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Tata Comms preps move for enterprise
March 8, 2010 | Howard Lichtman
LONDON--Having spent over US$2 billion the last four years beefing up its infrastructure, Tata Communications believes it is now ready to move up the network stack and deliver managed services to enterprises worldwide.
Speaking at the company's inaugural media and analyst summit here Thursday, Srinath Narasimham, managing director and CEO of Tata Communications, explained that the telecommunications company had been investing its efforts on expanding its network capacity across the globe.
Much of this growth came from various acquisitions including VSNL in 2002, Tyco Global Network in 2005 and Teleglobe in 2006. Topped off with the US$2 billion investment, which was also poured into building new data centers, the company is today the world's largest submarine cable operator, carrying 8Tbps (terabits per second) lit capacity.
It owns several submarine cable systems, including the TGN-Intra Asia line that connects Singapore, Hong Kong, Tokyo, Vietnam and the Philippines, and is also part of various subcable consortiums including the APCN-2 and Seacom. Its TGN-Eurasia system will be ready by the first half of this year, completing the TGN cable ring around the world.
Its global IP (Internet Protocol) network carries more than 1,600 petabits of Internet backbone traffic per month, a 66 percent climb over last year.
It has a network of 42 data centers worldwide, spanning 1 million square feet and with the capacity to house over 10,000 racks. A new US$430 million facility in Singapore will go live in April.
Tata Communications is also the world's biggest international wholesale voice carrier, managing 32 billion voice minutes--a 33 percent increase from the previous year.
With its infrastructure in place, the company is now well on its way to "create meaningful global enterprise play", said Srinath.
Describing the company as a "global player with its heart in the emerging markets", he said Tata Communications' strategy moving forward is focused on providing managed services to multi-regional global companies, particularly in emerging markets such as China, Brazil and Africa. Its suite of managed services will range from hosting, co-location and security, to cloud computing services, which the company will be launching before the end of 2010 in multiple markets, said its president and COO, Vinod Kumar.
In an interview with ZDNet Asia, Srinath explained: "The difference between what we'd done in the past is that, as part of constructive cables, we always have very little capacity to play with and therefore, the capability that we have to offer and range of services we can offer to both carriers and enterprises were always limited.
"Now, with much larger capacity going into these markets, we're in a position to create a broader portfolio of services," he said, adding that this portfolio will include "catalyst" services such as telepresence. The company currently manages 13 telepresence public rooms and plans to add another 25 by the end of the year.
But while it is heading in the right direction by focusing on augmenting its global scale and reach, Tata Communications--which was formally established only in 2008--will be challenged by the lack of brand awareness, noted Angel Dobardziev, practice leader of emerging markets at Ovum.
Also a speaker here at the media summit, the analyst told ZDNet Asia on the sidelines: "The challenge for them is their brand, which is still not as strong compared with some of the older telco market players out there such as Verizon."
"They'll also have to manage the conflict between serving their wholesale customers and enterprise customers [which are also potential customers of Tata Communications' wholesale clientele]," Dobardziev said, adding that this wholesale-enterprise clash remains a challenge for most telco players. "They will need to have a dedicated team to ensure their wholesale customers are given attention [while serving enterprise customers]."
He noted, however, that the company's advantage lies in having a strong parent, Tata Group, which size and deep pockets will go a long way in helping its telecommunication arm drive its strategy forward.
Srinath acknowledged that the company faces a couple of challenges in terms of implementation, from "morphing" its business model.
"One is an engineering-based business, and the other is a people business," he said, pointing to Tata Communications' co-network services and managed services business. "That's really the challenge. We have to create an organization that is geared around creating, delivering, supporting a new range of services for customers that has a different level of criticality and a different level of supporting ecosystem.
"If my network were to go down, it will have one level of impact. But if my entire network with the hosting and applications were to go down, the impact on the customers will be far more serious. Therefore, to be able to remodel ourselves around serving a customer base with such a suite of services requires quite a different infrastructure."
This challenge is not unique to Tata Communications, he said, noting that any organization going through a major transformation will face the same issues.
Srinath also acknowledged the company needs to focus on increasing its visibility, particularly among its target markets. A marketing campaign it kicked off last year and this week's media summit are part of ongoing efforts to improve its brand awareness, he said.
He added that it has been able to gain recognition by leveraging the Tata Group brand, which is increasingly recognized outside of India.
Encompassing over 100 operating companies, the Tata Group registered US$72.5 billion revenue last year and has 350,000 employees worldwide.
Asked, however, if this association might cause further confusion since the Tata brand is widely recognized for its outsourcing business, Srinath said: "When the Nano was first launched, I got more letters from people around the world saying we're the company that launched the Nano. So the ruboff in terms of awareness and credibility, saying that this Indian company has come up with a world-class product, has very positive result on us.
"Yes, you do tend to have a situation where customers confuse us with TCS (Tata Consultancy Services), but I'd rather have that problem than have a situation where the customers [don't] know us at all. So, it's a better problem to have than no recognition at all."
Eileen Yu of ZDNet Asia reported from Tata Communications' inaugural global media and analyst forum in London.
[via ZDNet Asia]
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