aarv infratel ltd Management discussions

Industry Structure & Development:

Macro-Economic Situation

A robust telecommunications infrastructure is now an essential service for delivering high-speed connectivity to people, homes, offices and governments. The global movement towards everything digital and proliferation of powerful mobile devices such as smart phones, tablets and IoT, rollout of new 4G and 5G networks for mobile and fixed broadband and increased penetration of highspeed, fiber-based home broadband is driving the global demand for all-pervasive, higher capacity fiber optic networks based. The telecom and internet service providers are investing significant capex to upgrade their optical networks and this presents a robust growth opportunity for our industry. A combination of factors such as, increased adoption of home broadband, high-speed mobile broadband, bandwidth-intensive applications such as high-speed business Ethernet, cloud connectivity, high-capacity wireless backhaul, and data center inter-connections are resulting in an expansion of the optical network equipment market. The continuing global trend of increased data consumption by consumers, enterprises and intelligent devices is a favorable driver for our business. With internet becoming more ubiquitous and use of high-bandwidth services such as video streaming, social networking and e- commerce becoming commonplace, there is a dramatic increase in data traffic in telecom networks. The global outbreak of COVID-19 and stringent social distancing restrictions are accelerating this trend. As a result, telecom operators are increasing capital investments in optical transmission and broadband access equipment to ensure that mobile and home broadband services are delivered with requisite quality and in cost-effective manner. While optical capital expenditure is growing in large parts of the globe, India and other developing countries in SAARC, South East Asia, Africa and Americas are growing faster than other geographies since developing countries have huge pent-up demand for optical fiber and fiber-based equipment in the access and backhaul to serve an exponential growth in highspeed data traffic driven by expansion of 4G networks while preparing for impending 5G rollouts, fiber-to-the-home (FTTH) and fixed wireless access (FWA) applications for broadband access, and growing bandwidth consumption by consumers and businesses due to preference for video-conferencing, video calling and virtualied events. India is expected to have one of the highest compounded annual growth rate (CAGR) of optical capex in the coming years and one of the highest proportion of optical capex to total telecom capex in the world in the next few years. The recent pandemic caused by COVID-19, has accelerated the need for high-bandwidth, reliable and secured networks, given the new trends such as work-from-home, remote learning, telemedicine, entertainment, e-commerce, e-Governance etc.

The demand for optical transmission will be driven by the following factors:

Mobile backhaul is defined as the transport of cell phone traffic between the cellular base station and the mobile switching centre. In the case of 2G and 3G networks that were dominated by voice and low-speed data services, cellular traffic was largely backhauled over microwave radio but with the arrival of 4G and 5G networks that are dominated by higher-speed data traffic, optical fiber based backhaul has become the norm. The fiberisation trend is further accelerating with the advent of 5G due to a 10x increase in backhaul capacity requirements and a 10x densification of cell towers, since 5G base-stations will be placed much more closer than the 4G base stations. In India, less than 30% of around 600,000 cell sites are currently fiberized (compared to 70-80% in developed countries) which is expected to increase to 60% by 2023. Overall, India has approximately 735 million mobile broadband subscribers today (source: TRAI statistics, March 2021) but the rural subscription base is ~30% so there continues to be a latent demand for higher speed 4G services, especially in smaller towns and rural areas.

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, 2022 is Rs. 458,92,380. /-

3. Net Loss:

The Company’s operating Profit/loss of Rs. 20,01,000 during the year.

4. Earnings Per Share(EPS):

The Earning Per Share for the Financial Year 2021-22 is Rs. (0.44)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.

For and on behalf of the Board
Bhasker K Bhatt
Date: 06th September, 2022 Chairman & Managing Director
Place: Hyderabad. (DIN: 09463033)