See strong growth in subscriber base: Ortel Communication

Detailing the second quarter earnings, Bibhu Prasad Rath, President & CEO, Ortel Communication said subscriber base has seen a sharp uptick in the quarter and going ahead too see a strong growth. The broadband and cable average revenue per user too were stable in the quarter, he added.

The year-on-year (Y-o-Y) second quarter total income was up 25 percent at Rs 46 crore versus Rs 37 crore for the same quarter earlier fiscal. The Y-o-Y EBITDA too was up 71 percent at Rs 11.4 crore versus Rs 6.7 crore. Margins in the second quarter expanded to 24.9 percent versus 18.1 percent reported in the same quarter FY15.

Ortel Communications is an Odisha-based multi system operator (MSO) and broadband service provider. Ninety per cent of its customer base is Odisha and the rest is in spread across West Bengal, Andhra Pradesh and Chhattisgarh. Below is the verbatim transcript of Bibhu Prasad Rath’s interview with Ekta Batra and Anuj Singhal on NCB-TV18. Ekta: Your total income was largely led by your infrastructure leasing revenue. Can you tell us how exactly this segment performed and what it comprises of and your guidance as well? A: Before answering your question can I just quickly take you through the synopsis of the result? Can I do that? Ekta: Sure, we do already have your numbers, so just to talk more in depth about it, if you could focus on the infra-leasing segment for us? A: Infra-leasing is a segment where we build our last mile network intracity across the markets where we operate and which is extremely fibre rich. And this fibre networks are used to buy other corporates including telecom guys for their data transfer. So, we have a relationship with many telecom players where we lease out their infrastructure for intercity data movement and they lease out our infrastructure intracity. So, this is the income coming from leasing out of our existing pipe and that has grown sharply over last four to six quarters, but more than that, what I want to point out is that if we look at our retail business, I am sure you already have the numbers. Our subscriber base is as on September 30, 5,72,000 which was 5,30,000 as on March 31. So, that is a growth of 42,0000. And if you see the trend, Q1 had a growth of 12,000 whereas Q2, this growth has more than doubled to around 30,000. Now over and above this, there is a 65,000 subscribers which is signed up with various local operators and are yet to be reported because reported after integration to our own network. So, we are also seeing a very strong growth in the retail subscriber base. Anuj: That point is taken. Since we have a bit of a limited time at our disposal right now, I just want to understand on your broadband and your cable business where we saw quite a bit of decline in your margins. If you could tell us what happened there? A: Not really, there is no decline in the margin. As I mentioned earlier, the average revenue per user (ARPU) in this business remains more or less stable. It does not grow much. So, most of the revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) growth comes from the subscriber base and there is a healthy trend, in fact a very strong trend in a growth in subscribers. Our broadband growth in the first half this year is over 5,000 numbers which has surpassed the last year full fiscal and the cable TV growth is extremely strong as I just mentioned. The total subscriber has grown by 42,000 and there is a pipeline of 65,000. Ekta: If you could just leave us with what exactly your ARPU was this quarter? A: Our ARPU for the analogue service is Rs 143. For the digital service, Rs 183 and for the broadband service, it is Rs 395 which is net of taxes. That is what comes to our income. Ekta: And the growth year-on-year or quarter-on-quarter? A: It is pretty much stable actually. The ARPU remains more or less stable. The revenues get driven by the growth in subscriber base and as I mentioned earlier, we are completely on track for achieving our target of one million subscribers in two years and that is what will drive the revenue and the EBITDA.