Good day and thank you for standing by. Welcome to PT Indosat Tbk nine months 2022 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. Please be advised that today's conference is being recorded. I'll now like to hand the call over to your first speaker today, Indar Dhaliwal. Please go ahead.
Hi, good afternoon, everyone, and welcome to the call today. My name is Indar, and I'm the Head of Investor Relations for the company. With us on the call today, we have Pak Vikram Sinha, our CEO, and Pak Nicky Lee, our CFO. I will now hand the call over to Pak Vikram for his opening remarks.
Thank you, Indar. Good day and good afternoon, everyone, and thank you for joining the call today. I am pleased to report another solid performance in the third quarter, where we again saw improvement across all financial and operational metrics. This is due to consistent execution of our strategy to become the most preferred digital telco in Indonesia. Allow me to take you briefly through some of the highlights of the quarter before I pass on to Nicky for more detailed financial results. We saw quarterly growth across revenue, EBITDA, and net profit, while also adding 2.4 million customers this quarter. Very important to note that previously our data yield continues to increase as a result of our monetization efforts. The continued strong results are driven by the resilience in demand of data, despite some challenges in the economic environment.
It is important for me to highlight that nowadays, more and more we see data becoming a primary then being a consumption, and then that is something what we saw in last two to three months. Increasingly, data services are being used for productive means as Indonesia's digital economy grows even bigger. I am pleased to report that our integration is well on track, and we are ahead in many areas. We have activated more than 20,000 sites with MOCN. What does this mean? This means that more than 20,000 sites are now powered by all the spectrum which we have, 900, 1,800, 2,100, fully loaded and fully modernized. And while we are doing integration, we have also shut down 800 duplicate sites, putting us well on track to achieve our target by 2023.
This execution has been made possible by both our RAN and tower lease partner. We thank them for their support and becoming a partner of our growth. Because of this, we are optimistic to hit the higher end of the range of synergies, which is closer to $400 million by year four. This is earlier than what we had planned. Finally, we have also reached another milestone this quarter with our FTTH brand launch under Indosat HiFi this quarter. This is a key step towards building our portfolio. I will now hand over to Nicky for the financial performance update.
Thank you, Pak Vikram, and good afternoon, everybody. I'm delighted to share with you our financial performance for Q3. Let's start with our quarter-on-quarter numbers. Overall revenue grew 3% quarter-on-quarter from IDR 11.7 trillion to IDR 12 trillion. This growth was underpinned by the enlarged customer base, as mentioned by Pak Vikram, as well as strong uptake of data services. You will see later we get good revenue growth contribution from all three business segments. Our EBITDA after normalization for one-off staff cost for group-wide restructuring and rightsizing exercise improved by 4.7%. The normalized EBITDA margin percentage is up another 0.7 percentage points. If you recall, we started Q1 at 40.3%. In two quarters' time, we have improved our EBITDA margin by 2.3% to 42.6% now.
This reflects the benefits we get from an increasing revenue base as well as our efforts on cost control. Our normalized net profit jumped 3.5x from IDR 105 billion to IDR 475 billion. Thanks to higher EBITDA, less interest expense from reduced debt balance, and retired assets D&A savings. Our net debt to EBITDA also reduced, improving the performance from 0.85x to 0.75x. Next slide, please. Here we show a lot of details on the normalization just to give people clarity and transparency on what adjustments we've made at the net profit level. Without going into the details of each adjustment, I just want to highlight a couple of points. Number one is the reported net profit.
The trend is somewhat distorted by the booking of massive gain from the formation of data center JV in Q2. The normalized net profit shows a very clear and solid upward trend. Starting from Q1 IDR 105 billion, it grew first quarter IDR 44 billion to the second quarter IDR 105 billion, and then in Q3 we achieved IDR 475 billion. Very solid growth there. Moving on to the next slide. As I mentioned earlier, on a year to we are seeing very good growth, very good contribution from everybody, and now we are looking at our different P&L matrix for nine months as well as on a quarterly basis. Let us focus on year-on-year. There are quite a number of bar charts here, many charts here.
On a year-on-year nine-month basis, most of the movements are because of the effects of the merger, so I'm not going to elaborate on that. In the case of a net profit, we had tower sale gain in the nine months of last year and data center profits in the nine months this year. Both of these transactions boosted our profit for these periods to IDR 5.8 trillion and IDR 3.7 trillion respectively. On normalized basis, the effect of merger has brought about 38.3% normalized EBITDA growth, and the net profit rose by 16.3%. If you look at our Q-on-Q reported figures, the normalized growth was 4.7%, but it was diluted by the one-off additional employee costs from the right sizing exercise to 3% on reported basis.
At net profit level, Q2 net profit has included the data center profit, IDR 3.5 trillion gain. On normalized basis, as mentioned earlier, it is the net profit growth is 3.5 x, and it is very very encouraging numbers for us. Let's move on to look at our revenue performance across the three segments. All of them are performing very well in Q3. Cellular expanded by 1.4% quarter-on-quarter after its very strong growth, 8.5% in Q2. Moving to the right side, both MIDI and fixed telecom grew at double digits quarter-on-quarter at 12.8% and 19.2% respectively. How about our cost base? Let's go to the next slide. Our total OpEx for the third quarter is 3% higher after including the additional rightsizing costs.
If we are to strip out this one-off cost, the delta will drop to a mild 1.2% increase compared to our 3% revenue growth. The incremental cost for right sizing is reflected in personnel expense as well as G&A. You see some increase in those two lines. In terms of our marketing expenses, it dropped 14%, this was because of additional spending in Q2, which was to do with promotion, seasonal promotion for Ramadan. It has come back down to a more normal level in Q3. For G&A, apart from some incremental spending for right sizing exercise, as I mentioned earlier, we also have a bit more corporate sponsorship program such as Formula E in Q3.
In case people, when you look at the other operating income expense, you see a fairly significant movement quarter-on-quarter. Once again, it is just because of the one-off data center profits that we booked in Q2. If you strip out the IDR 3.5 trillion there, it would explain readily the movement on a quarter-on-quarter basis. Despite the impact of the various one-offs, it's pretty apparent our overall costs are stable and are well controlled. Okay, next slide, please. In terms of our CapEx spending, our integration project has gathered pace, and the capitalized CapEx almost double in Q3 from the level we spent in Q2. This catch-up in CapEx booking is within our expectation and was highlighted in the previous meeting.
These Q3 CapEx pushed the CapEx to revenue ratio up by 12.1 percentage point, but our overall ratio for the nine-month period is still 13.4%, one percentage point below that of last year. We're, we are still not spending very high CapEx overall. Definitely we are catching up, which is a good thing for us. Moving on to the next slide to look at our net debt. Our net debt declined by 4.8% from Q2 to Q3, as our strong operating cash flow in the third quarter and a collection of receivables from IM2 liquidation was able to offset the payment of dividend of around IDR 2 trillion. Even after the payment of this significant dividend, we still have our net debt balance coming down.
It helps to compress further our net debt to EBITDA ratio to just 0.75x. On a year-on-year basis, in case you wonder why our net debt has gone up so much, the IDR 4.4 trillion for the first half reduced following the tower sale transaction in first quarter last year before the payment of IDR 9.5 trillion dividend prior to merger. Following this and the merger, net debt was up to IDR 16.8 trillion at the end of first quarter. However, our strong cash flow from operations from the second and third quarter this year help us to trim the net debt from this level to just IDR 13.1 trillion. This is a update for the financial section, and I'll now pass the time back to Vikram .
Thank you, Nicky. Let me touch briefly on operational trends. Most of our commercial indicators are positive, as I mentioned earlier, with customers, data traffic, and especially data yield growing. There was a slight decline in ARPU, but this is mainly due to seasonality factors with a strong Lebaran in quarter two. If you all remember, quarter one versus quarter two, our ARPU grew 9%, and that was mainly driven by Lebaran. Our underlying ARPU continues to trend very well. Our network rollout continues with us now targeting 188,000 BTS across the country, and we have completed the launch of 5G in Bali in August to support the G20 presidency. We have also attained some good awards this quarter. Especially we were very happy to see the award of one of the best performing stock. Finally, we have updated our guidance.
We expect the revenue this year to grow at least in line, if not better than the market rate of growth, given our strong performance in the first nine months so far. We have also updated CapEx guidance to IDR 12 trillion, given we are seeing good traction so far, both on the progress of our integration and CapEx project. As a result, some CapEx projects have been completed earlier than expected. This would help us accelerate realization of synergy saving and to deliver a strong and reliable data service for our customers. That conclude my remark. I think now let's go to the Q&A session.
Thank you. As a reminder, to ask a question, you need to press star one one on your telephone. Please stand by while we compile the Q&A roster. First question comes from the line of Piyush Choudhary of HSBC. Please go ahead.
Yeah, hi. Good afternoon and congratulations on the strong results. Two questions for me. Firstly, can you talk a little bit about the pricing environment, competition? You know, after the fuel price hikes, have you seen any impact on consumption or lower spends by any customer segment? I'm curious what drove this 8% sequential increase in ARPU in the postpaid segment, if you can cover that also. Secondly, on network integration, you mentioned more than 8,000 sites are now shut down. Can I clarify that the cost savings are already reflected in the second quarter?
In the third quarter results or there is some kind of lag impact as many tower lease rentals would not have come off? If you can give timeline for off-balance sites which are left, what is the timeline for shutdown and timeline for relocation? Thank you.
Hi, Piyush, this is Vikram. Let me start with your first question on the pricing environment and concerns around, you know, the impact of inflation or fuel price hike. On pricing, I think we have seen a more mature trend from everyone in the industry, you know. As I always say that the current level of data yield is one of the lowest in the world, and then customers are now looking for more reliable and better experience, and everyone is responding to that. I think we are seeing a more mature and right thing, and that is what, you know, will be reflected on the industry growth. If you look at historically last three years, industry was growing 1%, 2%.
I think this year, industry will grow at least 5%-6%, which is a very good news for the industry. Now, coming on to the whole thing around price increase, my learning and as a team what we saw, and this is what I tried highlighting in my presentation, that data, I see this more as a primary than consumption. You know? It has become an essential need of enabling the digital economy. Let's take an example of a Gojek driver. If the data is not there, his work stops, and there are many more such examples. That has been one clear indicator that data is more as a primary than consumption. Yes, there has been a bit of an optimization, you know, there with food inflation of 10%, with fuel price increase of 30%.
There is a bit of an optimization around, you know, pack consumptions and all. Historically, if certain set of customers used to consume 70% of their quota, now they are consuming 80%. We are seeing how we can add more value to those customers, so they see this more as a primary need. Overall it is very resilient. We were very happy with the way we were also a bit nervous with all these things, but the current third quarter result gives us more confidence that, you know, now it is even more important that we focus on giving good customer experience and good services, and then we want to build on that. Coming on to, I think postpaid, we are seeing some good traction on postpaid, high-value customers and all.
You know, with our merger now we have a very strong network across Indonesia, and that is why we are focusing on even pockets like Nusa Tenggara, and then eventually we will try to fix Papua and all, so that we want to make sure that people understand that, with IOH scale, our network works very well across Indonesia. We are walking that path, and then we are getting some good response. I think that is one, but you will see more work on postpaid. Postpaid we see as a clear opportunity. We see that our current level of market on postpaid is under index. In the coming quarter you will see more and more opportunities and better performance coming out of postpaid. This is what is on postpaid.
On this 8,000 shutdown, I will start and I will request Nicky to add. To your question, you know, 8,000 we have shut down. By year-end, we want to shut down 10,000. By first quarter next year, we want to shut down around 17,500. What you see now, the moment we shut down, there are few things which gives immediate benefit, like power consumption and all. There are few things which take one or two quarters, yeah. That is how it flows. This is how we are tracking. Nicky, over to you if you want to add anything.
Yeah. Just to add that, yes, you are correct. There is some time lag between when we shut down the sites and versus when we will get the savings to come into the book. Even among the savings, different elements of savings, it will come at different stages of the processes. Of course, the big significant savings will come from the tower leases. In terms of that, yes, the expiry of leases is one factor, but we are also able to work with our partners in the power company on different arrangements so that, for example, we'll be able to relocate some of these leases to the new locations that we may need for our rollout.
Even if we are not eliminating the costs in our P&L, we will be able to expand our scale and generate more revenue.
Got it, Vikram and Nicky. If I may follow up just on this time lag, right, to reflect on the cost savings, or to have the benefits of relocation, what should we think about as the time lag? Is it six months? Is it 12 months when we start to see full benefit of this shutdown of sites?
Piyush, as I said, there are two major elements there. In fact, three. One is power, second is managed services, third is the tower. The first two is between three to six months maximum. Yeah. The third one, when it comes to tower, there are multiple angles to it. The good thing is, as I highlighted in my presentation, all the tower companies, they have given us 100% relocation right. Number one. Number two, you know, there are some renewal and all which are all planned, so that also help us, you know, do it. The third one is, you know, not a straightforward three to six months. It is a combination of relocation, renewal, but eventually over a period of one year, you know, we make sure that everything is productive for us.
Got it. Thanks a lot, and all the best.
Thank you for the question. As a reminder, to ask question, please press star one one. Next question comes from Hussaini Saifee of UBS. Please go ahead.
Yeah. Hi, good afternoon, and thanks for the call. A few questions from me. Apologies because my line was cut for a moment. I just wanted to understand what drove such a significant growth in MIDI and fixed telecom revenues in the third quarter? And how should we see it going forward? The second question is, you know, again, going back to Piyush's question, on the price increases, and there is some softness on the macro side. Just want to understand, is there still a scope maybe this year or early next year for further price increases?
Given where the macro situation is, it will be more of a, you know, in the next maybe one to two quarters it will be tough to do that. Third question is on the CapEx side. Vikram Sinha, as you raised the CapEx guidance to IDR 12 trillion, what portion of that CapEx is also going in terms of rolling out FTTH, and what is management's strategy over there in terms of rolling out FTTH or fixed broadband? Just a housekeeping question is that the marketing expenses was down significantly on a quarter-over-quarter basis. Just what drove that? Thank you.
Hi, this is Vikram. Allow me to recap your question. The first one was on MIDI, correct?
Yes. MIDI and the other.
Correct. The fixed telecom. MIDI, you know, we see a very good traction on our core connectivity, you know, between us and our subsidiary, Lintasarta. As I want to remind all of you, Lintasarta is also one of the most preferred brand in Indonesia when it comes to core connectivity and enterprise services. What you see there is very sustainable. In fact, we believe it will only go up because we are seeing very good demand. That also has a bit of a one-time, what we call it as OTC, you know, project coming out. So sometimes, you know, between quarter-on-quarter there are more one-time project versus another.
The good news is, the core connectivity is seeing a lot of traction, and this is where we are also investing on fiber and all so that we have a good presence. We are covering more and more city between us and Lintasarta. On ICT side also, you know, we try to do these projects which have healthy margin and also it helps us on our recurring revenue. We are seeing some good traction there also. You can only see upward trend on that, and these are all very sustainable numbers. Coming on to your price question.
You know, I think the way I look at it, the current level of yield is very, very low, you know, and with it more focused on experience and service and the way demand which we are seeing, obviously there's an opportunity. At the same time we want to build trust with our customer, you know. We don't want to do knee-jerk things, short-sighted things. We are very mindful that this whole journey of making sure that we have more sustainable and sustainable level of price which is helping us deliver the right kind of experience. While doing that, we don't want to be transactional and short-sighted. It is not about pressure on doing it. It is more about doing the right thing and building the trust with the customer.
The third one is on CapEx. You know, FTTH is very important to us. Again, I want to remind everyone our aspiration is to get to first milestone is 10% market share on the home broadband space, by maximum three to four year. The current level of CapEx is very small. We are now capitalizing on our existing fiber footprint. You know, we have close to 50,000 km of fiber laid down across the country between us and Lintasarta, and then we are trying to see how from fiber to tower we create home passes. At the same time we are working with partners.
We are seeing a lot of interest from partners and private equity companies who are ready to work with us on creating digital infrastructure in terms of home passes and all, and we are exploring all those opportunities. The last one was on sales and marketing. I think Nicky highlighted. Generally, quarter two is a Lebaran quarter. The promotions and all those activities are significantly higher than normal quarter. It is more a function of that.
This is very clear. Thanks, Pak Vikram. Thanks, everyone.
Questions. Once again, to ask question, please press star one one. One moment for the next question. The next question comes from the line of Choong Chen Foong from CIMB. Please proceed.
Hi, good afternoon, and thank you very much for the conference call. This is Foong from CIMB. Three questions from me. Firstly, on the mobile revenue growth Q- on- Q, I note your comment on the seasonality effects. My question is whether the tariff hikes that you carried out in mid-July have they been fully reflected in the third quarter's revenue, or do you think that we will only see the full effects in the fourth quarter. That's question number one. Second question, post those tariff hikes, what have you seen in terms of the price elasticity of demand. You know, are you seeing consumer spend remaining very resilient, or is there any signs that you know it's starting to.
The price elasticity effect is starting to kick in? My third question on the right sizing that you have done, are we expecting any more right-sizing costs to be incurred in the fourth quarter or even next year? Yeah. Those are my three questions. Thank you.
Hi, this is Vikram. On your question of mobile revenue growth, I think we are seeing a very healthy trend, you know. If you look at quarter three, we have added 2.4 million customer. We have seen revenue growth on back of Q2. Q2 historically is the best quarter because of Lebaran and seasonality. We have seen a growth over that. I think we did. Yes, we did one in March and one in June, July, you know. We have seen some impact of it in quarter three, but the full impact you will see in quarter four full year because there are certain plans, you know, validity and all.
To answer your question, you will see the full impact of price uptrend coming in quarter four, but some impact we have seen. The important thing to note is while there was an increase in the price, there was also a lot of increase in food inflation, fuel price inflation. The most positive news for us was that we saw clearly that data is becoming primary. I personally used to categorize data under consumption, but my personal learning is data is more primary now. Yeah? With this background, yes, there is a pocket size, there is a wallet share, but people are using it more productively.
They are using it, whether it is student, whether it is, business class people, whether it is our, all segment of customer. We have seen some optimization on our lower segment. You know, their pack utilization has gone up. They are trying to optimize. Overall, we see, you know, all those things have been managed, and we see a more positive trend than what we had expected. Coming on to the last point on right sizing, Nicky, do you wanna add anything here?
Yeah, rightsizing is a one-off exercise for us following the merger, so we don't expect any more costs in relation to that in Q4 next year.
Okay. Understood. Thank you so much, Pak Vikram and Nicky Lee.
Thank you for the questions. As a reminder, if you'd like to ask question, please press star one one. We have a follow-up questions from Hussaini Saifee from UBS. Please go ahead.
Yeah. Thanks. Just one question from me is on the spectrum side. I understand that 700 MHz and the 5G spectrum will be up for auction likely next year. Just wanted to understand the means how Indosat look to participate in those auctions, and will getting low-band spectrum will still be priority after the consolidation, or do you think that you know you have enough spectrum on this side? Thank you.
Yeah. Hi, this is Vikram. I think what we see is 3.5 MHz, which is more 5G spectrum coming first next year.
700 MHz because there are a lot of free-to-air channels and there are a lot of other things. We are expecting this a little later. 3.5 MHz is what we feel, you know, will help us get the whole 5G ecosystem ready, and it'll help us scale the 5G. Yes, you saw Nicky highlighted our strong balance sheet and, with our strong support from our shareholder, we will be ready for 3.5 MHz specifically. We are more focused on, you know, how we ensure that the ecosystem is ready. One good news is, you know, with the 5G launch and scale happening in markets like India, it is developing the ecosystem, and it is also bringing the cost of the ecosystem down.
All these things will benefit us, and we are getting ready for that, so that whenever it happens, when we put money, we are ready to monetize those investment. We are keen to work with the partner ecosystem to do that.
Understood. Thank you very much.
Questions? One moment for the next questions. We have follow-up questions from Foong of CIMB. Please proceed.
Hi, thanks. Just one follow-up question from me for Nicky Lee. If I look at the balance sheet, Nicky Lee, you have a fair bit of debt that's coming up for maturity in the next 12 months, and the average duration of your debt is also not very long, only 2.4 years. You know, what do you plan to do with regards to debt? And do you see, you know, your cost of debt actually rising a fair bit with what you're going to do with regards to the debt refinancing and all that in the next 12 months, 24 months? And if so, how much?
Hi, our cost of debt is actually a function of number one, our floating versus fixed rate portfolio. Currently, we are about 50/50. Secondly is for the floating rate portfolio, of course, that would be dependent on the overall interest rate landscape. When the interest rate announced by BI is going up, then that would have an impact on us. However, on the other hand, we also have some of these older debts where we have a higher priced debt. We have been taking advantage of refinancing those debts and reduce the interest expense. Overall, our cost of the interest is around a bit higher than 7% at the moment.
We have been getting extra financing or facility from banks as well as going to the bond market to seek additional financing. We get a very good response from both the bank side and also from the bond issuances. We are able to get a much longer tenure from both banks and from the bond issuances. We do expect to see our overall maturity to be lengthen gradually over time from the current level. In terms of the cost, it's kind of difficult to predict how, you know, it would move because the interest rate environment is just very volatile.
At least we have quite a not-small fixed-rate portfolio, which would protect us from any significant increase in the interest cost for us. The other factor you need to consider is we actually see our interest expense lower in absolute amount. That is because of the strong cash flow from operation and some you know one-off collection from IM2 liquidation do help us to lower our net debt balance even after we pay IDR 2 trillion of dividends. We're with all three factors going together happy to report that even interest rate is going up, our interest cost is coming down. Going forward, of course, we will look at this very closely. Liquidity is not an issue for us.
The focus is looking at how we can reduce the interest costs.
Okay. If the interest rates don't really spike up too much from current levels, you think that the average cost of debt will not be too much higher than where it is right now? Like, 'cause you mentioned it's above 7%, right? You probably can refinance at about the same levels at this point?
Well, it depends on the extent of the increase really. That is the single source of the factor that is hitting us on the interest rate and on the interest cost. We should be getting, like I said earlier, when we do refinancing, we're actually getting savings and then also our cash flow. We should be generating good cash flow to reduce our debt balance overall. It's a mixed effect of the three.
Okay. Right. Understood. Thank you so much, Sir Pak Nicky.
Thank you for the question. We also have a follow-up question from Piyush Choudhary of HSBC. Please proceed.
Hi. I just wanted to discuss a little bit more on the CapEx, guidance upgrade which you have given. Could you share a little bit more details on where incrementally, you know, you'll be intending to spend? If you can also give some breakup or some color on the breakup of this capital expenditure between mobile and non-mobile segment. Is the non-mobile component rising and that is what is driving this capital expenditure, revision?
Hi, Piyush, this is Vikram again. I think one of the fundamental thing which I want to highlight is we are getting a lot of support from our shareholder on investing on growth. Yeah. On one side, you know, we got lot of sponsorship from our partner on integration cost, which are one-time integration. But we are putting our money. One of the example is a market like Nusa Tenggara, where after integration also our market share is under index. We are less than 10%. So we are making sure that our network is competitive on pockets like that. This is one example. Second, in terms of mobile, non-mobile, we don't give so much of detail on those things. Unfortunately, I'll not be able to share with you.
If I may add to Pak Vikram's answer on CapEx. As we highlighted earlier, the incremental spending is actually not incremental. What we're doing is rather than looking at one year, if we look at the multi-year forecast of what we need to spend, it is pretty much the same amount in terms of what we need in for integration and the ongoing CapEx project. It's really a matter of how quickly we can handle our integration and ongoing projects. It's actually a very good thing for us to be able to accelerate the pace of the project work and complete things earlier. We get the benefit from providing a much better network and with higher capacity so that we have more things and better network to sell to our users.
Yeah. On that point, you know, our integration plan was on 24-month. Now we are doing it on 11 months-12 months. A lot of things, you know, to support this, which was planned for next year, we'll be able to complete it this year. That help us realize the synergy value also faster and also deliver better customer experience.
Got it, Pak Vikram. Also on this MOCN activation, you have mentioned in the presentation that more than 20,000 of the sites have been fully integrated. Could we get the kind of timeline as you've shared for your duplicate site shutdown? Like, what is the timeline for this? And can you share what are the kind of financial benefits or implications of this? Like increase in capacity, how much is the increase in capacity, or is it more to do only with the improvement in the customer experience?
This is a very good question, Piyush. First, you know, in terms of timeline, we have to integrate close to 45,000 sites-46,000 sites. We want to complete it by first quarter next year. While doing that, we want to parallelly run and dismantle so that we are realizing the synergy value. By end of this year, we want to dismantle 10,000, and by early next year we want to complete the dismantling also. Both these things run parallel. Then that leads to, you know, lot of synergy. The high-end number, you know, when we started this journey, we spoke about $300 million by anywhere between four to five years. Now we are more confident on the upper end.
We are looking at $400 million of synergy, you know, coming out of it. This is the part around synergy value. Of this, 480% is driven by network and dismantling of sites. The point which you said, what excite us more is, the moment we do MOCN, you know, with the current technology, it helps us give more capacity and improve indoor coverage and experience to our customers. That is where we are seeing lot of traction, and that is what is also helping us add customer. You know, both the brands are growing. That is where we see the real opportunity to maximize.
Thank you, Vikram.
Questions? As a reminder, if you'd like to ask questions on the phone, please press star one one.
Hi, Desmond. Looks like there's no more questions on the line. Yeah? Hello? Desmond?
Yes. We currently have no more questions on the phone line. Please continue.
Okay. Great. I hope everyone found the session today very informative and very interactive. Thanks once again. Reach out to me if you need any additional details. If not, we'll speak again next quarter. Thank you very much, everyone.
This concludes today's conference call. Thank you for participating. You may now disconnect.