An interview with Vinod Kumar, MD &CEO, Tata Communications
What has been the impact of demonetisation on earnings from the ATM business? Will the revenue from the ATM operations shore up in FY18?
The payment solutions business was adversely affected by demonetisation in Q3. But early signs indicate that the business is steadily getting back on track and the performance will regain momentum with the economy springing back to normalcy. While there will be a shift in consumer behaviour towards other modes of payment, the need for cash in ATMs was adequately demonstrated in the early weeks after the announcement of demonetisation. We believe cash will continue to play an important role in this economy for some more time before we embark on the journey of building a cashless economy.
Going ahead, will the ATM business be non-core? Are you looking at divestment options for your subsidiary — Tata Communications Payment Solutions Ltd?
There is currently no coordinated effort to divest the ATM business.
Tata Communications has sold its data centres in India and Singapore. What other de-leveraging steps are you planning to reduce your consolidated debt?
We are comfortably placed with our net debt to EBITDA at 2.9 times and the cost of debt at sub three per cent. Our strategy of deleveraging systematically along with business growth is on target. The business is generating healthy free cash flow. We have successfully completed the India and Singapore data centre transactions with ST Telemedia, reinforcing our strategic partnership with them. We have also completed the sale of Neotel to Liquid Telecom, a privately owned, pan-African telecom group.
How is your partnership with Nilesat going to strengthen your overseas presence?
While India is our largest market and we continue to have a leadership presence in the enterprise communications solutions space with 28 per cent market share, it is important to note that more than 75 per cent of our revenues come from markets other than India.
We are celebrating our 15th anniversary this year and in these 15 years, we have transformed from an Indian PSU to a global provider of communications and managed services with some very exciting and innovative solutions across cloud computing, unified communications and the Internet of Things (IoT) amongst others.
We strive to bring outstanding value to our global customers and collaborate with partners to enable this vision. Our partnership with Nilesat is one such example. We are set to work closely with Nilesat in its bid to have a cost-effective and reliable hybrid solution for media delivery that users across the MENA (The Middle East & North Africa) region can enjoy.
Going ahead, what are your growth projections for the data services business? What factors would fuel the growth?
We live in extremely exciting times. Digitalisation continues to create new avenues for value and impact across the ecosystem and our investment in digital competencies holds us in good stead for the future. The ambit of the data business is expanding and we are continuously building our growth services platform in order to broaden the addressable size of the market.
Our constant endeavour is to improve longer-term productivity, enrich the customer experience, and allow decision-making based on deep business insights and market insights. Third, we will continue to invest in inflection creating services in the IoT (Internet of Things), security, and mobility space; all areas that are poised to grow exponentially in the coming years.
Source: http://www.business-standard.com
