Though the meeting where VSNL shared its vision and future plans with its customers was a closed-door affair, Kumar found time to share some of the strategies on rebranding VSNL as Tata Communications and turning it into a global organisation with Shuchi Bansal.
VSNL becomes Tata Communications from January 2008. Why did the re-branding take so long?
Brands are always sensitive topics. Besides, we were busy with M&As in the last two years, whether it is the assets from Tyco or the Teleglobe business that we acquired. We wanted those brands to carry on for a while, at least from the service perspective if not from the product perspective.
However, now the organisation is fully integrated and operates like a global company. You can't recognise any of the previous organisation structures be it Tyco or the Teleglobe business. So the timing is good for us to shed the earlier brands and come under one unified umbrella, that is, Tata Communications.
Most of our products and services have brand names but the go-to-market brand will be Tata Communications. Once we have the Tata name, we won't have to begin with the introduction that we are VSNL, part of the Tata group.
From being an India-centric company, how did you become a global player?
VSNL International was formed three years ago to expand our presence outside the country. We wanted to de-risk our business and tap into new geographies and markets. Our global acquisitions were first assimilated into VSNL International.
Till March this year VSNL and VSNL International had parallel structures. But at the beginning of this year, we decided that the international organisation has stabilised and it's time to go for full integration of the business.
So, operationally, VSNL is one company today, but legally we have 38 international subsidiaries. The list will grow as we expand into new countries. In fact, our leadership team of about 40 people operates from at least eight different locations - Mumbai, Singapore, London, Paris, Madrid, Montreal, Washington and Hong Kong.
Nearly 70 per cent people in the top team are not Indians. We want a global texture for our management structure. Indian talent is certainly world-class, but it does not have global grade experience. Our aspiration is to be a global company. Fifty-five to 60 per cent of our revenue comes from the international business.
What's the way forward for VSNL?
We are the world's largest wholesale voice provider and submarine cable operator today. We work with 600 mobile operators around the world and facilitate roaming between different GSM and CDMA standards. We even carry 5 per cent of the world's Internet traffic on our services backbone.
Two pillars of our business are integrated wholesale play globally and the retail play in India. Now we are creating the third pillar which is the emerging markets story. We are making investments in cable to allow us to access emerging markets in South East Asia, West Asia and parts of Africa.
This year our capex plan is $500 million which will get split 50:50 between India and the overseas market. The big spend in India will be on the national long-distance network, building wimax network for retail and enterprise customers, and building data centres.
Internationally, we will spend on data centres and building major cable projects. We had announced one between Singapore, Hong Kong and Japan with branches in the Philippines and Vietnam for the emerging markets. We are also investing in cable between India and Europe.