Eye on 5G opportunities, Tatas to recast telecom biz with extra funding

In June this year, the central government allowed enterprises to set up captive non-public networks to buy 5G spectrum directly from DoT, to establish their isolated networks

The Tata group is restructuring its telecom business, spread across various companies, by making further investments in Tata Teleservices and exploring opportunities in 5G-based segments by providing back-end services.

While Tata Teleservices is focusing on enterprise businesses, the group has brought in Tata Communications to provide services based on 5G applications, such as automated quality inspection of equipment, inventory management, and asset tracking. “The group considers 5G as a big opportunity, though it has refrained from buying the costlier 5G spectrum. It will instead focus on value-added services to stay in the game,” said a person close to the development. 

The Tata group did not reply to an e-mailed questionnaire. 

Bankers said the holding company will have to infuse additional money into the unlisted Tata Teleservices between November and March next year because the latter will have to pay Rs 4,225 crore to banks. Tata Sons has provided the guarantee to pay dues of Tata Teleservices, which is losing money.

The enterprise business of Tata Teleservices which contributes the greater part of the company’s revenues has increased after the pandemic as companies increasingly move towards cloud-based solutions. The company has an optical fibre network of 132,000 km and its enterprise business is expected to witness growth.

In June this year, the central government allowed enterprises to set up captive non-public networks to buy 5G spectrum directly from the Department of Telecommunications( DoT), to establish their isolated networks. While Tata stayed away from buying any spectrum, it is likely to tie up with existing players to offer enterprise solutions to their customers.

Tata Communications, a listed entity, on the other hand, is currently conducting trials to demonstrate private 5G use cases, such as automated quality inspection of equipment using video and image analytics, inventory management and asset tracking, warehouse theft detection, virtual reality-based remote working collaboration, and video-powered retail purchases.

Tata Communications is conducting interoperability tests to assess the compatibility of the company’s private network with different devices, and testing stable connectivity through the test duration at its new centre in Pune. The company owns the world's only wholly-owned fibre optic sub-sea network ring around the globe, called Tata Communications' Global Network, which consists of a 700,000-km sub-sea fibre network. This network shares around 30 per cent of the world’s internet routes and connects businesses to 80 per cent of the world’s cloud giants.

“The idea is to tap the strengths of all the telecom businesses. The Tata group is one of the biggest investors in the telecommunications business and the roll-out of 5G provides an opportunity for the group to make up for the past losses,” said the source.

THE PLAN  

Tata Tele, Tata Tele Maharashtra to focus on providing 5G-based enterprise solutions 

Tata Tele to tap nationwide optical fibre network of 132,000 km to offer services 

Tata Comm conducting 5G trials 

Tata companies had stayed away from spectrum auction