Good day and welcome to the third quarter 2019 results conference call. For your information, today's conference is being recorded. At this time, I'd like to turn the call over to Korhan Bilek, Director of Treasury and Capital Market Management. Please go ahead, sir.
Thank you, Denise. Hello, everyone. Welcome to Turkcell's third quarter 2019 results call. Today's speakers are our CEO, Mr. Murat Erkan, and our CFO, Mr. Osman Yılmaz. We have a brief presentation, and afterwards, we will be taking your questions. Before we start, I would like to remind you to review the disclaimer of our presentation. Now, I hand over to Mr. Erkan.
Hi. Good morning and good afternoon, everyone. Welcome to Turkcell's third quarter 2019 result call. I'm glad to announce a quarter of profitable growth on strong operational performance. We observe the positive result of our customer-centric strategy. We gained 526,000 new subscribers, 503,000 of which are postpaid. At the same time, the average revenue per user, both in mobile and fixed broadband, continued to rise by double digits. We recorded 14% consolidated revenue growth. On top of the 26% realized last year, our two-year cumulative growth reached 43%. Turkcell Turkey continuing its momentum while we were negatively impacted by our consumer finance company and termination of our sports betting business. This performance was in our expectation. As for Turkcell Turkey, the consumer business grew by 15% with a strong ARPU, while the corporate segment grew by an impressive 28%. We will elaborate more on revenue segments in the financial sections.
With TRY 2.8 billion EBITDA, our EBITDA margin was 43.1%. Net income was more than three times that of last year, reaching TRY 801 million. We have further strengthened our balance sheet with prudent financial management and cash generation capability. As at the end of September, our net debt to EBITDA ratio has improved by 0.8 times year-on-year to one times. Next slide. Now some more details on our financial performance. We recorded a TRY 6.6 billion top line and TRY 2.8 billion EBITDA in this quarter. As we stated in previous quarters, due to the new IFRS rules impacting EBITDA, we also started to discuss EBIT in our presentation. Our EBIT this quarter reached TRY 1.6 billion with a 24.9% margin. Capital expenditures remain under control with a 15% operational CapEx over sales ratio. In the third quarter, our net income was TRY 801 million.
In this figure, there is a negative impact of 160 million TRY provision booked for wireless tax related to 2018 and 2019. In the first nine months, revenue rose 19% to 18.5 billion TRY with a 41.6% EBITDA margin. EBIT reached 4 billion TRY with a 21.8% margin. The cumulative bottom line reached 2.5 billion TRY. These results are in line with our plans as we reiterate our full year guidance. Moving to next slide. We would like to give an update on our three strategic focus areas. Our digital services, Digital Business Services, and our Paycell platform. For digital services, we are focused on meeting our targets at standalone levels. To improve and enhance these digital services, we launched Voice over IP on BiP web this quarter. BiP user now make voice and video calls over the web with alternative devices even when their phones are unreachable.
We also launched a new platform for SMEs that helps them to save on expenses. In Digital Business Services, firstly, Bursa City Hospital, the IT infrastructure of which we installed is now operational. Secondly, in digitalization, the 112 emergency line infrastructure, after Istanbul, we now cover 24 additional cities across Turkey. All in all, the business line's nine-month revenue growth is around 48%. Reaching Paycell, we continue to expand the Paycell network through agreement with key accounts. Moreover, Paycell is now integrated into Istanbulkart, increasing its value proposition. Meanwhile, Financell has also started provision financing for corporates to assist in their digital transformation. Moreover, at Turkcell, we have launched smartphone leasing in the corporate segment in a first for the sector. Moving to next slide. Let's look into our operational performance.
This quarter, postpaid subscribers rose by 503,000. This strong rise results from offers that leverage big data analysis and innovative tariffs rather than price action. This is evident in the yearly 10% increase in new customer output. Our objective is further postpaid growth through structural action that enhances customer experience. Blended mobile ARPU rose to 45.5 TRY on a 17.6% increase with upsell to higher tariffs, positive change in subscriber mix, increasing data usage, and the continued effort of price adjustments. On a like-for-like basis, growth reached 20.1%. Mobile churn was at 2.1%. A regulatory change has been introduced concerning prepaid users without a resident permit. This change has led to mandatory closures impacting the churn rate by 0.1 percentage points. We foresee a larger impact in the fourth quarter. On the fixed broadband front, our fiber subscriber base rose by 29,000 net additions.
Residential fiber ARPU posted all-time high growth of 19.8% year-on-year. This reflected upsell performance and price adjustments. Next slide. Inflationary pricing policy remains a key pillar of our business model, playing an important role in achieving strong ARPU growth. Due to the contracted nature of the business, our price actions are reflected in ARPU with a lag. This has been evident in both mobile and fixed residential ARPU trends since the beginning of the year. This slide illustrates the strong momentum of ARPU growth that exceeded inflation following the second quarter. A higher postpaid ratio is yet another important factor supporting strong ARPU growth in the third quarter. Next slide. Superbox, our fixed wireless access product, provides a 5G-ready service on our strong 4.5G network. It is the ideal solution for customers without fiber access.
The customers who are not satisfied by the performance of ADSL service prefer Superbox. It generates twice the ARPU of fixed broadband, further monetizing our 4.5G spectrum. At the end of the third quarter, Superbox subscribers reached 217,000 on a strong add-on 88,000. Given the strong demand for this product, Superbox is becoming the generic name for fixed wireless access in Turkey. Moving to the next slide. We enhanced our marketing campaign with the use of artificial intelligence on subscriber profile and network parameters. The credit campaign offering customized gifts attracted 11 million young subscribers. Competitive tariffs introduced in Q2 contributed to new customer acquisition. More than half of the subscriptions to this tariff were new to Turkcell. 300,000 customers participated in our new social responsibility project, Smile. The project made use of face recognition technology.
All in all, consumers have continued to recommend Turkcell to a significantly higher degree than the competition, as seen in our Net Promoter Score. Next slide. Now an update on the data usage and 4.5G subscription trends. Average mobile data usage rose 49% in a year to 8.1 gigabytes per user. We observe growing data demand for 4.5G as well as non-4.5G subscribers. The main factors driving this 8.1 gigabytes are greater data consumption of all users, the rising share of 4.5G users, and digital services. Out of 42.2 million customers signed up for 4.5G services, 19.6 million have 4.5G compatible smartphones, indicating room for growth. In the third quarter, there were 655,000 net additions of 4.5G compatible smartphones. Next slide. Let's look at our performance in the international markets. Turkcell International generates 8% of group revenues.
The third quarter revenue of our international operation rose 23.8% year-on-year, mainly on higher mobile data consumption and FX impact. In local currency terms, the growth was 13.9% year-on-year. We started to see a lower positive impact of FX movements in the third quarter, and this impact will likely be even lower in the fourth quarter. This is an expected impact covered in our guidance. This segment has 9.5 percentage points EBITDA margin improvement. On a like-for-like basis, this is 2.3 percentage points. The analysis eliminates the impact of radio frequency usage cost capitalization in accordance with IFRS 16, which began in the fourth quarter of 2018. Our Ukrainian subsidiary, Lifecell, continued to extend 4G penetration and enrich its digital services. Lifecell maintained leadership in smartphone penetration with 79%. Three-month active 4G user exceeded 45% of total mobile data users, consuming 8.8 gigabytes per month on average.
Last but not least, I would like to remind you that we will be hosting a Capital Markets Day in London on November 11th. At the event, we will provide an update on group strategy along with our three-year outlook. I hope to meet you all on that day. Now, I will hand over to Osman, our CFO, for the financials.
Thank you, Murat. Let's take a closer look into the financials. In the third quarter, group revenues rose 13.6% year-on-year, corresponding to an incremental TRY 788 million. TRY 745 million of this increase is from Turkcell Turkey, growing at 16.2% on strong ARPU. Turkcell International revenues rose by 23.8%, contributing TRY 101 million in this quarter on strong ARPU with rising data consumption as well as currency movements. As expected, the contribution of Turkcell Consumer Finance Company turned negative in consequence of a declining loan portfolio, mainly due to regulatory limitation on installments. This had a negative 1.2 percentage point impact on group growth. On the other subsidiaries side, our exit from the sports betting business in Azerbaijan in December 2018, and in Turkey late in the third quarter was impactful by as much as two percentage points on the group growth.
All in all, the weight of Turkcell Turkey in group revenues has increased from 84.6% to 85.8% in the third quarter. Next slide. EBITDA rose 18.6% year-on-year to TRY 2.8 billion with a strong margin of 43.1%. Seasonally, Q3 is strong in terms of sales, thanks to higher usage over the summer. This reflects in higher profitability. Out of the 1.8 point EBITDA margin improvement, one point comes from the gross margin, and the remaining 0.8 point comes from OpEx. Gross margin improvement resulted mainly from lower cost of funding in consumer finance business, and lower Universal project sales. As you might recall, Universal is a special project covering rural areas and realized at cost. Regarding OpEx, we maintain effective G&A and S&M management. Particularly, we performed lower number of mass selling campaigns.
In line with EBITDA improvements, EBIT increased by 15.7% to TRY 1.6 billion on a 24.9% margin, representing 0.5 percentage point improvement versus last year. Next slide. Let me give you more color on our consolidated cash position. Our cash position rose by TRY 288 million in the third quarter. Our operations generated TRY 2.8 billion of EBITDA. The working capital improvement of around TRY 189 million in Q3 resulted mainly from lower receivables from Financell. As we have stated in previous quarters, we expect a continued positive impact from Financell. TRY 1.1 billion spent on CapEx during the quarter. As seen in the cash flow from financing activities, we were a net payer of debt redemptions in the quarter. Next slide. Now, let's take a closer look at our tech fin company's performance.
In Q3, Financell revenues lost 13% on shrinking portfolio due to the regulatory limitation on financing installments in place since September 2018. This resulted in flat nine-month revenues growth. Financell's net income was TRY 83 million in the first nine months of 2019, mainly due to lower interest rates environment, as well as lower dividends from its subsidiary, Paycell. In line with our expectation, Financell consumer loan portfolio continued to decline to TRY 2.7 billion. We expect this trend to continue to less than TRY 2.5 billion by the year-end. While this means a lower top-line contribution, it is positive for the group cash flow. Cost of risk rose slightly to 3% due to shrinking average portfolio size, but it's still below the market average for general purpose loans. Loan insurance penetration of 96% over the past year will continue to mitigate further increase in cost of risk.
While EBITDA is improving, thanks to a lower cost of funding, Financell's net income was affected by the mark-to-market loss of swaps due to declining interest rates. During the quarter, one-year Turkish swap rates fell 700 basis points to 13%, reflecting the declines in consumer price index. Our payment services company, Paycell, continued to expand its reach and service portfolio in the quarter with new agreements and launches. Over 4.6 million customers made use of these services in Q3. Revenue growth was at 21.6% year-on-year. Next slide. Some highlights from our balance sheet and leverage. Our leverage has further improved this quarter to one time. Excluding the consumer finance business, this was at 0.7 time. Our consolidated net debt position declined to TRY 9.7 billion from TRY 11.4 billion at the previous quarter.
The key underlying factors that led to TRY 1.7 billion decrease in the net debt balance were TRY 1.1 billion of cash generated from operations, TRY 491 million deleveraging of consumer finance company, and TRY 53 million of net FX impact on debt and cash. Next slide. I will go into the management of foreign currencies. We continue to hold the bulk of our cash in hard currency as a natural hedging tool. As at the end of September, some 11% of cash was in Turkish lira, which has already been allocated today's scheduled dividend payment. With hedging instruments in place, the share of FX debt declined from 83% to 42% as at the end of the third quarter. We are in a long net FX position of $155 million. Going forward, we target a neutral FX position. This concludes our presentation.
We are now ready to take your questions. Thank you.
Thank you very much. Ladies and gentlemen, we will now start our question and answer session. If you wish to ask a question, please press zero one on your telephone keypad. The first question comes from Cesar Tiron from Bank of America. Please go ahead.
Yes. Hi. Good evening. Thanks for the call, and thanks for the opportunity to ask questions. I have two please. Can you please talk a little bit about the slowdown in prepaid? I understand it's not really material because it's only about 20% of the Turkish revenue. If you could explain that, please. Also on the guidance, given the run rate for the nine months of the year on the EBITDA margin, 41.6%, can you please explain why you reiterated the margin target of 39%-41%? Do you expect any exceptional costs in Q4? Have you delayed any expenses in Q4? Thank you so much.
Good afternoon. Let me explain the prepaid trend. First of all, we do see that postpaid is more valuable customer for us and our customer behavior is moving from prepaid to postpaid, due to the better data reach, tariffs, et cetera. We do see that the switching from prepaid to postpaid is the trend in Turkey. I believe this is not just for Turkcell. The switching from prepaid to postpaid is also one of the trends in Turkey. For the question number 1. For the guidance side, I think historically Q3 is always, in terms of EBITDA performance, always a good quarter. This happened again. Actually, we didn't delay or postpone any expenses, but due to the Q4 seasonality behavior, we have more sales and marketing expense happen during Q4.
This is mainly coming from marketing and sales expense, and we expect that it impact 2% of our margin.
That was very clear. Thank you so much for your help. Thank you.
Thank you. The next question comes from Dilya Ibragimova from Citi. Please go ahead.
Hi. Thank you very much for the opportunity. Just had a couple of questions. One is on Superbox that you mentioned during your presentation. Could you give us a bit more insight where you see the customers are coming from, or which areas are you targeting with the product? Is it urban or outside of cities where there is less fiber? What spectrum you're using for this product? Is it a dedicated band or you're just using your normal capacity that you also use for mobile data? Yeah. If you could answer that and I'll then shoot my next one. Thanks.
Yeah. First of all, we have probably one of the widest frequency band in Europe and maybe in the world. This gave us the fastest mobile network in the world as well. These two things enables to offer latest technology and product to our customer. Superbox is kind of products in our pocket. We monetize the unused capacity on our 4G network through Superbox in an efficient way, and we have enough room for further growth. For which area? Mainly the area we don't have fiber. We have capacity for spectrum, and also there are a lot of ADSL penetration, et cetera. We focus on where the customer needs for high speed, but they cannot get due to the lack of fiber from us, actually. We penetrate this market.
That's fair. Maybe just to follow up on this, but do you have visibility or do you see how many of your ADSL customers are actually taking this product? Is it a good demand from your own customers?
To be honest, very limited ADSL customers, because the nature of the fixed broadband is long-term contract, mainly 24 months. It is not easy to switch the existing customer to new technology. The second thing is, the Superbox tariff is two times expensive than the ADSL tariff. We mainly target for the other competition customers.
Thank you very much. Sorry, Emma. A second question is on the corporate, the product that you launched, the leasing of devices. If you could give us a bit more color, how popular is this product, maybe how many corporate customers you have been able to get into this scheme since launch, and whether that helped at all your post-paid customer growth. Thank you.
For the corporate side, actually, we recently started this leasing program. We hear from our customer, which is there is a demand from our customer for this model. Nobody would like to own the product. They would like to lease it for their employee. As Turkcell, one of our priority is to help our corporate customer with their digital transformation. As part of this effort, now we have started to test this leasing model where the corporate customer can lease smartphones from Turkcell for 24 months. The scale is small, we will continue as long as there is a demand from customers and profitable from our company as well. There are demand, but it is not a significant scale. Yes.
Thank you.
Thank you. The next question comes from Atinc Ozkan from Wood & Company. Please go ahead.
Yeah, good evening. Thank you for the opportunity. Three questions, if I may. The first one is, on slide seven, you have an impressive inflection point showing the ARPU growth versus CPI trend. Can you remind us the latest inflationary price adjustments and whether there are any other plans for fourth quarter? That's the first question. My second question is, I was also looking at Türk Telekom's press release, and I noticed that there is a new regulation imposed by ICTA regarding requirement to write off inactive lines where subscribers cannot provide an ID line, and I think they written off something like 300,000. Does your quarterly net additions number of 526,000 include any such write-offs for the quarter? Finally, I noticed that in the new tax package being discussed in the Turkish parliament, there is a new digital tax of 7.5%.
If this is ratified, would you expect a significant impact on your margins given that you have several digital solutions and types of services? Thank you very much.
Okay. First of all, let me start with inflation part of the question. Inflationary pricing is our policy, and it's a key pillar of our business model. It is really important role in achieving strong ARPU growth along with upsell, and thanks to increased data usage as well. Due to the contracted nature of our business, our price action are reflected in ARPU with a lag. This has been evident in both mobile and fiber residential ARPU trends since the beginning of the year. Also, we follow the inflation. Recent month, I believe we increase our price based on inflation, but I would like to remind everybody that inflation in Turkey decreasing month-over-month, year-over-year. The inflation part is becoming more reasonable these days. Regarding the churn rate, let me tell you about because also everybody is under the BTK regulation.
Our average monthly mobile churn rate in Q3 was 2.5%. This regulatory change to close the prepaid lines of subscriber with no recent payment impacted the churn rate by 0.1%. You can see the calculation point. We foresee a larger impact in the fourth quarter as well. We see also nearly half of these lines are active or they use active existing line as well. We'll see during the fourth quarter what's going to happen on this. For this quarter, it is close to 70,000 prepaid customers for the Q3. For the tax question, this is actually what we were looking for to happen. The reason for that, we were saying that same service, same tax rules. Before that, we had some disadvantages versus foreign competition on the digital services side. This cleared everything for our competition.
This is a draft law, taxation of digital services. We believe that this is very important step for fair competitive environment. As we always say, same service, same rules.
Could you clarify what percentage of your top line would fall under digital services category to be taxed? I know it is not very clear, but whether you have any ballpark figures or idea.
I don't believe that we're gonna impact on this one. The law is draft, so when the law publish, we can see much better figure, but I don't think it's gonna impact our top line.
Very helpful. Thank you very much.
Since the law is draft, we see that this draft law, we are under the threshold level, so it's not going to impact our top line.
Thank you.
comes into existing draft play.
Thank you. The next question comes from Slava Degtyarev from Goldman Sachs. Please go ahead.
Thanks for the presentation. A question on slide seven. Your mobile ARPU has accelerated while inflation is going down. Trying to understand how sustainable is that trend? In other words, do you expect mobile service revenue to outperform inflation in the medium term by a certain percentage point? Thank you.
First of all, it was under plan. That's why we were sharing like-for-like ARPU growth levels that you can compare that what's gonna come next quarter. Because in telecom world, you cannot immediately react inflation increase or decrease. The reason is we are in a contracted world, so when we have contraction, contract with the customer, you cannot immediately take action on pricing. There is a lag between that. That's why this is sustainable. Also, we share our like-for-like ARPU basis as well. It's close to 20%. We'll see a little more better than inflation. At the end of today, everything will come to the similar level. In the long run, we see that they match each other on average basis.
Okay. Thank you.
Probably a couple of quarter, we're gonna get in favor of versus inflation.
Thanks.
Thank you. The next question comes from Cemal Demirtaş from Ata Invest. Please go ahead.
Thank you for the presentation. Congratulations for the very good results. My first question is related to your ARPU growths, coupled with the subscriber growth. We see significant increase in your subscriber base, and we see a similar picture in Türk Telekom mobile side. We see in both your company and in Türk Telekom, we see some increase. In this environment, you managed to increase your ARPU to a very impressive level. I would like to understand how much of the impact was related to your upsell to higher tariffs and contracts with new customers. Does it have any effect on that, and how sustainable it's for the rest of the year and for maybe for next year? That's my first question.
First of all, I think we have higher doubles, just close to 20% year-over-year, like-for-like ARPU growth. I would rather have a look the numbers more carefully here to see the difference. On the other hand, ARPU growth will continue, as I mentioned, for another couple of quarters, better than the inflation rate. Then they're gonna match each other, and we'll continue do our inflationary pricing. The good thing about it is we are gaining customers from postpaid side, which is a lot higher ARPU versus prepaid ARPU, which gives us more benefits on the other end.
Okay. Another question is about your financial expense side. When we look at the bottom line, we see higher negative impact of financial expenses. You do all the hedging and all those accounting, and most of the better-than-expected operating results was just overshadowed by some financial expenses side. We see similar levels of financial expenses in second quarter and third quarter. I'm just including the FX side and the expense side. The following quarters, at least in Turkey, we are just getting into a low inflation and low interest environment. I know you are protecting yourself through hedging, but it's the most difficult part to just maybe the estimate.
I just want to understand how could we look going forward, at least in the low interest rate environments going forward, maybe fourth quarter, and maybe you can just elaborate the mechanism in the third quarter, how maybe it was higher than maybe I thought. You can compare maybe from your perspective. Thank you.
Let me give you the stage to Osman. Osman will answer on that. Hedging is instrument that we use, especially, high FX currency fluctuation. It is under control with our treasury department. So far we did good, and we will continue to do hedging with a conservative way. Let me give you the stage to Osman. He can explain better than me.
Actually, estimating the net interest expense, net financial expense for Turkcell is becoming easier because we implement hedge accounting and the quarter variation in financial expenses is getting more and more smaller. The main underlying factor is hedge accounting. Applying hedge accounting since last year gives us more visibility for net financial expense and also for the bottom line. Actually, what impacted us during the last quarter was the mark to market losses on the swaps that we hold on our balance sheet. Most of these swaps were related to our consumer finance company, where we do not apply hedge accounting, since the hedges in this company are relatively shorter term. It is worth mentioning that over the last quarter, one year TRY swap rates fell more than 700 basis points. It is the biggest movement in almost a decade. It's the biggest downward movement.
Being in a net payer position in those swaps gives us some downside in terms of trading losses. That was another factor giving a minimal impact on our bottom line performance. Going forward, we can say that given that market conditions will be similar to that level, our financial expenses will be close to that level. We can easily say that our natural run rate of bottom line will be relatively close to what we had this quarter.
Thank you.
Thank you very much. Ladies and gentlemen, let me remind you again. If you have any comments or questions, please press zero on your telephone keypad to enter the queue. Thank you. The next question comes from Anna Kazaryan from VTB Capital. Please go ahead.
Good evening. Thank you for opportunity to ask the question. Could you clarify your view on the competitive environment in payment services? In particular, could you give us an update whether BKM Express was shut down? If yes, what impact it might have on Paycell business? Thank you.
Thank you very much. Turkish tech ecosystem is fragmented, whereas Paycell is present in our various domains with its wide portfolio solution. In terms of revenues, Paycell is the second in terms of market after BELBİM, which is the transportation subsidiary of Istanbul Metropolitan Municipality. Paycell is well positioned to grow in a fragmented market, leveraging Turkcell tech knowhow, customer base, and wide sales network. On the BKM Express side, I think this is decision by anti-competition court. We cannot comment on the board decision. As far as I see, they were not so strong player in this market. I don't think it's going to impact a lot.
Okay, I see. Thank you.
Thank you. The next question comes from Asli Kumbaraci from Yapı Kredi. Please go ahead.
Hello. Can I get some color on the provision that you recorded in this quarter about the wireless tax? Thank you.
For our digital services part, we have tax called TRx, which is wireless usage fee. We believe that we shouldn't pay wireless tax provisioning for our digital services. On the regulation authority-wise, they believe that TRX should be paid under digital service side. As we said before, same rule for same services. This should apply on this side. Unfortunately, we couldn't come to agreement with the authority, and we provisioned this amount starting from 2018 to 2019. I believe we're going to go for legal action on this side because we do believe that this is not the right approach, as I said.
Thank you.
Yeah. By the way, I want to remind you, if this thing doesn't happen, our net income will be TRY 1.028 million higher.
Thank you very much. Ladies and gentlemen, this is the last reminder. If you have any questions, please press 01 on your telephone keypad. Thank you. The next question comes from Ece Mandaci from ÜNLÜ & Co. Please go ahead.
Hi. Thank you very much for the presentation. I have two questions, if I may. One is about, again, Paycell. When you look at the quarterly growth figures on a year-over-year basis, the revenue growth figures, we are seeing a smaller growth in the third quarter on a year-over-year basis and a slight decline in the EBITDA margin of Paycell. What was the reason for that, for the coming quarters, how much growth should we expect for Paycell specifically? You were mentioning before that double-digit growth, around 50% growth could be possible in Paycell going forward. Also you mentioned about a potential partnership in Paycell in your earnings release. Could you overall comment on your prospects on Paycell and revenue generation going forward? This is my first question. The second one is about Digital Business Services.
I assume that the revenue growth in that category was around 25%-30% in the third quarter, possibly due to lower equipment sales, because you were also mentioning about the normalization in revenue growth. Would it be fair to assume around 30% sustainable growth again for this category on a year-over-year basis for the coming quarters? Thank you very much.
First of all, regarding Paycell, to be honest, we don't look at Paycell as a revenue driver at this point of time. Paycell is our long-term strategy to create value for our company. On this side, also regulatory changes are helping us to make this happen. Instead of looking at just revenue, we looked at other KPIs like number of app download, number of transaction, number of contracts for long-term like we did with Istanbul travel card agreement, et cetera. The KPIs for Paycell are different than just revenue and EBITDA, first of all. It also proved that we are on the right track, and in this aspect, we will create more value in the future. Regarding the other question, it's about DBS, Digital Business Services.
First of all, DBS is quite sustainable on this 30% revenue growth, 25%-30% revenue growth. First of all, we generate almost TRY 1 billion revenue first nine months, which has 48% year-over-year growth. Obviously, there are base impact of the revenue, we plan to keep it 30% coverage level for next years.
Thank you very much.
Thank you. This was the last question. Dear speakers, the floor is yours.
Okay. This is the end of our call. Thank you very much, Murat Bey, Osman Bey, for your wonderful presentations. Thank you all participants for your time, and hope to see you at our Capital Markets Day event on the twelfth. Have a good day.
Thanks for the contribution. Thank you.