Good morning everyone. Welcome to True Corporation's earnings disclosure for the second quarter of 2025. My name is Naureen. I'm the Head of Investor Relations. With me today are Group CEO Khun Sigve Brekke and our Co-Chief Financial Officer Khun Nakul Sehgal. We also have with us today a few of our analysts in the room for Q&A. We will be taking the questions from the room first before we move on to the questions on Zoom. To ask questions on Zoom, please raise your hand or you can put your questions in the chat box. I would now like to invite Khun Sigve to start the presentation.
Maureen and good morning to everyone. Satykrab to our Thai audience and it's good to see some analysts in the room and also good morning to all of you that are online. I'm also together with the team going on a road show later, then I will meet more of you. I will start with some of the strategic and operational updates and then as usual hand over not to go through the financials. Let me start with this slide, the four key highlights starting with the spectrum auction. As you know, we had a spectrum auction on June 29 where four spectrum bands were awarded to two qualified bidders and I'll come back to what that means, but I'm very pleased. I can say already that we secured 70 MHz on the 2.3 GHz band and 20 MHz on the 1500 MHz band.
I also need to mention the unfortunate network outage that we had in the quarter and it did impact our top line performance for the quarter. It happened on May 22 where we faced a power outage in one of the main switches, which led to disruption of voice and data services nationwide. It was very unfortunate and it was also unprecedented, but I want to confirm that it had nothing to do with the ongoing network consolidation. We have now done a thorough risk assessment and analysis on the incident, including a review of suppliers, and mitigation activities have been implemented in the point below there. Speaking about the normalization effects compared to the first half of this year, we see an intensifying macroeconomic challenge in Thailand.
The GDP forecast is down, tourism has declined beyond the expectations we had when the year started, which is also impacting several business segments. Of course, the quite recent escalation of the border conflict between Thailand and Cambodia has led to further political instability and further concerns about the second half of this year. However, as said on this slide, when we are normalizing for the impact of the network outage and also normalizing for lower NT domestic roaming revenues, our service revenues and EBITDA remain stable. All these factors combined, the macro and the business performance, we have decided to revise our guidance for the full year of 2025 and Akul will talk more about that in detail. Last but not least, we have an ongoing growth-focused transformation and as always also said in the first quarter, our overall strategic ambition remains unchanged.
The focus for the first two years after amalgamation has been on the integration and takeout costs. Now we are embarking on a more holistic long term transformation program. This you can expect will give results on both revenue growth and cost efficiencies in the quarters and the years to come. The transformation agenda will be focused on three key areas: it's customer experience, organizational transformation, and expanding the digital portfolio while at the same time protecting our core. Let me then go a little bit deeper on the spectrum. As I said, I'm very pleased with the successful spectrum auction. We acquired 70 MHz of 2.3 GHz spectrum for THB 21.8 billion and we also acquired 20 MHz of the 1500 MHz spectrum band costing us THB 4.6 billion.
We made the 50% deposit of THB 13.2 billion on the 29th of July, and as of the 4th of August the licenses have been awarded to us. We are now very satisfied with holding Thailand's leading spectrum portfolio and you see that on this slide. I will say, having been in this industry for quite a while, that we now have a unique spectrum portfolio where we have plenty of spectrum both in the high end, the middle band, and also the low frequency bands. This is going to strengthen our competitive edge going forward. This spectrum portfolio, in combination with us now coming to an end of the modernization of the network. We have now modernized 18,500 sites in the third quarter and our customers will see a direct benefit out of this.
Combined with the spectrum portfolio of at 17 higher capacity on 4G from the additional 10 MHz we got on 2.3, which also allows us to reform the 2.6 GHz spectrum that we have. Reform that to be used on 5G, which again can deliver 2.5x faster 5G speed. Despite the external factors, as I said, the top line stays stable and the profitability is sustained. We have been through a quite tough quarter. It's a lot of headwinds, some of them due to external factors and some of them also due to the network incident that I talked about. On a normalized basis we are able to stabilize and that is what you see on these slides where we have also showed you the normalized service revenue, EBITDA, and also the net profit.
We reported service revenues of THB 41.4 billion for the quarter and normalized for the incident, the network incident. Our service revenues improved marginally from the first quarter and improved by approximately 1% year-on-year. On EBITDA we reported THB 25 billion, which normalized again would have remained flat as compared with last quarter. Meanwhile, our profitability sustained its momentum with a normalized profit of THB 4.2 billion in this quarter. I know that you have a lot of questions to bring in a slide on that. Last year the Thai telecom oversets. This doesn't really make sense. THB 40 million gross ads in a market that is fully penetrated and there are basically very few new customers. We took actions to put a stop to this because we saw most of those THB 40 million gross ads being rotational churns driven by new promotions.
We also needed to put a stop to distribution or travel incentives resulting in customers throwing away old SIMs and buying new ones just in order to earn higher commission in the distribution. On top of this, we also see that our customers don't see a need for having both a True and DTAC SIM anymore and can combine those two SIMs into one. As a consequence of these actions, we see a 48% reduction in gross ads and a 35% improvement in churn, and at the same time we have saved 19% in commission costs. I think this was the right thing to do. Of course, it has hurt us in this transitional period. Now we have a more solid customer base that we can use for base management and grow on top of that. Let me then move into transformation.
This is the same slide that I showed you in the last quarter. A quick recap on what we talked about then as the driving forces for our transformation: our more long-term transformation journey is about customer experience, organizational transformation, and protecting the core. Today I will go a little bit deeper into customer experience and organizational transformation. We have done a massive consolidation of our two networks over the last two and a half years since amalgamation. Now we have the most modern network in Thailand because not only have we merged two networks into one, we have also used that opportunity to buy the latest network equipment. This single network project will not be completed during this quarter.
As a result of this, we can already see a significant improvement in our download speed, especially in the greater Bangkok area and also in the economic corridor in the east. Going forward, our focus will be to constantly work on even more granular network experience when it comes to both coverage and speed. This also includes indoor data connectivity. The other thing we are focusing on is our shops. We are progressing on our omnichannel experience for all our customers. One example of that, in March we launched one app for both dtac and True customers. We now have app for the customers, we have app for the retailers, and those apps we are using to offload some of the manual services that you had to go to the shops or call centers in the past.
The plan here is to then take most of the services being served digitally. As a result of this, we already now after some few months see that we have moved 19% into digital servicing, which means there's any saving costs. Another example as also mentioned on this screen is the call center. We have taken a holistic approach to how we can serve our customer better through improved automation in the call center, but also to systematically address customer pain points in the quarter. We see this has resulted actually in a 30% reduced wait time for involved customers that are not served by human agents. The rest is being done digitally. Since the amalgamation and now returning to the organization. Since the amalgamation two and a half years ago, we have reduced the workforce with approximately 40% of our FTEs.
We have a long-term ambition of creating a significantly more efficient and future-proof organization. What this means is to simplify the organizational structure, remove silos, flatten the organization with cutting down on layers, introducing automation of manual work, but also to change the way of working. The first step we did on this was when I took up the Group CEO position back in March. The next step we announced yesterday and a new organization will be implemented from September 1. We have made a structural change in the senior leadership layer of the organization. Simplified it, made it more focused and flatter to enable increased empowerment and faster execution. The new organization is designed to deliver strategic priorities, especially focus on growth areas in the B2B and the home segment and the wholesale segment.
At the same time, we are looking at transformational enablers within technology such as IT and AI. Going forward, you can expect us to continue steps in our organizational efficiency and the modernization journey. That was some of the strategic and operational updates. I hand over to Khun Nakul.
Thank you so much. Khun Sigve. Good afternoon and good morning. Good evening everybody who is on the call. Please allow me to walk you through the financial statements for the quarter. First, the key financial highlights. As Khun Sigve mentioned, the service revenue is a -1.1% on a year-on-year basis and a -0.6% QoQ normalized for the network incident and also normalized for the decline in domestic roaming with NT. We have registered the growth QoQ and year-on-year. The EBITDA is a 2.6% growth on a year-on-year basis. Again, normalized for the incident, the growth would have been higher and on a QoQ basis we are - 1.2%. Also, would have been a growth if you were to normalize for the incident.
We're proud to report a second consecutive quarter of reported profit of THB2 billion and a normalized profit of about THB 4.2 billion, which of course is normalized for the one-time effects that you are all aware of. The leverage continues to improve, a 0.7x improvement on a year-on-year basis and 0.1x on a quarter-on-quarter. We have a leverage now of 4x as at Q2. Let me then walk you through the details of the top line. Starting from the left to right, the service revenue declined 0.6% on a quarter-on-quarter basis and like has been mentioned a couple of times before, is basically coming on account of the network incident. Normalized for the incident, we would have registered a growth both year-on-year and QoQ.
If you see the details of the elements of the service revenue from Q2 2024 to Q2 2025, even though there is a decline of 1.1%, and of course if you were to normalize for the incident, the decline is basically on a reported basis coming on account of mobile and pay TV segments, when the online business has shown a growth on a quarter-on-quarter and also on a year-on-year basis. If you look at the total revenues, the total revenue declined mainly because of seasonally lower product sales and the network rental revenue. The network rental revenue, as you are aware, is going to go down gradually and eliminate completely beyond August 3rd as we continue to migrate customers from 850 MHz. There is a corresponding and even higher reduction in the cost as well, which is what I will show you in the OpEx slide.
The net effect of this is positive for us. The product sales declined 21% QoQ from seasonality. If I then go deeper into the mobile service revenues like I had mentioned, normalized for the incident, we would have shown a growth of 1% on a year-on-year basis. If I look at from the right to the left, as you can see the subscriber, sorry, the ARPU development has been quite decent. The blended ARPU improved 5.6% on a year-on-year basis and 2.3% Q1Q to 219. Postpaid ARPU declined marginally 0.2% Q1Q. That's basically on account of the network incident. While prepaid ARPU improved 3.4% on a Q1Q basis for the full year, the prepaid ARPU has actually shown an 11% increase, which is primarily the reason why the blended ARPU has also increased 5.6%.
The subscribers, however, we've had a 2.6% decline in the subs mainly from three reasons. Number one, the tourist inflow is lower in this quarter, second, it's because of the weaker macroeconomics, and third is because of the network incident. The 5.8% decline in the subscribers is due to the focus of quality on subscribers that Khun Sigve Brekke had explained and also the macroeconomic trends which, as you all know, are weaker. If I go on to the online business, there is a 2.8% growth in online revenue which is driven both by improved ARPU as well as by the subscribers. There is also a 1.7% growth in online revenues due to higher contribution from consumer broadband, a 0.3% improvement in ARPU, and a 0.4% improvement on a Q1Q basis and a growth in the subscribers as well.
The ongoing improvement in subscribers and ARPU have resulted in the increase in the online revenues and the numbers are for all of you to see as at the end of for the second quarter. Actually, now we have an ARPU of THB 526 from this business which has improved 1.1% on a year-on-year basis and 0.3% QoQ . I move on to the pay TV. There is a decline of 12.5% year-on-year, which is mainly coming on account of the seasonal concerts. As you know, they are seasonal in nature. Sometimes there is an increase, sometimes there is a decline, which you can see from the numbers as well. As we all are aware, the linear TV business is under pressure, so the subscription revenue continues to marginally decline on a quarter on quarter basis.
We report about 1.1 million subscribers in the pay TV business as at the end of Q2 of 2025, which has shown a 12% decline year-on-year and a 4% Q1Q, very similar trends that we have seen in the previous quarters. Moving to the OpEx, there is an 8% year-on-year decline in OpEx coming from ongoing synergies, operational efficiencies, and financial discipline. Let me walk you through each and every element in a little bit more detail. The regulatory cost increased 11.4% year-on-year due to the change in full-year effective rate pursuant to the expiry of the spectrum arrangement with NT. You would have seen a similar trend in Q1 as well. That continues for Q2 and is going to be the same in Q3 and Q4.
The network costs, however, declined 7% on a year-on-year basis and 3.3% Q1Q, which is benefited by the reduction in the electricity tariff, which showed a marginal decline, and also on account of the network modernization where we continue to actually modernize our network, reduce the number of towers, and hence reduce the amount of consumption of electricity as well, including the operation and maintenance expenses. Now, cost of sales has decreased 4.2% year-on-year and 20% Q&Q. This is in tandem with the product sales. Worthwhile to note that the subsidies that we give to the consumers are pretty much at the same levels as you've seen previously, so the margin is more or less stable on a Q1Q, slightly improving year-on-year. One of the good stories that you've all appreciated us for in the past is the SG&A, which has declined 12.4% year-on-year.
This is benefited by a lot of factors, including synergies, including operational efficiency initiatives, and so on. There is an increased marginal of 2.4% Q1Q, which is on account of higher bad debts and consulting costs, which primarily was on account of the spectrum auction, which as Khun Sigve Brekke mentioned, was quite successful for us. The other cost of providing services has declined almost 10% year-on-year and 5% QoQ. This is where the effect of the cost decline comes from the migration of traffic from 850 MHz, and like I mentioned before, you saw a similar effect on the revenues as well. The net effect is positive for us, and as a consequence of all of this that you have seen, the total OpEx excluding depreciation and amortization has declined 5.9% on a Q1Q basis. I move on to the profitability matrices and specifically on the EBITDA.
First, there is a 2.6% growth in EBITDA, which is coming on account of improvement from the ongoing realization of synergies and the financial discipline. Even though if you remember the top line was a bit of a struggle, which is pursuant to the network incident, the EBITDA improved THB 0.6 billion year-on-year, which is again 2.6% though declined 1.2% which is primarily on account of the impact. Once again, normalized for the impact, we would have been stable on EBITDA on a quarter on quarter basis. The EBITDA to service revenue has increased 2.2 percentage points on a year-on-year basis to 61% for Q2 2025, and though it's declined, of course, 0.4 percentage points because of what I had mentioned earlier, it is worthwhile to note that since amalgamation the EBITDA for the company has improved THB 5.5 billion.
Now, with respect to the net profit, like I had mentioned before, we report a second consecutive quarter of reported profit which stands at THB 2 billion in Q2 2025. Normalized for the one-time effects, the profit would have been THB 4.2 billion, pretty much similar to the levels that we had seen in the previous quarter. The one-time effects have been disclosed here, and let me just walk you through briefly. The net profit was negatively impacted by two one-time effects, which is actually amounting to about THB 2.5 billion, which is pertaining to the network modernization that is about THB 1.7 billion and the asset impairment related to 850 MHz shutdown that's about THB 0.7 billion. These two effects contribute to THB 2.5 billion, and normalized for this, the profit would have been THB 4.2 billion.
Our finance costs continue to decline quite well on a quarter on quarter and on a year-on-year basis. I will show you the effective interest cost in a subsequent slide. For the full year, the decline is about 12.4%, and that's basically mainly coming on account of the reduction in interest expenses. The depreciation and amortization has also improved 3.2% year-on-year, which comes on the back of the network modernization and the write-off of assets that we have been doing for the last few quarters. The CapEx for this quarter is about THB 7.2 billion, and I must mention here that almost half of this CapEx is pertaining to the network modernization exercise that we have been doing over the last since amalgamation.
Basically, then with respect to the net debt, there is a THB 33 billion reduction in the net debt over the last one year and a 0.7x year-on-year reduction in the leverage. As you can see from the middle graph, the effective interest rate has improved from 4.2% in Q2 of 2024 to 4% now, which has also shown a 0.1% reduction on a quarter-on-quarter basis. That is basically coming on account of the fact that we have been able to improve our cash flows, reduce our debt, and also reduce the effective cost of debt. Because whatever refinancing that we are doing is at a rate of interest which is lower than the current debt that we have refinanced. We have issued debentures of about THB 18 billion in the month of August at a weighted average cost of 3.4%.
That basically explains why the effective cost of debt is going down because if the new rounds are at 3.4% then the average cost is going to continue to go down. It is worthwhile to mention something that we are very proud of. We have refinanced THB 126 billion during 2024 and also THB 53 billion so far in the first half of 2025, which gives an indication that the remaining THB 36 billion that has to be done for the second half is quite small as compared to the efforts of the past. It is also worthwhile to note that THB 18 billion of the THB 36 billion is already done from the debentures that we've issued in the month of August. Let me show you a picture of 1H2 of 2024 and compare it with 1H2 of 2025.
If you look at the total revenues, of course there is a decline of 1.4%. If you look at the service revenues excluding the anti-roaming, there is a decline of 0.3%. The total OpEx has worked quite well, almost a 7% reduction in the first half of 2025 as compared to the first half of 2024. As a consequence, the EBITDA has improved 4.8% on a year-on-year basis. Please note that the EBITDA is going to continue to benefit from the change in the spectrum regime because now from an amortization model which is reported above the EBITDA, we are going to move to a CapEx model which is going to go below the EBITDA.
I think Khun Sigve had mentioned that this is going to result in a THB 7.1 billion benefit to the EBITDA on an annualized basis and THB 5.3 billion on a net income basis for the full year. Of course, the impact for 2025 will be smaller because it will be a five-month impact. The net profit after tax has improved THB 5.3 billion from H1 of 2024 to H1 of 2025 and normalized profit has improved THB 6.3 billion. Let me round up my presentation with the guidance. Khun Sigve mentioned this, but let me walk you through the numbers. We had indicated a guidance of 2% to 3% growth in service revenues in 2025, which now stands revised to 0% to 1%.
Considering the first half of the year and the macroeconomic headwinds and the impact of the incident and the lower tourists that I have witnessed in the country, the EBITDA is marginally changed from 8 to 10% growth to a 7 to 8% growth. The EBITDA of course is going to continue to benefit from the savings on account of the spectrum arrangement change, the synergy realization, and the financial discipline that we have shown so well over the last many quarters. CapEx and the net profit remain unchanged, but we would like to make a very strong mention here. There will be an interim dividend payout in the second half of 2025 which is going to be more than 50% of the consolidated net profit of the company, which is of course going to be subject to the board approval.
Thailand allows for interim dividend payout each quarter, so that's why there is going to be an interim dividend for the second half of the year which will be discussed when we announce the third quarter results. Because of the change in the EBITDA and more importantly because of the fact that our cash flows are impacted by a 50% of the spectrum payment of the spectrum that we won, which was different from what we had considered earlier when we had given the guidance because at that time we considered only a 10% payout and now we have paid out 50% of the spectrum that we won. The leverage has changed marginally from a less than 4x in 2025 to a less than 4.1x and basically this 0.1 turn is on account of the higher spectrum payment only.
Last but not the least, even though there is a revision in the short term guidance, considering the headwinds that we have, we reiterate that the long term guidance of the company remains unchanged. Let me mention the guidance for you once again. The EBITDA margin for 2025 is expected to land at 63%. This is as a percentage of service revenues excluding IC. This is expected to increase to 67% by the end of 2027. CapEx intensity is expected to taper down from a 16% of CapEx to sales and sales here are basically service revenue and the device sales. This is going to taper down from 16% to 13% to 14% by 2027 and the leverage which was marginally adjusted to less than 4.1x in 2025 is expected to go down to 3.2x levels by the end of 2027.
We reiterate there is no change in the long term guidance of the company. With this then I hand over back to Khun Sigve for the closing remarks please. Thank you.
Yes, thank you, Nakul. I just want to close off with this slide, briefly talking about the focus the management team now have, and as I said, we are really focusing then on the transformational long-term journey. On the customer side, when the network with the spectrum advantage we now have is starting to kick in, we see that we will be able to, in the end of this year, deliver a very, very good connectivity service. We have also now started a project on customer value management, and we are planning for seeing some value out of that going forward as well, where we are able now to take the customer base that we have and grow the value from those customers rather than just fueling growth with the growth ads.
We are also looking at driving growth in the B2B and in the home solution segment or the broadband. The B2B segment, in my view, is underserved. In Thailand, only 7.8% of revenues are coming from the enterprises and their SMEs. It should be higher than that, and we see a potential now to give new services and products to those B2B customers. The same on the broadband segment. We are not happy with the development so far this year when it comes to connectivity, and we want to accelerate that as well. We are now in the midst of fueling our brand with a clearer brand position, including also a shop consolidation. Last but not least, you can expect us to continue our financial discipline, where we will continue to take out cost going forward.
You saw the EBITDA guiding we have in the coming couple of years; that's going to come from additional transformational activities. That's the focus we have in the coming few months, and with that, I think we are ready for some Q&As.
Okay, thank you Khun Sigve and thank you Khun Nakul. Let me repeat the questions for Q and A first as many of you have joined us a little bit late. We will be taking questions from the analysts in the room first before we move on to the questions on Zoom. The Zoom queue is already shared in the chat, so I open up to questions. Khun Pesood.
Hello.
Thank you everyone. Congratulations on your result. I have about five questions. The first two is about the numbers. You talking about the DIF that after the conversion from the right or revenue to the ownership of DIF you will have the EBITDA upside by about THB 3 billion a year. I just want to know about the net profit impact that from my understanding the TFRS 16 may have. You book the below the EBITDA cost that higher than the EBITDA that you can have. Could you please give us some color on this one? My second question is about your guidance. If I subtract your full year guidance with the first half your operating performance, it seems like you going to indicate the level of growth that higher than the first half.
For example, - 1% in the first half to 1% to 2% or to 3% for the second half on the year-on-year basis. What make you so confident given the fact that the economic backdrop in the second half is going to be weaker than the first half? Also, you may have to have some impact from the EPL losses that you may have to subsidize to your customer or you may have to lose some customers. Those are the first two questions about the number. My third question, it's about your content strategy in the medium to long term. You lost the exclusivity of the EPL but you secure the exclusivity for the other support program like be integrated. What I'm afraid is about the war of the exclusivity for the content between you and your competitor.
Could you please assure us about this thing will not happen because you used to mention that you try not to overpay for the content? I start seeing something different from you have said in the past. Please correct me if I'm wrong. The second one is about the, let me think about, okay, the thing that, because you know looking into what resources that you have. I mean in terms of the spectrum bandwidth and you have lower number of subscriber. If you divide the number of subscriber with the amount of the spectrum you will have the much much big bigger spectrum bandwidth per subscriber than your competitor. My question is how you are able to translate this into CapEx saving in the future or faster than your competitor revenue growth in the near future? I think that's my fourth question.
My last question is that it seems like given that you are quite excellent performance over the past couple of years after you complete the AMOC mentioned, what do you think the market has not fully aware about how good that you are? I mean now and also in the near future. That's my all questions. Thank you.
Wow. Can you take the first two and then I will try my best.
Sure.
The first two, number one is on the DIF and the second one is on the guidance. So Khun Nakul, thank you. On the DIF, as you rightly mentioned, there is an improvement of THB 3 billion in the EBITDA, but there is going to be a negative effect on the net profit in the initial years. This is specifically nuanced due to the accounting standard because when we create a lease liability to the extent of THB 26 billion in the books, we need to record an interest expense on the lease liability, which is higher in the initial periods and actually tapers down in the latter periods. In the initial periods, this is definitely going to be negative to the P&L, roughly about THB 0.2 billion- 0.25 billion in a quarter. Your second question is on the guidance.
Of course, the first half, as we have shown, is about - 0.3% on a year-on-year basis. If we have to actually deliver in accordance with the guidance for the year, which is 0%- 1%, the second half has to be a growth. One reason that has impacted us in the first half is the network incident, which is roughly 1% of the revenues for the second quarter. There is going to be some impact of the network incident in Q2, but it is going to be lesser than what is there in Q1. As you will see on a QoQ basis, we expect an improvement in the performance of the company because the network incident impact is going to be lower. The second, we are going to continue on what we have done so very well in the past in terms of how we have grown the ARPU.
We have focused on high quality subscribers and as a consequence, as you have seen, our ARPU has grown quite well both on a quarter-on-quarter and on a year-on-year basis. We're going to use the more-for-more concept to actually deliver an improvement in the ARPU as well. In the quarter, the online business has continued to show an improvement. It improved QoQ, it improved on a year-on-year basis, and that is going to fuel the momentum of growth in H2 versus H1. As we transform our business with a better spectrum portfolio, we feel that with the CVM capabilities that we have, the customer value management, we can monetize our subscriber base much better than what we have done in the past. All of these things are going to contribute to the second half being slightly better than the first half.
Okay, let me address the content question. In my view, this EPL is a little bit overhyped. If you look at the EPL cost versus how many customers are really looking at EPL, I think you find an imbalance. What we are now focusing on is other sport rights. I think that our TV content can still be called the king of sport because we do not have the EPL and we do not have the TPL leader, meaning the Thai Football League, but we have a lot of other sports content. We are going to focus on that and we are going to focus on Thai content, being soap operas or being series or being content that is consumed from the Thai consumers in a much bigger volume actually than the EPL used to be. You can expect us not to move into a content war.
There may be a kind of positioning war where we are focusing more now on the Thai, what I call mass content, whereby our competitors are focusing on the more high-end EPL content. That is fine. I am not worried about that. We will always be having a financial discipline on the content and the ability to monetize the content as we have all the rest of the business. That is very, very clear. We do not see the content game creating a war or us buying exclusive rights to content that you cannot monetize. I think the EPL lesson we made from that is underlying what I am saying.
Now on the spectrum, I think that the combination of the new network that we have and the spectrum portfolio that we have, including also the 10 MHz extra we got on 2.3 GHz and our ability now to refarm the 2.6 GHz into 5G, is going to give us a very, very good network position. I do not want to compare to our competitors, but I want to compare to ourselves. I see this now already coming true. I think we have a network position now where we can combine both coverage speed, 4G and 5G speed without any capacity ceiling on that, but also a continuous network experience in a very good way. I expect us to come and surprise actually our customers with the network experience at the end of this year and that is what we are going to do.
Of course, the investments we have done now also into the single grid, where it is not only to combine two networks into one, but also to do that with the most modern equipment that we are installing, is going to help us also going forward when it comes to the cost base. We already have a CapEx guiding and that is why we are confident on that CapEx guiding, as Khun Nakul Sehgal said. I think that going forward network will definitely not be a disadvantage for us, rather the way around. On the last point, what is it the analysts or the investors do not see? I do not want to comment on that. I can just comment on what we plan to do. I think you can expect us to increase the growth on the online segment, also the broadband segment.
You can expect us to do better on the B2B segment than we have done so far this year. You can expect us to start developing our postpaid customers in a more for more concept where we are also putting services on top of the connectivity, and you can expect us to embark on this transformation program that I am talking about. Here I take with me a lot of experience I have from Telenor, that this long-term transformation program where you are utilizing new technology, being automation, being no touch operation, being AI, being cloud, will over time have significant OpEx savings and that is what we are going to do.
That is why I am talking about continuous OpEx savings both in a network domain, in the distribution meaning the way we are handling the shops, being on the IT side but also being in organizational modernization. That is what you can expect from us going forward. I am very confident that we are able to do that. Not the big one-off tickets as we have done the past two and a half years. Those are over because those OpEx reductions were related to the synergy effects. Now I am talking about a much more holistic, granular, long-term transformation project which then over time will enable us to continue to take down costs, being OpEx but also being CapEx.
Thank you, Khun Nakul. We move on to Khun Keejapat from Wah Leong Securities.
I have like two questions. First question is about the subsidy you offer for the passengers for THB 100. I would like to know how much you estimate that, have you factored in for this cost. The second question is about dividend. I think we do quite well for this year. Could you guys say what time should be the first time and what is the policy like, once or provides you?
I can take the dividend. You can expect us to pay dividend in interim dividend in the end of this year. As also Khun Nakul said, we also have a very clear dividend policy and that we are paying at least 50% of our net income in dividend going forward. I don't want to give you any more exact number than that. You can expect that dividend payout for our shareholders will be something that is very important for us. Basically, there are two financial parameters here that are very important. Dividend is one of them as a sustainable dividend policy going forward that you can trust us delivering on. Another one is to continue to take down the net debt to EBITDA number as we also talked about, and we will figure out are we going to going forward paying out dividends annually or biannually.
We haven't made any decisions on that.
Yeah, let me take your first question, Khun Keejapat . This is on the subsidy of 100. Let me just make it clear and remind everybody that we had 200,000 customers who were using EPL with us, and of course not all those 200,000 customers were mobile customers. A fraction of those 200,000 were actually mobile customers. This offer of THB 100, or 100 subsidy, was offered to our mobile customers who were actively using EPL. You can do the math. If it's THB 100 being offered to those customers for them to be staying with us, it is actually going to be a net benefit for us because we will not lose them to competition. That's the math behind the logic of why we decided to subsidize the THB 100 for those customers. Any impact of this is already factored into the numbers.
Let me also reiterate to you that we do not expect any negative impact to our bottom line from losing EPL. 200,000 customers is what we had. 20% of those 200,000 customers are premium TV customers. We do not see churn on those customers higher than what we had anticipated so far. The trends are very well in control, and EPL on a net basis means content cost minus the revenues was always positive, meaning we were spending more than what we were earning, and we still believe that even with the impact of EPL, the net impact on P&L is not going to be negative for us. Thank you.
Yes, we move on to Dawei from Morgan Stanley.
Hi, it's Dawei from Morgan Stanley. Three questions. First one is I might have missed this, but have you explained what actually was the reason for the network outage, and have you already started to see some recovery in terms of subscriber additions post the network outage incident? Do you actually need to do some CapEx maintenance with regards to that? That's the first part of my question. The second part is dividends versus deleveraging. Why not actually just focus on deleveraging? Why is there urgency or priority on dividends as well? Lastly, do you actually have any ROIC targets? Thanks.
Yeah, on the first one, as I also said, it was a power outage that took down the switch center. That was what happened. That was very unfortunate, and of course we are now mitigating that. We're looking at even more robust alternatives when we have a power outage, so there will not be any additional CapEx going into there. It's more that we look at backup solutions which are even better than what we actually had that took down that switch center. That's what was happening on the dividend. I think we get as many, what should I call it, answers on this as we talk to number of investors. Some of the investors say what you are saying, pay down the debt first, we are not really focused on dividend. Others say that we are very focused on dividend from our side.
I think we would like then, knowing that we are now having a net positive profit, we want to start paying out dividends because I think a lot of our investors really appreciate dividends, and we have to do it in a sustainable way, as I said, and I think it's possible to combine it, both paying the dividend and continue to take down the leverage with debt. It's that combination I think we now have found as a good balance, and that's why we have both those two financial parameters going forward. I don't think that we should do either or. Our policy is to do both, and with that I hope that we will satisfy most of our investors.
I think your last question on the ROIC, we do not have any externally communicated ROIC targets. The long-term guidance is something that we've already disclosed to you, which is basically EBITDA margin to service revenue, CapEx to sales, and also the leverage. Thank you.
Thank you. Any further questions from the room?
Thank you. Few questions from me starting from the mobile things about both the subscriber loss and also some of the, you mentioned tourism impact. I would call them cross border visitors, either Myanmar, Laos, or Cambodia. Try to gauge how much was that in your revenue portfolio in mobile revenue, basically tourism and cross border, if you can, like some ballpark number for us, and including subscriber loss as well. Let's say 1 million sub loss this quarter, do you think how much is that from those negatives? Just want to clarify myself that it's not an organic loss or kind of like the lowest of market share, something like that for the mobile segment. The second one is on the NT roaming, the mobile revenue one, not the. Can you recall us? Will that continue to decrease to zero? I believe no.
Or how would that stabilize or to be at a new normalized for us? Also, sorry, the third one is on 850 MHz shutdown. I believe there is one change in, according to these things you already mentioned, we will have more impairment, we will have more cost saving or something like that in terms of the third quarter that we're happening. Sorry, I heard news on 2G , 3G shutdown coming back again too. Can you comment on that? Would that be positive? Would that be negative for your customer base, for your operations? Something like that. Lastly, I agree with you on the B2B thing that we are quite underserved. How do you see that?
Is that lack of knowledge by Thai small companies, meaning they are not realized that this will help them cost saving, better optimizations, or it's just budget constraint that we need economy to recover before that smaller players can accelerate the investment for better operation. Again, thank you.
Take the last one, and then you can take the first four more.
Thank you so much. Kuhn Adaphop , let me take the first four. On the subscriber loss, the 1.2 million that we had in the quarter, let me break this down for you. Approximately 400,000 subscribers is actually on account of the lower tourists because we've seen obviously a gradual reduction of tourism in the country. You've seen the numbers from TAT already, so approximately 400,000. The next big effect on this is basically coming on account of our lower gross ads. As Khun Sigve explained, we are reducing the high gross and a high churn behavior in the market. That obviously has a contribution to the subscriber reduction in this quarter. This is also coupled with the effect on the weaker macroeconomics. Because macroeconomics are weak, the consumption levels in the country are compromised. That obviously impacts the gross adds.
Roughly 300,000, which is the last amount, is actually the impact coming on account of the network incident. This is the breakdown of the 1.2 million. Your next question on the NT roaming, will it be zero? It has been declining on a quarter-on-quarter basis as you have already seen. It is very difficult for us to answer whether this will be zero. As NT continues to migrate traffic to another competitor, this is gradually supposed to go down. I cannot tell you whether it'll be zero or not. It depends on how much traffic is still being used from our network as far as NT is concerned. If I understood your third question correctly, it is on the write-off of 850 MHz and do we expect anything in the third quarter. Was that your question? OpEx saving after the expiry of the 850 MHz?
Yeah, I would say whatever numbers that related to that, 850 MHz apart from diff.
Apart from that, okay, understand. For 850 MHz, as we have maintained in the past, we were paying roughly about THB 2.5 billion in 2020, and because we do not use that spectrum anymore, we haven't actually purchased the spectrum in the auction. This is a pure savings on the EBITDA, on the income, on every parameter that you can see, just that.
I saw you have some impairment of the 850 MHz in the second quarter, which quite surprised a bit because that ahead of the actual expiration, right?
Sure, sure, yeah.
I can explain. The impairment that we've recorded in the second quarter is pertaining to the dismantling cost of the assets and the assets that are actually pertaining to 850 MHz. Some part of this cost has been booked in Q2, another is going to be booked in Q3 because as we have mentioned in the past, we will write off the net book value of the assets that will be transferred to DIF and as we have disclosed, these assets will be moved. I think Khun Pisut also mentioned that the assets will actually move to DIF. They've actually moved already to DIF on August 4th. Whatever is the net book value of the assets is going to be impaired in Q3. To be transparent with you, the impact of this is roughly going to be around THB 1 billion in Q3. The fourth one. Do I take it segue?
This is on the 2G , 3G shutdown. Yes, one of the technology to be shut down is in our plans. We haven't made any official announcement to this effect as yet and please wait to hear more from us as we actually finalize the timelines and the plans on when this can be done. I can just say that of course the investments can be optimized, but the savings will not be that significant. Just for you to know over to you.
It will then, when we do it, further free up spectrum that we can use for 4 G and 5G. On your last question, the B2B underserved statement that I had, I don't think that has to do with the budget, macro, or with the customers. I think it has to do with the way we offer these services. Part of it is kind of legacy thinking as a mobile operator, used to be a consumer operator, where we are connecting people through services for the first time. That's basically the way we have traditionally or historically handled the B2B segment. Also, selling connectivity to an SME or a corporate the same way as we sell it to the consumers is something we need to get out of. We need to rebuild the sales team which is thinking differently. That's one. The other one is technology.
Now you have new technology which enables you actually to sell services. Take one example, the software defined networks where you can build on top of the traditional connectivity. Private 5G network where you're building on a customer's enterprise specification is another example. Cybersecurity solutions is a third example. Taking the IoT platform that you have now, but also moving up the value chain to offer analytical services is another example. All this is possible due to new technology for the SME segment. Of course, you need to find a model where you can scale this across and we are looking at that. The third element here is partnership because in the B2B segment you should avoid building up all this yourself. That would just add cost and complexity.
You can work with partners where you can either resell services in the customer relationship you have with partners or you can value add those, white label some of the services that you buy from partners and then you sell it to the customer. That's where I see a big room to grow in the B2B segment. I do see that some of the Asian markets are doing this better than we do here in Thailand. Even if you think about some of the European B2B businesses, operators in Europe are more advanced on this. It takes some learnings and that's why I'm saying that I think B2B has a growth potential.
Thank you. Let me move to the questions online. Piyush, if you could please turn on your camera and your mic.
Yeah, hi, good morning. Can you hear me?
Yes.
Yeah, thanks a lot for the opportunity and all the explanations and detailed presentation. Three questions. Firstly, in mobile you have shared what has led to the drop in subscribers, but have you reached a level from where we can start seeing positive additions? If you can share the outlook on subscribers in mobile as well as ARPU. Secondly, you mentioned recent organization changes which will be effective from the 1st of September. Could you share some more details on what has been changed and how you expect it to improve the operational performance? Thirdly, on the spectrum auction which concluded with a good outcome, can you share a bit more details on your network rollout plan both from coverage and capacity perspective using 2.3 GHz and 1500 MHz.
Thank you. Piyush, this needs to be the last question.
[Foreign language ]
yeah, you can address the first one on subscriber growth.
Sure. Khun Sigve, I'll take the first one. Thanks for the question. Piyush, on the subscriber trends in the second half of the year, let me first also mention that of course there is an impact of the network incident that we have seen in the second quarter, but because we have a definition of subscriber that goes with a 90 day inactivity, there is going to be a further impact in the subs which will be seen in the third quarter. That's going to be roughly around 500,000, ballpark here and there. We should expect that number to come in Q3. However, at the same time, we are not done with the high gross and the high churn impact that we have taken in the past where we'll continue to go for financial discipline and reduce this behavior which is not healthy for the market.
We do expect that the trends are going to improve as we go forward. You should see some back to growth maybe towards the end of the year, but maybe quarter three is going to be still kind of a decline on the ARPU. Again, the More for More, we've shown you a healthy development of the ARPU over the last few quarters and I think that trend you should expect to continue. Of course, when we reduce the high gross, high churn behavior in the market, ARPU improves as well. Going with the More for More concept that Khun Sigve actually explained quite well in the past, we should see an improvement in ARPU. This is on the mobile. You will see the same on the online business as well. I'll now hand over to Khun Sigve.
Yes, on your organizational question, I've basically done three things. One is that I have removed the layer because currently we have two Presidents and CEO, taking that away such that all the Chiefs are reporting directly to me. That's a simplification. The other one is that I have lifted up B2B as a position reporting directly to me and the same with Home. That's back to what I said. I see both those two areas, broadband and B2B, as growth areas for us. The third thing I have done is to separate out IT from the technology such that I have now one network, one IT. I'm also going to appoint a Head of AI to drive top down our AI activities. That is what it is on the spectrum auction, the detail of a network rollout.
The first thing we do now is to utilize this additional 10 MHz we have on 2.3 GHz and as you remember we are currently using 60 MHz and then we got another 10 MHz. This is helping us with the 4G capacity that we do as we speak. That will have effect already in the coming few months of this year. The second thing we do is to reform the 2.6 GHz such that we can put 5G on the 2.6 GHx network. That will also happen at the end of the year. The third thing we do now, when we're almost finished, the single grid consolidation, is to start to be much more granular where we also go into and look at are there any white spots or blind spots, can we improve also the indoor coverage? We do that very granularly, basically area for area.
Those are the three things that we are doing.
If I may just add, we have already given the guidance to you on the CapEx, so that remains unchanged. Thank you.
Thank you everyone. We have run out of time. Thank you for everyone who's joined online. We will get in touch with you to take the questions we have not been able to answer. For everyone in the room, thank you for joining us today. Thank you. Khun Sigve and Khun Nakul.
Thank you.
Thank you so much.
See you on the road soon.