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

Mr. N Kumar · Chairman & Independent Director – Indus Towers Limited

L64201 HR2006PLC073821 I Email: compliance officer@industowers com I www.industowers.com Final Transcript

Transcript of Indus Towers Limited First Quarter Ended June 30,

Corporate Call Participants · Mr. Pranav Kshatriya

Mr. Pranav Kshatriya

Edelweiss Securities · Mr. Kunal Vora

Mr. Kunal Vora

BNP Paribas · Mr. Vivekanand Subbaraman

Mr. Vivekanand Subbaraman

Ambit Capital · Mr. Arun Prasath

Mr. Arun Prasath

Spark Capital · Mr. Manish Ostwal

Mr. Manish Ostwal

Nirmal Bang · Mr. Praful Kumar

Mr. Praful Kumar

Dymon Asia Capital · Mr. Varun Ahuja

Mr. Varun Ahuja

Credit Suisse · Mr. Ankit Patel

Mr. Ankit Patel

L&T Mutual Fund · PRESENTATION

PRESENTATION Rajyita– Moderator - Bharti Airtel Limited Good afternoon, ladies and gentlemen.

I am Rajyita, the moderator for this conference.

Welcome to the Indus Towers Limited’s first quarter ended June 30, 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 are the Chairman and Independent Director of Indus Towers, Mr. N Kumar along with 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 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. N Kumar.

Thank you and over to you Mr. Kumar!

N Kumar - Chairman & Independent Director – Indus Towers Limited Thank you Rajyita and good afternoon and a warm welcome to each one of you to the earnings call of Indus Towers for the quarter ended June 30, 2022.

It is my pleasure to speak to you as this is the first time I have joined you all over the earnings call of Indus Towers.

As you are all aware, the industry is at a watershed moment with the imminent rollout of the 5G services in the country.

As one of the largest passive telecom infrastructure players, we are well equipped to cater to this demand and support our customers

for their rollouts. · Management

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Questions and answers

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Transcript of Indus Towers Limited First Quarter Ended June 30, 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 - reiterate what Bimal said that the receipt of payment from the customer remains challenging in the short term.

The customer has proposed a payment plan wherein they have conveyed the ability to pay part of the billed amount till December 2022 and 100% thereafter along with clearance in a phased manner between January 2023 and July 2023 of the old dues that would accumulate till December 2022.

We are engaged with the customer to work out a better payment plan, hence we expect to see gradual improvement in our trade receivables position that we will continue to monitor very closely.

In summary, we had a mixed quarter wherein our financials reflect the stress placed on them by the collection issues from one of our major customers.

We are hopeful of navigating our way through this situation given the long-term growth story of the telecom infrastructure space remains robust.

I would now like to hand over the call back to Bimal.

Bimal Dayal - Chief Executive Officer - Indus Towers Limited Thank you Vikas and I am happy to take questions, so over to you Rajyita!

Ms. Rajyita - Moderator Thank you very much Sir!

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

The first question comes from Mr. Pranav Kshatriya from Edelweiss Securities, Mumbai.

Mr. Kshatriya you may ask your question now.

Pranav Kshatriya - Edelweiss Securities - Mumbai Thanks for the opportunity.

My first question is regarding the impact of MSA renegotiation, you talked about decline in the revenue because of this.

Can you quantify how much will be the impact in terms of the rent per tenancy compared to the previous quarter of course adjusted for that Rs 5.5 billion one off which was there?

That is my first question and secondly how should we see the financial impact of no exit charges for 9% of the tenancy because.

I assume that they would want to execute basically it is churned out higher tenancy.

Will that have revenue implications, or it will have other cost implications because you might have to close certain towers because of that, so how should we see this impacting revenue/profitability?

Those are my two questions.

Bimal Dayal - Chief Executive Officer – Indus Towers Limited Thank you, Pranav.

I will take the second one first on this 9% and the impact thereof.

I think if you actually look at over a period of 10 to 12 years there has been a lot of let us say scope for optimization, which has been built in into whatever we end up doing, so this could be the landlord rental, this could be energy cost, etc., and I think over this period there is some amount of towers, which let us say we would like to exit or let us say jointly between our customers and us we would certainly like to work upon those costs as well.

However, I think this number in reality would be much, much lower than 9%.

This is more flexibility, which is existing with the customers and us.

I think there are certain incentives, which let us say the customers have wherein the costs are higher, and this actually puts a very good pressure on towerco like us to bring those costs down for some amount of such towers and we are working with the customers.

Now we certainly would like to give you a colour as to impact of this 9% and since we have kind of closed these MSAs very recently, I think in coming quarters we would certainly give you the colour as to whether this would be 1% or sub 1% or any other number, so just watch this space.

From a distance I can only say that no operator would like to change their grid because it impacts the customers, end customers and customer satisfaction for the end customers and more importantly it costs a good amount of money to shift these towers as well, hence once you take the incentive to move these towers out which is the higher cost I think we will be able to settle for a much higher number than 91%, which as I said as story develops we would share the impact.

On MSA maybe Vikas you could take us through on the impact.

Vikas Poddar – Chief Financial Officer – Indus Towers Limited Yes, sure.

Hi, Pranav.

Thanks for the question on MSA.

I think as far as the impact of the competitive prices in terms that we spoke about that would be on an average roughly about Rs.500 per tenancy and that would translate to roughly Rs.900 per tower on an overall average basis.

Pranav Kshatriya - Edelweiss Securities - Mumbai This you are adjusting for this lease equalization or that will not have material impact because of that?

Vikas Poddar – Chief Financial Officer – Indus Towers Limited So as far as the lean towers are concerned this is the first time we have started reporting as you can see, I am sorry I did not get the question, could you repeat the question, Pranav?

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