Good afternoon, everyone. Welcome to True Corporation's earnings disclosure for the fourth quarter of 2023. My name is Naureen. I'm the head of investor relations. With me today are our CEO, Khun Manat, our deputy CEO, Khun Sharad, and our co-CFO, Khun Nakul. Our presentation and additional documents are available on our investor relations website. If you would like to ask a question, please raise your hand. You can also type in the chat box. We will be addressing your questions at the end of our presentation during the Q&A session. For now, I would like to hand over to Khun Manat to start our presentation.
Okay. Thank you, Khun Naureen. Good afternoon, everyone. Thank you for joining us today. Let me start with a brief summary of our performance details to be touched later by our Co-CFO, Khun Nakul. Then I'll go through our strategic focus and outlook this year. Last year, we stepped forward as the leading telco tech company in the country, leveraging combined strength of True and the expertise of True and dtac as well as support from our major shareholders. Despite a challenging year with slower-than-expected economic growth, our combined effort in accelerating the amalgamation integration has enabled True to deliver ongoing top-line growth and consecutive improvement of the EBITDA. The service revenue was flat in line with the guidance, but progressed well with growth in every quarter since the amalgamation completion in March. EBITDA consistently grew for the fourth consecutive quarter in Q4.
At the same time, the synergy realization has progressed well and ahead of our target. We achieved a total of over THB 12.9 billion of gross synergy since the amalgamation, thanks to the organization-enabled modernization initiative. We laid a solid foundation on strengthening infrastructure, customer touchpoint, organization restructuring, and digitalization, paving the way for the higher synergy realization this year. Network and service experience significantly improved from the network modernization, 5G and 4G roaming across all frequency bands, and optimization of our customer experience and sales channels. Our brand leadership remained intact with higher customer satisfaction. As a result, we have also cultivated a performance-driven culture and co-creation approach that involves our employees in shaping the company from the ground up. Since then, we have seen significant improvement in organizational efficiency and employee engagement. We are now in a prime position to accelerate growth and deliver greater value to our stakeholders.
For the DJSI, True is , once again, ranked the first in the world telecommunication industry for the DJSI for six years in a row in 2023. This international recognition has proven our ongoing commitment to innovation, good governance, and developments in economy, society, and environment. Let me hand over to Khun Nakul to walk through our financial performance, in detail.
Thank you so much, Khun Manat. Good afternoon, and welcome, everybody. Please allow me to walk you through the financial highlights. Since the presentation has already been shared with you yesterday, I will go a little bit, quick onto the slides because the key messages are already available for you. As far as highlights for the fourth quarter of 2023, we've had THB 6.2 billion of gross synergies that we've been able to realize in this quarter. As mentioned by Khun Manat, 2.3% growth in service revenue has been witnessed in this quarter. At the same time, a very healthy EBITDA performance, 5% growth, has been witnessed in this quarter as well, which is roughly THB 1.1 billion.
And then, last but not the least, as you have already seen, we've had a fantastic round of fundraise with a successful bond issuance in the month of January of about THB 10.5 billion. As far as the top-line performance is concerned, there is a strong top-line growth which is witnessed from the service revenue and product sales. If you look at the numbers here, the total revenue improved by 4.4% quarter-on-quarter. The service revenue improved 2% Q-on-Q due to higher contribution from mobile and online segments. The product sales improved 28.7% Q-on-Q due to the launch of the iPhone in Q3. It's always a seasonal quarter for us. And for the full year 2023, the total revenue total service revenue remained flat on a year-on-year basis.
If I go deeper into the different segments, and first I'll touch the mobile business for us, there is a 2.3% growth in mobile service revenue driven by 1.9% growth in ARPU and higher subscribers. If I go on the slide from right to left, we've had a very good run in this quarter on the ARPU, wherein both the prepaid and the postpaid businesses have shown a good growth in the ARPU. While postpaid has increased about 0.7%, prepaid ARPU has improved 5% on a quarter-on-quarter basis. And as a consequence, the blended ARPU has increased approximately 2%. We've had gain on subscribers as well. The prepaid subscriber increased about 1.7% quarter-on-quarter, mainly due to an increase in the tourist and the migrant segments, which are now comprising 70% of the total subscribers.
Then, as a consequence, the total service revenue has improved 2.3% quarter-on-quarter due to higher tourist influx, growth in migrant segment contributed by higher mobile service revenue aided by focused base management. That's something we've been talking about for the last few quarters. If I go onto the online business for us, we've seen a 2.5% growth in online revenues as well, which is driven by a continued increase in ARPU. If you see on the right-hand side, the ARPU improvement has been 17 THB this quarter. And this also shows a good run over the last 3 quarters for us. That's basically coming on account of the subscription discounts that have been removed in our offerings. At the same time, our continuous effort of making sure that the ARPU is benefited from the converged offerings that we are doing to our base.
That is also helping us improving our ARPU. And then, as a consequence, the online service revenue has improved about 2.5% on a quarter-on-quarter basis. For the fourth quarter, as compared to the previous year, it's a 4% increase. The TV subscriptions remained flat on a quarter-on-quarter basis. As you can see from the slide, the ARPU is more or less flattish over the last few quarters. The subscribers are flat as well. And at the same time, the subscription revenues, which is the pink graph that you see on the left-hand side, has more or less remained flat. Of course, there is seasonality in this quarter. That's why the other revenues, which is basically the concerts, have slightly declined from the previous quarter.
As far as the OPEX development is concerned, if you see the details of the OPEX, and I'll go one by one on the major elements here, the network cost declined about 8.4% quarter-over-quarter due to multiple factors. The number one is, of course, there were lower energy costs from the tariff reduction that had been announced by the government. At the same time, our efforts on operational excellence have borne fruits. That's why the cost is down. Last but not the least, the tower reduction, which has happened because of the network modernization project, which has, at the same time, enhanced the customer experience, is also resulting in a reduction in the network OPEX. The cost of sales has increased 24.5% in line with the increase in handset sales as well, as you saw on the previous slide.
The SG&A remains well-managed and has actually declined 3.1% on a quarter-on-quarter basis as a result of our synergy benefits and also optimization of marketing spends in a seasonally high quarter. The other cost of providing services increased slightly by 3.9%. And that's due to seasonally high content costs that are typically there in this, quarter four. For the full year, the OPEX declined 11.2% on a year-on-year basis. If I then go deeper into the synergies and, you know, the next two slides are gonna cover the synergies for Q4 and for the full year, the gross synergies have been benefited by multiple initiatives that have been recorded in EBITDA as well as below the EBITDA. From the left to right, you see gross synergies of THB 6.2 billion, integration costs of over THB 9.7 billion, and hence, the net synergies of THB 3.5 billion.
The split of these net synergies in 3.5 are in the areas that you see: THB 0.9 billion in EBITDA and about THB 3.8 billion is basically coming on account of the integration costs, which consists of the network modernization costs on CAPEX and spends on organization modernization as well, as we have consistently spoken about it in the previous quarters. Please note that the integration costs are one-off in nature, while the gross synergies will be recurring benefit with the exclusion of the network procurement that you see on the red bar of, which is about 3.3-odd billion here. Then, if you look at the full year synergies, we've exceeded the target that we had set for ourselves of THB 0.25 billion in net synergies. And we end the year at about THB 1 billion in net synergies. Approximately THB 2 billion of these synergies impact the EBITDA.
And that's the reason why you see a good run in terms of EBITDA improvement for us. The net synergies, as mentioned, are THB 700 million higher than what we had expected, basically due to two big reasons. One is because of the acceleration of the organization modernization program. We've delivered about 135% higher than our target. And then, at the same time, it is offset by slightly higher network modernization cost, which will help us give a better experience to the customers going forward. Last but not the least, reiterating that the integration costs are one-off in nature, while the gross synergies are a recurring benefit exclusion of the benefit on network procurement. If I then look at the EBITDA performance, we have 4 consecutive quarters of EBITDA growth led by synergy realization.
A total of what you see on the slide is a THB 3 billion growth in quarterly EBITDA since amalgamation from THB 19.5 billion in Q1 2023 to THB 22.5 billion in Q3 and Q4 of 2023. Approximately 50% of the EBITDA improvement is coming from synergy realization. The EBITDA has also improved THB 1.1 billion on a quarter-on-quarter basis, which is the 5% that I indicated to you in a previous slide. The EBITDA to service revenue remained healthy and increased up to 55.4% for the fourth quarter of 2023. Now, if I move on to the net income, the net income has improved by about THB 1.2 billion on a normalized basis on a quarter-on-quarter basis. If you see on the slide, it was -THB 1.6 billion in Q3 and on a normalized basis, -THB 0.4 billion in Q4, which is a THB 1.2 billion improvement.
It is worthwhile to note that the net income in Q4 2023 was negatively impacted by a few one-time effects as follows. Number one is impairment of redundant assets, related to the network modernization program has been recorded to the extent of THB 7.1 billion. The second item is, again, one-time costs related to organization modernization project has been recorded to the extent of THB 1.9 billion. The third one is loss from investment in associates and other write-offs of about THB 1.8 billion has also been recorded in this quarter. Please note that all of these are non-cash in nature and are one-time in nature as well. So a total of THB 10.9 billion of these kind of adjustments have been recorded in this quarter.
Again, worthwhile to note that excluding these one-time effects, the net profit has improved THB 1.2 billion, which is primarily coming on account of the EBITDA improvement that we've seen in our operations in this quarter. The CAPEX for Q4 2023 was reported at THB 12.6 billion, which includes THB 5.8 billion of net integration costs, which is pertaining to the organization modernization project sorry, network modernization project. As far as the net debt profile of the company is concerned, as you can see, the net debt is more or less, stable over the last few quarters. However, the big news is that the leverage ratio, or the net debt to EBITDA, has seen a sharp improvement in the fourth quarter thanks to the good run that we have on the EBITDA.
So from our 5.6 levels in Q3, now we are down to 5.26-5.2 levels as far as the leverage is concerned. We've also indicated the debt maturity profile on the right, right, right-hand side for you. And then, at the same time, as mentioned earlier, we've had a successful bond issuance in January 2024 of about THB 10.5 billion, which is also gonna help us to manage the debt maturities as well in the fall due. Yep. I will round off this part of the presentation by recapping what was the synergy numbers that we had indicated to you and the operational guidance that was given during various times in the presentation, during the Capital Markets Day as well as in the earlier quarters.
As far as the gross synergies and the integration costs, we are delivering higher than what we had, given as an expectation of THB 10 billion each. Gross synergies are THB 12.9 billion. Integration costs are THB 11.9 billion. And hence, the net synergies are approximately THB 1 billion, which is roughly THB 700 million higher than the estimation that we had given to you. And as a consequence, if you look at the operational guidance for the year, as far as service revenue is concerned, we had guided flat for the 10 months of operations for us on a year-on-year basis. Keep in mind that we've been in operation for 10 months post-amalgamation. So against the flat guidance, we end the year for 10 months at about 0.3% growth. Against the EBITDA guidance of low to mid-single digit growth, we exceeded the guidance by reaching 6.7% growth on a year-on-year basis for those 10 months.
Against the CAPEX guidance of THB 25 billion-THB 30 billion, we end the year at about THB 21 billion, slightly lower than the CAPEX guidance that we have given to you, which already includes the integration costs that I had mentioned earlier. Now, please allow me to go to hand over to Khun Manat, who's gonna talk about the strategy for 2024.
Okay. Thank you, Khun Nakul. Now, let's move to our key strategy and focus this year. We put a significant amount of effort on integration, digitalization, and organization restructuring last year, which gave us the leverage, the right path forward to realize higher synergy value at faster speed. 2024 is an important year for the growth and synergy realization. We are very much on track for both. With the strategic focus I'll touch on in a moment, we are confident to achieve core profit this year. We are now in a prime position to capture higher growth and create sustainable value to our stakeholders. Next slide. Okay.
Our priority is to improve the profitability, return on investment, and free cash flow, hence emphasizing on service excellence, innovation, and value-driven digital offerings as well as operational synergy across organization, which will be driven by the efficiency enhancement, redundancy elimination, and optimization of costs for both OPEX and CAPEX, and leveraging on strength of the strategic shareholders. Details to be touched in the following. Next slide. We have continued to improve customer experience along with stronger network and spectrum portfolio. Our 5G quality is second to none as we solidify our network superiority through an optimal mix of the highest mid-band frequency on top of our widest coverage, utilizing a low-band frequency. Our network modernization and AI development enable us to deliver even greater service experience with targeted and precise investment, leading to CAPEX efficiency, while responding to customers' usage each cell site.
This should further drive our revenue growth along with an expanding 5G user base on 2 times higher 5G top speeds. Technological advancement and generative AI also help in terms of quality acquisition and retention. We've been providing personalized support for active maintenance and end-to-end service to our customers. Service quality has improved as a result, and timing required to service customers at shop reduced by more than 50% after the adoption of automated process. In addition, the integration of physical and digital channels, including iS ervice application, will further add convenience to customers and enable us to offer them more relevant products and services alongside our seamless omnichannel experience. Next slide. We're transforming ourselves from the telco to telco tech by combining our core connectivity and business capability with advanced technologies.
With our customer-centric approach and commitment to digitalization, we are confident to create better value distinct products and innovative solutions for both consumer and enterprise segments. We believe there is a room for growth on our core telecommunication service like 5G and broadband internet, along with enhancing customer propositions and our key strength on comprehensive and personalized offering across large ecosystems, while ample growth opportunity will be from digital services and enterprise sectors. Our ambitions, as announced at the Capital Markets Day, remain intact, and we're progressing well to achieve them. Next slide. As we keep expanding ecosystem, strengthening our comprehensive digital portfolio, and utilizing AI to better provide personalized offering to both consumer and enterprise, we are confident to be the number one choice for the customer and push growth higher this year. Our complete range of offerings and enlarged ecosystem are the key differentiators.
This allows us to provide better value convergence proposition to customers, including the various lifestyle and digital content package on our TrueID, smart living products, connecting cloud IoT device, home entertainment, utility and energy solutions, and fiber broadband via TrueX to create a seamless experience and respond to today's digitalization needs within the home. The OTT packages with a complete range of streaming and exclusive content from TrueVisions to TrueID and the other content partners and privilege across larger ecosystems of True Digital Tech CP Group and the partners nationwide. We believe this value-driven offering will contribute to our growth, pushing our ARPU and customer engagement higher, as proven with our solid track record. Next slide. For the broadband, the industry-wide, the country's broadband penetration is still underpenetrated, with just above 50% household penetration compared to other developed countries in the region, which saw penetration rates well above 90%.
So there's room for growth in the untapped areas. We also see a positive momentum for broadband ARPU following market regionalization and our continued focus on quality subscriber growth. The offerings in the market are moving toward improving customers' experience as well as smart and connected content bundle, paving the way for further uplift ARPU. With the largest portfolio and our pioneer in offering innovative products to various segments of our customers, we are confident to grow broadband revenue and market share further. Next slide. True's diverse portfolio and cutting-edge technology enable us to expand a range of service beyond basic connectivity to smart digital solutions that are customized for various vertical industries. Our strategic focus is on portfolio B2B solutions, which growth revenue from beyond connectivity service up 29% year-on-year in 2023 and continue promising outlook.
Our client base has been enlarged across a variety of the industry, including the agriculture, retailer, property developer, industry plant, and transportation. For example, we are the dominant leader in providing connectivity for smart transportation, including the sole provider for Tesla and other leading brands. This is based on our unmatched superior network and widest coverage. We believe the enterprise sector has a significant growth potential due to the increasing digitalization of Thailand business sectors and our capability to serve such needs. Next slide. True is accelerating our transformation journey with a clearly defined roadmap: one network, one operation, one team. The network optimization not only improves customer experience, as mentioned earlier, but also leads to savings on our electricity and rental. Last year, we exceeded our target for the site modernization.
We are progressing to enjoy more savings this year while our customer 5G experience will be further uplifted with the 2.6 GHz expansion. On the customer outreach, our channel optimization initiative and automation process will help us reach and service customers more efficiently. We will also simplify and consolidate various applications for partners into one to enhance efficiency further. Last year, we exceeded the channel synergy by 150%. Last but not least, we have modernized and restructured our organization and workforce with the right sizing to become future-ready. We achieved 135% against our original target for the year. We are cultivating a performance-driven culture while adapting to a shifting business landscape and changing customer demands. With the support from our major shareholders, we gained a significant competitive advantage by leveraging CP Group's widest retail footprint across the country.
Our presence is unmatched by others, with over 12 million consumers exposed a day. We also benefit from the higher scale and better price points, along with the global purchasing power and best practices of CP Group and Telenor. The global expertise of our strategic shareholders has empowered us to enhance customer experience with higher efficiency. This includes the knowledge sharing from China Mobile on the customer management 5G use case for enterprise and AI autotune power consumption, which allows us to save energy consumption in each sales site with up to 15%. We will continue to raise the bar on sustainability and maintain the number one position to further elevate quality of life for Thai and transform Thailand into the digital economy. Okay. Let me hand over to Nakul to walk through our 2024 financial guidance.
Thank you so much, Khun Manat. Allow me to walk you through the guidance for 2024, which is something that you've been waiting for. The industry is predicted to grow in line with the GDP forecast for Thailand in 2024. The latest forecast is roughly 2.5%-3%. We will also see ARPU improvement in mobile and online segments and definitely higher contribution from our B2B business as what has already been seen in 2023, which Khun Manat also spoke about. And as a consequence, the service revenue is expected to grow 3%-4% in 2024, full year as compared to full year 2023. We are also committed to profitable growth, resulting in EBITDA improving faster than service revenue, something that we explained in detail at the Capital Markets Day as well. And we will continue to drive cost discipline in the operations as well.
As a consequence, we would expect the EBITDA to grow 9%-11% year-on-year in 2024 versus 2023. The majority of our investments in network modernizations will be taking place in 2024, leading to CAPEX synergies and also related integration costs. Hence, as a consequence, including the integration costs, as far as the CAPEX is concerned, the guidance is approximately THB 30 billion, which is lower than the guidance that we had given at the Capital Markets Day. All of these efforts and the run rate that we have exiting Q3 2020, Q4 2023, and going into 2024, we expect the company on a normalized basis to be profitable in the year 2024. With this, I end my presentation and hand it over to Naureen for the Q&A.
Thank you, Khun Nakul. Thank you to everyone who is on the call. For those of you who have joined late, just to remind you, you can ask us questions by raising your hand on Zoom. You can also type your questions in the chat box. Before we proceed with the questions, we've received some common questions from many of you, so we'd like to address those first. The first question that we've received is, "Please explain the one-off impacts to net profit." Khun Nakul, if you would like to take this one, please.
Sure. Thank you so much. Khun Naureen, let me take that question first. As you saw in the slide that I had presented, there are three one-offs, all of which are totaling to roughly THB 10.9 billion in Q4. The first one is on account of network modernization, which has impacted roughly THB 7.1 billion in this quarter. Approximately 2,500 towers have been shut down during the year 2023 as part of our network modernization project, wherein the active equipment has moved from an ex-existing tower to a new tower to make sure that the customer experience is enhanced for both dtac and True customers. As a consequence, in accordance with the TFRS, the passive infrastructure, the obsolete active equipment from the dismantled towers, and also the right of use assets, which are pertaining to the lease of the dismantled towers, have been written off.
As mentioned earlier, a significant portion of this write-off is only an accounting adjustment and is non-cash in nature. These have been recorded on the other expenses in the P&L. The second one is on account of organization modernization, where approximately THB 1.9 billion has been recorded in relation to this program, which has delivered significantly as far as the integration benefits and the synergy benefits for the year is concerned. This covers the full impact of any potential restructuring that is expected to happen in the next two years on account of the organization modernization. This accounting adjustment is also non-cash in nature, and any cash payout is expected to happen as and when this organization modernization progresses in the next couple of years. However, from an accounting point of view, full impact has been recorded in Q4 of 2023.
The third adjustment that we have in, as far as the one-off is concerned, is on account of loss from investment in associates and other write-offs. This is approximately THB 1.8 billion. As part of the annual fair value assessment exercise, a loss has been recorded in a couple of our associate companies, which has been picked up on a proportional basis pursuant to the TrueCorp share in those companies. Besides, some other assets have been written off, which include certain IT assets, and all of which totals to about THB 1.8 billion. Approximately THB 0.9 billion of this amount is recorded in the line item share of results in subsidiaries and associates, and another THB 0.9 billion is in other expenses in the financial statements. I would like to repeat that all of these items are mostly non-cash in nature, are purely accounting adjustments, and are one-off as well. Thank you.
We have a follow-up to that question. Can you please guide us on further impairments to be expected in 2024? Khun Nakul, if you would.
Yes. Thank you. I can take that as well. As I had mentioned, since approximately 2,500 towers have been dismantled in 2023, for which roughly THB 7.1 billion has been recorded, there is gonna be further dismantle that's gonna happen in the next couple of years as part of our network modernization program. The write-off for the network modernization, even though the number of towers dismantled will be significantly higher, and please note that the customer experience most definitely is not gonna be impacted at all, the write-off is actually gonna be lower than what you see in the year 2023, even though the number of towers dismantling is actually higher. This is what I will explain as far as this question is concerned.
Just the last question we have again for you is, if you could please elaborate on the guidance for EBITDA, which seems very exciting, as well as for service revenue.
Yes. Actually, this was a common question that we got from almost everybody, and we've been given some credit to the guidance here as well. But let me explain the rationale that we have used to come up with this guidance number. We've had a good end to 2023, as Khun Manat also explained. There are consecutive quarters of revenue growth. There are consecutive quarters of EBITDA growth as well. If we just extrapolate the Q4 2023 numbers and assume no growth coming in 2024 on EBITDA and on service revenue, we're already hitting a 2.5% growth in service revenue and a 5% growth in EBITDA. And I would like to remind you, the guidance that we have given is 3%-4% growth in service revenue and 9%-11% growth in EBITDA.
As I mentioned, the industry is predicted to grow in line with the GDP forecast of about 2.5%-3%, so we expect to grow around those levels or slightly higher. The primary source of this growth is expected from ARPU improvement in the mobile and the online segments, and the fourth quarter is one good example of where you see that ARPU improvement actually coming. And this is all thanks to the focused efforts on active base management, that the ARPU improvement is actually gonna come. Last but not the least, of course, the upselling efforts on conversions offers also play an important part as far as this growth is concerned.
On top, the tourism is expected to further increase in 2024, and based on the latest numbers that has been given by the Tourism Authority of Thailand, approximately 35 million tourists are expected to come in 2024 as compared to 28 million in 2023. They've also given indicative numbers on what they will spend. And this is also gonna stimulate growth because you know that our company, True and dtac combined together, has a large share larger than the normal market share that we have as far as this segment is concerned. Lastly, as explained by Khun Manat, the B2B business is expected to further contribute to TrueCorp's top line and, of course, bottom line as well, where the beyond-core services are expected to grow double-digit in the year 2024, similar to the 23% growth that we saw in 2023.
In a nutshell, as far as the EBITDA is concerned, as mentioned at the CMD, we are committed to profitable growth resulting in EBITDA improving faster than service revenue through realization of synergies as we continue to drive cost discipline in the company. We will obviously continue to work in a structured manner to reduce the gap versus competition as well as far as absolute EBITDA and also the OPEX as well, which we believe we can do over the next couple of years. Thank you.
Thank you. Let us now move into the live questions from Zoom. First up, we have Khun Pisut. If you would please turn on your camera and your microphone.
2 questions. 3 questions. 2 questions.
Khun Pisut, for the sake of time management, if we could restrict questions to maybe one or two.
Oh, yes. Thank you for the opportunity. This is Pisut from Kasikorn Securities. Yeah. My face is quite big. Sorry to interrupt.
Not at all.
Yeah. May I have four questions? The first one, you know, noticing that you have gained prepaid, but lost a bit on the postpaid in terms of subscriber. In, at the same time, your competitor was in the opposite circumstance. Just want to know that, is this just the temporary market adjustment, or is it happening as per your, you know, your strategic intention? And, what would be the economic rationale that you try to expand your prepaid subscriber base at the expense of the postpaid subscriber base? Also related to that question, Khun Manat mentioned about the fixed broadband market that still, you know, has a plenty of room for growth in terms of the penetration to the household. However, if you look at the fixed broadband subscriber base, it was stagnant for quite some time.
Could you please tell us a bit about what happened, what is your strategy on this one going forward?
Khun Pisut, would you like to finish or for?
Oh, yes. Okay. Yes. My, my second question is regarding your core revenue growth guidance of 3%-4% that Khun Nakul mentioned about the first of all, the GDP growth, also about the tourist arrival and, and some other, you know, B2B segment. But if you, it would be great if you can break it down, yeah, into your growth target, especially for the mobile and also for the fixed broadband for this year. And my third question is, just want to clarify your financial target this year that you will turn profitable at the normalized level. My question is, your, your normalized profit is going to be for the full year starting from the first quarter or just for a particular quarter like in third quarter or fourth quarter, for example?
My last question is, about the, as you know, spectrum agreement with the NT, that's going to expire in 2025. What would be the most likely scenario you expect it to happen after that? Would it be possible, for the spectrum auction event to, bring back another round of the CAPEX cycle, for both, spectrum bandwidth purchase and also the network investment? And how much spectrum rental fee on the net basis will you be able to save under this scenario? Thank you.
Okay. Thank you, Khun Pisut. The first one on prepaid and postpaid subscriber base, I would like to request Khun Sharad, if you would please take that.
Yeah. Thank you, Khun Pisut. You look still quite good on the camera. Not the bigger face for sure. Answering this one, as you heard, the commentary from Khun Nakul as well as Khun Manat and our, you know, strategic priorities in the market. So we have a focus on both prepaid as well as postpaid segment. And if you recall, the one just presented by Khun Nakul, True mobile ARPU grew in quarter four 2023 by about 1.9% quarter on quarter. And prepaid, of course, was 5% and postpaid 0.7%. And just to reiterate that we are having a continued strategy on growth on prepaid with a continued encouraged arrival of tourist segment. This year, we believe, 2023, about 28 million. This year, expectations are more than 35 million, which is quite comforting. It means that we will continue to grow in that area.
Looking at the postpaid side, that is quite interesting. We don't concern with the blip on, you know, one quarter and so on, because our focus is quite clear, is to sustain growth momentum, based on the superior good quality network we have in 5G. What we are doing here in this area is that we are moving from connectivity to lifestyle area, where we have, you know, quite a good product portfolio, starting from streaming, entertainment, gaming, insurance, EPL, and King of Sports. Depending on the variety of the services, we have ARPU uplift. Also on the postpaid side, we are doing okay, but of course, we believe that moving the 5G base beyond 10.23, which we entered on 2023, we see a significant potential on moving 5G growth area, and there we see 10%-15% ARPU uplift in 5G.
I now move on to your second question, which was about our broadband strategy, which is also a very important, you know, arena for True Corporation. So of course, we don't look at the past. We learn from the past. If you look at our strategy and also based on what we have seen in 2023, you heard from Khun Nakul, our CFO, that we have gained about 31 THB ARPU in the year 2023. The quarter-on-quarter growth was also about 3.5%, right? Having that base now in 2024, we have a clear strategy on broadband business and two strategic approaches in na krub. Number one, proactively protect and monetize the base with customizable lifestyle benefits, moving from so-called broadband connectivity to smart living in na krub.
Then what we are talking about is that we are enhancing our network quality and coverage, to enhance customer experience and strengthen the position as number one best broadband network connected with smart living in a hub. We have a very strong focus, and you will see progressively, quarter-on-quarter, on providing solutions on smart living like OTT VWACs, CCTV security package, home insurance, and there are a few more coming in the pipeline. I'm sure you have heard about the app called TrueX, which is a home solution app. We are quite encouraged to see the growth in 2023 providing home solutions. When you have broadband, of course, you have, you know, quite a good signal. You end up connecting many devices. We really want to grow home solutions quite well in 2024 in a hub.
This is quite long, but this is our quite explicit elaboration of broadband strategy na krub . For question three, we move to Khun Nakul na krub .
Thank you. Thank you so much, Khun Sharad, to actually elaborate the strategy in a little bit more detail. Your third question, Khun Pisut, is regarding core revenue growth, if you can break down into the mobile and the fixed broadband. Actually, we haven't broken down the guidance into the fixed and the mobile broadband because, as we had mentioned and explained very detailed by Khun Sharad, the focus is on growing ARPU in both these businesses as what you have seen in the last quarter specifically, where both the ARPU and the broadband business online as well as in the mobile business has grown. At the same time, the focus is definitely on growing the subscriber base as well.
On the mobile side, it's definitely going to be on the prepaid, wherein more and more tourists are going to come in, and migrants are going to be there as well. And of course, as far as the broadband market is concerned, because it is underpenetrated, as the penetration improves, this is going to improve as well. So in a nutshell, we do not break down the guidance into the two into the two businesses, but in general, we're indicating a 3%-4% growth. Having said that, I just want to repeat, if we consider Q4 2023 numbers and assume no growth in 2024, we're already sitting at a 2.5% growth in service revenue for next year in aggregate. Then your second question was, clarification on financial targets, that when we will turn profitable on a normalized basis.
Our guidance, just to reiterate, is to be profitable full year based on normalized numbers. Of course, the impact, if any, that's going to come on account of the impairment is not included in these numbers. And as I had mentioned in the earlier question, the amount of impairment is going to be definitely lesser than what we have recorded in 2024 as far as the network modernization is concerned. So you can do your math and the number crunching based on this, krab. So for the full year, definitely, it's going to be profitable. We're not breaking down into the specific quarters here. Then, the next one is on the spectrum arrangement, and I will pass it on to Khun Manat, to answer this question in Thai.
Okay. For the spectrum strategy, we have done the spectrum strategy already. So but now the point is that, we're waiting for the NBTC to announce the spectrum auction and the caretaking rule, which this is very important for the operator to consider the operation afterward. The alternative of our mid-band of 2.3 and after which by to our NT which we have the alternative of choosing the 2.3 after the auction, or we have the other mid-band, you know, to suppress this 2.3. But we have the funding vehicle of the spectrum cost of 2.3 to do that, Krab. So that's a big key.
So the key point is that, we're waiting for the auction rules and timeline from the NBTC, from the regulators, and also the caretaking rules regulation, you know, krab. That's the point. All the plan is already planned with us already, krab.
Thank you, Khun Manat. Next up, we have Khun Kittisorn. If you would please, turn on your camera and unmute yourself.
Short questions. You hear me, right?
Yes, we can.
Okay. My first question is that, you did a good job on cost reduction in the fourth quarter, especially on the network cost and also the SG&A. My question is that, is it fair to use the fourth quarter number as a baseline for 2024? That's my first question. The second question is that, why is the impairment amount expected to be lower than 2023 despite higher network optimization in terms of number? Can you clarify a little bit more on this? And my last question is about the synergy number. According to the number at Capital Market Day, the target synergy value and the integration cost are still the same? And how much will go through the P&L, especially for the integration cost? The reason that I ask this this question is because in 2023, you mentioned that, the synergy realized is, like, higher than you expected.
I just want to confirm whether the number at Capital Market Day is still valid. Thank you.
Okay. Thank you, Khun Kittisorn. Khun Nakul, if you would like to take the first actually, all three of them.
Yeah. Okay. Thank you so much for your questions, Khun Kittisorn, Krab. For your first one on whether the OPEX of Q4 2023 can be considered as the baseline for the next year, yes. I think, barring any potential effect that can come from inflation in specific any hike in energy prices, which obviously the government has already indicated of what's going to happen in the month of April, you should consider these numbers as the baseline. And that's why when we explain the guidance to you, we say that let's keep Q4 2023 as the baseline and then assume what's going to happen as far as the future is concerned.
So most definitely, whatever cost programs we've run have brought the baseline of our OPEX to those levels that are sitting today, and there is going to be continuous improvement as we go forward, factoring in any potential adjustments that can come from inflation. Your second question on, the impairment amount, and, let me just try to explain this in a little bit more detail, right? So of course, the amount of network modernization is going to be higher in 2024 as compared to 2023, yet the cost that we expect to incur on account of impairment is going to be lower than what is there in 2023. The reason for that is in Q4 2023, True Corporation has actually recorded decommissioning costs and certain penalty amounts for all the towers that are expected to be dismantled over the course of the next two years.
So basically, some of the costs for the entire network modernization program has already been recorded in Q4 2023, and as a consequence, the incremental that's going to be recorded in the year 2024 for the additional towers that we're going to dismantle is going to be lower than what is already going to be booked as far as the year 2023 is concerned. Then your third question on the impact on the synergies. Actually, we've made it a little bit simple for us to explain the performance to you and for you to follow as well. That's why, even though we had given the synergy numbers as far as the guidance that was given to the capital markets is concerned, we are now talking about our everyday performance. And then we are saying, of course, everyday includes the cost that needs to be incurred to get the synergies.
It also includes the benefits or the synergies that we're going to get per se as well. Keeping in mind all of those factors, we are saying that the EBITDA growth is going to be 9%-11%. The one element in the P&L that you have always seen is the expenses incurred on account of organization modernization, which has completely been recorded in Q4 2023. So you will not see any incremental effect of integration costs on account of organization in the P&L. There is going to be cash payout as and when the organization modernization progresses, but that's not going to get impacted in the P&L in 2024. So that's the simple answer.
Please focus on the guidance that we have given wherein we are talking about 9%-11% growth in the everyday, which factors in everything: operational performance, the synergies, any costs that need to be incurred, and overall growth in the business as well. Thank you.
Okay. Thank you. We would like to move on to the next person. Ranjan, if you would please turn on your camera and your mic. Ranjan, are you here?
Hi. Good afternoon. And thank you for the presentation. Two questions from my side. Firstly, on the wireless revenues for the industry, if you can share your expectations on how much you think the industry could grow in 2024. And the second question is, I'm wondering why the service revenue guidance is not higher. If I just look at your wireless revenues for fourth quarter, and then analyze that, I come to, like, 2.5% growth in wireless revenues alone. And then you are improving ARPUs, and you're talking about growth in customers. So just wondering, like, what's behind the 3%-4% service revenues guidance? Based on everything you have said and delivered, it should seem to be higher. Thank you.
Thank you, Ranjan. Nakul, I believe both of those are for you.
Yeah. I think, when you were getting the questions earlier, it was more about how confident are you to deliver on those guidances. And thanks, based on the explanations that we've given now, Ranjan, you're challenging us whether the guidance is conservative, actually. But, I mean, just explaining this in a little bit more detail. Of course, there is a good momentum as far as the end quarter four is concerned. We do expect the ARPU improvement to happen. Of course, it's not going to be a, you know, a very significant improvement in ARPU because we will focus on active base management as we have done in the last few quarters. And as you've seen, the unlimited packs have been taken out from the market. It is generally starting to show some improvement in the industry as such in terms of the ARPU is concerned.
Of course, tourist influx is, you know, is going to be there as well. So we do believe that this guidance is what we stand behind. I mean, of course, the focus of the entire organization is actually on integrating the companies and delivering the synergies as well. And doing all of this at the same time, we believe that the 3%-4% growth in revenues is what we would like to aim for, and that's what we see as far as the industry growth is concerned as well. You also see the, the GDP guidance that's been there. It's roughly 2.5%-3%. So in a way, the 3%-4% is actually higher than the GDP growth that you would probably see in the country in the year 2024. Thank you.
Okay. Thank you. We'd like to move on to the next person. Arthur, if you can please turn on your camera.
Hi. Can you hear me?
Yes, we can. Good.
Yeah. Okay. Thank you. Sorry. Just several questions, please. Firstly, with regard to the move to profitability a year ahead of initial targets, I'm just wondering what has essentially changed for you to revise the guidance to profitability. I understand you are slightly ahead in terms of synergies. You're booking around THB 1 billion versus your target around THB 0.2 billion-THB 0.3 billion. But is there any other item which actually pushed you to advance the target on profitability? Then the second question is, with regard to it's a housekeeping question. For the assets that you have impaired, what kind of costs were they generating on your P&L? I assume some of them would have been depreciation.
Okay. Arthur, thank you. Nakul?
Okay. Thank you for your question, Arthur. Let me just try to recall. The first one is, see, yes. We have given a guidance on profitability for the next year, and that's based on the underlying performance excluding the amount of the write-offs. It's coming on account of a few factors. Of course, we are quite pleased with with the performance that we have, and you have specifically mentioned that our target on the synergies is higher than the number that we had indicated earlier. Then also at the same time, if you look at the everyday performance of the company, we had given a guidance for the year 2023 for 10 months to be low- to mid-single-digit growth, and we exceeded that guidance as well. That guidance, of course, is contributed by better synergies and also better operational performance of the company as well.
As far as the top line is concerned, we've had three consecutive quarters. As far as everyday is concerned, we've got four consecutive quarters. Our overall way of work in this company, integrating these two massive companies together from a people standpoint, from a technology standpoint, from an operational standpoint, has given us the confidence that we can deliver better than what we had expected earlier. So it's a combination of multiple factors. Of course, people have a lot more important part to play because everybody knows how to run operations. But to integrate a culture of two two companies together into one and then deliver is actually the secret sauce that we are we are working on. The CEOs are contributing very well in leading the whole organization together. Then your next question on impairment, what was it? What is the?
Naureen Quayum. Yeah.
Yes. So, the integration sorry, the impairment costs that we've recorded specifically on the network modernization flow through into the P&L of the company. So in a normal course, some of these assets would have been depreciated over a period of time. But now, most of it are no longer in use, have been flushed out, and impaired in accordance with the accounting standards or the TFRS. So the effect of this would have been into the line item of depreciation and amortization, and that has been recorded upfront in Q4 2023, which would obviously mean and I know there is going to be a follow-up from you. The D&A is expected to then be lower to this extent going forward. Thank you.
Thank you. Can we move on now to Wasu? Please turn on your camera and your mic. You are still muted.
For the presentation, I have around four questions. The first one is about the debt you have. So you mentioned in one of the slides that you will have to refinance THB 74 billion of debt this year. So how do you plan to refinance that debt, and what is the proportion of bond versus bank loan? So that's number one question. Number two, do you target positive free cash flow in 2024? Question number three, how much do you expect in terms of the impact on your subscribers coming from the prepaid identification regulation from the NBTC this year? And my final question is about the handset margin. In 2023, True's handset margin was around -6% versus Advanced's handset margin of +2%. So why is there a difference between the two companies in terms of the handset margin?
For the handset subsidies, does True focus the subsidies on postpaid or prepaid or both? Those are my questions.
Thank you, Wasu. I'm a bit conscious of our time. We're already over time. Let's start first with the handset margin question for Khunsharath, and then we take the rest from Nakul.
I'll take the handset margin.
Okay. Sorry. How much impact do you expect from NBTC subscribers?
Okay. Okay. Sure. Thank you, Khun Wasu. Good to see you again. You know, according to the re-identification notification, individuals who hold more than 100 mobile SIM cards must re-identify, you know, SIM cards by February 14, as well as there is a second more condition, which is about six to 100 SIM cards. So we are fully complying with NBTC regulation. We do see there may be some impact, but we are minimizing this impact through two things. One, making our re-identification process quite robust across all channels. And second, our teams are also discussing with NBTC in terms of timeline as well as, you know, simplifying the complexity in terms of classification of subscribers. So we are pretty confident on landing on this well. Thank you, Kapp.
We move on to Nakul.
Yeah. Let me take the rest of the questions quickly, Wasu. The first one on the refinancing of the debt in 2024. As we've indicated earlier, the primary source of the funds for us is definitely going to be tapping into the bond market. And the fact that we've got a very successful bond issuance that happened in the month of January is actually testimony to the ability of the company to refinance the debts it raised from the bond market. I mean, you know probably better than us, how tight the bond market is as far as this country is concerned. And the companies which have a good credit, specifically in our case where we have a rating of A-plus, our ability to tap into the market, give confidence to the bond investors is actually very high.
So that's going to be our primary source of funding going forward. We also have unutilized facilities on bank loans to the extent of THB 10 billion, which are not drawn down as of 31st of December, which if you want, we can tap into. But like I said, you know, we definitely want to tap into the bond market. And in addition, the True Corp is going to continue to explore other sources of funding, including any offshore borrowings as well, maybe specific to Japanese yen also. Then, your other question on the target free cash flow. I mean, we are not giving any free cash flow guidance for the year. I mean, we will stick to what we've mentioned, as far as our EBITDA guidance for the year and also the CAPEX.
But, you know, I would tend to say that the free cash flow is going to pretty much go in line as far as the net income development of the company is concerned if you are looking for some sort of a, you know, quasi, actually to that. Then your last question is actually interesting. I mean, as far as the handset margin is concerned, actually, there is more to it than what meets the eye. I mean, and the reason why I say it is that based on what you see in the financial statements, the reason for the difference in the handset margin of the two companies is basically on the different accounting practices that True dtac have and what our competitor has. So it is not actually comparable.
From what we see in the market, and that's most important to know, the subsidy levels that you see in the market for all operators across is pretty much the same levels except for certain tactical differences here and there where certain products, certain handsets which are slightly old into your inventory are being flushed out. But other than that, the subsidy levels are pretty much the same. So don't read too much into those numbers. It's just the accounting difference between the two companies that is giving you an indication that the handset margin is different. Subsidy levels are pretty much the same as what you see. That's how I'll respond. Thank you, Kapp.
Thank you so much. Unfortunately, we are already over time. I have to apologize to all of you who are still waiting to ask questions. Please feel free to get in touch with me. I will also reach out to you after today, to address your questions and concerns. Thank you so much. Have a great day. We will be hearing or you'll be hearing from me soon. Thank you.
Thanks so much, Kapp. Kapp, sorry to interrupt.
Thank you.