You all hear me? Is it okay? Thank you, Claire. A very good afternoon to all of you. Thanks for attending in person, and also those attending online, thanks for joining our Investor Day today on the 6th of December. I think Claire touched upon what my interview with The Edge was. That was pretty much the thinking around how we want to build Axiata for the future. And we call that as a multi-platform builder. Now, when I say multi-platform builder, it is essentially after a few of the transactions which we did last year, we kind of created ourselves into five buckets of assets. And I'll touch upon that. And linked to those five buckets of assets is really what is our strategy, our business strategy to fit in and create value for our shareholders.
I'll spend a little bit of time explaining what we mean by multi-platform builder. We have basically three buckets of assets, right? One is the digital telco, then infra business. Link Net, we have now, with the announcement which we made today, clearly classified that as an infra asset by moving the customers across to XL. Obviously, it requires a regulatory process to be completed, and that process may take some time. That makes Link Net as an infra company. The two businesses, and one which is the tech part of our journey, which is the ADL as a third digital business, which then creating. Our basic vision does not change. It still remains the next generation digital champion with a sustainable dividend company.
When I say multiple platform or multi-platform builder, it basically we define as telcos to be number one or number two players. We define infra as growth assets, eventually becoming agile at a point in time. We look at digital assets more from a value elimination, monetization perspective. And all that comes with a very strong view on how we allocate capital across these blocks of assets. Now, if I look at these five vectors, how we see that going forward, and we will look at all of them in these buckets on how we create value from each one of them. First one is the CelcomDigi, which is the Malaysia. As we consolidated last year, the rationale was very clear.
A market which has got 32 million population and pretty much flat growth. It was necessary for us to capture synergies of two companies, be the number one player in this market, and also look at market rationalization as a way forward to create value from this business. But essentially, growth in this market with a population of 32 million will always be subdued. Hence, the key focus priority for us from CelcomDigi has been, how do we make this as a strong yield asset? And that's where we work closely with our partner, Telenor, there to ensure that we have delivery of synergies by the company, as well as ensuring that the integration process is done efficiently, and we build a strong cash flow opportunity in this business. The second bucket is Indonesia. After we merged last year, the Malaysian entity, Indonesia became our largest asset.
From a portfolio standpoint, the highest value creator and potentially the highest risk asset from that perspective. We acquired Link Net last year, which was a fixed-mobile, second-largest company. Then we also continued our investments into the XL mobile and also built the fixed-mobile opportunity in XL. However, a key element for that is, how do we make it future-proof, given that in XL, we got relegated to being number three operator after the two other operators merged and became number two operator? An important aspect for us was, how do we build the value out of the two assets, which is the fixed broadband and the mobile together, and ensure that both of them can deliver to the objectives of fixed-mobile convergence we wanted to play in the market?
So now I think today's announcement was a lot focused around creating a clear separation between the role of fixed of the Link Net, which would be essentially a wholesale fixed broadband provider, and XL continues to deliver mobile as convergence solutions to our customers in the future. And it's not very different from how the Indonesian market is evolving with the three mobile operators essentially moving into becoming a converged player in those markets. So that I think was the second part of the equation. Third was the resilience around the frontier market. I think we saw post-COVID the increase in exchange rates, sorry, the strengthening of dollars, increase in interest rate, and inflation hitting our markets. So I think, how do we bring resilience in the times of crisis, in times of macro challenges in these markets and political instability?
How do we break those businesses, still continue to deliver strong performance and build resilience? I think we did well, and most of the markets are pretty much back to the way they were pre-crisis. Having said that, we still run the risk of the earnings in ringgit or dollar earning because of the share depreciation of those currencies here. But that was the third vector. How do we create value there? And the fourth one is really the sustainability of infrastructure. And that's where here I talk mostly around the Edotco. I think our acquisition in the Philippines, acquisition in Indonesia, coupled with the challenges in the frontier markets, is obviously a fair amount of stress on that asset, though they continue to do well on a BAU basis.
But long-term sustainability requires us to look at how do we create, get more capital into that business so that they can be more sustainable and grow in the future. And that was the fourth vector, which is the sustainability of the infra business. And the last one is really around the value of our digital businesses. Two businesses, one is the FinTech Boost and the ADA analytics and data business. And both of them are on their path for value creation. I think one of them we've demonstrated by recently getting new investors into ADA. And I think we're running a process on the second one. But we see these businesses still, in a sense, subscale for them to continue to grow and be sizable businesses. I mean, I won't call them unicorn in the future, but that's what the intention is to deliver.
So that's the portfolio part of what we are trying to do. These are the five vectors, and each one has got a very distinct value creation model which has been put in place. Having said that, I think there's a business strategy. Business strategy is around operational excellence, which continues to be a key focus. But it is beyond just looking at the cost and CapEx. But it is also ensuring that we have adequate guardrails in place in terms of the balance sheet each one needs to carry, what kind of capital allocation methodology we need to follow. I mean, we are I think driving ourselves towards some kind of a benchmark of CapEx to EBITDA or CapEx plus ROU to EBITDA as what we want to deliver.
It also looks at how do you look at the costs, not only at the OpCo, but also looks at costs at the corporate center. So that's really around operational excellence and the reinventing operating model. With these portfolio of assets here, I think we are seeing Axiata as a corporate center, as a group, becoming far more portfolio manager, far more capital allocator to ensure that it gets the right kind of returns from each of those portfolios which have been put in place.
But having said that, I think the operating model on how do we intervene, work with these buckets of assets also requires a change, which is what we've actually implemented over the last month or so, where essentially the boards of each of the companies would be empowered to make the decisions on investments as well as performance of these businesses within the guardrails, within the direction, within the expectations on returns set up by the group. So that's the kind of operating model which we are going to be focusing on. How do we change our culture as an organization to be winning?
Culture focused around three defined values, moving beyond what we call as uncompromising integrity and exceptional performance to be very focused externally and very focused on what we need to deliver with the changing environment and how do these businesses collaborate with each other to get the best value out. The fourth strategy is really around the journey from telco to techco. I think Hans says it's telco to techco because we are not becoming a technology company. We are doing things which are closer to the telco businesses. The last one is really around the portfolio optimization and value elimination, which comes partly out of what we've seen in our markets as the BAU aspect, which is the market repair. We've also seen the effects of consolidation in the markets. I think some of those consolidations we continue to pursue.
How do we look at in future some of these assets when they bring a scale, when they bring the right kind of partners coming in? How do we monetize some of these assets? I think those are the focus areas. It's really around the five buckets of assets and the business strategy, which is divided into these five elements. It's a five by five kind of a metrics. And eventually, what we are telling our investors is we should be able to give MYR 0.10 dividend, which at this current price, which is in my view much lower than what the company expects, it gives more than 4% yield. And so that's the story around the dividend. And then obviously that should drive all this.
If we can execute in the right earnest, it will drive a strong value uplift shareholder returns. We expect at least high single-digit returns should be delivered per annum. And I think more important is how do we manage our balance sheet, which at this point in time with high HoldCo debt has its own stresses. So I think those are this is broadly what we're trying to achieve. And a lot of that will be covered in the subsequent sessions as we will have as we go along here. Just to give you a perspective of how we had two years which went past for us. I mean, last two years, starting with early 2022, we've seen macro headwinds. We've seen in some of the markets, currencies depreciating substantially.
For example, in Sri Lanka, we saw a 60% fall in the currency, high inflation rates, which in a way kind of settling down. But the base itself has gone high. So even though you can say they're on an incremental basis, the increase is coming down. But the fact that the base has gone up has its own challenges. And we saw the effects of rising interest rates. Our interest rates as a company has gone up by nearly average by around 1.5%, which on a MYR 24 billion debt is a substantial impact. So I think that's what we dealt with. And on the EDOTCO, I think the acquisitions were quite meaningful. They were very strategic in nature. And I think focus on moving away from exposure to frontier market to emerging markets was the right decision.
However, it happened at a point in time where the interest rates were just on the verge to go up, and that's been a bit of a stress on us at this point in time, but going forward, we do expect interest rates to start leveling down. I think we're seeing that effect. We are seeing U.S. dollar weakening, so that should have some positive effects, and I think the fact that in the last two years, our organization has been able to build strong resilience to deal with the difficult environment, and you've seen the results on a BAU basis. Most of the OpCos are actually delivering strong performance. We should be much better placed when the macro situation starts settling down here, so that's how we look at ourselves going forward 2024, 2025, so let me just touch upon what are our challenges as Axiata.
One is clearly high debt at HoldCo. I mean, we have around MYR 11.5 billion gross debt, around MYR 9.5 billion net debt at the group level, which I think we need to manage. Part of it we are doing by and also consequently the discount which we get on HoldCo. Part of that is being handled through the repayment of some of the debts and also looking at the how do we transform our corporate center, not only aligning to the operating model, but also we bring down the cost at the corporate center. So that's one focus which is there. Indonesia I talked about. I think it's really the structural transformation, which I think we are going through in 2023. Frontier market, I think there's Ncell decision was a tough one for us to take.
Given the fact that this was the number one company in Nepal, it has had a strong asset with only two-player markets present. However, given the unfair and the unfavorable environment on regulatory taxation, also the risk of our license in 2029, as well as unpredictable stances by the government and also no foreign protection regulations available in that market, it was wise for us to have a clean exit from Nepal. That was a decision taken. As you know, on 1st of December, we did that, made that decision. I think market consolidation in Sri Lanka, which then brings down the country to a three-player market, would be an important one for us to look at. I think most important is the resilience, which has been demonstrated by most of the companies, most specifically Dialog and Robi, which were worst impacted with the macro challenges.
As you've seen in the performance of these two companies, Dialog is pretty much getting back to where they were before the crisis. Robi continues to show strong 17% growth. We do expect that growth to translate into improved EBITDA and improved profit margins in that market. I think that's the real focus around the frontier market. Smart continues to do well. I mean, I think we see that trend and the cash flows from Smart continues to remain stronger. The one is infrastructure. I think we've talked about, I think it's been the news, which is the fact that we are currently ongoing a fundraising process. A lot of speculation around that, that the objective of this is to basically get the existing shareholders exit, monetize.
But the primary objective is really to bring in primary capital into the company to deleverage EDOTCO as well as ensure that it has got dry powder for further growth opportunities in the markets where we invested in last year. And digital is really around looking at long-term ownership of these businesses. And eventually, one of the examples has been the monetization of ADA, where ADA was valued at around $550 million there. 2024, I think, is pretty much looking at how do we reposition ourselves and OpCos for when in line with the multi-platform strategy, pay down some of our debt, and also ensure that we continue to give dividend of at least MYR 0.10 to our shareholders.
I think going forward is improving the capacity to pay dividend, paid on further debt by monetization of some of the assets and looking at how do the objective, which I said earlier, are met, i.e., the multi-platform builder objective, which is basically having being number one or number two player in mobile and telco, infra being yield assets and digital businesses fairly value eliminated and monetized there. Let me go through these. I'll not spend too much of time because some of that will get covered in future in subsequent presentations. I think one is the acceleration of the delayering in Indonesia. I think that's to me, if we can execute with 6.5 million home passes with maybe 1.5-2 million home connects in the next couple of years, it would be a sizable business in Indonesia.
In market consolidation, I think we are in the pipeline in the process of completing this merger. I mean, it's going through certain regulatory challenges. We hope we expect those should be cleared and behind us. I think Nepal exit, we've talked about EDOTCO fundraising. I think we've talked about that and what form. So consequently, I think it's also about deleveraging our balance sheet here. Let me touch upon each of those and kind of say what have been our wins so far and what do we see as opportunities in these markets here. So I think Indonesia, if I look at XL, I think there's been market improvement. There we are seeing consistent market repair happening in the market, which has been a positive trend. I think all operators seem to be holding that now for a fair period of time. You don't know.
One of the operators may start getting reckless, but so far there seems to be a fair amount of alignment that market repair is more important than revenue market share. Go retail, direct to retail. I think XL has been doing a phenomenal job to go directly to retail, something which was not seen in the Indonesian market. Your dealers dominated how the distribution happened in that market. I think XL has been doing an extremely good job of going direct. I think they should be internalizing all the clusters by the end of this year or early next year. This does not only reduce the cost of distribution, but also it helps in terms of having a direct access to the retailers' performance, and so ensuring there is a standardization of offers, standardization of managing the performance management of the retailers, etc.
I think on the home side, 206,000 growing pretty much at a thousand every day, right? Again, is what has been delivered as new home connects in that market, which is nearly 85% growth. And majority of that is actually coming through converged offers. So that's pretty much putting in place the strategy of fixed mobile convergence. Link Net was a struggle. I think we are now seeing pretty much stability around there with the churn rates coming down sub 3%. I think 2.8-2.9%, which is still high, but it is not something which is sustainable. And at least going forward, once we are able to move the customers across, I think with the mobile convergence offers, we should see a much better outcome.
And then acceleration of home passes in Link Net, we should expect by the middle of next year or maybe second quarter of next year, Link Net delivering around 150,000 home passes every month, which is in line with what we want to achieve as 2 million home passes over the next 18-24 months here. Opportunities, as I see, I think Link Net with what we put in place to be the number two fiber company in Indonesia. I mean, as I see it, given that all three operators, MNOs have actually moved towards fixed mobile convergence with separating out the fixed ServeCo with the FiberCo which have been separated out. I think the market dynamics, in my view, would be pretty much run by the mobile operators through the fixed mobile convergence offers going forward.
So I think that's something should put us in a very strong position, which XL, we expect XL to be the number two, at least on the fixed mobile operator. With the strength of the 750,000 customers which they will get from Link Net and nearly 200,000 or 250,000 customers which they have on their own base. So starting point with the 1 million home customers is a very strong position to retain the position of being the number two player in that market. We see market consolidation as a possibility. Of course, this requires various things to fall in place, be it valuation, be it regulatory approvals, be it alignment in terms of strategy, alignment in terms of thinking. But we see that as a potential and also the network sharing opportunities in Indonesia, which we've been working somewhat in preliminary early stages.
But we think that may be a necessity as we move into 5G in future. So, frontier market, I think I touched upon a little bit on Robi market repair. We've seen our pools improving from something like BDT 128 back in last year, quarter one, to around BDT 145, which is nearly 15% improvement in our pool, strong 17% growth. And a lot of that is now flowing down into the bottom line and improvement in EBITDA. I mean, EBITDA margins have gone up to nearly 50%, 48% for Robi. So very strong turnaround in the environment which has been macro challenged. Dialog, I think, recovering from crisis. Smart continues to show strong improvement in our pool. So that I think has been the elements of, I would call it, resilience when it comes to the frontier markets or opportunities. I think we've been very focused.
I mean, you're seeing actually impact in our profit and loss in some of the markets because we're converting dollar exposure to local currency exposure. And that means you actually end up paying higher interest than what we had locked in with dollar. But we think it's still a right strategy. We should be reducing around $100 million of exposure in these markets by the end of this year and converting that into local borrowing. I think we see price hardening to stay. Network collaboration, I think, is opportunities in some of the markets. And of course, consolidation in Sri Lanka as we see. I think infrastructure, which is mostly EDOTCO here at this point in time. I think we organically continue to do well when it comes to growth in the colos, Malaysia at 2.31. I think we are getting strong interest coming from DNB in Malaysia.
We are also seeing Bangladesh continues to get new orders and improving colos. Again, Indonesia orders, which is post the acquisition of towers, are in the pipeline, which should give us strength in Indonesia, and we've completed the total acquisition of the towers in Philippines, which is again a strong footing where we are supposed to get some new orders coming from Smart on that, and though Edotco's slow, but we've been able to get some money repatriated from Myanmar, but it is a challenging environment for sure, given the current restrictions as well as the operating environment we are working on. I think Malaysia, clearly we are seen as the strongest partner to DNB on Edotco. I think we've been getting around 25%-30% of their new towers.
I think the last round, the third round, I think we should be, we are looking at being even more aggressive in getting those towers coming in, which should in a way help grow further in the Malaysian market. I think Bangladesh, there has been, we can continue to improve colo. However, we've been extremely careful in Bangladesh in terms of how many new towers we want to build. So focus is a lot around colo in Bangladesh. And also I think the contract renewals which are coming up in place. There are new opportunities which Edotco has been looking at, whether it is on energy servicing, enterprise solutions, and the shift from focus from being very frontier market focused to emerging markets, which is really three countries, Malaysia, Indonesia, and Philippines. And of course, the new fundraise to deleverage the balance sheet of Edotco.
Last but not the least, I think ADA is really around value elimination. I think we've doubled the value from the last round investors coming in. Boost, I think we are now ready to kind of launch the bank. Of course, launching the bank is one thing, but launching it right and ensuring that you have done adequate testing is important. But having said that, we are not really, our business model is not really stuck with the bank being launched because we continue to build our credit business on the existing platform we have, which should clearly give a jumpstart as we are ready to launch the bank. And ADL, which is the Axiata Digital Labs, using their capabilities to now start servicing external revenues. I think we'll cover that a lot more in the subsequent section, which is on the transition from telco to tech journey.
So I think operational excellence, I talk about from a strategy standpoint. I covered a little bit. More details would be covered, I think, by Lila later on what are we trying to do on the operational excellence. So I'll not spend time on this because this is covered in the section agenda number five in more detail on how does operational excellence drive. Operating model, as I said, given that now we have a very portfolio lens to look at our assets, is going to be a lot more driven by presence of senior management and the operating company boards.
They will work with the subject matter experts, whether it's the head of risk and compliance, people, CFO, CTO on the investment committee, and also the controllers, etc., on the board audit committee to work with them to drive performance expectation as well as management of the risk and the control side of these businesses. Consequently, we are re-looking at the structure, the corporate center. We should be bringing down around 20% of the corporate center cost. That should clearly release around close to nearly around MYR 70 million-MYR 80 million of spends in the corporate center, which I think is in line with what should be the operating model given the new dynamics on how Axiata has been shaping up will follow. I think winning culture, emphasis around the external, how do we drive obsession for customers?
How do we ensure that we have courage for change and passion to collaborate between ourselves? I think that's something going to be real focus around as the organization culture shifts. And it'll be a lot around how do we drive that culture towards winning in the markets on an everyday basis. So this is telco to tech journey. I think Hans will cover that in more detail, but it's just not the top part, which are the new services, but it's also about creating an asset like ServeCo and delivering to the NetCo and InfraCo as a separate. I think Indonesia is one good example of what we are trying to achieve by doing that. So if I look at how the value as a multi-platform builder gets created, one is BAU, which is what we are trying to achieve through our operational excellence.
Second part is market repair. I think we are seeing that in the market, market repair. We are not ourselves being market disruptors. We are now looking at how do we ensure that this continues in the market. Optimizing balance sheet, I think, is an important one given the high debt we have in our group. How do we ensure that we are able to get some of the funding to deleverage our balance sheet? I think creating value with partners. Here it's important not just the financial investors. How do we get the right kind of partners who can add value to our business? Good example has been ADA, where we had SoftBank as an investor or Sumitomo, who's been able to take this business to their core markets and allow it to expand. So I think that's what we'll cover a little bit around that.
And building the future is really about tech journey. What are the opportunities we see in enterprise and TechCo which can be built on? At this point in time, it's really looking at focused investments on that. So these are the kind of building blocks, I would say, for us to deliver what I said in the first slide as the objective financial outcomes we want to deliver to our shareholders. So I think these are those financial objectives we want to achieve. So the last one, I think we did announce yesterday, Nik Rizal Kamil, who's going to be the new Group CFO, will be starting from 1st of January. He comes with a very strong background. He's the Group CFO.
He was the group, is the group CFO till the end of this month of RHB Bank, but has spent time in Khazanah, very strong experience around investments, and also have been on the board of Telekom Malaysia. So he has a long experience of working closely with the telecom companies in Malaysia. So very strong background. So we welcome him into the family of Axiata from 1st of January. He's not here because he had to attend a board retreat of his current company. So he's going to attend that, but he'll be back with us. Having said that, I would like to thank Lila for holding forth after I was kicked out of being on that role. So then Lila's handled it well in addition to her role as the head of M&A corporate development, as well as looking after the corporate finance function.
So large portfolio, she's done well, but she's decided to move on, which I still have a couple of days for you to decide against. But we welcome him into the family. And I do expect him, with his strong experience on the corporate finance investment decisions, to add value to the group here. So that's it from me. Thank you very much.
Good afternoon. Great to see you all again. Picking up on a topic that we introduced last year, the telco to TechCo journey. Now, since then, we've given some thought to the exact articulation of this journey.
One important point to bring up right at the inception is that it is not a step change from being a telco to what one might call a TechCo, but indeed that it is a journey from being a telco, a pure integrated telco, to a telco TechCo. Because after all, we will never give up on the strengths of a connectivity base, not give up on the strength of the investments that have been made over the years across multiple countries and markets, and the customer connect that has been established through the leverage of this very solid infrastructure. So the question is, can we solve some of the major problems that you as analysts and investors might see with respect to the telco industry at large, and in specific with respect to telco returns?
These problems are largely around, telcos typically need to invest a lot of money. It's a lot of capital which goes into telcos in terms of infrastructure, investments in newer generation technologies which seem to fly at us at an ever-increasing pace. Likewise, telcos have not demonstrated the ability to return on this invested capital to a level which beats the weighted average cost of capital. So you've got a situation where you cannot expect investments to decelerate or reduce. And at the same time, there's no evidence globally that telcos are returning above the cost of capital. This is what is top of mind, I guess, to many of you in this room. So the question is, can the technology strategy of a company, can the technology direction, the technology journey solve this problem?
Can it attack this problem and reach a position where we comfortably return above the weighted average cost of capital? Now, there are many definitions of the word TechCo and likewise many articulations of this journey. There's no right answer and there's no wrong answer. It is the journey which best fits the operating markets, best fits your incumbent investments, and best fits the challenges immediately at hand. We've identified a few key dimensions which we can focus this problem statement on. The challenge to uplift capital productivity, the returns on capital employed in terms of cash flows, identifying and implementing at speed, the unlocking and the release of trapped value within the integrated telco model. Are there opportunities to unlock via concepts such as delayering to unlock value within the integrated model? Last but not least, to ignite a wave of growth.
The third problem about telcos today, telcos don't grow. While capital investments grow, telcos don't grow in terms of the cash flows. So the third challenge is igniting a new wave of growth, profitable growth. Now, what are the concepts that we need to add to the traditional integrated telco, the legacy telco, which might take us in the direction that we want to achieve? Some of the TechCo concepts that we will talk about today, and it's already introduced by Vivek a little while ago, delayering of the legacy telco, as we have seen in the landmark announcement this morning from Indonesia, where we delayer the FiberCo and we move fixed subscribers to the mobile business and create a converged ServeCo. And that's a creation of an ex core. I've called them ex cores here.
Could be net cores, serve cores, fiber cores, asset cores, data center cores, tower cores. This delayering exercise actually helps to unlock value and to release value for better utilization and a shifting of capital up the telco stack, which I'll touch on in a short while. Increasing capital productivity and unlocking value through delayering and the creation of these cores for higher utilization of assets. In terms of new revenue generation, moving up the stack to win in platforming, in cloud solutions, in cloud migration, and also in B2B2X solutions, i.e., enterprise solutions of various size and scale. Importantly, changing the ways of working and moving from the archetype of being asset-heavy, infrastructure-heavy constructs towards being asset-light, i.e., reduce your IC in the ROIC. How do we do that?
It is through the opening up of the various layers of the telco stack, through the use of APIs or application programming interfaces, which basically open up infrastructure layers for use by multiple parties and by multiple solutions and multiple applications, by working aggressively with partners. And when you work with partners, you need to make it very easy for partners to work with you. And this is again something telcos are not very good at. Reams and pages and pages of contracts which need to be reduced to one or two clicks on a partner portal. So these are ways of working. In no way are these concepts exhaustive, but it just places before you a trend line and a set of priorities for us as a business to transform ourselves from a telco to a telco TechCo. Now, what does this sum up in?
At the end of the day, to achieve our ambition of beating the cost of capital, ROIC, profit, yield aspirations, TSR, so I'd like to assure you that this telco to TechCo journey is not about a foray into building experimental digital businesses. It's not. This journey is about cracking the problems of high invested capital, low utilization, repeated obsolescence of investments, and the challenge of moderating growth. If we can use a technology strategy to solve these problems, I think we would be unshackling ourselves from the traditional challenges of the telco industry, which you might take as the archetype today. This picture here is the one we introduced last year, so I'm only recapping it today. But an important point is that we also recognize that Axiata had seeded some of the fundamental concepts of this journey way back in 2013 and the years beyond that.
Edotco was spawned in 2013. Likewise, the digital businesses, ADA, Boost, were spawned through acquisitions, through exploiting the strengths of the telco and creating digital interfaces to customers across multiple sectors over the years to follow. So long before these buzzwords of delayering, the buzzwords of TechCo came around, Axiata has been on this journey. Maybe we lost some momentum along the way, but as we said last year, we are now moving ahead at speed. More so than the delayering of the telco stack. And if I may just move very quickly from the bottom to the top, you would see that the layers at the bottom end of the telco stack, such as the TowerCo, the FiberCo, data center cores, NetCos, which would potentially provide networks to multiple service providers or multiple ServeCos.
And then the API or the application programming layer, which enables this delivering, enables interfaces to be built to each of these layers for multiple service providers to extract the benefits of the connectivity and various facets of the connectivity layer to produce new services, to produce services for enterprises, to create ecosystem businesses like B2B marketplaces and API marketplaces, and ultimately to provide enterprises across multiple verticals with a solution set which will generate the next wave of revenues. But all this is possible only if we change our operating model and our ways of working. Moving from a telco to a TechCo would mean moving from technology selling to solution selling, the building up of these people capabilities to sell solutions and to deliver solutions, from largely hardware-based infrastructure to software-based infrastructure, from asset-centric and CapEx-driven models to asset-light, talent-centric, people-driven digital models.
This is all part and parcel of this journey that we have been talking about. Before I hand over to Thomas, just to pick on a few words and a few factors of success which you should look out for during the various presentations today, including Thomas and Anthony, who will take us through the network side of this journey and the IT side of this journey. These include, without limitation, TCO, the total cost of ownership of our CapEx and OpEx investments, the fact that IT and software will now become a core to the transformation, the facilitation and enablement of partners and ecosystems, digital talent, delivering of the XCos across the business, ranging from TowerCos, FiberCos to API cores, and so on.
Very, very importantly, the establishment of an asset-light formulation which will attack the IC problem or the invested capital problem and enable the generation of multiple revenue streams on the infrastructures that we invest in. With that, I'll pass on to Thomas, who will take us through the network.
Thank you, Hans. Yeah, we are at telco. Connectivity will be at heart. In order to build the journey, as what Vivek and Hans outlined successfully, we need to build the most efficient network pipeline in a way for connectivity so that we can then layer all these fancy and interesting things on top. Cost to serve, and at the end of the day, delivering best possible connectivity is enabling us to do then the things we are envisioning. There are, as part of this journey, obviously a few building blocks I will walk through.
Ultimately, the objective is to arrest CapEx, drive cost to serve, means cost per gigabyte in a way down, and to create then value upsides in order to deliver the financial aspirations. So we have primarily four building blocks on that journey. One is network cost excellence. I will give you a bit of details on the initiatives we are taking. As you are aware, aside from Malaysia, we are not yet in the 5G era. And we will need to prepare ourselves, obviously, for that, which is unlocking in a way opportunities, but also creates a massive investment in a way coming on us. So ultimately, to build then network cost excellence and to prepare ourselves for that 5G era through automation, through obviously efficiencies, through sharing asset light, etc., is a very, very important component in order to bring CapEx intensity down to arrest OpEx.
Ultimately, as you recall, we had proclaimed an objective to bring our cost to serve to $0.10 a gigabyte. In order to achieve that, we need absolute network cost excellence. So to build literally the most competitive networks in our markets, not necessarily offering the highest possible speeds, because unfortunately, our customers are not paying for it, but to offer consistent experience at a very low cost point. The second building block, obviously, are innovation-led enablers, right? Primarily digitization, analytics, AI, our IT transformation, open APIs, and going towards an open architecture. Here, certainly, we are envisioning that it will lead to lower TCO, faster go-to-markets, which are a definition also of a tech core that you have permanently new products coming in, and it allows us to obviously do new developments.
As what has been alluded, asset light, strategic partnerships, that is a very important component going forwards. We envision revenue upsides, EV upsides coming through it. And asset light, in a way, is not just something which we can do optionally. We have to do it. We have to do network sharing a lot more and sharing of assets as compared to the past. Last but not least, yes, we would like to get growth from new verticals, win-in platforms, solutions, enterprise solutions. Our ambitions of growing to 20% enterprise revenues, obviously, they stand, right? And certainly, open our network capabilities, IT capabilities to offer then enterprise solutions at large is part of this consideration, while also embracing API business. And we have made a few very interesting moves already in this space. We'll come to that.
Let me give you a few perspectives on the network initiatives which we are having on our agenda. Ultimately, it has to lead to material CapEx savings and OpEx savings. Having said this, we have obviously ambitious financial targets outlined. If we would not make all these significant changes and uplift our efficiencies, we would not be in the position to deliver what we are actually promising. So that's why those building blocks, in a way, are a must to get to the outcomes we promise. As I said, we are not ready yet to launch 5G in our markets. Not that we are not ready, but the markets eventually are not ready. The regulators have not launched yet 5G, have not allocated spectrum. But this does not mean that we can wait and see. Obviously, we want to be ready for it.
We are preparing for the networks to be ready for primarily NSA 5G. The logic behind 5G for us is, yes, there are opportunities out there, but will it lead to significant ARPU increases? Questionable. However, we believe that 5G, in the long run, if the adoption is there, it will lead to a significant cost per gigabyte reduction. And that is actually one of the key fundamentals of 5G to deliver an even lower cost per bit, a better pipeline of data. To launch new services, we obviously need to get rid of the old. Architecture simplification, shutting down legacy. We have, during this year, completed a 3G shutdown in Dialog. We have done 3G shutdown already in Smart and in XL. The last one to come, in a way, is Robi. And it is a work in progress, and we are anticipating this to happen also very rapidly.
So, making legacy really phased out allows us to work then towards the future. That includes also data center consolidation. We have, in some of the markets, still too many data centers. We want to consolidate them. That leads to cost savings and efficiency gains. And certainly, there is a lot of virtualization, etc., legacy removal ongoing. We are working very actively towards deploying a cloud core. That, obviously, is an enabler for future 5G SA. And also here, it will allow us then to bring down the cost to serve, but also, in a way, to enable new services, both enterprise and consumer. And we have a very articulated agenda to yield the benefits of automation. And we have outlined for us to achieve an autonomous network level three by 2025.
However, not just for the sake of ticking the box and making some fancy announcements, but they are meant to really deliver efficiency gains, both cost-wise, but also in terms of when we launch new services to get faster to the market, and when it comes to 5G enterprise solutions, the complexity will go up so much that without a good degree of autonomous networks in play, we won't be able to do it. We are very much looking at the vendor landscape. Yes, we are relatively heavy on legacy vendors, we call it, but we are very open also to look at Open RAN, and I will talk about it a bit later, other vendors, alternative vendors coming to the table, and to look at how can we ultimately benefit from our scale, which we in Axiata have to get the best out of the supply side.
Arresting OpEx is something which is coming from multiple ends. Obviously, it's a cost thing, but also the initiatives we are taking are very fundamental in regard to ESG. Reducing our carbon footprint through solarization, through optimizing the power systems which we have at sites, outdoor conversions of sites, etc., it is happening while we talk, and that is an important factor, both in cost but also ESG. We have set ourselves a target that OpEx can grow maximum at half of the revenues, revenue growth right, so that actually our margin is effectively improving. We mentioned network sharing, and we firmly believe that when it comes to 5G, network sharing is a must, so we are very actively engaging and exploring how can we share it, besides, obviously, also the delayering concept on towers, fiber, etc.
But going forward, an active RAN sharing 5G, I believe, we believe in most of our markets, is a must-have. A lot is going on in the open networks domain. Yesterday, you eventually saw an announcement that out of the sudden, Ericsson is jumping on the open networks, open RAN bandwagon. Surprising. We have made a lot of moves already in that domain. Already two years ago, we had open RAN in commercial operation in Axiata. However, we are seeing that at this moment of time, it has not yet reached global scale to the level that it gets us economies at the end. So we are exploring, we are testing, we are experimenting, both in terms of the open networks, in terms of consumer networks, as well as private networks.
But we are not yet at the stage where we would say we have to go now mass Open RAN. But it is very much on our journey. Let me give you a bit of perspective and put things into context. As I said, network cost and managing this is the bread and butter of us. We are a telco while emerging to telco techco. But if you are not managing this domain well, obviously, we have a major financial challenge to master. So if you would not put all these initiatives in play, our CapEx likely would grow by 20% in the coming years. Our ambition is to keep CapEx flat at best, to reduce actually the CapEx intensity to 20% to revenue. We believe that those measures and the relentless work, both also on network and IT side, will get us there.
We had, if you recall, declared $0.10 per gigabyte as a goalpost, and we have made a fascinating progression over the years. We brought the cost per gigabyte from $0.27 in Q1 2021 down to $0.135. So literally, we halved the cost per gigabyte. That obviously comes through cost reductions, but obviously also through a bit of market repair, ARPU increases. So at the end, yes, we are, you can argue we are sweating assets because our data margin actually is relatively flat. But if you would not get there, obviously, we would not be able to deliver the returns you are also looking for.
Just to put a little bit further context, if you just compare our CapEx intensity at this moment of time, which yes, we believe is still too high in context to what, for example, a Deutsche Telekom in Germany is having. Actually, you need to put this into context to APU, right? Because the vendors, they are not just nice to us because our APU is just 20%-25% of the APU in Europe to give us the equipment at 20%-25% of the cost, right? It means we need to work a lot harder to get to a CapEx intensity of 20 given the APUs we are generating, while the data traffic per user is actually enormously high because most of our markets are mobile-first. We have in some of our markets data consumption north of 20 gigabytes per user in a month, right?
While certainly on average, it is not yet that high, but it is growing at 20%, 25%, 30% CAGR every year. Good. Over to Anthony, who will give a bit of a word on IT transformation. Anthony.
Thank you, Thomas. You can hear me? Can you hear me, right? Yes. Great. So on the IT segment, the problem to solve here was really around three elements. One was how to get the go-to-market speed up, reducing IT costs, and taking back control of the software stack to basically ensure that we own the stack and we can actually develop software much faster and cheaper. So if you click the next one, Thomas. So the foundation was really about, as Hans mentioned, an API-first architecture where we opened up our entire IT backyard, all the APIs from IT backyard, which enable our own development software.
In fact, in the last three to four years, there's about 6,000 APIs opened across OpCos and around 3,000 microservices built across this API layer. And also moving that satellite model, building the in-house software team to take back control. Now, one of the challenges we had was the year-on-year IT cost increase a few years ago, OpEx and CapEx, of course. And to address that, we began building the software factory via ADL. Now, with the amplification, take back control, and the platform changes, we want to have a drastic change in agility and speed on GTM. And then the final point here is that the platform player, as Dr. mentioned, basically playing the B2B2X game, one has to build that API layer on top of IT, and on top of that, build the assets to enable enterprise solutioning.
Along with that, we've also begun the cloud journey about two, three years ago. You may have heard recently we announced AWS Partnership as well, so we are now migrating cloud at a very high velocity, and it's enabling us to actually build solutions much faster, so some proof points on our journey so far. I think last year, TM Forum announced the top three telcos. If you go back one slide, Thomas, announced the top three telcos running on ODA, and we were among the top three with Jio and Vodafone, and on the ADL, current capacity increase, at the moment, about 1.4K software engineers at ADL serving group, and of course, on platform play, we began in 2013, 2014, where with IDMR platform, enabling others to develop apps on our platforms, so developers, as of now, around 70K developers engaging our platforms daily.
Of course, the way of working had to change in terms of analytics. We moved in the last two years from data-driven culture to building AI/ML models. This year, we really focused on building the AI factory, which gave a 2X improvement in efficiency in getting models out the door. As a result of all these initiatives in the last three years, we've seen an IT TCO decrease by about 40%. Going forward, we really want to get to below 3% of revenue for IT costs. We are at around 3.23% at the moment. Of course, getting a much higher GTM velocity. Now, during the build-out of this platform for our own use, ADL built this platform called DTE. It's a telco digital platform, a middleware that accelerates the journey to techco. We want to bring this to the external market as well.
Along with that, the AI factory, we have done POCs at scale this year. We will improve on that to others, of course, as well during the coming years. Then ADL will, of course, take that journey of the platform to the external market. This one I will quickly build in terms of the transformation of IT. You see here. If you click to Thomas, from 2019 onwards, what we have done. Up to this year, we basically achieved that cost reduction goal, built the software army through ADL. We are now going at a much higher speed in GTM due to the internal army of software, as well as cost reduction of 40%. Now, going forward, two key drivers here, simplification. We do have a fairly colorful application backyard in IT. We want to simplify this further.
And then higher velocity. This comes through the use of platform and as well as the, what do you call it, software reuse and API reuse, which we drive throughout the last couple of years. And with this, we will get to below 3% of IT cost revenue and further improving the GTM velocity and agility of IT. Just double-clicking on the AI journey, this began also a few years ago. The foundation of this is really about IT, the data lake setup, the plumbing of IT to enable this. And then we focus in the last couple of years building the talent from CXO down to the developers, training people how to build AI models and launch quickly. Now, one challenge that we had with the AI models was really from concept to model launch. It just took too long.
So, build this thing called AI factory, which essentially accelerates the model build-out and go-to-market. So that will be scaled out in the next couple of years. Now, if you click to more, Thomas. So underlying this is really what I mentioned earlier about technology enablement through ODA and software reuse, amplification, really enabling this journey. And of course, the people we are working transformation as well. So with ADL serving our own telcos at scale and with fairly impressive results so far on this journey, if you click to more, Thomas. So there is this massive skill set now inside, which is also demanded by other customers outside Axiata. And also this platform that we have built to really accelerate the journey. Now, this can be used in both fintech and telco backyards. So there is an initiative now to go-to-market outside Axiata as well with the same platform.
If you click a couple more, Thomas. So recently, GSMA launched the Open Gateway Initiative, the API program, Open APIs. We were one of the first to actually launch this countrywide in Sri Lanka with Axiata and non-Axiata telcos on the same platform on DTE. And also ADL is collaborating with other partners in joint go-to-market with this platform called DTE to enable telcos to accelerate like we have done. And as I mentioned earlier, announcement from TM Forum, we were one of the first to kind of get the ODA operational in practice in software and getting real impact. Okay, I think that's what I had, Thomas. Back to you.
Okay, I'm back again. This session, I'll be joined by three CEOs, Dian from XL, Ziad from Cambodia, Smart in Cambodia, and Supun from Dialog, and also the acting CEO of Link Net, Kanishka, and CFO of XL, Feiruz.
So very honored to have this panel to join me on this session. So as the title sets out, portfolio optimization and value maximization. So we've started the afternoon with Vivek setting out the entire group strategy and also highlighting the opportunities, some of the threats and risks we face, as well as the going forward strategy to build the portfolio of Axiata. Now, as we look at a portfolio from an operational perspective, and today we have the leaders of several of our OpCos joining us here and telling us of their achievements, their experiences, the challenges ahead along a fairly common theme of optimizing the returns of their portfolio and addressing and attacking the key problems and opportunities that they see in their markets. The common thread here is that, as I described during the telco-techco journey, that we are faced with the fundamentals of telco techno-economics.
Because the techno-economics of a telco are driven by the fundamentals of capital productivity, how much return on your capital, and what are the innovative ways and means and strategies that can be deployed to get step changes in capital productivity, therefore generate more cash and deploy that cash towards new growth. And what would that new growth be? Now, the North Star in this respect is ROIC. And the equation that we all are obsessed with is to beat the weighted average cost of capital as a bare minimum and to generate enough returns on our invested capital to do this. So taking this North Star into account and focusing on the returns side of it, what are the new wave methods, new wave strategies that we should deploy? Operational excellence, you might say, is business as usual. Yes, it is.
But the elements and the core drivers of this operational excellence need to be adapted and innovated in line with the opportunities, the technologies, the markets, and the various dynamics of the external world that we face. So our CEOs here would be talking to us about several operational excellence initiatives. You'll see quite a wide spectrum depending on the market environments in which they operate. A very important dimension that we have been talking a lot about and Vivek highlighted as well is market repair. Because I think we all recognize the fact that one of the key problems with telco returns is actually the market. It's the fundamental structure of the market, some aspects of market behavior, and you combine structure and behavior, the norms under which we operate.
So you can either accept these norms or you can actually work towards changing the market structure and what we call repairing the market. So two forms. One is repairing the market in terms of pricing environments, pricing strategies, addressing the dysfunctionalities in the value chain prevalent in each market. Also, we could consider in-market consolidation as one of the key tools of market repair. Moving more in the direction of invested capital and its optimization, as well as using strategies of investing your capital in a way which will also accelerate profitable growth. We've already spoken about de-layering. And here, again, the hallmark announced today, which we see as a key lever of the transformation of our play in Indonesia, is the de-layering of the FiberCo and the creation of a converged ServeCo at XL.
Structural transformation and moving towards an asset-light ops model can optimize invested capital, not only optimize invested capital, but also create illumination platforms which could release trapped value, which would otherwise not be available for specific investment in an integrated telco model. Now, both the acceleration of growth, the cash flows which come through profitable growth, as well as structural transformation in terms of delayering, in terms of also reconfiguring into a converged model, would ultimately feed into the optimization of the capital structure, and here we need to take into account the various challenges that the macroeconomy brings across our markets. The challenges have been varied. I would say Sri Lanka, Bangladesh, as Vivek mentioned earlier as well, faced the most significant from the macro, but all of our markets face macro challenges such as inflation, forex, devaluation, and also interest rate fluctuations.
So when you combine the ambitions of profitable growth, the outcomes of structural transformation, and the backdrop of the macro we are working with, we have a very interesting challenge and also a great opportunity to build strong capital structures which could support the telco-techco journey, which could support dividends, support growth. And we will hear two stories on this dimension as well, and in particular from two view angles, one being the angle of building an offensive balance sheet, redeploying cash flows towards growth and dividend, maintaining high margins, best-in-class cost structure, high-velocity cash flows. And on the other side, on the other hand, experience from building a defensive capital structure, a capital structure which is resilient to the worst case of macroeconomic challenges and also building sustainability for the future.
So as I said, the picture is not complete without actually addressing the challenge of building radical approaches, of deploying radical methodologies to beating the macro and the industry economics. So there's a very strong interplay between the macro and telco economics. And if you were to just look at indicators such as GDP growth versus the growth of the telco industry, if the telco industry is growing slower than GDP, there is trapped value hidden there which needs to be released. If your mobile share is lower than or is moving in the opposite direction to per capita GDP, again, there's trapped value. And that brings me to the subheadline here that by hacking or by dissecting, unpacking the telco fundamentals, we could identify and we continue to identify which trapped value can be released, which you would hear from our CEOs during the course of this session.
Whether this value is trapped in inefficient market structures, whether the value is trapped in uncaptured growth opportunities, the value is trapped in the fact that we haven't spawned new services on our platforms, whether it's trapped in inefficient telco integrated telco stacks which need to be de-layered, or whether this value is trapped in lazy and/or weak balance sheets. So these are some of the problems, opportunities, challenges, and solutions which our CEOs will be talking about in the next 45 minutes or so. And to kick things off, let's start with the de-layering in Indonesia. And it's my privilege to invite Feiruz Ikhwan, the CFO of XL, and Kanishka Wickrama, who is the acting CEO of Link Net, to tell us about their announcement this morning and what we can expect in the months to come.
Okay, Assalamualaikum and a very good afternoon to all of you here and those joining online as well. I see some familiar faces as well over there and over here, right? Good to be back at the Axiata annual analyst day. So today, between myself and Kanishka, we'll be presenting an update in terms of the we'll talk about fixed mobile convergence and our de-layering ambitions in Indonesia, so allow me to go to the next slide and I will click it myself. Okay, after the disclaimers, right? That was already put before this slide. I think it's important to understand the context, so Indonesia, as everyone is well aware, is the fourth most populous country in the world with 275 million population, and that brings to the internet penetration at close to 80%. But that internet penetration is mainly via the mobile.
That's where they have gone through and they're pretty much behind in terms of the fixed broadband. Now, when you look on the right-hand side of the slide, this is where you see how Indonesia stacks up with the rest of the countries in terms of the fixed broadband penetration from a household perspective. And it's lagging, right? It's lagging at 15% as of 2023. Now, not only this, if you compare, let's say, GDP per capita of Indonesia versus neighboring countries, right, around the region, that if you mark GDP per capita with household penetration, that 15% number should be anywhere between 30%-40%, actually closer to 40%. So these two points allude to the opportunity, right? The tremendous opportunity that we see in Indonesia for fixed broadband penetration. Now, recognizing that, allow me to paint a journey that XL has already embarked.
We've recognized this opportunity earlier on, not only from a fixed broadband penetration, but also the importance of a fixed mobile convergence. And fixed mobile convergence is not only from a consumer standpoint, right? It's also important to understand organizationally how do we prepare ourselves to capture that opportunity. So moving from the left, what is important is actually building the organization, not only from a sales standpoint, but also the IT stack and the network and the distribution. We were the first in actually launching the first convergence product, which we call XL SATU in Indonesia. And we've started, you will hear later from my CEO, Ibu Dian, in terms of how we look at preparation, but also building a strong, better quality mobile base and beginning with a family segment. And that starts off with building a nice base, right, to push for fixed mobile convergence.
We've created a suite of bundling products and definitely more to come. And what we will hear after this is also how we have undergone structural transformation to accelerate the growth of FBB and into FMC. So how have we done so far? Well, thus far, as of the year today, September 2023, some of you have seen these numbers. We've almost doubled the home connects to beyond above 200,000. And fixed mobile convergence, which is an interesting data point, we've also almost doubled to close to 70% convergence penetration. What does it translate to now and even moving forward? Definitely improve customer lifetime value and lower rate of churn with the stickiness that we see in the customers. Now, this brings me to the point of structural transformation.
We've announced earlier on, on the 10th of May, if I recall, two key initiatives in terms of how we will fuel our growth in FBB and FMC, in short. The question that we have with the opportunity that we've just painted, how do we accelerate the home pass? Now, that's where striking a key partnership with Link Net allows us to speed up the delivery of home pass. And together with Link Net, how do we capture the under-penetrated market? Now, Kanishka has highlighted early on, and he will touch upon, there's a target of eight million home passes in the next five years. Now, we don't stop there in terms of accelerating the home passes and capturing the opportunity. It's also important that how do we take it the next step further by creation of a ServeCo and a FiberCo.
De-layering XL into a ServeCo and Link Net into a FiberCo, or Dr. Hans has mentioned an InfraCo, will allow greater focus from both of us' perspective and collectively to capture the opportunity. Now, as a ServeCo, right, what does XL bring? Now, as a ServeCo, when the consumers move across from a fixed offering into the mobile space, we'll be able to offer a suite of products, right, or mobile services, or more of an FMC play and enhance our customer experience. In addition, XL has a very strong go-to-market strategy and go-to-market engine and machinery where we are able to offer regionalized products, end-to-end digital sales, very granular analytics in terms of how we will take it forward to capture the opportunity.
That, not only to mention the additional assets, right, collectively that we have from the close to 60 million mobile subbase, right, the penetration as well as the coverage all across Indonesia and the sales force of more than 4,000 and more than 137 retail touchpoints all around Indonesia. With that, on that note, allow me to hand over to Kanishka, who will take us through what he intends to do and how Link Net can be a fiber core. You will click it? I clicked it.
All right, thanks, Feiruz. Yeah, Claire, I noticed the timer that you have put in. Yeah, so let me touch upon what we are doing from Link Net point of view, transforming to a full-fledged fiber core in line with what was announced earlier today.
These are the key factors that we think that we can leverage on and where we believe that Link Net has the right to win in the market as a leading fiber core. We do already have a very sizable home passes base, which is 3.2 million home passes at this point in time. And we have started deployment of one million home passes to XL on a build-to-suit basis at this point in time where the deployment is ongoing. And the ambition is to reach up to eight million home passes. It's about 8.5 million home passes in the next five years, including the existing 3.2 million home passes that we have.
And the other part of the announcement that happened earlier today is that we have come to the terms of another 2 million home passes to be built for XL after the completion of the 1 million home passes, which are ongoing already. Then brings to the second pillar, which is the expertise that Link Net has in rolling out networks, which has a very experienced senior team which is doing the rollout. And then the other thing is that we are building a partner ecosystem of the vendors on both full turnkey, semi turnkey basis to do the deployments. And the ambition is that by mid next year, we should be rolling out close to 150,000 home passes on a month. That is where we are targeting in building the partner ecosystem.
And the third, the strongest pillar, I would say, is that what we call as the XL boost is we have XL as the anchor tenant, which one thing is the pipeline of the home passes, and the second is that we can leverage on the existing infrastructure of XL when we do the deployment, such as access to the backbone and the backhaul. That is quite a key factor for the fiber core to have a very strong anchor tenant backing the fiber core and with the longer-term commitments and longer-term contracts, which we have now secured for three million home passes, which combining all these things together, which makes Link Net a very attractive infrastructure asset. And with the delayering exercise that we are doing, there'll be a very clear focus on the fiber core separately.
The second thing is that all the contracts that we have entered now are long-term contracts with steady cash flows, which will be making quite a sizable fiber core going forward. Next slide. Yeah, so these are the transformations that we have been doing internally in Link Net. The transformation journey of ramping up the deployment up to about 150,000 home passes, the concept we call it fiber factory, where starting from, like, say, for example, 2022, before that, Link Net was rolling out 250,000 to 300,000 home passes a year from there. Now we are going to rolling out 1 million, then to 2 million home passes a year. So this transformation, we call it the journey of the fiber factory. Then similarly, with the new home passes, the other transformation that we are doing is there's a sizable existing home passes which are on HFC.
We are modernizing the network, converting from HFC to FTTH. Similarly, the customer premises equipment also, we are migrating from HFC equipment to FTTH equipment. That is supposed to be completed in the next four years as well. Touching upon what Anthony and Thomas presented, we are also going through the same IT transformation journey, aligning with what the group is doing. Similarly, the organizational structure, we have started moving to an organizational structure in line with the FiberCo concepts, which is quite lean, and where we are trying to outsource the functions, which is not key to the FiberCo, and getting the learnings from everywhere else in the group. Handing over to you, Feiruz.
Okay, thank you, Kanishka. This brings us to what we've actually announced or shared this morning.
What we have actually announced in our respective markets is XL and Link Net have actually entered into a non-binding agreement for the acquisition of the Link Net customers. That brings across the entire B2C business across from Link Net to XL. It marks definitely a major milestone, not only from XL's perspective, from an FMC ambition, but also Link Net's, as Kanishka has highlighted, ambition to the transformation of a FiberCo to a FiberCo. This delayering will also not only from a transaction perspective, but from a scale perspective, it will transform XL into easily the number two fixed broadband player in Indonesia with one million home subscribers. Now, this is very much in line with XL's FMC strategy, which I highlighted earlier.
There's clearly a vast opportunity, right, to serve and go after the market as a ServeCo from a convergence play, you know, from an enhanced customer experience and how we want to delight and provide this suite of services to our customers. Link Net, as Kanishka has clearly highlighted and articulated, transformation into a FiberCo, right, that will even deliver fuel for growth, right, for both of us. Rollout on over 1 million home passes is in progress, and that is expected to complete by the second quarter of 2024, and over and above that, an additional 2 million home passes to us, and that creates definitely a funnel, right, for us in terms of how we will go and capture the market. Now, in this slide, it will be the next steps and timeline. Maybe Kanishka.
Yeah, so covering the next steps very quickly based on the announcement that we did today. So currently, we have entered into the non-binding term sheets for the customer transfer from Link Net to XL. Given its related party, we have to go through the due approval process, starting from getting the fairness opinion and the board approval of both parties. And the transaction is a material transaction for Link Net. So we need to get the approval from the independent shareholders after we have gotten the fairness opinion, and then we'll start the actual migration of the residential customers into XL family. So it will go through following the regulatory process and following all the laws in Indonesia.
Yeah, so thank you, Feiruz and Kanishka. I think a hallmark indeed.
And from an ASEAT perspective, from the perspective of the group, I think it's a major step forward in our delayering strategy as well as our Indonesia strategy, which now creates two strong assets in Indonesia with Link Net as a FiberCo, with a roadmap to a 6 million or so home pass network within the next 18-24 months, and a 1 million ISP or 1 million home broadband provider in the form of XL, which again is a strong number two position in the market. So congratulations to XL and Link Net. Thank you very much. Thank you. Thank you, everyone. So we move on to the next segment, which will be led by Dian and Riyaaz. Please join me.
As I marked out on my first slide, we are focusing here on the growth drivers or growth levers of market repair, of operational excellence, of in-market consolidation, and how these levers can come together to uplift profitable growth in two of our largest markets, Bangladesh and Indonesia.
Thank you, Doctor. Good afternoon to all of you all. Yes, so I will discuss these two topics, you know, mainly about the repairs that Robi or the Bangladesh market has gone through, and also how we as a company have benefited and also used to our advantage the market consolidation that has taken place. Okay, let me start with the size of the Bangladesh market. This is one of the markets that has grown the most in 2022. We had a 6.5% GDP growth. You know, it has beaten everybody of similar size in the region.
It's one of the fastest growing markets. But interestingly, we still only have 55.9% of mobile penetration. You know, a population of nearly 165-170 million, depending on which paper you read, we still only have 55.9% mobile penetration. So that's a huge potential still there in that market. Also, out of this 55.7%, 74% or 75% of the population have internet, mobile internet. But if you look at the whole country, we only have 30% mobile internet. So as a country with a huge population, a younger population, there's a huge demand. In terms of GDP contribution to the economy overall, the economy, it's a staggering 6.2%. It's big because of the country and also the way it is structured. When I say 6.2, it also includes the entire telco, whether it's a TowerCo, whether it's a FiberCo, whether it's internet, everything, you know.
So it's big. Another interesting thing is, though we are still at 55.9% penetration, the mobile penetration overall is over 100%. So there's a young population, there's a growing population, huge market size, and with a huge untapped demand still. That's something that we still probably will, you know, as an OpCo, as a telco, benefit in the future. How has Robi done? What have we done? In the last year, we have managed to get an additional 3.2 million subscribers. Today, we are at what? 57.5 million subscribers or whatever population of, say, 165. In terms of growth, we have achieved a 17.7% growth in revenues year on year for the first nine months of September. This 17.7% also has translated into 18.6% into EBITDA and then filters down to EBITDA and profitability. It's going.
The market has its own challenges, but as a company, we have done well, and we are the fastest growing in that market. Though we are the number two in terms of growth, we are the fastest growing. The growth came from two factors. One is the subscriber growth I told you, which is 3.2 million, and also the growth in the rates or the RPUs, which I will come back to later. As a company, we are also getting into how do we de-layer, how do we set ourselves in this big journey of being telco to telco techco. You know, so we have, I will also show you how we have started structuring our operation, where we have already set up three companies with three different areas to look at. Okay, this is what we have achieved from 2019 to 2023, Q3, if you look at.
The topmost line is our price on voice. The price on voice was hovering around 60 paisa in 2019. Today, we have managed to turn it around. It started, all the prices started going down because of competitive reasons, because of challenges in the market, etc. However, we managed to start turning it around from the middle of 2021. And now we see the voice price is actually better than what we had in 2019. So that's what we have achieved in the voice. The red line is the data price. If you see the data price, which was around 36 to 34.6, started going down drastically. We have come down to 13.2 in 2022. However, now that also has somewhat stabilized, and now it is holding. The good part of data is the green line. If you see our subscribers, Robi's subscribers, were using only about 2.6 GB per subscriber.
Now we have actually gone to 7.9. So if you see from the middle of 2021, the equation changed. The total that we are getting out of data has aggressively turned the other way. So the tide has turned where now we are having a positive impact from voice and also a huge impact from data, which is our growing business. As I said at the beginning, you know, our internet penetration is still very low. Mobile penetration is still at 70%, so 74%, but still there's huge potential. And that is where we are capturing. Right at the bottom, I don't know whether you can see, we are showing two sets of numbers. One is quality of service in CCD, which is a market we dominate. Our market share is well over 60% in almost all sectors in that market. In CCD, it's the market dominated by our competition.
If you see in both these, our speeds were like 3 and 2.5. Today, we have increased our speeds to 4.9 and 7.2. So the speeds have increased, the usage has increased, and the price stabilization has happened in the data sector. So this is one big repair that has happened. Robi led this in the beginning, and now market also follows. So there is no real competition on pricing because everybody realized at the end of the day, nobody gains by dropping prices. So this is one big repair that has happened. And as I said, this has helped us to grow 17.7, and most of the market players also have grown. The second story is, again, market consolidation and how has Robi benefited. As you know, in the 2016-2017 era, Robi merged with Airtel.
After merging, there are some things that have happened which Robi had actually consolidated on and also gained in such a way that today we have two distinct brands. In Bangladesh, there are four players. One is a government player, which is very small, but two other big players. The market leader, we are number two, and there is the third player. Robi has two brands where we have positioned these two brands. One brand is Robi, the other brand is, of course, Airtel. The Robi brand is positioned as a premium brand to pitch against the market leader. That is where we challenge. The Airtel brand is pitched to challenge the number three, which is more data-centric, youth, urban-centric population. That's the growing market. Today, if you look at, we have about 65% on the Robi brand and about 35% on the Airtel brand.
And Airtel is growing faster than Robi today on the data sector because we have pitched it in such a way that consumers do not see the difference in terms of the network. They only see the difference in terms of brand and offerings. So today we have what, 16,500 sites? We have pitched it in the market like we have 33,000 sites. Each brand distinctly runs on the same network, but different propositions. So this is something that we have done well. And this has helped us to grow while the consolidation in the market, you know, from five players nowadays reduced to four players, one small player. So it's virtually a three-player market. And Robi is benefiting from that. Customer experience, as I said earlier, has improved drastically. And having one network with two brands, we can deliver better.
With the acquisition of Airtel, we also have got access to more spectrum. So for instance, in the 1900 spectrum, we have the higher spectrum. That also helped. Earlier, Airtel was operating, as I said, predominantly in the urban sector, while Robi was predominantly on the CCD. So we were a regional player. Today, we are a national player. That also has helped. And then, of course, the culture of the two teams has merged together and done well. So this is a success story of a successful merger. Then we go into delayering. So this is more about the future. Robi will still stand as the company on the connectivity business. Below Robi, we have three sectors today. One is Red Dot, second is Axentic, and third is what we just launched as our venture.
So as I said, Robi will continue to be the connectivity business whilst trying to extract more value from these other de-layered companies. Red Dot is predominantly a software and a software solutions provider. Axentic is predominantly the enterprise segment business, which will go into a thin layer of investment, predominantly a GTM company and with ICT solutions to the enterprise segment. Our venture is where all the new digital services are pitched under. For instance, one example I can say is we have BDApps. BDApps is today recognized in Bangladesh as the national app store. We have about 50,000 developers on that, and every month we have about 18-20,000 active developers. You know, they develop their solutions, put it there, and we get a revenue share, and we maintain the platform. So like that, we have different digital services on that.
So this is the platform we have laid for the future of being a techco to telco company. Yeah, so that's from my side. I think Dian, the floor is yours.
Thank you. Assalamualaikum warahmatullahi wabarakatuh. Good afternoon, everyone. So because Feiruz already talked about the delayering and the hardest part, so I will be just talking about the market repair. Following the success of market repair in other markets, including Bangladesh, that as Dan had just shared, Indonesia has also started our market repair move since last year. Okay, let me start with the Indonesian disclaimer first, and then the Indonesian market context. So of course, market repair is required for all of us to have a profitable growth. But in Indonesia, there is something that is very prominent, is that the telco wallet shares are relatively lower compared to the neighboring countries.
We can see here is that in Indonesia, the spending on telecom services is only 0.65% compared to the GDP per capita. Although telco services have become a basic necessity to Indonesians, but still, the wallet share of telco is that low. Currently, industry RPU is less than $3, which is lower than the price of one cup of Grande Vanilla Latte from Starbucks. So you can imagine, yeah, actually how low our industry RPU is. The other market context in Indonesia is that if we see the past three years, 2021, 2022, and also this year, we see that the industry growth is actually lower than the GDP growth. The GDP growth is at hovering between 5%-5.3%, but industry telco growth is around 3%-3.5%. So this market repair is expected to happen to increase the industry growth in the next few years.
Of course, it will be stimulated by the recent consolidation that happened in the market and also with the movement from all telco into the convergence offering that is actually pioneered by XL and also because all operators in Indonesia also now moving to more as digital telco. In summary, in Indonesia, while market repair is needed, but also the opportunity to do that is actually still widely open, knowing that the industry growth has a significant growth to the GDP growth. Next, I will share here what has been done by XL Axiata in conjunction with this market repair. Since last year, actually we have done several initiatives. If you see this as the journey of our market repair, actually the action or the initiative that we have done can be clubbed into four actions.
First is the price increase in our trade or retail portfolio. Last year, actually we have increased around 10%-12%, and this year also so far we have done around the same level as well, around 10%. And then the second one, the initiative that we have done is that reducing the bonus quota or removing free traffic by eliminating, for instance, unlimited benefit from our product portfolio. The third initiative that we have done as well is the increasing the starter pack price or SP price. So now customers would actually prefer to do reload rather than to buy a new SP. So this to actually remove the washing machine phenomenon in the market. The last thing that we have done is that we are reducing acquisition incentives and commission on our traditional channel.
As what was mentioned by Vivek earlier, for XL actually we have taken it further that we minimize the involvement of our trade channel such as dealers in our trade model. What is the result so far? We can see here on the left side in the graph, as we reduce the commission and incentives on the trade channel, the revenue in our digital channel and in our own apps has been accelerated. We can see here that since last year, September last year to now, we have seen the growth of more than 56%. The other indicators that the market repair happened in our case is that consistent improvement of RPU. We can see here that in the first quarter of 2022, our RPU was IDR 36,000.
Then in last quarter, third quarter of 2023, we managed actually to increase this RPU to 42,000 level, still actually below $3, but we are getting there. While actually increasing the price and also RPU, we still managed to keep the data traffic. I think this is the most question that we got from the analyst, whether the response from our customer when we increase the price, whether their usage is becoming lower or not. We can see here actually the data traffic is still in the healthy growth. Subs also, they don't leave us. We can see here that from January to September 2023, the number of subscribers is actually increasing. Then what's next? Of course, our aim is to continue this market repair because all the operation I think now is on the same page.
So we understand that everyone has to move away from the price war, and now we need to have a much healthier industry. Of course, there are some risks that we have to mitigate in doing so. The first is how if any of us is actually do not behave as what we should do in this and also the willingness to continue this movement. The other risk that we have to mitigate is also the price elasticity of consumers. But alhamdulillah, so far actually this is still in the manageable level. So we are quite confident that this market repair can be continued next year and also in the next few years. And we actually use India as our benchmark where they managed to improve the yield and revenue by more than 30%. So that's the share from XL in terms of the market repair.
I will give the floor to Dr. Hans.
Yeah, thank you. Thank you very much, Ibu Dian and Riyaaz, so two of the largest markets, 50 million subscribers approximately in each of these two MNOs, and as you can see, the challenge of accelerating profitable growth, that was the theme, and the unit economics become very, very important because any gain on the unit economics gets scaled by 50 million, so you can multiply every one cent or two cents or 10 cents gain on the unit economics by 50 million, so you can see the sensitivity of initiatives such as those discussed in terms of market repair, in-market consolidation, as well as driving the outcomes from both these, market repair and in-country consolidation, which both Riyaaz and Ibu Dian have brought to all of us today. So thank you very much for sharing.
So, the last segment within this session focusing on both operational excellence, driving high margins, as well as resilience against one of the worst macro crises that we have seen during the past few years. So, privileged to invite Ziad and Supun on stage.
So, good afternoon, and allow me to start with the quick refresher about Cambodia and Smart. Cambodia is a relatively small country with 17 million people living in it. Half of these 17 million are Smart customers, young population at 26 years old, and the average subscribers or age of subscribers in Smart is around 29 years old, which tells us that we are owning the young segment in the market and also classified or reported by Facebook Analytics as owning around 39% of the market share from Facebook.
And also being the owner of the young segment in the market, we are at $4.6 RPU as the number one operator in terms of RPU in the market. This really is very important. These are very important elements to build on later on as we go through the next slides. Moreover, this year we have grown, our RPU has grown at 5.9% compared to the GDP that has grown at 5.5%. Our growth in terms of RPU was higher than the growth of the GDP. The market has three mobile players with a market penetration higher than 100%. However, there are five key players in terms of fixed broadband, but with a market penetration of 20%.
Important to note that the monetary policy in the country is quite stable and it's a highly dollarized economy, so currency is not a risk at this stage or has not been a risk. Moving to this to the next point, being a or capitalizing on owning the young segment in the market and also having a low penetration of fixed broadband, we were presented by an opportunity by the market to the young segment needing more data consumption in the market. We were presented by this opportunity and hence we embarked on pushing up or migrating our subscribers or customers to the higher tariff ones, and when we are talking about higher tariffs, we are talking about a weekly tariff first and we were talking about from $1 to $1.5 and above, so huge increase in terms of tariff.
What we managed to do throughout the earlier seven months from April till November or even October, we migrated around 2.9 million customers. That is 40.2% of our customers now has more than 50% growth in terms of their tariff or weekly tariff. That does not mean RPU, but in terms of weekly tariff. Now, how did we do that? We capitalized on our capabilities in terms of advanced analytics, understanding our segments, micro-segmenting our customers and trying to migrate them up from one tariff to the other. This is very important to note that we have done this while maintaining the growth of our revenue-generating base. It is not, it is easy sometimes to push RPU up, but not maintain the base. Here we're talking about a very healthy increase of revenue-generating base at the same time multiplied with the RPU increase.
The important note here is that even when we increase revenue-generating base, it does not mean that we increase only sales, but rather we maximize the utilization of our existing base, meaning that our distribution and sales costs are lower. And important also to note at this point is that we have a high number of dual SIMs in the market. How do you shift the customers from non-primary SIM users to a primary SIM user? That is a high utilization using advanced analytics and also understanding the churn, but not also only predicting the churn, but also trying to understand why in order to act according to the reason that when you understand why the customer is churning, then you act properly to retain the customers. Having said so, on that was on the revenue side.
On the cost element side, we also saw an opportunity owning the young segment in moving or migrating more and more customers to the digital channel. That gave us an opportunity to reduce our distribution cost year on year by 10.3%. That is a significant increase or decrease in the cost. While we worked hard on creating a P&L for each and single site in the network in order to understand the profitability, we created a framework for acting on the sites when it comes to high revenue or high cost. Those categorized in the red one or the yellow ones, actions were taken. Since the beginning of the year, we managed to bring down the percentage of the non-profitable sites by 36.3%.
It's also worth noting that this is an important element of utilizing our existing asset, meaning carrying more and sweating the assets that we have without burdening the balance sheet with more and more capital. Coming to the conclusion so far in as of Q3, our B2C RPU has grew up by 5.9%, 4.9% in terms of EBITDA margin year on year, and 13.4% in terms of PAT margin, which is quite good, and 34% in terms of free cash flow or operating free cash flow. Now, all of this, what is it taking us? It's taking us to being able to, in 2023, to jump from dividends from MYR 55 million to MYR 75 million. And our hopes are that we will be able to boost the dividends in 2024 by 80% or more than that compared to 2022.
So a very high aggressive dividend payers, free cash flow, very healthy balance sheet. And it's also very important to note that this dividend payment shall not be, or we, I mean, there shouldn't be in the case that we have any sudden investment requirements that has not been taken into consideration. Our strong balance sheet will allow us to maintain the dividend payments, but at the same time raise debts in order to accommodate any unpredicted future investments. So with this, I think we can move on to Supun. Thank you.
Thank you, Sir. Yeah, I'll talk about the progress. I think last year during the fireside chat with Vivek, we were sharing the challenges in Sri Lanka going through the economic crisis.
Having gone through that over the last one year, I'll briefly give an update on the economy, how over the last 12 months the government has been able to improve the situation, bring stability, bring normalcy into the economy. The debt restructuring program with the guidance of IMF, the local restructuring was completed. The foreign debt restructuring, the control creditors, the Paris Club alignment again has been achieved, and the government is confident of getting closure on the debt restructuring in the coming months. This also means that we have stability in the macro indicators. The inflation has been stabilized. The remittances have started to come back in. The foreign reserves are building up gradually. It went down to a lowest of $20 million for the entire country. Now has taken back to $3.6 million. Tourism is coming back.
So overall, the macro indices are quite positive and moving in the right direction. In this backdrop, Dialog last year recorded a massive loss of close to about 30 billion or $100 million, largely due to forex. We have been able to turn things around. The crisis meant that our entire operational expenses ballooned, especially energy costs, all direct costs increased with inflation. So we had a massive challenge of resetting the business without hurting the P&L, without also damaging the top line. The inflation meant that the consumer was completely pushed to the wall. The wallet share was getting shrunk. For example, the energy prices, energy costs went up by over 100% for the consumer and for us as a telco. But in this backdrop, how do you fix the P&L? But that is largely focusing on the six areas which I touched last year.
Attacking costs, modernizing the network, Thomas highlighted 3G shutdown. 3G shutdown alone gave us about $15 million in savings, increased the data speeds by about 15% this year. We also resettled the organization, taking out about 500 resources out and then bringing down the organization. Across the different dimensions, we have been attacking to improve margins and getting back. So as a result, we have improved the core revenues. Cost rescaling, that means these are not simply cutting costs, but resetting so that the new business model is sustainable, has delivered about $12.4 billion this year, and core EBITDA margin has started now to trend upwards. This was achieved despite massive headwinds, especially on cost side and inflation really challenging the wallet share. The higher profitability also meant that we could improve our balance sheet and cash flow.
While constraining CapEx, optimizing CapEx investments, we also continued to maintain our market leadership. We continue to own over 55% revenue market share on customers and data. We also achieved market leadership in our home broadband segment. We continue to be the most valuable brand in the country for the fifth year in a row and also continue to run the best network in the country as confirmed by OpenSignal. So it's doing stuff smartly, just not hitting the bone, but making sure that we sustain our future, sustain our growth, but attacking the areas in order to reset. We reduced the CapEx, as I mentioned, significantly compared to last year from IDR 40 billion down to about IDR 21 billion this year. And this meant that EBIT increased significantly with profitability improvement and CapEx reduction. And profit before tax again has improved and is coming back nicely to pre-crisis level.
Mind you, this is happening within just a period of 12 months. Normally, a country that goes through a crisis of this magnitude would take minimum three to four years. You take Malaysia to all the ASEAN countries or to any other South American country, it won't come back in 12 months. So the real challenge for us is how to get back to where we were within 12 months to 24 months, and we are getting in that right direction. Operating free cash flows again, we moved from negative to MYR 13.4 billion of positive this year and return on invested capital, which Dr. Hans highlighted, the most important metric for us. Again, now trending in line with cost of capital at 12.6%. The balance sheet and the forex exposure was the other big challenge we had.
During the crisis, we had to get support from ASEAT as well as IFC to sustain operations. This year, we have managed to bring down that dollar exposure by $100 million, and now we are down to about $165 million, and we aim to bring it down further in the coming months. Again, it shows, indicates the real impact of profitability holding revenue and generating cash. And the balance sheet again continued to improve, gross debt to equity, gross debt to EBITDA as well as net debt to EBITDA at very healthy levels and improving from December numbers, so in summary, the key takeaways for all of you, Sri Lanka is coming out of the crisis and moving in the right direction. There are a lot of reforms to be done, but the government is executing them well.
In terms of Dialog, we are again coming back to profitability, strong cash generation. In terms of revenue growth, we will continue to attack and win in the market. Enhanced cash generation is something that we continue to focus on, reducing CapEx, improving yield on investments. Going forward, we have a declared dividend policy of 50%. In 2021, we paid out 60% of our net profits, and we aim to maintain that or get back to that dividend policy this year. We also announced a merger with Airtel in May this year. Airtel is the third or fourth largest operator with 10% market share. Dialog having 55% market share and the combined entity will have close to about 65% data market share.
We would have access to a larger spectrum pool in the country, which would significantly help us to improve market structure on one hand, improve the CapEx efficiency, reduce the CapEx spends, and set us well for the future, especially in the converged era. To date, we are winning very well in the converged business, and with 5G coming in, we would be in a very strong position with the Airtel merger, which is expected to be completed by Q1 of this year, next year, so with that, I'll pass on to Dr. Hans. Thank you.
Thank you, Supun and Ziad. I think with that session, which focused on two smaller markets but very different in terms of the challenges and the opportunities. On one hand, Ziad has built up a very strong cash generating business, consistent performance over the years, and a strong margin picture with well over 50%.
In the case of Dialog and Supun's journey in the last year has been quite a rollercoaster, but I think a fantastic turnaround both with respect to the economy as well as strengthening and restructuring the balance sheet for future growth. I think during this session, we have heard several concepts coming together, market repair on one hand, in-country consolidation, structural transformation, delayering, convergence, and then combating the challenges of the macro. All in all, I think you have heard from five top performing companies of the Axiata Group, and I think we can all draw confidence that from the way that they have captured opportunity and also dealt with whatever the macro has brought up in terms of challenges, not gone or succumbed to those challenges, but taken those extra measures to turn around.
And this we have seen across South Asia, and on the other hand, in Southeast Asia, Indonesia, and Cambodia, opportunities being captured both in terms of market repair, ARPU hardening, and overall quantum improvement in the fundamentals of the business and the unit economics, which keeps us, I think, places us in a very strong position as we enter the 5G era in the next few years. And with our focus on capital productivity across the group, we feel we can get to that apex of beating the cost of capital across our operations. Thank you very much to the speakers, and thank you for your patience. Thank you.
Okay, good afternoon again. Creating value with partners.
I think I talked about earlier that we will look at some investors in some of our businesses, and those are essentially the infra business as well as the digital business, because we believe these are still growth business, and to get them to the path of growth, we need capital, and Axiata may not be in a situation with our balance sheet to provide that capital, so we look at strategic partners and financial investors to come in, so let me just start quickly. I think we covered this section in a way. BAU was talked about, operational excellence, et cetera. Market repair, I think, was covered by DN Riaz as well as was covered by Ziad on market repair in various markets. I think that's a positive sign. We are seeing all markets showing R2 improvement.
Optimizing balance sheet, Lila will talk about it on how do we manage our balance sheet, how do we do cut capital. Building the future was really around telco to tech journey, which Hans and team did. And that was basically the... So what we'll talk about today now at this time is creating value with partners. The objectives behind that is clearly investment to grow. So it's not necessarily about monetization, but it is getting the right partners to invest and grow. Second is to help them come in so that we can deleverage our balance sheets in some of the businesses. For example, infra businesses are requiring capital, which has an impact on Axiata balance sheets. So we need to get external capital to come in.
And these are going to be financial investors as well as strategic investors, depending on what is the main criteria and how does that help. For example, in digital businesses, we've been largely strategic investors, whereas in infra has been more financial investors. And these are basically requiring us to deliver on mid- to long-term aspirations, helping us on the infra to become, as I said earlier in the first session, that would eventually be yield asset. And as far as digital businesses are concerned, would be more about value creation and then monetization opportunity. So that's broadly what we are looking at, the partners or investors in these businesses and necessarily infra as well as digital businesses. So I will go one by one, maybe hand over to Srini to start with how does he look at the strategic investors in the ADA space?
How has been the experience so far? We got SoftBank, Sumitomo as investors. And how do we look at future growth opportunities and where do we see those strategic investors coming in?
Srini. Yeah, so I mean, as you can see, the valuation growth from $109 million in 2018, SoftBank, $216, Vivek mentioned earlier, $550 watermark from Mitsui. Something interesting about all of this, all Japanese investors. So how many have been to maybe see a cherry blossom or a Japanese sakura ever? You're looking at one of them on the slide. It's constantly growing. And as you can see, we are really extracting beyond capital a lot of value, right? It's customers. So we are able to essentially unlock a lot of Japanese segments through them. Market access, we've just launched ADA in Japan. We are laying the groundwork for U.S. A lot of connections and actually credibility.
I mean, just a SoftBank investment has brought a lot of talent that wants to join ADA along the years. We are able to also bring in a lot of industry players who want to partner with us. Recently, we just announced a partnership with Databricks. We are also becoming kind of a deep partner with the likes of AWS and Snowflake and Azure. But beyond that, it's also kind of a vision, right? How do we create kind of a strategic vision together with them within the whole data and AI space that we play in? So really, with all these partners, it's been beyond capital. It's been, of course, their trust. It's been their resources. And finally, it's also been their kind of global vision in enabling us to get to the unicorn status over the next few years.
I would say through these different validations and through their support and together with Axiata, of course, we've just finished a half marathon. We've got another half a marathon left to go.
Thanks, Srini. You can go to the next one. I think it's Boost. Sheyantha, how do you look at partners in your business here?
Yeah, okay. Thanks, Vivek. So yeah, good afternoon, everybody. So Boost, our journey has actually been, the entire journey has been a journey of partnership, if you think about. And I've highlighted three kind of marquee partnerships that we've done. I think that those of you here in Malaysia are quite familiar with. But those partnerships are probably an example of things to come in terms of how we grow. A lot of you know about the digital bank partnership we have with RHB.
Again, when we think about partnership, it's really about the strategic value, synergies, capabilities, resources that two different entities, whether that be a strategic investor, financial institution, ecosystem player, can bring to create value together. And are you willing to put money on the table to back that? So if you look at the partnership with RHB, they brought in for our digital banking venture co-banking knowledge, expertise in risk control, compliance. We had a large digital ecosystem. We had fintech expertise, payments in payments lending. But we would be the first to admit we didn't know everything about banking, and they kind of filled the gap there. And the number there is kind of the committed capital that they have to this venture. A few years back before that, the Great Eastern Partnership was similar.
Great Eastern was a traditional company looking to get into digital at an existing base of customers, needed to partner a digital fintech company to understand how somebody could help them along the digitization process. We had digital distribution capability. We had experience in embedding financial products into ecosystems. And they had the underwriting capability. And I know that's what came together there. And again, there was a significant investment that they made in that partnership. We did a commercial partnership with Mastercard. Actually, it's a series of partnerships we've done over the last three years. Again, it's similar where they come with international expertise across markets, use cases that we are able to leverage, redeploy in the markets that we operate in, payment rails use cases, embedded payments, very strong in those areas as a scheme. And we have our custom ecosystems, data analytics, and agile technology.
So those are just three examples of three partnerships that helped us to actually build value, where the parties involved actually did put a substantial amount of investment behind the partnership, but there was also a roadmap and a plan on how to extract those synergies. Going forward, the playbook is no different. And as we look to new partners, investors to propel us to our next phase of growth, there are a couple of things that are obviously top of mind. Obviously, one is scaling our digital bank, a big priority next year for us, taking Boost Indonesia to full potential. I think a lot of you in Malaysia think of Boost as an e-wallet that is now becoming a bank. Actually, we are a lot more than that. We are actually a very large digital lender. We operate now in three markets.
In Indonesia, we are number five out of a large number of fintechs there, over 100 fintechs in that space, and we just entered Cambodia a couple of months ago as our third market, so when we think about strategic partners, aside from the funds deployed, what we typically look for is if it's a market that is foreign to us, relationships in market expertise that can be very valuable, resources capability, innovative tech, something that's always put on the table and always useful, and ecosystems and customer bases. We don't profess to always want to build our own ecosystem, even though we have a fairly large ecosystem in markets like Malaysia, but we are very good at embedding ourselves into other ecosystems, and that's been a real part of the value creation that we've been able to achieve.
So that's just a snapshot of, I think, an example of what we've done, but also kind of a hypothesis of where we want to go.
Yeah, thanks. Can we go to the next one? Link Net. So Kanishka, I think you've promised 8 million delivery, right?
Yeah, so I have a couple of slides covering the investment opportunities coming up in Link Net with the ramping up, the deployment, and the journey of transforming to a FiberCo. So the first step that we have taken in a way internally is the delayering of the existing business for different, we say, BUs business units. So the first one is the ServeCo, which is looking at the residential customers, the residential business.
With the announcement that happened today, the ServeCo portion is getting carved out and transferred to XL, which consists of the 750,000 fixed broadband and pay TV customers. The second part, what we are doing is that the other business pillars that we have, we are influencing them to FiberCo, which will be the infrastructure arm, and the enterprise core, which will look into providing all the enterprise solutions. We have quite a sizable enterprise business at this point in time. The third pillar is the media core, where we will be looking at the media and content products. The media core will be holding the relationship with the content partners.
By doing this segregation, the fiber core will become a very clear, independent entity in a way which is purely focusing on delivering the home passes and building it up to a business of 8.5 million home passes by 2026. And by looking at the next slide, looking at the opportunity in the market, I think quite a bit of information which is here has been captured already in the previous presentations. From the opportunity out there, we see still quite a big demand in the market, where the broadband penetration is only 15% with a country of 280 million people and 70-75 million households. So still quite a gap in terms of the demand which is out there. And to a certain extent, this is a result of a significant gap in the supply side that we see.
You have one operator which has close to 37 million home passes. And then there's Link Net, which has 3.4 million home passes at this point in time. And the rest is in the range of one to two million home passes. And this dynamic is what we think that we can change with the concept of fiber core, where if by the commitments that we have from Excel plus another two million home passes to be deployed either on a build-to-suit basis or open access basis, Link Net can become quite a sizable dominant fiber core in the market with 8.4 million home passes by the end of 2026. And this is in a way in two phases, happening in two phases. Currently, the deployments are happening on a build-to-suit basis for Excel.
Then after a while, we can open up the network on open access to any other operator in the market. I think I covered some of these points, what it takes and what Link Net has to become a leading FiberCo in the market. Currently, anyway, we are the number two provider. And with the 8 million home passes, we will become quite a sizable number two in the market. And we are part of Axiata Group, which has the management expertise to deliver these kind of rollouts. And then by creating this FiberCo, it will be quite a unique investment opportunity as an infrastructure asset, delivering long-term value. Then what is it in for any investors who are coming in? We have seen globally all the FiberCo carve-outs, all the transactions are trading at 20-22 times EBITDA multiples.
Quite a significant jump in the valuation multiples from a pure-play broadband operator to a pure-play FiberCo operator. Looking at the current 1 million home passes, the funding has been secured. But the 4 million home passes that we are planning to start delivering from next year onwards, it's a funding requirement of $500 million-$600 million that we are looking at to where the funding requirement will be coming in. This is what we see as quite a dominant infrastructure asset and a unique opportunity for investments going forward in Indonesia. Over to you, Vivek.
Thanks, Kanishka. Maybe Adlan, to you on Edotco, you're running the process, right, at the moment?
Yeah, hi, everyone. I think to those who are probably not familiar with Edotco, maybe a brief introduction, right? Essentially, Pan-Asia Regional TowerCo Platform. Today, we operate in nine countries.
In six out of the nine countries, we are either number one or number two. We own and manage close to 58,000 towers. If you see over the years, we have grown our colo numbers from the initial carve-out of 1.2. Today, we are at 1.66, and I think we'll continue to push the boundary to grow our colo as that's one of our biggest value creation. We actually work with all the tier one and tier two MNOs in all our footprint in the nine countries. And essentially, over the last five years, EDOTCO has grown very rapidly, expanded our operation to new countries, as well as growing organically in some of our footprint. Last five years, I think we have seen a double-digit revenue EBITDA growth, as well as tower growth as well.
I think over the last three years, we did four strategic acquisitions, two in Malaysia, one in the state, and two in the state, actually, Johor, as well as Pahang. And essentially, shifting a little bit our portfolio more towards the emerging market into Indonesia, as well as the Philippines. So I think the focus now is to really see how we can monetize in terms of the assets that we have actually acquired over the last three years. As we see today, our services are really focusing on infrastructure, passive infrastructure. We do managed service, as well as some energy in some of our markets.
However, as technology evolves, as MNOs continue to deploy their services, their assets, I think we will probably move up the value chain as well to probably play a bigger role in terms of managing these infrastructure assets, which may include going into energy as a service or potentially antenna as a service. And also, a lot more managed service potentially also could be involved in active managed service. So those are changing for the InfraCo as well. We'll probably move up a lot more on the value ladder as we go along in the future. Here, I want to share a little bit in terms of how do we see the landscape, what has happened in the last 10 years, and how we see the market landscape changing over the next 10 years. Over the last 10 years, we see that technology moving from 2G, 3G.
We see that 3G has eventually been sunset in some markets. 4G introduced, and you see a significant densification of 4G. We see that 5G is being introduced, but we see that in most markets today, 5G rollout has also been delayed. What we are also seeing now, 6G is also being tested in some markets. So essentially, I think the next 10 years, there are a few key trends that we probably would see. First, in terms of demand in the market, we see that Gen Z, Gen Alpha is going to drive the demand of traffic in the market today. By 2030, 46% of the workforce is going to be made up of Gen Z and Gen Alpha. 80% of our traffic by 2030 is going to be generated through Gen Z and Gen Alpha.
Essentially, I think the Gen Z, Gen Alpha traffic per user today from a 13 gigabyte, it will grow close to about 15 times by 2030. Hence, you see that the network in 2030, in the next 5 to 10 years, has got to be built based on the requirement of Gen Z and Gen Alpha. This is a positive trend that we are going to be seeing. What that means is that more infrastructure is actually required. We also see a change in terms of the MNO trends as well. MNOs are probably a lot more careful today in terms of rolling out their sites. We see that they are probably shifting a lot more from a CapEx to an OpEx model. MNOs are probably a lot more open towards sharing.
And hence, you probably see that a lot of network sharing happening and probably consolidation in the market. In some of the markets, Malaysia, Indonesia, Thailand, you've seen MNO consolidating as well. And we would expect that this trend will actually continue. So however, at the same time, you're also seeing that MNO are going at satellite. So delayering is one of their key strategies. And that creates more opportunity for infrastructure companies like us to play a bigger role in this. We also see new technologies emerging today. 6G are being tested today. 5G millimeter wave. You also see the LEO satellite being introduced and being rolled out to cover connectivity moving forward. And we also see in some markets as well, Philippines have opened up for independent tower companies quite rapidly. You also hear the news now, Japanese markets are also opening up.
So these are some of the changes that we are probably seeing today. And this we see is the brave new world that we all probably would be going into in the next 10 years. So from our perspective, how could we see that moving forward, we need to work closely with partners to probably create value. So value creation with partners is not just in the form of capital, but also in terms of the expertise and competencies that the partners could actually bring for us, especially if you're moving into new areas, new technology that we will probably work with. And this expertise would be one of some of the criteria that we will be looking to create value with our partners.
I think the next level that we're probably looking at partners that can bring us maybe in terms of how we can consolidate some of our assets in some of our markets. Because of the assets that the partners have in that similar market, that allows us to consolidate and probably create a bigger operation, as well as driving the industry and leading the industry as a market leader in those markets. Last but not least, with the emergence of this new technology, disruptive technology and all that, and essentially working with partners, for example, in the provision of satellite, LEO satellite, and even for example, in Open RAN, so on and so forth, is something that we think could probably create a lot more value.
Because as the path forward, as technology evolves, we as a group at Edotco will also evolve, moving up the value ladder and really focusing into the next generation product, moving on, taking on from what we have today. So those are some of the areas that we feel that together with our partners, that we can create value.
Maybe I'll sit down before I start challenging these guys. All this sounded very good. Let me ask them some tough questions. Okay, maybe I start with you, Trini. Sure, yeah. Okay, Trini, I think you talked about getting the Japs as your good partners, right? How do you see yourself? I mean, you've been in a journey to kind of build the capabilities around marketing transformation for the clients, right? So how do you see the future growth opportunity for that, for ADA?
How do you see that growth opportunity is really coming along with either the financial investors or strategic partners, which you talked about? How do you see that as the next ladder for ADA to become a unicorn, as we said?
I think there are essentially two legs to our growth. One is what we've been doing extremely well in Southeast Asia. How do we transplant that into larger economies? Earlier this year, we entered India. Now we have about 300 people in India. We made India kind of our center for data analytics, data engineering, Gen AI space, delivering to global markets. We went to Japan, fourth largest economy in the world. We've got to go deeper into that, huge market opportunity. On the back end of SoftBank, like I mentioned, we're laying the groundwork to enter the US.
So suddenly, out of Southeast Asia, now we have a target addressable market that's 100x bigger than Southeast Asia that we're really focused on across the services that we've been offering to brands and enterprises in Southeast Asia. So I know generally, I mean, this group generally struggles on understanding our business fully, but very simplistically, if you go and buy something on Lazada, say you bought on 1111, say Blackmores, we were probably the ones that drove the demand onto the store on Lazada, Shopee, or TikTok. We were the ones that eventually got that fulfilled through a third party, drove the data analytics behind it, et cetera.
If you saw maybe a WhatsApp coming from a bank, or recently you saw an email coming straight from Toyota or Honda or Hyundai or any of these cars, and assuming you drive one of them, we are the ones who probably crunched all that data in terms of what to cross-sell, what to upsell. So there is a journey that all companies are going through now, of course, and of course, data and AI has been the buzzword. But that journey has been, I mean, it began about four years back once the cookieless world started, which is every client started to consolidate their data more and more. And that's what we enable them to do. We enable them to create a full data lake, a full data stack. Then we enable them to do analytics on top of that.
Then we enable them to then target and reach them on email, on Facebook, on Instagram, on WhatsApp, et cetera. Where are we investing? It's, of course, geographic growth, but it's also deep capabilities, especially in machine learning operations, especially in data lakes on platforms like Databricks, on Snowflake, on AWS, et cetera, to kind of build the full data proficiency inside enterprises. That's a huge growth area because we believe the future of apps will not be run on compute power, but will be running on data power. Apps will be sitting on top of data. That's what we are really trying to enable.
If I may continue, you obviously have SoftBank, the Japs. What have they added to your business? How do you see them adding further to your business?
Yeah, so I think the first thing is, I mean, one thing SoftBank has been extremely good at in Japan is enterprise sales. They really have been, I mean, SoftBank, and they started as a software distribution company before they were a telco. So they've really brought a lot of that sales capability across into ADA. We have a team here that's focused on first unlocking a lot of Japanese multinational corporations. So currently, as customers, we have Toyota, we have JCB, we have many, many Japanese customers we've unlocked within the region. The second thing is SoftBank also has had an ecosystem of other software platforms that we brought into Southeast Asia. One of those platforms is a platform called Treasure Data, which is a customer data platform. We are their semi-exclusive operator in Southeast Asia and now in South Korea as well.
The third thing is, like I was mentioning earlier, I think they bring a lot of vision. I think they understand what to do in the data and space. They've been investing quite a lot across the globe. And they really guide us in terms of, hey, what should we do next? Where we should go? I think that's been a lot of strategic value add.
Thanks, Trini. Maybe I shift to Sheyantha. Sheyantha, we were a little shocked Grab launched before you a few days back. So you think that's a disadvantage to you?
I've never been asked that question before. I think that's like the most popular question going around these days. So I guess the more fundamental question is, is there a first move advantage in the digital bank space?
I think, and this is probably not me saying it, we were actually all the digital banks on a panel about a month ago. This question was asked about how big of an advantage is the first move advantage and Grab launched. I think the general consensus was it is an advantage, but it's not the defining factor of success. The reason I say that is if you look at the applicants that were eventually selected and who got the license, I think the way the regulator did it was actually quite smart. It was basically companies that had existing ecosystems and captive base of customers, which they could bank. If you take, I'll talk about the three parties that got the conventional license. If you take Grab, the Sea Group and us. Grab, the anchor base is kind of the gig economy workers.
If you take Shopee, it's everyone on e-commerce. And if you take us, I mean, it's really the merchant ecosystem. People again think of us as a wallet, but really we've done about MYR 2 billion worth of loans to micro SMEs. So I think the first priority for everybody in the first year of launch is really to bank your base. If you look at the business plans that we submitted to get the license, it's really how quickly do I bank, how do I bank my base? And I think that's the priority. And so it's not so much grabbing white spaces out there from each other. It's really about converting the existing customers you have. So I think to that extent, first move advantage obviously is nice, but it's not the defining factor.
I think the other thing is that unlike other fintech businesses, obviously a bank is the most regulated kind of business. And as part of the license, the regulator also gave a very defined time frame to get your model right. So between three to five years, you need to show profitability in your operating model. What that means is you don't have the luxury of taking a very long cash burn gestation period to experiment and get there. You need to be quite definitive in terms of your execution. You need to know what your target segments are, and you need to have ability to deliver that.
I think the guardrails are set to prevent anybody from being completely crazy in the market and let's say as the first mover when trying to capture X amount of the market by giving a huge number of cash backs away, for example. So I think the guardrails are set against something like that in terms of behavior. In terms of the actual rollout, I mean, obviously, Grab has done a great job. They did have an advantage over everyone else because they had deployed the stack in Singapore and were able to redeploy. So they got an advantage over the others over that in terms of time frame.
But I think if I look at least what we are going to do and I think early signs of what they are doing, if I look at how they've embedded their services into the Grab app where you can actually now do, you can actually link your bank account for payments on taxi ride hailing and delivery. They are focused very much on trying to bank a lot of the customers they have on the Grab app. So I think everyone will kind of stick to that script.
So while it does help to some extent more from a PR value, et cetera, and an excitement factor, I think nobody has the luxury of going completely crazy out there in the market and do a land grabbing exercise like you have seen, for example, in the e-commerce space or like you saw in the wallet space, for example, a couple of years ago in Malaysia. Good. The other question, I mean, once you have a bank up and running, what happens to the wallet here? Good question. So if you think about, and this is something we did extensive studies on, if you look at the types of digital bank models that are out there and the ones that have been successful, the ones that have been successful are the ones that have been able to have a captive transactional ecosystem and been able to bank that.
So you have a digital banking core, and then you have a digital banking ecosystem around that. I mean, the classic ones are the Chinese players. You would take WeBank and you would take Alipay. So Alipay, for example, my bank, which is the sister company that has a digital bank license, a large part of the loans, a large part of the banking services on Alipay are actually provided by my bank. It's the same thing with WeChat Pay, which forms the wallet ecosystem, but a large part of the banking products and services happen through WeBank. So our model will be slightly nuanced, but slightly similar to that, where the wallet will continue to be a high engagement, high use case transaction platform, but essentially all the backend banking services will be provided by our bank, and by doing that, we are doing two important things.
One is we are not reacquiring customers that we have acquired for the last four, five years. We are actually capturing a larger part of their wallet share. The second thing is that as opposed to competing with a traditional bank app, so if you go to a traditional bank app, it's not a high engagement app, it's usually more a utility app. You could go to either do a transfer, check your balances, do some co-banking service. Our kind of ambition, and I think the others are somewhat similar, is to allow people to continue to do what they do, drive the engagement they have today on your app, but do banking as a byproduct of that. And what that does is it drives a lot more stickiness, and it drives a lot more retention for the customers you have.
I think the final point is if you look at the digital banks that have been successful and got to profitability, the strategy has not been on large accounts. It's been on things like long-tail deposits, small loans, but high frequency. So engagement retention is important, but you don't necessarily need to be somebody's primary bank account. You don't necessarily need to be the first port of call for a loan. You can play in the long tail, but as long as engagement is there, as long as repeat behavior is there, that's really what is necessary to actually drive continued traction in the digital bank space.
Thanks. Now maybe I go to Kanishka. Kanishka, you said you want to have eight million home passes and peak funding requirement of 500 million. What are the timelines and how do you expect that to be funded there?
Thanks, Vivek.
So currently for the one million home passes, we have secured the funding already, leveraging the balance sheet at this point in time. And for the next four million, we are doing the groundwork at this point in time. How much, what is the structure, things like that. And actually the plan is to kickstart the process somewhere in quarter one. And then the completion to happen by the time we have completed the deployment of one million in quarter two. So the completion to be done somewhere in quarter three. So that is the current timeline that we are looking at for the new round of funding.
Okay, good. Maybe Adlan, how do you see Philippines?
Well, I think Philippines has been quite a hot market. You see that so many investors, PEs, were eyeing for the market.
And if you look at over the last two years, less than two years, you see that there's been seven transactions of towers taken place. With that, you see that backed by seven very strong either PEs or tower cos that have actually come in. And that's moved very, very fast, essentially. On the other hand, you see the industry has actually slowed down to a certain extent given the issues that we see at Smart, PLDT, the change of shareholders in Dito, as well as Globe didn't want to be aggressive in terms of taking that opportunity. So from that perspective, I think as far as we are concerned, that we see that the demand in the market is still there. We still expect that there will be 30,000 new towers and 40,000 new colos still to come within the next 5 to 10 years.
So, no change in terms of demand and the infrastructure requirement. However, given the situation that we see today, we are probably one year behind plan, essentially the delay of what we see happening in the industry. The first thing that probably will happen as well as we move forward in the next two to three years, you will see some level of consolidation happening between the tower company. Because essentially you see that this tower will be divided into the northern and southern part, so any consolidation that happens between tower companies, it makes a lot of synergistic sense because that's where you cover the whole country, and most of this consolidation between tower companies essentially will be using shares as a currency rather than cash.
And that would happen, definitely happen in the next two to three years where market, tower market will consolidate, but demand I think will continue to come as we go along. And I think the end result still remains the same in terms of the level of infra requirement over the next 5-10 years.
Okay, thanks Adlan. Claire, we're running out of time, right? So I don't have the luxury of asking more questions. Okay, thanks. I think we'll come back with further questions which the audience may have, right?
Yes. Thanks. Okay, thank you. Thank you. Thank you. Do stay back. I think we already see some interesting questions coming through on Slido. Later.
So this will be my first and last investor day, right? Okay, good afternoon all. Assalamualaikum. Just now we heard from Vivek, Dr.
Hans, Thomas, and the CEOs and CFOs on the strategy and initiatives being taken to achieve the objectives. So how do we stitch it all up financially? So let's go through this session. You've got the disclaimer here. Okay, so we're going to go through the four blocks. So basically the capital allocation framework 2.0, cost excellence, which you heard a bit just now from Hans and Thomas on both CapEx and OpEx. And then you've got the whole core cost reduction due to the change in governance model, which Vivek alluded to. And last but not least is the treasury management, which we will share with you the financial guardrails on this.
On capital allocation framework, so if you recall in 2021 or 2022, we touched on capital allocation framework 1.0, which focused on how Axiata allocates capital across all our OpCos, basically driving growth, future-proofing the business, and effectively translating into returns for shareholders. With the group's current target to deliver MYR 0.10 dividend per share and retain our ratings going forward, this framework has been tweaked. That's why we call it 2.0. It's looking more from an Axiata HoldCo perspective on its cash flow deployment. So this is to basically ensure the following. One is debt servicing and debt repayment. Secondly, shareholders are rewarded via dividends, of course. And lastly, capital allocation for OpCos sustainable growth. So those are the three main pillars for our deployment of cash. As you are aware, if you look at a table, this is your typical corporate finance table anyways.
Our sources of funds come from our OpCos through annual dividends. So upstreaming of dividends, as you have heard just now, takes into consideration of all the initiatives that they are also doing, savings on CapEx, savings on OpEx. So this will allow them to upstream more dividends upwards. Apart from that, cash also comes from asset monetization or value realization, as we like to call it, as we have seen from the past transactions with the CelcomDigi merger, which we garnered cash of about MYR 5.5 billion, sale of stake in ADA, as was mentioned earlier about $58 million. So those are the types of transactions that will gain more cash for us. And we also have a small HoldCo-master service agreement with the OpCos, which we receive about MYR 60 million every year.
So this framework basically guides us to balance the users of the funds that we receive through the dividends and also the transactions. So I mean, this slide you've seen before from Vivek's presentation earlier. So it just highlights some of the key corporate activities. So I won't go through in detail, but basically in terms of what we want to do is we want to execute all of this to make sure that we basically deliver on sustainable growth, our target to basically deliver dividends to shareholders and of course repayment of that. I think the last one I think Vivek did not mention on deleveraging our balance sheet. We have pared down $3.4 billion in 2022 alone. And recently we've also repaid another $100 million just recently. So you look at one of the pillars just now, we were looking at cost excellence.
This covers CapEx and OpEx. So this slide shows you capital productivity ratio of our OpCos, which is defined as CapEx plus ROU additions over EBITDA. Previously, I think we had measured this against sales. So this is a change internally. So as we move towards an asset-like model, we expect capital productivity ratios to trend lower. And this would be fully supported by the EBITDA growth at the various OpCos. And we also heard earlier from Dr. Hans on the uplifting of CapEx productivity. And also I think a good example from Supun of Dialog on their initiatives on measured CapEx spend, which translates to higher OFCF. Apart from CapEx, we are also looking at OpEx. Across our five MNOs, we have managed to keep OpEx growth at 4.7%, which is below the revenue growth of 6.4%. This comes from savings from the cost excellence initiatives.
This was also evident at the group level where EBITDA growth of 8.5% is also higher than the revenue growth. As you can see from the graph, the key movers there are largely coming from the network savings, IT, and also sales and marketing commissions. So this is mainly covered by Thomas earlier anyway, so I won't dwell on it too much. This was also, Vivek, we mentioned about this earlier on the HoldCo cost reduction circa 20% based on the change in governance structure. So this would also involve key initiatives involving strategy and business planning and performance management to help the cost optimization. Okay, treasury management. In managing our finances, we are of course governed by our financial guardrails. Retaining our credit ratings remains a key priority, and we ensure this by having prudent treasury management with financial guardrails which are aligned across our opcos.
Most of our OpCos maintain their financial ratios according to these set guidelines, except for Edotco and Link Net, which I think you heard earlier, due to their expansion plans, they will probably need the right partnerships with strategic investors to help them drive into their next growth phase, so these key guardrails, you can see here, our overall gross debt to EBITDA of less than 2.5 times, some exception to tailor-made for the different OpCos. For example, like for our MNOs in the frontier market, it's net debt to EBITDA of 1.5 times, Edotco 3.5 times, so we do look at it individually at OpCos also or sector, but overall it's at 2.5 times.
And then you've got a minimum of 50% of local currency debt, minimum of 50% of foreign currency debt to be hedged, and then 50% of debt on fixed rate basis and loan tenure of about 3%-5%. So you can see the chart on the other side, 58% of our group debt are foreign denominated debt, which is slightly above the threshold of 50%, largely from US dollar denominated debt at HoldCo level. As you are aware, we have about $11 billion debt, Edotco and Dialog and Robi, which you heard just now, they are also planning to pare down. 63% of this foreign borrowing are unhedged, comprising of, of course, Axiata's 30-year loan, EMTN of $1 billion. That's a very long-term loan. Edotco's debt of $5 million-$7 million, which I think in essence we are trying to find the right time to hedge, right?
And the U.S. dollar debt in frontier markets in Sri Lanka and Bangladesh. As I said earlier, I think on the 30-year loan, it's very difficult to find a maturity that long. And even if we do, I think it's going to be very expensive. And then on our frontier markets like Sri Lanka and Bangladesh, typical hedging options that are available here might not be available there. So those are the nuances that we have to look at when we operate in frontier markets. And then also we are also looking at focus efforts on de-risking balance sheet via lowering net forex exposure, as you heard just now from Supun and Riaz. So positively, 64% of our total group borrowings are on fixed rate basis, well above the 50% threshold, while 71% of the maturity is actually more than two years. So it's on the longer end.
On this graph, you can see CelcomDigi Berhad will continue to be our largest dividend contributor, the yellow side on that side to Axiata. It has a dividend policy to maximize dividend subject to, of course, debt threshold and of course reserves availability. We expect Smart to continue to feature as a stable cash flow generator to support dividend upstreaming to Axiata. XL, Robi, and Dialog are also forecasted to be streaming more dividends in the future. No pressures, guys. In the past, I think due to the crisis, countries like Sri Lanka and all that, so Dialog was restricted in upstreaming dividends where government usually tried to impose a pecking order so that dividend is actually lowest in the rank of priority for US dollar repatriation.
So they were affected before, but it's slowly returning back to normal subject to, of course, the availability of US dollar. So the message here is that Axiata will remain to be committed to return at least $0.10 DPS per annum from BAU operations, which is well supported by our OpCo dividend policy of minimum of 50% payout. So in summary, although we are not out of the woods in some of the markets with forex and of course interest rate changes, although we are expecting it to come down, for us, the discipline and prudent capital allocation will help us to ensure sustainable dividends of $0.10 and allow us to achieve net debt to EBITDA of 2.5 times to maintain our credit rating.
Our portfolio strategy of multi-platform builder and reduction in HoldCo discount in Axiata SOTP will help us to guide to a single digit TSR. So thank you.
Good afternoon. Sustainability in Axiata. What I like to do is to provide an update of where Axiata is on the whole ESG agenda. In doing so, I'd like to also recap on our strategy and our commitment, firstly. Secondly, progress to date, and also how we respond to all the calls to action, especially all the disclosure requirements, and the way forward for some of our programs, especially on the climate action. Green button is forward. Yeah. All right. Disclaimers. So just to recap on our commitment, again, you may have seen these wordings in the past. As Axiata, we're very focused on advancing the ESG practices as a very core strategic pillar.
It's really integral to our whole vision of advancing Asia, and the way we do it is all around inclusive development and also empowerment of societies that we operate in, essentially, and our ESG agenda can be categorized or captured under the four categories or four pillars here. You see on your left. The first being we improve lives through technology, and we call that digital inclusion. We have a commitment to improve the lives of 23 million of people that we touch in our markets, and that's within 2025. We made that pledge in 2022. Keep that in mind, and I'll share a bit of progress in the next slide. Secondly, advancing our people and communities. For your information, we are ranked 22 out of 200 in the World Benchmarking Alliance in terms of digital inclusion benchmark.
That's a way that calculates how companies conduct themselves in terms of fair, diverse, and inclusive practice. Three, green economy is probably the most complex topic for us in terms of climate action. We promote, obviously, circular economies and climate action. We made a commitment as part of our advancing to zero to be net zero carbon by 2050. That's consistent with a 1.5 degree temperature program. For us, we are making a commitment that for Scope 1 and 2, we will reduce it in terms of absolute terms by 40.5% baseline from 2022. And I'll explain a little bit why we baseline to 22. And for Scope 3, which is the largest contribution to ESG emissions, we are committing a 25% reduction by 2030. By the way, for those that may not know, 2030 is what we call near-term target, and 2050 is the long-term target.
Then lastly, but not the least, certainly driving governance and risk, we have a very focused agenda across our value chain to build long-term digital trust and enhance cybersecurity and data protection. What we've achieved, one of the achievements certainly is we achieved maturity level three based on the NIST, NIST Global Cyber Framework as of October this year. For today, I'll talk a bit about three topics: digital inclusion, which has more details about that, two, climate action, and three, digital integrity. Here for digital inclusion, I picked up some key examples here in terms of what we do in the different markets. Obviously, this is not exhaustive, and there are a lot more examples in all the different markets that the teams are very focused on.
I'm not going to read each one of those, but if you look on your right, the Edison Alliance is where we are committed to. As I said, 2025, 23 million lives will be touched. As of 2023, we have kind of touched the lives of about 5.9 million. And in 2024, based on the programs that we are rolling out and targeting, we should be hitting about 9.6 million cumulative. And the reason there's a jump in 2025 to 2023 is because there's a couple of programs that are being rolled out in two markets that will add another 11 to 12 million incremental. And then on your right, you see the World Benchmarking Alliance and how we are ranked steadily from 2020 to 2022. So 2020 is 31 out of 100, and 2022 is 22 out of 200.
In terms of climate action, this is, in my opinion, fairly complicated. We are on track, essentially, to deliver, sorry, I should look at the front, agenda for both SBTI validation and TCFD reporting as well. Our targets and baseline have been submitted to a science-based target initiative just last month, and we expect spending approval. We expect this to be endorsed and approved sometime by Q1 2024. We have reflected some adjustments to that. I think if you've read the SNCR report 2022, you might have seen some different baseline. Now, based on our discussions with our consulting partner and also SBTI, we have decided to rebase the baseline to 2022. And that's because of two kind of material adjustments. One is Celcom is no longer in the picture by end 2022. And secondly, Link Net is in the portfolio in 2022. Sorry, 2023. No, mid-2022, sorry. Yes, mid-2022.
That's the reason why we revised the baseline. In eight years, we have to have absolute reduction of GHG emissions by about 40.5% for Scope 1 and 2 and 25% for Scope 3. Our approach to meet the goals basically summarized by these three actions or objectives. One is to accelerate decarbonization across our network operations. We have seen, based on all the efforts that we have done, we have improved energy intensity by about 30% over the last two years. In the last two years, we have also, sorry, in the last year, actually, we have actually increased the number of solar cells by doubling it from about 2,000, just a little over 2,000 solar cells that we had before to about a little bit more than 4,000. We'll expect to continue to drive this program. Secondly, accelerate transformation of our value chain.
As you know, Scope 3 is kind of emissions that we don't control directly. And across this Scope 3, there's a need to work closely with our entire value chain to drive the 15 categories. But if you look at the details, it's only about six of those categories that drives or that contributes about 99% of Scope 3 emission. So that's where we'll focus on. And the roadmap to decarbonize has been worked on as we speak post-submission of SBTI, and we hope to get that all in place at the same time as SBTI approving our metrics and targets. Thirdly, we need to obviously deliver an inclusive climate agenda. This is not so much about very specific actions that you take, but to demonstrate that Axiata is committed to the whole program.
We are signed up to, or we are co-working with the likes of UNGCs, CEO Action Networks, the GSMA, etc., just to name a few, to drive our commitment and also to propagate the ESG agenda for us within Axiata. On the right side, that's important, TCFD, the Task Force for Climate-Related Financial Disclosures. What we've done in a few areas is under governance, for example. For climate governance, we have board oversight. Today, we have installed what we call the Board Risk and Compliance Committee, for which they are tasked to also look at climate-related matters. Secondly, strategy and risk management processes are defined for us internally in terms of how we identify, manage, or to some extent mitigate the risks that are associated with climate-related risk into our heat map as well.
So nine climate risks, for example, have been identified, and its impact is integrated into our portfolio, and we do scenario analysis as well for that critical ones. And then 11 climate-related opportunities that also come out of this process. We are going to focus on leveraging these opportunities at the same time. And these are all tasked through the BRCC, which I mentioned earlier. Metrics and targets. This goal will be set and formalized as soon as we get validation from SBTI. Yep, the green button isn't working. Got it. And thirdly, under digital integrity, this again is quite. We're very close and very passionate about what we do on this front. As part of the Board Approved Digital Trust and Resilience Strategy, we have done a tremendous amount of work in terms of how we ensure digital security across our entire network of operations.
It's across nine countries today. We excluded one just last week. So I've kind of listed five key achievements. They're non-exhaustive, but the ones that you should take note. I mentioned the first point, maturity level greater than three. That's a significant achievement for us. That's the reason why we call that out. This is the global cyber framework in which we benchmark ourselves upon. Secondly, we strengthen governance. I also mentioned that about the installation of BRCC that oversees cyber and data privacy strategy too. Thirdly, culture is important. Cybersecurity very often is not because of externalities. It's also as much an internal issue. And we are pleased to also share that we have a success rate of over 95% in terms of mandatory employee training across our entire operations. And the fifth bullet point, Cyber Fusion Center, I'll call the CFC.
We launched that CFC to essentially strengthen our cyber resilience across the group. This is a 24 by 7 by 365 monitoring and response to cyber threats that will look across our entire footprint of operations in all the markets, actually. And you will see on the bottom what we have done or what we do in the Cyber Fusion Center. Example, we do monitoring across hundreds of keywords in both the open, the dark web, and the deep web for threats, including brand protection. Thousands of IPs are scanned every day, every month. Fourth bullet, sorry, 24 by 7 monitoring of over 11,000 key IT assets. And these are obviously IT assets that are critical for our operations. We sometimes call them crown jewels, but this is something that we keep an eye on 24 by 7. Reporting is all automated.
Cyber drills and rate team exercises that we do across, and this is typically not announced to our operating companies so that we test the resilience of each of the opcos in terms of how well they secure their environment. And then the last bullet, and certainly not the least, threat intelligence or an attack surface monitoring. These are all stuff that we do daily. We have a great team out there that knows exactly what's going on in terms of every single IT point in our operations. Oops. Wow. Green button is forward. What's back? Sorry. Yeah. So perhaps some key points here is mostly for bragging rights, I guess. So what's important is, I think the one on your left, the CFC was awarded the Cybersecurity Project of the Year, and that's a significant achievement for Axiata as a whole. This is the first recognized project.
And as a result, on your right, we will be signing an MOU between Axiata and Cybersecurity Malaysia. And I think it's next month, is that correct? A bit? Yeah? Yeah, next month. And that's just a testament in terms of the level of trust our CFC delivers in terms of their capabilities. And then here, yep, some more awards that we got recently is, again, it's just a testament of our commitment on our own ESG agenda. Yep. So that's all I have. Thank you very much.
Okay. Shall we take questions from the floor first, if there's anybody? Phone at the end. At the end.
Hi, Phong from CIMB. Thank you so much for the Investor Day today. A couple of questions from me.
Firstly, the slide showing the improvement in the CapEx productivity over the next few years across your OpCos, right, is staggering, right, in terms of what you are expecting in terms of the decline, in terms of the CapEx plus ROU addition to EBITDA. Can you just sort of give us a bit more color as to how you're going to achieve that? Because you probably do have CapEx or 5G rollouts in some of the markets in the next few years. And then, of course, competition is also another area where you may have to contend with if, say, some of your competitors are rolling out into areas, for example, in West Java in Indonesia, and you may have to sort of continue investing quite heavily to keep an edge in those areas as well. Yeah. So appreciate if you could give us a bit more color there.
Then the second question, right, regarding also in Indonesia, the Link Net and XL deal, whereby for Link Net, you are transitioning it to become a fiber co. One of the ways you are creating value here is you are trying to increase the utilization rate of the fiber asset, right? By doing that, you are probably going to open up that network to access seekers and potentially increasing the competition in the fiber broadband market, right, and potentially reducing the value of an FMC strategy. Because if customers can buy mobile and buy fixed broadband from another player at a very cheap price, then they might think, "Why should we buy on a bundled basis from one of the players?" Right? So could you sort of share with us your thoughts as to how this could develop in a good way for both Link Net and XL? Yep.
Those are my two questions. Thank you.
So maybe I can make an attempt on the first one. Maybe I'll ask Thomas to add on. I think one is clearly we still think, given our scale and size, we should be able to command better prices from our vendors, which is about operational excellence. We also think with the overall emphasis around the market growth, which market repair, which is driving the ARPU, the revenue and EBITDA improvement should be seen going forward. Third is, I think a lot more focus is around the extraction from the existing investment which has been made and not necessarily expanding in most of the markets into new towers. I think if you looked at Smart's presentation, really focus being on site profitability, how do you extract the biggest value out of each of those assets?
One of the KPIs all the OpCos have been driving is actually converting the low-performing sites into profitable sites. So that's going to be key emphasis for us going forward. As I said, the combining the ROU with the CapEx actually drives much stronger accountability on the new towers acquisition versus extracting from your existing towers. So I think those are the things which we think is going to drive better CapEx. As Thomas said in his presentation, we think at the current level of CapEx intensity, we are still at the higher end of CapEx intensity. So within the same frame, we should be able to, with the efficiency being built in, we should be able to bring down our CapEx intensity across the footprint. So maybe Thomas, you want to add?
I'm just to add, on the one hand side, CapEx intensity obviously has two dimensions, right? It's the absolute CapEx we spend and the output, the revenue we generate, right? So market repair, uplifting revenue is equally important because actually it has an even bigger lever than just absolutely reducing the CapEx, right? So we need to work on both ends, bringing up revenues, market repair, and looking at CapEx efficiency. So CapEx efficiency, very much utilizing assets is what Vivek mentioned, driving site utilization. We will deploy a tool called Value-Based Planning in the next months where we are determining which sites give us the highest ROI in terms of where should we put money and invest. So at the end, to really look at if we have a limited CapEx envelope, where to put it so that we can increase our returns.
And then plenty of initiatives, both on network sharing, looking at Cloud Core, cutting off the legacy, 3G shutdown we just completed, as said in Dialog for example, and the other markets done. Then repurposing the spectrum towards 4G, data center consolidation. All these measures have to come in so that we obviously bring down our costs and CapEx intensity. Yeah, target is 20% of it, right?
On the second question, Phong, I think first of all, Indonesia, I think there's still a big opportunity, as Feiruz and Kanishka talked about. There's a big opportunity which is there in terms of the overall penetration on fixed broadband. So I think that's one. Second is also the fact it's not going to be very different from how towers evolved. Even towers were carved out.
They were available for access to the other operators, did not necessarily increase the competition on that side, right? So I don't think that's going to be fundamental because you're not going to have a discriminatory pricing. So if the pricing is the same and you have, it'll all depend on who's going to drive the acquisition of customers and who's going to drive the value of the ServeCo side. So I don't think that's going to fundamentally create high competition because at the end of it, if you are not efficient, then you can't really drive. Third thing is, I think fundamentally, our view is that in Indonesia, a lot of it would be driven through a fixed-mobile convergence route. So you may not have so many smaller ISPs in that country because the whole dynamics in Indonesia has been driven through a fixed-mobile convergence.
So there is a risk which is obviously there, but in the overall scheme of things, we think that risk can be managed provided we are fast to rollout and XL is fast to acquire those customers. So once you've acquired the customers, then fixed broadband is far more sticky than it is on the mobile side. I don't know, Dian, or you, or Feiruz want to add anything on that?
Yeah. Hi, Phong. Thanks for the question. It's a very valid question. I think to your point in terms of the partnership, right, with Link Net, I think where we see in the markets and the pockets of growth, right, when we analyze it, clearly we look at the under-penetrated market, right? I think clearly the partnership with some form of first mover advantage where therefore you will reach a certain level of pen rate, right, or penetration.
Where beyond that, then it's also much harder for competitors to come in. I think Vivek's point on the FMC is a very important point. That narrows down and that clearly creates a differentiation factor compared to the existing ISPs that you see are competing. And to your point, at least for XL on the CapEx plus ROU over EBITDA, I think on two fronts, right? So one, clearly trying to improve the level of profitability, optimizing the existing portfolio itself in terms of capacity allocation and maximize the site profitability and utilization, and basically sweating the assets, right? I hope that answers the question, Phong.
Okay. Thanks. At the back as well, I think it's Louis from Citi.
Yeah. Thank you. Yes. Yeah, Louis from Citi. I had two questions. One is on the XL Link Net transaction as well.
I'm just wondering, the independent shareholders need to vote in approval of it, but what if there's not enough participation? Is there like a time period which elapses and then the deal can push through? And the second question is on EDOTCO. If I recall during the proposed IPO in the past, the interest in Myanmar was an issue or a hurdle. Is it an issue as well in this value exercise that's being undertaken as well now? Or is there a way to ring-fence it as well?
No, sir. The first one, I think timelines, yes. XL doesn't require because it falls below these threshold. Link Net would require. And I think we have to go through the process of getting an independent valuation done, getting the OJK to approve that, and we'll have to go through the independent shareholders to vote in favor.
There's a very clear process which is there. I think from a timeline perspective, while we've signed now, I think it'll still probably be sometime in quarter two that we'll be able to complete. Just the process requires that kind of a timeframe. On the Edotco, I really couldn't get your question. Can you repeat once again?
Oh, yes. Myanmar used to be a hurdle to an IPO for this current valuation exercise that's going through. Is it also a hurdle? Or is there, and if it is, is there any way to ring-fence it or carve it out so it doesn't become an issue?
No, I think, I mean, we are looking at, it's not, I mean, obviously the investors who came in back in 2017, they would expect certain kind of returns before the decision is made.
But as I said in my earlier argument, I think it's not just about monetization for them. It's also about getting the right capital coming into the company to ensure their balance sheet is well managed, they can invest for growth. So I think the decision would be really taken based on the objective which we want to achieve from this exercise and not necessarily monetization as the outcome. Thanks. Adlan, you want to add?
Yeah, I think as we say, right, I mean, from our perspective as well, right, I mean, this exercise predominantly is to raise primary, right, essentially to fund our future growth as well, right?
So, and at the end of the day, I think for us, in terms of evaluating our partners as well, it's not just purely capital, but also what they bring to the table as well, like what was presented and discussed earlier. There's a question there.
Okay. There's a question at the back.
Oh, hi. This is Mengjiao from Fitch Ratings. First, thank you for the opportunity. So my first question is on the leverage target. So I think, is there any harder timeline to reach this target? Because I think last year it was stated as 2025. So I just wonder, is that still the plan to reach this leverage ratio? And no, so, yeah.
I think our plan is probably 2025, 26 is what we are looking at getting down to 2.5, but it's obviously subject to a lot of activities which we plan, which we talked about, getting new shareholders coming in, monetization of some of those assets, et cetera.
Another question is on the Edotco fundraising. Could you elaborate a bit more on what is the current status of this exercise and what is the amount the company is looking to raise? Because I think my understanding is the group is also looking to sell some minority stake in Edotco to some other strategic investors. Could you elaborate on that a bit?
Yeah. No, so I think from our status standpoint, I think we have some bidders who have shown interest. They're currently going through their due diligence for us to get the non-binding offers from them.
And that process should take probably a month, month and a half. But after that, we will have to look at what are the conditions they put in place. Based on those conditions, the execution of that will happen. So I think that's probably the timeframe we are looking at. Maybe middle of next year, we should be able to complete the transaction or second half of next year, given the different processes, activities need to be carried out here.
Are you able to share a bit more on the amount you are looking to raise from this exercise or beyond?
I think the objective is actually to, as I said earlier, to get the balance sheet in right. Honestly, I think we're looking at probably balance sheet should come down to around 3.5 net debt to EBITDA for EDOTCO. And that would be the kind of funding requirement.
But if there is someone who gives a better valuation, which allows the other shareholders to monetize, then that would be also considered here.
And sorry, just one last question. Is there any update on the XL and the Smart front discussion you can share at this current stage? Thank you.
No, I mean, as I said in my presentation earlier, we are not averse to consolidation. So we are evaluating, and it's not an easy deal if you want to conclude on that because there's clearly various moving factors which need to be kept into consideration. Specifically, valuation would be an issue. So I think we are in discussion, no denying about it, but we are nowhere close to coming into any kind of landing to move ahead with. So difficult for me to say when would that happen. Okay. Thank you.
Any other questions from the floor, or we can move to the questions on Slido?
Hi. One question from my side again on XL, Link Net. So XL has, of course, done pretty well on revenue, EBITDA growth in the recent times, but Link Net losses have been a drag on the net profit. With this deal coming through today, is that expected to accelerate in terms of profits at Link Net? Because now essentially the customers would sit in XL. So are we expecting churn to accordingly reduce at Link Net and profitability to grow for Link Net?
No. So I think two factors. One is the Link Net losses are not essentially coming out of the performance per se. It is also coming out of the fact that they are already building home passes for XL, which means they are investing into the new home passes. They are borrowing money for that.
There is an impact of depreciation and cash flow because of that. However, they've not started getting the revenue for that because revenue comes based on the home connects which Link Net or XL will get. So there is a gestation period from that perspective. So that I think is one. However, if you look at just the pure residential business of Link Net, that is still profitable. So it's not a loss-making. So that business actually goes into XL. So that's not going to get impacted. However, the model is going to be very different. So you would see Link Net making some losses initially because they will be investing into building those home passes. However, the revenue stream for them, cash flows will come at a later stage here. So after this transaction happens.
But this is obviously not going to be negative for XL because they get customers which are going to be, which are already giving profits and existing on the network of Link Net here.
Understood. So how long do we expect this to continue, like this drag on profits? Because they will essentially, they're looking to build 8 million.
So Link Net, if you look at what Kanishka presented, the overall capital requirement, both in terms of the investments which needs to be made for running is around 500 million over the next five, six years, right? And that's where we are saying we need to get new investors coming in for that purpose. So that's the capital requirement. That capital requirement is both to take care of the losses of initial phase as well as new investment for new home passes here. Understood.
The second question on ROIC greater than WACC, of course, it needs to be something that will be achieved at a company-to-company level. Are there any low-hanging fruits that you're seeing in certain companies? How to achieve that in particular?
I think we are seeing, obviously, Smart is a very strong. I mean, you saw the numbers. They deliver more than 20% ROIC, nearly 30% plus ROIC. The Robi, we are seeing a big turnaround in terms of their ability to deliver ROIC. I think we should see that improving. I think Supun talked about, even though Sri Lanka went through the negative part, but their ROIC is now pretty much close to their cost of capital.
So I think these three clearly, Edotco used to be, but because of the share investments which have been made in acquisition of the towers, that'll take a little while before they start getting new colos, new tenants coming in. I think with the improvement happening on the XL front, on the ARPU improvement as well as the overall cash improvements happening, we should see XL also going up on their ROIC. So that's a very clear focus from our perspective. But clearly, Smart, Robi, as well as Sri Lanka, I think they should be ahead of their cost of capital here.
Yeah, hi. Just one more question from me regarding the, okay, the dividend, you said MYR 0.10 per share, right, per annum. So that equates to about MYR 918 million that you need.
Obviously, that will be funded with the dividends from your OpCos as well as CelcomDigi. So I think Lila just now showed a chart of the breakdown of the sources of the dividends. But in terms of total dividends that you're expecting in FY 2023 or FY 2024, can you sort of give us an idea of how much that total dividend will be so that we could be assured that the MYR 918 million will be easily met? And also, if you could tell us the amount of interest expense at the HoldCo level, because that dividend from your OpCos and CelcomDigi will be required to fund that as well as your dividend.
Yeah. Hi, I will reply your second question first. So interest cost is about MYR 420-440 million per annum. In terms of dividends, yeah, you saw the chart just now in terms of percentage.
In terms of dividends to be received in 2023, we expect roughly about MYR 1.4 billion, roughly. Of course, subject to declaration and regulatory approvals, because some markets, we do need regulatory approvals first before they can actually repatriate out. Okay, thanks.
Okay, so perhaps we can take some questions on Slido. I'll just read them out. This is from Anonymous. So Vivek, you touched on reducing corporate functions, essentially to pare down corporate costs. Can you elaborate? Are we expecting FTE reduction, relocation of HQ?
No, I mean, I think headquarters is going to be where it is. Maybe we'll shift one building to the other building, right? So that's the only change in the headquarters, but this is where it would be. In terms of the, as I said earlier, the primary objective is not driving costs down.
Primary objective is to align ourselves as a corporate center to the new operating model, which we have put in place. That should translate into around 20% reduction in cost. And cost is not necessarily coming out of the people cost, but also a lot about the activities which are carried out in the corporate center. But in terms of the people, I think we've been constraining hiring new people in corporate centers from the beginning of the year, which has already organically reduced the headcount at the corporate center. And there are certain jobs which are getting impacted because of the new operating model. And those would actually be reduced in the coming months as far as we are concerned. So we should see the corporate center headcount coming down overall because of the two factors by around 120 to 130 headcount here. Okay.
Let's move on to the next question from Slido, also Anonymous. Does it make sense for Axiata to continue to be listed in Malaysia? Is there any plan to change this? And how do you balance this with macro challenges?
So I'll first look for recommendations. But leave aside that, I think we still have significant large shareholders which are Malaysians. So I think there is clearly rationale for us to be in Malaysia given the investor profile. But that's not something in our radar, in our thinking at the moment. I think we are very focused on what we presented in terms of execution around the portfolio and the business strategy. So that's something which we will continue to focus on. But this is not something we've really discussed, thought about. But having said that, as I said, we still have large shareholders who are Malaysians here. Okay, thanks.
Next question, which is quite interesting. Any potential opportunity with Starlink?
Maybe Thomas, you want to take that? Recent agreement we've signed.
Let's say it this way. I mean, there are plenty of opportunities in the non-terrestrial coverage domain. It's a very fluid thing. It's not just Starlink, it's Kuiper, it's direct-to-device. There are so many things going on, high-flying drones, etc. We're very actively exploring it. We are in discussions also how to build a business case out of it, which is not necessarily limited to one particular market. But certainly, Indonesia is possessing, of course, the largest opportunity, both in terms of home as well as enterprise. When it comes to, in a way, competing with fiber in densely populated areas, I don't think that any of those solutions can compete, at least not at the cost points which we see in the markets, right?
It's $10, $15 for a fiber connection. No Starlink or anybody else can compete on that. But obviously, in low populated areas, it is quite often for an opportunity. So yes, we are in advanced discussions with at least one partner, but certainly those projects are long-term in nature, right? So I think it's not yet cooked to perfection to make any announcement per se, but we are in discussion, we're exploring it. It's an interesting add-on. I would not consider it as a threat. I would not consider it as a needle mover, but more as a complementary opportunity for us.
Okay, thanks. So let's move on to another question on Slido, Anonymous. Mitsui Deal was set to value ADA at $550 million. The investment was into ADS, which also owns Boost. Does this investment not take into account the value of Boost?
No, so we restructured ADS before MidSuite came in as an investor. Boost is now directly owned by Axiata. It's no longer through ADS. The entire value is coming from the value of ADA. Having said that, MidSuite still owns some shares in ADS, which is where they have that ownership of Boost consequently because they had earlier invested in ADS. Now that's going to be something which will be carved out in future, but the valuation is entirely ADA valuation has got nothing to do with ADS because Boost has been carved out and owned directly by Axiata.
Okay, moving on. Also from Anonymous, what are the reasons for low FTTH penetration in Indonesia? Are deployment costs or affordability some of the key hurdles?
Maybe Feiruz or Dian, you want to take that question?
Okay, so the FTTH penetration is actually correct, is considerably lower compared to the neighboring countries because we are still at 15%-16% penetration. The problem why at that level is because from the supply side, actually only recently there are players that enter into the market for building this FTTH on the supply side. Actually, on the demand side is already there for this FTTH, but only I think the last two years we can see that there are a lot of contractors, installers, and so on and so forth that can fulfill the demand from the demand side. Currently, easily the market can actually fulfill the demand of building for instance, three to four million home passes per year. But like five years ago, even to build one million was not there.
So it's not because of the spending power or the ability to subscribe, but from the supply side. I hope that answers. Okay, thank you. Last question on Slido. How much is the annual operating costs at HoldCo level?
So I think Lila did show that there is one gross cost and there is one which we net cost after the recovery from the OpCos for the common services which we provide. So the recoveries are around MYR 60 million, right, Lila? So gross cost is around MYR 360 million. And as I said in our presentation with the whole operating model being changed, we should have a 20% reduction in that cost going forward.
Okay, we don't see any further questions. Maybe we want to come back to the ballroom if there's any questions from the floor.
Hi, if I may just have a follow-up question on the FTTH penetration in Indonesia. So Ibu Dian, you mentioned that just in the past two or three years, there are more contractors coming into the market to build this infrastructure. Is there any particular company you have in your mind that are contributing to this increasing supply or building capacity? Like is that a Protelindo, Tower Bersama, or any other companies you can share? Thank you.
So actually, apart from this big tower provider players such as Protelindo, Tower Bersama, and what else? The Mitratel, yeah. There are also many regional players that have a good relation with the local authority and local contractor that also provide FTTH for local communities or local server.
But currently, the one that has enough capital to do that is tower provider, such as Protelindo or Tower Bersama and Daya Mitra.
Thank you, Ibu Dian. Any last questions perhaps? I don't know, we're not. Okay, yeah, so Vivek, maybe you want to close?
Yeah, but I think first of all, thanks once again for all of you coming in person and those who are joining on virtual to spend time with us and hear our strategy and portfolio, both business and portfolio strategy going forward here. So I hope the direction what Axiata is looking at is being clearly articulated and communicated across the four and a half hours that we've spent together. I think, as I said in my first slide, that clearly we are looking at it from two lenses.
One is what is the portfolio, the five buckets, what are we required to do in each of those buckets to create value, and then building the strategy, which is the business strategy, and also looking at what are the new opportunities for us to grow, which is really the telco to techco journey. We're looking at that, how that needs to be done. Also, I think from our perspective, how do you drive portfolio optimization given those different BAU market repair, looking at partnerships, looking at value elimination, etc. So that's what we are working on. So I hope that was clear, but you can reach out to us if any further clarification, any further questions you have.
Having said that, I think we are really focused on driving, ensuring that we are able to provide the required dividend for our shareholders, grow the value of the company, and manage the balance sheet with a clear leverage levels of 2.5x net debt to EBITDA. So thank you. Thank you, everyone. And thank you, Claire and your team to organize this. Thank you very much and take care. Bye-bye.
Sorry, one last housekeeping question for those of you who drove. There is a parking validation at the foyer for MYR 10 in the foyer. Thank you.