Over the year gone by, the Indian economy remained resilient in a global environment characterised by falling macroeconomic risks but rising financial stability risks. Gross value added (GVA) at basic prices will measure activity from the supply side instead of GDP at factor cost. In terms of the new series, real activity (at market prices) picked up in 2014-15, rising by 7.3 per cent on top of a growth of 6.9 per cent in 2013-14. The firming up of growth during 2014-15 was driven mainly by private consumption and supported by fixed investment, even as government consumption and net exports slackened considerably. Majority of individual parameters showed improvement during FY: 2014- 15 over FY: 2013-14. In particular, the net responses of production, capacity utilisation and order books showed marked improvement in FY: 2014-15 over FY: 2013-14. Improved sentiments on cost of finance and cost of raw material were observed during FY: 2014-15 along with the declining selling price. The net response of profit margin, although in negative terrain, has improved during FY: 2014-15 over the previous year. However, the fourth quarter witnessed improving business sentiments, which is partly due to seasonality. On an annual basis, the business situation remained better during FY: 2014-15 as compared to FY: 2013-14. (Source: RBI)


As at 31-March 2015, India‘s telecom subscriber base was 996.49 million, which has clearly shown 6.80% up from 933 million on 31-March 2014. The subscriber base has been broadening after a steadily shrinking from June, 2012 to March, 2013.

Growth in Tele-density

The overall tele- density reached 79.38% at the end of March 2015, as against 75.23% in March 2014. Clearly overall growth in Tele-Density has increased. Despite the impressive overall growth in the telecom sector in previous years, the rural tele-density in India is quite low as compared to urban tele-density. The following table depicts the penetration of telecom services in rural & urban areas in the country:

Tele-density as of Rural (%) Urban (%) Overall (%)
Mar-14 43.96 145.78 75.23
Mar-15 48.37 148.61 79.38

Minutes of Usage (gMoUh)

GSM average MoU per subscriber per month has shown an increase of 1.56% YoY (MoU in Mar.-2015 was 383 minutes compared to 389 minutes in March-2014) after series of steady decline from a base of Rs. 360 Minutes per month per subscriber for the quarter ended December 31st, 2010. Similarly, CDMA MoU has declined by 3.6% with some nominal fluctuations on 265 minutes for Mar.-2015 quarter compared to 275 minutes in March-2014 quarter. The table below indicates that MoU is onto an increasing path now after a series of decrease during the last few years.

Total MoU/subs./month (minutes) Dec-10 Dec-11 Dec-12 Mar-13 Dec-13 Mar-14 Dec-14 Mar-15
GSM 360 332 359 383 379 389 376 383
CDMA 270 226 230 275 272 275 262 265

Note: Quarterly data

Source: TRAI

Average Revenue Per User (gARPUh)

The ARPUs in the Indian wireless telecommunications sector, which had seen a declining trend over the last few years, has reversed that trend and has witnessed the increase over the last few quarters. Mar.-2015 ARPU has witnessed a growth of 6.14% YoY (ARPU in Mar.-2015 was Rs.120 compared to Rs. 113.44 in March-2014) for GSM. Earlier, the blended GSM ARPU steadily declined from Rs 105 per month per subscriber for the quarter ended December 31, 2010 to Rs 97.93 per month per subscriber for the quarter ended December 31, 2012. However, the fall in ARPU for the next one year had been very nominal, and settled at Rs 113.44 per month per subscriber for the quarter ended March 31, 2014.

CDMA ARPU declined from Rs 82 per subscriber per month to Rs 73 per subscriber per month from Dec‘2009 to Dec‘2011.Whereas for the quarter ended Dec.2011, ARPU actually increased to Rs. 73 per subscriber per month and thereafter with a constant increase reached to Rs.104.98 per subscriber per month in March-2014.Clearly even ARPU has reversed its trend to follow growth path.

ARPU Dec-10 Dec-11 Dec-12 Mar-13 Dec-13 Mar-14 Dec-14 Mar-15
GSM 105 96 97.93 105.00 111.94 113.44 118 120
CDMA 68 73 79.95 95.25 103.60 104.98 109 108

Source: TRAI


The Telecom infrastructure services are made up of three components:

1. Passive infrastructure

Passive infrastructure includes of all the passive components of the network: steel tower/antenna mounting structures, BTS room/shelter, power supply, battery bank, invertors, DG set for power backup, air conditioner, fire extinguisher, security cabin, among others. These components are not dependent on the type of communication technology being used by the network riding atop the site, namely LTE, GSM, CDMA, 3G, WiMax, FM Radio, digital terrestrial transmission, etc. We estimate that roughly two-third of capex for a wireless network is spent on passive infrastructure.

2. Active infrastructure

Active infrastructure constitute the electronics that power the network and includes all the active components of a wireless network such as spectrum (radio frequency), radio antenna, BTS/cell site (base transceiver station) and microwave equipment. Each cellular operator will have to own a BTS at each tower site. A tower site can have 1/2/3/4 or more cell sites, depending on the occupancy level/tenancy ratio of that tower.

3. Transmission Media

Transmission Media is the network that connects the BTS/cell site to a base station controller (BSC) that controls tens or scores of BTS in a particular area. A transmission network may work on:

Point-to-point microwave radio transmission

Point-to-multipoint microwave access technologies like LMDS, WiFi or WiMax;

Optical fiber links

Digital Subscriber Line (DSL)



We are a telecom infrastructure services company providing rollout solutions for wireless and fixed telecom networks. Our strength lies in the breadth of services we offer in the telecom infrastructure space. The business offerings include services in Turnkey Site Build, Active Equipment Implementations, Technical Support Services and Operations & Maintenance. We are also registered with Department of Telecommunication as Infrastructure Provider - Category I.

In Turnkey Site Build, we provide services right from the site identification and designing, to installation of towers and other ancillary passive equipments. This includes entire Project Planning and Management Services. In Active Equipment Implementations, we provide services like Installation, Commissioning and Integration of active telecom equipment for wireless, wire-line and optical technologies. In Technical Support Services, we provide services in high-end telecom engineering that includes Network planning, Transmission planning, Radio Network Optimization, Networks Benchmarking, and Network Auditing. We provide these services on activity/time basis. In Operations & Maintenance, we provide 24x7x365 maintenance services for passive telecom infrastructure (preventive and corrective maintenance on periodic contracts), and first-line maintenance of active infrastructure. We are also involved in creation of In-building Networks for the Wireless and Data Applications. The CDMA network on the underground section of the Delhi Metro Rail Corridor is one such example.

The client list constitutes of all the prominent players in the telecom industry that includes Third Party Infrastructure Leasing Companies (like Indus Towers, Quippo, WTTIL), Telecom operators (like Airtel, Vodafone, Idea, Reliance Communications, Aircel), and Telecom Equipment Manufacturers (like Ericsson, Nokia Siemens Network, Huawei, ZTE, Motorola).

We have considerable expertise in rolling out projects in the most difficult of the terrains, both in India and Overseas. For our overseas clients, we provide services through Nu Tek India Ltd. and also through our subsidiary in Hong Kong, and cater to the growing needs of our clients in the Asia Pacific region and other Emerging Markets like Middle East and North Africa.

Business Performance

Comparison of FY2014-15 with FY2013-14

FY 2014-15 was challenging for the company, wherein the income from operations decreased by 52.64% to reach Rs.66.05 crores as compared to Rs.139.23 crores during previous year. Project related expense for the year was Rs.36.42 crores compared to Rs.108.58 crores. Employee benefit expense for the year was Rs.13.56 crores (includes expenses towards salary and wages of Rs.12.71crores as compared to Rs.19.64 crores in last year) compared to Rs.20.59 crores for the previous year, a decrease of 34.11%.Other expenses for the year was Rs.12.10 crores as against Rs.39.72 crores during FY2013-14. Other income for the year was Rs.0.31crores, compared to Rs.1.6 crores in the previous year. During FY2014-15, the net profit from ordinary activities after tax was Rs.0.38 crores, compared to Rs (Rs. 28.04) crores in FY2013-14.

On a consolidated basis, income from operations during FY2014-15 stood at Rs.81.64 crores, compared to Rs.156.54 crores in FY2013-14. PBDT (profit from operations before depreciation and tax) was reported at Rs.3.25 crores as against (Rs.23.39) crores in the previous year. Consequently, net profit after tax for FY2014-15 was (Rs.4.22) crores, compared to (Rs.30.33) crores in FY 2013-14.

Business Review and Outlook

India is the world's second-largest telecommunications market, with 996.49 million subscribers as of March, 2015. With 164.81 million internet subscriptions, India also stood third-highest in terms of total internet users in 2013. The number of internet subscribers increased at a compound annual growth rate (CAGR) of 52 per cent to 243 million in 2014 from 8.6 million in 2006.

The wireless segment (97 per cent of total telephone subscriptions) dominates the market, while the wireline segment accounts for the rest. During FY07-14, wireless subscriptions increased at a CAGR of 27.5 per cent to 904.51 million. Telecom penetration in the nation's rural market is expected to increase from 41 per cent as of March 2013 to 70 per cent by 2017.

Availability of affordable smartphones, along with a rise in the security level of mobile transactions, is expected to boost growth of transactions conducted via phones, with the overall transaction value being tripled in 2014 from last year. In addition, the mobile value added services (MVAS) industry forecast to expand at a CAGR of 30.9 per cent to US$ 9.5 billion by 2015 from US$ 1.1 billion in 2007.

To boost local research and manufacturing of telecom products, the government has proposed an investment of US$ 32.2 billion in three phases during the 12th Five Year Plan. The government has been proactive in its efforts to transform India into a global telecommunication hub; prudent regulatory support has also helped. The National Telecom Policy 2012 proposes unified licensing, full mobile number portability (MNP) and free roaming.

With daily increasing subscriber base, there have been a lot of investments and developments in the sector. The industry has attracted FDI worth US$ 16,994.68 million during the period April 2000 to January 2015, according to the data released by Department of Industrial Policy and Promotion (DIPP).

Telecommunications is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India will reach US$ 29.8 billion in 2014 and is expected to touch US$ 37 billion in 2017, registering a compound annual growth rate (CAGR) of 5.2 per cent, according to research firm IDC. According to a study by GSMA, it has been expected that smartphones will account for two out of every three mobile connections globally by 2020 and India is all set to become the fourth largest smartphone market. India is projected to have 213 million mobile internet users by June 2015, a 23 per cent rise over a six month period, according to Mobile Internet in India 2014 report. The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to the UK-based GSM Association (GSMA). India saw the fastest growth in new mobile-phone connections with 18 million net additions in the third quarter of 2014, followed by China with 12 million new additions, according to a report by Swedish mobile network equipment maker Ericsson.

Driven by 3G and 4G services, it is expected that there will be huge Machine to Machine (M2M) growth in India in 2016-17, according to UST Global. There is also a lot of scope for growth of M2M services in the government ambitiousUS$1.1 billion Smart City Programs. The rapid strides in the telecom sector have been facilitated by liberal policies of Government of India that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services at affordable prices. According to study by GSMA, it has been expected that smartphones will account for two out of every three mobile connections globally by 2020 and India is all set to become the fourth largest smartphone market.

During the year FY2015, your company witnessed a substantial change in revenue mix from earlier years wherein the revenue contribution was almost equal from all FTK, TI, TSS and O&M services. However, owing to intense competition in the sector, margins at all the verticals in the Telecom value chain have been under pressure. Going forward, the contribution from FTK and O&M Services will be higher than the TI and TSS services. Since FTK work involves a lot of material and O&M services being low margin-high volume business, the margins will continue to remain under pressure. However, a lot of churn is expected in the space and we expect some competition to weed out, after which some pressure on margins may be relieved. The Company is more focused in engineering work where the margins are high.

The company is also making headway into the business of natural resources, like trading and import-export of Iron ore, Coal and Fuel Oil. The business will currently focus on off-shore trade without actually importing goods into Indian shores.

SWOT Analysis


Existence for last 22 years in the Telecom industry. Having established relationship with almost all OEMs, Telecom operators, and Infrastructure Providers.

Presence across the length and breadth of the Indian Telecom market. Experienced and skilled work force of around 1,200 people.

Overseas presence (Central America, Africa, Nepal) to seize the business opportunities in these markets.


Longer Working Capital Cycle

Client Concentration

Opportunities (Pwc)

LTE to become mainstream in India. In 2015, multiple Indian players will be launching 4G on a more efficient 1800

4G LTE subscribers to reach 10 million to 15 million by December 2015 driven by competitive pricing, superior network experience and affordable smartphones.

Wi-fi as a bigger phenomenon; wired broadband to remain work-in progress: India will see a significant spurt in wi-fi hotspots driven by both the government smart cities‘ and digital India‘ as well as private sector initiatives.

Wearables in healthy lifestyle space and security apps for smartphones: In the wearables space, Indian consumers have shown most interest in buying fitness monitors (80%), smart watches (76%) and internet-enabled eyeglasses (74%). Price points are expected to go down with Chinese and local manufacturing. Increasing penetration of smartphones and their ability to carry confidential subscriber data will be a significant driver for traction in security applications for smartphones.

Changing landscape owing to MNP. Requirement of Network Strengthening and better connectivity by 2G operators


Intense competition foreseen in the telecom industry due to delayed M&A activities: Current M&A guidelines have not been able to stimulate any consolidation in the sector despite all policymakers expressing the need for it. With new network launches expected in 2015, the rapidly growing data market will witness intense price competition and will rekindle memories of 2010 voice-led price wars.

Our revenues are closely aligned to the Telecom Industry. Any adverse impact on the industry would directly affect our business