Ooredoo Q.P.S.C. (ORDS) Earnings Call Transcript & Summary

Good afternoon, everyone, and Ramadan Kareem. Hello, and welcome to Ooredoo's Financial Results call. My name is Sara Al Sayed from the Investor Relations team. We are joined by speakers from various locations in Doha during this Zoom call. Let me introduce my colleagues. We are joined by, if you have joined our recent virtual bond roadshow, you will be familiar with Aziz Ahmad Fakhroo, Managing Director of Ooredoo group. Joined also by Sheikh Mohammed Al Thani, Deputy CEO, Ooredoo Group and CEO of Ooredoo Qatar; Abdulla Al-Zaman, the new Ooredoo group CFO; Ajay Bahri former Ooredoo Group's CFO; and now adviser of the Group MD. All bios are available in the investor deck. Aziz will start the presentation with key financial highlights and consolidated results, followed by opco results information by Sheikh Mohammed; and our group CFO, Abdulla. We'll keep the presentation brief to allow sufficient time for your questions. The presentation is available on our website, ooredoo.com as well as on the webcast. Please do note the usual disclaimer on Slide #2. So to begin, I will now hand over to Aziz.

Good afternoon, everyone. Thank you. Once we've passed the disclaimer, I'll start, Sara, if you can go to the group results highlight slide. Perfect. Good afternoon. Look, we're happy to start the year on a very strong foot. As you will see with our results, our revenues are flat year-on-year. We actually have a slight decline of 1% at QAR 7.2 billion for the first quarter. Our EBITDA increased by 6% to QAR 3.2 billion for Q1. Our net profit attributable to Ooredoo shareholder has decreased by 50%, and this is mainly driven due to FX impact. Our data revenue accounts for now 55% of our revenue. This shows and highlights our leadership strategy in data across all our markets. And of course, as you are aware, we've announced 2 landmark transactions in Q1 of this year. One was the successful sale of 4,200 towers in Indonesia through Ooredoo Indosat for approximately $750 million. This is the highest valuation for this kind of assets reached in Asia. So we're very proud of this transaction. We also are very proud of our bond issuance. We returned to the market this year after a 5-year gap. We have a book -- we had a book that was oversubscribed by 3.4x and achieved a coupon of 2.65 -- 2.625% per year for $1 billion issuance. That puts us as the lowest coupon for all emerging market telecom operators. Next slide. Now as mentioned before, our revenue has marginally dropped to QAR 7.2 billion. That's a 1% drop, which is driven due to an FX impact. If you exclude the FX impact, actually, our revenue has increased by 1%. Just a reminder, we achieved an increase -- an operational increase of revenue by 1% comparing Q1 of this year to Q1 of last year. But Q1 of last year, the 2 first months, didn't have any of the COVID restrictions we experienced across the market and we still experience it today in most of our markets. So we're very happy with this performance. In terms of EBITDA, and this highlights our continued focus on cost optimization through leveraging technologies and digitalization. Our EBITDA grew by 6% year-on-year to QAR 3.2 billion. This is actually impacted again by FX. If we remove the impact of FX, our EBITDA actually grew by 9% in the first quarter. This has been driven by a very strong performance and margin expansion, mainly in Indonesia, Kuwait, Iraq and Myanmar. To put it in perspective, our EBITDA margin for Q1 is up 45% compared to last year's Q1 at 41%. Next slide, please. As mentioned, our net profit is down by 50% in Q1 of this year. This is really affected by an FX impact coming from Myanmar. If we excluded that FX impact, our net profit actually would be up 120% to QAR 457 million for the first quarter. Next slide. In terms of free cash flow, in CapEx and free cash flow, we are on schedule for the CapEx plan for the year. We're slightly ahead of last year CapEx expenditure at QAR 850 million. That's a 5% increase on CapEx for Q1 versus last year. Remember, CapEx is quite seasonal, so the variance is actually in the norm. In terms of free cash flow, again, we have a healthy free cash flow of QAR 1.3 billion. That's a slight reduction versus last year for the first quarter, minus 14%. One factor plays in, as you've noticed, our CapEx for the year is slightly higher at the beginning of this year. This accounts for most of the deviation in free cash flow for the first quarter. Our total customer base, our total customer base is for Q1 '21 at 118 million subscribers. That's close to par or stable versus Q1 of last year. There's been some slight drop in customer base, especially due to some regulatory change of accountability of customers in Tunisia. This drop in Tunisia has been offset by an increase in subscribers in Indonesia, Iraq, Oman and Algeria. Net debt, in terms of net debt, we're having right now a net debt-to-EBITDA ratio of 2, which is right in the middle of our Board guidance of 1.5 to 2.5x. Again, as a reminder, for the net debt, we just issued a $1 billion bond at the beginning of this quarter and used the proceeds to prepay a maturity of next year. As a summary, revenue is stable, minus 1%, in line with our guidance. Our EBITDA is at QAR 3.2 billion. That's a 6% increase versus Q1 that's ahead of our guidance for the year. And our CapEx is of QAR 850 million, which is right in line with our guidance for the year. We remain confident for the rest of the year. As you may know, a lot of the rest of the outlook of the year also depends on the evolution of COVID-19 and impact on our markets. Thank you.

Thank you, Aziz. I'll take you through the operational review, and we'll start with our home country Qatar. In our home market, Qatar, we maintained our position as the leading operator in terms of both market share and infrastructure with Ooredoo Qatar fixed line and mobile network, right, among the fastest globally. We remain focused on maintaining our network leadership as the Ooredoo fiber rollout program success continues to 479,000 homes connected across the country. Financially, we had a good start of the year. And in Qatar, we have a year-on-year growth of 1% at the revenue and top line. A strong adoption of Ooredoo ONE, Ooredoo, we call it all-in-one-home services. EBITDA remains stable, and we maintained a robust EBITDA of 54% margin in Q1 2021. Sequentially, revenue decreased 1% between Q4 2020 and Q1 2021. During the quarter, we were honored to have been recognized as the Global Partner of the Year and Digital Partner of the Year by leading money transfer company, MoneyGram, a testament to our strategy and developing an ecosystem of the distribution of our customers. If we move to Slide 13 on Kuwait. COVID-19 contributed to softening macroeconomy. EBITDA for the period -- the revenue declined 8% year-on-year. EBITDA for the period increased 2% and thankfully, that is due to the cost saving and optimization program that the company is having. Despite the revenue decline, we remain in a 28% -- back to slide Kuwait, please, still there. So in the EBITDA, still, we have a very healthy margin to 28%, despite the top line decrease. Overall, population reached a 30-year low level in Kuwait, with a sharp decrease in expat numbers, heavily impacted our customer base, and that's due to COVID-19 and the macroeconomy and whatever we have seen affecting the country itself. There's a positive MNP trend in Q1 2021. Ooredoo Kuwait was awarded the Best Internet Service Provider at the annual Service Hero Awards for the year 2020. The company will remain focused on launching new innovative products for its customer. Most important to mention here also in Ooredoo Kuwait, we signed MoU with NBK, the National Bank of Kuwait to develop digital services, products and solutions that contribute to the enriching customer experience, and that's part of our Ooredoo Group digital strategy. If we move to Algeria. Algeria delivered a very healthy number or set of results in Q1 2021 compared to Q1 2020 in local currency. Still there is a challenging macroeconomy environment. That is also a suffer from a 9% depreciation in Algerian dinar. And local currency revenue increased 2% quarter -- year-on-year, supported also by reopening of the business and bundling of our offers, mainly in Ooredoo App and also targeting SOHOs and SME businesses. It's a niche market that Ooredoo Algeria is really striving for, and hitting for a targeted customer in that segment. EBITDA, 34% due to cost savings and digital efficiencies as well. Customer base is at 12.7 million in Q1 2021, up 3% compared to the same period. Still, we have a leadership position in customer satisfaction. Over to you, Abdulla. So I will hand over to our group CFO, Abdulla Al-Zaman to take you through to the rest of the opcos.

Thank you, Sheikh Mohammed, and good afternoon to everyone. I will be covering starting with Indonesia. I would describe this quarter for Indonesia to be the best performance quarter ever when it comes to the past 5 quarters. When it comes to the revenue, the revenue increased approximately by 13%. Growth, of course, was driven by a stronger performance, and that consists of mobile and B2B. Also on the EBITDA level, we noticed that there is approximately 36% growth from a previous quarter or quarter 1, I mean, 2020. And this is also due to the combination of top line growth and optimization in the costs. When it comes also to our customer base, we have noticed an increase in the customer base from previous quarter, and the good news about also Indonesia, which was covered earlier by our MD&A's introduction above, the sale of the towers, 4,200 towers that generated approximately $750 million. This is also -- will be reflected probably in next quarter, but this is a good news right now in Indonesia. Then I can go to Tunisia. Also Tunisia had a good top line of QAR 394 million in quarter 1 in 2021, an increase of approximately 3%. And that also has an impact or favorable to the FX trends for the Tunisian currency. When it comes to EBITDA, it was slightly down a bit, approximately 3%, and that was due to one-off transaction in the OpEx. And I'm sure that this will recover by quarter 2. When it comes to our customer base, there was a lower of 2.2 million due to change in the prepaid customer life cycle definition of 90 days instead of 180 days. And this was a common methodology that was across mobile -- that was applied across the mobile operators in Tunisia. When it comes to Iraq. As you are all aware, Iraqi economy was impacted by weakening in purchasing power followed by 17% devaluation of the Iraqi dinar and the effect, of course, of COVID-19 pandemic. That caused a little bit stretch or a little bit pullback on the top line. So the revenue has decreased in quarter 1 versus quarter 1 of 2020, and that was QAR 852 million versus QAR 1.085 billion. On the EBITDA level, also, we've seen a decline of approximately 20%, QAR 380 million. But -- and overall, better margin, we can see it. It's a healthier EBITDA margin with 45% maintained. There will be a slow recovery, hopefully, going forward. In terms of the customer base also, we've seen a slight increase in quarter 1, 2021 versus quarter 1, 2020 year-on-year. One good news about Iraq that we have also was the successful launch of 4G, and this probably will impact or will lead to contribute more to the top line in the future months. When it comes to Oman. COVID-19 in Oman had played a big role in impacting the top line, so the top line was impacted by approximately 5%, so a decline year-on-year from quarter 1, 2021 to quarter 1, 2020. EBITDA also declined by approximately 12% during quarter 1, 2021. But the company can remain committed to manage its overall cost structure in order to gain market and improve top line. When it comes to Ooredoo Oman customer base, has increased by approximately 2%. So this is 2.9 million in quarter 1, 2021. And it seemed that the company has a very good foundation in terms of customer base. Lastly, I will go to Myanmar. As you are all aware about the political development in Myanmar, including the restriction in mobile and wireless broadband. So the Myanmar has -- the top line in Myanmar has been declining for approximately 11% year-on-year. It's driven by, of course, revenue restriction, but offset little-by-little in voice revenue. Luckily, the EBITDA was improved by 12%. And this is, of course, due to optimizations and cost savings in order to manage the circumstances in Myanmar. One of the major decline that contributed to the revenue of Myanmar is the FX decline, which contributed approximately 11%. Customer base also has decreased in Myanmar by approximately 14%. Just want to let you know that also Ooredoo Myanmar also has launched a number of initiatives to support the community including of course, the nation and free recharge in order to help the community during these circumstances. I will go back to you, Andreas.

Yes. Thank you very much, Abdulla. Before we go into the Q&A session, a couple of announcements. First, I'm very proud to share with you that we just uploaded our first ESG report, it's available now on our website, and you'll find some more details about our activities and disclosures in that space when you have some time, please check it out. I'm going to post the link here as well in a second. Moving on to the next slide. Activities for the first half, travel is still extremely difficult, so we can join at least some virtual conferences, and the next one will actually be coming up with Arqaam from the 24th to the 26th of May, followed by debt and equity conference by Bank of America Merrill Lynch at the beginning of June, and our first half results are due again at the end of July. And then another request from our side. The Excel survey or it is called now the Institutional Investor Magazine Survey, started the voting process again, and we would highly appreciate your support there. We have 3 nominations, best CEO as Sheikh Mohammed Al Thani; best CEO as Abdulla Al-Zaman. And we got 2 nominations in the IR sector with Sara Al Sayed and myself. I shared to see the link there as well and would highly appreciate your support there. If you have some feedback for us, IR is always looking forward to that. And that's always much appreciated. Yes, moving on to the next area, which is going to be our Q&A session.

[Operator Instructions] There's a question from Ziad. Can we just give him the audio access?

Can you hear me on this?

Yes, we can hear you.

Yes. So I have some real questions actually, starting with the cost optimization initiatives. It seems that employee salaries and associated costs are down 14% year-on-year. I'm wondering what's the cause of this? Is it because of digitalization initiatives, mainly in Indonesia because this is where we've seen most of the recovery? Or is it mainly due to the COVID -- sort of COVID-19 impact with shop closures, and we're going to see a reversion of that trend and an increase in cost on recovery and mobility? That's the first question. Okay. So second question is on Qatar. We've seen ARPU recover 5% year-on-year. And that's not just because of increased postpaid segment. We've seen specifically a 4% recovery in the postpaid segment's ARPU by itself. So what's driving the recovery in the postpaid segment ARPU in Qatar and do you think this is sustainable? And what are the key sort of levers or drivers for growth in that market, given that we've seen subscriber base decline? And that's the second question. And the third question is with regards to the allowances for impairments, this dropped by QAR 60 million year-on-year. Were there any sort of reversals in this quarter? These are the 3 questions I have, but I'll stick to this, and then I'll come back with more questions.

Can I take that question, Andreas.

Yes, please.

So let me take that question. I think with the salary and like we always have ongoing optimization programs, and that's where we are being very efficient looking into the cost structure and the mainly of OpEx item, the staff cost. And we always have the efficiency. Needless to say also that COVID-19 has really implemented or brought a new culture of digitalization and people working from home, and people start adopting a new way of -- methods of working. And that initiative that's being taken also by some opcos or being taken this as a pilot. So it's an ongoing program optimization and utilization also, and COVID-19 has really contributed to this efficiency. If I move to the question about Qatar, yes, frankly, yes, there has been a revision on our projects and portfolio of end prices, and mainly on the 5G plans and this is part of amortization of 5G investment. And basically, we are at Ooredoo Qatar focusing on giving more value for money, and that's where the revision of our offers and being innovative with also bundling these offers with content providers. I can name it with Netflix mainly and OSN/Disney+. And this is really happening during the 2020 year and helped Ooredoo Qatar to be innovative in providing more value for money with revised prices. And that's really helped also our ARPU increase. Is there any other -- is there a third question from Ziad?

Yes, definitely. The third question is on the allowance for impairments, the decrease in impairments for receivables.

I think, I have -- maybe someone from Ajay or ...

Quite not sure about your question, impairment on receivable or impairment as a general.

No, no. Allowance for impairment related to the receivables, but it's fine. So just one more question also with regards to the $750 million tower sale in Indonesia. Can you give us some details on the leaseback costs, the structure, how much do you expect to pay per year, this impacts these towers?

Somebody can answer that question. Aziz, do you have that? Or I ask Ajay to answer that question.

Let me pick that up, Abdulla. I think the exact details will be eventually released by Indosat Ooredoo. But as a concept, what I can tell you is the process was more to fix the lease payments and get the bids based on the lease payments, which we had bidded out. So it was not that these payments were to be paid by the bidders. That was already fixed in the RFP process. So it was benchmarked to the market rate. And then the highest bidder was selected based on the process. But more details, of course, Indosat would release in due course on that. And I can probably pick up your question on the impairment as well. The receivables, if you will recall, the COVID started in Q1 of last year. And the risk on bad debts have increased as a result of that. Some of that is getting reversed. As recoveries have improved in some of the opcos. So that is partly the reason why you see some improvements in that.

That's very clear. Is it possible to quantify the reversal in the first quarter?

I think we can pick that off-line with the details with Andreas.

Okay. We have another question coming up. Jessica, if you could unmute [indiscernible]. If that's not working, let me just take another question in the meantime. We have a question from Nishit from SICO. How do you plan to hedge the expected significant impact on earnings for exit from the Myanmar kyat devaluation?

Maybe I can take that one, Andreas.

Sure.

So the FX loss, which we get from Myanmar is related to their dollar payables. A big part of that is their IFRS 16 leases, which came into play once IFRS 16 was implemented recently. As far as hedging is concerned, there are no hedging instruments available in the Myanmar market. So that's a risk which we have to live with. What is done proactively in the country is to look at contracts which are dollar-denominated, and see these can be converted to local currency and there's a proactive work being done by the team on the ground to do that, not only now, but for quite some time, for example, even for the tower leases, a certain portion which is linked to local costs is paid in local currency. So that's a continuous effort. Unfortunately, there are no hedging instruments in that market. So that's a risk which will continue. The only way to reduce it is to reduce the dollar -- contracts and dollar payables, which is not always possible. A lot of vendors don't want to take that risk as well. So that's part of the overall risk, I think, of the business there.

All right. Good. Thank you very much, Ajay. [Operator Instructions] One comment on the conditions of the Indonesian tower sale. The details will be shown in the financials in the future. But the deal is not that different from the last tower deal that we have there. So you can expect more of the same impact.

I have just a few questions related to Oman. The first one is in regard of your -- of the VAT that got implemented on the 16th of April, I was wondering if you pass-through the full VAT in your prices? And the second question, again, related to Oman is the 5G license. Can you give us a little bit of detail about what's the conditions there? Because I understand that you have a commitment you and Omantel to build around 4,400 5G stations over the next 5 years. But I was wondering if there is an annual fee to pay related to that because I haven't seen any license payment fee-related to that? So maybe if you can clarify. And also just a final question in Oman if -- when do you expect the third player to enter and to start operating? Is it third quarter or fourth quarter? I mean, if you have any sense on that?

I can answer that question. The VAT is live right now in Oman since 16th of April, and that's in regard to the VAT. In regard to the tower deals, of the 5G and the licensing, we have paid that already. And yes, there is a commitment to the regulator over there to build approximately, I'm not mistaking, the number of towers, I don't have the number of towers, but yes, there is a plan to do that. And in term -- what was your third question?

The timing of the new entrants.

The timing of new entrants as our per -- as per the latest update is -- will be on the quarter 4 of this year.

Okay. So it doesn't really ...

Maybe just some additional information, just to clarify. So VAT is in place, and we have commented that in our pricing system, and we are actually ready to increase our prices by 5%. So we...

All the VAT, the 5% being pushed to the customer. So the price has risen.

Yes, exactly. Yes. So it's cash neutral there. Of course, we have to see how the customer behavior reacts to that, but that's the situation. With regards to the spectrum fees, we paid OMR 7.5 million already, and we have to pay an annual fee of approximately OMR 1 million for that. I see, we have Mohammed Siraj in the list.

Hello, it's Ziad.

Yes, we can hear you.

Okay. I just had one more follow-up question on Iraq. With regards to the $234 million license payment, was this entirely paid from cash in Asia sell? Or did we see some downstreaming from Qatar to that subsidiary? And also, is it a bullet payment? Is it going to be an installment? Because it seems that the net debt-to-EBITDA increased because of this. So I assume it was a onetime payment. And also on Iraq, since we're discussing this market now, why did we see the QAR 200 million quarter FX loss and dividend receivables from that entity back in Q4? Is there any issues in repatriating cash generated in Iraq? And is this improving now? And if so, why?

Okay. The historical FX loss was because of the devaluation done by the Central Bank in quarter 4 last year. So we have dividends receivables still from Iraq. You'll recall that about 4 years back, we were not able to upstream dividends from 2017 onwards, we've been doing that, on a regular basis. But still, there is some amount still available for us to upstream. So the un-upstream part had an impact for us because of the devaluation. But we are continuing to stream upstream dividends on a regular basis. But the amount will take maybe a year or 2 to deplete simply for the current rate that we see. The payment, of course, for $234 million was done completely from Asia itself. They had all the cash, they were prepared for that. It was a bullet payment done in the beginning of this year.

Okay. That's very clear. And one more question when it comes to 5G coverage in Qatar, are we now at full coverage? Or do you expect more CapEx deployments toward that? And is it possible to give us an indication on the normalized CapEx intensity we can expect and potential one-offs in preparation for the World Cup?

In Qatar, we are at almost 99% coverage of the populated area. In terms of the CapEx, we are always in guidance of the Board and of the ratio between 15% to 20% of the EBITDA. And we always keep that in mind and propriety is to provide the best interest to shareholders and connectivity for our customers throughout the country and also being prepared for [indiscernible].

Okay. And what about the World Cup preparation? Could we see a one-off investment, material investment or for that matter, any potential ICT business sizable revenues?

Still, there is always ongoing investments in hand-in-hand with them, Supreme Committee of the World Cup. We also have our big joint deals with blue chip company like Microsoft and all that really enhances the infrastructure of being a digital partner and having a digital hub of the country as well as funding a very well prepared infrastructure for the country. And also that helping both, so we have [indiscernible] on the investment. And still, we can see a bigger investment in regard to the World Cup, the [indiscernible] just mentioned about [indiscernible] most of the digital country and helping that for a very robust infrastructure also for the customers, B2C and B2B.

We have one more audio question. Jessica, if you could open up the microphone for [indiscernible].

I have a couple of questions. First question is related to margins. Since we have seen a healthy improvement in EBITDA margins in first quarter '21, how can we think about the sustainability of this margin through the rest of the year? If you can see, if the margins are not being able to sustain what would be the headwinds for the margins going forward? And my second question is on -- if you can answer that question, I'll ask a follow-up question.

In terms of ...

Go ahead.

Abdulla, go ahead if you want to.

Go ahead.

I said, in terms of margin, as you highlighted, Q1 is pretty exceptional if you're looking at a 6% post-FX or 9% margin expansion, EBITDA margin. There are some one-off items in there. We're not revising our guidance for the year, but predicting the year, especially that we still have uncertainty due to COVID is hard where we think we could see a conservative view of margin as between 2% to 3% expansion.

That's quite helpful. And second question is on Iraq. Since you have taken a hit from the revaluation, what is the positivity going forward for you to increase prices in various plans to offset this impact?

Well, currently, we are having help from McKinsey, okay, to reevaluate our marketing strategy. And we are expecting that will turn around and do a better job Inshallah in the coming months because we are focusing on the market strategy to launch and two, modify certain products to contribute, as you say, to the devaluation of the currency. And overall, to improve the top line.

All right. Maybe I'll read one of the typed questions here. Omar Maher from EFG is asking, what are your turnaround plans in Kuwait to counter the revenue decline? This is bearing in mind that STC Kuwait revenue did not decline as much as Ooredoo's in first quarter 2021.

Okay. So let me take that questions. In Kuwait, in STC, if we compare STC to Ooredoo, both are dropped, but the percentage on Kuwait is 7%, where for STC is around, I think, 6% year-on-year. And EBITDA both increased and that really you can see we have a very well plan when it comes to the EBITDA and cost optimizations. So that's based on the numbers that we have recently published, I think what is the plan or the counter -- or what is the counter, let's say, plan for the revenue decline. We have a robust plan in Ooredoo Kuwait, and that is driven by our growth strategy that has 4 pillars and 1 of 2 -- 4 pillars are improving and enhancing our core. And that's through honestly a very smart investment of 5G recently, we have done a very smart and good investment in 5G and trying to monetize that by providing a very innovative and creative product and offers by having solutions and basically, honestly, having more content and giving more value for money, and that can help you for uplifting your prices, as well as we are taking an advantage also begin -- having our subsidiary Fast Telco, which is fixed on having that infrastructure to help us obviously targeting and entering a segment of fixed and B2B in a very enhanced and allocated or, let's say, overall portfolio that can provide our customers for fixed and mobile, either B2C or B2B. That was part of that one-shop strategy -- one-stop shop strategy by Ooredoo Kuwait. On top of that, also, we have a pillar of group strategy in 2022 and 2021, as the digital. And that's where Ooredoo Kuwait is really working hard for providing a very solid digital journey. And that's through also a first digital product, and it's the kind launched in Kuwait called ANA. And that's something we are really relying Ooredoo Kuwait to capture better market by having digital product and services. And that will, of course, bringing more efficiency and less cost when it comes to also to customer acquisition. So these are a robust plan that we are having to counter the decline in the revenue and also EBITDA. Having said that, we had seen an obvious performance of Ooredoo Kuwait of enhancement on EBITDA margin despite understanding the 28% despite the drop in the top line. And that's always -- we have seen, sorry, that's continuing quarter-on-quarter until quarter 4. But in the quarter 1, we have seen a very good move in Ooredoo Kuwait and also in the market where there has been some let's say, positive recovery of the COVID-19. Still the country is suffering from the lockdown, but that's all operators already suffering from. But we are always looking into more efficiency and a new way or digital ways and new innovative ways of enhancing our top line and looking to do a very proper smart segmentation as well.

Thank you very much, Sheikh Mohammed. We have one more question from Ziad. I'll just read it out here. Is there a scenario where the merger with Hutch will see Ooredoo forgo control of the merged entity and no longer consolidate? What is the reason for the delay? Is it price-related or structural?

I'll take this one. Ziad, as you'd appreciate, we can't comment on the merger terms until they're inked, signed and executed. At that point, we'll disclose them completely. For the time being, it's too premature to disclose. The reason of the delay, actually merging discussions are advancing very well. As you'd appreciate it, it's a complex transaction where you want to layout plans and detail as much as you can premerger in terms of a merger plan, in terms of synergies, management, cost optimization, et cetera. And this is quite a hefty work. And due to travel restriction in Indonesia and Kuwait, we suffered a bit of delay in the due diligence exercise. But we're very confident that we will get to successful transaction within the revised timeline.

Thank you very much, Aziz. I'm afraid there's not much more that we can say about it at this stage. We have one follow-up. Can we please get [indiscernible] on mobile? Any plans to introduce microfinance remittance services, details on the partnership with MoneyGram, penetration of this and outlook?

I'll take just a high level and then maybe for someone in detail. MFS is a core part of our strategy. If you look at a lot of the markets we operate in, actually are underbanked in countries -- bank credit card penetration rates below 20%. So MFS pay pillar, which we're trying to develop across all our markets as fast as possible, and we've been very successful to this. Depending on each jurisdiction regulation, we need to sometimes partner with some with some local financial providers or international ones and also for technology reasons. More details on MoneyGram, I'll let someone take it.

Yes. I think I can take that. So we have a very successful journey, specifically with Ooredoo Qatar when we see a big spike on money remittance and that is during the pandemic, and that's successfully with our partner MoneyGram. And we always see this as part of our digital journey, as Aziz also said, our MD, almost a big part of digital journey is the entertainment, gaming and also the financial service. And Ooredoo Qatar is leading as one of the opcos into that journey as well.

Great. Thank you very much, I think that answers the question for Ziad. I don't see any more questions in the type area. Do we have any more audio questions? If there are no further questions, then I would like to thank you all for joining today's call. Please refer to the Ooredoo Investor Relations website for further updates and additional information. Do follow us on Twitter, @OoredooIR. Feel free to contact the Investor Relations team for any follow-up questions that you might have. We're looking forward to your future participation, at either the Arqaam or the BoA conference or at our next quarterly call with the first half results at the end of July. And please do check out our new ESG report, and do remember us for the institutional investor magazine vote. That's valid only for the equity investors and analysts, not for retail investors, not for Ooredoo staff and also not for the debt investor, they have a separate survey. Thank you very much for your participation. That concludes our call for today.

Thank you.

Thank you, everyone.