As of now, the network leases are usually for 12 months which are renewed every year, but for managed service customers prefer a contract for three or five years at the least to ensure there is no disruption in the services due to frequent changing of the service provider.
Tata Communications' bright outlook also stems from the fact that its South African subsidiary, Neotel, has now turned profitable at the EBIT (earnings before interest and tax) level and is expected to turn profitable in the current financial year.
“Neotel had to go through that phase of building its infrastructure, getting customers, increasing utilisations, something that each of our businesses has gone through,” says Kumar.
Neotel now has a 16 per cent share in South Africa.
Kumar, surely, is buzzing with excitement on the promise that managed services hold for the company.
In the future, he is looking to enter a whole new gamut of sectors from healthcare and education to media & entertainment.
“The price points of all these things will come down so dramatically that I can guarantee you in three to five years you will have at least one health-related censor on your body; for me, it is a very exciting opportunity for business,” he says.
Source : http://www.rediff.com/business/slide-show/slide-show-1-special-tata-communications-switches-focus-for-growth/20130813.htm