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Adith Charlie

Mumbai, July 20 Tata Communications, the rechristened VSNL, expects to more than double the contribution of its enterprise business as a percentage of company revenues by 2011.

The company anticipates its enterprise business to account for 40 per cent of total revenues in the next three years from 15 per cent at present, Mr Srinivasa Addepalli, Senior Vice-President (Corporate Strategy), told Business Line.

“Enterprise is currently growing faster than the other business areas of the company,” said Mr Addepalli. Analysts estimate that it could potentially be the largest contributor to revenues.

Tata Communications offers data services to both enterprises as well as carriers. According to some research reports, enterprise and carrier data together contributed about 37 per cent to the company’s revenues in fiscal 2008; remaining revenues are generated from the company’s voice and broadband business.

The company also intends to establish basic presence in countries such as Philippines, Indonesia, Vietnam and Thailand by the end of the year. “We will have at least one point of purchase (POP) in these countries or engage with partners with POP`s. This will enable us to connect our customers into these countries,” said Mr Addepalli

According to analysts, this Tata company has been following a strategy of focus on emerging markets (for its enterprise data products) such as South Africa, China and others, owing to lucrative margins associated with doing business there.

However, Mr Addepalli’s take is: “Margins may be good, but there are large scale investments that you have to make in terms of creating infrastructure and capabilities. Hence, we look at developing markets from a long-term strategy.”

He is of the view that the focus on domestic markets enables Tata Communications to break into key accounts. “While most of our customers would be from developed countries, they want us to provide services in developing countries where we would have expertise over their existing vendors,” said Mr Addepalli.

More Stories on : Outlook | Telecommunications | Tata Communications Ltd

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