Orange Belgium S.A. (OBEL) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Orange H1 2022 Results Conference Call. [Operator Instructions] I would like now to hand over the call to Koen Van Mol, Head of IR. Sir, Please go ahead.

Thank you, operator, and good afternoon, everyone. My name is Koen Van Mol, Head of Investor Relations at Orange Belgium. I would like to welcome you to our earnings call for the first half year of 2022. Here with me are Xavier Pichon, our CEO; and Antoine Chouc, our CFO. As usual, you should have received our financial communication this morning. In any case, you can also find all the relevant information on our corporate website. A Q&A session will follow right after Xavier's and Antoine's introductory statement. I will now leave the floor to Xavier.

Thanks, Koen. Good afternoon, ladies and gentleman. Hope you're well or this call finds you well. Thanks for participating in this earning call for the results of the first year -- first half of the year 2022. During this first part of this year, we've been able to provide positive commercial results, consolidating our position in mobile and improving our market share in broadband. We were able to do so this despite the macroeconomic environment that included an unprecedented inflation, and we were and we still are confronted with rising energy costs. We also observed a slowdown of the market with fewer net adds overall. And within these turbulent times, we've been able to prove our resilience. So I'll go into the Slide 5 of the presentation of the deck. At the end of the semester, we had the auction of the spectrum organized by the BIPT, and we've been able to gain -- obtain the maximum amount of the new 5G spectrum band available for auction, which is 20 megahertz in the 700 megahertz band and 100 megahertz in the 3.6 gigahertz band. In total, Orange Belgium acquired more than 200 megahertz of spectrum at a unique license fee of EUR 322 million. For the 1,400 megahertz, the auction ended July 20 and we obtained 30 megahertz, which means that's 1/3 of the auction spectrum at a price of EUR 2.33 million per megahertz. The unique license fee for a 20-year license period for the spectrum is EUR 69.65 million. The additional spectrum will allow us to ensure high quality coverage coupled with a high capacity for advanced mobile network for both residential and business customers. The same spectrum will allow us to realize our 5G ambition, while at the same time, to continue to provide optimal 4G services. To further optimize the efficiency of the spectrum use, we will also start the phasing out of the 3G technology on our network as from mid-2023 for a definitive switch off of 3G in 2025. The 2G technology will remain until end of 2028. Switching off legacy technologies such as 3G and 2G is a real opportunity for Orange Belgium to provide more efficient, sustainable and value-added experiences towards its customers. Slide #6. After reaching the major milestone of 400,000 convergent customers, we have launched a new generation of TV decoders based on Android TV and introducing several new features with the integration of native apps of content providers such as Amazon Video -- Amazon Prime Video and Streamz. We also included Chromecast capabilities and a new cloud-based multi-screen TV recording services, which are accessible on any device. This is a major revamp of that we provide content to -- the way we provide content to our customers, give them the control over the consumption and making new innovative experiences possible. Slide #7. To better fit the customer needs, we have evolved our GO portfolio, following a more-for-more logic as we were -- as we are offering our customers an increasingly large scope of services and content while building our multi-gigabit network. We have adapted our previous plan, while the data cap of the complete GO portfolio has been increased with additional data, as you can see on the slide. We increased the advantage for our multi-card customers from EUR 9 to EUR 10 on a permanent basis. We haven't changed our price for our hey! portfolio, but we will reward loyalty and additional discounts to certain customers. This is in line with our segmented approach to be able to address the different kinds of customers. Slide #8. To help reducing the digital divide, we have opened an Orange digital center in the heart of Brussels. The Orange digital center will serve as a support and development center, allowing everyone to acquire and improve their digital and entrepreneurial skills with activities ranging from digital training to coaching for small businesses and startups, offering a new trajectory for personal and business growth. Consistent with the group's focus and its commitment to sustainable development goals, Orange committed to opening an Orange digital center in all our -- or open to countries by 2025. The center consists of a digital academy and educational space based on strong partnership and a Solidarity FabLab, which is a digital production workshop. These initiatives will create bridges with other key Orange programs such as the Orange Lab and Orange Ventures, initiative to accelerate and to invest in startups. Slide #9. On the regulatory side, we expect that in the third quarter of this year, we'll have more details on the outcome of the procedure of the Competition Authority regarding the Ran sharing with Proximus. During the month of June, we had the spectrum auction, which we already mentioned earlier in the presentation. As said, we were able to acquire the spectrum for implementation of 5G, both coverage and capacity. The spectrum auctions also permitted other mobile players to enter the market. The 1,400 spectrum auction started on July 12 and ended last -- and ended on the 26. Slide #10. Let's take a look of the key achievements of the first half year of '22. The commercial performance remained positive, especially in postpaid despite the limited growth of the market compared with last year and the competitive environment nationwide. We had 22k convergent net adds, achieving a customer base or 470k customers, an increase of roughly 14% year-on-year. On the mobile side, we had 33 (sic) [ 33k ] net adds, reaching 2.8 million customers, an increase of 3.5% in comparison to last year -- of 3.5% in comparison with last year. Antoine will detail more the financial results, but from an overall perspective, we can put forward our positive results. Our revenue has increased by 3.3% to EUR 373.3 million following mainly the increase in convergent services and the digital service revenues. Because of the increased service revenues and continuous cost control, we are able to increase our EBITDAaL with 3.3% to EUR 167, roughly, million despite the difficult macroeconomic context with high inflation and skyrocketing energy cost. Our eCapEx has increased by 5.8% to EUR 86 million, furthering the acceleration of the deployment of the Ran sharing agreement and the implementation of 5G. With this, I would like to hand over to Antoine to go into more detail into the commercial and financial results. Please, Antoine.

Thank you, Xavier. Hi, everyone. It's a pleasure to be with you today. So let's continue on Slide 12. In the first half year, we've been able to have positive commercial performance, especially in mobile postpaid despite the limited growth of the market compared with last year, in combination with the competitive environment nationwide. We have been able to have 33k new mobile postpaid customers, many thanks to the success of our GO portfolio and the effectiveness of the GO Extreme Special Edition, which is a lifetime promotion on the GO Extreme offer. Also our hey! offer contributed to the results of this half year. For cable, we were able to have 22k new customers within the context of the end of the COVID boost. Slide 13. Our convergent ARPO has decreased slightly by 0.6% to EUR 73.3. The decrease is mainly a consequence of the discounts we are providing in our GO offers in combination with convergence and the increase of our Love Duo customer base. Our mobile-only ARPO has increased by 1.5% to almost EUR 20, many thanks to the increase of customer roaming traffic. I'm on Slide 14. Our total revenues have been increasing in comparison to last years, despite the loss of Mobile Vikings, which has disappeared from our networks in the second quarter of this year. The increase of the retail service revenues are the main driver for the increase in the total revenues. And as a consequence, our total revenues increased by 3.3%. Our retail service revenue continues to grow even with a higher pace in comparison to the former periods. We had an increase of 6.4% in comparison to last year. Our mobile-only service increased by 2.5%, also thanks to the increase of the mobile-only ARPO. Also, the convergence services revenues have increased by 13% as well as the fixed-only service revenues by 14%, mainly because of the inclusion of the home offer. I'm on Slide 17. In comparison to last year, our retail service revenues increased with EUR 29.7 million. Convergent service revenues increased the most with EUR 16 million, while mobile-only services revenues also increased with EUR 7 million. The wholesale's revenue decreased by EUR 6 million, mainly explained by the decrease in MVNO revenues by almost EUR 4 million, which is, as I said, mainly the loss of Mobile Vikings. Incoming voice and SMS decreased by EUR 10.6 million, while visitor roaming revenues increased by EUR 7 million. Equipment sales and other revenues decreased by EUR 2 million. This resulted in EUR 677.3 million, an increase of 3.3% in comparison to last year. Our EBITDAaL increased by 3.5% in comparison to last year, mainly thanks to the increase of our revenues and a tight management of our cost. Our indirect cost base increased less than the inflation of the period. For the first half year of 2022, we had an EBITDAaL of EUR 166.8 million. When it comes to CapEx, I'm on Slide 19, we had an increase, mainly explained by an acceleration of the deployment of our Ran sharing program with Proximus and the implementation of 5G. As a consequence, the CapEx was at EUR 86 million for the first half year, which is 5.8% more than last year. Our net debt had decreased to EUR 65 million with a gearing of 0.2. Slide 21, it will be the last one. With these results, we are cautiously optimistic for the year 2022 and we confirm that we will reach our guidance as we initially outlined. We'll have low single-digit growth vs. 2021, an EBITDA between EUR 350 million and EUR 370 million and an eCapEx between EUR 210 million and EUR 230 million. With this, I conclude the presentation, and we are ready for your questions. Operator, may I ask you to now open the call for the Q&A session.

[Operator Instructions] First question from Nicolas Cote-Colisson from HSBC.

Two questions, please. To start with, can we have an update on the VOO transaction? Because you filed with the European Commission at the end of June. So do you think it could be a Phase 1 process? Because eventually the deadline is next week. So you must know by now if the European Commission wants more from your side? And my second and I think related question is about your fiber strategy, if you will, to acquire control of VOO. On the last call, you mentioned a balanced investment between upgrading cable and moving to fiber. But since we have seen Telenet splitting the NetCo and announcing a EUR 2 billion cost attached to it. So how do you see CapEx evolving and what type of co-investment strategy all these deals may trigger eventually?

On the first one, I guess, that we can't make any comments. We are, of course, fully aware that there is a deadline at the end of the month, I guess, the 28 or 29. Then we'll know more. This is it. So we'll see whether -- what will be the decision making at the end of the month. But we can't say much more at this stage. On point number two, on your question number two, you're right. You say that we've, I would say, already evoked the fact that we'll have maybe a balanced strategy to get some multi-gigabit network in the future. So there are some fresh projects around -- I guess, announcements. First, we'll see whether it will be a real project at the end or not. But there are some fresh announcements that have been made by either Proximus and Telenet. So first, there are -- this is maybe much more capability and possibility we might have just to reach our ambition in that multi-gigabit fixed broadband approach. But I guess we're not so, I would say, ready for saying much more on that side as well. First, we need to get the clearance from the Completion Authority on the VOO file. And then, of course, we will be more precise, I guess, next year on how we might fulfill our ambition on that side. But no -- I would say, no major improvement and announcement at this stage so far. Sorry for that, Nicolas.

No, no, I completely accept that. But at least can you say that you have still -- you're not opposed to a co-investment, I would say, with your partners or opening your future platforms to co-investors as well as a form of a principle?

I guess we're not opposed to -- I would say, to anything, okay? We are in an open mind view on that side, of course. As we said to the BIPT as well, that we need to get some symmetric regulation on that side and at affordable price. So we'll see whether the situation could be, I would say, fixed in every region. I said that there are fresh announcements, including Brussels. So the infra -- the broadband infra market is moving a lot from Belgium, and that's, of course, a very good thing. But we'll see in the coming months, honestly. So we can say much more at that stage.

Next question from Joshua Mills from BNP Paribas Exane.

I've got 2 as well, please. The first is just -- it would be great to hear your thoughts on the new entrant risk in Belgium, how you perceive that? Whether you think you'll have to take any steps on pricing? And then related to that, your current thoughts on offering a national roaming deal? I know that Digi and Citymesh will be guaranteed one by the regulator once we get to 20% coverage. But how do you broadly think about the opportunity and the risk of doing deals there? And then secondly, if I could just follow up on Nic's question. I guess rather than talk about your CapEx envelope or upgrade plans, if I just take what Telenet said -- and I think the implied cost per home upgraded is something like EUR 650. And then they also said that it would be between EUR 100 and EUR 300 to connect homes or to upgrade it to fiber. Is there any reason why the broad economics of that kind of upgrade in your cable footprint should be any different? Or is that kind of the per [ carried ] cost we should be thinking about when we do our modeling?

So on your question number one. So in a way, what we've said in the last weeks or months on that side and particularly after the announcement of the Digi launch -- future launch, is that we were having some, I would say, strategic analysis when we arrived, with Antoine, a couple of years ago, that it could lead to a kind of newcomers campaigning in Belgium. Of course, you know that. So it has been always part of our decision-making since we came here. And it has been prepared also for years in a way just to make sure that on the convergent market and then -- on the cable first and then on the convergent offers, we were able just to start from 0 to 400k. And knowing that or having some thoughts on that, that's why the decision making since 2 years was in a way directly linked to the potential arrival of both entrants or -- and this is why we decided to follow up the purchase of VOO and the signing of VOO that has been fruitfully achieved last Christmas, last December, last Christmas. And that's why, of course, we know -- and this is another thing. We know the game in a way. We've already seen the movie -- the English familiar topic, okay, being there and bought the T-shirt, et cetera. We know that. We've been living in other countries, okay. We've been part of other Orange affiliates within the group, particularly in France and Spain, et cetera. And then we've already had to experience some newcomers in those markets. And that's why, I guess, first, we decided to try to buy VOO. And this is it. Now as I said, we are having this extra space. And that's why also why we changed the marketing policy. We moved from a single mono brand strategy -- marketing strategy to a multi-brand segmented approach on the marketing on B2C. This is it, actually. So we don't know when these guys will be coming in. We don't know what kind of strategy they will follow precisely. But what we know that we started to prepare it for, now, years. And of course, we will implement this as a strategy either on the get and keep. So that's it. And on your question number two. We've seen the figures on Telenet press release announcement. So we don't have to -- I would say, to comment. That's why in a way -- and I would maybe just say again that I said to Nicolas, we are for years seeking to get the most appropriate and smart and, I would say, valuable solution in every region on the multi-gigabit fixed broadband network. Somewhere we will have directly a network. And the question would be to get the most interesting balance between cable and fiber and in others. We need to find the best way to achieve our ambition and to make our -- I would say, markets we're growing. And that's it. So we can't say more. We know the figures, okay? We've seen the figures. We know the figures. We've seen the announcements in every region. And then we'll have the work to do and the homework to do just to find the better balance in every region. What is sure is that we do have a nationwide ambition and a nationwide approach. This is it.

Just maybe if I may add something regarding the unitary costs you just mentioned. If I'm not mistaken, the EUR 650 you mentioned is not an average cost for all the footprint of Telenet and previous NetCo. It's only on 50% of this footprint. And you also have to keep in mind that Flanders is significantly more dense than Wallonia. So it obviously also has an impact on the average cost per home passed as density is a strong driver of the unitary cost in FTTH. That's what I wanted to push up.

Yes, that's a great point. Yes. So the EUR 650 is really the cheapest it would be. You're obviously in less dense areas. And then you've got the EUR 200 cost on top. That's great. I mean, I think -- sorry. Just to come back on the other question I had around the MVNO or national [indiscernible]. You talked a lot about your retail response. But is the permits -- that you're creatively open to discussing wholesale partnerships with mobile as you happened in the past?

Sorry. I forgot to point out what we said on the side. I said we're open, but we'll see. This is something that we'll have to maybe work on. Honestly, this is not the first item on our list, on our roster. So which -- we are much more focused on the retail side, of course. And then we'll see if there's some appetite to deal with that. We'll see. It's not a closed -- I would say, a closed door, but not totally open as well. We'll see.

Next question from Ulrich Rathe from Jefferies.

Okay. If these 2 big strategic questions have been addressed, maybe some more on the details what happened in the quarter. On the indirect cost, that's quite an extraordinary achievement there. Could you talk about what measures you took to keep that under control? And whether that sort of was really slamming the foot on the brakes in the quarter and that wouldn't be sustainable? Or whether these sorts of measures that helped you on the indirect costs would be sustainable? That will be my first question. The second one is the postpaid-only ARPO growth. Could you talk a little bit about the relative support you're getting from the price increase compared to the roaming recovery? And then the last one. The postpaid-only subs were actually in growth in the second half of last year and they were sort of in decline before because of the migration to FMC. How does it look at this point in time?

Okay. I'll take the first question. Regarding the indirect cost -- and indeed, controlling our indirect costs in a time of the inflation is a huge challenge. As you may have seen, there is clearly a big impact on some renegotiations and some tough renegotiations we had with some of our main IT suppliers and network suppliers. So there are during the year significant savings, and I would say, record savings when it comes to this contracts. So that's part of the explanation, and it was a way for us to offset part of the labor cost increase due to indexation, et cetera. So that's, I would say, is one of the main impact for the semester. The second point is that we tried to offset as much as we could the impact of the indexation of our labor costs through a tight control of our recruitments, and this measure also -- there are some fruits and you can see the results today. And last but not least, we have a transnational program of cost savings within the company. So it's a lot of, I would say, small steps, small -- but at the end, it starts also to bear some fruitful benefits only some minor individual actions. Regarding the second question, the impact of the price increase on the postpaid-only ARPO growth. Well, clearly, the impact in the S1 ARPO of the price increase launched in June is rather limited, because it's only started at the end of the semester. As we said and as I said, the main impact comes from roaming and -- the customer roaming revenues. People are traveling -- our clients are traveling more and more, especially in the B2B segment. So what I can tell you is that we are not far from having roaming -- customer roaming revenues in line with what we had in, I would say, the pre-COVID era, if we look at the figures between 2020 -- this first semester and the first semester in 2019. And you had a third question on the evolution of the postpaid-only subscriber? I might be mistaken. So we still managed to have a very slow -- a sort of slow growth of our mobile-only customer base. We're helped by hey!, which is also a way to gain some clients in this segment. But of course, the cornerstone of our strategy and opened more after the 4 acquisitions, remains convergence. And that it's the best way to attract new clients and to keep them on the long run.

That's very helpful. I don't want to be greedy, but can I maybe ask one follow-up. Go ahead and please stop me if it's too much. And that is, do you actually see any change in payment behavior already? I think AT&T was commenting on that yesterday. And the whole sector today here in Europe is trading a little bit on that. So it's a bit of a topical question. Whether sort of the macro situation already leads to a visible effect in the accounts on your end?

And don't worry. You can be greedy. No, that's something we monitor very, very, very carefully. In fact, we monitor -- we had a special plan to monitor the bad debts since the beginning of the COVID crisis, and it has been extended program and this monitoring has been extended because of the very special macroeconomic situation. What I can tell you is that, for the moment, so far so good. We don't see a significant increase in our bad debts. But well, it's still the -- I would say that when you see the forecast of inflation and weaker macroeconomic environment -- it's still the beginning of this macroeconomic changes. So we'll keep on monitoring that very, very carefully. But once again, so far -- so far good.

Next question from Roshan Ranjit from Deutsche Bank.

Great. Just 2, I guess, follow-ups from me, please, based on the previous question. I see in your outlook, you've included the word cautiously optimistic now. Is that more on the pricing side? Because clearly, the second half of the year will benefit from these price increases from, I think, started a couple of weeks ago? Or is that to do with controlling your energy costs? Or is it, in fact, a bit of both? And secondly, going back to an earlier question around the roaming agreement -- and clearly, we wait to see how any discussions develop there. But can you walk us through the mechanics of how that would work given your tower JV? Would you need the buy-in of Proximus there? Are you able to host, I guess, what is in essence a third party? How does that work with potential emissions limits as well? Anything you could talk on that would be useful.

I can answer the first question. When I -- we're cautiously optimistic, it's more because of the macroeconomic environment, not because of energy cost because we are fully hedged for 2022. It's more about -- yes, as you said, we will be helped by the price increase and the review of our tariff plans in June. But we just talk about the situation, the risk regarding the bad debt because we -- at the end of the day with a 10% inflation, there may be at some point in time an impact and the reaction on -- an impact on our clients. So I think the macroeconomic environment invites -- has to be -- yes, to remain cautious. But we are -- but in cautiously optimistic, there is also optimistic. That's what I can tell you. But no -- regarding the energy cost, there is no impact. It's well forecast for 2022. Regarding the labor cost, it's also well forecast. Because, as you may know, there is a yearly indexation in Belgium, but it's only at the beginning of the year. So there will be an impact in 2023. But as far as we are concerned -- it's also the case for all companies in Belgium. But it's only a yearly one. So it's -- yes, our please stay cautious, it's more because of the macroeconomic environment and not because we had a risk on some cost lines. And...

On the point #2, this is -- sorry, but I can't get into more detail technically and also because -- actually, we don't know what to be the willingness, the need and the condition, of course, in terms of traffic, et cetera. But we could do it and we can do it technically speaking. But the question would be, at the end, what if then [indiscernible] what condition, of course, and what could be our strategy at the end and the decision making we'll make on this. So sorry, there is no actually precise item on this. It's a bit fresh now because, of course, the auction has just ended. But I guess that we'll have maybe much more detail and you will have more details in a couple of months. A bit fresh just to evoke that topic as well. And we know it, of course. We know and we read some on the papers on the documents. But this is something that we'll have maybe to assess in the coming weeks and months.

If I may say. Is there something which you would have to assess in conjunction with Proximus? Or can you make an independent decision on that?

No, no, no, we can make independent decision on that side. The question would be: What condition and when? So the question is -- and the topic is fresh, really fresh. So we'll see. But we are independent of that.

Next question from David Vagman from ING.

And most of my questions have been asked already. So just a few follow-ups -- a few follow-ups. Maybe to come back on the previous Telenet...

And then -- you'll have to go first maybe then.

Yes, not late. To come back on the previous Telenet deal from the Orange Belgium point of view. I estimate and I think you will agree that implicitly the words had read that Telenet is paying to get 10 gigabit speed seems really quite advantageous compared to the Proximus fiber rate. So yes, would you agree with this? Any chance that you might still want to do something with Proximus, maybe in some more remote part of Flanders? Or is it now really excluded? And then on the Wallonian side -- and I know you don't -- maybe you don't want to answer too fast. But is there any sense that you would also consider an acceleration of a fiber rollout when you look at what Telenet is doing? Or do you feel really like this was under the pressure of [ Proximus ] and there is no real point of doing this in Wallonia?

I guess all these questions are related to what we spoke a couple of minutes ago. There's a clear beat up in the infra fixed broadband network, multi-gigabit broadband network projects. And this is good. Honestly, this is good. Every single project that maybe comes in is a good opportunity for Orange just to be assessed and to see whether we might flow and enter on it or not. So the question would be just to see if those projects first will be interesting for Orange and then at what -- of course, at what conditions. So Proximus is now having a clear ambition nationwide. We do have a clear ambition nationwide. Telenet is having large projects either in Flanders and Brussels. There is a clear project from the Brussels government as well. And you have Unifiber and [ EV Fiber ] as well. So this is really interesting to see how we could, I would say, rely on part of them and to make sure to get our nationwide ambition as we go. So this is it. So the question would be now just to assess every single project -- continue to assess every single project, including the fresh one. But, but -- and there is a but; we need just to be cleared by the Completion Authority first to make sure that we'll have the possibility to assess the project in the south and Brussels. And then, of course, to go from Brussels to the north to get the nationwide panorama. This is it. So also on this topic, I'm so sorry, but you'll have to wait a little bit time first to be cleared and to process the closing of the deal and the stuff. This is very important. This is, of course, the first platform of our multi-gigabit strategy. And then we'll have the other region just to get -- to be nationwide, a kind of multi-gigabit network players as well like the others.

And when you say -- and maybe a very quick follow-up. So you are now insisting on the multi-gigabit. I understood that reading in press interviews of the CEO of VOO basically that they were still aiming to achieve 100% coverage of Wallonia, I think, with 1 gig speed by 2028. Yes. I guess we -- so when I hear you're talking about this multi-gigabit, I understand that you will be more ambitious.

Actually, we don't know yet the precise plan invoked by Christopher, the one you mentioned, the article which you've seen into. We don't know what they do have in the file. We don't know exactly what they have in terms of what plans or what plan they have -- they might have and the CapEx associated in their plan. So we'll see at the end. We do have a clear multi-gigabit ambition nationwide. So this is why we are talking about having a mix between cable and fiber and then to get some, of course, multi-gigabit agreement among the countries in every single region. This is it. We do have a clear nationwide ambition. And this is not, of course, something we won't, I would say, let down. VOO is, of course, a very important platform to get it, but our ambition is to move from the south to the whole country, nationwide to get this multi-gigabit network.

[Operator Instructions] A new question from Nicolas Cote-Colisson. Mr. Cote-Colisson?

Yes. Sorry, I was on mute. It must be the privilege of age. So look, on the cable wholesale pricing, it's under review now. And you are expecting a new decision mid-2003 -- 2023, sorry. So I was wondering 2 things. First, isn't it too ambitious to expect something given all the moving parts in the fixed market? And secondly, given the big hike in wholesale pricing that will hit you next year and combine that with the attitude of the Belgian government, do you think you are still -- you still have the capacity to increase prices and match or offset this price increase?

Maybe on the first question, Nicolas, it's true to say that the end of the regulation of -- yes, the current regulation of [ cable ] is, I would say, closed and it could be in 2023 or 2024 early. So we'll see. There is a fresh market analysis that will be proceeded by the VIP team. There are some questions around the fiber as well in terms of not only bitstream but, I would say, P2P tariffing as well. So the question would be to see how the regulation would be -- the first one would be, I would say, determined in the future. We don't know, of course, how -- what will be the results on that side. It's interesting to see and to say that from cable so far -- so the question would be how to address the [ speed ] of price depending on the speed. And this is your question number two. We do have now a clear segmentation in terms of our brand now, that high-value customers and the interesting content and, I would say -- and services would be dedicated to Orange, and I would say the value for money services would be dedicated to hey! So the question would be at the end to do the more-for-more. So it's not related to the wholesale price only. It's also related to what we will put on our customer value proposition. And this is a more-for-more approach we started this year and maybe the year before. We said that the more-for-more segment approach and policy has been interesting and fruitful for 2022. And of course, surely, we will follow it in the coming years. And this is it. It's not only the way we will increase price. It's the way we will increase our value proposition.

We have no more questions by phone.

There are some questions more which are coming from the chat. They're coming from Ben Lyons from Credit Suisse. So the first question is, is there any risk to your fixed business if a new entrant can also wholesale cable? What are you assuming as your base case scenario? And the second question from Ben is, to get to the midpoint of the guidance, you need to have a flat EBITDA in H2. Could you run us through the moving parts?

I will take the first one. So we said, of course, that we don't know when. Even we think that it's going to be in 2023, but we don't know precisely when and how Digi will enter the market and what segments, what products it will tackle. So the -- of course, it could be a FMC player or not or a single mobile-only player. We don't know. So we'll see, and we will answer your question when we know that. But so far, of course, we don't have any clue. And Antoine, maybe the other one? Sorry for that -- for the second question.

Well, as I said, we will be helped in H2 by the price -- the review of our mobile tariff plans that we launched in -- at the beginning of June. So it will be positive. But we will still have some pressure on our indirect cost base year-on-year clearly from the labor cost, because we won't be able to offset the impact of the indexation of almost 4% we had in the beginning of Jan. So control of our headcount will have also an impact of our energy prices, because as I said, we are fully hedged. But part of this hedge -- at least a part of this hedge is at a higher price than what we got in 2021. That's, I would say, the main -- yes, the main drivers that you should have in mind.

We don't have any further questions left. So we would like to thank you for your participation in this session. Would you have any further questions, please do not hesitate to contact the IR team. Thank you very much, and have a nice day.

Thank you. Bye-bye.

Thanks.