EXCLUSIVE: Tata Communications’ IoT head explains how COVID is driving the next wave of Internet of Things

EXCLUSIVE: Tata Communications’ IoT head explains how COVID is driving the next wave of Internet of Things
<p>Tata Communications’ profit increased seven-fold to hit ₹385 crore in the second quarter<br></p>BCCL
  • In an exclusive interview with Business Insider, Tata Communications’ IoT head Alok Bardiya explains how the company caught the ‘tailwind’ of the COVID-19, which led to a surge in demand.
  • The company’s revenue from ‘innovative’ services — which includes the Internet of Things (IoT) — saw a massive 62.4% yearly jump in revenue in the second quarter.
  • According to Bardiya, COVID-19 forced IoT to expand beyond the manufacturing line.
The Internet of Things (IoT) includes everything from sensors to data collection, and till now, large companies were mostly using it to make their manufacturing process more efficient. But with the coronavirus pandemic disrupting the workplace, IoT is expanding beyond the manufacturing line.

“A factory is not just the manufacturing line. There are a lot of people and a lot of processes. That is where the wave will take IoT — touching that broader set,” Tata Communications’ Head of IoT Business Alok Bardiya told Business Insider in an exclusive interview.

Over the last six months, Tata Communications’ IoT services have brought in three new customers and deployed nearly 15,000 new devices across 45 cities. “We actually did get a tailwind there. The interest in IoT solutions has clearly increased,” Bardiya explained.

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EXCLUSIVE: Tata Communications’ IoT head explains how COVID is driving the next wave of Internet of Things
Tata Communications' IoT performance over the last five quartersCompany filings/BI India

Overall, Tata Communications’ profit increased seven-fold to hit ₹385 crore in the second quarter. The following day the company’s share price surged 5% and hit the upper circuit in trade.

Tata Communications’ share price has increased 9% over the past one month and 129.45% since the beginning of the year.

EXCLUSIVE: Tata Communications’ IoT head explains how COVID is driving the next wave of Internet of Things
Tata Communications' share price since JanuaryBSE/BI India

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Sectors driving the growth in IoT
IoT falls within Tata Communications’ “innovation” services along with Mobile Innovation. The segment saw a 57% increase in revenue over the last three months compared to the previous quarter, a yearly jump of 62.4%.

According to Bardiya, a significant increase in demand was seen from clients in the fast moving consumer goods (FMCG) and pharmaceutical sectors. “For the FMCG sector, it’s important that demand comes back at scale and that frameworks are put in place for COVID tracing and tracking,” he explained.

Due to the urgency of finding solutions that work, Tata Communications notes that companies are now only taking a few weeks to make decisions about deploying IoT within their organisations — a process that used to take between six to 12 months before the pandemic.

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Even sectors like metals and mining and oil and gas have shown interest in IoT even though that was not previously the case.

The only industry to not show a substantial change in momentum is travel and associated hospitality vertices, according to Bardiya. This is because they were also deploying IoT solutions prior to the pandemic and the current slowdown will take time to dissipate.

IoT is expanding beyond the manufacturing line
“IoT solutions have been restricted to high-end manufacturers and original equipment manufacturers (OEMs). The OEM-drive IoT wave did have some legs, but it was restricted — it wasn’t all pervasive,” said Bardiya.

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Now, while most companies are focusing on making work from home the new normal, IoT helps others figure out how to get workers back into offices in a safe manner — shifting the focus from the manufacturing line onto workers and their safety.

And, once the infrastructure is in place, companies can continue to add use cases and expand the application of the data collected, increasing the return on investment (RoI).

Another aspect of this is the actual cost of deploying IoT solutions. Right now, lower price points are required to ascertain RoI in the Indian context. But, as volumes continue to increase, the price of sensors and hardware could come down.

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“More use cases and the flexibility of IoT will drive IoT adoption. I’m optimistic even in the medium term, the next two to three years,” said Bardiya.

He believes that one day a massive OEM like Foxconn could be manufacturing IoT hardware and sensors at scale, just as we saw with smartphones. Over time, not only will the sensors get cheaper but also improve in quality.

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