Good evening, good morning, and good afternoon, everyone, to everyone on the call, joining us today. Welcome to True Corporation's earnings disclosure for the first quarter of 2024. My name is Naureen. I'm the Head of Investor Relations. With us today is our CEO, Khun Manat, our Deputy CEO, Khun Sharad, and our Co-CFO, Khun Nakul. Our presentation and additional materials have been emailed out, as well as available on our website. To ask questions, please raise your hand in the Zoom box, or you can type your questions in the chat box as well. We will get to you at the end of our presentation. In case you're unable to do either, please feel free to reach out to me over text or email, whatever is convenient for you. With that, I'd like to pass over to Khun Manat to start our presentation.
Okay, thank you. Thank you, Naureen. Good evening, everyone, and thank you for joining our Q1 2024 online meeting. It's a privilege to share the incredible progress and dynamic developments at True Corporation with you all today. We have embarked on 2024 with a robust start, driven by the seamless integration of our operation and the strong dedication of our team. During 2023, we focuses on fostering a performance-driven culture through strategic cultural integration, leading to significant financial achievements and quality improvement in our performance. I'm proud to report at our fifth quarter that we have five consecutive quarters of EBITDA growth and a remarkable turnaround to profitability with just a year post-amalgamation ahead of our expectations. All these achievement were driven by growing revenues, continued cost discipline, and progress on synergy realization.
Our proven strategy are leading to tangible outcomes and putting us well on the path to accelerate profit in a sustainable manner. As we move forward, our strategic direction is guided by three key pillars. Our must-win battles, delivering the world-class customer experience, establishing ourselves as the digital growth champion, and ensuring future-ready performance. Let's dive deeper into how we excelling in each of these areas, starting with our commitment to providing an unparalleled customer experience. Our dedication to delivering a number one world-class customer experience is evident through our extensive AI-powered initiative. Till now, we have modernized over 3,700 sites, effectively doubling our 5G network's top speed and achieving the widest coverage across Thailand. We also maintain our leadership in 5G subscribers, reaching 11 million at the end of Q1.
This positions us as the preferred provider for tourists and migrants, our leadership in this connectivity. Our proactive AI monitoring system ensure high network reliability, continuously improving customer support and driving an increase in NPS quarter-over-quarter. Our AI-driven omni-channel service seamlessly support our customer, whether they are with True or dtac, no matter what service they want to use across our shops. But our pursuit of excellence does not stop there. Let me share with you how our sustainable future-ready network is central to delivering this world-class customer experience. At the heart of our network operation is the Business and Network Intelligence Center, so-called BNIC, which continuously monitoring and analyze network performance across Thailand.
Utilizing AI for anomaly detection, we can then identify and address abnormalities quickly, ensuring high network reliability, especially during peak times, like year, New Year and Chinese New Year, Songkran, without major outage. On the sustainability front, nearly half of our network sites are equipped with AI-powered energy-saving solution, achieving up to 15% energy savings. We are exploring new technology like smart breakers to potentially double these savings, reinforcing our commitment to environmental responsibility while maintaining exceptional service quality. These advancements serve as a strong foundation for our digital growth initiative. Moving on to our second must-win battle, establishing ourselves as the number one digital growth champion. We have exciting developments for both business and consumer. For businesses, we doubling almost 50% growth our digital solution revenue through advanced managed services, AI capabilities, and pioneering API system that integrate telecom solution into business application.
On the consumer front, we are integrating our everyday living tech with 360-degree insight to deliver an exceptional experience. We're focusing on enhancing the experience for the digital nomad group who travel for leisure while working remotely from anywhere, anytime. We are driving Thailand as a top destination for digital nomads in popular tourist cities such as Chiang Mai, Khon Kaen, Ayutthaya, Songkhla, in cooperation with the Tourism Authority of Thailand. This effort aims to provide outstanding experience, not only to Thai residents, but also for the international travelers and migrants and customers, both True and dtac. Now, let's shift to our third must-win battle, the number one future-ready performance.
Central to this effort is the development of our digital citizens, our workforce who are not only equipped with digital skills such as AI co-piloting, digital marketing, and automation, but also possess a deep understanding of data privacy and are ready to drive future organizations. These digital citizens are the change agent who will move our organization forward in the digital era, leveraging their expertise to innovate, optimize, process, and deliver unparalleled customer experience. We double our digital citizens since the amalgamation and set a target of 5,000 digital citizen by end of 2025. To facilitate an innovative mindset, we have organized hackathons and leadership development program, pushing boundaries by implementing quarterly incentive KPI. By investing in our people and cultivating a future-ready performance, we lay the groundwork for sustainable growth and long-term success.
As we continue improving in digital growth and future-ready performance, it's essential to recognize the role of sustainability and responsible AI practice in our journey. Last March, we highlighted how AI underscore many of our strategy initiative for 2024, and sustainability is no exception. When it comes to climate action and energy, we are not limited to our own operations. We are also encouraging our vendors and suppliers to set climate targets as per the SBTi. We held our first supplier forum to set them on this journey and provide them with the free GHG data platform for all of 2024. Moving to the social aspect, we use AI in some of our social projects, such as the Elephant Smart Early Warning System in Kui Buri National Park, which use cameras and AI to track elephant movement and minimize human-animal conflict.
Our Little Monk project and Plookpanya promote ethics in Thailand. Future workforce of the digital era, ensuring that the next generation is well prepared for the challenge and opportunity of the digital world, also adding the merit to the country. Governance is becoming an increasingly important topic for sustainability, and the DJSI Index have stated they will begin to look at AI governance in their corporate social responsibility framework. True Corporation has put in place a robust governance framework for our use of AI, including an ethical AI charter with five key points. We have an AI governance committee to review the charter's implementation in parallel to other ethical concerns, such as data privacy and data protection. We will continue to engage with stakeholders to keep improving this framework.
We will continue to raise the bar on sustainability and maintain number one position to uplift the quality of life for Thais and transform Thailand into a digital economy. Now, I'd like to hand over my presentation to Khun Nakul. So, over to you, Khun Nakul.
Thank you so much, Khun Manat. Let me start by giving the financial highlights for the first quarter of 2024. As you can see on the screen, the service revenue has improved 6.2% on a year-over-year basis, and a 1.5% improvement QoQ. The OpEx, though it's not visible on the screen, has reduced 13.4% on a year-over-year basis, and roughly 7% QoQ. As a consequence, the EBITDA has improved 21.3% on a year-over-year basis, and almost a 5% improvement this quarter. This is on top of a 5% improvement that we saw in the previous quarter as well, and marks the fifth consecutive quarter of growth for True Corporation.
As a consequence of this, largely because of the improvement in the operational performance, we are pleased to announce that we report a normalized profit of THB 0.8 billion for the quarter. At the same time, because of a good operational performance and slight improvement in our net debt, the leverage is down to 5x, which is roughly a 0.7x improvement from last year, and a 0.2x improvement quarter-on-quarter. Now, if I go into the details, when we go into the service revenue and the total revenue development, the service revenue has improved 1.5% on a quarter-on-quarter basis, driven by strong business performance across mobile, online, and PayTV segments. The service revenue has also increased roughly 6.2% on a year-on-year basis, thanks to our four consecutive quarters of growth in service revenue.
The product sales, as you can see from the right-hand side, has declined 24% QoQ due to seasonality. I'd like to remind you that the iPhone sales are highest in the fourth quarter because of the launch in September of 2023, and that's why the seasonality has had an impact. Hence, as a consequence, the total revenue has declined 1.9% on a quarter-on-quarter basis from the lower handset sales. All in all, there is discipline in our performance management, which is leading to continued top-line improvement. If I then move on, on a quarter-on-quarter basis, we register a 0.7% growth in mobile service revenue. If I go from right to the left, the blended ARPU and prepaid ARPU remained flat, while the postpaid ARPU improved THB 2 billion , or roughly 0.5 percentage points, quarter-on-quarter.
The blended ARPU has improved 2% on a year-on-year basis, with prepaid improving almost 7%, while the postpaid ARPU has improved 2% on a year-on-year, a gradual and a steady increase. As far as the subscribers are concerned, 1.5% quarter-on-quarter decline is what you see in the subscribers. In prepaid, it is mainly due to our focus on quality acquisitions. This is something that we've explained in the previous rounds. Postpaid subscribers declined 1.9% quarter-on-quarter for one-time cleanup of non-revenue-generating subs. As a consequence, the total subscribers on a year-on-year basis, though, have increased 1.2%, even after the decline quarter-on-quarter. The mobile service revenue, as a consequence, has improved 0.7% QoQ, and has improved 5.2% on a year-on-year basis.
If I go on to the next segment, which is the online or the broadband business for us, the subscribers in Q1 2024 have had a similar impact of a one-time cleanup of non-revenue-generating subscribers. These were done towards the end of the quarter. Normalized ARPU, which is taking into account or taking away the effect of the subscriber cleanup that we did towards the end, has improved THB 10 million on a quarter-on-quarter basis, and this is coming on account of, you know, the reduced discounts that we have started to offer to the customers, and also upselling existing customers to higher packages. The online ARPU has increased 9.2% on a year-on-year basis, again, a steady increase that you see every quarter.
As a consequence, the online revenue has improved 2.5% QoQ, and 7.9 percentage points on a year-on-year basis. If I move on to the next segment, this is the TV business for us. There is a 23.9% increase in the PayTV revenues from the higher music and entertainment revenue. The subscribers have marginally declined. That's been the similar trend that we see in the previous quarters, and the ARPU has slightly improved. But if you see, the subscription revenues has slightly declined from 1.2% to 1.1%. However, total revenues on the PayTV has improved 23.9%, as I mentioned, largely because of the music and entertainment revenues, which are seasonal concerts that happen. I would like to mention that these concerts do have a positive margin on the EBITDA.
Then, as far as OpEx, something that we are quite proud of, because we have been showcasing a quarter-on-quarter improvement on the OpEx. There is a 7% QoQ decline in OpEx from amalgamation-related synergies, efficiency measures amidst lower cost of sales, because of course the handset sales are lower. The regulatory cost has increased 8.9% QoQ due to higher effective rate of fees to NBTC. The network cost, I would like to mention here, has remained flat quarter- on- quarter, despite an increase in the electricity tariff, which was offset by savings on account of the network modernization program, where we continue to improve our network by reducing the number of sites, and hence, the cost also reduces as well in the process. The cost of sales declined 21.9% in tandem with the lower seasonality related to the product sales.
The ARPU declined 8.9% again on our QoQ, which is benefited by synergies from optimization of commission, from marketing spend optimization and synergies, and also the lower bad debts, which is the effort that we are putting in, in terms of improving our collections. Taking learnings from the best of both sides and trying to improve the collections, and hence, the bad debts have improved as well. Also keep in mind the fact that we have, you know, focused on quality subs. We've also seen a reduction in the commission expense, which indicates the fact that we are moving towards profitability. Our cost of providing services has also declined 1.2% QoQ, even though the total service revenue has improved on a quarter-on-quarter basis.
As a consequence, the total OpEx declined 13.4%, mainly benefited by the synergies from amalgamation and focus on structural improvement in our efficiency measures. If I move on to the EBITDA, THB 1.1 billion improvement again in EBITDA this quarter, which marks the fifth consecutive quarter of growth, which is primarily led by synergy realization. There is a 4.8% QoQ improvement in EBITDA, driven by top line growth and also synergies. Approximately 40%-50% of QoQ EBITDA improvement is contributed by synergy realization. The EBITDA has improved 21% year-on-year, which is obvious because there is a five consecutive quarters of growth. And the EBITDA to service revenue has also improved to 57.2% in Q1 2024, and as you can see from the chart, there is a gradual improvement that you see each quarter.
If I move on to the profitability, it gives me immense pleasure to announce that we have showcased a turnaround, a turnaround in the business within 12 months, with THB 8.8 billion of normalized net profit in Q1 of 2024. There is a THB 1.2 billion improvement in the normalized net profit, which is primarily coming on account of the fact that there is an improvement in operating performance, which is the improvement in the EBITDA that you saw in the previous slide. The net profit in Q1 was negatively impacted by known factors, which is the one-time effect of THB 1.6 billion pertaining to the impairment of redundant assets related to network modernization, something that we had highlighted when we did the write-off in the fourth quarter of 2023.
As a consequence, you're aware that the net profit is showing a THB -0.8 billion, however, normalized this profit of THB 0.8 billion. We're also aware that Q4 2023 was impacted by the big write-off of THB 10.9 billion, and hence, was a loss of THB 11.3 billion. The CapEx in this quarter was reported at THB 3.6 billion. Now, if I move on to the net debt profile, as at Q1 of 2024, as you can see from the left-hand side, there is a THB 17 billion improvement in the net debt from first quarter of 2023 till first quarter of 2024.
The leverage as a consequence of the slight improvement in the net debt, and primarily on account of the significant improvement of 21% in the EBITDA, has gone down from 5.7x to 5x, which is a 0.7x improvement over the last one year. It is worthwhile to mention that if I annualize my fourth quarter EBITDA, assuming the same level of net debt, the leverage will be down to 4.7x, which is a one turn reduction from the last year. The debt maturity profile you see on the screen on the right-hand side. I would also like to mention that it is publicly available, that there is gonna be an upcoming debenture issuance with subscription period between May 23-24 and 27th of May 2024.
My last slide, I would like to explain this in a little bit more detail. These are the two operating matrices that we had indicated as far as the guidance for 2024 was concerned. One was service revenue, and the other was EBITDA. On the first column, you see the FY 2023 service revenue and EBITDA, which is THB 158.7 and THB 85.7. The second column you see is Q1 annualized number, and let me explain this.
If I annualize my first quarter EBITDA and exclude the impact of one-time revenues like music and entertainment, which is the concert that we had this quarter, and eliminate that from the revenue as well as from the EBITDA, we're going to land at, for indicative purposes only, THB 163.5 billion on the revenues and THB 93.9 billion on the EBITDA, which is a 3% and a 10% growth, respectively. If I then compare it with the guidance that we have given for 2024, the guidance was 3%-4% on revenue and 9%-11% on the EBITDA, so we are on track to achieving the guidance for the year 2024. With that, I end my presentation and pass it on to Khun Naureen, who will entertain the questions from you. Thank you.
Thank you, everyone. We have a fair amount of people waiting to ask questions. Let me jump right into it. Just for your reference, for those of you on Zoom, you will be able to see your Q and Q&A on the chat box, so please refer to the chat box. We start with Ranjan. If you could please turn on your camera and your microphone?
Thank you so much for the presentation. Two quick questions from my side. Firstly, starting off where you ended on the guidance, if you normalized or if your run rate for EBITDA is already at 10% growth on the first quarter, why not, why not change the guidance, unless you see some risks to further growth and earnings in the coming quarters? So that's the first question. The second is on the dividend side. Now, that you've broken even on an underlying earnings basis and your free cash flow positive, could we expect a dividend payment for FY 2024 onwards? Thank you.
Thank you, Ranjan. Khun Nakul, I believe both questions are for you.
Yeah. Thank you so much, Ranjan. Nice to hear from you. Yes, the slide was quite clear that we are on course to meet the guidance that we had for 2024. To be very honest, we would like to see, you know, the next quarter as it unfolds. And if we continue the progress that we have seen and the one that we have spoken about in the previous quarters, where we aim for a QoQ improvement in our operating performance, we will consider revising the guidance in the next quarter. But things are looking good because we are hitting five consecutive quarters of growth on the EBITDA.
Then the question on the dividend, as we have explained earlier, the dividend policy is at least 50% of net profit of separate financial statements of True Corporation, subject to availability of cash flows. Even though True Corp on a standalone basis still has positive reserves, with the high leverage, we've maintained that we would like to see profitability at a consolidated level, something that you mentioned as well. As mentioned in our guidance, True is expected to be actually profitable on a normalized basis for 2024. We've already reached that in the first quarter. And any decision on the dividend is gonna be taken, which is gonna be subject to the approval of the board once we finalize the full year of 2024. So we'll keep you posted on how it unfolds.
Okay. All right. Okay, then, then we move... Sorry, Ranjan, I'm not sure if you're asking anything. Okay. Okay, that's it. Then we move on to Wasu. If you could please turn on your camera and your mic.
Good evening, management, and thank you for the presentation. Congratulations on the outstanding profit in this quarter. I have quite a few questions, six questions in total.
Yeah.
The first one is quite simple: what would be the amount for issuance in May this year? That's the first question. The second question is about the mobile revenue. So the revenue grew by 0.7% in QoQ. How did you grow the mobile revenue QoQ when the ARPU is flat, and the number of subscribers is down? So that's the second question. The third question, that is also related to the subscriber trend. Did the subscriber decline have anything to do with the NBTC forcing Thai people to register their SIM cards if they have more than five SIM cards? The next question is about the SG&A trend going forward. Can True's SG&A drop further now that the SG&A level is on par with AIS's SG&A in terms of the baht amount already?
The next question is about the network site modernization. In the fourth quarter, I believe you eliminated like 2,500 towers. But in the first quarter, the numbers slowed down to 1,200 towers. So what caused the slowdown in the tower elimination in the first quarter? The next question is about handset margin. Your competitor, AIS, mentioned that in the first quarter, their handset margin improved significantly year-over-year and quarter-over-quarter, thanks to the government subsidy it received. So with the government subsidy-
I move to you.
They did not have to offer a lot of handset subsidies by themselves. So, why did not you benefit from the same tax scheme by the government? And finally, why was the CapEx so low in the first quarter? That's all my questions.
You done?
Yeah.
Okay. All right. Okay, thank you.
So-
Let me ask Khun Nakul to start with some of the questions. We will just mix them up a little bit.
Yeah.
Okay. Maybe we start with the bond.
Yeah. Khun Wasu, thank you so much for the questions. Seven questions in all, right? So, let me take some, and then I'll pass it on to Khun Sharad. Issuance of bonds in May, I think that was your first question. We have not yet announced the amount of bonds that will be issued in the month of May, but the dates have already been mentioned. But what we have indicated is the debt maturity profile, which indicates that roughly THB 51.7 billion of bonds need to be refinanced, or sorry, need to be, are actually maturing in the remaining part of 2024.
What we have done in this quarter is, we actually got an approval by the board only recently, that we got an approval for a Japanese yen loan of roughly $700 million, which is going to be drawn down, you know, sometime in this quarter. So that's actually available with us as well. But the extent of the bond issuance has not been disclosed as yet. Please, you know, wait for us, as we will announce this further soon. Then, your next question on the mobile's revenue growth of 0.7%, when the ARPU and the ARPU is flat, and the subscribers are down. There is a little bit of nuance in this.
As I mentioned, the reason why the subscribers are down, on the postpaid and the prepaid side, postpaid, as I mentioned, was some one-time cleanup, which happened towards the end of the quarter, so it wasn't like, you know, there throughout the quarter. It happened actually right towards the end. And also, our intervention that we had taken with respect to, focusing on quality acquisitions, you know, we started this pivot to happen sometime in March. So that's why, even though the end subscribers are showing a reduction, but, you know, the reduction happened towards the end. Also, if you see the ARPU, and I think, the ARPU slide is a bit interesting, the prepaid ARPU is flat, at THB 109 million .
But you keep in mind, there is a one day less in this quarter, which means that there is a 1.1% improvement already in the ARPU. And as far as the postpaid ARPU is concerned, there is a 0.5 improvement of THB 2 billion . So there is a quarter-on-quarter underlying basis, of course, improvement in postpaid, and even though prepaid is flat, but we know based on equated days, it is actually growing. But the blended is because of the mix of the subscribers, that's why it shows a flat number. So if you keep all of these factors in mind, then you will lead to a 0.7% growth in the mobile service revenue. Then, on the subscribers, I'll pass it on to Khun Sharad a bit later, but let me take the fourth one on the, SG&A.
You were mentioning that it has dropped further. Yes, it has, and it continues to be a good story for us. You're also mentioning that this is comparable with AIS. I think, you know, we need to take this with a pinch of salt, because I cannot definitely confirm that the way both operators classify some of the heads of expenditure or even the structure of operations of the two companies are so similar, that you can just do a line-by-line comparison and say whether it's the same or not. The same will go for network cost as well. So keeping that in mind, I would say that we have done well so far. I mean, THB 8.2 billion reduced to about THB 5.9 billion. This is year-on-year reduction.
We'll continue to work on improving our different heads of expenditures, including SG&A as well, as we aim to deliver the guidance that we have for the year. We do not give a specific guidance on each of the heads, but please be rest assured that there should be a gradual reduction in all of the expenditure line items that you see, barring for seasonality here and there. I think the next one was. No, the next one is the network modernization. We'll again, I'll pass it on to Khun Sharad to answer, but on the AIS handset margin, I think you're comparing the handset margin between us and AIS.
I think we did explain in the previous quarter that the accounting of both companies, as far as the handset revenues and the handset cost, is a bit different, and hence, we cannot compare the AIS handset margin with True handset margin. I mean, to be very transparent to you, even DTAC and True had different accounting ways or different ways in which the handset revenues and handset costs were accounted for. So we, you know, you cannot compare with the margin of the two companies and say whether one is higher or one is lower. What I can confirm to you that, the subsidies that are there on the handset that are being sold in the market are almost exactly the same, barring tactical offers that both operators keep on giving from one time to the other.
So the subsidies are actually almost the same that's there in the market. So hence, the handset margin should not be different between the two operators, so it's just an accounting difference that that's actually there. Your last question is on the CapEx being low for this quarter. Yes, it's THB 3.6 billion, but also, Khun Wasu, keep in mind that fourth quarter CapEx was THB 12.6 billion. So obviously, we did a good amount of investments towards the end of fourth quarter. As you remember, we got an approval of the network modernization program from the board towards the end of second quarter. We started to roll out towards the end of the third quarter last year, and hence, there was a bulk that was actually purchased in the fourth quarter.
So we were busy rolling out from what we had actually purchased in the fourth quarter of last year. So that's why the CapEx number looks small. I confirm to you that the CapEx guidance for the full year of THB 30 billion remains intact, which includes the integration spends as well. So with this, I pass it on to Khun Sharad to take the two questions, please. Question number three and question number five. Yeah.
One is subscriber decline, and the other one is,
Sure.
Network organization.
Thank you, Khun Nakul, and thank you, Wasu, for really appreciating our good efforts. That's really motivating for the team. Coming back to your question about subscriber decline. So as Khun Nakul explained, we have been focusing on quality acquisitions, and that is the prime reason. At the same time, we are compliant on the NBTC regulation on prepaid identification, and we are following the course. We have been, I think, majorly done with it, but this will go on as we move forward in subsequent months in order to follow the regulation. We have been even also making the robust identification process, simplifying it, so that making it easy for customers to smoothen the journey.
Coming to your question number five, which is about slowdown on network modernization. I think let us reiterate that that we have prioritized also Smart City project alongside of Single Grid. And having said that, we have of course a bit of a delay in overall program, but we are covering up in quarter two, so hopefully we will be able to meet up to the targets we have set for Single Grid. And just to remind all of us that this project is so important for us in terms of meeting the expectation of our customer, in terms of delivering superior quality experience. At the same time, synergies are also linked with that. So we have a, you know, eye on both of them.
Hopefully, we'll be able to cover up most of it in quarter two. Thank you.
Thank you, Khun Sharad. Thank you, Nakul. We move on next to Piyush. Hi. Yes, you can start. Piyush is un... Can you please unmute, Piyush? Yes, thank you. Yes, Piyush, we can hear you now.
Yeah. Hi. Thanks for the opportunity. Congratulations to the management team. Few questions. Firstly, on mobile ARPU. Nakul, you have explained the subscriber were taken out in the month of March. So can you tell us what is the exit March month ARPU, and how should we think about mobile ARPUs going forward? Any levers or any steps which you have taken to improve so far in the first quarter, which should reflect in second quarter? Secondly, on broadband, what is leading to subscriber base decline in first quarter? And when should we start seeing subscriber base stabilizing in the broadband segment? And lastly, the minimum wage hike which is being proposed to be implemented from October.
I know it's still not implemented, and it has to pass through, but if it is implemented, from a cost perspective, what could be the impact on the company? And what are the potential benefits, on the, you know, revenue side? Because that would lead to more, you know, income in the hands of consumers.
Thank you, Piyush. I think I'll pass on all three to you, Nakul.
Hi. Okay, thanks for the question, Piyush, and thanks for appreciating the performance. A lot of hard work has been happening behind the scenes. The blended ARPU is flat, right? But as we had explained, the postpaid ARPU has improved 0.5%, which is better than the competition. And then at the same time, the prepaid ARPU, on a reported basis, is flat, but like I mentioned, if I normalize for the number of days, it has improved 1.1%. Q1 is a seasonally low quarter. I mean, seasonally low in the sense that, you know, there are lesser number of days. I mean, 92 in fourth quarter and 91, which, of course, has an impact as far as prepaid business is concerned.
But at the same time, we could still see growth in mobile service revenues of 0.7%. I'd like you to remember Q1 2023 actually showed a decline of 1.6%. So if you just do a year-on-year comparison, when Q1 2023 was a decline of 1.6%, Q1 2024 has improved quarter-on-quarter by 0.7%. If we were to equate the similar number of days, then actually the growth in our mobile revenues would not have been 0.7%, it would have been around 1.1%. As I mentioned, individually, the ARPU has grown.
The ARPU rationalization thus far, as we have mentioned many a times, has been primarily with respect to the new acquisitions, where prepaid, you've seen the market taking a lot of interventions over the last four-five quarters in actually removing the unlimited plans and, you know, trying to optimize the data usage. Not the usage, but the amount of data that is being offered and so on. Our focus, as far as the existing customers is concerned, is how we can continue to upgrade our customers with premium content, EPL and King of Sports. We are the leaders of content in the market, with lifestyle product offerings beyond connectivity solutions such as entertainment, combo packs, which are catering to preferred streaming content from the customers.
Something like Up2U , that is being offered, which allows customers to select lifestyle offers, you know, for their own choosing, giving discounts on food outlets, and I can go on and on. So we're focusing, as far as that aspect is concerned, to increase increase the ARPU. This not only improves the ARPU, but also ensures the stickiness. But to your question, what is the exit ARPU for March? We do not break down into the respective quarters, but what we can do confirm to you, that you should definitely see a gradual improvement in the ARPU, barring seasonal effects here and there.
Because we are confident on our ability to execute our program in terms of uplifting the ARPU, but it's not gonna be a significant increase that you probably have seen in some of the other markets. Then, your next question on the broadband subscriber decline. So, I did mention very briefly, but similar to the postpaid, the decrease in broadband is also on account of a one-time cleanup of non-revenue generating subscribers that we've had this quarter. Again, this happened towards the end of the quarter for us. And this is one time. We do not expect something similar to happen in the subsequent quarter.
I do want to mention that if I exclude this one time decline that has happened, which in case of broadband is roughly, if I'm not mistaken, around 85,000, then we do have a positive net adds on underlying basis in the online business. So we have bucked the trend that was there in the previous quarter. This quarter, we have a positive net adds, and we continue to expect the net adds to be, I mean, to be positive in the subsequent quarters as far as this online business is concerned. And then, your last question was on the minimum wage hike.
Maybe we pass it on to Khun Sharad?
Yeah, Khun Sharad, do you want to take this?
Yeah, sure. Thank you. So your question around impact for minimum wage, what we can say is that our value chain is above minimum wage, and we expect minimal impact to the cost line. However, we expect revenue benefit due to expanding customer wallet for sure. Thank you.
Okay. Do you have now follow-up? Okay, all right. Then, we can move on to Khun Jin. Oh, sorry, sorry. I'm so sorry, Pisut. I'm so sorry.
Yes. Hi,
Yes, go on.
Thank you, and, congratulations on a good set of results. This is Pisut from Kasikorn Securities. May I have four questions? The first one is about your subscriber cleanup. Just want to make sure that the cleanup was completely completed in the first quarter without any spillover to the following quarters. This is my first question. My second question is about your other service revenue that grew a lot on a year-on-year basis from the first quarter last year. Was it any seasonality on that and any specific reasons on that, and will this trend continue in the fourth quarter? My question is about your sustainability of the normalized profits.
Second quarter and third quarter seem to be a slow season for the domestic consumption in Thailand, if I'm not mistaken. Do you think the weaker spending seasons and possible backloaded OpEx and CapEx for the latter part of the year would, you know, bring you down to the normalized loss-making in some quarter of the year? And my last question is regarding an upcoming spectrum auction. It'd be great if you could share your thoughts about the timeline of the auctions, especially your 2.3 GHz and also the 3.5 GHz , and possible change of the cost structure after the spectrum auctions that you can- you may have. What is - what would be happening if your roaming agreement with NT expire, but the auction could happen prior to that? That's all for me. Thank you, sir.
Okay.
Thank you, Khun Pisut. Yes.
The fourth one, we share.
Yeah, sure.
Okay, Pisut, thank you so much.
Khun Pisut.
Khun Pisut, sorry. Actually, I expected the first one to ask the question to be Khun Pisut, so, I mean, that's why. Sorry. So, your first question on the subscriber cleanup, okay. Let me explain this a little bit because this is, you know, a little bit, you know, I'm getting a lot of questions there. So, you know, essentially what has happened is, just to explain why this is not gonna happen again, is that certain SIMs or certain connections for internal use of True Corporation and dtac were historically counted for many, many years as external customers, which is something that we've identified recently, and which were historically reported as subscribers.
So since we've identified these customers for internal use, we know that we do not count these revenues in our revenues, but we count as subscribers, so that's why these have now been removed from the definition of subscribers for us, and hence, as a consequence, we have taken it out. We do not expect this to have any other impact in the subsequent quarter. This is one time. This is done and dusted. Then your second one on the other service revenue, which is, higher on a year-on-year basis. Yes, it is definitely higher on a year-on-year basis. You know, besides what we do, on, on the mobile and the online and the TV, there are certain other revenues on the digital side, which is something that the company continues to focus on.
So yes, there are ad hoc seasonalities here and there, depending on new, new products or new, new customers that we, that we contract. But we do expect the trend that you see, roughly THB 0.8 billion-THB 0.9 billion, actually carry on from here in the subsequent quarter. So it should not go to the levels of what you've seen previously, last year. So there has been a growth, and, you know, THB 0.8 billion- THB 0.9 billion levels is something that you should see in the future. Your third question on the normalized profit, yes, we are profitable this quarter on a normalized basis. Our endeavor, as we have maintained for a few quarters now, we aim to grow quarter-on-quarter on EBITDA.
As long as our aim is to continue to grow EBITDA on a quarter-over-quarter basis, of course, barring extreme seasonality effects, you know, there might be a change in the EBITDA growth trajectory, but we do not expect to go into a loss situation. That much I can confirm to you. Then on the auction, Khun Manat, over to you.
Okay, thank you for the question. About the auction, we have some courtesy discussion with the NBTC, and right now, NBTC is in consideration, and I believe that the timeline of the auction will issue and release to operator this year. I believe that we're gonna see this thing in early Q3.
... cost structure.
About the structure, cost structure.
Cost structure. Yes, thank you. Khun Pisut, you had a, you know, another question or a subset to this question on what is going to happen to the cost structure. It's a little bit complicated, so give me a few minutes to answer this one, Nakul. As far as 850 MHz is concerned, we currently spend roughly THB 2.5 billion-THB 3 billion. That is, as in cost in the EBITDA. As far as 2,300 MHz is concerned, the approximate cost, which is hitting the EBITDA, is roughly THB 4.5 billion-THB 5 billion. In total, we are looking at about THB 7 billion-THB 8 billion impacting our EBITDA. We believe that the 2,300 MHz. Oh, sorry.
Firstly, we do not want to bid for the 850 MHz spectrum, which means there is going to be a THB 2.5 billion-THB 3 billion saving for us, which is going to benefit our EBITDA starting third of August of 2025. Then, as far as 2,300 MHz spectrum is concerned, for which we spend THB 4.5 billion-THB 5 billion, we expect this spectrum to be reallocated by means of auction. This is the government regulation. Post the auction, this will move from an EBITDA model or an OpEx model to a CapEx model, because then it's going to come as a spectrum cost for us. If you go with the market-determined price that's there for 2,300 MHz, the price that we...
Sorry, for 2,600 MHz, the market-determined price, then the price that we expect to pay for 2,300 MHz should be significantly less than what we are paying right now, and that's obviously going to benefit our spectrum cost and the spectrum amortization. But the full THB 7 billion-THB 8 billion is going to be a benefit as far as EBITDA is concerned. So that is the cost structure change that's going to happen from August 3, 2025, CapEx. Thank you.
Khun Pisut, do you have a follow-up? Yes, please unmute him.
Yes. Just need some clarification from Khun Manat. If I do understand correctly, you said that the auction could happen sometime this year. Am I correct?
NBTC is on the process under consideration of the timeline and the rules and regulation, Okay. They're gonna announce the timeline of the auction. I believe that by Q3 to announce when to auction, Okay.
Okay. Thank you, Khun Pisut. We then move on to Khun Gene. Khun Gene, can you please turn on your camera and your microphone? Can you unmute, Khun Gene, please? Yes.
Sorry.
Yes, we can hear you now. Yes, we can hear you now.
Yeah. I'm, I'm sorry my camera doesn't work because I'm working from home. But anyway, I just have one question. You earlier guided THB 26 million of integration costs and then THB 24 million of synergy for the whole year of 2024. Can you discuss how much was executed in the first quarter of this year? And for the remaining amount, would it be booked, or would it be executed evenly throughout the second to the fourth quarter, or it would be front-loaded or backloaded? Thank you. That's the only question I have.
Thank you so much, Khun Gene. Khun Nakul, would you take that one?
Yeah. Yeah, I knew this would come. Khun Gene, krap, as we had explained in the previous round when we gave the guidance for 2024, we will now focus on giving an operating guidance. I mean, the guidance is going to be on service revenue, is going to be on the EBITDA, and it is going to be on the CapEx. What I can confirm to you today, we are moving exactly as per our plan to deliver the synergies that we have promised at the Capital Markets Day. In some areas, as we had explained last time, we are progressing better than the plan. That's why we outperformed the guidance that we had for the year 2023. As far as what we have communicated, I can confirm to you, we are, we are progressing as per plan.
As indicated, we are in line to deliver the guidance that we have given for the year, which is 3%-4% growth on the service revenue and 9%-11% growth on the EBITDA. At the same time, having a CapEx of approximately THB 30 billion, with the company turning profitable in 2024 on a normalized basis. As you can see, Q1 is already profitable. That's how I will explain it, kap. It's as per plan.
Be concerned about integration costs, right?
I could not hear you properly. You, you're concerned about the integration cost? The integration cost-
I don't have-
Sorry. Yes.
Yeah. It means I, I do not have to be concerned about integration costs rising for the remaining of the year. Is that correct? Because EBITDA are supposed to keep growing Q- on- Q.
That's right.
Yes, yes, Kap. The integration cost is already captured in the CapEx guidance that we have given of THB 30 billion, Kap.
Right. Okay. That's all the question I have. Thank you very much.
Thank you so much, Kap.
Okay, I no longer see Arthur on the line, so I will move on to Khun Nuttapop. If you are available, please turn on your camera and your mic.
Yes, hi. We can see you now. Can you please unmute him? Sorry, Khun Nuttapop, I understand your sound is not there. We cannot hear you.
Can you now?
Yes, we can hear you now. Yes.
All right, thank you for the opportunity, and may I start by having congratulating you on the strong achievement this quarter. So a few questions, please. The first one is on a subscriber. You have mentioned that on the Fixed Broadband, if you exclude this one-time adjustment, it should be positive. Is it fair to say similarly to the mobile? Yeah, I mean, if it's that, so this is positive as well. On the second question on the Net Debt, something don't get along in my head, that you have very strong EBITDA this quarter, and then CapEx was very low, but I see, like, Net Debt is kind of stable. What am I missing on the debt?
And if I may continue on that question, how do you plan to your net debt or maybe your borrowing to start coming down? And that would help in term of saving interest expense also. And also on debt, sorry, that on... I think you mentioned that you planned to draw down $700 million equivalent in U.S. dollars, but in Japanese yen. Can you please explain the reason behind this? Are you trying to benefit from low interest rate in Japan and maybe weak yen right now? You exchange it to Thai baht and then use it as your working capital? I don't know on how the benefit versus the risk of cross-currency would work here. And lastly, on the— So let's say, can, could... Let's, let me ask like this.
Could you please update on the post-amalgamation requirement or the obligations by NBTC on your company? And how could that be progress that you have passed all the conditions? Because what I'm concerned now is that given the strong profit by both operator in this first quarter, whether that trigger something from the NBTC. Thank you very much.
Thank you, Khun Nuttapop. I am a bit conscious of time, so we will make this the last one. Khun Nakul, if you can take the first, and then Khun Manat, the regulations, please.
Yeah. Okay, thank you for your question, Khun Nuttapop, and thank you for your kind words, Khun. Question on subscriber was that, if we normalize for the one time that was done in mobile, will we be positive? So, just to remind you, actually, as far as mobile was concerned, was two separate accounts. One was prepaid, which was an account of focus on quality, which has nothing to do with any normalization. This focus on quality ensures us that we work and go for profitable growth. We reduce the high gross and the high churn behavior in this market, and that helps us in reducing our cost, getting more quality subscribers.
As far as postpaid is concerned, if we were to normalize the 225,000 or whatever the number, around this number, 230,000, then we will still be slightly negative in this quarter, but a very, very small amount, Khun. As far as CapEx being low and the debt is stable, I think I'd like to explain this a little bit, more. The net debt has actually remained flat in this quarter, but we've made a THB 21 billion payment for spectrum as well as for CapEx. So even with the significant high payment for spectrum and CapEx, spectrum is roughly THB 11.5 billion, and the remaining THB 8.5 billion-THB 9 billion is for CapEx. Roughly THB 21 billion of payment, net debt is flat.
This is a good sign that the operating performance of the company is improving, and even with the high spectrum and the CapEx payment, we are still positive on net debt. The CapEx that we spent this year, THB 3 billion, this quarter, THB 3.5 billion, is gonna be paid out in the subsequent quarter, so it doesn't impact this quarter, just to answer your question. As a base case, we expect the net debt to be the same levels as what we have as at the end of the first quarter. And we should see a gradual improvement in the leverage as we go on, because of the fact that the EBITDA is gonna continue to improve.
As I had mentioned earlier, if you just annualize the fourth quarter EBITDA, then we are looking at an, you know, leverage of net debt to EBITDA at about 4.7x, which is one turn lower than what we had last year. As far as the Japanese loan is concerned, again, I'm conscious of time. You know, you mentioned it's a low interest rate. Yes, most definitely. That's one of the reasons why... That's one of the biggest reasons why we wanted to explore this option, you know, as far as looking at our funding needs is concerned and because the interest rates are quite quite good. In fact, it's gonna be slightly higher than what we have on the bonds.
So this is a good alternative available for us. The all-in cost is gonna be slightly higher. And then, post-amalgamation requirements on the remedies, Khun Manat, would you want to take that, please?
Sure. Thank you, Khun Nuttapop. Is my mic on? Yeah. Okay. Thank you for Khun Nuttapop, for this question. I believe that, you're asking about the remedy. We working closely, we work closely with NBTC, and everything is comply to the NBTC, huh.
Okay, I have to unfortunately end this call here. We're out of time. Thank you so much. Thank you for the interest in us. In case anybody has unanswered questions, please feel free to get in touch with me. The recording of this call will also be available on our website within tomorrow or maybe one or two days. Yeah, that's it. Thank you, everyone. Have a good evening.
Salut.
Salut, guys.