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GTPL Hathway Ltd
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Ladies and gentlemen, good day, and welcome to the GTPL Hathway Q1 FY '23 Earnings Conference Call hosted by Emkay Global Financial Services. [Operator Instructions]. Please note that this conference is being recorded. I now hand over the conference to Mr. Pulkit Chawla of Emkay Global Financial Services. Thank you, and over to you, sir.
Thank you, Michel. A very good evening, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today, Mr. Anirudhsinh Jadeja, Promoter and Managing Director; Mr. Rajan Gupta, Chairman, and Non-Executive Director; Mr. Piyush Pankaj, Business Head, CATV and Chief Strategy Officer; and Mr. Anil Bothra, Chief Financial Officer. I shall now hand over the call to the management for the opening remarks. Over to you, gentleman.
Thank you, Pulkit Chawla. Thank you -- Good evening, everyone. I welcome you to all our quarter 1 FY '23 year-end conference call. At the outset, I would like to express my gratitude to our stakeholders for being part of this growth journey. GTPL Hathway has begun financial year '23 on a positive note with constant performance in digital capability and robust growth in broadband subscription revenue and ACB. We continue to explore our opportunity to expand our footprint throughout India and consolidate our presence in existing markets by leveraging our digital infrastructure and capability and building on the trust of customers by providing them enhanced service and product quality. With that, I hand over to Mr. Piyush Pankaj, who will take you through the business and financial aspects of the company.
Thank you, Mr. Jadeja. Good evening, everyone. I hope all of you are safe and healthy. I'm pleased to announce the business and financial performance of GTPL Hathway, the largest MSO in India. GTPL Hathway is consistently profit-making digital cable TV and broadband company in India, creating value for its stakeholders over the past 6 years with the growth of digital cable TV subscribers by 2.3x and broadband subscriber base by 4.8x. We are a dividend-paying company from last 6 years and maintaining our net debt-free status. Our ranking in Dun & Bradstreet in their top 500 companies for 2022 as per net profit has improved by 60 places to number 354 as compared to the 2021 listing. Our CATV active subscriber base as on 30th June 2022 stands at 8.4 million and paying subscribers at 7.8 million. On Y-o-Y basis, the increase in active and paying CATV subscribers is 400k and 500k, respectively. GTPL will continue to look at inorganic opportunities to augment its presence in existing and new markets. In the broadband business, we added 155k net subscribers on a Y-o-Y basis and 29k net subscribers in a Q-o-Q basis. Homepass stood at 4.85 million as on 30th June 2022, an addition of 750k Y-o-Y. ARPU stood at INR 450. The average data consumption per customer stands as 250 GB per month per customer, an increase of 17% from last year.
Moving on to the financial performance on a consolidated level, excluding EPC contract, in quarter one FY '23, revenue grew by 10% Y-o-Y to INR 6,454 million. The CATV subscription revenue stood at INR 2,727 million, up by 3% Y-o-Y. The broadband segment delivered robust growth of 24% Y-o-Y and the revenue stands at INR 1,139 million, led by healthy subscriber additions. Consolidated EBITDA for the quarter stood at INR 1,354 million with a margin of 21%. EBITDA witnessed a marginal decrease Y-o-Y on account of depleting deferred activation revenue and one-time non-recurring expenses due to change in the quality for provisions. PAT for the quarter stood at INR 433 million. On a stand-alone basis, excluding EPC contract during quarter one FY '23, the company's revenue grew by 9% Y-o-Y to INR 4,079 million. The company reported EBITDA of INR 753 million and PAT of INR 274 million. Thank you, everyone, for your attention. We can now begin with a question-and-answer session.
[Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question to assembles. The first question is from the line of [ Amitabh ] from Sera Capital.
Am I audible?
Yes, sir. You are audible. Please go ahead.
I have only 1 or 2 questions. My first question is that why your broadband number of subscribers are not increasing? I mean in this quarter also, we have seen 29,000 only. My original hypothesis was that if we have 8.4 million, that is 84 lakh cable TV subscribers and by changing the set-top box to hybrid and digital set-top boxes so we can convert most of them to broadband. So effectively, our quarterly numbers would be much, much higher. Now in the last year, in successive conference call, I heard that the management was telling that because of COVID, we could not do those tie-ups and all those stuff. But now that the tie-ups are happening, the JVs are happening, meaning local JVs , et cetera. So why these numbers are not increasing?
Yes, [ Amitabh ], first time will take on the broadband side than on the hybrid box side. So in the broadband, if I go for the gross additions, the gross additions are still increasing. We are seeing that this quarter also the broader gross additions is more than what we have did in last quarter or last quarter. Yes, as you know, the COVID has ended. The people who have adopted for the work from home or education from home, they all are going back to the offices and schools. So we have seen some of the -- those customers who are shifting and they're closing. Means, some of the customers are shifting to their main base for the work. Some are shifting as the schools have started. Those things have affected in this quarter, which we have seen that the cost addition has increased, but the net addition is still at the same range as we were doing it in the last 2 quarters. But we are very hopeful that as you know that broadband is a nascent industry and a lot of potentials are there, which we are doing, and we are hopeful and we are confident that the numbers additions will increase as it was in earlier term and as we have -- what we are expecting in the projections on that period.
Coming to your other question that the [ optimality ] that we have introduced hybrid box, we have so much cable home. And those homes should convert into broadband, you're right on that. We have started our -- as you know, that we are doing the B2C mainly in Gujarat and 6 other cities, and we are adopting to the B2B conversions for the broadband also to expand our footprint. That business has taken off very well. And a lot of signing has already happened, which you will start seeing the numbers coming in quarter 2, quarter 3, and quarter 4. So we are confident that the numbers will increase in the coming quarters.
Any guidance on that? I mean, for example, about 29,000 will become a lack in quarters, per quarter, something like that, you're having some projections?
[ Amitabh ], I can't give the future growth level and all on this call. But yes, we are expecting that the growth will be there. The good growth will be there. Yes, I can't give you the exact number or that projection from this call. We can connect to one to one and we can do something on that.
My last question would be that you had some problem you are facing on the hybrid box level, especially when you are changing the channels et cetera, the delays, et cetera. So that -- all those things have been sorted out now?
Those all things have been sorted out. That's one of the factors for delaying our launch by around 1.5 months, but all those factors have been sorted out and now the response and the quality and everything is very good. Customers are happy with the performance.
Okay.
This is Rajan Gupta here. I request you should meet this gentleman separately and also make sure key there are no misunderstanding there on the hybrid box ability to convert the consumer from a cable to broadband consumer? There seems to be some conceptual understanding gaps let's make sure that is clear. Otherwise, next call, also same thing will happen. So there is absolutely no connection of launching hybrid box with the increase in broadband customers or any automatic increase in broadband customer. So please make sure the network understanding is there.
Just to clarify once again, hybrid box is the box that converts your non-smart TV into a smart TV, and it gives the capability in the box of giving the CATV and OTT together as a combo. It can work on any broadband, whether it is GTPL broadband or any other third-party broadband. This box is -- will work on that. Just to give the clarity.
Yes, that I understand, but thank you for clarifying anyway.
The next question is from the line of [ Shailendra M from Veda Financials ].
First of all, I want to congratulate you for sustaining the performance. So on a Y-o-Y basis, the performance looks quite encouraging. But on a quarter-to-quarter basis, it's kind of flat. So that's okay. I'm happy to note that you have -- you are optimistic about growing in the near future. So I just wanted to understand what is the response to this the GTPL JV new set-top box and how -- so forget about the broadband part, how will it help you to convert some of the standard cable customers into this? And then there is a second question, which is when your depreciation numbers are quite high. So these are real depreciations or their accelerated depreciation? So there are 2 questions.
Yes. So just to give you thank you, [ Shailendra ]. You are right that quarter 4 to quarter 1 is flat. And if you see from a Y-o-Y basis, the growth is there. As you know that as we have appointed Deloitte as statutory auditors of the company, the provision policy has been made consistent with intermediate group and the business streams and onetime provisions have been taken in quarter one 2023, which is part of other operating admin selling expenses. That's why you're seeing the flat results in the quarter in comparison to Q2. See, on the...
How much are those provisions? Can you please say, which we may not expect any futures? What -- how much is the quantum...
Yes, it's around INR 5 crores, which is there. Total, which we are not expecting in the future.
So on the JV box, the initial customer response is very favorable. And we have seen surging hybrid STBs inquiries. Being the new product, the initial response and consumer capability is moderate, and that is owing to validity packs of 6 and 12 months. And given all the major OTT apps, we are giving 15 apps as an offering. As many customers have already subscribed to some of the apps, we get got the feedback that they want to go for hybrid upon completion of their existing subscription period. So based on the market feedback, we would be coming up with lower validity packs and introduce small bundles of OTT packs to capture larger customer demands better. Further, we also plan to offer the OTT bundles to our broadband customers and to existing cable TV customers in their regular subscription plan. This would enable us to expand our horizon in terms of customer base or OTT offerings and customer stickiness. During the quarter, we have seen it around 5,000 hybrid STBs till date and we are looking forward that as we will make it more attractive for the consumer in the coming days, the more adoption will happen towards the digital JV boxes.
On the accelerated depreciation. So [ Shailendra ], can you repeat the last question on the accelerated depreciation, if you can.
So just wanted to understand your depreciation is quite high. So is it basically the set-top box whatever you're providing free of costs, you are depreciating that -- so what is the policy and -- can we add that depreciation back to the cash flow? Is it a noncash item or it's actually a real depreciation, it has to be written off? I needed to understand that.
As you know, that we have procured our hybrid boxes last year only, but the capitalization of those boxes have started in this quarter. And that is the way. So already the cash, you can see that the cash has not happened. It is more of accounting policies, but the depreciation has started coming from this quarter.
Okay. So these are basically your set-top boxes you are depreciating, right?
That's right.
So how much do you spend annually -- let's say, quarterly on set-top boxes?
As we have given in earlier call also that the total CapEx for the -- we are looking forward for around INR 450 crores in next financial year. And out of that, right now, we did spend around INR 86 crores, INR 46 crores in the broadband and INR 44 crores is attributable to the cable TV currently. On cable TV, I will say around 90% CapEx goes into the set-top boxes.
Okay. So it's approximately INR 35 crores, INR 39 crores, or something like that on set-top boxes.
Yes.
That's for a quarter.
Yes, that's for a quarter.
And how much -- over how many years do you depreciate the set-top boxes?
It's the depreciation policy, which is going on from long, it is 8 years.
8 years. And is it -- so approximately 12.5% straight-line basis or it is written down value method.
So this is on a straight line basis.
Okay.
The next question is from the line of [ Arjun Shah ], an individual investor.
Congratulations on a good quarter. So I just wanted to talk a little bit about LCO that is being rolling out -- that's going to be rolled out soon. So I think the industry generally, particularly the broadcasters have been quite pessimistic about the whole thing. I think our team has been quite optimistic. So is it because of the revenue split between the LCOs broadcast changing? Or what is the nature behind the optimism, is what I am trying to get a piece of?
Rajan sir, will you take this question, please.
Piyush can you repeat the question, please?
He is talking about the implementation on NTO and what is going to be -- how is this going to be fuel for us or LCOs or broadcasters and what are the split and how we look forward on this on NTO.
So essentially, as of now, I think controls are still taking shape. So I don't think so we are into the implementation phase. The current deadline is for December for implementation. And I think as of now, we are neutral about that, okay? So as of now, we are neutral and wherever possible, any ARPU increase opportunity, we are trying. But from an NTO perspective, as of now, we are neutral.
Okay. Fair enough. And I just wanted -- I think there were questions about this as well, on the cable TV front, we saw margins shrinking a bit this quarter. Is that something we expect to continue in the future? Or it also has got to do with [ aviation ] and I assume that other factors as well, I think [ that ] provision. Is there anything else that we should keep the eye on?
Arjun, I always -- I will retreat myself that whenever you've seen the cable business margin, you have to make the pay channel and the current and placement income. On that basis, if you see the margins, we are at the same margin. We have not reduced on the margin side. Yes, as you know, that as the pay channel increases, your placement and my current income also increases. And on that basis, my denominator increases. The net -- if you do the net of that, you will find that our margins are safe. And we are expecting that from here onwards, the margin will improve -- margins should improve.
The next question is from the line of Hardik Jain from ISJ Securities.
So like the question was asked before also, I want to repeat it. So we have around 30,000, we added around 29,000 broadband customers this quarter. But I don't want you to give us a guidance, but if you can share us, what is your aspiration? How many customers? How are you preparing the organization, how many customers as an organization you want to reach in broadband, say, in the next 3 years from, say, 8 lakh odd numbers today? Do we see ourselves reaching 15 lakh, 20 lakh customers in the next 3 to 4 years?
Yes, Hardik, we are -- as you know, that from last 5 years when we did the IPO, we are at around 200k, and we have grown around 4x in the last 5 years. We want to do the additions on the same level or increased level of that. And that's the endeavor on which company is working. This quarter, we have maintained that, as I already explained that the gross additions are happening, gross additions are increasing. If we are seeing that the gross additions are increasing, that's very encouraging for the management and for the company as we will see that where I have to adopt or you have to get out of the adoption that's already happened as the situations are...
And what would have been the gross addition, sir, this quarter?
It's close to around 76,000 quarter.
That's nice.
Yes. So that's why we are hopeful or we are confident that the additions from that will be on the same trend as we are doing from last 3 to 4 years.
And out of the 76,000, if you can bifurcate say, Gujarat and non-Gujarat in this?
So 90% Gujarat.
90% will be Gujarat. Okay. And sir, one of our main cost item is bandwidth cost that we have to purchase bandwidth. So I just wanted to understand, please pardon me for my ignorance. So whom do we purchase this bandwidth from typically?
So all telecom, like, I'd say like Vodafone, [ LAN Series ].
And as our scale increases, do we have the benefit of scale in the sense that the per unit cost of this bandwidth decreases for us as we grow in size or it doesn't matter?
Rajan, sir, can you take this?
Yes. Essentially, I'll also put some light on the first question you asked gentleman. So in terms of growth potential, et cetera, okay? So broadband consumer number growth is directly linked to home pass growth, okay? Typically, what we are seeing in a competitive market, 40% penetration of home pass is what we are able to get, in an urban area because opened typically you have 3 players competing and 60% of the market typically is subscribing to broadband. So you're able to take one-third. Okay? So typically, 20% is what we are able to take in a macro kind of in market. Of course, in rural and semi-urban markets, penetrations are lower, but your market share is higher. So essentially 20% to home pass is what you are able to get it -- okay? So as we keep on investing in more and more home passes, like Gujarat itself, for example, there's no reason why Gujarat can't be 2 billion mark itself for GTPL. I mean we have done a project also some time back, which means that up to every panchayat fiber is there, okay? Only issue is that, the whole home path has to be created.
Right.
Fiber is a trunk line, which is available, okay? But then home pass in consumer home has to be created. Okay? I think this quarter, we have done 1.5 lakhs home pass, Piyush, if I'm correct. And so we had to add more home passes, okay? And then -- but from a long-term perspective, as you mentioned, from their perspective, Gujrat itself can be a 2 million market with the way broadband demand in second-level cities and third-level cities are increasing. And essentially, they are working model at a very low ARPU of 450 itself. There is a very healthy EBITDA greater than 40% we can deliver. So essentially, model is a very workable model. You will appreciate even the INR 450 ARPU even in a semi-urban area or at C-level town affordability is there. We are talking about QTS kind of high-speed broadband unlimited data at that kind of price point with a very profitable proposition. So it's a matter of how we have to see how much cash flow we have and how much we can roll it out. So that's the whole endeavor, which management team is trying.
Coming to bandwidth, of course, then your scalability with scale increasing in, bandwidth cost can come down to as low as 8% to 10%. There are companies where bandwidth costs their scale is reaching to as low as 8% to 10% of the revenue.
The next question is from the line of Parth Kotak from Alpha Plus Capital.
So I have a couple of questions, and please -- I would be sorry if I'm repeating one of the questions. So CATV revenue, as we've seen, the paying subscribers have increased and subscription revenue would have increased. But I think our average revenue per customer on the digital cable business would have gone down. One, is that the right reading? And why is it so?
You're talking about the ARPU?
Yes, that's correct. ARPU on the digital cable business.
Yes. ARPU in the digital cable business in this quarter, we have seen around INR 1, it has come down because of some of -- you can say the market which reduced in the higher side and got it to the lower ARPU side, but that will be get corrected within a quarter to 2-quarters time.
Perfect. And it would be helpful?
Mr. Parth Kotak, you are not audible. Can you please repeat your question?
Yes, is this better?
Yes. Please proceed.
My question was if you could give -- throw some light on your performance in newer geographies.
Newer geographies. We have entered into Madhya Pradesh. We have entered into the north-east markets, Tamil Nadu, on this, and another 4, 5 markets we have entered and there, the progress is very well. Already in Tamil Nadu, we are ranking 0.5 million. In north-east also, we have entered into Manipur and Tripura and all, where already the numbers are increasing at a very good rate. Same is happening in the MP, and we are looking forward that we will return to new geographies in the coming quarters.
That is very encouraging, sir. Sir, my last question is our revenue for -- from EPC contract is 0, do we expect it to remain for the coming years? Or how do we see it?
Yes. EPC contract, this is a onetime contract which we did for GFGNL which is BharatNet project. -- We are O&M, the operation and maintenance of that network is still continuing, which is coming in as an operating revenue in our books. And it's a general business because it is a final year contract, which is shared with the Gujarat government, GFGNL. We are looking forward for this type of project as we have developed those capability, and we want to cash those capabilities. So we are looking for the Bharat Net type of projects in other states. And plus, we are looking forward for some other government projects, small or bigger in Gujrat and smaller state also, other states also.
The next question is from the line of [ Riya ] from Aequitas Investment.
This is Pratiksha here. So my first question is on cable TV. You mentioned that our gross addition was 76,000. So how much of this would be basically a migration to Genie? And how much of this is inorganic growth? If you could give those numbers?
Hi, Pratiksha, 76,000 gross addition is in the broadband, which we have mentioned.
Okay. Okay. So what about...
We have already given that we have seeded around 5,000 hybrid boxes in this quarter.
Okay, 5,000 in this quarter. Okay. And do we have any other inorganic growth on cable TV sir? Gross basis?
Those are in the pipeline that will come into the next or next quarter, -- quarter.
Okay. I think for this quarter, right?
Nothing for this quarter. Okay, and the ARPU in cable TV for this quarter would be? It's close to around INR 119.
Okay. So typically, if you started deploying Genie, we would have expected our ARPU to go up because the unit economics are better than our normal set boxes, so when can we expect to show in the numbers?
Yes, yes. It will go up with the time Pratiksha. We are looking forward for that. And that's why in the last question, I'd say that all the corrections in the ARPU side also will happen in quarter 2, quarter 3 at that time.
Okay. Okay. And on the CapEx front, so we have said the guidance for this year was INR 180-odd crores for cable TV and this is more or less similar to last year. So are we seeing any inflationary pressures and cost pressures on a set-top box costing? And does that mean that we, on a number of unit spaces, we'll have lesser set-top boxes this year? Or how do I look at that?
No, no, no, no cost pressure on the set-top box side. Whatever pressure was there in last year because of the ship availability. Now no pressure is there.
Okay. And if you could just elaborate a little bit upon the churn that we are experiencing for the company as well as industry like what kind of churn ratios are you paying?
As explained earlier that the cable TV business has witnessed increased churn during COVID. After COVID, we have observed that there is a marginal arrest in the churn, but the same is still higher compared to the recoveries.
Okay. Okay. All right.
[Operator Instructions] The next question is from the line of Bhupendra Tiwary from ICICI Direct.
Good afternoon sir. Thank you for the opportunity of asking the question. I hope I'm audible. So my question is more on the long-term perspective. If we look at the last 2 years, subscription revenues, they've been flattish at INR 1,050 to INR 1,050, 1,070-odd crore...
I'm sorry to interrupt Mr. Bhupendra. I would request you to use your handset while asking your question. Your voice is...
Sure. Is this better?
It's much better.
Yes, sure. So my question is largely on the fact that if you look at the overall subscription revenues in last from 2021, '22, it has been flattish at INR 1,050 crores, INR 1070-odd crores. Even if I look at the absolute EBITDA of the cable segment, that has been flattish -- the heavy lifting of the EBITDA has been done by the broadband incremental of INR 100-odd crores in the last 2 years from '20 to '22. And during this period itself, we have seen that we have turned from #2 MSO to #1 MSO, which kind of reflects that industry itself has not done great. So what I would ask you is, for the next 3 years, how would you see this growth structure playing out? What segment will do the heavy lifting? We have also expanded to new cities, but the kind of transmission that you would have seen -- we should have expected to see in the subscription revenues or the absolute EBITDA of the cable that has not been very, very encouraging. So how would this segment play out for the next 3 to 5 years? I'm not looking for per se numbers, but some direction on how do you see this segment doing going ahead in the medium term?
So I'll just give it on the revenue and EBITDA side. And then I think I will ask Rajan sir also to put the light on those what we can do for 3 years and all. See, last 3 years, if you see on the EBITDA, mainly the EBITDA has impacted due to the activation revenue, the activation revenue, which used to have INR 125 crores, INR 130 crores, which was because of the deferred revenue on there. And the deferred revenue file is coming down. As you know, that when India started in 2015, we have to do the default of activation for 5 years. And after MTO, as we have been allowed to do activation, some activation upfront. So that deferred revenue has gone down. If you see this quarter also or from the last year also and from the last to last year also, mainly the impact, which is there is that EBITDA is there because of the activation revenue. If you take out the activation revenue, you will see that, that EBITDA has grown and the margins have grown and everything has happened on that way. So I will request back to you do the analysis on that basis, then you will get the correct picture on how the subscription revenue contribution is towards the EBITDA.
Now coming to the subscription revenue since the last 3 years, if you see, there is a growth -- good growth in the subscription revenue also, which has happened. Last 2 quarters, you can see that we are going -- the growth is around quarter-over-quarter is 2%, 3%, but we are expecting it to be get corrected as now is the time to go for the inorganic growth for the company, anyways we are doing all these in turn organic way. And we are looking forward that the revenue growth will start happening as it was happening around 2 years back, on that basis before COVID I can say. So that's it on the debt. Next 3 years, Rajan sir, you want to take that one? That how you are looking forward to the sector for the both cable and the broadband? Spanning out?
Sure, Piyush. So I think given a good perspective in the last 2 years. So essentially, I think the task is clearly cut out for us. While there are industry serious headwinds. But I think the task is now pretty much clear cut. The A, we have to go back to a consolidation journey with the consolidated industry, okay? Still there are more than 1,000 MSOs and -- which obviously includes a lot of competition, it's not very healthy from a market structure perspective. So that task is very clear cut whether organic or inorganic, we have a consolidated industry, okay? And finally, I think last 2 years, because of COVID-led, pandemic-led circumstances. Of course, so what distress was there in market specially at the bottom of pyramid and which is where a lot of our cable bases are there. So we couldn't increase ARPU. So I think tastes very clear cut for the management team that we have to now start focusing back on ARPU with the pandemic behind us. So I think both the levers, A, use our leadership in many markets to increase ARPU and finally, keep on consolidating market through both organic and inorganic. So that's the direction I see for ourselves for 3 years.
But one thing that we've been saying that the low-hanging fruit for the cable segment was taking higher share from those cable LCOs. So that has not played out. And I think we've been waiting for a long time. I think that is one thing which once converted could have kind of added the EBITDA and also set the background for the future also. So that is something that one is waiting as an investor and as an analyst, that is how I would say.
No, that's fair now. I mean I think the point is pretty much well taken, which is where I said the whole ARPU increase. Even from an LCR perspective because have lost their base in pandemic and which is where their existence kind of become questionable. In that situation, management team on it tough to increase ARPU. But with the pandemic behind us now, it is the right time.
The next question is from the line of Sanket from Kedia Securities.
Am I audible?
Yes, Sanket.
Firstly, sorry for repeating the question. I just wanted a little bit clarification on my understanding. What would be the defense in between the gross addition and related vision as you mentioned? And how do the [ embedded numbers ] benefit the company, if you can throw some light around it.
Yes. So gross additions is the new sales, new customers, which we are bringing into your network, which is a gross sale. And we calculate net on the basis that the existing customer who is turning out from your system, that has to be netted out, and that's the growth we show as net additions.
I'm sorry, Mr. Sanket, we cannot hear you. There is a disturbance from your line. Could you please repeat?
Just wanted to understand, you had mentioned or that we should back increase in the home passes as one of the key metrics to evaluate the company going forward? So how would that be material for us?
Yes. So -- for increasing the subscriber base, you have to meet the capabilities, which is the home pass. The home pass is that you can serve those customers within 24 to 48 hours if the demand is there. So it's like one building is 100 homes, I have made the home pass on that building. This means I can serve those 100 customers within 24 hours and provide the connections. So that's the way you create the home pass, which is the capability creation for the company. On that category creation, when you convert them into your connected customers.
And on the numbers side, just wanted to understand there has been a substantial increase in the other expenses if we look at the P&L, which is more than the quarter-on-quarter revenue growth. So where have we majorly spent on the other expenses?
So on the other expenses, if you look at the other operating income are also increasing. And consequently, their expenses are appearing in the other operating and administration selling expenses. So if you take the O&M cost, which is almost around INR 37 million, and there is one time actually the impact of the provision for doubtful net, which we have adopted ELC provision on the placement receivables, that is actually appearing in other operating expenses.
[Operator Instructions] The next question is from the line of Shailendra from Veda Financials.
This is a follow-up question. I wanted to know -- kind of follow-up to your previous comments. In terms of inorganic growth, what kind of acquisitions you have done in last quarter, if any? And what is the pipeline looking like for next 1 or 2 quarters. Last quarter, as I say that there is no inorganic in the last quarter. The pipeline is long. We are looking forward that quarter 2, quarter 3, quarter 4, we will start within a lot of inorganic numbers also, apart from the organic numbers. So we are very confident and hopeful that those inorganic deals will happen, and it will start reflecting the numbers.
So just wanted to check the acquisitions are attractive from our company's perspective, but is it also an attractive proposition from the seller's point of view?
Yes, as you know that anybody will sell only when it is attractive to that person. And there is a consistent, you can say, arrangement with them also on that basis so that they will be in the industry only. That's the way we make the deal.
The next question is from the line of Keshav from [ Rakson Invest ].
Sir, I have questions on bandwidth. So do the costs have escalation clauses and how often are they related?
Can you repeat that one or 2 words was not audible?
Yes. So on the bandwidth cost, do we -- are there escalation clauses? As in are they related per annum or...
The [ churn ] side or on the cost side?
Yes, cost side, cost side.
As you know that we are always saying that our bandwidth will become commodity with the time and the prices will go down. So we negotiate hard with our vendors. And we usually get the discounts on what the rates are currently. So that's the way we are doing it from the last 2 to 3 years, and we endeavor to continue on that way.
Okay. So just pardon me for my ignorance, but I just wanted to understand how bandwidth is charged. So is it on a consumption basis? Or is it bundled like, for instance, you have home passes increasing ex conversion. But if you say we see an increase in conversions, does the bandwidth cost also go yearly up as in per user basis?
No, it is -- see, the bandwidth utilization is dependent on the increase in the subscriber base and their bandwidth utilization and all. But yes, we do the deals with our vendors in such a way that the -- a percentage of revenue, revenue percentage, it should go down on such a way. So that's the way we do the deals with the bandwidth providers that with one customer, we get more markets, with the customer increases.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you all for joining the earnings call of GTPL Hathway for quarter one FY '23. And we look forward to talk to you for the next year -- next quarter results for quarter 2 FY '23. Be safe and healthy. Take care.
On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.