Earlier this year India’s Tata Group unveiled to great fanfare its Nano, what it hopes will become the world’s cheapest car.
More quietly this spring, the $29 billion conglomerate, whose holdings range from leather manufacturing to undersea cables, consolidated its telecommunications holdings under one brand: Tata Communications.
In doing so, it finally extinguished the name Teleglobe from the Canadian business lexicon.
Tata bought Teleglobe, largely known as an international long-distance provider once part of the Bell Canada empire, in 2005 and folded it into its VSNL division.
But Canada still plays a huge role in Tata’s world: Montreal is where the voice division of Tata Communications is headquartered, responsible for all voice services except inside India. Last year the network carried 21 billion minutes of international voice traffic. The data and enterprise products unit is headquartered in Singapore.
Voice is “not a super-growth area,” concedes Michel Guyot, Montreal-based president of global voice solutions. Revenue from data is growing faster. Still, with some 350 employees, his Canadian division is the largest unit of Tata Communications outside India.
On the other hand, Tata Consultancy Services Canada, an IT consulting division, has access to some 650 people. IDC Canada expects TCS’ revenues here will hit US $96 million, doubling revenues in 2007.
Tata Communications’ story here is a tale of how the telecommunications industry has changed so much within a decade. When it had a satellite and international cable monopoly, it was seemingly untouchable, big enough that Bell Canada Enterprises paid an unthinkable $7 billion for it at the height of the dot-com boom.
By 2001, as the world turned to IP, there was a telecom capacity glut. BCE turned off Teleglobe’s long-term funding tap in 2002. After chopping 850 jobs, nearly half of its workforce, Telglobe was sold to U.S. private capital companies. In 2004 its wholesale assets were merged with ITXC (Internet Telephony Exchange Carrier Corp.), a New Jersey-based wholesale telecom services provider. As a result, it dropped out of the retail services provider for enterprises business. The following year it was bought by Tata.
Tata Communications now competes with other long-distance providers such as AT&T, Verizon and British Telecom. But it’s also diversifying, increasingly competing not only against local telcos such as Bell but also consulting giants such as IBM and Accenture by offering network managed services as well as business process applications.
In April, Tata began offering a suite of security services, including managed and monitored firewalls and unified threat management appliances, intrusion detection and prevention systems, distributed denial of service detection and penetration testing. It’s even a Cisco Telepresence partner.
Guyot joined Teleglobe some 30 years ago and thought he’d only stay a year. Instead, rising to senior management, he and a group of Teleglobe executives have worked over the years to preserve a Canadian telecommunications force.
“They have a very aggressive strategy,” Sebastian Ruest, IDC Canada’s vice-president of services research, says of Tata’s IT and communications units. “If I was any of their competitors I’d start to put them closer on the radar,”