With NTO implementation done, GTPL Hathway to focus on broadband biz in FY20

MUMBAI: Cable TV and broadband player GTPL Hathway will shift its focus to the broadband business now that the implementation of the Telecom Regulatory Authority of India (TRAI) new tariff order (NTO) is behind it.

In FY19, GTPL Hathway added 1.1 million new Home Pass to take the total Home Pass to 2.42 million. It also increased its net subscriber base by 45,000 to end the fiscal with 0.33 million subscribers.

“For the last 6 months as the NTO implementation was going on, the focus was not totally on the broadband business. We are back on our strategy now and our focus is now fully on broadband on Capex side, on infrastructure building, on customer acquisition and geography and we are expecting that whatever we were not able to planned to achieve in last 6 months we are going to achieve that,” GTPL Hathway head- video business and chief strategy office Piyush Pankaj told analysts during Q4 earnings call conference.

Pankaj also stated that the company has set a target of reaching 3 million Home Pass in FY20 out of the market potential of 5-5.5 million Home Pass. Of the 3 million Home Pass, the company hopes to convert 20% of homes into potential broadband customers.

Queried about the partnership with Reliance Jio and how it will help the company, Pankaj said that the partners will try to exploit synergies. That said, GTPL Hathway is going ahead with its own broadband strategy.

GTPL’s goal is to convert all its cable households into FTTX households. The company has also relaunched its GTPL Giga HD service in Q3 FY19. GTPL Giga HD is a dual service package which combines cable and broadband services under a single package in the price range of Rs. 499 to Rs. 799.

“We have already launched our Giga HD in the third quarter of last year, but we have stopped that because of NTO. We are again going to launch our hybrid product and we are going to push for that. It requires marketing Capex or investments, we are ready to do that, and we have the cash flow capability,” Pankaj stated.

GTPL Hathway MD Anirudhsinhji Jadeja said that the company is targeting net broadband subscriber addition of 100,000 in FY20.

The company had deployed total Capex of Rs 155 crore in FY19 of Rs 51 crore was spent on broadband while rest went into the cable TV business. For FY20, the company is expecting the Capex deployment to be Rs 160 crore.

Talking about the NTO implementation and its impact, Pankaj said that the subscription revenue and the pay channel cost will increase. The full impact of the NTO will be visible by Q1 FY20 on the books.

“We are also still saying that because a lot of customers who have churned out or who have not activated the service, we are getting them back. So, the full effect can be redeemed by May end or June, that’s how the effect is going to be in our books. We are expecting that NTO is going to increase EBITDA and it is going to be positive for us as well as for the industry,” he stated.

Jadeja stated that 3-5% cable TV customers in auto-dunning will not come back, but those with second and third TV and some customers who have not reactivated the service because of exam period will come back. The company expects its customer base to be 7.1 to 7.2 million by June.

He also said that GTPL has not seen any local cable operator (LCO) churn during the NTO implementation. “Those who are with GTPL for 15-20 years are still there are.”

GTPL, Jadeja said, is also expanding into other markets. The implementation of NTO has removed area demarcations. MSOs can enter any territory in India. “So we are planning to consolidate small players also as they are facing a lot of issues because of the new NTO. It is a good opportunity for us,” he stated.

The company sees a good opportunity in Maharashtra, Gujarat, West Bengal, Andhra Pradesh, Telangana, Assam, Bihar, Jharkhand, and Rajasthan.

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