Dear Valued Shareholders,
Our Company broadly experienced a favorable macroeconomic environment in FY 2018. Economic environment recovered quite well from the disruption caused by demonetization, which was undertaken in FY 2017 and the teething issues of Goods and Services Tax (GST) introduced during the current year.
We continue to benefit from the current Government focus on Digital India with the Government taking forward significant investment in Bharatnet and Government''s focus on overall strengthening policy framework for broadband and Pay TV industry.
Digitally connected homes are having a profound impact on social, industrial and economic transformation happening around us. We are experiencing explosion of data which is leading to rapid shift in customer purchase and usage behavior across products and services. This was evident by increase in our average data consumption per customer per month which has reached to 103 GB per month in FY 2018.
Financially, strategically and operationally FY 2018 was a successful year for Hath way. We delivered strong financial results, improving Consolidated Operating EBIDTA by 70% year-on-year (YoY) and improving consolidated PAT by Rs, 88 Cr.
The mobile telecom industry faced an extraordinarily turbulent year in India through unprecedented disruption. Price per GB for mobility data reduced by around 90% for retail customers. While it helped in growing mobility data consumption by six times, it also provided much cheaper options to our extremely low usage home broadband customers thereby creating short-term stress on our revenue and EBIDTA. While we expect this stress to last for another 12 months, which is the time being taken for realigning our customer base to high data guzzling users. We are also sure that this new mobility structure will ultimately help in the growth of home broadband. We already see early signs of mobility customers sampling low price data on mobility and then shifting to home broadband for binge watching their favourite OTTs and for overall much better user experience.
Investment for the future, transforming customer service experience and cost optimisation were the key drivers for Hath way story in FY 2018.
Investment for the future Broadband
Your Company''s strategic and early investment in FTTH has positioned it well to benefit from the immense opportunities that lie ahead. This enables us to give speed up to 1 GBPS on current ARPU (Average Revenue Per User) levels while still growing current EBIDTA levels. Apart from upgrading existing home passes, we also launched 0.8 Mn new home passes through focus on rapid network expansion. This best-in-class FTTH launch provided us with long-term opportunities for subscribers, revenue growth and outstanding customer experience.
Growth in the share of high data usage customers
Our share of >80 GB monthly data usage customers in overall base increased from 11% to 55%. This happened on the basis of us adding free additional data limits of 200 GB/ month to 1 TB/month based on consumption trends. To ensure great customer experience and make it commercially viable, we invested in world-class data centre, evolved peering and caching solutions and formed alliances with Content providers for hosting their servers in our data centre.
We believe this focus on increasing data consumption and focus on heavy data users will be a good source of revenue growth in medium-to-long term.
We continue to invest in improving customer experience in Phase III and Phase IV of Pay TV markets by seeding high quality boxes and continuous focus on increasing the number of channels. This has helped us increase Phase III and Phase IV ARPU by 45% in FY 2018 and this will remain a key enabler for growth in FY 2019 as well.
In Phase I and Phase II markets, we are investing in transforming customer-viewing experience by introducing low price-high quality HD boxes. This has picked up pace in Q4 FY 2018 and will be a big driver in FY 2019.
Transforming customer service experience
We continue our focus on making lives of our customers easier by increasing their broadband speed and by offering value-added services.
Through focus on network up gradation, we have doubled the speed for our customers in majority of key markets, allowing us to eliminate digital divide for erstwhile slow speed customers.
On value-added services, we launched our easy-to-use, low cost home surveillance solution. This allows our customers to monitor their homes online and increase their productivity. We also launched our upgraded Wi-Fi device - a solution that provides our customers with enhanced Wi-Fi signal strength that extends and improves the Wi-Fi signal throughout the customers'' home.
With an objective of taking cost leadership in the wire line market, we started several projects to identify and remove out waste from our business.
This primarily happened through reduction of the organizational layers from 9 to 5 and removal of duplicate processes and automation. This is demonstrated by the fact that we delivered approximately '' 50 Cr. in Opex. cost savings in FY 2018.
Hath way today is very different from the traditional cable company that we were five years ago. We have strengthened our Cable Television base, have diversified successfully and profitably into high-speed broadband business and we are also more competitive and resilient. We have increased our focus on creating exceptional customer experiences that sets us apart from competition. While our transformation continues, I am confident that a strong foundation is in place to evolve our business to the next level and thrive in this digital world.
We enter FY 2019 energized, enthusiastic and purposeful as we embrace many opportunities given by digitally-connected world.
On behalf of all of us at Hath way, thank you for your continued trust and support.