Advanced Info Service Public Company Limited (ADVANC) Earnings Call Transcript & Summary

Good morning, analysts. Welcome to AIS 2021 Results Conference Call. This is Nattiya, Head of IR. First of all, let me introduce the management team with us today. First, our CEO, Khun Somchai.

Good morning.

And the new member of our management team, replacing Khun Hui who retired, our Chief Operating Officer, Khun Goh Seow Eng.

Good morning, ladies and gentlemen.

Next, our CFO, Khun Tee.

Good morning.

Then our Chief Consumer Business Officer, Khun Pratthana.

[Foreign Language]

Also join us, Chief Enterprise Business Officer, Khun Tanapong.

[Foreign Language]

So let me begin with the brief and then we'll go to Q&A. The 2021 obviously continue to be the challenging year for us with the ongoing pandemic that impact to the economy as well as the consumer spending. And also, we observed a continued price competition throughout the year, both in terms of mobile and also broadband. Yet, we managed to deliver a slight growth at the top line with our mobile nearly flat year-on-year, but we have very strong growth in the broadband and enterprise, both of them delivered a growth of close to 20%. We also continue to execute cost control where possible, but also ensure that we build a quality 5G network and market 5G to the right segment. So our EBITDA grew about 2%. And at the EBIT level, also grew 1% despite that we have the addition of the 700 megahertz spectrum amortization. Net-net, at the NPAT slightly declined almost 2% as this year had quite a bit of the FX loss. With a solid performance, we then announced the dividend, which is equivalent to 85% payout for the full year. In terms of our next year outlook, 2022, we expect some economic recovery in line with the GDP growth forecast. Our key focus will be, number 1, in terms of mobile business, we aim to leverage our 5G to win share particularly in the high-end segment as this continues to give a nice ARPU uplift. And hence, we will continue to invest in 5G and bring the population coverage to about 85%. Secondly, in terms of broadband, we will also invest into new areas to capture the demand, especially in the outskirts and expect the broadband subscriber to grow to about 2.2 million. Thirdly, in terms of enterprise, we've been satisfied with the early results with Microsoft partnership, which help us strengthen our capability to service cloud to the enterprise customer. We also earlier announced our partnership with Gulf and Singtel, which endorsed our aim in the data center business and also is complementary to growing our enterprise cloud service. And lastly, in terms of the digital business, the JV on digital lending is progressing with business setup. We should expect some launch within the first half of this year. We also look into other business -- digital business that we can leverage from our mobile subscriber base. Financial guidance. The core service revenue is expected to grow at mid-single digits. So this will support by the growth across all 4 business units as mentioned. In terms of EBITDA, we expect to grow at the low single digit, even though we continue with the cost optimization, particularly in the network OpEx, but the economy is recovering -- as the economy is recovering, we expect the marketing program to kickstart focusing on 5G. In terms of CapEx, we expect to spend between THB 30 billion to THB 35 billion. More so maybe to begin with the THB 30 billion depending on the market situation. We also are prepared to ensure that we have a quality network to compete. Plus, we spend a bit more to extend the broadband coverage and also invest -- continue investing in enterprise and digital platforms as well as the ongoing IT transformation. So that's all for the brief. We now like to open the floor for Q&A.

[Operator Instructions] First question from Khun Pisut, Kasikorn.

Can you hear me?

Yes.

May I have 3 questions for this one? My first question is about your guidance. You already explained, but I need to know a bit more. What could be the reasons for EBITDA growth target for this year to be lower than your core revenue growth, which is not quite typical comparing with the past year and also you will have such a huge fee cost structure? My second question is about your 5G strategy. Last year, you achieved the 76% 5G population coverage, whereas you got 5G adoption rate of only 5%. What would be your financial and strategic reasons for 85% 5G population coverage this year? How much 5G [indiscernible] do you expect for this year? And what will be your strategy for the mass adoption of the 5G? And if you achieve such a coverage this year, what would be your target for next year? And my last question is regarding your fixed broadband business. You target to grow subscribers by about 430,000 to get 2.2 million from this year by using THB 7 billion CapEx. And this industry has been unhealthy with intense price competition, even you can't grow the supposed top line, that's because you have the low base. Remember that your fixed broadband CapEx was about $5 billion about a year in the past. What is the rationale to raise the CapEx budget this year? Also, have you been thinking about to consolidate this 3.5 area market to improve the competition and the return on investment thereafter?

I'll take the first question on the EBITDA and then on the 5G strategy and fixed broadband, maybe later to Khun Pratthana. On the EBITDA guidance, I think this year, number one, definitely, there is a recovery in terms of the overall consumer spending. Number two, we also intend to continue to leverage our 5G service. And we also see that 5G service will continue to expand into the mid-tier segment. So with those 2 key reasons, we've been spending quite less in terms of marketing over the past 2 years due to the pandemic situation. So basically, we expect higher marketing spending this year to address the recovery of the demand and also continue to expand in the 5G. Network OpEx, I don't think that will be the major item on our forecast. This year should grow quite nicely along with the top line, but the marketing spending will be the major item. That's why our EBITDA guidance seems to be on the low side. However, at the bottom line, we will have support from the D&A. As you see, our D&A last year actually grew only at a low single-digit level. I think this year, we also expect D&A not to grow more than last year, maybe can be a bit more flat. So that will be a support to our net profit.

For the second question regarding 5G strategies, let me address in general pictures a little bit more on the 5G. In 2021, as [indiscernible] mentioned about the 5G customer and handset in AIS, network is roughly about 5%. In 2022, we do expect that the country will be adding additional 5G device for another almost 6 million. As an overall, in country, there would be about 11 million 5G devices in Thailand, growing probably about double from the prior year in 2021. The 5G device will start or had start in top tier and going to mid-tiers. The customer who use 5G device and 5G plan has been constantly increase the ARPU, roughly about 15% to 18% comparing to prior 4G plan and 4G device. So with that, we are taking leads for the industry to make sure that our 5G coverage has served them very well across the nation of Thailand, not only for consumer, but also prepare for the enterprise for nationwide as well. So that was the strategy that we laid out last year, and we continue on pushing that. There are also opportunities for 5G when it comes to devices that maybe the second half of this year, the device manufacturer will be able to provide more than what I just mentioned about -- after the economy recovery and the chipset situation has probably improved by second half. So we are very much prepared for that. That's the second one. The third one, regarding the FBB, allow me to take this question. Your question could be about -- why are we pursuing the aggressive plan for FBB expansion for another 400,000 whereby the industry has been competing in price? For FBB, for us, we look at the service, the digital service for customer to home to family as one. So we expand from mobile to broadband. As an overall, we can call average revenue per people or per household. FBB have served us very well, giving consumer connectivities, giving us more revenue as well as reducing a big amount of customer moving over around as we call churn. So in general, FBB will serve as a part of the whole connectivity to customer. So with that, I think the consideration of pushing FBB forward is very clear for us to answer the customer needs.

Let me add on fixed broadband. I think fixed broadband itself when AIS look -- start to look into separate the fixed broadband itself because it's like -- but the need to win mobile and fixed broadband together. This is our strategy to serve our customer needs when our customers go to our phone, they use our mobile. When they're back to the home, they choose to use our fixed broadband to serve our digital life service provider that we provide. And it's also -- it will be [indiscernible] value of our mobile revenue in the future also. Even the price competition in the market today, if you will see in fixed broadband, still a lot. We still have gained the profit in this matter. This is why we go to fixed broadband. But I don't push it very hard in the beginning. We just grow organically and serve customers as much as we can. I think this is -- that we can hit it off on our fixed broadband business.

Next question from Khun Wasu, CIMB.

I have 4 questions in total. The first question is rather about the CapEx in the past year in 2021. So I think last year, AIS was targeting THB 25 billion to THB 30 billion of network CapEx. But when I look at the actual numbers in the property, plant and equipment, I think the company invested probably THB 23.5 billion in CapEx. Why was the CapEx below the budget? So that's the first question. The second question is about the fixed broadband CapEx PAUSE since you increased the CapEx for fixed broadband business from $5 billion to $7 billion, can you tell us more about the fixed broadband coverage in terms of the current home passes and home passes that you are planning to achieve by the end of 2022? The third question is about the revenue growth for 2022. Since you are targeting mid-single-digit revenue growth, what is your assumption for the competitive landscape in the mobile market in both the prepaid and postpaid segments. And my final question is about data center business with Singtel and Gulf. Do you plan to secure hyperscale client before keying off the construction process? How do you plan to build a data center first and then wait for the customers to come? That's all my questions.

Let me answer you on the fourth question about the data center business. As you know, our enterprise corporate, we try to grow our CCIID in the new era of the enterprise revenue. For the data center, when we have the joint development of [indiscernible] with cloud and Singtel, this means we are [indiscernible] both things. First, our internally, we also expand our data center with debt for sure. Today, we have our existing data center that's not enough for serving our customer in the next 2, 3 years. So we really need to build it by our own. When we align with the Singtel and Gulf, it will align our strategy because Singtel is our regional operator who have really good relation with hyperscale. A lot of things and also Gulf have their [ efforts ] in the power that use a lot of power construction in data center that will maybe fit us even we view it our own. But combined [ center ] with Singtel and Gulf, you help us to be hyperscaler in -- that's when we do [indiscernible] both our business as usual for the data center and also open for the opportunity for hyperscaler in.

So I think on CapEx, last year, we still spend roughly around the guidance. But I think the numbers to look at, probably, it's in the addition of the fixed asset. Sometimes, I think, we had the timing on the acceptance of the equipment and maybe it's still under construction or under installation. So it hasn't shown in the book.

Let me answer the second question regarding FBB. In 2021, we have had 8 million home passes for FBB. In 2022, our plan is to go for roughly another 50% of that, reaching about 11 million home passes. And the third one, regarding the revenue growth and competition, maybe I address the competitions. We do foresee that the competition in mobile will continue on in 2022 as many of the analysts and every one of you have observed all along for the past quarter and probably early of this quarter. We very much focus on the qualities and the delivery to customer in variety of services. In postpaid, it's a lot more toward 5G that we believe this is the value to customer. In prepaid, there are a lot to do with masses and also a variety of products you can service for customers as well. We do not think the price competition will go away anyway. They will last in 2022.

Okay. Thank you very much for your answers. Maybe a few follow-up questions about the data center business. Am I understanding correctly that this will be a joint venture among the 3 parties? And can you give us some more details about the potential shareholding stake by AIS in this new venture? And also, when would the first hyperscale data center be operational?

I think we are in the stage of the joint development agreement. We still not concluded yet about how much a shareholder portion is a [ part ]. This is still a [ continuous ] act on based on the best effort. The second thing is when we do this thing, we did allow 2 years to make it happen in the new data center.

Next question from Piyush, HSBC.

Congratulations for strong results and increasing the dividend payout ratio. A few clarifications firstly on the guidance. Does your guidance also reflect for benefits from consolidation on the revenue side? And for CapEx in 2022, what's driving higher CapEx in 2022, given coverage has been quite strong on 5G also in 2021? That's on guidance. Secondly, if I look at your other cost of services that has increased 14% year-on-year and primarily led by higher content cost, so can you talk a little bit about the nature of these contracts? Are these fixed contracts or variable? And would it continue to increase in line with adoption of AIS PLAY?

I think in terms of the guidance, we haven't factored in the full, say, the benefit of the consolidation, given that, I think, still to be seen how that will play out, but we'll do our best to try to capture the market trend, and I think give the best service to our consumers. I think that's why I come to your second question. The CapEx of 2022, I think we upped the range a bit from last year, mainly because, as you mentioned, if there's a benefit from consolidation, there's supposed to be some shift in the subscribers. So we want to be ready to make sure that we have enough capacity once if the subscribers move over. So that's why we raised the range a little bit. In terms of, I think, content cost, that's because I think last year, we took on, I think, 2 special type of content. One is on Disney and the other one is on the Thai League, both of which have, I think, different kind of model to the cost. I think we can't disclose the type and the structure. But I think there's some commitment on the payment that we need to pay. However, those 2 type of contents increased the viewership into our AIS PLAY as well as, I think, give us a lot more subscribers to what we call the OTT service. I think Khun Seow can maybe give a bit more information.

Thank you, Khun Tee. Most of them will be relating on a number of customers who subscribed for their packages. And if I may give a general picture, it would be a variable cost according to a number of subscribers all along. And that also has been factored in terms of revenue. So basically, it would be a revenue and cost go along aside of this cost cut.

Got it. And if I may clarify the CapEx is accrual CapEx guidance, right?

Yes, it's a planned CapEx we plan to spend within this year.

And cash CapEx is likely to be lower than this?

Cash CapEx, yes, because I think we -- in the past 2 to 3 years, we have extended a portion of the data payment terms. But I think that depends. I think cash CapEx, it depends on the payment terms, which I think for different equipment and different type of spending, it's in different length, different period, so.

Your next question from Khun Weerapat, CLSA.

I have 2 questions. The first one, can you please share the revenue contribution from data center business as of last year? And what would be the target for data center business as well as the target revenue for nonmobile enterprise in the next 3 years? And my second question is about, can you please share your thoughts on dividend pay-out ratio of 85% last year? What investors should expect in dividend payout going forward?

[Foreign Language] On the data center business, if you consider a small number in terms of the total is [ AIS ] while the growth is you continue to grow in a modern market growing, that will be the fundamental [ service ] for the customer overall. So the future [indiscernible].

As I update to you, we try to push the price as our new growth engine. I said really clear, and you can see our CCII, I [ thought ] every year around 20% to 30% from the base line. However, the base line is still not big compared with the total revenue, but it will grow up this way because the market, the CCII market, it will [ heal ] we can catch up that market, 20% to 30% a year.

Maybe just add on a little bit on DC. I think a lot of people try to ask what's the plan, do we commit to build first and how big could that be? I think on the DC side, in the end, we look at it as the way to provide cloud service as well. So the cloud service is supposed to grow with high growth rate. I think for us DC, we look at this in 3 main segments. One is hyperscaler. I think that's what everyone is talking about. But hyperscaler, that's 1 market. So there's another market on government agencies. So that part, it's totally different market, different requirements. And the third segment will be normal enterprise. So I think for AIS, we look at different ways to serve the 3 different segments. And also, that's the reason why I think having a cooperation with the 2 shareholders will be very beneficial. I think as you know, Gulf can also provide us with, I think, good power, clean power, which can benefit a lot of discussion with hyperscaler as well. And also the connection within the Thai society can also help us with the local market. I think we're asked -- I think Singtel can also help us to discuss with the hyperscalers and also I think bring in the regional aspect of the transaction as well. In terms of the -- I think the earlier question, whether we're going to build first or we get -- I think because we look at the 3 components plus our internal use. So it's not that if we built first and we haven't get the deal with hyperscaler we're going to take on too much risk because in the end, I think, we can manage the space to serve other segment as well in the meantime. So I think with that then come to the second question, you asked about the dividend payout. I think this year, when we look at the cash flow in the past, we know that all the analysts ask us whether we're going to raise the payout rate. So this year, I think we felt comfortable enough that at 85%, it should be a suitable level. However, going forward, it really depends on the consolidation that's going to happen. I think going forward, then we need to look at this on a year-by-year basis. It depends on 2 things. One, development, what's going to happen during this year from a consolidation, how it impacts the market, how would the dynamic change? And secondly, I think we also look at the spectrum with the new NBTC Board to come then what would be their policy on the 3500 spectrum. So I think those are the 2 major things that will define how much in the end the payout will be for this year.

Next question from on Khun Thitithep.

I have 4 questions. Number one, the enterprise revenue is a fast-growing revenue line, but at the same time, you do not do it alone. You have many partners, both in Thailand and from other countries. Can you tell us the [ last ] idea of the net margins that you received after deducting the revenue share with the business partner? That's the first question. Number two, after DTAC and True merger, they would have roughly 55% revenue market share, you would have 45% revenue market share. Are you happy with 45% revenue market share? Or you think that you target to be #1 in terms of the top line market share? Number three, one of the local players mentioned that, I think, that [indiscernible] NT are saying they are in talk with you for developing 700 megahertz. Can you make a comment on that? I'm not aware that you need any more low band for the 5G development. And then number four, you once mentioned that you are studying the TowerCo's -- tower spinoff or the infrastructure chain. Please, can you update us on that front? That's all the questions I have.

On the enterprise, on the enterprise when we work enterprise is very clear. We will utilize our assets. That means we have our exit on digital infrastructure a lot first on the mobile that we can sell. On the mobile of the enterprise, the margin is better than on the consumer because it's not completely on the price as a game in the market. We also can utilize our existing infrastructure like EDS thing. This is also -- can make us a lot of margin in this area. For the CCII is the new thing. When we cooperate with the partner, we don't cooperate with all the things that our partner in the market of AIS, we cooperate with them only on the thing that we will need to do like the cyber security or some IoT, ICT in the vertical applications. That means we still can keep the profit. We don't show separately in this thing. However, when compared with the total, our company margin will still be okay. It's not less than like normal ICT company in the market because we can utilize our resource infrastructure to compensate with the total solution with the enterprise solution for -- to our enterprise. Your second question, when the costs on that happened, what we will do? Now we are in the strategic planning in the works, have many things. In fact, we are beginning to be the #1 not in the market also. However, we don't push it hard because we have to balance about the top line and bottom line. We need to see in the action of the market by consolidation by [indiscernible]. The -- you will see some of the existing customers will transfer to our system. If this is automatically like the [ technical ] worldwide, I think we can be shipped to the #1 without any [ pricing ]. But I think when the market situation like our competitor may push very hard in this matter, we will decide by [ e-comm ] and Board. We have the work to consider our e-comm export. We'll consider what we will do in the market in the overseas. Maybe we have to see the clear situation next 2 months from now on. I can answer you very clear, but we are aiming to be the leader in the market. Leader in the market is still not on the only subscriber or revenue market share, maybe in [ another ] [indiscernible] that we will balance between top line and bottom line also. For the NT 700, we proposed to the NT on the solution that we will propose, now in the processing of consideration of NT. Let's see because we proposed them in a 2-way that can utilize NT demand also. Let's say, the [ the list ] is still confidential on the evaluation today.

Okay. Maybe just to add a little bit on enterprise. I think as Khun Somchai mentioned, I think for our own -- the past 2 years and I think going forward 1 or 2 more years, we still believe that we can grow both the telco service and also the non-telco service. I think for the telco service, that's -- it's basically our own product and services, and we have, I think, a very healthy margin. On CCIID, it's very high growth, but it's coming from a low base. That part, there are certain products or services that we are a reseller. So as a reseller, definitely, the margin we get is much -- been -- however, that part is growing faster. So I think for the next 1 to 2 years, my guess is you'd like to get some assumption whether the margin will change. I don't think the margin will change significantly just yet for the next 2 years. But after that, we have to see whether the -- which product actually have more influence on our margin. On the last one on TowerCo, I think we're still under study and preparation. We'll conclude that once when the timing is right and we have a good rationale to monetize the tower and the assets.

So next question from Khun Thapana.

Quite a few of my questions have been answered, so maybe doing a housekeeping here. So just wanted to get a quick update so far in what's the follow-up [indiscernible] the AIS on a year-to-date basis, and if that's picked up at all or has come down. Hello, can you hear me?

Sorry, it wasn't clear. Can you ask your first question again?

Can you hear me now?

A bit better.

Okay. I'll speak a bit more slowly. I just wanted to ask what is the current situation in terms of floor customers to AIS in 1Q '22 or in terms of year-to-date basis as opposed to in 4Q after the merger was announced? Just wondering if the number per day migration or per week has come up or gone down. I just wanted a quick update on that. The second one is the dividend payout. So you mentioned that the dividend payout ratio will depend on competitive environment in 2022 and the 3.5 gigahertz. Would I be right in thinking that if you meet your guidance target for this year, there's no 3.5 gigahertz auction? And let's say that CapEx will actually fall below your guidance, then that might be a trigger for 100% dividend payout? Or would you reserve your cash just in case of the 3.5 auction in 2023? The third one is the -- just your thoughts on the NBTC. So right now, there's 2 seats left on this game of musical chair we're seeing. What are your thoughts when the last 2 commissioners will be selected? And what would be -- would they make a move from 3.5? Or is there still a lot of technical obstacles to 3.5 that will prevent them from effectively holding an auction this year? And lastly, the data center business model. Just wondering if AIS might also take the role of selling data centers, rack space to either hyperscalers or to enterprise or government customers for this JV and get it commissioned. Just wondering if that's also another possibility for AIS involvement?

Let me address the first one on your question regarding DTAC to AIS. We have seen very much the same level of customer needs and wanted to move to the better network all along in late Q4 until now.

Okay. I think on your question about dividend payout. So it's never high enough, right? I think basically, if we meet everything, it's still -- we need to consider a balance between growth versus payout to shareholders. There are still other opportunities that we can utilize, cash generation that we have to make sure the company is growing on a consistent path and sustainable path. For me, it's too difficult to comment at this point in time. We -- I think we also would like to be a growth company as well. So that hiring leaves a discussion until towards the year-end.

On the NBTC, I think there are uncertainty situation in the 2 things. First, on the new NBTC Board member. Even if a member are selected by the Senate, but still cannot perform their duty based on the announcement from loyal [indiscernible], they will not be there. So still need to wait until the new NBTC because I think all the new [ team ], even consolidation of the 3.5 megahertz auction or the other should be waiting for the new NBC (sic) [ NBTC ]. This is the first one that -- there are still uncertainty when this committee -- new committee will set it up. The second thing is on the new committee when they set it up, on my observation, they still need some time to think and plan for the new auction. So in this 3.5 megahertz, I think, it should be maybe next year, the faster. However, I call the uncertainty, it may not be like my forecast because when the new Board of the NBC happen, they make sure their power -- they make sure they exercise something that -- to think there are still set uncertainty on the accomplishment of the Board members and what they think on their action also.

At on the [indiscernible] capacity, we know that the hyperscaler will need a good demand that will capture the business in the future for sure. So regarding on your question, currently, we just [indiscernible] KDA, we just reported, which a lot of data that we need to work on, and we will keep updating once we have further information on that.

I think as to your question about the selling role, we definitely will assume that the selling role for the JV because we will be the main operator for the data center as well.

So next question from Khun Arthur, Citi.

Three questions, please. First, can you clarify the CapEx increase? Does this include any provisions for the data center build-outs with the partnership with Gulf and Singtel? Or is it mainly BAU CapEx? I'm just wondering if there's room for this to increase further. Second question I had is with regard to 5G. Could you share any subscriber targets for this year? You mentioned 85% pop coverage. I'm just wondering if this can be supported with monetization because it's presumably provincial market where you're expanding to. Last year, the focus was on deepening the network. So it seems like it's a big change in strategy. Lastly, I'm just wondering in terms of overall outlook, it's been a while since Gulf has now controlled InTouch. I'm just wondering, are there any changes in business priorities and targets from the Board with the change in controlling shareholder?

Yes. I think on the CapEx, whether it includes DC, I think it's not yet included. It's mainly, as I mentioned earlier, we do expect some movement of the subscribers from the consolidation. So that part, we like to make sure that we have sufficient CapEx to still provide very good quality network to all the subscribers. I think as to the CapEx of DC, how big would that be, please wait for the business plan to be settled. But still, normally, we'll invest in phases. So even though there could be some initial investment, it will be in phasing. And then because -- at least we're going to be sharing the investment with the other 2 shareholders as well. So the amount may not be that big.

Your second question regarding 5G numbers and strategies, on 5G, we do expect that people will start to travel around, especially the unlock of after COVID, along with the strategy to make sure that we deliver the best network everywhere where people would spend time. So our 5G, 85% are populated area, will cover majority in the very popular area that people travel to. We do plan to double the size of 5G customer from 2.2% to at least go to about 10% plus of our base within 2022.

On the last question on the [indiscernible] as our major shareholder, we are in touch when they come to be our Board. The total policy still not [ shared ]. We are aiming for digitalized service portal, even before in the [indiscernible] and also present to the Board in the 3-year. In this period, we will transform ourselves to be the cognitive telco. They are really supportive on our direction because our strategy and direction, it will [indiscernible] way to view our data infrastructure to serve our Thai consumer both in the -- even at the high side to -- can use their life better. That's all the things that bought for Singtel, for InTouch and also in dividend, both support us, not being chained. And I can feel that they [ assessed ] and support us more and more to move. It happened faster and faster. LINE, when we talk about the enterprise, the CCDII of data center, they are also willing to support more on their own investment also.

Next Khun Hussaini, UBS.

A few questions from me. First is on the fixed broadband. There are some market talks that AIS is looking for inorganic growth. So I just want to hear your thoughts on any such direction. Second is on the 5G ARPU premium of around 10% to 15%. Just want to understand that going into 2022 with higher adoption, what is your expectation? Can this premium be maintained? And finally, on lower EBITDA growth, slightly lower -- slower EBITDA growth and on the back of higher marketing expense. So I want to understand where those marketing dollars will be spent. Will a part of that will also go in subsidies? So I just want to understand which are the areas where those marketing expense will increase.

I think that, for the first question, I think we have no comment on that. Yes.

For the second one regarding 5G, the ARPU uplift of 15%, in 2022, we do plan and try to make sure that we maintain the capabilities by providing the best 5G for the customer. The ARPU may change. Along the way, we expand to the larger base, but the uplift that we do plan to monetize and maintain at that level.

I think for this year, given that it's a transition year, and we do expect that subscribers may decide to move one way or the other, so we did prepare to -- up our marketing spending, both in terms of branding, consumer promotion as well as subsidy. So we'll increase the spending in all aspects to make sure that whoever that would like to come to AIS network, then they get to come and with good benefit as well.

Maybe just if I can follow up with your expectations on DTAC and True merger. So what is your expectation on the time line of the merger? And are this marketing expense and potential shift in customers, can it happen before the actual merger going through?

I think we can't comment on the time line. I think it's up to their side to manage. However, I don't want everyone to think that it's a single event happening. I think for us, it's an ongoing business that we need to deal with. So whenever it's happened, I think that have no impact on us. I think our plan is to make sure that we can serve the best to our own customers as well as a customer that would like to use our service.

Next, Khun Ranjan from JPM.

Two questions from my side. Firstly, a housekeeping point. If I see your data customers, that seems to be declining. Is there any reason for that? And I'm looking at the numbers from your -- the spreadsheet that you sent out. The second, if you can elaborate more on the network transformation and IT transformation that you discussed as the reason why the EBITDA will be growing slower than the revenues.

Sorry, what was your second question again?

Yes. The second question is the -- what are the reasons that you've given for EBITDA to grow less than the revenues? Is it related to multiyear IT transformation? If you can just help us understand the investments that you will be making this year and in the coming periods.

Based on the first one regarding the data user, we will make a clarity slightly later, but more or less maintain the amount. In general, there are some slight numbers that might vary month-on-month, depending on how people use it. Some people during the lockdown, they use it at home, when they go out, start to go out. That's how, I think, I would address that. I would presume that you mentioned about purely the mobile.

Yes. I'm not sure I understood the second question correctly. But the reason why we guide the EBITDA growth to be lower than revenue growth because I think this year, we would like to be conservative on the profitability number. Given it's a transition year, there could be, I think, extra spending to make sure that, as mentioned, if subscribers want to move, then they should get to move, so both on the marketing side or the spending plus on the network side of spending as well. We need to prepare ourselves to be able to receive if there is a big group of customers that want to move in certain areas. I think this year would be -- yes. So that part -- that's why we project EBITDA to be lower.

Sorry, on this call, it's being discussed that the reason for the slower growth in EBITDA will be related to marketing spend. But in the documents distributed last night, some of the reasons that were given were AIS has embarked on a multiyear journey of IT transformation and implementation of autonomous networks to improve both CapEx and OpEx efficiency. I'm just trying to understand what investments are you making here? And how long will they continue for?

I think those are -- to address that, we try to continue to optimize our cost overall because we have continue on the journey around digitalization, including execute the transformation in terms of our IT operation. So part of that should help us manage the cost side to be more in line with the revenue. The main reason for the EBITDA -- so that's actually the positive point to support on the ongoing EBITDA margin. However, for this year, the pressure point on the EBITDA mostly will land on marketing spending.

Yes, maybe I think everyone, that the question has come around CapEx, 5G, why do we need to increase? How important is that? I think that is linked to OpEx increase because the larger network that we build out, the more OpEx that that's going to show up on the P&L as well. To us, the 5G rollout is a strategic decision. As mentioned in many calls before this, it's a way to really show to the customers that we are the best operator in Thailand. And being able to service them going forward with 5G all around the country, to us, it's supposed to be one of the major decision factor for a consumer to choose even though I know that a lot of people still have doubt in how do we monetize the 5G investment. But I think trust us that there will be new services that are going to come or the change in aspects that will make sure the increased ability of 5G network will help us monetize in the future. As to why we need to do all this automation, autonomous network, that's still a multiyear journey. Mainly, we need to make sure the network is smarter so that we can optimize the investment. As you have seen during the COVID, people do shift in regions or in area where they live and that's also shift the traffic on network as well. To be able to optimize the network investment in the long run as well as to lower the maintenance and operating costs to make the networks smarter is a given. So that part is why we mentioned that in the description. But it will be a multiyear journey. The objective is trying to make sure that we optimize the CapEx to be able to serve different trend of demand that may come and go in different areas. Secondly, to lower the growth of OpEx because I think the larger the network, I think people do expect OpEx to go higher but we want to minimize that growth so that we can have a better margin.

Our last question from Khun Thitithep, KKPS.

Just one quick follow-up question. Is there any plan to introduce the FWA fixed wireless access service in Thailand, especially for the area that is not worth laying the fiber to the household?

The answer is yes. The FWA will serve as a gap filler to where the fiber doesn't be able to penetrate into. There would not be a significant big portion. It would be gap fillers.

All right. Have you introduced FWA yet or that's a future plan?

It's a part of the plan. There are some services going on, in particular, selective area in a very small scale. And we are looking at where we could put the FWA in for gap filler as mentioned. The primary objective is to make sure that we get fiber and 5G for consumer in.

I think that's all for the session today. Thank you, everyone, for joining. And the next upcoming event for us will be the virtual meeting. The virtual analyst meeting will be held on Thursday of February 17. So please join us. Thank you, everyone. Have a good day.

Thank you.

Thank you.

Thank you.