hathway cable datacom ltd Management discussions

GLOBAL ECONOMY OVERVIEW:

On the surface, the global economy appears poised for a gradual recovery from the powerful blows of the pandemic and of Russias unprovoked war on Ukraine. China is rebounding strongly following the reopening of its economy. Supply-chain disruptions are unwinding, while the dislocations to energy and food markets caused by the war are receding. Simultaneously, the massive and synchronous tightening of monetary policy by most central banks should start to bear fruit,with inflation moving back toward its targets. As per latest forecast, global growth will bottom out at 2.8 percent this year before rising modestly to 3.0 percent in

2024. Global inflation will decrease, although more slowly than initially anticipated, from 8.7 percent in 2022 to 7.0 percent this year and 4.9 percent in 2024.

Notably, emerging market and developing economies are already powering ahead in many cases, with growth rates (Q4 Y-O-Y) jumping from 2.8 percent in 2022 to 4.5 percent this year. The slowdown is concentrated in advanced economies, especially the European Union area and the United Kingdom, where growth (also fourth quarter over fourth quarter) is expected to fall to 0.7 percent and –0.4 percent, respectively, this year before rebounding to 1.8 and 2.0 percent in 2024.

Inflation is much stickier than anticipated even a few months ago. While global inflation has declined, that reflects mostly the sharp reversal in energy and food prices. But core inflation, excluding the volatile energy and food components, has not yet peaked in many countries. It is expected to decline to 5.1 percent this year (fourth quarter over fourth quarter), a sizable upward revision of 0.6 percentage point from our January update, well above target.

Activity too shows signs of resilience as labour markets remain historically tight in most advanced economies. At this point in the tightening cycle, we would expect to see stronger signs of output and employment softening. Instead, both output and inflation estimates have been revised upward for the past two quarters, suggesting stronger-than-expected demand, which may require monetary policy to tighten further or to stay tighter for longer.

The stability of any financial system hinges on its ability to absorb losses without recourse to taxpayers money. The financial instability last fall in the gilt market in the United Kingdom and the recent banking turbulence in the United States with the collapse vulnerabilities of few regional banks illustrate that significant exist both among banks and nonbank financial institutions. In both cases the authorities took quick and strong action and have been able to contain the spread of the crisis so far (April 2023 Global

Financial Stability Report). Yet the financial system may well be tested again.

With persistent downside risks, countries with weaker perceived fundamentals face the challenge of Investor concerns. A sharp tightening of global financial conditions a "‘risk-off" could have a dramatic impact on credit conditions and public finances especially in emerging market and developing economies, with large capital outflows, a sudden increase in risk premia, a dollar appreciation in a rush towards safety, and major declines in global activity amid lower confidence, spending, and investment. In such a severe downside scenario, global GDP per capita could come close to falling an outcome whose probability we estimate at about 15 percent.

We are therefore entering a perilous phase during which economic growth remains low by historical standards and financial risks have risen, yet inflation has not yet decisively turned the corner.

More than ever, policymakers will need a steady hand and clear communication. The appropriate course of action is contingent on the state of the financial system.

As per the latest projections of IMF, an overall slowdown is indicated in medium-term growth forecasts. Five-year-ahead growth forecasts declined steadily from 4.6 percent in 2011 to

3.0 percent in 2023. Some of this decline reflects the growth slowdown of previously rapidly growing economies such as China and Korea.

Source: https://www.imf.org/en/Publications

INDIAN ECONOMY OVERVIEW:

The Indian economy, however, appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23. Yet in the current year,

India has also faced the challenge of reining in inflation that the

European strife accentuated. Measures taken by the government and RBI, along with the easing of global commodity prices, have finally managed to bring retail inflation below the RBI upper tolerance target in November 2022. However, the challenge of the depreciating rupee, although better performing than most other currencies, persists with the likelihood of further increases in policy rates by the US Fed.

Despite these, agencies worldwide continue to project India as the fastest-growing major economy at 6.5-7.0 per cent in FY23. These optimistic growth forecasts stem in part from the resilience of the Indian economy seen in the rebound of private consumption seamlessly replacing the export stimuli as the leading driver of growth. The uptick in private consumption has also given a boost to production activity resulting in an increase in capacity utilisation across sectors. The rebound in consumption was engineered by the near-universal vaccination coverage that brought people back to the streets to spend on contact-based services, such as restaurants, hotels, shopping malls, and cinemas, among others. The worlds second-largest vaccination drive involving more than 2 billion doses also served to lift consumer sentiments that may prolong the rebound in consumption. Vaccinations have facilitated the return of migrant workers to cities to work in construction sites as the rebound in consumption spilled over into the housing market. This is evident in inventory the housing market witnessing a significant overhang to 33 months in Q3 of FY23 from 42 months last year.

The Capital Expenditure (Capex) of the central government, which increased by 63.4 per cent in the first eight months of FY23, was another growth driver of the Indian economy in the current year, crowding in the private Capex since the January-March quarter of 2022. On current trend, it appears that the full years capital expenditure budget will be met. A much-improved financial health of well-capitalised public sector banks has positioned them better to increase the credit supply. The increase in the overall bank credit has also been influenced by the shift in borrowers funding choices from volatile bond markets, where yields have increased, and external commercial borrowings, where interest and hedging costs have increased, towards banks. If inflation declines in FY24 and if real cost of credit does not rise, then credit growth is likely to be brisk in FY24.

Indias economic growth in FY23 has been principally led by private consumption and capital formation. It has helped generate employment as seen in the declining urban unemployment rate and in the faster net registration in Employee Provident Fund.

Global growth has been projected to decline in 2023 and is expected to remain generally subdued in the following years as well. The slowing demand will likely push down global commodity prices and improve Indias CAD in FY24. However, a downside risk to the Current Account Balance stems from a swift recovery driven mainly by domestic demand and, to a lesser extent, by exports.

Outlook Year 23-24:

Indias recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment. The current 22 Economic Survey 2022-23 growth trajectory will be supported by multiple structural changes that have been implemented over the past few years. The private sector financial and non-financial

– was repairing balance sheets, which led to a slowdown in capital formation in the previous decade. Budgeted capital expenditure rose 2.7x in the last seven years, from FY16 to FY23, re-invigorating the Capex cycle. Structural reforms such as the introduction of the Goods and Services Tax and the

Insolvency and Bankruptcy Code enhanced the transparency of the economy and ensured financial discipline and better compliance.

Source : https://www.indiabudget.gov.in/economicsurvey

INDIAN M&E SECTOR OVERVIEW:

The Indian M&E sector continued its strong growth trajectory. It grew by Rs. 348 billion (19.9%) to reach Rs. 2.1 trillion (US$ 26.2 billion), 10% above its pre-pandemic 2019 levels. The Share of traditional media stood at 58% of M&E sector revenue in 2022 down from 71% in 2019

We expect the M&E sector to grow 11.5% in 2023 to reach Rs. 2.34 trillion (US$ 29.2 billion), then grow at a CAGR of 10% to reach Rs. 2.83 trillion (US$ 35.4 billion) by 2025

INDIAN M&E SECTOR GREW 20% IN 2022 TO REACH Rs. 2.1 TRILLION

							CAGR
	2019	2020	2021	2022	2023 E	2025 E	2022-2025
Television	787	685	720	709	727	796	3.9%
Digital Media	308	326	439	571	671	862	14.7%
Print	296	190	227	250	262	279	3.7%
Filmed Entertainment	191	72	93	172	194	228	9.8%
Online Gaming	65	79	101	135	167	231	19.5%
Animation and VFX	95	53	83	107	133	190	21.1%
Live Events	83	27	32	73	95	134	22.2%
Out of Home Media	39	16	20	37	41	53	12.8%
Music	15	15	19	22	25	33	14.7%
Radio	31	14	16	21	22	26	7.5%
Total	1910	1476	1750	2096	2339	2832	10.5%

All figures are gross of taxes (Rs. in billion) for calendar years : EY estimates

THE M&E SECTOR HAS BECOME MEDIUM AGNOSTIC

The M&E sector is projected to grow 10.5% in 2025 and add

Rs. 734 Billion in three year, The key contributors to this growth will be digital, online gaming and television (together contributing to 65% of the growth), followed by animation and VFX (11%), live events (8%) and films (8%).

Video remained the largest earning segment in 2022, and despite resumption of normal life after the pandemic, held on to a 11% gain in revenue share since 2019.

TELEVISION

Television subscription revenues in India decreased 4% in 2022 due to a reduction in the paid subscriber base by around five million television homes, while ARPU remained stable as channel pricing was not increased during the year The fall in pay television homes has been attributed to both cord-cutting at the top end as well as movement to free Television (DD FreeDish) at the bottom end of the customer pyramid.

TV WILL REACH 200 MILLION HOMES BY 2025

	2020	2021	2022	2025E
Pay TV	131	125	120	116
(cable + DTH + HITS)
Free TV	40	43	45	50
Unidirectional TV	171	168	165	166
Connected TV	5	10	15	40
(bi-directional)
Total TV subscriptions	176	178	180	206

EY estimates : millions of subscriptions

Future outlook

Subscription income is likely to see a 2.7% CAGR growth to reach

Rs. 425 billion by 2025, on account of several conflicting factors:

There were 120 million active pay TV homes and 45 million free TV homes and average Time spent on linear television fell 7% in 2022 due to a fall in both Hindi and regional language viewership Smart TV sets, however, increased to 25 million though only 8 to 10 million connected to the internet daily. Total television screens (linear and bi-directional) are expected to reach 206 million by 2025 from 180 million today

However, the mix would be different We estimate that growth of overall television households shall be driven by connected TVs which could cross 40 million by 2025 and free television which could cross 50 million and Pay TV households are expected to decline by two million in 2023, before falling slowly to 116 million households by 2025

In addition, increased acceptance of permanent and temporary work-from-home culture has created a large "laptop audience"

– possibly a reason why second TV sets are not getting reconnected, and a good case for parity-pricing between linear feeds on TV and on OTT

Subject to implementation of ad caps and regulatory restrictions on pricing, we expect pricing growth will be around half of inflation for subscription and inflationary for advertising, and hence television revenues will overall continue to grow to Rs. 796 billion by 2025

End-customer prices remained stable at an average of Rs. 223 per month (net of taxes), given that regulations prohibited pricing changes for a large part of the year

Industry discussions indicated that most consumers opted for packs created by the DPOs and LCOs with minimal customisation, however, periods of temporarily suspended connections increased marginally as alternate – and even free – entertainment options were available on mobile phones, which reduced the need to recharge in a timely manner

• Television households will grow from 176 million to 206 million by 2025E:

- Growth in population will increase Indian households by nine million till 2025

- Low entry barrier to consume free television

- While 44% Indian sports fans watch live sports only on TV, a sizeable 36% are using both traditional and digital media to watch live sports, while the remaining 20% are watching exclusively on Digital

- Strong performance of regional channels and sports on Free TV

- State elections in 2023 and national elections in 2024

- Distribution of free STBs (as envisaged by Prasar Bharati) and subsidised STBs by private players

- Relative pricing of television to broadband remains currently much in favor of television

- Availability of television sets for as low as Rs. 6,000

- Growth of Indias per capita income from approx. US$ 2,500 today to US$ 3,000 by 2025

• But active television homes will face downward pressures as well:

- Continued movement of the pay TV base to OTT platforms as broadband and 5G penetration increase

- Increased time spent on alternate platforms like YouTube, social media, and gaming platforms, which are vying for a share of free time

- Inability to completely pass on inflationary pricing growth to end consumers in a falling market

- Rise of a new sector to replace ad income lost from sectors such as gaming, crypto and betting

- Free IPL on digital and its impact on TVs share of ad revenues from the property

44% Indian sports fans watch live sports only on TV, a sizeable 36% are using both traditional and digital media to watch live sports, while the remaining 20% are watching exclusively on Digital

Millions of Indian households : EY estimates : SVOD includes AVOD

• Digital only: Consume content only on digital platforms, rarely access television

• Digital 1^st: Consume pay TV and at least one paid OTT service

• TV 1^st: Consume pay TV and generally only bundled/ free OTT content

• Free consumers: Consumer do not pay for content, either on TV or OTT

• TV dark: Consumer do not have access to large screen television but may have access to a smart or feature phone and consequently some households may access YouTube and AVOD platforms before TV Bi-directional television households will reach 52 million (or cross 100 million)

Connected TV sets will exceed 40 million

• Smart connected TVs will exceed 40 million (daily active users) by 2025, thereby ending the monopoly of broadcasters on the large screen and leading to around 30% of content consumed on large screens to be social, gaming, digital, etc.

The unified interface whether on app, device or platform will become the new landing page and earn placement and marketing revenues

• OTT aggregation will be a key driver of growth on CTV

The 2 x 4 LCO model will be the de facto reach driver

• LCOs will rejuvenate their last-mile distribution businesses with digital offerings, and will drive connectivity for India, supported by larger telcos and ISPs

• The LCO will evolve to provide two wires into each home – a linear TV connection for live television and a broadband connection

• Last-mile digital services will include aggregation of content (across TV and OTT), data, smart home capabilities and community social interaction and news

INDIAN BROADBAND INDUSTRY:

Subscriptions	Dec 2020	Dec 2021	Dec 20257
(In million)
Wired broadband	22	26	32
Wireless broadband	725	766	800
Total broadband	747	792	832

Internet Broadband penetration increased 4% to reach 832.0 million as on Dec 22, of which 800.0 million had broadband access Only 32.0 million Indian households had a wired broadband connection.

Wired Broadband reach to 32.0 Mn in Dec 22 has increased by 23% compared to the 26 Mn in Dec-21

With over 800 million broadband subscriptions, India has the second largest broadband subscriber base in the world, after China Currently, less than one in ten Indian households has a wired broadband connection Data published by Ookla in January 2023 it indicates that Indian consumers can expect to receive in 18.26 Mbps & 49.09 Mbps in Mobility and fixed line respectively.

Total telecom subscriptions were 1,170 million in December 2022 as compared to 1,178 million in December 2021 Urban subscriptions comprised 56% while rural subscriptions were 44%.

We also estimate the revenue will grow to ~ 860 Million at the CAGR 15% by 2025, driven by the various platform of revenue stream such as OTT, Digital advertisement, SME & E-commerce etc.

Indias low data prices are the key reason for growing telecom internet user base, and consequently, the growth being witnessed across online entertainment, audio streaming, gaming, social media, etc.

Despite the low prices, there are still an estimated 300 million feature phone users who are yet to migrate to smartphones

ONLINE CONSUMPTION INCREASED

Indians spent 4.9 hours a day on their phones in 2022, aggregating 748 billion hours of consumption (second highest in the world) in 2022 which Is increase by 6.8% hours compareIndian MSO toto 2021. Average time spent on social media by the Indians is around 82%

In India, average monthly mobile data usage per smartphone was 25GB per month in 2022, and this is set to increase at a CAGR of 14% to reach 54GB by 2028 Growth was driven by increased adoption of 4G and 5G, which grew to 74% of total subscriptions as compared. Average App download by an Indian is around 28.9 billion in 2022 a over a 8% growth in 2021

COMPANY OVERVIEW

Hathway Cable and Datacom Limited (the Company), a subsidiary of Reliance Group business conglomerate, is a vibrant

Organisation engaged to provide fixedline through Fiber ISP and

CATV services to millions of homes across the Pan India. As one of the leading fixedline internet service providers in the country,

HCDL provides uninterrupted and rapid-speed connectivity through its fast-growing ISP business along with OTT offering, Thefirst GPON FTTH and having 6.2 Mn

Home passes and 1.12 Mn subscribers base, and approximately 72,000 Kms of Fiber Optic Cable covered Pan India to service the customers.

Hathway Digital Limited (HDL), a wholly owned subsidiary of HCDL, provides CATV services, which is one of Indias largest Multi System Operators (MSOs), with 7+ main head ends and a network of approximately 31,000 Kms of Fiber Optic Cable providing cable services to 5.6 Mn viewers (including through its fellow subsidiaries & JVs) pan India and reach to 700+ towns and adjoining areas.

HCDL also delivers both CATV and Broadband services in certain parts of the country through its associate company, GTPL Hathway Limited.

BROADBAND BUSINESS:

Broadband Customers (1.12 Mn wireline broadband subscribers as of 31^st March, 2023) increasingly prefer wireline broadband as it allows online media consumption and seamless accessibility of data to multiple devices while at home. The broadband tier 2 and 3 industry saw a significant towns as many professionals shifted base to their home towns. Online education also became a key growth driver for broadband in smaller cities.

The Companys focus on FTTH-led technology edge and improving consumer experience through enhanced digitisation and automation helped in increasing the FTTH consumer base by more than 20%. Through enabling consumers to handle multiple digital engagements from OTT consumption needs to office video calls and online demand from schools, FTTH consumers enjoying unlimited data, Average Usage per customer is ~ 300 GB p.m., with high traction in Southern InfoTech hubs. This shows the level of engagement of consumers with the Company network. With high-speed unlimited plans, while Company focused to provide uninterrupted service, it also started giving consumers dual band routers which allowed them to get consistent speed on multiple devices.

The average data usage per costumer per month reached 300 GB in March 2023 exit which showed customers preference for watching online media.

Company is committed in providing exceptional customer service and has oriented a step further in this direction by focusing on AI driven automations which are resolving more than 50% customer queries in less than 2 minutes. Entire support function has been reoriented to provide within 4 hrs support to the customers and same day installation for new customers. This journey is continuing with re-engineering its customer front-end to make it technology-enabled, so as to drive operational efficiencies and strategic thrust on continuous innovation, in which lies a strong ambition to empower customers. The key innovation Initiatives taken during the year were as below :

• GPON customers are being committed of 300 Mbps speed on Wi-Fi on our 300 Mbps plans with our new high gain and long range ONT devices which work in both the Wi-Fi bands of 2.4 Ghz and 5 Ghz. 5 Ghz band has less interference and is able to give 300 Mbps speed on the latest mobiles and laptops that support 802.11 ac Wi-Fi protocol whereas 2.4 Ghz provides an extensive coverage in customer homes, so even if they are far from their Wi-Fi device, they will still remain connected with the Band Steering feature that we have implemented in our Dual Band ONTs.

With the launch of Digital CAF which has built in Artificial

Intelligence (AI) features of Aadhar based photo and address verification with the live photo of the subscriber,

50% of our new GPON customers are being connected and activated, the same day.

42% of the technical complaints including that of field pertaining to both network and customers are being resolved within 4 Hrs

During the year under review, the Broadband business revenue stood at Rs. 638.7 crores and the subscribers stood at 1.12Mn (Previous Years Broadband business revenue stood at

Rs. 621.9 crores and subscribers stood at 1.11 Mn).

CABLE TELEVISION BUSINESS:

Hathway Digital Limited (HDL), a wholly owned subsidiary of the Company, provides Cable Television Services on Pan India basis. Post implementation of New Tariff Order (NTO), customers have the freedom to watch channels of their choice with best-in-class technology.

To enhance the systems capabilities using the technical feasibility and to delight customers, numerous initiatives were undertaken during the year, including :

• Continuous focus to expand network footprint through incremental infrastructure, enabling to expand HDLs market share. HDL connected ~ 75 new locations with IP links and added ~ 1,800 kms of fiber network;

• Product/GTM strategy including new products and schemes to make Hathway infrastructure-ready to seize the benefitof the more conducive prevailing market;

• Hathway was one of the few MSOs which managed to hold ground in a situation where most of other MSOs are losing their base and share to OTT

• New Initiatives and Partnered with third party vendors:

- Enabling QR Code on EPG based digital payments with credit going to LCOs Bank Account directly and providing instant activation

- API creation for enabling instant activation through any App that LCO may be currently using Next generation HEVC HD box and OTT hybrid box were launched during the year to give Cable Television Customers enhanced viewing experience

• Online renewal facility to empower customers by giving them the freedom to renew their packages at the click of a button through MyJio App, at their own convenient time and place

• Leveraging platforms like WhatsApp for continuous customer engagement

FINANCIALS REVIEW:

Standalone Operating Gross Revenue stood at Rs. 638.7 Cr. compared to previous year Rs. 621.9 Cr. Total Comprehensive Income stands at Rs. 61.4 Cr (P.Y. Rs. 47.1 Cr)

Consolidated Gross Revenue stand at Rs. 1,858.4 Cr compared to previous year Rs. 1,793.0 Cr and Total Comprehensive profit stand at Rs. 58.1 Cr. (P.Y. Rs. 128.9 Cr)

Stand Alone	FY23	FY22	Growth%
Operating Revenue	638.7	621.9	3%
Operating EBITDA	194.8	195.4	0%
EBITDA Margin %	31%	31%	-1%
Total comprehensive income for the Year	61.4	47.1	30%
Consolidated	FY23	FY22	Growth%
Operating Revenue	1,858.4	1,793.0	4%
Operating EBITDA	315.4	393.4	-20%
EBITDA Margin %	17%	22%	-5%
Total comprehensive income for the Year	58.1	128.9	-55%

RATIO ANALYSIS

Sr. No. Prticulars	Year Ended March 31, 2023	Year Ended March 31, 2022	Variance	Remark
1. Current Ratio	3.00	2.33	29%	Movement from non current investment and other non current financial assets to cash & cash equivalents and current investment
2. Debt-Equity Ratio	0.00	0.00	-
3. Debt Service Converage Ratio	NA	NA	NA	The Company is Debt-free through the current and previous F.Y.
4. Inventory Turnover Ratio	NA	NA	NA
5. Trade Receivanles Turnover Ratio	18.82	61.89	-70%	Trade Receivables Turnover Ratio decreased due to Increase in Average Trade Receivables
6. Operting Profit Margin	17%	22%	-23%	Reduction in Operating Profit on account of reduction in Revenue and increase in Operaions Cost
7. Net Profit Ratio	0.04	0.07	-52%	Reduction in Net Profit on account of reduction in Revenue and increase in Operations Cost
8. Return on Capital Employed (Excluding Working Capital Financing)	-0.01	0.00	-

The Company has 349 & 277 employees on roll in the Company & HDL respectively as at 31^st March 2023.

DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

Hathways internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. Hathway has a well-defined delegation of power with authority limits for approving revenue as well as expenditure.

Hathway uses a state-of-the-art enterprise resource planning (ERP) system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. Entity Level Control documented. The documentation of process maps and key controls has been completed during previous financial operating processes. It has continued its efforts to align all its processes and controls with global best practices.

Detailed reviews are conducted on a periodic basis to evaluate the design, adequacy and operating effectiveness of the Internal

Financial Controls of the Company. Management testing has been conducted on a sample basis for Revenue, Expenses & payables, Fixed Assets, Inventory, Compliance, Related Party, Borrowings, Consolidation, Contingent Liability, Loans and Advances, Cash management, Current investment, Forex exposure and hedging, Finalisation, Retirement benefits taken or agreed upon with a finite closure date where control improvement . areas wereidentified

Based on the above, the Management believes that adequate Internal Financial Controls exist in relation to its Financial Statements.

SWOT ANALYSIS

Strengths	Challenges
Broadband:	Broadband:
First MSO to Launch GPON with assured speed of 300 Mbps and above on Wi-Fi	To retain Lower GB usage customers as they can manage their usage from mobility at lower price
Highly engaged customer base with Average data consumption 300 Gb per subscriber per month	Aggressive pricing plan from competition impeding ARPU Growth
First ISP Company to provide VoiceBOT, an Artificial Intelligence (AI) and Machine Learning (ML) applications & tools, for handling interactive Voice Services
Smart IVR system at call centers, which further strengthened
First Time Response (FTR)
Cable:	Cable:
5.6 Million digital subscribers base; Offers its cable television services across 700+ towns, operating in pan India regions	Lower paying capacity of consumers and poor infrastructure in Phase 3 and 4 markets
Next generation best in industry HD Set top box	Revenue sharing with LCOs making it difficult to compete with DTH
Enhanced system and technical capabilities based on JIO fibre backend support to meet customer expectations for best in class TV viewing experience	Continued movement of the pay TV base to free TV (at the lower end) and OTT platforms at the upper end
Encouraging LCOs to empower their customers with online renewal facility	Economic slow down during covid impacting renewal of multiple TV subscription
Provision of Mobile Apps and Portals to our customers and LCOs
Rolled out a new product/GTM strategy to make Hathway infrastructure-ready to seize the benefit of the more conducive prevailing market. We are in the process of rolling out new plans
Opportunities	Threats
Broadband:	Broadband:
Rapid growth of the Tier II cities, increasing trend for demand for high speed fixed broadband	Low end users may move to wireless service providers due to competitive pricing and improvement in wirelss technology
Increase in Media content through OTT platform main driver for online content consumption	Technology Changes can lead to need for network upgradation resulting in increased capex
Covid lead sampling of online education and other use cases of online working will help in continuous increase in demand for fixed line broadband
Cable:	Cable:
Launch of Value Add Services	Free Dish offering stiff competition in Phase 3 and 4 Markets
Geographical expansion	High end consumers / Nuclear families / Bachelors can move to TV viewing through OTT apps
Increase ARPU through HD packs at right price
Increase customer engagement through better regional content

RISKS AND CONCERNS

Product / Technology Risk	Competition
Consequence: The traditional cable customer preferences are very slowly changing and in long term some of them may move towards getting content in a non-linear manner.	Consequence: Broadband and Cable business verticals where Hathway is present, has low entry barriers and multiple players across geographies
Inability to meet the customers demand might lead to loss in business. Also Rapid advancements in technology leading to obsolescence of existing assets	Risk Mitigation Strategy: To take early lead over competition,
	Hathway has offered cutting edge products & solutions at value for money pricing to enhance customers delight Hathway is well poised to grow in this new segment of the market
Risk Mitigation Strategy: The company is well placed to serve the arising needs of the customers by offering OTT & broadband services to existing cable customers
The shift to MPEG-4/HEVC STBs in cable and provision of providing broadband through DOCSIS 3.1 /GPON network is testament to the fact that the Company is sensitive towards the rapidly evolving technology trends
Awareness Risk
Consequence: LCOs function as primary facilitators of our business expansion. Therefore, delay in updating/on boarding them on latest initiatives undertaken by the company would negate the first mover advantage.
Risk Mitigation Strategy: The company has launched Hathway Connect portal for LCOs by imparting real-time training to help them manage their customers.