Okay, let's do this.
Okay. We start. Okay. Good afternoon, everyone. Thank you for joining us for Sarana Menara Nusantara full year 2024 earnings call. I am Selvi. I am an analyst from BCA Sekuritas, and I will be the moderator for today's call. Here we also have Pak Adam Gifari, the Advisor from the Investor Relations Group. I think that is the short introduction. The floor is yours, Pak.
Thank you, Selvi. Hi, everyone. Hopefully everybody is well. We are approaching the end of Ramadan. Hope everybody has been having a good time for the fasting month. Let me walk you through the result of the full year 2024. Let's start with the press release that we have prepared. Okay. The revenue reached IDR 12.7 trillion, a growth of 8.48%. EBITDA reached 10.7%, growing 7.2%. Net profit reached, after minority interest, IDR 3.34 trillion, an increase of 2.5%. We think the achievement is reflecting the success of the management in leveraging and managing a larger operational scale in tower and non-tower businesses, as well as capitalizing opportunity in the industry to consolidate a significant tower portfolio from IBST of approximately 3,200 towers. We think this is important because, in the times of consolidation, we want to maintain scale and improve it further whenever we see opportunities.
We closed the year with 35,400 towers and approximately 170,000 km of fiber operating in Indonesia. We see more scope of basically synergizing, realizing potentials, utilization of further use of fiber. We have shown this in our recent results. We will walk you through with the numbers later on, but basically, you see that the tower and the non-towers have different margins. We see improvement or maintenance of those margins while we see bigger scale from the non-tower side. Our ROE and return on investments, as defined by net income divided by the different nominators, stood at about 18.8%. We are now about to see the next consolidation of XL Axiata and Smartfren. We saw an announcement yesterday. Another headwind is intense competition in the telecoms industry.
Although I saw this morning a different headline saying that there should be more rational pricing on the wireless side. We have seen enough of this ebbs and flows of expectation in the market. Let us see what happens. For 2025, our CEO says additional challenges for the organic business growth. Revenue for 2025 is expected to be in the low single digits organically, compared to 2024 achievements. Furthermore, EBITDA in 2025 will be impacted by the non-tower segment, which has a higher growth potentials than the revenue growth from the tower segment. The EBITDA margin of the non-tower tends to be lower than that of the tower segment. Financially, as mentioned by our CEO and our CFO, there will be implementation of optimal financial strategies to deliver best result for bottom line for TOWR of 2025 results.
Our CFO mentioned also, Bu Djauwati, that they are assuming there is no obstacles, then we should see rights issue process previously delayed from last year and will be executed in the second quarter this year. We have talked about revenue, EBITDA, net profit, and the net profit margin. As you can see, we have demonstrated not so bad net profit margins given the headwinds that we see 2023, 2024. Given the scale that we have, we have grown total tower from 30,500 to 35,400, growing by almost 16%. Tenancy ratio declined from 1.78 to 1.64. You can see also the margin on the net profits remains at about 26%. Not a bad achievement after all, given the headwind that we are facing as a company. Fiber to the tower, we have approaching 120,000 from previously last year, December, almost 100,000.
Fiber to the tower, 217,000 revenue generating, meaning that we have utilization ratio approaching almost 184%. A slight decline from previous year, 186%. Again, the driver of FTTT, as people may know, is from the wireless side. The more towers that we have with high traffic, with better revenues on the side of the wireless operators, then we have tendency of higher demand or higher utilization ratio of fiber to the tower segment. Last but not least, we have FTTH here. Growing 106%, reaching almost 1.8 million homes passed. We have communicated this number, a revision. At the start of 2024, we communicated that we could be achieving 2 million, but instead we achieved 1.8 million. At FTTH HomeConnect, we achieved 170,000, growing by 42%, and connectivity growing a strong 33%.
We expect connectivity to continue to grow this fast, basically helping us with the utilization of our existing fiber. Last but not least, our leverage ratio, 4.58x . An increase from previous year, 4.3%. This 4.6x , if you round it up a bit, is inclusive of the impact of us building towers for Indosat locations through the years up to 2024. On top of that, we also buy a company called IBST, that we consolidated for the 2024 for six months. We got it for 4.6x, which is, I think, a good result. A testament of manifestation of us being disciplined in CapEx outlay, very efficient in operating expenses, interest expenses, as well as per unit cost of CapEx. I am going to stop share this slide and then move on to the next one, which is the presentation.
Am I showing the right screen now, Selvi?
Yes. We can see that.
Okay. Let me view. We are now one of the largest independent digital infrastructure in Indonesia. 35,400 towers. A total of approximately 170,000 fiber kilometers of fiber optic network. As you probably heard in the marketplace, there are other parties in the market having sizable fiber. One operator having 180,000, another operator having 80,000, more or less, and another operator having an infra co of 30,000 kilometers. If I do the math, 35,400 towers is approximately 30% of all towers operating in Indonesia. Out of the fiber optic network, we probably own and operate about 30%, 32%, about a third of all fiber in the market. Probably if you take out the non-independent one, we are the largest independent owner and operator of fiber in the country. 170,000.
Out of this 170,000 km of fiber optic network, approximately 80%-90%, we got those fiber from operators, helping them with fiber rollout under build-to-suit contracts. The fiber that we have today out of this 170,000 is mostly from build-to-suit contracts, under which we are guaranteed 10 years revenue. Then we have excess capacity for, and then we basically try to increase utilization of those assets. For towers, we seek for co-locations. For fiber, we seek for higher utilization. That is what we are doing today. Under FTTT, it was easier to do the math, but we are now embarking into different types of fiber utilization, namely through fiber to the home as well as connectivity businesses. Again, you are looking at a company with a very high percentage of revenue coming from build-to-suit model. This one. Yeah.
Which does not exist much in other markets, if I may say. We have spoken with those counterparties in India, in Europe, in U.S. Only Indonesia having this sheer amount of fiber under build-to-suit contracts. Our investment-grade ratings as of time of speaking right now, S&P is still under review. Fitch has reconfirmed, reaffirmed its rating for us for stable outlook of BBB. S&P, the previous one is BBB-. We are showing a return on investment of 8.1% and return on equity of 18%. The stock is included in all of these matrices. We still are same company that you speak to. Now move on to the next one. Our source of liquidity. We have a very strong source of financing of $700 million equivalent that we can draw down as of December. Short terms, long-term financings, excluding the bond shop program that we have already with Otoritas Jasa Keuangan.
Low-risk business, still in the digital infrastructure business. We have mobile network operators as our clients. We have also internet service providers as our clients. We have data centers. We have banking sectors. We see our services as difficult to replace as long as we have arm's length contracts with those guys. That is what we have been doing. We do not rely on specific parties such as BCA Sekuritas to give us the most contracts. What we fight for is basically arm's length contracts, under which we believe the client will be willing to continue to do business dealings with us. Attractive industry structure, industry consolidating. I put this under attractive because we are demonstrating strong results, resilient results on the financials. We just repeat XL and Smartfren as the last one that we see forming the industry from four players becoming three.
We just take on those contracts, and then we just manage our costs internally for the results of return on equity, return on investment, as well as further opportunities for us to grow further. We closed the year with IDR 75 trillion of contracted revenue. Among the largest in the market. We have free cash flow that funds CapEx, dividend, and share buybacks whenever we see opportunities. At the moment, we are focusing on growth CapEx. We see ourself as successful consolidator. I will show you a chart that we come to that. EBITDA, AFFO growing 14% and 12% with ROE of 18%. We see consolidation of MNO under this box should create a better business case for 5G. I think Indonesia, for the longest time, operating under 2G, 3G, 4G, under having too many players.
We are about to see four players becoming three as probably among the last consolidation in the telco space. Not to mention opportunity for fixed mobile convergence and then 5G being another set of opportunities for us. I think I cannot stress enough the importance of synergies across asset classes in our results. I think I have been mentioning this, even though we see scope of lower tenancy ratios. But as we see higher utilization on the fiber side, you see that our ROE remains at about 18.8%, which is, I think, a phenomenal result here, being in the telco business. We just move forward, work towards a higher utilization as people consume more data, be it in their homes or on their wireless device. This chart talks about that. We see Maluku & Papua having towers.
We see opportunities for us to expand fiber to this side of Indonesia. Because not only Java, Kalimantan, Sulawesi, we see Sumatra growing nicely when it comes to towers and fibers. I think for Maluku & Papua, once we see more fiber, more towers, we see opportunities for more towers and for more fiber in coming years. As you can see here, Sulawesi, the fiber ownership is increasingly more than what we see in Bali Nusa Tenggara and even more so than in Kalimantan. Now Java, I think is a very good place for monetization. But I see opportunities for higher growth in those places outside of Java, especially for players like Indosat Ooredoo Hutchison. When it comes to build by return slide, I think we added approximately 5,000 towers for the full year 2024, including 3,200 from IBST.
That means we added about 1,600 towers organically. But don't forget, most of those 1,600 is for Indosat relocations. 35,000 km of revenue-generating fiber for the FTTT segment. 4,200 fiber activations under connectivity, which is very busy as always. [Silvi Liswanda] one that is specifically handling this effort under E14. We added 5,000 HomeConnect and then 9,200 homes passed. We distributed dividend of IDR 952 billion during 2024, while we maintain investment-grade ratings. 54% of towers located in Java. Tenancy ratio 1.64 under tower segment, previously 1.7, reduced to 1.6, and yet we maintain our margins. Growing need of additional scope. We see additional assets such as battery to be a new growth area for towers that we add asset to those tower operations. Fiber to the tower, we reach 271,000 revenue-generating fiber by end of December.
We have almost 17,000 activations by year end of 2024. 9% penetration rate of HomeConnects under FTTH. This is the part that we say rather competitive market, yeah. Not only on the wireless. Hopefully things turns out to be better later on. This chart talks about CapEx towers and non-towers. 2024 is inclusive of us buying IBST. Not everything has been paid for this year. But as you can see, the non-towers has been relatively higher than previous years starting 2021. If you look back 2021, 2020, you see that 2022, 2023, and 2024, the margins for non-towers is markedly higher. Utilization ratios is a bit lower on the FTTT compared to 2023.
But don't forget that we are not including the utilization of fiber under FTTT in the case that we are using those FTTT fiber for FTTH as well as connectivity. As I mentioned repeatedly, every quarter that we like to show you that our ROE and return on invested capital to be stable. Yeah. Defensive, we call it. This chart, we are showing that we are very busy under activations. Basically tripling the volume that we do under activations in connectivity segment. Basically getting help from FTTT segment to utilize our assets further. This chart, FFO growing 10%, still slower than that of EBITDA because interest rate environment has not come down materially from those years that we started doing calculation, starting 2016 or 2017.
We are now showing IDR 75 trillion of long-term contracted revenue through 2024, including about IDR 4.3 trillion of committed revenue, but not yet commenced by the time we do this presentation in December cutoff. Strong investment-grade rating balance sheet. You remember 2024 was the year we bought IBST . So leverage went up from 2.5 to 4.4. It was coming down in 2022, 2023, but we were building towers that we do not get revenues for, as you remember, because of relocations. We did the math yesterday, and turns out that we were building about 5,000 towers for IOH relocations. The impact on leverage is actually quite benign, meaning that we manage our leverage very nicely. That leverage only went up to 4.6, including the impact of us buying for IBST by December 2024.
This is the company that we do that for you as shareholders and analysts representing the shareholders. Average interest rate as of This is a typo, not September, should be December 2024. We marked December 2024, the interest rate at 6.2%, which is a decrease of September 6.3%. Maintain a rating of BBB- for S&P and BBB for Fitch. Showing you the past year's results. We were just reviewing this, and we think the business result of 2024, including the years of 2022, 2023, quite resilient. EBITDA margin 86%. During the years that we did the first batch of FTTH, FTTO in 2017, 2018, margin went down a bit to 84%. Now we are at 84% also in 2024.
2020, after we see a higher utilization of those fiber. Remember 2020 was the year of COVID, that people needed to use internet wherever they are, whenever in their homes or whenever they do mobile businesses. We see higher EBITDA margins, 86%, and now it is down a bit to 84%. Even in 2023, we think EBITDA margin can grow lower, like similar 2019, 83%. 83% was the year that we saw similar lower EBITDA margins because we were expanding very aggressively in the new area in 2019, namely fiber to the tower. In 2025, the difference is that we are growing into another segment, that we call it connectivity in a more aggressive manner. So margin may come down in 2025. I think the last slide I want to show you today Oh, this is the slide before the last.
We collected IDR 14 trillion of revenues. CapEx, OpEx being IDR 10.7 trillion. Interest expense IDR 3.1. Cash surplus of IDR 741. Loan proceeds of IDR 4.6, and dividend IDR 952. We did an acquisition of IBST IDR 3.5, ending cash of IDR 940. EBITDA. Sorry, I was mistaken. This is not the last slides. These are not the last slide. We still have a couple of more slides. So EBITDA - 2.1%, because we were growing faster in the non-tower segment, namely connectivity. With lower margins. We also still had those leftover expenses from IBST. So we should see better margins in 2025 when it comes to towers. Of course, there will be headwinds when it comes to EBITDA margins stemming from the non-tower segment because we will be doing more utilization of fiber. Namely from FTTH as well as connectivity segments.
The net income grew by about 5.5% here. Quarter-over-quarter, 7% year-over-year consolidated. Revenue analysis grew 1.4% for towers, then fiber to the tower 18%, then connectivity 13%, then FTTH 215%. Total being 8.5% consolidated. Operational data, 15% about 4,800 towers addition, then 9.6%, 3,700 tenants during the year, leading to lower tenancy ratios as you can imagine, ladies and gentlemen. Fiber to the tower grew by 19% when it comes to asset ownership. Connectivity growing, 33% year-over-year, very aggressive. Then 42% growing last year. Organically going forward, we think connectivity and FTTH will be the way to go. Utilization increase on the fiber side. As of December, excuse me. Long-term debt, 63% floating and then 36% fixed.
We are now looking for more fixed rate debt. We are talking with banks that can furnish us with fixed rate debt, including us perhaps going to the bond market in the second half of 2025 using our assisting unutilized limit with the Otoritas Jasa Keuangan of IDR 19 trillion. We will use a part of that. When it comes to maturities, we have second half of 2025 maturing to about IDR 1.2 trillion. Everything is relatively manageable. 2026, still manageable also. It is 2027 that we need to basically deal more about expiration of debt. We are okay for when it comes to expiration. We should have no problem with assisting debt maturities management. Okay, Selvi. Those are the slides I have. Going back to you, handing back over to you as our moderator.
Thank you.
Handing back to you. Thank you.
Okay. Thank you so much, Adam, for the comprehensive presentation.
Yeah.
Ladies and gentlemen, if you would like to ask the questions, please press your raise hand button and we will open the line for you. Or you can also type your question in the Q&A box. We already have one raise hand here, Sabrina.
Give me 30 seconds. I need to get something.
Yes, sure, Adam.
Okay, Sabrina, go ahead with your question.
Hello.
Yeah.
Hello. Yeah.
Hi.
Hi, Selvi. Thanks for the opportunity. Hi, Adam.
Yeah.
I have three questions here. The first one is I saw that your tower growth, you added 29 new tower additions for Q4 2024. But your tenant addition during the quarter was you lost 130 tenants during the quarter. Why did you-
What is the difference between total tower adds and then the tenants?
Difference between total tower adds was 29 towers, but you recorded around 58,035 tenants gone. That is like -130 tenants quarter-on-quarter.
Okay. What is the total for a year? I need to get back to that slide.
You mean the net adds for the year?
Yeah.
Around 3,751.
Yeah. Then we added about 4,600 towers, right?
You added around Yep, 4,842.
Yeah. Those are the difference that I was mentioning in the early quarters that we saw a higher churn. The highest churn was from Indosat, that we did not expect at the early start of the year.
Okay.
That led to a higher gap between the tower we added and then actually what's the end result of number of releases.
Okay.
Yeah.
For the subsequent quarters, we should expect there's no longer churns from Indosat? I mean like for first quarter onwards.
We expect less of churn from Indosat Ooredoo Hutchison this 2025, but we are accounting for a similar churn that we saw from Indosat in 2024 from the merger of XL and Smartfren.
Oh, okay.
Yeah. To say there is no repetition of churn in 2024 for 2025, I don't think that's correct. I think the better way of saying it is that we expect something similar in 2024 Indosat churn to take place for our XL and Smartfren account in 2025, which is approximately 700 leases.
Okay. So, we still expect for 2025 there will be 700-
[crosstalk], yes.
-churns, yeah. Okay.
Yeah.
But for...
The upside scenario of that is when XL and Smartfren cannot basically have the most liberty to move around because the way their spectrum combine are different in locations within the spectrum band as opposed to Indosat and Hutchison. Does that make sense to you?
Okay. I got it. But has-
You got that. Okay.
Yep.
Yeah.
Has there been-
There has been some communications between us and Smartfren XL. But in the board level, we think those numbers are still preliminary, because our thinking is that the existing sites that XL and Smartfren combined company after their merger, should focus on retaining locations with the highest revenue, number one. T hen number two, having the function as hub site, meaning there will be likely that those hub site having several dependent sites, number two. T hen number three, the site with the fiberized site would likely to be those retain, not moved away from. Okay. But what we see now, those assumptions, they seem to be their team still trying to understand the concept that we are proposing.
Sorry, just a follow-up question.
Yeah.
Because XL has actually conveyed to the market that they will decommission about 6,000 sites, if I am not mistaken. We expect about 700 churns for this year. I believe that the total 6,000 sites is not solely for Sarana Menara. What are your expectations on the total overlapping sites between XL and Smartfren due to the merger? Yep.
Okay, Sabrina. Let me walk you through a likely scenario for a company that size to achieve the minus 30%. Say 50,000, yeah. Say 50,000 leases XL and Smartfren combined, and then they say they want to achieve 40,000. I am just using my numbers. I am not using the numbers that XL and Smartfren have given in their presentation. So 50,000 to become, say, 40,000. So a decrease of 20%. Yeah. Are you still with me, Sabrina?
Yep. Yes.
Okay. The way to achieve this 50,000 to 40,000 could be that they added first the 60,000, and then they remove. So from 50,000 to become 60,000 first, and then they go to 40,000 after while reducing the numbers on the other locations.
We have the most in XL leases among other players.
Okay.
I think Sarana has the most leases compared to other players. We may have rather disproportionately larger out of that 6,000 part that you mentioned. What's the decrease in number of leases you mentioned again?
You mean-
The decrease that XL and Smartfren has mentioned.
The decommissioning was about 6,000 sites.
You mentioned 6,000, right?
Yeah.
We may get a disproportionately higher decommissioning because we have more XL leases or Smartfren leases than anybody else in the market. Does that make sense to you?
Yep. But, they haven't mentioned specifically on how much-
Yes.
then further. Yeah.
When it comes to our relationship with XL and Smart, we don't believe what they have communicated so far to us as the final number because
So yeah. But I'm giving you a heads-up that we may get a disproportionately higher because after all, we are the largest tower company. But we have given you in our press release by the CEO in the first five minutes of the call that revenue may grow a single digit as a result of all these headwinds, right? So if you want to drill down the numbers, I am giving you a heads-up that we may get a disproportionately higher decommissioning because we are the largest tower company and having more relationship with XL and Smartfren combined. Does that make sense?
Yep. Okay. Got it.
Yeah. But of course, let us play by ear. Okay. Obviously, let us play by ear because we have a long-term contracts signed for 10 years fresh when we bought the company IBST, number one. N umber two, we also have a commitment for fiber business going forward with entities under XL, Smartfren business group after their business combination. So that may play a part and how that to be deployed for our benefit. We also have an impact on how 2025 will look like. But we have already communicated that revenue for 2025 may be a single digit because of all these happenings. Again, we are trying to give you one scenario. It is not an easy scenario to play because we are still in the phase of doing Indosat Ooredoo Hutchison relocations.
We are about to finish by full year 2025, and then come XL and Smartfren merger also, taking place at the same time. Almost at the same time. So you may call us as being conservative, but that is one scenario that we see. Again, those are just organic. Not including if we do something inorganically.
Okay. Noted, Pak.
Yeah.
Thanks for the colors.
That means you have to bear with me, and you may need to call me again in two weeks time or something. That's fine.
Yeah. Okay.
As always, right? Thank you.
Sorry. This comes to my second question.
Okay.
I have been seeing FTTH contributions have been the one that is elevating your revenue growth year-on-year. But I saw that the FTTH revenue, which is the lease rate per kilometers for FTTH. I think it has came down to about IDR 10 million per kilometer per year. So, what is driving this softer lease rate, actually?
I think the pricing dynamics in the market also drives how much that people can pay and willing to basically do use, when it comes to that. Not anything else. I think at the end of the day, when we utilize our fiber for the second tenant, the same way we do for towers, it is just incremental return on equity or return on investment, Sabrina.
Okay, good. So currently, we should see the 10 million number as the stabilized one going forward?
Assuming there is not much growth, yeah. Because 2024, fourth quarter, frankly speaking, a lot of market participants, including myself, Adam, have been made quite pessimistic about the going forward of the telco business because a lot of competitions. But I just saw this morning one of the sales sides saying that there could be some more rational pricing by elimination of one or two of the brands under one of the telcos. Let us see if that happens. Because frankly speaking, we need fix on the revenue side of the whole industry, because at the end of the day, it is a primary need of consumers, than anything else.
Okay, thank you. Pak, I have more questions, but I will come back with the queue. Thank you.
Why not finish it?
Oh, okay.
Yeah, go ahead.
I think one more is regarding the. Earlier you mentioned that the target for FTTH is actually 2 million this year, but only 1.8 million is being reached.
2 million for FTTH.
I'm sorry, FTTH. Yeah.
Yes.
What is causing the delay, actually?
Okay. If you remember, I think early second quarter 2024, XL and Smartfren made an announcement that they wanted to explore the merger. Actually, the slowing down of FTTH rollout has started to take place at the end of first quarter 2024. We understand if they want to explore the merger. Fortunately, that same second quarter, Indosat started to give us home passes, businesses. That's basically help us to recoup the target that we wanted to achieve for FTTH for the full year 2024. 2024, frankly speaking, for FTTH, we could have gone 2 million from XL alone and then another 600 from Indosat, but the XL side did not happen. We end the year with 1.8. Did you get me?
Okay. Thank you, Pak.
Okay. Hopefully you are settled.
Okay. Thank you, Sabrina.
Pak, I would like to follow up Sabrina questions, Pak, about the FTTH rollout. Could you give us some guidance or some color about the rollout in 2025 for the home passes? Any target from the company, Pak?
Okay. I think for 2025, for towers, we could be growing by about 5%. Number of tenants to be flat. Are you guys jotting?
Yes.
Okay.
It is for tower.
Okay. I am giving you the whole thing. For fiber kilometers, i.e., the kilometers fiber for FTTH that we see for 2025. We see an increase of about 2% or 3%.
Okay.
Then utilization ratio, reaching 184%- 185%. Then HomePasses to be flat, HomeConnect to be a bit higher, to 12%. Our additional revenue for 2025 could be coming from higher penetration rate. Make sense?
You said that the HomePasses will be flat. Does it mean that there will be a slower addition for the HomePasses?
Yes. We have not seen, by the time we devised this budget, an organic source of FTTH. We expect a better HomeConnect monetization.
Okay. Got it. The addition on the revenue side will be coming from more HomeConnect.
Yeah. Yes, more HomeConnect. Because we are getting a part of that HomeConnections revenue additions to our benefit, to Sarana benefit. Okay. We do have other leaders of growth like the green energy, the ATMs, but I am just giving you the biggest part. Not to mention, of course, the connectivity. Connectivity may be growing by approximately 20% again. So connectivity is the organic growth contributor for 2025.
Okay. Noted, Pak. Thank you.
Okay.
We move to another question. We have Theodorus Melvin.
Hi, Melvin. How are you?
Hi, Pak Adam.
Hello.
Good. How about you?
Okay.
Congratulations on the result and that DATA acquisition. I have a few questions.
Remala, you mean?
Yep. Remala.
Okay.
Minor question. Could you elaborate more on the company's reason for acquiring Remala? I also want to know, in the financial statement, under which segment will DATA revenue be recorded? Second, could you provide the details on the rights issue in terms of the size and dilution? Lastly, just a minor question, can we know the group's target CapEx for 2025?
Well, if you see the company, we've bought company like Integra, Wahana, Varnion, and then more recently is DATA. The stock ticker is DATA. We've announced and then hopefully we can close this quarter, second quarter. The company is called Remala. I think in its prospectus, I can honestly speak of its prospectus. The top one that they mentioned is actually about connectivity business. Serving government institutions are the types of customers under connectivity. They have a smaller part of FTTH business. They have a very small balance sheet. So that's to characterize a company that is agile, entrepreneurial, that can help us increase utilization of fiber.
It's a company that if we go into the same market as them, we could be looking at each other and then say, "Rather than you competing against my effort to increase my fiber utilization, why not jump on board together? I buy your majority shares, right? Then you continue to own equity, and then you help us grow connectivity businesses, FTTH, HomeConnects. Sorry, fiberization, FTTH as well. Then we grow together rather than us competing." Effectively increase the utilization of fiber, basically, Melvin. Whatever revenue that we get is basically from the non-tower segment, most likely to be connectivity. Does that make sense?
Absolutely perfect, sir.
Okay. Is that the only one question you have, Theodorus Melvin, for me today?
Oh, no. The second one about the details on the rights issue.
Oh, rights issue. We do not have to report at this stage the details. By the time we said that the transaction back in December was postponed, we said already the price and size will likely change from what you saw back in 2024. There will be change in size and price.
Oh, change in size.
Quite likely, yeah.
Okay.
Since it's Ramadan, I'm going to say inshallah.
Inshallah.
Okay.
Lastly, the group's target CapEx for 2025.
Okay. I think we're still finalizing. It should be around IDR 5 trillion-IDR 6 trillion.
Okay.
Okay?
Thank you, Pak.
Thank you.
Okay. Thank you, Melvin. We also have a Q&A from Kevin Panjaitan, Pak, in the Q&A box.
Right.
Okay. Several questions on FTTH. Could you share the latest subscriber numbers? I think it is referred to-
Yeah.
Next.
The presentation. It's in there any presentation. Kevin, you can look it up.
Could you provide some color on the CapEx for HomeConnect or CapEx for HomePass, Pak?
I think the street price is about $100-plus for HomePass CapEx. If you order as a sizable customer, then you get probably discounts. But the street price is about $100-plus, Kevin. Oh, I see now. The next question from Kevin regarding acquisition of DATA. Is it strategic? What is the strategic roadmap going forward? Well, I've shared with you what we think of Remala to Melvin just now. Hopefully, you were there. I think I should not repeat what I said, not to bore everybody else.
Okay. Thank you, Pak Adam.
Thank you.
Participants, if you would like to ask a question, please press your raise hand button, and we will open the line for you. We have another raised hand from Henry Tedja. Yes, Henry.
Hi, Henry.
Hi, Pak Adam. Thank you, Selvi. Pak, perhaps two questions from me, Pak. First one, perhaps, I just want to reconfirm some of the numbers that you mentioned during the Sabrina question, Pak, about the leases that might be unrenewed or the churning, basically. I think you mentioned before that the IOH churning rate or numbers for this year will be lesser compared to last year.
Yes.
But the total absolute of the churning rate or perhaps the numbers for this year will be quite similar to last year at around 700. That includes the XL and Smartfren as well.
Yeah.
Okay. Yeah, Pak, I think that's clear. Second question, perhaps regarding the connectivity revenue, Pak. I think you mentioned that you expect more than 20% revenue growth coming from this segment, Pak. Just curious, who actually is the customer profile for this business, and what kind of margin are we looking at, Pak? Yes, for the fiber business, perhaps you can get 60%-70% of the EBITDA margin. Just curious about the connectivity in here. How's the gap between towers or even fiber, Pak?
Okay. We've always been defining connectivity as a basket of different types of data solutions. It can be through satellite, it can be through fiber, it can be through fixed wireless also. Many types. As a result, there is not a single uniform EBITDA margin that I can share in this market, in this conversation today. What I can tell you is that as a result of this segment growing faster than towers, which is mostly passive leasing of infrastructure, connectivity will be a more dynamic business activity. W e've given you an estimation that EBITDA margin consolidated will go down to 83% from previously in 2024, 84%. I'm trying to make it simplified for you rather than me going through the one-by-one types of line of business under non-towers.
Sure, Pak. That's clear enough. But I'm just curious, Pak, what actually drives all this growth suddenly, let's say, the last two years or so, Pak, compared to, let's say, 5 - 10 years ago.
Okay. Why connectivity is growing fast. Yes, because we become an alternative to whatever previous provider of connectivity in the market, right? And then we have a young set of fiber, and then new way of doing things. T hey like it, right? So I think that's the way to go. The pricing needs to be at arm's length, and then whatever contract that we get in the market, and then we just take them on and then manage the cost accordingly after that. The types of customers can be from banks, can be from universities, hotels, business groups. We maintain a rather sizable database of B2B customers now than ever before, Henry. Big groups like Mayora, SSE, those kind of customers who are in need of reliable, and then we can spend good CapEx with them, and then continue the journey together. Does that help?
Yes, that's clear. Helpful, Pak.
Yeah.
Thank you, and all the best for this year, Pak.
Thank you, Henry.
Okay. Thank you, Henry, and thank you, Pak Adam. We still have Sabrina, who has a follow-up question.
Sure, Sabrina. Go ahead.
Yes. Hi. I have a follow-up question. As you mentioned earlier that the tower revenue can grow by. Sorry. Towers addition can grow by 5%, but expect tenants to be flat.
Are these towers organic or inorganic, through organic or inorganic acquisitions?
Which one that you mentioned? That you asked about?
The 5% tower increase for this year.
Those are basically, we assume, concluding the last batch of IOH relocation, 2025.
Oh.
Yeah.
Okay.
Mostly coming from that, Sabrina.
Mostly organic then.
Yeah, just organic.
Yeah.
Right. Yeah.
Okay. Thank you, Pak.
Thank you.
Okay. Thank you, Sabrina. Thank you, Pak Adam. We have no more questions, but one curious question from me, Pak, is, as we know that the market lately was quite depressed, and also the share of TOWR share price. Probably any share buyback plans?
Oh, okay. As far as I can remember, no mention of share buyback at this stage. We are focusing on growth CapEx, maintenance CapEx. While the industry dynamics is recuperating, price fixes and everything, I think we are still at that stage. It's not yet right back at this stage.
Okay, noted, Pak.
We are approaching the end of the calls. Any closing remarks?
Not much from me, but I expect to talk with you guys again through phones or text messages in the next coming two or four weeks, to find out more what's happening with XL and Smartfren. We are also eager to find out more. Whatever communication we have received as a largest tower company and largest fiber lease company provider that we have received so far, we don't think is the final version because we don't think it's finalized based on our experience here. Including the fact that we have sites commanding high revenues on the side of the operators and then a lot of fiberization, a lot of sites functioning as hub sites with a lot of dependent sites. Those are the few parameters that we can share at this stage. We are hopeful for a better 2024, obviously.
But again, on the bottom line, we continue to work on optimizing the balance sheet as we have done and demonstrated all these years. Other than that, Selvi, I do not have anything else except if I do not see you guys again. [Non-English content]
Thank you, Pak.
Thank you, Pak Adam, for the insightful from TOWR. Thank you everyone for joining this call. I think we can end this call now. Have a good day, everyone. Thank you.
Have a good break, everyone. See you all. Bye.
Bye.
Bye-bye.
Thank you.