Allan Chan, Tata Communications: The midfield maestro
10 October 2012 | Kavit Majithia
Tata’s commitment to the emerging markets and traditional wholesale services is unrivalled globally. Allan Chan, president of global carrier solutions, tells Kavit Majithia how he plans to orchestrate the company’s next phase of growth.
As an avid football fan, Allan Chan has a playful analogy of Tata Communications’ role in the global marketplace: “We are the midfielders of wholesale telecoms,” he says.
“My aim is to ensure Tata’s wholesale segment provides strong defence, with elements of opportunistic attacking – sitting in the middle is our core role.”
Whether it’s through supporting service providers in emerging markets, providing IP backbone services or supplying operators with technologically advanced services in markets overcome with demand, Chan believes Tata has all areas of the pitch covered.
His two children are both fans of Barcelona FC, but Chan, a qualified chemical engineer by education, has a soft spot for English giants Liverpool.
And while following the club and watching the sport are his main hobbies, what really makes Chan tick is ensuring Tata remains the ‘playmaker’ of wholesale telecoms – the Spanish World Cup winning goal hero Andres Iniesta if you will.
He also possesses a boyish enthusiasm for the business: “The rapid pace of change in this industry still fascinates me,” he laments.
Engineering a telecoms career
Chan has been in his new high profile position for just five months, stepping into the big shoes left by his predecessor Byron Clatterbuck.
Unlike his predecessor, however, Chan has to report straight into Tata CEO Vinod Kumar. Chan therefore can’t afford to drift in and out of the game – the coach keeping a watchful eye on his key player as they hope to take Tata to the “forefront of the service provider market”.
Not that Chan has ever proved himself missing during his diverse and highly eventful 27-year long career to date. His background is in engineering, and he has had stints in both the steel and power industries, including a role at a Korean power organisation. “If you’ve ever seen a 35 tonne iron slab go through a large mill, or been to a nuclear power plant, just to see the pure scale, you would know what I mean when I say these industries are exciting to work in,” he says.
The synergies and business principles between the trades has helped Chan make the transition to telecoms. He notes, however, that the short life cycles in telecoms means he has to be a lot more nimble in reacting to rapid technology changes: “There is no technical innovation in power and life cycles are much longer. In telecoms, fluctuations are much faster.”
His first role in telecoms was with Bell Canada, where he took charge of the company’s international voice business and helped pioneer its role as a dial-up ISP. He went on to hold a similar position at Teleglobe, before becoming VP of business development. By 2006, the company had been acquired by Tata Communications, which was then known as VSNL.
An ‘emerging markets carrier’?
Chan believes Tata’s investment and growth in emerging markets has been supported by its position in its domestic Indian market. “There is a lot of talent in our home market, and effectively, the development of technology in the emerging markets is constantly being outsourced. Partnership models, due to increasing deregulation in emerging markets, are being embraced more,” he says.
Tata passes the term ‘emerging market’ around as often as Barcelona FC when they build an attack on goal. And Chan reveals his strong offensive instincts when discussing the potential these markets have to offer: “It’s an interesting dynamic,” he says. “I wouldn’t say emerging markets are even behind developed ones because they are more vibrant. The key is to look at growth potential, how conducive the market is to competition and how to handle the country’s regulatory environment.”
He does not, however, view the company primarily as an ‘emerging markets carrier’. Instead he believes success lies in converging emerging and developed markets. “It is important to find ways to provide emerging market connectivity. We are drawing on examples of what we have done in developed economies to advance in terms of technology evolution and altering business models.”
Tata owns a 56% majority in South African-based operator Neotel, and has made significant investments in subsea cables across Africa and the Middle East in recent years. Expanding into the emerging markets appears in the company’s core DNA, and it is a strategy that Chan expects it will continue to pursue.
The challenge the company faces now is how to keep pace with the level of growth in emerging markets: “The growth in mobile and the bypassing of fixed-line internet means there is a fundamental drive towards technology development and that has seen unprecedented scales of growth,” says Chan. “There is a much faster convergence to IP, rather than maintain a dated TDM infrastructure, which has not actually existed in these markets, and I believe that is why there is a unique opportunity for growth.”
The wholesale commitment
As well as the company’s tactics in the emerging markets, Chan also has a strong vision of how it can tap into the rapidly emerging enterprise sector, where new revenue streams and opportunity growth are coming to the fore.
Chan, who controls one of the biggest wholesale divisions in the world, believes the two spaces should run symbiotically. He believes that the growth of the enterprise market will be enabled by the scale provided by a successful wholesale businesss.
“I want our wholesale business to work actively and aggressively to provide scale and reach to achieve relevant economies of scale for enterprise. I want us to take applications and advanced value-added services that have been developed for enterprises and actively take on a managed basis to help service providers around the world,” he says.
The company’s wholesale offering has been highly fruitful to date, with Tata presently operating a global network consisting of over 400 PoPs. In March, the company announced the completion of what it claims to be the first fibre-optic cable network to stretch all the way around the globe.
Costing the company approximately $800 million to build, the ‘ring’ stretches from the UK across the Atlantic to the US, across the Pacific and into Singapore before going through Asia and into India.
In contrast to the wider industry’s declining investment in wholesale, Chan says that Tata’s interests and investments in the space will continue. He slams large traditional telcos that “see wholesale as a defensive mechanism to reduce their unit cost base”, adding that in some cases wholesale is only used to get better utilisation for retail.
“But for us, creating solutions in the service provider market is at the core of what we do, and given our position in the worldwide market, and without a large retail base, I believe we have been successful,” he says.
It would appear Tata could be searching for ‘defensive’ cover to complement its ‘offensive’ strategy. It pulled out of a deal to acquire UK-based fixed-line operator Cable&Wireless Worldwide (CWW) at the 11th hour in April this year, and the company was eventually acquired by Vodafone.
Chan believes CWW has the traits of a fully ‘defensive player’, but that “this could all change because of the Vodafone acquisition”.
He further states that Vodafone’s investment and reach into the wholesale market is an example of how rapidly the telecoms industry continues to evolve: “Two or three years ago you wouldn’t even mention Vodafone and wholesale in the same breath, but now they have become a much bigger player. It will certainly be interesting to work with them as they evolve in the market.”
Unlike the world of football, there is no transfer deadline in telecoms. Tata’s failed interest in CWW may not be the last attempts by the company to find Chan a ‘defensive’ back up this year.
History: Tata Group, the largest private sector corporate group in India, acquired Indian incumbent VSNL in 2002. The company was rebranded as Tata Communications in 2008.
Customers: Global and Indian enterprises and service providers.
President of global carrier solutions: Allan Chan leads the global carrier solutions team in developing solutions and strategies for sales, marketing and partnerships within the global service provider segment. He is also responsible for Tata Communications’ expansion in the mobile service provider market. He joined Tata when the company acquired Teleglobe in 2006, where he was VP
of business development and mergers & acquisitions.
Network: The Tata Global Network includes one of the largest subsea cable networks in the world, a Tier 1 IP network, with connectivity to more than 200 countries across 400 points of presence, and nearly one million square feet of data centre and co-location space worldwide. The company claims to be directly interconnected with the vast majority of the world’s voice and mobile operators.
Products and Services: Tata Communications’ portfolio includes transmission, IP, converged voice, IPX, mobility, low latency connectivity, managed network connectivity, hosted data centre, communications solutions and business transformation services. It also offers broadband content services to Indian customers. It has made strategic investments in South Africa (Neotel), Sri Lanka (Tata Communications Lanka) and Nepal (United Telecom).
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