Earnings Call: Q1 2024

May 13, 2024

Hi. Good evening, everyone. Thank thank you for joining us at StarHub's 1Q 2024 call. My name is Amelia and I take care of StarHub's investor relations. This evening, we have with us our Chief Executive, Nikhil Eapen, Dennis Chia, our CFO, Johan Buse, Chief of Consumer, and Tan Kit Yong, our Head of Enterprise Business Group. As usual, we start off with opening remarks from Nikhil, followed by Dennis on financials, then Johan and Kit on business highlights. We'll open the floor to questions thereafter. Nikhil, over to you, please. Hi, everyone. Thank you for joining us for our first quarter earnings this evening. Thank you for making the time. As usual, I'll start off with our financial highlights. As you can see, just focusing on service revenue, we were up 2% year-on-year for the first quarter. Some segments declined, including mobile, which I'll talk about. Some segments have grown, in particular enterprise, but within enterprise, cyber and managed services. Our EBITDA was slightly up, due to some early efficiencies, despite some revenue downdraft. Also, it must be noted, of course, that this EBITDA margin being up was in the face of continued spending on DARE+. As you know, this is a heavy DARE+ spend year. Our net income grew faster year-on-year at 8.1%, and this is reflective of early efficiencies, as well as a continuing trend through DARE+ of CapEx to OpEx substitution and improving return on investment as a result. What's not on this page but should be noted, as I always do, is we have strong free cashflow and our leverage is actually down from 1.36 times to about 1.06 times. That's something that we're quite happy with, as it gives us the funding and the financial firepower for our organic and inorganic. Looking forward, we will be reiterating our guidance for 2024. Also looking forward, we will be reiterating our stated intent to complete 90% of DARE+ spend by the end of this year, fiscal 2024. Therefore, as we approach the end of the year, we will progressively start decommissioning and realizing our DARE+ savings as we had highlighted. Over the year, we will continue to build DARE+ differentiation. Our IT transformation will be completed, hence we will have our digital customer journey across all product, which is the Infinity Play vision that we've been talking about for our consumers. We will also have, by the end of the year, our three Cs, cloud, connectivity and cybersecurity, converged on single hub hybrid multi-cloud platforms for enterprises. In particular, something that Kit Yong will talk about, which is quite near-term as a launch, is DCIx as one of the key examples. All of this will be in place and commercially launched by end 2024. Next page, please. Going to the segments, this was a difficult quarter for mobile with continued hyper competition. We had revenue decline year-on-year of 4.6%. We're focused on revenue market share, and we held our revenue market share over the number 3 player at about the 500 basis points levels. We saw a little bit of erosion in subs, but also in ARPU. We will continue to attack and defend and grow continual broadband. Now, broadband was relatively flat, and this was a function of two opposing factors. We have, in recent quarters, withdrawn promotions and premiums, hence our profitability in the segment has grown year-on-year fairly materially. What we have also done in broadband is we have aggressively driven the migration towards high-speed plans, especially 10 gigabit XGS-PON, as well as 5 gigabit onto our XGS-PON network. We're first in the market with both, and we are seeing very strong growth here. We view this quarter as a reset. Entertainment also is similarly a reset of sorts. We saw an expiry of subs on a specific content package that was bundled. On Premier League, we saw continuing good growth, continuing good cross-sales. As I said, we view this as an important reset. Last, on enterprise, we saw strong growth. Cyber was up very strong. Managed services within network solutions was up very strong, and up less strong were legacy connectivity streams. 2024 guidance, we performed in line with our guidance for the year on service revenue and service EBITDA margin. On CapEx, we outperformed, so we saw strong free cash flow. Overall, we are reiterating our guidance for this year. On financial overview, I'll just pass through this quickly. We would like to call out that we have completed the sale of D'Crypt. This was a side. We had signed the sale of D'Crypt in December, and we had held it as we passed and held the sale from the end of last year. We completed the sale on February 29th. For the 2 months that we've recorded results for D'Crypt, we have shown the impact on our financial results. Then again, I would like to point out at the bottom of the page that we have continued to reduce our leverage. We were 1.36 times at the end of the year, which has already been reduced, and we've reduced that further to 0.06 times. With that, I will pass off to our esteemed Chief of Consumer, Johan Buse. Okay. Thank you, sir. Good evening, everyone. I'll take you through mobile, broadband, entertainment. I would say mobile was a bit of a whirlwind quarter. ARPU is fairly stable, SGD 31, mainly impacted due to lower mobile revenue as lower IDD. The reduction in the base is mainly due to free subscribers, which are typically bundled in with broadband. That actually shows you the churn in the churn as well, which is fairly stable at 0.9%. We do see by the way, an interesting uptake of 5G in case you have got questions later on, and we do see also an improving NPS on that. On prepaid, ARPU is stable, flat. Prepaid subs slightly up QoQ. That's on the back of more tourists. Year-over-year, a small decline, and that has resulted in a slight decline in terms of revenue. Noteworthy is that the number of subs in terms of data usage and the amount of data used, which has been increasing, we're actually clocking close to 19 gig per quarter. That's on mobile. Broadband, Nikhil already mentioned that, quite a fair bit around that. It is a hyper competitive landscape. Against the market actually we hold the ARPU stable, which I think is a good performance, and also the base is stable. What has changed in the revenue is the allocation of premiums, which we stopped doing, and as Nikhil referred to, actually our gross profit on the back of that increased. We do see fantastically good uptake actually on the new XGS-PON network. We call it UltraSpeed by the way. 10 gig, and we actually launched two weeks ago 5 gig plans as well. We see a very strong appetite of customers upgrading to those plans, which in time will be valued through TIF and will help the ARPU. That's good news on the broadband side. Entertainment, mindful that last quarter, Q4, we had IPL cricket, which always comes with a, I would say a good appetite of customers signing up. That's why the base went down in the last quarter, in Q1. ARPU remained very, fairly stable. We also see that the number of subscribers buying more than 1 content pass actually remains stable, and that actually results in, I would say, for this business, a good churn percentage, 0.9%, which is really obviously commendable. The revenue is down but the gross profit also for this particular segment is actually year-on-year significantly up due to smart cost management. That's the summary for the consumer. A bit more flavor actually in the next slide. I just mentioned that to you already, the 5G broadband plan. If you haven't signed up yet, this would be the right time to do so. That will fuel further on, I would say, the revenue and the significance of the broadband product in our portfolio. Also with that we have taken a more bullish approach in terms of bundling content. We do have on the back of UltraSpeed also a HomeHub+ bundle, which comes with Wi-Fi 7 and we do see, as I mentioned earlier on, good demand from customers on that. We also see a significantly higher NPS on these particular tariff plans and bundles. That's it for my side and on that note, I hand over to Tan Kit Yong to give you an update on the enterprise side. Thank you. All right, thank you, Johan. On the enterprise side, we look at our enterprise services. Overall, we are seeing a 10% for this quarter growth, right? If we break it down into network solutions, cybersecurity and regional ICT, right, you can see that for our network solutions, we're still pressured for our data and internet, right? There's offsets that we are seeing. We are working on initiative. Later we talk about DCIX, what initiative that we are executing to grow our data network services. Now when it comes to managed services, we mentioned that there is a data center and our project services that we're doing for our mobile infrastructure. Some of you may recall in the previous quarter, we've been selling our capacity in our data center and the client has started to move in and we are starting to use the data center and contribute to our revenue, and these are all long-term multi-year contracts. It is a secure multi-year contract for us. We are seeing some demand for our data center, be it that we may have less capacity now, but we're still seeing good demand from data center services and we are seeing that we are winning more managed services in terms of a modern infrastructure in the market and order book looks good for us. When it comes to cybersecurity, right, tremendous high growth in cybersecurity for the project services that's coming in, right. Regional ICT, right, the nature of this business is more project basis, as project basis is more subjected to ups and down in the quarters depending on the client spend. We are seeing that the lower hardware sales for the 1st quarter contributed to a revenue decline, right, due to the spending cycle of the client. That's it for enterprise services. Maybe for the next slides. What we've been launched for, to grow our data internet services, right? We're gonna introduce a Low Latency Data Centre connectivity, right? We already have some key clients, seeding clients in it, right, that already sign on, try this service with us. We are also gonna make it available in Q3 to launch it for the whole of the market, not just locally but in the region as well subsequently. We have some unique value proposition because what's different between a data center connectivity today versus. Offering in the new Low Latency Data Centre Connect. The key difference is, it's a purposeful build network services. Reduce the number of hops between data center before it reach the end data center, measure the latency, and on top of that we're gonna future-proof it, right? To yet, globally they will standardize the standards for quantum encryption. This service is quantum encryption ready. Once they standardize it, we'll up, obviously, the latency, but quantum encryption. Again, future-proof our services. Most importantly, these services is built on top of our Cloud Infinity platform. This is gonna be the way for us to build our services on Cloud Infinity, and it will help us to have, better future functions, automation, AIOps. All these, important features for the future of operating model will be part of this service. All right. With that, hand over to Amelia. Thanks, Kit. With that, we'll now open the floor to questions. To join the question queue, as usual, just raise your virtual hand and we'll get to you. Sachin, please unmute yourself. Sachin. Yeah. Hi. Hi. Good evening to management. Good evening. My question is could you point out what happened in this quarter on the last quarter or previous quarter, any specific plan launched by competitor that actually we saw mobile ARPU decline, you know, quite considerably. I mean, we understand tourists are still doing. You know, too many tourists in Singapore. I want to understand the specific competitive dynamic or plans which are hurting. It seems lower-end plans by the smaller player are responsible. If you can validate that, number one. Number two, a standard question on your transformation costs. How much have you incurred in transformation costs out of SGD 54 million that you have guided for. I think that's expected for this year. The two question. Yeah. Okay. Johan. All right. Thanks, Sachin, for the first question. I'll take that. There is a bit of seasonality, as you probably well know, throughout the year when it comes to mobile revenues. Typically Q1 is a bit lower than Q4 and Q3. On the ARPU side, what we see is 2 things. I think number 1 is there is an effect of more and more customers moving to SIM-only. That's why, the local MRC, the local monthly recurring revenue as ARPU is slightly impacted. On top of that, we do see a bit more pressure on the 5G price points in the market, so that's flowing through to a certain degree. We do have wonderful interesting plans in the next few quarters to offset that. I would say stay tuned. We have some interesting things coming in that space. Sachin, does that answer your question before we move on to transformation costs? What percentage of our customers have moved to SIM-only? I mean, this is a structured trend, right? seems like this will continue, you know, and because I think it's a very small percentage has moved to SIM-only plans, right? Can you just comment on this structural trend of SIM-only plans? Is it like a two year, three years kind of visibility? Yeah. All right. I hope you will appreciate that we can't reveal detailed numbers, right? I would, however, correct the statement that it's very few customers these days on SIM-only plans. If you scan across the market and you validate it with market research, would be probably quite surprised to see how many customers have moved to a SIM-only plan. On top of that, I think, and you've seen that probably if you look at IDC reports when it comes to CPE device revenues, in the wider business beyond telco, you see that there is a bit of pressure due to macroeconomic climate on customers and their renewal cycle on devices. Those two together. All right? Does that answer your question? Yes. Thank you. Could you please take the question on transformation cost? Yeah, sure. Hi, Sachin. In terms of the transformation costs, Yes, we had previously guided to a number, we're now looking at executing or accelerating the execution of our initiatives such that we will be able to generate the outcomes as we intend as early as possible. The number that we're looking at is slightly north of SGD 100 million in terms of total transformation expenses that we intend to incur this year. The breakdown of CapEx to OpEx is about 55 to 45. We, as of the first quarter, have incurred about 15% of this amount. Sachin, does that answer your question? To understand, you have brought forward the whole transformation program into FY 2024. Is it? Yes, we're looking. Is that the plan? Yes. You know, so we previously guided at that 90%, at least 90% will be completed and incurred by the end of the year. At the moment, we're looking at incurring the balance with very little residual amounts going into Q1 of next year. Sachin, Yeah, let me confirm your SGD 100 million. You're talking of SGD 100 million transformation cost this year, is it? Correct. Correct. Okay. Okay. 55 to 45 CapEx to OpEx. Got it. Got it. Got it. We had- Okay Sachin, just to remind you, we had talked about 10% residual for next year. We're gonna try and we're on course and gonna try to bring forward as much of it as possible into 2024, not just because we wanna spend more money in 2024, but because we wanna get done and we wanna start harvesting as quickly as possible. Got it. Okay, thanks, Nikhil. Yeah. Thanks, Sachin. Next up we have Kenneth. Kenneth, could you unmute yourself? Hi, Yu Feng Management. Kenneth from CGS here. Thanks for the opportunity. Two questions from me. The first is, could you share what was Ensign's operating profit this quarter? Second question is, are you able to share how much does data center related revenue contribute to enterprise segment? Thank you. Okay. Dennis, could you take the first question on Ensign operating profit, and then Kit can follow through with the DC question? Okay. Hi, Kenneth. You know, in terms of Ensign's actual profitability, we don't actually disclose it. However, I would guide to say that typically in the first quarter of every year, and this is consistent to trends that we've recorded the last five years since we've have Ensign as our subsidiary, the first quarter is typically a low quarter in terms of the revenues as well as operating profits because most of the delivery of the projects tend to be in the second half. Suffice to say, therefore, that, you know, there is a slight loss position at the bottom line that is contributed by Ensign. Gross margins and gross profits remain healthy, as we continue to invest in building talent, and our capabilities in the cybersecurity area. You know, at Ensign, there's obviously a pretty high fixed cost component. When you look at the revenue seasonality, which implies low revenues in the first quarter and much higher revenues in the second half of the year, that fixed cost component serves to skew operating profit generation towards the back end. Okay. If Kenneth has no follow-up questions on that, Kit, could you comment on the data center contributions? If you look at what we share in the data itself, so for managed services, last year we did SGD 29, now we are looking at SGD 29.7, so SGD 6.8 million. One is data center, project services that we are doing. We do not provide the breakdown of the numbers, so you can see that from there as a contribution. I would say that it's a good balance between the project services and the data center contribution because we saw a huge capacity of data center revenue loss. That will answer your question. Kenneth, do you have any follow-up questions? Thank you. No follow-up questions. Thank you. Thank you. Next we have Huzaini. Yeah, hi. Huzaini. Can you hear me? Yes, we can. Yeah. Thanks for the opportunity and good evening, management. A few questions from me. First is on the, again, on the data center side, is it possible to indicate or comment how much data center capacity StarHub has, and how much is what's the utilization at this point in time, which will allow us to gauge the potential growth in that area or any potential new capacity addition in the pipeline as well, if there is any, that will be helpful. Then the second question is on the, any comment on industry consolidation? Assuming that means the players doesn't come together and consolidate the industry, what other options StarHub has to potentially drive consolidation in the market? In the sense, are there any potential for network partnerships, or something of that sort? Finally, just a housekeeping question. I see that the broadband RPOs have come off compared to the previous disclosures. Just wanted to understand what drove the decline in the broadband RPOs. Thank you. Thank you. Kit, maybe you can finish on the data center question. All right. If you look at our data center Mm-hmm. Not just in Singapore, because what you're seeing here is Singapore numbers, but in Malaysia we also have data center under Strateq. Right? Our broader strategy for data center is technically first we'll take consolidation of our data center business in Singapore and Malaysia. Right. In terms of capacity, actually we are selling near our capacity. We're left with a few percentage of capacity left, and it's very targeted with specific customer. We are also looking at our existing infrastructure, right, to get more power with our capacity, because we do have power that the SP Group power is unable to give us the power. We are applying for this power, like, to extend and maximize the power allocated to our data center. We're working with this progress. Of course, if you look at the whole Singapore, Malaysia data center business is booming, not because of OTT, but because of the emergence of the AI infrastructure that is also power hungry. Also bear in mind, in Singapore there is a data center moratorium that the IMDA will not release it, with any exception, unless it's pure colo business. For us, we'll be taking a very different approach in terms of our data center strategy, both in Singapore and in Malaysia. We are very mindful because we are delivering network services, and we're building digital infrastructure for the whole of nation for smart city, smart nation. Our data center is front and center of our strategy. It's not just for colo, but it's building our low latency network, putting AI infrastructure, and it's very strategic. It's not a colo business to us. With that, I will pause it. I hope I answered some perspective from your question. Yeah. Hussaini, does that address your question? Yes. That is very helpful. Thank you. Okay. Nikhil. Yeah. Maybe just rounding off on Kit's answer before I go to consolidation. As Kit said, and I would like to emphasize, we're not in the wholesale business for data centers, right? We're not in the business of selling large amounts of capacity to hyperscalers who then bundle it and sell it as cloud services. We're in the, we're in the business of services, which are services which have network and connectivity embedded such as DCIX. And that's a strategy, which for us, we believe is more capital efficient, with higher ROI. That's a strategy that we're gonna continue to pursue. We're not in the wholesale business for data centers. Now, moving on to consolidation. You know, I can't speculate on market conjecture and what has necessarily been written about and not written about. What I can guide you to is what we said in the past on the matter, which is that DARE+ is important. Our focus is on driving DARE+ organically. Of course we look inorganically at potential acquisitions to accelerate DARE+. We've acquired in the past. We have low leverage this quarter, and this gives us financial firepower to pursue those acquisition opportunities. Those may involve consolidation if and when consolidation happens, they could also, as I've said before, involve not just acquisitions for consolidation, but acquisitions in the enterprise space regionally as we build a fully integrated regional enterprise business. Now, you had asked whether outside of consolidation or acquisitions per se, whether there are other avenues to kind of consolidate the market. You'd alluded to network partnerships. I'd point you to Antina, the partnership that we have with the number three operator on 5G. Clearly we'd like to do more with Antina and are evaluating a number of possibilities. Okay. Maybe Johan on broadband ARPU. Yeah. On the broadband ARPU, actually, the only impacting factor on your broadband ARPU is the premiums, and there is an IFRS component to that. If you look at broadband ARPU year-on-year and also quarter-on-quarter, it's flat. Composition is changing. Basically ARPU is being pushed up due to higher speed plans, as I alluded to earlier. There is a small minus on the premiums, which over time will disappear. Hopefully that's explaining the ARPU background. Just to reiterate, you know, what both Johan and I said at this point, the premiums, you know, eliminating the premiums has the ability of improving our profitability materially in this segment. What we're doing alongside that is obviously driving the penetration of 2 gigabit, but really 5 gigabit and 10 gigabit plans with the purpose of moving our subscribers onto our XGS-PON network. We were first in the market with 10 gigabit, first in the market with 5 gigabit. As far as I believe, we're the only ones that have an XGS-PON network. Absolutely. Hussaini, have we addressed all your questions? Yes, we did. Thank you. Thank you. Next on the line, Arthur. Hi. You can hear me? Hi, Arthur. Yeah. Hi, good evening. Thanks for the opportunity. Several questions, please. Firstly, on the mobile side, I'm just wondering what's driving the decline in the postpaid base. I see in the deck it's mentioned that you've seen the expiry of some promotions, why would that result in a lower postpaid base? Second question is with regard to the ARPU, I understand Sachin had asked this earlier. Just wanted to better understand this. You've mentioned there were some price cuts on 5G. Where is this coming from? Are these from the MVNOs or from fellow MNOs? Lastly, just to clarify on the data center segment, you mentioned both Singapore and Malaysia data centers. I wasn't aware that there was a data center in Malaysia. Are you looking to invest and build out in Malaysia as well for capacities? Johan? All right. Thanks very much, Arthur, for the two questions, and I'm going to try to explain a little bit more detail to avoid any misunderstanding. First, the mobile base. As you may know, most ISPs in the market, if they have mobile in the past, it has been traditionally offered with a free data SIM on the side. Very few customers actually use these because there's no value really in it. We've changed the logic of that, and that is the main driver of the decline in the postpaid customer base because they're clocked as a postpaid SIM That's the main driving for this. Arthur, you mentioned just now in the recap that it's due to 5G pricing. That's not what I said. I said we see increased pressure on 5G pricing, especially on some of the MVNOs. Current ARPU impact for this quarter is coming from 2 reasons, from 2 sides. Number 1 is there's more customers who move to SIM-only, and within SIM-only there's obviously a more, I would say, higher competitive pressure. 2 is that logically, as you will understand, as the data bundles in the market have been growing, the amount of money or ARPU coming from excess data usage and also voice usage is continuing declining. That is basically the reason why the ARPU is a bit subdued. On the good note, by the way, is that we see roaming ARPU holding very well. That's maybe an interesting side note for you. Hopefully that's answering your question, Arthur Pineda. It's very clear. Kit on mute. Now, for the data center itself, we are definitely looking at opportunities to grow our data center capacity footprint, right, in Malaysia as well, not just in Singapore. We take a very careful consideration on who are the target audience. We are not going to compete with the hyperscalers data center operator, where they build capacity really wholesale off to the OTT players, right? We are not looking at just building colo for the sake of building it to the OTT because the dynamics of the data center business, especially in Malaysia, has also changed. There's a lot of capacity coming up. Do you have green energy or traditional urban-based energy also keep other considerations. What kind of stack of technologies that you're gonna put in to differentiate your data center? You know, it's just a building. When we consider data center in Malaysia, we also take in consideration connecting our Singapore data center to Malaysia data center with the lowest latency. We have done that in our own internal testing for our data center interconnect between Singapore data center and our KL data center. We happen to have common clients in Singapore and in Malaysia using the data center, and we get clients to experience the different network experience between these two data center, because we can control the data center design, we control the network design between two countries, between Singapore network and Malaysia fiber. That is what we are testing. What is our unique value proposition if we were to build a data center, is our key consideration, given that this is a crowded market filled with private equities. Don't forget our hyperscalers themselves are negotiating land and build data center on their own as well with the government. We can say that our focus is really on enterprise market where we see that there is more value for us to upsell and pull through our network services, our cloud services, our cybersecurity, rather than a pure colo based on who has the cheapest construction cost, who has the cheapest power. Don't forget, competition in Malaysia is very different. We have our companies building data center. They have a certain advantage, cost advantage when you're building data center. These are very often key consideration when we think about our data center strategy in Singapore and Malaysia. I hope I answer your question. Yeah. Maybe I can add to that, Arthur, and also reiterate a couple of the comments that Tan Kit Yong made. We are not looking at just building out not just our data center, but our fiber footprint in Singapore, Malaysia and specific regional locations, augmenting what we already have. We're not looking to do this, to build massive amounts of capacity to sell on wholesale. We're looking at it very opportunistically, very carefully. As we move our network to hybrid multi-cloud, we will have a hybrid multi-cloud layer on top of this ring, you may call it, of data center and fibers in Singapore, Malaysia and the region. We will sell regional cloud services, and we have significant early traction. DCIX is one example. There will be more to follow. We will keep you posted. The investments required for these businesses, that's all embedded in your current CapEx guidance? All embedded in the DARE+ spend that we've outlined, which is at SGD 270 million. You recall it was SGD 270 million, and then we increased it to SGD 310 million for Cloud Infinity, which was a hybrid multi-cloud, you know, a shift of our network. We brought it back down to SGD 270 million, and it's within that, yes. Okay. Thank you. To reiterate my CFO's point, we're looking to bring that in, you know, as much into 2024 as possible. That's very little. Understood. Thank you. Thanks, Arthur. Our next question from Neil. Hi. Morning. Evening all. Sorry, not morning. It's been a long day. Can you hear me? Yes. Yeah. Yeah. I can. Kit, I wanted to follow up on Hussaini's question. I don't think you mentioned what the capacity you'll have in data centers is. Did you or did I miss that? No, we did not. I don't think we're really disclosing that. Yes ... yeah. Neil, you know, again, it's, you know, the measure of capacity is probably less relevant for us than it is for a wholesale co-location provider. Yeah. You know, like a GDC or a GDS or an Equinix, because for us it's about regional cloud services, which DCIX is for. per data center. What does the PUE look like at this point? Just a ballpark number. Well. The reason I ask this is because there's so much capacity coming on, and the moratorium has been lifted. There are four new licensees there. Right ... then- Response, yeah. Yeah. Yeah. Go ahead. That's the reason, like, does it remain competitive or it's only for own use? Then related to that, my third question is why be in this business anyway? Again, we're not in the traditional data center business, right? We're not providing wholesale capacity. We're providing regional cloud services. Yeah. Ultra-low latency connectivity embedded. Understand, you could actually piggyback on a third party who has a very modern facility or it's a new data center, whether it's in Malaysia, Indonesia, Bangkok, I mean, that doesn't really matter. Yeah. From an invested capital standpoint, it's quite a capital intensive business and unless, even if it's for your own use, unless you have massive scale, the ROICs are not great. Again, Neil, we're not looking into going to the wholesale connectivity, wholesale capacity business. Mm ... which, and you're absolutely right, does require significant scale. Whether we build a data center, buy a data center or lease capacity on top of which we provide regional cloud services, all of those options we look at. We're not looking. Good to spend a lot of capital. We're not looking to increase our Capital Expenditure spending plans beyond what we've already allocated as part of it. Okay. we're not gonna see some major blow out in spending guidance towards the end of the year, I suppose. No that's where No that's where I was driving at. Definitely not. All right. Thanks. Yeah. Look, we already have data centers. We have, you know, co-location. We have existing assets. We're looking to optimize- Mm ...those to get better yield out of it. We're opportunistically looking at what's available in the market. Again, it comes back to the fact that we're, you know, we're not ruling out low margin wholesale co-location services to hyperscalers in the way that the pure plays are. We're doing regional cloud. Yep. Okay. Understand. Thank you. Thank you. Next up, Hussaini. Maybe just one follow-up on the mobile side of the things. Again, going to Johan's earlier comment that the pressure on the mobile side is because of the migration to SIM-only plans and lack of excess data usage. Given that, how should we see the mobile going forward? Means if those pressures are there, then the pace of decline should sustain, means if we do that mathematically. Just wanted to get your view on the mobile outlook going forward. Thank you very much, Hussaini. I appreciate the question very much. Without giving the house away here, what I probably can share with you today is that we have been in the past quite successful bundling components on the back of 5G and mobile. We have plans to continue to do so. Secondly, we have, we still maintain a price premium on 5G. I think that's defensible in light of what the customer experience is, and we do have further plans to enhance that. The third element to that is that we will have a closer look between device and SIM-only plans. My honest view is in the market that I think we can do more around the device plans, which because of everything from them are a bit, I would say, underrepresented in the market. I'm quite confident that we can get through this, and compete in the right manner, which is entirely constructive, which is delivering the customers what they expect a mobile plan to deliver. Yeah. You know, as an overarching statement, Hussaini, you know, last year we grew mobile service revenue by about 8%. Correct ... when others declined, right? The number three, I think had a decline of somewhere between 4%-7%. Yeah. Correct. Et cetera, et cetera. We did that. You know, I think the team was really smart, really tactical, used a lot of differentiation to grow out of the strength. Now that was phase one. The market continues to be competitive. We have other strategies at play, which Johan, as he mentioned, will come back and report on in due course. Those are promising strategies, but I would like to emphasize that those strategies are not gonna be me too strategies, which are value destructive, which are self cannibalizing that others have implemented. They're gonna be smart accretive strategies, because our focus is on revenue market share and revenue. Correct not subscribers. We hope that added more color, Hussaini. Yes, it did. Thanks a lot. Thank you, Hussaini. Thanks, Hussaini. Arthur? Yeah. Please. Yeah. Sorry. Thanks. Just a follow-up question. When I look at the revenue base, it seems like the consumer revenues are under pressure all throughout, with most of your growth drivers now really coming from the enterprise segment. I'm just wondering, what can help you drive the ARPUs and improve monetization in the consumer business going forward? Thank you for the question. First, back to defer a little bit on all lines. I think home broadband, as we mentioned earlier on, is, I think, doing well. Based on what I've been serving. No worries. Mobile, true enough, to your point, it is a very competitive market, and you probably have witnessed that yourself, keeping a close eye on the market. The key differentiation there will be a multi-play. That's all I can say today. Where we, coming back to Nikhil's point, there's no use pursuing SIMs for the sake of SIMs and not getting any revenue, which some of our smaller competitors are doing. We do have a smart strategy addressing the more premium segment of the market where we deliver quality on the back of network and bundling with other products and services. Entertainment, by the way, in that particular area is an important differentiator. The middle market which we address, the digital market I should say, which we address with giga!, we have plans coming out very soon on the back of technical enhancements as well for that particular segment. What has been helping us a lot, and that's something you do not so necessarily see reflected in these numbers, is what we call internally bundling with T2 services. Without giving a number away, quite a fair number of our mobile customers actually buy today mobile plans with cybersecurity services from us. That's still early days. That's growing quite fast, though. Again, it's an important and relevant differentiator for customers. There's a lot of bits and pieces which are being done. It's not one silver bullet for everything, which over time will make the difference, I'm sure. Hopefully that gives you a bit of a clarification. We need to segment the market, and we need to approach the different segments in a relevant way, which we are doing. Is that answering your question hopefully, Arthur? Well, it is challenging. I'm just wondering what can help drive up you know. I mean, it's. Well- It is challenging. ... if you see me in one of the next conference calls here with a lot of hair, we practiced. I'll. Yeah I'll keep that. We'll keep you updated. We've got good plans. Yeah. We've been doing well. Coming to Nikhil's point, against the market, we've been doing very well. Understood. Maybe, a finance question. Can you please remind us when 700 advanced spectrum is due? Is this actually even relevant to the business at this point? Is it necessary? Nikhil or Dennis? Yeah. There are no fixed dates on when the award date will be and what the payment schedule will be. Clearly there is a consultation period that is underway, and we'll keep you posted. It's not just us, it's the other operators of course. It's an industry consultation. And is- We'll keep you posted. ... is it still an essential band for you? I mean, clearly it's been delivered how many years behind schedule? At this point you've all moved to 5G. Yeah. Is it still something quite important? Is it something one can walk away from? I would say not in the form that was originally allocated, which was for 4G. Yes. As far as the applicability for 700 to 5G and in different areas for different uses, that's probably not something we can comment on today because it depends on how the original terms and scope of the award can be modified or not. Understood. The original scope, as you correctly point out, Arthur, is no longer relevant. Understood. Thanks a lot. And so- Thank you. we have time for maybe one or two more questions. If you have a question, please raise your virtual hand and we'll get to your question. I'll just give it a minute or two. Okay. Dennis is unusually quiet today. Dennis is feeling very disappointed. Oh. He doesn't get to answer. He's not getting enough air time today. Oh, that's fine. You know, the one great thing about having to finish DARE+ and spending money on DARE+ is Dennis won't have to take any more comments on how much more DARE+ spend is left and what's the split between CapEx and OpEx. It'll be outcomes next. Yeah. Okay. We really appreciate it, guys. Thank you for, you know, being always so educated, focused on our story and our transformation. Really appreciate it. Yeah. Okay. If we have no more questions, I think we can end early today. Thank you very much for joining us this evening, and as always, if you have more questions, you know how to get me. With that, have a good evening, and we will see you next quarter. Thank you. Thank you very much. Bye. Thank you. Bye. Thanks, all. Bye.