INDUSTOWER

[Regulatory cover note] October 29, 2022 BSE Limited The National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block – G, Bandra Kurla Complex, Dalal Street, Mumbai-400001 Bandra (E), Mumbai-400051 Ref: Indus Towers Limited (534816 / INDUSTOWER) Sub: Audio Recording of the Earnings Call for the quarter and half year ended September 30, 2022 Dear Sir/ Madam, Please find below the web link of the audio recording of earnings call conducted on Friday, October 28, 2022 for the quarter ended September 30, 2022: https://www.industowers.com/wp-content/uploads/2022/10/audio-recording-of-earnings-call-q2.mp3 Kindly take the same on records. Thanking you, Yours faithfully, For Indus Towers Limited (formerly Bharti Infratel Limited) Samridhi Rodhe Company Secretary Indus Towers Limited (formerly Bharti lnfratel Limited) Registered & Corporate Office: Building No. 10, Tower A, 4th Floor, DLF Cyber City, Gurugram-122002, Haryana I Tel: +91 -124-4296766 Fax: +91124 4289333 CIN: L64201HR2006PLC073821 I Email: compliance.officer@industowers.com I www.industowers.com [Investor-call recording transcript] and Vandana the moderator for this conference. Welcome to the Indus Towers Limited. Second quarter ended September 30th 2022 earnings call. For the duration of the presentation all participant lines will be in the lesson only mode. After the presentation the question and answer session will be conducted for all the participants on this call. In case of a natural disaster the conference call will be culminated post an announcement. Present with us on the call today is the senior leadership team of Indus Towers, Mr. Tejinder Kalra, COO, Mr. Vikas Poddar, CFO and Mr. Dheera Raghurvar, head investor relations. Before I hand over the call I must remind you that the overview and discussions today may include certain forward looking statements that must be viewed in conjunction with the rest that we face. I now hand over the call to our fourth speaker of the day, Mr. Tejinder Kalra. Thank you and over to you Mr. Kalra. Thank you Vandana. Good afternoon everyone and a very warm welcome to all of you. Hope all of you guys had a great Diwali. Thank you for joining us on the earning call of Indus Towers for the quarter ended September 30th, 2022. Joining me today are my colleagues Mr. Vikas Poddar, CFO and Mr. Dheera Raghurvar, head investor relations. You all must be aware that following Vimal's exit myself and Vikas are jointly responsible for the functioning of the company. The board is evaluating all talent options and we'll make an announcement soon once the right successor is finalized. Before I begin our agenda today I would like to reiterate Indus Towers' commitment to work towards government's digital inclusion goals by enabling connectivity across the nation. Our team of breadth and dedication is the main driving force behind our achievements as we continue to deploy remote areas in the remote locations such as border areas in JNK, Namsai area of Arunachal Pradesh, Tehsahalli in Karnataka thus enabling internet and mobile connectivity in these areas. At the same time we also braved the quarter and yet our field force was unwavering in their commitment towards maintaining the network. Our efforts in the fund for capacity of the financial results of the financial let me spend a minute on our operational performance wherein we have seen a pickup in our 10 co-location count at 1,87,926 and 238,128 respectively. Each growing at 2.4 percent and 1.7 percent year on year basis and 0.8 percent and 0.5 percent. But above the net addition of 1,746 co-locations on macro towers we've also added 1,535 co-locations on lean towers and as we have highlighted in the past demand for linear structures is rising based on the customer's requirement for densification. Moving on to the financial performance our reported revenues grew by 15.9 percent year on year to be 79.7 billion wherein the core revenue from rental were up by 12.5 percent. The recognition of the revenues from this settlement was recognized in Q23. The impact of deferred recognition on gross revenues and quarter on quarter basis our reported gross 0.3 percent respectively. Again after adjusting for the aforementioned two factors revenue were up 1.3 percent. Reported EBITDA was down 22.7 percent year on year and 21.1 percent quarter on quarter to rupees 28.1 billion. Our EBITDA margin declined 17.6 percentage points year on year and increased 1.6 percentage points quarter on quarter impacted due to increase in provision for doubtful debts which is accounted under other expense as we explained in the last quarter. In this quarter to be 17.7 billion. This number appears high during the quarter was towards settlement of resulting in lower provision for doubtful debts by about adjusted for the impact of one of items like the lower exit revenue the provision for doubtful debts and deferred recognition. EBITDA was up 1.1 percent year on year. Reported energy margins were at 14.6 percent in energy margins were also impacted due to on optimizing energy cost by taking appropriate measures. Profit after tax declined by 44.1 percent year on year and grew by 82.7 percent quote on quarter adjusted for one of items. Our profit after tax was down 3.5 percent year on year and up 6.4 percent. Operating activities for the quarter stood at 11.2 billion. In quarter two collection challenges we currently face and also the higher capex cash flows voted pre-tax return on capital employed and post-tax return on equity for the past 12 months quarter basis at 19.2 percent and 24.2 percent respectively again impacted by the project. Next I would like to provide an update on the receivable situation. Our reported trade receivables increased by rupees 2.5 billion during the quarter adjusted for the provision for doubtful debt matter and working towards the payment plan whereby the customer has agreed to pay a substantial part of the billed amount till December 2022 and 100 percent thereafter. It would also clear all its accumulated outstanding dues as on 31st December 2022 between January 2023 and July 2023. We continue to work on improving our receivables position and keeping a close eye on the situation. In summary our strong operational performance during the quarter is quite encouraging from the demand standpoint. Our financials continue to be impacted by the collection challenges we face from one of our customers. With the 5G rollouts already in motion we remain optimistic and prepared for the opportunities presented to the telecom infrastructure space as a whole. I would now request the moderator to open the floor for questions and answers. We will now begin the question and answer interactive session for all the participants who are connected to the audio conference service from Airtel. Due to time constraints we would request if we could limit the number of questions to two to enable more participation. Hence management will take only two questions per participant to ensure maximum participation. Participants who wish to ask question may please press star one on their touch screen enable telephone keypad. On pressing star one participants will get a chance to present their question on a first in line basis. To ask a question participant may please press star one now. Question comes from Mr. Kunal Vodam from BNP Paribas from Mumbai. Mr. Vodha you may please ask your question now. For the opportunity my first question is on the dues receivables. So Vodafone idea has offered convertible debentures to American towers. Have you considered that as an option and how comfortable would you be in receiving payment other than cash? Thank you Kunal. Thank you for the question. So we are aware of the developments that have happened with competitors. We haven't really considered this as an option. We already have payment plan agreed with the customers which we already shared. So we would really want to see that payment plan sort of materializing and so far we haven't really considered any option of convertible debentures. But what gives you the confidence that this payment plan can be like we will be able to make the payment? Well the confidence is basically from the fact that there have been positive developments. I mean couple of months back we have seen the forms package. We've also seen government support to the sector. Apart from that we've also seen the customer participating in the 5G options and still investing in the market. So we are quite closely engaged and monitoring the situation. Of course they have also sort of indicated that they are working on the funding plan and they are sort of close to finalizing that as well. So I think we are watching the situation closely and we are seeing improvement. Hopefully we will see the payment plan sort of materializing as I said. My second and last question. I wanted to understand how you're looking at the revenues coming in from the 5G rollout. So the operator who told us talked about rolling out almost pan India 5G by end of FY24. So how should we expect your revenues over the next few quarters? Would you see any serious lift from 5G rollouts and would it be front loaded or back loaded? Hi, thanks for the question. From a 5G perspective as we have said earlier the initial revenue from 5G is going to come in from loading of 5G equipment on the existing sites and that's the trend we are currently seeing from the orders that we have received from the customers. We are already doing RFIs around those sites and the revenue you know the same 4G side standalone 5G sites eventually will come but that looks to be sometime away or a few quarters away. Traffic on the 5G network for any... That's it from my side. Thank you. From Dollars Capital, Mumbai. Mr. Shah, you may ask your question now. Thanks for the opportunity. Am I audible? Yes, Anay. Yeah. So sir, my first question regarding the recent NCD raise of 2000 crores, can you give us a color as to the purpose for which the fund is being raised? Yeah, so I think this is driven by one of the requirements that we have from the regulator wherein INDUS is classified as a large corporate and we are required to comply with the provision of raising minimum 25% but that's circular. We are really expected to comply and our NCD issuance of 2000 crores, we have basically taken approval from the board and we would be issuing the NCDs in tranches in order to comply. So this was basically a regulation that was applicable on a block of two years starting FY22. So FY23 is our second year wherein we need to comply and then even subsequently the same regulation would still be applicable in 24 and 25. So we will be issuing tranches as and when necessary. Understood. The usage of the fund is concerned, of course, we will be using this towards our investment and growth and obviously you can see the rollout activities picking up. So we will certainly need the funding for RKPEC. Sure, sure. Fair enough. And so my next second question is regarding the deferred revenue recognition. I just missed that part. Can you clarify, it was 11 billion and 5.5 billion, right? You said in the... Yeah, 11 billion of, we had a deferred recognition of 11 billion in our total revenues and 5.5 billion in our core service revenue. So 5.5 is of course part of the 11 billion. Understood, understood. Fair enough. Thank you so much. That's it from me. Thank you. Thank you, Tanay. Thank you very much, Mr. Shah. Participants who wish to ask questions, may please press star 1 now. Ms. Falguni Dutta from just a Securities Private Limited from Kolkata. Ms. Dutta, you may ask your question now. I just have one basic question. The revenue that we mentioned, revenue from rentals was 4,780 crores for the quarter and the gross revenue is 7,960. So what comprises the differences? So basically within our revenue, our gross revenue, we have two sources. So one is the rental that we earn from our towers. And then we also have our energy revenue, which is largely coming from the pass-through of the energy cost that we build to our customers. So the difference, just to make it simple for you, Falguni, the difference between the two lines is the energy revenue. So the energy revenue would mean the cost that we incur is just a breakup of the revenue between cost and the net that we get, to understand it correctly. Because the energy cost is the cost we would be incurring, which we are passing on to the consumers. So one is that and the other is the net rental composition, if we were to understand the gross revenue breakup. Is that correct? That's right. That's right, yes. Thank you, sir. Thank you very much, Ms. Dutta. The next question comes from Mr. Pranav Shetty from New Vama, Mumbai. Mr. Shetty, you may please ask your question now. Yeah, hi. Thanks for the opportunity. I just, you know, trying to get a sense on the realization. So we have seen, you know, the realization coming to around 41,500 there about, you know, for the past two quarters, if I adjust for that, you know, one of the one-time revenue. Should we take this as a, you know, the base revenue and subsequently the, you know, the rent revenue for tenancy to grow from here? Or there will be some impact of, you know, renegotiation happening as and when those tenancies, you know, complete their tenures or so. And hence, we might see the renegotiation impact going on. Just trying to get a sense on that. Yeah. So Pranav, let me put it this way. The average revenue per tenancy of 47,000 that you see is obviously overstated because of the deferred recognition. We also mentioned in our previous calls that this also reflects the renewal discount that we have already agreed with our customers. That is roughly 500 rupees per tenancy from an overall portfolio perspective. So that's also baked in the numbers. Coming to the deferred recognition and the sort of jump that we see in the average revenue, I think that's pretty much come to an end. And we have received all the payments pertaining to those settlements. So going forward, our average revenue should get back to much more normal levels. And as far as the future renewals are concerned, like we have shared in our previous calls, this renewal discussion and agreement that we have reached is a very good reference point, is a very good sort of benchmark for all future renewals. And we don't expect any major change to happen. So any future renewal coming up in the subsequent years will also be pretty much on the same lines. And to that extent, we will see some movement. There is basically growth coming from 5G loading and so on, which will obviously take our average revenues up. And there will be in future maybe renewals and things like that. So it will be a mix of a couple of things. Does that answer your question, Pranav? It does. And my second question would be on how should we see the energy margin trending? Is there any green negotiation or anything happening on that front? I will probably just touch upon this energy margin and then I will maybe request Tejinder to also add a color from an operations perspective. So energy margin in this quarter, of course, is very positive because of the deferred recognition. We continue to be on a pass through model with our customers. And like I've always said in the past, pass through means no gain, no loss. But because we have usually some difference arising because of the actual cost and the expected cost. And by the way, these actual cost or expected cost can vary because of several factors that we face in our business. There could be seasonality. There could be high diesel consumption sometimes due to weather disturbances. There could be timing differences in electricity bills and so on. So we do face these gaps and that really causes the energy margin to fluctuate. We are trying our best to sort of drive a reduction in diesel which will obviously have a huge bearing on these gaps. And further, I think you heard Tejinder talking about the EHG initiative. So even our EHG initiatives and all the focus on the operational efficiencies would help us in sort of bringing this under control going forward. Anything you want to add, Tejinder? No, you largely covered it, Vikas. And Pranav, I think this energy margin is, as Vikas rightly said, this is a function of, you know, the greater size, availability at the sites is not in challenges with the ultimately, you know, which gets ironed out over time, but reflects in the quarterly where we are. But we are obviously on a continuous journey towards reducing diesel as much as we possibly can through a lot of diesel replacement solutions here which obviously the initiatives. Sure. Thank you and all the very best. Thank you, Pranav. Mr. Shastri, participants who wish to ask questions, may please press star one now. The next question comes from Mr. Rakesh Satya from SDFC Mutual Funds, Mumbai. Mr. Satya, you may ask your question now. The opportunity. Can you help us understand, you know, based on your initial discussion, how large will the 5G rollout order for you guys? I mean, you know, how should we think about it? What percent of the site or what percentage of the co-location probably would have loading that in the next 12 to 18 months if you can share some of the details around that. And secondly, would it be possible for us to quantify ballpark? What kind of a revenue upside are we looking from the 5G loading? Thanks for the question, Rakesh. Seeing these technology shift operators over a period of time will tend to cover 5G on all the sites they have with us or they have in the network. We have seen this already happening in the 4G space. So 100% of the operator sites have 4G rolled out on them. This has obviously taken a long while and now they are beginning to set up standalone 4G sites as well. For a period of time, I think the 5G curve follows a similar pattern. We already have seen a good amount of orders coming in from the operators. The announced position from the operators is that within 18 months in the country, which would largely cover the entire coverage area that they have. So I would expect a good percentage of the sites already being the capacity indicated in the previous. We have chosen 100 gigahertz would need a separate set of antennas in some cases. Then a loading that will come on the sites as well. Actually higher loading compared to the 4G loading that we already have would come. Okay. Would you quantify that based on your initial discussion, what the centers of the sites I understand that eventually 100% of the sites. But I'm just trying to understand what's the near term plan. The reason I'm asking is of course it can go to 500 towns, but what percentage of the towns operators would always have a choice. They can go cluster by cluster. They may not need to do 5G on the entire town in one go. So I'm just trying to understand that from a near term perspective, let's say over the next 18 months, are we talking about 100% of the 5G sites or are we talking about probably a fraction of the sites, if any visibility you have around the same based on your initial discussion with the operators. See, obviously the operators are also yet finalizing the overall plan, but from the initial understanding that we get from them over an 18 month understanding is anyway may be covering the operators may be covering. I'll not be able to give you any operator specific details, but that's largely looking to be the plan. If operators are talking about 500 be the minimum they would need to do. Secondly of the complete loading orbit of revenues, if you can also sort of clarify. My understanding was that some of the radios in the antennas are much lighter weight in the 5G technology. Doesn't that have any bearing the way 5G loading or the loading revenues work for us or will not that will not have any bearing? See, while the 5G loading 5G antennas or even the integrated antennas that you have on the 5G side. Yes, they are lighter in weight, but as I said, the power that we need to set up at the sites or the load power load of the site and a big chunk of the way the loading revenue is structured. There's a big component coming. We are talking about the aggregate energy plus non energy. I'm talking about the rental part of the revenue or the base revenue. Okay, understood. Thank you so much. Thank you very much Mr. Sekia. The next question comes from Mr. Ravi Agarwal from UTI AMC Limited, Mumbai. Mr. Agarwal, you may ask your question now. Hello. Thank you for the opportunity. My question is largely around the Vodafone and its receivable. So I would just try to buy the questions into a couple of ways. First is, sir, can you just tell me how much was the original total receivable from Vodafone idea before the write-off which was taken in the first quarter or the provisions submitted in the first quarter? And how much is the outstanding right now after the second quarter's provision? And what is the total distribution still outstanding from Vodafone and what is the aging? So that's the first question. And I'll come back with the second question after this. So Ravi, unfortunately, we cannot disclose customer-wise information. So your question regarding what is the receivable of Vodafone and how much is outstanding after the provision and aging, etc. Unfortunately, we won't be able to answer that. I understand, sir. So should we expect any further write-offs because what we understand from the previous one is that no major write-off would be coming in the next quarter or largely all the write-off have been accounted for. But now this quarter is even seeing a larger provision. So how much can we expect in the next half of the fiscal? Yeah, let me explain. And this is a very important point, Yobhi. So I think, first of all, we have already shared the payment plan that we have agreed with the customer. And as for the payment plan, like I mentioned, I would like to just sort of reinforce and reiterate that the payment plan also includes payment of the accumulated receivables in the seven months from January 2023 and July 2023. So currently, we are providing because there is a delay and there is an aging issue. And we are basically providing in order to hedge our balance sheet and de-risk the receivable situation. But I mean, based on the payment plan, currently we are not expecting any write-off. The payment plan envisages collection of the full dues and hopefully there will not be any write-off Now coming to the other point within this question that you raised, which is about the large provision in quarter two, I would like to explain that. So while from an optic perspective, you see 17.7 billion provision for doubtful debts. But if you recall, I did explain that part of the payments that we collected were basically towards the settlement of past dues, past issues, which otherwise, if we had not settled that, then those collections would have been applied towards the outstanding receivables. And if that was the case, then our provision for doubtful debts would have been much lower. So the 11 billion that I mentioned, which we collected towards the past dues, would have been applied towards the current dues. So to that extent, I think it's a bit technical. The real bad debt or the real provision for bad debt needs to be looked at in conjunction with both the numbers. Does that make it clear? So the provision towards the current receivables would be just 6.7 billion? Yeah, if you look at it that way, yes, it would be 6.7 billion if we basically take the total collections in this quarter, which is certainly lower than what we had in the previous quarter. So the previous quarters, 1200 was entirely towards these, which was nothing towards the past receivables. And this 1700 contains around 1100 of the write-off from the past receivables. Now, if the understanding is correct, the entire past receivables have now been written off, right? And from the current new billings, the payment plan will take care of that. Yeah, sorry, just a correction, Ravi. You said the entire past receivable has been written off. It's not the case of write-off. Like I said, we don't have any write-off. What I mentioned was the past issues have been resolved. And we had deferred the recognition till the time of ultimate collection. In this quarter, since we have collected the full amount, we have recognized. And hence, to that extent, the payment received towards our normal receivables is less. Sure, sir. Now, coming back to the second question, what is the future accounting policy we are looking to adopt? I mean, just wanted a clarification about the deferred revenue. And how are we looking to account for the new billings which would be done? And plus, how would the energy charges would be dealt with? Well, as far as the accounting policies are concerned, we don't have really any change in our accounting policy. We basically had deferred the recognition, like I said, because we wanted to be sure about the collection. And that has been the policy, so there is no change. What really could change is because we are constantly reviewing and reassessing the situation. And like I shared in the previous quarter, we did adopt a more stringent ECL computation. And as a result, we had made a provision of doubtful debts of about 12 billion in the previous quarter. That was based on the stringent ECL computation, which was a bit of a change. We will keep reassessing. And in third quarter, if we feel that things are not progressing as we expect, then we might adopt a more stringent approach again. But as of now, there is no change. And if there is any change, we will certainly let you know. Sure. Thank you so much, sir. Thank you very much, Mr. Agarwal. The next question comes from Mr. Arun Prasad from SPARC Capital Chennai. Mr. Prasad, you may ask your question now. Prasad, you may ask your question now, Mr. Azir from SPARC Capital Mumbai. Thank you, sir. My question is in terms of the vote of an idea. First of all, I want to ask that the payment plan which you are submitting to them, which you have disclosed in the media also. Have they agreed upon that with how the vote of an idea is, you know, how the management is giving the answers? The customer has proposed in our vote in order to support the customer as a temporary. As far as the percentage of revenue is concerned, I think, like I said, I'm unfortunately not able to disclose or share any customer-specific information here. So we will not be able to share the percentage of revenue from the vote. Repeat your last question, Azir. Yeah. My first question is in terms of the dividend announcement because we are getting a lot of pressure from the VIA. I think, okay, so coming to dividend, we assess the free cash flow situation at the end of the year and make the decisions accordingly. But we are fully committed to the policy and currently there is no change in the policy. I think, Azeem, you also meant to put it on record that that is purely speculation. We have done this anywhere or sort of made any such statements. So I just want to make sure that we execute the payment plan. And any tentative timeline can you discuss, you know, at least you can share, you know, in the next three or four months, next, you know, six months, it can be sorted out. It's on the call, actually. From a timeline perspective, I just want to reiterate what we shared earlier. From a timeline perspective, the payment plan is part of our monthly billing every month till December 2022. And from January 2023, we expect two things to happen. As per the payment plan, we expect 100% collection of the monthly billing. And whatever will be the accumulated outstanding as on 31 December 2022, our payment plan basically says that those outstandings will be cleared in a phased manner over seven months, starting January 2023 till July 2023. So I think from a timeline perspective, this is the plan that we have agreed. And this is the best indicator of the current situation. Yes, sir. Yes. Thank you for answering the questions. And all the best to you, madam. Thank you. Thank you very much, Mr. Pibatini. The next question comes from Mr. Upkash Mehrotra from Sean Fels, Singapore. Mr. Mehrotra, you may ask the question now. Thanks for the opportunity. Just one question from my side. So previously, we had some collateral which basically helped us offset any delay in getting the amounts from one of our key counterparties. But going forward, given the fact that there's been an inordinate delay in them raising capital, so in worst-case scenario, do we have anything similar planned going forward? Or how are we thinking about worst-case scenarios in case there's further delay in them raising capital to pay us with all? Thanks. So, Upkash, I think, first of all, regarding the security that we had, as we had shared earlier, the entire security was sort of restructured. And we received the money in the quarter four of last fiscal and also in this current quarter through basically the equity injection that the promoters have done. So we received almost $30 billion in March and then some more funds in the month of July. So currently, our primary pledge or the security that we have had has been completely monetized. Coming to the worst-case scenario, like I said, we are closely monitoring. We are also assessing our exposure and we will be making the right calls on the provisioning. And if our ECL competition and methodology and our practices need to be tightened, we will also adopt that in this quarter, depending on how things progress. So really, I mean, it is very difficult to predict what would be the scenario because that would be crystal gazing. So I think to a large extent, we keep watching and sort of... By the way, the significant provisions that we have made in the last two quarters have already given us a very significant hedge on our balance. And I think to that extent... Thank you very much, Mr. Malhotra. The question comes from Mr. Arun Prasad from SPAC Capital, Chennai. Mr. Prasad, you may ask your question now. Thank you. Thank you for the opportunity. Sorry, last time the call got disconnected. I think my question is similar to the line of other participants regarding receivable this is mostly answered. But just to summarize what you are saying is that by December 2022, the receivable should peak out and then post it, it will only decrease. Is it the right understanding as well? Yes, that is the expectation, Arun, based on the payment plan that you released. Secondly, on the unit, you shared some data points this time. Can you give a little bit color on what is the cumulative linear towers count and cumulative color count on those linear towers? Yeah, so I think we started reporting lean towers from previous quarters. So this quarter, like I said, it's close to 1500. The previous quarter was 1000. And then we also had a few sites that we rolled out in the last year. So I would say the data, sorry, the base of lean towers is somewhere in the range of 3000 or a little over 3000. It's still a small number compared to our total portfolio. But this is certainly picking up and we will see sort of this segment growing much faster in the coming quarters. And this is not part of the total towers reported or total co-locations reported, is it right? Yeah, what we report is the macro towers. And because the segment is very small, the segment of lean is very small right now. It's not significant and hence not included in the reporting. Thank you very much. Thank you very much, Mr. Prasad. We do have a follow up question from Mr. Kunal Vora from BNP Paribas, Mumbai. Mr. Vora, you may ask your question now. Thanks for the follow up. So regarding the, so you did a booking of 1100 crore for past views of which 550 crore pertained to energy. And there is no additional cost which has come against that. How should we look at this? Does it mean that the cost has already been booked in the past and the energy margins which we are looking at for the past quarter, they would have been better considering the additional revenue? Yeah. So Kunal, the way it works is, I mean, whenever we have these gaps as Tejinder and I spoke about, which is the gap between what is expected and what is actual and so on, we do have these sort of deferred recognition. We defer the revenue recognition until the gap is resolved. And it had really accumulated and we resolved this. So certainly, I mean, if we were to really go back and look at each of those periods where we had deferred the recognition, certainly the energy margin would change slightly. So you're right that the 5.5 billion that is sitting in the energy revenue does not have a corresponding cost because these are basically the revenues coming from the past periods. Similarly, like you've seen in the last two, three years, energy margins have been consistently negative. So it's possible that we could have some offset of that also in the subsequent quarters? Well, like I said, I mean, we did sort of resolve a lot of these past issues as part of the sort of one-time settlement that we did. I don't think we expect to really see such lump-sum recognitions going forward. But of course, this gap of expected and actual obviously continues in the diesel world. So to that extent, I think some reversals will keep happening, some recognitions will keep happening, but I don't expect such large quantums going forward. Understood. And lastly, on KPEX, can you talk about your expectations going forward considering that large 5G investment will be underway from Telcos? Will that require some additional investment from your end as well? So let me take that 5G side. As I said, 5G is coming as a loading on our existing sites. It could be a combination of new investments should the site need some electrical infrastructure to be upgraded or some mounts to be put up and so on. So some sites may be already ready to receive the 5G equipment and there could be additional capacity sitting on some of those sites because we are ultimately into sharing business and some sites may already carry that capacity. But in some sites where we are kind of already sitting at the edge from a capacity perspective, we may need to increase the electrical infrastructure and therefore investment to that extent may be required for mounting the antennas or the towers. Understood. That's it from my side. Thank you. Thank you. Thank you very much, Mr. Boram. The last question comes from Mr. Vivekanand Subraman from Embed Capital, Mumbai. Mr. Subraman, you may ask your question now. Hi. Thank you for the opportunity. I have only one question. When you spoke about the loading needs about 5G, you mentioned that the frequencies, you mentioned about 700 MHz, you mentioned about multiple antenna requirements and power requirements. Could you highlight the differences between 4G loading and 5G loading in the context of, you know, that any opportunity for you as far as 5G is concerned and why you believe that 5G will be a bigger loading opportunity for you than 4G? Thank you. Yeah, Vivekanand. So the difference between 4G and 5G in terms of the equipment or the split radios, there is none. So there is a split radio when it is coming, if it is coming on the 5G space. In 5G, typically, there are two types of equipment. When it is in the 700 MHz space, it radios going up similar to what you see in the 4G space. When it is, you know, in the 3.3 GHz 5G solution, you have the antenna and the radio integrated, and both of them are going up onto the tower from a 5G rollout perspective. The power load of that equipment is higher compared to what you see on the 4G. And therefore, as I said earlier, because loading revenue constitutes a big chunk of Toco perspective because of the higher power IPP. So just one small follow up. So Jio is the only one that has 700 MHz and they talk about carrier aggregation. So where they say that they are able to utilize all three bands of spectrum in tandem. So does this still entail separate antenna and loading equipment, the 700 MHz or are they talking about some other technology here? See, carrier aggregation is primarily combining different frequencies and different carriers to give a better output. That's primarily what carrier aggregation is. But ultimately, each spectrum frequency that needs to be fired would need a radio. So if it is 700, they need 700 MHz radios to fire. 900 or 1800 or 2100 or 3.3, each one of them have separate radios. So radios need to be deployed at the site. And then those different frequencies get aggregated, which is what is carrier aggregation to give opacity and so on. Comes to the antenna to port 700 MHz antennas or the tower, or you have multi-port antennas already deployed in which 700 band is covered. That means you have a wide band multi-port antenna which would cover from 700 to, let's say, 3300, which in Jio's case, then they don't need to put up additional antennas. Otherwise, they will have to. Okay. This is clear. Thank you. Thank you so much. Thank you. Thank you very much, Mr. Sudhiraman. At this moment, I would like to hand over the call proceedings to Mr. Tejendra Kalra for the final remarks. Thanks, Vandana. So to sum up, our strong performance during the quarter is a very encouraging increased demand for telecom infrastructure to continue. On the receivable front, we are constantly engaging with the customer and monitoring the situation vigilantly. We are excited about the 5G rollout scaling up across the country, which we believe would act as the next leg of growth for the entire telecom industry. Thank you all for joining the call today. Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. Thank you for connecting to audio conference service from Airtel and have a pleasant evening.