A very good afternoon. A very good afternoon to all of you on behalf of Vivek and myself. Thank you very much for taking the time to be with us here this afternoon. And also for all those joining us online, welcome and thank you. So this afternoon, as has been traditionally the case, we have a very exciting lineup of presentation topics, discussions, and panel discussions as well. And as always, we look forward to your feedback to make it an interactive event, an interactive discussion, and also to learn from you with respect to your views and reactions to Axiata's strategy as we move forward. We'll follow this short welcome with a discussion on Axiata's endgame, which Vivek and I will share some thoughts with you all on the priorities for the very short term, as well as the medium term and the longer run.
This will be followed by a discussion on our infrastructure business, EDOTCO, led by Adlan. And we will then follow with two focus areas with respect to the ServeCo or our digital telcos. The Indonesian market comes into focus as one of our key players going forward, and also the context of the headwinds especially impacting our frontier markets at present. We'll move beyond the tea break into our digital businesses or our TechCo businesses featuring ADA and Boost, and also then follow up with an Axiata investor proposition to which we would very much like your feedback and reaction based on what you have heard in the earlier parts of the afternoon. We'll also have a survey as usual, and I think we aim to close on time with a good Q&A session between 5:45 P.M. and 6:30 P.M. So that's a quick rundown on the agenda.
But having preset this agenda, please, I think, feel free to interject and provide your feedback as we go along.
Thank you, Dr. Hans. First of all, very good afternoon. Hans and I took over this role exactly or slightly more than six months back, so I think we've been doing this, and I think good news is that things which we have planned before we took on this role are falling in place, and the recent one is obviously the completion of the merger in Malaysia, so I think that's what was one of the key focus priorities for this year for us. Let me go through. I mean, I'll take you all back to 2020 when we had actually talked about our Axiata 5.0 strategy, and we had put these three pillars to focus, which are sustainable growth, operational excellence, and structural changes, and those were basically converted into 10 key focus areas.
And some of them we will cover during the discussions today on what's been the progress against these elements. It was very clearly looking at a long-term sustainability of the business, which was through sustainable growth, looking at opportunities outside the core mobile operations. I think something which we'll touch upon on how we are progressing on some of those opportunities. Continued focus around operational excellence. We will not spend much time on that other than covering the stakeholder management, which is more around the ESG part, and structural changes, which is industry consolidation and portfolio optimization, value elimination. So I think that's something which has been following pretty well. I mean, while we've not been part of the consolidation in Indonesia, but the market is getting consolidated. Malaysia consolidation has happened with Digi, Celcom getting formed.
We are looking at some of the opportunities around portfolio optimization, value elimination coming out of the other adjacent businesses, for example, tower, digital businesses, etc. So we'll talk about that as we go along during the afternoon. Let me touch upon. I think we set some financial goals for ourselves. Financial goals were basically saying five, 10, 20, which was basically within five years, we should bring down our cost per GB at MYR 0.10 and grow our EBIT margin to around MYR 0.20 and should be able to give a dividend of MYR 0.20 . I think at this point in time, at checkpoint September end, we are pretty much in line with what we said, which is cost per GB at that point in time was around MYR 0.60. So we are now kind of down to around MYR 0.20. We should be aiming to get to MYR 0.10.
Obviously, some effort, some work to be done to get there. EBIT margin for September, if you see the results, is around 16%. EBIT margin moved up from 14% in 2019. It came down in 2020 because of the COVID, and then now I think this year has been fairly good performance across the OpCos to deliver good results, leading us to an improved EBIT margin. Dividend per share, I think in terms of what we are declaring is in line with what we said, but obviously, 2024, we'll touch upon, requires some adjustments as we go along because I think some of the decisions or actions we are taking is to create a long-term sustainable position for Axiata, and that's something will mean that there would be disproportionate investments going into deleveraging the balance sheet as well as improving the growth future opportunities here.
So I think that's pretty much where we are on this topic, which we just wanted to touch upon before we get down to the next topic, which is unlocking future value. Okay. So let me start with this. Sorry. Yeah. Okay. I think 2019 - 2024, I mean, this is really about the journey of Axiata, how the past has been 2019, 2021, 2022, and how we look at the future. As Hans said earlier, there are very clear short-term goals, objectives to be met, and there are long-term positions to be created. And that requires Axiata to go through some transformation and improve or create, maximize the shareholder value over a period of time. I think pandemic did give us some realization. 2020 was a year we went through difficult times.
I think performance also got impacted because of the pandemic and the consumption while growing, but monetization was a challenge. I think most of the OpCos really focused on how do you retain customers at that point in time, and that did mean that you couldn't play around with the pricing and things like that during that period of time. I think 2022, all of us are seeing, has been so strong headwinds after the pandemic getting over on the macroeconomic side, and specifically, Axiata has been hit more because of our presence in frontier markets, and this is not just about looking at the impact coming because of the forex, but also the inflation and the interest rate increase and the affordability, consumption power of consumer is getting impacted. I think Sri Lanka has been the one which has been the biggest hit.
I think during the course of the day, Supun will talk about what has been done in Sri Lanka to take care of, and regulatory framework has also been a bit challenging. I mean, Malaysia itself, we went through a lot of discussions around 5G and then DNB formation and all that, right, which is very different from the way we thought the market evolution will happen, how 5G will get implemented, and this does change gears for us and focus on things which we were not exactly planned, and not just Malaysia. I mean, this was seen to be the most stable market when it came to regulatory, but in 2021, 2022, we've seen some developments here in Malaysia.
In addition, other markets also, we've seen regulatory developments happening, which have been a bit of a not necessarily positive, but there have been something which requires us to adjust to the future as we go along. So immediate priorities for us looking at these situations was how do we deliver still a good, strong organic plans, which means if you leave aside the impacts coming of forex, etc., how do we ensure the underlying performance of all operating companies remains strong? So I think that was a key focus area. I think the OpCos were, even though macro headwinds against the entire group, OpCos were actually focusing on how do they drive outstanding performance on an underlying basis. So I think we did not give up or start sitting back in terms of the impact of macro.
I think our investments continued in the line to ensure that the quality of customer experience or the quality of network is not compromised. I think good news is most of the OpCos are actually way ahead of competition when it comes to the experience which we provide to the consumers, even on these difficult times here. M&A track, I think we had very clearly laid out part of the structural changes which I said in the earlier slide on consolidation as well as the value elimination. I think that has led to few transactions this year, which I'll touch upon, which becomes extremely important. How do we get the results, the returns coming out of those investments? So I think that's something which has been a focus. Because of all these M&A, we have challenges on our balance sheet for sure.
I think the focus has been how do we start deleveraging. One of the, I think some of you actually mentioned, what are you going to do with the money you received out of the merger completion as well as the shareholder loan coming is obviously one of the ways to deleverage going forward for us. I think convergence opportunity, which Dian will talk about as we go along in the agenda number seven, how do we leverage that convergence opportunity? Because we believe with a strong business on XL as well as a strong fiber position on the Link Net side should allow us to move ahead with the convergence opportunity. Going forward, 2023, 2025, it's a lot about delayering telco assets.
I think Hans will talk about that, but mainly seeing that how do we get the right realization of values coming from different portfolio within the operations itself, and we've done that in the past with EDOTCO being carved out. We've done that with digital businesses being carved out, and we are seeing that value from these businesses which were kind of hidden within the telco frame, so I think that's something which we will do. I think Hans will talk about the journey towards TechCo. How do we move from being a pure telco operator to more technology or TechCo enterprise business? I think we've always talked about 20% of our revenue should come from enterprise. I think that remains a focus area, a priority for us, and that will be not just the organic, but we'll also look at inorganic opportunities there.
They may not be very large inorganic opportunities, but they act as a bolt-on to the existing enterprise business. And the last bit is value elimination coming out of our Tower business and digital businesses here. And how do we see beyond that in terms of maximizing shareholder outcome? I think we see long-term telcos will become essentially yield assets. Once the 5G cycle is done, I think the 5G cycle would be a challenging one. But long-term, we think telcos will not have or mobile operations, I would put not telcos because we are looking at some of the other assets being delayed. But if you look at mobile operations, we think there will be essentially yield assets, which has happened mostly in the matured markets. Same thing will happen in some of the other markets.
Similarly, infra business, eventually once we've seen that growth path and coming to stabilization with cash flows which are more predictable on the infra business, will become yield asset for us. We will continue to have assets within our framework, which will be continuing to be growth assets. And how do we move away from just being telco with probably 18%-19% of our business coming from Towers, Digital Portfolio and still predominantly telecom operations to probably looking at a mix of maybe 60%-65% from that and rest of the portfolio coming from other opportunities which we will be pursuing. So that's pretty much how we see the future of Axiata and how we will be delivering on the maximization of the opportunity for our shareholders here. So I think, I mean, I think we did touch upon this slide during our quarter four.
I think so far this year has been good for us. I think we are likely to exceed on our APIs which we had set for ourselves. I think at the beginning of the year, we looked at some of the transactions on the M&A track with very clear rationale behind why we want to do these transactions, what were the opportunities behind that. I think with Boost having a very strong position on the payment side on a digital wallet, which we have presence with more than 9 million customers, more than 500,000 merchants there, we think that's time for us to leverage on the credit business. Already, with Sheyantha, we'll touch upon how we've been growing the credit business.
We think with the banking license, with a strong partnership with RHB, we should be able to leverage that going forward. S hould on a longer term drive that kind of a value which we think we are at this point in time not credited with there. I think Link Net, XL, I think once the merger happened with Indosat and Hutch, I think we had to find a sweet spot for ourselves to focus on. That's where the all convergence discussions came in place and our attempt to get the Link Net on our portfolio, I think crystallized during the year. We finished that exercise in September with all the MTO getting completed.
I think EDOTCO, clearly with the desire or focus towards becoming the top five or top six tower companies and moving away from high dependency on the frontier markets to more emerging markets, clearly demonstrates our focus towards Philippines acquisition of PLDT Towers as well as the acquisition of Towers in Indonesia and Malaysia. Having said that, I think the business which Adlan will talk about continues to grow strong on its organic existing platform here. The last but not the least is the merger between Celcom and Digi, something which we did crystallize more than two years back as a reason for us to become the largest telecom company within Malaysia and driving this whole process. With the blessing of the regulator as well as the shareholders, we were able to complete that on 30th of November.
This is really around future-proofing the opportunities in Malaysia because we've seen last three years the mobile industry is being flattened. Other than the cash flows, there was very little growth to be seen. I think with this consolidation happening as well as synergies which we see and the opportunities to expand beyond just the telecom operations in Malaysia, this should become a very strong business or asset we will have ownership of. That's pretty much what I wanted to cover. I'll hand over to Dr. Hans to talk about the future.
Thanks very much, Vivek. I'll share a few thoughts which follows from the second sliver. If I just flip back to this slide here, the second sliver on the chart here, which takes us from 2023 - 2025, the next three years, and what the group will be busy with in terms of structural transformation.
What I'll talk about really is directional, should not be taken as a forward-looking statement, but more from the point of view of a statement of purpose, a statement of belief, which is increasingly shared not only between Axiata Group, as in Vivek and myself, the team at Axiata and all our OpCo and OpCo management, but also a growing belief across the telco industry that something needs to be done to unlock value of telcos. Because if you look inside a telco and indeed inside Axiata, we see a great potential for a transformation agenda which needs to focus on curing the handicaps that we perceive, but also to build and capitalize, exploit the strengths. Clearly, the telco multiple today does not translate Axiata's portfolio strengths.
As Vivek went through some of our key assets, and something that would strike you is the diversity of these assets, ranging from infrastructure on one hand to a very rich ServeCo, digital telco portfolio, and all the way to very advanced digital services. But the value that's been created, the growth that is being delivered does not translate into shareholder value, less so into capital appreciation. So we do share the growing belief and the growing thesis about delayering and also specifically the fundamentals of delayering, which, as we know, delayering is not specifically a telco topic. It could apply to any industry which is going through quantum change due to the evolution of technology. So if you were to take the Financial Services sector or the airlines or pretty much any business, logistics, for example, there is always the opportunity of delayering into paths.
Now, why is that important? It provides management focus. It provides clarity, and it provides or takes away the opaqueness of consolidated businesses with respect to how investors could understand how the components and individual parts operate and create value. This would, of course, signal that once you adopt a delayering approach, that you should also be prepared to shift capital in line with the growth needs and in line with the appreciation investors have for those specific layers or components of your business. Now, why do we think this is something we can succeed in? Axiata has indeed been a pioneer in delayering. Delayering was not a word that was present in 2013 or 2014. It's a kind of new buzzword.
But in fact, what Axiata set out to do with the carve-out and growth of EDOTCO, with the birthing of the digital businesses way back in 2014, is exactly what delayering is preaching today. So what is really needed is, we believe, sharpening of our strategy, which we are well versed with. We are experienced in this. A sharpening as well as a determined acceleration to do more things faster and to create this model which provides the required value creation opportunities. Delayering, of course, promises value creation in terms of margin, in terms of multiple expansion. You take, for example, the FiberC os today promise 16X-25X, NetC os 24X, and PlatformC os similar and 17X or so for enterprise solutions. So a far cry from the consolidated multiple that telcos get today of anywhere between 4x-6x .
However, I must caution that, and something that we are certainly very cautious about and very cognizant of, is that real value will not be created by purely doing financial engineering. Real value would come from actually driving the fundamental of the delayering thesis, which is increasing utilization, improving capital efficiency, and driving KPIs such as multi-tenancy and utilization of infrastructure. And that would deliver the value that we seek to achieve. Now, an accompanying thesis or buzzword, whichever way you look at it, to delayering is this concept of the TechCo. And journey from being a telco to a TechCo. In my view, it's not a transition. It's not that telcos can end up as TechCos per se.
Rather, what is important is that the telco journey is using the multiple layers of its business, evolves throughout the continuum of being a telco or pure telco all the way to being a TechCo. So these layers we talk about, clearly at the bottom of the stack, you get the infra layers. And here we could talk about TowerCos, FiberC os, and data centers. Now, whether we layer the business in combination of these or one or more of them is up to the DNA and also the structural fundamentals of the particular telco. The ServeCo is what we see today serving customers. And above the ServeCo, an important layer is the API layer, which disaggregates the lower layers of the infrastructure from the upper levels of the TechCo.
Now, Axiata is in particular very strong on this area of APIfication, as it's now known, as in providing a multitude of APIs which open up the lower layers of the telco stack for innovation, for digital transformation, for participation by parties beyond the telco. And here you would move into the horizontal platform layer where platform services could be provided by exploiting the APIs generated from the lower levels of the business. And also these APIs enable telcos to have zero-touch or friction-free partnering with the hyperscalers. So at the platform layer, you have your own platforms as well as you would make the most of what hyperscalers have to offer. But for both these, what is essential is that the API layers and the flexibility and friction-free connectivity to all aspects of the lower levels of the telco are made available.
Vivek mentioned the enterprise business and enterprise solutions becoming a very important component of the upper layer of the stack towards the TechCo end of this journey, and end-to-end solutions as well as vertical solutions for enterprises, again, potentially in partnership with hyperscalers, is where we see multiples of 14 x- 17x being given to a very high growth area. Now, I would also draw your attention to the right-hand side of this chart. Now, the left-hand side is the typical telco to TechCo evolution, a journey. You can have presence in one or more layers, but broadly, you need to evolve your focus or shift capital from the bottom towards the top.
Now, on the right-hand side, it projects some of the challenges, should I say, or tasks ahead for the management of a telco, as in realization that the same journey would also mean that while we are very accustomed to selling technology today, we would need to move into the arena of selling solutions. Likewise, comfort levels of dealing with hardware and hardware-based business and hardware-based infrastructure moving into software-based infrastructures. And very importantly, an asset-centric or CapEx-heavy archetype towards a talent-centric or OpEx-driven archetype. So these are some of the fundamental changes that we foresee in the next three years. If I were to very quickly map, I'm not going to spend time on this, but if you were to very quickly map Axiata's existing assets onto this template, you would see that we have a very comprehensive coverage of presence across this stack.
Importantly, EDOTCO plays a very robust and key role, one of the early movers in the delayering story. And higher up, we see the ServeCos across our group at various degrees of vertical integration. Some are moving very rapidly towards being ServeCos only, reaching out to their own or third-party infrastructure layers, while others are more vertically integrated. As I mentioned earlier, we have a powerful asset in terms of our DTE or Digital Telco Enabler layer, which is developed by Axiata Digital Labs and maintained and evolved by ADL, and also the AXP, which is a cross-connect gateway which connects our telco networks at various layers to third-party content providers, third-party OTTs, and so on.
In the platform layer, again, the DTE asset becomes very monetizable in that it can be a platform as a service going forward, and also our B2B marketplace and API marketplace, which is already mature in most of our emerging markets and frontier markets today. On the vertical solution side, we have two mature businesses in ADA and Boost, and the telco enabler would also, going forward, become a vertical solution to telcos as ADA reaches out to telco groups beyond Axiata. So this is a quick snapshot of Axiata's presence on this canvas, on a canvas of delayering as well as a canvas which shows the evolution from telco to TechCo. So what gives us a license to win and what makes us hopeful and confident that we should invest the next three years in this transformation journey? Several solid proof points. Let's start with ADA.
It's a fastest-growing market and digital analytics and marketing company in Asia. There's strong investor validation from seasoned digital investors. Likewise, Boost, which acquired its digital bank license recently and also has investor validation. The star here, of course, is EDOTCO, which, I mean, it's a story that we all know, with strong investor validation of $700 million in its 2017 private placement. Looking forward to the tech core evolution, ADA and the DTE platform already recognized by the TM Forum and Axiata as the driver within Axiata's tech core stack, which places Axiata among the first three telco groups globally to have a full implementation of the Open Digital Architecture, the other two being Jio and Vodafone, so Vodafone Group. So Axiata is in very august company with respect to its digital journey.
So overall, I'm just flashing this to give ourselves confidence that, yes, we can move down this track and also do it with stealth, but with a very high chance of success. Working with ecosystems, over 70,000 developers today engaged on our API platforms, third-party developers. And in ADL, we have 1,300+ developers in a take-back control formulation where we not only develop the tech core stacks but also bring back control with respect to our telco stacks. So these are moves that were less evident, less publicized, but you would note that it's some of the leading telco groups in the world, like Vodafone and Jio, who had similar strategies and continue to work along these lines. So there's financial as well as strategic rationale. I won't spend too much time here. I mentioned earlier the multiple expansion that can be achieved in the sum of the parts.
But very important to remind ourselves that at the end of the day, this is about clarity, focus, having the right people focused on the right business. You are then able to attract the right talent. You're able to provide clarity to investors, and you can utilize your infrastructures and capabilities at a high level of efficiency. So there's both a financial rationale as well as a strategic rationale. Last but not least, a quick mention that the outcome projected here is certainly not numbers cast in stone since there are no numbers here on this slide. That there would be a shift of our underlying PATAMI contribution in line with this model from telco through infra to the tech businesses. And this would also be true of the shift from frontier markets to emerging markets, to the more mature markets in Asia.
The same goes for the equity value broken down by business as well as region. The thesis here is that while some of our near-term initiatives, which we went through, the M&As, the consolidations, and some rearrangement of our investments would put some pressure on new PATAMI, overall, we believe that embarking on the structural transformation journey, delivering results on a very regular basis in terms of execution, extracting the efficiencies that this journey would promise, would enable value elimination of the new growth areas while commanding premium valuation multiples and thereby driving the SOTP of Axiata. I hope I gave you a whistle-stop summary of our thinking, I believe, and what we intend to focus on in the next few years, building on the strong foundation of organic growth and delivery, which Vivek shared with us a little while ago. Thank you.
Shape the future, and it shapes all mankind. Shape the mind and see what happens next. Discoveries, innovation, and successes are not created in a vacuum. It happens when we leave our comfort zone and come together. We embrace faiths, cultures, disabilities, differences. We embrace races, ages, ideologies, personalities. We are inclusive to accelerate sustainable growth in Asia. Connectivity is plural, not singular. The best way the world connects is everybody in, nobody out. Differences are not just celebrated but essential. So whom we're made of is everyone, guided by clear values and a collaborative moral code. A new generation of EDOTCO is more dynamic and forward-looking than who we were before. Equitable next-generation connectivity is not just what we do, but what we believe as a company. Because humanity isn't singular, i t's plural. No one should be left unconnected.
The truth is we're not just enabling connectivity, but we enable positive social transformation. The power is we shape future connectivity.
Good afternoon, everyone. Hopefully, you enjoyed the video. I think you can see that we've just launched our new brand last Friday. And essentially, I think it's taking EDOTCO, after 10 years of it's our 10th anniversary this year, taking EDOTCO to a new height, to a new level, right? Just to share a little bit on the new branding. I mean, sorry, Vivek, take a little bit of time, just a thought, we take this opportunity. The three dots on top, right, is just to reflect, yeah, present, tomorrow, and the future. And in the past, if you look at our team, it's about enabling connectivity.
But today, if you look at where we are today, we believe that we are already an industry leader that we should be shaping the future. And if you look at the full circle, the box, the half box, as well as the circle, it's about shaping the current, right, the today, tomorrow, and the future. And we decided to go full bold in terms of our logo because I think today, in the world of digital, I think that's something that's probably going to be more recognized. You see more and more brands today are going full cap, right? So it's a new beginning for us. For those who don't know, we have also just moved to a new office. Yeah, we consolidated our office to a new location, a bit further from Axiata.
But I think that's essentially is trying to consolidate all our people into one location so that we can have a better collaboration, a better working culture, working with all organizations across, right? As we grow in size, I think we also want to make sure that we can collaborate and work better to serve our customers better. So today, I'm going to talk a little bit about EDOTCO growth strategy. Yeah, so but before that, just to give a little bit of context, yeah, I think just very quickly, I think the pandemic has actually driven data growth. The demand for bandwidth has grown by twofold. I mean, this is based on last year's data. And you see that because of the pandemic as well, the demand pattern has actually changed, right? Today, if you look at the underconnected, right, of society today are growing in numbers.
So we are not just experiencing connectivity, high-end connectivity, not getting good connectivity, not only in the suburban or rural areas, but also more what is emerging today is in the city areas, the urban areas, yeah, because of the increase in the demand for bandwidth, right, as what you see. So I think, and you know that infrastructure is actually key, right, in terms of driving our digital economy. In the next eight years, we expect that digital economy globally is going to triple and making up close to about 40%, yeah, of the total economy. And what does it mean, right, to infrastructure? That means the demand, the need for an infrastructure play is actually significant, right? If you look at the number of telecom towers today, it's probably close to 5 million. That demand will probably need to double.
We'll talk a little bit about maybe the structure will also change. The need for fiber, right, as we move into 5G, 6G, right, fiber is absolutely core in terms of driving this technology. The need for data centers. Today, we are moving closer to the side, right? So data centers in the future, we're no longer talking about the big data centers. We are talking about more edge computing, right, to improve the latency, right, to reduce the latency of our connectivity. You probably need to have more edge computing at the side. Just a little bit of how our connectivity will transform, right? I mean, if you look in the world of 2G, 3G, 4G, right, we work more on a homogeneous single-layer network structure. So typically, you have your GBT, right, 30 m, 45 m, 60 m, 70 m.
Yeah, and essentially, this, we are looking at one or two cells per kilometer, right? And that's typically the traditional setup, looking at using low frequency between 700 MHz-2,600 MHz, yeah . However, as we move forward into the world of 5G and potentially later in 6G, I think from this homogeneous single-layer, it will move to a dynamic multi-layer network. What does it mean, yeah? It means that in the future, the structure that is going to dominate, yeah, is going to be more on street furniture. Structure getting lower as well. If you look at the DNB towers today in Malaysia, it's coming down to the 18 m-20 m compared to the traditional 30 m-45 m. You will see that more special structures will come into play as well with 5G, going down to 9 m.
You will see that you will leverage more on street furniture, and small cells will be a key component in terms of driving the connectivity of this technology. That means that for this to work, I think we are probably looking at 100-200 cells per kilometer. We are talking in a span of probably up to 2030, yeah? This is required to build low-powered, low-latency street furniture, yeah? Essentially, just to give you a perspective of how the connectivity world is going to change and what does it mean, right, in terms of the need for infrastructure moving forward. I think you see that today, as part of you, you will see that more and more MNOs are probably outsourcing a lot of this infrastructure work to independent tower companies.
Hence, I think to meet this demand, right, the role of independent tower companies are becoming absolutely essential in terms of ensuring that we actually achieve, right, the network quality as we move up as technology evolves. A little bit about ourselves. We are the sixth largest tower company in the world. We are number one and number two in six out of the nine markets that we are present. Today, we own and manage close to about 55,000 towers in nine countries. And we connect close to about 171 million users, right? That's approximately 16% of the total users in the market that we are present. And we manage close to about 21 EB of data in those markets.
Perspective, I think if you look over the last three, four years, you can see that from a revenue, EBITDA, EBIT, I think we have actually managed to grow double-digit CAGR, right, on the three parameters, yeah? So, and if you look at, as a result, you also see that our tower portfolio has actually grown, right, with a colo ratio of at 1.62 today. I mean, you can see it's probably a bit flattish. That's after some acquisition of tower in the Philippines, which have a colo ratio of one, yeah? So this growth, we expect in the coming years, looking at what we have assets that we have actually acquired, right, the acquisition that we have actually made, will continue. The momentum will continue, and I think we are probably looking at this double-digit growth to probably continue in the years to come.
How we view our market, we divide it into three categories, yeah? Today, we have the core markets, yeah? That's basically Malaysia and Bangladesh. We are a dominant market leader in Malaysia and Bangladesh. I think in Bangladesh, we have 86% market share. Malaysia, among independent tower companies, we probably have close to about 40% market share. And I think these are very stable cash flow. I think generating good returns and I think declaring good dividend, right, up to the it's a cash cow, right, to the group essentially. The second category of our portfolio is the growth market. These are the two new acquisitions that we did, right, Indonesia and Philippines. And I think while our contribution today from this growth market is small, however, we expect that this is going to be the main drivers of growth, yeah?
Having said that as well, I think while growth is also means that we actually need to probably put a lot more capital as well, yeah, to drive the new build- to- suit and to cater to the new demand that we are expecting, right? So, the last market, these are all the other markets, right? This comprises of Cambodia, Sri Lanka, Pakistan, Myanmar. I mean, you know, in some of these markets, probably it's quite challenging in some of this. And I think in some of these markets as well, in one of it, I think there is probably a risk of sanction, which is not today. So, I think the point of breaking this up into three different buckets because how we approach and what we do in each of these portfolios will be very different, yeah?
Today, if you look at the contribution today, yeah, of the growth and core market today, it's probably around 73%, right? So, 26% actually make up the other markets. However, in the long term, we expect that from a Tower's perspective, the growth and core market will make up 80%. Revenue for the growth and core market will be at around 85%. EBITDA will be around 87%, yeah? You will see that there's a significant shifting of portfolio, right, more towards the growth market, yeah, our new acquisition. And these are the two buckets that you're going to see a significant growth, yeah, in the years to come. These numbers are only reflecting organic growth, right? We have not included any inorganic opportunities in these numbers. Where are the areas of growth?
I think from EDOTCO perspective, I think given our platform, our portfolio, I think we do have competitive advantage versus some of our other competitors. And I think if you talk about the three pillars of growth, it's definitely in Indonesia and Philippines. Of course, I think in Indonesia, we are small in size at the moment. However, I think there is aspiration to grow that, right? So and the key for us in this market is first is to monetize the assets that we have actually recently acquired, yeah, through colocations and probably providing additional services to the sites, right? So today, we are already starting to colo in terms of the assets that we acquired between Philippines and Indonesia. I think the other part that we are also really focusing and we believe that this is absolutely necessary is to probably continue to innovate, right?
Innovate whether in terms of the product solutions that we have or even the next generation product that we are talking to make available in the market, yeah? I think there are various if you look at how the way that we have actually set up. I think you know that we focus a lot on innovation on our tower structure. For example, today, we work on a quite standardized tower to make sure that, yeah, that we look at the various technology that we have capitalized, be it from a bamboo tower, steel towers. We have also considered alternative material, right, precast concrete spun as well as aluminum towers, right? I think we will continuously innovate.
We have a center of excellence on this, and every demand for new towers will actually go to the center of excellence to make sure that we deliver lighter, more durable, stronger towers at the lowest cost, right? So similarly, I think with some of the other solutions that we see that we develop, especially on energy and all that, because we believe that these are requirements in the future that we see it's going to be a lot of pain points for our customers, right? Especially as we move into 5G, where the power requirements actually double or even triple, yeah? Last but not least, I think we do have a strong engine of M&A, yeah? You look at we did four acquisitions within the span of 18 months.
Not so much of that, but I think the key is how you monetize from the acquisition that you have actually done, right? So I think we are really tracking the M&A that we have actually done to make sure that we deliver, right, the business case that was actually presented and promised to the shareholders as well as our board of directors, right? So and in some of these cases, it's not just about M&A, but it's also about how you leverage on strategic partnership, especially on the new services, yeah, that we are probably looking at leveraging on capital as well as the expertise of our partners. High-level strategy in terms of where are the focus of these three markets, core markets. I think in these core markets, I think we'll continue to increase, improve yield, driving more colocation.
I think if you can see, this year is the first year that you see that in EDOTCO that we will deliver more colocation than build-to-suit, yeah? Overall, we are expected to deliver close to about 7,000-7,200 tenancies this year. And I would say that out of the 7,000, close to about 5,000 are actually coming from colocation, yeah? And this is due to the fact that the change in our business model, where today if we get coordinates from the MNO, we don't just simply build the towers, right? We will actually refer it back to our network planning tool. And in most cases, if there are sites that are actually nearby, we'll probably push for colocation.
We also do proactive marketing, yeah, for colocation that we see that there's high traffic, yeah, in the industry to the MNO with a certain flexibility for the MNOs to probably move in cases that traffic doesn't pick up within a certain period. I think in some of these markets also, we are also looking at new services. 5G is going to be key in terms of driving the growth in this market. Malaysia, specifically DNB, we are the preferred partner of DNB today. By the end of this year, I think we should be delivering close to about more than 1,000 sites to DNB, yeah? So, I think not only fiber, we are also working not only tower, but we are also working on fiber as well.
Not necessarily. We're building it, but we work with partners to make sure that we are able to fiberize our tower as quickly as possible. Because in the world of 5G, a tower without fiber is not going to be as attractive, right, to the MNOs. On the growth market, I think monetization of our assets that we acquire, of course, again, focusing on colocation. If you look at some of the assets that we acquire, I think the colo ratio is still very low, yeah? So I think we are working to make sure that we drive this colocation on these towers, and I think in this growth market, one of the key aspects you see in these two markets, right, 5G is going to be the key play, yeah, that's coming up, yeah?
And I think that's where that really focusing on street furniture, yeah, potentially focusing on the energy part is something that we feel, right, will give you the competitive advantage. Lastly on these other core markets, other markets, I think for us in this market, we are going to focus on cost sustainable operation to make sure that we don't put much capital in this market and in areas that we will potentially explore for potential monetization as well, right? With these three pillars, I think we are very clear in terms of how we want to move forward, how we're going to address each of the portfolios that we have and essentially growing, yeah, the growth market and really extracting whatever remaining growth that we see in our core market, yeah. Thank you.
To the second biggest thing of Axiata after CelcomDigi, Indonesia.
Do we believe that Indonesia is the right place for Axiata to be and to increase the investments we have made so far? Clearly, yes, we do so because we have made major investments manifested by the recent acquisition of Link Net and the by Axiata Group supported rights issue of XL Axiata. Next slide, please. Indonesia is the powerhouse in ASEAN and not just because of the recently very successfully hosted G20. The sheer size of the markets, the precious natural resources and commodities which Indonesia has to offer, the enormous amount of workforce, the strong economic growth fueled as a result, the growing middle class, the increasing purchase power despite short-term headwinds on inflationary pressure makes that market highly attractive from both a consumer standpoint as well as from an enterprise standpoint. That's why we believe Indonesia is a place for us to be.
But certainly the mobile play as what we have been anchoring so far primarily is in this market structure we have in Indonesia, a very intense and in a way tough business. It's a very competitive market. But at the same time, we see convergence as the right opportunity for us to go forward, both because of the assets we have on hand. And here, certainly Link Net is contributing majorly to the asset base of Axiata in Indonesia. But also we have made good outcomes so far, early results coming in from convergent play XL has going into. And those results are very encouraging. So it's an opportunity for us to scale simply because we have very favorable unit economics and we have tested and we see a clear preference of consumers towards convergent products. Accordingly, we believe that it is the right way to go forward.
While working towards scaling the convergence play towards 2023, we have since the acquisition of Link Net made already identified attractive synergy opportunities, both in terms of revenue upsides as well as costs and process synergies. Certainly, it's a journey to identify synergies and to reap them, but we have made early progress and we are very encouraged by the synergies we see from combining at the end of the day the assets of Link Net and XL in Indonesia. Now it is my pleasure to welcome Dian Siswarini, the CEO and President Director of XL Axiata to the stage to share with you how XL is leading the Indonesian convergence transformation, followed by Kanishka Wickrama, the CFO of Link Net, to give an introduction of Link Net as such, because I think it's relatively new to you.
You haven't seen yet Link Net on stage of any of the Axiata investor days and to share perspectives on the way forward. Thank you very much.
To the second biggest thing of Axiata after CelcomDigi, Indonesia. Do we believe that Indonesia is the right place for Axiata to be and to increase the investments we have made so far? Clearly, yes, we do so because we have made major investments manifested by the recent acquisition of Link Net and the, by Axiata Group, supported rights issue of XL Axiata. Next slide, please. Indonesia is the powerhouse in ASEAN and not just because of the recently very successfully hosted G20.
The sheer size of the markets, the precious natural resources and commodities which Indonesia has to offer, the enormous amount of workforce, the strong economic growth fueled as a result, the growing middle class, the increasing purchase power despite short-term headwinds on inflationary pressure makes that market highly attractive from both a consumer standpoint as well as from an enterprise standpoint. And that's why we believe Indonesia is a place for us to be. But certainly the mobile play as what we have been anchoring so far primarily is in this market structure we have in Indonesia, a very intense and in a way tough business. It's a very competitive market. But at the same time, we see convergence as the right opportunity for us to go forward, both because of the assets we have on hand.
Here, certainly Link Net is contributing majorly to the asset base of Axiata in Indonesia. Also we have made good outcomes so far, early results coming in from convergent play XL has going into. Those results are very encouraging. It's an opportunity for us to scale simply because we have very favorable unit economics and we have tested and we see a clear preference of consumers towards convergent products. Accordingly, we believe that it is the right way to go forward. While working towards scaling the convergence play towards 2023, we have since the acquisition of Link Net made already identified attractive synergy opportunities, both in terms of revenue upsides as well as costs and process synergies.
Certainly, it's a journey to identify synergies and to reap them, but we have made early progress and we are very encouraged by the synergies we see from combining at the end of the day the assets of Link Net and XL in Indonesia. Now it is my pleasure to welcome Dian Siswarini, the CEO and President Director of XL Axiata to the stage to share with you how XL is leading the Indonesian convergence transformation, followed by Kanishka Wickrama, the CFO of Link Net, to give an introduction of Link Net as such, because I think it's relatively new to you. You haven't seen yet Link Net on stage of any of the Axiata investor days and to share perspectives on the way forward. Thank you very much.
Thanks, Dian. Good afternoon, everyone. I also don't have a video. Clare didn't tell me that.
Given it's the first presentation of Link Net in the Analyst and Investor Day, we'll talk a bit about the background of Link Net introduction, some of the current priorities that we are working, then about the fixed broadband market, and then finishing off with the synergies that items that we are working with XL at this point in time. This is the profile of Link Net. Currently, we have slightly more than 3 million home passes operating, approximately about 800,000 residential customers, more than 3,000 enterprise customers, more than 200 pre-wired buildings or areas in our portfolio, and our network is present in 27 key cities in Indonesia. Yeah, I'll not go through, don't worry, I'll not go through all the awards that we have won. Moving on. This is the current footprint of Link Net in terms of home passes.
As you can see, majority close to 2 million, 62% of our portfolio is in Greater Jakarta area, followed by East Java and Bali, the next biggest portfolio. Recently, we have started moving into other areas such as Sumatra, Central Java, and West Java at this point in time. These are some of the residential products that we offer. As some of you might know, we offer a linear bundling of internet and Pay TV. So we have quite a bit of area of products in home broadband and then Pay TV as well. Similarly, we have partnered with quite many streaming partners. As you can see, we partnered with HBO GO, Lionsgate, etc. Then the other area is the Smart Living, Smart Home solutions that we are offering at this point in time. Link Net is quite strong and present in the enterprise segment.
Currently, close to 25% of our revenue comes from the enterprise business in the overall portfolio, and as shown here, the enterprise revenue has been growing at 16.4% CAGR year-over-year starting from 2017 until now, and we have a similar growth in 2022 as well. The yellow bars are the quarterly increase. You can see it's going up from IDR 182 billion to IDR 242 billion. We offer in the area of different services starting from connectivity, managed services, cloud services. The thing to highlight is that in each and every segment, the business segments, whether it is financial sector, hospitality, or even the government, we have a very strong array of very strong enterprise customers at this point in time, and we have quite a high growth plan for the enterprise segment going forward. Moving on. Let me talk about some of the current priorities that we are working on.
2020 and 2021, actually, there was an exponential growth of the new subscribers that came in due to the movement restrictions. But at this point in time, we are working on looking at the quality of the new subscribers that we are adding into the network. And the second thing is that there are multiple network quality improvement programs that we are working on. And one of the items is that the conversion of our HFC network to FTTX, one of the key priorities that we are working on. And the third item is that to give value for the money that the subscribers pay. And we are working on programs for the speed upgrade improvement programs as well. Yeah, I think this is kind of reemphasizing what Thomas and Dian spoke.
The penetration, the fixed penetration rate in Indonesia is quite low compared to the regional peers that we see. So the opportunity with that low penetration and with the population of 280 million people, the opportunity is quite high in that market. And based on the market data, research data that we see, the estimate is about adding about another 8 million new subscribers in the next four years in the market. So currently, approximately on average, we are rolling out about 250,000 home passes a year in the last four years. But going forward from 2023, we are planning quite a significant increase in the number of home passes that will be rolling out in the next three years. And the idea is to get quite a sizable share of the home passes in the market in the next three years by increasing the rollout in the coming years.
These are the synergy items that we are working with XL and to help them in their convergence journey as well. In October, we have launched our first mobile bundle, the first FMC product, making the XL mobile services available for our 800,000 customer base. There are other OpEx synergy items that we are working on in terms of the shared infrastructure. The next step is that, as Dian spoke, how we collaborate together to achieve future synergies and help XL in their convergence journey. Yeah, with that, thank you.
Okay, let me, you know, all of us know what's happening with the macro situation.
And as I said earlier, its frontier markets probably are more exposed than some of the other play markets, and specifically because of the exchange rate, interest rates, inflation, etc., and the fact that economies are not that big, that large to withstand those headwinds versus some of the developed economies which can still sustain and withstand those headwinds. But I'm not going to spend time today in saying what has been the impact of these macro deficiencies or macro headwinds, as you call it, because I think all of us know what's the impact of that. And it's also clearly visible in our results in terms of the mark-to-market impact because of the forex, the US dollar strengthening against some of these currencies. So I'm not going to spend time on that.
However, what I'll spend time on is how these headwinds have actually transformed these operating companies and look at these difficult times as an opportunity. So I'm going to spend time on that. And let's understand from the CEOs here on what they are doing to manage these difficult times. So let me start with the first, which is Supun, who's been, or the country's been most hit, which is Sri Lanka. And Dialog has been withstanding and the performance of Dialog, as you've seen, despite all the headwinds, have been growing well on revenue. They're still been maintaining decent performance and gaining market share. So what's, Supun, if I may ask you, what transpired when you had this 80% sudden depreciation of the currency, inflation above 60%, and maybe countries moving towards being a hyperinflation country? How did you look at this?
What kind of, you know, we talked about project resilience? What kind of actions have been taken? And how do you see this converted into an opportunity? Yeah.
Thank you. Yeah, it did. On one hand, it was a massive crisis in the country when from February, the currency was floated and the knock-on effect on the economy as well as the business was enormous. However, the Dialog story, Telekom Malaysia entering Sri Lanka in 1995 and then as the fourth entrant getting to market leadership in telecommunication in mobile in 2000 and then today as the largest telecommunications provider in the country hasn't been an easy journey. It was through successfully overcoming multiple crises that the country has witnessed over the last 25 years. The company's DNA is on how do we use a crisis to our advantage?
How do we take the crisis as an opportunity when everyone goes into a shell, goes into a defensive mode? How do we, on the other hand, have a very clear focus plan in order to take advantage of that competition weakness as well as the opportunities that come out of the crisis? So in this context, the economic crisis, the largest post-independence crisis that we have seen in the country, again, we saw it as an opportunity. We always make sure that we don't slow down in the market attack. We don't cut down on the product offering. We attack in the market. We continue to win customers. Along with that, we also have pushed for a price increase in both telecommunication and Pay TV businesses, which was successful. We implemented that in September this year. And the key outcome from that market attack is now coming through.
We have seen year to date, we have grown 5x faster than our largest competitor, Onyx. Growing 5x in this kind of a crisis for a large telco in the country is not an easy task, and it clearly shows that the consumer recognizes a telco which takes care of them, takes care of the country, and also does the right thing, then on the cost side, we looked at how do we use this because it gives an opportunity. Everyone is ready to change. Otherwise, everyone gets comforted because you are doing well. Why do you need to change? Here, we have an opportunity to reset everyone, get them to refresh and take this way of working to a different level. One big focus is on network modernization, so we earlier planned to shut down our 3G network by 2024. Now we have accelerated.
Today, we have less than 10% of our traffic coming through 3G network. We are confident within the next six months, we'll completely shut down 3G network, which will give about $100 million in CapEx savings because we can refarm the spectrum for 4G. T hen solarization. Again, our country had about 10-12-hour power cuts. Running the network with limited diesel availability was a very significant challenge. We again took that as an opportunity to go solar. About one third of the sites are converted to solar. All sites are now getting converted to lithium-ion batteries, again bringing down the energy cost, and in the meantime, we are also seeing electricity prices going up already, gone up by 70%, and the government is talking about another price hike, so solarization, green energy significantly helps to maintain our margins.
Data center consolidation is another focus area which we are doing. In addition, we have been maintaining a standard cost rescaling program. The cost rescaling is not simply cutting costs, but looking at the cost drivers and cost per driver and looking at how can we bring down either the unit cost or the volume of drivers. Together, we have this year brought down about LKR 8 billion in cost synergies. Last year it was LKR 5 billion. This year we accelerate to LKR 8 billion. And next year we are looking at another LKR 10 billion of costs coming out of the network. Similarly, CapEx also became a very big challenge because we used to have about 20% of revenue invested as CapEx, which is about $150 million.
But in today's exchange rate, if you have to invest the same $150 million, it will surpass even 30% of CapEx revenue, which is not sustainable. So we are looking at how do we do the network design in a different way, use a lot more analytics, AI into the network operations to bring down CapEx. And we are very confident that we can at least cut down CapEx by one third from where we were, which is about minimum $50 million in CapEx savings. Then if we are to build that future telco, the telco that Dr. Hans mentioned, we have to bring a lot of digitization, analytics, and AI. Without that, we can't bring down the cost and we can't deliver better customer experiences.
We are accelerating our AI factory implementations, expecting about 5% EBITDA contribution at minimum from AI and analytics, digitization, and again about $2 billion in savings. The last one is about balance sheet restructuring. Today, we have about 90% of our debt in dollar-denominated, partly from Axiata and partly from IFC. So we are looking at options on mitigating the dollar exposure, reducing the volatility on the balance sheet because of that dollar-denominated debt, working both with Axiata as well as IFC on bringing more stability. All in all, all these initiatives need to be done proactively rather than waiting for the next round of exchange devaluation or inflation, and we are seeing very, very positive results across all dimensions.
More than anything, the organization is ready to take on this challenge as an opportunity because they see that this is the greatest opportunity that we have to get the organization ready to face the next 10 years, create that TechCo in Sri Lanka.
Just a follow-up, Supun, a quick one. Would you have done the same things if this was not the crisis yet?
Not really. I guess we sometimes don't take these kind of bold decisions. Shutting down 3G network, for example, we would take it slow, not accelerate. We were taking good three years to convert all customers, say, to e-bill. But because of the crisis, because of the paper shortage, we said end of September, everyone got converted to electronic billing and we don't have any paper billing. Similarly, moving away from paper cards.
So crisis actually gave us an impetus to accelerate some of the work that we were doing. Same with green energy. We were always looking at the business case, but we were not looking at the reliability factor that comes when you have solar. The dependency on the grid is taken away. So in summary, it really helped us to accelerate these programs a nd the team was a lot more open to embrace change than before.
Good. Maybe I jump to Bangladesh, Riyaaz. You know, Bangladesh currency was BDT 85 to $1. It's down to BDT 102 to $1. So it's depreciated by more than 20% over time. Robi is a strong number two player, but when it comes to the margins, it's way behind the number one operator, which is Grameenphone.
You do not have the presence across the whole of Bangladesh. What's in these crises?
What's the real way of work for Robi to maximize returns, preservation of cash in these difficult times?
So the currency depreciated probably in about three to, yeah, three months, I would say. We actually went down to 30% and then bounced back a little bit. So then the CapEx was definitely a big challenge. So what did we do? We were anyway looking at seeing how we monetize our assets better. So we were always looking at, you know, break even sites, you know, how do we, you know, bring sites back to a profitable level. That was something that was in the agenda. But what we did now is we really accelerated it. We took it to a level where the sales guy on the street understands what needs to be done.
So rather than, you know, only looking at from a financial perspective, we also looked at how a sales guy can interpret it. So we put a benchmark saying any site should be over BDT 300,000 for the sales guy. If the site is giving you a BDT 300,000 revenue, then we look at the cost to see whether it's break even or not. So that is something that we had done. So we had, I think, about 4,300 sites. We managed to bring 1,300 out of them back to profitable state. So that's something that we did very aggressively. While doing that, we also managed to, you know, push our sales guys to make sure what is more profitable for us continues to be more profitable. So one of the things is the voice business. Bangladesh market, I think for the next five, six years, voice will still sustain.
So if you look at the penetration, what we have 110% penetration with multi-SIMs. But actually, if you look at unique single SIM penetration, it's about 55%-56%. Now these are the guys who give you the voice revenue, which is the most profitable in that market. So what do we do? We concentrate and see how we can push the voice and make the SIMs or the primary SIM for Robi. So we look at the sites, we look at the customer, and we try to push those two. These two big initiatives, you know, helped us to, you know, bounce back quite a lot during this crisis because what can you do when the forex depreciates? Two big impacts for us. One is there is no dollars in the market. You can't pay foreign vendors. Second is the liquidity, even in the local currency, starts getting mopped up.
Robi was always, you know, playing around with short term and long term big time because we do have very good cash flows. So whenever we are short, we play around with short term. We used to borrow way, way below the market. Now one of the things we did with this crisis, you know, when Supun and Sri Lanka faced this, we converted most of our short term into long term, secured those funds. In two tranches, we did nearly BDT 7 billion of securing so that, you know, you don't run short of money. Whatever the foreign currency thing, we pushed the banks to, you know, give us money because most of this money we need is either to service the loan or to pay the LCs back.
LCs, we dragged it as much as possible to about 360 days so that you don't have a crunch today. And we continue to invest and grow.
Thanks. Thanks, Riyaaz. Maybe I jump to Nepal. I think a country which was probably the slowest to come out of the pandemic and the effect of pandemic, specifically because of the large migrant population who came back but were not, you know, didn't go back and consequently the revenues on ILD, et cetera, also took time to pick up. Right? Andy, just to kind of understand in these difficult times where you don't see growth coming in line with what your expectations, there's still regulatory challenges and all, what's been the priority for Ncell, yourself and the team and how you've been managing this kind of situation which we are in?
Yeah. Thanks, Vivek. Hi.
You know, if I may just spend a couple of minutes to set a bit of a context to some extent for those who don't understand Nepal. If you look at the investments in the last, say, four, five years in Nepal from basically a duopoly situation, borrowers had invested over $600 million in the market, but yet the market is shrinking. It used to be a $100 billion market, now it's about $74 billion. So, you know, to what Vivek is saying, you know, we have to be prudent in terms of how we manage growth, and we take on the challenge to say that our growth has to be driven profitably rather than, you know, being an aggressive investor because the history has told us that, you know, having a high CapEx intensity doesn't necessarily give you the returns that you want to expect.
Hence, cash preservation is important for us. We focus on; it's a saturated market. Ncell has about, you know, 16-17 million subscribers. Obviously, there's about 1.4 dual SIMs in the marketplace. So, you know, for us, our focus is to drive a much lower churn and also to drive much higher value customers in our base. That's our key focus as opposed to gross acquisitions. Yeah. So to support that strategy and making sure that CapEx intensity doesn't blow out of proportions, we're going to take a path of where we say we would be far superior in terms of where we exist rather than where we do not exist. Now, Nepal's terrain is quite different as you move from the south to the north.
As you can imagine, from the plains at zero feet sea level to 8,000 m up, you know, we focus less on the midline and above, but focus more on the terrain, which is where our stronghold market is, where we have about 60%-72% market share. So cash preservation is key for us. We focus on, you know, churn management rather than gross acquisition. We focus on quality of network rather than a wide network. And yeah, that's what we are focusing on.
I think interesting both, I think Bangladesh as well as Nepal, it's just not about growth, it's just not about CapEx investment, it's about profitable growth these times. Where do you invest and where you get good returns versus going lean across the entire market and investing. So that's interesting. Now let me go to Feiruz. I mean, you've been in a sweet spot.
You don't have to worry about 20% depreciation because you work in a dollar-denominated economy, right? So you don't have to bother about that. You don't have to bother about borrowing because you generate $75 or $70 million of cash every year. Having said that, you still have challenges of inflation. You have challenges of affordability. And that's resulting in the consumption of data not growing as fast as was growing in the past. Consumers find it difficult to spend on the services. So how do you drive data growth monetization in that market and Cambodia, right?
Thank you, Vivek, for the question. Salam Alaikum and good afternoon, right, everyone. Maybe if I may backtrack a little bit, right, because we were talking about opportunities and crisis. I think that's how we look at it, right? We even started a bit earlier on from the pandemic, right?
If I may, it may start from that. In that position, we actually look at the behavior of the customers. In fact, the behavior of the customers, we saw a movement of traffic and customers away from the urban to suburban and some of the suburban or rural areas. So that caused us to look at the allocation of capital and basically where the pockets of value are, right? So therefore, in that time of crisis, there was an opportunity to actually invest a little bit more, slightly over-index in your investment for the suburban and rural areas. That's number one. The second one as well from a behavior standpoint, we look at the opportunity of fixed wireless broadband. As some of you may know, the fixed broadband penetration is actually very low.
So we consciously went after the fixed broadband market, and that to date is trending on a year-on-year much higher than the prepaid growth. So we are growing at 20% versus probably a high single digit for prepaid growth. The other angle is also the behavior. So analysis of the behavior of the consumer is very important. During the crisis, there was an opportunity to also push e-top-ups. So e-top-ups are something that for the longest time, we were trying to crack our head, why is the behavior not shifting? It's much more convenient. But that crisis saw an opportunity for us to push, and we managed to push e-top-ups as a percentage of a total from 30% to 40% in the space of a year. And that obviously results in also savings. To the question of data, right, growth opportunity, where we see data is still growing.
It's year-on-year anywhere between 20%-30% growth. So there is an opportunity to capture the market simply because the fixed broadband penetration is low. That's probably the next step that we probably have to look at. At the same time, it's obviously growing profitably. That's where as a DNA of operational excellence, or as a DNA of Smart, I mean, from a cost per GB, we're trending at about MYR 0.15. So I think data margins, we're eking out about 24%-25% EBIT margin. So that's an opportunity. What I'm trying to say is there's actually an opportunity. That opportunity, I'd like to echo as well from Supun's point, right? There is an opportunity, and we were actually thinking about this even before the pandemic. That actually allows accelerate.
It's a lot to do with behavior and making a conscious decision and basically biting the bullet to make the tough decisions, right? And in a way, it's a blessing in disguise, you can see it. I have less of a problem for forex, as you say. Interest rates, on the other hand, are actually benefiting us. So there's a bit of a portfolio allocation that we're doing, right? Doing a natural hedge, keeping a robust balance sheet. We always have healthy discussions with Vivek as well in terms of the shape of my balance sheet. But at the same time, in hindsight, that protects us a lot from the shocks that we're seeing. Notwithstanding, inflation is still a bit high. I wouldn't say it's not a challenge. I think it pans out about 7% somewhere in the middle of this year.
So that's somewhere we need to look at the affordability, Vivek, from a monetization aspect. You got a balance between raising the price as well as the consumer spending.
Thanks. Thanks. I think let me take on further. You know, there's been inflation, there's been interest rate hike, there's been exchange impact. And as Supun said, now that in September onwards, you've been able to pass on some of this to the consumers with price increase. In your case, it was a lot driven by the telecom operator or the, sorry, the regulator allowing you. And some of the other markets, it's not about regulator, but it's about market competition, which is there. Do we see, and it's open to any one of you, do we see this price hardening which we are seeing in some of the markets?
One is what is allowed by the regulator, but the others, for example, in Bangladesh, we're seeing that prices, the ARPUs are growing up, price hardening happening, and we are able to pass on some of the impact to the consumers and keeping our still healthy margins for us. Is that something you feel is here to stay?
Yeah, so if I start, probably, in Bangladesh, the regulator in July suddenly we had disparity between the VAT rates for voice and data. Voice was at 15%, data was at 10%. The regulator suddenly wanted to increase the VAT on the data also to 15%. So this, what does it result? We just pass it to the consumer and the cost to the consumer goes up. What we did was we started passing this price to the consumer while inflation pressures were going on.
So we started testing the market, you know, because we are number two. We have probably 54 million subscribers, but still we are number two in the market. So there's one player who is challenging us from the bottom, and there's also the market leader who is, you know, driving the price. So we started still testing the market with price increases. And to our surprise, the regulator loved it because we showed the regulator all the inflationary pressures because the forex started moving since the end of May. The regulator loved the first increase. We saw the competition also following the price increase. So since then, we have actually managed, of course, it's very small increases.
We have managed to do it five times, price increases, five, you know, five different times every month, beginning of every month, we, you know, do a small adjustment, and that has helped because what we learned is when the inflation is so high, people are not reacting to increases in the mobile pricing because it's anyway too cheap, you know, if you put it like that. So they are not really reacting. So that has helped us also to an extent to push the ARPUs up. But of course, on the negative side, as I said, you have so many subscribers who are dual SIM users. Some of these people consolidate towards one SIM. So we are also trying to make sure those whoever who consolidate comes to us. Luckily for us, we have two brands.
We have a brand called Robi, which challenges the market leader, and we have a brand called Airtel, which actually challenges our challenger. So that helps us to, you know, also make the customer either opt for one of our brands. So this also has been a strategy we have been looked at.
Supun, you want to add?
Yeah, probably, I think I would say it's been a challenge because as the market leader commanding nearly 57% of data market share and 52% of subscriber share too while maintaining a 50% + premium to further expand. However, given the CapEx constraint, we have been very carefully navigating the network experience and improving the yield on the data point of view.
So the data packs, we have been rationalizing and lifting the pack pricing in a sense to improve the yield and improve the ARPU rather than simply increasing the per unit rates. So customer thinks that he's getting a good deal because he gets a larger quota data, but we are also charging a higher price for that pack and locking in the ARPU. And this has been really effective in the voice space. Voice has been in the decline. And in order to arrest the decline and start growing again, it was the ARPU game that we moved into. Giving voice packs where customer commits to a monthly spend or a weekly spend, even if it's a prepaid customer.
Once they lock into that ARPU pack on voice, again, we secure the usage, we secure the revenues, and that really helps to gradually harden the pricing and also improve the revenue coming from the customer. So it's a mix of letting go of some of the low yield packs, but largely moving to an ARPU play rather than just looking at per unit pricing.
Interesting. I mean, I think locking in ARPU, I think that's what the message is at this point in time. I think we're going to run out of time. Just one open question for anyone to answer is, as CEOs, how much time do you spend on balance sheet and cash flows nowadays than what you were spending in the past?
Cash is king. Yeah, I think it's not only us across the company. Everyone is driving cash collections.
One simple example, despite all the challenges, we have been maintaining collections under at 98.5% or default rates under 2%. Despite all the challenges, interest rates are running at 30% +, which gives the indication that it's not something that I can only control but needs support from everyone in the organization and also our partners and driving that message to everyone that you need to bring the cash in to continue all the good work that we are doing, something that we religiously follow.
Thank you. I'll just open up for maybe two or three questions at best because otherwise we'll run out of time. Anyone's got any further questions to these gentlemen here on how they've been managing, how the opportunity, the crisis has been converted to opportunity? So any questions for anyone? Or anyone who's online wants to just type up the question? No? Okay.
If no questions, then thank you very much. Thanks, Supun.
Thank you.
Feiruz, Riyaaz, Andy, thank you very much.
And you probably had enough slides for the day for a Friday that day. So we'll make it a little bit more interactive. Feel free to ask any questions along the way. I might have some questions for you too. And if it's okay, please do answer. So ADA, like Clare highlighted, and Vivek always underscores profit, profit, profit, right? And that's been kind of our focus, but it's also about sustainable growth. We've grown significantly in the last five years, and we actually continue to. This is based on our model. We are essentially driving digital marketing and sales transformation across the region. Maybe first question, has anybody bought a Secretlab chair? You have.
It was probably us who actually managed that on Shopee or Lazada, assuming you bought it, or you bought it on the website. It was ADA that actually ran that full. Or you bought it secondhand. Okay, it wasn't us. Okay, fair enough. I mean, has anybody clicked on an ad on Instagram or TikTok or Facebook recently? Everybody, a lot of them, and it's probably ADA that was powering those ads, those creatives. And that's all part of marketing and sales transformation, and has anybody bought maybe some clothes on H&M or CK or any of those websites? If you have, it was ADA that did the full website all the way till customer experience, all the way till the whole e-commerce management, and that's what we do. We are a marketing and sales transformation business. We compete with the likes of Dentsu.
We compete with the likes of WPP. We compete with the likes of Accenture, so our unit economics are not too different from them, and speaking about profitable growth, we have our CFO, Fariq, as well here.
Yeah, so you must be wondering how we are sustaining this profitable growth. So we enjoy strong unit economics, which we use to reinvest and invest in new capabilities, and then that translates into profits again. So it's a very good cycle that has been working for us.
Cool. And over the last, and we have attempted to understand the market size that, and by the way, the market size within Southeast Asia is $26 billion as per our analysis, and this is within Southeast Asia alone.
This basically includes the agency fees from all the digital marketing and advertising, the agency fees from all the creative output that you see on TikTok, on Instagram, et cetera. This is also the agency fees from enabling e-commerce. Typically, when we enable maybe a Secretlab chair that I was talking about, we get a percentage of the GMV. So the more the brand makes or the enterprise makes GMV, the more revenue we are able to capture as part of it. And that's essentially our service offering. And if you ask any enterprise or any brand, why are they embarking on a digital transformation journey, typically in the marketing and sales function? I mean, they might say, okay, it's cost or because consumers are all about digital, but actually at the heart of it, it is all about top-line growth.
Enterprises are doing it because they want to grow their top line and they want more revenue from digital. And the beauty of this is that the more revenue they get from top line, they reinvest it back into the digital ecosystem to grow further revenue. And it creates a nice virtuous circle, at least until you hit a threshold, which is probably 50%-60% of their revenue coming from digital channels. Today, within Southeast Asia, probably less than 10% on average revenue comes from digital channels. Certain categories like electronics get a lot of revenue from Lazada and Shopee, maybe 30%, 40%. But by and large, if you look at the overall CPG sector, the banking sectors, et cetera, revenue from digital is still, I would say, kind of low teens.
Hence, it is a significant kind of growth trajectory and opportunity for us over the next five years. Hence, that's what ADA is. In a nutshell, we are an integrated growth agency. We connect various pieces and deliver various services from analytics to marketing to commerce to consumer experience. In order to deliver this, you require a cross-section of capabilities and skills all the way from data science to folks who understand deeply about how to run massive campaigns on Facebook, on Instagram, on TikTok, or understand how platforms like Lazada, Tokopedia, Shopee, et cetera, operate, and also deep technical knowledge of platforms like Adobe, Salesforce. How do you integrate all of these to actually deliver that end commerce experience that we are also used to? That's what ADA is all about.
I have a quick video to kind of show you our brand promise and also positioning in the market. So with that brand promise, we work with some of the top brands across Asia. The biggest sector that we serve today is banking, financial services, and insurance companies. We work with some of the big brands like AIA, BCA in Indonesia, FWD across the region, et cetera. The second largest sector that we support and grow are consumer product group companies and a lot of FMCG businesses, the likes, like I was mentioning about Secretlab, P&G, Unilever. In Malaysia, we work with, actually run all of Colgate- Palmolive stores on Lazada, Shopee, telcos, naturally because of our heritage.
We work a lot with Axiata Group of companies, but we've also then taken that capability that we've learned from these also to other telcos, which are not part of Axiata Group like Globe, Unitel, et cetera. The fourth sector that's really emerging, especially after COVID, is the whole retail and automotive. As these sectors are looking at more omnichannel experiences between online and offline, they require a lot of digital marketing and sales transformation. That's an emerging one. An example there is we work with BMW actually to manage their whole website in Thailand with all the consumer experiences with the ability to kind of design your car and hopefully eventually order one online in the future too. This growth is clearly evident in some of the financial numbers as well. Fariq will quickly go through that.
So the clients that you saw there in the earlier slide, we've been able to create tremendous value to our clients, and that has basically enabled us to grow our revenue from MYR 281 million in 2018, going up to MYR 1.3 billion in 2021, 2022, rather, the forecasted value. So that has flown through to our EBITDA. When we started, it was a negative EBITDA of MYR 14 million, where we were just short of MYR 100 million last year. That's the number that we will easily, comfortably cross over this year by reaching about approximately MYR 110 million.
Cool. And looking forward, this is actually what we do. I had explained previously. So we do analytics, we do marketing, we do consumer experience, and we do commerce for brands in an integrated manner.
If you look at these services, they're quite interesting because analytics and actually customer experience, we have long-term contracts with our clients where we typically work on our two to three-year engagement models. Marketing and commerce, marketing, we make a percentage of every digital ad dollars that they spend. So the more digital advertising spending grows, the more we are able to capture. In the commerce business, the more GMV, we make a percentage of the GMV. So again, I mean, as the digital ecosystem grows, we are able to capture more revenue. I mean, there are some headwinds, of course. I mean, with the economy, you will see digital advertising across and what Facebook reported, Instagram reported, TikTok reported. It's been flattening. But for us, although digital advertising might have flattened, but there's significant investment and growth of e-commerce revenue. So e-commerce kind of supplements.
Maybe if I can add on, Srini, I think in terms of analytics and customer experience, although we work on retainers, as I mentioned before, we enjoy strong unit economics and we make it a point to look at it very closely. And we have embedded those models into the commercial team so that into our pricing models, whereby the commercial teams can make quick decisions based on those models.
And actually, the more interesting fact is these services create a digital flywheel effect. With analytics, you're able to understand the consumers better. And then with that, you're able to create compelling consumer experiences. With those consumer experiences, then you engage with audiences on all sorts of platforms, like I mentioned, Facebook, et cetera, which then finally delivers commerce. And of course, commerce is a final proof point for companies, right? Because they're looking for actually top-line growth.
That gets reinvested back, as I mentioned earlier.
So I think when the commerce and the digital part expands, then the customer experience also increases because the interaction keeps on increasing when the commerce expands. So that way, we've been able to really generate a lot of value out of this value chain.
Cool. Okay. Any comments or questions along the way? No? Okay. We'll plow through. And just looking at the further growth model, our medium-term target has been, and which we mentioned last year as well, and continues to be a sustainable and a profitable unicorn for our business. There are three growth vectors which we are really sweating right now. The first one is country expansion. We are operating in Southeast Asia. We're looking at two new markets. One is entering India as well as Japan. India is quite interesting.
It's a huge domestic market, but it also has a lot of capabilities that we are able to leverage in India and then bring across into Southeast Asian enterprises and Japan, largely because of our shareholders. We have two marquee shareholders, SoftBank and Sumitomo at ADA. We're doing partnerships with them to kind of enter the Japan market. The second one is client growth. We keep adding new clients, but also expanding our scope inside the clients, so really leveraging economies of scope in every client and building our moat around them. The third one is capability expansion. We are expanding more nearshore capabilities, especially in technology implementation as well as kind of content creation. One thing that we all do, we consume a huge amount of content compared to just a few years back.
But clients' budgets don't increase according to the amount of content that actually is required. So it requires a lot of automation, a lot of operational efficiencies in actually content production a nd that's something that we are able to do with kind of nearshore capabilities in the Philippines. We have a large kind of content hub, essentially. And with that, we'll just look at how we bridge to our $ 1 billion target from where we are.
So based on the initial investment made by Sumitomo, we got a validation of a valuation of $110 million. And then with the second investment from SoftBank, we got a validation of $260 million. With the external investment that is being considered right now, we will be able to validate our valuation consideration of $500 million-$600 million as of now.
Based on what we discussed, based on the client growth, which basically because of our long contracts, we've been able to engage. Because we've been part of most of the value chain, we'll be easily able to convert the clients into cross-selling and getting more value out of the clients. Thereby, plus with the new capabilities and the new country expansions, we are very comfortable that we will pass the $1 billion mark by 2025.
That's in US dollars, yeah?
US dollars.
Okay, cool. That's pretty much what we had to present. Cool. Thank you very much.
Like Srini, I'll try and keep this a little interactive. If anybody wants to ask questions, please feel free to ask questions. Unlike Srini, Boost hasn't quite reached profitability. We are on our way there, so I'll ask my CFO to stay at home.
So one year ago, for those of you who were at our last Investor Day, I think I spoke about what we call Boost 2.0, how we had evolved from what was originally a payment business into a lending business and had aspirations to get into banking at that time. I think we had applied for the digital bank license. So as Clare mentioned, I'm happy to say that this year we were one of the five recipients that were awarded the license. And what I thought I'll do today is talk a little bit to the extent that I can about how we continue that story into digital banking from the evolution that we started five years ago in payments. So this is a bit of a busy slide, but it talks about the evolution of the business that started really five years ago.
Before I go further, how many of you guys use Boost? Can you raise your hands? Okay. Not too bad. I didn't totally embarrass myself. But yeah, so you can see a lot of people actually do use Boost. Not yet. So a lot of people do actually use Boost, right? But what I want you to take away from this slide is the fact that beyond just the e-wallet that you guys are familiar with, Boost is actually a collection of different businesses that have evolved over the last five years. And if you think about where we are today, the business has evolved where the center of gravity of our business is now focused largely on lending, right? So if you think about it, five years ago, we were probably a payment company that had ambitions to get into lending.
Three years ago, we were a company that was a pioneer in doing digital alternative lending, but had a large payment ecosystem. Today, we are really a lending company that has a payment ecosystem that captures customers in operating in a few markets, primarily Malaysia and Indonesia, and the journey is really how do we take the assets that we have today and fold that into our journey into banking, right, which is kind of the Holy Grail for us, so I'll touch a little bit on a few numbers, so you can see that generally from around 2020, we've had strong growth, but a large part of the growth trajectory and our focus has been really to turbocharge our lending business, all right? So while we continue to be a leader in payments, payments is really a captive business for us where we acquire customers.
But really, where we focus on making money, where we grow our revenues, is really from our lending business. And as you can see, from around 2020, we've seen very, very strong growth. What that means is it has translated into us getting our financial curve on a sustainable path, which is very difficult typically for a fintech business, right, with the heavy dependency originally on payments. But because we've shifted our portfolio, where a lot more of our revenues now come from accretive lines of business, we see that translating into our financials as well, which makes Vivek very happy. Not quite happy as he wants to be, I think. Just to double-click on lending, we operate in two markets really, Malaysia and Indonesia. I'll talk a little bit about the Malaysia business. The Malaysia business really is something we started three years ago.
We do close to about MYR 70 million-MYR 80 million per month in loan disbursements now, all to underserved customers, largely micro merchants, productive loans. But we also have a fairly sizable business in Indonesia. I think out of about 100 licensed fintech companies that do lending, we are in the top 10. So we've seen exceptional growth there being in that market for just three years. Now, what this does is it puts us in a fairly strong place because we have a fairly significant amount of assets at play when we launch the bank. So our starting point is never zero. So the digital bank is not a greenfield project. It's really a brownfield project. We are starting with businesses that have a sizable lending portfolio. We are starting with businesses on our consumer side that have pseudo deposits through our wallet, et cetera.
It's really how do we capture a lot of the assets that we have today and fold that into the banking venture that we want to do in Malaysia. My apologies for this slide. This is a bit of a busy slide. I have a lot of ex-consultants working for me, so they love to do this kind of stuff. Basically, when it comes to digital banking, we had about three years to analyze, study this space before we actually went on the venture of actually trying to make an application and build it. Broadly speaking, there are different ways to kind of skin the cat on this one, but there are three archetypes that you can think about in digital banks. There are platform players.
There are standalone neobanks, which are challenger banks, like if you heard of Revolut in the U.K., if you heard of Monzo. You've got the platform players, who would be guys like WeBank, MYbank, the guys on this slide, and then you get standalone lenders. Now, generally speaking, if you look at the financial statistics out there, I think the proof points are coming out quite clearly now, especially if you look at the latest data. The winning model seems to be the platform model, so companies that have or businesses that have a wider ecosystem that they can tap on, where they can embed their services into, tend to be the winning model when it comes to digital banking, and I think the data is quite definitive around that, so if you think about our model, I mean, and this is just an illustration.
I can't quite talk about the products we're going to launch, but it's a little bit of the strategy that we will employ, right? And I've just taken our two immediate assets. I'm not looking at the wider Axiata group. I'm just looking at what we have today, our consumer app, Boost, the Boost Life app, which is the app that most of you guys know about, and the Boost Biz, which is our merchant app. So today, one is a transactional lifestyle app. The other one is a settlement app for merchants. Tomorrow, we want to embed banking services into that to transact. So this is really providing services to customers who are already with us. And one of the simplest ways I can kind of bring this to life is if you think about your wallet today, a Boost wallet or for that matter, any wallet you have.
Once we have a bank account, that wallet gets replaced by a bank account, right? So today, a wallet is a limited stored value that you can do very little with. You can do everything that you have on a wallet with a bank account, plus so much more. You get interest, et cetera. We can extend this concept. Again, apologies for this busy slide. The culprit is sitting at the back over there. But aside from having our own, being able to plug into our own assets, our own consumer app, our own merchant app, we can also partner other ecosystems, partners out there. In fact, in our lending business, we have done a lot of that today. If you look at all these names, a lot of them are already working with us, not connected to our Boost ecosystem.
So that is how we extend the digital banking model, where we take it beyond just the immediate assets, the immediate ecosystems that we have at play. And I mean, if you have been following this space, this is quite common now. I mean, it's called the concept of banking as a service, right? A lot of people talk about it. Very few people have been able to do it successfully, at least in the markets in which we operate. And of course, we have our partner, RHB. RHB has been somebody who has been talking to us, partnering us, conceiving the bank for almost three and a half years. So aside from being somebody who understands core banking, they also have assets, ecosystems, products that can help us and that will fold into the proposition that we roll out into the market.
Okay, I'm going to end with two slides. One is to talk a little bit about our customers. So what I spoke about was really how we embed or how we want to embed our financial products into the apps that we operate or even third-party apps. Now, this concept is called embedded finance. It's getting a lot of traction with the banks. We have been doing embedded finance for almost three years with our lending. That's been the way in which we've taken our products to market. That's why you've seen that exceptional growth that we've had on the lending side. So I've just taken one example here of a small merchant that actually uses our service today. A small merchant today, I can't disclose the name, but works in the dairy space and basically makes dairy orders from a large supplier.
This merchant today, to get a loan from us, just needs to slide that toggle that you see going back and forth. The existing order management system that the merchant used continues to be the order system the merchant was using before we came and started servicing him. We have just integrated our service into what the merchant was already doing. So to take a loan from us, somebody doesn't need to change their behavior. They don't need to download another app. They don't even need to do anything else. They just need to toggle. That's it, right? And that's kind of the beauty of making embedded finance work.
Now, if you are going to make a play in the underserved sector, which is a mandate for digital banks, it's very important that you get this right because you're trying to market services to people who are not very digitally literate. So the worst thing you want to do is to try and get them to change their behavior. You need to interject yourself into what they do and be able to provide your service at the point in time they need it. If you can't do that, I mean, you lose the customer. I'll finish with two customers who actually grew up with us. I've got their permission to actually use their names here. But so one customer I'll talk about is Potboy. Some of you may know the company.
Eddie was an entrepreneur with six months of experience when he came to us in 2018 with an ambition to grow his business. He was a micro merchant at that time. He got his start by getting a loan from Boost Credit. And today, he's a big-ticket customer working with large banks. But we've been able to help him grow and achieve his ambitions, right? And these are the kinds of customers, and these are the segments that were not served by banks traditionally that we started serving. And these two are really two examples of a lot more stories we have out there. And with us launching the digital bank, we hope that these kind of stories will be the first chapter of a larger book that we want to write. Okay, so with that, I think I'm done.
I can take any questions now or maybe during the Q&A session.
So I think finance comes in the end always, right? You have to report some numbers at the end of it well, it won't be as exciting a presentation as was by Srini and Sheyantha, but I'll probably try and explain what our investor proposition is going forward. Let me start with, at different point in time, talked about what Axiata's investor proposition is. I think we used to be saying it's moderate dividend, moderate growth. Back in 2020, we said it's going to be a high dividend company with MYR 0.20 dividend. I'm not talking about here what we will now give as our statement for the investors. I think what I'm going to talk about is how we are going to, what are we going to do to meet the investor's expectation, right?
First, let me start with. I mean, these are the four things which we feel would be the cornerstone of how we run our business from an investor proposition standpoint. One is how do we allocate our capital. I think given that we have now multiple businesses present in 11 countries, looking at opportunities in different ways, and which is what we discussed earlier, which Hans talked about, I talked about in the morning or in the early first session, how do we allocate our capital? How do we manage our balance sheet? I think we've seen our balance sheet getting expanded. How do we bring down our balance sheet to make it more sustainable long-term position from a balance sheet perspective? Dividend transparency. I think we had predominantly dividend coming from Celcom.
But when I talked to the investors, analysts, et cetera, always the question was, we don't know where the dividend is coming from and where is it, how is it being distributed, right? So I think that kind of transparency on how the dividend would be. And last but not the least is the sustainability. I think for us, sustainability is becoming important like everybody. But I think what I'll talk about is, yes, everybody talks about environment, but as far as the telcos are concerned and the footprint we have, social and governance becomes equally, if not more, important as we go into the ESG journey. Okay, let me start with capital reallocation. I think why is capital allocation becoming important for us, given that we are doing a fair amount of transactions on an M&A side, mostly driven by tapping new growth opportunities?
But we also have capital requirement of our existing businesses because as we go into 5G, as the more data consumption requirements are coming, there would be capital required to be allocated across, and capital is always scarce. So that's one, I think, clear reason why we need to start focusing around how we allocate capital. Second thing is that when we set up our ambition around Axiata 5.0 and something which I talked about earlier, that 5.0 is something which we are meeting that, but that we realize is not going to be future-proofing the future. And if we want to future-proof the future of Axiata, we need to look at opportunities outside of a core telco, and which is what I think Hans talked about.
I talked about that split which is coming from mobile per se versus the rest of it would shift over the next five to six years. So we will have opportunities on whether it's on the tower side, digital businesses, fiber, enterprise, et cetera. Those are the opportunities we will tap. So there's a need for us to start future-proofing our business. So capital, how that gets allocated, becomes extremely important. Having said that, I think we are looking at five guardrails on how we actually allocate our capital. One is clearly at the bottom, if you see, is around the country and segments. Country, I think we look at it very carefully now on the macro situation, countries on the market structure, countries based on legal regulatory framework, countries based on the competitive landscape. So that's something.
And we have a process where we actually give some kind of rating for each of those before we start looking at how do we allocate capital. Similarly, segments. I think we talked about multiple segments for us now. How do we allocate capital on the segments? It looks at the industry structure, the market structure, barrier to entry, looking at the regulatory environment, opportunities, those markets. So there are scores which are there across all those, and which is what we consider how we allocate capital. Second is affordability guardrail. Now, when I say affordability, I mean, if I break down our businesses, basically we are talking about maybe broadly four segments. One is the mobile, second is mobile fixed, you can call it. Second is the infra business, which is towers, maybe fiber, et cetera. Third is the enterprise business, and fourth is a digital business.
So let me start with one by one. Mobile, we look at should be self-funded. So it's not where we intend putting more capital. These businesses should generate free operating cash flow, positive. There may be a year where there would be an investment cycle, but on a sustainable basis, they should be generating free operating cash flow. And they are the businesses which should start giving dividend, and they should be one which should be able to sustain their own growth, CapEx, through their own balance sheet and their own funding requirements, and eventually provide dividend to us. So that's the way we look at the mobile businesses from an affordability standpoint. Second one is infra. I think infra we still see as growth opportunity, which I think, for example, tower Adlan talked about.
These would continue to grow for some time, which would be funded by external investment or the balance sheet which can support that growth. Eventually, as I said earlier, that this business would be providing yield based on the sustainable cash which the businesses generate. There would be a phase where we would look at monetization. We would look at new investments coming into this business. Enterprise and digital businesses are not something we are looking at funding from Axiata. These businesses would be basically funded through other private investments for external investors coming in to grow these businesses. Eventually, we think these businesses, which I think Srini also talked about, should be able to generate a value which we should be able to monetize. They should be exited over a period of time, but the growth will come out of external investments coming to those businesses.
So these businesses are all looked at differently, and the affordability criteria and decision on how we put further capital on these businesses would be on that basis, what they should generate, and what is the source of capital for their growth. So that's, I think, the way we look at it. Third guardrail for us is really around the organic returns. What are the existing businesses? I mean, we used to look at CapEx intensity, which is basically looking at CapEx to revenue for existing businesses. Now, we realize that doesn't work because revenue is something which does not get generated even if you have CapEx coming in because CapEx cycle keeps coming in. Revenue growth is tapering. But we are saying now we look at CapEx to EBITDA or EBITDA to CapEx because if you invest, you should also bring in efficiency. You should also bring in growth.
You should also bring in a higher amount of EBITDA. So if the OpCo generates higher EBITDA, they would be getting higher CapEx. At the end of it, operating free cash flow should be positive. So I think that's what we're looking at. The other thing which we would look at and do look at is EBIT to gross investment. So if there's an investment which is going up in the OpCo, it should translate into higher EBIT generation for us, which effectively translates into higher ROIC. Similarly, for inorganic businesses, we measure through the IRR, which are basically looking at what are their investment case and then having a follow-up in terms of how they're performing. Last but not the least is the portfolio mix, and when I say portfolio mix, it's just not about investing.
I think we're also looking at maybe exit markets, maybe monetization of some of the assets over a period of time as a source of capital for us. And that's something also in addition to that, find ways. I mean, we have good cash, I mean, MYR 7.7 billion cash, but a lot of it is trapped in some of the markets. So how do we actually free up that capital for us to be able to reinvest into other growth opportunities? So that's how we look at the capital allocation. But key metrics for us is really how do we drive the underlying PATAMI, how do we drive earnings per share, and effectively translating into shareholders' return. If I go to the next slide, it's on balance sheet. I think we talked about a little bit around the stretched balance sheet. I think clearly we have some challenges.
I think we've had our rating agencies, Moody's and S&P, doing the assessment post the merger in Malaysia, and I think Moody's has maintained the rating. They've also given us additional headroom, coming from the fact that they expect the proposed merger between Digi and Celcom to maintain good cash flows, and also the offset of the lower dividend from Celcom should come from the merged company. I think given that balance sheet would be deleveraged now with the proceeds coming from the merger, and we would also look at opportunities of getting external capital in tower business, digital businesses, et cetera, right, so that should also allow us to bring down the leverage levels for us to the levels which are more comfortable to deal with. S&P has downgraded us from BBB plus, but now BBB is in line with what the Moody's is.
I think their concern is coming from the fact that we do not have a direct control over the cash flows from Celcom, which we had. But having said that, the philosophy around dividend upstreaming, what we have between us and Telenor as the joint owners of the MergeCo is pretty much same. So both of us believe that there should be a decent cash flow generation from the business MergeCo and translate that into earnings for the shareholders. The third bit, I think this is pretty much what we think how the trajectory would look like based on the actions which we are putting in place. At this point in time, this is around three plus. We expect it to be coming down to 2.5x by 2025. Transparency on dividend.
I think these basically give a kind of flow on what are the OpCo's contribution to the dividend which comes to Axiata and then gets distributed across to the shareholders. So we do see a shift happening predominantly from Celcom to the MergeCo , which is the one on the orange. And then we also expect some of the other OpCos to become far more cash accretive than what they've been at this point in time. So I think that's something which we will continue to communicate to the investors on what's the flow of dividend coming from the OpCos. All OpCos have a dividend policy in place. They have guardrails in terms of the balance sheet which they need to maintain. They have guardrails in terms of what kind of exposure they are allowed to take from forex, et cetera. So all those things are in place.
So that's how what we look at going forward. Last but not the least is talking about the ESG or sustainability. We've started, I mean, social and the governance side, we were always focused on. I think environment is something which we've started now looking at. We've set certain goals for us which are pretty much aligned to the GSMA goals of Net Zero by 2050. We intend reducing our carbon emissions by around 45% by 2030. We do expect this to still grow because of the high consumption of data, but various actions which we would be requiring to take should allow us to bring down that. Our focus is around three verticals when it comes to environment. Our focus is around how do we decarbonize the existing emissions which is there in our businesses.
Second is how do we work with our value chain to reduce the impact of the overall value chain, which is what they call Scope 3, which is something which we are quantifying at this point in time. And the last one is how do we do the overall climate inclusion, which is including how technology, digitization, et cetera, help us drive the carbon emissions down. So I think that's something which we are working on. We have done 2020 as our baseline for Scope 1 and Scope 2. So we will start reporting how we are project trending against those baselines which are there. And Scope 3 is something we are quantifying, and we think the biggest impact would come out of the Scope 3 work we will do. That's on the climate side.
If I look at the social side, I think there's a lot we do currently and opportunities there in the markets where we are present, specifically the frontier market, the impact which we make on digital inclusion, the impact we make on the privacy, the cybersecurity, the network experience per se, which allows consumers in those markets to get the best of services, best of experience is something which is important for us from a social standpoint, and we will continue to focus on that piece going forward, and also looking at how do we strengthen our governance in these markets. Specifically, I think a lot of focus has been on compliance to anti-bribery, anti-corruption over the last two years within the company. The whole ESG piece is now actually looked at by the board-run steering committee, which is the Board Sustainability Committee with two board members present.
I think that's been the overall supervision of the whole ESG strategy for us. In addition to that, I think we're working on the materiality assessment at this point in time, and we will start giving much explicit numbers, quantification, et cetera, as we go along, so I think that's pretty much what I wanted to cover in terms of what is our investor proposition more from what we will do to kind of drive investor requirements or proposition, which is essentially around capital allocation, balance sheet, deleveraging balance sheet, looking at environment part of it, and of course, the last bit is around what I covered was around the dividend transparency, and we do expect us to provide decent dividend for our shareholders. Thank you.