Tejas Networks Ltd (NSE: TEJASNET) Q3 2025 Earnings Call dated Jan. 23, 2025
Corporate Participants:
Arnob Roy — Executive Director and Chief Operating Officer
Sumit Dhingra — Chief Financial Officer
Analysts:
Mohit Mishra — Analyst
Vimal Gohil — Analyst
Ritesh Poladia — Analyst
Rishabh Gang — Analyst
Advait Lath — Analyst
Sunny Gosar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Tejas Networks Limited Q3 FY ’25 Results Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Mohit Mishra from ICICI Securities. Thank you, and over to you, sir.
Mohit Mishra — Analyst
Thank you. Good evening, everyone. Thank you for joining on Tejus Network Limited Q3 FY ’25 Results Conference Call. We have Network management on the call, represented by Mr. Arnob Roy, COO and Whole-Time Director; Mr Sumit Dhingra; CFO; and Dr. Kumar N. Sivarajan, CTO. I would like to invite Mr Arnob Roy to initiate with opening remarks, post which we will have a Q&A session. Over to you, sir.
Arnob Roy — Executive Director and Chief Operating Officer
Thank you. Welcome everyone to our Q3 FY ’25 earnings call. I’d like to — at the outset, I’d like to mention that our CEO, Anand is not doing well and is unable to join today’s call. So we will be taking the call between me, Sunit, the CFO and Dr Kumar, our CTO. Just to get started, I hope you got a chance to look at the slides. I think we were a bit too some time to upload. So the — for — I’m in the first slide. So the Q3 our net revenues were INR2,642 crores, which is a significant growth and it was flat quarter-over-quarter, but significant growth over FY ’24. But the Q3 PAT was INR166 crores and the order book at the end-of-the Q3 was INR2,681 crores. In terms of the highlights for the quarter, some of the significant events that have happened. For the wireless business, we have completed ramp supplies for 27,000 sites in this quarter, leading to a total of 86,000 plus sites delivered till-date in BSMO’s 4G, 5G network. I want to take a little bit of time over here and kind of share the incredible — the magnitude of this achievement that we have done with our team. So you know these are radios developed over five different bands from 700 megahertz to 2.6 gigahertz, the single band, dual-band radios, you know, and achieving not only the design of this product, but the volume manufacturing and supplies and reliable supplies to the network, which has been deployed. This has been an incredible achievement. And as you all know, BSNL themselves have reported that more than 65,000 sites have been deployed and are radiating and they are getting increased customer traction and adoption in the network. So all-in all, it is a — it has been a tremendous achievement by the company and we’re all proud about the customer success that has come along with this. So apart from this, with our — with our end-products, we have some — we started a few and we have a few ongoing POCs with the domestic operators for 4G and 5G. These POC cycles because the new products, these POC cycles are usually takes some time because they need additional functionality development, additional KPI parameters and all those kind of things. So there are some cycles of resolution that happens in the product during the POC cycle, so this take some time. Apart from this in this in Q3 we had started major engagements with multiple into international operators for our high-power 5G radios and they have mainly been given a lot of interest in our high-power radios and we see interest in doing a country-specific band customization for these radios for both mobility as well as fixed wireless access applications. For the wireless business, one of the highlights has been signing a three-year contract with Vodafone-Idea for supplying equipment for their pan-India 4 G and 5 G mobile backhaul network. This win was a result of very extensive testing and qualification of the equipment both in the labs as well as their fields. And this has been mainly our package transport as well as our optical equipment. So we have already started the supplies and the deployment is happening as we speak. And this is a very significant achievement for the company and the success since can mean a lot of replication of this business in not only in, but in other customers as well. So we have been selected as a broadband equipment supplier for state-led Bhat net last mile connectivity in Tamil Nadu and this has been another significant win and which has been around our mainly our FTTX equipment based on GPON. We also successfully completed the POC and received the initial purchase orders for a network modernization win in the US. We had earlier reported the solution win and then we had a successful POC and first office application in the network. And based on that, we have started receiving the orders for the larger deployment into the network. We think that success — the deployment of this network can lead to many other opportunities in the US with similar network modernization opportunities. From our existing customers in Asia, we received again major orders for the expansion of the mobile backhaul network and this has been for again our package transport and WDM equipment. Yeah. From a corporate update point-of-view, as seen our — from our press release, Sanjay Malik, who was former India Country Head of Nokia has joined the management team as EVP, Chief Strategy and Business Officer. Sanjay comes with a very extensive experience in our industry and he has led Nokia’s business successfully in India over a long period of time and we really value or very excited to have him on-board and really leverage his experience and skills in taking the company’s business forward. I have been elected as the Chairman of TEPC, the Telecom Export Promotion Council for ’25 to ’27 and succeeding NG Subramaniam, our Chairman who was the past Chairman for TEPC we have won the Global Connectivity Award for best Hardware Innovation at the Capacity Europe Conference in London and this has been for our ultra-broadband access equipment. We have significantly expanded our office and manufacturing facilities in Bangalore, in-line with our business and headcount expansion and we have almost doubled our flow space capacity, both for our R&D as well as for manufacturing. And as part of this, we have set-up the Center of Excellence for wireless communications in our new facilities for advanced research in Frontier Technologies and standards and architectures for next-generation wireless networks. I will now hand it over to our CFO, Sumit Dhingra, for walking us through the financials for the quarter.
Sumit Dhingra — Chief Financial Officer
Thanks, Arnob. Good evening, everyone. For the quarter three FY ’25, Dhana revenue of INR2,497 crores and operating — other operating revenue, which is mainly the PLI incentive of INR145 crores. So total revenue from operations is INR2,642 crores, which is roughly about 4.7x of the previous year. Quarter three EBIT was INR260 crores, PBT of INR211 crores and PAT of INR166 crores. You see the margins are profitability on a bit lower than the previous quarter and that’s mainly on account of lower of change in-product mix. And also there are certain provisions for old inventory and higher depreciation for certain R&D equipment that we’ve taken in this quarter. Moving on to the next page, our inventory levels stand at INR3,127 crores, which come down marginally over the previous quarter. Inventory continues to be high, mainly due to the ongoing project execution and also certain procurement for high-lead items — high-lead time items that we do on an ongoing basis for future projects. Trade receivables of INR4,730 crores, again there is an increase in receivables, but this needs to be also looked at in context of our revenues that we’ve done over the last couple of quarters in particular. And as we go along, as the collections go up, we would see the receivable numbers coming down. We’ve collected about INR2,000 crores during this quarter and the other thing I want to highlight is this receivables are essentially of the advances that we received from customer. So while the advances are defined in current liabilities, corresponding receivables are covered under trade receivables. So as we — as and when the milestones occur and the receivables will get adjusted against those advances that are there in the current liabilities. Closing borrowing position was around INR3,157 crores and cash of INR6,643 crores. Borrowings are mainly on account of working capital purposes. With this, I’ll hand it over to Arnob to take-over the rest.
Arnob Roy — Executive Director and Chief Operating Officer
Thanks, Sumit. Moving to the next slide, I’d like to give some color about the business of Q3. So in terms of revenue mix or in the India Government business has been 3% of our revenue and there has been a year-over-year decline of 40%. And as you know, our government business is tender-driven and lumpy. So there are seasonal variations of revenue-based on where we are in a project cycle and this is a reflection of that. The India business has been the dominant part of our — of our revenue. But again, like to mention as in the past that this is dominated by the 4G shipments to network, but shipments to PCS, who are the final system integrator. Now the other parts of the private business also has been Vodafone and a few other private operators in India and international. The international business has been 3% is still a small percent share of our overall business and our — we have — while we have a lot of focus in growing segment of the business, I mean, this is still something which — which is going to take some time to really mature. I mean, lot of really good engagement, a lot of really good trials and all those kind of things happening. I mean, there is a slow and steady increase in the business traction that we see, but we see in the longer cycles of business conversion into revenue. Our closing backlog was for INR2,681 crores, as you can see a small segment of smaller — relatively small portion for the international business. And lot of the backlog, we were anticipated larger backlog over here driven by some of the key opportunities, large opportunities that we were targeting, which is one of them was the expansion of 4G network and 5 G upgrade 5 G the FA network build-out this for the 5G, the performance where Indian is the collision avoidance system 5G application for large enterprise in India where we have done extensive trials and we’ve done successful trials and discussions are in advanced-stage. And then the brand customizations that I talked about for 5G radios for a few Tier-1 international operators. Those are some of the large opportunities that we are working on wireless for wireline, Phase-3, which has been in the news recently where the results for the tenders have been — have been announced and are still getting announced and the system integrators have bid, I think most of the tender results and have been announced and some of them the orders have also starting to get replaced. And this is at a stage where the FIs are going to start — starting to engage with us with the OEMs in terms of the product supplies and this is — this is the phase that we are in right now. And over this quarter and early next quarter, we expect this to happen. Then the expansion of WDM backbone for the and we expect significant investment to happen over here, but the large tender opportunity over here have got delayed. And then we talked about the FTTH and the network modernization deals with multiple operators in Middle-East, Africa and the Americas and the network expansion for private in India for mobile backhaul and enterprise services. These are the key opportunities that we are targeting. Some of the large tender-driven opportunities, which is an expansion, I mean on the government opportunities, expansion network, 5G,, etc.,, I mean there are all live opportunities which are maturing as we speak and we expect them to convert Q4 and Q1 of FY ’26 and that should contribute to our business for FY ’26. So at the end, I would also like to kind of recap, we still see very strong drivers for our business, both in India as well as internationally. We see continued investments in fixed-mobile technologies worldwide. You know, the drivers remain the same that we discussed, mainly the cloud enterprise, digital transformation, 4G and 5G have a long deployment cycle. There’s a long runway of 4G deployment also, long-tail of 4G and 5G deployers globally massive investments in broadband connectivity, both in India as well as worldwide in Europe, US and all other geographies. Modernization of utility networks in for across and this is also a phenomenon this is across the world digitization of cities and economies and on-top of these I think the newer, the new major investment that is happening is setting up AI data centers and the networking within the data center as well as the connectivity, this is going to be a major driver for networking business for us. You’ve heard about very recently the announcement of about $500 billion of investment in-building AI infrastructure. So similar kind of investments are happening across the globe in all geographies. So that’s also expected to be a major driver for our business. So what it means to us is in our investments in-line with those are for wireless, of course, our developing state-of-the-art 5G equipment, supporting diverse brands, which are in the spectrum which is which are available across the world, including massive radios, our fixed wireless access solutions for the M78 to 3.5 as well as the millimeter-wave bands, support for both 3GPP and OEM standards in our products and product architectures to support with any kind of consideration or architecture that the operators choose and we are starting to see a lot more traction happening for applications for 4G and 5G radios and all products are designed to support both architectures. And by leveraging a lot of our — the technology that we have from labs in satellite communications, we are building advanced non-terrestrial communication capabilities in our 5G RAN equipment and lot of this is going to be part of 5G advanced as well as 6G standards. And we have a leg-up in terms of the access to the technology that we can have for maturing our — evolving our RAN products. From a wireline perspective, it just means higher speeds and feeds, higher capacity. So the state-of-the art of 400 gig and 800 gigabits per channel has to evolve to 1.2 terabits per channel and that’s going to come out in this calendar year. We’re evolving our gigabit GPON to 10 gigabit and 60 gigabit PON standards. We are — we are seeing a lot of adoption of FTPX spawn technologies for enterprise and mobile backhaul applications because they offer a much, much more cost-reduced architectures for large-scale networks and we are seeing their evolution from not only for residential broadband, but also to enterprise and mobile national applications. And that requires building additional technologies and protocols and stuff like that for upon equipment, which we are investing in. And then evolving our converged broadband product, which is one of our flagship products, which provides a convergence of multiple access technologies, providing broadband, you know, capabilities. So these products we are upgrading to support LP for fixed wireless application. We are involving it to support 5G and we are upgrading our to PON and higher speeds. So these are the initiatives that are going on in terms of supporting the business drivers and the growth that we see, the growth diverse of our business worldwide. Now we are also investing significantly in our business development and sales and one of the key initiative over here has been bringing Sanjay Malik on-board and leveraging his experience in our field and his relationships and experience and you know, to drive strategy as well as business development in the company. We expanded our sales teams in North-America and LatAm regions. This is a special focus area for us and we are seeing quite a good success that we can build-on. And we have also expanded our partner networks in Europe, Asia and AMC regions as we as we build our — start to build our business in this region incrementally. So with this, I come to the end of our presentation. I’d like to open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. We have the first question from the line of Vimal Jamnadas Gohil from Alchemy Capital Management Private Limited. Please go-ahead.
Vimal Gohil
Yes, sir. Thank you for the opportunity, sir, and congrats on a good quarter. Okay. My first question is for Sumit, sir. Sumit, sir, if you can just help me understand on the gross margin front, while you’ve highlighted what are the levers that have impacted the margins this quarter. But if you can just help me understand what was the change in mix like in the wireless piece. My assumption is that when you say mix change, it should be the increase in the wireless equipment sale that would have happened this quarter. So if — and most of it would be coming from BSNL and given the fact that BSNL would be at the fag end of execution, should our gross margins be much better going-forward? That’s question number-one. The second question is on, if you could help us with an update on how is the overall business piece or the pipeline looking like ex of the BSNL deal with — both in India and abroad. I do understand we have won some of — some deals, but if you can just help us with some timelines, et-cetera, that will give us better clarity. And lastly, just one data point, if you can help me what is our headcount like at the end-of-the December quarter? Thank you so much.
Sumit Dhingra
I’ll take the first question on gross margin. And so,, like I think we’ve mentioned also in our earlier conference calls, while it’s difficult to comment specifically on project-by-project, but what it means by changing product mix is that even as part of one project, there could be various types of products, different configurations that we ship and depending on the product — depending on the margins of the products that get shipped within a particular quarter, whether — whether it be one project or across multiple projects, that would drive the margin movements up or down, and the other point related to your BSNL project was as again mentioned this in the past given that this being our first wireless project, margins were marginally lower than what you would see, let’s say, in typically wireline business. As we go along, as our international business picks up, as we are able to widen our order book, we would expect margins to improve over the next few quarters. On the — on your second question about the business pipeline, I think I’ll ask.
Arnob Roy
Yeah, yeah. So our business pipeline has two portions. One is of course, the run-rate business from existing customers which have long-term contracts like an example is like the Vodafone-Idea deal, there is a three-year contract for supply. So with most of the private operators, that’s what we have and that’s not there in our — in our order book, right? We don’t show that in our backlog order book. But the major components that we are banking on in our order book are the projects that we talked about, but the expansion of BSML’s 4G network and 5G upgrade. And as we speak, there are — we have — there is a lot of movement and progress happening over there. This is also something that we — this is going to be one of the significant opportunities that we are planning to close this quarter and next. The other one is, if you are aware, BSNL is also planning on building their standalone 5G network in 3.5 to band. So that’s another area that we have a very strong opportunity of finishing. And the third one was the railways cover for the collection rewarding system. We did a successful POC over there for our 4G products and we also wanted to try out 5G and those testing has also been done successfully we are waiting for the tender to come out and bid over there then it talked about private IP application this is also deal where we have completed the POC and they are in commercial discussions. The other one that we are talking about the engagement with a few Tier-1 international operators. That’s a little longer-cycle during the year because we are in advanced technical discussions and there will be some amount of R&D work required for the customization for those products. And for the wireline, the Phase-3, I think that’s been in the news and you are aware of it and we have an opportunity for our was service these projects. We are also expecting very large deals for the utility segments for the power rail segments where they are there for the telco business, they are significantly investing in growing their nationwide backbones, AAD and backbones and a lot of that has been built using our equipment. So as they upgrade it to our — from 100 gig to 400 gig and above, this is another major opportunity that we are lining up for. And the others, of course, the run-rate, the metro expansion and all those kind of things. So that will happen consistently quarter-over-quarter over the year. So these are some of the key deals in the pipeline that will go into, you know, adding to our backlog that we have and will contribute significantly. We expect to contribute significantly to our FY ’26 business. And then and the third question was about headcount. So as of today, we are upwards of 2,300 people, 2,350 plus to be exact and more than close to 60% of that are actually investments in R&D, the R&D people who are part of this team, part of the 50% of that is part of that of our team.
Vimal Gohil
And sir, one last question. On the BSNL deal, given the fact that our initial deal that we had with BSNL was for 1 lakh towers for their 4G equipment. We are — we have already completed 86,000, would it be fair to assume that next quarter we’ll see this execution being complete for this — for the 4G part and post which in FY ’26, we should see the 5G ramp of 5G part ramping-up. Is my understanding correct?
Arnob Roy
That’s correct. I think this initial 1 lakh sites order should get executed in this financial year. So what we expect to see is again an expansion of this 4G network because I think there is still some way to go for them to get coverage across the country wherever their plans are. So there will be expansion of this 4G network and upgrade of this network to 5G as well. And then separate opportunities for 5G in the — in the performance brand in the end 78, 3.5 brands. So there are multiple opportunities. One is the 4G expansion itself. There is a 5G upgrade of the existing network and then the 5G build-out in the performance bands. Yeah.
Vimal Gohil
Thank you so much, sir. I’ll come back-in the queue.
Operator
Thank you. The next question is from the line of Ritesh Poladia from Girik Capital. Please go-ahead.
Ritesh Poladia
Yeah. Thanks for the opportunity. Sir, on BSNL, can you comment how is the working of this 86,000 sites? I assume substantial would be already operational. So are they working as per your expected parameters and managing these profits?
Arnob Roy
Yes, as you can see, we only report what we supply, which is more than 86,000 sites, but themselves have reported, if you see yesterday or day before that they have already 65,000 of these sites are live. As I say, installation is a little more than 6,000 to 5,000 versus 5,000 are actually live and radiating and actually serving customers. So as far as we are concerned, I think BSNL is quite happy with the performance and quite happy with the customer acquisitions that we are doing. So yes, I would say it has been quite successful as far as we are concerned, both in terms of the equipment supplies as well as their performance in the network.
Ritesh Poladia
So the product doesn’t need a much of tweaking. In terms of also peak traffic, it’s working as per the parameters.
Arnob Roy
Yes, yes, yes, yes, absolutely. I think those — those things performance has been tested extensively during the POC that happened before we got awarded the contract. There was almost a year-long POC that happened, right, where our — every aspect of our equipment’s performance were compared with the state-of-the-art that has been deployed in the country. So only after that we got awarded the contract. So I think there is no concern on that front at all.
Ritesh Poladia
So POG in reality is the same
Arnob Roy
— sir, what are in reality?
Ritesh Poladia
And EOC performance and real performance is same.
Arnob Roy
Oh, absolutely. And by the way, I mean, just to let you know, POC is not just some testing in the lab, POC has been across many sites in Chandigarh for more than a year, okay. It was built across the Chandigarh city across many sites and testing has happened extensively over there. So it’s not just a small lab testing which has happened. So I mean, there is no — so you know that kind of COC testing and the production equipment will have to be identical with the kind of testing that has happened.
Ritesh Poladia
Okay. Sure. A second question on R&D spend. I think roughly spending about INR600 odd crore on R&D. Now, if a company doesn’t win, say, substantial contract in next few months, so there is a possibility of a revenue decline. So in that scenario, do you think in FY ’26, the R&D spend can be curtailed or will you still maintain your R&D as whatever your plans.
Arnob Roy
So without commenting on the revenue visibility and outlook. So from a overall long-term investment perspective, I think continue to build our products, continue to invest in R&D as mentioned in earlier conversations as well. It’s an important part of what we do in terms of the industry that we operate in and our overall plans that we continue to build-on the product and while we would always look at optimizing it and controlling the spend in general, but yes, at an absolute level, the investments in R&D will continue.
Ritesh Poladia
Sure. And then lastly, sir, what would be your import content in the materials or now is the domestic sourcing is higher.
Arnob Roy
So we have localized a lot of the components that go into our products, especially in our 4G5G radios. But having said that, I think most of the electronics active electronic components are imported and it varies from product-to-product. The amount of — it can vary between 40% to 65% in terms of the active electronics that gets imported, the semiconductor chips. But a lot of the key ingredients in terms of enclosures, in terms of accessories, cables, connectors, mechanical items, a lot of the taxes components, a lot of that has been localized in India, including the entire the manufacturing and assembly which includes the PCB assembly as well as the system assembly test and all this kind of things. So significant part of the entire manufacturing operations you know are actually in India.
Ritesh Poladia
Correct. That’s all from my side. Thank you very much.
Operator
Thank you. Thank you. We have the next question from the line of Rishabh Gang from Sacheti Family Office. Please go-ahead.
Rishabh Gang
Yeah. Hello, sir. Thank you for the opportunity. I want to understand on the international order front, I think we target Tier-2 and Tier-3 vendors. So how do we ensure that we win the orders from these kind of customers and the order does not go to the foreign players like Cisco, Ericsson and Nokia. Also, what kind of cost advantage do we really have because these players also have Indian R&D and manufacturing setup, right? So what is the cost advantage we have? And what can be the reason for maybe not winning an order and maybe Nokia Cisco Ericsson winning it? Like I want to have some granular insights on it, sir. Yeah.
Arnob Roy
Yeah. So when these equipment are selected, all the same equipment from different vendors are not identical. I think all of them are built with their unique thinking in terms of the network applications they want to optimize and solve well. So what usually happens is that based on the application in a particular architecture really wins. For example, as we’ve spoken before, our — if you compare our equipment with other wireless equipment, right? I mean, the kind of technology integration that we have done, for example, our baseband unit you know, integrates the transport functionality, right, the backhaul. So in typical RAN equipment, an operator would need to have the radio, the baseband unit and a separate backhaul unit in terms of in terms of a router or some other transport equipment and the tower to really backhaul the mobile traffic. And we have done a very unique architecture where we’ve integrated the entire backhaul network and with that, that gives the operator significant savings in terms of his our network deployment, right? And so similarly, the baseband unit is also a converged network product, right, where you can also plug-in additional modules which can do broadband services for enterprises and homes and stuff like that, right? So given a footprint in a particular area under with a tower, you know by adding those modules, the operator with a very incremental cost can actually reach-out to many customers in that area for serving them with broadband services, right? So if you look at — look at this, the technology still remains 4G or 5G from a radio perspective, but the total cost of ownership, the total cost of solution for building the network and the other applications that come along with it, these are — gives our implementation and architecture a unique advantage, right? And that is where the cost advantage comes in. The cost advantage is not in terms of, you know, if I use a particular component and my competitor use a particular component that do I procure it at a super cost and kind of thing, that’s not where the advantage really comes in. It comes into the architecture of the product, how you designed it and what kind of application this serves more cost-effectively. So I’ll just give an example of that. And so similarly, I think we have many other examples even for our wireline products of how we build-in the convergence of access and transport and all this kind of things, right? So I hope I’ve been able to answer this question. And that when actually operators value that kind of I know optimization that kind of a cost optimization that we did in the network. That’s the key reason — that reason.
Rishabh Gang
So what kind of a lifetime value right maybe your customer saves, right, because of all this integration and all like can you give some more granular insight on that, like some numbers or some percentage it.
Arnob Roy
It depends on the application, okay, the integration of radio with transport is one kind of optimization, the way they access — access to transport, there’s another kind of optimization. And you know, so the — and the cost-savings are not only in terms of the cost of the equipment, but also in terms of the opex cost, right, being able to manage a single equipment with a single management software gives them a lot of operational savings in terms of their own training, in terms of power management, all this kind of things. So you know, you may get a cost of the cost of goods advantage of maybe, 20% 25% to that extent, but we get a larger benefit in terms of the OpEx also in terms of running with this conversion or integrated equipment, right? So it’s like it really varies and these are just a kind of indicative of where the benefit really comes from.
Rishabh Gang
Very helpful. So kind of what would need to happen right for us to win India wireless orders, right? So I wanted to understand what is the status of ongoing POCs, right? When do you think outcome of these POCs will come through? Also, if such POCs are happening for international orders, what do you think about that, yeah?
Arnob Roy
Yeah. So as I mentioned that the live POCs are going on for operators in India and we think probably in this quarter or in Q1, we should be able to see some success in that in terms of additional orders and additional deployment. For international — for international customers, we had — have a lot of engagement. I mean they — obviously our success in BSNL has not given us a lot of visibility globally. And people see our equipment and see our architecture and the efficiency of our product and they are very interested. And there’s a lot of discussions which are going on in terms of how do we customize it for their specific bands which are there in their countries, right? So that’s why it’s going on. So those will take a little longer to really convert because that will require some amount of customization as well. But that’s the kind of engagement that is happening for in the international markets for our wireless equipment.
Rishabh Gang
Thank you. Just one last question from my side. On the international front, right, we have said that we are expanding teams in North-America and LatAm region and partner networks in Europe, ACI AMZ. Can you give some numbers, right, or some insights on how we have performed — how we have expanded versus last year, right, or maybe two quarters before? Some numbers on headcounts in the sales team outside India or partner in India like that?
Arnob Roy
Well, with respect to last financial year, we have grown our teams by more than 50%, 60% in those regions, right? We have added at least in the US and LatAm, we’ve added at least six, seven people, both in terms of system architects, senior sales marketing people as well as account executives, that’s a significant increase in headcount. Our partner networks in other regions, in every region, we’ve added one or two partners based on their geographical territories. So — and that’s what I said that roughly a an example or quantification of how we have invested in terms of sales book.
Rishabh Gang
And how does this partnership work? Like do they — how did they help you in getting the orders? Just if you can give some insight on that.
Arnob Roy
Yeah. So the sales partners, basically they are people who have operations local to the region and they are — there are many countries where you need to — the business is done in the local language, right? So they are people who are set-up over there expertise of building telecom networks, they have the expertise of supplying. They understand the technology well, they have the customer relationships, they have the experience of building networks using these technologies. We have countrywide presence in those countries, whether Indonesia or Malaysia, maybe in the Middle-East and all where we need on-the-ground presence and country presence of building networks because that’s how our equipment is deployed. So we need that. We need local language support for dealing with the customers as well as for you know, handling business at remote locations in the country. So those are the nature of the partners who are there, people with a significant in-country presence, significant local language support and significant customer relationships in those regions. So these are the people we work with in terms of partnering, in terms of sales and supplies and deployment and support.
Rishabh Gang
Got it. Thank you so much for the insight.
Operator
Thank you. The next question is from the line of Advait Lath from Nippon India Mutual Fund. Please go-ahead.
Advait Lath
Yeah, hi, sir. Am I audible?
Operator
Yes, you are.
Advait Lath
Yeah. So just congrats on a solid set of numbers. Just picking-up from the previous question. I just wanted to know what is the environment we are dealing with in the North American continent and LatAm in terms of the regulatory environment, especially because of regime changes, etc., and also the tariffs that we might be getting incurred upon us because of this and how we are going to deal with it and also the lead times within the — within these continents.
Arnob Roy
Yeah. So in terms of regulatory, you know issues, there are really no issues. I think the only regulatory things we need to meet is the performance of the equipment because these are — these are advanced equipment and they have to meet the global standards or the North Americans and that on standards, the country-specific standards in terms of their performance, the safety, the radiation in all this kind of thing. Those are the kind of — there are FCC and UL and those kind of agencies which are there and you have to have your equipment certified against those standards and before you ship to those markets. And you know, and we — when we design our equipment, before we take it to production, we make sure that we have tested for those standards in various markets, many of them are very, very similar. Three of them have one-off extra features that we make sure that equipments are designed to meet the regulatory requirements of performance, performance, safety, radiation and all these kind of things and that operator safety, all those kind of things that for various markets and also make sure that we get those certifications for our equipment, which we put on our equipment before we ship from there. And that testing happens actually in India because all those global certification labs like, UL and all this kind of thing, they actually exist in India, right? I mean, they have expensive infrastructure. And so they test and certified and we put those marks for FCC, CE, UL and all this kind of thing on recouper. So that’s as far as regulatory is concerned, compliance is concerned, right, for global standards. Now as far as and all are concerned, it’s still an open question. We really do not know. I mean, nothing has been announced and nothing has come up. So till that time it comes up, it’s all pure speculation from in this front. In terms of lead-time, I think lead-time, it’s very similar for customers everywhere. There is a process of lab testing, there is initial technical engagement, we make presentations, go through extensive technical discussions on what is the value that we’re providing to the customers. And then there is a cycle of the lab testing, sometimes they do remove demos and testing sometime then followed by lab testing in their labs and then very often they actually deploy the equipment in their network in their field to see the performance equipment and that takes some time. And after that, I think that’s when they come out, then we get into commercial discussions and get into an agreement. And if all of that works out and that’s how the deal closures. That’s the reason why from a start of investment of a particular opportunity cycle to closure is usually takes a long-time. But when you are selected, I think if your performance is okay, the supply cycle is also a long one. It’s like a — at least a year, it’s not a multi-year cycle or it’s a major project deployment that happens because the operators also invest a lot in the testing process in selecting a particular vendor.
Advait Lath
Got it, sir. And just a follow-on question. This is to do with our Vodafone and idea — report of an idea deal. So just wanted to ask what are the terms of the agreement, if you can share some detail on that in terms of what we’ve been doing?
Arnob Roy
Yeah. Yeah, it’s a very — it’s a very standard agreement that we have with any other private operators, which is to do with supplies for our equipment for a few — for set of states for set of circle. So we are building the entire network for the state across multiple states. And the contract includes supply and deployment and commissioning of the equipment, including supply of network management and getting the equipment live and connecting it to their mobile 4G, 5G networks and getting the traffic running. So there is the entire scope of the equipment and you know, and we are — we are getting paid as we do the supplies.
Advait Lath
Got it. Got it.. So this will be in tandem with TCS or this would be an independent contract?
Arnob Roy
No, this is an independent contract with us directly.
Advait Lath
Got it, sir. Thank you so much, sir. Thank you.
Operator
Thank you. The next question is from the line of Sunny Gosar from MK Ventures. Please go-ahead.
Sunny Gosar
Yeah. Thanks for taking my question and congratulations on the very quick execution for the BSNL project over the last three or four quarters. My first question is related to the PLI incentive. So we have booked about INR500 crores plus of PLI incentive in the last four quarters. And have we been receiving the money on a regular basis or is this still completely outstanding as on December?
Sumit Dhingra
We’ve received the PLI center for FY ’23 in FY ’24, and typically the payment happens in the subsequent year. So what you would see in — recognized as a revenue in FY ’24 is what we would expect to receive this year. The process for that is on. We’ve submitted the documentation that is back-and-forth from the agency and thereafter the ministry. So we are hopeful of getting the inceptive for FY ’24 soon. And then for FY ’25, the corresponding incentives are something that we would expect to get-in the — in the next year.
Sunny Gosar
Got it. That’s quite helpful. In the earlier part of the call, you alluded to a few opportunities like the coverage program, the 5G — private 5G application, the Phase-3 project. Will you — like if you could give some color on the — on the quantum of some of these opportunities, some ballpark numbers or some indicative color on how large some of these opportunities could be? And like on an annual basis, how much revenue opportunity that could lead to over the next few years.
Arnob Roy
These are very significant five projects. I think all those net projects and all the overall budgets and all have been public information in terms of the — what is the budgets. And I think all of them, the equipment opportunities for us is ranges from several 100 crores to several few thousand crores as well. There is a wide range and lot of it, but each of them are fairly significant-sized opportunities. And what will turn for us depends on how much of each of those opportunities win. But each of them are very, very significant size.
Sunny Gosar
Yeah. Got it. And in terms of — in terms of the conversion of these opportunities or proof-of-concepts into actual orders and then eventually into revenue, can you like give some kind of indicative timelines or which of the projects are more closer to conversion as compared to some of the others? So some indicative color because the order backlog now is about INR2,600 crores and most of it is related to BSNL, which would mean that post Q4, assuming that no new orders come in, there could be a temporary a dive in terms of the revenue. So how should we look at this in terms of continuity of revenue and the future outlook in that sense?
Arnob Roy
Yeah. So first of all, backlog right now, a lot of the BSNL backlog rundown — order book rundown has happened and a good part of the backlog is also the non-BS&L business. But having said that, as you are correct in the sense that it is still significantly small compared to what we had at the beginning of the year. So yeah, so these opportunities that we’re talking about, most of the — whether it’s BSNLA network expansion for this 5G or the covers or the other thing methanol, most of them, we expect to see conversion in this in Q4 and Q1, right, Q1 of FY ’26 and a significant part of that should be executed in FY ’26. So once if we are successful in most of the opportunities, it will lead to again a significant bump or significant refilling of — of our order book.
Sunny Gosar
Got it. And one last question.
Arnob Roy
I would also like to make it the last question of this session, if you don’t mind. I think we are running out of time. So please let’s take this.
Sunny Gosar
So one last question from my side. Basically, the BEED program in US, which is — which is like a multi-billion dollar government program and also the rep and replace initiative that the US government has announced. So are we likely to be beneficiaries of those programs? And what kind of opportunity do we see in the North American market?
Arnob Roy
Yeah, I think you know both of those programs we are trying to address with local partners and both beat in terms of the broadband rollout in the rural areas is a significant amount of investment and lot of the investment is happening in phases. And we are working actively with our sales team as well as partners over there to win part of this business. So the same holds for Rip and replace, Replace, I mean, it doesn’t really come in terms of here is some of equipment to be replaced. I think it comes along with as customers and operator expand their networks in those regions. I know along with that, I think the replacement of equipment and expansion of the networks really come in. I think that’s also there, but I think the bigger opportunity, one of the significant opportunities that we’re seeing in North-America is this network modernization because the network, many of the networks which are there in North-America have been built over many, many years using old TBM technology to optimize for voice. And as they modernize the network to a more modern database packet-based infrastructure, they cannot really replace all of their endpoint connectivity so easily. So they require the special technology that we have using circuit emulation over packet networks for being able to modernize the heart of the network and slowly transition their older networks to more modern interfaces. That is, I think a very unique technology that we have and that is something that we are also along with the BEAD and other optical transfer opportunities, we are seeing this as something giving us a lot of traction because also do something very unique for us.
Sunny Gosar
Got it, got it. That’s quite helpful and thanks for the detailed answers on all my questions. And all the best.
Arnob Roy
Thanks very much. So with that, I would like to thank everyone for joining the call and hope our — and thank you for your questions and hopefully you’ve been able to provide a good insight to our business and look-forward to our discussions talking to you guys again next quarter. Thank you very much.
Operator
Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.