Good day, ladies and gentlemen, and welcome to the Vodacom Group Limited Results Conference Call for the three months ended 31st December 2021. Vodacom Group CEO, Shameel Joosub, will host the conference call. Before I hand the call over to Shameel, I would like to ask that you refer to and familiarize yourself with Vodacom's forward-looking disclaimer. This is set out on page 15 of the trading update and can be located on www.vodacom.com. Alternatively, if you would like the copy of the trading update sent to you, please email the investor relations team at vodacomir@vodacom.co.za. All participants are currently in listen-only mode, and there will be an opportunity to ask questions later during the conference. This conference is also being recorded. I would now like to hand the conference over to Shameel. Over to you, sir.
Thank you. Good afternoon, everyone, and good morning to those of you joining the call in the U.S. I'm joined by our Group CFO, Raisibe Morathi, as well as our Head of Investor Relations, JP Davids. The third quarter was a very exciting period for Vodacom. In addition to delivering strong revenue growth, we launched our highly anticipated VodaPay Super App in October, and we announced two strategic M&A deals in November. All the while, Vodacom, the group, remained committed to focusing on the economic recovery markets where we operate through the execution of a purpose-led six-point plan. This plan includes expanding network coverage and resilience, accelerating support to governments, enhancing digital accessibility and digital adoption, supporting our customers as they adapt to new ways of working and promoting financial inclusion.
Our trading update for the third quarter was supported by the ongoing execution of our strategy called the System of Advantage, and was in line with our medium-term target framework. We expanded network coverage and resilience to support the various initiatives that we undertook to increase consumption of our products and services. Our seasonal summer campaigns provided increased engagement and was underpinned by our behavioral loyalty program called VodaBucks in South Africa. We delivered particularly strong results in Vodacom Business, while our financial service businesses continued to scale across all our markets. The integration of our digital and financial platforms is clearly at the end of December. We had recorded 1.4 million downloads with over 1 million registered customers. Platform service and merchant offerings are provided through unique mini apps.
At the end of the quarter, we had 72 merchants and services coming on via mini apps, with many more to be onboarded in the near term. We believe this app is a game changer as it brings together the best in technology with our investment across the fintech value chain, supporting greater digital and financial inclusion. The Super App also gives us the ability to aggregate the digital shopping mall experience with digital services such as entertainment and our broader fintech services roadmap, including money transfers, lending, and savings. In November, we announced two strategic M&A transactions, a 55% shareholding in Vodafone Egypt, and the acquisition of a 30% stake in CIVH as fiber assets, with an option to increase our stake to 40%. Our minority shareholders recently voted overwhelmingly in favor of the ZAR 41 billion Vodafone Egypt transaction.
This approval represents an important milestone in our target to close the transaction in the coming months. However, the timing remains subject to regulatory approvals in Egypt. Pleasingly, Vodafone Egypt sustained its strong growth trajectory in the quarter, with revenue up 17.9% in local currency. In addition to accelerating Vodacom's purpose of connecting people for a better future, what is particularly exciting about the CIVH fiber asset agreement is that this will facilitate an ambitious fiber rollout program across South Africa. This will assist in narrowing the regional digital divide by enabling affordable access to connectivity in some of the most vulnerable parts of society and help to bridge South Africa's digital divide. We have submitted regulatory filings in respect of the transaction to the Competition Commission and ICASA, respectively, initiating a process to obtain regulatory approval.
Switching to our quarterly trading update, where the focus is on revenue and key performance indicators. As with prior quarterly results, Safaricom does not report this performance, so we'll focus only on our consolidated operations. The revenue increased 6.4% to ZAR 26.7 billion, and we are now annualizing well over ZAR 100 billion. Service revenue was up 5.3% and underpinned by a resilient performance in South Africa, with particularly strong growth in Vodacom Business. At a product level, we reported strong growth in new services, reflecting our multi-product strategy, which we call the System of Advantage. Our new services, which comprise fixed IoT digital and financial services, continued to scale, making up 17.7% of group service revenue.
We target a new service revenue contribution to group service revenue of 25%-30% by FY 2024. IoT revenue was up an impressive 33.9%, while financial services was up 12.5% to ZAR 2 billion across the group. Adjusting for the impact of Mobile Money in Tanzania, group financial service revenue growth was 24.3%, reflecting the strong underlying fundamentals of this business. For example, transaction value per month across our M-Pesa platform, including Safaricom, increased 16.1%- $28.2 billion a month, a truly impressive number. In Tanzania, our lending product, Songesha, grew 21.3% with the equivalent of ZAR 900 million in loans being dispersed during the period. In Mozambique, we are seeing excellent initial adoption of the airtime advance program from South Africa.
This was launched in July. Shifting focus to South Africa. Service revenue grew 4.5% to ZAR 15 billion and was supported by continued demand for connectivity, especially within Vodacom Business, strong growth in financial services, and increased engagement from a successful summer campaign. New services such as financial services and digital services, fixed and IoT contributed ZAR 2.1 billion or 14.1% of South African service revenue. IoT revenue delivered strong growth of 30%, and financial services increased 11.8%. The financial services performance was supported by airtime advances and our insurance products. We advanced ZAR 3.4 billion in airtime during the period, amounting to 45.4% of total prepaid recharges.
Our insurance revenue increased 11.3%, with policies up 14.8% to 2.4 million as we continue to expand our portfolio of products. Vodacom Business had another excellent quarter with revenue growth up 14%. This growth was driven by mobile contract, which was up 17.3% and supported by our innovative work-from-home solutions. Growth was also supported by wholesale revenue. The broader contract serving segment, including both business and consumer, delivered a strong performance with revenues up 7.6%, and we added over 81,000 customers in the period. Our prepaid segment delivered a resilient performance against a very strong prior year comparative. We added over 263,000 prepaid customers and increased ARPU 1.8% quarter-on-quarter to ZAR 57.
In the prior year, ARPU reached ZAR 59 as we captured the wallet share opportunity associated with more stringent lockdown restrictions. Data metrics has remained strong. Data traffic accelerated 25.9%, supported by work from home and engaged summer campaign. We added over 150,000 customers in the quarter to reach 23.4 million data customers. The number of smart devices on our network increased 11.1% to 25.9 million, while the average usage per smart device increased 24.4% to 2.5 GB per customer. Our international operations reported service revenue growth of 6.7%, supported by strong growth in data and M-Pesa. Our customer base increased 6.9% to 42.1 million.
Data services remained a key driver of growth and was up 21.2%. Growth was supported by data customer additions of 126,000 and incremental usage per customer. Data traffic growth was strong at 34.9%. M-Pesa revenue was up 12.9% to ZAR 1.3 billion. The performance was supported by strong growth in the DRC and Mozambique. Mozambique lapped the reintroduction of peer-to-peer charges in the quarter, but we still delivered local currency growth of 22.4%. M-Pesa momentum in Tanzania continues to be hampered by the mobile money levies introduced during July 2021. The impact of the levies on service revenue was ZAR 250 million or 4.4 percentage points of international service revenue growth.
We're engaging with the Tanzanian authorities to assess the impact of the levies on the industry and the impact of financial inclusion in the wider economy. On the regulated front, the key focus area remains spectrum in South Africa. With the auction scheduled for March, we were working with government, ICASA, and the other telcos to unlock the economic tailwind of high demand spectrum. Telkos concession on this January interdict marks an important milestone in the consultation process and for the auction to proceed in March. In Tanzania, we will continue to engage with the authorities regarding the introduction of mobile money transaction levies in the country, so as to not interrupt the service, the significant strides made in the last decade in reducing barriers to financial inclusion.
Before we open up for Q&A, I wanted to highlight an upcoming investor event we will host on the twenty-third of February. The briefing will encompass a series of presentations and demonstrations covering the group's digital ecosystem strategy, including financial services. Please reach out to our investor relations team if you would like to join the session, whether in person or online, and have not yet received an invite. If you haven't received an invite and would like one, please just reach out to us. Isaac and I are now ready to answer any questions you may have.
Thank you very much, sir. Ladies and gentlemen, if you wish to ask a question, please press star and then one on your touchtone phone or on the keypad on your screen. You will hear a confirmation tone that you have joined the queue. If you wish to withdraw your question, please press star and then two. The first question is from Preshendran Odayar of Nedbank. Please go ahead.
Good afternoon, everyone, and congratulations on the quarterly update. I've just got two questions. Firstly, on your IoT revenue, if I look at it over the last three quarters, it seems to be flat at around ZAR 300 million per quarter, yet your connections have been increasing each quarter. Can you shed some light on why the revenue is staying fairly flat despite the increase in connections? Then secondly, on airtime advance, have we reached the, call it, steady state level of 45%? I know it was growing nicely above that, and now it seems to have staggered around that level. Just your thoughts on that. Thanks very much. Sorry, that's airtime advance. Sorry. Very appreciated.
Just to confirm your question on IoT, you're asking is the connections are staying broadly flat, but revenue going up, was that. Did we hear that correctly?
Sorry, JP, the other way around. The revenue, I'm calculating the revenue at ZAR 300 million per quarter over the last 3 quarters.
Okay.
Your connections have increased every quarter from the beginning of the year.
Okay. Perhaps we'll, you know, I'll reach out offline just to help you with the numbers on IoT.
Okay.
The number itself is growing about 30%. One of the issues impacting reported growth was in the last quarter of the financial year last year, we did a reallocation between IoT and the mobile service revenue line. We don't have to get into the weeds of that now, but that has impacted the reported trends for the year. Adjusted for that reclassification, IoT business is growing around 30%. Happy to run with that offline with you. It's a reclassification last year that is impacting the reported trends.
No problem. Thanks, JP.
Sorry, do you wanna have a crack at your second question again, Francois?
Yeah, no problem. Airtime advance as a percentage of prepaid recharges seems to have reached a steady state of around 45%. Is that a fair statement or are you targeting something higher?
I think it's fair. It's between 45%-47%. I think we hit a high of 47%. I think the best part is, of course, we don't wanna get completely carried away with it. I think it is. It will go up because we kind of keep reinventing different new options and those type of things. I wouldn't pencil in a big growth. I think it's, you know, more modest prepaid growth. Slightly higher than the normal prepaid growth going forward.
Perfect. Well, thanks so much for that.
We are doing instead is expanding the number of services using the same backend. Remember, if we push it too hard, the debt then goes up. Now what we're doing is, you know, we're using the same intelligence to effectively look at extending more credit to the same customers, but for other products, which we'll come to in a bit of time, right? Which is things like VodaBucks and, you know, the ability to lend and so on.
Gotcha. No, perfect. Thanks. Thanks for that. Appreciate it.
Thank you. The next question is from Cesar Tiron of Bank of America Securities. Please go ahead.
Yes. Hi, good afternoon, everyone. Thanks for the call and the opportunity to ask questions. I have three questions, if that's okay. The first one would be on the super apps. You've provided some very encouraging metrics on downloads and registered users. Can you please share also some any data points that you have on what users spend the most of the time on when they are in the app, how they use it, et cetera? Second question which I had was on the taxation of mobile money in Tanzania.
Just wanted to understand, to clarify if this will all be in the base case in July this year, and also what is driving, in your view, the volatility in the back half forecast on these changes in taxation. The third question would be on the, you've made a disclosure on what you call, I think, new type of revenues, which you think will contribute to 25%-30% of total revenue. Are you willing to disclose what would be the share of mobile money, you know, as guidance of your revenues by 2024? Thank you so much.
The second question again?
Sorry.
We didn't understand the second question. If you can maybe just repeat that. The line wasn't so clear.
Yes, sorry about that. I just wanted to understand what is driving, in your view, the volatility around taxation of mobile money in Tanzania, and when will that be completely in the base? Is that in July this year?
Okay. Let me start off with the Super App part. We'll be giving a lot more color at the session on the 23rd, sorry, about some of the activities that we're seeing. Of course, just high level, what people are coming to do is very varied. You know, you're having people buying airtime products, of course from the package itself, but also there's 75 different services. You know, there's of course things that are more popular, like for instance, Makro and Builders Warehouse and some of the big anchor brands and so on. You know, that's one.
Our highest spend, you know, was about, what was it, EUR 4,000-EUR 5,000 on the platform in one transaction. You know, but we'll give more color around that in terms. Then of course, one of the big. Of course, on the food side, KFC is doing really well. You know, there's a number of different products and services that are actually taking off quite nicely. But what we'll do is give a lot more color on the 23rd and go into a lot more detail then. On the second question on the volatility of the taxes.
Essentially what happened is, you know, at the time, I think government was a bit short of taxes, and went for a very aggressive approach. They admitted as much. They then came back and dropped it after we had discussions with them by 35%. I think there's an acceptance that they will drop it again. The question is when. You know, they're not being firm on the date of when any further ones will come. We've been presenting to parliament the impacts of these type of things, but it will be in the base by July. That's correct. What it's done in fairness is it's probably taken us back two years in terms of where we were in absolute numbers. So we
It took us back, and that was the impact of it impacting this quarter's been ZAR 250 million. You know, but we are seeing month-to-month growth. We are seeing the recovery coming through. That's positive, but fully in the base by July and on the new services side. Yeah.
On the new services, of the 18%, about 13% is financial services with the balance being fixed and IoT and so on. It is a question of when each one of those components started and accelerated. You will note that in the financial services that included M-Pesa and obviously VFS in South Africa. All these businesses are growing, financial services growing in the teens and whereas the IoT, as an example, is growing faster than that South Africa business. One would expect that shape will continue to correct, but certainly financial services is the next big offering after mobile.
The migration into the 30% bucket will probably still take that shape, but we do expect that to correct over time. It will change, the mix will change over time. Great. Thank you.
Thank you. The next question is from Jonathan Kennedy-Good of JP Morgan. Please go ahead.
Good afternoon, and thanks for the opportunity to ask questions. If I may ask on your new service revenues, how should we think about the impact on margin going forward? Would those revenues as a group deliver margin accretion over the next two to three years, or how should we think about that? Secondly, I've noted, I think in the U.K. and parts of Europe, there's some operators who are starting to raise pricing given inflationary pressures in those markets. Just wondering if Vodacom on the post-paid side has contractual terms which allow it to increase pricing and whether that would be something the group would consider, given, you know, you've had deflationary pricing for better part of more than a decade, I would think.
I'll start with the second one. Yes, we have the ability to increase pricing. That's always one of the things that we do consider. I think the way we do it would be different. What our modus operandi would be is to start with our competitiveness in the market, then look at you know, if we increase prices, how would that be. Effectively, there would be an allocation of value that goes with it as opposed to just a. Of course, that does result in higher ARPU.
Potentially, you know, if you, for argument's sake, say you were increasing by ZAR 10 or 3% or whatever it might be, or 5%, what you would then do is allocate more data, typically, or more voice, to the customer on that basis. You know, it would be not just a price cut with no benefit. We would also enhance the allocation of voice and data within our packages.
Thank you.
Okay. On the second one, you asked about the margin for the financial services. Just to note that the margin is variable depending on the product that we're offering. In some products, we're just taking a fee, like the lending products, we're just taking a fee. Obviously on the VodaPay side, where it is a platform economy, it's all about scale. Some of them would be low margin. Overall, the financial businesses contribute a higher margin than the mobile business. In addition to that, there is very low depreciation because there are low CapEx requirements. Net-net from an operating profit perspective is a very strong contributor.
Thank you. That's clear.
Thank you. The next question is from Slava Diktyarev of Goldman Sachs. Please go ahead.
Hi, thank you very much for the call. Couple of questions. Firstly, with regard to the spectrum auction, if you can elaborate on your expectations from here, what is the next steps, if all goes as planned, and where you see currently the balance of risks, with regards to the auction process? Secondly, any particular areas across the business, with regards to the cost inflation pressures that you are most concerned with? Thank you.
Okay. On the spectrum auction, I would say, look, I think we're closer now than we've ever been before, because Telkom has now removed the interdict. The likelihood that the auction would proceed with a couple of caveats, I'll come back to that now, is very, very good in terms of you know in all likelihood, where we stand at the moment, you know, it looks like the auction will proceed. However, there's still a Telkom case that's hanging. I don't see that case being heard. They've, of course, removed the interdict, which allows the auction to proceed. Now, what would then happen is the case would probably only be finalized post-auction.
Which means that, you know, Telkom would have to decide post-auction based on what they got out of the auction, whether it's worth the fight or not. You know, for all intents and purposes for now, it looks like the auction will proceed. There is still informal negotiations, you know, happening between Telkom and the regulators and so on, and government trying to facilitate discussions to try and see if that court case can be removed totally, which will be better.
I think the other key development which seems a lot more positive is that the e.tv part seems to be in much better state as well in terms of firstly the digital migration, but also, I mean, now of course e.tv will have to speak for themselves, but it does, by all accounts, it looks like things are getting better. You know, for all intents and purposes, you know, it looks like we're gonna have an auction. Yesterday they announced the bidders. No surprise, only the six bidders, so no new entrants. You know, we're preparing to go to auction and, Lindsay, with all the auction methodologies and so on, they've appointed a very good auctioneer, you know, that's basically got a good reputation internationally.
You know, I think, and they now looking at creating what they call auction trading and so on. You know, just over a month to go for the auction. Yeah, it's looking like all systems go. Ideally, of course, if the court case can be removed, then there's no delaying. The question on cost inflation, where are we, if anywhere, seeing any pressure points around cost inflation?
I guess, inflation is beginning to pick up. We also used the COVID time of digitizing to digitize a lot more areas. We're using RPA more. We still have a long tail side of the digital services to make efficient. For that reason, we think that it will help contain part of this inflationary pressures. Of course, I mean, looking at costs will always be part of our game. We'll continue to focus on that. Every season of the business planning we plan to have a priority job.
Okay, thank you very much.
Thank you. The next question is from Madhvendra Singh of HSBC. Please go ahead.
Yes. Hi. Thanks a lot again for the call. Can you hear me? My line was quite disturbed earlier, so just checking.
Yes. We've got you, Madhi. Thank you. Go for it.
Thanks. The first question I have is on the prepaid business in South Africa. That seems to be the only lagging segment within your overall business in South Africa. Wondering if you could share, you know, any insights there. You know, is that a declining trend still, or do you think the worst is behind us? Should we expect some growth in prepaid back anytime soon? How should I, you know, basically think about the prepaid segment in South Africa? And also related with that is that MOUs seem to be falling, you know, in overall. You know, is that just continuation of the voice cannibalization or is there something else to it? The second question is on the CapEx plans.
Seems like your third quarter was a bit slower on the CapEx side. If you could remind about the CapEx guidance and, you know, how should I think about medium-term CapEx outlook for Vodacom? Thank you.
Okay, let me start with the prepaid one. Effectively, I think the underlying measures in prepaid is strong. I think one of the things that you have to consider when you're looking at this year's results, you know, is that I think what we did really, really successfully last year is we captured some of the opportunities around COVID, and the lockdowns, and so on. That did boost revenue, and we were very, very well prepared for that, and we took full advantage of it. Now that did mean that we took money from other industries, for example, alcohol, and alcohol lockdowns and so on. We did benefit more in those lockdowns, and we benefited from some of the social grants as well.
Simply put, when there were tough, tougher lockdown provisions, you know, people were working from home, but more importantly, they had to stay home and couldn't go out, so they used more data. We captured that opportunity, and you would see last year ARPU was stronger at ZAR 59. What I think is encouraging is that once things started to normalize, of course, the ARPU then came down, which has impacted a lot of this year compared to last year. Encouragingly for us, though, you have seen a 1.8% quarter-on-quarter growth in ARPUs, and I think, you know, that does it. That is helping, and that is showing the right trend. Secondly, I think if you're looking at the net customer additions, that was quite strong.
If you're looking at the total customer base growth, you know, you are looking at the customer base continuing to expand. You know, over last year to this year, we've added 1.4 million, almost 1.5 million customers year over year. You know, most of that, of course, is prepaid. You know, I'd say the underlying parts are quite strong still in prepaid.
On the CapEx, the ZAR 2.3 billion that you see in SA is reflective of the shape where we front-loaded CapEx, taking advantage of the exchange rate, but also, you know, enabling the CapEx the better opportunities that we want to generate revenue from it. We do give you a sense of comfort in terms of what we plan to spend for the rest of the year. If you look at where we have spent now, just under ZAR 8 billion versus the ZAR 10.5 billion that you're guiding, it shows that we'll still be around ZAR 2.6 billion, which is around a similar number that we've seen in the previous quarters. Definitely not slowed down, it's just a question of shape.
On the IT market, it's a different picture, where CapEx has grown by 28%, and here we still had some remnants of a supply chain disruption coming from the COVID environment. Definitely spending to continue to improve our network. The growth in CapEx altogether we expect to still be within the guided CapEx intensity of between 13% and 14.5%.
Okay. On CapEx point, just, you know, digging a bit more, especially relating to your biggest competitor in South Africa, MTN, which has, you know, significantly upped the investment game in the market. With that, you know, I think there is a good perception about improving network quality and so on. How would you rate your network, compared to the gap you had versus MTN previously? Are you looking to regain that gap at all, or you are happy with where the gap is currently, versus MTN?
I think firstly, I mean, we are outspending MTN for the last two years or so in terms of CapEx. I think they've moved down to a lower level. That's the first part. I think the second part is in terms of performance and network. I think we've still got a very good customer perception around the network itself. In recent live tests, just to give an example, we've won the, you know, the, we've basically beaten MTN in all the voice parts, you know, for the country. You know, I think a very strong performance in terms of voice.
Voice to a large degree drives perception, because you don't worry about whether you one megabits per second, but you do remember when you dropped a call or there wasn't coverage. That part is, you know, we've put a lot of effort into, and made sure that we're leading in that respect. Of course, we're doing the same, region by region with MTN. Essentially, I would say it depends what you're looking at. If you're looking at reliability, coverage, voice, you know, then Vodacom is definitely leading. If you're looking at data speeds, then MTN's in the lead. To be frank with you, I call that more the ego space, of, you know, who's faster, who's slower.
I think the customer doesn't really care if you're a few megabits faster or slower. What they care about, does the service work? I think that's the bigger focus area for us. You know, I say tongue in cheek because, of course, you know, I trained some of these people to come back with the same methodology also. You know, they're fighting us with the same game we taught them.
Great. Thanks a lot, Shameel. Thank you.
Thank you. The next question is from David Lerche of Sanlam Private Wealth. Please go ahead.
Hi, good afternoon, everyone. Just, one question from me. Could you give a little bit of detail on airtime advance? Are you actually charging interest on that? I mean, how much more expensive is it for the customer to buy airtime with advance rather than just buying it straight up? Thank you.
SIMO, right? Effectively, and then they buy normal airtime to repay the loan. Okay? They still go to the process of buying airtime. Of course, the most beneficial to us is where we get both sides of the transaction, 'cause then we save on the commissions as well. What happens is the customer doesn't pay any interest, and there's no recourse. It's no-recourse funding. Effectively what it is it uses behavioral analytics to determine who to give credit to based on your telco history, but also behavioral stuff like what time you wake up in the morning, as an example. Example would be, you know, a customer wakes up between four and six is more creditworthy than a customer who wakes up at seven.
The way charged is a platform fee of ZAR 1. You only pay ZAR 1 for the transaction. We of course do a lot of loans, so you're extending loans of over ZAR 1 billion a month. The exposure at any time. Average payback period is two days. Your exposure at any time is never more than, you know, ZAR 40 million-ZAR 50 million per month.
Great. Thank you.
Thank you. The next question is from Ziyad Joosub of Nedbank. Please go ahead.
Hi, everyone. Thank you very much for the call. Just two questions from my side, please. The first question is, could you maybe give us an update on roaming revenues, specifically from Cell C and maybe to some extent Telkom? What trends are you seeing there? The second question is on your fixed service revenue growth. You know, sort of channel checks indicate that Vodacom continues to take market share in the retail fiber space. I'm just trying to understand why we've seen, you know, what seems to be a slight deceleration in fixed line revenue growth. Thank you. Hernout?
JP, thanks for the questions. Just on the roaming side of things. Yeah. Again, quite a similar profile to what we've seen over the last couple of quarters in terms of the impact of wholesale and Cell C, et cetera, on the growth profile. It added about a percentage point of growth in the quarter. Just as a reminder that we will lap that in the fourth quarter. We started seeing the benefit of that Cell C contract coming in in the fourth quarter of 2021. Anniversary's coming up there. To answer your question, yeah, it's been supportive in the third quarter, adding about a percentage point of growth to the South African performance.
On the fixed line side, you correctly called out that there has been a bit of a deceleration. That's not within the sort of core fiber business. As you said, you know, from a retail perspective, you know, from a wholesale perspective at the moment. Things are going nicely, and we are taking market share on the ISP side in particular. The drag is actually just within our cloud and hosting business, which forms part of fixed. But that's a little bit of an unfortunate accounting headache we've got to deal with. We've had to move contracts to classify them as software as a service.
You've got to net off your revenues and costs and just take the net number through your P&L. That's having a little bit of an impact on the growth profile in fixed. If you take that out, your fixed line business is still growing double, you know, around double digits. The underlying trends are fundamentally fine. There's just a bit of a headwind come from some of the accounting changes on the cloud and hosting side we're putting through. Hopefully that's fair enough.
Thank you, JP. That's perfect. Appreciate it.
Thank you very much. We have no further questions in the queue. Would you like to make some closing comments?
Yep. Thank you. Thank you everyone for joining us. We hope you can join us on the twenty-third as we've got some exciting things to show you on what we're doing. Look forward to chatting then. Thank you. Bye-bye.
Thank you very much, sir. Ladies and gentlemen, that then concludes this conference call. You may now disconnect your lines.