Tata Communications Limited — Investor Presentation 2021

Jan 28, 2021

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HQ/CS/CL.24B/17059 January 28, 2021

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai – 400 051 SYMBOL: TATACOMM

BSE Limited P.J. Towers, Dalal Street, Mumbai – 400 001 Scrip Code: 500483

Dear Sir / Madam,

Sub: Quarterly Investor Presentation.

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith the quarterly presentation for investors updated for the quarter ended December 31, 2020.

This is also available on the Company’s website at www.tatacommunications.com.

Kindly take the same on your records.

Thanking you,

Yours faithfully,

For Tata Communications Limited

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Sudipto Das Deputy General Manager

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Tata Communications Limited Regd. Office : VSB Mahatma Gandhi Road Fort Mumbai – 400 001 India Tel 91 22 6659 1968 website www.tatacommunications.com CIN : L64200MH1986PLC039266

email : sudipto.das@tatacommunications.com

Investor Presentation January 2021

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Index

Business overview 03 Strategic overview 15 Our key stakeholders 21 Performance overview 24

Business overview

Introduction

A digital ecosystem enabler, part of India’s multibillion-dollar conglomerate, the prestigious Tata Group.

We enable the digital transformation of enterprises, globally – unlocking opportunities for businesses by enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, embedding agility and managing risk. Both today and in the future.

With a customer solution orientated approach, proven managed service capabilities and cutting-edge infrastructure, we drive the next level of intelligence powered by cloud, mobility, IoT, collaboration, security and network services.

12,000+ employees worldwide

200+ countries of operation

50+ entities across the globe

37+ diverse nationalities

~7,000+ customers (including 300 of the Fortune 500)

Top percentile of NPS[®]

Introduction

30%

Global internet routes

carried by us

4 of 5 Global mobile subscribers connected through our network

#1 Enterprise data and colocation services in India

Leader In Gartner’s Magic Quadrant for Network Services (Global) 2020 – 7 ears in a row y

60% Cloud giants are connected to their businesses through us

#1 Wholesale voice provider submarine cable owner on-net mobile si nalin loball g g (g y)

Key Performance Indicators

Our voice business continues to be strong, and our data business remains instrumental to our overall revenue. As we grow scale, we are confident of an upward momentum in our profit trajectory in the coming quarters.

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Revenue EBITDA
(Rs. in crore) (Rs. in crore)
674
20
4,223 1,046
3,549 1,026
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Rs. 309 crores
PAT
Rs. 339 crores
CAPEX
1.9 times
Net debt/EBITDA
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Data Voice
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TCL Consolidated figures for Q3’ FY 21

Our evolution

• 2005-06 2008 2010 • Acquired Tyco • Established as Launched managed and Teleglobe, Tata services portfolio establishing a global Communications for enterprises presence • Diversified into

• 2002 • Launched nextenterprise generation dedicated segment

• Tata group global Ethernet service acquires 25% stake connecting North in VSNL (India) America, Europe and Asia

2014 2017 2018-20 Launched the most Launched Getting ready for the comprehensive NetFoundry, next wave of growth cloud enablement a revolutionary as a global digital platform, IZO[(TM)] SaaS start-up ecosystem enabler platform and MOVE[(TM)] , a mobility and IOT platform

Innovation

Diversification

Inception

What, why and how

Why we exist

Deliver a new world of communications to the industry and our customers

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CUSTOMER DRIVERS Enabling borderless Boosting product innovation Enhancing productivity Building agility Managing risk
growth and customer experience and efficiency
Mobility and IOT Collaboration NetFoundry
PLATFORMS
AND EXPERIENCE
Next generation Cloud, edge Voice
connectivity and security
COMMITMENTS Sustainability Innovation Artificial Intelligence
How we do it Our DRIVE culture
Daring | Responsive | Inclusivity | Venturing | Ethical
Services Wrap
Customer intimacy
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What we do

Helping customers unlock opportunities through digital transformation - enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, building agility and managing risk.

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OMNI-CHANNEL ONLINE Mobile apps, social media, online trading portals, PHYSICAL Internet trading through client portals, tablet app websites and mobile apps Primarily out of a trading office

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CONTEXTUAL

DIGITAL Highly customer-centric; real-time trading; AI/ML, Collaboration between Big Data and advanced physical and digital; analytics, etc. cloud infrastructure

Our customers

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MEDIA & SPORTS
AUTOMOTIVE MANUFACTURING PHARMACEUTICAL INSURANCE HEALTHCARE
ENTERTAINMENT
TELECOM BANKING CONSTRUCTION SERVICES FINANCE ENERGY
RETAIL IT/ITES CONSULTING REAL ESTATE E-LEARNING E-COMMERCE GOVERNMENT
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Our customers

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How we do it

• Our end-to-end capabilities in servicing and delivery make us a preferred partner for businesses everywhere.

• • All of our products and services are underpinned by our global network, the largest world’s largest wholly-owned subsea fibre backbone and a Tier-1 IP network.

How we do it

We view our success as a result of the unstinting commitment of our people and their efforts.

Our reatest asset? Our eo le. g p p

	Can-do attitude Collaboration Continuous learning Innovation Mindset for growth and agility Ownership and accountability Problem solving Skills transformation

Our people reflect our ethos 1,64,000

Lives impacted by our employees, through 59,184 volunteering hours as part of our CSR initiatives

Certified as a Great Place to Work by Great Place to Work Institute (India, Hong Kong, Canada and USA)

• ‘Best Workplaces in Asia’ for the year 2019 (Hong Kong)

• 2019 Best Employer in India by Aon

90% Learning via digital mode in Tata Communications Learning Academy

5,300+

Certifications completed by employees with minimum 16 hours of effort

• Best Companies for Women in India – Working Mother and Avtar

• Best Workplaces for Women by Great Place to Work Institute (India and Canada)

How we do it

Sustainability

We strive to make a positive, tangible impact on the environment and wider society through our actions, and through our products & services for our customers.

Innovation

We continue to innovate to stay relevant for our customers as a long-term partner in their digital transformation journeys.

Artificial Intelligence

We are bringing enhanced focus on leveraging the power of AI and ML technologies and embedding a framework to make AI an integral part of our capability and offerings.

Strategic overview

Operating context

We facilitate businesses to pursue digital transformation through navigating new and emerging technologies, to transition seamlessly into a more intelligent future.

Platform economy

7 of 10

Most valuable companies based on platforms

Managed services

11.5%

Growth of global managed services between 2018 and 2023

Enterprise mobility

6 billion

Mobile subscriptions by 2025

Internet of Things (IoT)

79.4 ZB

Data will be generated globally, by 41.6 billion IoT devices by 2025

(Source: Bloomberg and Google)

(Source: Mordor Intelligence)

(Source: GSMA Intelligence)

(Source: IDC)

Cloud computing

28%

Of the IT spending will shift to the cloud by 2022, affecting US$1.3 trillion

Hybrid SDN 60%

Of enterprises will have implemented SD-WAN by 2023

Cybersecurity awareness

41.2%

Growth in spending on cloud security over the next 5 years

Artificial Intelligence (AI) 37%

of organizations adopted AI in some form in 2019

(Source: Gartner)

(Source: Gartner)

(Source: Gartner)

(Source: Gartner)

Market we address

While all areas of our portfolio are expected to grow, 6 key pillars have been identified to significantly contribute to our growth in revenue.

COLLABORATION MOBILITY & IoT

NEXT GENERATION CLOUD, EDGE & SECURITY CONNECTIVITY

NETFOUNDRY

VOICE

Available Market 2023

Mobility & IoT		Collaboration
CAGR +3.9%		CAGR +12.2%
2022 $243Bn		2022 $35Bn
2019 $217Bn		2019 $25Bn

Voice		NetFoundry
CAGR (6.6)%		CAGR +25.5%
2022 $8Bn		2022 $109Bn
2019 $7Bn		2019 $55Bn

Next Generation Connectivity		Cloud, Edge & Security
CAGR +0.2%		CAGR +12.0%
2022 $145Bn		2022 $224Bn
2019 $145Bn		2019 $159Bn

Key strategic enablers

Our own agility in adopting digitally transformative technologies in order to provide the same to our customers is the key to our consistent business growth.

Prudent foresight

Our ability to anticipate change and transform to meet and exceed the expectations of the business and the industry has paved the way for sustained growth.

Skilled, engaged teams

We believe it is critical for employees to continuously learn and re-educate themselves; and we provide the right platforms for employees to be able to do so.

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Customer centricity

We help our customers make the most of the latest digital innovations and be agile, flexible and responsive.

Continuous innovation

Technology is constantly evolving; thus, we need to constantly challenge ourselves and innovate to invest in our future.

Analyst views

Tata Communications Positioned as a Leader in the 2020 Gartner Magic Quadrant for Network Services, Global - 7 years in a row

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CHALLENGERS LEADERS 1. Orange Business 11. Masergy
Services
12. Colt Technology
2. NTT Services
3. AT&T 13. GTT
1
3 2 4 4. Verizon 14. Telia
5
6 7 5. BT 15. Telstra
8
9 10
12 11 6. Vodafone 16. Global Cloud
13 Xchange
15 14 7. Tata
16 Communications 17. Singtel
17
18
19 8. T-Systems 18. Sprint
20
9. Telefonica 19. PCCW Global
10.CenturyLink 20. China Telecom
NICHE PLAYERS VISIONARIES Global
COM PLETENESS OF V ISION
As of January 2020
ABILITY TO EXECUTE
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Ability to Execute

Our emphasis is on a vendor’s service quality, pricing and track record.

These elements are particularly important for global networks because the issues of

infrastructure, language and culture are more challenging than if applicable to only one country.

Completeness of Vision

Visionary providers should have a clearly articulated strategy in evolving areas of enterprise networking, including networking for cloud services, SD-WAN, SDN, NFV and vCPE.

The portfolio should be broad enough to satisfy the evolving requirements of most enterprises, and not just a specific vertical, industry or customer size.

Source: Gartner (February 2020)

Industry accolades

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APAC Top 10 IoT Solution Companies 2019

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• Most Innovative IoT Project Magic Quadrant for Network Services, • Global Most Innovative Telecom Project

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Enterprise Telecom service provider Company of the Year – Large Enterprise Segment	Enterprise Data Service Provider Company of the Year	Managed Multi Cloud Service Provider Company of the Year	SDWAN Service Provider Company of the Year Video Managed Service Provider Company of the Year
Unified Communications Service Provider Company of the Year	Managed Security Service Provider Telecom Company of the Year	Cloud Interconnect Service Provider Company of the Year

Our key stakeholders

Our shareholders

The sustained trust and confidence of our shareholders enable us to remain focused on achieving our strategic objectives and maximising long-term returns.

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Drive capital efficiency

• Recalibrate investments

• Co-create with partners

• Inculcate strong discipline and governance around capital allocation and expenditure

Invest for long-term growth

• Reshape portfolio

• Invest in new services/ innovation to differentiate and accelerate growth

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Improve margin profile

• Improve operating efficiency and drive operating leverage

• Accelerate growth in high margin data segment and new services

Create strategic flexibility

• Generate free cash flow and deleverage balance sheet

• Pursue opportunities to unlock intrinsic value

• Rationalise businesses with sub-par return profiles

Shareholding pattern as of 31 December 2020

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1.4%
5.7%
17.9%
48.9%
26.1%
TATA Sons GOI Foreign Institutions
Domestic Institutions Non-institutional
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Our community

ENABLING SUSTAINABILITY AS KEY DRIVER FOR BUSINESS INNOVATION & GROWTH

• We are uniquely positioned to deliver the digital future now while doing good for People , the Planet and Communities

• • Our goal is to make a positive, tangible impact on the environment and society through our actions and through our products and services for our customers

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Zero Since last 3 years FATAL/MAJOR INCIDENTS MULTIPLE BEST EMPLOYER RECOGNITIONS 32.7% mix for new hires DIVERSITY increased from 19% (FY14) CERTIFICATIONS 5,300+ with minimum 16 hours COMPLETED BY EMPLOYEES of effort

9 lakh Focused solutions (IoT, Mobility, MOVE, Cloud and UCC) for UNITS OF ENERGY customers leading to cost saving, CONSERVATION GLOBALLY business optimisation, avoidance of travel, automation etc. ~15 Million UNITS' Renewable energy sourced 49% increase In water recycling as compared to FY20

62% women and girls 2,19,166 62% - communitiesaffirmative action LIVES IMPACTED Presence across 9 states in India 16 International presence - LONG-TERM Singapore PROJECTS Contributed by 11,030 59,194 volunteers to reach 50,000 lives VOLUNTEERING HOURS

Performance overview

Key financials (Quarterly)

REVENUE*

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Q3 FY 21 3,549 674 4,223
Q2 FY 21 3,642 759 4,401
Q3 FY 20 3,420 809 4,229
EBITDA
Q3 FY 21 1,026 20 1,046
Q2 FY 21 1,108 50 1,158
Q3 FY 20 714 47 761
FCF
Q3 FY 21 741 18 707
Q2 FY 21 828 45 840
Q3 FY 20 300 46 271
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*All figures in Rs. crore

• Consolidated revenues were flat YoY and dropped sequentially, due to effect of seasonality and impact of COVID on deal conversion.

• EBITDA grew by 37.5% YoY with a margin of 24.8% which expanded by 680BPs YoY on the back of strong profitable growth in Data business and focus on cost efficiencies.

• Profit for the quarter was INR 309 crore as compared to a profit of INR 59 crore in the last year. This profit is on the back of strong EBITDA performance and translates into a 5- fold jump in our EPS over the last year

Consol

Voice

Data

	Revenue Growth %		QoQ		YoY
	Data		(2.6%)		3.8%
	Voice		(11.2%)		(16.6%)
	Consol		(4.1%)		(0.1%)
	EBITDA Growth %		QoQ		YoY
	Data		(7.3%)		43.8%
	Voice		(60.6%)		(58.4%)
	Consol		(9.6%)		37.5%
	FCF Growth %		QoQ		YoY
	Data		(10.5%)		147.2%
	Voice		(58.6%)		(60.0%)
	Consol		(15.8%)		160.7%

Key financials (Annual)

REVENUE*

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FY 20 13,692 3,376 17,068
FY 19 12,655 3,870 16,525
FY 18 11,460 5,311 16,772
EBITDA
FY 20 3,026 263 3,289
FY 19 2,409 336 2,745
FY 18 2,066 347 2,412
FCF
FY 20 1,742 252 1,693
FY 19 820 331 881
FY 18 882 338 898
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*All figures in Rs. crore

• Consistent strong growth in Data Business despite industry challenges

• Data business growth is compensating for the decline in Voice business

• Voice business is declining in-line with industry and technology trends

• Shift towards more profitable data business leading to EBITDA growth and margin expansion

• Voice business continues to generate healthy cash flow despite decline in revenue

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Data Voice Consol
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Revenue Growth %	FY 18	FY 19	FY 20
Data	5.5%	10.4%	8.2%
Voice	(21.4%)	(27.1%)	(12.8%)
Consol	(4.8%)	(1.5%)	3.3%
EBITDA Growth %	FY 18	FY 19	FY 20
Data	6.2%	16.6%	25.6%
Voice	(16.3%)	(3.1%)	(21.6%)
Consol	2.2%	13.8%	19.8%
FCF Growth %	FY 18	FY 19	FY 20
Data	42.2%	(7%)	112.4%
Voice	(14.9%)	(2.1%)	(23.8%)
Consol	16.2%	(1.9%)	92.3%

Key financials (Annual)

Net Debt

Net Debt to EBITDA

USD Mn

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1,600 1,438
1,327
1,150 1,151 1,232 1,216 1,193 1,170
1,200 1,091
800
400
0
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Jun-20 Sep-20 Dec-20
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• Net debt was at USD 1,091 Mn, a decrease of USD 79 Mn over last quarter, aided by strong operating cashflows.

• Average cost of borrowing for Q3 was 2.88%, an increase of 8 BPS over Q2 FY21 primarily due to increase in Average LIBOR rate.

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USD Mn
6
4 3.3 3.4 3.2 3.2 3.1 2.8 2.6
2.3
1.9
2
0
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Jun-20 Sep-20 Dec-20
Cost of Debt %
6.00%
3.80% 3.87% 3.86% 3.73%
4.50% 3.41%
3.12% 3.03% 2.80% 2.88%
3.00%
1.50%
0.00%
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Jun-20 Sep-20 Dec-20
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Note: USD-Rs.: FY15 – 61.13; FY16 – 65.44; FY17 – 67.07; FY18 – 64.47, FY19 – 69.9; Q1FY18 – 64.48; Q2FY18 – 64.30; Q3FY18 – 64.77; Q4FY18 – 64.35; Q1FY19 – 66.94; Q2 FY19 – 70.10; Q3 FY19 – 72.13, Q4 FY19 – 70.47; Q1 FY20 – 69.6; Q2 FY20 – 70.4; Q3 FY20- 71.24; Q4 FY20- 72.32; Q1 FY21- 72.32; Q2 FY21- 73.77; Q3 FY21- 73.07. FY15, FY16 are reported numbers, and include Data centre business

Key financials (Annual)

Gross Revenue Share by Geography -

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15.0% 30.0% 50.0%
24.6% 41.1%
12.0% 11.2% 25.0% 40.0%
20.0% 30.6%
9.0% 8.7% 30.0%
15.0% 13.1%
APAC 6.0% Europe 10.0% India 20.0%
3.0% 10.0%
5.0%
0.0% 0.0% 0.0%
FY 15 FY 20 FY 15 FY 20 FY 15 FY 20
30.0% 10.0% 6.0%
25.4% 8.6% 5.0%
25.0%
22.5% 8.0%
6.6%
20.0% 4.0%
6.0%
15.0% 2.6%
America MENA 4.0% Global
10.0% 2.0%
5.0% 2.0%
0.0% 0.0% 0.0%
FY 15 FY 20 FY 15 FY 20 FY 15 FY 20
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Concluding remarks

Riding on global data growth	Digital Transformation and Cloud adoption to drive the business growth	Transformation driving demand for hosting, SD WAN and network virtualisation services	Positioned as “Leader” in Gartner magic quadrant for network services, global for 7th consecutive year	Digital push through partnerships with Microsoft, Cisco, Amazon
The revamped GTM strategy has started to show positive results with an improvement both in funnel adds as well as in closed sales. Product penetration ratio* (which is the number of products sold to each customer) of Top 300 customer has improved from 5.51 in Q3 FY20 to 570 in	FY20 Dividend of Rs. 4/- share which is 40% of face value of each share	Significant land bank with the company (~740 acres) post transfer of surplus land to HPIL	The Scheme for Demerger of Surplus Land has been approved by the NCLT, Mumbai on July 12, 2018. The Scheme filed by HPIL, has been approved by the Ministry of Corporate Affairs, New Delhi on 5 August 2019. The Record Date for the Scheme was September 18, 2019. HPIL has allocated the shares to all its eligible shareholders. The company shares were listed publicly, on 22nd October 2020
. Q3 FY21

Thank you www.tatacommunications.com

Contact for investor queries: investor.relations@tatacommunications.com

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