Earnings Call: Q2 2020

Aug 27, 2020

Good afternoon, ladies and gentlemen. Welcome to Exel Akshayas Earnings conference call for the first half of twenty twenty. My name is Ralph, and I will be your coordinator today. During the presentation, all participants are in a listen only mode. Instructions will be given on how to questions when we get to the question and answer session. Now, you would like to turn the conference over to our host, Mr. Indore. Please proceed. Thank you. 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 today, we have Pahadlan, our Chief Financial Officer, Pahad David, our Chief Commercial Officer and Pahadli, our Deputy Chief Financial Officer. Iberdian sent her apologies as she is not able to join the call today. Now, but Adnan will share the highlights of the first half of twenty twenty which will then be followed by the Q And A session. We are happy to report a good set of first half results despite tough competition and challenging economic environment due to COVID-nineteen. Our revenue and EBITDA grew for the 2nd consecutive quarters and we have outperformed the industry in the first half of the year. Service revenue grew double digit, rising 10% year on year in the first half of twenty twenty, driven by strong demand for data. As many Indonesian continue to work and screw from home. EBITDA rose 37% year on year as a result of revenue increase and cost efficiency with EBITDA margin now above 50%. We continue to be in a net profit position reflecting our focus on operational excellence with an emphasis on profitability and returns. However, competition for suffer to get tougher with all players now having some form of unlimited products in the market. Aggressive pricing is also seen across the smallest associated data package as operators tries to win wallet share of customer driving data yield down. Aggressive, the aggressive competition is expected to continue in the second half of twenty twenty as demand starts to soften especially in the mass low end segment as a result of COVID-nineteen impact with many businesses struggling, job cuts and unemployment rising. As a result, as the economy, Indonesia economy expected to contract in the second half of the year, the industry will also be negatively impacted. Distribution is key during this challenging environment, and I'm pleased to say that our digital channel and point has continued to grow double digit since last quarter. We will continue to accelerate the growth of our digital channel in line with the changes in consumer behavior. This will allow us to have a better control and visibility of movement in the market at cheaper cost. Nevertheless, traditional distribution channel remains important. And as we and we are ensuring that all our retail outlets have enough physical staff as we continue to support this channel during this tough time. The shift to digital has been one of our key transformation pillars. In line with this, I'm happy to announce that we have recently launched our new digital brand live on. This will be a new area of growth for for us in mobile. Flip on aims to give customer a fully digitalized telco experience by aspiring to be the digital brand that gives consumer power back over their digital lifestyle. It seeks to capture the upper tier of the digital savvy users whose current needs and pain points are left unaddressed by the current office. Our home business has had a strong start to the year. With increased demand for fixed broadband services. Despite not bundling any despite not building any new infrastructure, We have expanded our home process this year to more than 300,000 to a partnership model to increase our footprint. We are now present in 10 cities across Indonesia and we will continue expanding as we finalize a long term plan for this business. For the second quarter of 2020, we have seen record increase for home corner as demand for fiber to the home. Accelerated, during this pandemic. Today, we have more than 50,000 Focused on business continuity and employee well-being remains our top priority. We have reopened our hate office but we have introduced flexibility for our employees of either working from office or continuing working from home. We many are still working from home. We have seen increase in employee productivity as less traveling time has meant higher efficiency and better time management. Throughout this period, our crisis management team has ensured all operation runs smoothly and that our business can continue as normal during this period. Our network roll out and upgrade continues to be on track. As we as our early planning and procurement process has helped us secure all the materials needed to meet our network rollout plan in 2020. Start. We continue to roll out our network on schedule with our BDS count now 139,000 with 4 gs presence in 456 Cities across Indonesia, with almost 50,004 GBTs. We also continue to fiber our network to manage the accelerated growth of data traffic and ensure our customer will continue to enjoy good network guidance. We will also continue to expand and strengthen our network outside Java to further accelerate our revenue momentum that we are currently enjoying in this area. Our balance sheet is strong with net debt to EBITDA of below 1 We have no USD debt, and we have also secured committed facilities with the bank that we can tap at any time if we need additional capital. This is important today given the uncertainties in the coming quarters as a result of the ongoing pandemic. Although our results are positive so far, the situation in the market remains tough with the impact from COVID-nineteen, on rising unemployment and lower income for many Indonesian coupled with the rising competition. This creates an unprecedented situation. And as a result, it is difficult. To predict what the second half of the year will look like. Therefore, we are not able to provide you any guidance until until we have better clarity on the situation. I'll pass the I'll pass the for to David to finish off the remaining speech. Okay. Thank you, Parland. So finally, as per our announcement on Monday, our husband is leaving Exelac, continue his professional career within the Aksheta Group as CEO of E.co. We are currently in the process of identifying this replacement and we'll make the necessary announcements when it has been finalized. Badland will be here for the next few months to help with the transition and handover process. We wish him all the best in his future endeavors and thanks him for his many contributions to Exel Acietta over the past 9 years. Thank Please hang the but strictly limit your questions to only 2 and to allow other participants to raise your questions. Should you need to ask more questions, we shall end the conference call sharpe at 2 pm. And our first question comes from the line of Arthur Puneja from Citigroup. Arthur, your line is now open. Hi, thanks for the opportunity. Two questions as noted. Firstly, are you seeing any notable changes in the momentum following the unlimited time launch from telkom sales? Is this impacting your business, outside of what you've seen in the second quarter? I'm just wondering if you need to react there. 2nd question I had is with regard to, the growth trajectory that you're seeing. Are you able to provide any color in terms of how the growth momentum is trending within Java and outside of Java in revenue terms, and what the revenue sits in targeting those 2 regions. Thank you. Yes. Okay. So regarding the the telecom sale launching that limited, right? I have to say that we had already anticipated that that the concern will have a movement like this sooner or later. So answering to, I think there were two questions on you. One is whether we have seeing a change in our momentum. That's number 1. And number 2, whether we are thinking on reaction, right? So let me start for the second one. We are not thinking on reacting. So we are not thinking on cutting prices or entering in a price war. We are going to try to keep the market stable. Having said that, of course, you know that we have a regional pricing strategy that depending on our competitive dynamics and our network capabilities, which of the regions, we keep adjusting prices. So that will keep as a BAU business. So that's answering to the second. Assign to your first one, to be honest, our acquisition and our new subscriber acquisition is still in good momentum. So we are seeing still some momentum in that area during August. So Arthur, on your second question, I think if you look at year to date, I think we are still growing in both Ireland, right, Java and X Java, right? Of course, I think the growth that we are seeing in non Java is still showing very strong momentum, yes? So I think that, that will probably continue. And I think we think that we're also gaining market share in those areas, right? However, I think situation in Java, for example, has been quite competitive. Nevertheless, we're seeing some growth, but we expect that it's going to be, the battlefront, right, in the second half of the year. So I think that we have also seen that as a result of the pandemic as well that people, especially the Metro and purchasing power impacts given the rising employment and all that. But we expect that the challenge in the second half will be more in Java. Momentum in Jaguar has been good. I think we think that it will continue in the second half. Now I think X Java is already accounting close to 25%. Got it. Thank you. Well, congratulations as well on the new. Thank you so much. And your next question comes from the line of Colin McCallum from Chris. Your line is now open. Two questions from me. The first is, obviously, the 2nd quarter numbers look pretty decent given the circumstances, but the price per megabyte bid obviously declined quite sharply. Strategically speaking, are you worried that you've got decent growth short term out of that that might store up problems for the longer term growth trajectory this the pace of that price per megabyte decline? That's the first question. 2nd question is, noted on your comments on finalizing long term plans on fixed broadband. Are you looking organic or inorganic for that, following your experiments over the last year or 2? And if inorganic, have you firmed up anything on acquisition plans? Thank you, Bowen. So let me take the first question around the yields. So yes, you are right. Our yield or the price per megabytes has decreased in this in the second quarter. There are, I will say, three factors that has, that has affected that, right? So the first one is that, customers have moved themselves to packet with higher gigabytes, but they, I would say abuse of those. They use the packet, they switch the packet more. So with packet with lower yield by definition, higher packet, based on them more, right? So that's part of the of the yield decrease. There is a second part, a second factor that is the CSR, the CSR package that we offer our customers in such difficult situations. So as you know, we offer 2 gigabytes per day for third time, for third time applications and third time URLs for people to be able to work from home, study from home, etcetera. So that I would say is the second. And the third one, as you say, is also the the unlimited product that that we have in the market. Now when we look at our yield or our unlimited product, what we try to do always is that will optimize the share of wallet of our customers. And in order to do that, we also take a look to our identity dynamics and the network, capability on where we are playing with this, right? In this sense, one thing that I think is clear, is that our ARPU has increased. Our ARPU has increased. So we are taking a bigger set of wallet from our customers. So we believe that this is the correct, the correct step, and we are in a sustainable path. So calling on your second question, fixed broadband, I think you probably have seen, right, not only from from our side as well. But in the market as well, the demand for fixed broadband has actually increased, right, with this current pandemic. So So I think looking at the situation and the new norm moving forward, I think the demand for the fixed broadband is going to be would be a positive. I think maybe increasing growth expected as well, right? So of course, I think we're also seeing the same in our numbers. So I think, from that perspective, I think, we are looking at both, right, organic and inorganic, right? So I think there are challenges in both, but definitely we see also big opportunity, coming up with both, right? So to answer your question, yes, we are open to both, right, organic or inorganic, in terms of expanding our footprint, on the fixed broadband. Understood. Thank you very much. And your next question comes from the line of Chongqing Huang from CIMB. Hi. Thanks for the call. Two questions from me. Firstly, just wanted to reconfirm I'd like you mentioned that the ex Java is already accounting for 25% of XL revenue for the second quarter. Is that correct? And in terms of the profitability for the X Java region as a whole, where are we now on that And when do you see the region written even for XL? That's the first question. And second question, the EBITDA margin continued to improved very nicely into the second quarter. How do you see costs trending into the second half? Any major upward pressures or Did you see even more savings coming through in the next half? Yes, those are my 2 questions. Thank you. Yeah. So you're right. Yeah. So at Java, revenue, it actually account for about 25% of total revenue to the right of our service revenue. Thing in a AgJAVA starting from, second half of twenty sixteen to twenty seventeen, right? So I had to say that, that some of this cluster or some of this early investment have already started being breaking even already, right? However, I think our investment in Next Java has actually continued right throughout this year. So as a region on its own, for the region, nothing, We are still not making even yet, but I have to say that, we are quite happy to announce that, some of the profit that we have invested earlier in Nextiva are already breaking even and showing good progress, right? And looking at the momentum that we are seeing today, the progress that we are making in Next Java is also ahead of plan. Yeah. So I think we and we expect that this momentum will also in you, right, in the coming quarters. I will pass to Paguji to to answer the second question. So regarding the EBITDA, you're right. Our EBITDA has an awesomely higher compared to the same period last year in the first half. Increasing 57%. But please take note, we think that increase that include our IFRS 16 adjustment counting almost 1,000,000,000,000. So if you remove that factor, our EBITDA will increase significantly around 15%. So, contributing by 2 factors. 1, the revenue that as you can see increased by 7%. And also, our ability to manage our costs better. And then, you know, so I think the assets are better. That's why we're able to get lower OpEx and resulting at the higher EBITDA, even after we move the IFRS 16 impact. Okay. And I cannot, if I can just quickly follow-up on those two questions. So, back to the ex Java, if I can sort of pin you down on, timeframe for breaking even for the whole region. I mean, given the fact that the coverage in X Java is already at a pretty high level, as presume the expansion, there will not be as much as previously in terms of the coverage. When do you sort of thing that we can break even as a whole for the X Java region. And on the EBITDA margin, just coming back to that, into the second half, any sort of key cost items where we expect to see any cost pressures on the uplift or even some savings? Yes. So, Fum, I think if you look at when we do our investment, typically, Next Java and what we are actually looking at payback around 3 to 4 years, right? So I think you see that maybe the bulk of the investment on an average you would say that it's around average that we have invested in Escawa in around 2019, right, 'seventeen 18 and probably 'nineteen, right? So if, if the philosophy on a payback 3 to 4 years, if you take that, into account of what we have invested before as well, right? So effectively, if the trajectory continues, as what it is today with the strong momentum, we could be looking at around another at least 18 to 24 months. Yes, regarding the second half, we cannot give guidance, but roughly it's going to be the same big ticket items that we are focusing on. One would be around the tower and also fiber costs. Those are a few things that we really closely look at. And because this, there are some power contracts that are coming due. As you know, we always able to bring it down those contracts that have been signed with higher extra cost per tower, we're going to sign with the new rate so that will have passed in terms of cost saving. The rest of costs, we have, do the same thing, closely monitored and then, spend as needed. We make sure that every single dollar we spend going to optimize in terms of contribution to the revenue. Okay. Got it. Thank you so much guys and congrats on your promotion. Thank you. Thank you so much. And your next question comes from the line of Krishna Houdhabarov from Mandevi. Your line is now open. Hi, thanks for the opportunity and all the best part line in your coming Eagle I have two questions. My first question is on the revenue contribution from online channels. Can we get some color on the revenue contribution side from online channels today? Say in comparison to the same period last year? And how big do you think this revenue contribution can increase to? That's my first question. My second question is on your new product. Basically, this is your Challenger product, right, to Intercom Sales, are you or sponsoring switch? But what's your rationale launching such a fully digital product there. Is it pricing or segmentation? Any color on that would be helpful. Thank you. Thank you, Krishna. So to your first question regarding the revenue from online channels, I can repeat you a number, but I guess that, we all know that with all this pandemic, the traffic to certain outlets, even 2 excel centers have been reduced, right? And the amount of data that we are filling out in our own online data channels or digital touch points, it's increasing significantly. I mean, it's increasing double digit, a happy like that already since slash. So I think we are very happy with the, with the result, and it's very promising. So that's in the process. Regarding the second question, you are correct. So LEAPON, it's our new digital product in partnership with Silcos. As a managed service. And we believe that there is a demand in Indonesia for end to end digital products that are more, that are more customized to all, And there is a segment that we were not tackling as of now, that is the, the higher end digital savvy, that we expect to attract with this new product proposition. Okay. Thanks. And your next question comes from the line of Sachin Mittal from BBS. Sir, change your line is now open. Yeah. A couple of questions. Firstly, to be so almost 15% sequential drop in data pricing. Is there a reason for the sequential data pricing drop to slow down for 15% in the quarters ahead, any any factor or, should it further accelerate given that price war we have seen? That's question number 1. Question number 2 is on, telecoms and lost 2,500,000 customers in 2Q, but only 200,000 came to Excel. And bulk of them went to the other telcos. So, I mean, this is a in the in the post, the SIM card registration exercise era, right, I mean, I'm trying to understand what's really hampering, those customers coming to Excel network? Is it network quality? Is it the pricing? What's really the issue there? Lastly, Telecom Hill Company has launched unlimited plans in 65 Cities. Could you give an idea of, like, the 65 cities comprise what percentage of customers for excellence? Anything on that will be appreciated. Thank you. Okay. So thanks for the question, Shashi. The first one regarding the price, gigabytes, right? So you are right. It has, it has decreased. I think, as I was explaining before, there are mainly 3 part costs that has, that has made these decrease. Question number 1 is people have upgraded themselves to package that are more expensive, bigger, but also lower price per megawatt. And they are switching them more than they were before. This is a trend that we have seen also. So people who are in the packet now use it much more, they completed more than before. So I think there is a factor there. Second factor is our social responsibility program that we launched. We were giving 2 gigabytes free for every customer, to access third time URLs and certain applications. So I think that was another area of the decrease. And the third one, yes, it's price adjustments. Price adjustments is specifically, well, in in many things, but specifically, our unlimited proposition, right, or what we call the unlimited turbo. So this has also affected. Now couple of things that I want to clarify around this. When we take a look to the price per gigabyte, we take a look to our network utilization, we take a look to how to improve our ARPU. So we always try to increase the revenue. As you can see, the results as well, our ARPU has increased this this quarter. So I think the strategy has been positive. Yes, the price per kilobytes has decreased but the ARPU of the customers have increased. So that's number 1. Number 2, I would also like to explain a little bit, however, what we call unlimited turbo is different from what you will find in the And there are, three things that I believe that are worth mentioning, right. Our unlimited gives unlimited access only to certain applications. For example, Facebook and Instagram, only to certain applications. It's not a true whole unlimited like our competitors, number 1. Number 2, this access This free access only happens after the main quota has been finished. That's also a big difference from our competitors. And the third one is like for the high consumption applications, like streaming applications, for example, YouTube, you need to proactively activate them in our digital touch point. So I think, these are three factors that make our proposition, very, very sustainable. But as I was saying in the beginning, I think for us, the most important is that they are to increase. We control that in how we are able to increase the share of wallet of our customers. That's in the first one. Yes. So the second one, yeah, you asked about Tafomsel losing 2,500,000 subs, but what came in. So, we cannot comment much on that, but one thing that I probably want to draw attention, right? The definition of customer between operator defers, right? So I think, obviously, I think we know that, how we define our customer and I think We believe that ours is probably the most conservative in terms of, and reflecting the real situation in the market today, right? Therefore, what we are seeing good momentum in terms of our acquisition at this point in time, but we really cannot comment where the rest of the other customer that IIcon lost went to, right? But definitely, I think from our perspective since we launched the unlimited, in the month of March, I think our acquisition has been seen good momentum And I think it has even continued, even up to today, right? So and I think and we are, we probably would see a better trends for us, I think, moving forward with the current plans that we're seeing in our acquisition. The last one on unlimited, yes, Arkansas have actually limited launch in 65 Cities, yes, Obviously, we probably will not disclose what percentage of our customers are in the cities, but far as David mentioned earlier, I mean, we have not seen much impact at this point in time. And I think we are probably do not have intend to react because we believe that our product are quite competitive in this area, right, to be able to compete with this type of cell offering. Okay. Just a follow-up on that. Now, now that, rules to acquire SIM cards are more scriptor, then 2, 3 years back 2, 3 years back. So is it is it helping you? Is it helping the competition, being more rational Have you seen that? Sorry. Can you repeat that? You will repeat that. Yeah. Yeah. Actually, I now the you're telling me now? Yeah. Yeah. Yeah. Yeah. Hello. Can you speak now, but yeah. Yes. Go on 1. Process of yeah. The the the rules to acquire you some cards. Is more strict than before. Right? I mean, you can't. There's a limited person cars that you didn't have. So are you seeing that having some positive impact on the industry? And is that a factor that the competition will not intensify further, due to the restrictions of SIM card? Yes. So we believe that the impact has been positive. So, the use and throw churners have reduced the lifetime of our acquisitions have increased, which is, which is, I mean, it's positive. So I think the the impact Korsur has been positive. I will hope that this continues like this and that all competitors, complain with the given regulation. Okay. Understand. Thank you. Thank you so much. And your next question comes from the line of Graeme Sharma of JP Morgan. Your line is now open. Yep. Go ahead, Rajin. Hi. Can you can you hear me? Yes. I can go on 1. Okay. Good afternoon. And thank you for the presentation. Solutions from my side. Firstly, on the news flow that you have seen on Huawei and the Shit. The second question is yeah. Ratin, we lost you just now, Ratin, we didn't hear your first question, actually. We didn't hear. We lost you just now. Yes. My question is on the impact of U. S. Restrictions on Huawei, on Excel current and future network build plans. The second question is on the sales and marketing. How much is the reduction sustainable due to the digital channels? Thank you. Yes. So on Huawei, I think if you look at our policy today, right, in all the layers of our network, we have actually a 2 vendor policy, right? So in all these layers, we have we are not dependent on one vendor. And And we always have 2 or more. Yeah. But so that's the first thing, right? So at the group, we have actually made this assessment, on the impact of Huawei. So I think the impact of this U. S. Ban on the chip and all that will actually primarily impact Huawei on the on your smartphone business. However, in terms of the network product today, I think they are not they do not have a much reliance, for example, to the to the U. S. Chips of products and all that, right? So that assurance we actually got from Huawei. Yeah, nevertheless, I think you don't know where this it's going to grow. Yeah. Maybe now it's about cheap and later if they ban everybody to integrate with Huawei and all that. So we are assessing that situation today. And I think, of course, in all these cases, for example, we have actually million scenarios on how we are going to react, right? But at this point in time, at least from From the country perspective, yeah, Indonesia, today as an industry, you would say that 60, 70% of the industry rely on Huawei. Yeah. So the likelihood of the country banning Huawei at this point in time, I would say, it's not significant. But nevertheless, I think we are preparing plans. For example, how what we do, for example, in times when, for example, those situation or scenarios emerge here. So Regarding the second one, if I understood properly, it's marketing and sales, the digital digital transformation, right, the digital improvement there. So regarding marketing, she's the pandemic has started and we have moved big part of our budget from more traditional, channels to the data channels. So now most of our reports are in the retail channel, all the market in that, that we are doing. Right? So that's number 1. Number 2, regarding the channel or, how we are selling. Again, I cannot disclose the numbers, but what I can disclose that our data touch points are growing at double digit. So it's a very healthy growth and ahead of expectations as well. We are very happy with that. Yes. And just to add a bit comment about our sales and marketing expense, As you can see, our marketing sales and marketing expense has been decreased year on year 11% Q on Q is 4%. That's mainly different what, because of what the fit just explained that we shifting more towards digital. Yes, go ahead. And your next question comes from the line of Pram Jira Gisama from Macquarie. Your line is now open. Corey here. Two questions from me. First of all, I know a lot of time has been spent talking about data yields in Indonesia. But I suppose the bigger question for me really is we're still comparing Indonesian data traffic to some of the other markets, like Malaysia and Thailand, data traffic is to half of what we're seeing in these two countries. So I suppose the key is can our networks, with the current networks that we have, can we handle 15, 16 gigabytes of data without a substantial increase in CapEx, because I think that's where Telkom sells really good. And they spent the CapEx and now they're just turning on the pipes. So how what do you think is happening on this front? And can we afford for data to jump towards 15, 16 gigabytes. That's one. Secondly, consolidation in the market, I was quite interested in your comments around inorganic and organic growth on the fixed side of things. Have we also watered down our expectations of consolidation within our par, our role in consolidation of the wireless market? And are we now focusing more on the fixed side? Or is that wireless consolidation is still something that we want to partake with. So first thing is on, data yield. So if you look at today in terms of, 4G subs, right? Think, average usage for our 4G subs today is probably around 12 giga. So, per month, right? So essentially, if you compare to other market is probably slightly lower, but definitely, I think if you look at the rate, the rate of usage per sub is actually accelerating. So So next question is can our network cope with this data increase? I think the 2 parts here, right? So we have actually continued to build, not just coverage, but also capacity, increasing capacity of our network. So if you look at where we are put for 4G capacity today, utilization is still between at around 45%, right? So There's still ample room for us to take on headroom, for example, for us to take on the increase in data traffic moving forward. And secondly, as well, not just at the access side, we also fiberizing all our hours, at least one hawk to fiber, right? So, so, and I think where we are today, in the next 1 or 2 years, you would say that we would actually achieve 100 percent of our size with 1 hop to fiber, right. So and typically, that's one of the critical point or the bottleneck that you see, right, the transport layer. And we are actually investing in both at this point in time. Yeah. No doubt that TafamTel, they're being put in more, money, investment in the network side. But they in mind, they also have, are carrying more traffic than, today, right? So relative to our growth, to the traffic that we have today, I think, we think we should be able to take on more traffic increase that, based on our forecast, at least in the next 1 or 2 years, right? So but we also continuously building as well, right, as we speak today, right? So Secondly, on consolidation. So, yes, I think if you look at the situation today, right, with the with the pandemic, with the slowdown in economy, with, I think, a consumer retail demand also as well, especially in the low end segment. I think you would expect that I think that would probably put pressure on our us to probably accelerate the consolidation process. I mean, at least this is our internal assessment. Yeah. So So our view, has not changed on this. I think it's in line with our shareholders as well. We are fully in support of, in country consolidation. Because, and we are willing to willing to play a part on that. Even if we are not, I think we are also fully test because any consolidation would probably good, for the industry. Having said that, I think, well, you know the challenges in consolidation to date, right? And I think that's one of the areas that probably need to be addressed as on the regulation and the retention of spectrum, right? So yes, I think we was a on the mobile side. At the same time as well, we also see opportunity and how the fixed fiber fiber to the home, it's also growing as well. And then it is becoming a more and more interesting proposition as we can see as well, some of the investment that we have put on fiber, on home, on fiber to the home are actually showing a great progress. And I think Lee is also we are seeing a a record growth as well. Right? So so it's it's it's interesting. And hence, that's why we are pretty open in terms of, how we want to our plan to move forward. Be organic or inorganic or be it in mobile or even the fixed site. Thank you. Thank you so much. And your next question comes from the line of Sebastian Tubing from Omega. Your line is now it was a welcome relations guy for the, good result, in the middle of the pandemic and congrats on them for your next position. Now, now if you look at the competition, I mean, we, we've always, you know, there's always competition dynamics between the big 3. But, you see how, I mean, it's not trended, I mean, pretty good revenue growth in the few quarters. So, is this something that you start worrying about, you know, smartphone and 3 gaining some revenue market share, or is it maybe just in the fringes? Maybe if you can provide a little bit of color on that, And, you mentioned earlier about the, looking at ARPU rather than, simply data yield price. Now if you look ahead more of the next 3 years, perhaps, given that I think in terms of the number of prescribers penetration among the big three telecoms since already quite high. So the revenue growth will be driven more by ARPU. So what's sort of, you know, how much higher could the ARPU be I mean, ideally, you think in in the next, 2 years. Yeah. And thirdly, I mean, I know XL has been talking about fabriarization. So could you share a bit on on on how that the progress of of that fabrization, IE, of, all your BTS how many or what sort of percentage is already fiberized? Thank you. Okay. So thank you, Douglas. Regarding your first question, smartphone and trees, increasing in revenue, right? And the simple penetration, whether it's working. As you can imagine, everything that is in part of our what will be our market share is worrying for us. So of course, we worry about all of our competition and how they are doing, we monitor very closely each of the cities and each of the competitors in each of the cities and every product of the competitor in each of the cities. So, yes, it's something that worries her, and we keep monitoring. And part of our regional pricing comes exactly from from there. Right? So that's the first question. To the second one, you were asking that, yeah, the yields, the yields traditionally directionally, I mean, I think historically always has come down, right? The ARPUs, have increased this dynamic group. So what we meant is that, yeah, yield is something that is important, but the yield that you see, it's an average. It's an average of different yields in different cities. And it's an average of different yields in different cities where we have different network capacity different market share, different competitive dynamics. So that is what we try to optimize. Now how is it that, I'm sure that you have been also following the market for a few years, right? And you can see that there are moments where competition is tighter. And his goal accelerates in one direction, then it can be some kind of recovery. So that this is a market where many players are in there and the interactions, it's going to set how the next few years will look like. So that's why for me, difficult to say how I ambition and ARPU in 3 years from now, right? It will depend pretty much on how the competitive dynamics move forward. But again, I want to to make sure that, we understand that for us, yes, that is important, but It's an average. It's an average of different cities with different market share with different network capacities. And that's how that's how it's, we try to optimize our our. So on your last question on fiberization, so I think our topology architecture on the transport. I think we are looking at to fiberize, at least one hoc to fiber, right? So that means that 50% of our sites will actually be fiberized essentially, right? So and where we are day, we have been we started this process for the last two, two and a half years. Where we are today, we are probably around 60% progress, right? And we think that within the next 12 to 24 months, think we probably would achieve, the level that we are aiming for, yeah, one hog to fiber for all our sites. Thank you so much. And your next question comes from the line of Nicole Margarone from De Narica Stredes. Your line is now open. Yes. Thank you for the opportunity. Good afternoon, everyone. This is Niko from the Marissa. I would like to ask question on, the fixed fixed broadband. You mentioned earlier in the in your opening statement that you have about 300,000 home passes right now. May I ask what is the what is the infrastructure behind it? I mean, the last mile, how much percent is, is on fiber and Is there any other technology that you use maybe fixed wireless or is it cellular? Yes, that's my first question. Secondly, you mentioned also that, as part of, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the of the social responsibility. Is that, something that may happen again in the second in the second half. I noticed that right now that you are pushing our products like, conferencing and, educational products, is there a possibility that this might be reversed in the second half? So because your first question on fixed, when I talk about the 300,000 home passes, those are all fiber. Right? The technology idea is fiber. Right? So we got that fiber to the home. Right? So, on the second question, Yeah. So regarding the, the social responsibility, so as you say, we have already we believe to be very competitive, pockets, very competitive packets, in order to study from home or work from home. So they include some teleconferences, etcetera. So we believe that they are already very good. I don't know whether the prices will will change for those buckets, but we believe that the way they are today are already competitive in us and are already and interested enough for anyone who can, who have to use them either at home or Australia for work. And and I think on the the 2 gigs free, we are no longer offering it anymore. I think the offer has actually left up to June. End of June. Okay, okay. That's what I was asking. Basically, is this, can this be implemented again? I mean, is there such a thoughts from maybe from the government to push this again or because spending power is coming down? Currently, there is no, currently, there is no any idea of going in that direction. So as Paola mentioned, we, June was the last month with the social responsibility. And currently, we have a product for study from home and work from home that we believe that are already good enough. Okay. Okay. Thank you. Sorry. Pardon. May I ask you the on the 300,000, the home package, what is the penetration currently? It's slightly below 20%. So to be exact, it's 18%. Alright. Thank you so much. Good luck on on your new postcard. All the best. Thank you. Thank you. Thank you so much. And your last question comes from the line of Pierce Chaudhry from HSBC. Your line is now open. Yes. Hi. Good afternoon. And thanks for this call. Two questions. Firstly, could you update us if there is any development on spectrum auctions, likelihood and any timelines over there. Secondly, on your comment, in terms of decrease in spending power in lower end. Could you provide some color? Are you seeing that more in Java or it's more ex Java and any kind of geographical color could be helpful. Thanks. Yeah. So I think spectrum auction, I think it's probably still in discussion, right. So both in terms of time So obviously uh-uh. In terms of acquisition So if you would try to send power probably in some of, in in Sure. Can you kindly follow-up on spectrum auction? Is the bands decided which bands are going to be auctioned and how much quantum? It's the 2300. That's probably going to this thing. So, yeah, it's going to be 50 megawatts. Okay. Thanks a lot and congratulations, Bhakkadlam, on your new role. Thank you so much. There are no further questions at this time. I'll give it back to the management for the closing remarks. Okay. Thank you, everyone, for your participation in today's call. As always, we get back to us if you need further information. Please stay safe. Stay healthy and we'll speak to you next quarter. Thank you. That concludes today's conference call. All lines may disconnect now.