Bharti Airtel Limited (532454) Earnings Call Transcript

Good afternoon, everyone. Warm welcome to Bharti Airtel Limited Third Quarter Ended December 2021 Earnings Webinar. I must remind you that discussions today may include certain forward-looking statements that must be viewed with the risks we may face. Present on this call is senior leadership team of at Bharti Airtel. [Operator Instructions] With this, I would like to hand over to Mr. Gopal Vittal, MD and CEO, India and South Asia, for opening remarks. Thank you, Gopal.

Thank you. Thank you, Rajiv. Good afternoon, ladies and gentlemen. Thank you for joining this webinar to discuss our results for the quarter ended 31st December 2021. Also present with me on this webinar are Soumen, our new CFO; Harjeet Kohli; and Rajiv Sharma. As you know, the government announced seminal reforms in September last year. These have really infused confidence in the industry. As far as we are concerned, we've chosen the moratorium on spectrum and AGR dues rather than equity conversion of interest on these deals. In addition, as part of our commitment to financial prudence, we have decided to prepay the high-cost spectrum debt liability of over INR 15,000 crores. This has allowed us to clear deferred liabilities for the spectrum acquired in 2014. This will also save us interest and enhance cash flows. While the reforms are game-changing, more needs to be done, and we look forward to the next round of measures planned by the government. In particular, the high levies on the industry need rationalization. Equally, the reserve prices for 5G spectrum must be lowered so that it is viable for us to purchase spectrum. An important event this quarter has been the strengthening of the partnership with Google with a commitment to invest up to USD 1 billion through a combination of USD 700 million of equity and up to USD 300 million in creating a corpus to drive mutually agreed commercial objectives. As a part of the first commercial agreement, both companies will work to scale Airtel's offerings across 3 areas of device, cloud and networks. I do want to underscore through this investment a very strong validation of Airtel's role in being a leading pioneer of India's digital revolution. Our third event in this quarter was the successful conclusion of the Airtel VSAT business with Hughes to become the largest VSAT company in India. Let me now turn to our performance for the quarter. Overall, this has been another quarter of solid execution for Airtel that has seen broad-based growth across the entire portfolio. Our consolidated revenues for the quarter grew by 5.4% sequentially to get to INR 29,867 crores, and our EBITDA margins improved by 40 basis points over the last quarter from 49.5% to 49.9%. Let me briefly touch on each of our businesses. In our broadband business, we are seeing very healthy customer additions driven by the increased demand of fiber to the home. We have now hit a milestone of going past the 4 million customer homes mark. Sequential growth has been strong at 11.8% this quarter. Our very innovative, Uber-like digital model with the local cable operator as a partner as also the acceleration in the rollout of our own fiber in the top 100 cities are the pivots around which our home broadband strategy revolves. Our overall presence has now expanded to 672 towns and has enabled us to add 1.1 million home passes in the quarter. We believe fiber to the home is a massive opportunity for us. We will continue to step up investments to take our network to 2,000 towns across India with 35 million home passes in the next 3 years. In the DTH business, we have a presence in 18 million homes with an ARPU of INR 146. We've recently changed the box pricing and reduced channel commissions. These are expected to move the industry towards a more sensible business model by lowering the gross additions in the category while focusing on net additions. That said, free dish continues to disrupt the business model as good content continues to be offered for free in vast swathes of the country. At the same time, the irony is that the opportunity to convert and upgrade from cable is massive. There's also a huge opportunity to monetize OTT content and deliver a unified connected experience through Airtel XStream. To address this, we've developed a compelling proposition for customers, which will be launched in February. Let me now turn to Airtel Business. Airtel Business clocked another quarter with double-digit year-on-year revenue growth, with revenues touching INR 4,106 crores, up 13.4% year-on-year. We continue to outperform our peers and expand market share. We have a solid portfolio for services spanning connectivity, cybersecurity, data centers, IoT and CPaaS. In each of these areas, we are now the leading player, and in security, we're already amongst the top 10. Our CPaaS business has again outperformed the market and grown at very strong double digits. Our strategy, as I've mentioned earlier, revolves around going both wide and deep: wide to tap into the 80% of customers who account for only 20% of our revenues and deep in the accounts we already have a solid presence in so that we can sell many more products and raise switching costs. Our emphasis on new product acceleration, therefore, continues. Now on to the mobile business. Mobile revenue has grown by 5.9% sequentially, driven largely by improved pricing and modest 4G upgrades. ARPU has risen to INR 163, an increase of almost INR 9. We're again at a lifetime high in terms of revenue market share of almost 37%, validating our strategy of winning with quality customers. Early signs of the tariff increase have been encouraging, and the full flow-through is expected to be felt in quarter 4. At the same time, we have seen some SIM consolidation, leading to some moderation in customer additions as customers make decisive choices in favor of their preferred brand. We expect this consolidation trend to correct from hereon. In the postpaid segment, we are seeing good momentum at 320,000 net adds as we drive our premiumization agenda with a significant retooling of our overall customer experience. As a consequence, we now have decisive leadership in this segment. We are very bullish on the future of the segment. In sum, we're seeing consistent growth across our overall portfolio. This applies across all our core businesses, homes, mobile and enterprise. Last quarter, I talked of the moats that we are building. Let me provide a little more texture to this. We've stopped thinking of our business as a telecom business but increasingly think of our business as a digital business end-to-end. At the core of our business is our digital infrastructure. Over these past 5 years, we've invested about $46 billion in creating the finest digital highway, over which 40% of India's economic and digital activity takes place. A large part of the heavy lifting in terms of access, be it wireless or wired, as also spectrum is done. Massive investments have been made in our transport infrastructure in both domestic fiber and international submarine cables. This is what allows us to be ready for 5G. Another very critical part of this digital infrastructure is data. We now have a massive data infrastructure, a layer that has actually cleaned, tagged and coded every one of our 350 million customers. Over 400 data scientists and engineers work on this to lend agility and intelligence for all of Airtel. Above this digital infrastructure layer sits our digital experience. This runs across every part of Airtel: our channels, our customer touchpoints, our network experience, our customer-facing applications, our go-to-market capabilities, our stores and even our delivery teams of insulation and [indiscernible] repair are all seen through one customer, One Airtel omnichannel view. Be it improving the experience, recommending an additional service, collecting payments or simply engaging, this digital layer enables all of this. Our organization structure also reflects this now. We have one mass retail channel that's responsible for all consumer categories, DTH, prepaid and bank. We have on direct-to-customer channel that serves over 1,600 catchments in urban India and is responsible for all consumer categories: postpaid, broadband, DTH and bank. We have one digital channel that serves all of Airtel's businesses. We have one home delivery organization that's responsible for all of Airtel serving the home, and we have one B2B channel that uses different levels of customer touch from direct to digital in serving all our large as well as smaller companies and businesses. It is through this digital experience that we're able to deliver the best experience for our customers, and this is really what allows us to win our premiumization agenda and have industry-leading ARPUs. It's the same digital experience that allows us to have low levels of churn and raise our switching costs for customers. The third layer is our digital enterprise business. This is a key moat for Airtel because our customers trust us with their data and want to work with us due to the respect they have for our governance and privacy. This is an intangible but priceless source of competitive advantage. The core of our enterprise digital offer is around connectivity, but this rides on the digital infrastructure that serves all Airtel businesses. We're #1 here, but what makes it really interesting is what rides on top of this. In cybersecurity, as I mentioned, we're already amongst the top 10 players. We're #1 in IoT. SD-WAN is another exciting business, software-defined wide area networks, and our recent announcement to acquire a significant stake in Lavelle to develop and build software-defined wide area networks will be an important driver of growth in this area. The fourth layer is digital banking. This has been a business that we've built silently. Today, Airtel Payments Bank has a customer base of 122 million with a monthly transacting user base of over 32 million users. We are decisively winning in small towns and rural areas on the back of our distribution advantages. However, this has -- this is a business that has infinite potential, and we are ratcheting up the growth of the digitally savvy user. We think of the opportunity here in the form of a funnel. At the base of the funnel are the 100 million Airtel Thanks users. We want to enable them with an Airtel UPI handle. At the next layer is our bank or wallet user who transact on the app. Onboarding this customer is being enabled across all our channels. This user is exceptionally valuable for a variety of reasons that include the number of transactions that they make as also the deposits they maintain. We're now firing up this proven tool kit to accelerate payments. We already have an annualized GMV of $20 billion and are the only profitable payments player in the fintech space. Our profitability comes from our biggest strength, the low cost of acquisition. The fifth and final layer is our digital services. We have now tested, proven and will scale 4 exciting new businesses, each of which are in very large and growing markets. Airtel IQ is our full suite of cloud communication solutions that spans voice, messaging, video streaming, call masking, virtual contact center solutions and ultimately even workforce management. This is a large INR 8,000 crore plus category that is exploding in terms of growth. Airtel Ads is our adtech platform that leverages all our digital assets. We have 135-plus brands and relationships with all large agencies. The solution here is a consent-based privacy-safe platform that serves one of the biggest pools of quality customers across multiple screens. We are further strengthening this platform by investing in blockchain capabilities and developing solutions that address privacy issues and potential regulations around them. Again, we're in a very large INR 12,000 crore category that's growing rapidly. Nxtra is our data center platform. That is already serving hundreds of customers and all hyperscalers. We've added 28 megawatts of capacity in just 1 quarter across 4 locations. Our capability in the cloud now allows us to partner the large tech companies on public cloud, help scale private cloud for entities at one data store in India and edge cloud that enables businesses to provide low latency experiences for customers at the point of consumption. Lastly, our digital marketplace. This marketplace, on the basis of partnerships for digital services, that's what it operates on. Our focus here is around content, loans and insurance. In the content area, we have 2 models: one is the extreme partnership, where we provide a single sign-on unified search, a catalog of compelling content and a great payments experience to our customers. We also have partnerships with the leading content players, such as Netflix, Amazon and Disney. In the lending area, we've now developed our own proprietary credit score and have commenced lending on our platform through partners. Our insurance partnerships are also seeing traction. With the 180 million-plus monthly active users on our platform through Airtel Thanks, Wynk and XStream, we believe we can build another meaningful revenue stream here around the digital marketplace. In sum, these 5 layers of digital infrastructure, digital experience, digital enterprise, digital banking and digital services is what the new Airtel is about. While we do this, we are passionate about fiscal prudence. We, therefore, remain focused on exercising tight control on OpEx through a multiyear War on Waste program. We're also disciplined on CapEx through tools that allows us to plan and sweat every single tower that we put up. Our balance sheet is strong, with an improved leverage ratio of 2.67. We expect the tariff hike and operating free cash flows to help further delever the balance sheet. Finally, a quick word on ESG. During the quarter, we constituted an ESG Committee made up of the Board of Directors to sharpen our focus on the ESG agenda and on creating value through sustainable business practices. We have an internal ESG Committee as well that comprises of management that meets on a far more frequent basis. We have now agreed a clear set of goals and initiatives in this area, which we will soon disclose. We also joined the Science-Based Target initiatives business ambition for 1.5 degrees Celsius campaign and adopted targets to significantly reduce our carbon footprint and emissions from network operations. We also became the first Indian telecom company to join the UN Global Compact while remaining aligned with the Paris Climate Accord and proactively implementing clean fuel-based power solutions for our towers, our data centers, our switching centers and other facilities. We remain committed to society, our customers and employees right through these harrowing times of the pandemic. We continue to demonstrate the highest standards of corporate, financial and operational disclosures. In sum, I would say that we've had a very eventful quarter: a much-needed tariff increase, the investment by Google, the merger of our VSAT business with Hughes and, above all, solid execution and sustained performance. Let me hand it back to Rajiv at this point.

Thank you very much, Gopal. We'll now open the floor for Q&A. Rajyita, you may open the Q&A session now.

[Operator Instructions] The first question comes from Mr. Piyush Choudhary.

This is Piyush from HSBC. Congratulations, Gopal and team, for strong execution. Two questions. Firstly, on the mobile side, you mentioned about the SIM consolidation, which is happening in the industry at the moment. Do you think this will still continue given the tariff hikes which have happened? And what do you think post like -- probably a quarter or so, where does subscriber growth settles down for the industry? That's the first one. Secondly, we have seen growth in ARPU this quarter, but EBITDA margin in the mobile business has not expanded. Any specific reason? And are there any structural costs over here? Or we should see EBITDA margin expanding going forward?

Yes. Thank you, Piyush. Let me take both. And if there's anything to add, then maybe Soumen can add on. On the SIM consolidation, yes, we did see significant SIM consolidation during the quarter that we've been through. But remember, the level of consolidation that we saw was much lower than what we saw in the first round of tariff increase that happened back in 2019. So we were almost flat in terms of overall customer additions. And I would say that in relative terms, I think we've come out quite well. January was a very cold month, and I think the pass-through of the SIM consolidation sort of continued. But I would expect that this will be fully moderated as we go through into February and March, and we should hopefully see business back as usual towards the end of this coming quarter and certainly into quarter 1. On the growth in ARPU, you're right. I think while there were -- the marginal EBITDA, I think, went up by around -- went to about 53% to 54%, in that ballpark. The fact is that we had headwinds in terms of network costs. We had substantial rollouts, capacity enhancements, rollout of sub gigahertz that happened in the first half of the year, in addition to some increases in channel commissions and sales incentives. And I think it was that combination that led to the marginal EBITDA being what it is. In our business, as you know, we do get operating leverage. So if you have revenue growth, then a significant part of that flows through to the EBITDA. And I don't see any reason why that should change in the coming quarters going forward.

Got it. And just to clarify here, the increase in channel commissions and sales incentives, are these sustaining? Or these are some kind of one-off promotions?

No. I think what's happened is that there is a slightly elevated level of channel commission that is happening for the last few months and perhaps last 4, 5 months, and that's continued. Is that totally out of whack? No, I wouldn't say so.

The next question comes from Mr. Sanjesh Jain.

Sanjesh Jain from ICICI Securities.

Sanjesh, you're not very audible. If you can just speak a little louder.

Is it good now?

Yes, it's perfect now.

Okay. First question on the 4G subscriber addition. So this is a quarter where we saw record smartphone sales in the Indian market. While the 4G addition for all the operators put together, it looks like fairly muted versus how the smartphone sales are happening. So what are we missing here? What is stopping the 2G to 4G transition, which has been fantastic for last 3 to 4 years? Why is this sudden deceleration? That's one question. And connected to that is the data usage per subscriber. Have been looking, it's been flattening at 17 to 19 GB a month across the operator, and it's hardly inching up. Does that mean that it's very hard for us to imagine a premiumization or the opportunity for the premiumization where the subscriber jump to a higher part is very limited from here? So this is my first question.

Yes, I think we saw about 3 million 4G net additions in the quarter. And if I just look at the device shipments, October smartphone shipments was 18 million, and November was 13 million. October is typically the Diwali kind of shipments. I don't think that, that has seen a commensurate flow-through into 4G net additions in the quarter. But mind you, Sanjesh, this quarter has been a quarter where tariffs have been increased. And as a consequence, I think there is a moderation in 4G net additions because of SIM consolidation also that's happened. So given this tariff increase, we still saw a 3 million increase in our 4G net additions. My sense is that this should moderate now going forward into quarter 4. And remember, the other point to make on the device shipments is that these shipments don't necessarily get into customers' hand because they're also part of the inventory cycle that happens within the trade. On the data usage, I think the GB per month is a function of the massive allowances that are still happening in the industry. I mean, today, for example, at a INR 299 plan on prepaid, you get 42 gigabytes in a 28-day period. So that's almost 43, 44 gigabytes a month. People are consuming 17, 18 gigabytes and perhaps not being able to completely use it. So this cannot continue to grow infinitely because at some point, people have to live their lives as well, right? They're already spending 4 hours a day just looking at the device. And in a way, it's a good thing if we are seeing a moderation of GB per month because then this has its beneficial CapEx implications. So I would be actually -- I'm glad to see that it's moderated now. The fact that there were massive allowances given has actually led to the GB per month rising in previous quarters, and that's now beginning to moderate. The overall data consumption growth in the quarter has been soft primarily because what you normally see during a lockdown -- you remember April, May, June, there was a lockdown, and then it sort of grew rapidly. During lockdown, you see massive growth and that moderates as people come back, schools open up and so on and so forth. So I wouldn't look too much into that part. I think the 4G net addition slowdown is a simple -- simply triggered by the tariff change that happened in the quarter. And I think that is expected to moderate as we go forward. The last point is on your premiumization question. I think this has no bearing. The data usage is no thing on premiumization because premiumization is really -- the drivers of premiumization is, one, the feature for the smartphone upgrade; second, the prepaid to postpaid upgrade; and the third is the postpaid to the entire home offer that we had through Airtel Black. I think that story is totally intact.

Fair enough, Gopal. Now I was looking at the premiumization where people exhaust their data and try to go for a higher GB consumption. I think that complete premiumization is missing in India, and I believe that there was a much larger opportunity for us.

That, Sanjesh, is a function of the pricing structure. If you had a more sensible price architecture in the country where, let's say, like it happens in many other countries, you look at Indonesia or China or any of these countries, for INR 100, you get x amount of data, which is, let's say, 2. But for INR 200, you get 5, and for INR 500, you get 10 and INR 1,000, you get 50. That drives the premiumization. Unfortunately, in India, the pricing structure is all compressed. So if you buy something for INR 299, you have everything that you need. That's the problem. So it's more a price architecture issue more than anything else.

Fair enough. Fair enough. My second question is on the free cash flow generation we have been doing. This quarter, the free cash flow, we have generated close to INR 43 billion after paying all the liability, which is a commendable number. And I think this will only grow as the benefit of the tariff flows in. I just wanted to understand the thought process on the utilization of this large free cash flow which is coming into the company. Will it be fair to assume that a majority of it will go into repaying the debt, particularly the high-cost debt? And if that is true, how should we see the finance cost, which was at INR 33.5 billion this quarter? We have paid a significant amount of high-cost debt, and we are generating free cash flow, and there is a return of a guarantee by the government. That should have a very large positive bearing. So if you can just direct us, say, a quarter or 2 down the line, how much we will settle this to from INR 33.5 billion of this quarter.

Okay. Maybe I'll invite Harjeet then Soumen to comment on this.

Yes. Sure. Thanks, Gopal. Sanjesh, I think -- your comment on the free cash flow is right. There is -- of course, Africa has been free cash flow positive. And from a segment perspective, they throw up the dividends to us occasionally every 3, 6 months. India is now free cash flow positive, EBITDA, less CapEx, less taxes and less the interest cost. That dominant portion of the free cash flow in the shorter term for sure is definitely going to pay down the debt. There is a good debt profile mix that we have, as you know, but the higher cost fixed rupee interest rate, DoT debt, bulk of which, as you mentioned, we paid off the 2014 installment at the end of December. There is opportunity now the government and the DoT has given us the flexibility to do what we can in terms of cash flow matching, prepaying when we wish to, et cetera, et cetera. So some of these free cash flows will go to replace some high-cost debt. The second portion of yours was on the interest costs. You're absolutely right. The guarantees that have been returned will save between, depending upon which guarantee it is, 0.5% to 1.2% of the guarantee commission. That goes into finance charges, and you see that in the interest cost line. So you will see savings there, and dominant portion of the savings will be of the 10% interest cost going down to maybe a weighted average 5%, 6%, 7%, depending upon the sources of finance. Last quarter, we used more than half of the sources of finance to be the right call that we have made. So not everything has been debt-financed. And the sum total of INR 15,000-odd crores that was paid out, plus the guarantee saves is, in the state of a mathematics, it's about INR 1,000 crores of interest cost saved per annum, a little over that, but that's what the current situation is. If we get more free cash flows, we have more opportunity to substitute, but we will be mindful of maturities. We will not short trade the maturity, mindful of making sure that we have significant market debt capacity continuing to be available and all sources of finance continuing to be diversified and on the table.

So will it be fair to assume that this INR 33.5 billion will inch towards INR 25 billion?

No, I'm talking about per annum sale. So you have to cut price.

Got it. Got it. Let me do that math, and I will get back to the team. Just the last bit to the Gopal. We have been very strong on the War on Waste, but this quarter and the last quarter as well, the network operating cost looks like it's been growing quite sharply. Can you explain what's driving that cost? So sharply, I understand there is addition to the network. But on a Y-o-Y basis, it is 8% to 9%, where the cost inflation is 17.5%.

Yes, I think that's a good question, Sanjesh. I think we are seeing, number one, is like an aggressive rollout in terms of sites, and they know that, that's one of the big components of actually increase in network costs. Second is loading charges because when you sort of deploy additional capacities, which we had to do with the rollout of sub gigahertz, that again is a headwind on cost. And the third headwind is really the rise in energy prices, both diesel, which has sort of increased quite sharply during the course of the last 6 months. So I think it's a combination of all of this. Suffice it to say that we are working on a very strong program along with our partners and the tower company. And we are looking at a whole bunch of things. We have used a lot of tools in our NOC. We have built some AI and ML tools to actually turn off power and energy on the fly. So these are being experiments that we're running. And these have proven some -- given us some good results. These will be rolled out into the coming quarters. Secondly, we are also looking at reducing the complexity on our networks in terms of switch-off of certain technologies if the capacities are not utilized during certain times of the day. So that's the second area that's being looked at. The third is a massive conversion from indoor to outdoor so that the energy consumption goes down. And the fourth area is also looking at renegotiation on rentals. This, of course, needs to be done in partnership with the tower companies. So all of these levers are being looked at. There is a very strong focus and a very strong program that's actually driving all of this. But yes, in the last few months, we have seen these headwinds, and that's hit us, yes.

The next question comes from Mr. Vivekanand Subbaraman.

This is Vivekanand from AMBIT Capital. Two questions. One is how quickly would you deploy the $300 million Google corpus that is targeted at upgrading 2G users to 4G? Do you think that after this tariff hike and your user base already now 62% on -- being on 4G, it might be a good idea to deploy this quickly? That's question one. Secondly, how do you think about price hikes in, let's say, calendar year '22? Now that we are seeing some same consolidation and certain digital ecosystem players like Meta Platforms, even they're commenting that their India user growth seems to be hurt by price hike. How to think about tariff hikes from hereon?

Yes. Thank you, Vivekanand. I think on the $300 million corpus with Google, like I mentioned in the last call, one of the big levers is really device upgradation, the second is networks, and the third is cloud. We are in partnership on the cloud space as well from a go-to-market perspective. But let me talk a little bit about devices. I think, for us, the big opportunity is the upgradation of feature phone to smartphone. We've developed certain several capabilities, software features that will enable us to actually lock a phone on the fly if an EMI is not based -- paid. So these are capabilities that we've developed. There are platforms that we're working with to actually lend into devices in order to bring the unit price of the device down. The second is that you can also give targeted discounts and cash backs into specific devices. So that's another area that we are looking at. We will be aggressive in actually driving upgradation. At the same time, we do it sensibly because as I've mentioned in the past, getting into a subsidy type of game is not a great idea in a market like India -- actually in any market. And in India, particularly the P&L, in any way, can't absorb it because network costs are so high. But having said that, we do see a significant increase in the ARPU when people move from feature phone to SaaS smartphones. So in the longer term, this upgradation is essential, and as a consequence, we will use part of this corpus as well as all our capabilities to drive this upgradation. On the price hikes, as I've mentioned before, we hope that the ARPU of the industry -- our ARPU gets to INR 200 soon, preferably in 2022 itself and then kind of settles soon after in the next few years to INR 300, which is really the modest and a good level of ARPU, which can then turn a return of capital of upwards of 15%, which is really a kind of return that should be a respectable return. We -- I do expect -- I mean this is now -- from my perspective, I do expect a tariff hike sometime in 2022. I don't think it's going to happen in the next few months, for the next 3 to 4 months, simply because the SIM consolidation and growth needs to come back, but I do expect another round of tariff increases. Of course, it's got to be determined by the competitive dynamic and by what happens in the -- to the other players. But we wouldn't hesitate to lead it just as we've done in the recent past.

One small follow-up on the tariff hike. So this time and last time also, it was a broad-based tariff increase across price points, right, across data -- across the data allowance limits. But when we look at, say, certain longer duration packs, they seem to be very, very aggressively priced vis-a-vis, say, the 28-day pack. Is there any thought process of having a bit more steeper curve in this versus what we have today in the longer duration pack?

Yes. I think that's -- I mean just that we just took up the tabs by around 20% across all our packs. And yes, there are maybe some slightly higher discounts on longer-duration packs. But then equally, you must recall -- you must remember that on the longer-duration packs -- so let me just pull back. On this -- the more compressed your recharge period, the more you actually can lose revenue. And that is because every customer does not necessarily recharge in the very next day that their validity expires. So it's actually good business to move people to a longer-duration pack because you lose -- you gain that incremental revenue in those days when otherwise you may not have recharged. And so there will be some discount on the longer-duration packs. In specific, if there are some packs that need to be adjusted, that's something that -- we keep looking at those changes, but at this point, we just moved everything up by 20%.

The next question comes from Mr. Pranav Kshatriya.

I have a couple of questions. First question is regarding this home passes. You plan to take it to 2,000 towns. So when we expanded the home pass to almost 600 cities and towns, it was done largely in collaboration with the cable operators. Should we expect the same model to continue? Or you expect to roll out your own home passes to a large extent? So that's my first question. Second question is on 5G. So how do you see 5G as an opportunity considering it will require significant investment and possibly also will help gain market share on the other side? And this is more from a timing perspective that how should we expect the 5G rollout to be. I mean, would it be more accelerated rollout as soon as the spectrum is available? Or it will possibly take time considering the 5G ecosystem is not available? So some qualitative statement there will be...

Okay. All right. Thank you. On the home passes, I think that we are -- in the top 100 cities, we have our own fiber, where we actually go direct. This is what we call our own model. And in the rest of the cities, we have this partnership with a local cable operator. And we are -- we will continue to roll out through the local cable operator because the pace of the rollout that they do and the fact that we continue to own the customer but we make sure that the quality of the experience is great actually lend itself very well to that model. So the cost of rollout is lower, the pace is higher, and given that we control the experience, actually, we are very, very satisfied with the -- with that model. On 5G, we expect...