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Ortel reports marginal increase in subscribers in Q4 FY17; ARPU dips


Multi system operator Ortel Communications said it had 73,087 broadband subscribers on its network during the quarter ended March 31, 2017 (Q4 FY17), up marginally from 72,503 subscribers it reported in the previous quarter. Broadband users accounted for 9.7% of Ortel’s subscribers. This number was 10% in the Q2 FY17. On the other hand, Ortel’s Cable TV base increased to 750,471 subscribers during the quarter, which is up from 738,963 subscribers reported in the last quarter.

The operator seems to have recovered from the impact of demonetization and competition, which led the marginal decrease in subscribers in the previous quarter. However, Ortel is now making less money per broadband subscriber: Broadband ARPU decreased to Rs 375 in Q4 FY17, which has been reducing constantly from a peak ARPU of Rs 401 reported in Q1 FY17.  Cable TV ARPU also fell to Rs 147 during the quarter, from Rs 150 in the previous quarter.

Apart from falling ARPU, monthly data usage per customer also decreased 23.6% QoQ to 4,133 MB from 5,415 MB in the preceding quarter. The operator recently launched high-value plans with FUP of up to 1 TB to help increase data usage on its network. Currently, it offers Cable TV and fixed broadband connections (of up to 100 Mbps) in 78 towns across states like Madhya Pradesh, West Bengal, Chhattisgarh, Orissa, Andhra Pradesh and Telangana. The company said its network length (broadband cable) stood at 64,685 Kms as of Q4 FY17.

Segmented Revenues

Ortel reported Cable TV (CATV) services revenue of Rs 36.3 crore for the quarter, down 9.2% QoQ from Rs 40 crore in the preceding quarter. CATV revenues were also down by 7.1% YoY. The company makes more money from Cable TV services when compared to the broadband segment, which reported revenues of 7.1 crore in Q4 FY17. Broadband revenues were also down by 17.9% QoQ and down by 20.2% YoY.

As revenues dip, the cost of running a multi-system operator business is also increasing. Ortel claimed that bandwidth cost (broadband) increased by 71.3% annually to Rs. 10.1 crore in FY17, compared to a cost of Rs 5.9 crore in FY16.

Other financial highlights

-Ortel reported a net profit of Rs 80.75 lakh for the quarter compared to a loss of Rs 2.8 crore in the previous. On a YoY basis, net profit decreased from Rs 1.43 crore.

– Total revenues decreased by 7% QoQ to Rs 48.1 crore, with gross margins for Cable and Broadband segments at 74% each.

– Ortel said that it raised a total funding of Rs 100.79 crore from the Initial Public Offering (IPO) launched in March 2015.

– EBITDA stood at Rs 10.1 crore down 40.1% from Rs 16.9 in the same quarter last year.

-At least 3% of Ortel’s 823,558 subscribers (broadband+CATV) were inactive.

Download: Quarterly Report | Financials

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