GTPL Hathway Limited (GTPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GTPL Hathway Q3 FY '20 Earnings Conference Call, hosted by Maybank Kim Eng Securities Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Ramalingam from Maybank Kim Eng Securities Private Limited. Thank you, and over to you, sir.

Thank you, Lirin. Good afternoon, ladies and gentlemen. Maybank Kim Eng Securities is pleased to host the 3Q FY '20 earnings conference call of GTPL Hathway. From the management side, we have with us Mr. Aniruddhasinhji Jadeja, Promoter and Managing Director; Mr. Rajan Gupta, the Chairman and Non-Executive Director; Mr. Piyush Pankaj, Head Cable TV Business and Chief Strategy Officer; and Mr. Anil Bothra, Chief Financial Officer. I'll hand over the call to Aniruddhasinhji for opening remarks. Over to you, sir.

Thank you, Vikram. Good evening, everyone. On behalf of management of the company, I extend warm welcome to all of you the conference call of GTPL Hathway Limited to discuss quarter 3 results of financial '19/'20. We continue to deliver strong business and financial performance during the 9 months ended FY '20. Our ex EPC consolidated revenue and EBITDA grew by 37% and 34%, respectively. Our consolidated profit after-tax for the first 9 months of the year, excluding EPC business, stood at INR 66 crore, up by 41 percentage. During the quarter, we seeded around 150,000 set-top box and added around 100,000 digital paying subscribers. Our subscription revenue grew by 44% Y-o-Y basis. We added 240,000 new home passes and 20,000 net broadband subscriber and 10,000 FTTX subscriber during the quarter. Further in EPC project, we have connected nearly 2,200 gram panchayats of the total 3,600 gram panchayats to be connected. During the quarter, we have completed approximately 12,000 kilometer of fiber lay of total 17,000 kilometer. Our strong cash flow generation is helping us not only to meet our CapEx requirement, but also helping and reducing the debt. During quarter 3, we further reduced our debt by INR 47 crore. And with this, our net debt as of December 31, 2019, stood at INR 186 crores. Now I would hand over to Mr. Piyush Pankaj, who can take you through the business and financial aspects of the company. Piyush?

Thank you, Mr. Jadeja. Good evening, everyone. I will be taking you through the business and financial performance of the company. To begin with the cable TV business, during quarter 3 FY '20, GTPL seeded 1,50,000 STBs, taking the total seeded box to 10.05 million. As on December 31, 2019, digital paying subscribers stood at 7.35 million, increased by 1 lakh. Phase-wise contribution, as on December 31, 2019, for phase 1, phase 2, phase 3 and phase 4 the numbers stood at 11%, 20%, 33% and 36%, respectively. During the quarter, we made an entry into Tamil Nadu and have some good progress, but it is too early to talk about. We will have something more significant to share after quarter 4. Coming to our broadband business. During the quarter 3 FY '20, GTPL seeded 2,40,000 new home passes and taking total home pass as on December 31 to 3.16 million. FTTX connection constitutes approximately 50% of the total home pass. During the quarter, GTPL added 20,000 net broadband subscribers, of which 10,000 are FTTX subscribers. Thereby, taking the total subscribers as of December 2019 to 3,75,000, of which 85,000 are FTTX subscribers. The data consumption stood at 126 GB per month this quarter, up by 33% Y-o-Y. The broadband ARPU for quarter 3 FY '20 stood at INR 415 per month. Let us now move to our financial performance. On our consolidated business, excluding EPC contract, during quarter 3 FY '20, GTPL's consolidated revenue increased by 41% Y-o-Y to INR 4,499 million. This was primarily driven by a rise in CATV subscription revenue by 44% Y-o-Y to INR 2,581 million. The broadband revenue for the quarter grew by 17% Y-o-Y to INR 422 million, led by a rise in subscribers. EBITDA for the quarter surged by 62% Y-o-Y to INR 1,188 million, with a margin of 26.4%. Profit after tax for the quarter increased by 11% Y-o-Y to INR 205 million. On our consolidated business, including EPC contracts, during quarter 3 FY '20, GTPL's consolidated revenue increased by 115% Y-o-Y to INR 6,875 million. EBITDA for the quarter increased by 62% Y-o-Y to INR 1,352 million, with a margin of 19.7%. Profit after-tax for the quarter grew by 77% Y-o-Y to [ INR 329 ] million. Our EPC contract reported revenue, EBITDA and profit after-tax of INR 2,377 million, INR 165 million and INR 123 million, respectively. On our standalone business, excluding EPC contract, during quarter 3 FY '20, the company reported revenue of INR 3,197 million, which grew by 54% Y-o-Y. This was mainly contributed by 52% Y-o-Y increase in subscription revenue at INR 1,784 million. The company reported EBITDA of INR 788 million, with an EBITDA margin of 24.6%. The company's profit after-tax increased by 66% Y-o-Y to INR 225 million. This is all from my side. Thank you, everyone, for your attention. We can now begin with the questions-and-answer sessions.

[Operator Instructions] The first question is from the line of Deepak Agrawal from Impetus Advisors.

I have a question on EPC business. What is the remaining -- what's the revenue pending on the revenue work and when will it get over?

So the total, I think, in the quarter 4, 95% EPC project will get over. [Foreign Language] GP, it's called gram panchayat [Foreign Language]. Otherwise quarter 4 [ made 95% [indiscernible]. So the total project, this EPC contract is now INR 1,050 crores. So still we have just the total -- the revenue, which we have taken is around INR 400 crores on that. So still a lot of revenues are left there.

So total 95% completion, that means around INR 950 crore of -- I think INR 550 crore of revenue from EPC business in Q4?

No. Because some revenues, which we can book at the time of the total delivery of the project. So the revenue -- some revenue will come new financial year quarter 1. But yes, the project, we'll complete it almost 95% in quarter 4.

The next question is from the line of Sanjay Chawla from JM Financial.

I've got 3 questions. First is, can you indicate CapEx incurred in this quarter and also the breakdown to various segments? And secondly, what was the receivable level at the end of December, overall receivable level? And how does it break into various segments? And third question is, if you can give a sense of how the NTO 2 if it is implemented or if it gets implemented in the current form, how it is going to impact your business in terms of top line and EBITDA?

Thank you, Sanjay. So first, on the CapEx side, the total CapEx for this quarter stands at INR 36 crore. For the total 9 months, it will stand at INR 122 crores. For this quarter, INR 36 crores, the breakup is INR 13 crore has gone into the broadband and INR 23 crore has gone into the CATV business. The total INR 122 crore for the 9 months: INR 43 crore is in the broadband and INR 79 crore is in CATV. As we mentioned that our budget is INR 160 crore to INR 165 crore of the CapEx, so we are left with somewhere between -- around INR 40 crore of CapEx, which will happen in the quarter 4. The second question is on receivables. So the receivables for the subscription businesses has gone down by almost around INR 25 crores. But there is an increase in our carriage...

Marketing.

Marketing carriage placement and marketing data by around INR 10 crores. So net-net, effect is coming around INR 15 crore, which has gone down in the trade receivables.

Anything on the EPC front in terms of receivables?

EPC front, the receivables are at the same level as the last. It is at INR 154 crores, which is there.

So out of the INR 400-odd crore or INR 4 billion revenues you booked, INR 1.54 billion is receivables -- I think in receivables?

That's right.

Okay. And what kind of impact do you expect of this, NTO 2, on the business in terms of -- and financials?

I think Rajan will explain that.

So gentlemen, good evening. As far as NTO 2 is concerned, I think it's an extension of NTO 1. Actually, there are very minor changes, which have been done. We see more or less stability in the business model, okay? I mean there's NCO for 160 in the current -- in the new NTO. And there's NCO 130 in the earlier NTO. Plus, we had ability to charge additional INR 20 for every additional 25 channels. So broadly speaking, from a short-term perspective, they are more or less similar kind of thing, okay? So NCF has a big portion of our earnings. That is something which is more or less protected. While one can debate on what kind of future impact it will have after 3 years, after 5 years, but from a short-term perspective, that's definitely protected. In fact, we have the ability to charge INR 30 more in case market forces allow us to charge. And with GTPL being high market share in many territories, they should have the ability to charge higher, okay? And we are pretty happy about consumer. I think consumers will have more choice. DPOs, with higher market share like GTPL, should be able to make many more relevant bouquets for consumers. For example, genre-level bouquet. Currently, bouquets are limited to 5, 6, which is more based on the ARPU slabs, but probably there's a need to also have a very micro bouquet based on the genre, et cetera. So a lot of that work with NTO 2 that kind of flexibility is there for DPO, that should happen. I mean it's not a forum to fully debate on NTO, but overall, I think the management of GTPL, whatever their assessment is, it seems to be -- we should see a lot of stability in earnings and cash flow and other things continuing from...

Do you expect the percentage of customers taking à la carte going up and also because if -- and bouquet prices coming down because of the MRP on channel prices being brought down to INR 12 because you do earn a share of the pay channel revenues generated by the customers?

Frankly, too early to say all these things. We have to see how it plays. It's too early to say anything.

So you wouldn't expect any negative impact on your business if this gets implemented in the current form?

No. Now also, we have seen à la carte percentage varies from region to region. I mean there are regions where à la carte is 10%. There are regions where à la carte is 60% for GTPL and for many of the DPOs. Frankly, we haven't seen any major change in regional profitability based on à la carte versus bouquet. Piyush or Anu, maybe you can add to it, but that's my understanding based on the -- for example, east as a region has much higher à la carte for every DPO, but profitability for that region still remains quite intact. In fact, in many cases, these results are published, so that itself indicate that.

The next question is from the line of Charles Cartledge from Sloane Robinson.

Could you -- subscription revenue up a lot, could you break that down into the number of subscribers and the ARPU? And then share with us your expectations for ARPU on a go-forward basis, notwithstanding NTO 2?

Charles, it is too early to speak about that how the ARPU will be happened in NTO 2. In NTO 1, if you see this quarter, our ARPU has started around INR 118, and we are expecting that it will go up in quarter 4. We have gone down by INR 1, INR 1.50 because of the festive offer given by the broadcasters. We are expecting that in the quarter 4, it will go up as the festive offer is over. Right now, we have to wait to see what new bouquets, new channel prices comes from the broadcasters. And only after the assessment, we can comment on this.

Okay. As I -- I mean, so just ignore NTO 2 for the time being. What are the structural drivers for ARPU going forward? Because you have, in prior calls, guided to modest increases in ARPU over the next few years. And again, just to clarify, on -- the subscription revenue is up 44%, how much is from price and how much is from number of subscribers?

See Charles, we have explained that in the earlier call also that the sharing between -- our revenue is from the operators. We have the margin. There is a [ less ] margin, which we can increase at the operator level. And that is going to give us the ARPU increase. So right now, the opportunity has come that where we have to increase our margin towards operator, and you will see that our ARPU will increase on that fashion.

Could I ask you to be a bit more specific? I think I mean, maybe you can remind me what the share of the revenue part is between the MSO and the LCO? And if you were to normalize that share, what does that mean for ARPU?

Yes. So Charles, according to the tariff, the MSO can charge 55% of the network capacity fee -- up to 55% of the network capacity fee, and LCO can be at 44%, 45%. You see right now, if we take our average, it is somewhere at around 30%. So we have the room for 25% to increase our revenue overall in the next course of, you can say, 2 to 3 years and come to at 55%, which is allowing by the law. And so there, we can see that our ARPU will increase in the next 2 to 3 years.

And how do the LCOs feel about that if you were to implement that? Obviously, they wouldn't be happy. Don't you need a rising ARPU environment at the customer level to keep the LCO payments at least flat and then you take the excess.

See, it depends that how you will do it. A lot of strategies are there to do it. How you are going to attract customers to increase their ARPU, a lot of strategies we are working on that. So it will happen simultaneously that once we are increasing also, there is an increase of -- some increase in the customer side also. So -- but a lot of the strategies are there. We are leaving it on the table right now, but we are going to take that from the table.

[Operator Instructions] The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

Sir, I have one question. Let's say, if I am your consumer, and let's say, if I am paying INR 250 monthly, okay. Out of that INR 250, INR 130 is the NCF which I pay to you, where MSO and LCO, both of you share. So we record only our share in the revenue or we record the full INR 130 and then pay to LCO?

No. We record only ourselves in the revenue.

Okay. And so after that INR 130, we also get INR 120 from the consumer. So that, I think, so that is towards the pay channel. So that we don't share anything with LCO. That is shared between MSO and broadcasters only?

[Foreign Language] The revenue sharings, whether it is the NCF or whether it is a broadcaster margin in regulations, both revenue sharing, it's 55%, 45%. 55% will take a DPO and 45% will take LCO. But [Foreign Language] revenue sharing, don't know whether it is NCF or whether it is a broadcaster commission margin cover revenue sharing as per this same understanding [indiscernible]. Right now, we are -- our -- on margin level 30% [Foreign Language] revenue sharing charge [indiscernible].

Just simple terms, [indiscernible] INR 130 [indiscernible] from NCF...

In simple terms, let me explain [Foreign Language] close to around INR 40 [Foreign Language] INR 130 NCF. [Foreign Language] INR 240 to the LCO. [Foreign Language]

Okay, okay. Secondly, sir, what is the breakup in terms of carriage and placement fee? How much is the carriage fees and how much is the placement fee we are getting?

Carriage fee and placement breakup, I can -- I will give you offline. I will give you offline on that on the carriage pay and placement?

Okay. And sir, in terms of our interest cost, so we were assuming that after the [ auto-dunning ], the interest cost should come down gradually every quarter, but it was almost similar to the previous quarter. So if you can just explain?

Yes. So what happened, we are restructuring our loans, and we are in the phase of reducing the interest rates. So automatically, the interest charge will come down in the quarter 4 and then in the next financial year. But this year, actually, we have provided some additional charge on the interest, which is around INR 45 lakh [ apiece ] on some GST-related queries. So those things have been provided. That's why you are -- you can look at the interest number, which are in line with the Q2. It's flat. And in Q4, actually, we are expecting it will come down.

Okay. Sir, last question. So [Foreign Language] so basically, let's say, when a new customer is acquired and we give them the set-top box, [Foreign Language] set-top box, let's say, INR 1,500 is the cost of set-top box, do we take entire INR 1,500 from the customer or we don't take? And secondly, if -- let's say, if we take the entire INR 1,500 from the customer, then why we are -- take the -- we take the set-top box into the fixed assets and depreciate it over the years?

So first thing, this -- yes, Piyush?

Yes. On the set-top box side, it's a capital expenditure for us. We give it to the customer and there is activation and installation, which we take it from the customer. It's 2 separate things. So that is set-top boxes, our property, which is in our books. What we take it from the customer is for activation and installation.

Okay. And over how many years we depreciate the cost of set-top box?

It is -- as per the industry standard, it is for 8 years.

For?

8 years.

8 years?

Yes.

The next question is from the line of Sanjay Chawla from JM Financial.

My questions have been answered.

The next question is from the line of Charles Cartledge from Sloane Robinson. As there is no response from the current participant, we will move on to the next participant that is from the line of [ Siddharth Mehta ], an individual investor.

Yes. I wanted to ask you about having some sort of a presentation to clarify this. See, the reason is most of the companies that we look at they have a product and they sell the product, so we can understand how the company works and how the financial works, where the profit is generated, what the costs are. But in your case, there are so many complications. To understand your business model, I was hoping you could give us a presentation that will help you understand what is the revenue, how it is split, what is the regulation. There are so many terminologies, MSO, [ LS ], LCO and all these other terminologies that even though you have described it, it remains piecemeal, piecemeal, piecemeal answers to various participants today. So we need something comprehensive and complete with some diagrams or some visuals to understand where the money is coming, where it flows and how it moves forward. So what would be your thoughts on that?

Yes, yes, sure. We will share that. You can get in touch with me directly, and I will share that with you.

Okay. No, that could be useful for everybody. Whenever you publish sort of a presentation or PowerPoint, that will help us understand because your business is more complicated for us to understand first, and until we understand this, we are sort of in a foggy perception of what is actually going on.

Sure, sure. I will start including that in our presentation also going forward more...

Right. I guess I have a similar question that a lot of people have, and with this new tariff order, number 2, everybody has this concern that since there will be less revenue coming from the customer, there will be less profits for our company also. But you are saying that at this moment, we are not sure about this, let it all work out. And so if there is less money flowing in, is there any reason why you see that our profit will not be impacted?

See, less money flowing in, we are not sure right now because it depends what type of bouquets and à la carte price the broadcasters will come through. There is a price stability in the market right now in the last 1 year. And we believe that, that price stability will continue. Might possible that the services will increase on that price, but there will be price stability in the market, that is what we believe as a management.

I see. So what you are saying is that, for example, if the maximum drops from INR 19 down, even the subscriber might opt for further channels. Is that what you are saying?

Yes, yes. That's what I am saying, that the price stability will be there, the services will increase. They will watch more.

Services will increase. Okay. All right. And so when do you think we would have some clarity on this issue, maybe in a month or 2 months or...

Yes. It all depends once the broadcasters' bouquet and à la carte price will come up. And after that, around 2 weeks more, so more clarity will be there on that how market is reacting, and then we can give you more assessment on that.

And in the absence of that, the growth that we have had in the past, say, 3, 4, 5 years, do you see that same rate of growth continuing although our EBITDA and our sales and PAT and all that, we have shown vast improvements. But if we look at the number of subscribers and the revenue coming in, it has its own gradual way of growing?

See, if you see the CAGR of last 4 years, our revenues are growing at the rate of around 21%, 22%, and EBITDA is growing at the rate of around 23%, 24%. We are very confident that we will maintain our CAGR in the coming next 3 years also.

Okay. All right. In the next coming 3 years, you feel confident of maintaining this schedule? Okay.

That's right.

Do you have any special schemes where if somebody is your data customer, he can at a better cost opt to get cable TV from you and vice versa?

Yes. That's we are doing offline. You can say it's not a consolidated business. But we are doing it offline. Already, there is identified around 220,000 subscribers who are using both our services, and we are giving them as special services, and you can say special assistance and everything is going on. But yes, right now, the 2 business are distinct. We are not going to make it...

So my suggestion there would be if you can see customers from one side and suggest to them that they can get data, and if you can see your data customers and suggest to them that they can get cable at a discounted price because if they are buying both services from you, maybe you can give them some sort of incentive?

Yes, yes. That effort is...

220,000 seems like a very small number compared to your total customers.

Yes. I understand. Because our broadband subscriber is at around 375,000 out of 220,000 is the common subscribers. So we are doing those efforts and that's the action plan or you can say, the futures, which is a really...

The next question is from the line of [ Harish Kumar Gupta ], an individual investor.

I have one question. Like, in the areas where Jio has started this connections, are you facing the stiff competition or...

Sorry, [ Mr. Harish Kumar Gupta ]. Sir, we are not able to hear you clearly. Can you use the handset mode while speaking?

Hello? Is it audible?

Sir, no.

Hello?

Yes, Mr. Gupta, go ahead.

Hello?

Yes, Mr. Gupta, go ahead.

Yes. Sir, I have one question, like -- in fact, a couple of questions. First one is whether this EPC business will continue with your broadband and other services? Or is this temporary only? And second thing -- second question is, in the areas where Jio has started the fiber connection, how much competition you are facing? Or it is getting difficult for you?

See, we have gone into the -- this EPC project as a strategic mode first in Gujarat, where we have 4 million subbase, and we are expanding our broadband business, where this EPC project is going to help. It's a one-off project right now, which is -- which will get completed once we will complete all the gram panchayats and laying the fiber of 17,000 kilometers. But we have -- also, we are getting for next 3 years, plus 4 years for maintaining this. So the maintenance will -- operational and maintenance of this whole network will continue. Yes, it has given us a very good experience and capabilities, which we have shown. We will look forward that if we get any new projects in our strategic markets, we will opt for that.

Okay. And what about the other question?

Other question, can you repeat? Sorry, Mr. Gupta.

Yes. My other question is, like in the areas where Jio has started its services, how much -- like, your business is getting affected because of that competition?

So it's our privilege now, Jio is also our partners. And [Foreign Language] So right now, down the line, the last quarter [Foreign Language] majorly 90% business in Gujarat, that is our partner's business, all India [Foreign Language]. So I don't see right now there is any competition from our partner side.

Okay. And one more question, like you -- in this quarter, basically, we have grown more than 30%, so still -- like, you are saying that in the next 3 years, you can expect a 20%, 21%, 22% a year. Is there any reason where that for the targeting [ lesser than what we are drawing right now ]?

Can you repeat the last sentence, Mr. Gupta? Your line is not very clear.

Is there any reason why we are targeting lesser than what we are drawing right now?

Yes. This is -- it's not the target because this year and last year is that the NTO has come in this year, so that's why you are seeing the high growths and all. If you look after our CAGR, it is at 20% to 22%, and which we are committed to maintain.

The next question is from the line of Deepak Agrawal from Impetus Advisors.

In the cable TV business, the INR 22 crore CapEx that you did in the quarter, how much is for STBs?

We have seeded around 150,000 STBs on that. So around INR 16 crore has gone in STBs. The rest has gone in cable and back-end integration.

Okay. And the broadband CapEx, how much is for the CPE in that?

Yes. Out of INR 13 crore, we can take that 50% has gone into the subscriber acquisition and 50% has got in network upgradation.

So how about the [Audio Gap] to the Christmas that must also be CapEx, right?

Yes, yes. The consumer premises equipment which we are providing for customer acquisition, that is the CapEx, which is around 50% of total, which is INR 13 crore -- 50% of INR 13 crores and 50% of INR 13 crores has gone in network upgradation.

And currently, what is the activation fee for cable TV for a subscriber?

Yes. Activation fee is INR 100 plus taxes.

Oh, activation is only INR 100 per customer? Okay.

That's right.

The next question is from the line of Rahul Dani from Karma Capital. As there is no response from the current participant, we will move on to the next that is from the line of Charles Cartledge from Sloane Robinson.

You generated good cash flow in the quarter and you're paying down your debt. What plans do you have for the dividend for the final? And what kind of a dividend payout ratio might we expect for a full year basis?

Charles, this quarter also we have recommended some dividend with the Board, but there is a debate happened. And as the new -- the amendment in tariff order has come and still the impact analysis of that is going on, so nothing has been announced. And Board has asked us to come back with the recommendation in the next -- the quarter 4, and we are hopeful that the recommendation will be higher than what we are -- we used to give it. And -- so that's the thing. You can say that dividend ratio will be good. And we are hopeful that once we recommend that to management, Board will accept that.

Could you give me a number? I mean what is good? Is it 20% payout or a 50% payout?

Charles, the number, I can't give without the Board approval. We are recommending it at a higher level and -- on the quarter 4, and we are hopeful that it should be satisfying for everyone.

The next question is from the line of Sanjay Chawla from JM Financial.

Coming back to your cable TV business, we've been discussing that ARPU based on the pricing that you are seeing in the market and the realization ARPU in -- cable subscription ARPU should be INR 125, INR 130, but this quarter, we were below INR 120. So do you realistically expect ARPUs to go up to INR 125, INR 130 level? Or because of the competition and discounts and promotions, the ARPU is not going to go to those levels and it'd probably hang around INR 120-odd level?

Sanjay, if you remember, in quarter 1, we have given that we can go up to between INR 130 to INR 135. And in quarter 2, I have given the reason that because of the quarter 4, we have started lower packages, which is at below INR 200...

Yes. But Sanjay [Foreign Language] as per the market scenario or understanding. [Foreign Language].

But I think, obviously, it was mentioned also earlier that you have a very good market share in the key markets that you operate in. So you would have the bargaining power or position vis-à-vis LCO should be stronger. So it's a bit surprising that you are taking the lowest revenue share from LCO, whereas some of your competitor MSOs are actually extracting the higher share of the NCF.

No, you are -- Sanjay [Foreign Language]. Yes, we are planning to increase in quarter 4 this ARPU level.

Okay. So you expect any further ARPU increase from here to come primarily because of you taking a higher share of the NCF, the LCO?

Yes, yes. Absolutely.

Okay. And on the -- also, you take a share of the pay channel cost, so I'm just -- I have a question on your net content cost per customer, which was around INR 50 per customer per month in 3Q? Again, I think the discussion has been around INR 55, INR 60 kind of a cost, so do you expect your net content cost per customer per sub to go to those kind of levels over the coming quarter, INR 55 or INR 60?

No, no. It will remain at this level. If you see our content cost has gone up by 7%, and our placement has just gone up by 4% this quarter because we have left some marketing and placement for quarter 4, which hasn't moved into quarter 4 as per the negotiations in hand. So we are expecting that we will maintain this content cost, Sanjay.

So around INR 50 per customer per sub you expect?

Yes, yes.

Okay. And now are we -- has the carriage and placement revenue stabilized at 100 -- INR 1 billion per quarter kind of level INR 100 crore?

Yes. It is stabilized. We are expecting that it will go up more by 3% to 4%.

And what would be the driver of -- 3% to 4% quarter-on-quarter, but what is going to drive that?

As I said that some of the negotiations, which has happened in quarter 3, the revenue will get pushed in quarter 4.

Okay. So this is the last bit which is left in terms of increase, but beyond that, I mean, this number should be fairly stable, I suppose, once you get this 3% to 4% increase?

Yes, yes. You are right on that.

The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

Sir, there was a regulation that in terms of, say, if a consumer have a 2 connection, that on a second home, we can charge only INR 40 or INR 50 NCF. So how it can impact us? How much of the customers would be using 2 set-top boxes?

Rajan? Rajan, can you take this?

There is a published report available on this of E&Y and FICCI last year. In urban areas, around 5% of the households are second TV, third TV. And rural areas or phase 3, phase 4, around 3% of the households have second TV, okay? Frankly, that's the published data we have. We never really tried it earlier so much, okay? And -- but if you ask Piyush, if you ask sort of our operation team in GTPL Hathway, what I understand is there's a lot of scope to gain back this second TV, third TV homes, which currently are not really using TV, so we can reactivate those homes. So overall, it's a positive thing. But that's the data which we have which is available. We have to see how it plays out once we start implementing this from 1st March.

So from quarter 4 to quarter 1 last year, if you see from quarter 4 last year, when the NTO has got implemented in the quarter 1, if you see our subscriber base because of NTO 1 effect has come down by around 0.5 million. And out of that, if you see in the 0.5 million, I will say that somewhere around 80% or 75% to 80% is somewhere around second to -- second TV homes, which is on overall basis, it is coming to around 3%, which is the rural figure right now that 3% of customers have second TV homes. And there, you have the opportunity to gain back those customers from this. So we are hoping that it will be incremental to our business.

Okay. Secondly, sir, so I suppose the Jio Fiber would be introducing the new set-top boxes, where a cable TV and the Jio connection can be used. So obviously, we will, in sync, implement that. So do we see that need [Foreign Language] we have to replace all our set-top boxes to the customers?

[Foreign Language] they are coming with the cable TV. So I don't think cable TV set-top box [Foreign Language]. Yes [Foreign Language] GTPL is also planning same and we are also doing the same understanding. But I don't think [Foreign Language] replacement [Foreign Language].

Okay. And sir, just one last question. Is there any understanding with the Reliance Industries that all the 3 entities, GTPL, Hathway and the Den Network will remain separate going forward? Is there any chance of a merger between the 3?

So I think [Foreign Language]. So yes, GTPL will remain separate -- will remain separately [Foreign Language].

The next question is from the line of Deepak Agrawal from Impetus Advisors.

Sir, activation fee is INR 27 crore in the quarter, and we added 150,000 subscribers. So that works out to INR 1,800 per subscriber?

Yes. Activation fee and activation actually when Ind AS has implemented, and that is before NTO, you have to split the revenue over 5 years according to the Ind AS, according to the life of the customer. So there is a 5-year stake, so older revenues are also coming into that. In the new regime, the activation is INR 100 and installation is INR 350, which you are seeing there.

So bulk of this, are you saying, is the old revenue?

Yes, yes.

Some of old revenue.

Some of the old revenue.

1.5 years, right? Only 1.5 years activation fee would have come from the subscribers added during the quarter?

Yes. You're right. For that INR 100...

INR 26 crore is the older revenue, I mean, which were -- which you had on the balance sheet that you booked as revenue?

That's right. That's right. Those are the deferred revenues, which is theirs.

So how much of the deferred revenue is still there on the balance sheet?

In the balance sheet, it is around INR 93 crore is still there, which is [ there ].

And that will come over what period?

Two, 3 years.

It says, this will come in next 3 years' time.

Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Vikram Ramalingam for his closing comments.

Thank you, everyone, for joining the call.

Thanks, everyone.

Thanks, everyone.

Ladies and gentlemen, on behalf of Maybank Kim Eng Securities that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.