Welcome everyone to Far EasTone's 2022 second quarter earnings conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at that time if you would like to ask the question. For your information, the webcast replay will be available within an hour after the conference is finished. Please visit www.fareastone.com.tw under the Investor Relations section. Now, I would like to introduce Mr. Gary Lai, the IR officer. Gary, please proceed.
Good afternoon, everyone. Thank you for attending Far EasTone's second quarter 2022 result conference call. Today, our President, Ching, and CFO, Shen, both join the call with us. Before Ching's presentation, please pay attention to our first page safe harbor statement. Let me pass to Ching. Thank you.
Okay. Thank you, Gary. Good afternoon, everyone. Thank you for attending our second quarter IR call. To give you some update, we start with the financial performance that we have. We actually had another very good quarter. As you can tell that we are beating the guidance across all lines. For example, our total revenue and it is 6.3% YOY. If you look at not only we beat our target, BOD target in terms of YOY growth, and it is also a very good quarter. Our EBITDA is 9.4% year over year, and then also net income and EPS is both still are in this double digit, 17.2%.
In terms of the cumulative for the first half, we are looking at TWD 42.63 billion for the revenue, and it is almost 6% YOY growth compared to the same time last year. Then, of course, we achieved the BOD rate just about 100.6%. Our year-long guidance for revenue is TWD 88.79 billion. We are on target. To me, that is not to exceed it. In terms of the EBITDA, the first half, we have accumulated TWD 15.21 billion, and compared to the same time last year, it is at 10% year-over-year growth.
Net income and EPS are also both in double digits, and it's more than 20%, as you can see, 22.5% growth year-over-year. In terms of target rate achievement is also 103.6%. Okay. Look at our fundamentals. We have been continuously to improve our net debt and net debt to EBITDA ratio. If you look at, we were at TWD 52.59 billion net debt for the first quarter, and then we have now come down to TWD 49.97 billion. The net debt to EBITDA multiple is from 1.82, decreased to 1.69.
In terms of the cash flow, the free cash flow, it is sound, remains to be sound and healthy. We have increased that from TWD 5.15 billion to TWD 8.95 billion year to date. Our cash-based CapEx, we are on target. As of first quarter, it was TWD 2.34 billion, and now we have spent up to TWD 4.7 billion. Our CapEx target for this year is TWD 11.1 billion. That is still the case, okay? All right. Next slide. Okay. Some more financial highlights. For example, the revenue, for our revenue since fourth quarter 2020, we are on the growth momentum.
This is the seventh straight quarter that we have a YOY positive, and then it's at 6.3% YOY for this quarter. In terms of the EBITDA, we actually scored our record high for TWD 7.6 billion, and since 2018 fourth quarter, okay? This is the 9.4% year-over-year growth was mainly contributed by our better service revenue margins and also the ongoing cooperation with APT, okay? In terms of the EPS for the second quarter net income, it reached TWD 2.3 billion, and our EPS is another quarter of a point 0.71. It actually grew 17.2% YOY, its highest in the industry. Okay?
Look at our mobile service. It is continuing to grow with very solid growth. If you look at several quarters in a row, and then this of course has a lot to do with the 5G uplift, and then we are looking at 2.5% YOY for this quarter. Also in terms of the post-pay ARPU, we continue to be leading the industry, and then it's now at TWD 719 per month. Okay? For our 5G post-paid penetration, it's steadily growing. It is growing at a pace that we are very comfortable with.
Of course, we would anticipate in September, iPhone usually would boost even more conversion. With the bundled offers and also all that nice goodies that we add on top of it. So far the penetration has been steady as we expected and you know, as we preferred. For the postpaid churn rate, it continues to come down, and we actually hit a record low below 1% to 0.98% in this past quarter. Our New Economy continues to be our growth engine. It actually grew 22.7% year-over-year, the first half together. It accounted for 18.9% of our total first half of unique revenue.
This is also our goal for this year. If you can tell from the chart on the left-hand side, in 2016 the New Economy revenue accounted for 5% of the total FET revenue, but it has been growing since. Last year we scored 17% for the New Economy over our total revenue, and this year's goal is to be 18.9%. For the first half, we actually already achieved that. Our enterprise is doing particularly well. You could see in the past it's about half-half, right? 50% of New Economy revenue came from enterprise, and they became 51%. Then for the first half it is now showing a 56%.
We are doing very well in the ICT revenue in the ICT area as a whole, smart ICT. It's worth mentioning that cloud service is growing very well, and we are seeing a strong growth at a 60% year-over-year. Also our IoT solutions, which a lot of those are our homegrown solutions, so we got pretty good margin out of those as well. It's also showing very strong growth year-over-year, like 70%. For the consumer part, our friDay videos, the friDay video service, the paying users subscribers, we are seeing up 18% year-over-year growth. Our e-commerce, even though this year the pandemic, you know, kind of came back with the Omicron.
Compared to last year, a lot of folks, when the pandemic first hit Taiwan, so there was a lot of e-shopping, right? People were accumulating food and groceries and all that, you know, don't know if the cities will be shut down and all that. This year, people are a lot calmer. Even with that, we are still scoring a double-digit growth at 10% for our e-commerce. Okay. We also have some network highlights. For example, we had, as some of you may recall, our 5G spectrum sharing deal with the APT that included a second phase.
The prerequisite for a second phase to start would be if the authority has authorized the 4G spectrum sharing, or, you know, we would swap our 2600 TDD spectrum with APT's 700 LTE spectrum, because they had a 15 MHz , and then we would swap for 5 MHz out of it. We went ahead, did that. This is to improve our network overall, you know, because the 4G is really congested at times. With 700, the low band, it is very powerful. This actually improves our outdoor coverage by more than 10%, especially for those previously underperformed areas.
Then also for the indoor performance, it improved by 22% because of strong penetration by the low band. Then also it helped relieve the peak hours congestion that we see by the data traffic. The relief is as high as like a 15%. So it was a very good launch and then didn't take us long to get it, you know, launched everywhere, island-wide, nationwide. Also, we were the first company, and then Ericsson and then, you know, Far EasTone, we were the first to demonstrate successfully how to do the 5G SA using 5G SA slicing technology that globally. In Taiwan, we are also the first to actually use this technology and then demonstrate it in Kaohsiung.
We work with the police department there in their smart patrol cars. This is a successful POC. They actually also get some recognition for that. We are working with them to further expand the service. We also signed MOUs with three universities here to build the 5G smart campus for them. This will be using 5G technology. On top of it, we will do the monitoring, the patrol monitoring, the patrol, and use big data analytics. This is a very typical, you know, like we said, big data, AI, and IoT kind of application on top of our robust 5G network. Okay. For the ESG, which is, you know, something we have been doing.
We are very happy to join as the first carrier in Taiwan that joined Ericsson's global product take back program. This is going to recycle up to 98% of the waste electrical and electronics equipment materials. That is much higher than what was recommended by EU's WEEE directive. Only 2% of all that waste will be buried. This is really good news because, from the environmental, you know, perspective, that is a very good program. We actually are expecting by the end of this year, we will have retired more than 10,000 3G and 4G radio stations for recycle.
This is a big step, and then we are very happy that Ericsson has this program, and then we're happy to be part of it. Okay. All right. As I mentioned earlier, our enterprise actually drove, you know, very good growth for our New Economy in the smart ICT area. Some highlights included, you know, we look at the contracts that we have signed during the first half. It is 38% growth year-over-year. You know, we have some big wins, major wins. They are all bigger than TWD 100 million in size. There are several of them.
For example, drivers include this digital transformation that is happening in a or demanded in the public sector, in government agencies, and also in some big brand name kind of enterprise as well. The first one, that is, a new generation fixed mobile convergence project for brand name store chain, convenience store chain in Taiwan that we have got a contract with them to do this digital transformation project with them. It started with some infrastructure upgrade or pre-planning. On top of it, there will be some smart applications on top of it as some different phases go on. The second, actually is a bunch.
We have several smart surveillance solutions related to the IoT for multiple government agencies and affiliates. These, as I touched on earlier, smart IoT solutions use our homegrown solutions. This is the type of project we actually prefer because we are able to reuse our homegrown solutions and continue to expand the services and all that. For EMS, this is our energy management system. We have a homegrown platform that we built, and then we did that for every classroom has an air conditioner, you know, programmed previously.
More than 1,300 schools that we have this EMS deployed to manage their electricity usage after they all have the air conditioning systems installed. The same EMS platform that we are, you know, using different functions on it, that we are going to support Taiwan Power Company, because we are building a microgrid system project in Penghu Island, and this is in collaboration with our subsidiary, Prime EcoPower. It's building the solar plant. Okay. We have expanded our telemedicine platform for online clinic. This was really urgently needed during the peak of the Omicron crisis in Taiwan.
We were actually working with our affiliate hospital in our group and then work with them to help two cities here, Taipei and New Taipei. This will support the residents because they were advised to stay home and not to go to the hospital if their symptoms are not strong or not severe. They can just stay home. For them to stay connected with the healthcare personnel, how to do that, how to assist that from the online perspective, they need a platform that is secure and that is also convenient. They can just do that from their mobile. We did that, and then the daily users grew 20x more than during the peak of Omicron.
This is built based on the same telemedicine platform that we have previously launched with the 5G and that we are working with some Ministry of Health and Welfare that we are advancing these telemedicine services to all the rural healthcare centers. So far we have already covered 33 of them that are across 12 different counties. This effort is a multi-year project. Next year, and this number will continue to grow, and this is a multi-year project we have been doing with the government. We have got some awards and recognitions for the second quarter. Quite a few of them are CSR or ESG related. The first one is from the local famous business magazine, CommonWealth Magazine.
We got Overall ESG Performance Role Model Award. From institutional investors, myself and my IR team have been awarded the best in two years in a row. We are very honored and then we're very humbled by that. Our telemedicine service platform has received a certification from HIPAA in the States, and this is the first platform of this kind that have received the certificate, which will be required to do the kind of telemedicine service according to our regulatory requirement here. During pandemic, there were exceptions, so people were using different OTT to do that because of the pandemic. Once that is back to normal, in order to provide that kind of a service, this HIPAA certification is a must.
We are the first one to receive that, and we are ready for that already. Okay. We have also got Industrial Safety and Health Association Award, the Golden Award, and our service is really well-known. For 11 years in a row, we have got the best service in Taiwan. This is across all verticals, so this is not just about telecom. It's a service industry, period. We were the best. We have been the best 11 years in a row. It's a Golden Award, and this award actually started 11 years ago. We are the only one that has been receiving the award, nonstop for 11 years in the world in a row. Okay. For the second half, priorities, we will continue to promote because we see the demand on the digital transformation.
We have joined forces with our IT department, you know, to join forces with our enterprise BU to promote this digital transformation consulting services, because still many companies, they are looking for help in this area, and they don't know necessarily exactly what needs to be done. We have this all set up and then we will promote it more so there are more, you know, companies or enterprise aware of this service. Seeing the need and the demand in the ESG solutions, we are expanding our current EMS platform, you know, to support the growing demand that we see in this green ICT area.
Of course, in September, the new iPhone will be launched, and then we are getting ready for that. As I mentioned earlier, this will definitely boost more bundled 5G services. Our Mobile Circle, which is a digital platform, and this is where we will promote our digital services and strengthen our loyalty program, and then this is to improve our customer experience. We want to treat our users like members. This Mobile Circle will be our digital reach program that we will continue to enhance. Last but not least, we will pursue this regulatory approvals for FET-APT, which is actually moving along. So far, both Fair Trade Commission and also NCC have held a forum separately.
FTC held it in May, back in May, and NCC just had it, like, last week. This is with, like, scholars and then some officials and with the telcos. We had a closed-door discussion and presentation. Both have done that. For NCC, the next that they will have a hearing that will be in September. As far as we can tell, things are moving along. The feedback we receive from the scholars, they all kind of are in support of this merger for both cases actually. Okay? All right. Okay. With that, I will conclude my presentation for you all, and then we will welcome your questions now.
Thank you, President Chee Ching, and ladies and gentlemen. We will now begin our question-and-answer session. If you have a question for any of today's speakers, please press zero one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press zero two to cancel the question. Now, please press zero one to ask the question. Thank you. Our first question is coming from Neil Anderson, HSBC. Go ahead, please.
Thank you. Good afternoon. I have three questions, please. The first one is on mobile postpaid ARPU. TWD 719 in the quarter, and that's quite a bit higher than the previous five quarters. Were there any one-offs in the quarter that drove that rise? And do you expect that to continue at these levels? The second question relates to the Asia Pacific Telecom. You mentioned the EBITDA, that record high is due to, in part, to Asia Pacific Telecom. Was there anything that changed, particularly in the quarter? Is it just more volume that's driving that EBITDA growth? The final query relates to 5G. I know you started the network slicing with the police.
5G's obviously been rolled out for a while, and this is one of the first types of sort of live trial, if you like, or live service that we're seeing. Do you expect that pace to pick up now you've got a proof of concept that's live and working? Or is it still pretty slow in persuading government and enterprise customers of the benefits of 5G? Thanks very much.
Okay. All right. Thank you, Neil, for your three questions. I'll answer them one by one. The first one is for mobile, right? This is contributed by as we convert more 5G customers, right? You look at how we calculate our ARPU. The numerator is becoming bigger, right? The denominator is the same in terms of the number of subscribers. This number will continue to grow, and that's what I would expect. Okay. That's to your first question. The second question is on the AP cooperation. This is the amortized expense or the cost that they pay us, right? For both the spectrum and then also other depreciation, CapEx depreciation, OPEX sharing and all that.
We amortize it accordingly. This will just add up. This is also steady. Another is, there's still MVNO service that we granted them, and then that will continue to generate revenue as well. Those are what I was referring to as the APT cooperation. Okay. For the third one, 5G slicing. You're right. That one is actually although it's a police department, it is still to us, it's not consumer type of application yet. I still would see, for example, like the telemedicine, right? Although right now the Ministry of Health and Welfare, their focus is how we make the rural areas to those are, you know, like, less advantaged areas.
They can get as good medical services as the urban areas. The focus has been there. It is not to the individual consumers anywhere yet. However, they have since relaxed on the scenario where telemedicine can be applied and also be reimbursed for the insurance, which is important for the adoption of this service. We are seeing more scenarios that will be applied. That's why during pandemic, even though we did that for free during that time, to make this online app available, and people can download it on their mobile. That is kind of like the prelude to such consumer-driven, consumer-facing application.
That's what I would consider when that becomes more prevalent or as the regulation on this, health policy is more relaxed, there will be more adoption. That's when people will definitely see the difference between having a 4G service versus a 5G service. Because you do want your doctors to see you and your symptoms, and then your chart and all that with no lag and with good resolution. So there the 5G versus 4G will make a difference. People see that, and people will take it seriously. That's if you ask me what would be a killer application, and I'll say it is not about entertainment, it is about your health. Then sometimes it could be, you know, life-threatening. So that will be something like that.
You know, the other areas that I would say for 5G, we have heard enough about metaverse, AR/VR, but that's all kind of like. It's not critical demand. Maybe there are some people kind of like that, want that, but it's not something they need. That will take time to take off. However, for AR and VR type of applications, there's still a lot of application we already have today, like, you know, watch the videos, right? With the 3D and all that. We have the technology advancement can already make them a more acceptable solution and make it more prevalent. We don't really need to have metaverse all kind of, you know, painted out to see the benefits.
That is where I see the 5G kind of application for users will take on more. Also another driver would be kind of on a not so positive side. That is, as more people using more data, which is, you know, the data usage we see from our statistics or from our data just continues to grow. Every month it is growing, it's growing. 4G is getting congested. Eventually you can say, well, yeah, 4G is great when nobody is traveling on it, right? Like, you have a great highway you built just a few years ago. When there are not many cars on it's great.
Then say, "Why do I need another highway?" When they're full of cars and people couldn't really move fast enough on this highway, you will think about if there's another one that you can, you know, the congestion could be relieved, and then 5G would be that solution. I think it's from both of the new applications and also from the fact people, users or just the consumers in general, their demand for data is growing daily. Then our 4G capacity is fixed. 5G is the solution to that. Sooner or later, they just have to, you know, be moved to 5G so they can use both 4G and 5G. There's enough drivers as I can see. That's why we see a steady conversion, right? From the user base we have.
Okay, I hope that answered your question, Neil.
It did. Thank you very much. It's very interesting to get your thoughts on the 5G side and particularly the health element. If I could just follow up on the postpaid ARPU side. Understand that it's greater volume of 5G customers. In other markets, as you sort of move towards 30% adoption, the uplift has dropped, which is kind of what you'd expect, I guess, because the high-spending users, the high-value users move first. It sounds like what you're seeing is a fairly consistent uplift. As you say in the slide, it's above 20% and it's that volume that's driving the increase in ARPU. Have I got that right?
Because, you know, it's kind of ironic, right? For those that were already at a high rate for the 4G plan, those were the ones that we feel they are the likely early adopters kind, right? We approach them first. If you think about it, because their rate already was higher, the delta from their current rate or their 4G rate to the 5G rate, actually the delta will be smaller. If I were able to move a lower rate customer in 4G to 5G, the delta could be actually larger, bigger. That's why you get this mix, right?
Also because in 5G, when we move the 4G, you know, lower rate plans user to 5G, of course we wouldn't, they wouldn't want to move all the way to TWD 1,399. That's why we have TWD 999, TWD 799 kind of offer. Then in terms of the delta, they could be just as big, if not bigger than those high rate, you know, customers that we moved at the earliest stage. I do expect it to be, you know, pretty much about the same or, you know, still. Yeah.
Sounds great.
Did I help?
Thanks very much. Appreciate it.
Okay. Sure.
Thank you.
If you would like to ask a question, please press zero one on your telephone keypad. Thank you. Next we'll have Peter Milliken of Deutsche Bank for questions. Go ahead, please.
Thank you.
Yeah. Hi, good afternoon and great results. My question is really about congestion that you mentioned. I understand that it will be an issue for all operators, and I'm wondering whether you think the industry may consider lifting the pricing of the unlimited 4G plans as part of the solution.
You know, I wish we could. You know, I think sooner or later, but then I have to say, I think our consumers have been pampered, if not spoiled, very well, so it's really hard to raise the plan on 4G, right? I would say at least maybe our focus is more on 5G, so we will put more of our marketing resources on the 5G. The promotions or campaigns or, you know, promotions, I would say. Promotions, sometimes we give some extra goodies and then all that. We'll put more on the 5G side, for the 4G, we wouldn't entice them with more, you know, such goodies. That's where we will shift our resources a little bit.
If you want to change the rate plan and you know we can have, you know. We are independent operators, so everybody has different strategy. We cannot all do that at the same time, and the government say, "Well, you guys are, you know. What are you guys trying to do? You're colluding." Right. We cannot do that, and we won't do that. The fact is, if I'm the one to raise the price first, right away my rival is waiting to get those customers from me, right. Unhappy customers.
Mm-hmm.
I think people are already used to it. You know, and then our only chance was because 5G is a new technology, it did bring you a lot more capacity, so the rate increase and also not to mention the billions that we paid on the spectrum. It's well justified, and people can understand. They may not like it, but they understand, right? That's only reasonable to raise the rate plan for 5G is higher than what they have now in 4G. Otherwise, who can survive this telecom business? Who want to do this telecom business, right? That just wouldn't make any sense.
It was getting frustrating for many of us for a long time. It's good to see you come out the other side.
I told them, whoever started this unlimited data, you know, program is like a gosh, you know. They don't know what they were doing, right? How can you?
Mm.
How can you survive with any business, with a business model like that, right? You need to continue to invest in your capacity, but then the more they use, you don't get more money. What type of business can survive with that kind of model?
Mm.
We have technology change to, like, give us, like, a refresh, right? Not everybody will just refresh at once. That's why we need to do this migration. Thank you for bringing up that topic and the thought about raising price on 4G. I don't really think that's gonna happen. It's very hard.
Sure.
We will be happy if they are willing to upgrade to 5G, you know, and then that I'll be very happy.
Yes. Well, that's interesting. It's a good trend anyway.
Yeah.
I have a couple of other quicker questions.
Sure.
One of them is on the merger and the regulatory approval for that. Has there been any discussions of concessions being demanded for this? I wouldn't think you would need it. You're just going from five operators to four. Sometimes regulators try to push in that direction.
No. Actually, as I shared with you, from what I know, the scholars actually, if not all of them, I think the majority of them, definitely an absolute majority of them see the need. See, this is not a case where, you know, we have all companies that are doing well and then just want to get bigger, so to consolidate together or want to merge together. In this case, we're talking about two small telcos that just cannot survive. They've been losing money for so long, right? If this is really a free telecom industry, you let people come in, you need to let people exit, right? This is not like, I want to take over, you know, APT or Taiwan Mobile want to take over Taiwan Star.
This is the small ones. They cannot really survive. This is a mutual agreement, you know, and then they see the mutual benefit of doing it.
Yeah. Well, best case scenario.
Right. Then the government would know, right? It's the big companies like us that we are paying to kind of clean up the industry, right? Because otherwise-
Yeah.
they go bankrupt. It's gonna be the cost to the whole, to the government, to, you know, every taxpayer.
Sure.
They should really thank us for that.
I'm glad that they feel the same way, you know.
Well, so far, yes. Yes. They do see that. Yeah.
Just one final question from me. The 5G network slicing for the police-
Mm-hmm.
What type of services are they getting out of that network slicing?
Okay. If you are familiar with what's in the States, because I was from AT&T, right? They have a network called FirstNet, and that is for kind of like a dedicated bandwidth for first responders. During, you know, disasters, right? The firefighters, the rescuers, police and all that, they need to make sure their mobile communications will not be, you know, affected by all the, you know, majority of the users because during pandemic, everybody's calling, right? They need dedicated bandwidth or spectrum to support their communication doing that. I use that same idea, and I told my team, I said, "This is something you could do with our police department," right? The idea is like they would have their dedicated spectrum.
If this is gonna be, you know, rolled out, it wouldn't be just for one city. This will be a nationwide kind of thing. We started with Kaohsiung City. The application gets, you know, changed a little bit. They tried, like they said before, kind of have it totally dedicated. They want to see if they can have dedicated on there. They have a receiver in their car, so they wanna make sure the patrol cars, right, the police in patrol cars have all that dedicated capacity on the 5G with no lag and all that. In real time, when they are chasing the criminals, they get their information, their communication, and all that without any interruption or any possible congestion.
This is, you know, kind of a modified, smaller scope of application to the FirstNet that AT&T deployed in the States. Although that was based on 4G, and we are doing this with 5G. I stole the idea from my mother company before.
Well, yeah. Well done. Yeah, thanks a lot for the answers. That's been great.
Thank you.
Thank you.
Thank you. Next question is from Sara Wan, UBS. Go ahead, please.
Hi. Thank you for the opportunity to ask a question. I have a question regarding New Economy, say, business. How much % of the enterprise-facing ICT revenue is recurring? So far it seems the growth momentum of the overall New Economy segment is quite robust. Do you have any view or any plan of how much of the segment could contribute to total revenue in maybe mid to long term?
Okay. First question, you are asking about the recurring. For ICT, actually, a big part of it is like, my sales head would tell me, she every year on January first he feels most depressed because all his revenue from last year was like reset, right? They start from zero again. That's what they were telling me in a dramatic way. That tells you. Although, of course, we always have pipeline. You have carry over from the year before. You have contract that's signed. Then the point is ICT business is like every single project that you got the project, you get it done, you get a one-time revenue and all that.
However, more and more, and that's also part of our strategy. We don't want this ICT to be only a one-time effort because a lot of times after we have done what the customer asks for, they will still need ongoing maintenance or management. We will offer those like a, you know, maintenance service. That will be a ongoing subscription, kind of a recurring revenue. But then compared to the size of the. Like I said, you know, many of them were like over $100 million, you know, kind of a contract. But then the recurring piece, of course, will be smaller ones, but then those do add up. They are recurring ones, they add up. So they become the base, right?
Every year, starting January 1, we know they are not really starting from zero because they already have that base. You know, every year there's just so much that will come in, the income, the revenue. We are still at an early stage of building the ICT revenue. Most part of it, they are like a. They are not recurring because they are one time, and then there are each of those new projects or second phase to the same project. We do see the base for these recurring is increasing, and that's what we actually encourage our team to do, and that's what we should do. You know, we will see more there for the recurring part. Okay. Your second question is about, now we are about 18.9%, right?
How much higher it will grow to in the mid to long range? Right? That's your question? Okay. I think in two to three years, I would like to see them, you know, 25%, you know. My CFO is like, I'm not supposed to give that, right? This is not a forecast, right? Am I okay? I would like to, right? Just kind of, you know, if you see. Show the chart. Show the chart on the, from the 5%. Look at that. If you look at that, it's almost like every 2% growth from the previous, right? If you look at that. I think, in two to three years, for 25%, that is a good mid-range target. Okay?
We start with the telco, right? That is still very consumer-based, and the consumer base is big. We are talking about millions, right? 7 million subscribers. After the merger is completed, we are talking about 9 million, right? We want to grow our consumer business not just with the telecom, but then also with other digital services, with more value-added services. That's how we continue to grow our pool. With such a big base like that, I would still think the consumer part of the services will still be the majority of our total revenue. 25% if at one point, before I retire. I don't think it will become 40% or so.
For the long term, the pie will be very big when the ICT becomes 40%, I think. I think 25-30 will be good. 40 will be. We will have some major breakthrough or expansion or maybe some M&A, you know, in the enterprise area. Right now, I think, for the mid-term, 25%, if you add another two years or stretch, five years, maybe 30 will be the top that we'll be looking for.
Got it. That's very clear. Thank you.
Thank you.
Thank you. We are now in question and answer session. If you would like to ask the question, please press zero one on your telephone keypad. Thank you. If you would like to ask the question, please press zero one on your telephone keypad. Thank you.
I think there were about 10 questions I already answered in total, so maybe that was enough. Later on they can always contact our IR team for further details.
Sure. Thank you, President Ching.
Right.
Yep. I think there are currently no questions, and I'll pass the call back to Mr. Gary Lai. Gary, please proceed. Thank you.
Okay. Thank you everyone to attend our second quarter 2022 results conference call. See you next quarter.
Yeah, we welcome your feedback anytime, so you don't need to wait until IR call to contact us. Please feel free.
Thank you very much.
Thank you.
Thank you, President Chee Ching.
Take care.
Thank you, Gary. Ladies and gentlemen, we thank you for your participation in Far EasTone's conference. There will be a webcast replay within an hour. Please visit www.fareastone.com.tw under the investor relations section. You may now disconnect. Goodbye.