Indus Towers NSE -0.22 % is riding on strong tailwinds, with quite a few growth avenues in the coming future, CEO Bimal Dayal told ET’s Subhrojit Mallick. He said that all the private and publicly-owned telcos are talking about 5G, and they are also catching up with each other in different circles. India’s largest telecom tower company is also thinking of entering the fiber space and Dayal also sees the tower network as a big fit for EV infras ..
Merger between Bharti Infratel NSE -0.22 % and Indus Towers was a massive step…
We announced our merger in April or May 2018. We were almost in a situation wherein the merger was announced but was not happening. So, I think it was almost like two years. Finally, we went in, consummated this merger on 19th of November 2020.
Post that I think from a chronology perspective, we got into this COVID situation, and two years went by in that.
And I think it’s important that the role Indus ended up playing and what we managed to do during these times is something which I would like to emphasize with you.
How difficult was it to pull off the merger?
It has been a classic merger for us. Not a single pink slip. I think as the MD and CEO, I’m absolutely proud of this. Both companies prepared for this in a good way. We got the time as well to do so. And we have merged our platforms, our policies…in record time. While we did this, we managed to increase our rollout to the customers as well. So even if you go back to last year, or last to last year, some of the quarters were the highest ever quarters in 10 years’ time. So, with all this going on, I think we’ve managed to increase the rollout, and support our customers as well.
How did Indus function during the COVID wave?
While all this was going on, the degree of difficulty went up for us with COVID. Now please remember last year around the same time, we were struggling with the Delta variant. Ever during those times, we managed to do north of 3000 sites in the quarter, which increased more in Q2 and Q3. Q4, which we just finished, was a little muted. With all this, it has been a great couple of years for Indus. We supported the customers, and even the network well, during this COVID period.
Are the bad times for the industry over?
We were discussing AGR (adjusted gross revenue) issues a couple of years back. I think there was a serious threat of further consolidation in the industry. We’ve moved past that as well. With the government getting into participation with one of the customers, I think a good story is developing there. I have always said that we will see three healthy customers competing against each other. Plus, BSNL and MTNL NSE 0.23% are actually showing signs of getting into 4G, and later on, 5G as well. So, I think we’re entering a very exciting phase. But this was all enabled, in a very good way, when the government came up with the security package, both in terms of giving some lease of life to existing TSPs (telecom service providers), and getting into some structural changes. You would have looked at Gati NSE -1.20% Shakti and the portal which has come out as well. It’s part of the package itself. It’s a great enabler for industry like ours, where we have the government, themselves looking at NOCs, etc and making this a vital step across states. And let me also say this, it’s working. Constant follow ups are happening on this account. So very good tailwinds to ensure that there is further penetration of towers, penetration of these technologies. Before I go into the future technologies, I also want to touch upon the fact that 4G percolation has been phenomenal. Out of 1,84,000 towers, I can confirm we have 1,78,000 towers with 4G. This technology has been extremely successful, and has served very, very well as a base for what is coming in the future.
If I look at it from a distance, I think Indus, you know, being the largest passive infrastructure provider, not only in the country, but outside as well, I think we’ve played a major role in enabling 4G across the country as well. And I think our excitement and our participation in 5G is going to be similar, if not bigger than 4G.
Right now, what would be the split line between say three operators, approximately?
All three customers, BSNL and MTNL, are using our towers. If you look at the tenancy ratio which is important in this, I think we are sitting with 1.8, that is the industry best tenancy ratio, which should give you a little bit of a clue about (Indus’ participation with) Jio.
There were issues around Vodafone Idea NSE -3.66%’s payments. What is the status there? What are the receivables?
For seven to eight years, it’s been a great customer relationship with Vodafone and Idea. Then the industry went into a little bit of a frenzy. But we have been supporting them and we have been transparent with our numbers when it comes to receivables. But as a testimony of Indus supporting the customer, we took a very big and maybe an innovative step. If you remember during the merger, we had also announced that there is a security package, which we received as well. We did have the receivables, and in order to help the customer bring the money back, and also secure our receivables, we restructured it in the month of January or February. For that, we saw our receivables coming down this (Jan-March) quarter…I think from VIL’s perspective, they have been living up to their commitments within their security package restructuring as well. So, it has gone well.