Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Indus Towers Ltd (BOM:534816, Financial) reported robust performance in the first quarter, continuing the strong momentum from the previous financial year.
- The company successfully collected dues from a major customer for the third consecutive quarter, ensuring 100% collections against material.
- Significant progress in 5G deployment with almost 450,000 5G base transceiver stations (BTS) installed, positioning the company well for future growth.
- Operational performance was strong with the addition of 6,074 macro towers and 6,832 co-locations in Q1, reflecting a 13.9% and 7.8% year-on-year increase respectively.
- Indus Towers Ltd (BOM:534816) achieved a high network uptime of 99.97% despite challenging weather conditions, showcasing the resilience and dedication of its field force.
Negative Points
- Vodafone plc's decision to monetize its stake in Indus Towers Ltd (BOM:534816) could create uncertainty regarding future ownership and strategic direction.
- The company faces challenges related to weather disruptions, which could impact operational efficiency and increase maintenance costs.
- Despite strong performance, the company’s reliance on major customers like Vodafone Idea for revenue and collections poses a risk if these customers face financial difficulties.
- The transition to renewable energy and electric vehicles, while positive for sustainability, involves significant upfront costs and logistical challenges.
- The company’s gender diversity remains relatively low at 11.2%, indicating room for improvement in creating a more inclusive workforce.
Q & A Highlights
Q: Can you provide more details on the financial performance for the quarter?
A: Prachur Sah, CEO: We are pleased to report a robust performance for the quarter ended June 30, 2024. Our data additions remained strong, driven by our ability to maintain a high market share. We also made significant collections against bonds and sustained 100% collections against material dues. Additionally, Vodafone plc monetized an 18% stake in Indus Towers, and Vodafone Idea successfully raised equity funding and announced plans to raise debt.
Q: What are the key developments in the 5G rollout?
A: Prachur Sah, CEO: The total number of 5G base transceiver stations (BTS) deployed now stands at almost 450,000. We expect 5G rollouts to require additional towers, primarily in the form of small cells. The adoption of 5G by end customers is expected to be swift, with global 5G subscriptions projected to reach 5.6 billion by 2029.
Q: How is Indus Towers addressing sustainability and energy efficiency?
A: Prachur Sah, CEO: We have reduced energy consumption by 7% year-on-year in Q1 and set up close to 7,000 solar sites. We are also working on electrifying non-linked sites and converting indoor sites to outdoor. Our focus on using cost-efficient batteries with greater longevity is aimed at reducing overall costs.
Q: Can you elaborate on the operational performance and market share?
A: Prachur Sah, CEO: We added 6,074 macro towers and 6,832 co-locations in Q1. Our tenancy ratio remains industry-leading at 1.66. We continue to be the most preferred partner for Digital Labs and are making progress in deploying millions of solutions enabled by organizational change and capability building.
Q: What are the company's strategic priorities moving forward?
A: Prachur Sah, CEO: Our four key strategic priorities are market share, cost efficiency, network uptime, and sustainability. We are focused on strengthening our partner ecosystem, optimizing operating and capital expenses, improving network uptime, and advancing our ESG initiatives.
Q: How is the company performing in terms of network uptime?
A: Prachur Sah, CEO: Despite weather disruptions, we delivered a high level of network uptime at 99.97% in Q1. Our field force has shown exceptional dedication and commitment, helping us maintain this benchmark.
Q: What are the company's efforts in diversity and inclusion?
A: Prachur Sah, CEO: Gender diversity remained strong at 11.2% in Q1. We are creating equal opportunities across all levels, from field operations to management. Our CSR activities include partnering with local NGOs for cleanup drives and digital transformation plans to educate and upskill the community.
Q: Can you provide an update on the regulatory environment?
A: Prachur Sah, CEO: The government continues to take measures to speed up the deployment of telecom infrastructure while keeping sustainability in mind. The Telecommunications Act 2023 has introduced clauses related to public safety, same ownership, and rate of sale for telecom infrastructure. The green open access policy has been adopted by more than 15 states.
Q: What is the outlook for data consumption and its impact on the business?
A: Prachur Sah, CEO: Data consumption continues to grow significantly, with total data consumption for the top three operators increasing by 29% year-on-year for the March quarter. The average data consumed per user per month grew by 18% year-on-year to 25 GB. This rapid growth presents a significant opportunity for the passive infrastructure sector.
Q: What is the significance of the buyback approved by the Board?
A: Prachur Sah, CEO: The buyback approved by the Board is an indication of management's belief in the sound fundamentals of the business, its future outlook, and our commitment to generating value for shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
