Japanese telecom major NTT DOCOMO in
November 2008. Tata DOCOMO has received a pan-India license to operate GSM
telecom servicesand has also been allotted spectrum in 18 telecom Circles. The
company has rolled out GSM services in all of these 18 telecom Circles in the quick
span of just over a year.
Tata DOCOMO marks a significant milestone in the Indian telecom landscape, and
has already redefined the very face of telecoms in India, being the first to pioneer the
per-second tariff optionpart of its 'Pay for What You Use' pricing paradigm.

Financial Performance : Balance Sheet

Parameter

MAR'14

MAR'13

YoY

( Cr.)

( Cr.)

%Change

EQUITY AND LIABILITIES

Share Capital

285

285

0.00%

Total Reserves

7,600.61

7,231.42

5.11%

Shareholder's Funds

7,885.61

7,516.42

4.91%

0.00%

-165

250

-166.00%

375

375

0.00%

Long-Term Borrowings
Secured Loans
Unsecured Loans
Deferred Tax Assets /
Liabilities
Other Long Term Liabilities

-92.92

-8.71

403.26

376.28

7.17%

Long Term Trade Payables

25.43

15.28

66.43%

5,065.96

4,704.38

7.69%

5,611.73

5,712.23

-1.76%

1,144.56

1,082.81

5.70%

Other Current Liabilities

982.48

702.66

39.82%

Short Term Borrowings

316.18

149.7

111.21%

Short Term Provisions

1,161.42

1,137.43

2.11%

Total Current Liabilities

3,604.64

3,072.60

17.32%

17,101.98

16,301.25

4.91%

Long Term Provisions

Total Non-Current
Liabilities
Current Liabilities
Trade Payables

Total Liabilities

966.82%

Parameter

MAR'14

MAR'13

YoY

( Cr.)

( Cr.)

%Change

ASSETS
Non-Current Assets

0.00%

9,396.67

9,656.82

-2.69%

5,159.49

4,823.37

6.97%

0.00%

4,237.18

4,833.45

-12.34%

Capital Work in Progress

310.04

174.66

77.51%

Non Current Investments

2,068.66

2,030.51

1.88%

Long Term Loans & Advances

7,149.32

6,432.80

11.14%

13.87

11.99

15.68%

13,779.07

13,483.41

2.19%

934.31

462.41

4.15

4.2

-1.19%

Sundry Debtors

685.44

856.49

-19.97%

Cash and Bank

522.63

328.62

59.04%

245.86

232.37

5.81%

930.52

933.75

-0.35%

3,322.91

2,817.84

17.92%

-281.73

-254.76

10.59%

2,388.60

2,355.43

1.41%

17,101.98

16,301.25

4.91%

15,616.80

15,095.85

3.45%

Gross Block
Less: Accumulated
Depreciation
Less: Impairment of Assets
Net Block

Other Non Current Assets

Total Non-Current Assets
Current Assets Loans &
Advances
Currents Investments
Inventories

Other Current Assets

Short Term Loans and
Advances
Total Current Assets
Net Current Assets (Including
Current Investments)
Total Current Assets
Excluding Current Investments
Total Assets
Contingent Liabilities

102.05%

Profit and loss Account

Parameter
Gross Sales
Less :Inter divisional
transfers
Less: Sales Returns
Less: Excise
Net Sales
EXPENDITURE:
Increase/Decrease in Stock
Raw Materials Consumed
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
General and Administration
Expenses
Selling and Distribution
Expenses
Miscellaneous Expenses
Expenses Capitalised
Total Expenditure
PBIDT (Excl OI)
Other Income
Operating Profit
Interest
PBDT
Depreciation
Profit Before Taxation &
Exceptional Items
Exceptional Income /
Expenses
Profit Before Tax
Provision for Tax
PAT
Extraordinary Items
Adj to Profit After Tax
Profit Balance B/F
Appropriations
Equity Dividend (%)
Earnings Per Share (in )
Book Value (in )

MAR'14
( Cr.)

MAR'13
( Cr.)

Change
%

4,376.40

4,416.12

-0.90%

0.00%

0
0
4,376.40

0
0
4,416.12

0.00%
0.00%
-0.90%

0
0
84.51
640.81

0
0
167.31
639.46

0.00%
0.00%
-49.49%
0.21%

2,043.76

2,139.01

-4.45%

539.83

405.11

33.26%

36.32

40.62

-10.59%

36.78
0
3,382.01
994.39
467.5
1,461.89
59.51
1,402.38
680.23

24.4
0
3,415.91
1,000.21
380.22
1,380.43
119.69
1,260.74
762.4

50.74%
0.00%
-0.99%
-0.58%
22.96%
5.90%
-50.28%
11.23%
-10.78%

722.15

498.34

44.91%

81.33

158.35

-48.64%

803.48
261.05
542.43
0
0
1,102.23
1,644.66
45
19.03
276.69

656.69
181.45
475.24
0
0
993.12
1,468.36
30
16.68
263.73

22.35%
43.87%
14.14%
0.00%
0.00%
10.99%
12.01%
50.00%
14.14%
4.91%