NEW DELHI: Telecom tower company Bharti Infratel, which saw the highest tower adds in eight years, expects the robust growth in towers to continue as the worst is behind the telecom sector, chairman Akhil Gupta said.

“While we dont give any guidance…but we do hope this trend will continue because the telecom sector as Covid has shown, is the absolute lifeline of this country and to deepen that with more capacity and more coverage is a national demand,” Gupta said in a post earnings call on Friday.

“It is just a matter of time that the growth in the telecom sector, taking away all the legal uncertainties, is bound to come back,” he said.

In the July-September period, Infratel witnessed the highest net tower additions in the last eight years and the highest net colocation additions in the last three years. Its gross tenancy additions jumped two times to 2,610 sequentially. Besides, there was also an encouraging 60% fall in exits to 493, which resulted in net tenancy addition of 2,117.

“While the pick up in tenancy additions this quarter might be due to pent up demand of 1Q, the decline in tenancy exits bodes well for Bharti Infratel,” brokerage firm Jefferies said in a post-earnings note.

Meanwhile, average receivables for the company have risen from 56 days to 70 days over the past two quarters.

“While tenancy exits seem to be bottoming, pick up in gross additions may not meaningfully rise given rising pressures on receipts from telcos,” Jefferies said.

In the earnings call, Gupta said it is fair to assume that the receivables will decrease sharply post merger completion between Indus Towers and Bharti Infratel.

Energy margins continued to be negative and slipped further down to minus 3.3% from minus 2.1% in the first quarter as operators took ‘pass-through’ arrangements instead of fixed energy models.

“Negative margin has come because of some disputes (with operators and wrong billing with energy suppliers) and this model which has been adopted for the first time,” said Sachin Naik, chief operation officer, Bharti Infratel said. “But we are confident that these disputes will be resolved and will come back to the guidance which we have given of 0-3%.”

Post the merger Bharti Infratel in 30 days, which will cease to be Bharti Airtel’s subsidiary, will be renamed as Indus Towers. Airtel and Vodafone Plc‘s shareholding will be at 36.7% and 28.2% in the merged entity. Vodafone Idea‘s 11.15% stake in Indus will be exchanged for cash (valued at Rs 4000 crore), but Rs 2400 crore of this will be kept by Bharti Infratel towards VIL’s outstanding dues. The company has announced the appointment of Bimal Dayal as the MD & CEO.

The combined entity is estimated to have a tower base of 169,000, colocation base of 311,000, revenue Rs 25,566 crore, profit after tax of Rs 5034 crores. “This truly is a big company,” Gupta said.

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