INDUSTOWER — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Sub

Transcript of the Earnings Call for the quarter and year ended March 31, 2022 Dear Sir/ Madam, Please find attached the transcript of earnings call conducted on May 6, 2022 for the fourth quarter ended March 31, 2022.

Kindly take the same on records.

Thanking you, Final Transcript

CORPORATE CALL PARTICIPANTS · Mr. Sanjesh Jain

Mr. Sanjesh Jain

ICICI Securities, Mumbai · Mr. Pranav Kshatriya

Mr. Pranav Kshatriya

Edelweiss Securities, Mumbai · Mr. Peter Miliken

Mr. Peter Miliken

Deutsche Bank, Hong Kong · Ms. Falguni Dutta

Ms. Falguni Dutta Jet Age Securities Private Limited, Kolkata Mr. Viral Shah

Credit Suisse, Mumbai · Mr. Neerav Dalal

Mr. Neerav Dalal

Maybank Securities, Mumbai · Mr. Saurabh Handa

Mr. Saurabh Handa

Citigroup, Mumbai · Mr. Satinder Singh

Mr. Satinder Singh

Eon Investment, Chandigarh · PRESENTATION

PRESENTATION

Rajyita – Moderator · Good afternoon, ladies and gentlemen. I am Rajyita, the moderator for this conference. Welcome to the Indus Towers Limited

Good afternoon, ladies and gentlemen.

I am Rajyita, the moderator for this conference.

Welcome to the Indus Towers Limited Fourth Quarter Ended March 31, 2022 Earnings Call.

For the duration of the presentation, all participant lines will be in the listen- only mode.

After the presentation, the question-and-answer session will be conducted for all the participants on this call.

In case of a natural disaster, the conference call will be culminated post an announcement.

Present with us on the call today is the senior leadership team of Indus Towers, Mr. Bimal Dayal, MD & CEO, Mr. Vikas Poddar, CFO, and Mr. Dheeraj Agarwal, Head Investor

Relations. · Before I hand over the call, I must remind you that the overview and discussions today may include certain forward-looking

Before I hand over the call, I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face.

I now hand over the call to our first speaker of the day, Mr. Bimal Dayal.

Thank you, and over to you, Mr. Dayal!

Bimal Dayal – Chief Executive Officer – Indus Towers Limited Thank you Rajyita.

Good afternoon everyone, very warm welcome to each one of you.

Thank you for joining us on the Earnings Call of Indus Towers for the quarter and year-ended March 31, 2022.

Joining me today are my colleagues Mr. Vikas Poddar - CFO and Mr. Dheeraj Agarwal - Head Investor Relations.

Let me start by taking each one of you briefly back in time.

Well, most of you would remember that when we started the year, we were amidst the grip of the delta variant of COVID.

There were colleagues and families that were impacted and despite this, true to our values, our field force maintained and also grew the network throughout the quarters, and I am very proud of this fact and very proud of our field force.

Final Transcript

Questions and answers

System · Call Header

Transcript of Indus Towers Limited Fourth Quarter Ended March 31, 2022 Earnings Conference Call Republished with permission.

No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Bharti Airtel Limited. - 5 - Rajyita - Moderator Thank you very much sir.

We will now begin the question-and-answer interactive session for all the participants who are connected to the audio conference service from Airtel.

Due to time constraint, we would request if you could limit the number of questions to two to enable more participation, hence management will take only two questions per participant to ensure maximum participation.

Participants who wish to ask questions may please press “*” “1” on their touchdown enabled telephone keypad.

On pressing “*” “1” participants’ will get a chance to present their questions on a first in line basis.

To ask a question Participant may please press “*” “1” now.

The first question comes from Mr. Vivekanand Subbaraman from Ambit Capital, Mumbai.

Mr. Subbaraman you may ask your question now.

The next question comes from Mr. Sanjesh Jain from ICICI Securities – Mumbai.

Mr. Jain you may ask your question now.

Sanjesh Jain - ICICI Securities - Mumbai Thank you.

Good afternoon.

Couple of questions; first on the MSA side renewal; can you help us understand now that we have changed the tariff for one customer.

What will be the impact on ARPT because we have mentioned that we have gone for a competitive pricing that also indicates that we have taken some cut in the rentals going forward?

What kind of impact that will have on the blended ARPT?

That is number one.

Number two where does it lead us to, because in 2016 we made a significant change in the way we price the rentals.

We introduced the rate card which had two intention one to bring all the operators on the same rental plan.

Number two, the renewals in the future become very smooth and it is just a roll forward is what we were thinking.

Now that we have corrected the prices for one customer hence the rate card becomes an irrelevant factor.

So, what we have done an exercise over last five years, now how is it going to help going forward with the new changes that we are implementing in the tariff plan?

Bimal Dayal – Chief Executive Officer– Indus Towers Limited Thanks Sanjesh, and I will take this question.

Let me start by your second question first where you mentioned what we did in 2016.

Look at it from the prevailing conditions when we were operating let us say five years back or six years back to now.

I think we should start to look at it from even the customer’s perspective and I think we did complete the 10 years of this MSA with almost a flawless performance both from tower companies and from our customers.

I think when we did this in 2016 the situation of the operators and I think even the tower companies was way different.

I am not even commenting on that structurally we have made any big difference within this newer framework handshake.

What I would like to tell you at the moment is that we are in negotiation with one customer and we have closed the framework with the other.

Another significant thing maybe you have picked up or not, is that as an infrastructure company, it is vital for us to secure these contracts for long-term and we did mention that we have secured this for another period of 10 years.

We have always been hinting about creating a win-win for both customers and us, and we do believe that what we have secured is in favor of both our customers and for us.

What I would like to also table that since we are in active negotiations with the second customer, revealing the impact on ARPT at this moment will not be in favor of the negotiations itself and I think we would defer in giving any kind of guidance on what kind of discounts we ended up giving or what would be the framework.

We are a company believing in disclosures as well and we have always come and given you the picture transparently, but I believe this time we are amidst this negotiation.

I hate to comment on when we would close the negotiation, the moment it is done we would certainly come back with the kind of disclosures on the possible impacts.

Only thing I can say is where I stand as the CEO of this Company looking at running this for next decade, I think this is a great win-win which we have secured.

Until we pitch up the second customer as well, please hold this for now.

Sanjesh Jain – ICICI Securities - Mumbai Fair enough Sir.

Just one follow-up on that, you also mentioned in your opening remarks that this is a win-win situation wherein customer is talking of expanding the network.

Can you give us some understanding as per your discussion or the closing of the MSA, what does the tenancy and the tower growth look like over next two to three years?

Do you think there will be a material acceleration in the tenancy and tower expansion by this customer because this quarter looks like a kind of tapering down or a significant deceleration in the growth by the customer because one of the large customers has been talking about completion of a 4G capex for them which also is showing up in the number.

Now how should we look at the tower and tenancy growth in the backdrop that we have closed the negotiation?

Bimal Dayal – Chief Executive Officer– Indus Towers Limited Look Sanjesh first I will talk about the generic growth here and also comment on the quarter numbers as well.

I have been saying this in the past as well and now I have evidence to support what I am saying.

I think the first point which we need to keep in mind is the so-called parity between the operators has still not been achieved and I think those numbers are still known.

There is an operator A who is ahead of others, operator B will do the catching up, operator C will catch up with operator B, and I think there is that inherent growth in our business which is certainly yet to happen.

It is no rocket science here.

You guys can do your intelligent calculations; this is fairly simple.

So this is one business as usual growth which I do believe is still on the table as well.

With the data growth coming in, I see no reason why cell splitting and adding more number of sites will not come to the table.

I did mention that small cells and the leaner sites, where there is a great amount of traction which we are seeing and sensing and please remember Final Transcript