Axiata Group Berhad (AXIATA) Earnings Call Transcript & Summary

Hi, ladies and gentlemen. My name is Clare Chin, Head of Investor Relations at Axiata Group Berhad. Thank you for standing by for Axiata's fourth quarter results briefing. Today, as usual, we have with us Dato' Izzaddin, Axiata Group CEO; as well as Vivek Sood, Axiata Group CFO; as well as representatives from our operating companies. There will be a short presentation followed by a Q&A session. Lastly, 2 housekeeping reminders. You will be on mute throughout the presentation session. Also note that we will end the call promptly at 4:30 p.m. Without further ado, I would like to hand over the conference to Dato' Izzaddin, please.

Thanks, Clare. Very good afternoon to all of you, and thank you for joining us this afternoon for our financial year 2021 results. You can see you on the slide, and you would have picked up the Bursa announcement, 2021 reflected a strong underlying performance. Revenue and EBITDA at 8.3% and 8.5% growth, respectively, reflect -- surpassed the KPIs, headline KPIs guidance that we've given. EBITDA margin being stable at 44%. Reported PATAMI is at MYR 890 million, and that includes a MYR 338 million goodwill in Dialog and Ncell. So PATAMI -- reported PATAMI only reflects a margin of only 3.2%. Cost underlying PATAMI that grows from MYR 865 million to MYR 1.3 billion. And this -- the improved performance resulted from the EBITDA across OpCos lower net finance cost, that's effectively about 4.3% as well as narrowed losses at Axiata Digital. Of course, this was partially offset by the impact of accelerated depreciation of 3G assets in Celcom and Robi about 100 -- just over MYR 100 million. As I said, we exceeded the headline KPIs. Worthwhile noting also, we achieved an OpEx savings of about MYR 696 million. CapEx savings of about MYR 1.3 billion. That's a pretty significant and commendable achievement on the part of the operational efficiencies that we aspire to. Operating free cash flow, that's affected by the accelerated CapEx at XL. Notwithstanding that the operating free cash flow dropped by 43% to MYR 1.9 billion. And notwithstanding that, the balance sheet remained resilient. Gross debt to EBITDA of about 2.56x, just marginally over the 2.5x got real. And as a result of the Touch Mindscape acquisition that completed on 24th of December, that involved debt of about MYR 1.4 billion. And as a result, lifted the year-end leverage. Year-end debt stands at about MYR 19 billion, whilst cash balances at MYR 7 billion. Now worthwhile noting again, and Vivek will provide details later, 7% of our debt are fixed rate. And we have an average maturity of about 8.9 years, and 37% of that debt will mature within 1 to 2 years. Now all of that is largely revolving credit in nature, working capital alliance and those -- some -- and as I've said, the MYR 1.4 billion debt for the Touch Mindscape acquisition was the bridging finance, which will be refinanced by stock issuance by edotco sometime this year. Moving on to the OpCos. Celcom recorded a strong recovery with positive subscriber momentum. Revenue rose by about 5.6% to about MYR 6 billion. And this is largely driven by prepaid and MVNO subscribers. And again, you would have picked this up. Subscriber growth that Celcom achieved was about 900,000, 700,000 from prepaid and postpaid of 200,000. PATAMI rose to about MYR 943 million, as a result of the revenue flow through, improved credit management, better stock inventory management levels as well as better debt management levels, lower net finance costs. And of course, there were some one-off items the year before. I think what's worth noting also the focus is on the postpaid ARPU that declines about 67 million compared to the market benchmarks. But we are focusing on making sure that the average yield improves. Moving on to XL. A steady performance despite the competitive pressures. Revenue rose by about 2.7% to reach IDR 26.7 trillion, and that's about MYR 7.8 billion. On the back of higher data contribution, EBITDA growth of 1.7%, and that's a margin of 49.6%. And of course, this was moderated by higher sales. And marketing expenses was free cash flow declined by about 51%. Again, mandated accelerated CapEx rollout to an enhanced network capacity and coverage. PATAMI rose to IDR 1.3 trillion. That's the highest PATAMI we've ever achieved since 2013. And of course, this was also boosted by the lower D&A accelerated depreciation from the 3G sunset the year before. Robi, good data revenue momentum. Now you can see in all our markets, it's all about data revenue growing. Revenue grew by about 7.6% in tandem of higher usage led by increase in 4G subscriber base. EBITDA was moderated by higher network costs as well as sales and marketing expenses. But PATAMI was lifted by about 16% as a result of lower net finance costs and taxes. Dialog, star performer, double-digit growth across all metrics and all key 4 business lines. Notably, the acquisition of H1, the ICT service provider that we acquired last year. That performed -- that improved by [ IDR 2.2 billion ]. So as a result, revenue, excluding device, rose by about 18%, EBITDA went up by 15%, free cash flow by 22%, and PATAMI by 42%. As I've said, double-digit growth across all metrics. And this is as a result of a better market share capture from the well-executed network investments, cost management and lower net finance cost. Now of course, we all know and have read about the situation case so far as the Srilankan economy is concerned. USD is not billable, and we are making sure that the business of Dialog is maintained so that we can continue to provide the critical service of mobile telephony. Ncell, this is one of the companies that did not do as well as the others. In fact, the only one that didn't do as well as the others. The revenue was pressured by the continuous lockdown as well as stiff competition. Revenue declined by about 1%. As I've said, by lockdown impact and competitive pressures. And of course, the -- whilst core revenue went up by 3.8%, the ILD decline, revenue for -- from ILD declined by 19%. That was not enough to offset that decline of 19%. Value-added services also declined by about 36%. However, EBITDA rose by about 1.1% as a result of better cost control management and a healthy EBITDA margin of 58.2%. Moving on to Smart. Again, good results driven by higher data contribution. Improved data contribution on the back of higher data subscribers. Yes, you want to pay -- by about 10.5% as well as usage that drove revenue by 7.3%. Yes. As a result, EBITDA rose by about 4.5% from the revenue rise as well as -- but offset by the higher network costs. PATAMI consequently is rather flattish at about 3%. Now the good news is Axiata Digital, strong profits at ADA as well as narrowed losses at Boost. Revenue almost doubled to MYR 980 million. This is largely driven by ADA from improvements in its Customer Engagement business, coupled with the acquisition of new users at Boost, specifically users of the wallet of 900,000 and merchants of 139,000. So net losses narrowed to 62 by -- sorry, net losses narrowed by 62% to MYR 112 million, arising from lower marketing expense and higher profit at ADA and subsidiary. And again, Vivek will go through the details. But essentially, the good news is Boost has recorded smaller losses, MYR 125 million loss compared to MYR 298 million the year before. ADA, on the other hand, managed to chalk up profits of about MYR 32 million compared to the MYR 4 million the year before. So good news around. edotco, significant organic growth in build-to-suit orders as well as co-location. Revenue rose by about 5%. Now this is driven primarily by the 2 biggest market and contributions, Malaysia and Bangladesh. Of course, the other countries like Cambodia and Myanmar, there were lower contributions from those 2 markets. EBITDA and PATAMI rose by about 13% and 72.9%, respectively. And this is a result -- the higher EBITDA as a result -- continuous cost optimization and unrealized ForEx gain. In fact, if you look at the details later on, PATAMI rose to about MYR 242 million. Again, commendable set of results. The Board has approved a second interim dividend of MYR 0.055, bringing total dividend per share for the full year to MYR 0.095. This is higher than the year before. The year before, we declared MYR 0.7. And this is certainly in the right direction so far as our target of MYR 0.20 per share for 2024. Insofar as our sustainability efforts, our commitment to net zero target, you would have read that in November 2021, we signed and we made a business pledge on the science-based target initiative that formalizes our commitment to set a long-term science-based target, which net zero, no later than 2050. And we will plan -- we plan to announce our road map come this April, just before the AGM that will be held in May. Insofar as the 2022 headline KPIs, we're making a slight modification here. For revenue ex-device that stays, we are targeting a mid-single-digit growth. As I mentioned earlier, the growth for 2021 was 8.3%. But for 2022, we are giving guidance of mid-single-digit growth. Now we've decided to adopt EBIT growth as a measurement. So the guidance we're giving is high single-digit growth for EBIT. Now this is a metric that we've decided to use to better reflect a better measurement of our capital-intensive business. Yes. So this is something that we will sort of continue to give guidance to the market in months to come. Just a word of caution that this headline KPIs are based on BAU. Yes. Meaning, we've not incorporated the impact of a Celcom-Digi merger or the completion of the Link Net acquisition. Of course, if there are changes, such as the completion of Celcom-Digi merger and the completion of the Link Net acquisition, we will provide the guidance to moderate or to change the headline KPIs as the case may be. For 2022, the risks around regulatory challenges, global chip supply store shortage, which could result in supply bottlenecks, increased taxes in Sri Lanka, Malaysia and so Malaysia is the [indiscernible] and of course, uncertain macroeconomic environment. In general, specifically Sri Lanka, will have an impact on our business. There is expectations of [indiscernible] moving. And so far as the U.S. is concerned, that could lead to a strengthening of the U.S. dollars. We don't believe that the emerging economies in which we operate in will do the same because that will -- whilst inflationary pressures will set in, but high interest rate is certainly not a good recipe for economies to recover from this -- from the pandemic. So we don't think that the interest rates will move in the domestic -- in the economies that we operate in. Of course, Sri Lanka -- sorry, of course, Myanmar is another space to watch. We continue to monitor the developments in Myanmar. Insofar as the Axiata 5.0 vision is concerned, we are very focused on executing key focus area #9, which is industry consolidation and value illumination area #10. But pipeline for 2022 includes the completion of the Celcom-Digi merger, Link Net acquisition, and of course, right now, there's work in earnest in so far as the integration planning is concerned. So that we can kick off immediately on day 1. So that is, in a nutshell, a summary of the 2021 results. I'd like to invite now Vivek, our group CFO, to go into the details.

Thank you, Dato'. Very good afternoon to all of you. Let me start with the reported numbers. You would see reported numbers are marginally lower than what is underlying performance, and that's essentially because of the translation impact from the operating currencies to the reported currency, which is ringgit. Across markets, we've seen ringgit strengthening against the operating currencies, except in Indonesia. The biggest impact comes from the LKR which is Lankan rupee, which is depreciated by around 8%. The profits have been good on a reported number basis, more than 100% improvement and mainly coming out of the improved higher EBITDA, lower finance cost. However, offset partly by the Ncell goodwill impairment, which is around MYR 338 million, which we took at the end of the year. And if you recall, last year, we did take an accelerated depreciation of 3G across markets, which had an impact of nearly delta MYR 500 million between last year and this year. So that's what is reflective of the profit numbers. But I think the good story is that our sequential growth, both in revenue and EBITDA, remains strong. If you can see quarter-on-quarter, 5.5% growth in revenue and a 6.4% growth in EBITDA. A little more details around the underlying performance, which Dato' alluded to earlier. I think stable EBITDA margin of 44%. Underlying profit growing up by 57.5%, fueled by EBITDA improvement, lower net finance costs around -- close to MYR 109 million lower finance costs compared to the last year and offset partly by the accelerated depreciation, which was a continuing effect coming in Celcom and Robi. I think the key highlight here is all markets have delivered strong performance, except in Nepal, where we were impacted by prolonged lockdown and also on account of heightened competition, not just from the mobile competitor but also from the ISP. During lockdown, we saw most of the data actually moving to the home broadband, and that resulted in lower data consumption. I think key highlight is our program on cost excellence, which was started back in 2017, continues to deliver on savings and profit largely contributed by higher EBITDA, lower losses coming on digital business and lower net finance cost. This is explanation of underlying PATAMI movement from 2020 to 2021. If you see the major contributor, as I said, was EBITDA, followed by lower net finance cost and impacted partly by the higher D&A and around close to MYR 134 million coming on account of the accelerated depreciation in this year. If I look at the lower chart, which talks about the reported PATAMI versus underlying PATAMI, the key elements -- 2 elements to talk about. One is the impairment that we have taken on, Ncell goodwill, essentially because of the lower cost -- the cash flow projections, which we have also what we had earlier. And on account of the ForEx and derivatives, which is basically on both translation and transaction losses incurred on the unhedged position in dollars. If I go to the next slide, which talks about the adjusted OFCF. Adjusted OFCF is basically after lease payments if you factor that. The adjusted OFCF is down from last year, mainly coming on account of higher CapEx. And this is essentially contributed. If you look at the lower chart from higher CapEx spend in XL and edotco. edotco is essentially on account of backlog CapEx because there were a lot of towers in the pipeline which were implemented in 2021. edotco added around close to 3,500 new towers in our key markets during that year, which resulted in higher CapEx spend. XL has been essentially on account of accelerated CapEx investment to improve customer experience and extend our footprint coverage in the market. If I go to the next slide, which is really about the balance sheet. I think balance remains fairly strong with our guidance of 2.5x. Gross debt to EBITDA marginally up, mainly on account of the borrowing of around MYR 1.4 billion, which we did at the end of the year for Touch Mindscape acquisition. Our cash balance remains fairly strong. If you see at the right-hand bottom, most of the cash is actually at the group level at Celcom and edotco. Balance sheet remains even more resilient with a long maturity profile of our debt. On an average, we would be around close to 9 years of maturity. And we also have a fairly stable 67% of our debt in fixed and around 50% of our dollar debt is being hedged. So I think fairly strong resilient balance sheet as we speak. If I go to individual companies, Celcom, I think strong recovery, essentially coming out of strong growth in prepaid. Prepaid business grew by around 13% year-on-year. And also around an 8% improvement coming on from the MVNO business. Our postpaid business remained resilient with around 200,000 new subscribers being added. But in terms of revenue, pretty much flat. Profits coming out of an improvement in credit management, which reduced the bad debts, higher EBITDA as well as lower net finance cost. Year ended with 5.6% growth on revenue ex-device, and a 9.9% improvement in EBITDA. If I normalize for the employee restructuring program we did in 2020, the EBITDA growth is around 5.8%. This translating into profit improvement of nearly 39.2%, a good year for Celcom. If I go to the next slide, which is on XL, steady performance. I think competitive pressure remains intense in that market. And our impact coming largely on account of -- on the EBITDA as well as the profit. It's mainly EBITDA coming on account of the higher spend on marketing and increased regulatory fees. The year ended with strong profit of around IDR 1.3 trillion, which is the highest after 2013. So strong profit performance, though revenue and EBITDA remained muted on account of intense competition in the market. If I go to Robi. Robi continues to excel in the top line growth and mainly coming out of the data revenue improvement. Having said that, this market, we also see fairly steady voice revenue compensating for the investments in the data side. We are in this market fairly close when it comes to number of 4G subscribers to the #1 operator in the market. EBITDA, a 2.7% improvement, mainly on account of higher network costs. They rolled out around close to 1,700 new sites and also on account of sales and marketing expenditure. Profit at 16.1% growth, contributed partly by EBITDA improvement and partly by lower finance cost in the market. Essentially, the debt from the banks was available at reasonably cheap rates, supported by high liquidity in the market. Dialog. Strong performance, as Dato' said, on all metrics and as well as all lines of businesses. All of them contributed on double-digit growth. Growth also supported partly by a new acquisition, which we did early in the year. 18.2% growth in revenue and 15.6% growth in EBITDA, translating around nearly 42% growth in profit for the year. A very strong performance albeit I would say that the headwinds on account of macroeconomic situation in that country brings challenges as we move forward. Ncell. I think one of the business which struggled in 2021, essentially on account of prolonged lockdown. This was one market which saw the longest duration of lockdown. And given that it is essentially a prepaid market, the impact of lockdown resulted in lower distribution capabilities and consequently lower revenue. Having said that, pressure on competition continued from the government and mobile operator, as well as the ISP, which I had mentioned earlier. The core revenue, while grew, was not enough to compensate for a 19% growth in the ILD revenue. EBITDA continues to be positive at 1.1% growth, and the EBITDA margins remain strong at 58.2%. Our profit improved essentially because the -- some of the write-off which we took in the previous year. Smart. Continues to remain steady business, one market where we've seen ARPU improvement happening and also continues to deliver on a steady revenue growth and EBITDA growth and a very strong cash flow generation for the business. Digital business. I can spend a little bit of time there. Very strong performance coming from ADA. And this is coming on all lines of business, including the impact of the Awake Asia acquisition, which we did last year on e-commerce-enabled business. Most of the improvement came from the customer engagement business, which is essentially an A2P, an SMS-based advertising business. And also our partnership with Facebook in this area. So that resulted in a strong revenue and profit growth for ADA and also acquisition of new clients in that field. Boost. I think the primary focus for Boost has been to reduce the losses and improve the propensity of allied businesses, like Boost Credit, Boost Connect, Boost Business, et cetera. So all of them have contributed well in the year, offsetting a pretty much flattish Boost Life, which is the payment P2P business during the year, impacted because of the prolonged COVID impact. Consequently, lower losses from Boost as well as strong profit performance from ADA. We saw around MYR 173 million lower losses coming from the digital businesses. So a fairly strong performance. Boost continues to be on target to have a breakeven on a run rate basis in 2022. edotco, as I mentioned earlier, very strong performance coming from Bangladesh and Malaysia. Bangladesh, essentially on account of new towers, which were rolled out and improved colo in that market. Malaysia, coming out of existing business, but also from the new acquisitions which were done in the earlier part of 2021. The strong growth in number of towers, 3,500 and around close to 5,400. Tenancies resulted in revenue growth of 5.2% and EBITDA growth of nearly 13% and translating into profit growth of 73%. Partly, profit contribution also came from unrealized profit ForEx gain as well as lower bad debts during the year compared to what was there in the year 2020. Dividend. As Dato' announced, we are pleased to announce second interim dividend of 5.5, taking the total full year dividend at MYR 0.095, which is in line, if you recall, of our communication to the investors back in December 2021. So we've kind -- sorry 2020. So it's pretty much in line. And it's in line with our plans to deliver the Axiata 5.0 Dividend is. So I'll now hand over back to Dato' moving forward.

Thanks, Vivek. Well, so far as our headline KPI is concerned, I've kind of alluded to what we're trying to do now to from the EBITDA growth to EBIT growth. You can see on the left, tracking the FY '21 guidance, low single digit, both on revenue growth and EBITDA growth. And achievement of 8.3%, 8.5%, respectively. So revenue growth for 2022, we are targeting a mid-single-digit growth. Whereas for EBIT, EBIT growth rather, we're targeting a high single-digit sort of target. CapEx, which is not really part of the headline KPI, but guidance we're giving is about MYR 7.1 billion. So no letting up in terms of CapEx, significantly because of the needs for XL to improve coverage and improve the quality of service. And also, as far as Celcom is concerned, Again, these targets may change upon the completion of Celcom-Digi merger as well as Link Net acquisition. So that's just the base marker that I'd like to put on the table on this matter, on the headline KPIs. Next slide. And so far as the risks and opportunities are concerned, I, again, mentioned this already, regulatory challenges in various markets that we have global chip supply shortage, the taxes in Sri Lanka and Malaysia, uncertainty in certain economies, overall macro economy environment as well as developments in Myanmar. And so far as opportunity is concerned, yes, there is that opportunity notwithstanding the Indosat and Hutch where we completed the acquisition, the merger. But as you all know, merger integration will take time. The team at XL is not waiting for a chance and trying to seize the opportunity over there, insofar as the market is concerned in various cities. We think that continuing demand for data, digital content as well as the ongoing digital transmission, particularly for enterprise, that will provide opportunity for a revenue uplift. And of course, like all mergers and/or acquisitions, what is always key is integration. I keep reminding to the team doing the deal is probably the easier part. Definitely, the easier part. Integrating the businesses, generating the synergies, that underpin the basis of these acquisitions, is key. So focus -- a lot of focus and attention is being given to the planning side as well as later on once we complete the execution, if you like, of the integration activities. Of course, we continue to identify other inorganic opportunities this year. Because as part of our vision, Axiata 5.0, it calls for the -- certainly the -- in the enterprise space, especially. Yes. We hope to be able to, well, execute some of the plans that we've made so far as the enterprise market segment is concerned. And last but not least is the digital bank license. We're hopeful to be one of the winners that the Central Bank will announce next month as what was indicated by the government recently. And what's more important is after the announcement and if we are one of the successful ones, the launching of the digital bank. So a lot of planning that the team is doing and so far as 2022 is concerned. So I'll end there, and perhaps glad to go on to the Q&A session.

Thank you, Dato'. Okay. So we'll move on to the Q&A session. [Operator Instructions] So we are also joined by our colleagues from our OpCos, basically from Celcom. We have CEO, Dato' Idham; CFO Jennifer; as well CMO, Allan. From XL, we have Pak Budi, CFO; edotco, CEO, Adlan; ADA CEO, Srini; Boost CEO, Sheyantha as well as Dr. Hans, Group EVP. So feel free to direct your questions to them as well, if you wish. So shall we proceed with the Q&A session?

Okay. So we have a question coming through from -- first question, hands raised, is coming from Izzati from Macquarie.

Great. Congratulations on the set of results. Great presentation. I think I have two questions. I'll start with the first one. I guess, this is for Dato' Izzaddin. What's the guiding principle next to the M&A activities that Axiata pursues? Because there's been several development with Link Net home broadband in Indonesia Celcom-Digi, ICT service in Dialog. In the next 6 to 12 months, geographically, where will the focus be? Or if you can share what vertical of the business you'll be focusing on? That's my first one.

Okay. Is the second question part of the first question or it's separate?

It's kind of really -- I can just go on with the second one. So just a quick follow-up.

Yes.

There's been emphasis in the narrative as well on the enterprise business. So will there be any target that Axiata will be releasing and sharing the market in terms of revenue target or some sort like that? That's my second. That's it for me.

Yes. Thanks, Izzati, for the questions. In fact, the second question is related to the first question. Because part of the M&A focus -- I mean, if we go back to Axiata 5.0 is about the vision of, for example, new growth areas in enterprise, for example. And this answers the second question. The enterprise target is 20% of our group revenue by 2024. Now we shared this in the December Investor Day last year about how we think group revenue or how enterprise is going to be a very significant portion of our business. Now if you think about that, 20% of our current base of -- revenue base of 25 billion, that's 5 billion. I mean, okay, 5 out of 30, so that's 1/6, if you like. Yes? But the point is this, it's not just to grow the business organically, that will be impossible. There has to be inorganic sort of targets that we pursue, not just from a revenue base or customer base, but also capability base, whether it's managed services, cybersecurity, Platform as a Service and so on. So that's embedded, if you like, in Axiata 5.0. So the guiding principal insofar as enterprise is concerned, that's one aspect of it. Now insofar as Indonesia, for example, is concerned, why the Link Net acquisition is about pivoting the mobile business to go towards convergence? To bundle a lot of the offerings that XL is providing right now, together with a convergence play. Now for what it's worth, competitors are following suit. So maybe that's a testation, if you like, that we are on the right path. Yes? Because -- unfortunately, we've been relegated to third position insofar as the mobile business in concerned. We are now at about 17% market share. But at the same time, there is opportunity both on the integration -- opportunities from the integration of Indosat and Hutch. At the same time, pivoting ourselves towards the convergence play. So all the acquisitions that have been contemplated are actually unique to the markets, unique to the business segments. And it will actually be -- whether in the next 6, 12 months -- hopefully in the next 6, 12 months. And let's not forget, edotco, the aspiration to target something like 70,000 owned and managed towers, we are now at about 44,000. Just above 44,000 owned and managed towers. There are sort of assets being put up for sale. We're looking at opportunities in Thailand. Of course, Indonesia. And let's not forget, Philippines. PLDT has just put up its towers to a process. So it is something that has been sort of visualized under Axiata 5.0. And whether it's 6, 12 months, yes, I think we will try to accelerate or expedite these things because my view is that the opportunities will only be there once. And once it's removed, then it's game over. Yes? So I don't know whether that helps, Izzati?

Yes. Can I just have a quick follow-up?

Sure.

Yes. So it sounds like part of the strategy is also to acquire capabilities when it comes to the digital business. Can you share if you do face some challenges in terms of acquiring talents, in a way, you'll be competing with the big tech guys also, right? So is that something that you face?

Yes.

And if yes, how do you then overcome that?

Yes. Well, even -- it's not just acquiring talent, retaining them also is a big challenge. The churn rate in tech companies, my understanding is 30% to 35%. We're not too far off from that actually. At ADA, we are about 20% to 25%. So as the usual people risk in that profiling of the organization that I'm going through with the team, all our retention policies and remuneration policies as well, we are retweaking how, well, staff are compensated, remunerated. And different businesses will have different sort of pain points and expectations. But I think what's important for me is also to create the right environment at Axiata. People keep asking me throughout the last 1 year, how am I doing? My standard answer is I'm in a good place. Some people choose to leave us, but it's okay. The grass is always greener on the other side. But hopefully, with the environment we're trying to create, talents will be attracted to remain with Axiata, whether it's cross-functional roles, cross-regional roles, I think we are -- we can offer that sort of proposition to the talents that we have.

Thank you, Izzati. Perhaps we can take some questions coming to the Czech Group. We have a question from [indiscernible]. Basically, his question is, what is Axiata's position on DNB's 5G SWN structure and wholesale capacity charge? Second question is any potential completion delays in the merger with Digi to third quarter 2022?

Okay. As you all are aware, last Friday, there are 4 MNOs have put out a statement insofar as the 5G SPV or 5G network is concerned. I am not in a position today to speak on behalf of the 4 MNOs. I think it will be totally inappropriate. The 4 MNOs have taken their stance to not make any announcements thus far, except for the one last Friday. Out of deference to the minister as well as the government, we have been advised that the government will make a decision very soon. And that's something that we certainly welcome. Just for the record, we continue to support the government's policy to roll out the 5G network. And we're happy to support the government in every possible way that we can as an industry. And so I'd rather not make any comments on 5G single wholesale network structure and wholesale capacity charge and so on. I think it will be premature and a bit unfair. As I've said, I can't speak on behalf of the 4 MNOs. I don't know, Dato' Idham, would you like to add anything to that?

Thank you, Dato' Izzaddin. Thank you for the question. Well, it's simply, as Dato' Izzaddin has mentioned, at this point in time, the industry has made their statement. So it's something that we cannot comment at this point in time, and we respect the decision that's going to be made by the cabinet or the government.

Yes. As so far as the merger of Digi is concerned, just a bit more color. 4 Months have passed since the Form 2 was acknowledged by the MCMC, our regulator. There's a lot of work, engagements, exchange of information, meetings and so on between MCMC and with both Digi and Celcom, insofar as the data points are concerned, insofar as the market share is concerned, information and so on. We are hopeful that the evaluation and validation of the work done by the commission should complete anytime soon. And hopefully, we'll get a decision. And hopefully, we will no longer have to wait to the third quarter. Again, I do not wish to preempt what the MCMC or when the MCMC makes a decision, but we are preparing for day 1. We are hopeful that day 1 will come sooner rather than later. And the good news is something I'd like to share with everybody on the call. Over the last couple of months, we've assembled a team of about 85 people, plus/minus, from both Digi and Celcom. And what they've been doing is working on the various work streams on the integration plan. So we have what we call integration teams. Now the good news is this, if every time the team does a presentation, because the various work streams and various sort of topics that they cover, every time a team does a presentation, Jorgen, my counterpart and Telenor and I Co-Chair, we can't tell or I can't tell whether the person is from Digi or Celcom. It's not that I'm trying to second guess or stereotype people, but the good news is the cultures of 2 organizations are blending quite well, jelling quite well together. And of course, this integration team planning is done within the confines and boundaries of the law. We make sure that no commercially sensitive information is exchanged between the 2 parties. And there are protocols that each of the individual is to observe. So we are ready. We are preparing to be ready on day 1 -- for day 1, and hopefully comes sooner rather than later.

Yes. Thank you, Dato. That came from the Czech Group Okay. So we hope that answers the question. Next is from the Czech Group. We have a question coming through from Jim from Kenanga. Question is basically on group level. How many percent of revenue comes from enterprise?

Yes. Sorry, the answer is about 7% to 8% of the revenue of MYR 25 billion comes from enterprise. Yes, the larger contributions are from Celcom and XL. And are simply because these are the 2 big markets so far as SMEs are concerned. If you think about it, Indonesia [ Loscam ]. And again, this depends on how we define SMEs. That's easily something like, in Indonesia, I can't remember what the number is, but a couple of million sort of SMEs. In Malaysia, the number that's been bended around about 1.5. But I think, again, it depends how you define SMEs. So the contribution comes from organic -- inorganically. If you remember, we acquired a company called H1, that's an ICT space provider in Dialog, in Sri Lanka. That contributed something like INR 2.2 billion in financial year 2021. And of course, Celcom has also contributed to relatively small acquisitions, not bit size -- bite size of acquisitions, but that's more to provide the capability. And this business is all about the people, the customer base and of course, the capabilities of each organization because, as you would appreciate, it would have signed up certifications from various parties and with a lot of tenders. These are key components to qualify for some of the tenders. So it's about 7% to 8% of the 2021 revenue. And as I've said, if the aspiration is 20%, assuming 25.9% remains constant, that's about MYR 5 billion. And that's a fair bit of way to go. But we believe with a significant acquisition, we will meet those -- that target. And I think from -- just to complete the story here on enterprise, Jim. At the end of the day, enterprise -- people in the enterprise segment and workstream are very different from the mobile sort of background. So there is a gap in terms of capabilities that we need to acquire also. So every time we look at an acquisition, it's not necessarily purely equity higher, purely customer base, purely solutions, track record. Ideally, we have all 3 of them. So that's the sort of thought process we go through when we look at acquisitions in the enterprise segment.

Okay. Thank you. We have a question coming through from questions coming through from Foong from CIMB.

Okay. I'll try to speak louder through the microphone. A couple of questions from me. Firstly, I wanted to ask a bit about the digital banking prospects in Malaysia. As you highlighted just now that we're in the final leg of that license award possibly by next month. And I've asked this before, about the addressable market. And I think Sheyantha mentioned that the addressable market may be north of MYR 40 billion on the unbanked and underbanked population in Malaysia.

Yes.

But if I look at the total industry banking loan size, right, that MYR 40 billion is only about 2%. So I just wanted to get any thoughts on whether that is just being too conservative or -- and there's significantly a bigger addressable market out there?

Okay.

And also, is there anything within the license that will constrain or boost from taking a share out of the current banking loan size? I mean if you could take away some market share from the existing traditional banks. So that's the first question. And the second question related to that as well is we are seeing players making moves into digital banking in Indonesia.

Yes.

Just across the border, one of our regional peers are buying up a smaller bank there. Any thoughts on whether that might be something Boost would pursue as well? And then my third question on the acquisition of Link Net, given that you want to keep it listed, so who actually undertake the mandatory tender offer? Will it be on data alone? Or would it be together with XL?

Okay. Very good questions, Foong. As always, I'll try and answer the first and second questions. I'll invite Sheyantha to then chip in, then I'll address the third question. Yes, you're right. Actually, in the engagements with Central Bank, they talk about the unbanked or unserved and underserved market. So let's take one simple segment. Let's call the foreign worker sort of segment. Let's assume -- I mean, I know at the peak, we had something like I don't know 3 million or 2 million official -- officially foreign workers. If one worker -- foreign worker earns MYR 1,000 which, let's say, a month, yes, 1 million, that's 1 billion, and that's per month salary that goes through his wallet or his pocket not necessarily e-wallet, his pocket. So 1 million, 1,000 average, that's 1 billion. So if let's say that's 2 million, that's 2 billion. So you multiply that by 12 months, that's 48 billion. And you and I know, Foong, they earn more than MYR 1,000 on average, right? So if you think about it, my view -- our view is that it's a big market that is underserved or not served. And I think that's why Central Bank is also very encouraged with this idea of a digital bank because people don't have to go through the motion of fitting in those forms to get -- to open an account. Now from our perspective, we've been operating. As if we've been offering micro financing, we're offering micro insurance products and so on. The fact that digital bankers in this world, the big way like from digital bankers license actually the ability to take deposits. So if you think about 1 billion from 1 million customers passing through the system every month, that's a decent sort of deposit base. I mean, you don't have to assume you get 100%, right? Because there will be other people. So is there a constraint from who's taking share of the current banking loan size? Actually not because that's a different portfolio altogether. Then, again, you could -- we could be looking at, for example, the youth market. They're not interested in going to open a bank account with -- I would mention bank names, the High Street Banks. For us, if it's a digital bank, it will be a much easier proposition for them to enjoy the facilities of savings account and hopefully, credit cost micro insurance and what have you. So if we were to draw seconds of opportunities or what we -- what you term here as addressable market, we like to think it's pretty big, yes. Now for Boost in any -- in all likelihood, let's say, a micro SME, they might graduate and grow bigger. And in fact, it will go the other way around, in all likelihood, yes. But again, from the traditional people that bank -- with High Street Banks, if you look at the [indiscernible], the gamers and so on, I think the digital bank license will provide a very good sort of proposition insofar as they are concerned, yes? Indonesia, yes, there is a great opportunity. Our advantage is we have XL, 58 million customers, distribution channels, retail outlets that we can capitalize on. But perhaps I'll pause there and get Sheyantha to chip in. Sheyantha ?

Thank you, Dato'. Thank you so much for that question. So you're right. I think if you think about the addressable market, there are various ways to slice and dice the numbers. So if you start off with an addressable market, and our model is primarily based on building a lending proposition around micro SMEs. There is an official number of micro SMEs, but there's a large set of micro SMEs that are not registered. So depending on the baseline, you take that number can be very different. I think we've gone on some of the official numbers out there. But certainly, as Dato' said, the opportunity is quite large. So when we do our projections, we are perhaps somewhat conservative. In terms of whether there are any restrictions on the banking license, so I think Bank Negara has been quite clear that the purpose of this license is basically to develop new horizons for banking, right? So to go and target underserved segments now, would that limit who can bank with the bank? I don't think so. But in terms of the focus and in terms of the strategy and the target segments, our bank would focus, or for that matter any bank that gets the license would be expected to focus on the underserved segments. And the good news is that is if you take the lending model that we have today, that is exactly the playbook that we have, and that's how we've been doing business. So I think having been in that space, at least on the lending side of the business, we are quite confident that there is a sizable market out there. On Indonesia, yes. So as Dato' said, I mean, we're watching the space. There is no stand-alone licensing framework that has come out like in Malaysia, but their OJK has changed guidelines so that there's an opportunity to through inorganic routes, perhaps get into digital banking for it and by acquiring [indiscernible] banks, and I think that's been quite popular with a lot of players. We are evaluating options right now. I think Indonesia for us on the lending side has been a great market. We've grown quite significantly. So as a market, we see a lot of potential. But in terms of our next set of actions, we are evaluating all options right now.

Okay. Thanks, Sheyantha. And insofar as Link Net is concerned, I'm not sure where Foong you heard this about wanting to keep it listed. Actually, no -- we do like to acquire the remaining shares not owned as a result of the acquisition from [ CBC and Lipo ] that's 66 -- just over 66%. The party that's willing to take the mandatory tender offer would be Axiata alone, because the plan is for XL to own 20% and for Axiata to own 80%. Now that structure of ownership came about a whole process of a company trying to cover many issues. The primary one is the given ratios at both XL and Axiata. So on balance, we felt that there's a strong logic or reason for XL to own 20% given the effort to integrate the 2 businesses and for Axiata to still own directly 80%. And owning 80% of this business will provide the direct dividend line of sight if you like so far as cash flow is concerned. So as far as Link Net is concerned. So if you think about it, where this is going to sit in our 3 business verticals will be under infrastructure. You have digital telcos, digital businesses and infrastructure. So Link Net will be part of that infrastructure or vertical.

Yes, Okay. If I can just add in a follow-up back to the digital banking business in Malaysia, right? So would it be fair to say MYR 40 billion is like the baseline conservative estimate of the addressable market? And what would then be the blue sky addressable market, do you think?

What would be the, sorry?

Blue sky.

Foong, pick a number. I'll make that Sheyantha's KPI. I double that and make Sheyantha's KPI.

MYR 100 billion, MYR 200 billion.

Sheyantha, do you want to take that?