Tata Communications reports Q3 net profit of Rs36.5 crore

Tata Communications has reported a net profit of Rs36.5 crore ($6 million) in the third quarter of the current financial year (October-December 2013-14) against a net loss of Rs201 crore ($37 million) reported in the comparable quarter of the previous year.

The company said the profit would have been higher had it not been for the fall in rupee value from 54 a dollar to 62 a dollar in the latest quarter. 

Consolidated revenue from operations increased by 12 per cent to Rs4,953.7 crore ($798 million) in Q3-FY14 compared to Rs4,434.1 crore ($819 million) in the corresponding quarter last year.

Consolidated EBITDA improved by 29 per cent to Rs773.9 crore ($125 million) in Q3-FY14 compared to Rs601.1 crore ($111 million) in the corresponding quarter last year.

Revenue from operations for the core business improved by 12 per cent to Rs4,434 crore ($714 million) from Rs3,953 crore ($730 million) during the corresponding quarter a year ago.

Growth in Q3 was mainly driven by the global data solutions (GDS) business which sustained growth momentum across regions, the compny said, adding that Ethernet, VPN solutions and managed services helped global data solutions grow significantly.

Global wholesale voice business delivered stable performance, in-line with its long-term vision of sustainable performance.

The start-up business, comprising primarily of Neotel, contributed to an 8 per cent rise in revenues at Rs519.6 crore (ZAR 849 million), compared to Rs481 crore (ZAR 772 million) in Q3 of FY13. EBITDA margins stood at 31.1 per cent during the quarter, compared to 10.3 per cent in Q3 FY13.

''Tata Communications continues to deliver sustained and profitable growth on the back of investments into innovative services and brand, as well as prudent cost management. Our business mix is favourably trending towards a higher proportion of managed services and consumption by Enterprise customers,'' Vinod Kumar, MD and CEO of Tata Communications, said.

''Operationally, we are hitting the right milestones across our businesses. As envisaged, while voice margins have normalised during the quarter, the overall margin profile has remained robust and is being complemented by the data business delivering sustainable margins at 20 per cent.

Enhancing operational efficiency at every level of the business and driving free cash generation remain our two key focus areas," Sanjay Baweja, chief financial officer of the company, added.
Tata Communications said it has invested in building customer-centric programmes to drive solutions across mobile broadband, cloud and unified communications - areas that are seeing exponential growth across markets.

During the quarter, Tata Communications announced its network readiness to supply Voice over LTE calling (VoLTE) to its growing global community of IPX-connected service providers.

VoLTE will allow mobile network operators to offer HD voice over their LTE / 4G networks and is seen as a key factor for the success of 4G customer uptake.

Customers will benefit from near-instant call setup, better sound quality and the ability to have HD Voice conversations with more users outside the mobile-only community.

Tata Communications launched a 100 gigabits per second upgrade along the TGN-Pacific (TGN-P) submarine cable system that connects the US to Japan and three routes in the TGN-Intra-Asia (TGN-IA) market across Asia.

With this latest in a series of investments, Tata Communications becomes the only private subsea cable owner that has 100G deployed across major routes around the world on its own infrastructure.

The company also launched a mobile VoIP platform, which is a hosted, white label solution that allows mobile network operators (MNO) and other retail voice providers to deliver and monetise innovative converged IP communication services.

Besides, Tata Communications launched its mobile messaging exchange service that enables over-the-top (OTT) providers and SMS aggregators to connect to a large community of MNOs globally, while allowing MNOs to monetise the SMS traffic with an added layer of security.

''This service provides a mutually favourable and profitable solution for all the stakeholders in the value chain,'' the company said.