BENGALURU: The Bibhu Prasad Rath led regional cable television and broadband internet player Ortel Communications Limited (Ortel) reported 17.3 percent year-over-year (y-o-y) growth in total revenue from operations (TIO) for the quarter ended 30 September 2016 (Q2-17, current quarter). Quarter-over-quarter (q-o-q), TIO increased 2.5 percent in the current quarter as compared to the immediate trailing quarter. Ortel reported TIO of Rs 53.7 crore for Q2-17, of Rs 45.8 crore for Q2-16 and Rs 52.4 crore for Q1-17.

Profit after tax (PAT) for Q2-17 declined 10.2 percent y-o-y to Rs 2.5 crore from Rs 2.8 crore in Q2-16, but almost tripled (2.95 times) q-o-q from Rs 0.9 crore in Q1-17.

Company speak:

Ortel President and CEO Rath said, “We reported steady performance during the quarter led by balanced growth in Cable TV and Broadband revenues. Subscription fees in both the segments jumped by 7 percent q-o-q. More importantly, I am happy to highlight that the overall costs have stabilized with 5 percent reduction in Total Expenses. This was possible due to management’s focus on efficiency and cost rationalisation.”

“During the quarter, we turned EBITDA positive in the emerging markets of Andhra Pradesh, Chhattisgarh, West Bengal, Telengana and Madhya Pradesh. I believe, this is a huge positive for us and I am confident that the operating performance in the emerging markets will further improve as the subscriber base increases,” said Rath further.

“The road ahead appears encouraging and we remain on track to demonstrate solid performance in times ahead. Full control over the last mile network as well as our strategy of focusing on B2C customers will continue to drive growth for us,” revealed Rath.

Revenue breakup

Cable TV revenue in Q2-17 increased 35.8 percent y-o-y to Rs 42 crore from Rs 30.9 crore in Q2-16 and increased 2 percent q-o-q from Rs 41.2 crore.

Cable TV Activation fees or connection fees in Q2-17 were almost 6 times (5.9 times) at Rs 4.2 crore as compared to Rs 0.7 crore in Q2-16, but declined 8.1 percent q-o-q from Rs 4.6 crore.

Cable TV subscription revenue in Q2-17 increased 44.4 percent y-o-y to Rs 29.7 crore from Rs 20.6 crore and increased 7.2 percent q-o-q from Rs 27.7 crore. Channel carriage fees in the current quarter declined 16 percent y-o-y to Rs 8.1 crore from Rs 9.7 crore and declined 9 percent q-o-q from Rs 8.9 crore.

Broadband services revenue in Q2-17 increased 22.4 percent to Rs 10 crore from Rs 8.1 crore in Q2-16 and increased 4.8 percent q-o-q from Rs 9.5 crore. Internet connection fees in Q2-17 declined 33 percent y-o-y to Rs 0.5 crore from Rs 0.7 crore and declined 24.8 percent q-o-q. Internet subscription fees in Q2-17 increased 27.9 percent y-o-y to Rs 9.5 crore from Rs 7.4 crore and increased 7 percent q-o-q from Rs 8.8 crore.

Ortel’s revenue from its infrastructure leasing segment in Q2-17 declined 83.5 percent to Rs 1 crore from Rs 6 crore in Q2-16 but increased 3.2 percent q-o-q.

Subscription numbers (revenue generating units – RGUs’), ARPU

During the current quarter, the total subscribers (both cable and television) stood at 804,889 subscribers. Net addition in Q2-17 stood at 34,748

Television ARPU’s remained almost flat. Analog and Digital TV ARPU stood as Rs. 153 per month and Rs. 154 per month for Q2-17 and Q2-16 respectively. For the immediate trailing quarter, ARPU was Rs 152. Digital ARPU’s have been falling. In Q2-17 it was Rs 167, in Q2-16, it was Rs 183 and Q1-17, ARPU was Rs 169.

The company added 1.573 broadband subscribers in Q2-17, taking its total broadband subscriber count to 79,182.

Broadband ARPU in the current quarter increased to Rs 406 from Rs 395 in Q2-16 and Rs 401 in Q1-17.

Let us look at the other numbers reported by Ortel in brief.

Total expenses (TE) in Q2-17 increased 20 percent y-o-y to Rs 37.2 crore as compared to Rs 31 crore, and declined 4.8 percent q-o-q from Rs 39 crore.

Programming cost in Q2-17 declined 8.5 percent y-o-y at Rs. 8.6 crore as compared to Rs 9.4 crore and declined 13.3 percent from Rs 10 crore. Employee expenses during the current quarter stood 6.8 percent higher y-o-y at Rs. 6 crore as compared to Rs 5.6 crore, but declined 3.1 percent q-o-q from Rs 6.2 crore.

EBITDA in Q2-17 (including other income) came in at Rs. 17.1 crore (31.5 percent margin), representing a y-o-y decline of 1.2 percent from Rs 17.3 (35.8 percent margin), but a 22.8 percent q-o-q increase from Rs 13.9 crore (26.3 percent margin).

Note: The unit of currency in this report is the Indian rupee - Rs (also conventionally represented by INR). The Indian numbering system or the Vedic numbering system has been used to denote money values. The basic conversion to the international norm would be:

(a) 100,00,000 = 100 lakh = 10,000,000 = 10 million = 1 crore.

(b) 10,000 lakh = 100 crore = 1 arab = 1 billion.