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Data biz accounted for 75% of Tata Communications’ revenue in Q3FY19

Tata Communications reported a consolidated operational revenue of Rs 4,269 crore, remaining largely stagnant over the corresponding quarter last year when it reported Rs 4,144.7 crore in revenue. The company’s profits increased almost 17x from the same quarter last year to Rs 173.8 crore this quarter.

Data 

Tata Communications’ data business includes corporate data transmission services, VPN, signaling and roaming services, TV and other network managed services, and data centers.

Revenues from the data business rose by 14.1% YoY to Rs 3203 crore, and increased 8.5% over last quarter. In fact, data brought in 75% of the company’s revenue this quarter, and 72% of the company’s FY18-19 revenue up till now. Moreover, profits from the data business amounted to Rs 254 crore, almost 80% of the total profits of Rs 319 crore this quarter. Profits from the data business have accounted for 66.7% of the company’s FY18-19 revenues for nine months. In FY17-18, the data business accounted for 65% of the company revenue.

Revenue from ‘Growth services’, which include private cloud service IZO, hosting, security, video streaming, SIP trunking etc, grew 13.2% YoY and 4.6% QoQ. According to a statement, EBITA was marginally negative due to costs for a large deal and lower usage-based revenues because of a traditionally seasonal slower quarter.

Metrics:

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  • Revenues by segment
    • Service provider / carrier: 42%
    • Enterprise: 58%
  • Revenues by product segment
    • Traditional Services: 64.8%
    • Growth services: 22.5%

Other notes: 

  • IZO Platform grew by 138%, mobility services grew by 64%, media services grew by 39% (all increases YoY)

Internet of Things

Earlier this quarter, Tata Communications acquired Netherlands–based Teleena, an IoT and mobile virtual network enabler (MVNE) company. It was already the largest stakeholder in Teleena with a 35% stake. After the acquisition, the number of devices ordered under IoT in India has increased to over 96,000 devices from around 61,000 devices in Q2FY19.

IoT in India is deployed on long-range (LoRa) technology, which enables connectivity for IoT devices in rural and offshore areas. Products on the company’s IoT India platform include smart street lighting, human safety solutions, feedback systems, automated metering for gas, water and electricity.

Metrics:

  • PoCs completed: 72
  • Customers: 20
  • Base stations: 5,131
  • Cities covered: 38

The company’s MOVE platform enables MVNOs (mobile virtual network enablers) and IoT devices.

  • Customers: 129
  • SIMs ordered: 155,957

Voice

Revenues from the voice business, which consists of international and national long distance services, reduced 23% YoY to Rs 943.5, from Rs 1,230 crore in Q3FY18. Profits from the segment have largely remained stagnant over the past year at Rs 66.6 crore, from Rs 65.2 crore in Q3FY18.

Metrics:

  • International long-distance minutes: 6.4 billion minutes
  • National long distance minutes: 0.6 billion minutes

Payments

The payments business brought in Rs 40.7 crore in revenues, which is largely stagnant from Rs 34.9 crore in Q3FY18. The segment reduced its losses by 38% YoY to Rs 22.4 crore this quarter from Rs 36.4 crore in Q3FY18. The payments business consists of ATM deployment, PoS services, card issuance, and other services carried out by the company’s wholly-owned subsidiary Tata Communications Payment Solutions Ltd.

The company closed 1,523 less profitable ATMs this quarter, leading to an increase in profitability, with an EBITDA of Rs 6.4 crore, as against Rs 0.4 crore in the preceding quarter.

Metrics:

  • Third party ATMs: 5,003
  • White-label ATMs: 8,059
  • Total ATMs managed: 13,062
  • Total PoS managed: 12,790

Download: Financials | Presentation

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