Tata Communications Ltd Management Discussions.

Economic overview

2019 - while the global economy registered a growth rate of 3% and India continued to be the worlds fastest growing major economy at 6.1%, this was also the year that was marked by ecological events including floods, bushfires, typhoons and most recently, black swan events such as Covid-19, which has now evolved into a global pandemic.

As international response to the Covid-19 outbreak continues to develop, governments around the world are trying to manage the delicate balance between controlling transmission and forming an exit strategy that enables some form of return to economic activity – the ‘new normal. This historic event will change many aspects, ranging from geopolitics to the economic impact on many industry sectors, the competitive business landscape, the long-term societal impacts such as an exacerbation of inequality, consumer behaviours, the nature of work and the role of technology, both at work and at home.

While the near-term response to the pandemic remains critical, governments and organisations will also need to focus their responsibilities in creating long-term sustainable value by balancing economic performance together with environmental and social performance. As countries emerge from the immediate health crisis and reboot their economies, changes in working practices, attitudes towards travelling, commuting and consumption might make it easier to find business opportunities to capitalise on a lower carbon and more sustainable recovery. This could enable society to adapt responsibly, to return cleaner and greener, and to develop through sustainable growth with people and communities at the centre of society.

The pandemic is reshaping the global business environment, with the UN anticipating a US$1 trillion hit to the world economy in 2020 owing to the crisis. While the impact on economies, sectors and businesses is evolving by the day, one thing that is known is that this crisis is accelerating an already growing trend towards digitalisation. Therefore, for governments looking to drive economic recovery after the pandemic, supporting such digital competitiveness will be key.

On the domestic front, the Indian economy has taken big strides to shift towards a digital economy. Increase in internet access and the usage of smart phones have led to a boost in the adoption of digital technologies across the country. Indias digital infrastructure is coming to life through a combination of policy making and technological innovation. The Digital India plan is predicted to boost GDP by up to US$ 1 trillion by 2025. While these are pre-Covid 19 numbers, most analysts are expecting Covid 19 to give a boost to the Digital India mission as companies limit offline operations and encourage customers to adopt digital means.

Industry Overview

The Digital Ecosystem

In an era of changing consumer behaviour and technology driven transformation that has been sped-up more than ever before, Tata Communications continues to help organisations unlock the economic value and the potential that digital transformation provides as a global digital ecosystem enabler.

The digital ecosystem represents the entire technology ecosystem that plays a role in digital transformation. This ecosystem spans from independent software vendors, system integrators, IT consultants, product OEMs, value-added-resellers, cloud service providers, SaaS companies, right through to telecom providers.

In the past, digitalisation and technology already played a vital role in the growth and success of any business. And today, as people and organisations adapt to new ways of connecting with each other, some might say that it is the human desire to embrace the ‘new normal that has fast tracked organisation-wide appetite and adoption of digital transformation at a speed that has never been seen before.

Technology has been central to the way people, companies and governments have managed the Covid-19 crisis. Borders have returned, as have local communities, but technology is allowing a return to a more global world. Technology is enabling the contact-free economy, through applications such as online retail, tele-medicine, and social distancing delivery methods such as click and collect. New business and employment opportunities are being created in these sectors, but a greater dependence on technology has also increased cyber security risks.

As a result, there will be an even bigger spotlight on the role of digital transformation within organisations. The digital ecosystem will emerge as the driver of business value, unlocking opportunities for organisations by enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, building agility and managing risk.

However, this ecosystem can be complex for businesses to join up, manage and derive maximum value from. Different pieces of the digital ‘jigsaw need to be connected to work effectively. And it will be an environment that will continue to grow in complexity against requirements of today such as network transformation – the crucial foundation of any digital business, but also cloud deployment and collaboration, mobility & Internet of Things (‘IoT) and security solutions.

Even more opportunity is still to come as industries ride the next wave of digital evolution. Things like Edge computing, SASE, 5G, Block chain will significantly gain prominence. And enterprises will need one trusted partner that can see the whole picture, connecting and enabling this ecosystem and delivering the transformative outcomes it knows are most valuable to their business.

Telecom Market

The global telecom market stood at US$ 1.7 trillion in 2019. The share of enterprise segment is ~28% of the total market size. In the enterprise segment, fixed line services and mobile services contributed in similar ranges to the value. (Source: Gartner Forecast – 2019 Q4 update)

Over the last two decades there has been a paradigm shift in connectivity. Today, connectivity needs extend across the value chain of businesses – from suppliers and partners to employees, customers and end-consumers. Running businesses entails interaction among people, processes and devices, enabling real-time conversations through voice, video and data.

India is currently the worlds second-largest telecommunications market, having a subscriber base of around 1.2 billion. Owing to rapid expansion taking place in the Indian mobile economy, it is expected to contribute substantially to Indias GDP. The subscriber base is also widening on account of increasing mobile network coverage and competition-induced tariff reductions. These factors coupled with growing broadband internet access and smartphone proliferation have positively impacted demand. With exponential growth in video consumption, enterprises are also taking a mobile-first approach.

The government plans to hold auction for 5G spectrum. An effective 5G deployment will need huge investments in fiberization. In Budget 2020, the Government of India proposed to allocate Rs 6000 crores to the BharatNet programme which aims to provide broadband services to all households and institutions. This will further strengthen Indias 5G back-haul capability.

The recent Supreme Court (SC) ruling on Adjusted Gross Revenue (AGR) has put a financial burden of Rs 1.47 lakh crores on the telecom players. This will force them to re-evaluate their investment priorities, Developments in this space are being closely watched as the sector comes up with a long-term strategy for sustainable growth.

Key Trends Impacting our Industry

Tata Communications operates in a market context which continues to evolve rapidly. The enterprise landscape is changing, underpinned by the need for digital transformation. Digital transformation is happening across all layers of enterprise IT – with infrastructure becoming invisible, cloud becoming dominant, data driving new business models and security requirements changing from reactive to proactive. Changes are happening across the industry, with consumer preferences leading to a new breed of competition.

Digital is now more strategically core to businesses but also vastly more complex to manage, making agility key

As companies digital infrastructure grows, it is becoming more strategically core to their business, especially with the context of workplace 4.0. But its also becoming vastly more complicated, and most enterprises are still grappling with how to manage it effectively and maximise its value. This reinforces the importance of business agility.

Many of Tata Communications customers digital estates have expanded and they need help simplifying and future proofing the technologies, tools and platforms they now deploy.

Every enterprise will have a unique combination of different needs and a different tech stack. They need an assessment, advice and support that is tailored to their specific requirements. One-size-fits-all simply isnt appropriate.

• 42% of CIOs describe their role as ‘transformational, compared to 40% who describe it as ‘strategic, according to the IDG State of the CIO survey, January 2020. But from next year, more CIOs expect to have a ‘strategic role, rising to 50% by 2023 while just 32% will still be ‘transformational.

• 95% of CIOs in the IDG study also said that their role is expanding to include new responsibilities – the main areas are cyber security (64%), data privacy/ compliance (49%) and customer experience (46%).

Enterprise tech stacks keep sprawling. Netskopes 2019 Cloud Report found that the average enterprise now uses 1,295 cloud services, with the vast majority of them not ready for use by the enterprise. Oktas 2019 Businesses @ Work study found that large enterprises are deploying 129 different apps on an average, up 68% in the past four years.

Digital ecosystems will be the driver of business value in future

Enterprises will increasingly rely on their digital ecosystem to innovate and grow, not just to operate. In order to unlock opportunity and drive value for their business, enterprises must connect the different parts of this ecosystem together in the right way. This encompasses both their tech and their physical ‘extranet (supply chain, vendors and partners), which is rapidly digitising.

An effective and productive digital ecosystem will be the bedrock for business innovation and growth. Tata Communications delivers this by connecting a companys employees, customers, partners, vendors and supply chain.

Tata Communications role as a digital ecosystem enabler means it can interconnect and aggregate value from various ecosystem features with its own to empower customer platforms and not just provide a product. This will be context aware and much more intelligent and valuable over the longer-term.

Both reach and capacity of networks will need to be increased as usage grows among customers and employees – making it vital for digital ecosystems to be resilient and well connected.

• 70% of enterprises are reworking their network setup over the next three years to adapt to changes in customer demand and employee usage.

• 23% CAGR in amount of data being handled within the average enterprises digital ecosystem.

• 2.6% year-on-year increase in expenditure on enterprise mobility.

Greater competition also requires greater collaboration

The digital ecosystem is an operating environment that continues to be highly competitive and increasingly complex for customers to navigate owing to the following factors:

• Hyper-scale cloud services providers such as Amazon, Microsoft, Google, etc. are growing into conventional telecom space with bundled cloud and network offerings. These tech-mammoths are increasingly investing in the underlying infrastructure

• System Integrators (SIs) too, are competing with conventional telecom players for overseeing customer relationships as they continue to grow their managed services portfolio

• Product OEMs (Original Equipment Manufacturers) are particularly active in the overlay services play like SD-WAN

• Pure-play technology vendors are offering services directly to enterprises in niche areas

There is increased competition from conventional telecom companies as well, especially in India. Following the telecom sector consolidation, consumer mobility players have increased their focus towards serving enterprises.

By playing the role of a digital ecosystem enabler, Tata Communications places the customers business needs in the centre and stitches together a comprehensive solution across various components, thus precluding the need to deal with various components individually.

Organisation Overview

In todays thriving digital economy, Tata Communications is a digital ecosystem enabler assisting enterprises globally in their digital transformation journey.

We enable the digital transformation of enterprises, including 300 of the Fortune 500, unlocking opportunities for businesses by enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, building agility and managing risk.

With our solutions orientated approach, proven managed service capabilities and cutting-edge infrastructure, we drive the next level of intelligence powered by our platforms, solutions and services including next generation connectivity; mobility & IoT; collaboration; cloud, Edge and security; NetFoundryTM and voice.

We carry around 30% of the worlds internet routes, connecting businesses to 60% of the worlds cloud giants and 4 out of 5 mobile subscribers. Our capabilities are underpinned by our global network which encompasses the worlds largest wholly owned subsea fibre backbone and a Tier-1 IP network.

We aim to take away the complexity of designing, building and managing underlying digital solutions from our customers, and in return, provide them the ability to concentrate on their core business with ease by unlocking opportunities that digital transformation provides.

Along with our globally established subsidiaries and associate companies, we serve customers in more than 200 countries and territories worldwide leveraging our technology capabilities and partnerships.

Vision, Mission, Values and Strategy


Deliver a New World of CommunicationsTM to advance the reach and leadership of its customers


To enable enterprises to succeed in the new world of digital (technologies and business models) by being borderless and always available (to our customers and partners).

Shared Ambition

To achieve profitable growth and become a leading digital ecosystem enabler in the eyes of our customers, and the industry


Our strategy addresses three interlinking components:

Financial fitness, which is about getting our balance sheet healthy and also achieving double-digit profitable growth through our growth plan;

Our growth plan, which will move us towards our shared ambition of profitable growth and being seen as a leading digital ecosystem enabler. And underpinning this is our culture, which embraces the behaviour shifts we need to collectively make to achieve success.

Our growth plan addresses the who (superior customer experience), the what (platforms, solutions and services) and the how (the right operating model and our commitments in sustainability, innovation and Artificial Intelligence).

We will work closely with our customers to bring together complex solutions that cut across products and deliver it seamlessly; aggregating the capabilities we have and bringing it to the core, in order to deliver real value and superior experience to our customers.

We plan to generate investments in services through leading technological innovations and seek to better the existing offerings and optimise our assets. Through these improvisations, we expect an increase in demand for our services and expansion of our market presence as well.

Customer Segmentation

Our operations are categorised into two major segments, namely, voice solutions and data services. Our business and revenues are further distributed across various business segments, customer profiles and topographies. Being a key global player in the industry we operate, we offer products and services to three customer segments:


Particularly among enterprises, digital transformation is rapidly changing the way businesses are run with the Covid-19 pandemic acting as a catalyst for accelerating the scale of adoption.

Digitisation brings transformation across industries and functions with unparalleled opportunity for value creation and capture. Enterprises recognise the strategic implication of this and are designing digital transformation strategies to realise the maximum benefit of this movement.

It is no longer just a driver of marginal efficiency but the key to enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, building agility and managing risk. These five customer drivers offer a set of opportunities for us to provide differentiated platforms, solutions and services for our customers. We aim to be the partner of choice in the digital transformation journey of our customers and are well positioned to enable workforce collaboration, enterprise mobility and provide omni-channel access to end-customers.

Service providers

The service provider segment is driven by growth in data consumption world-wide, primarily driven by consumers. To support the segment, we offer an integrated set of services covering:

• Wholesale voice

• Domestic and international data connectivity - Internet backbone connectivity (IP transit)

• Value-added roaming services for mobile operators

• Carrier-specific business process outsourcing services

We provide platforms which are reliable for service providers and keep their business relevant and in-tune with market dynamics and end-user demands.


OTTs are a fast-growing segment which are already dominating the bulk of the world IP Traffic. We offer the OTTs a set of connectivity services across the globe.

• Point-to-point network connectivity in India and globally

• Sub-sea cable capacity for inter-continental needs

• Inter-city and intra-city data centre to data centre connectivity

We enable OTTs to address the spurt in global growth in data consumption in a reliable and scalable manner.

Business Segments

Voice and Data Services

With the endeavour to diversify our presence in the digital ecosystem as well as sustain our long-term growth, we continue to capitalize on emerging opportunities and new possibilities by investing in newer business segments. This enables us to mitigate the risk of being over-dependent on a concentrated portfolio or any one geography. With revenues categorised and spread across the segments of voice and data services, we drive the next level of intelligence powered by our platforms, solutions and services including next generation connectivity; mobility & IoT; collaboration; cloud, Edge and security; NetFoundryTM, and voice.

Platforms, Solutions and Services

With our solutions oriented approach and proven managed service capabilities and cutting-edge infrastructure, Tata Communications drives the next level of intelligence powered by our platforms, solutions and services to help customers stay ahead of their competition by embracing digital transformation and adopting cutting-edge technology.

All Tata Communications platforms, solutions and services are underpinned by our global network. It includes one of the most advanced and largest submarine cable networks, which carries around 30% of the worlds Internet routes, connects businesses to 60% of the worlds clouds, and enables businesses to reach more than 200 countries and territories.

Our proven managed service capabilities, solutions oriented approach and cutting-edge infrastructure, we power the next level of intelligence with our platforms, solutions and services including next generation connectivity; mobility & IoT; cloud, Edge and security; collaboration; NetFoundryTM and voice.

Data Services

We are a data services industry leader in India and an emerging challenger globally.

Next generation connectivity - Traditional data services portfolio

Service Provider data

Tata Communications is one of the worlds leading wholesale providers of data, IP and mobile signalling services. The Tata Global Network (TGN) and our investments in multiple consortium submarine cables enable us to provide seamless global connectivity services across all major business hubs.

Enterprise data

Our network services address four broad categories of connectivity needs for enterprise customers: Ethernet, dedicated point-to-point connectivity (IPL or NPL), Internet (IP-based) connectivity, multi-location connectivity through Global Virtual Private Networks (GVPN) and IZO™ WAN (which encompasses hybrid WAN connectivity, IZO SD-WAN and Cloud Connect services), enabling enterprises to transform their network to adopt cloud, internet and software-defined services.

Recognition: Leader in the 2020 Gartner Magic Quadrant for network services (global) for the seventh year in a row

Largest: We operate the largest wholly owned and most advanced subsea fibre network which underpins the internet backbone and its network carries nearly 30% of the worlds internet route

This portfolio also includes Video Connect, our flagship fibre based global media transport network to over 300 media hotspots across 125 cities supporting broadcast quality real-time video, optimised for enterprise demands. This dedicated media network promises the highest quality of service, with built-in redundancy and flexibility across all major video formats. Its scale and interoperability makes it future-ready, and the managed services layer give customers peace of mind.

Recognition: Managed Services video provider in India, Gartner

Mobility and Internet of Things - Innovation data services portfolio


Platform enabling intelligent, agnostic and network independent global cellular connectivity.

Tata Communications MOVETM combines access to pervasive cellular connectivity with over 600 mobile networks across more than 190 countries, coupled with a programmatic API based platform as-a-Service communications model. It is now well established as a leading multi-network connectivity platform for cellular based IoT services. The service has gained significant customer adoption and grown strongly since its launch in 2017 with ~200 customers in 5 continents. Among them are leading global airlines who leverage our platform - with global mobility coverage optimized to airline destinations, for digital transformation programs that include projects like Electronic Flight Bag (EFB), ancillary programs containing passenger connectivity, smart aircraft updates, etc.

Recognition: 2019 Telecom Asia Awards – Most Innovative IoT Project, 2018 Carriers World ‘Best IoT Initiative

India IoT

Enterprises and Governments are progressively adopting digitalization to enhance efficiency and productivity. Internet of Things (IoT) is the next frontier of automation with public and private sector enterprises recognizing the impact it can have in achieving their efficiency and sustainability goals.

Tata Communications Internet of Things is at the core of the Indian market, playing a pivotal role in the business transformation of these enterprises across sectors. Our vision is to be the enterprises partner of choice for their IoT transformation, focused on enhancing their resource efficiency and productivity for employees and assets by implementing full stack IoT solutions and data driven insights.

Over the past three years, we have invested in developing IoT infrastructure, software and solutions for Indian customers. We have implemented a smart IoT infrastructure including a dedicated IoT network based on LoRaWAN technology. This infrastructure ensures citywide coverage in 45 cities across India. We have built strong solutioning capability and have taken an integrated approach to deliver end to end IoT solutions including smart devices, a secure network, a cloud-based platform and rich applications.

FY20 has been the year of portfolio expansion and customer validation for us. We have stabilized large scale end to end solution deployments in real world environment across different segments including connected worker and asset tracker for enterprises and smart lighting solutions for smart cities.

We launched SafePassTM as part of our Connected Worker Solution. The solution was successfully deployed at scale by a large steel manufacturer in India across multiple facilities making it one of the largest such deployment in India. Our asset tracking solution has been used by high growth enterprises to track their business-critical assets. Our smart lighting solution is live in multiple metro cities including the city-wide roll out in a large metropolitan area.

We continue to strengthen our applications and analytics capabilities which will help us develop and deploy end to end IoT solutions at scale in conjunction with ecosystem partners. Overall, we aim to provide enterprises the flexibility to address a larger set of use cases and pain points while keeping the implementation simple which will help drive adoption.

Collaboration services - Growth data services portfolio

Tata Communications provides collaboration and unified communication solutions for enterprises, as well as service providers. These include calling services; SIP trunking services; conferencing services (voice, data, web, video); and Insta CC Customer Experience platform.

Our world-class global Unified Communications as a Service (UCaaS) brings our customers the full power of Microsoft Teams. Our global relationships with more than 1600 carriers ensure state-of-the-art communication and collaboration, wherever your business is.

Recognition: Frost & Sullivan Unified Communications Service Provider & Enterprise SIP Trunking Service Provider of the Year 2019

Cloud, Edge and Security - Growth data services portfolio

Tata Communications IZO™ Cloud platform is the most comprehensive platform of its type available today. A unique combination of innovative hardware and intelligent software topped with our industry awarded managed services, our cloud platform solution is designed to bring together an agile IT ecosystem with hybrid multi-cloud environments, security and network.

IZO™ Cloud platform includes: IZO™ Private Cloud, IZO™ Cloud Storage, IZO™ Managed Cloud, IZO™ Cloud Containers, IZO™ Cloud Analytics and Disaster Recovery.

As part of our long-term commitment to offering global security services with deeper local expertise, Tata Communications state-of-the-art advanced cyber security response centres aims to be a one-stop partner for managing cyber risks, globally. Our comprehensive portfolio of cyber security services are built on its multi-layered, integrated, secure and trusted security framework.

Our proactive approach using real-time security analytics allows us to provide customers with advanced intelligence that enables them to keep their cloud operations secure across all points of access with unparalleled visibility of global network traffic flows and embedded attack patterns to issue intelligence advisory.

Recognition: 2019 Frost & Sullivan, Global Hybrid Cloud Services Product Line Strategy Leadership Award


NetFoundry™, a software and business developed as part of Tata Communications Shape the Future innovation and entrepreneurship programme, has become an independent subsidiary within the Tata Communications Group w.e.f. September 2019.

NetFoundryTM enables IT to transform their networks, in order to support and enable their digital transformation by providing the worlds first cloud orchestrated platform which enables IT to leverage zero trust, programmable, high performance networking from IoT to cloud, and everything in between.

As a subsidiary, NetFoundry Inc. enables Tata Communications to take a more holistic approach to network transformation opportunities for its customers. NetFoundry Inc. provides the industrys best solution for Internet delivered applications, enabling Tata Communications to blend IZO™ WAN solutions into an overall network transformation solution.

Recognition: NetEvents Innovation Awards 2019 – Hot Start-up

Voice Services

We continue to be one of the largest players worldwide in the wholesale voice industry. Despite the global decline of this market, we continue to hold the leading position in this business.

International Long Distance (ILD)

Tata Communications is the worlds largest carrier of international wholesale voice traffic, and has its most advanced intelligent routing platform to enable quality and differentiated voice services. We have over 300 direct routes with leading international voice telecommunication providers. The wholesale international voice business is mature and increasingly commoditised. Our strategy is to grow our leadership position while optimising traffic volumes, and maximising margins and cash flows.

In 2019-20, Tata Communications handled approximately 22.6 billion minutes of international voice traffic globally, a decrease of 18% over the previous year (27.5 billion minutes in FY 2018-19).

National Long Distance (NLD)

Our NLD traffic decreased from 2.6 billion minutes in 2018-19 to 0.7 billion minutes in 2019-20. Mobile Network Operators (MNOs), however, continue to expand and roll out their domestic networks, shrinking the market for our NLD services. The consolidation of the India domestic Telecom market to a limited number of players that all have large India network is resulting in the elimination of this market. Hence the reduction of traffic and revenue from this business in FY20 and we expect this business to be minimal in FY21.

Vertical Industries


• We offer customised solutions and managed services to the automotive industry.

• With the introduction of driver assistance services, V2X, autonomous vehicles and a range of infotainment and extended eco-system connectivity models, the automotive industry is opening new territory in driver experience and commercial service interactions. Tata Communications MOVE™ Automotive connectivity solution provides a cloud-based platform, to connect and manage vehicle assets and enable real-time data connections across the world.

• Tata Communications MOVE Intelligent Vehicle Connectivity Platform delivering the highest levels of control, visibility and reporting

• Quality of service metrics and monitoring to furnish the highest customer experience

• Enabling 122 markets for Automotive by end of financial year 2021

Media and Entertainment Services (MES)

Tata Communications MES is a comprehensive platform for global media distribution. Our infrastructure spans the world to allow end-to-end content delivery at any scale. Our technologies enable consistency, reliability and speed of content dispersal via our core product areas: Video Connect & Cloud Based Media Ecosystem.

Tata Communications offers customised video network transmission solutions and managed services to the media and entertainment industry. Our strategy in this space is to create the worlds richest, connected, open media ecosystem providing business-to-business video services, cloud-based services and flexible, modular, managed services.

Tata Communications world-leading Video connect Network & cloud-based media ecosystem enables the entire content pipeline from origination to distribution and connects content producers with technology providers, distributors and consumers.

Business Excellence

Tata Communications leverages the Tata Business Excellence Model (TBEM) which is drawn up on the lines of Baldridge Excellence Framework, to facilitate systematic evaluation and improvement of performance and attain higher levels of efficiency in our business operations.

TBEM has provided us with a framework for achieving business excellence across multiple parameters covering Leadership, Strategy, Customer, Measurement, Analysis & Knowledge Management, Workforce, Operations and Business Results.

The model requires us to go through a rigorous assessment of our key processes and associated results every two years. The last assessment was conducted in 2018 by a team of senior Tata executives under the aegis of the Tata Business Excellence Group (a division of Tata Sons). Tata Communications has made its place in the ‘Emerging Industry Leader category, which indicates effective, systematic, well-deployed processes that are periodically evaluated and improved.

We manage our financial capital in an optimum and diligent manner with emphasis on the efficient capital allocation and margin expansion. Our focus on generating and communicating economic value is reflected in our financial performance with a consolidated revenue from operations of Rs 17067.99 crores and a consolidated EBITDA of Rs 3288.95 crores.

Financial Performance (Standalone)

Particulars FY 2020 FY 2019 YoY growth (%) Reasons for deviation more than 25%
Net Revenue 5,750.33 5,389.13 6.70 -
(Rs in crores)
EBITDA 1,572.06 1,225.97 28.23 Mainly due to increase in revenue and decrease in network and transmission cost
(Rs in crores)
PAT 208.78 (442.32) 147.20 Previous years loss includes an exceptional loss of Rs 667 crores
(Rs in crores)
Debt equity Ratio (in times) 0.07 0.06 16.67 -
Interest coverage Ratio (in times) 10.77 9.28 16.06 -
Current Ratio 0.65 0.64 1.56 -
(in times)
Debtors Turnover (in times) 4.43 4.28 3.50 -
Operating Profit Margin (in %) 10.34 6.22 66.24 Pursuant to the effectiveness of new CLS charges from November 28, 2018, in the previous year the Company recorded revenue of Rs 89.94 crores, operating and maintenance recovery of Rs 258.81 crores in Other expenses and a corresponding increase in Network and transmission expense due to transfer pricing adjustment.
Net Profit Margin (in %) 3.63 (8.21) 144.21 Previous years loss includes an exceptional loss of Rs 667 crores
Return on Net worth (in %) 2.54 (5.39) 147.12 Previous years loss includes an exceptional loss of Rs 667 crores

Outstanding debt

As of March 31, 2020, the outstanding principal amount of debt was approximately Rs 546.26 crores, on a standalone basis and Rs 10,720.88 crores on a consolidated basis. Considering the current capital expenditure requirements and debt maturing in the near future, we may resort to refinancing existing debt and raising further debt, to the extent and as and when required.

We understand that the nature of our operations and sector may not have much implications for the environment and natural resource management as compared to other sectors like manufacturing, real estate, automobiles, mining & processing. However, we are committed to minimise our environmental footprint.

We have an Environment Policy in place which states our commitment to design services which are safe to use, and to not cause any environmental hazards. Our efforts are to minimise use of energy and other resources, and to enable recycling or reuse of resources.

As a continual improvement plan, we have established Environmental Management System in accordance to with ISO 14001:2015 requirements and fourteen of our Indian facilities have been certified for the same. The ISO 14001 standard helps us to regularly review the

Environmental Management System, with programmes in place to mitigate the identified environmental aspects and impacts of our operational activities and services. The system also helps us to review the environmental compliances, objectives and targets, training plans and needs and expectations of our stakeholders in a comprehensive manner.

As a business, we are working towards improving upon the following priority areas:-

Increasing Renewable Energy (RE) footprint and reducing our GHG emissions

At Tata Communications, we consume nearly 630,000 gigajoule (GJ) of energy, mainly comprising of indirect power supply (89%) from the national grid while the rest comes from conventional sources and from renewable energy sourced from third party / in-house. We understand that our main impact on carbon or other greenhouse gas emissions comes from using indirect energy. Hence, our primary focus area is to reduce these indirect emissions. To reduce such emissions, there is an ongoing move to use renewable energy at key locations of Tata Communications.

In our operations across the globe, almost 8% [~ 52,000 gigajoules (‘GJ)] of the electricity used in the reporting period was sourced from either wind or solar energy. The major locations harnessing green energy are Delhi, Chennai, Bangalore, Hyderabad and Pune. In order to meet the increasing energy demand for customer services as well as our own facilities as on date, we have 10 megawatt (MW) (18 million units) capacity agreement with third party providers whereas our in-house solar power generation capacity amounts to 5 MW (on site for both IDC and non-IDC).

During the year under review, we completed the Renewable Energy Assessment studies with the help of expert consultants like Deloitte and PTS: Schneider Electric for India and International regions (United Kingdom, Guam, North America, Japan, Portugal, Spain and Singapore) respectively. The exercise was planned under two phases, of which maximum focus was placed on India region, primarily on account of the large infrastructure space and high energy consumption pattern. The study confirmed that Tata Communications has a scope to expand the existing Renewable Energy (‘RE) capacity by ~16.5% to 32% (34.3 million units per annum).

We have established an accounting mechanism and are calculating our Green House Gas (GHG) emissions i.e. Scope 1 and Scope 2 emissions data in accordance with the GHG Protocol Corporate Accounting and Reporting Standard to account for our global emissions. During the year under review, our total GHG [Scope-1: Direct emissions from our own operations (DG sets fuel and emissions from ODS) and Scope-2: Indirect emissions from the generation of purchased energy] is detailed below-

Type Source GHG Emissions
(Tonnes of CO2e)
Scope -1 Emissions arising from the consumption of fuels like diesel, and use of refrigerant gases 6,376
Scope-2 Emissions from consumption of grid electricity 108,482
Total 114,858

We periodically report on environmental stewardship and actions to manage climate change through the Carbon Disclosure Project - CDP [a network organisation which works with shareholders and corporations to disclose the GHG emissions of major corporations]. Tata Communications has received a score of ‘C Grade, which is within the "Awareness" band. Our CDP submissions are available on www.cdp.net/en.

Conservation of energy

In FY 2020, we consumed 175 million kilowatt-hour (kWh) across our operations around the globe. Our energy consumption over the years has decreased as we have expanded our focus towards optimising energy efficiency with an aim to continuously measure energy consumption, while also identifying any leakages in our operating procedures. Last year, our Indian operations identified a total of 56 opportunities involving projects related to Heating, Ventilation and Air Conditioning (HVAC), Switched-Mode Power Supply (SMPS) and Uninterruptible Power Supply (UPS) efficiency enhancement / Optimization and consolidation, Smart Lighting (Conversion of conventional lighting into LED), usage of IOT (Internet of Things) and reduction in State Electricity Board (SEB) contract demand. Out of the 56 identified opportunities, 37 (66%) projects stand completed, and we have achieved savings of around 804 thousand kWh with annual savings of Rs 7.85 crores.

Our international operations have also worked towards energy conservation projects and have completed two big projects - installation of VFD (Variable Frequency Drives) on IT room HVAC units in our Wall, New Jersey site, resulting in annual savings of approximately 82 thousand units and installation of EC (Electronically Commutated) fans on Stratford, London Colocation room CRAH (Computer Room Air Handler) units resulting in annual savings of approximately 30,600 KWH. Further, our teams installed EV (Electric Vehicle) Charging station at our site in the United States of America – Wall, New Jersey. This allows employees to utilise the charging station facilities while at work as well as for charging other electric vehicles at the site.

Reducing our water consumption

We recognise the value of water as an increasing global concern and are conscious of the impact of its use in our operational activities. Hence, we align our operations with the steps to minimise our water footprint and reduce the amount of fresh-water consumption by ensuring maximum recycling and reuse of water.

Our facilities in India exist in areas that face water scarcity. Most of our water usage is for office and catering facilities, or in HVAC to support cooling equipment. Even though our operations are not as water intensive as those of manufacturing industries, we consider it to be a material aspect and have undertaken steps for water conservation across our facilities. Since most of our international operations facilities are on leases, we consider water as a material issue for our Indian operations.

During the reporting period, we drew nearly 4.62 lakhs kilo litres of water (including requirement for STT Global Data Centres India Private Limited - an Associate Company), of which 73% was from municipal facilities, 25% from third-party tankers and bottled water and the remaining 2-3% through rain-water harvesting and ground water extraction.

In order to map water consumption in our direct operations, we conduct a Water Risk Assessment exercise regularly. This helps us to improve processes and facilitates identification of inefficiencies in water use or distribution system. Our Water Risk Assessment exercise for all major facilities was revisited this year, wherein sites falling under critical results were asked to set up objectives and targets along with plans to conserve and improve water recycling in their region.

Our operations and facilities align with the ‘3R resource management strategies: Reduce, Reuse and Recycle.

In a water-stressed country like ours, recycling and efficient use of water is crucial. Therefore, we have installed wastewater treatment plants at most of our facilities. Also, to make our cooling system more efficient, we have implemented a geothermal cooling system – using a water-cooled HVAC technology that loses almost no water to evaporation at Dighi campus, Pune (one of our largest campuses).

Further, most of our facilities have been designed to be ‘zero discharge, where the generated waste-water is treated through Sewage Treatment Plants and recycled for cooling and other domestic applications such as gardening and water sprinkling etc. For some sites, treated water is discharged to the municipal drains after complying with all regulatory limits. During FY20, we recycled nearly 77,000 kilo litres of water for reusing purposes.

Our growth plan addresses the who (superior customer experience), the what (platforms, solutions and services) and the how (the right operating model and our commitments in sustainability, innovation and Artificial Intelligence). These strategic shifts need to work in harmony for our strategy to be successful.

To fulfil our shared ambition, Tata Communications engages with a diverse range of external and internal stakeholders across all parts of our business. Our business teams, including Operations, Sales, Investor Relations, Legal & Corporate Secretarial, Corporate Communications, CSR, EOHS, Corporate Services, work closely with their associated stakeholder groups such as Investors, Regulatory bodies, Shareholders, Employees, Community, Industry bodies, Business Partners and civil society to monitor material aspects that interest stakeholders.


Providing a superior customer experience is at the core of Tata Communications business model, organization structure and investment decisions. We aim to engage with our customers more intimately and be seen as trusted advisors in their digital transformation journeys. To deliver a superior customer experience, Tata Communications has adopted an agile and holistic approach by shifting from an individual product focus to an integrated customer solution focus – our platform model – so that our platforms stay relevant to our customers digital transformation journeys. To further drive home positive returns, our focus is on simplifying the customer engagement process – to make it an easier process right from initial contact through the customer lifecycle.


Tata Communications Limited strives for the highest degree of transparency of disclosures and timely dissemination of public communications regarding its strategy, business outlook, various risks, financial results and industry perspective.

The Investor Relations team at Tata Communications Limited facilitates two-way communications of the investor and analyst community with the Management continuously and on a frequent basis, with the aim of ironing out all information asymmetries to merge the Companys stock price with its fair market value. This is achieved via a multitude of interactive channels such as investor roadshows, analyst meetings, management conference calls and one-on-one meets with more than 300+ touchpoints in a year.

The earnings release and the Companys event updates are shared on the Company website as and when such events take place. The earnings updates are also shared over e-mails to the analyst community who subscribe to this service. The quarterly earnings conference call is conducted via livestream video conference calls where the Management declares the business performance and interacts with the investors and analysts.

The detailed Company factsheet and investor presentation has various business KPIs (Key Performance Indicators) and cross-sectional views of Tata Communications business and trends. All material updates and corporate actions are intimated to the public via press release, exchange notifications and our Company website. The quarterly and annual filings, results, upcoming investor events, earnings call transcripts and webinar recordings can be found under the Investor Relations Section of the Company website at https://www.tatacommunications. com/investors/

Regulatory and Industry Bodies

In India, Tata Communications Limited participates in the stakeholder consultations with the Department of Telecommunications (‘DoT), Government of India, Telecom Regulatory Authority of India (‘TRAI) and also interactions between industry associations like FICCI, ISPAI and relevant Ministries (Department of Telecommunications, Ministry of Electronics and Information Technology, Ministry of Home Affairs) etc. to support long term policy formulation in the Telecom sector as well as to deal with the critical operational / business issues being consulted upon by the relevant authorities.

Tata Communications Limited is member of ISPAI – an association of Internet Service Providers in India . Apart from ISPAI, the Company through its representatives actively participates in consultative committees of TEC (Telecom Engineering Center), DoT which is the standards-making body for telecom equipment in India. The Company is also represented on the Board of NIXI (National Internet Exchange of India) - a not for profit body under the Chairmanship of Secretary MeitY (Ministry of Electronics and Information Technology).

We proactively contribute to realizing the United Nations Sustainability Development Goals that aim to protect the planet and end poverty. Our investment in Corporate Social Responsibility (‘CSR) activities are focussed on creating a positive impact on the economy, society and the environment. Our endeavour is to not only to uplift the communities in which we operate but also to build a strong ecosystem connecting global and local megatrends with initiatives that improve the life situations of the most vulnerable and underserved communities.

CSR at Tata Communications derives inspiration from Tata Groups philosophy ‘to improve the quality of life of the communities served globally through long term stakeholder value creation based on leadership with trust.

We aspire to continuously impact communities by differentiating ourselves as a unique ecosystem of connections. Our CSR programmes leverage the organizations core expertise, partnerships, infrastructure and other resources to create long-term shared value for the community it serves; focused primarily on underserved groups, especially women, young girls, youth, Affirmative Action communities (Dalits and Tribals).

All efforts at Tata Communications are aligned to complement the following 5 SDGs, in accordance with its vision and ambition of touching a million lives by 2022:

Tata Communications synergises with the programs and initiatives of the Tata Group wherever possible and provides support for disaster rescue, relief and rehabilitation in close coordination with other Group companies.

Our community initiatives are undertaken in a project mode with defined activities for each stakeholder, mapped to outcomes with specified targets and milestones. As a practice, Tata Communications establishes long-term multi-year partnerships to provide ample time for creating an impact. All projects undergo periodic monitoring with a defined, project-specific Monitoring and Evaluation framework. Monitoring is done through a cloud-based tool that enables partners to upload real-time and geo-tagged data. In addition to this, regular interactions and site visits are also conducted by our CSR team to monitor the progress of the projects and to provide guidance in achieving their specified targets.

In our effort to make impact assessment more robust, a third-party Social Return on Investment (‘SRoI) study was commissioned for MPowered, a project for women, to enhance sustainable livelihoods using mobile technology being implemented in Odisha and Jharkhand. The SRoI study found that for each rupee invested, a social value of Rs 6.7 was generated. Additionally, impact assessment studies were conducted for two other education programs in Bengaluru and NCR.

The entire CSR portfolio is managed by a dedicated team of in-house CSR professionals. We collaborate with NGOs, trusts and agencies to implement projects. Additionally, through a Global Employee Volunteering Program, we utilize the skills of our employees to support different projects and community initiatives.

Initiatives undertaken and Outcomes achieved


We undertook four projects through NGO partners in Delhi NCR, Maharashtra and Karnataka. These projects are multidisciplinary and improve the quality of education through digital enablement of institutions, introduction of innovative learning methods including sports, capacity building of educators, youth engagement and leadership development of students. Scholarship and academic assistance is provided to youth from challenging backgrounds along with mentorship to students from socially and economically underserved sections.

Employability and sustainable livelihoods

We provided vocational training to youth to develop skills for BFSI, customer relationship management, retail sales, BPO, Android application development, general duty assistant, electrician, beauty therapist, solar technician and auto sales in Delhi, Maharashtra, Uttar Pradesh, Tamil Nadu, and Telangana. Post training, they will be placed in reputable companies with an average salary of Rs 11,597 per month.

Women belonging to rural areas of Odisha and Jharkhand were trained to use smart phone applications on cultivation, livestock management and financial literacy. Women from Raigad district in Maharashtra were trained on entrepreneurship development to build their capacity for sustainable income through enterprise creation.

Healthcare & Disaster Relief

Supporting the establishment of the ‘telepathology infrastructure for cancer diagnosis to offer remote location histopathology analysis.

This year we have initiated project Drishti, that aims to improve eye care of and provide better visual health for and by young girls and women, in order to improve their ability to participate fully in every aspect of life and help them break out of the gender-health-poverty trap.

Tata Communications supported ‘One Tata for Disaster Response by contributing funds for relief and rehabilitation during Cyclone Fani in Odisha and floods in Maharashtra.

Employee volunteering

Our CSR projects are enriched through skills-based volunteering; channeling employees energy towards community action on key social and environmental issues and providing a space for leadership development.

We launched One in a Million, the first ever recognition platform for champion volunteers, with 15 volunteers from India, APAC, Americas and Europe getting the top honours for their effort to inspire volunteering within the organization.

In addition, the employees volunteered for the Employee Giving Program that resulted in a substantial outreach of 28,103 beneficiaries.

Awards & Recognition

Tata Communications was recognized by The Singapore Human Resources Institute for a ‘Special Mention for CSR in July 2019. We were awarded the ‘TAAP Good Practice Award in Leadership and Education by Tata Business Excellence Group and won the DX Awards instituted by the CII-Tata Communications Centre for Digital Transformation for ‘Innovative Practice in CSR in 2019. We were also awarded for ‘Highest Per Capita (large company) and for ‘Most Unique Volunteering Activity during Tata Volunteering Week 12 by the Tata Sustainability Group.

We aspire to be the Company that offers people opportunities to develop their talent and a work environment in which they feel included, engaged and motivated to perform. We strive to establish a mutually beneficial long-term relationship with our employees who are proud to work with us.

Learning and development

We continue to make steady progress to empower our employees with skill sets with the launch of the Tata Communications Learning Academy. This initiative has enabled employees to enhance or build skills required to learn-on-the-go and grow in line with the continuous technological change taking place.

Our innovative training methods help build profiles for future job requirements, helping our employees pivot their skills from hardware to software, from legacy wireline to mobile and the digital economy, transforming them from data recorders to data analysts and scientists.

In FY20, more than 8000 employees were provided training to develop skills like - mobility, digitisation, software defined network, cloud, data science, Artificial Intelligence & Machine Learning (‘AI & ML) etc., and were offered opportunities to upgrade their existing skills through individual learning requests or structured, role-based learning interventions. The latter includes our Project Miles, Tata Communications Way of Selling, TCTS Upskilling, and People Manager Capability Building initiatives.

Crowdsourcing global talent

To further streamline collaboration and nurture employees for the future across various organisational operations, Tata Communications ‘Project Marketplace platform facilitates business units and teams internally to crowdsource talent from its global employees.

The platform provides employees an opportunity to work on projects spread across different regions and disciplines as compared to those in which they may currently work. This provides them with the opportunity to grow their personal networks within the organisation, as well as share ideas on their areas of expertise. Since its launch, the platform has hosted ~150 projects (38 projects in 2019-20) and engaged 3500+ users.

During the year, we also extended Project Marketplace to encompass external freelance network in partnership with Upwork to provide project managers access to additional, best-in-class talent available globally.

Human Capital Development

Tata Communications offers a dynamic work environment where our employees benefit from working with other innovators from around the globe – driving meaningful change together, both for our customers and us. We have a diverse and multicultural workforce representing more than 47 nationalities.

The representation of women in Tata Communications has grown from 16% in FY14 to 21.5% at the end of FY2020 with new hire Diversity at 32.70% in FY2020.

During the year, Inclusive Leadership was introduced as an immersive learning journey to help people managers (including Leadership Forum members) manage a diverse workforce, with the help of webinars from world class D&I (Diversity & Inclusion) leaders, and customized e-learning modules with assignments, case studies, and online social discussions. The Global Part Time Work policy, Work from Home Policy & Caregiving Policy in conjunction with LEAP (Life Event Assistance Program) are all aimed at helping employees balance their personal needs and professional responsibilities at the same time.

Tata Communications has been recognized, for the fourth consecutive year, in the AVTAR Group and Working Mother Media, ‘2019 - 100 Best Companies for Women in India (BCWI) for policies and programs that encourage a balanced workforce. Great Places to Work has also named us as ‘Best Places to work for Women in India and Canada.

Tata Communications compensation and employee benefit practices are designed to be competitive in their respective geographies where it operates. Employee satisfaction, motivation and loyalty remains crucial to maintain our competitive edge. We offer a range of benefits to attract and retain the best talent. The benefits vary across geographies and some of them include Group Medical Insurance, Group Term Life Insurance, Group Personal Accident Insurance, Car Lease Program, Sodexo Meal Coupons, awards for Employees and Retirement Gift Vouchers to our full-time employees.

We aim to grow and develop our employees and their careers by widening their experience and expertise. As a result, we conduct a training-need analysis on a regular basis to assess training priorities and also hold group discussions to benchmark the training programmes.

Employee Well Being - Health & Safety

As an organisation that is built on a strong foundation of values, with more than 10,000 employees across multiple geographies, we take the Occupational Health & Safety (OHS) and well-being of our employees seriously.

We follow the Tata Groups safety principles at every step of our operations, and also uphold the Group safety standards that specify the minimum mandatory requirements required to be followed to keep personnel and facilities safe, for ensuring ‘zero harm. The OHS Policy outlines and demonstrates our commitment to safety for our stakeholders.

We have introduced Mandatory Safety Standards (MSS) covering key operational activities in India. To assess adherence to these standards, regular audits were carried out, with findings forwarded to the leadership team for action. To oversee the implementation of MSS, the EOHS team and Business functions conduct around 500+ audits per month on an average and close all nonconformances in time.

We also launched various behavioural awareness campaigns, training sessions and a health & safety mobile app that resulted in an increase in reported unsafe observations. The number of unsafe observations reported were 3,500+ which was an increase of more than 80%, in comparison to FY 2018-19, whereas the total number of man-days of Health & Safety training for employees and contract workforce was around 5,000. We had no major incidents in the last 36 months, including fatal incidents.

We have also received the OHSAS 18001:2007 certification (international best practice with respect to H&S risk management) for our four facilities (GK-1-Delhi, VSB-Delhi, Dighi-Pune and BKC-Mumbai) in India and two facilities (Tai Seng street and Global Switch Office) in Singapore. During the year, we also received AS 4801 OHS certificate for our Sydney operations in Australia. Additional ISO 45001:2018 Certifications are also in pipeline for 4 more sites in South India (VSB Chennai, JTP- Chennai, VSB – Kochi and VSB Hyderabad) and 3 sites in Canada (Montreal, Laurentide and Toronto) – expected by Q1 FY 2021. The certification exemplifies our systematic approach and our consistent H&S framework across various business functions and our commitment towards ensuring continual improvement of occupational health and well-being of our employees and the contract workforce. It further reinforces our efforts towards improving our corporate image, reputation and credibility among stakeholders like regulators, customers, prospective clients and the public.

We have a strong commitment to our Health Safety Environment (HSE) framework. Our programmes are driven as per the material risks identified to our operational activities across the geographies we operate in. We are now looking forward to implementing an HSE IT automated solution which will aide business and corporate EOHS teams in automating the HSE programmes and MIS system for Tata Communications. The automated EOHS systems are standardised, easier to implement and use, and more affordable. This modern system will significantly boost productivity, enterprise connectivity, and management visibility to mitigate risks. The system has partially gone live in Q4 FY 20 (trainings KPI). Rest of the KPIs (Unsafe observations & Incidents) are expected to go live by FY 2021 Q1.

During the year, our H&S program was also recognized by a third party - Grow Care India Safety Award jury. Our H&S program was selected for the ‘Gold Award for safety. Specifically, the jury appreciated our IT based interventions (Driver Behaviour Monitoring tool for 4-wheelers; Automatic Speed Detection System deployed at Dighi campus, Pune; and safety app developed for monitoring over speeding for 2-wheelers) in deploying safety measures. The award was conferred to us in December 2019 at New Delhi.

Employer awards and accolades

Best Workplaces in Asia

Tata Communications (Hong Kong) has been recognized as one of the ‘Best Workplaces in Asia for the year 2019

2019 Best Employer in India by Aon

For the fourth year in a row, Tata Communications has been included in Aons Best Employers in India for 2019. The recognition is a testament to Tata Communications commitment and approach towards our employees.

Certified as a Great Place to Work by Great Place to Work Institute

In 2019, Tata Communications was certified as a Great Place to Work by the Great Place to Work Institute in many countries.

• In India, Tata Communications was certified for the fourth consecutive year

• In Hong Kong, Tata Communications was certified for the third consecutive year

• In Canada, Tata Communications was certified for second consecutive year

• In the United States, Tata Communications was certified for the first time

This, again, is a testament to the progressive people practices deployed by us.

Best Companies for Women in India – Working Mother and Avtar

In 2019, for the fourth year in a row, Tata Communications was recognised as one of the top 100 companies for women employees in India. This is a testament to the leadership buy-in, manager support and employee feedback received by Tata Communications for its Winning Mix, a strategic Diversity & Inclusion initiative.

Best Workplaces for Women by Great Place to Work Institute

In 2019, for the second consecutive year, Tata Communications has been identified as ‘Best Workplaces for Women in India. In 2020, Tata Communications has been identified as ‘Best Workplaces for Women in Canada.

Risk Management

Rigorous systems ensure company-wide protection.

Being a digital ecosystem enabler, operating in a complex and competitive environment across diverse markets and geographies, Tata Communications is clearly exposed to multiple threats and risks, from both internal and external sources.

We take adequate measures and steps to mitigate risks covering all our business operations. A holistic risk management framework ensures placement of rigorous systems to identify any impact on our operations. By taking all possible scenarios into account, as detailed below, we are making informed decisions to sustain our market leadership globally.

Internal control systems and their adequacy

Tata Communications has robust internal control mechanisms, and our financial authority is clearly defined at the appropriate management levels through delegation of powers policies and procedures. Technical and financial operations are controlled by state-of-the-art technology and systems. Tata Communications Limiteds accounts are subject to internal and statutory audit.

Tata Communications operates well-established risk management policies and procedures to identify and assess risks across all business units and operations. These take into consideration well-defined risk management principles based on experience, known best practices and principles of good corporate governance. Their focus is on mitigating the potential adverse impact on the business from changes in the external and internal environment. Risk management and mitigation of key risks are considered as a vital exercise to achieve corporate objectives and deliver long-term value to stakeholders.

The Companys key risks are discussed with the members of the Risk Management Committee and the Board of Directors. The responsibility for effective and efficient implementation and maintenance of the risk management system rests with the Global Management Committee, which comprises the CEO, CFO , CLO and key business and operations heads. Tata Communications risk management procedures are subject to a continual improvement process.

Enterprise Risk Management (ERM)

To manage risks, the Board of Directors has established an Enterprise Risk Management (‘ERM) process. This comprises the necessary organisational rules and procedures for identifying risks at an early stage and taking proactive steps to manage the risks inherent in any commercial activity. The Risk Management Committee monitors and undertakes an assessment of risks critical to the organisations performance and strategic delivery. After identifying and assessing the risk under categories such as strategic, financial, operational and compliance, Tata Communications then defines control measures aimed at reducing the likelihood of its occurrence and the potential impact.

ERM risk assessments are a key input for the annual internal audit programme, and cover Tata Communications various businesses and functions. In addition to its internal audit, Tata Communications also continues to conduct a detailed review and testing of the key internal controls related to financial reporting. This approach provides adequate assurance to the management and the Audit Committee regarding the effectiveness of the internal control procedures defined and implemented by the management.

Market risks

Competition is intensifying from both existing telco players and new entrants in the market, who are offering new and disruptive technology solutions. If we are unable to evolve our strategy and execute well, we face the risk of losing market share to emerging competition and experience a fall in our revenues. Beyond traditional telcos, competition in our industry has expanded to include pure-play technology vendors, OEMs, service integrators and Cloud Applications Services Providers (CASPs). Evolving customer needs and technology advances have opened-up a space for these categories of competitors, especially in the enterprise segment. Our failure to track the array of competition across products and services, the markets they operate in and pre-empt their moves, could leave us blind-sided. Maintaining and strengthening our position in the market is hinged on our ability to invest further and bring competing products and solutions to the market at a fast pace. Our failure to successfully execute the strategy laid out, will have a direct impact on our market share and revenues.
With cost optimisation emerging as a key buying factor, our pricing and margins may decline. For reasons of cost and agility, enterprises are looking to transform their technology infrastructure. For instance, enterprises have been increasingly adopting cloud-first strategies and moving from an on-premise to a hybrid model of operations. As a result, the enterprise network architecture is undergoing a transformation. While lowering cost remains a priority for enterprises, the expectation on performance and security remains intact. Downward price pressure and emergence of new alternatives for our enterprise customers pose a risk of fall in our revenues and market share and can affect our profitability. Our failure to simplify our internal business processes, bring in higher productivity to rationalise the cost structure and at the same time, differentiate on quality and service, would pose a threat to our position in the market.
We face pricing and gross margin erosion, given a considerable portion of our revenues come from declining and low-margin carrier and service provider segments Products and services in the wholesale voice and data business remain commoditised globally. With prevailing low prices and continued price erosion, margins from the segment are shrinking further. Additionally, consolidation and restructuring of carriers and service providers as well as overall heavy financial leverage in the industry, particularly in India, further reduces the cost appetite for the segment.
A considerable share of our revenues comes from carriers and service providers which poses a threat to our revenue as well as margin profiles. While our focus is on increasing business from the enterprise segment, if we fail to transition faster towards a larger share from enterprises, there is a threat to the overall growth in business and the margins.
Tata Communications is a truly global business and, therefore, exposed to additional externalities and risks Being a global business, we are under the constant threat of socio-political and economic events. Our customers, suppliers, partners, and workforce have multi- geography presence. Our business operations and those of others in the value chain remain exposed to localised or wide-spread political changes, instability, civil unrest, other social tensions, and trade wars; events that are beyond our control. These externalities may impact the relevant communications markets, result in potential re-evaluation of local regulations and change the global business landscape. Black swan events like COVID-19 or other epidemics/serious public health concerns, may lead to restrictive, preventive, precautionary or else protectionist steps. Such an eventuality could have a negative effect on the economies, financial markets, business activities and cost of operations. Implications for us could vary from demand slowdown, inability to maintain business continuity, impact on cost viability, as well as reduced ability to invest and grow. Our failure to cushion ourselves from these externalities and adapt swiftly could adversely impact our ability to maintain and grow the business in a profitable manner.

Regulatory risks

Any change in the regulatory framework under which we operate could adversely affect our business prospects Tata Communications has presence across the globe and our operations are subject to the laws and regulations applicable in the countries in which we operate to serve our large multinational enterprise customers. New laws or regulations or changes to the existing regulatory framework by regulatory authorities could restrict the way we manage our platforms, products and services in the region. This could also impose additional costs and impact on our revenue opportunities and potentially, our ability to serve our customers in a manner that would be attractive to us and our customers.
We are subject to litigation, orders by authority on tax which could require us to pay significant damages or settlements. We are subject to a substantial amount of litigation and as such, we may incur significant expenses in defending these lawsuits. In addition, we may be required to pay significant awards or settlements. Example: Resolution of Tata Communications case on Adjusted Gross Revenues (AGR) dues in India with the Supreme Court which is pending. Our challenge against TRAIs regulation on access facilitation & colocation charges of cable landing station is also pending with the Supreme Court.
Changes in licensing policy and regulations restricting our business expansion plans and introducing new services could adversely impact our financial performance. We are frequently required to maintain licenses for our operations and conduct our operations in accordance with prescribed standards. Without relief, existing laws and regulations may inhibit our ability to expand our business and introduce new products and services. The loss or a material limitation on certain licenses could have an adverse effect on our business, results of operations and financial condition.
We ought to act responsibly and protect the environment as it constitutes an important aspect of our business. As increasingly stringent legislations addressing environmental concerns come up, they would require us to invest in initiatives to address them. This will incur additional cost to drive those initiatives and maintain the required guidelines set by the respective governing bodies.
Tata Communications is required to ensure continuous compliance with environmental laws and regulations to minimise any harm to the environment.
Geo-political issues imposing restrictions from the regulatory authorities on the choice of vendors that we can work with for our network and other services. We depend on various key suppliers and vendors to provide us, directly or through other suppliers, equipment and services that we need to operate our business and provide services to our enterprise customers. Strict guidelines issued by regulatory authorities restricting our ability to choose a vendor / partner of choice could have a severe impact on us to maintain or upgrade our network. Our business could be significantly impacted if we are required to choose or replace the existing deployed product or service. Any such disruption will have an adverse effect on our business, results of operations and financial condition.

Financial risks

Tata Communications has presence in multiple geographies and is exposed to exchange rate fluctuations. We conduct our operations internationally across multiple countries and have exposure to earnings and costs in foreign currencies. Additionally, we have significant indebtedness in Indian rupees and US dollars. This results in variability on our interest costs. Large currency exchange rate fluctuations can thus have a significant impact on our financials.
We are significantly influenced by the credit risk associated with our customers and an increase in delinquencies and deterioration of credit profile of our customers could adversely affect our financials. Tata Communications has a large customer base with multiple long-term recurring revenue contracts with many of them. Deterioration in creditworthiness of these customers and increase in rate of delinquencies in receiving payments from such customers could result in material shortfall of earnings and cashflows for us. The ability of customers to honour such obligations is impacted by factors, like industry shifts, economic conditions, liquidity, management quality etc.
Tata Communications has significant debt which increases our exposure to various adverse market movements. Tata Communications depends on external borrowings to operate and grow our business. This results in dependence on external capital markets for access to debt at economical rates. Our capacity to access debt depends on both internal and external market & economic factors. Adverse movements in these areas could significantly reduce our ability to access debt markets. This could impact future investments, operations, ability to react to market shifts.
Our ability to repay or refinance debt is dependent on a combination of both internal and external factors, some of which are beyond our control. Adverse movement in some of these factors could impact our ability to repay or refinance portions of our existing debt Tata Communications has various categories of debt with varying repayment schedules, currency denominations and geographies of borrowing. Our debt levels and debt service capability could be impacted by both business considerations and external market linked factors like credit availability, liquidity and foreign exchange rates. Hence, deterioration in cost and availability of credit financing and credit ratings could have an adverse impact.
Tata Communications has a limited free operating cashflow availability after paying our taxes. This limits our ability to ensure liquidity for supporting our internal expenditures as well as our ability to finance them through external means. Tata Communications needs to undertake significant expenditures into assets, technologies, and working capital. Alongside this, we operate in highly competitive markets with significant regulatory oversight. Our operating cashflow is thus impacted by adverse developments in these areas. This results in risks related to our ability to invest to grow our business. It also increases the risks related to honouring our existing liabilities.

Operational risks

If we are not able to adapt to changes and disruptions in technology and address changing customer demands on a timely basis, we may experience a decline in the demand for our services, and experience reduced profits. Our industry is rapidly changing as new technologies are developed that offer consumers an array of choices for their communications needs and allow new entrants into the markets we serve. In order to grow and remain competitive, we will need to adapt to future changes in technology, enhance our existing offerings and introduce new offerings to address our customers changing demands. If our services fail to gain acceptance in the marketplace, or if costs associated with the implementation and introduction of these services materially increase, our ability to retain and attract customers could be adversely affected.
We make significant investments in new platforms and services that may not be profitable. Our growth depends on our ability to create new and higher value platforms and service offerings. We will continue to make investments in research, development, and marketing for existing products, services, and technologies, such as mobility, unified collaboration, network virtualisation and security. Commercial success of these platforms and services depends a lot on our market positioning and relevance to our customers. Failure to create value for the customer business will have a severe impact on our platform growth plans and hence revenue.
Failure to attract and retain talented people, who have specialised technical skills (e.g., sales, product development, data analytics, managed services, engineering, etc.) could negatively impact our ability to execute our business strategies. Due to the highly technical nature of our services and the dynamic changes in industry trends, our business depends on successfully attracting and retaining talented employees. The market for highly skilled workers and leaders in our industry is extremely competitive. If we are less successful in our recruiting efforts, or unable to retain key employees, our ability to develop and deliver successful platforms and services may be adversely affected. In addition, effective succession planning and the ability of our employees to adapt to new operating environments such as remote working is also important to our current and long-term success.
Improper disclosure of personal data could result in liability and harm our reputation. As part of our business operations, we store and process large amounts of personally identifiable information of our customers. At the same time, the continued occurrence of high-profile data breaches provides evidence of an external environment increasingly hostile to information security. This environment demands that we continuously improve our design and coordination of security controls across our business groups and geographies. Despite all efforts, if we fail to avoid improper disclosure of personally identifiable information, it could harm our reputation, lead to legal exposure to customers, or subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue. Our software products and services also enable our customers to store and process personal data on premise or, increasingly, in a cloud-based environment we host.
We may experience outages, data losses, and disruptions of our services if we fail to maintain an adequate operations infrastructure including equipment and systems. Our increasing user traffic and complexity of our platforms and services demand more networking and computing power. We have invested and expect to continue to spend substantial amounts to purchase or lease network infrastructure and equipment to handle increased traffic. We are also growing our business of providing a platform and hosting for services provided by third-party businesses to their end customers. Inefficiencies or operational failures, could diminish the quality of our products, services, and user experience resulting in contractual liability, claims by customers and other third parties, damage to our reputation and loss of current and potential users and subscribers, and advertisers, each of which may harm our operating results and financial condition.
Natural disasters, geo- political disruptions, cyber- attacks, terrorist acts or acts of war could cause damage to our infrastructure and result in significant disruptions to our operations. Our business operations are subject to interruption by natural disasters, pandemics, power outages, cyber-attacks, terrorist attacks, other hostile acts and events beyond our control. Such events could cause significant damage to our infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers. While we maintain insurance coverage for some of these events, the potential liabilities associated with these events could exceed the insurance coverage we maintain. These events could damage the infrastructure of the suppliers that provide us with the equipment and services that we need to operate our business and provide services to our customers. A natural disaster or other event causing physical damage could cause us to experience substantial losses resulting in significant recovery time and expenditures to resume operations. In addition, these occurrences could result in lost revenues from business interruption as well as damage to our reputation.
Other carriers may not provide us local access services at prices that allow us to effectively compete. With the consolidation of telecommunication players in India market the choice of last mile providers in India is very limited. We acquire significant portion of our local access services from other carriers. Network access represents a very large portion of our direct costs. The carriers from whom we buy local access are also our direct competition in the enterprise space and hence we have the risk of them favouring themselves or their affiliates to our detriment. Less favourable pricing and high provisioning time frames our customer revenues and customer experience.
Inability to replace aging undersea cables may disrupt our connectivity services to our customers and adversely impact revenues. Some of our undersea cable systems, which carry a significant amount of our network traffic, are now reaching end of life. We will rely on alternative new undersea cable projects to replace that traffic. Undersea cable projects are expensive and typically take 2 years to build. As a result, we need to plan in advance, our undersea cable strategy in anticipation of supply and demand of network traffic on various routes. Lack of availability of equivalent replacement cables at the appropriate time could impact our services.

Ongoing legal cases with risk implications

1. Disputed Tax Matters

In past fiscal years, Tata Communications Limited made certain tax holiday and expense claims based on its understanding of the tax laws, as reinforced by legal precedent and advice received from external tax counsels. In some cases, the Indian tax authorities have not accepted these claims and in a few instances, have sought to levy penalties against the Company. The disallowances and penalties have been challenged by the Company under the applicable legal appeals processes, which are at various stages of adjudication. Though no such appeal has been finally decided against the Company, in the unlikely event of all of the disputes culminating in judgments against us, this could have adverse financial implications on the Companys business.

2. License Fee Matters

i. In 2005, the Company had approached the Telecom Disputes Settlement & Appellate Tribunal (‘TDSAT) along with several other service providers to challenge the definition of ‘gross revenue and ‘adjusted gross revenue (‘AGR) as interpreted by the Department of Telecommunications (‘DoT) for levying license fees. TDSAT issued its final verdict on August 30, 2007, which was broadly in line with the Companys arguments. However, not being satisfied on two issues viz. (i) the date of applicability of the TDSAT verdict, and (ii) the disallowance by the TDSAT of deducting certain charges passed on to other service providers, the Company had challenged TDSATs order in the Supreme Court of India. Concurrently, DoT also filed an appeal against TDSATs order. On the basis of submission made by the Company, its appeal and DoTs appeal qua the Company have been de-tagged from the other appeals. While the Companys appeal and DoTs cross appeal remained pending, the Supreme Court passed its judgment on October 11, 2011 setting aside the TDSAT judgment dated August 30, 2007 and permitting the telecom operators to approach the TDSAT for challenging the demands. This round before TDSAT culminated in the judgment dated April 23, 2015. Appeals against this TDSAT were heard by Supreme Court while the Companys appeal and DoTs cross appeal were again directed to be heard separately. The Supreme Court has pronounced its judgement in the appeals of / against the other service providers, vide its order dated October 24, 2019. The Company believes that this judgment of Supreme Court is not applicable to the appeals and licenses of the Company. The Company had also in August / September 2019 received demand letters from the DoT on license fee for the financial years 2006-07 till 2017-18, for which the Company has submitted with the DoT its responses and awaits further revert from the DoT.

ii. The Company had also filed a separate petition in TDSAT on the penalty and penalty interest provisions under its international and national long-distance license agreements, which was allowed by TDSAT in its judgement of February 2, 2010, entitling the company to a refund of Rs 115.73 crores being the penalty and interest thereon realized by DoT in January 2008. Under TDSATs order of May 2012, DoT refunded to the Company, an amount of Rs 226.23 crores (Rs 115.73 crores plus interest), and simultaneously challenged the order in the Supreme Court of India, for which appeal is still pending.

iii. In 2013, the Company filed a Writ Petition before Madras High Court challenging the demand notice dated February 19, 2013 issued by DoT, which demand was issued pursuant to special audit for FY 2006-07 and 2007-08 for additional license fee and seeking the quashing of the said demand notice. The Madras High Court by its order dated March 1, 2013 stayed the demand. The petition is pending.

iv. In 2013, the DoT introduced a new Unified License (UL) regime for internet service providers that replaced the old service-specific license regime and imposed a new license fee of 8% of AGR on internet services revenue under the new UL-ISP Licenses. This created a non-level playing field among providers. In 2014, the company applied to the DoT for a new UL-ISP license with the condition that we would not pay the new license fee on internet services revenue to maintain a level playing field with providers not yet subject to the new license fee, and also requested an extension for the old service-specific license. The DoT, while extending the old license, imposed license fee on internet services, which was challenged by Tata Communications in TDSAT. In its hearing of March 25, 2014, TDSAT granted a stay on payment of license fee on pure internet services and extended companys license during the pendency of the litigation. TDSAT has granted similar stays on petitions filed by other service providers on imposition of license fee by DoT. Vide judgement and order dated October 18, 2019, TDSAT has allowed the petition and decision of DoT to include the revenue from pure internet services in the AGR for levy of license fee on the ISPs under Unified License regime is set aside with direction to raise revise demands of license fee on the basis of same concept of AGR as is being done in respect of ISPs holding license under the old regime. The expectation was expressed by TDSAT from DoT to expedite the process of taking decision keeping in view the relevant recommendations of TRAI as well as the constitutional requirement of providing and safeguarding a ‘level playing field for all the ISPs. DoT was further directed to do it without any delay to end the uncertainty.

3. Access Costs on Cable Landing Stations (CLS)

The Telecom Regulatory Authority of India (‘TRAI), issued the International Telecommunication Access to Essential Facilities at Cable Landing Stations Regulations, 2007 (‘2007 Regulations) on June 7, 2007, authorizing the owners of Cable Landing Stations (‘CLS) to fix their own cost-based charges for access to CLS, after obtaining approvals from TRAI to ensure that the charges were cost based. In 2012, TRAI amended the 2007 Regulations vide Amendment Regulation dated October 19, 2012 empowering itself to specify/prescribe these charges, and thereafter issued another Regulation dated December 21, 2012 prescribing a uniform access charge in the form of a ceiling which led to an almost 90% reduction in the charges prevailing prior to issue of these Regulations and which were approved by TRAI in the year 2007 onwards. These were challenged by the Issuer by way of a Writ Petition filed in the Honble High Court of Madras. The High Court, in 2016, dismissed the Companys Writ Petition, and against which order, the Company filed an appeal with the Division Bench of the Madras High Court. Since the Division bench of Madras High Court refused to grant interim stay to the Company while deciding to hear the Writ Appeal finally and keeping the Misc. Petition (CMP) for interim stay pending, the Company filed a Special Leave Petition (‘SLP) with the Supreme Court of India. The Supreme Court, dismissing the Companys SLP, requested the Division Bench of the High Court to dispose off the matter at the earliest. The Division Bench of Madras High Court vide its Order dated July 2, 2018 partly allowed the Petition and quashed the schedules to the Regulations which prescribed charges, kept the CLS Regulations in abeyance and directed TRAI to rework the schedules within a period of six months. In October 2018, TRAI and other parties filed SLP in Supreme Court against the judgement of July 2018 in which the Supreme Court ordered TRAI to re-work the figures within a period of six weeks from October 8, 2018. TRAI reworked and re-enacted the schedules and issued Amendment Regulations with effect from November 28, 2018.

In December 2018, Association of Competitive Telecom Operators (‘ACTO) filed an application in Supreme Court seeking direction and interpretation that the November 28, 2018 Regulations may be declared to be effective from retrospective effect. This application was disposed off by the Supreme Court on January 28, 2019 stating that it is not for the Supreme Court to give any interpretation and the matter may be taken up in Appellate Court and consequently remanded the matter to TDSAT.

On January 7, 2019 the Company filed in the Supreme Court an SLP challenging the jurisdiction of TRAI which has been admitted by the Supreme Court.

ACTO and Reliance Jio filed their separate petitions in TDSAT in pursuance of Supreme Courts order dated January 28, 2019. BSNL also filed a petition before TDSAT. By a judgement dated April 16, 2020, TDSAT has dismissed the petitions filed by ACTO, Reliance Jio and BSNL in favour of the Company. ACTO and Reliance Jio have filed their Civil Appeals before the Supreme Court challenging the TDSAT judgment dated April 16, 2020. These Civil Appeals are yet to be listed for hearing.

4. Premature termination of exclusivity and compensation

As previously reported, the Government of India (GoI) terminated the Companys exclusivity in the International Long Distance (ILD) business two years ahead of schedule and allowed other players to enter the ILD business on April 1, 2002. The GoI offered the Company a compensation package for this early termination under the terms of a letter dated September 7, 2000. The GoI also gave the Company an assurance that it would consider additional compensation, if found necessary, following a detailed review of its decision to open up the ILD market.

Contrary to its assurances, on January 18, 2002, the GoI issued a further letter to the Company, unilaterally declaring that the compensation package provided in its original letter was to be treated as full and final settlement of every sort of claim against the early termination of the Companys exclusivity rights in the ILD business. The Company filed a suit in the Bombay High Court in 2005. On July 7, 2010, the Bombay High Court ruled that it did not have the jurisdiction to hear this suit, in view of the provisions of the Telecom Regulatory Authority of India Act, 1997. Aggrieved by the said order, the Company instituted an appeal before a division bench of the Bombay High Court on various grounds. This appeal is yet to come up for a hearing.

Indian Telecom Regulatory Developments

The Government of India, on September 26, 2018 approved its new telecom policy - National Digital Communications Policy 2018 – with a view to attract US$ 100 billion investment in the telecom sector and create 40 lakh job opportunities by 2022. This policy envisages to provide universal broadband coverage at 50 megabit per second (‘Mbps) to every citizen in addition to providing 1 gigabit per second (‘Gbps) connectivity to all Village Panchayats of India by 2020 and 10 Gbps by 2022.

The Department of Telecommunications (‘DoT) released the ‘National Telecom Machine to Machine (‘M2M) Roadmap on May 12, 2015 to serve as a single reference document for all M2M stakeholders in India and with the aim to provide guidance to all stakeholders to nurture M2M Communications. The Telecom Regulatory Authority of India has provided its recommendations in respect of M2M to DOT. Further, the Telecommunication Engineering Centre, Department of Telecommunications (‘TEC) has, on January 8, 2019 issued its Recommendations for IoT/M2M Security. DOT is expected to soon issue the guidelines with regard to the M2M/IoT services in India.

The DoT, on August 31, 2018, issued guidelines for grant of Unified License for Virtual Network Operators (‘VNOs), under which VNOs are treated as extensions of Network Service Operators (‘NSOs) or Telecom Service Providers (‘TSPs), where NSOs or TSPs own the core network. Although VNO may establish, operate and maintain telecommunication networks parented to NSO or TSP network and provide telecommunication services using any technology as per prescribed standards in the service area authorised under VNO License, VNO are not allowed to own/install equipment interconnecting with the network of other NSO or TSP. VNOs are allowed to create their own service delivery platforms in respect of customer service, billing and Value Added Services.

International Regulatory Developments

Concerns about the ability of certain telecommunications equipment providers to utilize their equipment as modes of government surveillance have prompted many countries to consider or apply restrictions on the use of high-risk telecommunications vendors. The focus of the restrictions has been on certain equipment manufacturers who may be deemed to pose security risks.

Internationally, certain countries like the United States of America, the United Kingdom, Australia, Canada, Japan, New Zealand, etc., are considering, or have applied, restrictions or outright prohibitions on certain telecommunications equipment manufacturers.

Tata Communications is monitoring the regulatory developments on a global basis to align our existing network configuration and future deployment with applicable requirements.

Our Commitment to Data Privacy

Tata Communications recognises the importance of protecting personal data to individuals, organisations and stakeholders. Accordingly, we strive to earn and maintain the publics trust in their ability to share personal data with us. We currently have policies, procedures and controls in place to ensure that we process and manage personal data securely and in accordance with all applicable privacy laws, including, the General Data Protection Regulation (‘GDPR) in the European Union, which is regarded as one of the highest and strictest in the world. Our Privacy Policy, available at www.tatacommunications.com/policies/privacy, further explains in detail our practices and processes with respect to handling of any personal data that we receive from customers, suppliers or partners.

As part of Tata Communications ongoing commitment to ensure compliance with global data privacy laws and to provide enhanced protections for customer, supplier and employee personal data globally, we continue to review, test and improve our data privacy framework updating it in light of emerging developments, best practice and new legislation. In the financial year, these efforts included reviewing our existing GDPR based compliance processes in light of the requirements of the California Consumer Privacy Act (‘CCPA) which came into force on 1 January 2020 and ensuring fitness for purposes and identifying any additional measures required. We are also conducting an equivalent exercise with respect to Indias Personal Data Privacy Bill (PDPB) as it progresses through the legislative process.

Data privacy laws like the GDPR, the CCPA and the PDPB are important steps forward for clarifying and enabling individual privacy rights. Tata Communications is committed to data privacy and information security compliance across all of our products and services. We continue to be vigilant on all matters of data privacy and security to ensure that our policies, processes and controls keep pace with this ever-developing landscape, so that we can maintain the publics trust in this area.

Cautionary Statement

Statements in the Directors Report and Management Discussion and Analysis describing Tata Communications objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ substantially or materially from those expressed or implied. Important factors that could make a difference to our operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which we operate, changes in government regulations, policies, tax laws and other incidental factors. Further, Tata Communications retains the flexibility to respond to fast-changing market conditions and business imperatives. Therefore, Tata Communications may need to change any of the plans and projections that may have been outlined in this report, depending on market conditions.