Earnings Call: Q4 2023

Feb 7, 2024

Hi, everyone. Thank you very much for joining us this evening for StarHub's FY 2023 results. As usual, this evening we have Nikhil, our CEO. Hi, guys. Dennis, our CFO. Hi. Johan, our Chief of Consumer. Hi. Kit, our Chief of Enterprise here on the panel. You know, Nikhil will start off as usual with the highlights, and then he will leave, and then we will end off. Thank you, Amelia, and thank you all for joining us for our FY 2023 results. A good evening to you. I'll start off with financial highlights and chat a little bit first about service revenue. We were able to grow 5% year-on-year, which we're quite happy with. We grew across all business segments, which is something I'll elaborate on shortly. Now, when we look at service EBITDA margin and EBITDA dollars, you can see that we expanded our margin to about 21.7%, and we were able to grow our service EBITDA dollars by about 14% to SGD 432 million. Now, there are three points here. Number one, please note, of course, as you are fully aware, that we achieved these numbers despite significant DARE+ spending this year. Number two, that we were able to achieve this growth by growing in high-margin segments, like mobile. Number three, whilst we haven't truly started harvesting the platforms that we're building on DARE+, we have started harvesting some early efficiencies. Now, looking at net profit, number one. Again, three points. Number one, this net profit growth was 140% year-on-year. As you know, in 2022 we took some write-offs, and if you add those write-offs back, the net profit growth is about 77%, so still quite high. As I said, three points. Number one, this was a function of revenue and EBITDA growth. Number two, one of the things that we've been talking about a while is CapEx to OpEx substitution, as we move from legacy to cloud platforms, as we move from 4G to 5G. Our net profit number vis-à-vis our EBITDA growth was turbocharged in essence. Now, the thing that's not on this page, which I'd like to emphasize, that I'm particularly pleased about as well, is our capital structure. Our free cash flow was strong. Strongly at a multiple of net income, which provides good buffer for us to pay out a good dividend. The other thing is that, with that free cash flow, we've been able to keep and, in fact, reduce our leverage, despite significant DARE+ spending, to a net debt to EBITDA of about 1.36 times. That obviously gives us a war chest we're very happy to have, to fund organic initiatives, as well as potential acquisitions. Let's chat a little bit about segmental revenue. We did experience and achieve growth across all business lines. Taking them number 1, one by one. Number 1, mobile. In mobile, we are a strong number 2 player, on the basis of service revenue market share. We have been growing while certain competitors are shrinking, and we believe our market share lead to the number three operator is approaching 500 basis points, in fact. Now, we were able to capture strong roaming recovery without dilution because we were also able to hold our base ARPU. Hence, we were very happy to grow at the service revenue growth rates that we did for mobile. Number two, on broadband, here we are the revenue market share number one, and the number one operator in Singapore. We were able to grow year on year by 3%. And again, two points here. We were able to achieve this despite eliminating premiums, which helped us to improve, in fact, profitability. number 2, we saw, you know, selective additions on subscribers, which helped us to grow. Now, on entertainment, we were able to solidify our number 1 position, in particular with Premier League, where we saw strong cross-sell with ARPU rising. we're able to increase our service revenue in entertainment by 5%. on enterprise, we have leading market positions across segments. we were able to grow overall enterprise by 5%. the stars are Ensign, which grew over 20% and is a strong number 1 in Singapore and, as we've talked about in the past, in Asia, in fact. Network solutions, where we actually held strong on connectivity revenue, while at the same time growing managed services by close to 20%. That's performance across segments that we are quite happy with. Handing off to Dennis. Okay. Hi. I'll just cover our balance sheet and our cash flows. If you look at our operating cash flows, they remain very healthy, and north, way north of SGD 300 million. This is on the back of ongoing improvements in our AR collections as well as our payment terms to our vendors. Free cash flow is also a function of the capital payments that we make, and on the back of our transformation investments in CapEx. There was a relatively higher capital expenditure payment in 2023 versus 2022. The net free cash flow that we generated for the full year of 2023 is SGD 186 or SGD 0.108 on a per share basis. We are guiding to SGD 0.067 on a full year dividend that translates to SGD 115 million. We ended the year with SGD 5.2 million of cash and cash equivalents, as Nikhil mentioned. Our net debt to EBITDA ratios remains very healthy at 1.36 times. Liquidity and available lines of credit as well as the drawdowns on our Medium-Term Notes on the public debt still remain very open for us in terms of investments in future growth. Our interest cover is at very healthy 11.4 times, way north of all our industry peers. As a guidance, over 90% or about 90% of our borrowings are on fixed rates. With that, I'll pass back to Nikhil to talk about what we've achieved for 2023. Yeah. Thank you, Dennis. We have beaten our guidance, all metrics on all fronts. On service revenue, we achieved 5.5% versus our guidance of 3%-5%. On service EBITDA margin, we've met and therefore grown EBITDA above anticipated targets. On our CapEx commitment, we've outperformed again, where we are at about 8.8% on 2023, including investments versus 11%-13%. On dividend, dividends per share, as you know, our policy is SGD 0.05 or 80% of net profit, whichever is the higher, and the 80% of net profit is the higher, and on SGD 150 million of net profit after tax were therefore at about SGD 0.067. We have beaten on dividends as well. Handing over to Johan to talk about some of our business lines. Good evening, everyone. Later on we decided to change a little bit of the dialogue. I'm not going through the details on the slide. You can see that ARPU have held actually quite nicely. Good growth due to roaming. Even excluding roaming, our ARPU is very solid and it sort of hold. Churn is there, I mean, meaning it is still below 1%, which is a great performance. giga! continues to perform well. Some of you will later ask, "Oh, the market is very competitive. How is that going?" It's a bit more than just price. We invest quite a fair bit in 5G, and that's appreciated by customers. Here we are. 8% revenue, good performance. Moving to broadband. Stable ARPU. Same story here. We focus on speed up. We launched ultra speed, good uptake, churn very low, segment revenue up close to 3%. Same question you will ask later as well about SIMBA. We'll discuss that later. Far, no impact. We closely monitor that. The last one is entertainment. Entertainment is an interesting one. You'll say, "Oh, 0.4 Almost 5% down for the second half." Just read the footnote, please. Last year we had World Cup. If you exclude World Cup for the second half, actually revenue was slightly up. ARPU is on an upwards trajectory, which is really great. Great work by the team. Churn is well within the boundaries. It's creeping up a little bit, but that's due to some of the OTTs. You can ask me later if you like. I think the highlight is really around the ARPU and the Premier League uptake. We see a very good solid continuous uptake with Premier League, which flows through not only in Premier League, but also in adjacent TV entertainment passes like Sports+, where we see a significant growth. It comes with corresponding strong revenue growth also from the advertising space. Year on year, we see a good performance here as well. If you look at the 3 lines within consumer, all of them show good trajectory. Are we concerned about the market? You will ask that for sure later on some of these product lines. Mobile, we held our ground really strong, and it's a trade-off between pricing and quality. We will continue to do that. We have giga!, which is performing very well. Broadband, we really believe in service differentiation. Broadband is a very different product than mobile. For most consumers, broadband at home is a necessity. It's a product which they expect quality, performance, and if something goes wrong, the ability to call someone and have it serviced. We have been investing in the XGS-PON network, which is first of its kind in Singapore. We will use, in the early part of this year, the opportunity to migrate all our customers to that new network. That by itself will deliver a much better experience than even today, what we have. Also there to remind everyone, we have been having a very strong record in getting recognition in terms of networks and quality. Opensignal has been awarding us not only the best 4G network consecutively for, I think, 3, 4 years, but even 5G, and that's important for customers as well. I just want to give you that context a little bit beyond the numbers. You can ask me any questions later on. On that note, I'm going to hand over to Kit to give you a bit of flavor about enterprise. All right. Thank you, Johan. Again, I will not read through the slides like what Johan has done earlier, right? We will not go through the slides and give you some flavor of our business, right? If you look at network solutions, the year-on-year growth is actually on managed services. What is that? We talk about projects, we talk about data center, right? We are focusing on all of it, where we close our contract year before, and then today, after the client start provisioning their services, for example, in this case, data center, we start to clock the revenue. These are long-term contracts, monthly recurring, right? It's multi-year contract that we are signing for data center business. When it comes to projects, right, we are actually changing our solution mix, right, going to market. You may not have known because it's not shown here, we actually have reorganized, restructured the whole enterprise business from a go-to-market. We are now organized not from a traditional telco, but we are now organized by tracks, which is based on agile organization concept. Right. We've completed our restructuring into three service lines. One is the Enterprise Connectivity, Enterprise Mobility, and finally, Strategic Services. We are pleased to, with the current restructured outcome, our enterprise network revenue has been stabilized. We managed to flatten the erosion. Our mobility solution has evolved to more products and services adjacent to mobile products, for example, Mobile Threat Defence. We are adding these new portfolios, and we're getting the three famous local banks, right, that have subscribed to our services. We are growing in places with new revenues and new software revenue for our mobility solutions. Finally, strategic services. What is that? That is really the industry we talk about data and AI, application modernization, hybrid multi-cloud services, and our connectivity service all in one so that we are now creating services and solutions, not just products that we use to sell and go to market. Our point of view in getting good traction with, especially with our technology partners, and one of the reason why we can get a good results for managed services is because we're not just being a technology partner. They are the largest partner in Singapore, and that help us a lot in terms of the mind share with our clients and mind share with the industry itself. We are trending on the right track for our network solution, and there'll be more things to come that we'll share in due course. Right. In terms of regional ICT services, right, you can see that despite the challenges due to hardware fulfillment, and if you look at what we are doing here in Singapore, moving into managed services, looking at emerging technologies to help our clients to do digital transformation and look at our Cloud Infinity with a platform-based business. We're gonna bring this platform to the regional ICT. We're gonna help the regional ICT clients to modernize their infrastructure, their journey to cloud, not just cloud, but hybrid multi-cloud with secure connectivity, which is our natural strength. We will help them with digital transformation with using emerging technologies and application modernization. This will be the new portfolios that we go to market for, not just in Singapore here, but also for the regional ICT. Right. Finally, when it comes to cybersecurity services, Ensign, some of you may have went through the last call that we have. They are specialists, right? They focus very, very heavily on building bespoke security infrastructure to protect our clients' environment, and they are focusing on the high growth business for us, but it's also a very talent-intensive business to be in. That's where we'll continue to focus on cybersecurity services. It is very important for our clients, right? We'll see that we have more and more competitive advantage in these cybersecurity services. With that, I pause. Nikhil, you want to do it? Yeah. Looking forward at 2024 and our guidance. First of all, for service revenue, we expect 1%-3% year-on-year growth. One thing you have to keep in mind is that we have D'Crypt, which we are in the process of disposing of. There is that adjustment that is therefore necessary. On service EBITDA margin, we maintain 22%. Now, as you know, we still have significant, you know, DARE+ spending over 2024, which we expect to get tail off after 2024. On CapEx, on BAU, 4%-6%, including investments, 11%-13%. We're maintaining that number. On dividend, per share, you know, we are sticking to our dividend policy, which is the higher of SGD 0.05 or 80% of net profit, whichever is the higher. Again, like with 2023, we expect the 80% of net profit to kick in. We've said at least SGD 0.06. We do, looking forward to 2024, we do expect continued CapEx to OpEx substitution. We do expect our net profit as a percentage of our EBITDA to continue to increase. Therefore, while not explicitly in our guidance format, we do expect NPAT, net profit after tax and EPS growth from 2023 to 2024. Looking forward, you know, beyond that, as we've been mentioning and talking about, we expect our DARE+ investment to tail off by the end of 2024. Over 2024, starting in the second half, we will start progressively, you know, harvesting through decommissioning of existing platforms, through realizing automation efficiencies, from the cloud and digital platforms that we're that we will then have the benefit of. We will also be focused on over 2024 on building new growth platforms, you know, working with anchor customers who are existing customers of ours, leveraging again the platforms that we're building on both consumer and enterprise, as well as our network, Cloud Infinity. With that We'll move on to Q&A. We can move on to Q&A. Okay. Wow. -the question queue, as usual, please click on the Raise Hand button. I'll call your name, and then when it's sent to speech you can unmute yourself and converse directly with management. First up we have Neil. Hi, Neil. Hi team. I've got 3 quick questions. The first, perhaps for you, Dennis, is, like, if you've got a 90% fixed rate debt structure, what are the tenor buckets that's in? As rates, I guess I'm wondering, as rates likely start falling in the second half of this year, will you be disadvantaged? Some sense of maturity profile would be great. The second is on entertainment. Yeah, I mean, we know second half 2023 versus second half 2022 you've got the World Cup effect, but second half 2023 versus first half 2023, the revenue, segment revenue is pretty much flat. Does that mean you've maxed out in the market there and it now depends on pricing strategy? The third part, I guess for you, Nikhil. Random question, but I'm sure you've been asked that before. Scenarios on industry consolidation. Yeah. Okay. I'm glad you're laying it out there right up front. Maybe would you like to. Oh, I keep getting questions from clients on it. On behalf of all your colleagues and much of the media. Yeah. You know, I can't comment on consolidation, obviously. All I can say is that there's a truism, you know, I think many of us have been involved in this industry for a while. The one truism about telco consolidation is it never happens when you want to or never happens when you think it will. It always takes longer, but it inevitably happens. Every year that passes, I suppose we're one year closer. The second thing, which of course we all have to note, is we've been through a number of waves in the U.S., Europe and even in our regional geographies, you know, we've had consolidation taking place, and they've realized good returns, right? With all of that, or as it pertains to us, number one, we're obviously keen to consolidate. Number two, from a financial perspective, we're ready to consolidate. We have 1.36 times leverage. We have lots of cash. We have bank line. You know, we have profitability and free cash flow, so we're ready. We do believe we've demonstrated execution credibility. You know, we have, albeit smaller, we have made acquisitions in the past. It's something we're keen and ready. Having said all of that, we can't comment on the propensity for or the timing for consolidation. It takes two hands to clap, and these are complex things. You know, sorry to give you the boilerplate answer at much length, but there you go. Dennis, go ahead. I mean, okay, if I can quickly follow up on that, Nikhil, you obviously know the other industry players better than most of us third-party analysts do. Yeah. What do you think the out- Because we've seen pricing recovery in pretty much every market except for Taiwan and Hong Kong over the last one and a half years since COVID, and Singapore. That's a standout. Within your, one of your competitors', footprints, Australia hasn't happened, but then there's Telstra, who has not been known to behave rationally quite often. You're thinking, I mean, your perspective on whether consolidation will lead to pricing recovery. Well, there was one market, Thailand, as you know, AIS got a bit disrupted for a while. Do you think it'll lead to more rational pricing? Yeah. Sorry, or? Will IMDA think that tariffs are high and therefore there's no, you know, put some sort of regulatory curbs, although they haven't in the past, it's been done through wholesale rate structures, so. Yeah. You're probably not gonna be fully satisfied by my answer. What I will say is that we expect consolidation to realize, you know, material value. That material value will come from a number of different buckets. You know, I think it's a bit premature, both from a planning perspective as well as, you know, for many other reasons to kind of allocate where, you know, value creation comes from amongst those buckets. We are confident, like with, you know, pretty much most consolidations, that this market will be no different. In fact, it's quite a dense market with dense infrastructure. We're quite confident that value will be realized through a consolidation. Thank you. I think, Dennis, maybe you can take the question on the maturity of our debt. Okay. Neil, to your question on the maturity of our debt, 55% of our debt sits in 3 public bond, two tranches of public bonds and one tranche of perpetuals. The first tranche of the public bonds, at 3.55% in terms of the coupon is going to be maturing in 2026. Our perps are due for, to be called, in 2027, and that's at 3.95%. The last tranche of bonds at 2.48, which is the one that we issued at the end of 2020, will mature in 2030, and that's at 2.48%. That makes up 55% of our total borrowings. About 20% of our total borrowings is up for refinancing about a year from now. That allows us to take advantage and negotiate on the, on the terms at which the financing, or the interest rates are being paid. In short, you know, most, we would. We are actually well-positioned, in terms of the lines, the financing lines as well as the public bond, public debt tranches. They're all fixed at rates which are far lower than the prevailing market rates. Those that are up for financing, refinancing or available for us to negotiate at terms which are probably going to be lower when as interest rates are inversely moving to time. We're well-positioned from that perspective. Quick follow-up, Dennis. The 3.95% tranche that's already available. I mean, in a hypothetical scenario, if we have a mild recession in the U.S. and you've got 6 rate cuts, you'll probably get financing lower than that, right? Is that up for refinance or when is it up for refinancing? I missed it. okay. That tranche of perps is in 2027. Okay. We can call on that earlier if we want to as well. Thank you. All right. Johan. Johan, second question. Thanks, Johan. Hey, Johan. Hey. Second question related to entertainment, let's maybe put a bit in a wider perspective, sort of the market size and the market revenue. As you probably have seen from the numbers is that the customer base has sort of come down a little bit and the ARPU went up. There's an interesting phenomenon going on in the market, as you probably have seen, is that quite a few of the OTT players have started to price up. This market is shifting a little bit into a more, I would say, healthy state of mind, where we go after the initial sort of hype around OTT to, I would say, a bit more value-based market. That's something we will pursue as well. There is, we believe, opportunity on the revenue side, probably more than there is initially on the customer side. There's no more. Number 2 element not to forget is that we use entertainment in different shapes and forms, and we use it particularly to differentiate and to bundle. That's a strategy which we use in different flavors. The third one, which I think is an interesting opportunity, and I want to just bring it to everyone's attention here today, is that Singapore, as a country worldwide has the highest piracy rate. That's what we live with today. There are some interesting developments going on in actually tackling piracy more forthcoming in Singapore, very concretely. That will open, we believe, opportunities to swing back customers who left the legit payable, pay TV system back to that, also on the back of increased fears around and justified increased fears, I would say, amongst customers and consumers around cybersecurity threats on the back of that. We're positive when it comes to entertainment going forward and based on these three elements. Okay. Thank you, gentlemen. That's very clear, Johan. Thank you. Thinking on it. Thank you. I will get myself on mute now. Okay. Thanks, Dennis. Thank you. next up, event, Arthur. Hi. Thanks for the opportunity. Arthur Ng. Yeah, just three questions, please. Hi, Arthur. Hi. Can I just clarify the service revenue guidance of 1%-3%? When you say 1%-3%, is this because of the impact of D'Crypt's removal, or do you look at this on a like-for-like basis? Second question I had is with regard to DARE+, what had been booked so far as of year-end 2023. Can you remind me of the CapEx, OpEx split expectations into 2024? Last question I had was with regard to mobile revenues. It seems to have been softening on a Q-on-Q basis, so the growth had somewhat flattened. We're seeing some reductions in subs as well. Apologies if I have missed this earlier, but what's driving this softness on mobile? Okay. Dennis, would you like to take the first two questions before we go to Johan for mobile? Sure. Hi, Arthur. On your first question on service revenue, we ended 2023 with SGD 1,992 in terms of service revenue. If you adjust for D'Crypt, which we've divested, and the transaction is likely to close in the next couple of months, the service revenue in 2023 would have been SGD 1,945. We're guiding to 1%-3% on that SGD 1,945 number. That's to clarify a so-called like for like without D'Crypt in the picture once the divestment is completed in 2024. Your second question on DARE+. About 60% of DARE+ investments have been incurred up to 2023. In 2024, we expect to incur another 30% thereof. that's about, now mathematically that adds up to be about SGD 80 million. CapEx to OpEx split of that SGD 80 million is 60/40. Does that answer your question before we move on to Johan? Yes, it does. Johan, for mobile. All right. Mobile revenues. You know, flattening, that was your observation. To a certain degree, the growth is indeed coming down a little bit. That's on the back of, I would say, an initial strong growth on recovery of roaming revenues. Having said that, roaming is still growing in terms of revenues. We believe here in StarHub that consumers will continue to travel happily as they have been doing since COVID disappeared and made travel again available. We do see that continuously still increasing. There is obviously, let's not shy away from that, on the lower end in the market, some price pressure, particularly driven by Simba. If we compare our revenue performance compared to the one we know, the orange one, we actually have been widening our service revenue gaps to them by quite a significant amount. Where we grow in consumer service revenue, connectivity service revenue, they seem to be going down, which I think attests to a very smart pricing strategy which we apply. Again, I think the industry, especially for the smaller players, it's probably a bit of a difficult time because typically MVNO don't perform well on roaming and with some pressure, quite a significant pressure for them, I would say, on the, let's call it cost-conscious quadrant, where a lot of the MVNOs operate and compete against SIMBA in a way also to M1. That's the quadrant where we stay out. We basically focus on quality, a little bit more premium. We compete where needed. We do that balance. We don't go after each sub when it doesn't bring any bottom line. That's what you basically see being reflected in these numbers. On top of that, interestingly enough, we managed to maintain a premium on 5G pricing. Again, we have been rolling out very aggressively 5G over the last 12 months, hitting over 99% population coverage. Also doing a lot of work on 5G indoor coverage on the back of being the number one 4G operator. That's at the end of the day something customers value. Because you can pay peanuts or something, but if it doesn't work, it doesn't work. That's a trajectory which we continue to pursue. Linked to that last one, which continues to help as well, is we differentiate where possible. We've got quite a sizable customer base build up over the last two years on cybersecurity add-on in conjunction with Caller ID. All these things help to show the numbers which we are showing you today. Hopefully that's answering your question. Thanks, Johan. Yeah. It's clear. Sorry, if I could just have one follow-up question maybe, with regard to content. I mean, there's a very interesting move by Disney recently to launch a sports OTT platform across multiple industry players. How does that actually impact your pay TV business down the road? Well, we had an interesting discussion about it. It's a bit of a, I would say, very premature question. Since you're asking it, two cents on that. Sports rights are always sold on a territory basis, right? Singapore is Singapore. Sports live is a very different execution compared to all the other entertainment. You know probably our content holding and sort of contract durations. We will observe it with interest. We continue to move from a starting point of strength, which we have built up. PL has been doing well for us. It continues to grow as a customer base for us. It also helps us to attract a younger profile of customers, and it has been surprisingly better than what we thought, actually helpful to cross and upsell other products and services. It brought quite a fair bit of new products and services customers to us in a way. What is happening in the U.S. with Disney, we'll monitor closely. I mean, it's not the only development, right, in sports. You also have seen and heard some things around Netflix. We'll continue to observe that and we keep our eyes open. That's where we stand today. Singapore is a small market, so it's not immediately attractive for that sort of player. We do play an important role for the time being, and we'll continue to do so. Got it. Thank you very much. Thanks, Arthur. Thanks, Arthur. Next in the line we have Sachin. Hi. Congrats management on a good set of results. Two questions. Thank you, Sachin. How do we look at the normalized net profit? Because we can see SGD 16 million fair value loss and then I think 6, 7 million of some gains. How do we think of normalized profit, which should be using as a base for FY 2023? Because we are thinking of transformation cost dropping. That's something, you know, simply because the point is how to think of this. Because this is simply mathematical addition of the drop in transformation cost on a base, on a normalized base. How about the savings? Because we're talking about SGD 80 million annualized savings from the transformation program on a per annum basis. Is it something which we are going to see? Why are we seeing not in your guidance anything based you know because the margin-wise you are saying similar to FY 2023. Is it the timing-wise we have to wait longer a bit for those savings to come through? Maybe that is a first question I'll ask you. Okay. Okay. Denny? Yeah. Hi, Sachin. Denny, you're on mute. Yeah. Sure. I'll just clarify on the net profit without the two events or the two Events of the divestment of D'Crypt, as well as the gain on the deferred consideration that was paid to MyRepublic. The SGD 60 million of loss that you refer to is before the non-controlling interest. If you take up the non-controlling interest, the net impact on the net profit attributable to shareholders is SGD 9 million. The gain for MyRepublic is SGD 7 million, the net effect of the two is actually a SGD 2 million loss to the net profit. Effectively the SGD 149.6 million would effectively be SGD 151.7 million. If you look at that number in terms of the underlying net profit without those two events per se. I hope that answers your question, as it pertains to the net profit before I move on to the debt plan. Yeah. I can see that. I mean, I think that's 80%. You've exactly given out 80% based on that. Yeah. Okay. Yeah. Yeah. All right. To your second question, on the debt plus investments, you know, as I mentioned earlier in response to an earlier question, we expect to incur about another 30% of the debt plus investments this year, which is fairly at par with what we've incurred in 2023 as well. It's like for like. Some of the debt plus outcomes are going to come through in this year, in 2024, but not a lot of it. When we launched a debt plus program in November of 2021 in our Investor Day, we've always said that that SGD 80 million increment to our net profit after tax is going to be baked in on an annualized basis of 5 years from the start of the program, right? You won't see the full impact of the SGD 80 million coming through until five years following completion of the program. We expect to complete the transformation largely in 2024. Some of the outcomes are going to be coming through this year and baked into our guidance. The SGD 80 million is going to be realized in 2027. Another follow-up question, if I may, on your 700 MHz spectrum. Is there any update for the spectrum and the payments related to that 700 MHz spectrum? Danny? Well, the 700 MHz spectrum is something that we're still in discussions with the regulators on. The regulators will give us a 6-month heads-up in terms of when the spectrum's gonna be available. So six months before that date will be the date that we need to pay for it. As of today, we're still in discussions with the regulators, along with the rest of the telcos and things. So there's no further update other than that point, yes. Got it. Okay. Okay, thank you very much. Did you have- That's all from my side, yeah. Yeah. Did you have other questions, Sachin Mittal, or? No, thank you. I'm done. Thanks. Thank you. Okay, next in line we have Wei, Hong Wei. Oh, hello, I'm Hong Wei from OCBC. Congrats on the positive set of results. Thank you, Hong Wei. Just a few questions from me. So just now there was a question on perpetuals, and then we know that there's cash on the balance sheet. Given that there's cash, is there some reason why you are not looking to call the perp when you can really kind of do so you can save on the interest expense? Or is this because you want to do, like you say, you wanna keep sufficient war chest for acquisition? Is then some thoughts on refinancing into another perp or refinancing into a bank loan, which could potentially be a little bit cheaper sometime? That's my first question. My other question is, in terms of the net debt to EBITDA, you indicated that this is quite a lot better than regional peers' average. At current levels, is this something you're happy with or we would be okay to push this higher, let's say if you have acquisition? Then the third one would be operating cash flows. Going into like 2024, how should we think about how this would change? Like, for example, is there like big working capital kind of changes in debt plus spending and how that, how would that translate into the free cash flows also? Yeah, these few questions. Sure. Sounds like questions for you, Danny. Oh, thank you. All right. Hi, Hong Wei. So your first question on the perps. So the perps are, as I mentioned earlier, at a coupon of 3.95%. If we were to issue a perp based on current pricing, it's likely to be way north of 4%. So it doesn't really make sense for us to refinance the perp at this point in time. You know, with the cash that we have, it does give us the flexibility to consider that at some point in time when the interest rates start tapering off. At this point in time, it doesn't really make a lot of sense. It does help our capital structure at this point in time. The short answer is that does provide us with the working capital requirements as well some of our war chest for potential acquisitions, which we always monitor the market for opportunities. I hope that answers your question on the perps. Second question you had was on our leverage ratio. It sits at 1.36 times. We take guidance that the industry median or average is about 2.5 times. At the 2.5 times level, I think we as management are very comfortable with that. We would believe our debt holders would also be comfortable with that ratio. That gives us the headroom to, you know, to lever our balance sheet, for potential growth acquisitions, as we've discussed both in the regional enterprise space, as well as, local consolidation. Your final question on operating cash flows. There are timing differences, as you move in the receivables and payables buckets. Largely, I can guide to the fact that our operating cash flows would be north of SGD 300 million. There are certain timing differences here and there, tax payments that may occur in one year versus another, but otherwise, it will be well within that range. The key mover, the one that moves the needle, would be our capital payments. As we invest more in growth, some of the capital payments do catch up with us. That's why, you know, the cash flows, for example, from year to year may differ on that fact. Operating cash flows are fairly stable. Thanks, Dennis. Hong Wei, does that answer your question? Yeah, yeah, it's quite comprehensive. If I can add just a small question, like, on the China-Singapore visa-free, you know. Do you think that this would be something that is significant on results or this, that there shouldn't be anything? Okay, Johan. Between there is nothing and significant, there's a middle way. I would advocate that we expect some upside. How much to be seen, but we're definitely ready and looking forward to that. Thanks for the question, by the way. Thank you. Thanks, Hong Wei. Thank you, Hong Wei. Next up we have Piyush. Hi, Piyush. Hi. Yeah, hi. Good evening, management. A few questions. Actually, firstly, on the home broadband segment, could you talk a little bit about the outlook for home broadband segment? You know, given the pricing plans which are launched by SIMBA, like, how do you see the industry, you know, pricing environment moving? What have you baked in your guidance for the broadband segment, you know, with that backdrop of pricing plans launched by SIMBA? Okay, Piyush, thanks for the question. I'll take your question. First of all, broadband is a fundamentally different business than mobile. In the past, people would switch mobile plans because of a phone. In recent years, people switch plans because they're no longer on the contract and, you know, it all seems pretty similar, and it's an easy switch. Broadband, on the other side, is a product where things are very different for a few reasons. Number one is, it's a hassle to switch. If it works, it works. If it doesn't work, you call someone. Number two is that it's not a product, unlike mobile, you can test out. Including that you just mentioned, all broadband plans comes with a contract. There's a good reason for that. We have been preparing for this market move for quite some time. We have a really detailed, well-worked-out plan which hinges around quality and differentiation, quality of network, quality of CPE and differentiation in terms of experience and in differentiation in terms of service. Furthermore, we use content as a differentiator on top of that, bundling products and services. Churn rates in broadband have been traditionally always very low. We see us typically trailing of 0.5, 0.6% churn. We have, as I mentioned, a very detailed plan worked out to handle this. We're confident that we will be able to handle that and we're ready for it. That's what I can say to you. That's basically the way we baked it in as well for 2024 going forward. Stay tuned, I would say. That's all I can say. We're ready. We're really ready. By the way, we're doing it on the back of our new ultra-speed 10G XGS-PON network, which is a key differentiator. Today, that's something we didn't discuss in detail. We launched ultra-speed end of last year, this 10G XGS-PON speed. In a very short time, we actually have seen that base growing very fast. That gives you also an indication that it's, especially in broadband, not only about price. It's really about the quality in relation to price and the service. That's what I can share with you today. Hopefully, that's of use for you, Piyush, for now. Yeah, that's. Can I just also say in addition to the fantastic comments that Johan made, that the 10 gigabit broadband package is SGD 88, just under SGD 89 for 10 gigabit broadband plus Netflix plus Premier League plus Sports+. If you're not already on it, you should look at it very closely. It's a great package and great quality and redefining home experience. Fair, Johan? Absolutely. Totally. Thank you, Nikhil. Got it. Thanks a lot. Thanks. Now you need to run to our store to get it. We're still open. We're gonna track you along the way, Piyush. All right. We have time for a few more questions. Just a gentle reminder to raise your virtual hand if you have a question for us. While people maybe think of other questions, just a few, 1 more comment to broadband. A lot of people think that all the broadband is the same. I just wanna make sure that we demystify that right here today. Not all broadband is the same. Most of the operators obviously use NetLink Trust. Besides that, there is a whole element around international gateway, our own 10G net, GPON network, the routers in which we invest, the expertise our installers apply to the home to install it in the best possible way. The content, layover which we deliver. It's an end-to-end experience, especially the international gateway, we never talk about that. That really makes us different compared to some of the others, and that defines ultimately your experience as a broadband customer because you will go visiting sites all over the planet. That's why we invest quite a fair bit of money as well to differentiate. Just keep an eye on that. Just FYI. Thanks. Thank you, Johan. Okay, we have Arthur in the line. I just wanted to clarify this 10Gbps program that you're upselling. Just wondering, what's the key use for this? I mean, I wouldn't even notice a difference between 100 Mbps to 500 Mbps. For 4K TV, you just need 25 Mbps or so. What is the purpose for people to upgrade on this platform? Arthur, you need a bigger family with more devices. No, jokes on all aside, there is definitely an experience difference, especially if you have a broadband network at home, which is used by multiple users using, I would say, demand-heavy applications. That's number one. Second, it's a newer network, typically the ping and the latency and everything else are just much better. Future use cases, by the way, for this one, without giving too much away, are similar to 5G in a way. You can start thinking about the defined verticals for consumers, whether it's gaming, whether it's video applications and so forth, and you could potentially slice that. This is the start of basically like a new era. Then of course, the CPE, which we deliver is the latest generation. Actually, next week, we'll be launching this plan, which we are discussing with Wi-Fi 7 as well, which comes with, you know, better cyber protection, better cyber security. There are a bunch of differences. This would be a point if you're a light user, Arthur. No, that obviously is not your product. If you have a family and a lot of people at the same time use video applications, entertainment, gaming, you will find it a different experience altogether. Come and test it out, by the way. Come to our stores, and if you wanna have a free trial, buzz me, ping me. Happy to let you experience at home if you want. Great. Thank you. Thanks, Arthur. Thanks, Arthur. Thanks for the question. Give it a few more minutes to see if anybody else has a question. By the way, a big thank you to all of you who responded to our perception study. We hope you like this new format. We took in your feedback, so you can see we take your feedback very seriously. Yeah. We hope you noticed the difference. Maybe that's why I have no question. Maybe somebody has a question for Keith. Please, for me. You did such a good job, Keith. Yeah. Very good. Okay. If not, then I think we can end the call early, and we can look forward to our long weekend. A big, you know, happy CNY to our Chinese friends for celebrating the Chinese New Year or Lunar New Year, and have a restful long weekend for, you know, the rest of our friends on the call. Thank you very much, and. Thank you.