Earnings Call: Q4 2019

Feb 11, 2020

Quarterly report

Afternoon, ladies and gentlemen. Welcome to XL Axiara's earnings conference call for 2019 financial year. My name is Revathi, and I'll be your coordinator today. During the presentation, all participants are in a listen only mode. Instructions will be given on how to register your questions when we get to the question and answer session. This conference is being recorded for replay purposes. Now we would like to turn the conference over to your host. Mr. Indoor, please proceed. Thank you, Eviti. 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 Ibojyan, our Chief Executive Officer by Adlan, our Chief Financial Officer, Arlene, our Chief Commercial Officer and Fabulian Deputy CFO. Now Iberdian will share the highlights of 2019, which will then be followed by the Q And A session. I'll now hand the call over to Iberdian. Thank you, Indore, and good afternoon, everyone. We are incredibly proud of our performance in 2019, which was a record year for the company. Hard work and consistent implementation and execution of our strategy, we posted our highest ever revenue of 25 35,100,000,000 and highest ever EBITDA of RUB 10,000,000,000 as well as return to profitability of 713,000,000,000 per year. Our strategy of continuing to invest in 4G, especially in extra far, as well as consistent execution of our dual brand strategy with an increased focus on operational excellence has enabled us to outperform the market was on revenue as well as EBITDA this year. In 2019, our service revenue grew 15% year on year, driven by growth in data revenue, which increased 28% year on year. As a result, data revenue in the 4th quarter now accounts for 91 percent of service revenue and continues to be higher than our peers. Data growth continues to be driven by increased customers' data usage through our product and analytic driven app selling initiatives. The customer's value management initiatives that we continue to employ has been a key factor in our success in attracting and upselling customers. Our analytical engine that we developed using a unique omnichannel approach to create among others, personalized offers encouraging our customers to upsize to bigger data package delivered solid results in 2019. Evidence of this is our blended ARPU, which rose 9% year on year to 35,000 rupee as our customer base increased 3 percent to 56,700,000. We intend to do more and make our systems smarter to enrich our portfolio and become the new standard in our general management in 2020. Our focus on operational excellence meant that EBITDA rose faster than revenue growing 17% year on year with margins increasing 3 percent year on year to 40%. This strong growth in EBITDA is driving our return to profit this year with full year net profit of RUB113 1,000,000,000. In donations, data savvy customers has continued to respond well to our data network as we are increasingly being recognized as the brand of choice for smartphone users. As of the fourth quarter of 2019, our smartphone subscribers stand at 48,800,000 and 11% growth compared to same and 11% growth compared to same period last year. This makes up 86 percent of our subscriber base, which is significantly higher than the industry operates and we also continue to see a faster rate of migration of to 40. At the end of 2019, for the customers make up 33% of our total subscriber base. Both our XL and active brands were successful in addressing their target segment with unique and differentiated product offers in 2019 as part of dual brand strategy. The extra combo VIP that the extra brand launched in early 2019 has been a key example of our success in upselling. For access, the focus has been attracting the youth segment with products as well as customization of offers through partnerships with content providers mainly social media and gaming. Our postpaid brand as a priority task also continues to grow with the focus on smartphone bundling with the latest handset. In 2019, SL and ATSIS grew their respective Net Promoter Score strengthening their position within their target segments. In parallel, we continue to ensure a high quality data experience to our customers through the ongoing rollouts and upgrade of our net work. Our total BTS account is now above 150,000 BTS with our 4 g l bs service covering for 125 Cities and areas across across Indonesia with more than 40,004 EBITDA. We also continue to invest in fiberizing our network, building on our efforts from last year as this will help enabling the increase in data traffic we are seeing. At the same time, we continue to increase fiber station of our power site and in the next two years, the majority of our sites will be fiberized. In 2019, our network investment continues not only within Jafaa, but with a focus also on Xjafaa following on the efforts from previous years. This has approximated to better coverage and network performance in these areas, and we are increasingly known as a nationwide brand. This has also translated to a stronger revenue performance outside Java which continues to grow at an exceptionally faster rate than Java and increased overall contribution to revenue. Despite our record performance in 2019, we are seeing increased competition come into the market from the second half and especially towards the end of the year. We are seeing that even smaller operators are becoming aggressive in product offering. As a result, We have tactically made selected ticket adjustments in several areas to remain competitive which impacted our year this quarter. We hope that competition exists in 2020 as the industry needs better price repair to continue to improve returns and profitability. Today, we have also announced the successful completion of our 3rd power cell and leaseback transaction where we sold 2782,000 to Proselindo and Centracama for total proceeds of 4 points 5,000,000,000,000. The objective of this transaction is not maximized up front cash collection. But to monetize our assets and lock in our lease rates for the next 10 years as well as to make our operations more efficient. This deal is accretive to us as the easy to EBITDA transaction multiple is more than 10 times, which is higher than our company's trading multiple. The proceeds from this sale will go towards strengthening our balance sheet with additional capital to be used for capital and working capital for policies. Due to our strong performance in 2019 and align with our dividend policy, We are declaring a dividend equivalent to 30 percent of our normalized net income subject to a profile at our upcoming ATM. Finally, our guidance for 2020 is as follows. For revenue, we are guiding for revenue to grow in line with market. Our EBITDA margin guidance is low 40% on pre IIFS existing basis. And our CapEx spend guidance is rural 7,500,000,000,000 rupee which will remain focused on data network investment in 4G and continuous network improvement and modernization in and outside Jafar. Thank you and let us now proceed to the Q And A session. Thank you. Please kindly ask more questions you. We have our first question from the line of Mr. Ranjan Sharma from JP Morgan. Please go ahead. Hi, good afternoon, and thank you for the call. Two questions from my side. Firstly, following Axiata's, Investor Day last year, how does that change your CapEx strategy for 2020 beyond, I see that you have maintained, your CapEx at the same absolute level of 7 and a half trillion rupee. Is that going to be more spent within Java, or are you still maintaining a 5050 it between Java and Exshawa. The second question, is on the competitive environment. Now that over 85% of your revenues are coming from data, that leaves you most exposed to data price competition, especially what you've seen in markets like Indonesia that a lot of free data has given. How do you mitigate that risk going forward? And what is your pricing strategy? Thank you. Okay, Rajan. I'll take the first question. Yes, I think if you look at our CapEx guidance for 2020, we've kept it at around the same as last year, around BRL7.5 1,000,000,000 I think as we shared, during the Ajeeta and Alite, I was in line with the OE. I think what we have we've done is we are tightening up a little bit in terms of our criteria for investment. Here, hence, I think the whole objective is probably to get a shorter payback period from our investment. This is especially true for our investment outside Java. Having said that, I think we also see that looking at the momentum that we have done in 2019, there's still quite a bit of opportunity coming from outside Java. And hence, I think looking at this year, in terms of investment split between Java outside Java, is probably, still going to be at around fifty-fifty between Java and outside Java. So I think no change in strategy but we would have probably a tighter investment criteria when we go into new areas or investing in capacity or be Java or outside Java. 2nd question was mainly regarding the Heidi on any AT's regarding our revenue coming from data. You're asking what's the risk that we see that we are part of our strategy. We're going to be a data service company, meaning that we're going to focus only on data now and going forward. And we have never seen this as a disadvantage as we strongly believe that one of the reasons why we are competing or is it taking notes on revenue share in the market for the last couple of years, mainly because of the high data value in the beginning. So we don't have to think about legacy product. We don't have to think about voice or SMS when we do new product, when we do new price planning. The basic Jovan for Ursa on on cases. So we don't need as a risk. The opposite is why we're able to see the risk for the guys who have more legacy products than we have. Okay. Thank you. Thank you. We have our next question from the line of Colin McLem from Credit Suisse. Please go ahead. Thanks very much. And then well done on the 2019 numbers. A couple of questions for me. The first one actually is also on CapEx. Just in terms of the overall amount, I see you have, as you said, Adland decided to spend 7 point 5 trailing again for 2020. That's still quite a punchy, almost 30% CapEx to sales ratio. That might have made sense in 2019 when you were growing kind of double digit, but from what you said in the MD and A and the tone of competition, it sounds like maybe the revenue opportunity will be more constrained this year. And therefore, was it considered to maybe invest less, given how low the profitability is? That's the first question. And then the second question, related point, really, on the revenue side, obviously you won't want to be kind of tied into this, but for the industry as a whole, do you think as current competition is such that mid single digit revenue is possible for the industry in 2020? Or given the intensity that you guys are seeing at the moment, do you think low single digit is a more likely outcome? Okay. I'll take the question. So, if you talk about the CapEx, right? So, I think, what we see in 2019, right? I mean, we are seeing both Java and outside Java, we are growing, right? Obviously, I think if you look at XAVA, we're growing our rate of growth are growing much faster than what and by bigger multiples as compared to Java. So as we speak, we see that there are still a lot of areas of opportunity for both coming outside Java, right? So hence, I think if you look at that, If you look at that, we believe that, outside Java, we can still grow at a double digit, no doubt about that. At the same time, I think we also are putting a little bit of capacity investment within Java to address some of the network conditions that we are actually seeing. So I think all in all, I think if you look at the momentum, whether we should cut the investment at this point in time, when we're seeing good momentum in the market, we believe not. We still see a huge opportunity for growth. Maybe competition would probably be a lot more tougher this year. However, I think given our strategy and the momentum and plan that we have in the market, we are still optimistic, especially in our position outside of Java, right? So, and hence, I think we are probably going to continue in terms of rolling out the network outside Java, which at this point in time, I think we are seeing positive momentum and positive results. Second question on the industry outlook. Our view on the industry outlook is we are looking at around low to mid single digit. I think primarily, I think it's driven by the growth of the incumbent, right? Because I think, as you know, in this market, the incumbent has close to 60% market share whatever revenue growth that comes from the market leader would probably drive the overall industry growth, right? And looking at the fact that the composition of revenue, there's still quite a big chunk coming from legacy we feel that I think that growth would not be, as far as one might expect, if coming from, for example, data, right? So our view is, yes, there will probably be a bit more intense competition in 2020. However, I think we believe that there's still opportunity coming in some other growth areas outside of Java. And hence, I think, looking at the overall position low and mid to mid single digit is probably our estimate for the industry in 2020. Got it. If I could just come back quickly on 1, so it sounds like the tone of what you're saying and the, as you say, the proportion of revenues from in non, it sounds like you would hope that your revenue growth exceeds what the industry will do, although I see that you've chosen in your guidance to say that you'll grow in line with the industry and not better than. So is that just a difference between what you hope will happen and what you want to commit to? Is that basically conservative guidance? I think we probably need to see how the competition works out, right? I think as the same as last year. I think we initially, I think we are probably a bit conservative on our guidance. But towards the second half of the year, when we have a bit more clarity on the competitive environment, we adjusted up our guidance. I think we are probably taking the same approach here today, given that we see that competition is actually increasing at this point in time. We probably want to be a bit more conservative. We have our next question from the line of Arthur Pimeda from Citi. Please go ahead. Hi, thanks for the opportunity. Two questions. Firstly, how should we view dividends going forward? I think it's good to see a dividend return with the 30% payout, but that seems low considering the free cash flow that you actually generate how should we how should we view this going forward? 2nd question is a housekeeping question, on the finance costs. That's up around 27%. But your debt position is relatively flat during the year. What's driving this change? Is this due to accounting? So I think on dividend this year, yes, I think it is probably a small token amount that we are giving out this year, but it's in line with our dividend policy, right? It's not significant, but it is probably a good gesture given that we have done well this year. We probably want start, indicating to the market that we're probably going to start declaring dividend, right? So I think it's also an indication that we are probably a bit more optimistic in terms of the profitability level moving forward, yes? So hence, I think that 30% dividend policy payout that, we set ourselves, we'll probably continue And I think maybe over time, right, if things are going on well, that ratio will probably go up over a period of time. But for now, I think it seems a bit small, but I think it's just probably a good token of appreciation to the shareholders for this year. And probably we could probably see that number increasing over a period of time moving forward. Yes. So second is on interest on interest costs. I think what we have probably seen is, yes, you are right. If you look at the interest, actually, it's a loan is actually coming down, but there's two parts there, right? So if you look at our total interest overall, actually pretty flattish. Yes, we are coming down, sorry, total is coming down. However, you remember that we also, moved from a USD debt into 'eighteen to IVR debt in 2019. And that actually was a higher cost of debt in 2019. Having state that, I think if you look at the total interest went up, it's because of the financial lease interest. That probably coming from the fiberization project, which are in the balance sheet restricted as finance lease, right? So and that has been the primary driver of the increase in our, overall interest cost. So total interest real finance costs at GSE flat, but the interest on finance is probably driving the increase the increase in our total interest costs. And that should grow going forward as well? Yeah. I think things will change in 20, 2020. Yeah. So with the adoption of I IFRS 16, that number is going to go quite substantial because all your operating lease will probably be treated as finance lease in 2020. Yeah. So, effective from January 2020, we are going to adopt a IFRS 16 and what the impact of that, the impact is probably going to have a significant impact to your EBITDA and your EBITDA margin. In 2020. So I think, you would expect that your EBITDA and EBITDA margin would probably increase up to between mid to high 40. At the same time, I think your profit after tax would actually be slightly lower in 2020. However, over a period of 10 years, I think the total pack will actually equalize, right? So we will probably give you more color when we announce Q1 numbers in April this year because that would already be already IFRS 16 compliance. Understood. Thank you very much. We have our next question from the line of Jun Cheng Fu from CIMB. Please go ahead. Hi, thanks for the call. Two questions from me. The first question on competition in the last, conference call, you mentioned that the competition has somewhat cooled down. So it seems like it has picked up again, in the last 2 months of 2019, is that coming, in, is that happening in Java or X Java? And can you provide some color to some of these aggressive offers that you are seeing on the ground? That's the first question. And then second question, on the, the tower sale you've just announced, what is the rental rate on the leaseback and does it come with or without inflation escalators? And, what would be the tower lease revenue that we would lose on tower sold. And in terms of the net profit impact, what would be the net what would be the impact? Would it be positive or negative? Thank you. Yes. Let me first give a little bit of flavor of the competitive situation, especially here, at the end of the year, end of 2019. So I think as you all have been aware of that target is getting much more competitive in Q4, especially at the end of Q4, right? So both sales come through. And those sites were very active in the lower end segment of the market, where the status projects, became actually being introduced to many of the manufacturers is the no price and the shop validity. At the same time, we also saw our friends that now kind of becoming a significant player in the market because they have now been running for more than 1.5 years with the unlimited offer in the market. And we also saw hodge 3 at the end of the year, introducing unlimited products as well, which was a very surprise surprise for us. Now just give you one example as, let's say, Intelsat, right? So Intelsat, they started the beginning of the year with unlimited. They took it out again in Q3, they're unlimited, took it out, meaning that new customer could not buy unlimited anymore. But if you were an existing customer, you can still buy the voucher. And surprisingly Tuesday, the 4th February, they again introduced unlimited for both new and old customer. So suddenly, you have 3 player in the market with this Intelsat, it's smartened and in hot who are playing, the unlimited game and you own a circumstance and you have Excel who is not playing the game. So that's the market situation at the moment. We have made a few adjustments, especially for the Access brand to be more competitive in the lower market and for the young people's Indonesia. But at the same time, we also keep the excess prices very stable. At the moment, we are monitoring the market very closely in almost every day, looking into ease of the cluster, each of the cities to see what's actually going on. We are not doing any foolish thing at the moment as we are monitoring and we will not be the 1st mover in the market when it comes to pricing. So right now, we are looking about it, but to be honest, it's a little bit disturbing. What's happening as the 3 player now have fully unlimited in the market. Maybe before this year, let me give you a little bit of what we're trying driver in terms of doing our trucks of Tahoe, right? I think, again, I think the drive for this is not so much of a cash collection upfront. But it's more of monetization of assets, right? I think if you see from this power transaction, we are realizing an EBIT EBITDA of more than 10 10.2 times here as compared to probably XL that's trading today at probably 4.5 times, right? So is essentially a value accretive deal for us, yeah, and the positive impact to cash positive impact. To probably net profit as well. 2nd is, I think one of the key objectives here is also we actually want to lock in a low release rate over the next 10 years, right? So our lease rate is 8+2 over the 10 years, right? So So that's the second objective. And thirdly, if I think if you look at where we are today, we have close to about 4000 plus hours. I think this is probably our final tranche of tranche of sales, right? So and I think if you look at where we are, we think we do not have scale in terms of to run this business efficiently. And we think that given that permits, getting permits and handling community are actually becoming more and more challenging these days. We think that from a productivity and realization, we are probably better off selling this tower. And that's probably reflected in the value that we have, we have actually realized. In terms of the real impact to profits and all that, I think Given that this has got to be in line compliance with IFRS 16, I think we're probably going to give a bit more clarity in detail when the transaction is eventually closed in quarter 1, right? So we'll probably give you a little bit more color in terms of what this case, at the end of Q1. But essentially, I would say that these batch of towers are probably not as good as the previous powers that we have because this is the last branch, a last set of powers that, we will be selling. Right? Adlan, if I can follow-up, just now you mentioned, you wanted to lock in a low lease rate, right? And you mentioned 8+2. Is that $8,000,000 plus $2,000,000 on the O and M portion? Or yes, you can clarify that? Yeah. Yes. It is. It's 8+1000000 basic and Milan. Okay. So the 2,000,000 has got an inflation escalator on that portion. Yeah, I think, not immediately, but after year 6. Okay. Understood. Thank you so much, Alan and Alan. Thank you. We have our next question from the line of Penger Rajasringham from Macquarie. Please go ahead. Hi, thank you for the opportunity and congratulations on your numbers. Two questions from me, please. So first of all, we've talked about consolidation in the Indonesian mobile market for quite some time. And now we have competition appearing to step up quite a bit. What do you think the endgame is for the smaller operators and does consolidation look like it's ever going to happen anytime soon? And do you think the new government may have changed its views around facilitating consolidation in the marketplace. And secondly, I appreciate your data analytics in trying to drive efficiency of CapEx, but could you remind me again how quickly can you turn on and or turn off the CapEx spend given the current structure where you own less and less of the sites? I think the first question on consolidation. So actually, consolidation is good for the industry because the consolidation will make the industry structure healthier. And we've been hearing, about this plan for US for 5 years. Hoefer, currently, everyone is still waiting for the clarity in terms of regulation for the spectrum. Because currently, in terms of policy, there is no clarity yet whether we can retain the spectrum that we get post merger or post acquisition. So we hope that the new, minister, the new government actually will give us that clarity. So then, the shareholders can have a better view on how will be the business case after the merger or acquisition. I'm on your second question. I think on CapEx, how quickly we can ramp up and ramp down our CapEx here. So essentially, I think, if you look at, if you look at, let's say, the two types if you talk about co location on existing towers, I think typically with that, between 1 to 3 months, I think we should be able to get the site up and running, yes? So that's on a co location. But for, let's say, example of new sites that you require, you require to build a new tower so that TPP takes around it can be generally 3 to 6 months, but it can also be extended to 9 to 12 months or so, right? And I think the key driver there would probably be getting finding that location and getting the permits for those sites, right? So but in most cases, what we see even going to new areas there are quite ample, I mean, co location around that other providers have probably built with probably a single tenancy on the both towers, right? So I think we would say that it's probably skewed a lot more colocation, then probably build to suit. But, on, on, and in addition, I think even if we let's say we go to a certain site and all that and assuming we don't pick the right sites and For example, the revenue coming from both sides are not as good. We have managed to negotiate with all our our providers today that we do have co location rights, meaning that within those periods, for example, we are able to relocate certain amount of towers from one to the other sites, right? So and that gives us a little bit of flexibility, assuming that we don't keep the right site for whatever reason, even though our based on our analytics today, I will keep it quite high, pretty high and pretty good. We actually have that flexibility to relocate those sites, to a new, to other areas or to other locations. Yes. So with that, we do have a flexibility, for example, to move around those towers to other locations. Okay. Thank you very question from the line of David Smith from Smith Handset Management. Please go ahead. Hi guys, just wondering, you guys expect your losses to go up in 2020 for X Java? Or do you expect the losses to shrink? So I think this is a question of scale, right? I mean, Exela today, I think we are probably growing double digit and I think we're seeing very good momentum coming from outside Java. Of course, at this point in time, we do not have scale. And we look at our market share outside Java today, we are probably in low teens, right? But I think those numbers are actually growing, right? So, so and I think if this trend continues, for example, we would expect, overall, I think in all our investment thesis moving forward and in and outside Dava, we are looking at a payback of less than 4 years, right? So between 3 to 4 years to be specific, right? So So of course, looking at the current trend, current momentum, losses, if any coming from X Java, is actually going to reduce. Having said that, I think if I look at cluster per cluster basis, there are class us, especially the one that we have probably built, agreed 4 years ago has really started to turn around and already giving us a positive feedback. We have our next question from the line of Sachin Mitchell from DBS. Please go ahead. Thank you. 2 questions for me. Firstly, on the competition side, 3 players are availability data plans. Question is, are you waiting for them to get rational or we have already started to offer guaranteed plans? Because typically, when there is a reaction or there is kind of a pride for, that is financially, you know, the strategy changed for other telcos. So could you throw some light? I know you have Excel as a low end brand. Have you reacted on the active brand or not yet? Secondly, my question relates to your digital strategy. I understand that Telkom plan has launched BYU by 2 digital plan, which are very cheap. And naturally, their digital and the cost is very low. Have you offered already some kind of digital plan which are all digital with no manual information required. And I can buy the SIM card digitally has lower cost, sir. Thank you. The first question regarding have we re accessed on the competitive landscape regarding unlimited for sure, I will not tell you on this call, not very clear if we are going to do something, if we are not going to do something, that will be foolish of me. But as I said before, we are monitoring every day and we somehow have reacted when it comes to access. As I said, we have there's just some small adjustment when it comes to access. We've also been very regular or very detailed granular in our pricing. So if you go out in the region here in some of the cities, some of the clusters, you will see different prices for the XL as well. But if we are going to react on a limited or not, I cannot reveal that at this point in time. Can you repeat the number 2? No, so I think your second one on digital, I think, if you look at, where we are today, yes, I think we started on digital. Even though where we are today is probably small, we will see in the scheme of things, Essex has been pretty aggressive in terms of the digital plan, right? And I think if you look given the segment that access is actually driving today, It's a lot of the youth and it tends to be a lot more digital, right? So in 2020, we would expect quite a substantial increase in the acquisition, especially on both brands, but mainly access because it's addressing more of the use brand is probably coming from digital. Thank you. We have our next question from the line of Lexo from Ambank. Please go ahead. Thank you. I have two questions. The first is regarding your effective tax rate. In the 4th quarter, your tax rate went up over 40% while the first 3 quarters was just around 30%. Could you give us a little bit of guidance on what should we expect for effective tax rate for 2020? And what cost the tax rate will jump up in the 4th quarter, right? That's my first question. And my second question is regarding your CapEx guidance of RMB 7,500,000,000,000. Is there any allocation for spectrum, the Chase in that that end, could you give us a bit of guidance on your spectrum allocation you've given in your notes that you're looking to move from 2 and 3g to 4g And could you give us a bit of a timeline on when you expect that to happen and how much do you allocate on the spectrum additional spectrum fees. Yes. Effective tax rate is probably a bit high in 2020 because of some non deductible expenses. I think primarily what actually happened as well at the end of fourth quarter, there are some tax losses coming from the acquisition of access, which actually expired in 2019. And hence, the portion that's not utilized, have been provided for, right? So it's a bit artificially high in 2020, given of that fact, in 2019, given of that fact, right? However, in 2020, we would expect that tax rate will probably be at around the 30% level or so. Right? So, and, on on CapEx, I think Oh, on CapEx, the 7.5 H2 Spectrum. I see. Could you give a bit of guidance on your on your spectrum strategy? I mean, moving from 2 to 3G to 4G operation, 5G later, could you give us a bit of time frame? How much you think will be spending on it and, yeah, potential amount that you you would need to budget for that? I think spectrum today, you know, that, maybe the $2300 would probably be auction down or beauty contest, sometime each year, right? At that time line, we are probably not sure. But in any case, I think that would probably be around 30 megahertz. In our case, I think it's very clear in terms of our spectrum strategy that we need to free up a lot of spectrum, coming from that's used for currently for 2G or 3G. To move into 4G, yes? So in 2018, 2019, we have been aggressively moving up and shutting down the 2G sites. Right? And today, I think we are probably only using 2.5 Megahertz on 2G today, right? And in not in all cluster even in some cluster, we didn't switch off. The next level is, I think, we will also be quite aggressive in terms of, let's say, freeing up the 3G as well to move the spectrum up to 4G, right? All this is to make sure that We are able to dedicate a lot more spectrum to cater for our 4 gs traffic. Yeah. So so in whatever case that we do, we know that there will be some spectrum that's probably coming out on 4G, not sure when the spectrum on 5G will become up. Actually, there's no clear indication at this point in time. Okay. Thank you so much. We have our next question from the line of Krishna about it from Mandevi. Please go ahead. Agreement. I have two questions from my end. My first question is housekeeping. Can we please verify what forms the 202,000,000,000 Rupya other income in full year 'nineteen. I realized that most of it was booked in 4th quarter 'nineteen. Is that a one off? An ACS was not included in the profit normalization disclosure. And my second question, can I just get your thoughts also on the next level of depreciation that Excess can start this against the rest of the players? In the past 2 to 3 years, I suppose you have managed to expand your mobile broadband coverage in Nextiva, ahead of IndoStar, Hodge, and friend. But, Since the CapEx intensity has picked up 2 over the past few quarters, the next year for gap should narrow too. So, yeah, I just would like to hear your thoughts on what sort of key differentiation points that you think AXA can establish over the next 2 to 3 years to secure continued enterprise growth? Other income. Yeah. Okay. There's two parts there, right? Krishna, only 202 1,000,000,000 power gain, right, in others. We actually have sold our data center to to Princeton, Princeton Group, right? And part of that as a result that we hold 30% in the joint venture. The bulk of the gain is probably derived from the sale of the gain that is derived from the the sale of the data center. Of course, it's actually being normalized, in there. But I think in the normalization, we actually reflected net the deferred tax from the tax losses, the unentered tax losses that I explained earlier. Okay, got it. Thank you. Can you please repeat the second question please? Yeah, just basically just like to get your thoughts on the next level of differentiation that Excel can establish against the address of the mobile players. I suppose Nextiva was one them. But what will be next year? So, as I hear, you're talking about differentiation, right, when it comes to XAVA and to come to JAVA, So it's very clear that in our uptick, we have a much better engine when it comes to upselling, cross selling, approaching our customer in not in a regular way, right? So we are trying in many ways, and that's why we see, we still have a, at least in our view, we still believe that we still have a way to go when it comes to revenue from existing customer. So we are not only looking at acquisition in the old traditional way. We're also looking at how QBXure create more revenue from our analytics machine, meaning that we have to do the upselling and upselling. And we are doing this in two ways of all, we do it in a digital way, of course, we are trying to use all the digital tools, all the digital channels that we have. And the engine behind that is our analytic engine. We had a pretty robust, and we have spent some money for building that. So we have a pretty robust analytic engine. That is actually feed in all this, offers to our customers and we are able to upsell it faster to our customer. So we can see some upside in the next couple of years from that analytic engine that has. Alright, sir. Thank you. We have our next question from the line of Ranjan Sharma from JP Morgan. Please go ahead. Hi, just a couple of follow ups from my side. Firstly, on the unlimited data plans that you mentioned, Can you remind us on what price points are they being introduced, especially for 30 day unlimited plans? And secondly, on the SIM registration regulation, I think there were some discussions on strengthening the regulation and maybe even bringing KYCs uh-uh procedures. If you can share, what the update on this is, So where we are in the process. Thank you. Okay. I take, a second question on implementation. So basically now the discussion with the government is still going on on the customer journey for this EMA regulation. And also the discussion on what kind of method, which is black place versus white police that we'll we'll use to actually filtering the non legal email. So, currently, their plan is to have this immaterialization to be take to take effect in act of 2020. But as I said, it's still not final in terms of the regulation, customer journey, and so on and so forth. So the last stages is we are still in discussion with the government and also other operators. When it comes to the pricing for unlimited, there are many details for that and it can change overnight and depending where you are. But If I just look at one of our competitors with the SmartFresh, they started introducing the unlimited for around 65,000 And we also see that all our unlimited products, they're actually above 50,000. Then at the end of Q4, we saw that smartphone are actually increasing the around 10% to 15%. So it came up to 70,000,000 dollars, $75,000. So in that range, we have also unlimited pack at the moment. But we always see that that 3 has introduced a new unlimited, as I said before. I haven't seen the prices yet in that level, but it's above the 50,000 for all of them. Thank you. We have our next question from the line of Shun Shun Foon from CIMB. Please go ahead. Hi, thanks. I've got 2 follow-up questions. Firstly, in the info memo, you mentioned that the majority of XL sites will be fibrised in the next 2 years, are we referring to 1Hawk to fiber here, or are we referring to fiberization all the way to the site And, where are we now in terms of of this definition? And, IFRS 16 a site, because of this, fiberization of the sites over the next 2 years, should we expect to see a big increase in lease expenses, or is this fiberization? Going to come out of your CapEx that you've budgeted for. And then second question on the EBITDA margin guidance. You've guided for low 40s. And in the fourth quarter, you've already hit about close to 41%. So I'm just wondering whether you see further improvements from the 4Q 'nineteen levels in 2020? Those are the two questions. About fiberization is fiberization our insights, yes? So we are looking at in the next 2 years that majority of our end sites have already been fiberized, right? We already started the process. I think we're probably going to go quite of this year and even next year, right? So, second is, if you talk about a hybridization today, I mean, the impact on our aggressive hybridization, has already started. You can see that impact is really coming in, in the 290 numbers, right? I think the trajectory that we'll probably be looking at in 2020 will be the same as what you're probably seeing in 2019. Right? So because we have faced it in such a way that we achieve those numbers, if we go, not as duration just probably in 1 year, but actually doing it on a gradual manner. And I think those impact you probably seen pre MFR IFRS in 2019 already. Of course, the biggest driver of the financial lease will be IFRS 6 implementation, which is probably going to drive your overall margin, to meet, to high 40 strike zone. Lastly, on EBITDA margin, I think yes, we are at around, we are already at 40% in 2000 in quarter 4, 2019. Obviously, I think with the accretive in revenue and our continued operational excellence, we would expect that EBITDA margin to grow. And hence, the guidance would be a low 40s airport. No 40s means it can be, from 40% to probably 42%, right? But again, this is pre and my, the, implementation, of course, would probably drive EBITDA margin to lower to meet and high for this. Excellent. Just following up on that, so in terms of fiberization to N Sykes, what is the percentage today. And on the margin question, do you see significant amount of, power leases that will be up for renewal this year? That will help to contain your network cost increase? I think this year, where we are today, we are for fibrosis, fairly less than 1 third of our sites. In the next 2 years, we'll probably hit 50 a month. 50 or majority of our sites, right? And EBITDA margin is primarily going to be driven definitely from network costs. Either from renewal of our tower rental. What we are actually working on now today is also early renewal of our tower rental. So that we can benefit the lower rental earlier than before the expiry, the actual expiry, right? So that's one of the key driver to our network, secondly, it also we are working quite extensively on our power management because today, under the new managed service contract, power is under Excel's responsibility. And as part of our power management, we also modernizing our sites as well as closely monitoring to make sure that we have really close monitoring on our site utilities for each and every site that's been monitored on a monthly basis on a very granular basis, right? So I think, year 2020, you would probably see that, we probably see benefits coming this power savings initiative that we are probably working on at this point in time. Last, I think, especially, I think the other part that we are also looking on at all. I think it's a it's also looking at our, our cost of goods sold. Primarily coming from if we look at where we are on our on the voice side, given that voice is actually relatively small, our position on interconnect is also improving quite substantially, right? So, that would also help us in terms of driving costs down as well as improvement in margins. So I, there are some of the areas that we see that we could potentially benefit and hence contribute to EBITDA margin improvement in 2020. Thank you. Don't have any more Thank you everyone for your participation in today's call. As always, do reach out to us if you need further information. Otherwise, we'll speak to you next quarter. Thank you. Thank you. That concludes today's conference call. You may all disconnect your lines now. Thank you.