Tata Communications today announces its financial results for the quarter and full-year ended March 31^st, 2020

Highlights

Data services portfolio

• Strong growth in Data business; Q4 revenue grew by +7.5% YoY on the back of robust performance in Traditional and Growth services aided by an uptick in usage due to the COVID-19 pandemic and ensuing lockdowns. Full year revenue grew by +8.2% YoY
• Q4 Data EBITDA was at INR 823 crore (USD 114 Mn); up +39.8% YoY led by a strong profitable gain in Growth services¹, robust performance in Traditional services. Full Year EBITDA grew by +25.6% with a margin expansion of 310 BPs
• Traditional services² saw strong growth in revenue and profitability; revenue grew by +5.3% YoY and EBITDA grew by +24.5% YoY with margins at 37.0%. Within this portfolio, we witnessed a surge in internet traffic (+23% QoQ) with enterprises implementing work from home
• Growth services continue to scale and witness profitable growth; revenue grew by +9.8% YoY. Within this portfolio, we witnessed a surge in Conferencing traffic and revenue (+20% QoQ). We have achieved double-digit margin (11.6%) in this portfolio during the quarter

Consolidated financial highlights

• Q4 Consolidated revenue was at INR 4,398 crore (USD 608 Mn); growth of +3.6% YoY on the back of continued strong performance in the Data business
• Q4 Consolidated EBITDA stood at INR 869 crore (USD 120 Mn); increase of +26.8% YoY on the back of strong profitable growth in Traditional and Growth services
• Consolidated loss was at INR 275 crore (USD 39 Mn) as compared to a loss of INR 199 crore in Q4 FY19. This quarter’s loss was due to a provision of INR 342 crore towards additional license fees liability. Full year loss at INR 86 crore

Commenting on the results, A.S Lakshminarayanan, MD and CEO, Tata Communications, said, “We are living in extraordinary times with the COVID-19 pandemic continuing to disrupt businesses at large. At Tata Communications, we are enabling smooth and continued operations of services for our customers, delivering service upgrades and changes in record speed, as they implement work from home measures and shift workloads seamlessly across borders as part of their business continuity plans. We are also helping our large customers and partners to rapidly expand network capacity to serve the need of their own customers. The agility, service quality and responsiveness of our teams is being recognised by our customers who continue to show their appreciation. Our customer satisfaction score during this time has seen a record high – contributing to a top quartile Net Promotor Score (NPS).

As enterprises adapt and find a new equilibrium in this contact-free economy, Tata Communications is delivering secure connected digital experiences to enable them to unlock the economic value and the potential that digital transformation provides. Our platforms, solutions and services are not only enabling tens of thousands of employees of our enterprise customers to work from home, collaborate, improve productivity, and maintain business continuity, they are also keeping people and societies connected. We are proud of the work our teams have been doing in this crisis. The business results and the response from our customers are a testament to Tata Communications’ role as a key enabler in our customers’ digital future.”

Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said, “We have registered another quarter of robust growth in these tough times with all our financial and operating metrics tracking in the right direction.

We witnessed strong profitable growth in our Data business; in FY20, EBITDA margins for Data business expanded by 310 BPs coming in at 22.1% on the back of Growth services’ delivering INR 199 crore of EBITDA for the year. We continue to drive the business towards sustainable profitability and positive cashflows.”

An investor fact sheet providing a detailed analysis of the results for the quarter ended March 31^st, 2020 has been uploaded on the Tata Communications website and can be accessed here

Business highlights | FY2020

COVID-19 response:

• Delivered 650+ orders resulting from COVID-19, corresponding to 1.35 TBPS of additional provisioned bandwidth.
• 30% growth in internet traffic on our network in March compared to January 2020.
• Capacity expansion in a short span of time has been possible due to extensive upgrade and modernisation of our network done in the last three years.
• Recorded 1 billion minutes of Enterprise voice traffic in March alone.
• Enabled 98% of Tata Communications employees to work from home within two weeks, thanks to the robust infrastructure in place.

CSR:

• In FY20, our programmes and initiatives reached out to 1,64,000 people, of which 69% were young girls and women, and 34% from affirmative action communities. Our focus remains on the four cornerstones – digital enablement, affirmative action, women and young girls and disaster relief – which help us create shared value for the communities we serve within the overarching framework of the UN Sustainable Development Goals.
• DRIVE week: Tata Communications’ company-wide tools-down day that unites employees across geographies to serve the common goal of giving back to society, saw 7,700 volunteers in FY20; contributing a cumulative of 44,238 hours of volunteering and touching 47,139 lives across countries. DRIVE week is a movement at Tata Communications that focuses on a clear strategic objective of serving the communities in which we operate. Along with other initiatives, we clocked 59,184 volunteering hours in FY20 (5 hours per capita) with a global footprint in 51 cities, which supported more than 20 different causes.
• Our CSR efforts also continued during the time of COVID-19. We are responding to the call of the community, along with our partners. Our teams are engaged in providing:
  • Support to hospitals under Pune Chinchwad Municipal Corporation (PPE & isolation ward set-up)
  • Ration and hygiene kits for thousands of families in need. Also, ration for 500 families of children studying in two schools run by the Brihanmumbai Municipal Corporation, Mumbai.
  • Tata Communications raised $135K through employee contribution. In addition, the company has matched this amount and the total sum is being allocated to Tata Community Initiatives Trust and local NGOs in India as well as other countries around the world.

Awards: Outstanding customer service

• SDC Awards 2019: Excellence in Service Award
• Telecom Review Summit: Best Customer Service Provider
• Stevie Awards: Bronze award for Innovation in Customer Service
• CCW Asia Excellence Awards: Bronze award for Best Customer Service
• CX ASIA Excellence Award: Silver for Vendor excellence

Awards: Best Employer

• Great Place to work (India, Hong Kong, Canada and United States)
• Great Place to Work®: Best Workplaces for Women 2019 (India) and 2020 (Canada)
• Aon: Best Employer in India 2019
• Great Place to Work: Asia’s Best Workplaces (Hong Kong)
• Working Mother and Avtar: Best Companies for Women 2019 (India)

Awards: Analyst recognition

• 2019 Frost & Sullivan Asia Pacific Best Practices Awards: Asia-Pacific Managed UC Service Provider of the Year
• Leader in the Gartner Magic Quadrant for Network Services, Global, for seventh year running: Evaluation based on ‘completeness of vision’ and ‘ability to execute’ in global network services
• Received top honours at Frost & Sullivan’s 2019 India ICT Awards with 7 awards: Unified Communications Service Provider of the Year Award (Second consecutive year), Managed Security Service Provider of the Year Award (Telco) (First-time winner), Managed Video Services Company of the Year Award (First-time winner—new category), SDWAN Service Provider of the Year Award (Second consecutive year), Managed Multi Cloud Service Provider of the Year Award (Second consecutive year), Cloud Interconnect Service Provider of the Year Award (First-time winner—new category) and Enterprise SIP Trunking Service Provider of the Year Award (First-time winner)
• Frost & Sullivan: Asia-Pacific Managed SD-WAN Service Provider of the Year
• Rocco Research: A2P Messaging Leader Award
• Frost & Sullivan Managed Security services Market Study – APAC (India Chapter)
• IDC MarketScape APAC: Professional Security Services and Managed Security Services
• CDN Vendor Scorecard: IHS Markit (Omdia) Leader
• Everest Group: Everest Network Transformation & Managed Services Peak Award

Awards: Industry recognition

• Microsoft Intelligent Communications Partner of the Year Award: Tata Communications named a finalist
• Telecom Asia Award: Most Innovative IoT Project and Most Innovative Telecom Project
• Red Hat Innovation Awards: IZO Cloud
• MVNO World Award: Best eSIM Provisioning Provider
• Cisco: Cisco Service Provider Collaboration Partner of the Year, APJC and Cisco Webexceptional Achievement Award – Service Provider
• 2019 MEF Awards (x2): Enterprise Application – Media | SDWAN Provider of the Year
• Visteon: Best Supplier recognition
• MEF 3.0 Proof of Concept (PoC) Award for Service Assurance Implementation (Dynamic Connectivity and Commerce Enabled by MEF 3.0 and Blockchain)