Earnings Call: Q3 2021

Oct 21, 2021

Good afternoon, everyone, and welcome to DG's Third Quarter Financial Year 2021 Earnings Presentation. It's nice to see about 77 of guests today, and I hope you enjoy the new corporate video that we've just shared earlier. Quickly, let me introduce you DG's management team. We joined today, as you can see here on the video, it's Alban, our Chief Executive Officer Oto, our Chief Financial Officer, who is this who this is the first quarterly briefing for OTO since he joined Digi. We are also joined by Praveen, the Chief Marketing Officer and Eugene, the Chief Business Officer. And last but not least, we also have Jo Kim, the Chief Corporate Affairs Officer and Kosepen, our Chief Technology Officer. Now that's almost the entire DG Jedi for you today. Okay. So let me just give you a quick reminder. All your mic is actually muted. We will unmute it closer to the Q and A session. Alternatively, you can use the chat box if you have any technical issues or you have some questions in advance. Over to you, Alvin. You can start the presentation now. Yes. Thank you very much. Thank you very much, Christine, and good afternoon and good morning to all of you dialing in from various parts. Welcome to our 3rd quarter results. We will cover very quickly some of the key highlights, and then we'll open up, as So let's take the next slide. Thank you. Allow me to just give you a little bit of an overview of the 1st 9 months of 2021. We've basically It's been a year where there have been many lockdowns, many challenges in the pandemic, and it's still ongoing. While there are signs of improvements, We have stayed committed to ensuring that we keep focus on empowering societies and ensuring that we have the right Internet Offerings and Digital Solutions for Customers. What we have seen here is on our areas of 3 Blocks that I always introduce to all of you and on modernization, we have completed 100% new and upgraded 4 gs sites, which we have rolled out as part of Gendela. This has underscored the prioritization of investments into moving into 4 gs, which is also something that all of you would have heard in the analyst briefings from MCMC on Jumeela's plans as well. We've also then basically kept pace with the 3 gs sunset program and move everyone into 4 gs eventually by end of the year. And happy to also report that we have done quite well on our touch free operations, which is monetizing the IT systems in terms of ensuring better customer experience. On the growth side, we had a quarter which as you saw, Tesla growth increase by 25% year on year. We've also seen some good traction on Malaysian subscribers. And this was in the last quarter update, we shared a little bit of our strategy plans in this segment. So we've seen some of that. B2B continues to grow, the revenue growth here close to 4% year on year and dividend per share of SEK 0.11 in total, which is to our valued shareholders, representing 100% of dividend payout ratio. In responsible business, Jo Kim will cover some of it later, so I won't repeat. But in a nutshell, we continue to support The country recovered from the pandemic, and we also ensure that we are providing relevant services. However, I'm happy to report one new item that here on this page is that we have achieved 100% vaccination of all our retail employees, thus making it extremely safe and also ensuring that our customers can engage and seek help from On the next slide, I'll just give you some key highlights of our performance for the quarter. First of all, Q3 saw encouraging performance from service revenue. Although you would see that there was some decline in device and digital revenue. Our service revenue improved from a quarter on quarter to 0.2%. In a full year, it's still as per guidance, it is still at minus 2.3% year on year. OpEx reduction, we achieved a minus 3.5% quarter on quarter on the Our focus on efficiency continues. The lower OpEx mainly due to timing effects in sales and marketing spend, but also we had mitigated some other cost increments. EBITDA was encouraging by 6.1% quarter on quarter. PAT also then at 11.8 percent quarter on quarter improvements, reflecting a slight slightly of a recovery, I would say, on top line, but So prudent cost management and key focus on segments that we wanted to move in and continue to develop both usage on our base of customers, but also some new customers and new support based on our new portfolio. Also, we'll cover some of this later on in the slides. So we'll stick with that. When you come to blended ARPU here, you'll see In line with quarter on quarter at RMB 43, we had a good subscriber growth of 100 and Close to 150,000 subs quarter and quarter, taking out total subs close to 10,400,000. Postpaid continues with good acquisition, and we'll touch on that when it comes to consumer. And B2B, as I mentioned, also not just revenue growth, but also subscriber growth quarter on quarter. And the data network, which is the network part that I touched on and also talk on the next slide, continues to show that Malaysian users' first choice of connectivity on Internet remains on mobile with a 22.5 gig usage. Next slide. On the network, I want to talk a little bit about what have we done to ensure that while there is pent up demand and more requirements from our customers, how do we actually serve our customers as good as possible to ensure that they have a great experience. It's high quality and performance on this area. We're leaning On the network from a consistency and speed perspective, that's been now a couple of quarters we've been able to do that. Stable network performance Despite the growth, I mean, the growth is good, but we need to make sure that we've been upgrading at the same pace so that customers can have good experience. From a national perspective on digitization, we continue to deploy On the network, as I mentioned earlier, so in Jardela, 100% of greenfield sites from a target perspective and brownfield targets were met with Jardela, and we are on track to meet targets under the USP program as well. On 4 gs LTE and LTE Advanced coverage, that takes us then to 92% of 4 gs LTE and 75% on LTE A. On fiber, we are still continuing that focus. It has been a bit slower this year. However, we are now close to over 10,000 20 meters of fiber. Spectrum efficiency continued to drive network experience, and we continue to focus on how we actually serve our customers. On the 4 gs integration in existing 3 gs slides, that's been very much as for the plan. Praveen, I'm going to hand over to you to talk a little bit about what does this mean from a consumer and what are the activities that we did from the restaurant opening. Praveen, please. Hi, good afternoon. On the consumer side for Q3, our efforts were anchored in 3 specific areas. The first one was on driving quality gross adds across postpaid, prepaid and the fiber business. A lot of the efforts here were driven by base management activities using our targeted marketing platform to maintain the current base and also work on driving ARPU upwards. We have introduced several bundling Our deals in the market in terms of promotions on prepaid as well as Postpaid and fiber, which we've mentioned for the last couple of quarters, we've been very focused on the bundling activities there. Then we've also made introductions into segments where we believe there are future opportunities for growth. These are specifically on the youth segment. We've introduced a packaged past earlier, as well as Refreshed offers in the migrant segment through our proposition call raja combo. And then the second pillar is on the Clear focus on retailing efforts, both in terms of efforts within key market centers as well as outside in secondary towns. We're enabling more of our retailers to be digitized on the app as well as submitting orders online during the lockdown period. Earlier on, as you entered this call, you've seen a video about our fiber fleet. So we've been able to deploy more people on ground to specific areas where there are ports to also drive up fiber installations. And this goes hand in hand with continuous modernization of the channels, which is perfect opportunity for us now as the market reopens. Then on the digital side, we continue to emphasize efforts on MyDigi, Our targeted marketing in there and increasing billing convenience. So we've done direct integrations to the touch and go app in the last quarter, as well as several auto billing promotions for the postpaid customers. This as we Close the quarter, we've of course introduced several new promotions, which you also see on the right hand side of the screen. This is the queue for me to now hand over to Eugene to give you a perspective on B2B. Thank you, Praveen. In quarter 3, on the B2B side, we are able to grow revenue plus 9.0 percent year on year and also to grow overall B2B subscribers by Plus 7.4 percent year on year. This is like a result of the healthy growth in both our core mobile, now also like with the FCTO acquisition and the opportunity also to up So the SME segments into digital, leveraging the government's SME Penchana program, Right. For large enterprises, like DG B2B has, in Q3, accelerated the expansion of our new book, securing new contracts in FSI Financial Services Institutions in Oil and Gas and also in Manufacturing sectors. Finally, in parallel to the focus on core growth of the business, Digi has also dialed our brand building campaigns for DTB2B through digital, radio and also printed media. We've also further developed strategic and key partnerships in order to further And reach into the ecosystem, including with Astro, with Touch and Go, with Oracle NetSuite and also with Cisco. If I may, I'll pass over to Thaim to the next presenter. Thank you, Eugene. Joakim here on responsible business. Just a quick update on some of our key efforts over the last quarter. As Alvar mentioned at the start, we have been continuing our efforts As part of the industry as well to drive society's recovery during the post COVID recovery period. As I would mention as well, prioritizing safety of our employees and all stakeholders has been of key importance to us. We're now pleased to note that we have 100% vaccinated all our frontliners, the retail store to enable us to serve our customers a little bit better. Then a few words on some support for government initiative. We've continued our COVID-nineteen aid to support Mercy Malaysia deliver medical and vaccination needs across the country. We are continuing, of course, now more than a year, and government initiatives such as the recent package from Arja, package Paranty, Kolongam Malaysia and Maybarkati to improve Internet accessibility and affordability from all. On the diversity and ESG front, we have achieved a higher MSCI CI ESG rating to AA recently, and this highlights the ongoing efforts to also drive leadership in ESG and sustainability practices. Recently, we've also become a signatory to UN Women's Empowerment Principles and a member of the 30% club in Malaysia to strengthen our corporate leadership on quality and inclusion. On future skills and digital safety, these are our flagship We continue to partner with the Ministry of Education, UNICEF and MTech to boost digital encoding skills recently through our bullet code initiatives as well. We have launched our first Yellow Heart Life under COVID-nineteen for children online. The Values and Challenges surveyor, we believe it's an important insight into the life of a large segment of our users. We hope this will be useful for a range of stakeholders in Malaysia as well to understand how Malaysian school children generally are coping with new digital lifestyles during this pandemic, including how it's affecting their own literacy and resilience. And then throughout the year, there are ongoing webinars and initiatives on Internet safety for Schoolchildren and university students. Finally, on an important topic on climate, we recently held And DG was a foremost participant in the telco roundtable on climate change with 6 telco CEOs in partnership with Climate Governance Malaysia and the CEO of Action Network, Ritu Vigi's CEO, also leads. Thank you. And I will now hand over to Otto, CFO for the financials. Otto? Yes. Good morning, everybody. Good afternoon. I have met some of you already, and I look forward to meeting more of you going forward. So today, I will walk you through in a little bit more detail on the 3rd quarter results and also present to you a revised outlook. Before I start, some of you may have noticed that we have started to disclose a fact sheet where you can find all key financial and other KPIs information in one place. I hope you find that useful. Let me start with this slide showing the development of subs and ARPU. And I'm very pleased to see the good development of the subscriber base. After several quarters of decline, we now had an increase of 148,000 subs in the quarter. There are many factors behind is increased. But we clearly see that the more focused strategy and stronger focus on which segment to prioritize and also the simplification and the strengthening of our product structure is giving good results. The stronger focus is also allowing us to align much better the whole chain from distribution to marketing. And you can see that on the left hand side of the graph, where you can see that the postpaid base has been growing consistently the last 5 quarters. On the prepaid base, you can see that we have declined from SEK 7,66,000,000 to SEK 7,111,000 over the last quarter. But in the last quarter, as you can see, we had an increase of 86,000,000 subs. And this is due to the decision we made to exit the low end migrant segment, which is high rotationable, high churn and focus on the higher end of the market. And this And underneath this decline, we have actually had, at the same time, consistent growth of our Malaysian custom prepaid customer base. So today, we have a much Higher quality of the customer base. And that you can see on the right hand side of the graph. And if you if I can start with the yellow line at the bottom, which is The prepaid ARPU, you can see it's stable and increasing, and that is due to the improvement of the quality of the customer base. If I included a few more quarters at the beginning, you can actually see it has increased from 28%, 29% to 34% over the last period. On the postpaid ARPU, you can see there is some pressure on the postpaid ARPU, but it's quite stable. Part of the decline, and that is both prepaid and postpaid, is also due to voice and less roaming now in the COVID area. In total, the blended ARPU, you can see that it's increasing and resilient, and that is due to the improved quality of the customer base with constantly increasing postpaid customer base with higher ARPU and an increased quality of the prepaid base. Next page, please. And here, you can see in this page, you can see the development in terms of core service revenue. So if I start with the bottom line, you can see what I described when we decided to exit the migrant segment. We had some Quite big declines at the beginning. You can see down 7%, 8% at the beginning. But we have seen that slowly we actually have recovered. And now we can see the last two quarters, the prepaid core revenue has actually increased. The same development is on also on the postpaid revenue, but not so dramatic, where we've had a very Stable increase quarter on quarter of revenue, also the last two quarters with growth last quarter, 1.6 percent growth in postpaid revenue. The top line is the total, and you can see that the percentages do not fully add up. Here, I have also included the digital revenue, which has gone down. I will explain that to the on the next page. But it's comforting and it's good to see that the consistent execution of our strategy is showing results quarter by quarter and that we have now had growth in 2 quarters in a row. Next page, please. Yes. I will not comment again on the prepaid and postpaid segment, but let me comment a little bit on the digital Revenue, which you can see, has decreased from high 80s at the peak down to SEK 65,000,000 this year. This is a clear strategy to reduce To avoid excessive gaming on our own platform, we have introduced limits on reloads on the elements that we can control on our platform. However, we are not obviously able to control What consumers are doing on their own, so they have other ways to do that, but we want to reduce that revenue. We think this revenue level will stay around this relatively more stable going forward. You can also see that handset and hardware revenue has been high over the last That is obviously related to PRAATIN. And good High hardware revenue is good because we mostly sell hardware with bundles where consumers stay with us for a longer time. But we think that this the hardware will go a little bit back to the previous level going forward. Next page, please. So over to the cost side. You can see we've had a pretty nice decrease of cost in the last Quarter 10% or I think SEK 88,000,000. So let me explain that in a little bit more detail. On the COGS side, that's the main bulk of the reduction is coming from the COGS, SEK 74,000,000. That consists of mainly of 3 elements. The first one is what I described previously, the high volume of hardware and or the declining volume in the last quarter of hardware and digital revenue. And as These segments typically have pretty low margins. So when revenue is going down on those segments, that translates directly to lower COGS as well. In addition to that, there has been lower traffic on voice and roaming due to COVID-nineteen. And then finally, there was an adjustment in the 2nd quarter between revenue and COGS, Net effect, 0, but you can that has also some effect. So the COGS level you can see hit the total cost level you can see around COGS remains relatively stable if we look at over the whole period. We also had a decrease in OpEx of SEK 14,000,000. And you can see the Q on Q development here on the right hand side of the graph. Some of the decrease is related to timing and activity level. During this COVID period, most of our employees have been working from home, and some activities are obviously lower for that reason, for example, building cost and others. So some cost reduction is coming from the lower activity. Some also the sales and marketing costs are timing so that of spending. With regard to the increase in Of course, that is more a technical thing. Our headcount is stable, so we don't to see any increase in underlying personnel costs. We also see a small increase in doubtful debt allowance and that is also related to the higher volume the much higher volume in the recent quarter of handset sales volume. Next page, please. So the development that I Explained on revenue and cost side, you can see here is translating to a nice increase of EBITDA increasing by NOK 45,000,000 to NOK 788,000,000, which is a margin of 49.7%. If I know also on a normalized basis, the increase Q on Q is Both Q on Q and year on year on the EBITDA is more than 3%. On the right hand side, you see the development of depreciation and amortization. You can see that there has been a slight increase in the last two quarters. That's mainly due to two reasons. 1, we have somehow higher ROU cost And the second one is accelerated depreciation related to the 3 gs sunset. As you know, we will sunset our 3 gs at the end of the year. So that effect will stop at the end of Q4. Next page, please. Yes. For the same reason as the increase in EBITDA, we see that the good performance is flowing through all the way to the gross profit tax with an increase of NOK 33,000,000, I think 12 percent to NOK 313,000,000 in the quarter, and that's a margin of 19.8%. We can also see that if I take the yellow bars here on year on a normalized basis, we've also had an increase. And on the right hand side, you see the same reasons for the development year on this is year on year where on the operational side, higher revenue and lower COGS and OpEx is leading to an increase. And then we had quite a high wall of adjustment in the Q3 last year, which is now has Then a negative. So normalized, we actually also have increased the strong quarter of profit after tax. Next stage, please. If I look at our investment activity, we actually have a very high level regarding investments. You don't see that here in this quarter, But we have invested SEK 170,000,000 to expand and improve our network and also of IT Systems. We do foresee an increase in the next quarter and into to 2022. I will explain more on that in the coming slides. But on the right hand side, You can see that the improvement of EBITDA and The lower investment is leading to a very good development of operating cash flow standing at EUR 618,000,000 for the quarter and 39%. Next, please. So coming to the outlook for the year. We are now at the end of the COVID period, and we go into, hopefully, a good much better For everybody with society opening up and much more activity, economic activity around. And that represents both upsides and risk. In general, We are positive, obviously, to this development. And we with regard to the impact on our business, We maintain our guiding with regard to service revenue from low to single digit decline. On the EBITDA level, the improved performance In the last quarter, we reflect that in our guiding. So we operate the guiding a notch from mid single digit decline to low to mid single digit decline. What I explained on the CapEx to sales revenue, the previous guiding was 14% to 15%. We stand at 11% today. We believe that we will the guiding for the end of the year is 13% to 14%. So as I explained, there is an high activity with expanding network coverage and quality around as a country, also related to the government's Gendela projects. So there will be a peak in the 4th quarter. The reason for guiding down is not that we are cutting CapEx, but it's rather a delay in So increased level going into 2022. However, we don't see an increase in the underlying level of CapEx going forward. So this is just variations between the quarters. Next please. So if I can summarize the key messages from this 3rd quarter is that we continue to see good results from and execution of our strategy, which allows us to maintain a positive top line momentum and to continue the modernization pace of our operations. The second Point is that we also continue to support society during this very difficult COVID period. We have delivered 100 percent of the Gendela program with investments to improve and and the network of the country, also offering, by the way, higher data capacities, also offering 1 gigabyte extra per day to all our customers for productivity. For example, students needing to study, they can do that which they have 1 gig free every day to use for that. And last but not least, we have also been able to in this difficult period while keeping all our staff and our customers safe. And as Alban said at the beginning, we are now at 100% vaccination rate among all our Frontline employees. Last point is that we also managed to maintain our leading network position. And I think it was actually the 5th time in a row where we land as the leading in Malaysia with regard to download speed. And this we do through very clever investments from our A7 So that sums up my presentation today. So we are ready to take questions. Yes, Otto, you might have to mute Otto. Thank you. Okay. So yes, please use raise your hand function and If you can introduce yourself and you can begin now. Can I see let me just see, I see some hands? We will start with Ranjan. Over to you, Ranjan from JPMorgan and then Phong. Hi, good afternoon. It's Ranjan from JP Morgan. Two questions from my side. Firstly, For the 5 gs build out in Malaysia, if you can just share like what the update is in the development of 5 gs And when do you think services can commence? The second question is on competition. Have you seen the stabilization of price points? Or are you still seeing some aggressive behavior in the market to gain market share? Thank you. Can we have Khozaven first and then Praveen for second question? Thank you. Yes. So Rajiv, thanks for the question. On the 5 gs build out, we are working very closely with DNBs. And of course, as you know, the build out itself is being carried out by DNB. What we know is that we are on track to launch in Putrajaya, Syprajaya and KL by end of the year. Yes. And Ranjan, on the question on competition and pricing in the market. If you refer to what we are doing on prepaid and postpaid, we believe we are at very competitive prices today. The market is somewhat, as you know, on prepaid is mostly unlimited at RM35. Our products come in at RM30 and RM35 today on prepaid And that has been there for several quarters already. On postpaid, similarly, We have not been doing any you don't see us throwing prices at this point, very competitive prices in the market Can I thank you for that? Can I just have a quick follow-up? On the 5 gs side, if you're also expecting the launch by the end of the year, Have there already been wholesale agreements in place? Should we expect 5 gs planned in the market before the year end? Yes, Rajin. Hi, Arun. Thanks for the question. So that's still in progress. So as per the last update, The technical and the commercial discussions are still ongoing with DNB and Industry. So we will come back to the analysts and to you once we have a little bit more finalization of that. As you know, industry, BNB and MCMC are still in their discussions. Okay. Got it. Thank you. Got it. That's good. Thank you, Ranjan. Now over to you, Phong, please. Hi, good afternoon guys. Phong from CIMB. Thank you so much for the call. Three questions from me. Firstly, I wanted to ask about the So we have had a couple of quarters, right, where we are seeing a very positive traction here. I wanted to again ask where are these Subscribers coming from, especially looking at the 3rd quarter numbers, are these new, new subscribers that are coming in due to the mid-nineteen work from home, study from home requirements? Or are you Getting these subscribers from other telcos? And if so, which segments or geographical areas are they coming from? That's question number 1. Number 2, can you talk a bit about the traction that you've seen in the fiber broadband business, whether more subscriptions have been mostly coming through The bundles of fiber and mobile bundles. And are there any visible evidence, right, That getting into the home has enabled Digi to gain new mobile subs from traditionally non Digi households. That's question number 2. And the third question, which is a little bit looking a little bit more into the medium to longer term, Once we get past the meeting the GENDELA targets, my question is, will our CapEx drop to maintenance levels for the 4 gs network or do you foresee continued CapEx to upgrade capacity and continue to evolve the 4 gs RAN technology in the coming years. Those are my 3 questions. Thank you. Hi, Phung, Praveen here. I will take the first two questions. On the Malaysian subs growth, I will cover the perspective on both prepaid and postpaid. On prepaid, the efforts in the last few quarters have been, On one hand, on the existing base, we have been driving the active usage. So we've been keeping the number of inactive users also at a lower level, and this is driven a lot by the targeted marketing campaigns that we can do. So that's on the base management activities in prepaid. At the same time, we have been increasing our efforts on prepaid retail. So the ability to go Outside of key market centers, areas where we have ample growth opportunities, for example, like The East Coast of Malaysia and the northern parts of Malaysia, we're increasing the retail touch points in order to to drive new customers. Of course, the majority of these new customers tend to buy a new SIM or a new number, But we also have a percentage that we will switch from other telcos. And there, we don't see any regular patterns today. That is on the prepaid front. I've also mentioned that we have put in additional efforts to drive our growth in the youth segment, which is a big area of opportunity for us and we will continue to do that. In the Q3 specifically for prepaid as well, we did see Attention on the Jarengan Pre Hapin program, and we did our best there to promote it to our existing base as well as encourage other customers from elsewhere to choose PG. On the postpaid side, We continuously aim to be net adds positive quarter on quarter. A lot of this is driven by our family propositions today. So these are customers who will choose a new line or port into us. And it is a combination family lines as well as our budget device bundles and the high end phone freedom proposition. So that's a bit of color and perspective on the subs growth, Malaysian subs growth. On the question on fiber, we have mentioned before, our focus is promoting fiber to our postpaid base. So we have just over 3,000,000 customers there, and we are promoting it to them because the offer the main proposition that it is really unlocked for the postpaid pace. So to your Question then, the follow-up question on, is this predominantly from the postpaid base? The short answer is yes, because that is our focus and we have mentioned that before. We do not at this point have any New evidence on the second question of whether this is attracting non DG households because our focus is on upselling to our base bus. Okay. 3rd question, what's your first, Vimi? Yes. On the CapEx development going forward. So you have to divide the CapEx into several categories. So if you take the network CapEx and the core IT CapEx to cater for more traffic. So with DNB, over time, yes, CapEx 4 gs CapEx will go down. But there is still we're still working with improving the 4 gs. And as you know, 4 gs will still remain an important carrier for a while, so we will continue to invest in 4 gs and improve 4 gs. And then on the core IT side to cater for all the traffic that comes from the radio, obviously, we will continue to invest in radio to meet the expected traffic increase. So this will take a while. And Keesevan, perhaps you want to comment on this? Yes. No, Otto, spot on. Actually, we do see the traffic for 4 gs will continue to grow over the next 2 to 3 years. And of course, with the coming in of DNB, we will monitor that closely to see how the traffic shifts before we Decide on further investments. So you're right, Otto. That will be closely monitored. And the investments then also, as Otto mentioned, will shift towards More of the IT tracks given that new use cases will be coming up with 5 gs. So That's how we see it at this point in time, Paul. Understood. Thank you so much. Can I just maybe put in one more question In regards to the migration of the 3 gs subscribers over to 4 gs, you mentioned that there's remaining 300 1,000 subscribers? Do we expect to incur any significant costs to do this migration? I mean, do these subscribers have 4 gs phones and 4 gs capable SIM cards already in their hands? Okay. I'll take that or I can comment Yes, I'll take that. I think the 4 gs SIM cards, we are proactively swapping out anybody who has All SIM cards. So we don't expect that to be a cost driver for us for this base. In terms of Our offers in the market, we are promoting the current offers that we have. So we have attractive phone bundle programs on postpaid, and that's where we try to drive these customers to choose it. The majority of these customers who are In this group of the 300,000 currently very low data usage very low in terms of data usage. So this will be an ongoing effort for us. Understood. Thank you so much, Praveen, OTO and Tessa Wang. Thank you. Now can I hand over to Alex from Ambank, please? Thanks, Christine. I've got two questions. One is regarding the postpaid ARPU trajectory. Given the fact that you have family plans coming up and you've got a Calvarga program also that's being introduced by the government, Do you see the trajectory moving downwards for the postpaid segment? That's my first one. And the second one is regarding the merger with Cellcom. Is there any updates on that? We don't see very much news lately. Just wondering, are there any issues, any hurdles that you may want to give us a bit of insight on? Yes. Hi, Alex. I will take the first question on the postpaid segment and the ARPU trajectory. A few quarters ago, we talked about the introduction of a new postpaid portfolio. That postpaid portfolio, we have brought in the value proposition of the principal lines at RM60, And the family line start from ringgit and it goes upwards, so ringgit, ringgit and ringgit. We have been successful in the last few quarters in attracting the family unit to us. Families of, on average, about 2 to 3 lines joining us. And of course, they start off the family line proposition at about I believe that it's a matter of time before some of this stabilizes. We do not foresee at this point that we will be pushing for lower ARPU. We are aiming for consistently being net adds positive every quarter at the moment. And that is the trajectory we are aiming for. The family proposition also provides ample opportunity for us longer term to drive some of these customers upwards. As their needs increase, we're able to also increase their service commitments with us and potentially even move them to their own dedicated principal lines at some point. Yes, but Praveen, given the fact that the packages are lower per user, I mean, on a family line, The I mean, could you give us a bit of idea on what is the percentage overall to your postpaid subscriber base for all the net adds. And surely with the lower package plot points surely on At certain point, the average pricing for that segment is will be moving downwards. Would I be right in assuming that? Today, we don't disclose the family composition and the percentages. Of course, the law of numbers, yes, you're absolutely right if you say that we are only crossing all family lines, but that's not the case. We are very active on the principal proposition. We are very disciplined on our principal proposition at RM60 and above, and that's where we see the majority of our take up at this point. Okay. Thanks. Okay. With regard to the merger, the work on the merger goes on as planned. As you know, it's these kind of processes take time and we hope we think we're hopeful that we will Meet the deadlines that we indicate have indicated previously with approvals and closing towards the Q2 Next year. Okay. Thank you very much. Thanks, Alex. Thank you, Alex. I think, Phuong, do you have follow-up questions? If you do, please go ahead. No, I think I yes, I think I just left my hands up. But can I just add in one more question? With regards to the student package of RM30 for 20 gigs over 3 months, I think you guys have just recently launched and that's going to be valid till April next year. What should we expect in terms of the earnings impact? Is it going to be positive or negative? Or is it not going to be or negative? Or is it not going to be very substantial? Praveen, you first and I can add on. Sure. Pong, sorry, some hesitation on who will take the question. But let me start with at least how we are where we see it. For us, I think we see lots of opportunity to increase our youth segment market share. We see that opportunity, especially even for those below 20 years old. So this is on one hand, it is an industry standard offer. All operators are providing the same exact offer. Sacked offer. But for us, we see that it could be an opportunity also to get into a segment that Maybe we don't have a large market share. The proposition today requires that you have a prepaid next So you must buy a SIM with us and then you can add this on top. It gives you a 90 day validity, but you can add As much data as you want as you go. At this point, we don't see this making any adverse impact on the overall composition of our customers. Yes. So maybe just to add, Praveen covered all the right points. I think from a consumer perspective, I think this is also a segment that the government is trying to help in the post pandemic period. And therefore, I think when the industry looked at this, This made sense for parents to also enable their kids to connect should there be a hybrid model from school and study from home and everything else. So this was a perfect timing to do that. And then as Praveen talked about, from a practical business point of view, it's also a segment that we want to look at and it continuously Looked at it before anyway, SDG, as you know. So it was good for us. Okay, understood. Thank you so much, Alban and Ravi. Thank you. Thank you. Now we have Izzati from Macquarie, please. Much better upgrade version of prem. Hi, Isati. Hello. Can you guys hear me? Yes. All right. Just one question for me for Eugene, I guess. Just wanted to understand on the B2B side of the business. Going into Q4, do you guys expect the traction will also be higher coming from the enterprises? And how is the conversation going with the businesses? Like you see traction coming from the larger corporations going into like 4th Quarter or more so from the SME side? Because I guess from the SME side, they are barely surviving. There are so many news flow on them trying to pick up the pace. Survivability is the key concern. So which segment you guys will be focusing more, I guess, in the 4th quarter? Hi, Zati. Thanks for the question. I think I will not make any speculation except to say that in quarter 4, I think as what Otto has said earlier, We see that the earlier restrictions due to COVID has basically like been lifted. So you know like SME and in the market, I think SMEs are returning back to the office. So there's a lot more opportunities for us now to engage the SMEs. So a lot of the discussions that were postponed previously due to some of these restrictions actually is no longer Present will no longer be as stuffed in quarter 4 compared to quarter 3. What we are also seeing among the large enterprises is that they are also like in the process of initiating relatively big digitalization projects or in order or larger what we call business solution projects. You definitely see that in some of the key sectors that we are part of, which includes basically the banks, the oil and gas and also some of the manufacturing clusters. Okay. All right. Thanks. Thank you, Sati and Eugene. Now I open to the floor if there's any more questions from anyone else. Does it look like it, Kristi? It's very good. Yes, this is very good. Now thank you so much everyone for tuning in. And as usual, you can actually reach out to me if you have any I have also pasted the link to our website for quarterly financial results, which includes the fact sheet that we have published this quarter. Thank you, all presenter, and I see you all next quarter. Happy to Pavali. Thanks, everyone. Take care. Thanks for dialing in. Take care, everybody.