Earnings Call: Q2 2021

Aug 5, 2021

Good morning, ladies and gentlemen. Welcome to XL Exciator's Earnings Call for the First Half of twenty twenty one Non GAAP Year Ended June 30. My name is Ajay, and I will be your coordinator today. During the presentation, all participants are in listen only mode. Instructions will be given on how to register your questions when we get the question and answer session. As a reminder, This conference is being recorded for replay purposes. Now we would like to turn the conference over to our host, Mr. Inder. Please proceed, sir. Thank you, Ajay. Good morning, everyone, and welcome to the call today. Firstly, just a small housekeeping matter. We have prepared a backup MS Teams link, which we sent out That link is in listen only mode in addition to the main conference line. If you are using both the lines, please mute the MS Team link to avoid any audio issues. With me on the call today are Ibu Diem, our Chief Executive Officer Pak Budi, our Chief Financial Officer Pak David, our Chief Commercial Officer for Consumer And Abhijit, our Chief Commercial Officer for Enterprise and Home. Now, Ibu Dien will share the highlights for the first half of twenty twenty one, which will then be followed by the Q and A session. I will now hand the call over to Ebonya. Thank you, Inger, and good morning to everyone. We are happy to report a strong set of second quarter numbers despite the ongoing impacts of the COVID-nineteen pandemic and the weak Indonesia economy. This is due to the improving market environment, Our right product strategy, this is generally strong in the current period and also because of our network quality improvement. As a result of the consistent execution and implementation of our operational excellence strategy, we are on track to is our vision of becoming the number one converged operator in Indonesia. This quarter, we are happy to report a strong rebound in revenue growth with our revenue growing 8% quarter on quarter in the second quarter. Refund coupled with rising EBITDA as well by 8% Q on view due to cost efficiency. Our net volume is continued to rise as well, increasing by 23% Q on view in the Q2 to rup395 billion. However, the situation on the ground has drastically in the past month with the latest unprecedented spike in COVID-nineteen cases, resulting in lockdown across Japa and Bali. As a result, economic activity has been severely affected with a development going up, which will result which will result in income and consumer spending power being impacted. This constraint means there might be an impact to Industry, which is worse than our initial prediction of recovery in the second half. On a more positive note, COVID-nineteen has accelerated our transformation agenda for our long term goal of becoming a fully digitalized operator. This is through a partial digitization of our business processes from the front end to distribution and our internal processes. This will create long term benefits in the form of business and cost efficiency. We also continue to execute on our With a strong focus and on giving our customer what they want. Through our customer intimacy strategy, we are focused On giving our customers the best product and customer experience in the market and not just offering them the lowest price list. We also continue to develop our analytics capabilities, which enables us to successfully upsell our customers to better product operation and almost ensuring we deliver the right product for the right customer. Following the success of our package, Accra, being the 1st offer of February, where you can share quota with your family members, We have further expanded on this with the recent launch of Exaxe Safu Fibers. Exaxe Safu Fibers is the 1st truly converged Offering in the market with a quota on both mobile and fixed, putting us further along our path of achieving our vision to become a truly conference Operator, although it is still in the early stages, we are seeing good traction from the market for these comforted products, indicating strong new market of product of this type in the market, especially in the current work and school Current work and school from home situation. Positively, our 2nd pack months in ex JALPA continues to do well for us And growth continues to be well ahead of JALPA growth rate, increasing its contribution to our revenue to 30% in Q2 2021. Our investments that we have made, there are delivery reasons and payback in line with what we had initially planned. We will continue to invest in Exelqara, guided by our professional external principle and strategy and ensure that we can continue to see growth And deliver reasons for our stakeholders. Our network for hours and upgrades continues to be on track And this, we continue to roll out our network on schedule with our VCS count now above 156,000 With 40% in 4 58 cc across Indonesia with more than 65,040 bps. The key now is that infrastructure development needs to be modified. What used to be thought as a temporary trend, Sadegh's work from home and work from home is now becoming a more permanent part of living and working. Therefore, There is a need to invest in our network to ensure a high level of service is available for those both in and outside major cities. We have therefore started putting in more investment in these areas and improving the network quality that will support the business growth. This is an addition to modernizing both our active and transport networks as well as revamping and upgrading our IT systems. Our balance sheet remains strong with net debt to EBITDA of 1x. We have no USD debt, and we have also secured committed facilities We have entered into a non binding term seat with the major shareholders of LiveMed with a view to acquire a 66 0.03% stake in the company. At this point, we have not made any binding offer, and the transaction is It's subject to due diligence and negotiation between the parties. If all goes well, we have We hope to enter into a sales and purchase agreement in around 4 weeks' time. This is the next step in our strategy and vision to become the number one operator in Indonesia, and we are well on track to executing that vision. We will make further announcements on date and when necessary. Finally, we would like to reiterate our guidance for the year. In 2021, we are guiding for revenue growth to be in line with market. EBITDA margins in the low 50% and CapEx To be on $7,000,000,000 for the year. Furthermore, we expect CapEx to be on the higher end of the $7,000,000,000 number also the level of investment we are making. Thank you. And let us proceed to the Q and A session. Thank you, Please kindly but strictly limit your questions to only 2 and to allow other participants to raise questions. We shall end the conference Sharap, 11:30 a. M. Jakarta time. Ajay, can we have the first question? We have our first question. The first question comes from the line Karstenma from Nederich Securities. Hi, hi. I think that's it. Yes, Krishna, go ahead. All right. Thanks for taking the questions. Two questions for me, please. Number 1, would you mind giving some update on the I have a question for me please. Number 1, do you mind giving some update on the EcoTechno fiber, especially How many most fabs added in the 2nd quarter and also how many essential fixed for the subs and excelerate that month and what will be the status for 2021 Perhaps for 2022 as well. I think the question is actually on mobile product distribution. How do you expect from recent mobility restriction? How different is the impact to XL Design versus the restriction back in Q2 2020? And Compared to challenges. Let me just take another one. And when we look back at the cellular new growth recovery in Q2 2021, any sense on how much of that growth Coming from digital channels versus traditional channels, I guess I'm just trying to get some sense of consumer behavior shift post COVID-nineteen and XL? Thank you. Yes. So thank you, Krishna. This is Abhijit. I'll take your first question guidance on So our fixed broadband business, it continues to do well in the first half. And as all of us know, this is driven by a strong demand for home Internet services overall. We have now reached more than 580,000 homes passed. And what we are witnessing is a very healthy penetration rate of 30%, which is an average penetration rate across our whole footprint. In particular, what we are witnessing is a strong demand Ex Java for this. Our ARPU remains healthy with this penetration rate, And this is north of INR 250,000. We have recently launched, as our CEO highlighted, our 1st convergent product, ExelSatu, wherein we approach homes with a converged fixed and mobile proposition. And this is the first step in our journey to become a fully converged operator, offering bundling of fixed and mobile And driving convergence. I think your second conversion question was on mobile. I'll hand it over to David. Hi, Grendel. So answering your second question around the distribution challenges due to the lockdown, right, to the PSBB. So it's true that there has been I mean, through that there is a PSB that we all know and that has some impact In the traditional distribution, some of the retail outlets might be closed, especially in certain areas. So you know that the lockdown has not been On the Guineas in whole Indonesia, so it has been more localized interpenal areas like Jakarta, for example, and that we can see. Now as you were saying, one of the things that we are seeing is that our digital channels are growing very healthily. I can tell you that it's double digit growth from quarter over quarter. But most importantly, That's the user growth. But most importantly, the revenue that we receive from those digital channels is growing even faster That the adoption of the customers, which means that the customers are coming to our digital channels, but they are moving more of the share of the wallet. So we are getting the Better customers and part of the share of the wallet is also moving to data. So this is the trend that we are seeing. It is accelerated because of this Lowdowns, etcetera. Yes, it is. But it is a trend that it is already there and it's quite consistent in the last few months. I don't know if that answers your question. I think that's helpful. Yes. Would you mind, Olivier, maybe you could share How much of the revenues right now are coming from digital channels versus special channels, perhaps in comparison to weak COVID time? I cannot give you the exact As of now, what I can tell you is that the growth in the digital channels, the revenue growth in the digital channels is more than double it's double digit quarter on quarter. Thank you. We have our next question from the line of Arthur Pineda from Citi. Please go ahead. Hi, thanks for the opportunity. Just a few questions, please. Firstly, on the CapEx side, I know you've maintained it at around $7,000,000,000 But are you able to split out between fixed and mobile investments? I'm just wondering how that is trending. And just going back to the fixed line comment, sorry if I missed it, you mentioned you have around 580,000 homes passed. What is your target or ambition for this into the next year? Okay. Let me start by addressing the second question also. Our target is to be the leading number 1 converged operator in Indonesia. And to achieve that target, we launched our business a couple of years ago, as you know, the fixed footprint, and we have a healthy footprint of around 188,000 homes passed. Now as you know, we have announced the first step of the LinkNet transaction. So we will progress according to that and then we'll see where we reach and establish an ambition next year onwards. Yes. After on the first questions on related to CapEx, yes, please stay there. But first of all, I give like a glimpse on Why we still call it $7,000,000,000,000 right now? Right now, we're seeing the traffic pattern In the last one year, post pandemic, people going for work from home and less mobile right now. So we're seeing that as a new normal. And then we start looking at the interest more to strengthening our network, especially on the housing area In Jabota Bay and major suburb. And then we're also modernizing our network and also increasing our fiber footprint Because as you know, as the data continue growing, then fiber footprint needs to become more and more strategic investment that need Be done, right? So with that, with those situation, we continue relooking at our CapEx guidance. So second 3 year may say the number as of now, but we continue looking at this CapEx guidance. So that's the baseline, yes. On the fixed, how much so on the mix, how much it goes to fiber how much goes to mobile. Currently, The majority still goes to mobile because that's where The structure right now because of the demand, right? But again, we're still looking at this CapEx guidance and Soon we will say more. Hope that address your question, Helper. Thank you very much. Thank you. We have our next question On the line of Qingqing Feng from CJS CIMB. Please go ahead. No, we can't No, it's cutting in and out, Fung. Maybe we'll go to the next question first and then we'll try and address yours, come back in. Okay. Okay. So can we go to the next question? The next question comes from the line of Frieder From JPMorgan, please go ahead. Hi. Thanks for the call. My question is regarding the Potential investment in Link. Can you share on how do you plan to fund the acquisition of Link and also share the strategic rationale behind the acquisition? And also if you can share some color on the fixed network that Exel has. Thank you. Vida, thank you. This is Abhijit, let me address the strategic rationale first, and then I'll hand it over to Murali for the funding questions. As we mentioned, our And then it is to become the number one converged operator in Indonesia. We saw this vision about 3 years ago or so. And as a first step of that, We decided to launch our own fiber business, which was an organic deployment because we wanted to test the demand in the market and our ability and capability to And as I shared a few minutes ago, we have achieved a significant scale in our own fiber business. I shared the figures as well. And now the second step of this journey is to scale it even more in order to drive conversions Become the number one converged operator. And as such, LinkNet is considered to be A good company to acquire to help us scale and drive the strategy further. So this is a strategic rationale behind Acquiring Lindt. I'll pass over to Udi for the funding question. Yes. So In terms of how we're going to fund the transaction at this stage, right, we still are evaluating all our funding options Along with Acieta, we as you know, we're always trying to get the most optimum option that we could get in any front, Oppressional excellence in our DNA, so we always try to squeeze anything possible with the optimum option available. So you can name it Right. Issue, bank loan, bonds, local, international, Secoo, all we're exploring. We're looking at the most optimum, then soon we'll share more detail on that one. So that's the success of NAMB Okay. Yes, thank you. Thanks for that. Yes, operator, can we have the next question? We have The next question comes from the line of Sachin Mitchel from DBS. Please go ahead. Yes. I have two questions. Could you Share with us the latest fixed broadband penetration in Indonesia, the latest number that you have with you. Secondly, If we notice the second question is, if we notice in most countries fixed broadband ARPU is 2 to 3 times, whether it's Of the mobile license, perhaps including the pay TV components inside it. So that is differentiated very high, 7 to 8 times. So we are talking about more than US20 dollars kind of ARPU for the fixed broadband side. So could you throw some light? I mean, do you expect this overall fixed cost to come down? Even that, does Treyno, why are the people willing to pay such a high premium for fixed broadband? Is it that for wide quality is bad or And the fixed broadband is very good. The difference seems to be too huge in Indonesia, The ARPU between mobile and fixed broadband. So could you give some color here what are your views on how the ARPUs are going to behave given that titration will rise for 6.1? Thank you, Sachin. This is Abhijit. I'll take both the questions. So yes, Indonesia, unfortunately or fortunately, is amongst the emerging markets with a very low fixed broadband penetration. Right now, it is hovering in the low double digit team figures, so around 10% to 12%. I'm talking about the overall Broadband penetration in Indonesia. Now structurally, if you look at the market, there have been 2 major players in Indonesia. The first is IndiHome Telecom Group and the second one is LinkNet. The rest of the market is pretty fragmented There's a lot of players having very small market shifts. So the first is a low broadband penetration, which means there is a huge pent up demand, which has been enhanced by the current COVID situation and secondly, only 2 major players in the market. Now if you also look at the geography of the country, it is extremely complex. So it is not necessary that competitors compete with them. As such, the players in the market have not felt the need to have a price based competition. And hence, what you see is price points are still high and the resulting ARPUs of the players are still high. So structurally, we still have the view that this is going to continue. The basis of competition in the market It's still predicated upon quality of service, speed, content offerings, providing an overall good customer experience. The market hasn't matured to a level where there is intense competition and the overall penetration has crossed 40%, Which is when typically you start seeing the basis of competition shift to price. Hence, we don't see A very high degree of ARPU decline or a price based competition in the market. Yes. Abhijit, just a follow-up question because The question is we are talking about annual spending of almost US300 dollars for the fixed broadband. You're looking at the fixed broadband ARPU. There is a possibility. Let's compare to even in the Highland, right? Highland has high GDP per capita, But the broadband is almost 70% lower than the export. The question is not about price competition. The question is affordability factor. Does the affordability hurt the pent up demand? That's the question, Ben, actually. Yes. So when we talk about Arun, one thing we need to understand is mobile and fixed are inherently and fundamentally 2 different businesses, right? If you look at the fixed business As a nationwide business, then perhaps that's not the right lens to look at it. It is a very localized business, and the nature of consumer demand and affordability differs Geography to geography. And yes, you are right. An ARPU of $20 approximately a month It's still in the higher range. It's almost like similar to some of the mature markets. But at the same time, even in that demographic, There is a lot of pent up demand. And as I was saying, it's 10% roughly 10% to 12% penetration in the market. So I think there's still some way to go Before we start going out of that demographic, out of that geography and into other geography where the question of affordability starts coming into play. Got it. Very clear. Thank you, Vivek. Thank you. Thank you. We have our next question from the line of Nikhil Kroglari, Degnerix Securities. Please go ahead. Yes. Thank you very much. Congratulations for the good result in the Q2. My question is On the margin expenses and overall for the EBITDA margin, EBITDA margin you suggested would be low Low 50s for the year, currently is at 50%. So my question is And in relation to your comments that marketing expense have increased during Q2 due to expanding distribution footprint. This is It appears that it will be the marketing cost will remain high Well, Q1 and Q2 has been higher. Is this the trend going moving forward? And do you see other cost Do you see cost savings made in other OpEx lines? Yes, that's question number 1. Number 2, I missed in the introduction And Mohit Boudian, what is €8,000,000,000 CapEx in 2022? And What is driving the increase in that number? Thank you. Okay. Let me start with the first question. So you are right, right? Our marketing and sales Cost increased as a percentage of the revenue. So that's a fact. Now there are different factors that have played in this. As you mentioned, I would have mentioned in this, one of it is that we are expanding our footprint and digitalizing our footprint. So that is Part of the increase of the cost. In the Q2, of course, you always have the level of seasonality that also brings it up. We have had also in the last few months a government school program that has also sank a little bit Of the marketing and sales expenses. And even if we're seeing that, as you know, we are now launching New products like the new services like Comberia, right, which is also a new line Of expense. So I think those are the reasons why the marketing and expenses has increased in this first half. We expect it to remain at the numbers that we are seeing at around 8% to 9% most Certainly, in the coming months. Yes. So, Nico, just to add on the whole structure The OpEx margin impact on the margin, right? So David explained about why we spent Marketing and sales in Q2 in the figures. But overall, as As you can see the figure, we managed to ensure that our OpEx are still in the right level. Year on year, our Operating expense lowered by 2%. How we do it? Because we continue pushing our operational excellence Where we make sure every single rupiah that we spend giving the most optimal return to the company. So we continue looking at that Daily, you can. To make sure that every time we spend something, it give us more. How we're going to make sure we go with that? There are a couple of cost Selling opportunities continue we're looking at that are giving us good traction upon other Activity like this market is selling spending that we did because we have a few area because one, as we Explained before, of course, I think coming more on the tower lease renewal where we have around 30% sites coming up For renewal over the next 2 years, we are able to secure RMB10 1,000,000 rental cost tower per month From all our providers, they give us a big lift, right, to relocate the expense to other areas that give us more Faster return, April, like the marketing and selling expense. So those things That we're doing to ensure that we're still hitting the same margin level that we're aiming, which is low 50% level. I'll just address your questions, Niko. You also have questions on CapEx, right? Yes. The second question is on Cepes 2022. For now, we cannot comment on what we're going to do in 2022 Because then probably in near the term, then we can talk more, Nico. Your question was on CapEx 2022, right? Yes. Okay. Thank you. Yes. I think I heard that would be about €8,000,000,000 CapEx. Is that or I missed it? Yes. I think So actually on the ending point of my speech, I'm Actually, I was saying that our CapEx for this year will be on the high end of the JPY 7,000,000,000. And that was because, as also mentioned previously by Udi, because we see that After right now, more than 18 months entering the pandemic, we see that the new normal will reward us To do some life of investment modification. So the trend that we saw that it was like a temporary like Working from home or school from home now become more permanent. So and we see that the Traffic generated from the wholesale areas is now much higher compared to the Oasis business district. So we would need additional investment this year, which will be higher than 73 years or Probably meaning like as period because we will enhance the Internet experience in those crossing areas. Thank you. We have our next question from the line of Chen Kun from CJS No, no, Fum. Your line is too bad. It's very choppy. It's cutting in and out, Feng. Is it possible for you to type the question maybe on MS Teams link? Okay, okay. Thank you. Operator, can we move to the next question, please? Yes, Lisa. We have our next question from the line of Jim Lim from Jimmy, your line is open. You can ask your question. Hi, can you hear me? Yes, Steve. Can you hear me? Yes, Ken. Okay. So First question is what drove the Q on Q prepaid ARPU growth? And second question is Considering the geographical challenges in growing our fiber in Indonesia, when Indonesia's 5 gs network is up, Do you think 5 gs fixed wireless access will be more popular than home fiber when it is available in the market? Thank you. Okay. Regarding the first question, the Q on Q, the ARPU, the ARPU increase. So You have seen that in general the revenue has suffered very good traction, right? And this means I mean, this has come from different things. But the first one is that some of the products that we have launched have behaved very well. And those products are the ACRA family packets, which are higher to package by definition. A second one that is working very well is the one focused on the youth segment that is Paget Tuca Suca, which is also bringing Higher ARPU, that's number 1. Number 2 is the Lebara seasonality. Lebara seasonality usually This also happens, revenue growth, but it is also an RPU increase what we usually see. Number 3 is around our network improvements. So there has been some network improvement that we have done that has allowed us To increase the traffic per subscriber and also the ARPU that they are bringing. And the last one, I will also want to remind that we are seeing that competition It's smoothed in a little bit. It's not worsening. It's going in the correct direction, especially from the incumbent. The rest, it is still It is still aggressive, but the incumbent has put a little bit more of, let's say, common sense or rationality In the market, which is also helping with the ARPUs in the market. So I think I hope that I answered the first question The quarter on quarter ARPU growth, that is also linked to the revenue increase. For the second one, Sahid? Yes. So Jim, this is Abhijit. I'll take your second question. I think geographical challenges are the same, whether you're deploying a fixed network or a radio network, right? So We do have a complex geography. Now if your question is if I understood correctly, you were asking about 5 gs being more popular. So if you're asking whether 5 gs will replace fiber infrastructure for fixed broadband, the answer is no. And the evidence we are seeing even from mature markets is that when it comes to fixed broadband to the residences and enterprises, Cyber is predominantly the first choice. But I do think that it will act as a complementary technology. As in when it is launched in Indonesia, especially on the enterprise side, I guess. Does that answer your question? Okay. Thank you very much. Thank you. Thank you. We have on the line with Alexo. Please go ahead. Thank you. I have two questions and congratulations on the great set of the numbers. The first is regarding your growth In subscriber, in the Q2, it is strong, no doubt, Wadi. But I'm just wondering the impact of would your growth have been Stronger or has it been slightly impeded by the movement restrictions? Can you put that in Malaysia? All right. That's my first question. The second question is regarding your potential acquisition of PT Link. I think it looks very good. I mean in terms of valuation, if EBITDA is lower than But in terms of output for fiber, It is about 3 times higher than your postpaid So I'm just wondering, for your regulators in Indonesia, Are there any potential risks that maybe a move to lower Fiber rates going forward are similar to experiences in Malaysia. So let me start by tackling the second question since I'm sitting near the microphone. I'll grab it from David. So let's address the question on the Fixed ARPU is right. As I was explaining earlier, Alex, structurally, the market is different to Malaysia and other mature markets, right? We have 2 major players and overall penetration is very low. It's in the 10% to 12% range. So fundamentally, there is no reason for players to engage in a price based competition. So as such, we don't see Any reason for anyone to start playing on price and consequently reduction in ARPUs? Well, If you look to the future, what are the challenges on ARPU in a fixed broadband business? They are typical as you would see in any market, right, including pay TV, for example, or the way people consume content, It is shifting towards OTT, etcetera. So these are typical challenges, and they are not unique to Indonesia. And we'll be addressing them As and when they rise up. Does that answer your question? Yes. Thank you very much. I'll hand it to the right David. So for the first question on the growth of the mobile subscribers, Yes. As you mentioned, we are seeing a very healthy growth in our mobile subscribers. It's been already a few months that we have seen this traction. And it's not linked to the PSPP or to the lockdowns. I mean, we believe for the fact that we see is that it's linked to our go to market strategy and Strengthening of our digital services that we are offering. As I was saying before, we have launched a few Digital services, family packets, Tsukasuka or Make Your Own access in the youth that are having a good traction. So that we believe that the customer experience and the digital services that we are providing are allowing us to Increase our market share, number of subscribers faster than what was happening Previously. So I think those are the main reasons, but not the pandemic or the lockdown. So going forward, you expect this kind of growth in the subscribers to continue at least for the next 1 to 2 years? 1 to 2 years, it's a long one, yes. So we are seeing still that we are in a good growth momentum, and I Expect it to still remain like that. Okay, thank you very much. That's all for me. Thank you. I would like to hand the call to our host to read out the question from one of our other team. Thank you. Yes. Okay. Everyone, Phuong has texted me his questions, so I'll just read them out. The first question is for Abhijit. With the potential acquisition of LinkNet, does that complete the puzzle for XL to pursue its ambition to be the leading converged operator in Indonesia? Or would there be other areasinfrastructure where XL would need to beef up with further M and As? The second question is for Park Budi. He asks The finance cost was lower than last year. What is the average interest rate on debt now versus a year ago? Did site renewals at lower rates also contribute or perhaps What's the main contributor to the lower finance cost year on year? Yes. So I'll take the first question. I think the journey to conversions is a long and complex one. So the leaflet It is definitely a big strong piece of the puzzle falling into place. Yes. Right. So Phuong, your second question on the Coins cost lower than last year. Yes, that's right. Because last year, if you remember, Our weighted average interest was around 7%, right, 7% Yes. So that's the level that we were last year. We're able to get lower rate. I think it's also because of the situation that helped us. So this year, we are looking at around 6.4% for the first half. That's the running back that we have for the interest. So it's lower. That's one contributor. The other reason for the lower finance costs, you are absolutely correct also about the Leased rental for the financing, as I mentioned earlier that we Able to negotiate it with the lower rate for the tower rental. So that also give us lower financing costs On this tower end up? Actually, the more question is whether it will be also Sorry, Phuong. The second part to my answer Sir, on the pieces of the puzzle. So yes, LinkNet is definitely the first big piece of the puzzle to fall into place. Your question was, would we be looking at other potential M and A activities? We cannot rule it out, right? So for us, it's a question of scale and becoming the strongest And we will look at every single lever we can pull to achieve that ambition, be it organic or future M and A as well. I hope those two answers from me and Bode address your questions. The next question comes from the line of Nikhil Ghaen from BRI Research Securities. Please go ahead. Thank you, Ian. It was mentioned at the beginning that the revenue from ex Java is currently 10% Contribution. What is the contribution to earnings EBITDA or perhaps EBITDA From Ex Java. And yes, maybe secondly, In regards to the I guess going to the latest comment, is that of In organic growth, does that entail also in the mobile sector or You refer to the fixed pro form a moment? Thank you. Yes, go for it. Okay, let me address the first question, Niko, on the ex Java. You're right, it's around 30% now the contributions. In terms of EBITDA, the majority comes here coming from Java because as you know, we just started our ex Java investment in 2017, so it's at 3rd year, coming 4th year now for us. And then you know our operational excellence principle Where we always look at the payback area where the payback somewhere around 2, 3 years payback. And then some of the ARIA, most of the ARIA already profitable, but EBITDA on the most contribution still coming from Jabra ARIA. So, Niko, your second question was about organic growth. And it was if it was stimulated by my response to Foom's question, Then yes, I was alluding to our aspirations on the fixed side. When I said that we will All levers, be it M and A or organic. As for the mobile side, the story has been of organic deployment of network. So was that your question? Thank you, Bhavathi. Yes, that was the question. Can I go back to Babuji's reply? And may I ask, is there increase in the subscribers coming from Ex Java as well, was this the driver in the growth of contribution? Or is it how would this play On the subscriber growth? Let me maybe take that one. So the subscriber growth has happened in both Java and ex Java. So we have seen positive traction in both. It is true that in ex Java, the growth, the same like the revenue growth, has been Higher than in Java. But this quarter, the positive growth has been improved. Okay. Thank you, David. Thank you. We have our next question from the line of Hugh Salvi. Please go ahead. Hamish speaking. Yes, hi. Good morning. Thanks for the call and congratulations for a great visibility. Two questions, please. On your earlier comment, can you expand on what kind of network improvements were done, which have helped to improve mobile ARPU? It was not very clear. And secondly, can you comment on how has been the pricing environment in mobile services over the last 1 month when COVID related restrictions have further enhanced? Any color over there would be helpful. Thank you. Yes. So regarding the network improvement, well, first of all, I am not an expert in the network, so yes, that's it. But we have improved our transport that was congested in certain areas. That has allowed us To increase the throughput and the traffic in certain areas, which has allowed our customers To upgrade their product and to I mean, to help with the ARPU and to spend more in general. So I think That's overall, in a nutshell, what has happened. And to your second question, sorry, I didn't get it. Can you repeat it, please? Pricing over the last month. Correct. So I think as I was saying before, the competition environment is a little bit smoother than before. Especially the incumbent has taken some steps in the correct direction. From rest of competitors, we can always expect a little bit more of aggressivity, but It's not worsening. I think it's moving to more rational areas. So I think we are moving as an industry So what's better pricing and better competition? So maybe I will add to David, answer on the first question in terms of network quality improvement. So as mentioned by David, actually, the first part that was improved is on the transport. So what we are doing on the transport is actually removing, if any, position in the network By upgrading the capacity, but also by doing the fiberization. So currently, our rate of fiberization has increased Significantly, if we compare to last year. So that was on the transport part. The other improvement is on the radio network. So in our radio network, what we are doing is actually doing derefunding. So now we are shifting The spectrum that previously utilized for 3 gs technology to be more in 4 gs Because what we see is that now the 3 gs traffic is becoming less and less. So we are step by We are performing those spectrum, the 3 d spectrum to be in 4 gs. And by doing that, now we have a Much higher capacity for our LTE service. And this capacity is actually translated to the better customer Experience for our Internet users. I hope that answered your question. No, thanks, Vijay. This was very helpful. But if I can ask like the fiberization of towers, like how much we have Could you again share what's the medium term goals over there? And secondly, on the spectrum of refarming, is the exercise complete? Or we are still in the midst so refarming from 50 to 40. Okay. So on the fibrotation now is almost reached 50% level for our sites. And for the refarming, for the major cities, almost done, But we still are going to also implement that for the secondary cities and more cities. Thank you for your participation on today's call. And as always, do get back to us if you need more information. Please stay safe and stay healthy. We'll speak to you again next quarter. Bye.