Morning everyone, welcome to Grameenphone's earnings disclosure for the second quarter of 2020. My name is Maureen. I'm the Head of Investor Relations for Grameenphone. Our presentation today will be in two parts. There will be a business and situation update from our CEO, Mr. Yasir Azman, followed by an overview of our financial performance by our CFO, Mr. Jens Becker. The presentation that we are using today, along with additional documents, have been uploaded to our investor relations website. The question and answer link is now live. You can start posting your questions. We will be addressing your questions at the end of our presentation. In case we are unable to answer your question today, please send me an email. I would now like to welcome our CEO, Mr. Yasir Azman, to start our presentation.
Thank you, Maureen. A very good morning, everyone. Thank you today for joining us in this session. This is Yasir Azman, Chief Executive Officer of Grameenphone. I will start with a very quick overview of the highlights of this quarter two being one of the toughest quarter for the industry as a whole we have ever faced. I think this global pandemic, I will not stress again and again. Since the end of March till May, according to our regulator, the telecommunications industry has actually lost 3.8 million subscribers, ending with 161.5 million total subscribers as reported by our regulator. Mobile internet subscribers have also declined by 1.14 million over the past two months. Grameenphone reported a quarterly year-over-year revenue decline for the first time in at least six years owing to the impact from COVID-19.
We started to report COVID cases in Bangladesh in March, following the declaration of general holidays at the end of March, and we witnessed most of the negative impact in April. What we have seen gradually starting to recover from May, which has continued throughout the Q2. The holidays were declared by our government as a measure to prevent the spread of coronavirus, and this caused an overall slowdown of our economy. That also, it is negatively impacting our performance. As I mentioned, that we started recovery from May onwards. At Grameenphone, we put together a very strong business continuity plan, which includes daily interactions between management, functional leaders, and health safety experts for overall organization.
Our business continuity plan has successfully enabled us to identify, quantify, and mitigate possible risk related to COVID, which extensively covers health and safety of our employees being a prime for us and for our customers, partners, and value chain, as well as countermeasures to impact on our business. Implementing some of the best practices in our BCP has helped us navigate this tough quarter during this global pandemic. During this quarter, our regulator has issued SMP-related directives on us, which came into effect in July, and we shall discuss these in detail shortly. The revenue, if we go by the revenue decline due to the COVID-19. If you see our government declared general holidays from 26th March till 30th May as a precaution to the spread of COVID in our communities.
Due to these holidays, many city dwellers moved back to their rural homes while educational institutions and non-essential business remained closed, ultimately resulting in a slowdown of economic activity. Therefore, telecommunication services were declared essential, we kept operating and serving our customers throughout the holiday period. With the announcement of the finance budget in June, industry got a revision on supplementary duty on telecom services, increasing the supplementary duty further from 10 to 15%. These changes were implemented immediately from 11th of June. Driven by this pandemic, we witnessed significant adaptation of digital reload options by our customers. That was encouraging to see that customers have transferred from physical world to digital world to a great extent, and this resulted in a 10 percentage point jump from pre-COVID times in February 2020 to end of second quarter. A bit of update on the network rollout.
From quarter one, our regulators started approving no objection certificates, which enabled us to carry out our operational activities. As a result, we were able to resume our network rollout and expansion. In quarter two, we added 132 sites to our 4G network. This time of the year is usually challenging for us on the weather front, and this year was no different actually. Cyclone Amphan was the largest recorded storm over the Bay of Bengal and made landfall in Bangladesh towards the end of May. The destruction left by this cyclone was massive, resulting in prolonged floods, power and network outage, and extensive damage on our infrastructure.
Over the past few years, we have invested in building a sustainable network and along with the continuous reports from our teams, workforce, and with the help of local communities, shareholders, stakeholders, and law enforcement, we were able to rapidly recover our outages caused as a result of the cyclone. I would say that was an encouraging fastest move to recover from the situation, we can combine efforts from all corners of the country, be it the regulators, the stakeholders, and the company people. Grameenphone also launched VoLTE, or what we say the voice over LTE in June, which will provide our customers with high-definition quality voice call, as well as faster call set-up time over the 4G network. This is significantly improving our customer experience. We have a challenging regulatory environment.
Grameenphone paid the second adjustable deposit of BDT 10 billion on 19th May, following the order of the Honorable Appellate Division relating to the injunction, and we continue to dispute the validity of this order. Grameenphone has also been issued SMP directives by BTRC, which have been implemented under protest. I'll discuss both these topics in more detail shortly. We believe in empowering societies. As a socially responsible citizen, we have taken a few initiatives in the past few months to support our communities to the best of our abilities. In partnership with BRAC, we launched the "Dakche Amar Desh" initiative, which enabled us to provide emergency food assistance to 100,000 families in dire need. This initiative has generated the attention of many other compassionate members of our society who have also come forward to join this cause.
At the same time, we handed over 50,000 medical-grade personal protective equipment to the doctors working in hospitals designated to treat COVID patients. Grameenphone launched Bangladesh Challenge in collaboration with ICT Division, a2i, Google, which urged everyone to pinpoint important locations such as hospitals, community markets in their respective localities so that these locations become freely accessible to the public. This has generated youth engagement and the youth all over the country to identify those important locations, and eventually, these will be used to serve the inhabitants of the localities. We have seen the selfless act of many frontline doctors who have stayed away from their families for extended periods to treat COVID patients. To help them keep in touch with their families, Grameenphone offered 30GB data package for a validity of six months at the cost of BDT 1 only.
We made this offer available to 25,000 listed doctors, of which 19,000 have already opted in. Many Grameenphone customers were also unable to recharge their balance while the lockdown was there in April due to various restrictions and were imposed to prevent the spread of coronavirus. We offered 10 minutes free to such 1 crore existing prepaid customers so that they could continue staying in touch with their loved ones. We also extended expiration of these connections till 31st of May, when the lockdown actually has been withdrawn by the government side. We introduced reduced call rate of BDT 0.48 per minute from 8:00 A.M. to 12:00 P.M. for a recharge of BDT 48, which can be availed by our entire sub-base. Ensuring health and safety for our employees is one of our top priorities in this situation.
As such, we have been working from home since middle of March. Over the past few years, we have invested in upskilling our workforce, transforming our organization, and introduced modernization initiatives, which has created digital enablement of our employees. As a result, our workforce was rapidly able to adapt to work from home with digital empowerment. We are still continuing work from home with that enablement and with that engagement for our employees. For the select few of our workforce who still have interface with the external world, we have ensured their safety by taking the recommended measures as well as providing personal protective equipment for them first.
COVID-19 situation and impact, if you would like to see in our society and our market operations, especially, as mentioned earlier, the government declared general holidays from 26th March, extending every few weeks till finally lifting the holidays on 30th May. During the initial few weeks, we faced some challenges as despite telecom being declared as essential service, our value chain did not receive the same recognition, especially when we talk about small retailers. Therefore, we saw a large share of our retailers and point of sales being closed during the initial few days of the holidays. A few areas in the few localities were also completely locked down. We have also experienced a community lockdown due to increased numbers of COVID cases with strict law enforcement measures.
With the help of the stakeholders, local communities, and law enforcement operatives, we were able to get our value chain recognized as essential to telecom services. Gradually, more and more retailers and point of sales were made available over the holiday period. However, during the entire holiday period, most businesses, educational establishments, and other public places were closed, causing a sudden and dramatic decrease in economic activity. Since the holidays have been lifted in May, till now, we have witnessed gradual recovery of our economic activity, even though the measures by the government are still in place selectively. As far as the workforce concerned, an essential part of our operation includes the maintenance of our network and sites. As such, we have many field force employees who were out in the market ensuring connectivity to our customers.
We also have sales executives who constantly liaise with our retailers to encourage recharge and stock availability of our products. It is a priority for us to ensure our own employees and those of our partners and vendors are following the proper health and safety measures. All our field force have been equipped with PPEs, with proper training on social distancing. We also have several health safety measures in place following government's recommended protocols. We have been very successful running our distribution and network operation during this period of lockdown. As far as our point-of-sale concern, to meet the needs of our customers, we have customers walk-in centers operational even though we encourage availing solutions through digital means. At these physical centers, we ensure hygiene and cleanliness of the premises in frequent intervals.
Our staff visiting customers practice individual safety with the use of PPEs, following all recommended social distancing protocol. Now, I would like to briefly discuss our regulatory landscape, as I mentioned previously. The first one being, if I highlight SMP regulation, BTRC actually issued SMP directives for the third time on 21st June, imposing asymmetric MNP locking period and asymmetric approval process for all campaigns, packages, and services effective from 1st of July. Again, on 20th June, BTRC has also issued a fourth SMP directive imposing asymmetric interconnection charge of BDT 0.07 per minute versus BDT 0.10 per minute, effective from 16th July. On 14 June, GP wrote to BTRC requesting to review its latest directives and filed a writ petition on 20th June, getting no response from BTRC side since then. However, on 30th June, BTRC responded to GP's letter.
On 1st July, GP sent a letter to BTRC informing that GP disagrees with BTRC's rationale. However, that GP would comply with BTRC's directives under protest and without prejudice to its rights under law. GP intends to work with BTRC so that the emergent SMP regime is anchored in the principles of the market-based competition and global best practices. On 2nd July, GP appraised BTRC of the execution status of MNP locking period directives, and on 6th July, GP submitted for non-prosecution of writ petition in the virtual bench of the High Court Division. The virtual court ordered the writ petition to be out of the hearing list. To move on to BTRC audit update, GP has been pursuing a resolve audit dispute with BTRC in two tracks, actually, either through legal proceedings or finding an amicable resolution through a transparent process.
The original title suit is now pending at the district court. The next hearing date is fixed on 21st July for reply of BTRC and auditor. Due to limited operation of the courts for COVID-19, as we all understand, situation, no hearing took place neither in the appeal at High Court Division nor in the review petition and Appellate Division on 31st May, which was due after GP had deposited the remainder BDT 10 billion as per court's direction. BTRC has continued to broadly comply with the order by gradually withdrawing operational restrictions. Briefly to touch upon the TowerCo license. The TowerCo regime actually is still not functional. What we see, we are in a continuous dialogue with TowerCos and the BTRC to see an outcome of these dialogues favorably for the industry.
Now, I would basically like to invite our CFO, Jens Becker, to take you through our financial performance in details. Jens.
Thank you, Azman. Good morning, everyone, and thank you for joining us today. I will proceed with our presentation, starting with an overview of our financial performance. In the second quarter, our growth in the revenue and profitability was negatively impacted by the COVID-19 situation. This was a result of the country-wide general holidays and the COVID-19 related restriction and countermeasures, leading to an economic downturn as described by Azman before. After the sharp revenue decline in April, however, recovery started from May, which was further impacted by the imposition of increased supplementary duty, which increased from 10% to 15%, starting from 11th June. In summary, Grameenphone had 8.1% year-on-year degrowth in subs and traffic revenue, leading to 10% decrease in EBITDA.
With the gradual NOC approval from BTRC, CapEx to sales ratio for the quarter improved at 7.5% on a standalone basis, which was only 1.1% in the previous quarter. EPS for the quarter stood at BDT 5.38. We turn to the next slide on the subscribers. The subscriber acquisition in the second quarter was negatively impacted. The general holidays resulting into 0.8 million negative net adds during Q2 and 2.1 million lower net adds compared to last year, where we had 1.3 million net adds positively last year's quarter. Our sub-base for the quarter stood at 74.5 million, reflecting a 1.1 degrowth from previous quarter. As of May 2020, the mobile industry lost 3.8 million subscribers compared to previous quarter, which is a 2.3% degrowth. Grameenphone subscription market share has improved to 46%, with a 0.4 percentage points improvement from previous quarter. It has been 45.6% in Q1.
The 4G population coverage reached 77.1% with a 1.8 percentage points increase from last quarter on this. Turning to the next slide, please. The subscription and traffic revenue had a sharp decline in terms of year-on-year growth after the declaration of the general holidays from 26th of March. After this sharp decline in April, gradual recovery started from May, which was further impacted by the imposition of the increased supplementary duty. At the end of the second quarter, Grameenphone is yet to reach the positive year-on-year growth, which is also subject to the overall economic recovery of the country in the coming days. Next page. The 8.2 year-on-year total revenue degrowth in Q2 is mainly driven by the 8.1% fall in subscription and traffic revenues and the lower other revenues from interconnection and devices.
The BDT 2.7 billion decrease in subscription traffic revenue is mainly driven by a fall in voice revenues, roughly -BDT 3.9 billion, which is partly offset by a higher data revenue, +BDT 1.2 billion. The voice revenue decreased by 15.6% in a combination of a 10.9% fall in outgoing minutes and a 5.3% dilution in voice APPM. Data revenue continued to growth with the rate of 16.7%. Next page. The 16.7% growth that you see here in the data revenue was mainly driven by an 11.7% increase in the data ARPU. As of Q2, data revenue contributes to 25.7% of service revenue, which was 24% in the previous quarter.
The data user acquisition in the second quarter was positively impacted by the number series availability, along with the expansion of network capacity with the gradual NOC approvals that we got. The number of data users for the quarter stood at 40.9 million, with a 1.2% increase from last quarter. With our continued focus on the 4G conversion, the 4G data users increased by 0.9 million, while total data users increased by 0.5 million from previous quarter. Next slide. On the service ARPU, the lower service ARPU that you see was mainly impacted by the lower contribution from voice and interconnection, which is partly offset by the higher contribution from data. The lower contribution from voice is mainly attributed to lower usage during general holidays, where the outgoing average minutes per user decreased by 10.7%. 148 versus 166, while voice average price per user decreased by 5.3%.
The growth in data ARPU came from continued growth in the data usage. Grameenphone's average megabyte per user grew by 65.1%, despite the two months of the general holidays. We have launched several dedicated offers to the market to provide subscribers with a better value under this pandemic COVID-19 situation. On the OpEx side, return. You see that our efficient OpEx management led to a year-on-year 6.7% OpEx degrowth, including our CSR contribution that Azman mentioned before for the COVID-19. The OpEx for the quarter stood at BDT 10.3 billion, and this lower OpEx is mainly attributed to the lower revenue-driven cost and lower overhead expenses. The 10% degrowth in EBITDA is mainly driven by the lower revenue during the general holidays and the increased cost for the enhanced bandwidth capacity. Our EBITDA margin could be maintained at 62.4% for the quarter.
In terms of our investment, we resumed in Q2 with this gradual NOC approval from our regulators starting from the end of Q1. The majority of the Q2 investment were focused towards 4G capacity expansion and the network modernization. We rolled out 132 4G sites and 13 3G sites in the second quarter, despite having the general holiday. The number of 4G sites reached 10,351 at the end of the quarter. On the net profit, we saw a 23.9% decrease in the NPAT, which was mainly driven by the lower EBITDA modernization cost and some higher financing cost. The lower EBITDA, as mentioned before, mainly driven by the lower revenue. Regarding the modernization cost, this relates to our organizational restructuring that we have, and the higher finance cost were mainly driven by the higher FX losses and the interest expenses.
On the operating cash flow, we had BDT 1 billion lower in the second quarter compared to last year, and this de-growth is mainly driven by the BDT 2.3 billion de-growth in EBITDA, which was partly offset by also lower BDT 1.3 billion CapEx. Our net debt stood at BDT 0.9 billion. The BDT 4.3 billion increase in net debt from last quarter comes mainly from a BDT 2.2 billion lower cash balance, excluding the restricted cash and a BDT 2.1 billion higher liability. In terms of the contribution to the national exchequer, during the first six months of 2020, Grameenphone has paid BDT 46.7 billion, equaling 67% of our total revenues to the national exchequer in the form of taxes, VAT, duties, revenue share, and fees related to license and spectrum.
For the interim cash dividend, I'm pleased to inform you that the board of directors of Grameenphone has recommended 130% of paid-up capital as a cash interim dividend for 2020. This is equivalent to 98% of our profit after taxes, with our dividend per share comes to BDT 13 with this. Finishing here the overview of the financials, would now like to welcome back Azman to conclude our presentation before we then go into the Q&A.
Sorry, I was in mute probably. COVID-19, what we have seen has left its mark on our business performance and growth momentum. As we witness gradual recovery, we will continue to focus on strengthening our network with planned investment. Undoubtedly, we are facing one of the toughest situation in recent history that also brings high uncertainty and risk to human life. Our dedication to our communities and the betterment of our societies will always remain at our core as we will continue to use our expertise and aid our government in battling this pandemic. We are all together into it. Thank you, Jens, taking us through the numbers of quarter two. I would now like to hand over to Maureen for our Q&A session.
Okay.
Thank you very much.
Thank you, Azman. Thank you, Jens. We have a couple of questions already.
Yes. Let me start with the first one I see here. There's a question, let me read out. In case of digital reload mix, are the profitability margins better, worse, the same? What % of the revenues go to bKash, digital wallet providers, banks, et cetera? Is it higher, lower than that of the traditional channels? For reloads through digital channels, it's far more convenient to customers and is more empowering. For this, also more efficient. Reloads through digital channels is still lower than physical channels. The mix improved by 10 percentage points from the pre-COVID-19 level. On what we have here, next one, payment to suppliers, contractors, and others increased by 76% year-on-year in the last six months. Why does it happen?
Here, you have to reflect that this includes the adjustable BDT 20 billion deposit to BTRC in the months of February 2020 and May 2020 that we have made. Please let us know about your increased debt financing in this quarter. Here we have at the end of June, loans and borrowings include a short-term bank loan of what is BDT 5 billion on it. For December, we still had the last installment for the International Finance Corporation, IFC, that we have paid back here. I think that is from the finance side. There's a question on, I think, Azman, for you on the service level agreements for BTRC. Is it?
Yes, I think it's some BTRC imposed a complete agreement in place of service level agreement on MNOs. It is obviously, what I clearly understand it's on TowerCo. What we believe this could ultimately result in non-competitive TowerCo market, not in favor of customers need what we see.
We have some more questions rolling in. "What are the first major changes in customer behavior you have observed compared to the pre-pandemic level?
I can take it.
Yes, sir.
I think, as we mentioned already that there was a 10% jump we have seen in terms of our recharge pattern towards the digital channel. That one was very intended from the very beginning. We have also seen that customers change in terms of their locations. Their usage patterns from metro and semi-urban towards the rural over Bangladesh, which is still continuing to a great extent. The reason being I'm bringing into the perspective, because this has implications on the way we build our network strength and maneuver, and which we were pretty successful during this period. Other than that, I would say that obviously, during the presentations, we mentioned that there is a dip in voice, whereas that data continues with a healthy growth. That indicates the users' pattern.
Just to continue with that same question, did you see any drop in the level of digital recharge after the holiday was over?
This is, you'd say till end of June, it was basically holding back.
Jens, there's a question for you. "Could you please explain what drove higher salaries and personal costs during the quarter?
Yes. I think this include the restructuring costs that we have for the modernization.
Okay. We have one question from Consortium. "Can you elaborate on the SMP regulatory issue a bit more? And how will this impact the operations incrementally for the rest of the year?" Unfortunately, we will not be giving out any forward-looking statements because we are prohibited by our SEC to do so. There are more details on the SMP issue on our documents. We will wait a few more minutes for any more questions. Okay. Since there are no more questions, we will end the call here. Again, if anybody has any questions or if you would like a meeting with us, please get in touch with me. Send me an email, we'll set something up. Thank you very much. Thank you, Azman and Jens for the session today. I hope you all stay safe.
Thank you.
Thank you very much.
Thank you, everyone.
Goodbye