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Ortel’s subscriber base dips in Q1FY18 as competition intensifies

Multi system operator Ortel Communications said it had 70,273 broadband subscribers on its network during the quarter ended June, 2017 (Q1 FY18), down from 73,087 subscribers it reported in the previous quarter. Ortel’s Cable TV base also dropped to 747,528 subscribers during the quarter, from 750,471 subscribers reported in the last quarter. Note that broadband users accounted for 8.5% of Ortel’s total (broadband+cable TV) subscribers. This number was at 9.7% in the previous quarter.

The company holds a Multi System Operator License and operates both broadband and cable TV service in states like Odisha, West Bengal, Andhra Pradesh, Telangana, Chhattisgarh and Madhya Pradesh. It claims to have a presence in 78 towns within these states. It launched high-value plans in April with FUP of up to 1 TB to help increase data usage on its network and to attract new users.

“Extreme competition hurt performance; might raise fresh funds”: Ortel

Ortel had recovered from the impact of demonetization and competition in the previous quarter, and added a marginal number of subscribers on both broadband and Cable in Q4 FY17. However, in the current quarter, both broadband and cable base has dropped. “This has been a challenging period for the company as intense competition in our core markets and new subscriber integration issues in new markets continued to impact our performance,” Bibhu Prasad Rath, CEO of Ortel Communications said in a statement

Ortel has also hinted on either raising fresh funds or consolidation to sustain its operations in the competitive market. “We are evaluating fund raise possibilities to bridge our short-term capital requirement, our focus in FY18 would be to consolidate the operations and improve the operational matrix which would result in notable cash flow generation,” Rath added.

Broadband highlights

  • Broadband Revenue: Rs 6.1 crore, down 25% YoY from Rs 7.1 crore.
  • Broadband ARPU stood at Rs 267 in Q1 FY18, a drop of 33% YoY from a peak of Rs 401 in the same quarter last year.
  • Data usage Per user per month stood at 23GB in the current quarter, up 28% QoQ from 18GB in Q4 FY17.
  • Distance covered in terms of broadband+cable network stood at 65,309 kms, up from 58,516 kms in the same quarter last year.

Financial Highlights

  • Overall Revenues: Rs 46.8 crore in Q1 FY18, down 10% YoY from Rs 51.2 crore in the same period last year.
  • Cable TV Revenues: Rs 37.1 crore, down 5.5% YoY from Rs 38.4 crore.
  • EBITDA (including other income) stood at Rs. 11.5 crore.
  • EBITDA Margin stood at 24.2%
  • Net Loss stood at Rs. 2.9 core in Q1FY18, compared to of Rs 10 lakh profit in the same period last year.

Download: Financials | Presentation 

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