PT Sarana Menara Nusantara Tbk. ($TOWR)

Good afternoon, and hello, everyone. Welcome to Bahana Sekuritas Corporate Access Group Call. Thank you for spending your valuable time to join us today. My name is Nicholas, I am the research analyst covering Telco, Power and Tech at Bahana Securitas. Today, I will be serving as your moderator. Please join me in welcoming today's speaker, [indiscernible] Vijaya, Director of PT Sarana Menara Nusantara and Chief of Staff, accompanied by Baba Adam Gifari, adviser of PT Sarana Menara Nusantara and Group Investor Relations, who will present the company's full year 2025 financial results operational performance and outlook for 2026. Without further ado, [indiscernible], the floor is yours. Please start.

Thank you, Niko. Hi, everyone. [indiscernible] is sitting next to me due to the technical glitch, so we'll be sharing the screen together. It's good that we're next to each other part here. So a [indiscernible] is our Director and Chief of Staff, covering Group Investor Relations. I'm adviser to this role. So let's start with what we have released for our full year 2025 audited results that we announced March 2026 right before Lebaran break. So I'm going to share my screen. Let's go through the press release that we prepared and we're going to go through the presentation for the full year. And after that, we will wait for more on has more remarks on the results, and then we can go to Q&A. So as you can see here, we reached full year operating revenue of IDR 13.3 trillion, representing a IDR 4.6 trillion increase for 2025 compared to full year 2024. EBITDA reached IDR 30.7 trillion, growing by 2.5% and while net profit after minority interest stood at IDR 3.678 trillion, an increase of 10.3% year-on-year. So we think the result is because we look at what we see, what we have, despite challenging industry and macroeconomic condition. We have refocused on our core strength while improving areas where we can see improvement for better results. We leverage our operational scale. We basically try to get more business by using our scale on towers and fiber and then maintain strict cost management and drive ongoing efficiencies. As you know, we have a lot of different types of businesses, and we try to combine where we can see synergies between assets that we have. That has been the topic of management doing every week, where we can see efficiencies and try to leverage higher utilization on our assets. So we are now, given we have 170,000 kilometers of fiber. We have 35,000 towers. We see that we have one of the largest independent digital telecommunication infrastructure provider. And then we have the most comprehensive range of services. So it allows us to provide solutions for our clients to operate different conditions, including consolidation, our mergers that we have seen recently during 2025. So the merger of XL Sinar Mas and XL Smartfren, which opens up significant opportunities. they need us because more than 50% of their network is on our towers, and they use a lot of our fibers as well. And then we believe with 5G further service enhancement will be -- will require our involvement with our services and assets, tower and fiber included. So now we see what we expect for the next 12 months that firstly, we see consolidation can strengthen pricing discipline. I know that for the past quarters, we've been talking about pricing discipline. We think we -- in the infrastructure space, we are among the leaders of pricing discipline. That remain relatively low, but what we provide to the industry is actually something very efficient compared to where people would go our pocket spend their own capital to the towers and fiber, we believe we provide the value for money when it comes to their network enhancement or network expansion. So we think we competition becoming more healthier, and I think I invite everybody on this call to together monitor this, whether 4G and 5G monetization is improving going forward. We see several signs of improvement. But hopefully, for Indonesians, to give that the unique position as the fourth largest country in the world. So we think we should be monetizing this position better for everyone for the telcos, for the fiber users for the Internet service providers. And then provide better revenue mix, better revenue growth and then better OpEx allowance that would work well for our ability to provide services and infrastructure. Second, the continued acceleration of economic digitalization. We are hearing because of the war the government is requiring 1 day of week that ISN, the state apparatus to work from home or from anywhere, right? So that would drive further digitalization, similar to what we saw in COVID time. So I think there is an increase of independencies sorry, dependencies of people using Internet, wherever they are mobile or over Internet. So data traffic is shown to be growing robustly over the years like double-digit CAGR, and we expect this momentum to continue and then the potential rollout of 5G will further support this trend. I think just as a matter of personal observation, before Lebaran, I experienced very bad 5G. But now after coming down spending holiday for 2 weeks, I noticed the 5G in Java is getting better here. So I think that shows that better penetration of infrastructure in places like Jakarta, even will still require more investment. And we'll be there for people who ever need infrastructure in many forms. Number three, Indonesia is in the early stages of AI and cloud technology, which will drive up -- will further increase data traffic and the demand for enhanced CNPT. So we expect further traffic growth and then there will be a requirement for data centers, fiber optic and power generations. We have for the energy, we have also several other functions under the Forte Baton casually add some more on later on during this call. And then number four, operators continue to adopt asset-light financial strategies for towers, fiber optic networks and provision of clean and renewable energy. I think we see try to continue. I think the requirement for instance, that require more dividends out of calcs, right? That means CapEx per sales should remain low and whatever existing infrastructure should be used more optimize going forward. So that's the what we see during 2025 and it should hopefully continue until 2026 and future years. So I'm going to Patna, if you want to add something.

Yes. I think already well summarized by you. Maybe you can see and the financial unless there is any discussion.

Yes. So I'm going to go through the presentation for the fourth quarter, full year audited. So people can see and then we can discuss together. And so -- so we have 36,000 towers as of last December. For those of you who have not seen or have not gone through this presentation. We have more than 170,000 private optic network as of December, we still remain -- maintain a large percentage of our business model and the build-to-suit model for towers and fiber with long-term reliable cash flows. We maintain investment-grade ratings with S&P, even that there was a change in the sovereign rating for Indonesia. But for us, we are still like with S&P, BBB-. And with Fitch, we have a stable outlook and no change in the soveriegn ceilings of stage. And then for return on investment, 8.3%, return on stock is included in many of these indices still footprint with IDX, and then we have MSCI rating at a single A. Sustainalytics score as 24.2%, S&P 40. So that's what we have achieved so far when it comes to ESG profile during 2026 -- 2025 and others. And then I think for number one, capital management, I think we discuss this every week as a management team. Access to low cost of funding is discussed all the time. We want to be sure that we have the best cost of capital in the country. But the banking sector is pretty much liquid. So liquidity amount was $1.3 billion equivalent in rupiah mostly given banks are also having trouble to find other businesses that is as stable as ours. And then low-risk business with digital infrastructure business, high demand difficult to replace. As we have exhibited with XL and Smartfren merger. So -- and then proven a possibility of long-term airport contracts. ESG-conscious company even smaller carbon footprint, I can say, we just discussed with many of our clients, and we have a -- we have been able to basically made the clients pay for their own electricity. So that should improve further our ESG profile in our tower business. And then -- now number four, number four, the telecom space has come down to 3 players basically during 2025, as we all know, with the most recent merger of XL and Smartfren. And then opportunities for acquisitions still exists. We can discuss more later about this. And then valuation today is -- we have an annual free cash flow that funds CapEx, dividend and share buyback and we have been successfully consolidating assets that we see as accretive to the business. EBITDA and IFFO CAGR 11.4% and 8.5%. ROE 2025 of 16% using the most recent numbers. What we tend to do is continue to invest our strong free cash flows using lower cost of capital whenever we need to borrow. And then Indonesia is still at the start of 5G, if I may say, because we haven't heard anything in when it comes to what is the time line for 5G spectrum auction. So we still think largely Indonesia, it's a 4G country. Penetration for towers is also still pretty much low. So I think for Indonesia, for the continuation of the trajectory is a matter of time because the consolidation has happened. We've been in the business for almost 20 years. And then for the longest time, we can remember, we were operating with more than 10 at the start of the business. And now we have 3 telco players all intended are very eager to basically monetize whatever they have spent in 4G and 5G so far. So -- and then prepare for new opportunities. I think I don't know you can add more later on, obviously, for see none, expanding product offering. We -- I think for the past quarters, we mentioned about managed services, power as a service, and we now come -- we have come into clean energy provision for our clients. And the strategy is driven by evolving customer needs, obviously. With high energy prices right now, it should be interesting for people to look into green energy, right, on now because for solar panel, for instance, it's a matter of where we can find suitable property for us to invest in solar panels and then provide our clients and other types of customers, not only the cost with green energy going forward. Fixed mobile convergence is also there. We can talk about what we see for 2026 and 5G obviously represent under the set of opportunities. So I'm going to skip this Slide #5. So now Slide #6, we have 36,247 towers. I think I can say this number reflects majority if almost all of Indosat and Hutchinson location have been fulfilled. We have some carryover into 2026. So we expect a number of tariffs to increase for 2026 because of completion of Indosat Hutchinson location towers, probably in the hundreds, no longer in power. When we spoke firstly about this, we still have about, 1400 to be completed during 2025, we should about 400 by now that we need -- that we should conclude to basically finalize the towers that we built for IOH locations. So the location of the towers mostly in Java, Bali, and TV, Sumatra approximately about 8,200. Kalimantan 3,000. Maluku Papua is still with the lowest number of towers given density. So obviously, we see this increase approaching that of Kalimantan is quite interesting because of the economic activity in that area, especially mining and plantations. And then our towers and fiber, where we have our fiber, you see the difference between revenue generating FTTT is basically where we charge our customers. And then FTTT-kilometer pole is the kilometer of physical cable that we own under FTTT category. So as you can see, Java utilization is high, Sumatra is high. But in Nusra is also high and in Kalimantan is lower. Sulawesi is a bit lower. It's a function of density, basically where we see our customers need fiber to the tower as a means of data transport because of data traffic is increasing in those areas. And then our build by return strategy. We invest in build-to-towers, so in the form of various contracts mostly for 2025 is relocations and then expand fiber optic network, FTTH and then more so growth in FTTP. FTTH, we expect to grow quite interesting. But when we say we have fiber, we can also use it for other types of business such as connectivity. And then during the 12 months, we added 847 towers. So that's short of a couple of hundred towers that we need to conclude for Indosat Hutchinson, and then 6,789 kilometers of revenue generating fiber. We added 9,000 applications. We added 89,000 home connects and then 31,000 home passes. So very good execution on the Home Connect side. Return that we mostly basically focused on protecting investment-grade ratings. And then we maintain investment-grade investment ratings. We distributed dividend, IDR 1.2 trillion during 2025. based on past quarter's results. So diverse product portfolio. So we have 36,000 towers and 60,500 tenants as of December, tenancy ratio 1.67, 53% of towers are located in Java. Just in third quarter, I think this number is 52%, but we added towers more in Java. So that's also an interesting trend, ending the quarter with 52% of towers located in Java. And the MNOs have growing it for addition scope. And then fiber to the tower, we basically is a function of our service to mobile network operators. So we have 2,400 -- 224,000 kilometers of revenue generating by end of December. Network focus is to support surging data traffic. So if data traffic continues to increase, we are hopeful towers and fiber to tower to be more correlative to that situation. And then we continue to basically provide the FTTP leases under long-term contracts, noncancellable contracts and opportunity for higher utilizations with other fiber solutions for our customers. Namely connectivity business, so the right -- we saw very nice growth in our connectivity business. Now it's over 25,000 activations. I think this number used to be below 20,000 by December 2024. So a very good growth in the connectivity side. FTTH also saw penetration reaching 14%. I think this number last quarter -- third quarter, I mean, was about 12%. And now going into where we spend our money. In 2025, as you can see, the amount of towers for nonpower CapEx for non-towers is approaching that of towers. And then for our synergy ratios 1.67, slightly higher than 2024 because we basically restructured some reseller contracts to become direct lease to our towers. So we see -- in the past, we did not count reseller as part of tenancy ratios but with seller being direct lease into our towers as part of the XL Smartfren merger. So tenancy ratio can go up. And then for fiber to the tower, I think we see impact of mergers. So a big decline to 1.79% from previously -- from previous year, 1.84, but still at a very high utilization ratio 1.8. And now our track record of consistent growth, we see tower is inching a bit in terms of tenants. As you can see the darker blue chart there. And then with Towers start to grow again after years of stagnant performance because of the years of Indosat merger. And then as you can see here, we were very busy with -- everybody is busy actually towers and tenancies how to manage 36,000 towers, locations making sure we are basically getting what is our right under the contracts for towers and fiber has been the theme of 2025. That's why we saw 2025, a growth of 4% revenue. Basically, we look back at what we have in past contracts. And then we basically did a very thorough, very diligent review of what we have under our existing contracts with all of our customers. And then from there, we take it that we can charge some money, we can get away from certain penalties even though the same of 2024 -- 2025 was mostly serving for IOH relocations for towers here, but we have been able to book higher revenue because of those very strict practices by management. And then for fiber to the tower, revenue generating revenue increased by a little bit about 3% there. So 7,000 kilometers compared to 2024. And the number of activations under connectivity actually grow very fast, very quickly. That's almost 9,000 applications during the course of 1 year because we have been very aggressively utilizing our existing fiber. We opened up new places where we can reach closer to our customers with new offices and then use our existing fiber as much as we can work together with our subsidiaries. We have many new names like Fermion, we have Remala basically helping us utilize our fiber and work together and to entity a new location as opposed to working separately in the same market. Strong financial performance. You see the towers have been quite stable. Actually, we etched up a bit to IDR 8.7 trillion and then for the yellow bar, which is the non-power, we actually increased almost 10% there, CAGR 7% from tower, the non-tower is almost 40%. If you look at the EBITDA growth came 11.5%, IFFO, 10.6%. So actually, given still high interest rate environment, if I may say, during 2025, even though we were among the lowest cost provider when it comes to borrowing costs, we're still seeing FFO growing slower than EBITDA because of high interest rates environment in 2025. There were hopes -- there were hopes actually in the market. I think, as we all know, everyone that there was a hope that for rate cut during the year, but it was not sufficient to make it the FFO growth as much as we grow EBITDA during 2025. And then leverage, 3.74 on this page, talking about our balance sheet. During the year, we paid down about IDR 7 trillion. The money from rights issue came in IDR 5.5 trillion. So we paid more than what we received in raise money, IDR 5.5 trillionSo we paid down IDR 1.5 trillion more than from our own operations. So leverage came down to 3.74, interest coverage ratio, 3.9 and borrowing costs at the end of 2026 -- 2025 was 6.4%. If you remember, this number used to be 6.5% at the start of 2025. So we cut down to 6.0%. We -- I think we see a very close resemblance of what we saw in policy rate cut in Indonesia by Bank Indonesia. So we use -- utilize different types of borrowing structures going into the bond market, going into the money market with the banks, going into different types of structure, even though I don't remember seeing -- going into foreign exchange transactions during 2025 because rupaih was so interesting to borrow in rather than going into ForEx market and then hedge it back to rupaih. So we use mostly rupia during 2025, basically. And then corporate ratings remain BBB- with S&P. Fitch AAA and BBB. This is summarized profit and loss. So I think when it comes to performance of the company revenues, gross income, EBITDA, I think we have been executing a very good performance given where our competition is when it comes to these kind of metrics. Net income margin is 27%. I've been getting questions about tax expense. I can say it's rather difficult to project when it comes to tax expense, given different policies during different times of, say, finance ministers financing strategy. So we see very difficult to forecast tax expense. But we do -- when a better we see -- we paid more in certain years back in 2024, wherever we pay in 2025. So that should better reflect what we think is the taxation for the year, for instance. And then financial position. I think these are -- we have discussed in previous slides when it comes to our balance sheet. And then this is our cash flows beginning balance, IDR 940 billion. We have basically adopted more stringent cash management policies. -- starting 2023, basically. Whenever we have excess cash, we used to pay down debt or maybe make some down payments for future CapEx where we see more efficient to do it that way. That's why you see cash management is very stringent. Collection comes to almost IDR 15 trillion, and then CapEx OpEx is almost IDR 9 billion. Interest expense is IDR 2.78 billion which is below the run rate before, which is IDR 2.9 billion And then cash plus from -- cash surplus from operations, IDR 4.1 billion. business acquisition is a smallish IDR 579 million. And then raise money, IDR 5.5 trillion that I mentioned. And then proceeds, we paid down basically IDR 7.2 trillion. So we paid more than we received in rights issue money. And we paid dividend IDR 1.2 million. So ending the cash with IDR 650 billion by end of December 2025. And then going to quarter-by-quarter analysis, 10% year-on-year or as well as quarter after quarter. Basically, connectivity is the brightest spot that we have discussed with people before -- the non-tower segment under connectivity is the bright spot for the company. We see consolidation playing a big impact on our towers operations. But I think what we have also experienced that if we look hard and then work diligent enough that we are able to basically collect better what we should be able to collect from tower businesses. And EBITDA 6.7% year-on-year and 8.5% growth quarter-over-quarter. And the net income attributable to parent 24% Q-on-Q increase and then 26% year-on-year. Revenue analysis, 2.4% just by segment and Fiber to the Tower, 10%, connectivity, 4%; and then FTTH, 21%. And then total, we increased the business with 4.6%. Summary, operational data, we have increased the number of towers, 847 and then tenants increased by 2,500, because the reseller of becoming direct tenancy to our towers. Fiber to the tower, 6.7% -- 6,700 increased kilometers, 3.1%. Connectivity increased volume by 53% year-on-year. And then FTTH increased 53% because of past contracts that we delivered during 2025. Going into Slide 23, this is very much relevant what we have been able to finance this -- the sources that we financed out of the company is using mostly rupaih during 2025, and then exploration profile is looking like this. So we have very much -- we have -- we are preparing for a new bond offering for -- to replace our 2024 for facility. It's in the works right now. And then we have maturing USD loan in 2027 but the maturing debt in USD have all been hedged with FX IDR 15,000, respectively. While we are on this slide, I received a question whether we would get a ForEx gain or ForEx loss. If rupaih continues to depreciate, like, for instance, today, it's past IDR 17,000 to the dollar. I think our response to that is that we do not have hedge accounting, which means there is not direct correlations between certain depreciation in rupaih with our P&L or appreciation in into our P&L. So only by the time we basically pay down the debt and we enjoy a positive mark-to-market by the time we pay, then you see a positive result in that moment in that quarter, for instance, when we pay down the same debt. So assuming, for instance, in 2027, rupaih maintained at IDR 17,000 or IDR 18,000 for this matter, so we should be able to achieve a positive aftermarket when we pay down the debt in USD on this chart, the red one, $130 million notional amount. So hopefully, the analysts or the investor who asked me the question is on this call, so he or she can basically get this response reply from us. Okay, Nico, I think that's all we have.

So yes, the 2025 despite of the challenge, the merger on the Indosat with Hutch and also XL with Smartfren, so we are still able to bring a good result from the revenue, EBITDA, net income, This, we achieved through the several initiatives within our group, mainly synergy. And then we, like Adam said, that we're carefully looking at every line of the expenses, which 1 that we can optimize or synergize. So I think that's the additional comment from me.

Yes. So it's a very meticulous exercise. There is not 1 particular array of the company that we can say as -- when it comes to this exercise that saying that, okay, towers or nonpower. I think we really, we look at everything that we have in the company. So given the storm -- the business of mergers are behind us. So we used the opportunity to basically relook at what we have in various contracts and this is the result we see for 2025 book that have been audited by Asana. So now, I think both of us have concluded, Nico coming back to you.

Okay. Thank you and for your insightful presentation. [Operator Instructions] To start with, we have a question from Sabrina.

Congrats on a good set of results. Only 2 questions from me. So the first 1 is we actually noticed a meaningful Q-on-Q increase in the revenue from XL Smartfren contracts. Could you share with us more color on the nature of these deals and what is actually driving the growth? And the second 1 is as interest rates are likely to remain elevated for longer, how does the company plan to actually manage or balance its financing costs with ongoing organic expansion despite we have seen some efforts of deleveraging in full year '25?

So we -- like we said, we really look at what we have. So several of the collections were actually taking place in 4Q and then some additional run rate revenue also incurred during 2025 last quarter, fourth quarter. So I think going into 2026, we expect, given we are now -- we'll be working very hard with XL and Smartfren to successfully create value for the merger. So we see us working more on the non-towers because they will need some restructuring on the non-tower side. So coming back to this question. So we expect for towers, again, before seeing some more upside. So we see towers to remain flat for now. And then we see additional incremental from the non towers, which is fiber to the tower as required by XL Smartfren. And then we expect to see some increase in penetration rates as well as some additional compasses business that we see during 2026. So this is also concludes a discussion about what we see for 2026, yes. So overall, I think for towers, non-towers combined, we see the company to book basically low single-digit revenue growth, and then EBITDA also and then net profit before we see additional upside here because we -- when we were discussing this, this was back when we prepared what we see for 2026, that was sometime in January, December time. So we are hopeful that we can update the market what we see for the remainder of the year when we release our newer quarterly results, because we see a lot of noise right now at the moment when it comes to what we see as the outlook for 2026. I think the requirement of merging parties is actually like we saw in IOH. So they see -- they want to see efficient use of assets, efficient use of leases on whatever that they want, right? But since XL Smartfren is focused also on 5G. So we see the need of fiberization to be higher at this stage. Does that make sense?

Okay. I understand. And what about on the interest rates here?

Yes. On the interest rates, I just had coffee with banks. They also have problems lending to various sectors in the country, even elevated oil prices recently, which did not come into our picture when we prepare our budget. So we think the bond market may see some movement, but the banks are not that facing easy times for themselves to lend. So we expect the bank to remain liquid in other words. So this answer may come to you differently as you ask me before the war, frankly speaking. But just talking to the banks when they need to find good credit quality borrower to lend to, they have problems because everything has gone up in price, inflation and then that's where you see equity prices come down because people expect inflation to be high. And then even though we have taken a lot of the risk from our balance sheet, like, for instance, the fuel cost I mentioned in the first 10 minutes of our call. But again, the customers that have to bear those fuel costs, transportation costs, will face difficult times themselves. Frankly speaking, we have not taken into account a very significant rate cut in our in our protection, some cut but not so much. So we -- so we see we have some buffers there. So for instance, dugout 2023, we were 6.1% and in 2024, average cost, 6.2%. 2025 is 6% like we just presented to you. In 2026, we are hopeful we don't have to go fix something, longer-dated given liquidity is still abundant in the marketplace, in the bank market, especially. Does that make sense, Sabrina? In other words, I don't have an answer right now because during the last Board meeting, we were not discussing about borrowing more. We are pretty much well funded at this stage. And then we only have to talk about new interest rate with banks when it comes to the need of, say, IDR 5 trillion or IDR 10 trillion of new facility with banks. Does that make sense? And BIRT remained stable 4.75%, Sabrina. In other words, this quarter, maybe we don't see the impact yet of increased rates so much because of the war. The war only started at the beginning of March.

Okay. So it will be pretty much at the same rate from 4Q?

Probably slightly higher, yes, which is -- which means if it goes higher than what we saw in December 2025 was 6%. So that means the management has to work harder to find the savings elsewhere.

Okay. I think maybe 1 last question. Can you share how many kilometers of fiber connectivity services were actually added or deployed in 4Q?

In 4Q, didn't you see in our presentation slide. I think it was in the operation numbers.

So Sabrina, for the connectivity, the metrics that we use is not the line of the cable but actually, the connection, the activation. So that's the metric for connectivity because different with FTTT, which is we build the customer by kilometer per month. But for connectivity is regardless how long the cable is, I think we charge them actually on the band with the dedicated bandwidth that we provide to them. So the measurement is not using the kilometer for the connectivity.

Yes, because I was seeing the numbers on the slides for 3Q, but it seems to be not there anymore for 4Q. So that's why?

You mean the fiber run. You mean the fiber physical cable. It's in Slide 7. Everything is on together. You just have to basically take out the FTTT and then everything is in there. We just decided not to be too details about that one for the fiber assets.

like to ask the next question, but I think we all recognize that the 2025 result be it was partly driven by the tax. Can you please quantify normalized full year 2025 earnings? If we take out the tax expense volatility and what would be the effective tax rate that we should assume for 2026?

I think that's difficult there because when we see, say, for instance, in 2025, 2024 year, if you look at Slide there's a P&L there, Slide #16, 16, in 2024, there was a higher tax payment because of different opportunities between our management and tax office in 2024. So there was a slightly higher tax payment back then. And then whatever we paid, and then we decided to expand it in that particular year. So 2025, the numbers to increase, but to say whether this is a run rate, it's very difficult for us. It's a new tax system, for instance, right? So there could be a different interpretation still about where the tax office sees the tax expense should be. It's an ongoing process to this now. So I think I'm hearing if it's -- right now, it's starting quite normalized tax rate, but no guarantee about that because there's always a possibility of different tax opinion between us and tax office.

Okay. But thank you. For the next question.

Yes. I have 3 questions. But -- my first question is regarding your reseller conversion reseller revenue conversion to direct revenue. But can you please explain more about this concession and was this related to the XLS revenue?

Mostly, yes. So IBST was a reseller, but the towers belonging to somebody else.

Okay. And the conversion, is it going to be a one-off in the fourth Q? Or are we seeing for the conversion part?

No, not anymore, not so much. So next year 2026, I think we expect to see some increase in tenancy ratios because of ratios also start to basically expand. And then there are a -- especially with IOH, they no longer have relocation rights. So whenever they need new, it's going to be new co in 2026.

Okay. So basically increase...

Not like a jump, but a slight increase under our base case, there's still a bit of an increase in tenancy ratios.

Okay. So the conversion is actually related to the IBST contract previously about.

In 4 years. And don't forget here, when we say revenue will be a bit flat in 2026, it's excluding potential consolidation of subsidiaries or acquisition of additional shares of our subsidiaries. So because some of the transaction is related to corporate actions that have not been disclosed yet.

Okay. And can you please share the CapEx guidance for '26?

Yes. CapEx should be around IDR 5 trillion.

Okay. And can you share the like allocation for...

Should be still similar with what you saw in full year 2025 when it comes to split, because we still have to -- we expect to build new towers also for XLS but not as in the tune of IOH locations. So XLS, I think the required relocations is about 8,000 locations, but then a lot of that will be on existing towers.

Okay. And how many supposed to be in BTS form?

About 1,000.

Only 1,000. Okay. And CapEx already covering for that 1,000.

Yes, yes.

Okay. And my last question is the -- on the potential upside from the FWA deployment. Can you share the color on that and the timing?

So at the start of fastening, it was below 100, but now we see that number comes to about 400 coming from FWA colocations.

That's already being realized or...

Yes, in the works to be realized, you should be able to see some first quarter results.

I see. And that's for the full year or only for the first Q?

Only for the first Q.

Okay. And can you share like what's the potential in the full year?

Nothing that we have received a final number in our management meetings here. So they come in the batch of hundreds. Maybe if we talk again in 1 month, I'll be able to share more numbers with you.

Okay. And my last question is following up to that. So the low single-digit growth. Is that already including the upside?

Yes. Yes, that's why you see the unexpected increase in financial ratios for 2026. I mean we assume always possibility of not too strong wireless market churn, stuff like that. So we can always assume a positive net gain in financial ratios unless we see something different, materially different. So we're kind of a bit cautious in our assumptions.

Next, I will read out the question in the chat box from Julie. Was there an increase in average tower and dollar rate in 2025, what was the reason behind this?

Yes, that's a function of what Parapan was saying that we really look at what we have in ability to charge our customers like occupancy of tower space that we have originally stipulated in an original contract, and then we then end up occupying with more equipment. So that's why you saw average lease going up. But what we see is that base rent, I think we're pretty quite stable. I don't have the number with me right now, but should be around IDR 12 million, something in average lease spread for our leases, including locations.

Next, I will take a question in the chat box from selfie. WiFi and Min Republic are expanding to fixed wireless access will become the power partner for their services.

Yes. Yes.

Yes. Okay.

I think we already answered that in the immediately previous question from Sabri -- yes or sorry.

Yes. And could you please give color on the revenue expectation and EBITDA margin?

We mentioned about the -- what we see in 2026. We have devised the budget for 2026 under which management will be operating. So I think still low single-digit kind of revenue growth similarly with EBITDA. Again, the major driver for growth is connectivity, as mentioned. Because we see opportunities to basically cover more market under connectivity under our own discussion. We are hearing off and on mobile wireless operators being hesitant about spending CapEx. So that's why we think 2026 will still be the potential.

Yes. Still connectivity is, we feel that there's still a room for quite an improvement, utilizing the kilometer of fiber layout that we have closed Indonesia. And also, we see that the needs for the Internet is increasing from year to year. So we see that connectivity, especially will book quite growth, yes.

And then the growth from that FTTT, very strong growth on connectivity will lift the overall performance for 2026.

Okay. Next, we will take a question from Etar and then we will take 1 last question as we approach the end of the call today. Part, what is the pricing trend for tower and fiber, what is the sustainable level in the industry? And then what is the typical tower required in 5G?

Yes, answer for the IDR 5 billion. For the pricing for the fiber is related to the FTTT, I think it's already button. I think we don't see any further decrease on that. For the connectivity, yes, we see that it's very natural. The price will go down every year. However, what we do is we don't -- we try to maintain the price instead of lowering the price we give them more bandwidth. So the revenue is still remained same. So that's our strategy for the IDR 5 billion.

I think for towers, I think, like, for instance, the new possibility of bigger volume with FWA, I think again, what we -- what I mentioned during the first 5 minutes is that what we've been trying to do is that same with fiber with towers also. Rather than these guys, whoever wants to expand the network or improve their network rather than them go out of pocket to build new infrastructure using other people or their own capital. I think we have the flexibility of very efficient CapEx and OpEx outlay on a per unit basis. I mentioned this a couple of times, I'm going to mention again. For instance, the number of people operating under towers even though we were 15,000 towers or 20,000 towers, the headcount on the tower still 100 people more or less. So that provides a very high tower count per -- headcount that we have under towers. For fiber, I think the same thing. We -- if we reach a certain scale, we've reached a certain scale with fiber optics, very good margins, that we think we should be able to outperform the competition. Not to mention, we have also very good access to capital, as you can see in our recent performance. What we want to avoid is going out there and then try to propose a new business proposal. And then the pricing is off, meaning it's just too expensive or what we want to be able to provide is earn the business by providing something very efficient. So if they do their own calculations. It's just where of to just lease and that goes for colocation as well. So based on that, and we've been saying this for the many, many quarters already, pricing have been quite stable. So I think about IDR 12 million, for instance, for towers. So that what we think should be the main focus of management going forward.

Okay. Thank you. And for our last question today from Andres. Previously, you touched about acquisition opportunity. Can you give more details on that?

Yes. Not some -- nothing I can share actually. But you see some assets still left to be consolidated. We will look at those opportunities very carefully. At this stage, frankly speaking, we are looking at something very strategic where we can enhance value to the whole franchise. We own several subsidiaries. And then I think 1 transaction is pending to conclude in second Q, but not much that we can say at this stage. So when we say revenue growth, flattish is not including transactions like that.

Before we end the call today, do you have any closing remarks?

Yes. So hopefully, all of you will be able to see more of us, Baatar and myself talking about the business. It's just a matter of 5 weeks and the whole world is different because of the war. Right now, fortunately, we don't have a funding need that really necessitates us to basically discuss the new term sheet, fortunately Indonesia did not increase rate. So that reflects the banking system liquidity. We also priced a lot of our loans based on that policy rate, BI rate with banks. The biggest banks in Indonesia also included state banks, commercial banks. And still, we have very much liquidity offering coming ourselves coming our way from financial markets, including banks. So I think we are in a good position if we are to launch a bond, for instance, because we don't have a financing need that is necessitate us to borrow at a much higher borrowing cost at this stage, okay? I think this answers to Sabrina's question. I think for us, we are optimistically looking at where our customers are heading. Hopefully, this war doesn't cause any more concern than what we already see in our other type of business in our daily lives. Thank you, Nico.

We come to the end part of the session. On behalf of Bahan Sekuritas, I would like to thank you for the informative and interesting talk that we have today, and congratulations as well on your impressive results. And I would like to thank the audience for your participation. We hope this presentation is beneficial for everyone. Thank you, and see you in our next event.

Thank you.

Thank you, Niko. Thank you.

Bye. Thank you.