Indus Towers Ltd
NSE:INDUSTOWER
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Indus Towers Ltd
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Good afternoon, ladies and gentlemen. I'm Kamaldeep, the moderator for this conference. Welcome to the Bharti Infratel Limited Third Quarter Ended December 31, 2018, Earnings Call. [Operator Instructions]. Present with us on the call today is the senior leadership team of Bharti Infratel Limited. 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. Akhil Gupta. Thank you, and over to you Mr. Gupta.
Thank you. Thank you all for joining us today. The Indian telecom industry, as you know, has undergone unprecedented consolidation in the last year driven by a heightened competitive intensity following the entry of the new operator. With the completion of Vodafone-Idea merger, we believe that the consolidation phase is now largely behind us and so are the co-location exits that we have been witnessing. Between Indus and Infratel, there were exits of over 57,000 on a consolidated basis till 31 December 2018 spread over 6 quarters on account of various mergers and acquisitions. We believe that the industry will now move forward with higher network rollouts to cater to a better 4G user experience and we are already witnessing early signs of this with an increased demand of both new tasks and co-locations from all operators. On a consolidated basis, gross star and co-location additions in this quarter, I'm pleased to report, were the highest in the last 5 quarters. Following our announcement and disclosures last quarter regarding the exit charges, I'm also pleased to report that all these exit charges with Airtel, Tatas, Telenor and Voda-Idea have been settled for all the major exits that were received up to 30th November. As a snapshot, on a consolidated basis, of the total exit charges of approximately INR 20 billion, which related to about INR 37 billion on a 100% basis, we have had a cash settlement against INR 20 billion of INR 11 billion, that is more than 50%, and extension of 2x in rental revenues for the balance amounting to approximately at least INR 18 billion. For the cash settlement, we have received INR 550 million in cash and for the balance INR 10.7 billion, we have agreed to equated monthly installments over 36-month period with interest. In line with our accounting policy, the amount of INR 550 million has been accounted for as revenue for this quarter. The EMIs amounting to approximately INR 900 million per quarter shall be accounted for from next quarter as the revenues for the next 12 quarters. This is important to highlight that despite such major exits the company's financial performance has been quite stable with revenues flat on a year-to-year basis, EBITDA, of course, declined by 6%, but PAT and operating free cash flow are both up 11% and 13%, respectively, on year-to-year basis. I would also like to point out that the return on equity pretax improved from 24.7% to 27.4% year-on-year and on a posttax basis improved from 14.6% to 16.4% on Y-on-Y basis. An interesting development, which we have been witnessing, is on 5G, which by all accounts seems to be evolving faster than was anticipated earlier. I'm sure that the Mobile World Congress in Barcelona next month will give an in-depth view of the progress being made globally. Needless to say that beyond 4G, which, of course, itself requires very significant rollouts, 5G that will follow will not only ensure continued growth but would also open up many more opportunities like fiber, Wi-Fi, et cetera, for infrastructure companies like ours. Let me give you a quick update on the merger process of Indus Towers. Currently, we are in the process of getting approvals from shareholders of Indus for which the court-convened meetings are scheduled on 2nd of February. Subject to approval by majority or minority shareholders, we expect the closure in April to June quarter, barring, of course, any unusual delays at NCLT or DoT. To conclude, we see a sizable opportunity for infrastructure providers like us to create robust and scalable networks of tomorrow that go beyond the traditional macro towers. We believe that we are best positioned given our large nationwide footprint, very strong balance sheet and proven and reliable high quality of service on complete non-discriminatory basis to our customers. We would be pleased to take your questions now. Thank you.
[Operator Instructions] The first question comes from Mr. Manish Adukia from Goldman Sachs, Mumbai.
Two questions. First, just on the pick-up in gross tenancy, which you saw this quarter and has been an accelerating trend, is that a broad-based trend in terms of almost all operators rolling out? Or is that led by just 1 operator in particular? And what's your outlook for that over the next couple of quarters? Second, just a few clarifications on the exit penalties that you talked about. If you can just clarify on the noncash settlement part and how exactly that is going to work. And this quarter also you saw a few exits, so are these just residual exits from Vodafone and Idea? And are more of those likely to come in the next few quarters?
So Manish, Rawat DS. Firstly, on the pick-up of gross numbers, they are across the board. Of course, I can't give specific numbers yet, but we do see 4G focus from all the leading players. And they continue to do rollouts and that's where some of that translates into new billed and some of that coming in as additional co-locations in our case. There has been a steady increase from Quarter 1 to Quarter 2 and then from there on to Quarter 3 on the gross ads that we looked at. The second question about the noncash component, as Akhil mentioned in the call in the beginning, the understanding is to see that 2x of the residual revenue comes in as extension of the contracts by a period of 5 years, corresponding to that value. So whatever sites that come up for renewal under those buckets will be extended for a period of 5 years, translating into a revenue of 2x of the Delta amount that's in reference there. About your questions on exit, yes, there were exits. I, again, cannot give specific numbers and operator-specific details there, but there was exits that have been reported even during the quarter. Do I expect them going forward? We have seen them already taper down in terms of number. The bulk is pretty much played out. Small amount of business-related exits that come up, that will continue in business as usual, where operators are trying to optimize their network and expand and regrow. That is part of standard growth. We see that continuing to happen across the board too. And it will -- we believe will continue, but the numbers will be significantly smaller than what we've seen in the past.
Right. And just a quick clarification there. I mean, you mentioned that this exit amount, this accounts for all of the exits that have happened till 30th November, this is gross amount and beyond 30th November what will happen will come in the future -- or you could talk about that in the future, right?
Yes, please.
The next question comes from Mr. Kunal Vora from BNP Paribas, Mumbai.
First one, can you explain the difference between INR 37 billion, which you mentioned, and INR 20 billion, why was the amount settled at a lower level? And on the same lines, the INR 18 billion, which the exiting operators are committing to, is it new business or is it extension of just the existing contracts? That's question 1. If you can answer that, I'll go to the next one.
The INR 37 billion is the number at 100% level.
Okay. Okay. Okay. So why was it settled at a lower level?
INR 20 billion was the number at 42% level.
Okay. Okay. Okay. INR 20 billion is the 42% level. Okay, understood. The second question, sir, yes, okay. On -- is it new business...
It's the extension of the current existing tenancies.
Extension of the current existing tenancies. Okay. Okay. Okay. No, like, new business commitment from the exiting contracts?
That's already there. We do have those commitments already from them.
Sure, okay. Second question, maintenance CapEx has come up a lot. Can you explain that, like what's driving this decline? And how should we see it going forward? Because earlier, we used to look at, like, a number of INR 60,000, INR 70,000 per month, et cetera. Or those matrix seem to have changed a lot. So if you can explain how we should be looking at maintenance CapEx?
This is Bala here. Generally, the maintenance CapEx during this Q3 is simply little seasonal in nature. And you should see this in the light of the past guidance, it is essentially in trend and you should -- maybe you should keep it at the same level. I don't think you need to see any increase in anything or new fresh guidance.
So just to add, Rawat DS. Maintenance CapEx has to be seen on a full-year basis. There are seasonalities. We run projects before summer starts in or before rainy season starts in because there are specific circles, where there is specific CapEx needs, which have to be done before the season kicks in. Snow is probably a case in point now for areas where there is snowfall going on currently. So there are preparatory work and you do see this trending to be a little cyclical in that sense going into areas, but you have to still see it on a full-year basis. Also, there has been certain optimization on account of exits too that has been happening on sites. So we've kind of redeployed some of the assets in the locations, which have come out on account of exits in -- of the co-locations that have happened.
Sure. Sure. So should we...
Sorry, just to add, with increasing improvement on electricity, we hope that this CapEx will trend downwards in the long run.
Sure. Sure. So we should be looking at like a declining trend in maintenance CapEx Or at best flattish and no further increase from the levels which we are at right now? Is that understanding right?
Yes.
Okay. Okay. And final question on -- is there any revenue contribution from Smart Cities? And how shall we look at any revenue or operating cost for Smart Cities in fiscal '20?
In the current revenue, nothing. We will have, but it's a very small number in the larger numbers that we are trying to look across here. The Smart Cities are just getting into a launch mode right now. So the revenues for the current year could barely be anything that would be visible in this kind of a P&L.
The next question comes from Mr. Sunil Tirumalai from Crédit Suisse, Mumbai.
Just going back to the extensions, which are part of the exit package. Just to understand correctly if there are 2 operators on a tower who merged, collapsed into 1 tenancy, that particular tower they have committed that, if the MSA was to expire, let's say, 6 years from now, it will get extended automatically by another 5 years with all escalations and base rate everything intact. Is that correct?
Sunil, firstly, the settlement is not tower-specific about future business. So the first part of the settlement of exit amount computation is on the current rates on the sites that have been exited. So it is not about either consolidation or anything because the different operators have had different situation on exits. So it is an exit computation as per the master service agreement that was computed and the numbers that we referred earlier are the numbers that had come out as per that. The settlement, however, on extension is again not tower-specific. Whichever tenancies are coming up before -- in the next couple of years for renewal, operators have a sure thing that those many x number of tenancies that will translate into a value over 5 years of 2x of the Delta revenues what has been agreed. Now, specifics of that are still being worked out on site-specific basis on sites which would be extended by the operator as part of this understanding.
Is this different from the disclosure in the presentation end of December that these extensions would happen? Or is this -- this is different from that?
So at a broad level, yes, it was the same. I think what we've said in the last call was that we will look at opportunities of either new business or extension of existing business. I think it falls in that category itself.
Okay, got it. Second question is on the rental sharing revenue per tenant per operator. The way you reported now, would that include the exit charges or not?
Bala here. It will include the exit charges.
So that's a mathematical calculation.
Right. So if we remove the INR 550 million for the quarter...
That would be the ongoing figure. But then as I mentioned, INR 900 million every quarter will be coming on account of EMIs.
Yes, I understood. So if I knock off INR 550 million, it still shows a sharp 5%, 5.5% quarter-on-quarter jump on the consoled numbers. It's surprisingly a large number even if you account for loading increases or increase in the rentals for remaining tenants, et cetera. I just wanted to understand how -- is there any one-off or timing issues of exits and coming in of new tenancies? Or is that the sustainable number for the base?
So Bala here. I think other than the one-off, which we already removed it, I think you should see it as a sustainable number coming out of new businesses and new tenancies, which are coming through.
Okay, got it. And sorry, one last question. The energy margin seemed to be in a quite strong at least on our calculation and I think in Infratel, it came to 15% plus for the quarter and 9%, 10% in Indus. Unusually high. I mean it's way out of your guided range. What do we make of it? I mean, is it a one-off again? Or what drove this kind of high margins?
Bala here. I think in the past, we have repeatedly said that you should see the energy margin on an annualized basis because there are seasonal impacts, which is coming here, and Q3 is generally a season where there is a lower consumption of diesel and higher energy availability. So you should stay with the guidance, which was earlier given, which is in the range of 5% to 8% on the margin side full-year basis.
The next question comes from Mr. Pranav Kshatriya from Edelweiss, Mumbai.
Can you please help us understand, so INR 900 million will be the revenue, which will be booked in every quarter and for next 36 months? Is that how we should pick it? Or the -- so that's my first question. And secondly, how do you see entry of Reliance Jio? They are also talking about sharing their towers and their fiber. So what's your take on that? And do you think that it has a potential to impact the growth in the tenancies given, one more operator -- strong tower operators could be there with possibly fiber back on this?
So the first question, the answer is, yes. INR 900 million is the kind of revenue for the next 12 quarters that's going to come in. Your second question on Jio, a little premature to right now comment on Jio, which is also our large customer today. They are already hiring off, and the commentary that's available in the public domain is available with you. So we'll have to wait and watch as to how this plays out. As on date, I'm not aware of any master service agreements that they have or sharing arrangements that they have with various operators today. Can they do it going forward? They could look at certain opportunities there depending on what percentage of their towers are shareable and where they would be keen to share this with now 3 strong competing operators only being available in the market. So we'll have to wait and watch how this plays out. Early for us to make comments on that.
The next question comes from Mr. Vivekanand Subbaraman from Ambit Capital, Mumbai.
Just one question. Why are you calling out contract renewals as a settlement in lieu of site exits? Weren't we expecting these customers to renew their tenancies anyway? Please help me understand how should one look at the contract renewals on those towers as a settlement per se.
Well, expectation and certainty are obviously 2 different things. I would much rather have that certainty that on for INR 1800 crores of revenue, there is an absolute certainty now.
Okay, but then in any case, you outlined in the analyst meet also that you expected, I mean in the -- as part of the new contract, 1/3 of your revenue, or 1/3 of the sites needed to be rolled over by the customers, Vodafone-Idea and Airtel. And that was anyway on the cards. So why are you positioning this as a settlement? I'm still not clear on that.
Because I'm saying, if anybody has a choice of renewing or not renewing and you can secure that renewal from -- at our company point of view, it is obviously certainly a positive outcome of the settlement.
The next question comes from Mr. Himanshu Shah from HDFC Securities, Mumbai.
Sir, just wanted to check Voda-Idea had alluded in their presentation and analyst meet, they may look for additional tenancy exit. So the settlement that we have done, does that include for even the -- is -- first of all, is there any potential -- any exit -- additional exit that has taken place that alluded a number of 22,000 to 27,000?
So to your first question, again, we don't want to give operator-specific numbers but there were exits in the current quarter that we have stated there in our numbers that we have declared on a consolidated basis. But on your next question of whether there is -- second question was on?
The balance 22,000.
So balance 22,000, I think that's for the operator. The way they're going here and planning, the first part of what we've declared right now is for all the exits that were given up to the end of August. So that's the settlement that we've referred to so far -- till up to November, sorry. I stand corrected. So till November, all the exits that have come in have been settled as part of the settlement. Anything beyond November will again carry up on a fresh round of discussion.
Okay. Okay. And sir, secondly, in our presentation, we had highlighted that post merger there will be an improvement in EPS depending upon the structure that may take place. Just want to understand -- because earlier, we were understanding it would be more of a cash flow item, savings on dividend distribution tax. So how will it lead to an EPS improvement from P&L perspective?
So today the dividend distribution charge is charged into the P&L, right, and tomorrow when we round and merge the basis, this charge is essentially going away and it goes into an appropriation when we pay out to shareholders. So essentially, it will be accretive in terms of the EPS.
Okay. So it will be a reduction in tax out book?
Yes, that's right.
That's right.
The next question comes from Mr. Srinivas Rao from Deutsche Bank, Singapore.
First question I had, Indus profitability has kind of trended down a bit more over the last couple of quarters compared to Infratel at least from the way the numbers are reported. Could you help, is that any particular reason for that? Is the impact of the operator exits has been more on them compared to standalone, what you call, Infratel? Secondly, again, I mean I -- maybe I'm asking it again, but if you can help us understand how the rental revenues per tenant has gone up quite materially this quarter than adjusting for the penalty. Is that loading is what has helped? That would be helpful. Finally, just want to understand, you in your merger presentation also indicated that net debt-to-EBITDA targets are obviously much larger than what would it will be at inception. Would it be fair to say you will actively look at buying fiber assets from that operator?
So let me take up the last one first. I think on fiber, it's a little premature because the operators, that's Airtel, Vodafone, Idea, they are still in the process of demerging that asset and we haven't heard finally what their combined plan would be. We would be open as a Tower Co., but whether there will be a transaction on that, obviously, cannot be said at this stage.
Bala here. On the Indus profitability is definitely I think the volume of churn which their lost tenancies definitely have and that's clearly the main reason for why the decline in the -- you see the difference on their EBITDA performance. On the [ ARPT ] other than the one-time revenue, rest is all an ongoing business. There are nothing, which is -- other than exit charges, sorry, not the one-time, it's the exit charges, everything is related to the normal, you should see it as regular business through which it has come.
So Srinivas, we have said in the past that as tenancy ratio kind of goes down, this number also tends to go up besides, of course, the operational performance that is there, most of it is actually coming out of the fact that the number of co-locations have also come down and there were exits and that's also amounting to an increase on average revenue. But visibly you can see that average revenue per tower had also come down on those areas. And that's why you see that shift. As mentioned by Bala, I think other than the INR 55 crores, there's nothing more that is there on that which is exception or one-time.
Understood. Just if I can clarify or maybe I'm asking it -- repeating it, 2 questions. Your rent has -- there's the absolute rent, which you pay, has come off this quarter. It has been trending down even though your number of towers have generally been stable. So is it -- you're able to negotiate better rental agreements? Or what's happening there? Secondly is on the comment which is there in your quarterly report that x number of exit notices have been received, I think 2,540. But there are other than the 2,744 where you have received notices, but not -- exits have not happened. What's the significance of that? What should we make out of this particular statement?
Bala here. On your first question on the rent reduction, definitely post the tenancy exits, we have gone back to the landlords to renegotiate rents and that's where I think you're seeing the rental reduction. Our excavations are not really large. So as I said, it is -- you have to see it as a tenancy reductions consequently, there is a renegotiation of landlord rental. As far as the second question.
On the numbers that you said 2,540, these are the same set of numbers. There are on a consolidated basis exits, which are around 2,500. OpEx revenue continues to be there. These are coming to us more at the end of the quarter. So while they are still continuing as tenancies, these numbers have been taken into the number reporting that we do based on the notices from operators.
So just to clarify, sir, your reported tenancies include the exits, but the revenue is still accruing from those tenancies. Is that correct what I'm saying?
For this quarter, yes.
For this quarter, that's the case, right?
That's correct.
Is that would -- that would also be...
Could also contribute a bit to the revenue per tower, yes.
The next question comes from Mr. Sanjesh Jain from ICICI Securities, Mumbai.
I probably have missed on this INR 18 billion of incremental revenue we are seeking. Have we mentioned the time frame in which we are looking at this revenue coming in as 2x of the revenue because INR 36 billion will come in what time frame of period?
So the INR 18 billion was the cash component, which will be paid over 36 months on a 100% basis.
No, that was INR 11 billion -- okay.
No, no. Cash component is INR 11 billion.
Cash component is INR 11 billion, for INR 9 billion we are getting INR 18 billion of revenue. Now this INR 18 billion will come...
This is over -- an extension over 5 years.
This is expected to come over next 5 years. Is that the right understanding?
Yes.
Beyond the date when they were expiring.
Now this is cumulative of the 5 years or this is per annum INR 18 billion of revenue are we seeking?
Cumulative.
[Operator Instructions] The next question comes from Mr. Sanjay Chawla from JM Financial, Mumbai.
I missed on the earlier portion of the call. I just wanted clarity on this INR 553 million amount. You said INR 900 million is what is expected in a quarter as an installment for the next 12 quarters. On what basis INR 553 million has been worked out for the last quarter?
So INR 550 million was the exit amount for the exit settlements that we've done until a certain date, which we have received as cash money and has been accounted for in this quarter as per our accounting policy to recognize this. So that is the number that [ INR 55 million ] on a consoled level that's been mentioned in the current quarter. Going forward in terms of run rate, the expectation is of INR 900 million, which is INR 90 crores every quarter, which is the EMI portion or equated installment over the next 3 years that we're going to continue on that. And then there is a third component, which is coming on account of extension of the contracts, which will be for a period of 5 years compensating for 2x the revenue that's left off of the exit amount.
So INR 553 million pertains to the 30th November cut-off date prior to that, is that the?
Before that, yes, before that.
Okay. Okay. And this INR 900 million, you said this is in the nature of a installment that includes interest as well. So what is the rate at which the interest is embedded in this?
Interest is at the rate of 7%.
Okay. Okay. And lastly, just a question on the balance sheet. Your receivables have gone up quite sharply in this quarter. So is it one-off or structural? And how soon could it normalize?
This is Bala here. This is more of a timing issue. This money has been subsequently collected in the month of January.
So this has already come back, come down?
Yes.
Okay. Okay. And there is an item called other financial assets also, this has also gone up by INR 400 crores. What is the nature of this item? And why this has gone up by INR 400 crores in this quarter?
So there are 2 parts to the receivables. One is the billed receivable, the trade receivable which you see in the balance sheet is essentially the billed receivable. The other non-financial assets as per the accounting requires to be classified -- unbilled portion would be classified as per other financial. So essentially, there's a certain pending unbilled, which has not been converted into commercial billing that has gone up. And those are also being collected.
So we need to add these 2 to look at the receivable -- overall receivable level?
Yes.
We have a follow-up question from Mr. Srinivas Rao from Deutsche Bank, Singapore.
This one question I had. Is now all the towers or is it fair to say the majority of towers are now on the rate card model, which means all the operators would be at a similar level of cost -- or cost per tenancy?
Yes, Srinivas.
We have this master service agreement, which applies to everybody on a completely nondiscriminatory basis. The only difference between operators is based on their volumes for which they get volume discount, which is also nondiscriminatory.
Yes, understood. No, the reason I'm asking about where we were transitioning from the earlier one where -- because of the different timings at which someone would have come on a tower were lead to different prices on the same tower, so -- and the company was transitioning into what you have always called a rate card model, which is irrespective of the time that you come that will be a rate for that year or at that time and that's what you were transitioning everyone. So just wanted to check that's now the case?
Srinivas, as mentioned, all new business we are doing on the new rate card basis only, if that answers your question. Historical things, they are gradually correcting themself. There was, if you remember, I think a fees that was applicable, which was meant to correct this over a period of time. That continues. I think the final normalization will reach somewhere around 2022 or something. By then, all would probably come to the point that you were referring earlier, will all be on the same rate card. Then the only difference would be depending on the tenancy ratio and which particular operator is sitting on a particular site. They should all come down to the same levels then. But today all new business continues to be on the new rate card itself.
Understood. Understood. Okay. This is helpful. Just one final question. There was a news too around some tax -- favorable tax judgment which came in your favor. Is there anything more we should need to know on that? Or does that change one of the time line at all?
Bala here. So that was never -- actually it was a favorable order because the -- it is more -- there was no actual demand on the company. It was just a notice and we filed a writ petition in the high court and that got in our favor. Actually, there was no physical -- financial demand on us.
So the writ petition was relating to the notice for reopening of the assessments which were made earlier and what we had contended was that since all the points had been already taken into account and viewed by the department, the high court ruled in our favor that anything which has already been considered cannot be part of reopening of assessment.
So there is one more point, which I want to clarify. This is Bala here. We also got a favorable order from again Delhi High Court on [ east and west ], which relates to the treatment of towers as an immovable property. So this was a matter which was pending in the high court, and we got a favorable order and so that is the one -- something that we won in this quarter.
Okay. This is helpful. This is helpful. So just to double check that the merger timeline broadly which has been indicated still is valid, right?
Yes. Q1 is what we've said most likely depending on how government approvals go from here on.
The next question comes from Mr. Aliasgar Shakir from Motilal Oswal, Mumbai.
Just a very quick clarification on this INR 900 million. This is consolidated number, correct, with 42% consolidation of Indus? And if that's the case, can you give me a separate number for how much of this portion, if at all, meet 100% Indus and Infratel separately would be?
100% would be approximately INR 150 crores.
Okay. This includes also Infratel?
Sorry? Yes. Yes.
We are losing your voice, Aliasgar, maybe you'll have to repeat what you said because we lost you in between.
Okay. I'm just checking, out of INR 150 crores, how much will be Bharti Infratel standalone number?
We don't give a standalone. The consolidated out of this will be INR 90 crores.
Okay. So Indus is INR 90 crores?
No. No. Consolidated Infratel standalone plus 42% amounts to INR 90 crores.
INR 90 crores, got it. And if you take 100% as Indus then it's INR 150 crores?
That's right.
We have a follow-up question from Mr. Vivekanand Subbaraman from Ambit Capital, Mumbai.
So the operating expenses, excluding power and fuel, they are steadily declining, if I notice it, for the last 2, 3 quarters. You explained about the rental cost declining and that being sustainable. What about other expenses? What are we doing there to ensure that this is recurring? Or is there any nonrecurring one-off there?
So Bala here. So there is nothing, no one-off here. It is essentially basically cost drive that we will be essentially doing in terms of cost -- various cost initiatives which as a program we run in the company.
But going forward, to your question, will this be -- do we expect similar kind of reductions? I'd probably be a little skeptical on that. We are reaching pretty much the bottom in terms of where we can drive operational excellence. IT is now the next tool that we are trying to leverage to see how we can get better synergies and better cost in terms of what we operate on. If you look at our manpower numbers and those costs that have been disclosed, pretty much all line items have remained a focus area too. Some of that was also aided by the rent reduction by Bala referred to and we answered to the earlier question there. So whether it will be recurring in a similar manner, we expect to continue working on operational excellence. But the results might not be as steep as you've seen in the current quarters.
In any case, I must point out, this business is not about some minor saving in cost. It is about revenues. And that we are pretty confident that from now onwards we should see a revival of that.
Great. And Akhil, on revenue, you had mentioned about non-operator revenue, Smart Cities and small cells and other initiatives. Anything to report there? Any contribution -- meaningful contribution of non-Telecom revenue in this current quarter? And how do you see things there?
As I mentioned -- Rawat DS. I have mentioned this to an earlier question where I had said, nothing in this quarter at all, but going forward there will be small but that is really small as compared to the P&L that we're trying to look at for the company, because some of the Smart Cities projects are getting into a launch phase now. We have started to get acceptances from the various authorities there. And we think there will be small amount of revenue, but that is -- and then there's larger pie of revenue, not something which is noticeable too at this stage. As we start to grow this and expand from this point on or if we get into a big way in fiber, et cetera, maybe early next year is when you could start seeing some kind of revenues being reported against these. Till then, this is too small to be coming up on this reporting scale.
At this moment, there are no further questions from participants. I would now hand over the call proceedings to Mr. DS Rawat for the final remarks.
So thank you. As Akhil mentioned, the consolidation phase is majorly behind us and data will be the driving factor for future expansions. We continue to see an increase in 4G rollout. Furthermore, this quarter, we reached settlement on exit charges for the exited tenancies with our large customers. Despite the consolidation impact, we closed the quarter with robust operational performance with consolidated revenue of INR 3,640 crores, EBITDA of INR 1,513 crores and PAT of INR 648 crores, up 11% year-on-year. We've already started to see an uptick in towers and tenancy rollouts. With the increasing data consumption and need for better quality of service, there would be a focus on both coverage and capacity rollouts. With our pan India coverage and strong operational performance, we are best placed to capitalize on this by building and sharing vital telecom infrastructure with all operators on a nondiscriminatory basis. On behalf of entire Bharti Infratel team, I thank all of you for continued support, and we wish you all a very Happy New Year 2019. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. Thank you for connecting to audio conference service from Airtel, and have a pleasant evening.