Indus Towers Ltd
NSE:INDUSTOWER
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Indus Towers Ltd
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Good afternoon, ladies and gentlemen. I'm Rajitha, the moderator for this conference. Welcome to the Indus Towers Limited Third Quarter Ended December 31, 2021, Earnings Call. [Operator Instructions]. 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 terminated post an announcement. Present with us on the call today is the senior leadership team of Indus Towers: Mr. Bimal Dayal, MD and 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. Bimal Dayal. Thank you and over to you, Mr. Dayal.
Thank you. Thank you very much, and good afternoon, everyone. Thank you for joining us on the earnings call of Indus Towers for the quarter ended December 31, 2021. Firstly, let me wish you and your family a very happy New Year. Joining me today are my colleagues, Vikas Poddar, CFO; and Dheeraj Agarwal, Head Investor Relations. Looking back at 2021, I can say that we've made great strides in enabling connectivity. In the last quarter, in line with our mission of transforming lives by enabling communications across the nation, Indus Towers installed new towers in some of the most challenging and remote locations in Himachal Pradesh and Ladakh. One of these, in -- the one of the [ Losar ] in [ Hikim ] Village, was installed at an astonishing altitude of 4,100 meters, which has the world's highest post office at an elevation of 4,400 meters. In fact, recently, the government informed a parliamentary panel that telecom infrastructure is being upgraded in 14,708 border villages as part of the border area development plan. Partnering with government in this effort, Indus Towers installed 10 mobile towers in some of the highest-altitude locations in Ladakh, paving the way for greater mobile connectivity in the region. Kudos to our braveheart field force. On the demand side, I'm very happy yet again to report that growth in data consumption is unabated even at a very high base already. The growth of 51% year-on-year in data consumption in September quarter of last year, as reported by major operators, is just remarkable. Commercial launch of 5G, as you would know, would fuel this data consumption to provide further end user's enhanced experience. In a recently released report by [ EUI ], India stands the highest when it comes to smartphone data consumption, which is 14.5 GB, and this is slated to grow by 2.7x by '25/'26 to 40 GB. I think this is an astonishing growth rate which we are actually presenting for the demand side. And no wonder, I think our demand for the infrastructure would continue to grow. On the customers and regulatory, the industry has made some encouraging moves post the relief package by the government in September. A tariff hike of about 20% by telecom service providers in the last quarter is a step towards improving the financial health and bringing in stability to the sector. Operators have indicated to support their investment plans by generating additional cash flows. As per the latest disclosures by a major operator, its ARPU is already up by 6% in quarter 3 financial year '22 on a quarter-on-quarter basis. Both Airtel and VIL have also opted for 4-year moratorium on payment of AGR and spectrum dues as part of the relief package. The government's intention of playing a facilitator's role, along with its reciprocation by operators, is a very positive sign for maintaining well-being of this sector, especially when the industry is preparing for 5G rollout. I must remind you of some of the conversations we've had in the past on this subject. One of the significant points to be brought forward in this is the state of VIL. With government becoming stakeholder, the question of survival is addressed in the medium term. This certainly augurs well for the industry and for us. Now let me touch upon a little bit on future, which is 5G. The government of India, as you would know, is planning for the spectrum auctions in July this year. The operators are preparing for 5G rollout by forging partnerships, conducting trials and exploring the use cases. At Indus Towers, we will play a central role in helping realize the transformative potential of 5G. As services are rolled out in major Indian cities, we will be the backbone across when these services are delivered. Just as the launch of 4G services heralded India's entry into technology-driven economy, 5G will unlock significant economic value in many sectors. Globally, 5G rollout and subscriptions uptake is picking up very fast. As per Ericsson Mobility Report, global 5G subscriptions grew by 98 million in September quarter as compared to 84 million in June quarter last year. It's far ahead of increase of 48 million in 4G subscriptions in September quarter. More and more communications service providers are joining the bandwagon. By September, over 180 providers have commercially launched their services compared to 176 at the end of June. You would be aware of certain announcements, which have already been made by Airtel. I think that move is, again, an alignment towards what I just mentioned. Moving on to the operational performance. I think from an operational perspective and our financial standpoint also, we've had a steady quarter. We added total of 2,971 colocations with 1,286 net tower additions. Our total towers and colocations at the end of the quarter were about 1,84,748 and 3,35,106 colocations, respectively, each growing approximately by 5.3% year-on-year basis, with our industry-leading tenancy ratio which is stable at 1.81. One thing I would like to point out is that our reporting includes only macro towers and the corresponding tenancies. Nonetheless, there has been an increasing trend for lean -- leaner towers and small cells. With customers' focus on cost efficiency and upcoming 5G technology, preference for more and more innovative and leaner products is on the rise. But last but not the least, while we are preparing to enter this new era of connectivity, we understand that it entails a greater respect for planet and everyone in it. Sustainability has always been a key component of our strategy. And to this end, we have taken steps to beef up our ESG efforts. We have now set up an ESG Committee with representation from Board and ESG management council to drive an overall sustainability agenda of setting up ESG vision goals and implementation plans. We plan to include global best practices with regards to ESG in our business operations, thereby reducing our environmental footprint and creating long-term value to our stakeholders. In 2022, we will continue to expand our infrastructure and make it more resilient in tandem with sustainable practices. We will start sharing our progress on key parameters in this ESG journey in the next financial year. I will now request Vikas to take you through our operational and financial performance for Q3 FY '22, and I look forward to your questions. Over to you, Vikas. Thank you.
Thank you, Bimal, and good afternoon to all the participants on this call. I'm pleased to share with you the financial results of the third quarter ended 31st December 2021. So we had a steady quarter 3 from an operational and financial standpoint. Our total towers and colocations at the end of the quarter were up 5.3% each year-on-year to about 184,700 towers and 335,100 colocations. Coming to the financial performance for the quarter. We have witnessed a steady year-on-year growth. Our gross revenues were up 2.8% year-on-year and 0.7% quarter-on-quarter to INR 69.3 billion. Our core revenue from the rentals grew by about 1.9% year-on-year and 3.4% quarter-on-quarter to INR 44 billion. The year-on-year growth numbers were impacted due to the higher base in the corresponding quarter of previous year, which included significant amount for previous quarters because of the alignment of accounting practices and estimates, including the exit charges. Normalized for these factors, the gross revenues and the core revenues were up 7.4% and 7.5%, respectively, year-on-year. As we indicated in our previous calls, the exit revenues are expected to taper off from quarter 4 FY '22. Our EBITDA grew 2.7% year-on-year and 1.7% quarter-on-quarter to INR 37 billion. After adjusting for the impact of higher exit revenues and accounting practices and estimates in the corresponding quarter of last year, our EBITDA was up 11.8% year-on-year driven by revenue growth and our cost efficiency programs. The reported EBITDA margin improved by 50 basis points to 53.5% on a quarter-on-quarter basis. Our profit after tax was significantly up, 16% year-on-year and 0.8% quarter-on-quarter to INR 15.7 billion. Quarter 2 FY '22 included approximately INR 400 million of tax benefits on account of long-term capital gain on investments. After adjusting for the impact of higher exit revenues and accounting practices and estimates in the corresponding quarter of last year, profit after tax was up 29.8% year-on-year. Our free cash flow for the quarter remained low mainly due to the further increase in receivables by INR 16 billion. Continued delay in payment from a customer has resulted in this low free cash generation. While we continue to monitor the situation closely, we remain positive about the gradual improvement in this area. As you know, we continue to be adequately covered by the security package and will take a judicious call as and when required. Our pretax return on capital employed was up year-on-year and quarter-on-quarter to 24.5%. And our post-tax return on equity was up year-on-year and quarter-on-quarter to 29.8%. Both these figures were calculated on the trailing 12-month basis. In summary, we had a steady quarter with good financial performance except the spike in receivables that we will continue to monitor. So with this, I would like to open the floor for questions and answers, please. Thank you.
[Operator Instructions] The first question comes from Mr. Sanjesh Jain from ICICI Securities Mumbai.
A few questions. First, on the RPT growth quarter-on-quarter. It looks significantly strong. Can you explain what's driving the growth in the RPT considering that in this quarter, the incremental tenancy sharing was 1.99x, which should have resulted in a drop in the RPT, plus the unwinding of equalization while we have seen a very strong growth in the RPT?
Vikas?
Yes. Sure, Sanjesh. Thank you for the question. So of course, the RPT growth -- [ ERPT ] growth has been strong at about 3% quarter-on-quarter. And this is on account of various factors. So primarily, there are some nonrecurring benefits coming from the billing reconciliations in this quarter. And then there are some timing elements relating to things like municipal taxes, which are basically charged back to our customers. And then the third factor is also our tenancy and loading going up. So it's a mix of these 3 or 4 elements, Sanjesh.
Got it. Got it. So we had few one-offs in this quarter barring the tenancy and loading thing?
Yes, that's right.
Yes, yes, yes. The second, on the business. You mentioned of leaner and small cells and the adoption happening. Can you just explain what is the business model in the leaner towers or in the small cell? What is the tenancy sharing in that, if at all possible, in that business? And what kind of economics are we seeing in that part of the business?
So thanks, Sanjesh, for the question. We've been actually talking about a shift in our profile of these towers, and we've always said that as we enter into the higher spectrum, we will -- and the densification in the future, we will start to see a different profile of towers rather than the heavy and traditional macro ones. As things were progressing, I think we were seeing very small numbers. But lately, we've actually started to see these numbers grow. Now we are talking about 2 types of towers. One is traditionally the small cells, and second are some amount of leaner sites. Now leaner sites are low-cost sites. They are shareable as well and come in of various variants as well. Now if you are interested in, let's say, the profile or return profile of these sites, if I compare it with a single-tenant macro, I think our profitability on these sites is way better than what we used to have in our macro environment. I think costing of these sites is also fairly favorable both to us and to our customers as well. And I think I would certainly call it as an innovation, which is probably leading to adoption of these kinds of sites as well. I think we would certainly keep an eye on the volume of these sites. And as the volume grows, we may think of having a separate reporting of these sites so that there is a clarity which you all have because I think the market share would be calculated with these sites in place.
So we count the site in our tenancy and tower?
No, we don't.
So even the leaner? Because they look like more of a smaller version of a macro tower.
So these could be n number of these sites equal to a macro tower. And I think that n needs to be kind of stabilized and figured out as well. I think, as I mentioned, as these numbers grow, we will certainly take a decision to give you more transparency on both n, which is equivalence of the macro site and also the numbers of it as well.
Just one follow-up on that. Is this the reason why we are seeing slowdown in the tower addition and the tenancy addition?
Well, if you actually add this number up as well, we will still be short of the total number as well but short by a whisker. So you may like to say that the shortage if you add those numbers, we might be neck-to-neck as well. But I would like to answer your question on slowing of this in a slightly different manner. I think one thing is very clear, which I made it clear through some outside reports as well, that the demand side within this industry is unabated, okay? As the operators and, I would say, some of the other verticals within our industry make and strike these alliances for 5G, it augurs very well. The demand side is certainly very robust at the moment and will be even more robust going forward as well. We are talking about 2.7x by 2025/'26 as well. So overall demand side is good. Tower demand will continue, and I will say it for 2 reasons. One, of course, densification as well as 4G and 5G go deeper as well. We will need towers. One or two, let's say, softer quarters, I won't kind of read too much into it as well because if I actually start to compare year-to-date as well, we are doing much better this year on an overall basis than the CAGR of a couple of years back as well. So I won't read too much into saying that there is a slowdown here. There is one more reason which I would like to actually direct you towards, and you could possibly derive your own answers here as well, that there is a sizable delta variance between the operators' points of presence as well. So if there are 3 large players or 4 large players in the market, please look at what kind of delta that the second player sits with and the third player sits with. And that catching up, any case, has to be done as well. And I don't think there is anybody who believes that catching up will not happen. And if anybody has an aspiration to really grab more subscribers and provide a good subscriber experience, this delta will come to the table as well. So my take is I don't think I would read too much on the demand side. Demand side is robust. 1 or 2 softer quarters on this rollout cannot be sort of looked at it from a wide brush. Thank you, Sanjesh.
No, I mean -- just one thing and a small observation from my side. And it may not be a trend, but this is a -- first quarter, we have seen a quite slower addition on the 4G side. Data volume growth has been muted if you look at across the 2 operators who have already announced their results. At least on the 4G side, it looks like we are hitting a more normalized growth rate versus earlier a significantly stronger growth rate. On the other side, the 2 major operators have bought a large amount of spectrum, which they need to sweat it out. It looks like the slowdown may remain for few more quarters if -- before we see any major rollout from this operator. But yes, point taken that the #2 and #3 have to catch up in terms of footprint from the -- where #1 is today.
Yes. I think -- so Sanjesh, we need to look at it in a long term. As I said, a quarter or 2 here or there, I don't think I would try and make it a trend. I think when we are looking at -- we should be looking at a little bit longer term and say whether there is growth. I think one can easily say eyes shut, we will see many more -- requirement of many more locations from our customers, and that's what is really a clear fact. Thank you.
And just one last bit from my side. Your discussion with operators, do you feel that they're also in a planning stage to cover the footprint gap versus the competition? Do you get that sense? And how fast do they want to do that? If you can give some understanding there, it will be very helpful.
Sanjesh, I don't think I can delve deep into our customer discussions here as well. At this moment, I can only direct you towards a very clear surrogate here. if anybody wants to have a good customer experience and compete in the marketplace and remain relevant, I think it's foregone conclusion as well. Hence, I would only repeat myself and say, if you are putting in surrogates for demand, I think demand is certainly out there. It will get even more bumped up when we roll out newer technologies that -- as 5G. Thank you.
The next question comes from Mr. Kunal Vora from BNP Paribas Mumbai.
First question, on power contract renewal. Can you just update u on contract status? Have you signed any renewals? And if that is the case, at what rate? And how should we look at FY '23 rental revenue considering that there are large contracts coming up for renewal?
So thank you, Kunal, for asking this question. If we had signed this contract, we will certainly share this with you. Let me back off a little. And I answered this question last time, so I will pick up my answer from where we left. I think we are in intense negotiations with our customers, no doubt. When it comes to the parameters, each and every parameter is being discussed from both ends, be it tenor, be it discounts, et cetera. I did mention even last time as well that our position is fairly strong. Our track record here is to certainly create win-wins, both sides as well. And all I can say is I think please wait for the outcome of these negotiations as well. We have made progress since the last time we met, but we have not concluded. So I would only recommend that please watch this space. Moment this concludes, we will certainly come back to you. These are tough, hard-drawn negotiations which will create a long-term value for the company. And hence, we are taking it extremely, extremely seriously and are top priority.
Sure. And when do you expect to conclude these negotiations? And considering that most of your tenants are having financial difficulties and it's also reflecting in your receivables, should we expect that rentals will be lower for FY '23 average receivables?
Well, it would be -- let me put it this way -- let me first answer your first question. Ideally, the contracts end by 31st of March. 1st of April, the newer contracts will have to be adhered to as well. And that is what all of us are targeting. When I say us, it is us along with our customers as well, and no one wants to create an anomaly out there as well. What kind of discounts, what kind of benefits for Indus as a win-win we will end up with? It could be anybody's guess at the moment. So I won't jeopardize any negotiation position from Indus, giving you any number here as well. My submission is these are intense negotiations and just watch this space for some more time. We just want to subscribe you to some more patience here.
Sure. I understand. Second is if you can help us quantify the contribution from one-off factors in revenue this quarter. You mentioned a couple of factors, but if you can help us quantify them.
Sorry, I couldn't get your question. Could you repeat that?
The one-off factors in revenue. So revenue is 3.4% quarter-on-quarter. I believe there is a one-off element. So if you can help us quantify that.
Okay. So you're talking about one-off elements in our revenue this quarter? Maybe, Vikas?
This quarter, this quarter, yes.
Yes. So I think the one-off revenue would be probably circa 1%, I would say. And the rest is basically normal business growth driven by the loading, the tenancy growth, et cetera.
Sure. Okay. And just lastly, if you can share CapEx outlook for FY '23, FY '22. You've seen -- keep it well below FY '21. I understand that it's a factor of towers and business growth. But if you can share any thoughts on CapEx.
Sorry, we can't...
Could you repeat, Kunal? Your voice was not very clear.
Sorry. I was just wondering, the CapEx guidance or your view on CapEx in FY '23.
So unfortunately, we don't really give any forward-looking view, Kunal, so we will not be able to share anything about FY '23. And in any case, we are yet to finalize the FY '23 plans. So...
The next question comes from Mr. Ankit from Oculus Capital Mumbai.
My question was basically the same regarding the contracts renewal and how we are looking at 2023 because these contract renewals will basically decide the trajectory of our revenues. I think that question has already been asked.
Thank you. Thank you, Ankit. We are working on it.
The next question comes from Mr. Pranav Kshatriya from Edelweiss. Mumbai.
My question is basically a follow-up to a previous question. You talked about the profitability of the smaller cell to be in line with the single-tenancy macro tower. But single-tenancy macro tower basically starts at rarely the cost of capital. So if I compare profitability of a small tower or a leaner tower to a -- to tenancy tower, then how does it stand? And is the return profile, considering it will have a lower tenancy, is it similar? If you can comment on that. And my second question is the -- a lot of companies have started their 5G trials, and I'm sure that Indus Towers would also be involved in that. Do you see any incremental role in those companies' 5G rollout per se? Any new business model emerging either on the fiber side or tower sharing side? Or anything you think are possibilities?
Thanks, Pranav. So let me answer or clarify on the profitability of the leaner sites as well. And when I compare the profitability, I compare macro single-tenant -- the profitability of these leaner sites. And I said it is better than the macro. Now leaner sites as such as a concept is having lots of variability when we go out in the marketplace and we install these as well. And that's why putting a finger right now and saying where this profitability would be -- I think when substantial numbers come in, we can actually put our finger and get some averages going as well. Why I'm saying this is you can acquire a rooftop and build a site, which is a simple pole and infrastructure, out there. Come second tenant, we can either share the infrastructure or just bring up another pole on top of it and use the electronics. All such variants and combinations are actually in play at the moment. And as we get some averaged out numbers, I think we can actually get into reporting and sharing of those as well. So I think we are reaching some -- when we reach some amount of threshold here, we can share those numbers with you as well. Where we stand, I think a lot of work has been done on the cost side of it. And obviously, the customers have also participated in evolving this product -- or these products as well. And I don't see -- I would say, the return profiles on an overall basis would be dilutive. However, we will keep on monitoring and sharing this with you. Only thing I can say is what we used to build as a single-tenant macro site, I think our return profile on this is way, way better than what we used to do earlier. The second question was on 5G trials. Yes, I -- in fact, I shared some of the 5G trials which we have been having with pretty much all the customers and in various towns. I think there is much more than even trials which have been going on, including identification and even preparation of some of the sites in some key markets as well depending on -- from customer to customer as well. And we are actually playing a major role at the moment to enable these sites or prepare these sites for 5G. We've also said in the past as well that the initial rollout of 5G will take place on our existing networks, as we saw in case of 4G. And subsequently, the densification will happen as well. Now if you actually look at 5G on existing sites equals the loading opportunity. And I think this loading opportunity will also vary from customer to customer depending on what kind of equipment they bring, including power and the space and -- on their tower as well. And I think those are the things which are being finalized at the moment. So yes, a lot is going on. If your question was, can we do more within the 5G domain? Answer is yes. We'll share with you as time passes by. At the moment, I don't think I can go beyond this.
Sure. Sir, that is really helpful. And if I can just ask a follow-up based on that. I mean based on whatever discussions we are having, do you think that from a capital allocation perspective, if 5G requires more capital, would you be considering the -- anything on the dividend policy or a buyback because of that? I mean how should we see return of capital from Indus considering leverage has a fair bit of room currently?
So Vikas, do you want to take this?
Yes, sure. Pranav, I think the dividend policy of the company remains linked to the cash flow. And currently, we are not expecting any change in that. Now if I understand your question right, you're basically trying to understand, if 5G entails a higher CapEx, will that have any implication on the dividend policy. So first of all, to answer that question, I think 5G -- how the 5G is going to evolve is something that needs to be seen. We really don't expect, at least in the initial years of 5G, to have a large impact on our CapEx. Our CapEx pretty much will remain within the sort of envelope that we are. And from that perspective, I think we will certainly look at a very stable dividend policy, which will continue to be linked to the cash flow. So I really don't see any major impact on account of 5G CapEx.
The next question comes from Mr. Arun Prasath from Spark Capital, Chennai.
So my question is on receivables. We are seeing the receivables grow. Every quarter, there is a sequential increase in the receivables. Where do you see this number taking it up and probably we'll see a reversal of the receivables? Is there any plan for this? Can you give some -- a little bit more color on this line item?
Thank you. Thank you, Arun, for this question. I will request Vikas to take it, and then I will add something to it.
Sure.
Vikas?
Sure, Bimal. So I think, yes, I mean, you're right, Arun, I think the receivables have been going up. And certainly, we are watching this situation very closely. However, at the same time, we remain positive about a gradual improvement in this area. I mean if you look at the -- some of the positive developments that have happened in this sector over the last 3, 4 months, I mean, there has been a relief package, which gives us much more certainty on the continuity of the players. There is a tariff hike in the sector. There is also a release of the substantial amount of bank guarantee, which basically will benefit the liquidity in the sector. The customer has also announced its plan to close its fundraise by March 2022. So overall, we continue to be adequately covered, and we are actively engaging with the customer to arrive at a mutually acceptable arrangement, and we believe the overall situation will see certainly some gradual improvement. But it's very difficult to really put a hand on timing when that will happen. But certainly, it will gradually improve is what we know. Bimal, do you want...
Is this the peak receivable? From here, only it can go down? Is it what we are implying? Because now the liquidity package has been given. From here -- the customers' liquidity position also can only increase from here. Are you saying that we are at the peak receivables?
Well, look, Arun, let me give you a little bit of a different perspective on the receivables. I think if you go back in time, we have been servicing or serving these customers for north of 12, 13 years as well. And I think these problems actually started maybe 2, 2.5 years back, and obviously, I think it has gotten vitiated in last 1 year or so as well. Now having the security package gives us a way to work with some of these stressed customers. And the option we have is on invocation, which is not necessarily a right option at the moment to go towards provided, I think, the customers who are actually willing to work with us. We are actually in constant discussions with the customers, and we had -- we thought that we would come up with some kind of a workable solution between both the customers and us before this meeting. We are very hopeful that we could actually bring some kind of a closure to this receivables situation sooner than later. However, I cannot comment that we have seen the peak at the moment. But the endeavor was to end all this, let's say, before this Board meeting or before this close of the quarter. Just that the whole thing has spilled over. So as I said, watch this space. We will report to you where these receivables would be. Just that both the customers and us are working feverishly to bring these down.
The question is the customers' cash generation ability may go up, but there is 2 ways they can spend that. Either they spend it on the further CapEx to improve the coverage or they pay the creditors like Indus Towers and declare the balance. It seems like they would rather spend on CapEx rather than paying the liability towards a service provider like you. So is it -- you have that compromise because you are compromising between collecting the current revenue versus creating a room for the future revenue? Is it the dilemma that the company is currently in?
Well, Arun, I think when it comes to the customers, there's always a dilemma. I think when I look at it from a distance, I think we should be happy about that we have a security package and we can walk up to the bank any time. Now obviously, if we can bring a win-win here as well -- and as I said, we were very close to possibly coming to a conclusion with our customer as well, this has spilled over. All I can say is just watch this space for now. And obviously, we'll work out -- you are right. However, there could be many more things that can be worked out along with the customers as well. So good news is, I think there is a good cooperation going on between the customer and us. So just watch this space. We are addressing this along with the customer.
Okay. Sir, just a final question on this receivables. At what point you will be encashing the pledge -- primary pledge? Is there any clarity on this?
Arun, this is a difficult one. We are talking about customers, and we are actually talking about something which is -- with us, it is our right to invoke it as well. However, I think in conjunction with the Board and the discussions with pretty much all the related parties, we will certainly invoke it as and when needed. As I said, there is a good discussion which is going on right now with the customers, and I do believe that we can come up with some kind of a win-win here as well and address the mounting receivables situation. Just watch this space for now. If not, I think we can walk to the bank anytime.
Okay, perfect. And so my second question is on the leaner tower structure that we are talking about. What exactly technically is it? Is it a rooftop pole or a simply set of electronics mounted on some wall? What exactly -- can you just explain it a little bit more on how probably that is a leaner structure?
Well, I think please look at it this way, that when we started to make towers, we had multiple operators. And gradually, I think we have now -- are looking into, let's say, 4-operator scenario. It is 3 plus 1. Now not only the number of operators have kind of gotten consolidated, the spectrum in which the new rollouts will take place have also gone higher. And 5G, as you would know, is worth 3.3 gigs and so on and so forth. So the requirement of load on these towers have considerably come down. The power consumption of these towers has considerably come down. And hence, we can play around with type of towers. And second, I think the requirement of height, which used to be a very big deal in 2G or even in 3G, has come down with fiberization as well. We are actually seeing the requirement of even microwave is coming down as well. And there are newer solutions on backhaul which are coming in as well. Looking at this, the operators' requirement of type of sites has changed as well. The size of GSM antenna has also reduced with 4G, and it will go down with 5G as well. So these are very, very lean structure popping out of a rooftop as well, which can even accommodate one microwave and fewer of the GSM antennas with, let's say, a power backup, which is absolutely a requisite there as well. Now there are variants here as well, and that's why I will refrain from what height, et cetera. But suffice to say that this is a fairly lean structure and the entire product is also having a few variants as well. You will probably see them all across your town now. And it could be on the floor of the roof or it could even manifest itself as a pole on the facade as well. And 1 operator will be on the -- one pole and it could be the next operator coming in with a very similar additional pole on the same rooftop as well. So those are the leaner sites which we are talking about at the moment.
The next question comes from Mr. Amanjit Singh from Oculus Capital Mumbai.
My question has been answered.
[Operator Instructions] At this moment, there are no further questions from participants. I will now hand over the call proceedings to Mr. Bimal Dayal for the final remarks.
Thank you. Thank you very much. Thank you for your questions. Looking ahead, I'm seeing great reason for optimism. The tenancy outlook is positive given the developments towards improvement in the financial health of major players and upcoming 5G rollout. With our focus in place to leverage growth opportunities in the tower infrastructure, adjacencies and other business verticals, we are very optimistic and excited about achieving greater heights and exploring new space. I will reiterate our increased focus and efforts on driving a sustainable long-term growth with a formal structure in place now to work in this direction. Thank you all for joining the call. Stay safe. Thank you.
Thank you.
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.