Suyog Telematics Ltd Management Discussions.

Business Overview

We are a growing passive telecommunication infrastructure provider in India, engaged primarily in the business of installing and commissioning of Poles, Towers and Optical Fiber Cable ("OFC") Systems in India. We are registered as Infrastructure Provider Category-I (IP-I) with DoT (Department of Telecommunications). "Passive infrastructure" refers to the telecommunication towers for wireless telecommunication services and "OFC" is used for the purpose of hosting and assisting in the operationoftheactiveinfrastructureusedfortransmittingtelecommunications signalsortransporting

Our business is to build, own and operate telecommunication Poles, Towers, OFC systems and related assets and to provide these passive infrastructure assets on a shared basis to wireless and other communications service providers. These customers use the space on our telecommunication towers to install active communication-related equipment to operate their wireless communications networks.

Current FY was one of the toughest year for Indian Telecom Industry in which we have seen exit of almost 4 telecom operators. But even in such a difficult condition, we have not only sustained but have also grown our Revenues by 24.5%.

Products and Services offered by us

Our company specializes in innovative solutions which are different from the existing tower sharing concept. We play host to telecom service providers by acquiring and deploying LCHR (Low Cost High Revenue) Sites. Thus our company provides services in terms of infrastructure provisioning for Poles, Towers and Optical Fiber to Telecom Operators in niche areas.

1. Tower Business

We are in the business of installing Mobile Towers and providing the same to telecom service providers on a sharing basis. We have a tenancy ratio of 1.8 per tower. These telecommunication towers are being used for all technologies like CDMA, 2G, 3G, and 4G. Our Towers are normally in range of 6 meters to 30 meters in height and are considered structurally stable assuming a wind speed of 180 km per hour.

2. Poles Business

Since it is not possible to erect regular network towers etc atop flyovers/bridges we have spearheaded the concept of Poles for telecom infrastructure. We have deployed a huge number of Poles and Infrastructure on lease over several MSRDC Flyovers, Bandra - Worli Sea Link Project, MMRDA Flyovers as well as Skywalks in and around Mumbai and have also installed BTS equipments on poles for the telecom service providers. We have covered all the 3 Main Routes of Mumbai (Sion Panvel Highway, Eastern Express Highway & Western Express Highway)alongwithcritical South Mumbai Area through our innovative pole concept solution.

We have recentlystartedworkinginNHAIprojects&areinstallingsimilarflyover sites in Bangalore.

Further, we have also worked on the concept of installing BTS on Poles in local areas where there is severe traffic and congestion in collaboration with the local Police Authorities, whereby we install poles in places such as Check Naka’s, Near Railway Stations, Areas, Slum Areas etc and also install CCTV Cameras for the Police Department in such Poles in order to help them with their surveillance mechanisms.

Clients using our poles infrastructure include Airtel, Reliance Jio, Vodafone & Idea Cellular.

3. Optical Fiber Network Business

We have set up our own optical fibercable network of about 200 km from Thane Ghodbunder Road to Kalamboli & on all flyovers, skywalk & FOB Sites in Mumbai Metropolitan Region. In addition,our OFC network, fiber has been laid in ducts intended to provide added protection and to allow us to lay more fiber as demand increases. We have provisioned extra ducts throughout our OFC network, with the majority of our OFC network having been laid with eight ducts.

The average age of our ducts is thirty years, and the expected life span of such ducts is approximately thirty years. Our OFC network is laid about 2 ft below the ground for protection against natural elements and human intervention.

We have also started laying our Fiber Optic Network in Bangalore Circle.

SWOT Analysis of Tower Sharing Strengths


• Fallingrevenues,growingcapitalexpenditureandthehighoperating expenses incurred by each telecom operator on a site ownership basis individually, is driving operators to consider the sharing of infrastructure;

• Infrastructure sharing can be used to build more cost effective coverage in urban & rural areas;

• Once a tower asset is rented out, it usually generates a stable and predictable cash flow in the form of tower rentals from occupants;

• India has the problem of spectrum scarcity, which increases the requirement of towers to maintain a reasonable level of service quality;

• Recent 4G rollout by almost all major telecom operators has strengthened the market;

• High Potential in expanding markets like Bangalore, Gujarat & Goa;

• Our forte in executing LCS (Low Cost Sites) in Niche Areas & executing sites on Government establishments.


• No uniform policy guidelines by Civic Authorities for installation of cell sites across the country. Various Civic Authorities across India have varied policies/ guidelines for installation of cell sites.


• 5G Technology is around the corner & will be launched very soon, which will lead to huge rollout of sites by all the telcos.

• Market Consolidationhas lead industry towards 4 Big Player Market, which will ensure consistent investment in network & rollout by all Top Telecom Players.

• 4G rollout has provided with tremendous opportunities. 3G grew threefold & clocked a 146% growth while 2G grew by 59%. Airtel has implemented 4G data in more than 159 cities in India, Idea Cellular has reported a 39% y-o-y (as of Q3 FY15) growth in 3G cell sites, both clear indications of intent of telecom operators to spend on developing their data networks;

• RJio’s entry in 4G segment has further increased the demand of sharing of passive infrastructure & has also lead to increase in network rollout.

• Ever Increasing Data demand has also lead to drastic increase in Fiber Optic & Small Cell Rollout which can be our next engine of growth.


• A 25% - 30% success in active infrastructure sharing has the potential to reduce tenancies by 12% - 15%. This would have a negative impact on the business case of passive infrastructure providers and the future valuations.

Risks & Concerns

The following section discusses the various aspects of enterprise-wide risk management. Readers are cautioned that the risk related information outlined here is not exhaustive and is for information purpose only.

Suyog Telematics Ltd believes that risk management and internal control are fundamental to effective corporate governance and the development of a sustainable business. Suyog has a robust process to identify key risks across its operations and prioritize relevant action plans that can mitigate these risks.

Key risks that may impact the Company’s business include:

1. Changes in regulatory environment

The regulatory environment in India continues to be challenging. Recent regulatory developments will have significant implicationson the future of telephony as well as India’s global competitiveness. The entire industry looks to the Government for a fair, transparent and sustainable telecom regime. Amidst this uncertain regulatory environment, the positive feature is that larger players continueto enjoy majority of market share. Considering we derive a substantial portion of our revenues from the three largest telecom players in India, the risk is mitigated to a large extent.

2. Natural disasters damaging telecom networks

The Company’s telecom networks are subject to risks of natural disasters or other external factors. The Company maintains insurance for its assets, equal to the replacement value of its existing telecommunications network, which provides cover for damage caused by fire, special perils and terrorist attacks. Such failures and natural disasters even when covered by insurance may cause disruption, though temporary, to the Company’s operations. The Company has been investing significantly in business continuity plans and disaster recovery initiatives which will enable it to continue with normal operations and offer seamless service to our customers under most circumstances.

Internal Control Systems

The Managing Director and Chief Financial Officerareaccountableforfinancialcontrols,measuredbyobjectivemetricsonaccounting hygiene and audit scores. The Company deploys a robust system of internal controls that facilitates the accurate and timely compilation of financial statements and management reports, ensures regulatory and statutory compliance, and safeguards investor interest by ensuring the highestlevelofgovernanceandperiodiccommunication investors . with

The Audit Committee reviews the effectiveness of the internal control system in the Company and also invites the senior management/ functional directors to provide an update on their functions from time to time. ACertificate forming part of the Corporate Governance Report confirms the existence of effective internal control systems and procedures in the Company.

The Company’s Internal Assurance Group also conducts periodic assurance reviews to assess the adequacy of internal control systems and reports to the Audit Committee of the Board. The Company has taken several steps to enhance the internal control systems across all its circle operations such as: significantly improving the quality and frequency of various reconciliations, enhancing the scope and coverage of revenue assurance checks, segregation of duties, rolling out self-validation checks, regular physical verification, systems audits, desktop reviews as well as continuous training and education.

In summary, the healthy balance between empowerment and accountability at every operating level fosters a culture of responsible and well-judged risk taking.


As one of the leading providers of tower infrastructure services, the Company is well poised to benefit from the demand for towers as India is at a critical inflection point of data growth and the incrementalvoicegrowth.Theoperatorlandscapeisalsorationalizingas some of the evils of hyper-competition are going away and operators focus with a renewed rigor on rollouts, seamless coverage and new technologies in order to effectively compete in the marketplace and recover economic returns on the enormous investments made on spectrum and license.

The Company is focused on capitalizing on the rollout of new technologies and data services. Its outlook is in line with future growth potential of the sector. With a specialized operations in niche areas, expanding footprintsinallsignificantlycritical circles of indias, significant deployment expertise and healthy relationships with the customers who are India’s leading telecom operators, the Company is poised to benefit from all growth opportunities in the Indian market. Also our continued unwavering focus on cost and synergies across the organization will keep us in a healthy financial position and this very business model augurs well for its expansion and success in new geographies.

Focus on delivering Shareholders’ Value

With multifold growth in revenue, we are focused on delivering return to its shareholders on long term basis. We are focused on identifying opportunities for inorganic growth that are value accretive and feasible. Aim is to balance growth capital needs and distribution to shareholders.

Initiativ es and Future Plans

The Company is growth oriented in its approach and has made certain decisions for expansion of its operations:

• The company has extended its operations into NHAI projects.

• We are expanding our presence in Bangalore Circle with plan of rolling out 1000+ flyover pole sites

• We are also planning to expand our presence in Gujarat Circle in current FY

• The company is focused to increase the slum site tenancies from existing 1.8 to 2.

• The company is planning to provide fiber sites in Mumbai & Bangalore connectivity mainly flyovers, skywalks, and FOB sites. This initiative will ensure strong presence of the company is fibre business.

• We would also be capitalizing on our expertise in rolling out Small Cell Sites which is the next wave of deployment growth.

Discussion on Financial Performance with Respect to operational performance

Major revenue are generated from slum sites in Mumbai circle followed by MMRDA and MSRDC. The major telecom operator revenues are contributed by Jio, Airtel followed by Vodafone.

Material Developments in human resources/Industrial relation front, including number of people employed.

Employees are recruited from various spheres of industry like Engineering, Labour, Law, Administration etc. yearly management meeting are organised to address employee’s issue currently 100 + Employee’s work in company.

Pursuant to amended Schedule V of Listing Regulations, for specified ratios reference may be drawn to Board Report and Financial Statements.

Vivek Lature Shivshankar Lature
Date: August 09, 2019 Whole Time Director Managing Director
Place: Mumbai DIN: 02274098 DIN: 02090972