Good morning, everyone. Welcome to Grameenphone's earnings disclosure for the Q2 of 2023. My name is Alif, and I'm the Head of Investor Relations, and with me today are our CEO, Mr. Yasir Azman, and our CFO, Mr. Jens Becker. Please note that the presentation we are sharing today, financial statements, along with additional documents, are available on our investor relations website. You can start by posting questions, and we will shall address them at the end of the presentation. In case you are unable to post your questions due to technical reasons, please send them to me by email or text. I will now welcome our CEO, Mr. Yasir Azman, to start our presentation.
Thank you, Alif, and good morning, everyone. Thank you for joining us for our Quarter Two earnings call. I'm Yasir Azman, Chief Executive Officer of Grameenphone, and I would like to begin with some key industry updates. As reported by our regulator, till May this year, the telecommunications industry reported 185.1 million subscribers, increasing by 1.2 million subscribers from March 2023. During the same period, mobile data users increased by 1.5 million and reaching to 115.6 million in May 2023. If I go to the highlights of the quarter, this quarter, Grameenphone has continued its growth momentum, riding on its network investment, innovation, digital adoption, and execution excellence, and showed improved financial performance amidst challenging macroeconomic situation.
Inflation level in Bangladesh currently stands at the highest level in the last 11 years, reported by Bangladesh Bank, and directly impacting the overall spending capabilities of our customers. Bangladesh Bank in July announced a new monetary policy, lifting the interest cap on bank loans and rising the repo rate by 50 basis points to control inflation. As of July, in line with the IMF guidelines, Bangladesh's Forex reserve stands $23.6 billion. The macroeconomic pressure from a depleting Forex reserve continues, which also impacts on the LC openings, in June being the lowest in 2023, with year-on-year fall of 27%. However, as I already highlighted, following growth momentum in the Q1, Grameenphone is reporting improved performance, driven by revenue and EBITDA in the Q2 of 2023. We continue to focus on our...
enhancing our customers' experience through our network investment. At the same time, leading the market in launching industry-first initiatives and digital-centric customer-focused solutions. With regards to dispute resolutions, Grameenphone and Large Taxpayers Unit, through alternative dispute resolution process, have settled all income tax disputes for the assessment year from 2007 to 2008 to 2019 to 2022, and obtained a tax clearance certificate from LTU-Tax for the same period on 22nd June this year. With this settlement of disputes, GP considers that NBR claims under the BTRC audit demands related to corporate tax have been resolved.
Following the publication of the Honorable Appellate Division written judgment on June 1, 2023, GP has paid the entire principal amount of BDT 9.9 billion to BTRC on June 14 this year, without prejudice to its right to pursue review petitions and without considering any factual or legal issue in accordance with the said judgment. While making the said payment, GP also reserved the right to adjust against its future payment obligations, subject to the outcome of the review petitions. Subsequently, GP also filed review petitions before the Honorable Appellate Division, challenging the said judgment. GP is also continuing a without prejudice constructive dialogue with BTRC to resolve any matters related to this in terms of interest and fees.
Amidst a challenging macroeconomic environment, we continue to grow top line and EBITDA now for a ninth consecutive quarters, reinforcing our commitment to driving sustainable growth and creating long-term value for our shareholders and stakeholders. Now, to expand a bit more on the business aspects. In Q2 2023, we have significant level of network investment in a spectrum rollout, increased number of sites, and capacity enhancement. We have increased fiber connectivity from 17% - 40% over the last six quarters and have rolled out over 21,000 total sites. We have invested in new tools to provide better customer experience in the technology space. We have further strengthened our number one network position through surgical priority of our increased investment.
We have modernized our physical distribution by introducing touch-free distribution model, partnering with Mutual Trust Bank, that eliminates manual intervention, it simplifies our operation and enhance productivity. This signifies a transformative leap towards a streamlined and digitally empowered ecosystem. We have also launched our state-of-the-art Grameenphone Experience Center in Dhaka, which is in Gulshan two, driven by the commitment to put customer at the heart of every endeavor. The experience center has been meticulously designed to fulfill customer demands and queries with utmost convenience. With a future-fit outlook, Grameenphone has created a unique environment here that offers premium service, cutting-edge technologies, and all an unforgettable experience for our visitors. Our focus on digital adoption has resulted in almost 32% of year-to-date recharge transaction, demonstrating the growing trend towards digital adoption and engagement of our enhanced customer.
MyGP continues to be the largest local app in Bangladesh, with 15.7 million customers, while our total self-care app users reaches to 17.5 million. This tells the success of our continued efforts to develop seamless digital experience for our customers. Grameenphone always believes in ensuring simplicity and convenience for our customers. 99% of our customer services can be availed through the self-care app. International roaming and its related services are the latest addition in MyGP app, which was only available through physical visit to Grameenphone centers earlier. Customers can easily activate roaming service through MyGP app on their own and on the go. Subscriber-based growth momentum continued in Q2, increasing by 1.1 million- 81.3 million in total.
Unleashing the next level of customer experience, at Grameenphone, we strive to provide customer-centric digital solutions and industry-first initiatives, keeping the demand of our customers at the core. There are several exciting and innovative products and services been launched in this quarter to enrich our customers' digital lifestyle and mobility. One of them, the Grameenphone Prime, is the enhanced and revamped postpaid product, which offers customers a limitless digital lifestyle with life and more as its mantra. This subscription not only fulfills the customer's telecom needs, but also offers diverse lifestyle benefits, like digital subscriptions and exclusive privileges at our partners' outlet. Second thing, the Grameenphone has partnered with T-Sports, Bangladesh's first dedicated sports channel, and through this partnership, we offer our customers access to popular sports. This initiative, which pairs entertainment and connectivity, is designed to meet our customers' needs and enhance their digital experience.
As an industry-first initiative, Grameenphone has also introduced Tourist SIM for the first time in Bangladesh. This service enables short-term visitors to purchase authorized SIM cards and enjoy seamless connectivity while visiting Bangladesh. We continued our initiatives at empowering societies. We believe that our responsibility extends beyond just our business operations, and we are deeply committed to drive social impact and make a positive difference in the communities we serve. GP is committed to protect the environment and contribute to the prevention of climate change. The priority is to minimize CO2 emissions from GP's operation in line with the targets set in the Paris Agreement on Climate Change and through science-based target initiatives. By adopting these climate targets, GP demonstrates its commitment to operate in a sustainable manner, while also positioning as an industry leader in climate action in Bangladesh.
GP has set a target to reduce 50% CO2 emissions by 2023 from its base from 2019 levels. 2030. By 2030, 50% reduced. With Grameenphone Academy, we aim to reach the youth of our nation to build their future fit skill set. Within 1 year of journey, more than 58,000 individuals have enrolled in this platform, out of them, 15,000 of which were female. As an equal opportunity employer, diversity and inclusion are imperative in the way we do our business. Our diversity agenda broadly includes gender, skills, and competence. As of Q2 of 2023, the percentage of women in the total workforce reached to 19.4%.
I'll now welcome our CFO, Jens Becker, to take you through our financial performance for the quarter and come back at the end to summarize this. Jens?
Thank you, Azman. Good morning, everyone. Let me start with a short overview of the key financial KPIs. Grameenphone continued its financial performance in Q2, with nine consecutive quarters of growth in top line and EBITDA, amidst rising inflation and other macroeconomic challenges. Fortifying deployment of new spectrum and site rollout to improve network experience, along with increased customer-focused market activity, resulted in a 5.3% year-on-year growth in subs and traffic revenue after 2.7% growth in the last quarter. Additionally, Grameenphone's continued drive for operational excellence, along with top-line growth, resulted in a 5.7% year-on-year EBITDA growth in Q2 after 2.7% EBITDA growth in Q1, while maintaining a strong EBITDA margin amidst highest inflation in the last 11 years.
With our continued investment momentum, GP's CapEx to sales ratio, excluding licenses and leases, for the quarter stood at 14.2%, which was 13.4% in the previous quarter, based on a Q4 moving average. However, on a standalone basis, our CapEx to sales ratio for the quarter stood at 17.7%. EPS for the quarter stood at BDT 8.84, with a year-on-year growth of 29.7%. The EPS growth was positively impacted by one-off adjustments. Grameenphone subscriber growth momentum continued in Q2, with 1.1 million net adds during the quarter, though our sub losses during the SIM ban period have not been fully recouped. In addition, after Q3 of degrowth, data users returned to growth momentum with 2.66 million data users added during the quarter.
Our reported subscriber base at the end of the quarter stood at 81.3 million, with a 1.4% growth from previous quarter and a -4% degrowth from last year. The number of data users stood at 46.1 million, with a quarter-on-quarter 6% growth and a 0.2% degrowth from last year. Due to the growth in the subscriber base, GP subscription market share improved to 43.9% from previously 43.7% during the quarter, according to BTRC published information as of May 23. Grameenphone delivered nine consecutive quarters of growth in total revenue, as well as daily subscription and traffic revenue. Total revenue in Q2 grew by 5.6% year-on-year, after 2.8% growth in the previous quarter.
The growth in total revenue was mainly driven by 5.3% growth in daily subscription and traffic revenue, which was 2.7% in the last quarter. Continued and improved double-digit growth in data revenue remained the main contributor to the accelerated growth in subscription and traffic revenue in this quarter. For the last two quarters, Grameenphone has delivered double-digit growth in data revenue with improved growth momentum, and in Q2, Grameenphone delivered year-on-year 17.1% growth in data revenue, up from 11.5% growth in the previous quarter. This continued growth momentum in data revenue is the outcome of our efforts to improve the network experience, along with our consistent efforts to simplify the products and improve the digital experience to ensure that offerings are more focused and effective, meeting our customers' evolving needs.
Additionally, Grameenphone introduced appealing bundle packs throughout the quarter in both the physical and digital channels, which led to 9.4% increase in bundle revenue from the prior quarter. Grameenphone's average data usage per user reached the 7 GB milestone during the quarter, which is the highest ever in GP's history, with a 32.5% growth from last year and 15.2% growth from previous quarter. The growth in data usage was supported by better network experience as an outcome of continuous efforts towards network expansion, deployment of new spectrum, and fiber connectivity.
Despite the year-on-year 4% degrowth in our sub-base, GP service ARPU grew by 10.6% in Q2 compared to last year. We recorded a 5.6% growth in service ARPU compared to previous quarter, against the quarter-on-quarter 1.4% growth in our sub-base. The year-on-year growth in service ARPU was mainly driven by a higher contribution from both our data and voice segments. Reported OpEx for the quarter stood at BDT 13.1 billion, with a year-on-year 9% growth. The year-on-year growth in OpEx was mainly contributed by the increased energy price and network expansion. Grameenphone delivered consecutive nine quarters of growth in EBITDA. During the quarter, GP registered 5.7% year-on-year EBITDA growth, which is double from the previous quarter, while maintaining our EBITDA margin at 61.1%.
The accelerated growth in EBITDA was driven by our top-line growth and our continued drive towards operational efficiency, which resulted in better cost performance amidst hike in energy prices, inflationary, and other macroeconomic challenges. GP invested BDT 7.1 billion CapEx during the quarter, focusing mainly towards our 4G network coverage, expansion, and spectrum deployment. We rolled out 2,200 plus new 4G sites and 1,600 plus new coverage sites in the last 12 months. At the end of Q2, the number of 4G sites reached 20,603. During the quarter, our 4G population coverage reached at 97.9%, with an 0.8 percentage points increase from last year. Net profit for the quarter stood at BDT 11.9 billion, with a margin of 29.8%.
The year-on-year 29.7% growth in net profit was mainly contributed by positive one-off adjustments arising from the settlement of dispute on completion of assessment. Operating cash flow for the quarter stood at BDT 17.3 billion, with a year-on-year BDT 0.2 billion degrowth, in combination of BDT 1.3 billion higher EBITDA and BDT 1.5 billion higher CapEx. On the other hand, net debt stood at BDT 13.8 billion as of Q2, in combination of BDT 23.2 billion short-term bank loan and BDT 9.4 billion cash balance, excluding restricted cash. In the first half of 2023, GP has paid BDT 70.3 billion, equaling 91% of its total revenues to the National Exchequer in the form of taxes, VAT, duties, licenses, and spectrum assignment fees.
Since inception, GP contributed BDT 1,131 billion, or BDT 113,109 crore to the National Exchequer. During the quarter, Grameenphone saw positive developments on the resolution on legacy disputes. It settled all the income tax dispute till 2018 through alternative dispute resolution processes and paid BDT 7.8 billion to NBR. GP has already paid BDT 9.9 billion with regards to the written judgment for 2G. As mentioned before, our contribution to the National Exchequer in the first half equals 91% of total revenues. GP is in constructive dialogue with BTRC for the remaining settlement, with an unknown outcome. Despite this positive development on dispute resolution, this BDT 17.7 billion payment strains GP's cash position as it comes on top of our regular payments.
In light of these additional payments and the uncertainties around the final settlements, GP is not recommending interim dividend for the first half of 2023. With this, I'm handing back to Azman now.
Thank you, Jens. To summarize, the Q2 of 2023 registered ongoing growth momentum in both revenue, which is at 5.6% level, and EBITDA, which is at 5.7%, driven by 10.6% ARPU growth. Strong market execution, innovation, and a strategic focus on network investment. Keeping the customer at the core of everything we do, we are enhancing customer value and strengthening as the number one network. We have invested BDT 7.1 billion CapEx in the past quarter. We continue to focus on looking towards the needs of our customers through focused digital-centric innovation and services driving growth momentum. More than 99% customer services can be fulfilled by the largest local app in the country. Digitalization of our customer interaction through MyGP and other digital channels has contributed both in efficiency and driving growth.
We have had positive developments on dispute resolutions with our authorities. Those have already been highlighted by our chief financial officers. I'll now hand back to Alif for Q&A session. Thank you, everyone.
Thank you, Azman ভাই. We will wait for a few minutes now for the questions to start coming in. I believe which they have. We can start first with Jens. Jens, from where did such a big tax addition come back from? Or where did we get such a big tax addition from?
Yes, let me answer this. This in amount includes or this includes the amounts arising from the settlements of disputes and completion of assessment. I think if you look into the financial statements, you will find disclosure note 29.1 for more details.
Thank you. We have another question for you, Jens. What was the total settled amount for 2 litigations? How did you incorporate them in financial reporting?
Yeah, I assume that this refers 2 litigation means 2G litigation, I assume. during the quarter, Grameenphone saw the positive development on the resolution of our legacy dispute, and it settled all the income tax dispute well till 2018 through alternative dispute resolution and paid BDT 7.8 billion to NBR. In addition, GP has already paid BDT 9.9 billion with regards to the written judgment for 2G. For the accounting topics, you see it please in the note 20.1 and 35.B.
Thank you. Azman , this one is for you. What is causing active data users' degrowth?
Okay. Actually, Grameenphone subscriber growth momentum, which has continued in Q2, as we already mentioned, with 1.1 million subscriber additions during the quarter. However, the sub losses during the SIM ban period have not been yet fully recouped. After three quarters of degrowth, data users now return to growth momentum, with 2.6 million data users added during the quarter, which is a significant progress. Thank you.
Thank you, Azman ভাই. Jens, we have some more for you. What are the updates on other legal issues?
Yeah. Except as disclosed in note 35 of the interim financials, there has been no significant development of the events disclosed in the financial statements for the year ended 31st December, 2022. No further significant developments on the other topics.
Thank you. Jens, we have one more for you. We see no declaration of interim dividend, which is an exception of GP's usual norm. What are the reasons?
Yeah, I think I mentioned it in a speech already, but let me reiterate. During the quarter, Grameenphone saw the positive developments on the resolution of our legacy disputes. With this, we have settled all the income tax disputes till 2018 through alternative dispute resolution and paid BDT 7.8 billion into NBR. In addition, GPS already paid BDT 9.9 billion with regards to the written judgment for 2G. With this, as mentioned before, our contribution to the National Exchequer in the first half equals 91% of total revenue. We are additionally also in constructive dialogue with BTRC for the remaining settlement, where as of today, it's an unknown outcome.
Despite these positive developments on dispute resolution, this 17 or both topics together, this BDT 17.7 billion payment strains our cash position, and it comes on top to our regular payments. In light of these additional payments and the uncertainties around the final settlements, we are not recommending interim dividend for the first half.
Thank you, Jens. We have some more for you. What is the current total amount of contingent liabilities net of all these payments?
I think you can find our Grameenphone's contingency, in the annual financial statements of the year 2022, and as well in the interim financials of the year, for the first half of this year.
Thank you. Another one for you. Could you please explain the BDT 4 billion provision under finance expenses and BDT 6.4 billion provision reversal under income taxes? What are their sources?
Yeah. GP has taken the provision for regulatory disputes based on the available information of the outcome of court proceedings mentioned in disclosure note 28.1. The tax, as I mentioned before, includes amounts arising from the settlements of disputes and completion of assessment. Again, this with more details in disclosure note 29.1.
Perfect. That's, that's all the question and answers that I can see till now. Why don't we give it a couple of minutes and see if any more questions come in?
I think that concludes it. If there are any more questions that may have been unanswered or you have any further questions, please reach out to me, and then we will, we will take that forward. There are no further questions, and thank you very much, Azman and Jens, and thank you all for joining. Goodbye.