HKT Trust and HKT Limited (6823) Earnings Call Transcript & Summary

Good afternoon, and welcome to the HKT 2021 Annual Results Webcast. In attendance today, we have Susanna Hui, Group MD; and Evan Wang, CFO. We will start with the presentation followed by Q&A. Let me turn it to, Susanna.

Ladies and gentlemen, thank you for attending the HKT results announcement today. It is indeed our third year of results announcement with our mask on. Unfortunately, I hope that we can basically remove our mask next time when we do our results. In 2021, especially the second half of the year, we saw the local pandemic situation actually stabilize a bit. And this has enabled the economy to regain some of our strengths. So against this backdrop, we are very pleased to report that in fact, has resumed growth with our top line posting 5% gain as compared to 2020, it was a 2% drop in top line. EBITDA was up by 2%. In fact, if we adjust the ESS, the government subsidy's impact in 2020, the EBITDA growth would have been 5%. And this was as compared to the again, 2% drop in EBITDA in the year 2020. AFF for the year was up by 2.4%, and all these were underpinned by continued demand for our reliable broadband acceleration in terms of our 5G upgrades and, of course, our vigilant cost management as always. Full year distribution was HKD 0.7277, representing an increase of 2.4% and also an attractive yield of 6.76%. We regret to see the recent surge in Omicron cases and return to more stringent social distancing, which obviously have propelled almost all success in society and also caused uncertainty to the local economy. We will, of course, continue to stay vigilant and adapt to the rapidly evolving situation. Nevertheless, we do believe that our strong fundamental, our diversified portfolio and resilience is well positioned for a rebound and accelerated growth when COVID wanes, hopefully soon. The second slide here is to show that we remain focused on strengthening our core offerings of reliable ICT end-to-end solutions to enterprises, both in Hong Kong and globally. And we also partner for a larger product portfolio in order to become the one-stop shop for all ICT services. On D2C side, basically, we have separated into household level and individual level. On the household level, with the incorporation of the pay-TV operation now TV into the HKT starting from 2021, we were able to leverage on the quad-play of advantages on the household level, providing more bundles for broadband and the entertainment with content. On D2C individual side, obviously, mobile has become the anchor for us to expand into complementary digital services, including online shopping, the FinTech Tap and Go and also health care services, DrGo. By leveraging our very strong market reputation, strong mobile subscriber base market share and scale, all with the singular aim of providing relevant value-added services for our customers. We are, therefore, confident that we will be able to provide sustained growth in our AFS and distributions for our unitholders in the years to come. The third slide here is to show that the -- we are able to leverage the group assets to bolster our market-leading business. For those of you who are in Hong Kong, obviously, you would be very familiar with the huge success of our media assets within the wider PCCW Group, which is basically the Mirror boy band in ViuTV. We are able to leverage on the popularity to reach across a broad range of market segments, enhance attention to our service offerings as well as penetrating newer demographics such as the user group. For example, in the year 2021, we have launched numerous collaborations with the group on the various campaigns or the different lines of business. And this has included the Netvigator MOOV concerts as well as the highly successful CSL Mirror 5G Plan unveiled in November, which incorporated AR features. And this has led to huge market hype, which resulted in a lot of new subscriber conversion. As mobile has now become the media of -- the medium of every phase of our life, let's first focus on mobile. Now on this slide, you can see that we continue to sustain our market leadership with postpaid subscriber, reaching 3.3 million for -- as at 2021 year-end which represented a net addition of 45,000 subscribers during the year against a very competitive marketplace. Postpaid churn rate also reached an all-time low of 0.7%. And this is made possible due to the customer loyalty, our superb services and the engagement with the customers. And on the slide, if you look at the total mobile revenue, despite the roaming overhang due to traveling and quarantine restrictions, which are really frustrated, total mobile revenue reported a 13% growth year-on-year, and we have basically split into the different sections here. So you can see that the local core services actually was still up, expanded by 2%, and this is because of the accelerated 5G upgrades with postpaid ARPU expanding to HKD 187 as of December 21, with a 2% year-on-year growth. And the 5G -- higher 5G absorption was also made possible by the availability of a lot of new 5G handsets in the year 2021, which also boosted the mobile product sales as well. In fact, it was surpassed -- it has surpassed the pre-pandemic levels. Now zooming into 5G, which is now in its second year since launch. We are pleased to report here that we have achieved a total of 756,000 5G customers as at January, representing 23% of our postpaid base. Again, an incremental plan fee uplift of HKD 70 is what we have achieved. And the penetration of 23% in fact, is ahead of our internal target. In addition to the burgeoning 5G handset models available during the year that I mentioned, the accelerated 5G adoption, its success is also spurred by our creative influencer-led marketing. Again, for instance, the recent 5G Mirror campaign, we offer a dozen of unique idle service plan, bundled with 5G-enabled entertainment pack as well as innovative AR images of Mirror members so that the fans can be interacting with them all the time. Now we also have built a csl. 5G lens application, incorporating again, a lot of innovative AR features. We have now signed up over 400 merchant partners distributing more than 1.5 million coupons. And it has become another platform for a lot of merchants marketing to take place and also for CSL to deepen our engagement with our customers, and therefore, explain why our churn rate is -- has been kept at a very low level. Now obviously, we take pride in our superior network which is well recognized for speed and reliability, underpinned, of course, by the largest number of cell sites and connected by the strongest fiber backhaul, benefiting from the fixed mobile converged network, which is unparalleled, I mean, in the Hong Kong market. During 2021, we continuously invested in the network in terms of both coverage and capacity. So our coverage now reaches 99% of the territory, both outdoor and indoor locations, including the full MTR network using dedicated spectrum for 5G. We have further dynamically enhanced coverage in particular locations, addressing the needs for different customer segments, for instance, the popular hiking trails for the mass market, sea routes and private clubs for the premium market. We also spend a lot of efforts in terms of enriching the capacity layer and to uplift the overall network speed by deploying on a large-scale basis of domestic MIMO for C-band and 4x4 MIMO for the low-band spectrum. Now at the same time, we have successfully defended and expanded our spectrum resources with a successful bid recently of the 20 megahertz of the newly assigned 700 megahertz and also the crucial 2,600 megahertz in order to strengthen indoor reception and improve wide area coverage and render us the biggest holder of low-band spectrum as well. Now turning to our enterprise segment, the B2B opportunities. I think, again, we are in an unparalleled position as compared to other operators in Hong Kong. 5G when coupled with technologies such as AI, IoT, VR and so on, indeed, opens the door to found commercial business and revenue opportunities. And HKT has been spearheading the development of the relevant applications with partners in various industry verticals, such as health care, property and construction. For example, Smart Healthcare, we have been successful in building more than 10 5G infrastructure projects with a number of public and private hospitals. We also have more than 20 projects implementing applications such as Holomedicine, Internet of Medical Things, Remote Consultation and robotics for patient care and so on. And worth highlighting is our project for University of Hong Kong, medical school to provide remote consultation solution, connecting their Hong Kong school as with the Hong Kong U Shenzhen Hospital. Now of course, in the smart properties and smart constructions, we have also completed a number of projects to create better experience for occupants, monitor the assets for the property managers and achieving greater energy efficiency for the property management company. And for the construction sites, we have been able to provide solutions, pairing 5G with 4K network cameras to a cloud-based video analytics for safety surveillance and so on to help promote the safety in the construction site as well. Now 5G, just now, as I said, bundled with all the other technology has -- we are able to provide a lot of solutions and applications to address the accelerated digital transformation efforts required by the various enterprises, public or private during the pandemic. And we have a proven track record of delivering end-to-end solutions. And we have been able to secure many new contracts in the different sectors. And notable wins include the design and construction of secure private cloud for a public financial infrastructure provider and to provide managed WiFi and SD-WAN project for a well-known local jeweler, who has operation across the entire China of more than 6,000 retail outlets as well as for one of the world's largest cosmetic companies to support its smart retail applications in Hong Kong and Macau. Now our international business under PCCW Global, putting aside a headwind in global carrier voice trading, which has a very thin margin anyway. We continue to invest in expanding and enriching our subsea cable network system and have been pivoting our focus to ride on growing adoption of cloud-native applications, on our self-developed console connect software-defined platform. Now this platform provides instant on-demand interconnectivity to cloud data center applications and IoT devices. And it now provides interconnectivity between 148 cloud zones through POPs in close to 600 data centers across 55 countries, connecting all the major hyperscale cloud players and we intend to further invest in the platform to drive growth. Turning back to the local scene, the fixed broadband side. As working and studying from home is still the norm for much of 2021 and looks like, unfortunately, for the coming months. Consumer demand for our highly reliable broadband network remain robust. So we were able to continue to drive net adds, driving subscriber base to 1.46 million as at year-end. And more importantly, in terms of the fiber subscription, which, of course, command a higher margin, increased by 6% to 944,000 during the year. And in order to support multiple broadband users at home, whether it's for entertainment, for work or for study, we saw growing uptick of home WiFi solutions as well with subscriber base growing to 30,000 at ARPU uplift of HKD 95. Now the recent -- our recent new acquisition was driven by a live concert with MOOV drawing on their appeals boy band Mirror and we were able to drive new subscription at higher ARPUs and bring in incremental contract revenue. Of course, we do see the headwind from the slightly increasing trend of integration that was evident in the year 2021. So there was a number of line terminations. But despite that headwind, we are able to increase revenue and increase subscribers. On the B2B side, we also worked with a number of different partners in terms of pre-installing smart living solutions in the new residential properties as well. Now fiber network. Our fiber network over the years, we have continually invested to build the most extensive territory-wide true fiber network. And in support of the government broadband subsidy scheme for remote areas, we continue to add new reach in outlying areas and remote islands. And we have included adding subsea cable connection to select online islands as well. And this is the benefit of expanding and upgrading our cellular coverage in those locations as well. So I guess that explains the beauty of having a fixed and mobile converged network. And we are able to utilize also 5G for the last-mile access to provide high-speed broadband to areas which have not been covered by fiber before. Right now, actually, we are able to cover fiber and high-speed coverage covering more than 98% of all the households in Hong Kong. Turning to our pay TV operation. 2021 represented the first full year of incorporating now TV into the HKT family. And as you all know, live sport is the main state of unique irreplaceable content in pay TV proposition. And we are pleased to announce that we have recently renewed our exclusive broadcast of the Premier League for another year and this marked the -- our 12th consecutive year of coverage of this very popular football game. This long-term broadcast partnership with Premier League is testament to the scale of our now customer base, especially our sports base and also the high-quality viewing experience provided by us, incorporating the 4K and watch party function for social viewing rather than solo viewing. And this is particularly important and popular. In the current COVID situation where pubs and bars are closed, and social distancing is further restricted. So we are the -- also the only platform which provides a full suite of soccer, including Euro, Europa, LaLiga and so on. So different footballs. Other popular sports such as tennis, or the Wimbledon, U.S. Open and so on are also available on our platform, also golf and Formula One and so on. Now in addition to sports, we have also invested in the Chinese Japanese, Korean, western drama movie and variety shows. We have also added our Now True and Now Studio, which are curator programs from independent producers and documentaries, which help to build our extensive linear and VOD contents. Now with a lot of students spending more time at home because physical classes are being canceled, we see great potential in differentiating ourselves from other OTT players. So we have strengthened our offerings in the education segment for kids and family. Recently, we have partnered with Snap Ask, a leading local tutoring service provider to deliver a number of content in terms of the different subjects, which include also a package of tailored service individualized and interactive learning, targeting students in junior secondary years. We plan to continue to invest in this ecosystem, which is relatively untapped by the other players. And we believe that this will help further drive the growth in our now TV base as well which currently is standing at 1.37 million, a 2% increase as compared to last year. Next is the Club loyalty program. We have last year, implemented the convergence of loyalty and e-commerce platform. So we have made very significant strides forward with now over 3.54 million members registered on the platform, posting a year-on-year increase of 11%. Now with the convergence of Redeem and Shop experience, which is seamless, the gross merchandise value, GMV, for 2021 more than doubled over the past 12 months as members were attracted by a large number of products available, including not just mobile handsets, but also other electronic products and other household goods and so on. During the year, we have also added new point conversion partners with a leading bank, a leading U.S. bank and a hotel group as well, enriching our ClubPoint currency further enhancing customer stickiness and engagement. Now turning to the -- our fintech side, fueled by the growth in e-commerce and social distancing measures, the number and value of digital transactions has proliferated on our platform, tap-and-go. And we have seen increased users, which reported a 31% year-on-year growth to 3.6 million and also customer spending increased substantially by 140% year-on-year, following our participation in government's consumption voucher scheme last year. Yesterday, the government has announced another batch of CVS this year, and we would be very happy and pleased to support the government in distributing the CVS again in April. Now obviously, Tap&Go, together with its Mastercard and UnionPay partnership and able to use of our payment means in over 100,000 local point of sales and over 3 million retail locations worldwide. And we are also adding new features to our HKT Flexi, which is basically a personal loan product and also buy-now-and-pay-later option for payment flexibility. Now on the Merchant Solutions side, we have continued to focus on the rollout of smart point-of-sale devices, the POS devices to facilitate fast and contactless payments as well as to enable merchants to understand and optimize their retail mix by providing them with data analytics and financing products. And during the year, merchant using our smart POS increased by 182% to 4,800, and we also saw a 4x increase in transactions. We will continue to review opportunities to grow and upsell the space of users. Turning to our telemedicine platform, DrGo. Since launch, our DrGo platform continued to see growing adoption with users tripling to 276,000 and with the onset of the recent 5th COVID wave, we have seen the number of transactions growing very rapidly, especially for the past 2 weeks. And a growing number of doctors and hospital networks have joined the ecosystem, including not just the 2 hospitals at the onset, but also a number of different medical chains as well. So altogether, right now, we have more than 80 doctors and professionals on the DrGo platform. We have also partnered with a number of insurance partners to offer service to their policyholders to drive usage and providing seamless experience in terms of seeing the doctor and claiming for expenses. In terms of the corporate social responsibility, naturally, a key CSR focus in 2021 was to support the Hong Kong community to weather the COVID pandemic, particularly amongst the most vulnerable members such as the senior citizens to whom we provided free mobile service and DrGo health care plans. And with the recent 5th wave surging, we have provided additional support by commuting -- by committing to deliver 100,000 rapid test kits and donating fixed line to support government hotlines as well as subsidies for the DrGo users. Now longer-term initiatives, of course, during the year included and will continue to include giving back to the community through monetary support as well as community events, including concerts and so on, in-kind and in cash as well as, of course, we have our ESG targets in the electricity consumption, GHG consumption -- GHG emissions target, water consumption target and general waste target by 2025. And we would also try to look at the green sustainability-linked loan and so on in order to support the government initiative. And overall, the final slide. Looking ahead, HKT will continue to maximize the synergy of our quad-play platform and leverage the group assets of PCCW to establish new competitive edges to bolster our core offerings by market-leading fiber broadband, mobile and pay TV businesses. In terms of enterprise transformation, we continue to see great potential in the enterprise segment. So we will be committed to help the enterprise and public bodies to navigate the digital transformation journeys. And we do think that there is a potential in terms of China and the Greater Bay Area as well. We continue to nurture our digital ecosystem, integrating our loyalty program and continue to expand into adjacencies to meet customers' health, financial services and other needs. With our strong and diversified set of core businesses, we believe that HKT is well positioned to strive and to accelerate growth once COVID situation stabilizes. And with that, I would like to ask Evan to share the financial update. Thank you.

Yes. Thank you, Susanna. Let's first have a quick recap again on our key financial lines of HKT Group for the year 2021. Our AFF has increased by 2% to USD 707 million, total revenue up by 5% to $4.35 billion, in which our service revenue was also up by 1% to USD 3.85 billion. The growth in service revenue is mainly driven by the continued strong demand on broadband as well as the data connectivity as well as the encouraging 5G uptick on the mobile side, also together with the full consolidation impact of our Pay TV business in this year. Such growth momentum has fully offset the negative impact from the decline in international voice wholesale business as well as the further reduction in mobile roaming revenue given the continuous global travel restrictions. So as a whole, our total EBITDA for the year was $1.6 billion -- $1.632 billion, up by 2% year-on-year. And in fact, the growth would be 5% if we are to take out the impact by the one-off employment subsidy scheme that the group has received in 2020. Our profit before tax for the year was USD 747 million, steady year-on-year. And if you exclude the impact of one-off accounting gains that was recognized in 2020, the gross NPAT net profit for the year was USD 617 million, a decline of 3% year-on-year, which was mainly due to the increase in P&L tax charge in respect to the utilization of our available tax losses. Then let's have a detailed look at our financial performance of our TSS segment. From the chart on the right-hand side, you can see our total local TSS revenue was up by 1% to USD 1.898 billion in which our local broadband -- our local data connectivity and broadband business continued to be the key growth driver, showing a growth of revenue by 4% to $1.097 billion. With the well-accepted remote working and online learning arrangement in the society as well as the strong demand for home entertainment, the demand for our fast and reliable broadband services on the consumer side remain strong with constructing revenue up by 2%. The enterprise segment also sustained a robust growth momentum with revenue rising by 8%. As the accelerating digital transformation of both enterprise customers and public sector is supporting a continuous demand for our fixed mobile integrated solutions, incorporating 5G and other emerging technologies. On the other hand, due to the drop in international voice wholesales revenue, given the industry-wide decline in the product sector, our total TSS revenue of the group was USD 2.796 billion, a decline by 2% year-on-year. But given the minimal margin contribution by the voice wholesale business, our total EBITDA of the whole TSS segment has still shown a growth by 1% to $1.086 billion, with the corresponding EBITDA margin also improved slightly by 1 percentage point to 39%. Turning to our mobile business. Our total mobile revenue surged by 13% to over USD 1.5 billion, driven by the higher 5G adoption of our subscribers reflected in both the mobile service revenue as well as the mobile product sales, which has fully offset the negative impact caused by the prolonged softness in -- on the roaming side. From the chart on the right-hand side, it shows our mobile service revenue has, in fact, improved by 1% year-on-year to just over USD 1 billion. And if you exclude the roaming and IDD portion, our local mobile service revenue has increased by 2% to USD 965 million. Postpaid brand ARPU was also up by 2% to HKD 187 and our postpaid customer base also further expanded by 1% to around 3.3 million subscribers by end of the year. Our sales of handsets also increased by 51% year-on-year to USD 504 million, given the strong demand for 5G handset alongside with our -- the 5G upgrade of our subscribers. As a whole, the mobile EBITDA was up by 1% to USD 613 million and our mobile service EBITDA margin was still kept steady at around 60%. On our Pay TV business, as previously discussed, our now TV business has been integrated into HKT Group since the fourth quarter in 2020, such that it has a full year financial contribution in this year. Its revenue and EBITDA were USD 315 million and USD 62 million, respectively. With the unique content proposition and festival subscription plans, our Now E streaming services continued to gain popularity in the market with corresponding revenues grew significantly by over 50% year-on-year despite the competition from other OTT players in the market. Our advertising revenue also showed an encouraging growth of 17% year-on-year, reflecting the successful exclusive broadcasting of Euro 2020 as well as other sports events like the Tokyo Olympics. So as a whole, our now TV in-store customer base was up by 2% year-on-year, reaching the level of over 1.37 million subscribers by end of December. And if you include the first 9 months, this has been reported under PCCW in 2020, the Pay TV EBITDA of $62 million in this year actually reflects a year-on-year growth by 6% on a like-for-like basis, which is showing the benefits that we have realized from operation synergies under our quad-play platforms, in particular on the content cost rationalization. Then let's take a detailed look at our operating expenses. For our TSS and mobile businesses, we were able to achieve an overall OpEx saving of 9% year-on-year, thanks to our continuous effort in process digitalization, tightened cost control as well as the optimization of O2O sales channels and retail footprints. And we have reinvested such savings to nurture the growth of our new digital business segments, such as the Club Tap and Go and DrGo that has just been described by Susanna. So as to drive the value creation and the long-term growth momentum of the group as a whole. So our total OpEx spend for TSS mobile and digital businesses has been maintained flat year-on-year. And in particular, to note that the OpEx expenses in 2020 is also -- has already offset with the ESS subsidies data core we see. So excluding that impact, actually, the savings that we have achieved in this year is much more. And after including the OpEx -- the full year peso pay TV business, which was consolidated in full in this year, our total OpEx amount was USD 577 million and increased by 8% year-on-year. And the overall OpEx to revenue ratio was still kept at around 13%. Then on our capital expenditure. Even after again, the full year consolidation of the Now TV capital expenses, the overall CapEx investment of the group has just increased slightly by USD 3 million to $315 million. On TSS side, the CapEx amount has -- we have achieved a saving of 7% year-on-year to the level of USD 168 million, which is the benefit from our extensive local fiber infrastructure and international cable investment that the group has made over the past years. Mobile CapEx was also steady at USD 113 million, while we are adopting a demand-driven strategy for our further 5G network enmeshment. So as a whole, our total CapEx to revenue ratio has further moved from 7.5% in 2020 down slightly to 7.2% in this year, which is a gain as well continued to within our 10% guidance. The next is our adjustment for statement. We have already discussed about our EBITDA and the details of our capital expenditures. The total customer acquisition costs and license fee has increased to USD 218 million, mainly due to the consolidation impact of the customer appreciation costs as incurred by the Now TV business as well as the increase in license fee on some new mobile spectrum. Fulfillment costs in respect to the customized commercial projects is down slightly to USD 62 million and the payment for right-of-use assets, which is representing the rental expenses increased slightly by $4 million to $208 million, again, it's due to the pay TV rental expenses. For the payment of our net finance costs benefiting from the lower market interest rate for 2021. Our cash interest payment has reduced by 20% to USD 77 million. And for our tax payment, also down by 28% to USD 48 million, reflecting our utilization of available tax losses after consolidating the pay TV entities since last year. So as a whole, our AFF increased by 2% to USD 707 million, translating to a total distribution of HKD 0.7277 per each share stable units in the issue. Then on the detail of our P&L, the consolidated income statement. Again, we have discussed our revenue, OpEx and EBITDA. The depreciation and amortization expenses for the year has increased by 6% to USD 724 million, which was mainly contributed by the inclusion of amortization charge on customer acquisition and content costs associated with the NOW TV on a full year basis as well as the increase in the new mobile spectrum fee amortization. In year 2020, the group had a net gain of USD 46 million, which mainly comprised the content noncash gain recognized upon the transfer of Pay TV business in last year. Our P&L finance costs, again, benefiting from the low market interest rate has reduced by 11% to USD 147 million. So profit before tax has been maintained at USD 747 million, excluding the other gains that I have just mentioned in last year. On tax charge, our effective tax rate for 2021 was 17.1%, which is close to the Hong Kong statutory tax rate of 16.5%. While the gross effective tax rate in 2020 was particularly low at 13.8%. As in last year, we had certain one-off capital gains and accounting credits, which were not tax accessible, such as the net aggregate capital gains that I have just discussed earlier. Before this, our net profit for the full year was USD 616 million. And if we exclude the one-off accounting gains in last year, it shows a drop by 3%, which is mainly due to the increased tax P&L charge, of which a material portion is relating to the deferred tax charge upon utilization of tax loss of the group, which is a noncash item and not affecting our cash flow and AFF. Then quickly on our gearing position. Our total gross outstanding by end of December was around USD 5.6 billion and our net debt balance was $5.256 billion, with the net debt-to-EBITDA ratio steady at 3.2x. Currently, we have a total liquidities on hand of over USD 1.6 billion, including on joint bank facilities of around $1.3 billion, and we continue to carry investment grade rating at BBB and Baa2. Then lastly, on our debt maturity profile. From the chart, you can see that for the remaining of 2022 this year, we don't have any further immediate refinancing need at the moment. Our current proportion of floating rate to fixed date debt is approximately half to half, 50 to 50. And our effective interest rate for the year was 2.4%. In last month, which is January 2022, we tap on a favorable market window and raised USD 650 million tally upon the 3% coupon rate for the purpose of general debt refinancing. And after considering these debt new bond refinancing, our fixed rate debt ratio has now been moved up to around 60%. With this, it concludes my financial presentation on the annuals. Thank you.

Thank you.

Let us now open to questions. The first question is with recent wins of additional spectrum, what is the likely impact on CapEx for 2022 and beyond?

Evan, you would like to take this?

Okay. Thank you. On the new spectrum, actually, there are 2 parts. One is the 700 megahertz spectrum that Susanna has just mentioned, it will a further supplement or support on our 5G network as a whole, but of which we won't expect a fairly particular incremental capacity investment required on that spectrum because it's just a supplemental on mainly our indoor and some supplement for the overall 5G network. And for the other part 2.3 -- of 2.4-megahertz spectrum, that is basically a renewal of our current existing holding of the spectrum, of course, with a further bandwidth that we have obtained for the option. But again, this is just a renewal of the spectrum by expiry in 2024. So as a whole, and as just we have mentioned, we don't have any particular -- we don't expect any further particular incremental spike in terms of the mobile CapEx in this area. Thank you.

And if I can supplement a bit there in terms of the spectrum license fee, I think 2021, we have seen increase in terms of spectrum license fee because there's an overlapping of the spectrum payment from the old one and the new one in the year. But going forward, because of the new renewal of the 2,600 megahertz spectrum is at a lower price, and therefore, we do expect that there will be some savings of structural license fees starting 2024.

Yes, correct.

Thank you.

The next question is, do you believe there is more room to streamline OpEx in your core TSS and mobile businesses?