Earnings Call: Q3 2020

Nov 5, 2020

Good afternoon, ladies and gentlemen. Welcome to Excel Aslada Earnings Conference Call for the 1st 9 months of 2020. And answer session. As a reminder, this conference is being recorded for replay purposes. Now we would like to hand the conference over to our host, Mr. Inda. Please proceed. Thank you, Don. Good afternoon, everyone, and welcome to the call. On behalf of the Excel management team, I would like to thank all of you for taking the time to join us today. With us on the call this afternoon, we have Iboudian, our Chief Executive Officer, Pat David, our Chief Commercial Officer and Pat Wu, our Chief Financial Officer. Now, Ibudian will share the highlights for the 1st 9 months of 2020, which will then be followed by the Q and A session. I will now hand the call over to Ibudian. And good afternoon everyone. We are happy to report a good set of numbers in the 1st 9 months of the year despite tough competition and the challenging economic environment to the COVID-nineteen, Both of our revenue and EBITDA have increased and we continue to remain in a net profit position this year. In the 1st 9 months of 2020, service revenue grew 8% year on year, driven by strong demand for data as many Indonesian continue to work and school from home. EBITDA rose by 34% year on year of as a result of revenue increase and cost efficiency with EBITDA margin now above 50%. We continue to be profitable, reflecting our focus on executing our operational excellence strategy with an emphasis on profitability and returns. However, competition remains tough with all players now having some form of unlimited products in the market. Aggressive pricing is also seen across the smaller Sache data packet as operators tries to win share of customer wallet, driving data yields down. This aggressive competition is expected to demand. As a result of COVID-nineteen impact with many businesses struggling, job cuts and rising unemployment taking its toll on consumer spending. As the Indonesian economy is expected to contract in the second half of twenty twenty, and this may prolong into first half of twenty twenty one, the industry will likely be negatively impacted as well. Despite the stock environment, the growth we have recorded this year is due to the structural demand for data but also a result of the measures we have put in place to ensure our business continues to grow in the light of COVID nineteen and its impacts to the business environment. The main benefits are from cost optimization and increased productivity as a result of digitization and simplifying our operations. These measures will benefit us beyond the short term. On the commercial side, the shift to digital continues rapidly with more customers buying data through online channels. We have ensured that customers are able to get the best deals on these channels. And have started introducing personalized offers as well. This will have benefits in the longer run. As we can control the product and pricing that we want to deliver to customers. On the traditional channel side we continue to support these channels by ensuring enough stock availability while also redesigning our processes to allow for virtual visits and remote audits. On the network side, we have continued to infect to handle the unprecedented increase in data traffic upgrading thousands of sites to ensure we have the adequate capacity while ensuring our quality of service remains high. Due to Coffee 19 pandemic, and rapid digitalization of daily life, we have seen a faster shift and migration to 4G with now almost 80% of our subscribers and 80% of our traffic on 4G and increasing rapidly. As a result, we are allocating more capacity and resources of our network to 4 D and continue to reduce capacity on other services, especially on 3g. We have also launched to follow new initiatives in the 2nd half so far, including the implementation of the sub HANA power enterprise management system. We are the 1st telco in Southeast Asia to implement this and it will generate huge benefits by streamlining our internal data and processes apparel app simplifying the user experience thereby making it easy to use. Finally, as we mentioned last quarter, our free digital brand live on has been launched and this will help us type into a growing customer segment which are the sophisticated data user. Positively, ex Java continues to do extremely well for us and is growing well a ahead of the JAPA growth rate increasing its contribution to our revenue. Our investments that we have made there are delivering returns and payback in line with what we had initially planned. We will continue to invest there guided by our operational excellent principles and strategy and ensure that we can continue to see Our network rollout and upgrade continues to be on track. As our early planning and procurement process has help us secure all the materials needed to meet our network rollout plan in 2020. Thus, we continue to roll out our network on schedule with our BTS count now above 142,000 with 4 d present in 45 edge Cities across Indonesia with more than 53,004 DBS. We also continue to fiberize our network to manage the accelerated growth of data traffic and ensure our customer would continue to enjoy good network experience. Our balance sheet is strong with net debt to EBITDA of below 1x. We have no US dollar debt and we have also secured committed facilities with the bank that we can take any time if we need additional funding. This is very important today given the uncertainties in the coming quarters as a result of the ongoing pandemic. The Omnibus law has been passed in Indonesia in October 2020 and East Landmark Peace of legislation in line with the nation aspiration to increase investment by simplify regulation and reduce Fed state. The thermostatore will see many new opportunities as a result of this and will benefit massively from this regulation. The main benefits are through spectrum with spectrum sharing and spectrum leasing are now allowed low in for B2B arrangements between operators. Further benefits would come from the digital dividend or the ship from analog to digital, freeing up more spectrum for the operator. Finally, the regulation will make it easier to facilitate MNA as the rules regarding spectrum retention post merger are clearer. Also our results are positive so far, the situation in the market remains tough with the impacts from COVID-nineteen on rising unemployment and lower income for main Indonesian coupled with intense price competition. This creates an unprecedented situation and as a result, it is difficult to predict what the end of the year will look like. Therefore, we are not able to provide any guidance until we have better clarity on the situation. Finally, as per the results of our EGMS last week, I would like to formally introduce Baburi at our new Chief Financial Officer on this call. He has a wealth of financial experience and will help drive our business forward. I'm sure he will do a great job in the next phase of our growth journey. Thank you and let us proceed to the Q And A session. To ask more questions, you can go to the queue by entering star 1 again. We shall end the conference call shop at 2:30 pmchecker.com. The first question comes from Sachun Patel from DBS Bank. Please ask your questions. Hi. Thanks. Two questions I have, rather key. Firstly, Can you talk, we saw actually gain 1,000,000 subscribers in the quarter versus, in the fact, gaining 3,200,000 So my question is, does it indicate that you need to change your plans so that you can gain more subscribers compared to your competitors? Kind of unlimited plan? That's question number 1. Secondly, was there any one off in this quarter? Because why network costs decreased you know, substantially, we also saw it was partially offset by rising the staff cost and the marketing cost sequentially. So could you explain the drivers behind these cost increase? And you asked me, I'm I'm I'm of course, you want to know impact on the data margin, is it sustainable? And, you also disclosed 25 percent revenue contributions from extra overlap quarters. Where are we now? Thank you. David here. So I'll take your first question regarding the acquisition. So you were mentioning that we increased our in 1,000,000 versus competition. In this case, in those that got 3,000,000 or whether we are thinking on changing our strategy, right? As you may know, how to count the acquisition in this market is a little bit complex, I would say, right? Depending on how you measure the the number of subs, who do you consider whether it's the SIM card that is active or whether it's existing subs, it can change a little bit. So what we are seeing in our own data is that our share of acquisition stays healthy, competition has increased. True, especially from the incumbent. But we believe that our acquisition strategy is still holding and we are acquiring in those places where we should be acquiring. So we will continue with our regional pricing and regional acquisition strategy as we have been doing until now because we believe that that's the numbers for us are still okay. The second and the third questions, I will let Ravi on the second question you're asking about, is there any one time off in this quarter regarding the labor cost and network cost for labor costs, yeah, there is there's a accruals on our LTI program. As you know, the LTI with these are high competition. The talent is a key. So we try to do what is necessary for the that's why we do this accrual for IOTI. And in terms of network costs, why the cost is slower. Yeah, we have significant number of towers that coming due this quarter into quarter. And also some in Q4. So those new contracts under, I mean, the rental under the new contract is significantly lower compared to what we used to pay. I think we already indicate this in the few calls before that we're going to enjoy some cost coming from this contract that are due in second half of the year. Hope that answered your question. Yeah. The third one, the question is about EBITDA. EBITDA is really sustainable. If you're looking at the 34% the EBITDA that's getting better, you have to take out the portion of IFRS 16 impact first. As you know, IFRS 16, we have to account, the book, the rental as a capitalist. So with that, our EBITDA actually increasing by 16% instead of 34%. So that 16% growth with the rate of our current EBITDA is going to be sustainable because going forward, we continue implementing this IFRS 16. Okay. And the last question, yes, just the last one, the ex Java contribution, how has it changed compared to last quarter? We continue seeing the same growth. If you have continued to be the right decision for us, the track sensor there, the growth compared to Java actually the growth is quite significantly higher. It's almost 10 4th, 10 4th of Java head growth. So we believe that going to be continued in this future. Okay, great. Thank you very much. Your next question is coming from Brandon Sharma from JP Morgan. Please ask your questions. 2 questions from my side. Firstly, I believe, Iberdian mentioned that, that the Omnibus law facilitates M and A by giving clearer rules on spectrum retention. Can you elaborate on this? Like, what do you see? And also any insights on when do you expect the implementing regulations The second question is if I can clarify that the decline in infrastructure costs quarter on quarter is all driven by revisions in, tower leases, and there's no So does that become, the run rate for the following quarters as well? Thank you. Okay. I'll take the first question on the on the bus flow. So as I mentioned, we are very positive on the recent past umnibuslow because this allowing opportunities both Excel and also for industry. Especially the biggest benefit is on spectrum sharing and leasing and also the from analyst to digital that further will freeing up the 700 spectrum for industry to use. In terms of the M and A, yes, of course, it will be easier for M and A to happen. As the confirmation, that we do not have too recent spectrum after the consolidation. The industry today is not sustainable for long term health of the industry. So we believe that further consolidation is really needed and X Thirty three d to play in this part. However, we understand that this omnibus law will require a government decree to be operationalized. So this government decree will need to be constructed by the leading sector with the cooperation with other sectors. So, usually, this a process will take around 3 to 6 months. So we believe that we need to wait until those time frame, to enjoy the benefits of this omnibus law. On the EBITDA, the one time off adjustment of IFRS 16 it's not going to happen again. So there's a $1,300,000,000 adjustment there. Related to our parent. What's your what's if you do compare year on year, we have to normalize 1st. So the, the, the figures, 50 percent EBITDA that you can add because we only do the just one time. Is going to be the figure that we're looking at. But however, this structure will continue to be a fault depending on, how fast we do that our how big the revenue increase, etcetera. So for now, this is how we can comment about Okay, thank you. Maybe just one clarification from Iberdian. So Iberdian, you are saying that this Omnibus law specifically mentions, that operators will be allowed to retain spectrum of M and A? Yes. Your next question comes from Chongqing Phong from CIMB. Please ask questions. Hi. Thanks for the call. This is Feng from CIMB. Two questions from me. Firstly, I wanted to ask a bit more color on competition. I know what you mentioned about the incumbent having been more competitive, but can you give us a bit more color as to what you see on the ground, maybe in the last 1 to 2 months have there been further moves to be more aggressive by the incumbent as well as the other operators in the market? And any in terms of the intensity of competition in the different geographies, if that applies, That's my first question. And then my second question on the costs, I just wanted to go back. Did you mention about the labor costs one off, from the LTI program that accrual. Will we see more of that being booked in the fourth quarter of this year? And also on the tower rental cost reduction you mentioned renewals in the third quarter and also more to come in the 4th quarter. But my question is, into 2021, will there also be a very sizable number of towers that will come up with a renewal? Maybe 25 or maybe even over the next 1, 2, 3 years, the amount of towers that will be upward renewals, that will be helpful. Okay. Thank you. So I will take the first one from David. So regarding competition, what we have seen in the last couple of months as I was saying is that the incumbent has become much more competitive. What do I mean by this very specifically? Is they have launched an unlimited portfolio in many cities, not in the whole Indonesia, but in almost of the of the V Cities. So that's number 1. And number 2, they have also jumped into something that is fairly new for them that it's all the low denominations and short validities. In both cases, both in the unlimited and in the short validities or the low denominations, they have taken a price leader position. So they are like the cheapest from all the offers out there, right? So We are now in a situation where the incumbent is the price leader, right, which is not it's not not usual to see this in the market, but I guess that because of the COVID and the current situation, the incumbent in this market has gone into that direction. On top of that, we of course have the rest of the players, the smaller players and not so a small group always have been very aggressive and are continuing also with that, with that aggressivity. So that's a little bit the competitive dynamics that we are finding on the ground in the last in the last few months, especially in the last couple of months with these incumbent changes. On the second question, related to the labor costs, the catch up is the one that we do in third quarter. 4th quarter, we should back to the normal 100, in terms of labor costs. For network costs, the rental that I was talking about, the biggest churn actually happening in that quarter. So, 4th quarter, going to that number going to be the new normal and then, more coming up to the end of the year. 30% up to until the end of the year, we will be a tower that's coming due. So that's the figure I can set for now. Okay. And if I can just throw in one follow-up question, in terms of the X Java contribution to your total mobile revenue. What is the percentage as of the third quarter? And am I right to say that, because your service revenue was flat Q on Q, you saw your ex Java revenue growing, but Java revenue is actually declining in the quarter? So both revenues have been positive for us as we were saying before, the growth in the growth in both year on year are positive. X YAVA is growing ten times higher than the Java 1. Now regarding the split between Java and Java, currently we are around 1,000,000 dollars, $25,000,000 Okay. And Q on Q, going from second to third quarter, did Java revenue decline? The service revenue is positive in both Yaba and X Yaba. Thank you so much. You. You. Your next question comes from HSBC. This is Piyush from HSBC. The question is for Iberdian. Thanks for the presentation. But can I clarify on the Omnibus law? In case of M And A, is it clear that both the parties speeding parties can retain their entire spectrum? Or is there a formula which is now clear how much of spectrum can be retained? That is the first one. Secondly, what kind of spectrum leasing arrangements can be, is allowed under the new regulation Sorry, can you repeat number two questions? In your opening stage, you mentioned spectrum releasing is also allowed B2B. So can you elaborate like what kind of arrangements are allowed over there? Thank you. Okay. So, number 1, yes, it is for M and A that it is mentioned that for two parties that is doing NMA, there is confirmation that we do not have to return the spectrum for consolidation. However, as I mentioned, the this to be operationalized needs to be uh-uh explained further in government decree, which is the presidential decree or ministerial decree. Yeah. There's something that we have to wait for a few months from now. So for the second one, what you mentioned about the leasing and our understanding in the Omnibus law that the leasing can be done to operator that has already licensed careful license. So it cannot be done for any, parties. But it has to be done between telco operators. Right. So basically, this can give us opportunities to acquire large block of same band of spectrum and enhanced capacity then? Yes, yes, yes, correct. But if we are referred to countries that has done this kind of uh-uh scheme before usually the government actually asked for kind of like fees uh-uh from this transaction. That's something that will be clarified in the government the CRE. Your next questions come from Krishna Hanta Bara. From Mandiri Sabaritas. Please ask your questions. For the opportunity. Congratulations on the strong profit growth and also the congratulations to Bhabhudi on the appointment as the CFO. Two questions for me, please. Question number 1 is on the quarterly D and A run rate. So the quarterly D and A has been on a decline in the past 2 consecutive quarters. Can you get some sense if, if the latest DNA run rate would be the new DNA run rate going forward, especially after your tower sale deal has completed? That's my first question. My second question is on the other telecommunication revenues. The growth in 9 months 'twenty is on the 5.6% year on year, but I recall that within this report revenue line, revenue from handset bundling activities has dropped, quite materially. So the other component of the other communication revenues must be growing way faster. So can we confirm what are these other components? And, does this include XL Fiber to the Home business? And if yes, would you mind sharing some color on the development and the performance of that business line? Yes. So the question regarding the depreciation, the number that you're looking at, Yes, so the Q3 number, the precision that we're looking at, there's a bit some adjustment there, but the running rate will be around 2,400,000,000,000 in terms of depreciation per quarter. On the second question, on the other telecommunication revenues, Oh, yeah. On the other revenue, the one that you're paying coming from the tower lease reckon, as you know, we saw a significant number of towers at the beginning of the year. So that's the main impact. From the equipment. But I think there's another revenue items there, right? The other non silver items in the past is to show the disclosed the bundling revenues, but I think I said I'll stop disposing that as of first quarter 'twenty. And I think the benefit has slowed down quite a lot. So there's another revenue line called Others, it's just growing, I think, going quite fast. So I just want to get some color on what's driving that Yes, the biggest chunk of our revenue coming from this power and the rest we got this line, we also got some roaming. So how many is the other one that's also coming down? But the bundling, we don't really do it anymore since last year. So, I mean, it's very limited amount since last year, if you're now It's not really one of the days, but for the building. The biggest jump coming from our mix, Krishna. Okay, got it. Thank you. Thank you. Bye. Your next question is coming from Pramjura from Macquarie. Please ask your questions. Hi. Thank you for the opportunity. This is Prem Jarringer from Macquarie. Just one question from me, really, with regards to competition again. Has there been, you know, if you were to dissect that competitive response from your from the incumbent, has that been greater within Java or ex Java. And do you think that this is just an interim move given the economic situation, or should we assume that this aggression is here to stay and therefore industry dynamics may be permanently impacted from it. What are your thoughts on this would be most appreciated? So, well, as I was saying, the first thing that we have seen is that they have jumped into 2 different areas, right? One is the unlimited proposition. The second is the short validities or low denominations. Both of them were new to the income that they have jumped in both. It's both in Java and Xyaba. So they they have focus in different geographies, but all around Indonesia. So it's not in only Java, for example, or only outside of Java. So I think We have seen cities in both YAVA and X YAVA being, I would say attacked or whatever it is implemented with this new proposition. Both of them have different cities. So some cities are going to for unlimited, some cities are going for the short validities and load announced and are going for both. So they have like a very widespread strategy on moving this. Have even seen these cities where they are really strong or they are a true big incumbent. So they have gone to the level of being aggressive in to somehow say where they are really big versus the second one, right? So that's what is happening. Now, why did this happen or for how long it's going to be? It's something that we don't know, right? I mean, we cannot know what's going on there on their mind. We assume or we get that they have been also impacted by COVID. And probably this is a response on trying to acquire as many customers as they can in this year given that potentially the profit or the revenue, it's going to be tough in any case. So that's an assumption. But again, why are they doing that? It's difficult to answer. The reality though, what I was saying is that we are in a, I would say different scenario, right? Where the incumbent is taking the price leadership position, which is not the common in most of the market. And even less when the incumbent has such a gap with the second player, right? But this is the reality. This is the reality where we are today. Perfect. Thank you very much. You. To ask more questions. Your next question comes from Let's go from unbangulation. Please ask your questions. Yes. Thanks for the opportunity. I have two questions. The first is regarding your CapEx, which you have spent about RMB5.1 trillion for the 9 months. Earlier in the year, before the COVID 19, your target was RMB7.5 dollars for the full year. Is that achievable or has the COVID-nineteen slowed down that impact? And how is that going to affect your tower expansion going into the fourth quarter and maybe next year, is that going to be a slowdown because of that? And my second question is regarding your spectrum it's given the fact that 700 megawatts will be available. Would you be bidding for that? And could you give us a bit of color on, is our spectrum fee is going to go up? You know, taking account that you will be sharing and leasing perhaps with other people, how would that trend that trend going to go up or is it going to come down? Thank you. Yes. On the first question regarding CapEx, You're right. We are currently at around 5.073000000000 capitalized CapEx. The We continue monitoring. As you know, the situation we did, we always do With our OE approach, our operational excellence approach, we always make sure that the investment giving the highest return for the company that's our Sundam and our operational decision, basically. Right now, I cannot give the number, but we are really monitoring the amount whether it's really necessary to the benefits of the order. We due to speed as the plan or we receive the amount, but definitely going to be some adjustment towards the target to make sure that we don't offer should our investment unnecessarily. So I think that's the comment I can give. The second question are in terms of spectrum. Yes, with this new omnibus flow, actually it provide availability of the room. So the availability of the spectrum is it will be higher because as you mentioned, the second 100 will be available in 2022. And the second one is also the ability of operator to tap into new spectrum is higher as well. Because now we can have additional spectrum by sharing a leasing on transferring spectrum. So this uh-uh new opportunities is actually gives new perspective to operators on redefining our spectrum strategy, with the supply that seems to be higher, actually logically, the spectrum, price, so be lower. Yeah, if you follow the I mean, uh-uh logic is what is the availability, if the way to tap into spectrum is easier, then the spectrum price, should be lower. I see. Okay. So we should expect spectrum fees to be lower. In that case, go going over the next few few years. Is that definitely the the spectrum from government is lower, but the, a course that we can actually that we have to to pay in terms of cost per giga for instance, it will be lower. Okay, perfect. Thank you so much. But the the the program with the government can get might not be lower, but the operator, our cost per gig can be lower because there are several methods that we can tap into. Okay. Thank you so much. Your next question comes from Chanshi from JP Morgan. Questions. Yes, hi, good afternoon. Thank you for hosting the results call. Just want to ask about the network capacity and also a related question CapEx, given that your beta usage is up around 49% year on year, how do you see your network capacity or utilization right now? And given that tower skills have happened and also balance sheet has successfully, levered, are you looking to ramp CapEx to meet the kind of data capacity obligations going forward? And how do you plan to fund if you plan to ramp up your CapEx, how do you of funding, is it just using internal cash or will it be via a mixture of that internal cash? Yes. So on the first questions, the in terms of utilization of our network right now, we are somewhere around 50% right now. So we still have room to play for the I think that's the position that we have. In terms of the cash, our balance sheet, as you said, is pretty, very healthy. There's a room for us if we want to do more. But as of now, the our work test, we believe enough right now. We have a facility with bank almost 5,000,000,000,000, 5,000,000,000,000 ready to be utilized. Mix between committed and uncommitted. So those death figures enough to give us a bigger work test to to deal with any potential situations in the future. Okay. So it is just one quick follow-up. So it is very likely CapEx going forward will stay around the kind of amount, the dollar amount that we are we have seen in the last couple of years. Yes. It's going to be towards this direction because we're seeing the impact of this COVID going to be Greg folder. So the recovery will not be as a fee save. It's going to be a bit longer. You save a kind of the covering. So we continue carefully looking at our investment this year. I guess that's with the benefit of maximum and optimum returns for the company. Your next question Hi, thanks for the opportunity. Firstly, on the towers, are you able to indicate where the pricing is on your renewals versus prior levels? And maybe what percentage would be up for expiry in 2020, 2021? Second question I have is with regard to the network. It seems that your peer has actually caught up in terms EPS count and now they are able to actually get some market share back. Is this a point of concern for you that the networks have basically converged, do you feel that there's any need to actually invest more to deliver better growth? Thank you. Yes. On the first question related to rental costs per tower, I can give an indication the new contract that we're signing the price somewhere between 10.5to13.54 shows the new per month, 1,000,000, yes. That's the new number that we're looking at, depending on which area, depending on how long the contract is. So it's very mixed compared to the previous quarter, it was around 18000000 to 22000000 per month hour. So, you can calculate the math. That's just on the first question, second question. Much. Okay. So regarding the second question, yeah, it's true that if you take a look to the number of VTSS, it looks that we are converging. Now, how we think about this is we need a good network to give a good customer experience to our customers. And number 2, it needs to be a network with a reasonable cost. So we believe that now we have the correct network and we have the correct us to maintain the network. So I think that was also very important. We are able to provide a good customer experience as there is an all additional price, which allows us to give the customer experience. So I think that's how we think about this. It's like the network is there. Have still some spare capacity as we said and we'll have a very good cost in order to maintain the network. Moving from there, of course, we will do all that it's in our hands to keep improving the network and expanding to areas where we are still not strong enough. Thank you. Sorry, just to clarify my first question earlier, would you be able to provide what percentage of your tower portfolio up renewal in 2020, 2021? So the one that we're looking at, in run rate here, so not necessarily the fixed amount because we also are being, reasonable in in trying to negotiate on the price because we know it's below what we are aiming for 10.5, it's not going to be healthy for us as well. So the one that we're looking at right now, somewhere between 20% to 30% in terms of rental running debt that we are trying to aim. So around 20% to 30% of your tower portfolio would be up for renewals. Is that right? Oh, the one that's up for renewal? Yes. The question was what percent was upper renewals? Okay. It's going to be around 30% in the next 2 years. Got it. Thank you very you. Repeat your questions Your next question is coming from Ken from Fidelity. Please ask your question. I'm Carlos from Fidelity. Thanks for the opportunity. Just a quick follow-up on the, on your back to bill, especially your network sharing. So I would like to know what the exact definition of new technology would be. Is that something you can answer at this moment? Does that only include 5G or does that include 4G as well as 5G? Or we just have to wait for the clarification from the decrease going forward? Thank you. Yeah. Actually at this point, we don't know what is the real definition of this new technology because it's actually debatable, yeah, whether it only for 5G or we can say for instance like 4.5G is new technology or not. So, you're right. We will have to wait until the government, the degree is out. So then we can get more clarity on this definition. Your last question is coming from let me ping from Ping Investment. Please ask your question. Hello? Hello? Yep. Hi. Hi. This is, Limi from CIM. Thank you for the opportunity. And congratulations to Gordian and for the good results. I have one question in regards to the actual realization of the education subsidy from the government. I understand that it is only effectively running in the last month of third quarter, but can you give some color on the impact to your operation or perhaps revenue in regards to this education subsidy program? Thank you. Yes. So thank you for the question. Yes, you are correct. The program started to run-in September. So we only saw it in the last month of the quarter and we have also some data from October. So, well, as you know, we got around 6,000,000, subs involved in that, in that program. So far what we are seeing, it's an ARPU cannibalization in the program. So the ARPU that we are receiving from the subsidy plus whatever the customer's addition is below what they were using before. So the impact of the program so far is not it's not positive. It's not positive in the sense that ARPU is being cannibalized. So it's still the 2nd month So we will see how November, December goes, but that's the early signals or the early signs that we can see. So just to clarify, the current program is effective until the end of year only or what is the valid period? Yes, correct. So the current program is until the end of the year. I now would like to pass back the call over to your host, Mr. Okay. There are no more questions. I think we will end the call today, here. Thank you everyone for joining and we'll speak to you again next quarter. Thank you. That concludes today's conference call. All lines may disconnect now.