and gentlemen, welcome to the Proximus Conference Call on the Q4 2021 results. For your information, this conference is being recorded. At this time, I would like to turn the call over to the Proximus CEO, Guillaume Boutin. Sir, please go ahead.
Thank you, Clotilde. Good afternoon to all of you, and also from my side, welcome to this conference call on the Proximus fourth quarter results. Let me kick off with this slide summarizing some of our key achievements. Achievements we can be proud of, and that all have contributed to achieving the goals we had set for ourselves for 2021. I will come back on this in more detail in a few minutes. An important achievement, of course, is meeting the guidance for 2021, with the company delivering on all metrics. I'm also pleased to announce that the board of directors approved to propose to the General Assembly of April to return to our shareholders the promised dividend of 1.2 EUR gross per share.
Before taking a closer look at the results of 2021, let me walk you through some noteworthy steps forward we have taken in our Inspire 2022 strategy. With climate change remaining a key concern, I'm pleased we have made further progress to help where we can on that front. In every decision-making process, we embed green ideas, but we also have taken specific actions to reduce our own carbon footprint and help our customers to reduce emissions on their sites too. Thanks to the Green Bond we issued in November, we can sustainably invest in our future-proof and energy-friendly gigabit networks. On the fiber front, I'm very proud of how our deployment is evolving. Proximus Fiber is being rolled out in 35 cities as we speak, and our fiber partners too have now started civil works in 10 cities.
Really moving fast, and we are ready to further scale up this capacity with the ambition to grow our footprint by 10% on an annualized basis as from end 2022. Over the last three months of 2021, we have achieved a significant step-up in our fiber rollout, passing an additional 126,000 homes and businesses, beating our own objectives. With this, our footprint reached 813,000 homes and businesses, meaning close to 14%, 1/4, of all Belgium premises. For 2022, we'll add to this more than 500,000 additional homes, and hence we'll move our fiber footprint above the 20% mark by end of this year. At the same time, we have been able to keep the build cost well under control.
We continuously look for ways to optimize our construction cost, and for 2021, our cost per home passed in the so-called brownfields stayed on average below EUR 800, which is 5% better versus what we had planned before. Overall, our goal is to become and remain the undisputed network leader in Belgium. Not only we'll be broadening our fiber footprint, we'll also further improve our offer. Over the coming next 10 months, we have several launches in the pipeline. Already in a few weeks from now, customers will be enjoying higher upstream speeds. In the May timeframe, we launch a brand-new Wi-Fi 6 gateway, which will be the first Wi-Fi 6 gateway of the Belgian market. By the end of the year, we aim to activate 10 gig specs in the first couple of fiber cities.
Our network leadership ambition also applies for mobile. Already today, Proximus is recognized for its very good 4G connections. To keep up the superior mobile experience, we also invest in the deployment of our 5G network with the objective to reach national indoor coverage for Belgium by 2024. In meantime, we have already demonstrated multiple use cases with business customers, and this in a wide range of sectors. Over the past year, we also realized major milestones in terms of digital innovations, bringing us closer to becoming the digital companion of our customers. For example, by improving access to healthcare through our teleconsultation solution, Doktr, but also by better protecting our customers in an increasingly digital world by developing expertise in cybersecurity.
We have also close partnerships to support our business customers in their digital transformation, just to name a few, with BICS through aug-e joint- venture or with HCLTech to develop hybrid cloud solutions. As a final point on this first part, as we have announced in December, we are in the process of taking TeleSign public through a business combination with NAAC. A transaction that implies a pro forma enterprise value of TeleSign of $1.3 billion. The transaction is ongoing, and we expect to close this in Q2 2022 with the listing of TeleSign on the Nasdaq. Turning now to the second part of my introduction. One of the goals we had set to ourselves was to improve our net promoter score, NPS.
I'm very pleased that the many initiatives that we have taken on this front have clearly delivered, as you can see on the slide, especially as a better customer experience is key in our ambition to further grow our customer base. As you can see on the chart, we had a strong commercial momentum on all fronts over the fourth quarter. Including the good momentum in the enterprise segment, we grew the group mobile postpaid by 53,000 cards, which represents the strongest growth in 10 years. With our fiber footprint increasing, our consumer unit sees an increasing traction for its fiber offers. By end 2021, 123,000 customers had the fiber subscription, with typically a higher ARPC and a lower churn.
We see a swift technology switch in the fiber zones, with 65% of our customers having moved to fiber one year after we started selling fiber in that particular zone. From a revenue perspective, our consumer unit shows a nice trajectory as shown on the chart. We closed the last quarter of 2021 with a 2.7% revenue growth while remaining stable on organic basis. Conversions remain core to our strategy with sustained support for our Flex offers. We continue to attract multi-mobile customers in our base, which benefits the overall ARPC, growing year-on-year by 0.7%. Now turning to our B2B unit, which continued to perform very well. The fourth quarter revenue grew by 1.9%, and this despite the ongoing intense competitive dynamics in the market. Let's first have a look at the ICT domain.
The positive evolution of the chart is proof of the good progress we are making on the B2B transformation. The ICT services revenue is showing sequential growth. In contrast, revenue for low-margin ICT products remains stable, with the global chip shortage continuing to affect some of our hardware suppliers. On the telecom side for B2B, we also maintain a good revenue momentum with good results for internet and especially for mobile, with a 3.6% revenue growth. Turning to our wholesale unit. As shown on the chart at the right, we turned around an historical declining trend in our wholesale broadband park, supported by our fiber rollout. Wholesale revenues from fixed and mobile services were up by 6.4%. Of course, today still on a limited total revenue, but I remain convinced there is a great growth opportunity in wholesale on the midterm.
This brings me to the total domestic revenue for the last quarter of the year, which was up in total by 2.4% and higher by 1% on organic basis. On the international front, I'm very pleased with the growth in revenue and EBITDA for BICS, which resulted from a strong performance in A2P messaging, cloud communication, and a gradual recovery of roaming. Following the completion of the acquisition of 3m Digital Networks, BICS is well positioned to address new digital communication use cases in the enterprise market. For 2021, the enterprise revenue represented already well above 20% of the total revenue of BICS. As for the legacy voice and messaging business, this continued to benefit from a favorable destination mix, reflecting the trading nature of this part of the business. Turning to our other international platform, TeleSign.
TeleSign had a strong fourth quarter performance, especially on digital identity. It proves for TeleSign another important step in its journey to become the global leader in that area. With a good sales performance over the last quarter, TeleSign achieved for the full year 2021 nearly 23% revenue growth on constant currency. Moving now to the operating cost of the group. Here, I just want to highlight that our domestic OpEx was up by 3.4% on organic basis. With our ongoing cost efficiency program offsetting in part the higher cost related, among others, the inflation, wage indexation, but also some phasing impacts, cost related to higher customer volumes and cloudification effects.
As you can see on the chart, the year-on-year increase in domestic OpEx was the main driver for the lower fourth quarter group EBITDA, while the domestic direct margin was positive. Our full-year CapEx level came in as expected at EUR 1.2 billion. The increase from last year was largely driven by our investments in the gigabit networks with the fiber-related investments now representing 31% of the total CapEx envelope. Including the significant investments in our networks and the equity injections into two fiber JVs, our full-year free cash flow for the year 2021 was solid at EUR 376 million on a normalized basis, and hence covering for our annual dividend. The financial position of the company remains very sound, with our net debt- on -EBITDA ratio end 2021 at 1.55 x.
That is it for the 2021 results, and that leads me to give a quick view on our expectation for 2022. We are now entering the final year of our Inspire 2022 strategic cycle, and this on the solid trajectory of the past year. 2022 is already bringing some fresh challenges with steeper inflation rates. Nonetheless, we keep our ambition very high. We continue to focus on our domestic growth, for which we expect both revenues, excluding terminals, and underlying EBITDA to go up by up to 1%. Including TeleSign and BICS, we anticipate the underlying group EBITDA to be down by around -1%.
In line with our announced fiber rollout strategy, the group CapEx for 2022 is expected to rise to close to EUR 1.3 billion and our debt ratio to be around 1.6x EBITDA. As a final remark, we reiterate our commitment to an attractive shareholder return with the aim of paying an annual growth dividend of EUR 1.2 per share for the 2022 result, which is in line with our announced three-year dividend policy over the 2020 - 2022 period. Thank you. Now it's time for questions.
Thank you, sir. Ladies and gentlemen, if you wish to ask a question, you may press zero one on your telephone keypad.
Thank you.
First question is from Mr. Nicolas Cote-Colisson from HSBC. Sir, please go ahead.
Thank you. Hi, Guillaume. One question on TeleSign, or maybe two actually. The market has been quite tough with peers here today, so I wonder if you could come back on the technical aspects of the IPO. What could go wrong from a process point of view or from a pricing point of view? Because you agreed on $1.3 billion EV to secure 67% stake. I just wanted to check if numbers can remain. The second question on TeleSign is I'm trying to understand the volume and price dynamics there, if it makes any sense, 'cause I've got no doubt about the volume trajectory, but on pricing I've got more doubt. So any color on this would be helpful. I may have a follow-up, a short follow-up on the guidance. Thank you.
Mark, do you want to take this one?
Thanks, Guillaume. Thanks, Nicolas. On the process, I think we are progressing well. You know, we filed a confidential S-4 in December, and we're currently closing the year audit financials for TeleSign, and we will progress to filing a public S-4 in due course. Initial discussions with the SEC are going well. In terms of the overall process, we will, you know, start to engage with investors through March and April with an intended vote, you know, around mid-April.
At this point, you know, we're cognizant of the various elements going on in the market, but at this point, from a TeleSign process perspective, we feel everything is in line and going as we expected. In terms of the overall results, again, I think you saw Q4 was in line with what we expected and what TeleSign guided broadly. That business, you know, we feel is progressing operationally exactly as we expected and we're pleased with the performance so far. In terms of performance, I think, as we said, you know, it overall from a CPaaS perspective, it was slightly lighter.
That was all related to a specific client in terms of we chose, from a profitability perspective, not to pursue on the CPaaS side. On digital identity side, you can see from our Q4 results, we're very pleased with the volume of transactions that are ramping on digital identity. That's overall, I think TeleSign and the process towards IPO is progressing well, you know, albeit the market conditions are, you know, volatile to a certain extent.
Okay. No, that's very helpful. The 67% stake is something that will not move whatever it takes?
No. No, we don't expect so. Now again, you know, as always, you know, there is factors in a SPAC process in terms of the overall redemption profile that will come through. You know, we don't necessarily have influence over that. You know, we'll be discussing with investors in terms of, you know, what that looks like. As I said, you know, pro forma conditions that we set out in December remain as is.
Many thanks. That's very helpful. My follow-up is super short. Just on the group EBITDA, the pro forma revenue and EBITDA guidance, how do you take into account for the pro forma, Mobile Vikings? Are you taking Mobile Vikings contribution for the full year, 2021?
Yeah, exactly. Yeah. Mobile Vikings is in our full year guidance. You know, in terms of the contribution, I think you know, there's numbers out there that you'll be able to work that through. You know, from a top-line perspective, revenue guidance on domestic includes Mobile Vikings and just, you know, including that, we will still see a growing underlying domestic business augmented by the Mobile Vikings.
Okay. Mobile Vikings, also for the full year of 2021 for the sake of the comparison.
Sorry. For comparison, no. The comparison period is the stub period that we've owned it only. 2022 is fully in.
To 2022 takes 100% of, I mean, the full year of
Exactly.
Mobile Vikings.
Exactly.
When 2021 the comparison basis is only call it, six months.
Exactly.
Okay. Thank you.
Just for the sake of clarity, even if we exclude Mobile Vikings for the guidance, we plan to grow domestically next year.
Exactly.
on both revenues and EBITDA.
Okay.
Mobile Vikings is just an accelerator to that return to growth story.
It augments the underlying consumer business, correct?
Perfect. Thank you both.
Thank you, sir. Next question is from Mr. David Vagman from ING. Sir, please go ahead.
Yes. Good afternoon, everyone, and thanks for taking my question. First concerning the 2022 domestic EBITDA guidance and let's say the building blocks, what type of commercial net adds dynamics are you counting on for 2022? I've got a bit of the impression that the broadband market, let's say the COVID boost all players enjoy is kind of slowing down or nearing the end. In terms of net savings, so for 2022, what should we expect now if we could get some kind of update of your savings plan, especially taking into account you know, the acceleration of the inflation, the wage inflation, maybe some more on energy as well. That's my first question.
Second and last question, concerning Fiberklaar and Eurofiber. Maybe it's a bit early for 2022, but I'm also interested for 2023 and beyond. How should we best model the rental costs that I think from an accounting point of view, you'll have to book for these two networks? Could you give us a sense of the economics basically, and the margin impact, with some indication also maybe of the phasing of this impact over the coming years? Thank you.
Hi, David. Let me start. Maybe Jim can jump on in the net add dynamics. I think you saw from our Q4 numbers. I think the momentum, certainly the start numbers continues. We're very pleased with the pack and the net add dynamics both on mobile, on internet, on fiber and TV. That's great. We continue to, you know, we don't see that trending away immediately. I think, you know, our guidance continues to assume that we get momentum and certainly early trends in January continues to show that. We feel good on that. Maybe Jim, I'll let you come back in.
On net savings, I don't think we're disclosing overall net savings elements. In terms of our EUR 400 million gross savings plan, we're very well on track with that. I think, you know, I'm sure we're gonna get into discussion on inflation. We are clearly looking at, you know, whether we can accelerate some of those elements into 2022 to offset some of the, you know, more recent indexation elements. I think, you know, we feel confident that we'll be able to do that to a good extent. That's that.
In terms of Fiberklaar and Eurofiber, as I said, we haven't gone into any detail in terms of how that's gonna affect it, but it won't have a significant operating expense for Proximus in 2022 at all or and marginally in 2023. I think that's where we are on JVs. Jim, do you wanna talk any more on dynamics?
Yes, Mark. Thank you. David, on the commercial part, of course, we continue to build on the traction that we have seen in Q4, and we expect to continue to see that growth also continuing in 2022. As you know, fiber is gonna become more and more omnipresent in Belgium as well. We really see a good traction of fiber from a commercial perspective as well. We indeed continue to expect to have the performances that we have seen in Q4 going forward as well.
Just to add a last color on the market dynamics, I think the good performance of Proximus in Q4 is not linked to unusual promotional activities. It's really linked to the thing that we shared in the slides, you know, better NPS. I think the very important progress we made on NPS are starting to pay off. This is the work that we are doing on the brands and on the different brands that we have around Proximus, Mobile Vikings now and Scarlet that is starting to pay off. Also, the effort we make in digital experiences, that is also starting to make a difference. Last but not least, the product superiority of our networks.
We have the best mobile network of the country. Now with fiber, the perception that Proximus also in the north of the country is really providing the best connectivity is starting to be present. Now there is a debate actually, as we speak around in Belgium around what is the best technology between coax and fiber. That debate was not happening months ago or one year ago, two years ago. Now the debate is happening. Of course, our fiber technology is going to be the best one. So it's really important for you to understand that we are convinced that we want to grow thanks to our product superiority and not thanks to aggressive promotional activities.
That's really important to note.
Yes. Thank you very much. If I may, a very quick follow-up on exactly on this point. How do you see the take-up rate of fiber evolving now that you have, let's say, kind of a 12 months, so it's not more track record on that? Based on, let's say, the installation you have, and then, I don't know, let's say, one year later, the take-up rate, I mean, also beyond your own customer base.
When you look at the fill rate that we see today on the fiber network, 12 months after deployment, we are fully in line with the ambitions that we have set at the Capital Markets Day in 2020, where we now reach 29% penetration on the fiber network, one year after deployment. We're really seeing the traction that we want to have. I think we're also, like Guillaume said at the beginning, of that fiber supremacy we announced this morning, that we're gonna launch a 10 Gigs XGS-PON-capable technologies by the end of 2022.
We're really convinced that we're gonna continue to build on the good traction that we see in the market today.
Thank you. Thank you very much.
Thank you, sir. Next question is from Mr. Roshan Ranjit from Deutsche Bank. Sir, please go ahead.
Good afternoon. Thank you for the questions. Just three quick ones, please. Just to follow up on the previous point, on the broadband market, I think you said, you know, very good KPIs, which I think, you know, your peers have also reported through last week. If I think back maybe, you know, a couple of quarters, I think everyone was maybe cautioning on that tailwind continuing through FY 2022, but it seems to, you know, the momentum is there. Can I ask then on price increases?
You know, I see you put your typical inflation-linked price increase at the beginning of the year, but do you think that there is scope for further price increases through the year, particularly as you said, you know, your NPS scores are quite good on the initial fiber take-up. Secondly, moving to the OpEx. Now, you mentioned some of the items affecting your OpEx trend this quarter. Can I check what kind of component of that will be carrying forward? I guess clearly the inflation-based wage indexation, energy. You also mentioned some volumes reflecting in the commercial momentum. I assume that will ramp up. So any additional info you could give there will be good. Lastly, just to check on the CapEx.
Now this year for 2022, you're guiding to EUR 1.3 billion. If I think back to your fiber update, you said this was the kind of peak level we should think. Is it fair to assume, you know, EUR 1.3 billion for FY 2023 and maybe also FY 2024? Thank you.
In the broadband market, indeed, we have experienced nicely growing broadband market over the past 18 months or past two years, I would say, with the COVID crisis kicking in. You know, I think that going forward, the good thing about that market is I think there is enough room for growth for all operators, probably. That also why all operators have a rational behavior in terms of marketing strategies. I think that what you see since a few quarters now is that Proximus is really winning the high end of the market, that's the dynamic.
We are more and more attracting the best customers of the country. That is related to product superiority, the brand perception of Proximus, which is really increasing on the market, and all the effort we put, as I said before, in customer experiences. That's a little bit to your point. There is room for everyone to grow, but I think we are making some good and nice progress in the high end of the market. You can also see that on the TV net adds and the fiber take-up, which is also really important.
In terms of our ability to increase pricing, I think this is clearly something that we have in mind. Why that? Because indeed we are in a context of very high inflation rates. As you know, there is no automatic pricing indexation of the telco contract in Belgium, as opposed to some other countries. You know, with the NPS that we have, with the strength of our brands, I think we have some pricing power and we might move in H1 in some price increases on some products.
On OpEx, I would give the floor to Mark.
Yeah, I'll take that.
Thank you, Richard. On OpEx, maybe start off a little bit with you know, the inflation pressures we're feeling. We are clearly open to the indexation on internal wage costs. I think that's something that let me come back to that. On energy, I think we said before, energy in the short- term, we've got a limited exposure to, we're hedged through Q1 2023. I think although there's a small part unhedged in 2022, it's not as material effect as you would think. In terms of our you know, contractual positions with some of the external contracts, we're in a reasonable good position.
Overall inflationary exposure is primarily on the wage-related part, but it is, you know, it is a reasonably material number. That's maybe the first part. On customer, as you said, yes, you know, we had a good momentum in Q4. Those customer costs are coming through specifically kind of installation-type costs on migration. That's one part. We also have, and I think we've been clear on that through the year in terms of transformation costs on digital, on MWingz. And then we've also got some kind of cloudification costs coming through from just kind of a transfer from CapEx. That's the way I would kind of think it through.
Q4, I'd also maybe just point out we also had, I'd say kind of, you know, phasing or non-recurring in nature, amounts round about EUR 68 million related to workforce provisions that we've made, and also the startup costs for programs like our ATL program. I think that's maybe how you could think about it. In terms of the inflationary part, in terms of the Q4 increase, you know, you probably think through somewhere around a quarter of that increase was inflation related. Hopefully that gives you some guidance to think through for 2022. On CapEx, the question there on EUR 1.3 billion being the peak.
I think again, if you look back at our Capital Markets Day disclosures, EUR 1.3 billion was the peak that we disclosed at that point. We continue to believe that's the case. 2023 will be broadly the same. It will not be higher than 2022. As we get into 2024 and beyond, we see that moderating quite quickly down to a more normalized run rate, if you look back in history in terms of what Proximus would normally run rate at. That's roughly where we are.
That's perfect. Thank you very much, guys.
Thank you, sir. Next question is from Mr. Polo Tang from UBS. Sir, please go ahead.
Yeah, hi. I just have two questions. The first one's on broadband. Orange Belgium has increased broadband prices by 5% at the start of this year. I'm just interested to know what impact this has had on the market, and have you noticed any shifts in gross adds or NPS between operators in terms of January, February. The second question is really just about VOO. With Orange Belgium acquiring VOO, what impact do you think this will have in terms of the competitive dynamics in Wallonia, and how do you think about the impact on the broader Belgium market? Thanks.
Thanks for the question. On the first question, on the indexation that we did in January, that was actually an indexation that we did on the tariffs that are in the, I would say, the non-commercialized tariffs. And that was an indexation that was more on the level of 2% on those tariffs. As these are not commercialized tariffs, of course, this hasn't impacted the commercial dynamics that we have seen in January, February. We're still very satisfied with the performance. Like I said, on Q4, and like Guillaume mentioned as well, we have very good dynamics for the moment, on the different brands, on the market.
Fiber is gonna continue to feed those dynamics, so we're really comfortable going forward on that performance. On the impact of the potential impact of VOO Orange. As you know, in Proximus, we have the benefit of being able to work with three strong brands. With Proximus mainly working on the convergence, Scarlet on the low cost, and then Mobile Vikings more on the data savvy customer base. Each have very strong NPS performances as well. Through those brands, we can really address the market in a very segmented way. We're confident that with the offers that we have today in the market, we will be able to continue to win the market also in Wallonia.
Just to add.
Sorry can you-
Just to add, because I think on OBEL price increased 5%, because I think it was your initial question.
All right.
As you can see, Jim hasn't noticed it, so apparently no impact on the market at all. I think no impact for OBEL, neither for us. This is really not a big theme here in Belgium, that price increase. Just one additional comment on VOO, because sometimes I'm hearing that VOO was not a good competitor, but this is not completely correct. VOO was not a bad competitor, and even sometimes a little bit aggressive in terms of marketing strategies. I think that the VOO acquisition is rather, you know, a good news.
It was not a mystery that it was not the worst scenario for Proximus that VOO to be acquired by Orange. I think it strengthened the case of a continued rationality for the market. Also a case for us to really work on that product superiority, thanks to the rollout of our fiber in the Walloon region as well.
Thanks.
Thank you, sir. Next question is from Mr. Joshua Mills from BNP Paribas Exane. Sir, please go ahead.
Hi, guys. Thanks very much. Two questions from my side. The first is just trying to get a bit more color on how you see the revenue dynamics developing in consumer versus enterprise as we go into 2022. I guess going back to one of the earlier questions, if I take Mobile Vikings out of the guidance and kind of normalize for that, I suppose you're basically looking at somewhere between 0.5% and 1% revenue growth domestically next year, which is a touch lower than the 1% underlying organic you delivered in 2021. Is that the enterprise segment which did quite well in 2021 is maybe gonna be a bit slow in 2022, or it's a slowdown in consumer? Just love to get your thoughts on that.
The second question is around your fiber strategy and then partnership with either Telenet or Orange Belgium. Both management teams I think on recent calls have talked about the opportunity of getting into the trenches and the ducts when you dig them up to do your own fiber build and using that as an opportunity to upgrade their own cable systems. Could you give us a sense of how much money you could make from that? How it works? Is it do they pay you when they get into the ducts? Do they share the cost of the labor? And ultimately, could this be an opportunity for you to reduce the CapEx burden and the fiber to the home contract, you know, costs going forward as it looks like you've already done? Thanks very much.
Maybe I'll take the first one, and then I don't know, Jim, you'll take the second one. On overall growth, I think, Joshua, I think you're kind of close to it. I think consumer, you know, we see a continued
Next year, supported by the momentum we've seen in the market and the momentum we continue to experience next year, we expect some pricing, fiber monetization, fiber migration. Consumer, we think, is on a good track. In terms of enterprise, maybe I'll let Anne-Sophie talk a little bit more about the operational dynamics, but enterprise very pleased with the last two quarters. I think we've seen and talking about that the resilience, the management of the telco business. I think the team have done a very good job there.
The ICT world continues to progress in the way that we want to, but we're still, you know, we're still in a transition period for the enterprise business, and we're still in that view that it will fully transition back to growth in 2023. 2021 did have some, you know, following winds in terms of some of the COVID impacts in terms of usage. Also, to a certain extent, the supply chain constraints on some of the box moving type equipment will continue into 2022. Enterprise will continue to, in our view, be a transition year through 2022.
Maybe I'll pause there and, Anne-Sophie, do you want to put any other color on that before we turn to the fiber question?
Just one additional comment on the consumer dynamics, because it was also the center of your question. In 2022, you're gonna have only but accelerated trends in our consumer revenue dynamics, excluding Mobile Vikings.
Okay. On your second question. When we deploy fiber, there is always a mix of indeed deployment on façade, but also deployment through trenching. Now in Belgium, it's as such that these trenches they are always open for synergies. What we see that is indeed in a part of the streets that we open up for our fiber deployment that Telenet is sometimes following to anticipate probably a number of things. Now, what is important to mention there is that it's a normal way of working that happens in a good operational collaboration. This is not causing us any delay at all. The machine we keep on speeding up our machine.
Indeed, on the opposite, I would say it enables us to kind of co-finance some of those trenches. Typically, when you have, say if you have two parties following in a trench, well, there are kind of cost distribution rules that you cut at that moment in time for the trenching part, the cost in half. That is then I would say the bit, the opposite, the positive side of this all. In a sense, what is important is that we see in a fraction where we open up the street, this happening. Our network is a combination of façade and trenching, so following us in part of the trenching doesn't make another fiber network either.
Got it. Maybe just one clarification, 'cause I think Telenet on one of their conference calls had said that they think about 25% of their network is, you know, fully ducted and 45% or so is on façades, and for the rest aerial. Is that broadly the same with your network? I'm just trying to think about what longer- term, assuming VOO and Telenet do want to partner, the how much of your fiber upgrade could potentially be cheaper if you do those partnerships. Is that 25% or not?
I think it's a bit too early to comment on those kind of dynamics. I think we're really focusing on rolling out our own network for the moment. I think we're gonna have time for discussing those elements, you know, later on. It's a bit too early to discuss this kind of metrics with you.
Got it. Thanks very much.
Thank you, sir. Next question is from Mr. Martin Hammerschmidt from Citi. Sir, please go ahead.
Yeah, thank you for taking my questions. I have a couple. The first one is could you walk us through the mechanics of like how wage is gonna increase in line with the health index? I.e., do you increase them every time as soon as the four-month average exceeds 2%, which means there might be another adjustment coming in April, and then maybe even another one if inflation comes high further down in the year. In your domestic EBITDA guidance, how many more wage increases have you backed in? On TeleSign, I think you just mentioned that you're gonna engage with investors in March and April. Could you give us a timeline on when you expect to list TeleSign?
To what extent will you know if there might be redemptions, more redemptions coming that you might expect? Because I think we've seen, one of the telco services SPACs in the U.S. was, canceled because, redemptions were too high. I think that happened sort of last week. The third one is on CapEx. You mentioned in your presentation that, your rollout cost per home is 5% better than you initially planned. At the same time, you still sort of guide for sort of fully EUR 1.3 billion CapEx. Is that a function of you rolling out faster than you might have expected at the beginning? Or where are those rollout savings, going to be invested instead? Thank you.
Let me take the wages and the TeleSign question. Maybe you take the CapEx one or the rollout one. Martin. On the wages. Effectively, the mechanism is once the health index reaches a specific level, it triggers an automatic wage indexation in Belgium. In terms of what we've got in our guidance, we had one of those in October, and that's fully in. We've got one in February and one in April. Both of those are fully in the guidance. There's a discussion of a third one towards the later end of the year, but given that it's likely to be the tail end of the year, it's gonna be immaterial in nature.
That's fully in, and as I said earlier, you know, our overall growth savings program is such that, you know, we use that in terms of prioritizing and accelerating as we can to mitigate those where we can. I think that's where we are in terms of the overall wage indexation. In terms of timeline, as I said, you know, we are on track for a mid-April closing. And that will, you know, follow various investor engagements in March, a proxy discussion or proxy vote with the NAAC shareholders through the end of March into April. We saw the recent market developments on there.
Again, as I said, you know, TeleSign is a different company and has its own merits. We, you know, the feedback we're getting from investors so far is very positive, so we will wait and see how that process runs out. At the moment, we fully believe we're on track for a mid-April listing. In terms of CapEx here, do you wanna take that one or you want me to?
No, it's fine, Mark. I can take that. You can add something if you want. If you look in fact at the speed that we realized last year, well, in fact, we went as fast as we could. That was the idea, and it's true that we went a bit faster than what we've planned, but it was not seen in the CapEx figures due to indeed that we were capable, in addition to as well do it at better unit cost. Now, for next year, our intention is still to keep on working on both elements. Of course, you have seen, next year we're doing again about a times two.
We go as well from higher density to more or less density, meaning that it's more meters of trenching per home passed, et cetera. At work volume, the times two is even underestimated. At the same time, we will keep on searching to do better on the unit cost.
Thank you. If I could just add a quick one real quick. In your domestic revenue guidance, you've talked about a possible price increase. Is the price increase included in your 1% growth guidance, or would there be an upside? Thank you.
I think the guidance both some price increases for some products are including the guidance and all the worst case scenario on the wages indexation.
The guidance, correct.
Thank you.
Thank you, sir. Next question is from Mr. Alexander Caldwell from Jefferies. Sir, please go ahead.
Hi. Thank you for taking my questions. I mean, most of them all have been asked, but I have a few. Telenet talked about having a 5G CapEx step up in 2022. I wondered if you could talk around how much CapEx you have budgeted for 5G next year. My second question would just be on supply chain issues. I wondered if they are having any potential impact on your fiber rollout plans for 2022. If you could just talk around how much equity injections would be needed for the two JVs next year. Thank you.
On the 5G CapEx, we don't disclose the value, but there is a step up, but it's fairly material at the overall group level. We do see a step up in 2022, and that's included in our EUR 1.3 billion guidance. In terms of the supply chain, Geert, I'll maybe let you comment on that. In terms of the equity injections needed for 2022, there is a further equity injection expected in 2022, but it's of the same magnitude as we've done in 2021. I think you can get that from our disclosures.
On your second question with respect to the supply chain, of course, we see higher delays in getting material, but we have anticipated on that. We have a plan in place where, you know, that we are even right now already looking at volumes that we're going to do in 2023. We are anticipating and preparing all the necessary steps, not only for the months to come, but in fact, we're also already today looking at our plan of 2023. In that sense, this is not a hindering element towards our rollout.
Okay, thank you.
Thank you, sir. Next question is from Mr. Simon Coles from Barclays. Sir, please go ahead.
Hi, it's Simon from Barclays. Thanks for taking the questions and Nicola on the other questions. I had two, please. Just on the free cash flow bridge into 2022, because when I look at company consensus, that has quite a material drop in free cash flow, which looks largely linked to the step-up in CapEx. But you obviously came in higher than what people were expecting for 2021. So I'm just wondering on the moving parts, working capital, tax, interest, etc. It sounds like equity injections are the same, like you said, EUR 100 million extra for CapEx. Those other lines, it would be great to get some additional color, please. Just secondly, on VOO.
I mean, Guillaume, you said that they've been aggressive at times, and they've always been a strong fixed operator. Could you give us a bit more color on the difference between Consumer and Enterprise? Because I think from the outside, our expectation would be that it's largely a consumer operator and never really played in enterprise. Now it's potentially gonna get bought by Orange. Is that something that could change and how have you seen them in the Enterprise segment in the past? Thank you.
Simon, let me take the free cash flow. Indeed, for 2021 we were, you know, slightly higher than consensus. I think, you gotta look a little beyond the pure accounting CapEx numbers. The cash CapEx doesn't necessarily follow the true CapEx. That's, you know, there's certainly a part of that in 2021, which will reverse out into 2022. We do continue to, you know, concentrate on business working capital, and we did see some improvements. We have a structural program looking at, as you'd expect, on AP accounts receivable inventories. That was a little bit also of where we had some benefit in 2021, which again, I would see repeating in 2022.
I think that in terms of how to get to 2022, I think, you know, generally the consensus is in the right direction. We are gonna have to step down primarily because the increase in CapEx. I do think we will have a, you know, a timing effect of the better cash CapEx that we had in 2021 reversing out in 2022. Again, in terms of, you know, magnitude, it's, you know, EUR 40-50 million in that kind of range. I think that's the way that I would think about it.
definitely, you know, the consensus is going in the right direction and as you said is you know primarily related to our investment ramp up and the cash timing of that. On the second question,
M-Mark.
Guillaume, do you wanna take that?
Yeah, Mark, maybe it's Anne-Sophie. I can take the second question. Hello, Simon. I'm responsible for the enterprise unit here at Proximus. With regards to VOO, I have to say that we've hardly seen them in the enterprise market thus far, if at all. We're of course, going to be looking very carefully at what Orange decides to do, but we don't expect any material impact.
That's great. Thank you. Sorry, Mark, can I just follow up? Cash taxes was obviously very different this year versus the year before. Is there any reason to expect it changes in 2022?
Yeah, as I said, the cash CapEx, you know, there will be.
Sorry, cash tax.
Cash tax. Again, we will look, we kinda look at that on a timely basis as and when. Yeah, we're not disclosing fully, you know, any significant movement in that. As I said, I think we tend to make a decision on that on a cash basis as the year progresses. I think that's probably the biggest movements that you need to think through are really the cash CapEx pieces, I would think. The working capital and tax effects will generally neutralize themselves out in our planning at this point.
That's great. Thank you so much.
Okay.
Thank you, sir. We have one last question from Mr. Emmanuel Carlier from Kempen. Sir, please go ahead.
Yes. Hi, good afternoon. Yeah, my question has actually already been answered, but maybe you can still clarify it a little bit. It's on the guidance on EBITDA. During the call, I think you mentioned several times that you might raise some prices during 2022. I just want to know, is that already included in the guidance or not?
I think I said it twice already.
Yeah.
I will repeat. Indeed, this is including in the guidance both the worst case scenario in terms of wage indexation that we could have this year. Also some price adjustments for some packages.
Yeah. Okay, thanks.
Thank you, sir. We have no other questions. Ladies and gentlemen, I would like to remind you that if you wish to ask one, you may press zero one on your telephone keypad. We have another question from Mr. Alexandre Roncier from Bank of America. Sir, please go ahead.
Hi, guys. Thanks for taking the question. I would just wanted to ask on the dividend and, you know, obviously, you know, we are at the end of the 2019-2022, like, commitment on EUR 1.2. I was just wondering what's really stopping you from renewing that commitment heading into 2023, given that, well, you know, you've already planned the sale or partial divestment of TeleSign and, you know, you've already made all those fiber joint venture plans. What's really the framework you're thinking about in terms of shareholder distribution from 2023 onwards? Thank you.
Yeah, good question. I think it's a little bit early to discuss that matter. It's a broad discussion that needs to happen. But what I can say is that, you know, as already stated in our Capital Markets Day and something I also repeated several times, we are committed to come back to free cash flow coverage in midterm at the current level of dividend payment. That commitment, I think, still remains.
All right. Thank you.
Thank you, sir. We have no other questions. Back to you for the conclusion.
Thank you all for participating in this call. Should you have any follow-up questions, you can address those to me. I wish you all a very great weekend.
Happy birthday, Nancy.
Thank you. Thank you.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.