FY10 Earnings & Strategy Update to Shareholders August 6, 2010
SAFE HARBOR STATEMENT Some of the statements herein constitute forward-looking statements that do not directly or exclusively relate to historical facts. These forward-looking statements reflect our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Because actual results could differ materially from our intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained herein with caution. Tata Communications does not undertake any obligation to update or revise forward looking statements, whether as a result of new information, future events or otherwise.
ANNUAL GENERAL MEETING August 6, 2010 FY10 Financials
Financial Highlights: FY10 Consolidated Gross Revenues Consolidated EBITDA As Per India GAAP Rs crores 9,963 11,026 1,350 1,012 FY 09 FY 10 Consolidated PBT FY 09 FY 10 Consolidated PAT 423 316 (598) (681) FY 09 FY 10 FY 09 FY 10
The PAT Movement: FY09 to FY10 400 316 200 0 FY09 PAT Addl. Neotel Losses Addl. Dep Addl Interest Others FY10 PAT 10-200 (314) (400) (598) -400-600 (210) -800
Segment Revenues: FY10 As Per India GAAP Rs crores Global Voice Global Data 9% 8% 5,629 6,147 3,872 4,189 FY 09 FY 10 Others FY 09 FY 10 49% 462 690 FY 09 FY 10
Gross Revenue Split by Business & Segment (FY10) RBU/Oth 6% Voice 56% Data 38% Service Provider 21% Enterprise 17% FY 10 Total: Rs 11,026 Crores Enterprise & Retail is 19%; Service Provider is 81%
Net Revenue Split by Business & Segment (FY10) RBU/Oth 12% Voice 21% Data 67% Service Provider 37% Enterprise 30% FY 10 Total: Rs 5,652Crores Enterprise & Retail is 33%; Service Provider is 67%
Net Revenue Growth & Mix Net Revenue (Rs Cr) 4,154 5,631 5,652 1% 4% 8% 5% 4% 4% CAGR 17% 225% 6% 68% 65% 67% 17% 26% 26% 21% 4% FY08 FY09 FY10 Voice Data Broadband Neotel
Key Metrics: EBITDA Margins EBITDA Margin (%) 24% 21% 11% 14% On Gross 18% Revenue 9% On Net Revenue FY08 FY09 FY10
Key Metrics: Capex Key Investment Areas Submarine Cables IP, MPLS & Ethernet Expansion Data Centers New / Managed Services FY07 FY10: $1.99 Billion
Major Announcements & Launches Innovative Products & Services Video Connect - Dedicated global video network Managed Two-Factor Authentication as a Cloudbased Service Global 10 Gigabit Ethernet Service IP Exchange (IPX) sou solution o to enable Universal Service Interoperability for MNO s Mobile Security Solutions for Mobile Subscribers Global Mobile Video Telephony Service Application Performance Visibility Service Partnerships BT Global Strategic Voice Services Agreement Whygo, Starwood, CWT, Dimension Data expand reach of Telepresence Tyco Telecommunications construct TGN Gulf cable system SugarCRM On-Demand CRM Mahindra Special Services Group provide High End Security Consultancy Services RTComm, Russia deliver joint data services throughout Russia Qtel offer global connectivity Qtel offer global connectivity services Strategic Investments Acquired BT Group plc s Mosaic business Media Management platform Set up 55,000 sq ft. data centre in Pune for Colocation, Managed Hosting & Storage
ANNUAL GENERAL MEETING August 6, 2010 Our Vision for The New World of Communications
The New World requires MORE MORE MORE Connected Speed Face-to-face Secure Pay-per-use and LESS LESS LESS Cost Complexity Carbon Constraint Capital
Our Vision Flexibility to Manage Uncertainty New Growth Markets New World of Communications Cost Control
Tata Communications in numbers Minutes of International 32Billion Voice Traffic 42racks Centers with more than 10,000 42Data 8Terabits 8 of International Bandwidth Lit Capacity 1,600backbone every month on our Internet 1,600Petabits backbone
Business Portfolio - Update Global Voice Solutions Global Data Solutions India Broadband Investments World s #1 in Wholesale International Voice services World s largest submarine cable network Non-stop around the world IP Backbone Wireline and Wireless (WiMax and WiFi) networks in India FOCUS on SMB Neotel (49%) South Africa s second network operator TTSL (strategic investment) India s #1 in Enterprise Data Services BitGravity CDN technology start-up Focus on Managed Services UTL in Nepal
Our Leadership Strategy Apply our home market model to the next strategic growth markets Drive catalyst services for Enterprises Emerging Managed Markets Services India Leadership Integrated Wholesale Define and empower profitable model for Service Providers Build on our Wholesale foundation
Our Position and Aspirations India Enterprise Data Wholesale LD Voice Global Wholesale International Voice Wholesale Connectivity Enterprise Services Now Aspiration p #1 #1 #1 #1 # #1 Top 3 New #1 Top 3 Top 10 To be T b amongstt the leading providers of global/multil b l/ lti regional services to MNCs, with an emphasis h i on emerging markets and managed d services
Our Organization
Our Wholesale Scale 1,600 Service Providers 480 Direct Voice Bilaterals 785 Mobile Operators 55 IP Peering Partners 650 IP Customers 40+ NNIs Major Transformation Services Partnerships
Our Enterprise Solutions Suite UNIFIED COMMUNICATIONS Services Collaboration Security Data Center Voice Solutions Web Conferencing Firewall Colocation Services VoIP Audio Conferencing Anti-X Managed Hosting VcIPLC Managed Business Messaging Telepresence Video Conferencing vutm IDS/IPS mddos Managed Storage Virtualization Hosted Contact Center IPVoice Connect Hosted PBX Network Se ervices NETWORK OPTIMIZATION SERVICES Content Delivery Networking Application Optimization Optimisation Int. Leased Line Nat. Leased Line Internet MPLS Access Services (Wireless, Wireline) WAN Ethernet
Media & Entertainment: Segment Solutions Best-in-Class Integrated t Portfolio Satellite Broadcast Video Connect Mosaic lobal Medi ia Delivery frastructur re G In Content Delivery MPLS Network (CDN) Managed Global IP Security Network Services Ethernet Managed Hosting and Storage Services Enabling Services 23 23
Banking & Financial Services: Segment Solutions Banking Infrastructure with One-Window Service Management Started operations in April 2009 Launched pay-per-use end-to-end d ATM outsourcing Managing 1,000+ ATMs and 3,000+ PoS carrying 32% of India s point-of-sale transactions Hosted Core Banking Solution End-to-End PoS Service End-to-End ATM Service 24
Broadband Wireless Access (BWA) Spectrum Auction Update Participated for all-india spectrum Circle-wise business cases developed over two years, with experience of broadband market as well as Wimax operations 5 cities / 50,000 subscribers Bids exceeded business cases by large margin; exited the auction progressively when no viable package was available Immediate focus on SMB market leverage synergies with Enterprise play, including managed services, SaaS and cloud computing SMB business segment now reporting into the Global Data Business Unit Await developments to evaluate future opportunities in the retail segment
Continued Global Industry Recognition Best Global Wholesale Offering Award, 2009 Capacity Magazine #1 Enterprise Data Services Provider in India 2009 Frost & Sullivan Product Innovation award for Managed Telepresence, 2009 Frost & Sullivan Mr. N Srinath named world s eighth most influential telecom personality Global Telecoms Business magazine Telepresence Managed Service Provider of the Year, 2009 European CEO Best service coverage, 2009 Optical Transmission Vision (OTV) APAC Network Operator Award Entered the Gartner s Magic Quadrant for Global Network Service Providers, 2010
Strategic Focus: 2010-2012 Redefine Wholesale Integrated, Turnkey, White Label Continue to expand India access networks Focus on catalyst services: Telepresence, CDN/Mosaic and Ethernet Achieve global benchmarks in customer service and operations Create at least one new home market (in addition to India and Create at least one new home market (in addition to India and South Africa)
In Conclusion Global player with its heart in the Emerging Markets Exciting and rapid transformation has been completed Proud of our established Wholesale leadership; well on our way to creating a meaningful global Enterprise play Investments in India, South Africa and other Emerging Markets will continue, both organic and inorganic
Compensation Matter The Single Judge Bench of Bombay High Court on 7 July 2010 decided that it did not have the jurisdiction to entertain the suit in view of the provisions of the Telecom Regulatory Authority of India Act, 1997 Suit was not filed pursuant to, under and consequent upon the breach of terms of the licence. The dispute did not relate to provision of telecommunication services as envisioned under the TRAI Act. Company is examining options including filing of appeal
Surplus land: Acquisition notices The land identified in 2002 for demerger at different locations measured about 773.13 acres Discussions with Government continue Out of which about 85 acres of land is situated at Padianallur near Chennai Last year 32.5 acres was transferred to the Employees Housing Society at Chennai as per the High court order Now, the Govt. has sent acquisition notices at Padianallur near Chennai and at Greater Kailash I, New Delhi which are part of the surplus land Land at Padianallur is proposed to be acquired for highway development measures about 1,102 sq mtrs At GK I, New Delhi, land proposed to be acquired for road widening measures about 234 square mtrs
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