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Ortel broadband revenue down 49.3% YoY, subscriber base down 17.6%

Multi system operator Ortel Communications said it had 65,262 broadband subscribers on its network during the quarter ended June, 2017 (Q1 FY18), down from 70,273 the previous quarter, and 73,087 at the end of the last financial year. The subscriber base is down 17.6% from 79,182 for the same quarter last year.

Ortel’s Cable TV base however, increased to 766,480 subscribers from 747,528 last quarter. Note that broadband users accounted for 8% of Ortel’s total total (broadband+cable TV) subscribers. This number was at 9.7% at the end of the financial year. Broadband contributes to 12% of Ortel’s revenues.

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, and has 61% of its subscribers in Odisha.

“Severe competition, collection shortfalls”

Bibhu Prasad Rath, CEO of Ortel Communications said in a statement that the performance was impacted by “severe competition in our core market, collections shortfalls, repayment of debt as well as integration issues among others. Financial year 2018 has been a difficult year for us on all the fronts and we are actively working towards restoring the business performance.”
“We have taken many firm steps to turnaround our performance over the last few months, and we expect operations to improve going forward. However, we will take one year to fully stabilize our business. In the near-term, our main effort is to improve cash collections, which will help us through this difficult phase of the Company. We remain committed to our B2C ‘last mile’ business model and believe it will help us through this tough operating environment.”

Around 89% of Ortel’s connections are B2C, and its franchise based B2B model, wherein they work with local cable operators, is facing major challenges.

Broadband highlights

  • Broadband Revenue: Rs 5.1 crores, down 16.4% from 6.1 crore last quarter, and 49.3% year on year from Rs 10 crores. Of the Rs 6.1 crores, Internet subscription fees contributed Rs 5.7 crores, and Rs 0.4 crores were for Internet connection fees.
  • Broadband Gross Margin: 51%. A year ago it was 74%.
  • Broadband ARPU stood at Rs 223, down from 16.4% from Rs 267 in Q1 FY18. It was Rs 401 in the same quarter last year, so that’s a drop of 45% YoY.
  • Data usage Per user per month stood at 18GB, down 21.7% from 23GB in the last quarter. It’s marginally more than the 17 GB reported for the same quarter last year.
  • Distance covered in terms of broadband+cable network stood at 65,377 kms, up from 61,988 kms in the same quarter last year.

Download: Financials and Presentation

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