Consistent recovery of dues from Vodafone Idea and full collection of monthly rent from service- providers continue to bolster its financial performance, Indus Towers, India’s largest telecom infrastructure firm, has said.
The strong operational performance positions the company to capture a significant market share, as Vodafone Idea and BSNL intensify their 4G network rollouts, the management has said.
“As our major customers continue to roll out, I believe this growth will continue. In fact, if you see over the last one and a half years, because of a strong tower rollout, we will remain the prime candidate to make sure we capture this growth,” Indus Towers’ chief financial officer (CFO) Vikas Poddar said during a post-earnings call on October 23.
A day earlier, the telecom infra firm reported a 71 percent year-on-year increase in a consolidated net profit at Rs 2,223.5 crore for the September quarter.
Vodafone, BSNL boost
“We expect the ongoing rollout from major customer (Vodafone Idea) coupled with the start of the 5G rollout will continue to drive near to medium-term growth,” chief executive officer and managing director Prachur Sah said.
The tower company was engaging with Vodafone Idea to clear its dues as soon as possible, he said. “From our perspective, the timeline has to be as quick as possible but we are working with the customer (Vodafone Idea) to make sure about it,” Shah said.
“…in line with the trajectory of the previous three quarters, we sustained 100 percent collection against monthly billing from a major customer (Vodafone Idea), while our collections against past overdues improved further during the quarter.”
Poddar said Indus was expecting additional tenancies from Vodafone Idea as it expands its 4G capacity and coverage.
He said the company completed a significant tower rollout in the last one and a half years, putting it in the prime position to offer second and third tenancy at the tower.
“From an availability point of view, we remain in the prime position. So, we will continue to make sure that our operational performance keeps us in the pole position to get the majority market share,” he said.
The company expects tower tenancies to increase towards the end of the current quarter, as Vodafone Idea’s 4G deployment gets underway.
Sustained demand for network expansion drove the company's growth in the September quarter.
The company said its loading revenues continue to act as a lever for growth. “We expect our loading revenues to be gradually supplemented by a demand for new sites once a certain penetration level is achieved to aid the network decongestion,” Sah said.
Data consumption rising
The swift uptake of 5G along with the ongoing migration of users from 2G to 4G is giving a boost to data consumption.
For the top three operators, the total data consumption growth was 28 percent in the June quarter, above the average of the previous eight quarters.
The average data consumed per user per month increased to 26 GB during the period, growing 17 percent from the previous year, the latest TRAI data show.
In the June quarter, 5G data consumption grew 28 percent sequentially to 11.4 billion GB and accounted for 20.3 percent of the total data usage, up from 16.9 percent in the year-ago period.
“The robust data consumption story, coupled with the rapid uptake of 5G, is expected to spur the need for passive infrastructure and we are confident of leveraging our core strengths to capitalise on this opportunity,” Sah said.
In the September quarter, the company added 3,748 macro towers and 4,308 corresponding co-locations.
Its total macro towers and co-locations based stood at 229,658 and 379,236 each, up by 12.5 percent and 7.3 percent from the previous year. Its tenancy ratio stood at 1.65.
During the quarter, the company also completed the buyback of its 56.8 million shares at Rs 465 apiece. The shareholding of Bharti Airtel in the company has now increased to more than 50 percent.
The Indus Towers stock ended October 23 at Rs 357.50 on the National Stock Exchange, down 2.52 percent from the previous close.
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