PT Sarana Menara Nusantara Tbk. (TOWR) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us for Sarana Menara Nusantara Full Year 2024 Earnings Call. I'm Selvi, and I'm the analyst from BCA Sekuritas. And I will be the moderator for today's call. And here, we also have Pak Adam Gifari, the advisor from the Investor Relation group. I think this is sharing. The floor is yours, Pak.

Thank you, Selvi. Hi, everyone. Hopefully, everybody is well. We're approaching the end of Ramadan. Hope everybody has been having a good time for the breakfast -- for the fasting month. Let me walk you through the results of the full year 2024. Let's start with the press release that we have prepared. Okay. So the profit -- the revenue reached IDR 12.7 trillion, a growth of 8.48%. EBITDA reached 10.7% growing 7.2%. Net profit reached after minority interest, 3.34% -- IDR 3.34 trillion, an increase of 2.5%. We think the achievement is reflecting the success of the management in leveraging and managing a larger operational scale in tower and non-tower businesses as well as capitalizing opportunity in the industry to consolidate a significant tower portfolio from IBST of approximately 3,200 towers. We think this is important because in the times of consolidation, we want to maintain scale and improve it further whenever we have -- we see opportunities. So we closed the year with 35,400 towers, and approximately 170,000 kilometers of fiber operating in Indonesia. So we see more scope of basically synergizing, realizing potentials, utilization of further use of fiber. We have shown this in our recent results. We will walk you through with the numbers later on. But basically, you see that the tower and the non-towers have different margins, but we see improvement or maintenance of those margins, while we see bigger scale from the non-tower side. And our ROE and return on investments, as defined by net income divided by the different numerators, stood at about 18% and 8%. So we are now about to see the next consolidation of XL Axiata and Smartfren, we saw an announcement yesterday. But on the -- another headwind is intense competition in the telecom industry. Although I saw this morning a different headline saying that there should be more rational pricing on the wireless side. But we've seen enough of these ebbs and flows of expectation in the market. So let's see what happens. For 2025, our CEO says additional challenges for the organic business growth. So revenue for 2025 is expected to be in the low single digits organically compared to 2024 achievements. Furthermore, EBITDA in 2025 will be impacted by the non-tower segment, which has a higher growth potential than the revenue growth from the tower segment. But the EBITDA margin of the non-tower tends to be lower than that of the tower segment. And financially, as mentioned by our CEO and our CFO, there will be implementation of optimal financial strategies to deliver best results for bottom line, for the order 2025 results. Our CFO mentioned also Juliawati that assuming there's no obstacles then we should see rights issue process previously delayed from last year and will be executed in the second part of this year. We've talked about revenue, EBITDA, net profit and the net profit margin, as you can see, with the demonstrated not so bad net profit margins given the headwinds that we see in 2023, 2024, given the scale that we have, we've grown total tower from 30,500 to 35,400, growing by almost 16%. Tenancy ratio declined from 1.78 to 1.64. Then you can see also the margin on the net profit remains at about 26%, right? So not a bad achievement after all, given the headwind that we are facing as a company. Fiber-to-the-tower, we have approaching 120,000 from previously last year, December, almost 100,000. Fiber-to-the-Tower, 217,000. Utilization ratio approaching almost 184%, a slight decline from previous year 186%. Again, the driver of FTTT, as people may know, is from the wireless side, right? The more towers that we have with high traffic, with better revenues on the side of the wireless operators, then we have tendency of higher demand or higher utilization ratio of fiber-to-the-tower segment. And then last but not least, we have FTTH here growing 106%, reaching almost 1.8 million home passes. We have communicated this number a revision -- last year, we -- at the start of 2024, we communicated that we could be achieving 2 million. But instead, we achieved 1.8 million. FTTH home connect, we achieved 170,000, growing by 42% and connectivity growing a strong 33%, and we expect connectivity to continue to grow this fast, basically helping us with the utilization of our existing fiber. And then last but not least, our leverage ratio was 4.58x, an increase from previous year of 4.3% (sic) [ 4.3 ] . And this 4.58% -- 4.6x, if you will round it up a bit, is inclusive of the impact of us building towers for Indosat relocations through the years up to 2024. And then on top of that, we also buy a company called IBST that we consolidated for the 2024 for 6 months. So we guided for 4.6, which is, I think, a good result, a testament of manifestation of us being a disciplined in CapEx outlay, very efficient in operating expenses, interest expenses as well as per unit cost of CapEx. So I'm going to stop share this slide and then move on to the next one, which is the presentation. So am I showing the right screen now, Selvi?

Yes, we can see that.

Okay. Okay. So there'd be a few -- okay. So we are now the largest -- one of the largest independent digital infrastructure in Indonesia. 35,400 towers, a total of approximately 170,000 fiber kilometer of fiber optic network. As you probably heard in the marketplace, there are other parties in the market having sizable fiber. One operator having 180,000, another operator having 80,000 more or less, and another operator having an infraco of 30,000 kilometers. If I do the math, 35,400 towers is approximately 30% of all towers operating in Indonesia. And then out of the fiber optic network, we probably own and operate about 30%, 32%, about 1/3 of all fiber in the market. But probably if you take out the non-independent one, we are the largest independent owner and operator of fiber in the country. So 170,000. And then out of this 170,000 kilometers of fiber optic network, approximately 80% to 90% is -- we got those fiber from operators helping them with fiber rollout under build-to-suit contracts. So the fiber that we have today, out of this 170,000, is mostly from build-to-suit contracts, under which we are guaranteed 10 years revenue, then we have excess capacity for and then we basically try to increase utilization of those assets. For towers, we seek for colocations. For fiber, we seek for higher utilization, and that's what we are doing today. Under FTTT, it was easier to do the math, but we are now embarking into different types of fiber utilization, namely through fiber-to-the-home as well as connectivity businesses. So again, you're looking at a company with a very high percentage of revenue coming from build-to-suit model, this one, yes, which just doesn't exist much in other markets, if I may say. We've spoken with those counterparties in India, in Europe, in U.S. Only Indonesia having this shear amount of fiber under build-to-suit contracts. Our investment-grade ratings, as of time of speaking right now, S&P is still under review. Fitch has reconfirmed -- reaffirmed its rating for us for a stable outlook of BBB. S&P, the previous one is BBB-. We are showing a return on investment of 8.1% and return on equity of 18%. The stock is included in all of these metrics. So we still are same company that we speak to. Now move on to the next one. Okay, our source of liquidity. We have a very strong source of financing of $700 million equivalent that we can draw down as of December. Short terms, long-term financings, excluding the bond shelf program that we have already with OJK. And then low-risk business. Still in the digital infrastructure business, we have mobile network operators as our clients. We have also internet service providers as our clients. We have data centers. We have banking sectors. So we see our services as difficult to replace as long as we have arm's length contracts with those guys. So that's what we have been doing. We don't rely on specific parties such as BCA to give us the most contracts. What we fight for is basically arm's length contracts under which we believe the client will be willing to continue to do business dealings with us. And then attractive industry structure, industry consolidating. I put this under attractive because we are demonstrating strong results, resilient results on the financials. And then we just repeat XL and Smartfren as the last one that we see forming the industry from 4 players becoming 3. And we just take on those contracts. And then we just manage our costs internally to -- for the results of return on equity, return on investment as well as further opportunities for us to grow further. We closed the year with IDR 75 trillion of contracted revenue, so among the largest in the market. And then we have free cash flow that funds CapEx, dividend and share buybacks, whenever we see opportunities. At the moment, we are focusing on growth CapEx. And we see ourselves a successful consolidator. I'll show you a chart that comes to that. And then EBITDA, AFFO growing 14% and 12% with ROE of 18%. We see consolidation of MNO under this box should create a better case for 5G. I think Indonesia for the longest time, operating under 2G, 3G, 4G under having too many players. Now we are about to see 4 players becoming 3 as the last -- probably among the last consolidation in the telco space. And then not to mention opportunity for fixed mobile convergence and then 5G being another set of opportunities for us. And then I think I cannot stress enough the importance of synergies across asset classes in our results. I think I've been mentioning this, even though we see scope of lower tenancy ratios. But as we see higher utilization on the fiber side, you see that our ROE remains at about 18.8%, which is, I think, phenomenal results being in the telco business. And then we just move forward, work towards higher utilization as people consume more data, be it in their homes or on their wireless device. So this chart talks about that. And then we see Maluku and Papua having towers. We see opportunities for us to expand fiber to this side of Indonesia because not only Java, Kalimantan, Sulawesi, we see Sumatra growing nicely when it comes to towers and fibers. But I think for Maluku and Papua, once we see more towers, we see opportunities for more towers -- and for more fiber in coming years. So as you can see here, Sulawesi, the fiber ownership is like increasingly more than what we see in Bali Nusra and even more so than in Kalimantan. So now Java, I think, is a very good place for monetization, but I see opportunities for higher growth in those places outside of Java, especially for players like Indosat Hutchison. And then when it comes to build, buy, return slide, I think we added approximately 5,000 towers for the full year 2024, including 3,200 from IBST. So that means we added about 1,600 towers organically. But don't forget most of those 1,600 is for Indosat relocations, and then 35,000 kilometers of revenue generating fiber for the FTTT segment, and then 4,200 activations under connectivity, which is very busy, as always, [indiscernible] is one that specifically handing this effort under iForte. We added 5,000 (sic) [ 50,000 ] home connect and then 9,200 (sic) [ 920,000 ] home passes. And then we distributed a dividend of IDR 952 billion during 2024, while we maintained investment-grade ratings. And then 54 towers -- 54% of towers located in Java, tenancy ratio, 1.64 under tower segment, previously, 1.7, reduced to 1.6 and then yet we maintained our margins. And then growing need of additional scope. So we see additional assets such as battery to be a new growth area for towers that we add asset to those tower operations. Fiber-to-the-tower, we reached 271,000 (sic) [ 217,000 ] revenue-generating fiber by end of December. And then we have almost 17,000 activations by year end of 2024, 9% penetration rate of home connects under FTTH. This is the part that we say rather competitive market, not only on the wireless. So hopefully, things could turn out to be better later on. And then this chart talks about CapEx towers and non-towers. 2024 is inclusive of us buying IBST, and then not everything has been paid for this year. But as you can see, the non-towers has been relatively higher than previous years starting 2021. If you look back 2021, 2020, you see that 2022, '23 and '24, the margins for non-towers is markedly higher. And then utilization ratios is a bit lower in -- on the FTTT compared to 2023. But don't forget that we are not including the utilization of fiber under FTTT indicates that we are using those FTTT fiber for FTTH as well as connectivity. But as I mentioned repeatedly every quarter that we like to show you that our ROE and return on invested capital to be stable, defensive, we call it. And then this chart, we are showing that we are very busy under activations, basically tripling the volume that we do under activations in connectivity segment. And then basically, getting help from FTTT segment to utilize our assets further. And then this chart AFFO growing 10%, still slower than that of EBITDA because interest rate environment has not come down materially from those years that we started doing calculation starting 2016, 2017. We are now showing IDR 75 trillion of long-term contracted revenue through 2024, including about IDR 4.3 trillion of committed revenue, but that had commenced by the time we do this presentation in December cutoff. And then a strong investment-grade rating balance sheet. Remember, 2024, we -- was the year we bought STP. So leverage went up from 2.5 to 4.4. It was coming down in 2022, 2023, but we were building towers that we did not get revenues for, as you remember, because of relocations. Then we did the math yesterday and turns out that we were building about 5,000 towers for IOH relocations. And the impact on leverage is actually quite benign, meaning that we manage our leverage very nicely. That leverage only went up to 4.6, including the impact of us buying for IBST by December 2024. So this is the company that we do that for you as shareholders and analysts representing the shareholders. And then average interest rate as of -- this is a typo, not September, should be December 2024. But we marked December 2024 interest rate at 6.2%, which is a decrease of September, 6.3%. And then maintain rating of BBB, and then -- for Fitch and then BBB for -- sorry, BBB- for S&P and then BBB for Fitch. And then showing you the past year's results. We were just reviewing this and then we think the business result of 2024, including the years of 2022 to 2023, quite resilient. EBITDA margin, 86%. And then during the years that we did the first batch of FTTH -- FTTT in 2017, 2018, margin went down a bit to 84%. And now we are at 84% also in 2024. And then 2020, after we see a higher utilization of those fiber. Remember, 2020 was the year of COVID, that people needed to use Internet wherever they are or whenever in their homes or whenever they do mobile businesses. Then we see higher EBITDA margins, 86%, 86% and now each down a bit to 84%. Even in 2023, we think EBITDA margin can grow lower, like similar 2019, 83%. 83% was the year that we saw similar lower EBITDA margins because we were expanding very aggressively in the new area in 2019, namely fiber-to-the-tower. In 2025, the difference is that we are growing into another segment that we call it connectivity in a more aggressive manner. So margin may come down in 2025. So I think the last slide I want to show you today -- this is the slide before the last. So we collected IDR 14 trillion of revenues. And then CapEx OpEx being IDR 10.7 trillion, interest expense, IDR 3.1 trillion, cash surplus of IDR 741 billion, loan proceeds of IDR 4.6 trillion and then dividend IDR 952 billion. We did an acquisition of IBST IDR 3.5 trillion, ending cash of IDR 940 billion. EBITDA -- sorry, I was mistaken. This is not the last slides. These are not the lasts. We still have a couple of more slides. So EBITDA, minus 2.1% because we were growing faster in the non-towers segment, namely connectivity with lower margins. And then we also still had those leftover expenses from IBST. So we should see better margins in 2025 when it comes to towers. Of course, there will be headwinds when it comes to EBITDA margins stemming from the non-towers segment because we will be doing more utilization of fiber namely from FTTH as well as connectivity segments. So -- and the net income grew by about 5.5% here quarter-over-quarter, 7% year-over-year, consolidated. And then revenue analysis. Grew 1.4% for towers and then fiber-to-the-tower, 18%; and then connectivity 13%; and then FTTH 215%; and total being 8.5% consolidated. And then operational data. 15%, about 4,800 towers addition. And then 9.6% (sic) [ 6.9%], 3,700 tenants during the year, leading to lower tenancy ratios, as you can imagine, ladies and gentlemen. And then fiber-to-the-tower grew by 20% -- 19% when it comes to asset ownership; connectivity growing 33% year-over-year, very aggressive; and then FTTH 42% growing last year. So organically, going forward, we think connectivity and FTTH will be the way to go utilization increase on the fiber side. And then as of December, long-term debt, 63% floating and then 36% fixed. And then we are now looking for more fixed-rate debt. So we are talking with banks that can furnish us with fixed-rate debt including us perhaps going into the bond market in the second half of 2025, using our existing unutilized limit with the of OJK of IDR 19 trillion. We will use a part of that. So when it comes to maturities, we have second half of 2025, maturing to about IDR 1.2 trillion. So everything is relatively managed -- manageable. And then 2026, still manageable also. It's 2027 that we need to basically deal more about expiration of debt. So we are okay for when it comes to expiration, we should have no problem with existing debt maturities management. Okay. Selvi, those are the slides I have. Going back to you -- handing back over to you as moderator. Handing back to you. Thank you.

Okay. Thank you so much, Pak Adam for the comprehensive presentation. [Operator Instructions] We already have one raised hand here by Sabrina.

Give me 30 seconds. I need to get something.

Sure, Pak.

Okay, Sabrina go ahead with your question. Hello?

Hello. Hello. Yes. I have 3 questions here. The first one is I saw that your tower growth, you added 29 new tower additions for fourth quarter 2024. But your tenant addition during the quarter was -- sorry, you lost 130 tenants during the quarter. So why did you...

What's the total -- if you -- what's the difference between total tower adds and then the tenants?

Difference between total tower adds was 29 towers, but you recorded around 58,035 tenants count. So that's like minus 130 tenants quarter-on-quarter.

Okay. What's the total for the year? I need to get back to that slide. So...

You mean the net adds for the year?

Yes.

Around 3,715.

Yes. And then we added about 4,600 towers, right?

You added around 4,842.

Yes, Yes. So those are the difference that I was mentioning in the early quarters that we saw a higher churn from -- the highest churn is -- was from Indosat that we did not expect at the early start of the year. So that led to a higher gap between the tower we added and then actually what's the end result of a number of leases.

Okay. So for the subsequent quarters, we should expect this no longer churns from Indosat. I mean like for first Q and onwards.

We expect less of churn from Indosat Hutchinson this 2025, but we are accounting for a similar churn that we saw from Indosat in 2024 from the merger of XL and Smartfren.

Okay.

Yes. So to say there's no churn -- there's no repetition of churn in 2024. For 2025, I think that's -- I don't think that's correct. I think the better way of saying it is that we expect something similar in 2024 Indosat churn to take place for our XL and Smartfren account in 2025, which is approximately 700 leases.

Okay. So we still expect for 2025, there will be 700 churns. Okay. But for...

Yes. So the upside scenario of that is when XL and Smartfren cannot basically at the most liberty to move around because the way the spectrum combined are different in locations within the spectrum band as opposed to Indosat and Hutchinson. Does that make sense?

Okay. I got it. Has there been...

There has been some communications between us and Smartfren, XL. But we -- in the Board level, we think those numbers are still preliminary because our thinking is that the existing sites that XL and Smartfren combined company after their merger should focus on retaining locations with the highest revenue, number one. And then number two, having the function as hub site, meaning there will be likely that those hub site having several independent sites, number two. And then number three, the site with the fiberized site would likely to be those retained, not moved away from, okay? But what we see now those assumptions, this seems to be their team still trying to understand the concept that we are proposing.

Sorry, just a follow-up question because XL has actually conveyed to the market that they will decommission about 6,000 sites, if I'm not mistaken. And we expect about 700 churns for this year. So I believe that the total 6,000 sites is not solely for Sarana Menara, but what are your expectations on the total overlapping sites between XL and Fren due to the merger?

Okay, Sabrina. Okay. Let me walk you through a likely scenario for a company that size to achieve the minus 30%. So say 5,000 -- 50,000, yes, say 50,000 leases, XL and Smartfren combined. And then they say they want to achieve 40,000. I'm just using my numbers. I'm not using the numbers that XL and Smartfren have given in their presentation. So 50,000 to become, say, 40,000, so a decrease of 25% -- or 20% yes. Are you still with me? Sabrina?

Yes. Yes. Yes.

Okay. So the way they achieve this 50,000 to 40,000 could be that they added first the 60,000 and then they remove -- so they from 50,000 to become 60,000 first and then they go to 40,000 after -- while reducing this -- the numbers on the other locations. So we have the most XL leases among other players. I think Sarana has the most leases compared to other players. So we may have rather disproportionately larger out of that 6,000 parts that you mentioned. What's the decrease in number of leases you mentioned again? The decrease that XL and Smartfren has mentioned?

The decommissioning was like about 6,000 sites.

You mentioned 6,000, right?

Yes.

So we may get a disproportionately higher decommissioning because we have more XL leases or Smartfren leases than anybody else in the market. Does that make sense to you?

Yes. But -- so they haven't mentioned specifically on how much then further...

Yes. When it comes to our relationship with XL and Smart, we don't believe what they have communicated so far to us as the final number because -- so yes -- but I'm giving you a heads up that we may get a disproportionately higher because after all, we are the largest tower company, but we have given you in our press release by the CEO, in the first 5 minutes of the call, that our revenue may grow a single digit as a result of all these headwinds, right? So if you want to drill down the numbers, I'm giving you a heads-up that we may get a disproportionately higher decommissioning because we are the largest tower company and having more relationship with XL and Smartfren combined. Does that make sense?

Yes. Okay. Got it.

Yes. But -- of course, but let's play by ear, okay? Obviously, let's play by ear because we have long-term contracts signed for 10 years, fresh, when we bought the company IBST, number one. And number two, we also have a commitment for our fiber business going forward with entities under XL, Smartfren business group after their business combination. So that may play a part and how that to be deployed for our benefit, we also have an impact on how 2025 will look like. But we have already communicated that revenue from -- for 2025 may be a single digit because of all these headwinds. Again, we are trying to give you one scenario. It's not an easy scenario to play because we are still in the face of doing Indosat Hutchison relocations. We are about to finish by full year 2025, and then come XL, Smartfren merger also, taking place at the same time, almost at the same time. So you may call us as being conservative, but that's one scenario that we see. Again, those are just organic and not including if we do something inorganically.

Okay. Noted, Pak. Yes.

So that means you have to bear with me and you may need to come again in 2 weeks' time or something. That's fine. That's always, right. Thank you.

Sorry, this comes to my second question. I've been seeing like FTTP contributions have been the one that's elevating your revenue growth year-on-year, but I saw that the FTTT revenue, which is the lease rate per kilometer for FTTT, I think it has come down to about IDR 10 million per kilometer per year. So what's driving this softer lease rate actually?

I think the pricing dynamics in the market also drives how much that people can pay and willing to basically do use when it comes to that, not anything else. I think at the end of the day, when we utilize our fiber for the second tenant, the same way we do for towers, it's just incremental return on equity or return on investment, Sabrina.

Okay. Good. So currently, we should see the IDR 10 million number as the stabilized one going forward?

Assuming there's not a growth because 2024 fourth quarter, frankly speaking, a lot of market participants, including myself, Adam, have been made quite pessimistic about the going forward of the telco business because a lot of competitions, but I just saw this morning, one of the sell-side saying that there could be some more rational pricing by elimination of one or two of the brands under one of the telcos. So let's see if that happens. Because frankly speaking, we need a fix of the -- on the revenue side of the telco -- of the whole industry because at the end of the day, it's a primary need of consumers, right, than anything else.

Okay. I have more questions, but I will come back to the queue.

Why not finish it.

Okay.

Yes. Go ahead.

I think one more is regarding the -- earlier, you mentioned that the target for FTTT is actually 2 million this year, but only 1.8 million is being achieved.

FTTH. 2 million was FTTH.

Sorry FTTH . Yes. So what's causing the delay, actually?

Okay. If you remember, I think second quarter, early second quarter 2024 that XL and Smartfren made an announcement that they wanted to explore the merger, right? And then actually, the slowing down of FTTH rollout has started to take place at the end of first quarter 2024. We understand if they want to explore the merger. But fortunately, that same second quarter, Indosat started to give us home passes businesses. And that's basically helped us to recoup the target that we wanted to achieve for FTTH for the full year 2024. And then -- so 2024, frankly speaking, for FTTH, we could have gone 2 million from XL alone and then another 600 Indosat, but that -- the XL side did not happen. So we end the year with 1.8 million. Did you get me?

Okay. Thank you, Pak.

Pak, I would like to follow up the Sabrina questions about the FTTH rollout. Could you give us some guidance or some color about the rollout in 2025 for the home passes? Any target from the company, Pak?

Okay. I think for 2025, for towers, we could be growing by about 5%, number of tenants to be flat. Are you guys jotting?

Yes, it's for fourth quarter.

So I'm giving you the whole thing. For kilometer poles i.e., the kilometer fiber for FTTT that we see for 2025, we see an increase of about 2% or 3%. And then utilization ratio, reaching 184%, 185%. And then home passes to be flat. Home connect to be a bit higher to 12%. So our additional revenue for 2025 could be coming from higher penetration rate. Makes sense?

You said that the home passes will be flat. Is it means that there will be a slower addition for the home passes?

Yes, we have not seen by the time we devised this budget on organic source of FTTH. So -- but we expect a better home connect monetization.

Okay, got it. So the addition on the revenue side will be coming from the more home connect.

Yes. Yes, more home connect because we're getting a part of that home connections revenue additions to our benefit, to Sarana benefit, okay? And of course, we do have other cylinders of growth like the green energy, the ATMs, but I'm just giving you the biggest part of the -- and not to mention, of course, the connectivity. Connectivity may be growing by approximately 20% again. So connectivity is the organic growth contributor for 2025. Okay?

Okay. Noted well. And we have 2 another questions. We have Theodore Melvin.

Congratulations on the result and that acquisition. I have a few questions.

Remala you mean?

Yes. Remala Abadi. Minor questions. Could you elaborate more on the company's reason for acquiring Remala. I also want to know in the financial statement under which segment will that revenue be recorded? Second, could you provide the details on the right issue in terms of the size and dilution? And lastly, just a minor question. Can we know the group's target CapEx for 2025?

Okay. Yes. Well, like if you see the company, we've bought a company like Integra, [indiscernible] Varnion and then more recently is DATA, the stock ticker is DATA we've announced and then hopefully, we can close this quarter or second quarter. The company's called Remala Abadi. I think in its prospectus, I can honestly speak of its prospectus here. The top one that they mentioned is actually about connectivity business, serving government institutions, other types of customers under connectivity. They have a smaller part of FTTH business, but they have a very small balance sheet. So that's to characterize a company that is agile, entrepreneurial that can help us increased utilization of fiber. It's a company that if we go into the same market as them, we could be looking at each other and then say rather than you competing against my effort to increase my fiber utilization, why not jump on board together. I buy your majority shares, right? And then you continue to own equity. And then you help us grow connectivity businesses, FTTH, home connects -- sorry, fiberization, FTTT, FTTH as well, and then we grow together rather than us competing, effectively increase the utilization of fiber basically. And whatever the revenue that we get is basically from the non-tower segment most likely to be connectivity. Does that make sense?

Absolutely perfect, sir.

Okay. Is that the only one question you have Melvin for me today?

No. No. The second one about the details on the right issue.

Right issue, yes. We don't have to report at this stage the details -- by the time we said that the transaction back in December was postponed, we said already the price and size will likely change from what you saw back in 2024. Yes, there will be change in size and price, quite likely. Since it's Ramadan, I'm going to say Inshallah.

Inshallah. Lastly, the group's target CapEx for 2025?

Okay. I think we have -- we're still finalizing, but it should be around IDR 5 trillion to IDR 6 trillion.

Thank you, Melvin. And we also have a Q&A from Kevin Panjaitan Pak in the Q&A box. Okay. Several questions. On FTTH, could you share the latest subscriber numbers? I think it's referred to...

The presentation. It's in there in the presentation. Yes. Kevin, you can look it up.

And could you provide some color on the CapEx per home connect or CapEx per home pass, Pak?

I think the Street price is about $100 plus for home pass CapEx. If you order as a sizable customer, then you get probably discounts, but the Street price is about $100 plus, Kevin. I see now. So a number -- the second -- the next question from Kevin regarding acquisition of DATA, is it strategic -- what is the strategic road map going forward? Well, I've shared you what we think of Remala to Melvin just now. Hopefully, you were there. I think I shouldn't repeat what I said, not to bore everybody else.

Okay. Thank you, Pak Adam. [Operator Instructions] And we have another raised hand from Henry Tedja.

Perhaps 2 questions from me, Pak. First one, perhaps, I just want to reconfirm some of the numbers that you mentioned during the Sabrina question, Pak, about the leases that might be unrenewed or like returning basically. So I think you mentioned before the IOH churning rate for numbers for this year will be lesser compared to last year. But the total absolute of the churning rate or perhaps like the numbers for this year will be quite similar to last year at around 700. That includes the XL, Smartfren as well?

Yes.

Okay. So I think -- that's clear. And second question, perhaps regarding the connectivity revenue, Pak. I think you mentioned that you expect more than 20% revenue growth coming from this segment. So just for us, who actually the customer profile for this business? And what kind of margin that we are looking? I mean, like yes, for the fiber business, perhaps you can get like 60% to 70% of the EBITDA margin. So just curious about the connectivity here. So how is the gap between towers or even like fiber?

Okay. We've always been defining connectivity as a basket of different types of data solutions, can be through satellite, can be through fiber, can be through fixed wireless also, many, many types. As a result, there is not a single uniform EBITDA margin that I can share in this market in this conversation today. What I can tell you is that as a result of this segment growing faster than towers, which is mostly passive leasing of infrastructure, connectivity will be a more dynamic business activity. And we've given you an estimation that EBITDA margin consolidated will go down to 83% from previously in 2024, 84%. I just -- I'm trying to make it simplified for you rather than me going through the one-by-one types of mergers -- types of line of business under non-towers.

Sure, Pak. That's clear enough. But I'm just curious, Pak, what actually drives all this growth, suddenly, let's say, like the last 2 years or so compared to, let's say, like 5 to 10 years ago?

Okay. Why connectivity is growing fast? Yes, because we become an alternative to whatever previous provider of connectivity in the market, right? And then we have a young set of fiber and the new way of doing things, and they like it, right? So I think that's the way to go. The pricing needs to be at arm's length and then wherever a contract that we get in the market and then we just take them on and then manage the cost accordingly after that. The types of customers can be from banks, can be from universities, hotels, business groups. We become -- we maintain a rather sizable database of B2B customers now than ever before, Henry. Big groups like Mayora, SSCR, those kind of customers who are in need of reliable and then we can like spend good CapEx with them and then continue the journey together. Is that helpful?

Yes, that's clearly helpful. Thank you and all the best for this year.

Thank you, Henry.

Thank you, Henry and thank you, Pak Adam. We still have Sabrina. Would you have a follow-up question?

Sure, Sabrina. Go ahead.

Yes. I have a follow-up question. As you mentioned earlier that the tower revenue can grow by -- sorry, towers addition can grow by 5% but expect tenants to be flat. Are these towers organic or inorganic -- through organic or inorganic acquisitions?

Which one that you mentioned, that you asked about?

The 5% tower increase for this year.

Those are basically we assume concluding the last batch of IO relocation, 2025. Yes. Mostly coming from that, Sabrina.

So mostly organic then.

Yes. That's organic.

Thank you, Sabrina and thank you, Pak Adam. Pak, we have no more questions, but one curios question from me Pak, as we know that the market lately was depressed and also this year TOWR share price. Are there any share buyback plans?

Okay. As far as I can remember, no mention of share buyback at this stage. We are focusing on growth CapEx, maintenance CapEx, while the industry dynamics is recuperating, price fixes and everything, right? I think we're still at that stage. No, no, it's not yet buyback at this stage.

Okay. Noted, Pak. We are approaching the end of the call. Any closing remarks?

Not much from me, but I expect to talk with you guys again through phones or text messages in the next coming 2 or 4 weeks to find out more what's happening with XL and Smartfren. We're also eager to find out more. But whatever communication we have received as a largest tower company and largest fiber lease company provider that we have received so far, we don't think as the final version because we don't think it's finalized based on our experience here, including the fact that we have sites commanding higher revenues on the side of the operators and then a lot of fiberization, a lot of sites functioning as hub sites with a lot of dependent sites. So those are the few parameters that we can share at this stage. We are hopeful for a better 2025 obviously. But again, on the bottom line, we continue to work on optimizing the balance sheet as we have done and demonstrated all these years. Other than that, Selvi, I don't have anything else, except if I don't see you guys again, [Foreign Language].

Thank you, Pak Adam, for the insightful from TOWR and thank you, everyone, for joining this call. We -- I think we can end this call now. So have a good day, everyone. Thank you.

Have a good break, everyone. See you all. Bye.

Bye.

Bye-bye. Thank you.