GTPL Hathway Limited (GTPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to GTPL Hathway Q1 FY '21 Results Conference Call, organized by Batlivala & Karani Securities India Private Limited. [Operator Instructions] I would now like to turn the conference over to Mr. Yogesh Kirve. Thank you, and over to you, sir.

Thank you, Mayuri. Good afternoon to all the participants, and thank you for joining in. We at Batlivala & Karani Securities are pleased to host this earnings call for GTPL Hathway Limited. To discuss the results and the business outlook, we have the senior management of the company represented by Mr. Aniruddhasinhji Jadeja, Promoter and Managing Director; Mr. Rajan Gupta, Chairman and non-Executive Director; Mr. Piyush Pankaj, Business Head, CATV and Chief Strategy Officer; and Mr. Anil Bothra, Chief Financial Officer. I will now hand over call to Mr. Jadeja for his opening remarks, which will be followed by a question-and-answer session. Over to you, sir.

Thank you, Yogeshji. Good evening, everyone. Warm welcome to all of you to the conference call of GTPL Hathway Limited to discuss financial and operational performance quarter 1 FY '21. Let me give you a quick overview of quarter 1. The GTPL team delivered another strong quarter. The highlights of the quarter 1 was strongly profitable and debt reduction. As on quarter 1, our seeded set-top box stood at 10.2 million and paying subscribers stood at 7.2 million. Our consolidated subscription revenue grew by 7% during the quarter. In the broadband business, we have added 1,80,000 new home passes. GTPL added 50,000 net broadband subscribers, a sharp growth of 2x in subscriber additions, includes 20,000 FTTX subscribers. During the quarter, we have significantly reduced our gross debt by INR 37 crores. Our net debt as on June 30, 2020, stood at INR 108 crores. Quarter 1 FY '21 consolidated revenue, EBITDA and PAT grew by 10%, 11% and 39%, respectively. With that, I hand over to Mr. Piyush Pankaj, who can take you through the business and financial aspect of the company. Yes, Piyush.

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 opportunity that this sector has potential to offer. Allow me to give you a glimpse of our trajectory in the past few years. In last 4 years, we have doubled our paying subscriber base from 3.4 million in FY '16 to 7.2 million in quarter 1 FY '21. 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 sales by INR 288 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 me take a deep dive into performance for the quarter. Let me start with the CATV business. As on quarter 1 FY '21, our STBs stood at 10.2 million. As on June 30, 2020, paying subscribers stood at 7.2 million, an addition of 1 lakh paying subscribers as compared to the last year. GTPL's digital CATV services reached 800-plus towns, scrolled across 12 states in India. Our CATV business expansion in Maharashtra, Tamil Nadu, Andhra Pradesh and Telangana is on track and will gain momentum in the coming quarters. In the broadband segment, during quarter 1 FY '21, we added 1,80,000 new home passes and -- taking the total home pass as on June 30, 2020, to 3.51 million. During the quarter, GTPL added 50,000 net broadband subscribers, taking the total net broadband subscribers as on June 30, 2020, to 4,55,000, of which 1,20,000 are FTTX subscribers. The 2x subscriber growth was encouraging. Let us now move to our financial performance. On our consolidated business, excluding EPC contracts during quarter 1 FY '21, GTPL's consolidated revenue increased by 20% Y-o-Y to INR 4,717 million. The CATV subscription revenue grew by 7% Y-o-Y to INR 2,653 million. The broadband revenue for the quarter grew by 35% Y-o-Y to INR 527 million. Led by a rise in subscribers, EBITDA for the quarter surged by 14% Y-o-Y to INR 1,261 million with a margin of 26.7%. On our consolidated business, including EPC contract, during quarter 1 FY '21, GTPL's consolidated revenue increased by 10% Y-o-Y to INR 5,020 million. EBITDA for the quarter increased by 11% Y-o-Y to INR 1,287 million with a margin of 25.6%. PAT for the quarter surged by 39% Y-o-Y to INR 409 million. Our EPC contract during quarter 1 FY '21 reported the revenue, EBITDA and profit before tax of INR 303 million, INR 26 million and INR 20 million, respectively. On our stand-alone business, excluding EPC contract during quarter 1 FY '21, the company reported revenue of INR 3,186 million, which grew by 26% Y-o-Y. This was mainly contributed by 12% Y-o-Y increase in subscription revenue at INR 1,827 million. The company reported EBITDA of INR 792 million with an EBITDA margin of 24.9%. On our stand-alone business, including EPC contracts, during quarter 1 FY '21, the company reported revenue of INR 3,489 million, which grew by 10% Y-o-Y. The company reported an EBITDA of INR 819 million, with an EBITDA margin of 23.5%. The company reported PAT of INR 305 million, which grew by 21% Y-o-Y. Finally, before we open the floor for question and answer, I would like to tell all of you that the provisions against the receivables that the company has been making for the past 2 years due to implementation of new tariff order, we will not have to do that during this financial year, that is FY '21. Moreover, there are good chances of some of these receivables turning good, and whenever that will happen, it will straightaway add to the profits. Thank you, everyone, for your attention. We can now begin with question-and-answer session. Thanks.

[Operator Instructions] We have first question from Ms. [ Preksha Jain ] from [ AMS Wealth ].

I have a couple of questions. One was, I think, in the investor presentation from where it is mentioned on Slide 17 that we are planning to relaunch the hybrid box. If you can throw some light on it, sir?

Yes. So this hybrid box, we are going to launch again because of COVID, [Foreign Language] it was planned to launch on 1st April 2020, but because of the COVID [Foreign Language]. The hybrid box, it's like [Foreign Language], it's called CATV plus all different, different OTT applications, like your Netflix or Amazon Prime or Hotstar. So [Foreign Language] plus your broadband also. So all put together, [Foreign Language] bundle [Foreign Language] we are going to launch hybrid box.

Okay. And sir, the launch will be on a pilot basis or it's across the country?

[Foreign Language] launch [Foreign Language] across [Foreign Language]. Pilot basis [Foreign Language] testing [Foreign Language] but launch [Foreign Language] across [Foreign Language].

Okay. Okay. And sir, by when can we expect this launch?

Expected is this coming quarter. So right now, we are trying to do it in early quarter 3. That's the expectation right now, seeing all the COVID and all those things, we'll take that call. But right now, quarter 3.

Okay. Okay. Sir, I have 2 more questions. One is if you can give any guidance on the broadband ARPU and also, if you can give us an update on demand which was raised on our company by DoT?

Yes. So on broadband ARPU, we are at around INR 422, which is consistently we are maintaining. INR 400 plus of the ARPU, which we are going to maintain that, that's the endeavor that we should maintain our ARPU above INR 400, and that will continue. On DoT demand, as we stated in the last call also that they have raised it to all the entities, lot of entities, including PSUs, including private players, everyone. And right now, PSUs have gone back to the Supreme Court, and Supreme Court has directed to the DoT for the response. And on the response, DoT has stated that they will withdraw the demand from the PSUs as they have a different license. So our businesses are under different licenses on which they have put the demand. So that's a positive thing which has come out on that for us also. And we are looking forward for all the legal advices and all. And as that will happen, we will go ahead, and we'll see that how it'll span out. But it's a positive thing which has happened for all the peers who are doing the businesses under different licenses and -- on which the demand has been cut.

Okay. Okay. And sir, any update on the insurance claim? I think in the last call, you were mentioning that you were supposed to receive claim in some -- it's taken a very brief time. So any clarity on that, sir?

For insurance claim, we have submitted all the documents to the surveyor. Surveyor has already done their preliminary investigation, and they are at the final stage for issuance of the survey report. Due to COVID, what happened -- and the surveyor is actually based out of Kolkata and the Kolkata is affected, and still they are in the lockdown situation. We have tried with the United India Insurance, and they're putting pressure on the surveyor to get this report released on top priority.

Next question is from Mr. Rohan Agarwal from Moneyjar.

I have a couple of questions. One, great job on reducing the debt diligently quarter-on-quarter. I just wanted an idea on when do you see going debt-free? Or what is your planning with regards to the outstanding debt that's there on the books? And another question that I had was what will be the growth levels going forward? So you've done a good job maintaining our revenue on a Y-o-Y basis. Just wanted to understand, do you see the broadband sector of your company performing in the future or where will our growth primarily be driven by? And just one last question. Did you face any problems with receivables during the previous quarter or because now that you are fully prepaid 100% digital this thing, receivables are not an issue?

Thanks. I will just take question #1 and question #3. On the debt reduction, we are at around INR 108 crores as a net debt and reduced around INR 38 crores of gross debt this quarter. We have the plan to reduce the long-term debt to 0 by FY '21. There is going to be some small short-term debt in the company just for maintaining the relationships with the banks and all. So we are endeavoring to make this as a debt-free company by the end of FY '21. So that's the endeavor on which we are working on. The third question is -- so on the second question on the broadband, Rajan sir, can you take that?

Sure, Piyush. No, on broadband, we have seen a very healthy growth this quarter, as we can see the net adds, these are historical highest, okay? Now obviously, as all of us can see, broadband this quarter, there's a huge demand across companies, and overall sector has been quite buoyant. While we also have seen as an industry, okay, from a lot of IT cities like Bangalore, Hyderabad and other southern cities, we also have seen migration of work from home for IT professionals who have moved to other cities. So some of the southern cities have got affected. But from a GTPL perspective, wherever they have presence, okay, they have a mere kind of -- in the private sector, it leaves at the BSNL, so they're near 80% market share, okay? So whatever the growth in demand which has come, that has purely come to GTPL, okay? So -- and then we see this trend continuing because the kind of price bucket, ARPU bucket, GTPL has, like Piyush just now also said we are around between INR 400, INR 450 bucket, okay, going up to INR 500. So in that bucket of INR 400 to INR 500, there is a very least price sensitivity. And if you can get a quality broadband within that kind of ARPU, okay, there's a huge demand. In fact, we could have done much better this quarter, but just because of some installation issues and other ground-related issues. So in nutshell, we expect momentum to continue.

Got it. And sir, do you foresee increasing the cable business ARPU also? Or do you see that the remaining constant at the figures that are there right now?

See, in the cable business, we have the room to increase as I always say that we are one of the lowest ARPU in the market right now. But right now, there is no plan for increase in this quarter. We have to see that how the COVID would span out and all, and then we'll take the decision in the quarter 3 that we have to increase our ARPU or not.

Yes. Any problems specifically -- I'm sorry, go ahead.

Yes. You go ahead.

Sir, are you seeing any issue with the receivables in last quarter?

So last quarter, when the lockdown happened in April, we have given some credit to the -- in the market to some specific players in some specific areas, where the problem was there in the collection and all, which we already withdrew in May and all the collections, which we have given the credit, had already been come in the month of May only. From June onwards, it is very smooth on the collection part. So we have not given any credit, and there is no problem on the receivables side from the ground, from the subscription.

Next question is from Ms. Gautami Desai from Chanakya Capital.

And I think 50,000 net adds broadband subscribers is a stellar effort. Congratulations to the entire team. A couple of questions on the cost side, that is pay channel costs going up by 25% and then the other operating costs going up by 34%. So if you could explain both of these. And also employee costs going down by 11%. So have you done any pay cuts or anything -- you let employees go or something like that?

Yes. So first, coming to the pay channel, Gautami. If you see quarter-to-quarter, it has just gone up by 1% in this quarter. Yes, year-to-year, it is 25%, but that is in the corresponding that our subscription revenue and placement and carriage, which has also gone up on that corresponding. So that's the case. On employee cost, we have seen the increase of around 1% in the consolidated from INR 31 crores to INR 31.3 crores. And if you see the quarter 1, it is around from INR 35 crores to INR 31 crores. Yes, in stand-alone results, you have seen that employee costs have gone up by 10% from INR 15 crores to INR 16.5 crores, that is because of the performance-linked incentive, which was for the last year and has to be paid in the quarter 1 of FY '21. So that's why that 10% increase in stand-alone results you're seeing.

So have you let any employees go in this COVID thing or given any pay cuts or anything like that?

No, no. No employees' cut off, nothing. Business as usual.

Okay. And just, yes, other operating cost has gone up by 34%. And these are, like, kind of lumpy cycle which keeps coming. So can you explain that what it is?

You are talking about consol results or?

Consol results.

Yes. In the consol results in 1 pager, you are seeing that it's 30%, but you have to club it with the other expenses. If you club it with the other expenses, the cost has gone down, which is other operating admin and selling expense. The cost has gone down by 24% quarter-to-quarter. So you have to club these 2 expenses together and see the growth.

And the hybrid boxes, would it be something similar to the Jio TV plus STB, which was announced in the Jio AGM speech yesterday?

Hybrid. Yes, it's the same. But the only difference is might be, they will -- linear TV also might be they will give it through IP format. We'll give you linear TV through our RF format.

Next question is from Mr. [ Akash Shah ] from [ AMS Securities ].

Yes, can you hear me?

Yes. We can. Please go ahead, Akash.

I have 1 question on the broadband, this 50,000 net add subscribers that you have got, how much of that do you think is just from the temporary COVID phenomenon and lockdown phenomenon?

See, I have given 1 slide there that -- what is going to be the new normal in this thing. Now the households are realizing that they should have wired broadband in the house because the schools, the online classes, the -- all digital consumption has increased in the households. So estimating it on the lockdown right now is -- because still, in a lot of places, lockdowns are going on, it's not the normal situation right now. We will come to know only in the normal situation that whether this surge is only because of this or it is because of the demand has increased. But what we are seeing it in the market and all that the demand has increased because of the -- being -- understanding that broadband is becoming necessity for every household. Rajan sir, you want to highlight something on this?

If you see, I mean, GTPL is charging around INR 500 ARPU and giving pretty much unlimited data, with 400, 500 GB kind of data limit, okay? Our understanding is, we're listening to a lot of calls, Piyush, me, Anu bhai, we have been listening to a lot of consumer calls both the new consumers and old consumers. It looked like earlier, it was not coming top of mind, okay? You were using mobility connection, you were reasonably happy. And only if your kid is pushing you hard, you take a broadband, otherwise, life is going on, okay? Now suddenly because of this forced lockdown, a lot of visibility came, a lot of need came because of increases in OTT users, increase in online education and a lot of other similar trends. So I think the whole category, somewhere it has come up right now top of the mind for consumer, okay? Because affordability with this kind of price point because even at this INR 500 price point, GTPL is able to make greater than 35% EBITDA, okay? So with this kind of price point, this kind of value creation for us -- for consumer, it makes great sense to continue this. So our current estimate is there's momentum to continue for quite some time. It's about more for a new normal. And the new normal will require broadband as a kind of asset in home.

Okay. So like one more thing I just wanted to know sir [Technical Difficulty]

Piyush, I think I can't hear it. Maybe there's some issue at my end, I don't know. Are you able to hear?

Your voice is not coming, [ Akash ].

Mr. [ Akash ], your line is not clear.

I'll reconnect. I'll reconnect.

Sure. So meanwhile, I will take the next question. Next question is from [ Ms. Pratiksha Gadkari ] from [ Equitas Investment ].

Sir, my first question is on cable TV business. So now that we are trying to see here some growth coming from other geographies, like Maharashtra and Telangana. I wanted to know broad plans about growth here and what kind of strategy we have in terms of penetrating in these markets? And what kind of competition we may face in these areas? And my second question was on the EPC front. If you could just give us an update about what is happening on ground? And if there is any change in plan and -- change in execution plan or change in terms of this contract, anything like that, thanks to the COVID hindrances right now? And thirdly, on broadband front, I think most of my questions got answered. I just wanted to know what kind of home passes do we expect that we'll be able to do in near future. And what kind of -- like do we expect this run rate of 50,000 subscribers to continue for the rest of this year, at least? I mean I understand you say that the momentum will continue, but quantifying a bit.

Yes. On the cable business, we will continue our journey of adding customers in -- as we did in the last 3 years, and we are confident on that way. This year, we are planning that it's going to be at least 1.5 million boxes adding and 1 million addition in the subscriber base. Due to the COVID, we have downgraded it. If you remember, last quarter, we have said that we're good to do 1.2 million, 1.3 million net add. It is, right now, 1 million add we are going on. We are not changing any other parameters or other forecast. And in these states, there is a lot of opportunity, which we have seen, and we are going ahead. The demand is very high, and we are trying to match this with the supply as the supply is inconsistent because of the lockdown, but we are trying to do the supply, but the demand is very high. And so we are confident that at least we will do that with 1 million boxes with inconsistent supply also. On EPC, as we...

Sir, if you could just -- I'm sorry to cut you, sir. But if you could just tell me, when you say that you will be able to add 1 million subscribers, which geographies will be contributing to this more? And like, just if you could just tell me which states or which geographies do you think markets will be driving this growth?

AP -- Andhra Pradesh and Telangana is going to be highest on this. And after that, it's going to be Maharashtra, Northeast and Gujarat. And the last one is Tamil Nadu, where we want to go on very aggressive. But because the Chennai is in lockdown, the whole Tamil Nadu is in the lockdown, so we are assessing this. If that market opens, then it might be possible that we are going to, again, revise our estimate from 1 million to 1.2 million or 1.3 million.

Okay. Okay.

On EPC project, we have done around -- 3,100 gram panchayats already been done. And due to COVID, this quarter, we have did less. And -- but already government is accepting our -- all those things, all the terms, and they are extending the terms of the time lines, and now they have already extended. And on that gesture, they have released our bank guarantees and all for all the works which we have did till date, and they are just keeping the bank guarantees, which is the remaining work which is there. So already, those cash flows and all have come back to us on releasing of the bank guarantees and all. We are getting the appreciation as you see that there are articles also on the mass release and all that -- the government is getting the appreciation for doing this project on the target as it was. And we are hopeful that as the things is now improving, that we will complete this whole project well by end of quarter 2 or start of quarter 3. On the broadband, [ Pratiksha ], this quarter, we have added 50,000. We are very confident that quarter 2 also, it is going to be 50,000 to 60,000 at least. And quarter 3 and quarter 4 also, the momentum will be made on that basis. If you remember last time, we have given the estimate that we will do between 120,000 to 150,000 subscriber addition in this year. And we are going to change that, the projection. We are going to do between 150,000 to 200,000. That is the projection right now. We are taking it internally that we will do 150,000 to 200,000 net additions in this year now in financial year '21.

Next question is from Mr. Brijesh Ved from BNP Paribas.

Congratulations for a very good set of numbers in a very tough environment. My first question is with regards to the broadband ARPU. Now in this given environment and like what you also kind of very well covered that there is an uptake in terms of the overall consumption. If I'm not mistaken, as I see that you have most of your plans, which do not have a concept of fair usage policy. And therefore, to that extent, most of these plans continue to remain unlimited on a higher ARPU bracket. Do you have any sense in terms of where do you see this ARPU going up in this given time? And do you see that happening? Any changes that you're doing to your current plans? So that was my first question.

Yes, Brijesh. Brijesh, on the broadband ARPU, which we maintain every time that we are going to maintain our ARPU INR 400 plus, you were seeing that from last 4 quarters, we are at INR 420, INR 422, and we are maintaining that. So that's the outlook on which we are working. Rajan sir, if you want to give some outlook on the industry, on the ARPU for the broadband.

No. I think from this year perspective, for GTPL, we need to bring consumers because we have invested a lot of CapEx in creating home pass and upgrading home pass, okay? And EBITDA levels are quite healthy, as we can see above 35%. So with healthy EBITDA levels, I think it's imperative, this year, we fill the home passes by bringing in extra consumers, okay? And obviously, from a future perspective, it's possible to increase ARPUs. I mean, with the improved surveys and even a 50 mbps product at 500 GB or at sub-INR 500 level is obviously a feel. So we feel, obviously, there's scope for ARPU increase, but probably that will be left to next year at least. This year, focus will be more on selling the home pass.

Sure. Fair enough. And on the same discussion, if you could just kind of throw some light in terms of -- based on your experience, Rajan sir, the home pass conversion. This is a great year from a perspective of what's happening in the economy because of COVID and work from home, et cetera. Where do you see this home pass conversion in your view in next -- in this year and next 2 years?

Piyush? You'll have to answer that, Piyush.

Yes. Yes. So as explained by Rajan and also before and I have explained, Anu explained that in FTTX, when you are doing that you first you have to meet the supply, and then you have to go for the demand. Earlier, you can say that once the demand comes, you can go for the supply. So it was a reverse situation -- it is a reverse situation in FTTX. And this takes around 18 months to 24 months to convert after creating the supply to then come to at the level of 18% to 20% on that basis. Right now, if you see on FTTX basis, if I will go, I will have at around 12%, 12.5% right now. And overall, I am at around 13% -- 13%, 13.5% conversion. So as we are doing the investment every year, so the FTTX side, I will say, I'll give you that, Brijesh, that it has increased from 8% to 9% to 12% right now, and we look forward that we'll do the investment and it will go up to 14%, 15%. But yes, that gap will be maintained till the date we convert our all...

Pick up the main customer to a GPON format. Brijeshji, STB network upgradation [Foreign Language] parallelly home pass [Foreign Language] build up [Foreign Language] or close to around 25% ratio [Foreign Language] home pass [Foreign Language] build up [Foreign Language] upgradation [Foreign Language] home pass [Foreign Language] growth [Foreign Language] even though existing market may be. So yes, as Piyush said, almost 50% to 60% upgradation, some [Foreign Language] already complete [Foreign Language] financial year [Foreign Language] remaining [Foreign Language] lane customers [Foreign Language] lane home passes [Foreign Language], we'll convert them into GPON format.

So once that will happen, Brijesh, then you will start seeing that the numbers will start going up from 13% right now to go up to 15%, 17%. And then coming to the 20%, which is the industry standard.

And as Rajanji [Foreign Language] yes, because of the COVID [Foreign Language] down the line [Foreign Language]. But still, we are matching our expectation [Foreign Language] momentum, at least another quarter 2 or quarter 3 [Foreign Language].

Sure. Sure. And therefore, I just wanted to understand what is your outlook now for the full year in terms of the revenue as well as EBITDA trajectory? As well as have you -- do you have any changes in terms of CapEx that you're expecting for the full year?

Brijeshji, right now, we are keeping the CapEx same as it is around INR 210 crores to 220 crores for the cable and broadband. As the broad -- cable has gone down, earlier I have given that the broadband will be INR 75 crores to INR 80 crores and rest will be cable, right now, we are increasing the -- on the broadband side, making it INR 100 crores, INR 110 crores. And as I say that the number of boxes from 1.3 million, we are keeping it to 1 million, so the rest relatively is going down. On the revenue side, we are still maintaining that the CAGR on which we are growing will grow at that CAGR only. And this year, we are at around -- crossed INR 1,750 crores, we are close to INR 1,775 crores. This year, we are going to cross INR 2,000 crore mark. And in EBITDA, we did INR 462 crore in the last financial year. This year, we have given that we're going to cross INR 550 crore, which we are trying to do that. And we're keeping that -- those all projections or all of this intact right now and watching it.

Next question is from Mr. Bharat Sheth from Quest investments.

Congratulations on good set of number. Sir, this, I mean, hybrid box, so can you give some pricing strategy? And will it be offered to all of existing plus new or -- so how -- what will be the mechanism? And how the -- say, right now, instead of cable when someone will be getting, I mean OTT also on this. So our revenue share will be in that whole platform?

See the hybrid box is going to come and where you can give the multiple service together. It's like a triple play where you have cable, broadband plus the embedded OTT plus customer can download the apps on the TV. Their non-smart TV will become smart TV. You have the explorer over there. You have the casting over there. And so all type of things which you can do, it's like more of your TV is becoming really computer plus with all embedded apps, and you can download the apps also. So this is the -- this way, we are going to make a proposition for the customer to our existing customer also and new customer also. And we are going to break down, we can say, the product in such a fashion that you can go for 2 services or you can go for 3 services or you can go for single services. And later on, we will add more services on these boxes. So that's the broad plan on which we are ready now. You can see we are -- actually, all those things were ready, and we wanted to launch, all the testing has been done and all. But due to COVID, now it's got delayed the whole box production and all. So we are just looking for the box so that we can get the box and we can go ahead and launch it. So we are hoping that by end of this quarter or early next quarter, we should be ready to launch.

So I mean -- and how will be the pricing difference for the -- this hybrid set-top box? Then...

We are going to bundle the prices and all that will come on when we are going to launch. But we are going to bundle the services with the boxes and give the attractive prices to the customers so that it will be valued for them for the customers that they will feel that it is a -- there is a value in getting those boxes and services.

Sir, is it fair to assume that there will not be -- only services customer will have to pay. They don't have to pay any additional charge for the box?

No. It's going to be bundle price. It is going to be bundle price and going to be some discounts, but it's going to be bundle price.

And how that will -- I mean, over -- not this year, but whenever once, I mean, full commercial launch happen, I mean, so our additional ARPU because of that, we expect, I mean, some kind of -- I mean, your study, whatever we have done.

Yes. Let it commercially launch, then I will give you all the projections and all regarding to that. Because still we are trying to launch it every time because of the COVID, we wanted to do it first in the April, we had to shift it. Then we wanted to do on the 1st of July, we had to shift it. So let it commercially launch or at least that we are at the cusp of launching, and at that time, if we give this -- all the things, then that will be better, I think.

And here, sir, in this case, just to understand, the service provider will be back end side will be Jio only or?

GTPL. No, it is going to be a GTPL-branded box, and GTPL will be the service provider.

Okay. And right now, whatever broadband service we are providing, so are we providing for any internet service provider? Do we have tie-up with any internet service provider? Or how does that play?

No. It is GTPL-branded service.

GTPL itself is an ISP holder. So we are the providing service. Rajan, [Foreign Language].

No, no. I think you should arrange a separate call again to understand the basic architect of broadband. So then GTPL is a ISP player -- is CAT A licensed ISP player and they're providing their ISP services to consumer, actually. Nothing to do with any other company, actually.

Okay, okay. And sir, with this change in the -- I mean, Hathway is getting merge over, I mean, a joint venture partner. So will it have any, I mean, impact on the kind of -- I mean, with merging with Network 18. So how that will, I mean, really play out for us?

It's just that right now...

No. It's -- frankly, it's a privilege that Jio is our partner. Or yes, Hathway is going -- Hathway is then going to merge with Network 18. So yes, going forward, [Foreign Language] compliance [Foreign Language] future, this Network 18 is our partner, it's our privilege. Yes. Obviously, as a group, synergy is there and future maybe...

What kind of synergy benefit are we seeing, sir?

Sorry? Pardon?

Are we seeing any synergy benefit because of that?

Yes, yes. Synergy benefits [Foreign Language] synergy benefit, network infrastructure sharing, content negotiations, vendor negotiations, [Foreign Language] knowledge sharing [Foreign Language].

All type of synergies we are getting, and all the synergies' benefit is rewarded to us.

So over a period, do you think we'll also get merged with an -- I mean, as an entity, that makes a much broader sales. I mean from all -- whole ecosystem perspective, is there any possibility?

[Foreign Language]

Right now, there is no plan to that.

Next question is from Mr. Kunal Vora from BNP Paribas.

Congrats for great results in difficult times. Just wanted to understand about 5G. Like how do you see 5G impacting your broadband business? Main application is likely to be fixed wireless broadband, Jio has announced to launch. I mean it will take some time, but obviously, just wanted to understand, like -- because right now, we are seeing consumers moving from 4G mobile data to fixed broadband. Do you think 5G can like reverse that with better speeds and potentially lower cost per GB?

Rajan sir, can -- if you give some highlights on this, and then if there is -- I will add it.

Look, none of us are 5G experts, but we have been answering this question for quite some time. If you even take learning from any of the global markets, where high-speed mobility solutions are available or even experience in India in the last few years actually, okay? So we have seen with the growth of data consumption on mobility, a lot of sampling happens, because [ consumers ] are seeing a lot of 5-minute videos, 1-minute videos, 150-minute tutorial on mobility. And then they shift to broadband for major consumption. So that seems to be getting replicated in India as well, okay? So people see a 5-minute video on YouTube on mobility. And when they want to do 3 hours Netflix show or they want to binge watch a series on weekend, they obviously switch over to broadband connection. Similarly for education purpose, 1-short 5-minute call with a tutorial can happen on a mobile. But when it comes to 2 hours or 5 hours engaging session or a coding session, that obviously happens over kind of a broadband connection. So that has been the experience. And then -- and I think that should continue.

And what are the speeds which you're current offering? I mean what are the existing speeds which your consumers are getting? And can you really increase it significantly over, like, is there a path to increase that significantly to ensure that like you remain well ahead of wireless?

No. So currently, most of the consumers are coming on 50 and 100 mbps, the technology where GTPL has put it, okay? The kind of OLTs and ONUs and everything which has input, that's obviously capable of 1 gig, okay? We have been telling this earlier also. We haven't launched it, but it's very easy to launch with the current infrastructure itself, okay? So technology, frankly speaking, allows us to go up to 1 gig.

Sure, sure, sure, sir. And secondly, on what proportion of the television households will have smart TVs in your assessment when you're looking at smart set-top box opportunity? I mean like would you -- would it be limited by the households with fixed broadband and they've also limited because of, say, lack of smart TVs. I mean how do you look at the opportunity for smart set-top box?

Smart set-top box, if you go for that, the smart TV...

[Foreign Language]

So smart TV penetration in India is still very, very low. It's hardly 0.5% -- 0.4%, 0.5% right now and -- if you take all over India households, so it is a market good opportunity if we can push the smart boxes in the houses who can make their non-smart TV into smart TV, that's a good proposition on which we want to go ahead and do the marketing.

Next question is from Mr. Hardik Jain from White Stone.

My first question is now with carriage and placement fee whatever we are getting, so -- but there are any broadcasters, especially we do have channels which must be struggling for -- with their advertising revenue. So are there any negotiations? Or is there any talk of giving some relaxation in this carriage and placement fee to these broadcasters? So yes, just wanted your view on it.

[Foreign Language]

[Foreign Language]

No. Actually, right now, there is no -- nothing that will go down from here. Adjust [Foreign Language] according to the quarter 1, we have already adjusted it in this quarter by doing the conservative accounting. It's more of like on an anticipation basis, whatever the talk is going on and all, we have taken more than that and reduced it in our revenues right now. So the revenue has -- after the negotiation, we are hoping that our revenue will go up, rather than go down, because actually, we have taken that net.

Okay. Great. And sir, you have already clarified that you did not -- you gave some credit in the month of April to your LCO network and withdrew it in May and now everything is smooth. But does your LCO network -- I'm sure because LCO network must be tackling problem while collection because still there are issues. So your thoughts on that, how is the LCO network handling the collection issues?

See, till the time the new tariff has come into the place, we were pushing our LCOs to collect online, digitally from their customers. And we have given a number of tools throughout the year. And in March and April, we have given the new tools to them where they can send the link straight to the customers. Customers can pay through the link straight to them -- their bank accounts only. So...

And that transaction there...

Yes, that has worked tremendously on the ground. And LCO is able to convert their non-digital customer into digital customer also. And that's why from May onwards, we are seeing that everything becomes smooth. For 1 month, or you can say, 1.5 months, from -- somewhere from 15th of March to 30th April, the disturbance was there because of the lockdown and society getting closed and all. But from May onwards, we are seeing that it is really smooth, and though the customer is in the lockdown and they can't pay and all, they're going for a digital option. So that's what we have seen, and that's why June is totally normal on the collection side.

And sir, March end, debtor figure was around INR 280 crore, what would be the debtor figure on June end?

Come again, sorry. Sorry, your voice was cracking.

In March end, the debtor figure -- debtor number was INR 280 crores. What will be the figure for June end?

Yes. So as on June '20, the trade receivables have gone down by around INR 13 crores or INR 13.5 crores, from INR 353 crores, it has come down to INR 339 crores, and that's the case. The -- mainly the subscription has come down, the subscription debtors has come down on that way. And some debtors have come down from the EPC project.

Sir, how much will be the EPC debtors in this?

EPC debtor in INR 339 crores is INR 110 crores.

INR 110 crores. Okay. So balance will be related to the -- this thing, right...

Carriage and placement.

Carriage and placement.

Yes, mainly the carriage. The subscription is hardly INR 15 crores and something. Yes. 15-point something.

And sir, my last question is, now when we launch this hybrid box and because now Network 18 will become our partner. So when we launch this hybrid box, there will be -- will there be some package where your subscribers will get all the Network 18 channels and Voot and other OTT content that they have, and we can bundle them together and give it to your customer at a price?

Yes, let's say, [Foreign Language] maybe OTT applications, say, whether it is Voot or whether it is Netflix or Amazon, [Foreign Language]

[Foreign Language]

So as Piyush said, we'll make it entire -- completely, it's a bundle product.

Okay. It will be a bundle product where our customer will not have to subscribe separately for all these different OTTs?

Yes. That's right.

Next question is from Mr. Ankit Pande from Quant Mutual Funds.

I just wanted to get an update, especially as you mentioned in the past, the CapEx, I didn't quite catch the figure, it was INR 250 crores, right? And the split is changing, could you just explain that one, sir?

If you are talking about the whole year CapEx?

Yes.

Yes. First, I have given the CapEx from INR 210 crores to INR 220 crores. Around that, we have given that [indiscernible] cable. Now we are changing that, where broadband is going to be INR 100 crores to INR 110 crores, the rest is consumed in the cable. Total CapEx is going to remain the same, the projection.

Okay. And the EBITDA that we're targeting of INR 550 crores, is that on a consolidated level, right, including EPC?

EBITDA is 500 -- your voice is...

Yes. I'm sorry. I was saying that the EBITDA that we're targeting of INR 550 crores in FY '21, would that be on a consolidated level, right, including EPC?

No, no. That is excluding EPC. We did INR 462 crores excluding EPC last year. On apples-to-apples from INR 462 crores, we are targeting that we'll go INR 550 crores plus.

All right. All right. That's great to hear. And also, could you just talk a little bit about the broadband? I read a line in your presentation talking about the Truly Unlimited plan, 99%-plus subscribers have opted for it. So with Truly Unlimited plan, what are the speeds that we're offering because we have been saying that 100 mbps for us right now is enough. And you can see you obviously have room to go up and competitors who are coming up with 200 mbps plans. Do you think there's more room for improvement in the quality of service that you provide, and therefore, later on, we can improve the ARPUs?

See, right now, we are providing 40 mbps speed, 60 mbps and 100 mbps speed in the market. We are consistently giving that, and we are seeing, and with the unlimited means, there is no limit on the data. They can use, they're truly unlimited. If we have to increase the ARPU and all, we have to launch for 150 mbps, 200 mbps, which we can do. But right now, seeing the market and all, we are happy with the 40, 60 and 100 mbps offering. When we will see that the market is ready for more, then we will go ahead and launch...

So network is capable to offer to up to 1 gig. It's not a problem.

Yes. But based on the marketing and all and based on the demand, we'll see when we have to launch higher packages.

Great, sir. I look forward to the new offering. And just a final one. What are the -- in terms of perspective discussions with the content creators and the -- I'm sure there's plenty of spice in that area, are we seeing some negotiations, some movement and some alleviation of stresses -- financial stresses or is the situation still a little concern if you look?

You're talking about the content providers? The broadcasters?

Yes.

Yes. Broadcasters, we already explained just in the last one, but broadcaster side has, you can say, some FTA broadcasters. Smaller broadcaster has faced the problem in April, May. From June onwards, we are seeing that the normalcy is coming back. And in this quarter, the carriage and placement revenue which we have taken, we have taken on the haircut anticipating that if some discounts and all will be asked by us, and we have taken that, double of that, actually. And the negotiation is going up on both. Some of the negotiation is going on. And we are hopeful that we are going to close on more than what we have taken in our books, and the revenue will increase in that business. So now we are seeing from June onwards, the normalcy is coming back in all the broadcasters. Almost, you can say the negotiation has ended with main broadcasters and all. Yes, a few smaller broadcasters are there for which still the negotiation is on.

Okay. So the discounts, et cetera, that we have offered, I mean, do we hope that this comes back or that's not really an expectation, at most to keep the relationship and the content going, et cetera?

It depends on the negotiation side. We are trying to get it back. But yes, if we have to give some small discounts and all, being on the relationship side arm, we will provide, which we have already taken into our books in the quarter 1.

Okay. Any idea -- I might be pushing my luck, but any idea as to what these discounts could be on a ballpark number?

Ankit, I don't want to disclose those. All our broadcaster friends are listening to it. So please.

Next, we have a follow-up question from [ Mr. Akash Shah ] from [ AMS Securities ].

Am I audible now?

Yes. Yes.

Yes. I wanted to know the new markets that we are entering, Andhra Pradesh, Karnataka, Yanam. Is it just -- these are only cable TV? Or is it broadband plus cable TV?

No. Andhra Pradesh, Telangana, Tamil Nadu and the whole of new states in the Northeast, apart from Assam, which we are already there, we are just going for the cable TV first. Once we will be ready with the cable TV and our infrastructure and all, then we will see that on that infrastructure, we can use for the broadband. But yes, right now, we are entering as a -- on the cable TV business. We have already entered a lot of markets, we are expanding.

That is from a business perspective. Going forward, if you want to offer the broadband, the new infrastructure will be required or the existing infrastructure that you are putting up will be sufficient to offer broadband?

No. Actually, see, one of the great things is in the cable that if you're riding on the cable, that's why your ROI increases as we use the cable assets also on the ground for the broadband. So your return on investment increases on that way. So once you establish your cable lines and everything, then you can just put the active devices on that, and you can start broadband. So it's like...

These are LTTH cables.

We are -- everywhere, we are going with the fiber. So already fiber is going to be there. You just have to put the active devices on that, and then you can start your broadband. Yes. Active devices...

So it is just a matter of product launch and timing of it?

That's right. That's right. Now you got it.

We can go for even the hybrid boxes also in these markets?

Yes, yes.

This will be across.

Yes. Across, you can do.

Hello?

Yes, you can do across the states, across the markets.

Hello?

Yes, yes, can you hear us?

Yes, yes.

Yes. Yes. So we can do active devices...

Hello? Hello?

Yes. Yes. Akash. Go ahead.

Yes. Okay. So hybrid can be launched in these -- on this infrastructure as well right?

Yes, yes. That's right.

Next question is from Mr. [ Nilesh Vernekar ], an individual investor.

Good set of results by GTPL and team. So my compliments to the entire team, Anu bhai and rest of you all. And especially in times where cable and broadband business have never delivered in the past, so my questions are around to -- the larger question is around the -- larger macro question is, how do we expect the competitive landscape to evolve going forward over the next 3 to 4 years in terms of pricing disruption, both on the broadband side and on the cable TV side? And in terms of the evolution of digital technologies by the big competitor who has raised so much of capital yesterday, do you see kind of going forward, your capital needs will increase? And how do you kind of intend to support it? I mean because largely, I think you've seen situations where companies have supported their growth with debt-aided CapEx. Those have kind of seen through disastrous results. So I think we would expect the company to raise equity, and then obviously, support growth. So one is the pricing disruption on the broadband side. And second is how -- I mean, this question was also asked in the past, that post the kind of integration with Network 18, are you going to be complementing situations with Reliance Jio because there are situations where we have where Jio has been also laying fiber and taking kind of fiber to home. And are you going to -- kind of go and compete in the same set of areas? Or is there going to be an understanding with Jio that you will not kind of compete in the areas where they are kind of laying fiber and taking fiber to home? That was one question on the CATV side. And second question -- was on the broadband side. And second question is on the CATV side. I mean are you seeing cord cutting happening with the kind of OTT platforms being made available? And will you -- I mean, are you seeing the entire situation evolving and changing going forward?

Nilesh, yes, first, coming to the cable side. On the cable side, as you see that out of 300 million households, around 200 million household is TV households, and out of that, around 160 million is your CAT cable and satellite households and that 100 million is cable households. On cable households also, if you talk about the organized player, they are hardly 35 million right now. So still 55 million households are under the unorganized player, which is a large, large opportunity to do the consolidation in the market. Plus there are 60 million households in the DTH. As you know, that now cable is fully digital and the services side, and also, this is at par. So you can lead the competition to the DTH on that way and having a better technology, cable is a better technology than DTH, so you have a large market there to consolidate and to have the -- to win back all the boxes and all, plus 100 million household is still not TV households in our country. So that will give you another growth on that way.

TV households only, but they're not cable subscribers.

They are not the cable subscribers, around 140 million households. So that is one in the cable side, which we are seeing. If we talk about the broadband market, the wired broadband, I will say that wired broadband is like a start-up right now because the whole country is around 20 million, 21 million wired broadband, and out of that, 12 million is with BSNL and MTNL. So there are a few private players in the market. And they all have -- out of 300 million households, they just have around 8 million in between them. So it's more of like a start-up business where the players are coming. Coming to the -- you are talking about big digital player, Jio. Jio is our partner, and we are very happy that they are with us. Doing the business on that way, we are getting all type of support from them, whatever technical support, technology support, your negotiation support and everything is provided to us on that basis. On that ground, we are very clear that we are going to...

So yes, Nileshji, as you said, like technology-wise, like if you say, we are -- almost 50% to 60% of our infrastructure migrated to mainly to the GPON. Yes, it's a large technology right now available in the, you can say, globally, also, it's GPON formats, right? So the digital is also upgraded to GPON format. And this coming year also the rest of all main customer will be converted into GPON. And in terms of the technology-wise, in terms of the market delivery side, we are completely ready on up to 1 gig product also. So that's not a issue. And the same thing is the hybrid part and also, yes, because of the COVID, we were planning to launch last quarter, or you say 1st of April but [Foreign Language].

Right, right. But in situations where...

So yes, we are ready. Overall, I can say network-wise, infrastructure-wise, technology-wise, we can say we are at par.

But as regards to pricing because disruptive pricing has been the kind of game plan of Jio all the times. So is there a situation where you can compete with them on pricing front and in areas where they will now start to bring out CapEx very aggressively. So are they going to be complementing -- I mean, will you -- I mean will your services be complemented with them? Or would you compete with them? Because I would hope to believe that collaborative approach is something which will aid the broadband growth for GTPL as well using the...

Sorry, if I explain that way, see, there is a totally different segment in different markets. You can say that they are working above INR 800-plus segment and the pricing side, we are at INR 400 to INR 600 pricing bracket right now. When we are going to come with the hybrid and bundled also, the pricing difference is going to be there. The market difference is that we are in Phase 3, Phase 4, all those things. If I talk about in the Gujarat, we are at 110 cities right now present. Out of that, there are just 3 big cities. Otherwise all smaller cities, if I talk about. So on this way, our penetration is on the different markets and all. And one thing is very clear with Jio being our partner and all, that we are complementing each other's business on the ground. We are going in such a way that we will -- the ground team and everyone is aligned on that basis that we are not going to compete each other, but rather complement each other.

Sure. And what is going to be the strategy on the cable TV side in terms of growth plans and competition from Jio again because they're also kind of talking about launching television through OTT platforms?

[Foreign Language]

[Foreign Language] I mean, it's too early to say because rollout [Foreign Language]

Nilesh, in the cable side, if you see from last 5 to 6 years, it's not that we are looking out Den market or Hathway market and all. There is a understanding on that basis. That understanding is still continuing. You have the large market of 65 million, which are independent, and there are 60 million DTH households. So we have to target those. All the big players, if you see, they are, for the last 5 years, there is nothing -- controversies between them. They know that this is their market, and they are -- they have the understanding, which is going into the cable market from last 5 years, but it's still continuing.

In Hathway, the cable to -- I mean, subscribers who are currently using cable, are you seeing them switching over to fiber and consuming television through fiber as Reliance delivers on the growth plans of...

No. We have....

See, as you said like, I'm not saying it's the cost cutting right now. It's -- I can say it's more of a complement. With either the linear or OTT format, they will complement each other rather than cost cutting.

Okay. Okay. And could you throw some highlights on your future funding raising plan to support your growth CapEx? I mean is it going to be largely because I would expect it to be largely equity funded and maybe cash accrual funded rather than debt funded because that is going to be disastrous raising debt to fund your growth CapEx. So is that...

Nilesh, I'll say that all those things we can talk one to one. If you can give me a call, I can explain you all that. I think this is not a forum where we can...

By the way, I think, compliments again for delivering on great set of positive earnings for the current quarter. I'm sure that it will continue going forward. So all the best.

Thanks.

Thanks, Thanks.

Sir, now there are no questions in the queue. I would like to hand the floor to management for closing comments.

I thank, everyone, for taking out the time for this earnings call. And I look forward to talking to you and the whole management looks forward to talking to you in the next quarter for the earning calls. All the best, be safe, be secure and stay healthy. Thanks.

Shall I conclude the call?

Yes, please.

Thank you. Thank you, ladies and gentlemen. This concludes your conference call for today. We thank you for your participation and for using iJunxion conference service. You may disconnect your lines now, and have a great day ahead. Thank you.