“Tata Communications’ clear focus on enabling customers’ digital transformation through integrated, globally-managed solutions is gaining real traction in the enterprise ecosystem. At the same time, we continue to innovate and scale our products and platforms. In doing so, we have kept at the front face of the changing technology landscape, and are transforming ourselves from a pure connectivity provider to a next-generation digital infrastructure provider. This transformation is improving our agility and efficiency already and will accelerate the deployment of our solutions and services. Going forward, our focus will be on bundling our services, further increasing product penetration, reskilling our employees and continuing to build operational efficiencies.”, said, Vinod Kumar, MD and CEO, Tata Communications.
Commenting on the results, Pratibha K. Advani, CFO, Tata Communications, said, “EBITDA margin has expanded on the back of sustained productivity initiatives despite battling industry headwinds. The change in portfolio mix in favour of data services and the continued focus on productivity and digital transformation initiatives will continue to drive an improvement in our margin profile.”
Highlights | Q1 FY2019:
Data business was steady despite industry headwinds. Quarterly Data revenue grew by 3.9% YoY and declined by 0.3% QoQ, the growth was impacted due to operator consolidation in India, and IndAS 115 Impact.
Data Services now contribute to 73.8% of the overall revenues up from 64.4% in June 2017.
Data EBITDA grew by 3.1% YoY and 0.4% QoQ on the back of cost efficiencies. Data EBITDA margin expanded by 10 BPS on a QoQ basis.
Consolidated revenues declined primarily because of lower volume and price compression in Voice business.
Despite decline in revenue, EBITDA margins expanded; Consolidated EBITDA for the quarter came in at INR 555.4 Cr. The margins expanded by 30 BPS sequentially and 120 BPS on YoY basis due to cost optimisation and control.
Change in treatment of one-time service revenue in accordance with IndAS 115 has impacted our data services portfolio including Growth Services.
Traditional data services revenue was impacted by operator consolidation but witnessed a strong EBITDA margin of 30.8% for the quarter and expanded by 210 BPS on a YoY basis and 40 BPS on a QoQ basis on the back of sustained productivity initiatives.
Growth Services EBITDA loss declined to USD 9.3 Mn as compared to USD 13.7 Mn in Q4.
Capex for the quarter came in at USD 72.3 Mn, the capex was higher because of expansion in India access network.