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Strategy and FY13 Earnings Update Presented By: Vinod Kumar, MD & Group CEO Sanjay Baweja, CFO May, 2013 www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 1 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. www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 2 Agenda Presenters Title Mahesh Pratap Singh Welcome, Introductions, Safe Harbor Disclosure and Today’s agenda Vinod Kumar Vision and Strategy Update Sanjay Baweja Financial Update and Q4 FY13 Earnings Review Vinod, Sanjay, Srini Q&A www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 3 Vision and Strategy Update Presented By: Vinod Kumar, MD & Group CEO www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 4 Vision and Strategy Update • The landscape we operate in • Why Tata Communications matters • Vision and Strategy • Progress in FY2013 • Focus areas in FY2014 and beyond www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 5 Evolving enterprise environment = impact on business decision making IT centric business approach Pervasive BYOD, mobile video workforce (consumer & All apps mobile: 1st business) Desk: 2nd if at all Smart apps BIG data www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 6 Connected devices omnipresent, and projected to reach 19 billion by 2016 i.e. ~3times every person on earth Everything has a URL Remote sensing of objects and environment New routes to market via intelligent objects Cameras and microphones widely deployed GPRS $7/WiFi $3 2 GB flash $3 Content and services via connected products Augmented reality NFC Audio $0.5 Situational decision support LTE Building and 7” 800x400 display $20 infrastructure management Over 50% of Internet connections are Things 2011: 15+ billion permanent, 50+ billion intermittent 2020: 30+ billion permanenet, > 200 billion intermittent Source: Gartner’s Top 10 Strategic Tech Trends for 2012 & Cisco VNI 2012 www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 7 High-end devices significantly multiply traffic • The growth in usage per device outpaces the growth in the number of devices • The growth rate of new-device mobile data traffic is two to five times greater than the growth rate of users. www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 8 Global IP Traffic set to enter Zettabyte era in 2016 growing at 29% CAGR • By 2016 total traffic will be 3 times Global IP Traffic Growth 2011-2016 (Eb/mth) larger than 2011 • Video traffic to be the key driver of 110.3 Business Consumer this growth, and Video 13.1 communications to drive video 87.3 traffic surge 11.2 • By 2016 global IP traffic will be 69.0 equivalent to 37M DVDs/hour 9.4 54.8 • Annual traffic will surpass zettabyte 43.5 7.6 97.2 threshold by the end of 2016. 6.0 30.7 76.1 4.9 59.7 47.2 37.2 25.8 2011 2012 2013 2014 2015 2016 Source: Cisco VNI 2012 www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 9 www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 10 Opportunity Business Shifts Outsourcing Networked IT Centric Emerging for growth and economy and business markets productivity social media approach Implications and Opportunity • Significance of • Blurring the distinction • Managed services network infrastructure between hardware, • Ubiquitous communication and data centers software and services • Video next voice New apps Mobility Video Cloud Big data and platforms Technology Evolutions www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 11 Vision and Strategy Update • The landscape we operate in • Why Tata Communications matters • Vision and Strategy • Progress in FY2013 • Focus areas in FY2014 and beyond www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 12 Leadership and scale • #1 international voice carrier by minutes Industry • #1 submarine cable owner by length leadership • #1 in enterprise data in India by revenue • #2 network operator in South Africa (enterprise and wholesale) • Over 200,000 kms of owned fiber Global • 400 Points of Presence Infrastructure • Over 20% of the world’s lit international capacity • 42 data centres with more than 10,000 racks and 1 mn square feet of space • 1 out of 6 wholesale voice calls globally are carried on Tata Communications’ network World’s largest and only round-the-world sub-sea cable network. Tata Key Enabler of • Communications’ network carries nearly 10% of global internet traffic Communications • Only global tier 1 ISP with a top five position in all continents – leading international internet backbone • 3,000 large corporates including 260 Forbes 2,000 MNCs Customers • 1,600 carriers and 700 mobile operators www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 13 Vision and Strategy Update • The landscape we operate in • Why Tata Communications matters • Vision and Strategy • Progress in FY2013 • Focus areas in FY2014 and beyond www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. 14 Addressable market Times CAGR (%) Growth 2.5X 26% 2.1X 20% 1.7X 14% 1.6X 12% 1.1X 2% 1.0X (0.2%) www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms 15 © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries. * Note: 15 Our 3-5 years aspirational net revenue mix Industry Wholesale Solutions Voice 20% 15% Traditional Network Services Managed 40% Services 25% • Industry Solutions | Banking, Media Services, Telecom Outsourcing www.tatacommunications.com | @tata_comm http://tatacommunications-newworld.com | www.youtube.com/user/tatacomms © 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 16 TATA are trademarks of Tata Sons Limited in certain countries. GDS – moving beyond traditional services Traditional Broadcasting and Content Mobility VPN Services Managed Services 11% 14% 18% 21% 13% 17% 8% 19% 1% 23% 8% 1% 8% 3% 6% 2% (% of Gross Revenue) Gross of (% GDS Service Portfolio Mix Portfolio Service GDS 67% 60% 52% 48% FY10 FY11