Perusahaan Perseroan Persero Pt Telekomunikasi Indonesia Tbk Q2 FY2023 Earnings Call

Good day, and thank you for standing by. Welcome to the Telkom Earnings Call First Half of 2023 Results Conference Call. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Mr. Edwin Sebayang, VP of Investor Relations. Please go ahead, Pak Edwin.

Thank you. Ladies and gentlemen, welcome to PT Telkom Indonesia Conference Call for the audited results of the Second Quarter Year 2023. There will be an overview from our CEO followed by Q&A after the session. Before we start, let me remind you that today's call and the responses to questions may contain forward-looking statements within the meaning of safe harbor. Actual results could differ materially from projections or estimations and may involve risks and uncertainties that may cause actual results to be different from what we discuss today. Ladies and gentlemen, it is my pleasure now to introduce Telkom's Board of Directors who are joining us today: Mr. Ririek Adriansyah as President Director and CEO; Mr. Heri Supriadi as Finance and Risk Management Director; Mr. Honesti Basyir as Group Business Development Director; Mr. Herlan Wijanarko as Network and IT Solutions Director; Mr. Bogi Witjaksono as Wholesale and International Service Director; Ms. Venusiana as Enterprise and Business Service Director; Mr. Budi Setyawan Wijaya as Strategic Portfolio Director; Mr. Muhamad Fajrin Rasyid, as Digital Business Director; Mr. Afriwandi as Human Capital Management Director. Also present are the Board of Directors of Telkomsel, Mr. Hendri Mulya Syam as President Director; Mr. Mohamad Ramzy as Finance and Risk Management Director; Mr. Derrick Heng as Marketing Director; Mr. Adiwinahyu Basuki as Sales Director. I now hand over the call to our CEO, Mr. Ririek Adriansyah for his overview.

Thank you, Edwin. Good afternoon, ladies and gentlemen. Welcome to our Conference Call for the Unaudited Second Quarter Year of 2023 Results. We appreciate your participation in this call. The second quarter of 2023 was considered one of the significant milestones for Telkom Group towards the implementation of five Bold Moves. On that quarter, to be exact on the 22nd of June 2023, Telkom signed a spin-off agreement with Telkomsel that initiated segregation between B2C and B2B business. On the B2C business, Telkomsel will concentrate on improving the synergy with IndiHome to be the strongest Fixed Mobile Convergence or FMC operator in Indonesia. By having the FMC initiative, Telkom Group is very confident to monetize revenue uplift, CapEx and OpEx efficiency to create EBITDA uplift starting as early as the second semester of 2023. On the other hand, Telkom will concentrate on B2B business covering the monetization of its fixed broadband in the Enterprise segment or IndiBiz, enhancement of its network infrastructure InfraCo Company, establishment of seamless Data Center Company by improving the data ecosystem, enhancement of B2B services by synergizing Sigma Citra Caraka and the Regional division, and exploration of digital business prospects secured by creating a digital ecosystem nurtured by the digital business directorate. The market for B2B business in Indonesia is promising, and some prospects could become Telkom’s future engine of growth. Therefore, to nurture the B2B business prospect in Telkom to become tangible revenue generators for profitability, just recently, Telkom initiated the development of Group Business Development or GBD Directorate, led by a director. Indonesia's enterprise and B2B business market is tremendously promising with several prospects having the potential to drive Telkom's future growth. The strategic move enables Telkom to proactively seek partnerships, foster innovation, and capitalize on growth opportunities within the B2B sector by creating innovation and strengthening collaborative relationships to secure a thriving future for Telkom and our valued business partners. On our financial performance as of the second quarter of 2023, Telkom maintained revenue growth by increasing 2.1% year-on-year, and on a quarterly basis, we could grow our EBITDA by 2.1% Q-on-Q, while our quarterly net income went down 1.4%. This period, we have additional spectrum costs from our last spectrum obtained in 2022, which in the future will have a positive impact on service quality and capacity. In the reported net income, you also got the impact of tax treatment because of the opportunity gain from GOTO shareholding. Mobile and Fixed broadband still dominate the revenue growth contribution. On the Mobile business, Data, Internet, and IT services grew by 6.1% year-on-year, while IndiHome contributed 4.0% year-on-year growth. Mobile business continues to contribute positively to revenue, experiencing a 1% growth year-on-year, supported by growth of the digital business driven by healthy growth of data and digital services. Telkomsel's top-line growth absorbs the impact of the natural transition of legacy to data as we manage this prolonged tail through personalization initiatives in order to create more valuable packages for customer needs. This EBITDA margin could be maintained at 56% mainly due to revenue growth and a successful cost leadership program. Digital Business remained the engine of growth supported by the focus on maintaining dominance in network supply. This segment recorded positive performance with 7.4% year-over-year growth to IDR 37.7 trillion and increased its contribution to total revenue to 85.6% from 80.5% in the same period last year. Telkomsel maintained focus on customer value management with a customer base of 153.3 million in the second quarter of 2023, increased from 151.1 million in the previous quarter with improved productivity and quality of the customer as indicated by higher payloads and data users and solid ARPU growth from IDR 45,300 in the first quarter to IDR 49,700 in the second quarter of 2023. Through healthy conduct, Telkomsel built a strong fundamental base that reflected in the growth of the payload, aligning with the improvement of productive customers as well as ARPU and revenue. Ladies and gentlemen, the penetration of Fixed Broadband in Indonesia still poses a big opportunity to grow. The FMC initiative continued to progress in the second quarter, marked by the signing of the spin-off Agreement between Telkom and Telkomsel on the 27th of June 2023. This initiative will enable the Telkom Group to compete more aggressively in terms of existing customer acquisition and to gain more new subscribers. Telkomsel will prepare a massive strategy that involves cross-selling, upselling, and product differentiation using FWA and FBB technology. During the first half of 2023, we continued to maintain our position as a market leader and recorded revenue of IDR 14.4 trillion or grew by 4.0% year-on-year, where its contribution to Telkom Group revenue increased to 19.6% compared to 19.2% in the same period last year. As a result of higher economies of scale and effective marketing strategy, the EBITDA margin of IndiHome was relatively stable at around 50% in the second quarter. From CapEx and OpEx perspectives, we recorded around 316,000 additional customers during the first half of 2023, bringing total subscribers to reach 9.5 million by the end of June 2023, or increased 7.2% year-on-year. Around 66% of total customers were on workplaces while the remaining 34% were on Dual Play package while the remaining 34% were on Triple Play. We are more selective in getting new customers to ensure customer credit quality. IndiHome plays an important role in building a digital society as its services cover 97.5% of cities or districts throughout Indonesia. IndiHome ARPU in the second quarter of 2023 slightly declined to IDR 260,000 due to more customers preferring to subscribe to the dual-play package. IndiHome has become the market leader as a main portion of the customer base comprises high-income customers. To maintain sustainable growth, we aim to target other lower-income segment households for overall better service delivery across IndiHome's customer base. Along with the economic recovery in Indonesia, the Enterprise business segment also grew in a positive correlation. As of the first quarter of 2023, the Enterprise segment successfully grew by 7.8% year-on-year in revenue to IDR 4.5 trillion due to the growing enterprise connectivity business, digital solutions, and satellite business. This achievement marked a successful strategic alignment of the enterprise segment business and we hope to remain in positive territory throughout the year. The Wholesale and International business segment also experienced positive growth in the first quarter of 2023, contributing IDR 4 trillion in revenue, an increase of 4% year-on-year. The driver of Wholesale and International business revenue growth was supported by our growing wholesale voice business and our digital infrastructure businesses. We believe that the consistency in implementing the five Bold Move strategy would be key for Telkom Group to sustain its dominance in the digital telecommunications business in Indonesia and the regional peers. After the spin-off agreement on the FMC initiative, we continue to pursue other strategy, especially in the Telkom B2B sector; some important moves on the five Bold Moves include the signing of the spin-off agreement on June 27, 2023, after the approval from the minority stakeholders through unanimous decision in the FMC independent AGMS, where Telkom agreed to transfer its IndiHome business to its controlled subsidiary, namely Telkomsel. Consequently, Telkom's shareholder position increased from 65% to 69.9%, whereby Singtel as the minority shareholder was diluted to serve Telkomsel from 35% to 30.1% after capital injection of USD 250 million from Singtel to maintain its stake around 30%. The purpose of the spin-off itself is to maintain competitiveness and superiority of Telkom in facing the competition in the Indonesian telecommunications retail segment. This is also expected to accelerate and equalize the penetration process of broadband services for all people throughout the nation. In the spin-off agreement, it is also stated that Telkom and Telkomsel agreed on the Wholesale agreement for the Industrial provision, the TSA 1 for fixed broadband and core service provision, and TSA 2 for IT system service provision. Telkomsel and Telkom will prioritize cost efficiency with no duplication of investment for the deployment of cellular and fixed networks and ultimately will create significant synergy values. To capture the opportunity in B2B, recently Telkomsel and Telkom launched IndiBiz at the Digiland 2023 exhibition in Jakarta. IndiBiz is the solution for the digital ecosystem for businesses to support micro and small-medium enterprises (MSMEs) in Indonesia going global. IndiBiz stands strong on four pillars, which are platform solutions for digital services, collaboration with startups and developers to focus on supporting solutions for MSMEs, collaboration with the financial execution of MSME financing, and collaboration with MSMEs community to improve their productivity. In the near future, Telkom will accelerate the B2B segment transformation through its seven Regional Divisions throughout the nation to support MSMEs and local municipality governments in their digitalization efforts. Telkom has been pursuing infrastructure value and unlocking the FMC initiative. Telkom will continue to explore new InfraCo and infrastructure sharing potential. This initiative aims at optimizing consolidated Telkom's CapEx, improving efficiency, quality, and coverage of service. We expect carving out Telco infrastructure assets can maximize valuations as well as achieve strategic differentiation. In InfraCo initiatives, we will have a new entity in charge of managing Telkom's fiber assets, which will be established this year and start running the business next year. By having InfraCo, we can make our fiber network position more neutral and can be used by external parties. Furthermore, with this initiative, we believe Telkom can optimize asset utilization and market penetration to address business challenges and create business value that meets our investor expectations. As an effort to enhance competitive advantages, scalable competitive growth, and high operation, we are still in the process of restructuring our data center business by consolidating under one entity called PT Telkom Data Ekosistem with NeutraDC as the brand. Data center and cloud remain as key focus areas as the demand is growing significantly with the rise of activities in digital business. Our digital carrier and cloud projects are supported by a supreme network and backbone as our key competitive advantage to lead the competition in the data center business. With our integrated network, we can accommodate our future customer digitization needs such as edge computing, 5G services, blockchain, and other digital solutions. During the first half of 2023, the data center and cloud recorded IDR 837 billion in revenue. As of June 2023, we have a total of 30 data center facilities, with 25 in Indonesia and 5 overseas, spread across 4 countries: Indonesia, Singapore, Hong Kong, and Timor-Leste. Our data center has ideal load capacity of up to 42 megawatts. Locally, we operate a data center and 1 Hyperscale Data Center with a classification of Tier 3 and Tier 4. Our data center business provides several products and solutions, such as shared colocation, dedicated colocation, working room, cross-connect, and smart hands, DC interconnect. Our tower subsidiary, Mitratel, is now the biggest tower provider in Southeast Asia with more than 36,000 sites. In the first half of 2023, Mitratel's tenancy ratio improved to 1.9% compared to 1.6% in the first quarter of 2023. Mitratel also enjoys site diversification with around 58% of the towers located outside of Java, while the remaining 42% are located in Java. We believe the tower business still has opportunities to grow, driven by increasing demand for mobile data and the upcoming 5G technology implementations. On a stand-alone basis, in the first half of 2023, Mitratel reported revenue of IDR 4.13 trillion, an increase of 10.8% year-on-year, driven by total leasing revenues. EBITDA and net income grew by 16.1% and 14.7% year-on-year, respectively. Both EBITDA margin expanded to 81.2%, an increase of 3.7 ppt, while net income margin is at 24.8%, an increase of 0.9 ppt. Colocation and the number of tenants grew by 19.1% and 24.6% year-on-year, respectively. Mitratel has demonstrated a strong financial position with a relatively low debt ratio at 1.8x net debt to EBITDA. This allows the company to secure growth opportunities while also providing stability to shareholders. Mitratel is also expanding into the Fiber to the Tower business as part of its strategy to strengthen its product portfolio to become a digital infrastructure company. Mitratel also strengthened its fiber optic business by deploying 10,628 kilometers organically in the first half of 2023, building a total fiber optic line of 27,269 kilometers by the end of the first half of 2023. That concludes my remarks, and thank you for your kind attention.

Thank you, Pak Ririek. We will now begin the Q&A session. When raising your question, please speak clearly and state your name and your company. Operator, may we have the first question, please?

Our first question comes from the line of Piyush Choudhary.

This is Piyush from HSBC. Two questions, please. Firstly, in the non-mobile segment, we saw EBITDA margin has dropped to 45% in the second quarter versus 48% in the first quarter. So what is driving such margin decline because within the segment, we see IndiHome's EBITDA and Mitratel's EBITDA has been stable, which implies the other businesses' EBITDA margin has fallen significantly. So any color on that? Secondly, on Telkomsel, congratulations on the launch of Telkomsel One brand. Could you help us understand what's the strategic objective here? Would it be to gain market share by providing bundling discounts? Or is it more of a retention strategy to defend market share in the high-value segment? Also, any one-off costs due to this integration which can appear in the subsequent quarters? Finally, on the Telkomsel One, when would the cost synergies start to kick in in the financials?

Thank you, Piyush. Heri speaking here. Regarding your question about the non-mobile segment, the decline in EBITDA margin is due to several factors. Firstly, the allowance for bad debt is lower than what we observed in the first quarter of this year, although it remains relatively high. This is because we are conservatively recognizing costs and revenues, particularly from the enterprise segment. We expect this figure to improve as we finalize our administration and enhance our collection efforts. Overall, this should correlate with revenue growth in terms of bad debt allowance. Additionally, there have been increases in interconnection costs. Investment in interconnection has risen slightly, as some technology now makes up about 30% of these services, coming from platforms like WhatsApp, which have replaced traditional interconnection revenues. This shift has led to a reduction in margins, even though the volume remains stable, resulting in interconnection costs growing faster than revenues, though it continues to be a profitable business. Moreover, we are incurring costs from enterprise content that we need to acquire for services, which adds to the revenue increases. These elements are affecting the EBITDA margin of the non-mobile business. However, we anticipate better performance towards the end of the year, as we have explained before.

This is Derrick. I will continue to add more color on Telkomsel's strategy regarding IndiHome and FMC. With the FMC initiative, we want to enhance home broadband penetration throughout Indonesia. We have launched more valuable propositions, faster products, and services, collectively known as Telkomsel One. We enhanced the experience for our customers with one bill, one app, one touchpoint, and one solution, known as unbreakable Internet. The offers we have introduced in the market include a 1 Gbps package and a hero product of 100 Mbps with new features such as Wi-Fi calling.

Yes, on the second question about cost synergies. We have identified various areas for immediate cost efficiency. First, on service and channel integrations, we see that there are resources serving both mobile and fixed services that we can eliminate. We also have redundancies we can eliminate easily. We can manage the call center better by integrating the channels as one, as Derrick pointed out. Furthermore, we have identified several items in cost management regarding CPE and device sourcing, both for fixed wire access and for the IndiHome service which we can manage efficiently on investment. Additionally, we are continuously optimizing our costs regarding billing and service platforms, including simplifications to reduce duplications.

Got it. Thanks, Pak Heri and Derrick. Can I just confirm the cost synergies will start kicking in from the second half of 2023. Would that be a fair estimate?

Yes. In terms of cost synergy, as this is Ramzy speaking. As we have indicated previously, we expect our synergies from these initiatives to amount to around IDR 5.6 trillion over the next 5 years. For this first year, we estimate around IDR 500 million will benefit from the efficiencies mentioned earlier, through platforms already discussed and different market alignments.

And basically, the savings or synergies mentioned by Pak Ramzy encompass aspects from both the parent company and the subsidiaries, some resulting from Telkomsel.

Our next question comes from the line of Arthur Pineda from Citi.

This is Arthur from Citi. Several questions, please. Firstly, on the OpEx line. When comparing with your competitors, you're seeing well-controlled OpEx and rising margins, while you're experiencing some pressure on your margins on a quarter-on-quarter basis. What accounts for this, and what can be done to address this? Of course, you're seeing O&M and personnel cost growth as a problem. I know you mentioned a while ago that there are issues on receivables. Can this improve in the second half? Even mobile didn't see an improvement unlike your peers. Second question relates to your fixed mobile convergence savings. You've mentioned a target synergy of IDR 0.5 billion this year. Is this purely cost reduction, or does it include potential cost savings which may not translate into improvements in margins like aspects of CapEx? Lastly, could you provide guidance, having viewed the first half trends?

Heri speaking here. First, regarding the margin pressure. If you see from Q-on-Q, as Ririek mentioned earlier, some costs reflect conservative recognition procedures that we apply, particularly in the enterprise segment which has seen rising allow for bad debt costs. Regarding personnel costs, this includes some relative benefits we provide to employees. We expect to see costs for personnel to normalize over the year. Other costs also reflect benefits we expect from the spectrum cost, which began impacting us starting this year. This will subsequently lessen the need for us to invest crazily in network infrastructure compared to the scenario without that additional spectrum. Thus, looking forward, we expect to achieve better overall compensation regarding the margin. Overall, we aim to stabilize expenses growth year-on-year and maintain growth similarly. We aim to maintain margins above 50% in the second half of the year. On synergy, the synergies resulting from this agreement come from both ends. It's driven by top-line additions from the fixed mobile convergence, as well as cost reductions from eliminating redundancies. We expect to recognize around IDR 500 billion in cost savings from this synergy in this first year, and around IDR 5 to IDR 6 trillion combined from OpEx and CapEx savings plus revenue additions by 2027. That sums up the figures.

Our next question comes from the line of Hussaini Saifee from UBS.

Several questions from me. First, regarding Telkomsel revenues where we've seen softness or market share decline compared to competitors. I understand that legacy plays a part, but do you see competitors becoming more aggressive or gaining market share in the ex-Java region? Additionally, data volume growth for Telkomsel—around 7% to 8%—is significantly lower than your competitors' rates of about 15% to 20%. I would like to understand factors leading to this slower data volume growth. Secondly, for IndiHome, growth seems softer compared to previous quarters. How should we interpret the second half for IndiHome in terms of customer additions? Will the focus lean more towards fixed wireless access or a combination of IndiHome fiber and wireless access customers? Lastly, as Telkom focuses more on B2B business, will substantial initial investments be required for growth?

This is Derrick. I will address your inquiries. Regarding competition, we continue a rational approach, focusing on profitability and long-term service. Some areas do exhibit pricing competition which correlates with coverage expansion outside Java and the offerings of lower prices. Currently, our strategy emphasizes healthy market conduct, focusing on profitability while also pushing for growth. Regarding our quarters recently, our customer base has grown by 0.5% Q-on-Q to 153 million subscribers, indicating our optimization strategies are beneficial. We remain focused on productive and quality customer improvements as seen through solid ARPU growth of plus 9.8% Q-on-Q and plus 13.1% year-on-year growth. We remain confident that as we implement our healthy conduct strategy, our traffic will grow positively alongside network quality enhancements and productivity improvements.

Regarding IndiHome, we expect growth to come from various avenues. We aim to capture equipment additions via both fixed broadband and visual assets. Continuing efforts will focus on driving the adoption of fixed broadband wherever available while also aiming to increase revenue through higher ARPU targets for our high-value customers. Our newly launched product, 100 Mbps, aims to attract higher-speed customers and enhance ARPU. This will see better monthly performance through the combination of Telkomsel as a mobile fixture integrated into IndiHome's offerings. Additionally, we will accelerate the expansion of fixed broadband access to reach markets previously underserved.

On the question regarding B2B focus, yes, there is investment involved in that pathway. For B2B operations, a foundation of connectivity is crucial and thus, we will require some investment towards that, resembling practices for fixed broadband with an enterprise focus. Additionally, there are specialty solutions we will need to cater to within this space. Further investments do include data center expansions, as highlighted in the second Hyperscale Data Center in Batam to capture demand throughout the region.

If I can have a couple of follow-ups. On the Telkomsel side, just wanted to get your view: as the focus is more on monetization, do you see opportunities to further increase prices in the second half? Regarding IndiHome, how would you characterize the competition in the market? Was the softer IndiHome growth in the first half driven by elevated competitors, or more a matter of being selective in adding customers?

This is Derrick. Regarding potential price increases, Indonesia does have one of the lowest data pricing in the world. In 2022, we undertook Telkomsel market adjustments and rationalized pricing. During recent periods, particularly around the Lebaran holiday, we focused on pricing monetization opportunities. The good news is, we see operators adjusting prices as part of strategic decision-making; we also addressed this via customer value management to meet their preferences and needs for better service experiences. Such dynamic pricing strategies will impact revenue positively as we deploy various methods on customer interactions.

To add to that and also address the IndiHome question: on the mobile side, we've consistently aligned ourselves with industry growth rates as reflected in first half results showcasing an increase in ARPU alongside growth in overall consumer base. We observed some competitive aggressiveness particularly in certain cities but we're consistently positioning our pricing directly against competition without reducing our service quality. High-value products broadly capture customer interest allowing us to leverage competitive positioning. Competitively, there are areas where our market share is strong, enabling us to command better monetization when possible.

Our next question comes from the line of Ranjan Sharma from JPMorgan.

Thank you for the presentation. A couple of questions from my side. Firstly, if I can just revisit the cost discussion. I see O&M costs are up 9% quarter-on-quarter. Personnel costs rose 10% quarter-on-quarter. I missed the part of the discussion around why costs rose so much; could you revisit that? Secondly, regarding your profit and loss statement, I see IDR 288 billion classified as non-operating expenses. Can you explain where that arises? Lastly, strategically, with Starlink getting licensed in a number of countries recently, including Malaysia, if they are licensed in Indonesia, what impact would that have on your broadband strategy for IndiHome?

This is Ramzy. To respond to your question about the cost side. On O&M costs, we see incremental costs from our investment in spectrum, which accounts for additional IDR 70 billion monthly. While this is beneficial, it is necessary due to capacity increase requirements. There are also personnel cost rises as a result of tax decrees affecting income benefit taxation that was recognized at year-end. This adjustment reflects normalization through the remainder of the year.

Pak Ramzy, sorry to interrupt. The spectrum costs started when?

It started last year when we acquired additional spectrum.

So making a quarter-on-quarter comparison versus the first quarter, that does not affect your costs?

Let's get back to that later; however, regarding your inquiry about IDR 288 billion in non-operating expenses—this is mainly comprised of foreign exchange losses related to our currency fluctuations influenced by a USD depreciation by USD 651 million. Despite that, over time, we've observed a positive trend in the strengthening of the rupiah versus USD. Thus, we recognize unrealized losses based on the foreign exchange transitions at the season. That is driving us to report these non-operating costs.

Last question...

Starlink's license in Indonesia is currently limited to wholesale services for consumers, not for service in the consumer space. Currently, services would serve cellular networks for remote areas, and for IndiHome as well. We're positioned well to accommodate this as the demand for cellular and data consumption is increasing significantly.

Let me add to that. As a hypothetical scenario, if the government does issue rationalized licenses, the price point would inherently differ due to opposing service structures and target markets. The distinction means our segment and competition will not directly adjust against one another as we cater to different audiences.

As I emphasized earlier, growth on O&M costs is around 0.8% quarter-on-quarter, and in terms of year-on-year growth, approximately 6.6%. A majority of this growth arises from additional expenses relating to our investments into the spectrum. Normalizing for these will imply growth around 2%, which correlates with increased capacities and new demands.

I will be following up post-call with additional calculations to provide clarity here.

Our next question comes from the line of Aurelio Sathyapuri from BNI Securities.

A few questions from my end. I'd like to inquire about Telkomsel subscribers, which has seen growth in the second quarter. What is your outlook on subscriber growth moving forward? Should we expect continued momentum, or will stabilization occur? The second part of my question refers to the addition of 2.2 million new subscribers in the second quarter. However, if we closely analyze mobile data subscribers, only 252,000 were added, representing about 11% of new subscribers. Could you provide comments on this pattern? Lastly, concerning ARPU and churn, we saw a churn of 9.7% quarter-on-quarter. However, with a modest increase in mobile subscribers, will the growth be driven primarily by existing subscribers? If so, what insights do you have regarding new subscriber spending trends?

This is Derrick. I will address the questions. First on the Telkomsel subscriber’s outlook: yes, we are managing to grow 1.5% Q-on-Q. This reflects our consistency in applying healthy market conduct. Our smart customer acquisition strategies, along with optimized customer value management, have been related in our subscriber growth. Concerning ARPU, we see stable customer bases alongside improved productivity and quality depicted by growth in terms of payload and a healthy ARPU increase. We anticipate continued subscriber growth; our focus will be on enhancing value while meeting diverse customer needs.

We have reached the end of the question-and-answer session. Thank you very much for all your questions. I'll now turn the conference back to Pak Edwin for closing remarks.

Thank you, everyone, for participating in today's call. We apologize for those whose questions could not be addressed. Should you have any further questions, please don't hesitate to contact us directly.

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.