GTPL Hathway Limited (GTPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q4 FY '21 Earnings Conference Call of GTPL Hathway Limited, hosted by Emkay Global Financial Services Limited. We have with us today 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. [Operator Instructions] Please note that this event is being recorded. I now hand the conference over to Mr. Naval Seth from Emkay Global. Thank you, and over to you, Mr. Seth.

Hi, good evening, everyone. I would like to welcome the management and thank them for this opportunity. I shall now hand over the call to the management for the opening remarks. Over to you, sir.

Thank you, Naval. Good evening, everyone. A warm welcome to all of the conference call of GTPL Hathway Limited to discuss performance quarter 4 and 12 months ended March 31, 2021. GTPL Hathway has continued to constantly deliver on key KPIs in tough time of pandemic during entire year FY '20-'21. GTPL remains committed to providing uninterrupted connectivity and entertainment to its customers. The highlights of FY '20-'21 was growth in subscription revenue for both CAT and broadband business. Strong profitability, achieving net debt free status, geography expansion, healthy balance sheet and improving return ratio. We have reduced our gross debt by 693 million in FY 2021 to become net debt-free as promised earlier. Additionally, the board has recommended to increase the dividend INR 4 per share for FY '20-'21. GTPL is up to launch new products and services in FY '20-'22, thereby proposing its value proposition in existing and new markets. With that, I hand over to Mr. Piyush Pankaj, who can take you through the business and financial performance in detail.

Thank you, Mr. Jadeja. Good evening, everyone. I hope all of you are safe and healthy. GTPL Hathway is one of the few cable TV and broadband companies in India to deliver superior performance consistently. Our business model is quite robust and capable of leveraging multiple growth opportunities that the sector has to offer. It is important to note that in the past 5 years, our CATV subscriber base has grown sharply by 2.2x to 7.5 million. Additionally, our broadband subscriber base has shown a significant growth of 3.7x to about 0.6 million. We have been consistently generating free cash flow and have managed to reduce our gross debt by INR 4,034 million in the last 5 years and have returned the money to shareholders in the form of regular dividends. We are delighted to share that GTPL Hathway has achieved net debt-free status during FY '21. The company has reported an impressive ROC and ROE of 35% and 21%, respectively in FY '21, thanks to enhanced operational and financial performance, coupled with a strong balance sheet position. As of March 31, 2021, our active subscribers stood at 8 million, GTPL's CATV services reached 800-plus towns that's spread across 15 states in India with Tripura, Meghalaya and Manipur being the latest addition during FY '21. GTPL's CATV platform services own and operate 49 channels across 6 [indiscernible]. Of the 310 million households in India, only 171 million households, that is translating to 55% penetration of CNS homes. The CATV industry offers an underlying growth opportunity for an organized and seasoned player like GTPL Hathway. Our CATV business expansion will gain momentum with organic and inorganic growth in the coming quarters. GTPL is very happy to have roped in Mr. Boman Irani, a versatile actor, as its brand ambassador in FY '21. The Indian wireline broadband sector is a sunrise industry with huge untapped growth potential. It accounts for legal resource concentration of the total household in India and against 80% penetration in Japan, 70% penetration in the Eurozone region and 55% penetration in China. Additionally, the profile of high-speed unlimited data packages offers an opportunity to connect homes with wireline broadband services. In the broadband segment, GTPL is growing at a much faster pace than the industry. We added 5 lakh 40,000 new home parts in FY '20-'21. And taking the total home-pass, as of March 31, '21, to 3.87 million. During the quarter, GTPL added 45,000 net broadband subscribers, hitting the total mid-broadband subscribers as of March 31, 2021, to 6 lakh 35,000. The data consumption as on March 2021, stood at 212 GB per month, up by 21% Y-o-Y. The broadband ARPU for FY '21 grew by 5% Y-o-Y to INR 445 per month. GTPL looks forward to expanding its broadband business by leveraging its existing base of 10-plus million CATV subscribers and attracting new broadband subscribers through business partners. Let us now move to our financial performance. On our consolidated business, excluding EPC contract, during quarter 4 FY '21, GTPL's consolidated revenue grew by 29% Y-o-Y to INR 5,991 million. The CATV subscription revenue stood at INR 2,665 million. The broadband revenue for the quarter grew by 77% Y-o-Y to INR 817 million, led by a rise in subscribers due to the adoption of e-learning and work from home. EBITDA for the quarter surged by 27% Y-o-Y to INR 1,423 million with a margin of 23.8%. On our consolidated business, including EPC contracts during quarter 4 FY '21, GTPL's consolidated revenue stood at INR 7,877 million. EBITDA for the quarter increased by 25% Y-o-Y to INR 1,554 million with a margin of 19.7%. PAT for the quarter stood at INR 571 million. Our EPC contract during quarter 4 '21 reported the revenue, EBITDA and profit before tax of INR 186 million, INR 130 million and INR 130 million, respectively. On our stand-alone business, excluding EPC contract during quarter 4 FY '21, The company's revenue grew by 23% Y-o-Y to INR 3,927 million. The company reported EBITDA of INR 881 million, with an EBITDA margin of 22.4%. On our stand-alone business, including EPC contract during quarter 4 FY '21, the company's revenue surged by 16% Y-o-Y to INR 5,814 million. The EBITDA stood at INR 1,012 million with an EBITDA margin of 19.4%. PAT for the quarter stood at INR 410 million. This is all from my side. Thank you, everyone, for your attention. We can now begin with the question-and-answer session.

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

Congratulations for the good set of numbers. Sir, first question from my side is if I look at the presentation on Page #31 and 32 where we have given the revenue breakup of consolidated revenue, there is this other income of INR 62 crores for the full year, which was INR 40 crores last year. And for the current quarter, it was around INR 39 crores. Can you mention of what is this regarding?

We're talking about other income?

Yes, other income.

For the quarter, it was INR 39 crores. And for the full year, it was INR 63 crores versus last year full year, INR 39 crores.

Yes. So on a year-to-year basis, other income has increased by EUR 223 million. It is mainly on account of one-off revenue recognized on account of merger of JV subsidiaries in FY '21. And same, there is a one-off expenses accounting in FY '21 of around INR 239 million. So it's one-off revenue of EUR 223 million on account of merger and expenses of INR 239 million. The expenses is coming under the admin expenses that you see in the presentation.

So net-net, so -- even if -- this will not be there from next year onwards? Net-net, it does not impact our profitability, right? Because that's -- both things will not be there going forward, income and expense.

That's right. It's not going to impact the EBITDA.

Secondly, sir, recently, we appointed Mr. Boman Irani, and we -- in our earlier interactions, you have indicated we are planning to increase our marketing and ad spend since we are now pan-India present. So obviously, we must have done some marketing and advertisement in FY '20 also -- so -- in '21 also. So incrementally next year, how much this cost can go up?

See, currently, we have started in the March month, we have launched. And 4 TVCs has been launched in March month, which is still continuing right now. We are keeping it as -- on the revenue side, we are keeping it at around 0.5% of revenue as our budget for the marketing budget on this year.

Okay. And we -- again, for the full year, this much, we are planning to spend 5% of revenue? Okay.

Yes, 0.5% of the revenue of total dividend.

Oh, just 0.5% of revenue.

Yes. So we have -- I think, the revenue, you can see and you can calculate on that basis.

Okay. Okay. Secondly, sir, sir, if I see the segment revenue breakup, in our broadband business, quarter-on-quarter revenues have went up from almost INR 77 crores, INR 78 crores to INR 82 crores. But our profitability in the segment has come down. So what was that? The profitability has come down from INR 15.4 crores to INR 11.8 crores.

So what happened? Actually, we have provided a one-off item in the broadband, which is almost around INR 3.3 crores. And because of that, you can see the same profitability as for the last quarter, whereas this will be a one-off, so it will not actually be affected in the expenses side in the future.

One last question and then I'm joining back in the queue. So sir, in our earlier interaction, you have mentioned that as of now, majority of our broadband subscribers are through our own network. And we, going forward, we are planning to tie up with almost 28,000 cable operators, and then they will provide our broadband service. So anything you can share on that, how you are -- has that already started? And what kind of numbers they can add up in subscriber base?

Basically, back-end [Foreign Language] across the rollout here, first quarter, in the start [Foreign Language].

So just to build on that -- yes, please go ahead.

Yes, so basically, this year, we added almost 2 point 3 -- 2 lakh 35,000 subscribers in Internet. So how this will -- how much we can add in FY '22 and going forward?

We are going to maintain our additions, which is like quarterly somewhere around 60,000 for the year which is good. We are going to maintain that in FY '22 also. And just to clarify, on the Internet service on the segment results, if you see March 31, 2020, we were showing the ISP Internet service as at around INR 5 crores, which has increased to INR 43 crores in 2021. Quarter-to-quarter, it is down, but year-to-year, it is like 10x more.

The next question is from the line of Pratiksha Daftari from Aequitas Equity.

So sir, my first question is on cable TV. Was it the ARPU that we had in this quarter for cable division?

Yes, it's -- the ARPU remains the same at INR 122. It remains the same.

And sir, this quarter, the activation revenue took -- was substantially lower on a quarter-on-quarter basis. Any particular reason? And any guidance you would want to give about how this would pan out in FY '22?

Activation revenue has gone down because The deferred revenue of activation, which was there at the time of gap, which was continuing for 5 years, has come down. We did a lot of sitting in FY '16 and FY '17 as the digitization was going on. Now those different revenue is flushing out from the system. And NTO -- after NTO has put the guidelines for the tariff, you are booking around 80% of activation revenue in the same year. Only 20% is getting deferred, around. So that's why you are seeing that the activation revenue has gone down. Going forward, one year more, if we go down, and then it will be stabilized from FY '23.

So you have given, like, about INR 18 crores, INR 20 crores or something that we could expect tapering forward going ahead also, right?

That's right because those deferred revenue is ending.

Okay. Okay. And sir, what -- if you see on a year-on-year basis, the subscribers or the paid subscribers in cable TV has been pretty flat for FY '20 -- from FY '20 to FY '21. So now what is our expectations for subscriber addition in FY '21? What are the key growth drivers here for subscribers?

Yes. In FY '21, there is a growth in the residential side, in the residential connections. But this has got affected due to the corporates, the hotels, corporates, hospitals, offices, small offices and all, which has not come back totally because of the pandemic. And we are looking forward that in the normal scenario, as businesses grow, the residentials are growing. If I will say that the -- we had collected around 0.5 million more residential houses in the pandemic also. We are looking forward that we will continue to do that. And the target is that in the next 3 years' time we can have a 50% jump in our subscriber base over current.

And this would be -- like what would be driving the 50% mode overall? Any key initiatives you want to...

It is more of that we have entered around 6 states very recently. And there is a lot of potential on those 6 states where we are going to grow organically. There is a lot of opportunity for the consolidation. Already, we are on the verge of doing the deals and all. Last year, we have not bid anything because of the pandemic, but as the situation will improve going forward, we will do those deals and do the consolidation in the market.

Okay, sir. And sir, for broadband division, what I understand is that the home-pass added during the -- during each quarter is coming down. The FY '21, we did not have too many home-pass additions. So would this impact the subscriber addition in next year?

Yes, because, already, as I explained in earlier calls also that as you do the home-pass for the FTTH, it takes around 12 to 18 months to cover that. This year, due to the pandemic, it is not very high. And Rajan, sir, if you can take this going forward.

Notice, essentially, we have been maintaining earlier also, 25% penetration with home-pass is achievable number. So if you see our home-pass today and you do 25%, that obviously shows we still have a huge room for growth. And in many markets where we have done FTTH upgradation, we have shown 25% penetration, which is achievable. Basically in a market like Gujarat where GTPL has taken a full position in terms of creating a world-class fiber-to-home network. And practically, nobody else is there. So this is quite possible to achieve. So I think in spite of a limited number of home-pass increase last year, we have our hands all full to maintain the same or better momentum as Piyush rightly mentioned.

Okay. And sir, on the ARPU front, do we think that we'll be able to increase like what I understand from previous calls is that our ARPU increased because of upgradation of plans. But before that, our ARPU is pretty stagnant. So now -- do we see now at a higher basis in form of [indiscernible] do we see any growth in ARPU possibly in broadband? Are we planning to change the pricing in any way?

I think the current focus is to create the market in Gujarat and other areas where GTPL has a very high market share in cable. So I think the focus is creating the market. As you rightly mentioned, as upgradation happens from -- in the end to FTTH, there is some ARPU increase which happened last year and the same momentum will continue. Piyush, anything you want to add, please add.

No, no. It's perfect, sir.

So we expect 5% kind of growth in ARPU going ahead as well?

Yes, that's what we are gearing for.

Okay. And sir, any update on launch of our hybrid box? I don't think we have planned to launch it in early Q4 '21 days?

Yes, we wanted to launch in quarter 4 hybrid box. But due to this pandemic, the production has been delayed. Now the boxes are ready and they are getting shipped right now and we have nothing. We are expecting it to come to India end by of April. As it will come, we are ready with our plans and all our -- all the back end and everything is ready. As the box will come, we will launch it very quickly.

And sir, last couple of questions. What is the CapEx target for maybe next 6 months or next 1 year? And if you could help us understand that we are net debt cash surplus now. So where -- how do we plan to deploy our excess funds?

Yes, so this financial year, as I said that we have increased our CapEx-to-CapEx predictions, and we did the INR 335 crores of CapEx in FY '21. Out of that, INR 175 crores is in the broadband. And INR 160 crores was in the CATV. Next year, we are projecting that we are going to do around INR 400 crores of CapEx. Out of that, it's INR 225 crores to INR 230 crores is going to be in the broadband. Rest is going to be in the CAD side. All CapEx is going to be funded through internal accruals only. We are not looking forward for any fundraising at this point of time.

Okay, sir, and sir, how do we hold that excess cash right now, like in what mode or what kind of interest...

So we are actually net debt free. So we are utilizing some of the credit limits, which we are having with the bank. And the surplus funds, we are investing in the very safe fund, which is either money market mutual funds, which we are exploring the options. But right now, it's all in the fixed deposits.

Okay, okay. And what kind of returns do we have on that?

We are generating in the range of around 6% to 7%.

The next question is from the line of Anil Sarin from Centrum Portfolio Management Service.

[Technical Difficulty]

Anil, I'm sorry. I'll request you to come back in the question queue for a follow-up question. The next question in queue is a follow-up question. The next question is from the line of Swechha Jain from ANS Wealth.

Sir, I wanted to understand regarding the EPC contract. If you can just share an update as the contract is over this completed the laying of the lines.

So EPC contract is almost completed. Actually, the project was awarded amount close to around INR 1,000 crores, it's INR 1,073 crore right? This means it's close to around INR 838 crores something already value realized can we invoice [Foreign Language] the total gram panchayat GT was targeted was close to around 3,767 [Foreign Language] So almost 98% project is completed. Because some [ publisher ] issues from government side and all, so [Foreign Language] but the overall project is complicated.

So can we expect around INR 40 crores revenue from EPC in Q1, sir, this year?

Yes.

And that would be, like, the last tranche?

Yes, that's [ our ] income. Yes.

Sorry, sir. Go ahead. Sorry.

Go head. Go head.

And so the O&M of this would start this year, right? And what kind of margins would you expect in the O&M, sir?

O&M revenue has started from quarter 3. This year, we made around INR 27.4 crores of revenue which is the part of our other operating income in FY '21. And going forward, we are going to get around INR 57 crores in the next financial year. The margins is going to be around 20% in all the business.

Okay. Okay. And to this INR 57 crores, I believe, it's there for 3 years, right?

It is 3 plus 4 years.

Yes, 3 plus 4.

Okay. Okay. Okay. Sir, any write-backs that we are expecting write-back that we had in Q4? I think in Q3, we had some write-backs, sir.

No. In quarter 4, we don't have -- we didn't have any like that quarter 4.

Okay. Okay. Okay. And sir, now with respect to this EPC contract, I believe, strategically, we are very well placed because we have laid down the fiber lines and everything. So in terms of revenues, strategically, how do you think this will help us add to our revenue growth in the broadband segment, sir? Just want to understand like a fair guidance that you can give.

Already, O&M is starting. Now we are going to handle this old fiber. The fibers are reaching to around 3,700 gram panchayats in relative -- in the rural areas. We already have presence in around 90% of those rural areas in CAP business. We already have infrastructures there. We just have to start the broadband business in those villages in those rural areas, which we are going to do in FY '22, FY '22 and FY '23 and we are expanding on that side. It's just that we have to upgrade the last mile to reach the home from the fiber. So that project is already we have started upgrading the infrastructures and all in different places. And very soon, we will going to start the rural broadband business.

Okay. And sir, just 1 follow-up on the additional participating -- participant question regarding the hybrid box. So can you share some context around in terms of what kind of pricing and what kind of margins are you expecting from this launch of hybrid box? I believe we'll be launching them in May, right, sir?

Most probably right now the plan is to launch in the May. At the time that we will launch, we are going to do all the marketing activities right now. And I will say that we should disclose our strategy and pricing at that point of time when we are close to launch or we can talk to one-to-one.

So just 1 last question with respect to, again, the surge in COVID cases, How do you see it going forward, it is going to impact average Q1 of FY '22? Or how do you see this impacting going forward?

See, currently, when the last year lockdown happened and now the whole industry was not ready. Now they already have 1 year of experience working in the lockdown, and I would say all my business partners, my team, the whole management, they are more prepared this time under such. And taking the ground reality and everyone, how to serve our customers now that you can say more experience, and we know the tools, which we have to use on the ground for serving the customer as well as safety of employees and safety of our customers. So that way, I will say that we are not looking forward, but there's going to be a lot of impact on -- impact there. We have target subscribers, which has -- some has come back to support the subscriber. We are going to see those going away, but we are hopeful that we will cover that with our home subscribers.

The next question is from the line of [indiscernible] from ICICI Securities. We move on to the next participant. The next question is from the line of Ritwik Mohapatra from ICICI Bank.

Yes. Can you please help? There are a couple of, I think, important questions that are let -- from what has not asked, for me. Because the situation on the ground has -- must have changed a lot. And in terms of the per channel, you know what the consumer is actually spending for the subscriber is actually spending on the channels. That amount might have gone up and down. And I see that the pay channel cost has significantly increased, even though the subscription revenue has gone up by only 5%. So on a per subscriber metric, can you tell me later how much a consumer, on an average, is paying? How much is your revenue out of that and how much you're passing as on content costs? And secondly, the carriage fee has also shown a substantial increase. How is that -- I think one of the people, I heard them say it has plateaued. Looking -- going forward? And again, on an on-the-ground basis, how are you negotiating this fee with your broadcasters? Is it a per subscriber charge? Or is it a fixed charge? If you can throw some clarity on these 2 aspects.

Reality, so I will say that how we should read this is subscription plus carriage and placement minus the G&A cost, That is my gross margin. On that gross margin, we have to see the percent. If you calculate on that way, you will find that there is no increase in the G&A costs. Our gross margin has remained same. So in a nutshell, if I will say, whatever we were generating last year, we are generating more than that in this year. So the placement and marketing and pay channel has to be read together with the subscription. So that's the way you should look into the...

Right, right, right. Okay. Okay. And sir, on the ground, is the MRP that you're getting from per subscriber, is that reducing the consumers moving towards lower-priced packages or anything of that what is happening? Do you see that?

No, we have not seen those moments that people are opting for the lower packages and all. As you see that we are the lowest -- having the lowest ARPU in the industry right now. And due to pandemic, we have not increased our ARPU. We have remained the same in the whole year. So we have not seen those type of moves.

The next question is from the line of Miten Lathia from Fractal Capital Investments.

Yes, just on the debtors, what would be the EPC debtors as of March 21?

Yes. EPC debtors' total is INR 2.26 crores, Miten.

Great. And the INR 200-odd crores that we have outlined for the CapEx in the CATV business, is that primarily maintenance? Or is there growth built in? And what sort of underlying subscriber growth are we targeting in that INR 200 crore of cable CapEx?

No, the growth is built in on those CapEx. Maintenance is a very small CapEx and overall CATV business. So we are going for the new expansion, acquisitions and everything and they have that CapEx that has been built in.

Would you like to put an underlying subscriber number just like you used put it for broadband as 60,000 a quarter is what you were looking at? Would you like to put a number on the cable side as well for this underlying amount of CapEx that you are putting?

See, as I said earlier that we have got around 0.5 million of home subscribers this year against the -- what we lost in the corporate of around 0.5 million, and that's why my numbers are flat. So Right now, we are looking forward, if I talk about that not the next year, but they are in 3 years' time or 2.5 to 3 years' time, we are looking forward that we will grow by around 50% in the subscriber base, which is going to be equal in the years.

Okay, and this INR 200 crores should help you get that 50% over 3 years that you're targeting.

Yes.

The next question is from the line of Vinit Manek from Karma Capital Advisors.

Sir, just 1 question from my side. We have seen a little bit elevated data in this year financial year ending versus last year. So any specific reason towards it? Or any collection issues are we facing on ground from the customer?

No issues on the Subscription side in all. I think Mr. Bothra will explain.

So Mr. Vinit, the total debtors receivables, which are appearing in our financial is around INR 3,833 million, out of which INR 2,266 million belongs to the EPC project, which we are undergoing. The rest of the debtors -- mainly the carriage and placement is around INR 1,010 million and the remaining is the ISP provider and some of the others. So the debtors have increased by around 147 million, out of which, actually, the EPC project itself is showing an increase in debt as well INR 802 million. There, actually, the payment we are expecting in the month of April and May, and we are not anticipating any kind of fee [ inquiry ] on the EPC debtors. So this is the status as of date. Also, yes, we are not expecting on the EPC project further.

So these data will taper down to the normalcy levels, what we are seeing close to March levels?

Yes. By September, most probably by quarter 2, you will see that it will be greatly reduced in value as EPC project will better support [indiscernible]

The next question is from the line of Riddhima Chandak from Roha Asset Managers.

Sir, our CATV ARPU has decreased to INR 118 per month. So any reason as against INR 122 in Q3 FY '21, so any reason behind that?

You are calculating it from active subs or paying subs?

Paying, paying.

According to us, it is almost same. There is some adjustments in the subscription revenue because of a small change in the accounting side on the deferred side. And that's why the calculation is coming under 18. Our ARPU has remained the same as INR 122, and I can explain you the math on that 1 to 1, same with the net subscription revenue.

Okay, okay. And on the broadband side, you said that profitability has reduced as one-off item that is INR 3.3 crores. So what is that one-off item?

That 3.3...

Insurance claim.

Yes, there was an insurance claim in the broadband for which we have provided for right now.

Okay. Okay. Okay. And at the end of FY '20, what is our total STB seeded boxes?

STB seeded is around 10.8 million.

Okay, so it has increased overall from 10.61 million. Okay.

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

Sir, first question is regarding this EPC receivables of INR 226 crores. So can you expect that most of this payment will be received in next couple of quarters? Or are they going to do some retention money for a couple of years or something like that?

I think almost 95% revenue before 30th might set are all received from the area. So right now, the total or EPC projects, [Foreign Language] treat the receivable, again, down the line, government contracts at close to around [Foreign Language]. This must be close to around [Foreign Language].

Okay. Okay. And sir, last question is, so when the new tariff order was implemented compared to other -- compared to our competitor, we have given the larger share of revenue to our LCOs. And we, as a company, have kept the lower share and we were planning that going forward in 1 year or 2 when the implementation will be over, we will increase our share. So it's been almost 2 years. So are we planning to increase our share from LCO in next 1 year or so?

So because of this pandemic, [Foreign Language] financial year [Foreign Language] target, mainly ahead, down the line [Foreign Language].

Earlier, our plan was in FY '21 to increase our ARPU, but due to the pandemic, we have not taken any steps. This year also -- we started planning for that in February and March. But seeing the current situation right now, we are deliberating that we should go ahead with that or we should keep it in abeyance. So for right now, for this quarter, we are keeping it in abeyance..

[Operator Instructions] The next question is from the line of [ Anil Sarin ] from [ Care ] Portfolio Management Service.

Yes. First of all, congratulations to the management, not only for this quarter but also for the last many years. What I have seen amongst the other CATV providers, your performance really stands out. So I want to give some view on that. I just wanted to know about this carriage and placement fee. What is the longevity of it? I mean, when does it stop? And how does it impact your economics?

Carriage and placement is going to remain the same. As you see, the trend of carriage and placement is from last 10 -- 12 years and every year, it gives us growth. So this is going to be there as we expect.

My second question is regarding the competitive threat from Jio. I'm aware of the shareholding, but if you can elaborate on, is there some kind of a demarcation? Is there -- or is it free for all? How does it operate between yourselves and Jio?

So basically [Foreign Language] whether relative to content, whether relative to infrastructure, whether relative to [Foreign Language] down the line, market [Foreign Language] competition, [Foreign Language] major leagues [Foreign Language] more than INR 100,000. [Foreign Language] major league competitor is [Foreign Language] competitor [Foreign Language].

The next question is on CATV per se. You mentioned in your opening remarks that the penetration of CATV in India is yet only 55%. So what, in your estimation, is the near-term target? Can we reach 60% penetration? Or what is theoretically possible? India as a poor country. So keeping those constraints in mind, what is the max you can go? And within that, if you could also enlighten me, what is the organized sector penetration and what is still held by small LCOs, which is -- which can be, eventually, taken over by the organized sector? So 2 questions, what is the eventual penetration, at least in the next 2, 3 years that we can achieve? And second, within that, what is the organized sector market share?

Rajan, sir, can you take this question?

No, essentially, as far as market is concerned, I mean, it has been growing, I mean on anything between 4% to 7%. Obviously, very strong safe to say. There are states like Odisha, where it has grown higher, there are other states, which has grown lower. So the growth continues. And which I think, need a separate call or in-person discussion to explain the market share between major MSOs and smaller MSOs, et cetera. So that probably you can have your off-line discussion with us 1 to 1.

Okay. Okay. So the very last question, from my side, is that these days, even on your cell phones, we are getting good broadband connectivity and the prices are pretty low. Now with 5G around the corner, do you see that as a threat to your wireline broadband admissions?

So this question was being done, frankly, 3 years back. I remember, even during IPO times, this question was being asked to us. And even with the 4G, we have seen 20, 30 Mbps speed being given, right? All of us have those plans. All of us are using mobiles. But again, If you're giving at INR 400 to INR 500, pretty much unlimited data with a speed which is very firm, 50 to 100 Mbps. We have seen a huge amount of consumer traction. So wherever [Foreign Language] home-pass upgradation or they've done [ ME ] into FTTH, we are seeing a very natural demand, which is getting built up. So I think key thing is, both the things are complementary, high-speed wireless, will obviously gain a lot of sending. And once we get hooked to the content, we want to watch at a much longer period, which is where the whole home broadband kind of comes handy. And I think the key is the value which we give to the Indian consumer. If we keep on giving the right value, which today we are giving. I mean, in GTPL, if you see broadband EBITDA is very, very healthy. At such a healthy EBITDA, if you are able to manage this ARPU and still give nearly unlimited data at this kind of speed. So I think we just need to focus on making sure this kind of value creation and our EBITDA equation [Foreign Language].

Maybe if I can squeeze in 1 more, for the full year fiscal '21, If I take out the EPC revenue as well as EPC cost, just to get a clearer picture of the underlying operations, I get a EBITDA margin, not counting other income. Other income, INR 63 crores I have taken below that. I get EBITDA margin of around 23%. And last year, using the same approach, I get an EBITDA margin of 24%. So there is a little bit of a decline this year relative to last year. However, both these years, if I take -- when I compare with, let us say, fiscal '19, fiscal '18, that time, the EBITDA margin used to be 27%, 26% odd. So if you can let me know why the margin is apparently coming down.

Yes. The margin, if you see, we are not taking other income above. If you take the other income above, it is going to be 25.4%. Last year, we did around 25.7%. There is a margin loss of around 0.3% or you can say 0.7%, 0.8% if you take out the other income. This is mainly due to the renewed reduction in the activation income, which I explained that the deferred revenue, which was there at the time of GAAP in FY '16, FY '17, when we did the digitization and see that there are a lot of boxes that signed 2 million, 2.5 million in a year and go by years. Those are going out. So because of that, the activation income is coming down, and that is getting out the margin by 0.5% to 0.6%.

Okay. So then logically, going forward, since broadband has higher margin, and it is also growing at a faster rate relative to CATV, can one expect the overall margins to head higher?

Yes, that will happen. Next year, we are looking forward that margin will be flat as we are going to gain from broadband, and we are going to lose some from the activation. Going forward from FY '23, you will find that margin will go up.

[Operator Instructions] As there are no further questions, I will now hand the conference over to the management for closing comments.

Thanks a lot for joining the call for the GTPL Earnings Call for Annual FY '21 and Quarter 4 FY '21. I wish that all you be safe and healthy. We will, again, meet in the quarter 1 of FY '22 in the investor call. Thanks a lot.

Thank you, thanks a lot.

Thank you very much. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Thank you.