Tata Communications, the erstwhile Videsh Sanchar Ningam Ltd (VSNL), is aiming for 90 per cent of its voice business from contractual customers in the next three years, up from 70 per cent now.
The company, which has a global network of submarine cables, is a leading provider of international wholesale voice communication services. It has over 1,600 direct and bilateral relationships with leading international voice telecommunications providers.
With the onslaught of video-calling solutions such as Skype and Google Talk, international voice traffic is growing at a meagre 4 per cent. Despite this in 2011-12 the company handled 46.7 billion minutes of international voice traffic globally, an annual growth of 13.4 per cent.
The success of this growth lies in company’s strategy to convert the business into a long-term outsourcing model from a traditional spot model.
“We believe the voice market is shrinking and moving to IP to data and so on,” said Michel Guyot, president, global voice solutions, Tata Communications. “So we are converting the commoditised voice business into a long term viable outsourcing model where customer can plug in for additional services,” he said.
Couple of years ago the company signed a deal with Brtish Telecom (BT) to outsource their voice traffic. It provided BT with system and pricing tools along with global connectivity. “This way we have gone beyond the voice business, it is more of a solution that we are offering,” said Guyot.
The company currently has 20 per cent of its voice business on long-term contract of one to three years, while additional 50 per cent is on short-term contract of six months to a year term. In 2011-12 voice business contributed 48 per cent of company’s total revenue of Rs 4091 crore. Rest of the revenue came from data services and the South African subsidiary Neotel, 48 per cent and 12 per cent respectively.
Apart from converting the business from spot to long term contracts the company is also looking for providing new solutions to grow its voice business.
The company is collaborating with various video calling service providers to bridge the gap. The company is interconnected with them and provides the service to terminate these calls. so that a user can do video calling from one service provider to other. The video calling service has been growing exponentially at the rate of 45 per cent and company hopes to benefit from creating service for this business.
