Tata Comm eyes big gains in media space

S Kalyana Ramanathan / London January 29, 2010

Tata Communications yesterday announced the forming of a new division, Global Media and Entertainment Solutions, as a sequel to the takeover of the Mosaic platform from BT Group plc. It will invest $50 million over the next two years in the new service, a cloud-computing media management system.

The company said the new business could bring in $200-300 million annually over the next three to five years. The service is targeted at the entire spectrum of media customers, encompassing content creators, producers, post-production houses, digital media publishers, content service providers and TV channels, the company said.

Claude Sassoulas, the company’s managing director, Global Data Solutions-Europe, said the new lot of services will be targetted at emerging markets in India, China and South Africa, even as the company expands its reach in established markets in North America, Europe and Australia.

Tata Communications had, last week, announced the acquisition of BT’s Mosaic platform (for an undisclosed sum). This cloud-based system, it said, would help media companies and broadcasters globally manage their content more efficiently, while also offering potential cost saving. Though the acquisition price of Mosaic had not been disclosed, the company indicated the potential gains on account of this acquisition (and through its integration into the existing network) could be several times the cost of acquiring Mosaic.

Integration of Mosaic to its existing portfolio is expected to throw open opportunities it could not effectively tap earlier. The media and entertainment solutions portfolio of Tata Communications already has Video Connect and Satellite Broadcast services, that provide content delivery network (moving media files more efficiently, within all key players in the system), global IP network and managed hosting and storage services.

The company said broadcasters could expect savings from Video Connect’s flexible pricing scheme, as they could pick traffic direction and purchase for the exact bandwidth required for a specific amount of time and be billed by usage. “Video Connect’s on-demand and customisation capabilities also allow broadcasters to activate the service for special broadcasts and enable different feeds to be used for different time zones, so that revenue streams can be created from local advertising,” the company said.

Tata Communications’ current global infrastructure comprise advanced and largest submarine cable networks, a Tier-I IP network with connectivity to more than 200 countries, and nearly a million sq ft of data centre and collocation space worldwide.

The proposed $50 million investment will mostly be in software development and hardware to support ambitions in GMES, but does not include routine capex the company would invest in its global IP (internet protocol) infrastructure.