AARV Infratel Ltd Management Discussions.

Industry Structure & Development:

Macro-Economic Situation

The outbreak of Coronavirus disease 2019 (COVID-19), first identified in Wuhan, the capital of Hubei, China, in December 2019 and since then having spread globally, has been recognised as a pandemic by the World Health Organization (WHO) on 11 March 2020. India is widely affected by this pandemic. As on 29.04.2020, more than 31000 cases of Coronavirus have been confirmed in India with more than 1000 deaths.

The effect of Corona virus is badly felt and noticed in the worlds most developed countries like USA, Britain and Germany etc. Obviously, India was bound to be affected not only because of its domestic slowdown but also because of international recession. Corona virus had its impact in the industry in general, which has seen, not only cutting the salaries but also laying off its employees.

The United Nations Conference on Trade and Development (UNCTAD), has suggested that Indias trade impact due to the COVID-19 outbreak could be around USD 348 million. For India, the overall trade impact is estimated to be at 129 million dollars for the chemicals sector, textiles and apparel at 64 million dollars, the automotive sector at 34 million dollars, electrical machinery at 12 million dollars, leather products at 13 million dollars, metals and metal products at 27 million dollars and wood products and furniture at 15 million dollars. As per UNCTAD estimates, exports across global value chains could decrease by USD 50 billion during the year in case there is a 2% reduction in Chinas exports of intermediate inputs. What is also worrisome is the effect of all the circumstantial conditions on the Rupee value which is at its lower value of more than Rs. 76 per USD, exerting extra burden and pressure on the cost of import of commodities and services in India, and on the accumulated foreign reserves.

Indian Telecom Market

India is the worlds second-largest telecommunications market. The telecom market can be split into three segments - wireless, wireline and internet services. The wireless market segment accounted for 98.25 per cent of the total subscriber base as of January 2020. Rural subscribers comprised 43.69 per cent of the total telephone subscribers as of January 2020.

India is also the second largest country in terms of internet subscribers. As of 2019, India holds the worlds highest data usage per smartphone, averaging 9.8 GB per month. It is expected to double to 18 GB by 2024. The internet user base in India is likely to reach 627 million by end 2019. App downloads in the country increased from 12.07 billion in 2017 to 19 billion in 2019 and is expected to reach 37.21 billion by 2022F. Total wireless data usage in India grew 10.58 per cent y-o-y to 19,838,886 TB (terabytes) during Q2FY20. The contribution of 3G and 4G data usage in total volume of wireless data usage was about 5.72 per cent and 93.65 per cent, respectively, during Q2FY20. Share of 2G data usage remained 0.62 per cent during this quarter. India had over 500 million active internet users (accessed Internet in the last one month) as of May 2020.

Gross revenue of the telecom sector stood at Rs 121,527 crore (US$ 17.39 billion) in FY20 (till September 2019). Strong policy support from the Government has been crucial to the sectors development. Foreign Direct Investment (FDI) cap in the telecom sector has been increased to 100 per cent from 74 per cent. FDI inflow in the telecom sector totalled US$ 37.27 billion during April 2000-March 2020.

Global Telecom Market

The global telecommunication market was valued at ~US$ 2 Trn in 2019 and is expected to expand at a CAGR of ~5% from 2020 to 2030, reaching US$ 2.5 Trn by the end of the forecast period

According to the report, the global telecommunication market will continue to be influenced by a range of macroeconomic and industry-specific factors. Asia Pacific will remain at the forefront of the global demand, with the market in the region expected to grow at a higher rate throughout the forecast period.

All businesses are affected by the increasing lockdown situation due to COVID-19. Demand for telecommunication solutions is expected to increase with the adoption of different cloud based communication platform solutions across all regions.

Outlook: Company is evaluating various opportunities and suitable business opportunities which improve the operations of the company.

Performance Review:

Discussion on Financial Performance with respect to Operational Performance:

1. Total Income: Nil

2. Share Capital:

The paid-up share capital as on 31st March, 2020 is Rs. 458,92,380. /-

3. Net Loss:

The Companys operating loss of Rs. (20,87,000) during the year.

4. Earnings Per Share (EPS):

The Earning Per Share for the Financial Year 2019-20 is Rs. (0.45) per share (Face Value: Rs.10/- each).

Your directors are putting continuous efforts to increase the performance of the Company and are hopeful that the performance in coming year will overcome from the present situation.

By order of the Board of Directors
For Aarv Infratel Limited
Sd/- Sd/-
Chairman & Non-Executive Director Managing Director
(DIN: 05243450) (DIN: 00475947)
Date: 04th September, 2020
Place: Bangalore