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I'm in charge of investor relations. Let me introduce my colleagues. Our main spokespersons today are Aziz Aluthman Fakhroo, Managing Director and CEO of Ooredoo Group, and Abdulla Al Zaman, Group CFO. We are also joined by René Werner, our Chief Strategy Officer, and Eyas Assaf, the Deputy CFO. The presentation begins with our strategy vision, followed by key financial highlights and consolidated results presented by our Group CEO, Aziz. The OPCO section will be covered by our Group CFO, Abdulla. We will keep the presentation short to allow sufficient time for your questions. The presentation is available on our website at ooredoo.com, as well as on this webcast. The recording and transcription of the session has started now, so by attending this meeting, you consent to be included in that. Please do note the disclaimer on slide number two. To begin, I hand over to Aziz.
Perfect. Good morning, everyone, and thank you for being with us for these Q2 results as well as first half results. As Andreas mentioned and following the same presentation structure as last quarter, we'll give you a quick highlight of our strategic pillar. Just to recap, to repeat, we have five strategic pillar for this year. One is value creating portfolio. The other one is excellence in customer experience, strengthening the core, evolving the core, and then people. If you remember last quarter, we took a quick snapshot into value creating portfolio with our FinTech MFS business. Today, something which is actually extremely important and a change of mindset, we're actually focusing a bit on customer experience. Historically, Ooredoo as a whole has had a general mindset as what I would qualify an incumbent approach with a technology-first mindset.
This year is a clear shift where we're really positioning as customer experience and customer first, mindset. It's not just saying it's really implementing it. One of the first step we've done is we've implemented, voice of the customer monitoring, tracking, and unified KPIs across every single OPCO, and that is a first. We've done this in partnership with a leading company and service, Qualtrics. We've also historically been measuring, CSAT across 7 of our OPCOs. As stated, as of today, in 2 OPCOs, we're ranked number 1, in 4 OPCOs, we're ranked number 2, and in 1 OPCO, we're ranked number 3. It's a decent picture. Our goal, our stated goal is to be number 1 in customer experience in all markets we operate in. As I said, it's really a strong mandate from the top and embraced by the whole management.
As a reflection of this, actually, CX targets and KPIs are implemented in all scorecards of the management of each OPCOs and as well as the group. They actually represent 15% of the total weighting. This has already yielded fruits. If we look between the beginning of the year to the first half, the last CSAT measurement, we've seen significant improvement to general improvement in six out of seven OPCOs. We're very happy with this. Again, we'll do a deeper dive into our customer experience normally at the Capital Markets Day. This slide. Yeah, perfect. Financial achievements. We're very happy to continue on the very strong performance we've been having for the last now 18 months. We're seeing growth in revenue of 4% year-on-year.
We're seeing EBITDA growth of 2% year-on-year at nearly QAR 4.5 billion. We're seeing EBITDA margins stable at 41% and a CapEx intensity which is at 9%. Free cash flows are up 10% and net profit is up 43%. I'll dive in a bit more detail for each of these sections. Just to recapitulate, this is pro forma. As pro forma, as you remember, at the beginning of this year, we merged our Indosat operation. Now it's called IOH. It's held as a joint venture company. As pro forma, we exclude it from the comparison year-on-year. We can go to the next slide. These are the actual numbers in terms of performance compared to last year.
What you will see is a significant drop in revenue and in EBITDA, and this is due to the fact that last year we used to consolidate what was our second largest operation, which is Indosat. In terms of Q2, it's the same trend as for the first half. Revenue is up 3% year-on-year for Q2 alone. EBITDA is up 2% for Q2 year-on-year alone. EBITDA margin, again, is unchanged. CapEx intensity is minus three points at 11%. Free cash flow is up 13%. Net profit is up 37%. Our net debt to EBITDA is stable at 1.3x, and our customer base is at 55 million.
We'll touch a bit more on that, -6%. This is the detailed breakdown which we've been providing everyone recently. What you see is the general pro forma performance of our revenue. What you will note is that in every single operation in local currency, we're actually up and have experienced growth in local currency in every single market. Actually, Algeria was up by 4% and Tunisia was up by 1%. What we have is a slight drop in actually Qatari riyals for both Algeria and Tunisia, and this is driven mainly by depreciation of the currency in these respective market. Group revenues, as mentioned before, have increased by 3% for the second quarter. In the other bucket, what you see is an increase versus last year.
This is mainly driven by our subsidiary called Starlink, which is held by Ooredoo Qatar, which is a device retail and equipment business. The main growth across all OPCOs is coming from mobile data. Mobile data has grown by 12% across the group. Thank you. Same picture in terms of EBITDA. We've seen improvement across most of the OPCOs. Tunisia and Algeria are still currently impacted by just currency. We see also a slight underperformance in Iraq. This is mainly due to the cost of energy. Energy has gone up by 14%. I'd like to remind you that Iraq doesn't have a fully sustainable grid, so a lot of our equipment is powered by diesel generator, and therefore we are quite sensitive to fuel cost in this.
There's also a bit of additional spending for the World Cup preparation in Qatar. This is one-off spending. Just as a reminder, Qatar is a country with a population around 2.7 million people. Our network is generally geared for that kind of capacity. For a one-month spike, we will have visitors from 1 to 1.5 million people. This is a significant strain on our network. Therefore, we had to put in place additional redundancy to ensure that we can deliver an exceptional performance for that event. Next slide. Here we decided to show you a bit more breakdown, given that you've asked many question on what are the adjustments we're doing in terms of normalization.
If we look at first half 2022 reported versus first half 2022 normalized, we have an adjustment of QAR 97 million. This is FX. We have a positive adjustment from a data center sale gain in Indonesia of QAR 245 million. This explains the adjustment of -QAR 148 million for the first half of this year. If we look at last year, the adjustments we had, we had an impairment loss of Myanmar. As a reminder, we took a $750 million write-off, approximately. We had an FX impact of QAR 545 million across all operations and a one-off gain from the tower sales Indonesia, which gave us a normalized H1 QAR 930 million net profit.
Now if we go to a comparison, what we see from a normalized standpoint is we've grown our net profit by 43%. This is mainly driven by a reduction in depreciation, given the total write-off of Myanmar last year. That accounted for close to QAR 235 million improvement in net profit. We saw that we're showing you here the bridge for the adjustment from Q2 reported versus Q2 normalized. FX represented QAR 75 million. The data centers, which has recorded this quarter QAR 245 million one-off gain. That brings us from QAR 816 million to QAR 649 million. When we look at 2021, the adjustments we did was the impairment, again, was taken in Q2 for Myanmar.
FX impact for that quarter only represented QAR 281 million, and the tower sales happened in Q2 of a one-off gain of QAR 1 billion. We had a normalized net income of QAR 472 million. Now if we compare normalized to normalized, it's a 37% gain. Again, the majority of the uplift is coming from the reduction in depreciation and amortization, mainly from Myanmar. In terms of pro forma CapEx, we're in line with our guidance. Our CapEx is currently actually slightly lower, and this is due to seasonality. A lot of the CapEx happens in second half of the year, but we're still in line with our target. What you'll see is we have two operations which are significantly increasing in CapEx versus last year. One is Palestine and the other one is Algeria.
Both is driven mainly by the same thing. It was orders of last year due to customs, and import and logistics strains, which were shifted from last year to this year. What you will always also see is in Iraq, Oman, and Kuwait, a significant drop in CapEx versus last year. Iraq, as you remember, we launched 4G at the beginning of this year. So last year we had a significant ramp-up for 4G equipment. Kuwait and Oman had quite a significant 5G ramp-up, and Oman had a one-off, Musandam project, which is a data center last year. That explains the general reduction. Free cash flows in line with both, top line growth and CapEx. What you see is we're increasing by 10% our free cash flows.
Free cash flows are up in all operations except again, Tunisia and Algeria, and this is mainly driven due to the currency depreciation and Palestine, which has a slightly negative free cash flow due to the CapEx profile which we've explained before. Customer base. Our customer base is actually 6%. The main driver to the 6% is a 5.5 million drop in customer base in Myanmar. This is due to a couple of instances. As you remember, there was some political instability and a coup d'état, there. The regime has installed a $11 tax for recharges, which has driven throughout all operators a significant drop in subscribers. It's a market where people used to dual SIM, triple SIM.
That new tax has driven people to reduce the number of SIMs they're using, and therefore there's a 5.5 million drop in customer base. That being said, ARPU has increased respectively in Myanmar. Tunisia, what we're seeing is a 340,000 drop in subscriber base, and that's from a cleanup of our subscriber base of idle subscribers and a rectification. All other markets we've experienced growth in our subscriber base. Just as a note, if we add our Indonesia subscriber base, we're actually at close to 150 million total subscribers. Just as group results, we reiterate our guidance. Given the outperformance for the first half, you might find our guidance conservative. We're confident that we'll probably reach the upper hand of our guidance.
The reasons why we're keeping the guidance in terms of revenue and EBITDA similar and not adjusting are quite a few uncertainties in the markets we operate. One is currency, and the other one is inflation in terms of fuel and energy costs. CapEx, we're confident that we'll hit probably the lower to mid end of our guidance. For Indonesia, we advise you to go and see the detailed presentation of our IOH performance. The general statement is that the merger is going extremely well, and we're on track to deliver the synergies and the performance that we guided to at the beginning of the merger, and we're very happy with the performance of IOH. We invite you to go and see their pre results presentations, which are happening tomorrow, I guess.
That's right.
Exactly. Debt profile. What we can see is our debt profile hasn't changed. We still have a very strong cash position, a very low net debt to EBITDA with 1.3x. I think in the current environment, the key area of focus is what's the amount of variable rate debt which we have versus the amount of fixed debt. What you'll see is that 86% of our debt profile is fixed. Only 14% is floating, and that's nearly mitigated by the cash reserves we have, which also benefit from higher deposit rates as rates increase. I think this slide is self-explanatory. Now I'll hand over to Abdulla Al Zaman, who will get you through a detailed review of each OPCO's performance. Abdulla Al Zaman, please share.
Thanks, Aziz, and good afternoon, everyone, and thank you for being here today. I will now review the first half quarter two results for all our operations. I will start with Ooredoo Qatar. First half of 2022 revenue grew by 3% year-on-year, mainly due to mobile and fixed service revenue up by 5%. A slight drop in EBITDA, driven by sponsorship activity for the World Cup. Healthy EBITDA margin at the rate of 51% and very good customer numbers stood at 3.2 million, which is 5% year-on-year growth. Economic benefit from higher gas prices, population up 7% also year-on-year. World Cup year expected between 1-1.5 million visitors for the tournament. Kuwait, strong growth, 13% year-on-year on revenue, driven mainly by mobile data and business and higher equipment sales also.
EBITDA increased by approximately 17%, driven by higher revenue. EBITDA margin increased to 31% in quarter two of 2022 due to higher revenue and lower OpEx. Overall, economic outlook improving with higher oil prices and easing of travel restrictions or removal of the travel restrictions. Customer base reached 2.6 million, 6% year-on-year growth also. On the other hand, there is a new MVNO, Virgin Mobile launched on 25th of May, with a new focus on young segment and offer more value in terms of telecom benefits premium numbers. Market share in the last two months is almost 0.1%, approximately. Algeria reported revenue year-on-year decrease in Q2 due to currency depreciation of approximately 7%, as is mentioned earlier. Revenue dropped by 3% in Q2 and EBITDA by 1% year-on-year in Q2.
Local currency revenue and EBITDA increased by 4% and 6% year-on-year, driven by higher mobile revenue data. Customer number also increased to 12.9%, which is a +2% year-on-year. EBITDA percentage declined in the quarter to 2022 due to network coverage penalty provision and litigation with net impact of approximately 9 million QAR. Tunisia also impacted by currency depreciation, approximately 8%. Revenue dropped by 6% in QAR and EBITDA by 2% year-on-year. In local currency also, we have seen a revenue and EBITDA increase by 2% year-on-year, driven by higher mobile revenue data in consumer and B2B segment. Customer number was or is at 6.9 million stable. We go to Iraq. Iraq, strong performance on the top line.
Revenue increased by 5% year-on-year in local currency terms and 3% in QAR terms, driven by strong data revenue on the back of 4G launch. Compared to previous quarter, revenue slightly lower due to lower voice revenue. EBITDA year-on-year dropped by 3% due to higher energy, which also Aziz has highlighted earlier, and lease line cost. Customer number also increased by approximately 3% year-on-year to reach at 16.3 million. Overall, the economic situation is stable and good growth in B2B segment, which is contributed or almost to 39%. App user reaches 1.54 million in quarter two, which is a very good news for us. Also the recharge on the app is increasing actually trend quarter-on-quarter by 19%. Oman.
Revenue year-over-year increased by 2% in the first half of 2022. The growth in wholesale, mainly the growth coming from the wholesale and higher device sale. EBITDA year-over-year increased by 5% and EBITDA margin increased to 53% in Q2 2022, which is a very good level. Customer number increased year-over-year by 3%. Overall economy outlook improving with the high oil prices and mostly applicable on all GCC countries. As of May 2022, Vodafone capture around 3.8% of the mobile customer market share, mainly from Omantel and Ooredoo Oman since its launch in December 2021. Increase of the fixed royalty from 7% to ten percent effectively January 2022, which is also we highlighted on the first quarter.
Customer base decreased by 2% year-on-year to 2.8 million due to new market entrants. Shifted from pre to post-paid also continue. Myanmar, I would say a strong and excellent performance for Myanmar. Revenue year-on-year increased by 12%, driven again by mobile revenue data and voice. EBITDA increased due to higher revenue and better cost control. Customer number declined to 8 million, which is as Aziz has emphasized on the reason due to higher SIM card and taxes. Actually, the taxes on the SIM card. We have higher taxes and fees, and data have impacted on consumption significantly, and voice usage also has increased. EBITDA percentage lower quarter-on-quarter due to higher voice interconnect, which led to a higher OpEx. More restriction by Central Bank in USD payment. This is what we've been observing also from the beginning of the year.
Maldives, another positive and strong, I would say, performance OpCo. Revenue increased by 9% year-on-year. EBITDA increased by 15% year-on-year, and EBITDA margin increased to 55%, supported by efficiency, efficient programs. Customer base increased to 375,000, up 3% year-on-year, and 5G expansion project is ongoing in Maldives. Lastly, Palestine. Actually, revenue year-on-year is increasing by 5%, and EBITDA margin increased to 37% due to higher efficiency and lower cost of sales. Customer number increased to 1.4 million, which is 5% increase, driven by a prepaid and postpaid mobile, and Palestine is considered one of the most efficient OpCos that we have. One of the most efficient OpCos that we have in terms of OpEx. Thank you. This will conclude my presentation, and I will hand it to Andreas for the Capital Markets Day.
Much appreciated. Thank you very much, Abdulla. We are very excited about our upcoming Capital Markets Day. It's now scheduled for the 26th of September. We haven't done a Capital Markets Day since 2019, so this will be a great opportunity to meet our management team and hear the latest Ooredoo news. It's gonna be a hybrid event probably, so it's definitely gonna be a webcast and hopefully an event here in Qatar as well. With regards to other events, we also have a few conferences coming up with Bank of America in Dubai and EFG as well in Dubai, and then with HSBC, a virtual conference at the end of September.
Before we go into the Q&A section, I would just remind you that at the back of the investor deck, we have many additional slides that provide some additional KPIs from our commercial team and our technology team, and we added quite a lot of new data points this year, so that's definitely worth having a look at. We're also keen to hear your feedback on our new format and our IR activities in general, so we prepared a brief survey for you. When we finish the seminar, you will get some questions, and it would be much appreciated if you could answer this and give us your feedback. How do you like the new format? What information are you missing? What comments do you have in general for us? It would be much appreciated.
Okay, now we come to the Q&A part, and you have the chance to use the Q&A function here in Zoom. You can type your questions, or you can just raise your hand in Zoom, and then we open the microphone for you, and you can ask your question live. If you're dialing in from a phone, you could push star nine, and then you can also ask a question there. I see the first question is already coming in from Ziad. Hold.
There are three participants that raise their hand.
Okay.
Yeah, let's start with one of the questions here, then we come to you in a second. There's a question from Man Yiu Tan from Eastspring. Thank you for the presentation. Net profit in the first half seems to be driven primarily by the Myanmar segment. Is that sustainable going forward?
Myanmar net profit has increased generally also in line with the general increase in performance. It is true that versus last year, between the impairment of Myanmar last year, there is still the benefits as we reduce our asset base depreciation, and amortization will reduce, and this is sustainable in the future.
Thank you very much. There's another question from Celia Lambour. What is the situation of the TowerCo project outsourcing of technical sites in Algeria?
The current TowerCo project is a project we have, and it's not just in Algeria, it's across six of our OpCos. As mentioned before, this will be part of a more detailed update during Capital Markets Day.
Yeah. We have another question from HSBC there. The last time we spoke about Myanmar, Ooredoo mentioned that the company is quite committed and recently renewed tower leases to lower the rates there. What has changed since the last and is there a consideration to sell?
First of all, as you've seen, the performance of Myanmar has been very strong this quarter. Since the beginning of the year, we're still committed to the business and we're supporting Myanmar's management in delivering the strong performance. That being said, we will always be opportunistic in reviewing any strategic options. For the time being, we have nothing to report to the shareholders. To the extent we do view a value creating transaction in Myanmar or for an acquisition, at that point of time we will report it.
Excellent. Yeah. Fahd, can you open the microphone for Ziad, who raised their hand?
One second.
I can see Ziad.
Oh, Ziad is typing the question. It's right here. On the sale of data center in Indosat, this generated substantial QAR 245 million gain. It seems sizable. For how much was the sale for? And most importantly, how much was it contributing to Indosat's net income? Basically, will this have a material negative impact on Indosat's EPS going forward?
It's a very positive transaction for both Indosat and ourselves. We do believe that this transaction will allow us to grow our data center business in Indonesia, which is the fastest-growing market with a partner alongside us. It's not a 100% sale, but it's a 70% stake sale with a partner which will be able to fund substantial CapEx going forward and for us to capture growth. We will let the benefit tomorrow of the presentation of Indosat to go into more detail in the transaction. We believe here at the group that it is a very good transaction both for IOH shareholders, but also for us Ooredoo and Ooredoo Group shareholders.
Excellent. We got a question from Omar Maher, and I'm opening up Omar's microphone now.
Yes. Hi, can you hear me?
Yes.
Yes. Hi, everyone. Thank you for the presentation. Just a couple of questions. First one on Oman, actually. I guess my question is, you know, on both the revenue and the EBITDA. I find it a bit surprising that revenue has picked up quite nicely in the first half of the year, which I find a bit counterintuitive, because this is, you know, right at the time of the entry of the third operator. I guess, you know, we're thinking that perhaps this is something that should have pressured revenue share in general or, you know, the absolute figures.
I was wondering if you could, you know, give us some insights on what's going on in Oman just to, you know, to understand the market dynamics after the entrance of the third player. The second question is actually on the reported EBITDA for this quarter. If I take the sum of the OpCos, there seems to be a positive difference between reported EBITDA and the sum of the OpCos EBITDA, which has not been the case in the past. Was there like any reversal of intercompany eliminations at the EBITDA level or anything of the sort?
I'll take both questions. First, when it comes to Oman, indeed, Oman has had quite a strong performance. Revenue has grown by 2% and EBITDA has grown by 5%. What you will see is there are quite a few drivers to this. One is the economic recovery in general in Oman, driven by higher oil price, a bit of recovery of tourism with the reopening of the country. That has helped not just us, but all the economy in Oman. Also, secondly, it's true that there is a third entrant. One of the things we've done is we've secured a wholesale agreement with Vodafone, and Vodafone currently uses our network. So even if Vodafone is capturing customers from us and from our competitor, we get a revenue stream from that business.
That has been one of our defensive play to protect from market erosion in the country. We're also seeing quite a strong performance from our operation in general with a customer increase even with a third entry of 3%. The management in Oman has been doing a very strong work. We've been preparing for the entry of Vodafone now for close to over a year before their entry. I think the strategy we've put in place has proven to be successful.
Excellent. Thank you very much.
Thank you. Sorry, on the second question, actually, on difference between reported and total margin, total EBITDA, sorry.
Sorry, could you repeat the question?
Yes, sure. Well, there is a difference between reported and the sum of the EBITDA for the OpCos that is very different than historical quarters. Usually reported EBITDA is typically lower than the sum of the OpCos because I'm guessing because of the eliminations, and this difference is usually around QAR 100-200 million. This quarter it's the opposite. Actually, it's around QAR 47 million positive diff, i.e., the reported EBITDA is higher than the sum of the OpCos. I was wondering where this is coming from.
Look, I'm not really sure what is your comment. We'll try to clarify it. If you do the sum of the OpCos, we also have group revenues, which account for close to QAR 22 million riyals. This is maybe where difference. You have the OpCos plus the group itself generates revenues. I think maybe that's where the differential is coming from.
Okay. Thank you.
Thanks.
Great. I see Faisal Alzaabi raise his hand, so I'm gonna open up your microphone, Faisal.
Good afternoon, gentlemen, and thank you for the presentation. Congratulations on the outstanding set of results. I do have two questions. On a sequential basis, what were the main reasons behind the growth in the share of associates and profits from associates, on a quarter-on-quarter basis? My second question is it a fair estimate to say that whatever we've seen during the first half in terms of, let's say, clean earnings or normalized earnings, is sustainable going into the second half of the year? That's it. Thank you, gentlemen.
For your first question, the growth in share of associates, it's mainly due to the difference in accounting treatment of IOH. As you know, IOH was fully consolidated. Now it's owned as a joint venture, so the contribution comes at the associate level. We've lost the top line contribution, we've lost the EBITDA contribution in our accounting, but we get the share of associate at the associate level. The main one-off in this case is the proceeds from the data center sale, which is around QAR 245 million. If you adjust for this one-off and how sustainable is the growth, well, we keep our guidance in place for the full year. We haven't changed. We're very happy for the first half of the year, which has performed very well.
We hope we can perform as well, but there's quite a few headwinds which is out of our control. One mainly is currency, with dollar strengthening significantly. We also have tailwinds, which are helping us. Six of our OPCOs are economies which are oil-based or oil-denominated, so they're benefiting from the current oil prices and the impact in their economy. At the same time, we also have impacts in terms of inflation, especially on the energy cost.
Yes. Thank you, Mr. Abdulaziz. That was quite clear. However, if I were to go back to the share of associate, I completely understand that IOH currently is being recognized as an associate. However, when has this treatment been in place? Is it starting from the second quarter or the first quarter?
No, it's from the first quarter. This treatment started from the eighth of January 2022. On the day we actually closed the transaction. From that day, immediately we deconsolidated and the accounting treatments changed, as a result of the merger and our reduction in ownership, going from 35% to 33% in direct ownership.
The significant increase from Q1 of 2022 in share of profit of associates versus Q2 of this year is mainly because of the timing difference of the recognition, right?
Yeah. From Q2 2021 to Q2 2022 is difference in accounting treatment. From Q1 of this year to Q2, the increase is because of the one-off sales proceeds of the data centers in Indonesia, which yielded QAR 245 million in terms of share of associates. Also by the good performance of Indosat, which you will see those tomorrow.
Yes. Thank you.
The floor is open for.
Thank you, gentlemen.
Thank you.
All right. Thanks, Faisal. We got a question here from Celia Lambour. Ooredoo Algeria, what's happening with regards to cost reduction? What is the impact and which areas are you targeting?
Ooredoo Algeria has been performing very strongly, as you've seen. It's a difficult market. We have seen some slight increase in terms of cost, especially again on the energy side. That being said, the management has been putting quite stringent measures in terms to keep OpEx in control at the same time as a customer acquisition strategy. I don't think we can go more in specific details of what exact measures we're doing just for competitive reasons.
Great. A question from Yewande Onabule . Which markets are most challenging? What is the impact of inflation? Is the company increasing prices? And, what's the strategy with regards to the new player in Oman? Is it a price war?
That was a lot of questions in the same.
The first one was.
Can we take them one by one?
The first one was, which ones are the most challenging markets and the impact of inflation?
In general, all our portfolio for the first half is performing extremely well. Each market has their specificities. From an operational standpoint, of course, Myanmar, given the political situation there, is slightly more challenging than the rest of our portfolio, given, you know, on one side, political situation and two, the uncertainty on the currency weighting. The rest of the operations, we have very competitive markets like Kuwait. Oman is becoming a very competitive market as well, but we've been performing in all markets, growing at the rate of the market or actually exceeding the market growth rate. We're very happy in general with our performance.
We got the questions up there. The next question was, What's the strategy with regards to the new player in Oman? Is it a price war?
For the time being, the new player has come, of course, with some quite disruptive pricing in the first offering. Of course, these pricing were, I would qualify, and I can't really comment on Vodafone's strategy, but, thankfully, these initial offers, which were launch offers, were quite limited in time. What we've seen between us and the two historical players in Omantel has been a lot of discipline in not creating a price war and not value destruction for Oman, therefore, the strong rebound in our operations. Plus, we've put in a defensive strategy of doing a wholesale agreement with Vodafone, but this is helping us in the general performance of the operation.
Excellent. We got a question from Didier with regards to our bond maturity. What's the plan for the 2023 bond maturity? Rollover? Repay?
As you know, we've raised a bond last year. We've secured all the financing. If you look at the chart, maybe you can put in the slide of our cash and debt profile, we actually are fully funded and sustainable to be funded for the foreseeable future, and we're in no pressure whatsoever in terms of refinancing. We will do as we've done in the past. We will address the market if we see conditions to be favorable for us and if we can secure compelling cost of capital. For the time being, we have no pressure, and we've already taken care of our 2023 maturity in last year's bond issuance and RCF put in place as well.
Excellent. That covered the bond question. Then, Ziad is asking about the customer satisfaction KPIs. Competitive prices with inflation kicking in elsewhere and squeezing the customer's wallet, is there a risk for you to cut prices for better scoring? Or do you see a risk on ARPUs? Why did the ARPU on prepaid mobile in Qatar decline so much, 5% Q-on-Q and 15% year-on-year?
Sure.
Prices.
Can we take them one by one again?
Yeah. Sure.
Look, customer experience is more, and this is why we're putting in place the voice of the customer, is more than just pricing. Pricing is one component. There are a lot of touchpoints during a customer journey, whether from a billing cycle to recharging, quality of service, response time, outage time. We're trying to touch all of the different points.
Mm-hmm.
The impact of inflation is the same for us and our competitors in all of the markets. We're not seeing this as. We're seeing quite a lot of discipline across all markets in terms of the players. We're not seeing deterioration of pricing, and we will definitely not impact our revenues for customer satisfaction. We actually started with a price increase at the beginning of this year in Qatar, which is our home market. We believe that, over time, stronger customer satisfaction actually leads to higher ARPU than lower ARPU. What was the second question?
The ARPU decline in Qatar. In the prepaid segment.
Sure. We've had quite a significant strategy of migrating a lot of the upper tier of our prepaid market to the postpaid market. The ARPU decline is migration from prepaid customers and the upper tier, so the higher ARPU prepaid customers to our postpaid plans. That has been quite a successful strategy.
I see a question here from Maddy Singh , who's asking about the revenue in Qatar. What's the reason behind softer revenue in Qatar? Is it in a specific segment, competition?
Softer. Look, Qatar has performed very well. We're already the incumbent with 75% revenue market share. Our competitor is performing well, but we're performing in line. I think revenues have been quite sustained across the board from mobile to B2B. I wouldn't qualify them from softening. At the same time, the country's population and it's more than 100% penetrated, so there is limited growth left in Qatar. At the same time, we're still capturing quite a bit of growth.
Great. We got a question on: can you comment how you manage FX risk?
Look, FX has always been one of the risks of our portfolio of OpCos. We try to secure as many of our contracts in local currency in all of the countries, and we try also, to a limited extent, to leverage if it's competitive in the local markets, in local currency. The most significant hedge we have against FX is converting as much as we can, as many as we can, our procurement contracts in local currency. Which for certain categories is quite easy, especially on the service sides, but when we come to equipment side, which is imported, is usually not that evident to do. Even if we convert it to local currency, there is an FX calculation into it. It's part of our endemic, I would say, structure as a portfolio as we do.
Great. There's a question from Omar Anwar. In terms of fixed business, are you seeing any shortages on the fiber optic cable side? And have fiber optic cable prices increased due to inflation?
No, fiber is core to our strategy. The next roadshow has strengthened the core. Fiberization is a key play for us across all our markets. Fiber has been highly commoditized, and the price of fiber is decreasing year on year.
Okay. A question from Ziad on the Wataniya operations. He's asking: what is driving the jump in cost? He said employee salaries are up 13% in Kuwaiti dinar terms, and there's a severe FX devaluation in key OpCos. Is it a typical salary adjustment set toward the end of the year, or what's driving the jump in cost for the Wataniya operations?
Oh, so for...
Fuel and different fuel and something.
No, for Wataniya. Wataniya is,
NMTC.
Yeah, NMTC. In this you have Kuwait, Algeria, Tunisia, and Palestine. You have quite a different variables into it. It's a bigger mix. Look, one of the drivers for increase in OpEx is of course, the cost of fuel, which is impacted through some of these operations. There is a marginal increase in the staffing cost. In the operations, part of it has been done through an incentive program to drive better performance. We believe that is a fair system which have driven the good performance in all these OpCos. We're still watching very carefully our OpEx and all costs in general across all operations, not just through the Wataniya ones.
Excellent. There's a follow-up question in Kuwait again. Any updates on the number range case with NMTC? I don't think there are any new developments.
No, there's no new developments since last quarter.
Okay. Thanks for the comment on the presentation there, Ziad. That's very kind of you. Divia would like to know how do you see the impact on EBITDA margins with the inflationary environment, and how much are you able to pass through?
The biggest pressure point today on the EBITDA margin in terms of inflation is cost of energy. Again, our footprint is quite specific. In certain geographies, we're quite diesel dependent. Iraq and Myanmar are the two countries which are the most sensitive to price of energy. As of today, we've seen very marginal erosion. If you see the general performance, our EBITDA margin is down 1%. We've been able to control it and mitigate it. Any increase in fuel costs, we'll try to offset it in savings in other segment of our OpEx. In terms of passing it through, the increase is not significant enough in order to pass it through to our customers. In general, we are always striving for ARPU increase and not passing through, cost, but sort of taking our customers through the ARPU ladder by selling more services en masse.
Excellent. I see one question here from Pradyuman Mishra: Is the free cash flow sustainable, or is it primarily due to lower CapEx allocation?
No. Two parts to that. Free cash flow is sustainable. We actually have a very strong free cash flow yield as a telecom operator in general. This is driven by top-line performance, control in OpEx, and also discipline in CapEx. We've guided to a sort of general reduction in CapEx over time, and we'll commit to this to the extent it doesn't impact our competitiveness in each and every market we operate. We've been operating in growing markets in general historically, so we had CapEx intensity rates in general across our market ranging from 12%-22%.
What we're seeing is a lot of the markets we're operating in are maturing, and therefore our CapEx intensity rate has to go down and to revert back to typical mature markets in the range of 10%-12%, and this is our goal over the next years. We do believe our free cash flows are very sustainable.
Excellent. I don't see any more questions in the chat, nor any hands raised. If there are more questions, please
I think there's one more question.
Any plan for tower sale or data center?
Oh, yeah. Sorry. Yeah. There's a new question there from Ziad Al-Murshed . Tower sales and data center plans.
Both the tower sales and data centers are part of our core strategy and stated as our asset-light strategy. We'll come with a full update at the Capital Markets Day for both tower sales, where we're standing in that process, and data centers, what is our strategy with data centers.
Excellent. Greetings from Roham Jamal. He would like to know if we see any political risk that might disrupt operations in Asiacell in Iraq.
No, we don't see any political risk that might disrupt our operations in Iraq. At the same time, I think as much as on the currency side, it's part of our portfolio. We believe as we do, our area of strengths is operating in such geographies where there are political uncertainties, and one of our strengths is always trying to be commercial and apolitical. Therefore, we're not impacted or as little as possible by any change in local political scenarios.
Excellent. I think that was the last question. Great. I would like to thank you all for the participation and looking forward to further interaction. Twenty-sixth of September is gonna be our Capital Markets Day, and our Q3 results are due at the end of October. I encourage you to fill out the little survey after this call in the Zoom section. If you need any follow-up information, please contact us here in Doha. Thank you very much for joining.
Thank you for your time.
Thank you.