TATA Communications

Tata Communications is a leading global provider of telecommunications solutions serving the voice, data and next-generation service needs of carriers, enterprises and consumers across the world. Earlier known as Videsh Sanchar Nigam, the company became a part of the Tata group in 2002. In 2008, VSNL, VSNL International, Teleglobe, Tata Indicom Enterprise Business Unit, VGSL and CIPRIS were brought under one global brand name Tata Communications. The company is now the number one global international wholesale voice operator and India's largest provider of international long distance, enterprise data and internet services in India. Tatas global network spans five continents and comprises major ownership in over 200,000 km of territorial network fibre and subsea cable capacity. The company has a trans-Atlantic and trans-Pacific data transfer capacity of 1 trillion bits per second, a global MPLS network and the worlds largest VoIP network. Diversification of Tata Telecommunications: The diversification of TATA is totally unrelated; It has many new businesses which has no obvious relationship with any area of existing business. It is very

superior in internal governance which includes Place business units in selfcontained divisions, Manage divisions in a decentralized manner, Link performance to incentive pay. The value was created through diversification by lowering the cost of value creation activities in the diversified businesses, Creates opportunities for differentiation and premium pricing value creation activities, Adds value where commonalities important to competitive advantage exist, Creates value by applying skills for one business opportunity and applying them to another. The Acquisition and restructuring strategy is creating value through diversification, some of the strategies includes Replace nonperforming top management team, dispose of unproductive assets, establish performance goals requiring significant improvements in operating efficiency. Compelling Reason for Tata to go for Acquisition: There are many reasons for TATA Tele Communications to go for a joint

venture with DoCoMo, some of the reasons include:

Access to new markets and distribution networks. Increased capacity. Sharing of risks and costs with a partner.
Access to greater resources, including specialised staff, technology and

finance. The reasons for DoCoMo to go for a Joint Venture are,

 To enter into the fastest growing markets like India. To access in to new markets. Businesses of any size can use joint ventures to strengthen long-term relationships or to collaborate on short-term projects. A joint venture can help your business grow faster, increase productivity and generate greater profits. Joint ventures often enable growth without having to borrow funds or look for outside investors. You may be able to use your joint venture partner's customer database to market your product, or offer your partner's services and products to your existing customers. Joint venture partners also benefit from being able to join forces in purchasing, research and development. A joint venture can also be very flexible. For example, a joint venture can have a limited life span and only cover part of what you do, thus limiting the commitment for both parties and the business' exposure. Business Model for Tata Telecommunications and DoCoMo: Tata Communications called itself a telecom service provider. No longer. It now offers cable connectivity across the globe along with massive data centres that provide customers with the entire spectrum of ICT solutions from voice solutions and mobility and data services to virtualisation services, hosted services and cloud-based computing applications.

There was also a time when Tata Communications could accurately be defined as an Indian company. That too has changed. Today, the $2.45 billion enterprise has offices in 48 countries across the globe, 65 per cent of its revenues coming from non-India operations, and its top 50 managers sitting in 12 cities in Asia, Europe and North America. The transformation of Tata Communications has been rapid and all pervasive. We still function with the aggressive and flexible mindset of a start-up, even though we are a $2 billion plus, 6,500-people strong company, says Vinod Kumar, chief operating officer, Tata Communications. Start-up is not an inaccurate way of putting it the company entered the Tata stable just eight years ago; in its earlier avatar as the government-owned Videsh Sanchar Nigam, it was an entity that Indians recognised mainly for its international calling facilities. In revenue terms, Tata Communications is still relatively small in the telecom industry, but in some ways the company is already a part of the big league for instance, it is the worlds number one provider of wholesale voice, mobility and data services, implying that the company carries the largest share of the worlds communication data over its networks. Today, with its growth figures hovering around 9 per cent a year at a time when the global telecom industry is more or less in limbo, Tata

Communications is confidently heading for its goal that of being one of the top three ICT companies in the world. Business Model of DoCoMo: DoCoMo i-mode has been extraordinarily successful in Japan. This is because of its outstanding convenience and it's unique business model. Its reliance on this system offers an innovative approach to the mobile service value chain and to wireless service / Internet relationships. We collaborate closely with equipment manufacturers, content providers, and other platforms to ensure that wireless technology, content quality, and user experience evolve jointly. This synchronization guarantees that customers, partners and shareholders share interests with end-user's, thus enabling all parties to maximize value and to continue to improve the quality of products and services connected with i-mode. Moreover, it has been our mission to make i-mode operationally as simple as possible. By adopting an HTML subset we have made the creation of sites exceptionally simple. We have also enabled the compatibility of many other standards including: GIF, Java, MIDI, Macromedia Flash, and HTTP.

Advantages for TATA Communications and DoCoMo: NTT DoCoMo, the largest mobile telecom company in Japan, entered into a joint venture (JV) with Tata Tele Services Ltd (TTSL), the fifth largest mobile telecom company in India. The two partners had come together because both had recognized that they could put complementary capabilities into play. NTT DoCoMo could build on TTSL's knowledge of the local market and ownership of telecom licence (given by the federal government only to domestic firms). TTSL could gain access to NTT DoCoMo's core competence in 3G technology, which was soon being rolled out in India through spectrum auction. As part of signing the deal, the two partners had to deal with issues other than business synergies - like the percentage of equity holding of each

partner in the JV, the price at which NTT DoCoMo would buy its stake to be offloaded by TTSL and the provision for veto rights that could make up for a minority holding. The case study helps students understand the dynamics of the formation of an international JV. It also highlights the unique advantages of a JV over other forms of international collaboration, such as technology licensing and agency distribution. Success or Failure? Its a very big success story, Tata Teleservices Limited has also become the first Indian private telecom operator to launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in all the nine telecom Circles where it bagged the 3G license. In association with its partner NTT DOCOMO, the Company finds itself favorably positioned to leverage this firstmover advantage. With 3G, Tata DOCOMO stands to redefine the very face of telecoms in India. Tokyo-based NTT DOCOMO is one of the world's leading mobile operatorsin Japan, the company is the clear market leader, used by nearly 55 per cent of the country's mobile phone users. Tata Teleservices Limited also has a significant presence in the GSM space, through its joint venture with NTT DOCOMO of Japan, and offers differentiated products and services under the Tata DOCOMO brand name. Tata DOCOMO arises out of the Tata Group's strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. Tata DOCOMO has

received a pan-India license to operate GSM telecom servicesand has also been allotted spectrum in 18 telecom Circles. The company has rolled out GSM services in all of these 18 telecom Circles in the quick span of just over a year. Tata DOCOMO marks a significant milestone in the Indian telecom landscape, and has already redefined the very face of telecoms in India, being the first to pioneer the per-second tariff optionpart of its 'Pay for What You Use' pricing paradigm.