Good evening, everyone. Welcome to Grameenphone's first quarter earnings call for the year 2025. I'm Chowdhury Tazrian Israt from Investor Relations. Joining me on today's call are Mr. Yasir Azman, our CEO, and Mr. Otto Risbakk, our CFO. The recording of this call, along with the earnings release presentation, financial report, and other documents, will be available in the quarterly results section of our Investor Relations website. Starting this quarter, we will be conducting the Q&A session on Microsoft Teams following the presentation. Invites have already been shared with our investors and analysts. If you'd like to participate, please feel free to share your email address with me during the call, and we'll make sure to include you. With that, let's get it over to our CEO, Mr. Yasir Azman, to tell us more about the business updates.
Good evening, everyone. Thank you for joining us for our Quarter 1 2025 earnings call. I'm Yasir Azman, Chief Executive Officer of Grameenphone. As per our regulators' report, as of February 2025, there has been a decline in subscribers for the telecommunications industry in Bangladesh, with 186.50 million subscribers reported for the month, decreasing by 1.08 million subscribers from December 2024. During the same time frame, mobile data users decreased by 1.04 million, reaching 116.03 million in February 2025. Let me now touch upon some of the key macroeconomic updates. Increase of supplementary duty in telecom service from 15% to 20%, and increase of SIM Tax from BDT 200- BDT 300, burdening our consumers with heavy tax. The point-to-point inflation rate has eased a bit to 9.32% in March 2025. Bangladesh Bank is publishing daily dollar rates, with the value of US dollar remaining comparatively stable.
As per IFC, Bangladesh's GDP growth rate for fiscal year 2024 to 2025 has been revised to around 4%, with further prediction of rebounding the following year to 6.7%. Now, let's delve into the detailed aspect of our business updates for this quarter. We have faced an economic downturn since the second half of last year, which has been putting significant pressure on businesses, including the telecom sector. Although we are still navigating through the challenges of this difficult macro environment, with the strategic measures we have put in place, our financial performance is improving. The revenue decline has slowed from previous quarters, and we expect further improvement moving forward. We are stepping into a new era of innovation through the transformation of our IT and network infrastructure, laying the foundation of a data and digital-centric economy in the country.
Each quarter, we are driving significant IT transformation initiatives that are boosting service reliability and delivering highly personalized experiences. On the network front, we are decentralizing our data centers to reduce latency, improve responsiveness, and bring content closer to our users. This modular architecture is adapting to regional demand and supporting AI integration for smarter, more efficient digital experiences. While the overall market conditions have been tough, I'm happy to share we have witnessed an increase in both data usage and user growth in Quarter 1 2025. Customized data packs, AI and machine learning-backed personalized offers, and data-driven services through our digital and physical channels helped us to get this momentum. Additionally, our number one network infrastructure has supported increased data demand, ensuring faster speeds, reliable connectivity, and seamless services. We are innovating across technology, experience, and engagement for our customers.
This quarter has been marked by innovation across the board, whether in technology, marketing, or the way we engage with our customers. This quarter included one of our peak seasons, which is Eid. To ensure seamless connectivity and customer experience across the nation during this high-traffic period, we leverage advanced data analytics and predictive modeling to anticipate traffic patterns and strategically allocate network resources. Reflecting our continued drive to enhance customer experience through innovation, we made a major milestone this quarter with the launch of the country's first-ever VoLTE roaming services. VoLTE roaming provides exceptional 4G call quality for our customers abroad, while also establishing a strong foundation for the future rollout of 5G roaming. The service is now live in Malaysia and Norway, with more countries to follow.
We also launched a gamified customer delight program with time-limited offers this quarter, which was an innovative marketing approach designed to generate excitement around our products and counter the Ramadan revenue dip. We successfully drove engagement and boosted product uptake, hence increased revenue. We remain committed to expanding household connectivity with GPFi, our fixed wireless broadband service. This quarter, as part of our efforts to bridge the digital divide, we made connectivity more inclusive by introducing low-cost routers that bring affordable internet to our rural communities. At the same time, we are deeply committed to our premium customers, introducing the country's first-ever wireless mesh solution to enhance wider network coverage and deliver a seamless experience. We will now move to the four strategic pillars that are guiding our transformation journey to a future-fit organization.
At the core, it is customer-centricity, ensuring our efforts are aligned with the evolving needs of our customers. MyGP continues to be the largest telco self-service app in Bangladesh, with now 21 million monthly active users with increased revenue contribution. There are continuous developments to bring in engagement services into MyGP app. Contextual services like introduction of Ramadan-specific services such as Ibadah, an exclusive Muslim Pro partnership enabled 2.4 million users to access the app for different religious contents. This year, we are set to redefine customer service with our omnichannel strategy, ensuring that our customers receive seamless support whenever they need it. We have launched three key services channels for enhanced customer experience: WhatsApp Roaming for roaming-related queries, WhatsApp Promotional Channel for updates and offers, and a smart IVR system that allows customers to access services in just three easy steps.
Aligned with our AI-first ambition, we are building strong AI capabilities through both in-house development and global partnerships with Meta, BCG, and others. From deploying GenAI chatbots to AI-driven recommendation engines, our efforts are driving growth, operational efficiency, and enhanced customer experience while ensuring a foundation for responsible AI. We have completed the final step in achieving full geo-redundancy in the revenue management domain, ensuring uninterrupted service. In the event of a failure at one data center or site, another site in a different region can seamlessly resume operations, ensuring no disruption in our service. By implementing site-level redundancy, we have enhanced network reliability, mitigated service disruption risks, and improved system stability, resulting in a better customer experience. We are driving deeper internet penetration by expanding 4G adoption and device responsibility.
In Q1, we introduced low-priced 4G cloud phones designed to empower even the most marginal communities to join the digital economy. While over 50,000 devices have already been onboarded, this is just the beginning, an approach that will continue to scale and strengthen internet penetration across the country. Capturing the same essence of transformation, Touch-Free Distribution, which is our industry-first initiative to automate and digitize GP's distribution processes, is gaining traction in partnership with new banks. This is a journey that started back in 2023, and as of Quarter 1 2025, 37% of our existing distribution houses have adopted this system. Despite the challenges of a slower economy, our B2B segment experienced positive growth of 5.1% year-on-year this quarter, with our ICT and IoT products also gaining significant traction.
These products are still in their early stages, and we aim to capitalize on their potential as they continue to develop in the future. Our ICT revenue saw a remarkable growth of 34% this quarter. Sustainability is a part of Grameenphone's growth and legacy. All our efforts are centered around reducing our environmental impact, advancing digital inclusion, and fostering a sustainable future for all. We have marked our place as a sustainable leader, and we shall continue our commitment in making a positive difference in the communities we serve. We work closely with our partners and vendors to ensure that sustainability standards are met across the board. As of March 2025, a staggering 56% of our total spend for the last 12 months was towards suppliers who commit to reduce carbon footprint and have targets set for Science Based Targets initiative.
We have been advancing policy reforms on Corporate Power Purchase Agreements in Bangladesh to support our decarbonization goals, and we are actively collaborating with various national and international organizations to further this effort. Online safety and women empowerment have always remained key priorities for us in our effort to build an inclusive digital future. Our Digital Inclusion Project has trained more than 3.1 million people last year, and this quarter, we continue this journey of upskilling over 220,000 individuals, mostly women from marginalized communities, equipping them with essential digital skills and online safety. We wrapped our flagship GP Accelerator program, celebrating the journey of empowering young entrepreneurs across Bangladesh, honoring top 20 startups and 30 key community builders. Through 20 regional bootcamps, the program trained over 5,200 young entrepreneurs, empowering Bangladesh's next generation of innovators and driving inclusive digital growth.
Lastly, I'm very happy to announce that we have started S2 sustainability reporting, fully aligned with international standards, making a big achievement for Grameenphone. At the first in the industry to adopt this comprehensive reporting framework, this report underlines our commitment to transparency and reasonable, responsible corporate practices. We'll hear more insights on the sustainability reporting from our Chief Accountant, Faiaze and then over to CFO, Otto Risbakk, to take you through our financial performance for Quarter One, and then I will come back to summarize the session.
Thanks, Azman Bhai, for introducing and referring. We are proud to inform that in the latest annual report of the year 2024, we reinforced our highest commitment towards transparency and global best practices regarding sustainability reporting. We have voluntarily adopted the ISSB standards, IFRS S1 and S2, which are effective from the year 2024, and issued, aiming to standardize and enhance the reporting of sustainability-related financial information. We have also prepared our annual report by taking inspiration from European Sustainability Reporting Standards and gave an update on our contribution to UN SDGs.
We identified key sustainability risks and opportunities through double materiality assessment, ensuring relevant and value-driven disclosures. To ensure the accuracy and reliability of the information presented, this report has also undergone external limited assurance by an external auditor in accordance with the recently approved International Standard on Sustainability Assurance. To the best of our knowledge, we are the first listed organization in Bangladesh to adopt ISSB standards and have external limited assurance for sustainability reporting at the same time. Such proactive decisions and actions underscore our unwavering commitment to the well-being of society and the environment, recognizing the immense value these standards bring to our sustainability efforts. Needless to mention that we will continue the journey of improving our sustainability report in the upcoming days. Thank you.
Thank you, Azman , and a big thank you to all of our investors and participants for joining us today. In today's financial presentation, I will be guiding through our four main areas of focus. We will start, as usual, with the revenue metrics and then move down the P&L and finish with the balance sheet. Let us begin with the highlights from the first quarter. If you remember when we presented the fourth quarter results, I said that we expected the economy to gradually improve during 2025.
I'm pleased to report that that is exactly what we have been seeing on the ground. If I look at Q1 normalized, revenue was down around 5% in the last quarter of 2024. I should add that this was not caused by GP underperforming. Now that all the numbers from the competitors are out, we see that GP has increased both revenue and subscriber market share slightly in the second half of 2024. In the first quarter of 2025, we see that the positive momentum from Q4 last year and the impact of the recovery of the economy is reducing the decline from around 5% in the fourth quarter to 2.5% this quarter. If I adjust for the leap year effect, the reduction is only 1.4%.
We are still feeling some impact of the challenging macro environment that started in Q3 of last year, but we see good signs of recovery, and I believe that we have a good basis to build on. Moving down the slide, we can see how the top-line decline and higher operating expenses driven by continued network expansion and modernization initiatives have impacted EBITDA, declining with 8.1%. Delivering BDT 22 billion EBITDA and maintaining solid margins around 57% is a good performance in a challenging market. Let me give some background on the cost side. We have decided to continue our modernization despite the weaker macro. We actually think it is quite a good time to invest as opposed to only in periods when the economy is going full speed.
What we are trying to build is a scalable operational machine that is future-proofed both in terms of AI capabilities and cloud. Typically, you will see the full benefits of such investments over time and, in particular, in a growth scenario. In this quarter, as the cost at the revenue has been declined, we do not see the full effect of all the investments that we are doing. Moving to the bottom line, NPAT this quarter ended at BDT 6.3 billion with a margin of 16.5%. On a reported basis, this is a decline of almost 53%, but if I normalize for the reversal of our tax provision that we booked in the first quarter last year, the decline was 24.9%.
The lower net profit after tax reflects the top-line decline, but also higher cost and depreciation from continued modernization, higher and higher finance costs, mainly due to balance sheet restatements from a weaker Bangladeshi Taka. Operating Cash Flow stood at BDT 17.2 billion, and that is a robust margin of 45%. To summarize, I'm very pleased with the first quarter where we continue to show solid margin. I also believe that we're well prepared to capture the benefits of AI and cloud, and in particular, when the markets start to grow again. In my lifetime, I have never seen such a rapid technology development, and it will be interesting to work with all our stakeholders to shape the future of GP and Bangladesh. Now let's turn to the development of key value drivers, starting with the subscriber base.
As shown on these graphs, we are seeing an increase in the subscriber base, both Q- on- Q and year- on- year. On a year-on-year basis, our total subscriber base grew by 2.2%, with active data users increasing by 4.4%. Let me also highlight that we did quite well in the second half of 2024. While the industry has lost around 10 million subscribers since July 2024, GP accounted just for 1 million of that loss. The subscriber growth this quarter reflects all the investment that I explained earlier were done on the network and the excellent execution on the ground. We continue to also see strong churn management, and as anticipated in the last quarter, the gradual recovery of the economy is leading to a rebound both in data usage and subscriber growth.
I would like to send a huge thanks to our technology and commercial teams for the efforts during Ramadan and the Eid. This is a particularly important period for all our customers and partners, and it has been great to see that the network performance has been fantastic, and the energy on the front line has also been awesome in all corners of the country. As we enter Q2, we remain optimistic and hopeful that the economy will continue to improve. Now moving on to ARPU and usage. Here we can see that the early signs of economic recovery I talked about on the previous slides have had a noticeable and positive impact both on ARPU and on data consumption. After two consecutive quarters of decline, ARPU has finally taken an uptick in Q1 this quarter and is growing from a low of BDT 145- BDT 148 this quarter.
We still see a decline from the pre-unrest levels in 2024, but we are confident that we will continue to see gradual improvements as the macro improves. Similarly, the graph in the center shows that data consumption, which began to recover already last quarter, kept up its upward momentum this quarter. In this quarter, we've seen a growth of 11% Q- on- Q and 7% year- on- year. We see that the levels of data consumption now are higher, 7% higher than the pre-revolution levels last year. On the right side of this slide, we can see that the voice volume has gradually decreased, which is part of a broader industry trend as consumers transition from more voice-centric to more data-centric solutions. We anticipate that this shift will continue as 4G penetration and data usage grow in the coming years.
Turning to revenue, on this slide, you can see that the revenue declined 2.5% year on year on total revenue, with substantial traffic revenue dropping 2.4%. This decline is a reflection of the more cautious consumer spending due to the weak macro conditions that I explained previously. However, as you can see on the green line, the recovery is quite noticeable in Q1, with a decline going from 7%- 2.5% on the reported figure. However, if I normalize the last quarter of 2024 and the first quarter of this year, we can see that the decline has been reduced from 4.9% last quarter to 1.4% this quarter. Higher data usage is the main driver behind the recovery, together with very resilient voice. Note that in this quarter and also in the next quarter, we are still comparing post-revolution numbers with pre-revolution numbers last year.
From Q3, we will start comparing to post-revolution numbers, which means lower comparables. Now let's move to the cost side and the EBITDA. On this slide on the left, you can see that OPEX grew by 7.6% compared to Q1 last year, but we can also see that OPEX has been quite stable since the second quarter in 2024. More than half of this increase in cost comes from our IT and network modernization efforts and higher energy costs. On the network side, we are expanding the network and strengthening the core, whereas on the IT side, we are implementing several state-of-the-art cloud-native and AI-native solutions. On the core side, we are implementing advanced solutions from Huawei and ZTE.
One of the use cases of this is to use AI to reduce electricity consumption on our towers, but all solutions come with advanced AI capabilities that will become very valuable going forward. You have probably seen in media that we also signed an agreement with Ericsson for implementing the next-generation state-of-the-art billing and customer management platform. We believe that that will be a great asset moving forward. We are also continuously doing investments to enhance our cybersecurity side. With these investments, we will have a platform that is both scalable and future-proof, and our ambition is to bring the OPEX inflation down over time. I believe the impact will be more visible when we see growth resume as the costs related to these new investments are more fixed in nature.
In this quarter, you have also seen growth in sales and marketing costs and personnel costs reflecting a sticky inflation. We are hopeful that the government will succeed in taming the inflation over time, and when they do, we will see the impact also in our P&L. On the right side of this page, you can see that the EBITDA for the quarter came in at BDT 22 billion, a decline of 8.1% year on year, driven by the lower revenue and also increased costs. However, despite the negative macro impact on revenue and costs, we managed to maintain an impressive EBITDA margin of 57.4%, underscoring the resilience of our business and the strength of our cost management efforts, even in a challenging macroeconomic environment.
Moving to the bottom line, we see that thanks to the resilient operational performance in a very challenging environment, net profit after tax reached BDT 6.3 billion, or a margin of 16.5%. On a reported basis, we see a 53% decline year over year of net profit. However, excluding the one-off reversal of the tax provision I mentioned earlier, net profit is down only by 24.9%, reflecting mainly the revenue decline of BDT 1 billion and the cost increase of BDT 0.9 billion, along with higher depreciation costs as well as foreign exchange losses this quarter from currency restatements. The corresponding EPS for the quarter is BDT 4.7. Finally, let's take a look at some of our major balance sheet items.
As you can see from the graph in the middle, we have continued to generate strong operating cash flow, maintaining a robust margin of 45% and delivering BDT 17.2 billion in cash flow this quarter. This kind of cash flow shows the strength of our operating and operating model and our ability to weather economic challenges. On the right side of the slide, you can see that we continue to have a very strong leverage position with almost no debt.
This quarter, we are cash positive, but you will see that this level will fluctuate with dividend payments and CapEx. For your ease, I've also prepared this time a summary slide comparing Q1 2025 with Q1 2024, where you can see the deviations and the main drivers line by line. Feel free to contact Tazrian if you have further questions on the development. Let me turn the word back to Azman to summarize the quarter.
At Grameenphone, we take a proactive and integrated approach to both external challenges, like regulatory shifts and economic pressures, and internal vulnerabilities across systems, processes, and people. Our risk management team works closely with leadership, embedding risk into strategy and fostering a culture of resilience. We have structured tools and a robust framework with which we ensure compliance, protect assets, and support informed decision-making. We understand the need for robust cybersecurity defenses across the company, for which we continue strengthening our defenses against the evolving cyber threats. Insider threat detection time has been reduced by half using AI-based cybersecurity monitoring capability, which significantly lowers the potential for data leakage. We have significantly reduced high-risk travel after sundown across our operations through key initiatives and interventions.
Overall, only 6% of our total travel now occurs after sundown, a 50% reduction from the previous quarter, reflecting our commitment to safer and more responsible field operations. We are dedicated to building an inclusive environment for all customers, including those with disabilities. This year, we launched a sign language translation service, enabling individuals and their support personnel to communicate more easily through trained agents. The service has been widely used for everyday needs like medical visits, family counseling, and vendor interactions, empowering users to navigate life with greater independence and confidence. In closing, I want to thank you for taking the time to connect with us on this call today. While the external environment remains dynamic, we are navigating it with clarity, discipline, and a strong sense of purpose.
As a leading service provider in the country, we understand the critical role we play, not just in delivering connectivity, but in shaping a resilient and forward-looking digital economy and ecosystem. Looking ahead, our focus remains clear to sustain the momentum of innovation. We are continuing to invest in cutting-edge technology, digitalize our operations, and continually enhance the customer experience. With early signs of economic recovery, we are confident that our business is well-positioned to return to a growth trajectory in the coming days. Thank you very much for your listening.
Thank you, Azman Bhai and Otto, for the quarter updates, and that brings us to the end of today's presentation. The Q&A session will begin shortly on Microsoft Teams at 9:45 P.M. local time. We look forward to sharing updates, answering your questions, and hearing your thoughts. Thank you all for joining the call.