Tata Communications Vs Tata Teleservices: The Tata Group is one of the oldest and most prestigious business groups in India. It is a value-based corporation, a visionary, a pioneer and a leader since 1868. Jamsetji Tata set up a trading firm in 1868. Today, the operating companies of the group lead the nation in ten business verticals.
The group has 29 publicly listed companies. Two companies -Tata Communications and Tata Teleservices in the telecom and media sector have given multibagger returns in the past five years.
In this article, we shall compare Tata Communications Vs Tata Teleservices based on their businesses and key metrics. We shall take a look at how these companies are different from each other though they are from the same group and the same sector. Keep reading to find out!
Tata Communications, formerly Videsh Sanchar Nigam Ltd. (VSNL), is a leading global digital ecosystem enabler. The government sold 25% of its stake in 2002, as per its divestment plans. As a result, the company was taken over under the administrative control of Tata.
The company delivers managed solutions to multinational companies and service providers. Further, it partners with 300 of the 500 Fortune 500 companies. They provide communication, collaboration, cloud, mobility, connected solutions, network and data centre services.
Their global network includes one of the most advanced and largest submarine cable networks. They are amongst the top 5 IP providers on 5 continents and offer public and private network connectivity to more than 240 countries and territories. They carry 30% of the global internet route. Dabur, HCL, Federal Bank, Indiabulls, Aditya Birla, Spicejet, and HP Petrofac are some of its clients.
Some of the significant services/solutions that it provides are network engineering, development & management, a fully Integrated Communications Platform with solutions such as video, audio and web conferencing, contact centre solutions, A2P messaging, global mobility in addition to an array of data centres, cloud, hosting and security Services.
Tata Communications operates in three business segments- data, voice and others.
It provides Network engineering, development & management, and a fully integrated communications platform with solutions such as video, audio and web conferencing, contact centre solutions, A2P messaging, and global mobility. Its major customer segments include large enterprise customers and telecom service providers.
Its digital platforms provide cloud hosting, security, SDWAN, UCaaS, SIP connect, micro teams solution, cisco powered solution. Further, it provides a media ecosystem in all segments of media and entertainment, including gaming, sports, news, cable, OTT and broadcasting.
Tata Communications is the world’s largest wholesale voice provider, carrying a billion minutes per week. It handles 1 out of every 10 international calls and connects more than 70% of the world’s mobile carriers.
Tata Communications Payment Solutions Ltd, its subsidiary handles ATMs. Another subsidiary, Tata Communications Transformation Services Ltd is a network management outsourcing subsidiary that supports global service providers, respectively. Moreover, some of its land parcels and buildings are used for various commercial purposes. They add to its rental income.
Government stake sale
The Government of India divested its entire equity shareholding of 26.12% in the Company by an offer for sale of which 10% was sold to Panatone Finvest Limited (Promoter), in March 2021.
A surplus land parcel of 740 Acre was demerged into Hemisphere Properties India Limited. The government has a 50.12% stake and the Tata Group has a 23% stake in the company. Earlier, the company had a total land parcel of ~1496 Acre, now it has left ~756 Acre of land on the books.
Most people these days prefer to stream videos online instead of watching the conventional form of television. The streaming services industry is expected to grow to be a billion-pound industry within five years.
The infrastructure that provides a high-quality high volume of content and fast service is largely down to the use of an extensive network of underwater cables connecting the world.
Tata Communications operates the world’s largest wholly-owned submarine fibre network. It has more than 500,000 kilometres of subsea fibre, routing 24% of all internet traffic. Without these cables, there would be no email, social media, Netflix or Spotify, online shopping, search engines, cloud computing and so on.
Tata Teleservices (Maharashtra) Ltd
Tata Teleservices (Maharashtra) Limited (TTML) is a subsidiary of Tata Teleservices. It is a leading enabler of digital connectivity and cloud solutions to enterprises. It was incorporated in 1995. The company offers a comprehensive portfolio of ICT solutions for businesses in India under the brand name Tata Tele Business Services (TTBS). Further, it offers services like connectivity, collaboration, cloud, SaaS, security, IoT, and a wide range of marketing solutions.
It provides solutions that allow enterprises to be resilient, maintains business continuity, and grow in a flexible, scalable, and secure manner. Moreover, it follows a progressive approach of partnering with businesses as their trusted technology enabler, empowering them with a comprehensive portfolio of connectivity and digital solutions.
TTML offers cellular services and internet telephony. It covers both wireless and wireline services. The company concentrates in cities as well as rural areas. In 2007, the company along with Samsung introduced the first dual SIM card wireless phone in India. The majority shareholder Tata Teleservices Limited has a licence to offer the same services in 12 more telecom circles.
The promoters are reviving this telecom entity in a new avatar Tata Tele Business Services (TTBS). The entity will now cater to small and medium enterprises and will support Tata Electronics. Accordingly, the company has launched Smartflo, a cloud-hosted communication platform targeting SMEs that have a hybrid work culture. This app can be accessed through mobile phones as well as desktops.
Tata Communications vs Tata Teleservices – Key Metrics
|Particulars||Tata Communications||Tata Teleservices|
|Face Value (₹)||10||10|
|Debt to Equity||8.51||-0.83|
|Market Cap (Cr)||26,487||25,081|
|Promoter’s Holdings (%)||58.86||74.36|
|Dividend Yield (%)||2.23||-|
|Stock P/E (TTM)||17.88||-|
|Net Profit Margin||8.83||-111.08|
A Comparison Between Tata Communications and Tata Teleservices
In the year 2020, Tata Sons wrote off its ₹28,600 crore investment in Tata Teleservices. Thereafter, they transferred the consumer mobile business of Tata Teleservices to Bharti Airtel. However, they did not merge the enterprise segment with Tata Communications. The company is now being rebranded to tap the SME sector. Earlier it used to handle the retail sector. On the other hand, Tata Communications caters to large enterprises and corporations.
The Tata group was going to merge both companies in 2018. However, Tata Communications shelved the plans to buy Tata Teleservices, instead wanting to concentrate on strengthening the balance sheet.
Tata Teleservices was in a financial mess earlier. However, Tata Sons has cleaned up the mess and the entity will resume operations on a clean slate, as per reports. It will offer services like intelligent call routing, call monitoring and an option for a dashboard to check the number of inbound and outbound calls.
In this article, we took a look at the businesses of Tata Communications and Tata Teleservices. We understood the difference in their businesses and got to know about the latest developments. That’s all for this article, folks. Happy investing, until next time!
You can now get the latest updates in the stock market on Trade Brains News and you can even use our Trade Brains Portal for fundamental analysis of your favourite stocks.
Hey, there! Thank you for stopping by 🙂 Simran is a master graduate in commerce from Bangalore University, an NSE-certified Fundamental Analyst and a NISM-certified Research Analyst. She finds interest in investing and personal finance. Outside of work, you can find her painting, reading and going on long walks.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
The article is very much useful Thanks a lot
Good. Can you provide, qtr. Result of all indian cos, in a e-book format, containing all information, of earlier capital market book followed? It will help the investors.
T TMl share target
Thanks for valuable information and guidelines to share holders.