GTPL Hathway Limited (GTPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to GTPL Hathway Q4 FY '20 Earnings Conference Call hosted by Ambit Capital Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vivekanand Subbaraman from Ambit Capital. Thank you, and over to you, sir.

Thanks a lot for the introduction. Ladies and gentlemen, we, at Ambit Capital, are pleased to host the management team of GTPL Hathway to discuss the 4Q and full year FY '20 results of GTPL Hathway. We have with us the senior leadership team of the company. Mr. Aniruddhasinhji Jadeja, our Promoter and MD; and Mr. Piyush Pankaj, Chief -- our Chief Strategy and Corporate Affairs Officer. So I'll hand the call over to Mr. Piyush for an introduction followed by Q&A. Thank you.

Mr. Piyush, may I request you to unmute your line. [Operator Instructions] Thank you for your patience. We have the line from the management connected. Sir, please go ahead.

Hello?

Yes, sir. Go ahead.

Yes. Vivek, are you there?

Yes, sir. We can hear you. Actually, I directed the call to Mr. Piyush. You can start. I think you can start.

Yes. Mr. Jadeja is starting. Yes.

Thank you, Vivekanand. Good evening, everyone. On behalf of the management of the company, I extend warm welcome to all of you to the conference call, GTPL Hathway Limited, to discuss financial and operational performance of the quarter 4 and the full year ended on March 31, 2020. I believe all of you must be working from home and taking good care for your family and yourself. COVID-19 pandemic has put lives and business at significant risk and the full economic impact of this difficult to estimate risk as we speak. GTPL business model, however, as you know, is relatively unaffected and pandemic -- in pandemic. People are watching more TV in this post lockdown. Of course, there are operational challenges of most of us working from home, except for critical operations. Collection is another issue, but more than 80% of our collection through digital payment mode. We delivered a strong business and financial performance in this transformative year for the industry. Amidst a year of industry reforms, GTPL Hathway has emerged as a stronger company. Our operational ability to extend our service have improved so as our ability to generate free cash flow. The highlights of FY '20 was strong profitability, debt reduction and geographical expansion. Our FY '20 consolidated revenue and EBITDA grew by 88% and 39%, respectively. We have collected nearly 3,000 gram panchayats of the total 3,600 gram panchayats to be connected under our EPC project. We have completed approximately 13,500 kilometers T&D works of the total 17,000 kilometers in FY '20. During the year, we have significantly reduced our gross debt around INR 130 crores. And with that, our net debt as on March 31, 2020, stood at INR 128 crores. The Board has recommended 30% dividend, that is INR 3 per share. I will now request to Piyush give you a detailed overview operation and financial performance for the year.

Thank you, Mr. Jadeja. Good evening, everyone. I hope all of you are safe and healthy. GTPL, as many of you know, is one of the few consistently profit-making cable TV and broadband companies in India. Our business model is quite robust and can explore multiple growth opportunities that this sector has potential to offer. Allow me to give you a glimpse of our trajectory in the past few years. Between FY 2016 to FY 2020, we have doubled our paying subscriber base from 3.4 million in FY '16 to 7.5 million in FY '20. During the same period, our revenue and EBITDA have grown by 24% and 30% CAGR, respectively. We have been consistently generating free cash flow since FY '16 and have managed to reduce net debt by INR 2,523 million, means INR 252 crores in the last 4 years and have returned money to shareholders in the form of regular dividends. I believe with such strong fundamentals we are ready to pursue the next phase of growth, which has already been put in motion. With that, let us take a deep dive into performance for the year. Let me start with the CATV business. During quarter 4 FY '20, we seeded 1,50,000 STBs, taking the total seeded box to 10.2 million. As on March 31, 2020, paying subscribers stood at 7.5 million, increased by 10% Y-o-Y. With that, during FY '20, we seeded 7 lakh STBs and added 7 lakh paying subscribers. Our new customer acquisition campaign added 1 lakh new subscribers in FY '20. We launched 12 new channels in FY '20, taking the GTPL owned and operated channels count to 47. Our consolidated subscription revenue grew by 41% during the year. During the year, we have strengthened our CATV presence in Mumbai and have entered Chennai, Tamil Nadu. We have also expanded our subscriber base in Andhra Pradesh and Telangana in FY '20, marking GTPL presence in 12 states across India. We are proud to be the first MSO in the industry offering versatile language-wise digital recommended packages to customers. During the year, we have launched the industry's first reward program, GTPL Pragati, to reward our business partners. The program emphasizes on subscriber retention and upsell and the reward program offers performance-based incentive cash back. In broadband segment, during quarter 4 FY '20, we added 1,70,000 new home passes and taking total home pass as on March 31, 2020 to 3.33 million. During the quarter, GTPL added 30,000 net broadband subscribers, taking the total net broadband subscribers as on March 31, 2020 to 4,05,000, of which 1 lakh are FTTX subscribers. For the full year, we added 9 lakh new home passes and added 80,000 net broadband subscribers and 46,000 FTTX subscribers in FY '20. The data consumption as on March 22, 2020, stood at 162 GB per month per customer, up by 54% Y-o-Y. The broadband ARPU for FY '20 stood at INR 4.22 per month, marginally up by 2% Y-o-Y. Let us now move to our financial performance. On our consolidated business, including EPC contract during quarter 4 FY '20, GTPL's consolidated revenue increased by 39% Y-o-Y to INR 485 crores. This was primarily driven by rise in CATV subscription revenue by 27% Y-o-Y to 265 million -- INR 265 crores, sorry. The broadband revenue for the quarter grew by 27% Y-o-Y to INR 46 crores, led by a rise in subscribers. EBITDA for the quarter surged by 8% Y-o-Y to INR 112 crores with a margin of 23.1%. On our consolidated business, including EPC contract during quarter 4 FY '20, GTPL's consolidated revenue increased by 91% Y-o-Y to INR 666 crores. EBITDA for the quarter increased by 20% Y-o-Y to INR 125 crores with a margin of 18.7%. Our EPC contract during quarter 4 FY '20 reported the revenue, EBITDA and profit before tax of INR 182 crores, INR 12.9 crores and INR 12.3 crores, respectively. FY '20 was the first full year of implementation of new framework across the industry. Implementation of new regime, prima facie resulted in change in LCOs' earning profile adversely and restricted their cash flow cycle, consequently, lowering their ability to pay their dues to the company. Pursuant to the above change and assessment carried out by the management, we have recognized INR 668 crores towards impairment of trade receivables and disclosed the same as exceptional item. The company has taken impairment of trade receivables as the exceptional item in last year also of INR 65 crores. Last year, impairment was mainly for direct business of company. And this year, we have taken for all joint ventures company in their books and took provision of corresponding trade receivables in company books. As told you in earlier call that there is around INR 120 crore which was 3 months collection pre-NTO, that is on March 29, being the credit cycle, was left on ground due to the implementation of NTO, which we will collect during FY '20. We have collected around half of the amount from the ground. And assessing the current position, that 1 year of NTO had passed and COVID-19 pandemic, it is advised to provide this trade receivables which was mainly in joint venture companies. This is not deferring our cash flow generation and no further exception item in this nature should come in FY '21. On our stand-alone business, excluding EPC contracts during quarter 4 FY '20, the company reported revenue of INR 314 crores, which grew by 36% year-to-year. This was mainly contributed by 20% Y-o-Y increase in subscription revenue at INR 180 crores. The company reported EBITDA of INR 63 crores with an EBITDA margin of 20... [Technical Difficulty]

Participants please stay connected, the line from the management dropped.

So I was on our stand-alone business. So on our stand-alone business, including EPC contract during quarter 4 FY '20, the company reported revenue of INR 496 crores, which grew extensionally by 1.15x Y-o-Y. The company reported an EBITDA of INR 77 crores with an EBITDA margin of 50.4%. This is all from my side. Thank you, everyone, for your attention. We can now begin the question-and-answer session.

[Operator Instructions] First question is from the line of [ Akash Shah from AMS Securities].

Yes. I wanted to know where the GTPL stands in the whole merger of Network 18 then and Hathway?

Right. So we are not...

Yes, we are not going to be part of that merger. Right now, Hathway is holding the shares in GTPL Hathway. Once that merger will happen with the TV18, then TV18 will hold the shares in the Hathway -- in the GTPL Hathway.

So the previously considered synergies that we were foreseeing with the whole Jio broadband will not happen? Or we can see some partnership with Jio?

See, all the synergies benefit we are getting as a GTPL Hathway for all the vendor negotiations, all the lease line side, all those benefits with the -- which we are getting GTPL Hathway. Yes, GTPL Hathway is doing their own broadband business as we are mainly doing it in the Gujarat. And we are going to complement each other business, Jio. Jio is with us. It's a privilege, and we are going to complement each other business on the ground.

So no competitive intensity in -- from this Hathway then foreseeing after the merger?

No, no, no, not at all.

Okay. And my second question is, can you just brief about what was the whole high income tax case that has been -- that you have mentioned in the note?

Come again, can you repeat the question, Akash, sorry?

Yes. Can you just brief about the income tax demand notice that you have mentioned in the note, financial note?

It's not income tax demand.

Okay.

It's exceptional...

You're talking about exceptional?

No, no, no. There is some items that you have mentioned that there is a demand notice that has been raised of around INR 200 crores and interest and penalty of around INR 700 crores?

Yes. So this is from DoT. So DoT after the honorable Supreme Court order of 24th October 2019, and since that demand to various ISPs, including PSUs. We also received demand notice from DoT, which took into consideration our cable revenue for the period of demand in their AVS calculations for arriving at the demand. We had already restructured our business and hived off the broadband business to 100% subsidiary of company from April 2016, and there is no license held by the company thereafter. We have given the representation to DoT that this demand does not hold good on ground that cable business revenue does not come under AVS. Based on the opinion of legal experts, company is confident that they have a strong legal ground to defend itself and will take appropriate legal remedy as advised by the legal experts.

So this demand amount is standing for how many years, from which year to which year?

This is -- they have given from 2006 to 2015.

2006 to 2015. So we were holding the license under the -- till that time the ISP license was not hived off to the subsidiary, right?

No. That time, it was not hived off. It was hived off in 2016. And the license was -- earlier, it was the B category and then the A category. It is already disclosed in the RHP, in our RHP when we have gone to the public, that the whole thing was disclosed under the RHP.

The next question is from the line of Siddharth Oberoi from Prudent Equity.

Yes, you just paid a lot of debt between last year and this year, but as you can see your finance cost has still gone up. Can you explain that?

Finance costs have gone up year-to-year because of the restructuring of the loan, which we did some of the loans. And there is a onetime expenses that the processing fees are there. So that's why you are seeing that the finance cost has -- if you see year-to-year, it has reduced. From quarter-to-quarter, you will see that it has gone up because we have did some restructuring of the loan.

Actually, year-to-year also it's higher, if we see it like INR 11 crores and it's now INR 13 crores.

So it is like consolidated. So last year, the cost was INR 39 crores, whereas this year, it is INR 34 crores.

I'm saying in the quarterly results, so how much is this...

If you talk about on the quarterly, in consolidated, if you will see the finance cost was INR 51 crores in FY '19, which has come down to INR 43.6 crores in FY '20, absolutely.

But -- yes, but in the quarterly, it is up?

Yes. Quarterly it is up because of the processing fees, which we have paid to the bankers for restructuring the loans. So definitely, in the next year, we are going to get the interest rate benefit and that will be compensated out of that. So quarterly is a onetime kind of thing. And it will have the effect for this year. So we are expecting the interest rate is coming down overall on the loan portfolio for the coming financial year.

So how big is this cost restructuring thing? Is it INR 4 crores, INR 5 crores because it's a big jump?

This was for almost around INR 80 crores.

No, no, there is restructuring that you report in the finance cost?

Yes, yes. The onetime processing fee has come into the finance cost.

Which is how much?

Which is around INR 4 crores.

Okay. All right. Also, this exceptional item that is INR 68 crores, the INR 67.96 crores. So what is -- how have you arrived at this?

Siddharth, just want to know that when I was giving the speech, you guys are able to hear the whole thing on the exceptional?

Yes. I did hear it. I did hear it.

No, no, I will answer that. The INR 68 crore has been arrived on the basis that joint venture companies, what is the outstanding on their books for the ground and how much is there in our books for that JV companies. So it goes -- it works from the ground to JV companies, from JV companies to parent company. And based on that, it has been arrived.

But last year also, you had given this, so which was only for the parent, are you saying that? And now you've taken it into...

That was only for the nonrelated parties, you can say, not for the related. Now we have given the effect for joint venture companies.

Is there anything left now because we may get it another quarter or next year again?

No.

No, no, no, not at all. It's all...

It's the exercise, which we have taken. And now this should not come in next financial years.

All right. Also, in this goodwill in the balance sheet, if you see the goodwill and other intangible assets, they have gone up again by INR 71 crores, INR 72 crores. What does that pertain to?

Yes. This pertains to our Mumbai -- the Mumbai network, the Scod network, which we have acquired. So there, you will see that tangible has gone up, intangible. And now...

Everything...

Yes. So when you are acquiring this, the -- your -- how much you are paying and how much you are taking over the liabilities and all. Based on that, it becomes an intangible.

This is a very big charge, actually, INR 28 crores on goodwill and INR 43 crores on the other, so.

Yes. That's right. That's right.

So everything, whatever you have paid has been routed through these 2 items?

That's right. Because there was high liabilities on that company. When we took over very few amounts have gone to the promoters, back to those companies, mainly all the liabilities and all we took over, and we took over the company. That's why you are seeing that it is going into the intangibles.

All right. Okay. Also, the same INR 1,000 crore demand raised by DoT, do you have to pay some amount initially as a litigation fee or something?

No.

So this just goes to the court and carries on the process of law.

That's right.

So what is the probability of your listing here? Is there any precedence that somebody also has this and they had to pay up, somebody also received a notice similar to this and they ended up paying?

See, this is a legal matter, Siddharth. I can't comment on the public forum. I have already given my comment that what company believes. And based on that, we have disclosed it.

Yes. But this is a very large claim actually, so therefore.

Actually, can't comment on this, Siddharth, a lot. We can talk offline.

Next question is from the line of Ayush Mittal from [ MBPL Value Investments. ]

Sir, I was trying to understand about the company. I've been reading off late about it. And I wanted to understand like in terms of technological landscape, where do we stand in terms of technology when we compare to the new fiber broadband, which are getting available in the market, like when we compare it to ACT Fiber 5G or when we compare to Jio? From what I understand, we have -- our technology is older, and those new technologies are faster and they are offering bundled packages. How do we compete against them as of now?

Rajan sir, can you take this answer?

Yes, Piyush. Am I audible, Piyush?

Yes. Yes.

No, essentially, I think we've discussed it in earlier calls also. What GTPL has done in last 2 years, if you see the broadband company balance sheet and the CapEx which has been invested, there is a significant CapEx invested in upgrading the network. So we had something called MEN earlier in GTPL, and most of that has been upgraded to now fiber to building and fiber to home, okay? In fact, that was the kind of inherent strategy as a part of the whole IPO itself. That's one of the purpose for which money was being spent. And now the last few quarters or few months, we clearly see a huge increase in net trading also. Piyush, maybe you can share the -- a little more detailing about last 6 months the kind of turnaround which has happened in broadband vendors, which is based on technology upgradation, which we have done. And as far as cable is concerned, GTPL always had technology, which is one of the best in the world, at par with any other MSO across the world, frankly.

No, I'm trying to understand like today, the cable and broadband is getting merged. Like a single fiber is getting -- is offering both of these, and I think GTPL is also doing that.

Yes. So we are also going to the -- you're absolutely right, we are also going to the launch. It's a hybrid setup box. You can see the cable TV also and...

What kind of investments will we need to do going forward towards this to upgrade whole of a network or if it's already done?

I think we have to divide into 2 parts: one is something called access network; second is the last mile consumer equipment, okay? So access network, fiber is fiber and access network is capable to handle anything, okay? So access network is already there. Now last mile, you put 2 consumer premises equipment or you put a hybrid equipment, that's a different aspect, okay? And as far as legally is concerned, still cable and broadband have a separate license, one is MIB and second is DoT. In any case, combined bill, et cetera, is not possible because both have different licensing requirement itself, okay? And so we are to differentiate between the access network technology and the last mile which is at consumer home, which is the CPE. Piyush, probably you can take it forward from here.

Yes. So as Rajan sir has said, that there is what we are going to do and we are working on that technology already.

And we already upgraded this entire network. Now it's our network. Earlier, it was in MEN form. It's -- now it's -- we -- almost 70% networks we transferred into GPON technology. You can call it FTTH or FTTX.

So that's already happened. We are working on the hybrid box. Already order has been given. So we are going to launch the hybrid boxes, the combined business of...

Cable and...

Cable, broadband and OTT together. Earlier, the plan is to launch in -- somewhere in July. But due to COVID, we have to see that if we have to extend it by 1 quarter, we will do it. So all the technological things, latest technology and all that's we are working on. As a market leader, we are very much want to take benefit of these opportunities and to serve our customers better and better.

So second question is the extension to the question which keeps coming up, like do you have Jio as a shareholder. But in our areas, Jio must also be launching the broadband and cable services on their own. So is that a threat to us? Or if not, then why?

Jio is not launching any cable TV business. They are majorly in the broadband business. So yes, I'm not saying it's our privilege because Jio is our partners. And we almost a very good understanding, and we have a lot of synergy in terms of the infrastructure sharing, in terms of the content sharing. So we are not saying right now any competition side is in Jio. So instead of -- each other, we are complementing each other. So there is an understanding on the ground also. As you know, Jio prices starts with INR 700 plus taxes. Our prices is lower than that. So we are working on that way. And we are -- you can see on the ground also, we are complementing each other.

Okay. And are there any plans that we can -- like if Jio want to have their presence in Gujarat, can we be a friend for them or do something on those things? Or that is not being considered as of now?

That is not considered as of now.

Okay. And what about the competition with other companies like ACT Fiber and all these companies we are seeing are being very aggressive these days? And though you mentioned that cable and broadband can't be offered separately, but I'm seeing in my area, in many areas that these things are getting adopted now.

See, last year, we have launched our GIGA HD, where we have started providing the cable and broadband business together, but we have to roll it back just because of the new NTO which was getting implemented. Now again, we are coming with this in the hybrid box, where we are going to provide cable, broadband and OTT all together to the customers. So that's the endeavor for the company to get more and more customers as a dual or triple or quadruple customers so that the stickiness will be much, much higher on that.

And Piyush, in any case, all the areas where GTPL is operating, there is no other private players, some of the names which are being mentioned here actually. BSNL, we are primarily in competition. There is no -- none of these players which are being mentioned, which are there, actually, so.

Okay. Okay. Sir, in continuation to the previous participant question around the write-off that we have recognized this year and last year, and then we continue to see very high intangibles and other things on the balance sheet. As an investor, how do we get comfort that more such write-offs won't happen in coming times because this is very -- like though the company is doing well, we appreciate the other parts, but this is very concerning to see such large write-offs keep happening and there are concerns around the intangibles and other areas of the balance sheet?

Yes. One thing I want to confirm that there is no impairment of investments, high investments. There is no impartment of investment involved in this, in this whole write-off and now this all exceptional items. Second, if you see, we are doing the valuation every year for the different companies. Already, if we talk about this company part, already, we get more than 250,000 subscribers. And if we do the valuation in 250,000 subscribers, we are getting around INR 150 to INR 160 as an ARPU on that. Maybe it is a very high level. So what we are seeing that, no, the impairment will not happen on these things.

And sir, other thing is that the interest cost, like the previous participant asked, like if we are paying INR 45 crores of interest on a gross borrowing of almost INR 350-odd crore, this is a very, very high interest cost. Why is it so?

Yes. The 2 things, 2 factors are there. One, I have already said that because of the processing fee and all. Second, there is a change in Ind AS guidelines, where you have to show lease as in the interest side. So there's a 2 impact on that, as you have to see all the lease, lease rents and all under the interest cost now.

So earlier, it was grouped under the head rents. And now as per the Ind AS 116 which is implemented with effect from 1st April 2019, means the current financial year for which we are discussing. So that has been grouped under the interest expenses. So put together the lease rentals and the processing fees which we had paid, that's why in current quarter, it is showing higher. But with this kind of restructuring, which we have done so far, we are expecting that the interest burden on the company will come down in future.

Can you, sir, quantify how much will be the reduction for the coming year?

We are expecting almost around 2% on our INR 120 crores of portfolio. So quarterly, it will be somewhere in that range only.

2% on the overall loan of INR 120 crores?

Yes, yes, yes.

Okay. Okay. And sir, on the EPC part of business, the order that we have got, once this gets completed, what is the visibility on that?

So basic -- actually, our plan on our target was -- it should be on -- before 31st March. But after 15th of March, actually, [Foreign Language] close to around 3,000 gram panchayats GP is already connected, and our -- the total -- against 3,600 gram panchayats. So our planning was complete it to before 31st March is close to around 3,300. But yes, because of the COVID, I think it will take next quarter.

No, I'm asking about further visibility on more orders or something once we complete this. Like how can we -- like is this a onetime business that we got or we'll get more of such businesses going forward?

This is a strategic call, for this BharatNet project to do it in the Gujarat as we will get access to every villages, every gram panchayats in the Gujarat. And we are going to manage this for next 7 years also. So we can expand our business at a very fast pace and we can reach to the -- every nook and corner of the Gujarat. So that was one of the strategic call on which we have gone for the BharatNet project. Other projects right now is under evaluation, but we are going to take call on those after -- once we complete this project then we'll take the call on those.

Yes. Sir, one final question. In the credit rating report, there's mention that Jio wants to acquire some of the GTPL's public holdings. I couldn't understand that part. Can you shed some light on that?

Public shareholding, that is the offer for sale offer has happened last year. And now already, they have given up the -- their shareholding in the public to bring back the public shareholding of 25% as per the SEBI norms.

No, I couldn't get it.

So Jio has given the open offer last year in FY '19, 2019 in February, as per the -- as they were doing the open offer for Hathway and Hathway also that they have given the open offer for GTPL Hathway. It's still good. And this February, they have already offloaded the shares to meet the public shareholding of 25%.

Next question is from the line of [ Pratyusha Baspari ] from [ Equitas ].

I have a couple of questions. So sir, on the EPC front, just wanted to understand that because of this lockdown, I'm sure there will be delays, but are the terms being modified? And are we getting reasonable extensions? And how do we see this playing out after the lockdown open? Do we see any one-off extra costs for delays from our end because of any operational issues on undrawn issues for implementation?

So madam [Foreign Language] majorly delay first round delay [Foreign Language] because of the monsoon impact. And [Foreign Language] because of the COVID second round delay [Foreign Language], the target was -- as per the understanding and as per the agreement date was 31st December 2019. But because [Foreign Language] almost 60 days delays [Foreign Language] because of the COVID. But [Foreign Language] impact or whether there's any healthy [Foreign Language]. So all extensions and all those things are in place.

Okay. And sir, [Foreign Language]

We have taken in our financial all those provisions. Extra cost, you can say, is just the salary cost, where some of our employees are there. Otherwise, no extra costs are there.

Okay. And sir, my next question is for broadband business. So we've been seeing some steady growth in home passes since last 7 quarters now. But -- and the conversation earlier was that it takes about 12 to 18 months for these home passes to eventually come into increase in subscription. But we have not seen any significant jump in subscribers. So what -- how do we see this panning out? That's my first question. And my second question is relating to the outlook of ARPU in this segment. So sir, our ARPU has gone up by about 2%, but we've been -- our consumption -- the data consumption of our subscriber has gone about by 54%, right? I think the numbers that were quoted. So I wanted to understand how long are we going to be using the strategy where you keep the revenue same, but the data provided is going to keep going up?

Rajan sir, would you like to take this question, and then I will complement?

So Piyush, in terms of -- you can probably share with them last 6 months your gross add and net add numbers to give them comfort. But as far as data and pricing is concerned, okay, until the time incremental bandwidth costs is being managed and we are delivering the required EBITDA, okay, until the time overall market prices, the way mobility also is positioned, et cetera, that only will be able to tell in next few quarters to come, okay? So currently, whatever little price increase is happening quarter-on-quarter, that only will be there, okay? But yes, definitely, there's a traction in bidders, and Piyush, you should share the last 6 month trends.

Yes. Yes, sir. So [ Pratyusha ], if you see -- you're right that we have started doing our home passes from somewhere in the mid of FY '19. And you will see that from 1.6 million house -- home passes, we have come up to around 3.3 million home passes. So last, you can say that, yes, 18 months has gone. As I told that it will take around 18 months to 24 months between that to reach to somewhere between 18% to 20% of the penetration in the FTTH scenario. That has already happened. We are seeing the trend in the last 2 quarters, that suddenly, the sales has jumped around 40% for us. Means if we were doing around 30,000 sales in a quarter, it has gone up to around 50,000 sales in a quarter right now. Yes, the churn is there. The churn has also came down. Earlier, if you see, we are doing around 30,000, 35,000, the churn was around 20,000. That's why we are adding only 12,000 to 15,000 net subscribers, which has already come down to 20,000 now the churn, and we are adding 50,000 there. So already 30,000 we have got this quarter. We are very hopeful that the coming quarter is going to be good. As you see that the home passes, which we have built, have started giving us fee. And we are hopeful that this year, we have jumped by 16% in the revenue. This is going to be much, much higher in the next year in the revenue side.

Sir, on the churn side, so when you say that the churn has been high, so what exactly is happening? Are we losing out our existing subscribers to competition? Or is it that the people have stopped like the use -- it's more like a cancellation of subscription from their end?

Yes. You talked about on that way, the industry churn is at around 25% right now. The overall -- we are lower than that, on the churn side. Yes, customers are taking the connections on their need. They might be shifting to the wireless also, they are shifting to the -- some of the wireline. In our cases -- in our case, as the competition is low in the Gujarat market, mainly it is on the -- either on the wireless or either they don't need this service. So that is the only probability. I will say that it is -- mainly people are shifting to the wireless. And that's why you will see that, that churn is happening. But yes, the new customers are coming in very high proportion on that way.

Okay. And sir, one -- just last clarification about the write-offs. So you mentioned that total write-offs were about 120 -- sorry, the total collections were about INR 120 crores. Out of which we have taken INR 68 crores write-offs right now. So is it safe to assume that the rest has been received? Or is it that last year, we took half of the write-off, and we are taking the other half right now?

No. I have mentioned that in the first quarter of my call, in FY '20, that there is around 3 months collection lying on the ground because of the NTO, we have not collected that from the payroll operator, which was at around INR 120 crores. Out of that, around 50%, we have collected in this last 9 months. And rest, we have taken the call that we should provide, as already 1 year has gone for the NTO plus this COVID pandemic is there. So somewhere for the more conservative accounting, we should go for provision.

Okay. And then my last question is on cable TV segment. Sir, how much of our collection right now is on a prepaid basis? And how much of it happens on online basis? So how does the cash flow works, so when the subscriber pays, how does -- how much do we get it? And how is LCO -- our LCO is compensated for it?

When subscriber pays to the LCO, LCO keeps its portion and give us the money as per the billing from our side to the LCOs and right now, if you see around more than 80% of our collection is under digital mode already. We are trying that the next 20% also comes under digital.

And sir, this would be prepaid basis for the LCO?

Yes. It's a...

It's a 100% prepaid basis.

It's a prepaid.

For LCOs, it is 100% prepaid basis. And for us, it is the raise invoices for the LCOs -- to the LCO?

No, no, no. Our LCO is 100% prepaid business.

100% prepaid. They have to give the money in the wallet before activating the customer.

Next question is from the line of Rohit Dokania from IDFC Securities.

I'm sorry, I got cut in between. So if this was a repeat, my apology. Piyush, can you throw some light on -- during the last 30 days, that is during this lockdown, how consumer behavior would have changed across both sort of cable and broadband? Are you seeing sort of upgrading impacts? Or are you seeing any down trading? Are you seeing higher number of recharges, so on and so forth. It will be very helpful.

Two trends which we are seeing right now. One trend is, yes, the residential customers have gone up in that last 30 days, both on the broadband side and both -- on the cable side, both in the -- both business. But the commercial customers, you can start talking about shops, offices, restaurants, those have come down. So if you can say it's more of a net-net for both the businesses, for the broadband and for the cable, that we are not getting renewals for the commercial restaurants, the offices and all hotels, and there is a surge in the residential connections.

Offices, restaurants, hotels. Offices, hotels.

Okay. And across residential, sir, are you seeing any upgrading or downgrading in terms of tax or anything?

Yes, upgradation is happening in the packs. In both with the broadband side, they are taking the higher speed, upgrading it to the higher speeds and all. And in the cable side, also, they are upgrading into the higher packets.

Okay. And in your best estimate/guesstimate, would you believe that these trends would sustain post the sort of COVID thing starts to ease off? Or do you think consumers will go back to their earlier sort of packs and all which they were used to?

See, once the pack is taken, I can't comment on that, but we believe that we will try to retain customers on those packs. Yes, once this will be over the normalcy comes, our commercial customers will come back.

So overall industry trend lasts, if you see the last 2 years, 3 years, customer [Foreign Language]

[Foreign Language] If and when commercial customers also come back [Foreign Language] from an overall both cables -- more so from a broadband perspective what they had from cable and broadband as well?

[Foreign Language]

Next question is from the line of Brijesh Ved from BNP Paribas.

Congratulations, sir, on a good year that has actually gone by for you. My first question was that in FY '21, given this recent COVID and even otherwise, what will be the CapEx that you will need to do? That's one. And secondly, in terms of your activation targets on the broadband front. What kind of tailwinds are you likely to see given that there is some pickup in terms of residential and with a normalization, what will be your target for the year?

CapEx. First I will take the CapEx, then the numbers we will get to. Brijesh, CapEx side for this year, in the normalcy, we are keeping it around INR 250 crores to INR 260 crores CapEx projection, on which around INR 150 crores to INR 160 crores will go into the cable business, the rest will go into the broadband business. But yes, we have to reevaluate it somewhere in the quarter 2 to see what is the COVID effect and how much longer COVID effect is going to be. But yes, as Mr. Jadeja has already said, our business is not much impacted at this situation as -- if people are watching more TV, people are consuming more data. It is good for our business. That's one. And second, on the broadband numbers, as you see, we have did around 80,000 subscribers this year. Already, we have reached 30,000 net subscribers in the last quarter. We want to maintain and increase that trend. So somewhere, we are looking forward that we will do between 120,000 to 150,000 subscribers in the next 1 year.

Sure. The -- my other question was that, which would also bring that your FY '20 as well as a year that is now going to come by FY '21, you will continue to have very strong free cash flow generation. You already made a kind of payout, which is higher than what we have seen in previous years for the financial year, which has ended. What is your thought process as a management in terms of increase that you are likely to see in terms of free cash flow in the business? And therefore, while there is always a growth opportunity in terms of inorganic opportunities that may come back, but what will be the kind of payout that you will continue to look at on a sustainable basis for your shareholders?

Yes. So if we see Brijesh, this year, we have generated around INR 400 crores of free cash flow. And after that, we utilize that in the CapEx, paying the loan, interest, taxes, and dividend. And next year, we are hopeful that we will maintain the increase in the cash flow in the line of whatever decrease is happening in the EBITDA side. And we are very happy that we will give back to the shareholder as a dividend, and we will try to maintain or increase that in the coming years.

Would the Board also look at considering buyback is one of the options of kind of creating value because if we look at your cash flow generation to your current enterprise value as well as market care. Would that be one of the options that Board would have considered or would look at during the year?

Yes. The Board is very positive on the whole thing and Board has evaluated that in the last Board meeting, we had a discussion also. And I think more evaluation will happen on that. And as a management, we are positive that Board will consider it.

Moving back to the business. Your thought process on the M&A opportunities for the year. Specifically, any specific geographies that you are specifically kind of looking at targeting?

See, a lot of opportunities of M&A is there. And already, if you see, we have started the new territory of Tamil Nadu. The state of Tamil Nadu, we have started the expansion. We are expanding very fast in Telangana and Andhra. The opportunities are at both the places. Northeast is the another focus area for us to expand in the states in the Northeast. So that is the another focus area on which we are working. We are working on around 2 to 3 new states on which we can expand. Some of the big opportunities are there, which we are evaluating. So these are the opportunities, which is in the front of management right now. And one by one, we will take the call, and we will expand.

Next question is from the line of Yogesh Kirve from B&K Securities.

So as of March '20, we had receivables of about INR 280 crores. Is it possible to share how much of this actually pertain to the EPC contract that we are pursuing?

Yes. Just a minute. Just a minute, Yogesh, so I can give. Yes. So the -- we're talking about the trade receivables, which is at INR 278 crores. Overall, there is a drop-down in CATV and broadband trade receivables of 154 million. And the BBNL project receivables have increased by 146 million. Out of this 278 million, the total BBNL is around 1 -- INR 146 crores. Yes, so it's INR 146 crores because last year, the BBNL project is not there. So the trade receivables have -- of BBNL is INR 146 crores of that.

Okay. So the normal receivables -- so apart from the EPC, the receivables would be roughly in the handle of INR 140 crores compared to INR 290 crores sort of last year.

Yes, that's right.

And this trajectory should continue, right? Because...

This is the -- mainly for carriage and placement and some others. Subscriptions are almost nil in this.

Okay. It pertains to carriage and placement so this can continue at similar levels?

Yes, that's right, except the broadcasters.

Right. Sir, in terms of -- I understand our business is prepaid at the LCO level, so are dealing with LCO on a prepaid basis, but I understand there is specifically some challenges as far as collections at their end. So is there any release which has been thought by the LCO community from us under the prevailing circumstances because of lockdown?

No. The -- right now, LCO communities have not asked for any relief. But yes from our side, we have given the relief for around a week -- week's time on the credit.

Okay. So the prepayments, which were due in say month of April, so there has been no major disruption, right, apart from a couple of days that you have really...

It was in this way that 1 week's course, they have to pay, again, 1 week's course they have to pay. So there is no effect on the collection for the whole month.

Okay, fine. And in terms of the broadband subscriber additions. So for the full year, we did about -- for the first 9 months, we have did about 50,000 and then last quarter, you had accelerated to 30,000. So is there a sense about what should be the expectation for the coming quarter? So I would presume because of COVID and although the increase in the subscriber activations, so any sense about what are we expecting in the next couple of months or quarters as for run rate?

So right now, Yogesh, you'll see that what we are seeing in April right now, there is no change in the trends till date. We are hoping that if the lockdown will go away as announced by the government, then the -- it is going to be positive for the business. If it continues, then we have to evaluate at that point, what effect will come into that. But we are hoping that the trend will be same as the quarter 4 trend, which has happened.

And finally, regarding your television business, this year, you had a big benefit from the NTO that from first quarter onwards. I mean from the next 2 to 3 years, perspective. So what are our ambitions in terms of the, one in the new subscribers growth? And secondly, in terms of the realization for ARPU. This is from a longer-term perspective.

Yes. So if you see the subscriber base, we have grown by 10% this year. We are going to grow more buyback if all the things goes well. So the target is to grow more than 10%, much, much higher in that way, the subscriber base. And on the revenue side also, we want to maintain our CAGRs of what we did in the last 4 years. So that's the outlook for the business on which we are working on.

Okay. In terms of -- if you particularly look at the ARPUs, I mean, what sort of increases can be possible once -- considering the base has already moved up quite materially in FY '20. So is it possible to maintain a 5% sort of a run rate for the coming year?

Yes. ARPU, if you see that GTPL is at the lower ARPU than the industry right now. Somewhere, we have to match that as per the industry ARPU. So yes, ARPU, we are going to get the gain on that side, somewhere 5% to 6% as I will say that we are targeting that way that at least 5% to 6% average for the whole year we should get.

And just one last question, if I may. So Piyush has referred to be -- with respect to this Jio's broadband plan and our plan, there's any -- they would complement each other. So is this area -- so is this complementarity would be geographical in terms of, I will not -- so both companies will remain restricted to that region. Or you -- we may operate in the same region, but there will be complementarity in terms of the scope of services. So maybe Jio will only focus on the higher ARPU service, which is -- which we include not just broadband, but a whole food of services, and we would be more in terms of the data provider?

See...

No. So basically, [Foreign Language] GTPL major broadband business, a 95% broadband business in Gujarat, whereas majorly the 4 cities Ahmedabad, Baroda, Surat and Rajkot, usually Jio [Foreign Language] operation start [Foreign Language] not even Jio, but not major or any other wireline or service provider [Foreign Language]. But yes, as it is Ahmedabad, Baroda, Surat [Foreign Language] majorly high ARPU [Foreign Language]. We are complementing each other. [Foreign Language]. We have good understanding with Jio.

So it is a combination of both, Yogesh, on that way, what we were asking. Yes, we are at around 110 cities, 110 cities in the Gujarat. And so that is the case, our expansion and our footprint is much, much larger.

Next question is from the line of [ Swechha Jain ] from ANS Wealth.

I just have a couple of questions. The first question is, will you be able to provide any ARPU guidance for next year?

I think I have just given that with the EBIT that we are looking forward as GTPL has the lowest ARPU in the industry, we want to match the ARPU with the industry. So we are looking forward that somewhere 5% to 6% jump in the ARPU will happen for average of the year.

Okay. So sir, that is on the cable TV side, right?

Yes. On the -- yes, please, please go ahead.

So on the broadband side, is there any guidance that you can give?

No. On the broadband side, we are not taking that -- we will go into -- the ARPU will go up. We are looking forward that our volume will go up. And through that, the revenue will go up. We are going to maintain our ARPU in the market.

Okay, okay. And so just a clarification regarding the CapEx guidance that you've given for next year, this INR 250 crores, INR 260 crores, just wanted to confirm INR 150 crores to INR 160 crores is what you would be spending on the cable TV, right? I just missed that part actually.

Come again, come again, sorry.

So the CapEx guidance for next year, you've given INR 250 crores to INR 260 crores, I missed the split that you gave between the cable TV and the broadband figures actually?

That's right. Cable TV is INR 150 crores to INR 160 crores, including some acquisitions and all, and 100 -- the rest is going to be the broadband.

Okay. Okay. And sir in Tamil Nadu, I think they're growing very aggressively. Can you give some more flavor to it and just explain what exactly is happening in that place?

See, we have just entered last quarter in the Tamil Nadu. And we had already presence in around 8 districts in Tamil Nadu, expanding very fast in other districts, and we are hopeful that we will penetrate this market very fast.

Next question is from the line of Mayur Gathani from OHM Portfolio.

So 2 questions. First, there were some changes post the NTO. Very recently, TRAI had come up with some new guidelines on the tariff. So has that been implemented? Or what is the status on that? And second point is, when you talk about expanding into newer markets, now these are markets where someone is already present like TN or Andhra Pradesh or Telangana. How are you able to make a dent in there? I mean, are you changing the service -- are you being able to change the existing LCO, MSO, and making a road for yourself? It's not that easy, right?

No. So [Foreign Language] majorly like Tamil Nadu, and AP, Telangana, let's take example like Tamil Nadu [Foreign Language] Tamil Nadu is close to around 50% market is still not completed in digital format. So if you see the overall Tamil Nadu, cable is, I mean, close to around 16 million whereas the only digital customer in itself is Tamil Nadu is not more than 7 million. So it's a lot of opportunities there or [Foreign Language] big, at least you can say [Foreign Language] The same as like AP, Telangana, except Hyderabad, [Foreign Language].

[Foreign Language] I mean Tamil Nadu I understand because of Arasu being present for so many years, you -- no one got an entry over there, which is now you getting a chance to enter. But let's say, AP and Telangana [Foreign Language] local cable operators [Foreign Language] right? So are you tying up with them? Or you are getting completely -- you're just displacing them off?

So expansion is at both format, whether it is organic way or inorganic way. So [Foreign Language] close to around 16 million customers. [Foreign Language] digital [Foreign Language]

Fair. I got that point. That's okay. I find because Arasu [Foreign Language]?

That is still under the legal. I think broadcasters have gone into the legal. And so it is still under legal. So we have to see how the things will come up. And when the implementation will happen.

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

Sir, 2, 3 questions. One, you mentioned that out of the total INR 278 crore receivables, INR 140 crore is only from cable TV business and that too mainly carriage and placement. Is it right?

Yes.

Yes.

Okay. So secondly, sir, you mentioned that this INR 68 crore, which we write-off during this year, so that is -- those all receivables were prior to the tariff order, which came last year, right?

That's right.

Okay. So after the tariff implementation, we are on auto Den mode, and therefore, there are no more receivables from the LCO side.

That's right.

Okay. Secondly, sir, in you earlier calls also, you have mentioned that Reliance's -- Jio's main focus area is on the Internet side. And GTPL Hathway or even the Hathway and the Den Networks will work independently on the cable business side. Now recent -- so that was true, but let's say, after the merger of Den and Hathway with the Jio, all -- both those brands will be now marketed as a Jio brand only. So in that sense, do you see a competition in the Gujarat? Because obviously, Jio will not -- I mean, Hathway or Den players will certainly target the Gujarat market as well under the brand Jio?

[Foreign Language] Hathway and Den, they are merging in Network18, right, a subsidiary of Jio. So basically, [Foreign Language] yes, whether it is GTPL or Den [Foreign Language] they are our good partners, and we are very much [Foreign Language] whether it's a content side, distribution side, infrastructure side. So [Foreign Language], we are not seeing any competition, and we have good understanding.

Okay, okay. And second thing, Jio has launched that IPTV kind of model where on their INR 700 or INR 1,000 pack, everyone can use most of the apps like Hotstar or Amazon or even ZEE5 and all. So Jio have tie up with all those things. So if I see, let's say, as a consumer, if I have that connection, most of the channels be it entertainment or news or sports, everything is available through Hotstar or a Sun TV [Foreign Language] or even a ZEE5. So do you foresee any competition due to this thing?

See, we are also coming with our hybrid box on that way, all OTT, cable, and broadband together, which we are going to provide. I will say the competition for cable business is not going to be there. Broadband side, we are already complementing each other as we are just in the Gujarat, and we are complementing each of the business. So we are not seeing threat on our business as a GTPL Hathway from the Jio side at all.

So basically, [Foreign Language], it's a completely linear or nonlinear television competition [Foreign Language]. But I don't see in India, the way linear TV ARPU is close to around INR 350 to INR 400, whereas nonlinear TV ARPU, as you said, like INR 1,000 or INR 1,200. So I'm not seeing any competitions. I think it's better -- it's not a competition, it's like complimenting each other rather than competition.

Okay. And last question, sir, on the EPC side. So what are the payment terms like we have a receivable of close to INR 150 crores? And secondly, on the EPC side, how much more is left out -- order book left?

So yes, Piyush, go ahead.

Yes. So in BBNL project, if you see, this project is self cash project, you can say, we are not utilizing any cash flow from the main business to fund this BBNL project. It is in auto mode that once the money comes from the government, we pay to the vendors, as you know. One of the vendor, big vendor is Polycab, which is our partner only. The main equipments are coming from them, the fibers and all. So we have a good understanding that once the payment from government will come, then we will pay.

And payment mechanism, as you -- we said, [Foreign Language]. Close to around [Foreign Language] 3,000 gram panchayat [Foreign Language] must be around 2,500 payment, we already -- gram panchayats [Foreign Language] but yes, 500 panchayats because of this COVID situation, it's under process, but [Foreign Language].

Okay. And in terms of revenue, how much more is less in EPC side?

Kind of the for around. The total -- the project cost is INR 1,050 crores.

INR 1,057 crores.

Okay. So around INR 400 crore is left approx?

Yes. Right now, we have taken INR 606 crores in the revenue.

And total project cost is then the implementation is INR 1,050 crores and close to around another INR 400 crores in the O&M sites. It's -- but it's spread out 7 years.

Next question is from the line of [ AR Surabhi ] from [ Mergers India Infocom ].

Sir, can you throw some light on DoT claim, is the matter is under High Court or Supreme Court or just negotiating with -- representation to the DoT? Because there the claim is very high.

Yes. So DoT, I will give you the whole background. It's more of -- DoT has raised the demand somewhere around 2013, 2014 on that time. We have given all the disclosures in our RHP on all those things, then there is no communication. After the Supreme Court judgment on 24th October, 2019, DoT has started sending the demands again for all the winning parties, including PSUs, including private parties and everyone. We got the demand also with the interest and penalties and all those things. If you see, in this case, the demand has come to the many PSUs. The PSUs have gone back to the Supreme Court for the review and Supreme Court has given the direction to the PSU that for the release, we will go to the appropriate authorities. This means that we have to go for appropriate authority means somewhere the legal opinion, which we have got that this Supreme Court order is just on the telecom operators....

So finally, this order is applicable to -- majorly, we got this legal opinions, it is related to TSP operators. And yes, this -- whatever revenue we are doing in cable TV side, it's a completely different licenses under MIB guidelines. So the completely license format is also not part of under ISP.

Yes. So we have in a different license, which is given by the different ministry, MIB. And under that, the cable revenues are there. So our context is that you should not charge the license fee on the cable revenues, and this is just the remaining cable revenues on which they have given the -- so the legal opinion, which we are getting from our lawyers and all that our case is very strong. And once the courts will open and all and other PSUs are also taking their legal course, so we have to make the strategy. That's how we can go ahead and do it.

And I think some of the comments -- some of the comments in the parliament also it's I think on the TSP.

Next question is from the line of Hardik Jain from White Stone Financial.

So just a couple of questions. Sir, as you were explaining about the intangible assets, I can understand the goodwill is because of the acquisition, but there is also other intangible assets, which I assume should not be because of acquisition. So if you can explain what is this other intangible assets?

See, 2 type of things happen. One is the tangible and one is the CATV franchisee. CATV franchisee is when there is a partnership firm and we took over the subscribers from them. So there is a partnership from [ Sun All ], and we took over the customers from them. The assets of those goes under the CATV franchisee, if there is liabilities and all. And the other one is the intangible, where you are taking over the private limited companies, and you are doing the acquisitions, but taking over some liabilities of those, and that is going under the intangibles. So that's the difference, both are on the same. One is from the partnership, and second is -- because in cable business, if you'll see a lot of cable businesses happening under the partnership firms. So that is the difference, both are same.

Okay, great. Sir, one more thing because now many broadcasters are also -- will also face the problem of advertising revenue and all. So this we foresee a situation where there will be negotiation on the placement and carriage fee or you'll have to give some relaxation to the broadcasters on that front?

So [Foreign Language] 70% [Foreign Language] carriage and marketing revenue from pay broadcasters and 30%...

Sorry, sir, I can't hear you properly. There is some noise.

[Foreign Language] 70% to 75% revenue is from pay broadcasters, [Foreign Language] we have not foreseen any impact on that? [Foreign Language] Yes, [Foreign Language] free-to-air broadcasters [Foreign Language] some news channels and some music channels or some movie channels might be [Foreign Language] yes, there is a issue. So on those -- if the COVID extends and they are going to get affected. So there, we might see some problems.

Right. Right, okay. And sir, even if we no add back, the write-off that we have done, the INR 68 crore, if we add back, given EBITDA, so still our EBITDA margins have fallen a little bit. So if you can explain that.

Yes. EBITDA, margin side, you can say it has gone because this year, what is happening that till last year, we are collecting and we are paying to the pay channel according to the deals -- earlier deals. In the NTO what happens that you have started collecting more from the customer and paying more -- a bit more to the pay channel. So as your base has increased, means your revenue has gone up very -- increased on that way ARPU. Because if you see, our ARPU was at INR 73, INR 74 before NTO, INR 36, it has gone up to around now INR 125, INR 126. But earlier, we were able to -- you can say, if we are giving INR 50 to the broadcaster, now we are giving back to the broadcaster around INR 65, INR 70. So on the percentage terms, if you see, because it has gone higher, your margin will shrink a bit. But we are hopeful that this will -- we will recover in the next financial year.

And same way, the marketing placement and the carriage income fee also -- income has also increased.

Hardik, actually, if you compare the ex EPC business margin versus the last year margin, the margin is around 29.5%. In the last year, the EBITDA margin was 28%. So if you are including the EPC business, then probably we are trying at least the lower margin because the EPC is a lower-margin business. And last year, the EPC was not there. So if you compare the ex EPC number versus the last year, our margin has actually gone up by around 150 basis points. And if you compare with the EPC contracts, then your statement is correct.

So it's primarily because of the EPC, I understand that. Okay. So and one more thing because, okay, from the LCO side, you have given this 1 week credit period to them. But I understand that most of the LCOs must be -- will have to collect physically from their customers. So how are they coping up? Because I don't -- how will they manage to paying for even 2, 3 weeks that have gone by?

So basically, the -- we have given a facility to online payment to our LCO also. Lot of online payment portals is connected with the LCO portal also. So today, a lot of offer is going on with our LCOs customers and they are collecting on online also. And yes, they are getting some issues on because of the lockdown issue. But our LCO is very much comfortable. [Foreign Language].

So more of LCO has also started collecting online. We have given that facility to the LCOs that they can collect online from their subscribers, which is going directly to their bank account. And then digitally, they are paying to us. And we have given some relaxations on that way. So the situation is totally under control, and we are getting the collections as predicted.

Next question is from the line of [ Harsh Shah ] from [ BM Securities ].

Yes. So my question was regarding the EPC contract. You said -- so I wanted to know what are the payment terms for the EPC contract. You said the payment comes first and then you subcontracted or you execute the work, is that correct?

No, no. We execute the work with the workers. Then as the execution completes for the -- one gram panchayat, we go back to the government, hand over that, government gives us around 64% of that revenue, not the 100%. On that 64%, we are managing our vendor. After one process win, there is a government process. After that, they release again around 10% of this. They keep 16% impact, which will come, which the last cash flow will come after the completion of the commitments.

So 10% margin we already received and that mobilization one is also we are utilizing it.

So in the beginning of the project, there is a mobilization money of 10%, which is around INR 107 crores, INR 100 crores has been given by the government to start the work. And we have -- then the cash flow is like circular cash flow, which is happening.

But like if you see other players also Tejas Networks, I was just hearing their call yesterday. They have been having a lot of trouble with the payment terms from the government. They were also in the BharatNet Phase I, and they have been still not receiving the money since almost 1.5 years now. So you guys haven't been facing any such problems from the BBNL or BSNL?

So this -- that is why we are not saying this is a BBNL project. This is under GFGNL project. It's not a BBNL but yes, part of the BBNL, but the ownership with the state government.

Okay. So the payment comes from the state government not the BBNL?

Yes, yes, yes.

Okay. And then in this case, would be...

It comes from the State government and Gujarat.

Yes. So and absolutely, because [Foreign Language] close to around 2,000 gram panchayat's payment is almost just as Piyush said, 70% to 75% revenue [Foreign Language]. Because of this COVID, another 400, 500 gram panchayats invoice is under process. I'm sure this month, we'll get that entire money also.

[ Operator Instructions] As there are no further questions, I'll now hand the conference over to Mr. Vivekanand for closing comments.

Yes. On behalf of Ambit and all the participants, I thank the management of GTPL Hathway for the elaborate answers. I now hand it back to the management for closing comments.

Thanks a lot, Vivek. Thanks a lot, everyone, for joining on this evening. It's a trying time for all of us. So be safe, stay at home, and we will connect again in the next quarter. Thanks a lot. Thank you.

Thank you.

Thank you. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.