Tata Communications Limited (TATACOMM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Tata Communications Analyst Day Webinar. We are joined today by MD and CEO, Mr. Amur Lakshminarayanan; and Pratibha Advani, CFO. We will commence today's call with presentation from Lakshmi, who will share his views on overall business and company's strategic direction. At the end of presentation, we will open the forum for Q&A session. Interested participant may click on Raise Hand icon next to their name in the participant's pane on WebEx application to join Q&A queue. The participant may click this option during the presentation itself to ensure they find a place in the queue. Upon announcement of their name, the participant will be unmuted by the host, and they can start asking the question. Before we get started, I would like to remind everyone that some of the statements made or discussed on the conference call today may be forward-looking in nature and must be viewed in conjunction with the risk and uncertainties we face. A detailed statement and explanation of these risks are included in our annual filings, which you can locate on our website, www.tatacommunications.com. The company does not undertake to update these forward-looking statements publicly. With that, I would like to invite Lakshmi to share his views. Over to you, Lakshmi. Lakshmi, you are on mute.

Thank you, Vipul. Hello, everyone. Very pleased to meet you all, and we had mentioned during our year-end call that we would have this session explaining our strategy. What I would cover today is a context of the market, what we have learned from our customers, and what their views and what their directions are. You will see also some explanation on how we see the overall market and its size. And you would see within that, what is our strategy that our focus would be and how we are setting our priorities for the medium to the long-term of our future. So that is what we would cover during the session today. Next slide, please. So what are the customer drivers? So when we talk to our customers, there are 5 key themes that are emerging in the world of digital. You might say, Industry 4.0, in many, many other industries. These 5 themes stand out across various businesses. The first one is now people feel more confident of leveraging digital for growth. They don't see digital as a disruption. Yes, in the beginning period, yes, there was worries about disruptors coming, disintermediators coming and so on. But now people feel that digital, they can use for their growth. And borderless growth is one of our solid themes, and it's playing out quite nicely in the context of the current pandemic as well. The second key theme is how do you use digital for delivering a superior customer experience and also boosting the product innovation within the company. So digital is all about how do you deliver everything real time, understanding the customer and deliver a superior experience. So this is not just in B2C, we see that in the B2B world as well. And similarly on the product innovation, where people are trying to embed more intelligence into the product and leverage IoT to see how they can deliver a better service, after sales and so on. And we have our solutions and offerings that addresses some of that. And you would see some of those examples. The third key theme that you see is -- and this is an age-old theme. How do we use digital for productivity and efficiency. And a lot more focus on how do I use AI, how do we use automation to drive and deliver those efficiencies. The fourth is building agility, digital and agile go hand in hand, and how do you build agility. And from our point of view, our -- the network architecture that we implement for our customers, agile flexible architecture, and we will probably briefly touch upon that. And the fifth one is about managing risk. Again, in the world of digital, these 2 points of views around risk that we talk to our customers about. One is digital brings with it a myriad of technologies, whether it's the network, whether it's the cloud and security and so on. How can we stitch all of these together to deliver a seamless and end-to-end future-proofed, secure, robust architecture and, therefore, services to our customers. So that is one way to manage this. The second way is about our security offerings. That, for example, our IT network comes with DDS embedded in that, many providers don't do that. And on top of that, we offer a secure security overlay when we deliver a network transformation for our customers. So these are the things that we help our customers. But these are the 5 broad themes in the world of digital that we hear from our customers. Next slide, please. So in my view, digital is about data applications and connectivity. And it's like a 3-legged stool. And the point of view that I have been developing in the last 6 months since I joined this company is, connectivity has been a sort of [ cousin ] and has got a short shift in the digital. Everybody recognizes that to deliver the digital transformation, the connectivity, cloud, security, all of them are equally important, but somehow the importance associated with that is not very pronounced. And therefore, one of our jobs, one of our mandates is to explain this importance to the customers. And also take our rightful position within the enterprise, given that connectivity is an important part of our customers' digital transformation. Next slide, please. So what is our opportunity landscape. Internally, we also look at this as the economics of data. There is an explosion of data, as we all know, but the question is where is the money going? And the slide, as you would see, we've broken down into the 6 broad segments. And each of the segments, as you can see, is in triple-digit billion number, barring the Voice segment, which we all know is declining, at $7 billion to $8 billion numbers. I would particularly pay more attention as we go along on the next slide with the next-generation connectivity piece. But in all of the -- just in periods like these, on the -- all of those 6 that we saw here, we have all our robust offerings: be it mobility and IoT; collaboration; in the next-gen connectivity; the cloud; edge and security, NetFoundry; which is placed in the -- one might call it the edge as well as the cloud app or zero trust. It's a software-based ability to spin up a network on the slide. And voice, of course, with enterprise voice as well as the PSTN voice that we provide in our collaborations with businesses. Next slide, please. So if you look at the enterprise network spend, and I would draw your attention to left-hand side bottom bar chart. $145 billion is the enterprise network spend globally. And the one below that you see for 2023, $254 billion is enterprise spend on mobile, which is all the internet as well as the mobile access of enterprise users who are accessing and consuming the enterprise resources based on data center or the cloud or the collaboration. What you see on the right-hand side is the breakup of that $145 billion number. And while the $145 billion number between 2018 to 2023 isn't slated to change. And I might have a different viewpoint on that, but this is the data. But this $145 billion world is not going to be static. It is going to churn. It is going to transform, and therein lies our opportunity. And just to give you an example of -- within that $145 billion world is now the NPLs and the Ethernet and different forms of connectivity that exists, including Internet. And now with software-defined WAN and associated services coming onboard, this entire space is going to transform and change. While the overall, the headline number is shown to be not changing. We believe there is going to be a substantial amount of activity in this space, essentially driven by people's movement to cloud. So one of our customers, the global customer headquartered in the U.S., is they are a Tier 1 suppliers to automotive companies. And that CEO remarked to me that had they not done the network transformation alongside with their cloud transformation, their ability to have reacted for the current pandemic in an agile way would have been extremely difficult for them. So the point being, when customers move from data centers to cloud, and cloud, there are different manifestations of the cloud. As they do that, they need a very agile network to go with that and to be able to cope with those changes that the customers are making; as well as when the customers do M&A as well, the network needs to be agile enough to be able to absorb a different heterogeneous network that comes into a company when they do that. And all of these, we have seen through network transformation, and we have some excellent case studies that we talk to our customers about. So that's 1 important point to note. Next slide, please. So this is still talking about that $145 billion world and the $254 billion world. The 1 -- the $145 billion world, you can see that is within the enterprise ecosystem. The OTT and the cloud service provider ecosystem and then the service provider ecosystem that we see, and that's entirely the $145 billion. So when we talk to enterprises, them connecting to the data centers, their factories, their branches and all of that. Or if they are breaking out to cloud, all of that is part of the $145 billion world. The one you see below the $254 billion world, which is currently $237 billion is all mobile users of enterprises. So when they are consuming the enterprise resources or accessing applications of enterprises, and they are connecting through their broadband, that is the space that is fact. And similarly, when there are also doing e-commerce activities and consuming that or if they are consuming for their infotainment through YouTube and other things, those are all the spend that goes into a $254 billion world. As of now, we play in that $145 billion world, and we do not play in the $254 billion world. And I think -- and I explained the $145 billion world, the upside for us is the churn and the transformation that is happening within that world and how we can participate in that. And in the $254 billion world, there are some opportunities that we are spotting, and we will develop some of those offerings in those spaces. Next slide, please. So what are our key pillars? And we've identified some of these key pillars based on what is the headroom available. Can it scale? Can it scale profitably? What is the CapEx intensity involved? And those are all the questions that went into it for our discussion and evaluation. And we believe we have a comprehensive set of pillars and solutions that we can take to the market. So the Move, an IoT platform, we already are aware, it's about how we bring together and MVNE capability, our eSIM platform capability to deliver an IoT solution, which for a large auto OEM are eSIMs rolled out into their cars, which enables the manufacturer to sell the car anywhere, to be able to bootstrap, connect securely. And we take care of all the hotspots, so that it can connect dynamically with multiple providers and so on across different many countries. The same solution, the platform is used for airlines, for example, when the airline crew travels from country to country, we have at least 3 airlines who are customers of us, who is using this platform solution with them. The next pillar is the Network++ that we talk about. So the Network++ means all our core network as well as the security overlay that we talked about, and that's a key pillar for our network transformation. The Insta CC is the cloud-based platform that we position for both customer experience as well as the employee experience that we offer. And the collaboration is a full suite of services that we offer for the enterprises' employees to collaborate more effectively based on Teams, based on Cisco, based on any of the platforms. And associated connectivity services as well as the platform that we deliver are keeping at that. Media. Media services is a very unique thing, and I will probably touch upon that basically in a subsequent slide, that we deliver a seamless and dedicated Video Connect for both the consumption as well as the distribution network for many broadcasters and as well as the sporting federations. MMX is essentially the omnichannel messaging, A2P messaging service that we all know. So these are some of the key pillars that we have. And we have other solid offerings around, as I said, cloud, security, all of the capabilities goes into that. So for example, our Video Connect includes some edge cloud capabilities. We do offer cloud as a stand-alone capability, largely in India. And security overlay, as I talked about, has over-the-top of the network. CDN gets embedded alongside with Move, similarly. So we have all of these other capabilities, which can get embedded into these key pillars when we deliver the solution to our customers. Next slide. So all of those 6 pillars and offerings that we talked about addresses the current capabilities. And in the -- as a post-COVID scenario and what we saw with customers, I see the secure connected digital experience as a family out of broad team of solutions that we are launching. And this will go some way to address the $254 billion market to begin with in a limited way. So the first one is a secure connected digital workplace, which is enabling enterprise employees to work from anywhere. This is what I said is probably a work-from-home 2.0 solution, and we have multiple patterns of solution and more traditional VPN and a secure vUTM kind of solution or our new zero-trust solution based on NetFoundry plus [ VDI ], which has seen some very, very good results in terms of not only providing the security that enterprises look for, but also being able to accelerate the performance over the IT metrics, which is a very unique thing. The second is about the customer experience platform. How can we help our both -- the B2C customers largely, to bring or deliver the next-generation of e-commerce for them. So more a video collaboration and a video commerce-enabled platforms for them. So that is what is a customer experience platform. So -- and that we are piloting with a couple of customers as we speak. The third is still a work-in-progress in terms of how do we help B2B ecosystem connectivity for our customers. So those are some of the new solutions. The first two -- the first one is already launched, and we have held hundreds of customers already. The second one is under pilot, and the third one is still work in progress. Next slide, please. Before I go to this, I just wanted to give you an example of how we view the customers. So if you imagine a manufacturing customer, a manufacturing OEM, they are looking at how do they improve their customer buying journey? Now how can they make it more personalized, the buying journey? And that is where I talked about our SCDX, the customer experience platform, which is video collaboration, video commerce-enabled solution that will help our customers in that journey of personalizing and delivering a superior customer experience in the buying journey as well as in the after-sales service that they have to deliver. The next set of things the customers look at is how do I do design engineering in a more collaborative way, whether using AR/VR or through design collaboration in B2B with their suppliers. And there, again, our solutions around are hybrid WAN solutions and some of our collaboration solutions will have a role to play. Third is if you look at how do they produce, manufacture, get the supply chain logistics, all of their factories connected, the headquarters connected. That's the core connectivity platform that we have. And within the factory and within the campuses, how do they ensure the workers safety, asset tracking and all of that. And there again, we have, in India, LoRa network-based IoT solution. And outside India, it will be largely the platform of worker safety and solution that we can offer. And in the after sales and the logistics part, how do you track where the goods are? How do you embed, so when the customer's product is shipped outside and has to bootstrap and connect locally, to be able to deliver the IoT, and that's why the Move platform will become a lot more relevant to our customers. So as an example, when I look at the value chain of a manufacturing customer, in each of those areas, we have our products and offerings and solutions that we can offer to customers, and we have examples of these. Our go-forward ambition is that we will be able to put all of these together and see how we can be even more relevant to our customers in delivering a wholly-stitched-up solution rather than offering point products. And in that context, when we look at today as to who owns the customers, especially when it involves, whether it's the connectivity, whether it's the collaboration and so on. A lot of it is multiple players are involved, the cloud product OEMs, the Ciscos, the Avayas, the Microsofts and so on. And you have other players in that ecosystem, and we as a connectivity and other kind of -- are also part of the ecosystem. Our ambition, as I said, going forward, is we have to be one of the key enabler of this digital ecosystem, and not just be part of the ecosystem, which is not very significant. So we want to be a very key part of the enabler in the digital ecosystem. So that's our ambition. And we think we have all the capabilities and products and solutions. And some of the shifts that we would make in the company would help us to position this even more strongly going forward. Next slide, please. So what is our ambition? Our ambition is to achieve a profitable growth and become a leading digital ecosystem enabler in life of our customers as well as amongst the industry. And how would we do that is, I will explain in the next chart. So our strategy is in 3 parts. I'll explain. I mean, the goal eventually is to get a healthy balance sheet, achieving a double-digit profitable growth, which if we do and when we do, we will have a financial fitness. The growth plan is around who, what and the how, and we will explain. And as I said, our positioning will be as a digital ecosystem enabler. And internally, we will make some shifts, both structurally as well as driving through our signature campaign of drive through leadership behaviors. Next slide, please. So talking about the financial, we want to achieve the profitable data revenue growth, delivering a ROCE of 20% in the medium to long term, focus on double-digit EBITDA growth and significant reduction in the net debt, in the next 3 years. So that's what we have set up ourselves as goals for financials. And in terms of the who, what and the how. Next slide, please. The -- I will explain -- sorry, previous slide, I'll just dwell on each one of them a little bit before I go to the who and what. So in the who part, it's all about the segment, how we focus on the customer, and I will elaborate that a little bit more. And I already articulated how we want to be perceived by the customer. We want to be seen as problem-solving and not selling product and not a product out company. In the what, we have these products that we talked about, and we want to make a shift from products to platform. And then the how part is about how we are going to organize ourselves to deliver that superior customer experience as well as our operating model that will deliver both the right cost structure as well as the experience for our customers. And underpinning all of that are certain key commitments that we are making and which I will cover in the subsequent slides. Next slide, please. So this is an essential part of the who, how do we deliver a superior customer experience? Segmentation, both in terms of the market segmentation, India is a big market for us. International is big in terms of the potential. When we talked about $145 billion network market that we talked about, India is about $1.3 billion to $1.5 billion. And the rest is in the International segment, and we see a big upside in both the markets. So we will be very focused on the markets from a market perspective. The other aspect of segmentation is about the industries, and I will call out a couple of them subsequently. And the third element of the segmentation is how do we focus on our customers. Deeper with fewer has always been the strategy of the company, and we are just giving it a lot more sharper focus in terms of how we are structuring ourselves, which is the next point, to deliver a single point of ownership to our named customers. We are putting a structure, which we'll be calling as customer success teams that will have a single point of ownership across different products and solutions that we will deliver to our customers. Third is about the customer service, the overall engagement that we have with the customers to deliver on the outcomes that we promise to the customers. And the fourth is the internal transformation that we had embarked on, called Optimus, which delivers the automation to eventually deliver the superior customer experience in the way we serve to our customers. So these are some key tenets of the who part of our strategy, essentially simplifying ourselves in the eyes of the customer delivering a superior experience. Next slide, please. I talked about the segmentation. And segmentation, one segmentation I talked about is based on the industry segment. And I want to call out the media industry, which we have been focused on for the past several years, but I see this as a very, very good example of how we engage and the successes we have seen. Today, we are delivering, as you can see, more than 5,000 live events globally, right? So be it various sporting events that we do, and we are one of the leaders in the motorsport racing. As you know, we deliver for, as you see here, the MotoGP and many other sporting events that you probably are already aware of. And similarly, we have other sporting events that we do, whether it's the sailing, cricket and many, many other sporting events. We are one of the leaders in delivering the sporting events in Europe, in India, in APAC, in the U.S. And today, we are delivering and enabling our customers for about 750 of these events to be remotely produced. So if you imagine a sporting event, so the last World Cup, for example, it was helped in the U.K., but the production of that was happening in India. Previously, the companies will have to send people to the stadium or close to a stadium to do all of those production. Today, the remote production is becoming more and more popular, which means that all of these events will be brought to one central location where they can do their remote production and, thereafter, it will be distributed with the broadcasters. Or it gets distributed to -- directly to the devices of consumers. And again, we have offerings both on the -- on both sides of being able to pull all of the events to a central location as well as to distribute these events. And there is significant amount of upside there today, if you look at the 5,000-plus events, there is potential to take it up to 10,000 events. And similarly, the 750 remotely produced, many -- more and more customers will move towards the remote production as opposed to the old fashion, old ways of doing things. And this has gotten a significant upside of doing that as well. So I just wanted to briefly touch upon this, and we see a lot of expertise within the company. The customers and the market recognizes our expertise, and we have a very important niche in this segment. So this is one example of when we focus on an industry segment, what we can deliver. And we are creating another segment in auto OEM, largely, to focus around our Move IoT platform, on the back of the success with one of the OEMs that we have. And one of the critical things we have to do is to replicate that, and we are creating and calling out a separate vertical focus unit to focus on this. So these are the 2 vertical focused and in the context of segmentation, and we can expand this in the future, but you see the direction of our travel trips. Next slide, please. In the what part of it, reimagining the platform, as I said, our efforts would be to shift some product to a platform concept. And already, we are seeing very many good examples of that in terms of our ability to combine our Move IoT platform, coupled with a NetFoundry platform, coupled with our CDN capabilities to deliver to our customers with the edge capabilities as well as the MVNE capability and the IoT capability there. And the Media example that I talked about brings together several platforms, as I said. The core connectivity, which is a very low latency, high-performing network that we deliver and combined with that, a video delivery network, which is on the edge, so it brings together our edge cloud capability as well as the video transport capability that's in it. So that's another example of a platform that we have. And there are similar other platforms, there's customer experience platform that I talked about brings together our Insta CC platform and combined with that, some of the video capability, collaboration capability. All of that comes together to deliver the customer experience platform. Some of the philosophies that we'll be focusing on developing products, Tier 3 design principles. From a CapEx efficiency, how will we enable platform-based solution through? And third is, how can they be agile? So all new product, new feature introduction will be in an agile concept. And it has to pass the test of the 4 business validation: no scalability from a revenue point of view, profitability, its relevance to the industry and our customers and the technology shifts that are happening, and the fourth is differentiation in terms of product and service design as the customer would see it. Next slide, please. So putting all of these together, on the top, you see the customer drivers, and I spoke about it. The middle part of our various portfolios that I talked about, the customer intimacy, customer experience, delivering that is going to be a crucial part. And to enable that, if we are calling out something as service ramp, this is something that we always have had in terms of our ability to deliver our network services or our Insta CC platform or all of these. And -- but we are calling this out more explicitly and aggregating that and ensure that value that they can bring to our customers. And give it its due importance both within the company as well as in the eyes of the customer. So that is one thing that we're calling out. On the left-hand side, as I talked about, it's just not individual products, but it's about the platforms and delivering the experience. And our commitment all through this is, one, a sustainability will be of core at what we do, in how we do things as well as in the products and solutions that we deliver, the customer must see that they are enabling them and helping them to become more sustainable. The second element of this innovation. We have always had a very good innovation program, but they are giving it a lot more sharpness and focus, which we can see associated with where their needs are, where our investments are going and what are the results we need to deliver on. And the third element is about artificial intelligence. Again, from a data maturity standpoint, we have done an assessment internally, and we are at a very good place, and we want to use that capability to harness that power of the data. Both internally to deliver the efficiency as well as to embed in our products to be able to deliver that to our customers. So these are the commitments, and we are in the early stages of these, but that's the direction of travel for us. Next slide, please. Now I think we -- I emphasize the customer experience. And in 2019, we had an NPS score of 55, and I'm very pleased to say that earlier this year, when we did the survey in 2020, our score was 70, a huge jump that we saw. And this by all and any means is a very clear benchmark, and we are extremely pleased, and this is one of our key differentiation in the market to be able to deliver to our enterprise customers. Thank you. I think with that, it wraps up my presentation, and we'll be ready for questions. So Pratibha and I will take your questions.

Thank you, Lakshmi. Anyone who is interested in asking questions can click on the Raise Hand icon next to your name in the participant list, and we will take up the questions. We'll just wait for 1 minute for queue to assemble.

Yes.

Okay. So first question is from the line of Sanjesh Jain from ICICI Securities. Sanjesh, you may please ask your question now.

Yes. Thanks, Lakshmi, for that detailed presentation. A couple of things. On the $145 billion revenue by way we participate today, what is the addressable market today? And how do we see that addressable market expanding? And again, when we are talking of a double-digit growth, whereas industry probably remaining flattish, that means we are looking at a significant market share gain there. So which are the area where you are confident that you will see a significant jump in the market share? That's one. Number two, on the product churn, what we talked about, whereas traditional mostly are declining, and other areas like Cloud Connect and the value-added services are growing, how we expect to participate there? Given that we have a significant dependence on traditional, which is declining, that means for us, the asking rate in participating on those services is significantly higher, given that we have an ambition to grow in a double-digit. So these are the initial 2 questions.

The $145 billion world includes all connectivity, right? So what previously we would have classified as traditional and growth and so on. So that's $145 billion market. As I said, the market opportunity, while the market is remaining stat -- static. We believe that customers will do -- will have to do a significant amount of network transformation. And there are some examples and I alluded to a recent win that we had with a large medical equipment manufacturer in a global company. And that company has selected us to do the transformation of the network. So typically, the customer pain points in the network are with the traditional network that they'll have, whether it's the MPLS, the branches would be having either MPLS or Internet connectivity. There's data centers would have some connectivity. They would have breakouts to the cloud from the branches or from the hub that they would have. This kind of a setup doesn't allow the customers to be very agile. So when they shift their applications from a data center to a cloud and cloud is just not 1 cloud, right? So in different regions, they are present. They might be going to a SaaS cloud. They might be going to their own application hosted on their private cloud and public cloud. As this migration happens, it is not just enough for the clouds to be connected, the cloud connectivity that we provide, but the enterprises connecting to them, see and find that they have to have an architecture, which is more agile. And today, the enterprises do not have that. So they are having to transform the network, that is one of the key drivers for the network transformation. The other, of course, is the cost. They are probably on high-cost MPLS and so on. Today, they can move to the Internet based connectivity. And lastly, the software-defined WAN how do they do that, that overlay, which helps them to be more application context-aware, user-aware so that the connectivity can be delivered at the right quality and as well as the right price. So these are some of the key drivers for the network transformation. So that transformation has to take place. And within an enterprise to do the transformation, there might be a smaller spike in the spend, and then the cost comes down. But that is what I meant by that $145 billion world. In the long run, it might look to be the same but that change and the churn will happen. And for us, the opportunity is to go and participate in that transformation, is the opportunity. Given that today, in that $145 billion world in international markets. So India is about $1.3 billion, as I said. Probably growing to $1.5 billion in the international market. Our participation, while it is there, we have a tremendous amount of white space that exists. And that is why I'm calling out that as an opportunity for us to grow.

Got it, sir.

And the second part of the traditional are there are certain things within traditional. But I do believe traditional will -- can and for example, within that, we are trying to redesign something based on demand and so on and so forth. So that has still got room left for growth, even though one might call it as traditional. And in the picture that I showed you on the enterprise side and the OTT side and so on. There are traditional as well as the new network transformation that happens, in the new world, I wouldn't see the split exactly a traditional and [ growth ], I think that my view would be I want to look at enterprises more holistically, and if we are taking an ethernet, if they are taking an MPLS, they're taking our internet, I don't want to split that as how much of ethernet they take, is the traditional or is it new. That's not the way I'm going to see, and that's not the way I see things. If you look at more customer out, customer has got a network, how can I help them to modernize. And in that, they will use different products and solution of ours, and they will participate in that transformation.

And if I can just leave a data point with you, Sanjesh. In FY '20, our enterprise business has grown by 13% -- 12%, 13%, right? 16% growth from India and 11%, 12% international. And as Lakshmi rightly pointed out that while we are going to look at data holistically. But having said that, and if I still go back and to your question of traditional is coming down and cloud connect, et cetera, going to grow, how do you expect double digit? Even if you look at FY '19, if I look at the breakup of how -- where the growth came from, a large chunk of our revenue did come from growth services and growth services actually gave almost, if I remember correctly, close to INR 400 crores of revenue, while traditional were about INR 375 crores, INR 376 crore INR. So that's really what makes us confident that we can deliver on double-digit growth.

Got it. Pratibha, thanks. Lakshmi, just first a little bit of clarification on that -- on my first question, when we are talking of double-digit growth, there is 2 face to it, right? One is market share gain and one is expansion of our footprint itself in the market. So I just wanted to understand on the second part. How is our footprint in the market going to expand, given that we are already present in 98% of the global GDP? Are we significantly present in that $145 billion kind of a market are our presence is restricted there?

Yes. So when we talk about a double-digit data growth, it is not just on the network, right. I mean, we're also including our other collaboration and other services in that group. So that is 1 point I want to make. And to your question on the international market and our participation, yes, I think we are -- that is one of our strong points, and that's always been our strong point. That when customers look for global connectivity of multiple regions to be able to connect them. Our participation there can be very, very strong. Due to the fact that we enabled global connectivity, and we are present in -- across different countries. You're right. There are certain things, like if you look at only an in-country operation, let's say, like the U.S., our connectivity and reach and the capillarity within that will not be the same as a large incumbent there. Having said that, if there are international customers, we will be very strong in participation, and in the deal that we -- that I alluded to, we won against a very large U.S. headquartered company. So our ability to compete and win there is definitely there. But if a company is concentrated very heavily in just one region, then our ability to compete, as of now, isn't there. But with some of our newer solutions like the [ fiber ] internet and our ability to claim the internet, we can definitely still disrupt there.

Yes. Got it, Lakshmi. Just one last question from my side. Till last year, we used to share the order book, now I understand that we don't share it. But just wanted to understand how is the visibility on the growth given our sales funnel or order book, how confident we are in terms of delivering the strong double-digit growth in next few years?

Yes. Sanjesh, all I'm talking about now is a mid- to long-term plan. So the direction of travel for [ the years ] -- the upside that I'm talking about and the direction that we are setting ourselves to move on and all that. And I don't think you can look at last quarter's order book and extrapolate our growth for the next 3 years. That is not the intent of this presentation. And the reason why the order book thing, I wanted to get more clarity on the linkage between the order book and the growth, right. Because our -- we have a product mix which is very varied. Some products are usage based and some products are based on fix MRC that the customers seek. And given that product mix are different, the order book. How it is calculated and how that translates revenue are all very different. So until we gain more clarity, and we are able to see the linkages very clearly, we decided not to share that information.

No that I appreciate, Lakshmi. Just my question was only that in our presentation, we have given a target that we will achieve a 20% ROCE in the next 3 years. I just wanted to get a comfort on how is the order book and how do we see? And much confidence we have in terms of reaching 20% target? That was the only [ question ].

I'm presenting a mid- to long-term plan, and we are very confident of the aims. I think we have the confidence, both stemming from the strength of the product and solution, it's stemming from what I've heard from customers. Obviously, we'll have to execute. There are multiple shifts that we have to make, and they are not necessarily easy shifts to make, but we have some early signs of success. But we have to mobilize the entire company behind making these shifts, and we are quite confident of making our travel towards that direction in a very sure [ indiscernible ].

The next question is from Vivekanand Subbaraman of Ambit Research.

My question pertains to the market structure of this $145 billion market, you gave some color, Lakshmi, on the -- on the spend, percentage of spend that happens in cross country operations. You have a much better rate to win than some of the others, whereas in-country related spends, like in the U.S. you lack the reach and capability. How should we think about the market share of the 2 sets of players? One is players like you who provide network services and then have laddered up to new solutions and are sticking together bundled services versus, say, integrated telcos and system integrators? You had a slide where you mentioned about being at the center of these things. I would like to understand that better. And can you also talk about whether you feel an integrated solution would work better vis-à-vis a modular solution, let's say, customers opting for cherry picking their own cloud provider, cybersecurity and so on.

Okay. On the market structure of the $145 billion, I just want to -- as a -- and as you rightly picked up, our ability to compete in the -- for our multinational companies, which are spread across multiple regions is that much more stronger. And when we serve those multinational companies, we do serve them in their countries as well, so in the U.S. and in Europe and this. And Europe, by definition, is an assembly of different countries anyway. So we have many of our large network transformation deals have happened in Europe. And Asia Pacific is, again, similarly, multiple countries. In the APAC region, the way customers see it and the way we see, so in each of these areas, we think our ability to compete is quite strong. So that is one. I don't know if that answers the question on the market structure. But if you ask me, how many customers would be a domestic-only customers. So if I take, I don't know, U.K. as an example and say, Sainsbury's as a retailer there. Would we be able to compete strongly on the network transformation for them? Not holistic network transformation, probably not. There are aspects like, for example, with NetFoundry and few other capabilities that we can address. But there are companies and banks, which are multinational and spread across regions, then our ability to compete there is strong. And I don't have the split readily of the $145 billion of the example I gave -- of an example of the Sainsbury's versus somebody else. But all I can say is -- even if so that you take only 50% of that, the upside is there and we are not still very significant in [ that play ]. Our game will be to position ourselves as a network transformational player, overlay it with security and ability to compete and when -- is what we see as a potential upside, even if you were to take only a smaller percentage. If I remove that for customers who are only having in-country operations. So I hope that answers your first question. The second question on integrated play is, I believe for example, when we do the network transformation, there are efforts by some companies who say they underlay can be provided by somebody I will do the overlay with somebody, then I will have somebody else for network security, and somebody else to see how we can stitch all of these together. And we believe that providing a complete end-to-end joined up solution is a lot more beneficial for our customers to deliver on the promise of giving them an agile architecture, which is flexible, secure and cost efficient, right? So that's how we see it. So I think the integrated play would be important, at least in that side of network plus-plus portfolio that I talked about. Similarly, when I look at the customer experience, and I talked about our Insta CC platform, which integrates with the CRM, which integrates with social and hosted on the cloud. And that, again, we will stitch together capabilities of our MMS messaging capability, some of our video capabilities, all of that to deliver a video collaboration and a video commerce capability to our customers. So that will also be stitched together. And I called out a service wrap, which is a capability which will stitch all of these products and solutions together to deliver to our customers. So I think bringing all of that together will -- the customers will see a better value proposition in their mind. Of course, there will be customers who would want to un-pick and do that. But our job and effort would be to show that 1 plus 1 can be 3, rather than 1 plus 1 being 1.5 or 2.

[ Vivek ]. So, there was one more question I had within this complex discussion that where do we stand versus system integrators or globally integrated telcos like Verizon, Vodafone, et cetera? And what makes us unique to win a greater share of this $145 billion market than those players?

Yes. I -- in the recent Everest report, we have been put on the leader for the network transformation. The capability that we bring in that space is, as I said, our global network is architected in what we call as an agile architecture to be able to help the customers to connect to different parts of the cloud, different clouds in different regions. We have a solid SD-WAN capability embedded within our own network as well as an overlay that we can deliver as a managed services to our customers. We have a service wrap capability that can stitch all of this together. And combined with that, the security that we talk about, right, as people move out to cloud, how do we overlay it. So all of that capabilities combined together with our network presence globally, the way it is architected and for the enterprise, specifically that we can deliver this as an agile architecture. And the overlay capabilities that we have and the service capability and the security capability. This is what our customers look for. And I think some of the recent wins gives us the confidence that we can position ourselves strongly. Now, having said that, if you look at -- we are not we're not an SI per se. We don't play in the application space, but in the space that we play around network, around the adjacent areas of security, how do you transform it and how do you deliver that? Combined with that underlay of network, which is hugely important, even if you have an SD-WAN on top, that holistic knowledge and the deep expertise that we have will position us very uniquely in the market.

The next question is from the line of Mayank Babla of TCG AMC. Mayank, you may ask your question.

Can you hear me, sorry?

Yes, we can, yes.

Yes. Sir, actually, my question is regarding these platforms, MOVE IoT and the media platform. So who would be our peers in this space? And how are we placed versus them vis-à-vis them?

Yes. In the MOVE IoT space, well, I would like to think we are very unique because it's a combination of certain capabilities that we bring, right? So what one would call the MVNE platform that we bring. And combined with that, we bring the eSIM capability -- the eSIM hub capability. And there are different players in the eSIM world that one might be there. So with the eSIM hub capability, for example, we can be a very carrier-agnostic play. So what we are doing for a large OEM or the airlines, for example, when the airline crew, you might have seen they carry their own devices, maybe [ night fliers ] and others to service. But when they go to a country, it automatically boots up and connects to whichever countries -- whichever carriers that would deliver the best service that we would have configured alongside with our customers, right? And it can dynamically switch from one to another as well, depending on where they are if they're in the airport, if the quality there -- of one is better than when we go to the hotel, maybe somebody else is better, or based on cost. So, we dynamically be able to switch, all of that is the capability. And so there, we can -- while we have relationships with about 150 carriers around the world, we are fairly agnostic, and that is fairly unique to us, in the way that we offer the solution. And the eSIM hub part and the intelligence that we are building is also fairly unique. Now other telcos would also have some capability of the other in this. But what we have, I would like to think is fairly unique. And in the eSIM there are multiple other competitors on the MVNE side. Also, there are multiple other global telcos who can play in that space.

Fine, fine. And sir, my question is...

On the media, you asked, in media, again, as I said, there are the competition of the large global telcos there, be it Telstra or the BTs of the world, [indiscernible] or others. But again, our unique capability is our deep understanding of the media ecosystem. The relationship that we have built with large amount as [ sporting federations ] and the experience that we have gained to deliver a low latency product, a 4K video quality, right? With very low latency to deliver that network that we've engineered and the solutions we have engineered are fairly unique. So all of that capability puts us in a fairly good position to serve the media segment more effectively.

Okay. Okay. And my second question was regarding the security space. So I just wondered if you could help me understand so even TCS was recently put in the Leaders quadrant for security services, how are we placed -- do we complement them in this space? Or?

So the security, as I said, we -- I call it as [ start ] of the network plus-plus. We come from an adjacency of network, right? So some of the products and solutions and the capability that we bring. We don't come from an application background, and having said that, we have a strong portfolio of complete security offering in India. Internationally, we complement them. And internationally, our positioning is more adjacent to the network in our security offerings.

The next question is from the line of Nimit Tanna of CWC Advisors.

Lakshmi, I just had 2 questions. One is that the Net Promoter Score from 55 to 70 is actually a is very incredible in a year, especially when you take into context, what you said on your con call of higher participation by 6%. I wanted to understand, in a short period to see such a big jump. What was some of the key tweaks that were made and where did it come from? What are the drivers for that? And my second question is to try and get a better understanding of the potential of TCOMM and TCS on a going-forward basis. What is the current tradition? And you spoke about digital having the 3 legs, and they are a very important [indiscernible] well integrated with global enterprises. How do you see that relationship going forward, especially given the focus of the One Tata policy?

Yes. So firstly, on the NPS, it is just not the effort of the last 6 months. There has been a program that has been on, what we call as a customer success management. It's partly tweaking our structure to be able to dedicate a team of people who are focused on our customers as part of our Deeper with Fewer strategy. And that -- that has played out to a very large extent in the success of the program, and the result is there to see. The second, I also think in the last few months, particularly in the level stages of the COVID and within the survey in the midst of the COVID, and one of the concerns we had was the customers are going to be busy. They don't know what experience they would have and they all struggled for their own business continuity plans. But then we nonetheless went ahead and did that because that is the time we normally do, and we didn't want to just shift it because of what is happening now. And I must say our teams had done a terrific job in terms of responding to our customers' request to quickly enable them to work from home in providing some of the solutions, which will bring them secure connectivity from home, as well as maybe shifting some of the call center agents who had to work from home to quickly come up with solutions to enable that. Or large enterprises, as a result of the increase in the cloud collaboration, they had to increase some of the capacity, and we were able to help them to increase the capacity very, very quickly. The underlying reasons being the -- as I said before, the way we have engineered our networks as well as the service orientation and the customer centricity that our employees and our teams have, all of that has contributed. So there might be an extra point that we might have gained during the COVID because of the experience that we gave to our customers. But it's a combination of several things, a program that has been running for last one year that is delivered these results. That's the first question. And your second question on the potential of collaboration. We have a fairly strong collaboration. We've always had a good collaboration with SIs, particularly with TCS. And we -- and as you rightly call the One Tata, and looking at synergies and scale as a group theme, we are calling out certain areas where the collaboration can be stronger, and the teams are working in many of those key pillars as to how we can complement each other during the network transformation and how we can complement the [indiscernible] collaboration space, for example, in enabling large enterprise customers to implement and adapt Microsoft Teams, for example, or any other collaboration platform that our customers might choose, how do we strongly collaborate in this area. So we have a program as to how we will collaborate a clear understanding so that we can take it to market.

We are almost out of time. Actually, we are already out of time. So we'll take the last question. The last question is from the line of Aliasgar Shakir from Motilal Oswal. Ali, you may ask your question now. Ali, you will have to unmute yourself. We have unmuted you from the back end. There seems to be...

Hello?

Ali, we can hear you now.

Yes. Am I audible now?

Yes, yes.

Yes, you are.

I have a couple of questions. One is on your CapEx trends. So given that the kind of -- I mean, or we have in multiple of these segments and growth that we are targeting double-digit growth. Just wanted to understand what is our CapEx guidance? And related to that, now that we have indicated that we are looking to significantly reduce our debt. Also wanted to understand if there is any upward bias on this CapEx and probably acquisition of TTSL, which could probably disrupt this debt reduction target?

On CapEx, I don't know what guidance, we have stated that I'm factoring a similar level of ongoing investments that they we would have to make. A large part of our CapEx goes to maintaining our current network infrastructure, both the submarine as well as the terrestrial infrastructure that we have. And the other part goes towards the expansion of the network or some of the growth products and platforms that we invest in. And some of them are more customer-specific CapEx that we do when we win the deal. So the overall envelop, we believe will continue to be the same. Obviously, how we invest, where we invest, some of the internal processes that we are looking at would fine tune that, but the overall envelop would remain the same. The second question, I can't answer that. I mean, there is nothing -- I mean, all of these strategies and plans are based on organic. And I know nothing either in terms of not factoring in any other one-off that you might have.

All right. And the second question is on -- I mean, just talking a little bit about the segment parts, of your growth and innovation businesses. So you mentioned in detail about the opportunity in that $145 billion market. Within that, if I look at it on a segment-wide basis, wanted to understand, is the growth going to accelerate in the growth segment significantly? Or should we assume that to be sort of in mid-teens and more margin-led improvement that should drive profit growth, particularly from the point of view that, I mean, we have reached addition scale, and now there could be a lot of monetization of the OpEx that we have already done? Also related to that, on the innovation side, I just wanted to understand at what scale do we expect innovation segment to start turning profitability?

So Pratibha, do you want to take that question? I...

Sure. Lakshmi. So I actually want to start from your last question on the innovation service. The way we look at it is -- and Lakshmi pointed out that we are now looking at the entire data portfolio, it's a more integrated, really. We are not focusing on products per se, but bringing them together to have a platform play. Having said that, the moment innovation touches a revenue of about $125 million to $150 million, is when we would start to see that portfolio turn EBITDA positive, given that we are still investing in that portfolio. Again, coming back to your point on growth, I think I pretty much covered that. We're looking at a more integrated play. It is a portfolio that, as you rightly said, is now a large base. And the fact that we've called out that we are looking at our entire data portfolio to grow a double-digit in medium to long-term speaks for itself that, obviously, the momentum is going to come from that growth portfolio.

Seel, also the $145 billion we talked about is only in the network space, right? The collaboration space, the other spaces are distinctly different. Yes.

I'm just going to touch upon. I will just -- since you had talked about $145 billion growth. And again, I think on the network, Lakshmi, you had very rightly said that the opportunity is really going to come from transformation, and that is what gives us the confidence that we would have the growth momentum.

Got it. Actually, my question was more from the point of view that while I understand we are looking for a double-digit growth in the data business. But if it would be coming from probably a particular product categories, we are still in the nascent investment phase, then is there a risk that, that kind of revenue growth may probably not translate to stronger profitability?

No. I think the goal is to say we are going to grow profitably. And I laid out the selection of the key pillars, tested based on whether it can scale and revenue terms. And can deliver the margins that we expect to deliver. So there's [indiscernible] called out, it will have to pass on those tests that I talked about. So we are quite confident that we can continue to grow and grow profitably. And as I said, the upside remains in the medium and long-term is what we are rather -- the test that we have done in terms of the market potential as well as what is the need in our customer base. And we believe that those 6 key pillars that we've called out does have the upside potential. And as you said, some of our products within that, which are in the early stages, and have not turned EBITDA positive, as Pratibha pointed out, and that -- those are the evaluations that we did to see can it become profitable as we scale. And when we were satisfied that the answer is, yes, is when we call this out as 6 key pillars.

And I think specifically that Lakshmi did touch upon on his presentation when he said, how are we going to now look, profitability and scalability, it will be the 2 parameters that we would consider. And all these growth pillars have passed that test. So they are low in terms of capital intensity. And obviously, we're also going to get now economies of scale when it comes to our OpEx as revenue ramps up in some of these pillars.

Got it. This is useful. I have just last one follow-up on innovation. You mentioned $145 billion kind of revenue will make you profitable reach breakeven. Could you share any timelines? And during that period if our losses in the business should be at a similar level or it should sort of grow or reduce some here?

Ali, we don't give guidance, but I have given you the way forward, and we're going to have. Yes. But I mean, we don't give formal guidance.

Thank you, Ali. This brings us to the end of the event. I'll now hand over to Lakshmi for his closing comments. Thank you, everyone.

Thank you, everyone, for your patiently listening to the last hour plus. As I said, we are quite confident of our medium- to long-term potential, both in terms of the upsides available in the marketplace that I explained in each of the areas, and our ability to execute to get that potential tapped into hit [indiscernible]. So with that, I would like to close, and thank you all for joining us today.

Thank you, Lakshmi. Thank you, everyone, for joining. You may now disconnect the call. Thank you.