Global conflicts, US tariffs may affect revenue: Tata Communications CEO

Says spending slowdown may hit plan to have $1 bn revenue from US

Uncertainties due to geopolitical factors, ongoing conflicts, and US tariff orders are likely to be the headwinds, causing a slowdown in customer spend in the time to come, and may impact revenues of Tata Communications in the future, the company’s Chief Executive Officer (CEO) Amur Swaminathan Lakshminarayanan told Business Standard. 

In a virtual interaction, the top executive said that the slowdown in spending may also have a spillover impact, affecting the company's ambition of achieving $1 billion revenue from the US market by 2027-28. 

“On the other hand, there is still a good degree of excitement from the technology-induced macro environment and what it can do for the businesses. It is fuelling certain requirements from the customers. That is why our order booking, in the digital portfolio, is growing,” he said. 

For the first quarter of 2025-26 (Q1FY26), the company reported a 43 per cent year-on-year (Y-o-Y) decline in profit to ₹190 crore, despite a 6.5 per cent increase in consolidated income to ₹5,959.85 crore. The company’s data revenue, however, grew nearly 10 per cent Y-o-Y at ₹5,130 crore. 

The global headwinds have also impacted the company’s revenues in Saarc countries. 

Though the company believes that these factors could constitute the new normal macroeconomic environment for the time to come, it is still growing faster and better than its peers, Lakshminarayanan said. 

“The reason why we are ambitious is that we think all the investments that we are making are in the right direction to meet the needs of the market and the customers,” he said. 

In digital, the company expects further growth in the next-generation network space, with the convergence of local-area network (LAN) and wide-area network (WAN) and demand for seamless security of networks, Lakshminarayanan said. As customers worked more in the digital space and in the artificial intelligence (AI) domain, they would have no option but to transform their networks, he added. 

In December last year, Tata Communications announced a strategic collaboration with leading global graphics processing unit (GPU)-maker Nvidia. 

As part of the agreement, Tata Communications integrates cutting-edge Nvidia software solutions, including Nvidia NIM Microservices, Nvidia Omniverse, and Nvidia Isaac platforms, into its AI Cloud offerings. 

“In the Cloud and security fabric, we are winning deals to implement security operations centre solutions and network security. We are expanding beyond the SMS channels. So, we said we would go to programmable voice, RCS (Rich Communication Services), and others in the international market. That would give us some growth,” he said. 

On the recently launched Vayu Cloud, Lakshminarayanan said that a good amount of interest was being seen from enterprises while a few proof of concepts were being conducted for the AI Cloud. 

“There are some commercial projects that we have converted into fee-paying customers, but not all of them yet. So, we are yet to see scale happening on the AI Cloud space,” Lakshminarayanan said. 

He further added that the company is continuing to invest in its AI Studio offering alongside agentic AI framework and capabilities that it can give to customers. 

“We are in a beta stage with a few friendly customers, and internal use. We will be getting that to the outside world pretty soon,” he said.