Grameenphone Ltd. (GP) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Grameenphone's Fourth Quarter Earnings Call for the Year 2024. I'm Chowdhury Tazrian Israt, the Head of Investor Relations. And joining me on today's call are Mr. Yasir Azman, our CEO; and Mr. Otto Risbakk, our CFO. The recording of this call, along with the earnings release presentation, financial report and other documents pertaining to the results will be available in the quarterly section of our Investor Relations website. Participants are all invited to begin posting questions and we shall address them at the end of the presentation. In case you're unable to post questions on the portal, please feel free to reach out through e-mail or text messages and we'll address them later. With that, let's now get it over to our CEO, Mr. Yasir Azman, to tell us more about our results.

Good morning, everyone. Thank you for joining us for our quarter 4 2024 earnings call. I'm Yasir Azman, Chief Executive Officer of Grameenphone. As per our regulator's report, as of November 2024, there has been a decline in subscribers for the telecommunication industry in Bangladesh with 188.78 million subscribers reported for the month, decreasing by 2.1 million subscribers from September 2024. During the same time frame, mobile data users decreased by 5.8 million, reaching to 119.06 million in November 2024. Let's now move on to some of our key business highlights for this quarter. As we are all aware, the current economic climate has brought numerous challenges with rising inflation and continually decreasing GDP, putting significant strain on business across various sectors. The telecom industry, too, has not been immune to these pressures. Despite the tough context, we performed well in the market, delivering an underlying profit margin of 20% with an EBITDA margin of 60% for the year 2024. Furthermore, according to the latest data from 3 operators, we have not only maintained our revenue market share, rather gained marginally, standing at 50.2%. Our continued success is built on 2 foundational pillars: the best network and the best value. We remain focused on our strategy and forge ahead with our investment plans and did operational CapEx of BDT 18.3 billion to support our growth opportunities and provide our customers with a fast, reliable and high-quality experience. In addition to offering the best network, we believe in providing holistic experience that empowers our customers. From personalized plans to advanced services, we have continuously evolved our portfolio to ensure that we provide solutions that help our customers to stay connected and beyond. Our value-driven digital offerings are resonating well, leading to greater engagement with our data services. Our digitalization journey has further progressed in this quarter with 27% DSTR contribution and 36% reload sales to subscriber share through digital channels. Despite economic constraints, more people are turning to the Internet to stay connected, work and access essential services. We are also capitalizing on the IoT and ICT products, smart home connectivity and advancements in AI to create even more value for our customers. While we have experienced some pressure on both our top line and bottom line growth during the second half of the year, I want to emphasize that we remain focused on delivering long-term value and stability for our investors. We will be maintaining our dividend payouts as part of our strategy to provide you with consistent and reliable returns. We believe that this is a crucial way to demonstrate our confidence in the long-term strength of the company even in the face of short-term market fluctuations. Let me now touch upon some of the key macroeconomic updates. Increase of supplementary duty in telecom service from 15% to 20%, an increase of SIM tax from 200 to 300 BDT, burdening consumers with heavy tax. Point-to-point inflation is around 10.89% as prices of goods and services stayed high, straining the purchasing power of our consumers. Bangladesh Bank is publishing daily dollar rates showing further increase in dollar price with IMF's emphasis for a flexible market-based exchange rate. As per HSBC Global Research Asia, Bangladesh's GDP growth rate for the fiscal year 2024 and '25 has been revised to 4.5%, with further prediction of rebounding the following year to 7.1%. Now let's delve into the detailed aspects of our business updates for this quarter. We are connecting deeper and innovating smarter. This quarter has been a time of reflection and a renewed focus on truly understanding and meeting our customers' evolving needs. Our efforts have been centered around rethinking our approach and addressing not just their immediate needs but also get deeper desires. We are seeing a shift in how customers are approaching their spending. Each customer now has their own unique spending pattern and with this flexibility has become essential. We introduced the #1 plan, which is an all-in-one solution for Internet and voice, and limitless data packs that provide users freedom to explore seamless data experience, making telecom services more accessible and convenient. As we continue to redefine the telecom landscape, we are committed to building a future-proof network that sets us apart in the industry. Our network, the most extensive in the country with over 22,000 sites and more than 17,000 kilometers of fiber infrastructure, is supported by largest Tier 3 data centers, cloud platforms and AI-powered technologies. We are proud to be providing our customers with a comprehensive integrated telco tech experience, one that blends top-tier connectivity, data, entertainment, personalized services and geo-diversified experience with cutting-edge technology. While GPStar has long been a sought-after loyalty platform, we rebranded it, providing our customers with a refreshed and elevated experience. Throughout the year, GPStar customers enjoyed BDT 4.5 billion worth of discounted value across partners, products and services. We successfully onboarded 679 partners and more than 9,000 outlets nationwide, ensuring that the GPStar experience reaches more people across the country. We remain committed to expanding household connectivity with gpfi, our fixed wireless broadband services, now reaching more areas in Bangladesh. In response to power outages, especially in rural regions, we introduced routers with battery backup. Additionally, we enhanced our mid- and top-tier gpfi packages to offer unlimited seamless connectivity. We are transforming for the future. Our journey to a future-fit organization continued. I'm excited to share some key developments that will drive growth for our digital segments. Firstly, we have launched the auto-pay feature, enabling seamless recharge and auto renewal to foster long-term retention. Secondly, we have introduced an enhanced search feature that simplifies navigation, enabling users to qualify, quickly find what they need while ensuring smoother, more efficient customer service experience. Finally, we have integrated a cutting-edge adtech engine, allowing us to drive app monetization and unlocking new revenue streams while providing better customer experience. Grameenphone is creating its own sovereign AI factory and utilizing advanced infrastructure and machine learning from Cisco and NVIDIA to drive innovation and personalized customer experiences. This quarter, our hyper-personalized AI recommendation for ATL packs in MyGP has improved communication efficiency for 70 million subscribers, reducing SMS volume by half. The personalized cash-back offer is a further step in our AI-driven customer-centric approach, leveraging AI/ML to provide customized cashback for eligible users and streamline manual disbursement based on their profiles. Despite the challenges of the slower economy, our B2B segment experienced positive growth of 7.6% year-on-year in 2024, with our ICT and IoT products also gaining significant traction. The induction of the Alo CC camera has been well received, and we have secured key partnerships, including a significant tender for Alo Smart Attendance with Bangladesh Power Development Board. Additionally, we have expanded our reach by onboarding Daraz as a new digital channel for promoting Alo products such as the camera and the gas detector. Moreover, our bulk SMS also saw a remarkable growth, contributing to more than BDT 100 million incremental revenue. Touch-free distribution, which is our industry-first initiative to automate and digitize GP's distribution process, is gaining traction in partnership with new banks. The touch-free distribution system automatically generates purchase orders when stock levels are low and handles financial transaction without any human input. The system now supports multiple banks for credit facilities, enabling wider digital transactions and increase touch-free ERS lifting.

Thanks, Azman. I'm now pleased to invite our new Chief Marketing Officer, who will share insights into our robust distribution system and how it plays a key role in driving our growth and efficiency.

Good morning. I'm Farha Naz Zaman, the Chief Marketing Officer of Grameenphone. Distribution is one of our core strengths that help us to take our services to 85 million of our customers and beyond. And today, I'm going to share with you a glimpse into the operations. At the heart of our business lies an extensive distribution network, which is truly unmatched in its rich and efficiency. With the support of 430,000 retailers, and 370 distributors across the country, we're able to provide seamless and reliable services to every corner of Bangladesh. This extensive reach ensures that we can cater to the diverse needs of our customers, whether they are in the bustling cities or remote areas. The scale is complemented by an incredible team behind it, whose commitment to excellence has allowed us to lead the market with unmatched efficiency. Our distribution network is more than just logistics, it's the center of all our operations. It allows us to react quickly to market changes, respond to customer needs and drive growth in real time. Keeping pace with the fast evolving market, we have incorporated the power of digitalization into our physical distribution. We have introduced Cockpit app for retailers, leveraging the latest technologies to improve both the experience of our retailers and the customers. Cockpit is a powerful retail application designed as the one-stop solution for our distribution partners, sales executives and retailers, which enables them to run operations and business from their fingertips. The Cockpit app has been successfully installed by over 400,000 retailers, and about 60% of the retailers are using the app actively. This interactive platform empowers retailers to place orders in real time, enabling a zero-time distribution process that ensures immediate fulfillment of customer demand. Not only has the app facilitated higher-margin contextual sales, but it has also played a pivotal role in uplifting our ARPU. With 60% of ERS transactions, over 80% of ARPU-driven parallel sales and 100% of biometric SIM sales and services being conducted through the app, it is clear that our future is digital with Cockpit in our distribution system. However, we recognize that adoption is just the first step to ensure that all retailers can fully leverage the app's capabilities. We are committed to educating them on its use and highlighting the tangible benefit it offers. Last, but not the least, our distribution ecosystem makes no compromise on the health and safety of our employees and partners. We have rigorous program in place to educate, monitor and ensure implementation of standard health and safety protocols in our premises and in our operations. With the unwavering support and dedication of our partners, we look forward to making our distribution network even stronger and more advanced so that we can continue to serve customers wherever they are and whenever they need us. Thank you.

Capturing the same essence of digitalizing the distribution processes, electric retail system lifting opportunities are also accessible 24/7 via MFS partners, eliminating reliance on retailers for physical visits, especially in remote and challenging areas. This enables retailers to lift the ERS anytime while reducing operational costs and commission expenses for both GP and for our partners. The modernization of the provisioning platform to a cloud-native DA-compliant architecture has equipped the system to handle 2,000 orders per second, ranking it among the top 3 in the world for speed and to support over 100 million subscribers, placing it in the top 5 globally. The transformation brought several key benefits, including increased capacity, a more secure and reliable environment, and the ability to develop new 5G provisioning workflows. The transition to an industry-standard RAFM system enables scalability, AI/ML integration and enhanced fraud management. It improved data integrity, billing accuracy, reduced revenue leakage while strengthening financial control and operational efficiency. Shaping the future with our sustainability vision is one of the priorities for us. Sustainability is a part of Grameenphone's growth and legacy. All our efforts are centered around reducing environmental impact, advancing digital inclusion and fostering a sustainable future for all. We have marked our plays as a sustainable leader and we shall continue our commitment to building a sustainable future, making a positive difference in the communities we serve. We are introducing sustainability into every aspect of our supply chain. We work closely with our partners and vendors to ensure sustainability. Standards are met across the board. As of December 2024, a staggering 77.5% of our total spend to our suppliers are with companies who commit to reduce carbon footprint. We have been advocating for policy reforms on corporate power purchase agreement in Bangladesh to support our decarbonization goals, and we are actively collaborating with various national and international organizations to further this effort. I'm excited to share that we have secured more than 250,000 megawatt hours of Energy Attribute Certificates locally, which represents the environmental attributes of renewable energy, promoting greener consumption. We developed a local market for trading EAC, which involved extensive collaboration with key stakeholders, including government agencies. Online safety and women empowerment has always remained key priorities for us in our effort to build an inclusive digital future. Our digital inclusion project has empowered over 3.1 million individuals, 65% of which are women from 8 marginalized communities across 28 districts, and 3,000-plus unions equipping them essential digital skills and online safety. We have directly impacted the lives of more than 100,000 women through our Internet Er Duniya Shobar initiative. In Q4, as a guiding force, we highlighted inspiring stories of how these women have transformed their lives through Internet access to help many other women of our country in the rural regions. Grameenphone is always committed to playing a significant role in enhancing the skills of our youth. We have upskilled 43,000 youth through our FutureNation and GP Academy training program. Additionally, our GP Accelerator platform has launched a nationwide boot camp, Jelay Jelay Smart Uddyokta, across 19 cities, training nearly 5,000 aspiring entrepreneurs. We dedicated to fostering innovation and unlocking the potential of our youth across the country. We are proud of these milestones, but we are equally excited for what lies ahead of us. I hope together we will continue to lead the way in creating a cleaner, greener and more sustainable world for generations to come. Now I will welcome our CFO, Otto Risbakk, to take you through our financial performance for the quarter.

Thanks, Azman, and thanks again to investors and analysts for being online with us today. In the financial presentation today, I will go through 4 areas with you. I will start with taking you through the P&L and the underlying metrics to help you understand our Q4 results. After that, I will give you an update on 2024 dividends. There may be new listeners here today, so I will also give you a bit of history on that. And since we are at the end of the calendar year, I will sum up the full year performance to you. And finally, for the very first time, we will also give you our outlook for 2025. So in this quarter, we have chosen to show you normalized financial results on the P&L slides. I will explain to you the main difference between the normalized and the actual reported results in this presentation. Note that you will also find the information on our IR web page. And if you have any questions, you can contact our IR head, Tazrian. So let me start with the highlights of the fourth quarter. Historically, the fourth quarter has always been a slower quarter in the year due to normal seasonal effects from things like colder weather and no festivities like eat and other. In addition, in this quarter, we continue to see the impact on consumer spending from the weaker macroeconomic conditions that started in Q3 after the unrest driven by rising inflation, taka depreciation, reduced government spending, and businesses holding back on investments and spending. Despite all these effects, we are still delivering very good results with strong margins. I'm truly impressed how the entire organization has gone the extra mile this quarter. Now if you look at the highlights of this quarter, if we start on the top left side of the slide, total revenue of BDT 38 billion declined by about BDT 2 billion or 4.9% year-on-year, mainly due to lower spending on data. Due to the challenging macro, we see that many customers have contained their spending and chose smaller packages. Going right on the slide, we see on the top line decline of about BDT 2 billion year-on-year pretty much flows through the P&L. Good cost management limited the EBITDA decline to 8.3%, allowing us to reach almost BDT 23 billion in EBITDA, and maintain an impressive EBITDA margin close to 60% for the quarter despite the difficult macro. OCF ended at about BDT 20 billion and an impressive margin above 50%, whereas NPAT ended at BDT 7.4 billion and a 19.4% margin. When I look at the reported revenue, and that's at the lower end of the slide, they are roughly around BDT 1 million lower on revenue side and BDT 1.5 million lower on EBITDA due to several unusual one-off effects. You will find an overview in the appendix of these effects and on our web page. On the NPAT line, we have an opposite effect from one-offs. As you can see on the right side of the slide, reported NPAT increased by 15%, whereas the normalized results declined by 13%. This is due to a positive effect from tax provisions that we booked in the fourth quarter of 2023, more than offsetting the negative one-offs at the EBITDA level that I just explained to you. As you may recall, we have reversed this tax provision in the first quarter of this year. On the lower part of the slide, you'll find all the reported results, including one-offs. The one-offs are mainly related to a negative revenue adjustment of BDT 0.9 billion and one-off cost items totaling BDT 0.8 billion, following the implementation of a new fully integrated, state-of-the-art enterprise software for revenue recognition and fixed asset management. So if I can sum up, our ability to maintain such strong leading market positions and such strong margins over time comes from decades of stringent capital allocation and a fantastic team with, I would say, almost an obsessive focus on customer experience and relentless focus on efficiency. We are quite proud of these results, that these results also make us one of the largest taxpayers in the country. I will now take you through the development of the key value drivers, and I will start with the subscriber base. As you can see on both the graphs on this slide, the subscriber base has been slightly declining since the unrest in Q3 this year, both when it comes to total subscribers and data subscribers. Part of this is due to normal seasonal variations and part is due to the impact of the weak macro I explained earlier. In Q4 this year, consumers have been more careful with their spending due to the economic downturn and the high inflation. And with more than half of the country in our customer base, we obviously feel this on our numbers. However, there is still a large potential for subscriber growth as the handset penetration and the data consumption in Bangladesh are still very low compared to other Asian markets. In particular, for 4G handsets, penetration in Bangladesh is just recently passing 50%. And data consumption is only around 7 gig per month. This compares to close to 100% penetration and consumption from 30 to 50 gig per sub in more advanced markets. In this environment, we are very pleased to see that churn remains very low in this quarter. This is, in my view, a sign that consumers will resume their data habits and new subscribers will come gradually as the economy improves and the inflation is tamed. Note that on a year-on-year basis, our subscriber base grew by 2.8% and the active data users increased by 2.9%. This shows that the impact of the weaker economy has been limited. I should add that the fourth quarter is usually a slower quarter when it comes to subscriber growth, and we do see signs of improvements now in Q1. This underscores the strength of our business model and the effectiveness of our customer-centric strategy execution. Now a few words about the ARPU and the usage. On this slide, you can see that the weak macroeconomic and political situation of the country has had a significant impact on ARPU and data usage. On the left side, you can see that the overall ARPU declined by BDT 5 to BDT 148, a drop of 2.7% from last quarter, and it dropped more than 10% compared to the pre-unrest levels in the first half of 2024. This decline is primarily due to a general decrease in usage as consumers have been more cautious with their spending in response to the current economic slowdown and rising inflation. The middle graph shows that the recovery in terms of data consumption from the third quarter has started. Data consumption of 6.7 gig per sub is up 11% Q-on-Q and up 2% year-on-year. We see positive trends continuing now in Q1. Looking at the right-most graph, you can see that the voice volume is declining gradually. This is a natural shift we are seeing across the industry and in all countries as customers transition from voice-centric to data-driven services. Note that Q3 was a mere exception as there were more reliance on voice due to the Internet shutdowns. Going forward, we expect increased 4G penetration and increased data usage to continue to drive the growth we have seen in Bangladesh over many years. As I said previously, Bangladesh is far behind other South Asian and global market when it comes to data usage, and we believe there is room for significant usage growth longer term. On the next slide, we will see how the subscriber and ARPU development impacted revenue. On this slide, the graph on the left side shows total revenue and the graph on the right side shows the subs and traffic revenue. On a year-on-year basis, we have registered a normalized decline of about BDT 2 billion or 4.9% in total revenue and a decline of 4.6% in subs and traffic revenue. The year-on-year decline this quarter is mainly a result of careful consumer spending behavior, in particular on data, due to the weak macro and high inflation. Again, we expect revenue to gradually improve as the economy recovers and growth in mobile data usage and handset penetration resumes. It's difficult to know exactly when the recovery will start. But fundamentally, we are positive to the economy and the mobile sector in Bangladesh. We believe that the current downturn is more a reset than a crisis and that the economy will rebound once reforms start working. On the next slide, we can see the cost and EBITDA development. So on this slide, you can see that we have been quite successful in containing the impact of the external factors on OpEx, protecting our industry-leading margins. With an inflation rate of more than 10% and a depreciating taka rate, we are quite happy to see that OpEx growth has been limited to less than 2%. Again, we see that the systematic work on efficiency and automation that we have been practicing for years pays off. We believe more in continuous improvements and systematic work rather than a stop-and-go approach, although the systematic approach also includes being able to adapt in special environments. One thing worth noticing is that we start seeing that usage of AI and analytics in our operations is bringing efficiency and cost reduction. One example is smart network management where we see that electricity savings, around mid-single digit in percentage, can be achieved through AI. The graph on the right side shows the EBITDA development. While the EBITDA shows a normalized decline of 8.3% this quarter, it is commendable that we are still maintaining an EBITDA margin close to 60% and an EBITDA level of BDT 23 billion for the quarter. This is an impressive result that I'm proud of, especially given the macro pressures we are facing and reflects the resilience and the effectiveness of our business model. You will see on the next slide that the strong operational performance and BDT 23 billion EBITDA flows all the way down to the bottom line and allows us to maintain a solid profitability and industry-leading cash flows, supporting our balance sheet and dividend policy. So here, you can see the NPAT to the left side and the corresponding EPS to the right side. Due to our strong balance sheet and very low debt, the solid operational performance flows directly down to the bottom line, allowing us to reach an impressive margin above 90% in a quarter with significant macro headwinds. On a normalized basis, the BDT 7.4 billion NPAT is down 13%. As the revenue decline, we saw it's flowing all the way down to the bottom line. Low financing costs due to the strong balance sheet and good cost management with below 2% OpEx increase helped containing the shortfall. The reported NPAT, however, is up 15% year-on-year, mainly due to a tax provision that we booked last year that we reversed again in the first quarter of this year. The graph on the right side shows the corresponding EPS reaching BDT 5.6 (sic) [ BDT 5.5 ] this quarter. On the next slide, we will show you the development of cash flow and net debt. So this slide is one of my favorite slides. The graph on the left side shows how we are maintaining operating cash flows around or even above 50% and BDT 20 billion per quarter, quarter after quarter. And the graph on the right side shows our strong balance sheet and enviable leverage at only 0.6x EBITDA. Before I go to the dividend slide, I would like to show you something else we are very proud of. So here, you can see how much taxes we pay. This slide clearly shows that when we are doing well and making good profits, we are sharing the success with the government through sizable tax payments. In 2024 alone, we paid more than BDT 123 billion worth of direct and indirect taxes to the government. About BDT 43 billion of that is relating to direct taxes whereas about BDT 80 billion is related to indirect taxes. Since inception, we have paid a staggering BDT 1.306 trillion in taxes. That's an impressive number. These numbers are a testimony that having profitable companies is the best assurance for securing state finances and welfare. We think there are opportunities to improve the tax system in the country, but we are also proud to make such important contributions. Now over to the dividends for 2024. This slide gives an overview of the dividends we have paid since 2015. As a matter of fact, we have paid similar dividends every year since our IPO in 2009. The first thing I would like to say is that this level and regularity of dividend payments does not come by default. The strong results, cash flow and balance sheet you have seen in this presentation is the result of a unique organization with very strong governance, a uniquely competent Board, a sharp and consistent business strategy with stringent capital allocation, significant and continuous investments in our network, in IT and in people, and razor-sharp focus on customer centricity, continuous improvements and efficiency. The strong balance sheet allows us to continue to invest with a long-term view even in periods with a challenging economy like this year, and it also provides the basis for an attractive and predictable dividend policy. So for 2024, our Board is proposing to pay a second dividend of BDT 17 per share after the BDT 16 per share we paid after Q2, bringing the total declared dividends in 2024 to BDT 33 and 123% of NPAT. We have ample balance sheet and retained earnings capacity to support this dividend. The dividend will be paid entirely from existing cash and committed bank facilities. The proposed dividends have to be, as always, approved by the AGM, which will take place in April 2025, and will be paid with normal delay after the approval is received. This concludes the presentation of the fourth quarter of 2024. Before I show you the guiding for 2025, let me show you a slide summing up the full year of 2024. Top section of this slide shows the normalized performance for 2024, and the bottom section shows the reported numbers. There is not so much difference between the two, but I still prefer to show you both to be transparent. What you see here is the total year. But as we all know, 2024 has been very special. We started the first half of the year very well with growth above 5% and good momentum. Then came the unrest and the regime change in early Q3, followed by an economic downturn in the rest of 2024. As a result, the strong trend and plus-5% growth in the first half of '24 turned into a decline of about 5% in the second half, leading to a total normalized S&T revenue of almost BDT 160 billion and a growth for the year of 0.5%. Including one-offs, we had a minor decline of minus 0.2%. Solid OE programs and sharp capital allocation allowed us to reach EBITDA of BDT 96 billion and maintain an EBITDA margin over 60%. Normalized operating free cash flow and net profit after-tax reached BDT 78 billion and BDT 33 billion, respectively, and margins of 49% and 20%. We are very proud of these margins, which rank among the best globally. And as I mentioned earlier, this allows us to continue to invest with a long-term view, to maintain an investor-friendly dividend policy and share the benefits with the country through meaningfully high taxes. In the section below, you see the reported numbers, including one-offs. You will find more details on the one-off in appendix and on our website. You can also ask Tazrian in IR and/or post questions in the Q&A session immediately after this presentation. Now over to Azman to talk about the standards for excellence that we are setting in the industry.

As we continue to navigate both opportunities and challenges in our industry, one thing has become increasingly clear, that our success is directly linked to the strength of our people and the leadership we have in place; the resilience, what we mean. We are fostering an inclusive, skill-centric workplace led by an international and diverse leadership team. As part of our ongoing commitment to workplace diversity, women representation has gone up to almost 20% of our overall workforce, with 14.3% holding senior leadership position within the organization.

I would now request our Chief Human Resource Officer to share some detailed insights on people and organization.

Partnering with the revenue divisions in driving the business priorities of GP, people and organization division is relentlessly working to develop a future-fit organization with a continuous performance and learning culture. In 2024, we redefined our revenue functions, introduced a new digitized performance management system in our own OneGP app, which helped us identify and develop the right talent for our future. We also defined the cultural traits of GP based on Telenor behavior and focusing on the future ambitions of Grameenphone.

We understand the need for robust cybersecurity defenses across the company for which we continue strengthening our defenses against the evolving cyber threat. Insider threat detection time has been reduced by half using AI-based cybersecurity monitoring capability, which significantly lowered the potential for data leakage. As we look ahead, our focus remains on sustaining the momentum for innovation. We will continue investing in cutting-edge technology, expanding our reach and enhancing our customer experiences. Over the next years, we will be realizing the advances of our proactive investment in platforms and AI that will lead to automated operations, autonomous network management and advanced customer engagement. We are towards the end of the call, and I am incredibly proud to share that we have been recognized as the most loved mobile service provider in the country and the second most loved brand of 2024 for our services by Bangladesh Brand Forum. The accolade reflects the quality of our network and the trust, love and loyalty that our customers have placed in us. We will continue to listen to our customers, adapt to their evolving needs and provide the best possible experiences that keep them connected. Thank you very much for listening. With that, I will turn it over to Tazrian for Q&A session.

Thank you, Azman, and thank you, Otto, for the presentation, and thank you, everyone, for listening. So we'll now begin the Q&A bit. We already have some questions from some of the analysts, so let's start with the first one. So the first question is, why there is such a big drop in service ARPU in Q4, whereas Q3 was the most impacted quarter. Otto, would you like to take that?

Yes. That's a very good question. Thank you for that. So there are a few reasons for this. First, if we look back at Q3, actually, the first 2, 3 weeks were very good before the unrest started. So we have a good portion of the third quarter with very good results. Then if we look at the macro into Q4, actually, the weaker macro that we saw in Q3 has remained very slow in Q4 and inflation has remained high. And with 84 million subs and most of the corporates in our customer base, this is also impacting our numbers. And thirdly, Q4 is always a little bit slower quarter due to the winter weather.

Okay. So let's see if we have another question. This one is also for you, Otto. It says, in 2024, what led Grameenphone's operating profit go down by 8%, whereas the top line de-grew by 2%?

Yes. So this is due to several factors. So whereas, as you know, the top line was rather flat, minus 2% reported, plus 0.5% normalized, we have continued during the year to invest in our network and in digital solutions. So we are constantly expanding our network. I think we added about 1,500 sites this year and also investing in IT, and we expect to see very good return on these investments as the macro improves. So in one way, we have done the investment. We haven't seen the full return yet. So that's one very important reason. And also, I would say that in the current difficult macro, in the second half of the year, we have not fully passed on the cost inflation to our customers. And I think that's a good thing. So this is mainly the two main reasons explaining a little bit lower earnings or profit development. But we expect that as the macro improves, hopefully now going into 2025, you will see a return to growth also on the bottom line.

Okay. Thank you, Otto. So we have a question on the regulatory front. It says, what is Grameenphone doing about the contingencies and dispute? Has there been any discussion with BTRC? So joining with us in this call is our CCAO, Tanveer Mohammad. So I would request Tanveer to take the question.

Thank you. There is no significant development on the BTRC case in this quarter. And the next data in the original title suit is set on 7 July 2025 for statutory mediation. So actually, what will happen on that date, the parties will need to inform the court as to whether they would like to explore mediation or not. In case of any dispute, while GP relies on the court system as the last resort for judicial education, GP encourages exploring the avenues for amicable resolution in an appropriate and transparent manner. Thank you.

Thank you, Tanveer. We have another one for you. Does GP plan to purchase low band spectrum this year?

Yes. Actually, we, along with other MNOs, we are in dialogue with BTRC about the terms, the conditions and also the preferred band. So the discussions are ongoing.

Okay. Let's wait for some few other questions, if there is any. Okay, so we have another question on data revenue growth. It's from IDLC. What's the data revenue growth in 2024 and Q4 2024? Otto, would you like to take that?

Yes. So with regard to the data growth, we see in Q4 that the data was having a decline of around 11%. And this is mainly due to, in this macro environment, we see that a lot of consumers have taken smaller packages as they are cutting their spending, adapting to the high inflation. And also, in this very difficult period, we have supported our customers with larger and more affordable packages, which has also impacted the data growth. And we're hopeful that in '25, as the macro improves, we will also see the continued growth of data. It has been growing steadily over many, many years, and we think that this will continue to grow. So it's a question of time.

Thank you, Otto. And we have answered all the questions that we had at hand. If you have any further questions, you can mail to me at the Investor Relations portal or you can send me text. With that, we will end the call. Thank you, everyone, for listening. Thanks a lot.