TPG Telecom Limited (TPG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It is my pleasure to welcome you to TPG Telecom's Annual General Meeting for 2021. My name is Canning Fok, and I am honored to be the new TPG Telecom Chairman. I would have preferred to be here in person today, but holding an online meeting remain the safest option for now. I look forward to meet you -- to meeting with you when it comes -- becomes possible to do so. Whilst I am speaking to you from Hong Kong, many members of the Board and management are joining from TPG Telecom's head office located in Sydney, Australia. I'd like to begin by acknowledging the traditional owners of the land on which we are meeting or dialing in from today. I pay my respect to the elders past, present and emerging. Before proceeding with the business of the meeting, I would like to introduce my fellow directors. Joining in Sydney are Tony Moffatt, Jack Teoh, Helen Nugent -- Dr. Helen Nugent, Iñaki Berroeta, CEO and Managing Director; Robert Millner; Arlene Tansey. Joining from overseas are Frank Sixt in Hong Kong, Diego Massidda in London, and Pierre Klotz also in London. I also welcome TPG Telecom senior management joining today's meeting, including Stephen Banfield, CFO; Vanessa Hicks, Group Executive People Experience; and Trent Czinner, Company Secretary. [indiscernible] and [indiscernible] from PricewaterhouseCoopers, TPG Telecom's external auditors, and representatives from our legal advisers are also in attendance. The company secretary has advised that there is a quorum. I formally declare the AGM open. In the event of any technical issues where I cannot be heard, I will ask my fellow Director, Dr. Helen Nugent, to assume the chair so the AGM may continue. The agenda for today's meeting is as follows: First, I will present my address. Following that, I will invite Iñaki to present to the meeting. Trent Czinner, our company secretary, will then explain some of the meeting procedures. Subsequently, we will proceed with the formal business and the 5 resolutions to be put to the meeting today, and we will be available to answer any questions from shareholders. My address and Iñaki's address has been launched with the ASX prior to the AGM commencing, and we will -- and will be available on TPG Telecom's website. Today's meeting is a historical moment, TPG Telecom's first AGM as a merged company following last year's merger between TPG and Vodafone Hutchison Australia. I am honored to have taken on the role of Chairman in March following the resignation of David Teoh. I would like to thank David for his leadership of the Board since we merged last year. Indeed, there has been many changes since the last AGM of TPG Telecom in December 2019, where it has the ticker code, TPM. Some of you would have attended that AGM as TPM shareholders. TPG Telecom has now become the second largest listed telecom company in Australia. We are a company serving more than 5 million mobile customers and more than 2 million fixed customers. We own and operate nationwide telecoms infrastructure, including Australia's second largest fixed network, a 4G mobile network with coverage reaching more than 23 million Australians and a 5G network, which is being rolled out. The company's 2020 performance and achievements are vindication that we are better and stronger together for shareholders, customers, employees and the communities. The leadership of the unified executive team, led by CEO Iñaki Berroeta, has been key to the delivery of the company's progress and outcomes in 2020. Our people have also worked extremely hard to deliver stronger competition and excellent service to customers. On behalf of the Board, I thank our people and executive team for their hard work. Following the merger, there are some opportunities to deliver on TPG's telecoms potential. Your company is working hard every day to realize these benefits. The company's strategic priorities to drive, enable and support growth has the unanimous support of the Board, which is working well and cohesively together. Most important is to continue to roll out 5G and modernize our mobile and fixed network. We will also look to maximize the use of our own infrastructure, grow share in the enterprise sector and deliver a target of $17 million in cost synergies this year alone. Iñaki will discuss this priority in more detail shortly. Despite of the challenges of 2020, we maintained a strong focus on financial performance to support returns to TPG shareholders. In April, we paid a fully franked maiden dividend of $0.075 per share in respect of the first 6-month period post-merger. It was made possible through the generation of $342 million net cash flow in that period. The company also reported a 2020 net profit after tax of $734 million. Turning to our commitment to operate both sustainably and responsibly. Playing our part in a sustainable future is a key priority for the Board. We have recently announced a commitment to power our Australian operations with 100% renewable electricity by 2025. We are also working to introduce energy-saving technologies in our network. TPG will also continue to build on its gender diversity and inclusion of all employees. An important part of our strategy is to ensure our approach to remuneration for executives supports both short-term and long-term alignment between employees and shareholders. We have outlined our approach in detail in the Remuneration Report section of the 2020 Annual Report. From the start of this year, executive remuneration has shifted to a new single approach that links our purpose, strategic priorities and our remuneration principles. We have spent a tremendous amount of time working to get the balance right between delivering value for shareholders and attracting and incentivizing and retaining the best possible leadership talent. We have recently seen changes in TPG's telecom support, and we are at the start of a new chapter. The merger of Vodafone Hutchison Australia and TPG has bought the drive, ambition, and challenger spirit into one organization, and you will always be part of our company. In March, David and Shane Teoh announced their decision to resign from the Board. David chaired the Board during the critical months after the mergers and we thank him for his contribution. David made his reasons known in a letter to shareholders, but as a private person, he did not wish to say any more. As Chairman, David was focused on the 5G network rollout creating value from our assets and ensuring a profitable merged company, and that is also my focus. We all thank Shane for his work on the Board of TPG both before and after the merger. We are pleased to have Jack Teoh on the Board to represent the Teoh shareholding, and Jack is being put forward for the election today. Today, 3 directors are nominated. They are Mr. Frank Sixt, for reelection; Jack Teoh, as I mentioned, and Mr. Tony Moffatt, both for elections. You will hear from each of them later in the meeting. I'm very pleased that Frank, Jack and Tony have nominated for the election and they will continue to make significant contributions to the Board. In closing, I can assure that since our merger not even 10 months ago, the company has come together better and faster than we expected. 2020 and the start of 2021 has been challenging, but even with continuing uncertainty due to COVID, our year-to-date results are tracking well against our expectations, and we will enter the second half of 2021 with increased confidence. I thank all shareholders for your continued support. I will now ask our CEO, Iñaki Berroeta to address the meeting.

Thank you, Canning. Thank you, everyone, for joining us virtually. I would also like to acknowledge all the traditional owners of the land on which we meet today. It is a pleasure to speak to you at our first AGM as a merged company. Next week, it will be 10 months since the merger was implemented and during that time, much has been achieved or is underway. We have accelerated our 5G mobile network rollout with services now available in more than 500 suburbs in cities and major centers and with more than 0.5 million customers using 5G mobile devices on our network. At the recent millimeter wave auction, we secured spectrum holdings in all available license areas, which will significantly increase capacity for our fixed wireless and 5G mobile services. And today, I'm pleased to announce that we will be -- we will begin inviting selected customers to access our 5G fixed wireless services next month. Take-up of our fixed wireless services has been encouraging as we expand the service across more brands and channels. We have also launched Felix, Australia first telco brand powered by 100% renewable electricity, and we have set a target that, by 2025, we will have 100% renewable electricity powering the company's entire Australian operations. Over the coming years, we will increase our focus on environmental sustainability. We continue to strengthen our enterprise proposition, leveraging new NBN products and our significant fiber assets and build capabilities. In the last quarter, we have been awarded contracts with 2 major companies which have national and international operations. Fiber rollout for our mobile sites is ahead of schedule, and we have already integrated in excess of 400 small cells, enhancing coverage and capacity in our mobile network. We are also working on our cultural program and teams integration as we continue to leverage our culture as a primary company asset. We now have a harmonized approach to remuneration and workplace policies. We support employees to be at their best. Company engagement is tracking above expectations, and more of our spaces, systems and processes are coming together as our integration progresses. I thank all of our people for their commitment and enthusiasm and for working hard every day, often in challenging circumstances through 2020 for our customers, shareholders and the future of TPG Telecom. All of this significant achievements are delivering consistently on our strategy, which with the Board's unanimous backing is allowing us to deliver the opportunities from the merger. We have 3 growth priorities: first, to grow our share of converged households. Having brought our mobile and fixed broadband capabilities together, we are able to provide a richer portfolio of products to each of our customers. Second, to make the most of our extensive network infrastructure assets by providing compelling on-net broadband services to more customers; and finally, to drive competition and growth in enterprise, government and wholesale with whole of business telecommunication solutions. To support these priorities, we will continue rolling out 5G on our wireless network and transform IT and digital to improve customer experience, simplify the business and improve our company's efficiency. Underpinning this is our synergy program with a target of $70 million in 2021 alone, along with the organizational integration. At the end of last year, we renewed our tower arrangements with Axicom, allowing us to upgrade our Axicom sites to 5G. It will also increase the speed of our 5G rollout with more than 400 Axicom sites to be upgraded with 5G equipment in the next months. We are on track to reach 85% 5G population coverage in the top 6 cities of Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra by the end of this year. Our increased scale allows us to offer more compelling propositions to customers across our mobile and fixed products supporting customer needs and driving growth. A good example is our strong result at the recent 26 gigahertz spectrum auction. The millimeter wave spectrum we acquired will complement our current spectrum holdings and allow us to deliver an excellent 5G experience for customers. The spectrum will be used to offer 5G's fixed services to mass market as an NBN alternative and to boost performance for 5G mobile services. The $108 million fee for the spectrum, which we intend to pay in 5 equal annual installments from this year was also an excellent outcome for our shareholders. While upgrading to the next generation of mobile technology, we continue to focus on improving our network. Watching video is what customers do most on their devices, and our mobile network has been built for that. For the first quarter on 2021, our 4G and 5G network was ranked #1 of the Australian mobile networks for video experience by OpenSignal, a leader in measuring user experience of mobile devices. And for 5G alone, Open Signal ranked our network equal winner on all key experience metrics of 5G video experience, 5G game experience and 5G voice app experience. In the same period from January to March this year, we were also recognized as being #1 for consistent quality, uplink speeds and latency across common coverage areas by independent network benchmark firm Tutela. With our fixed and mobile capabilities and scale, we are driving stronger competition in the consumer and enterprise segments. We are scaling up cross-selling initiatives capitalizing on the high NPS of our customer across our multiple -- our multi-brand portfolio. Leading our people at TPG Telecom is a highly experienced and driven executive team, leveraging on the talent of TPG and VHA and also incorporating new talent from the market. I want to take the opportunity to acknowledge Steve Banfield, who has decided to leave the company in November. Steve has been part of the TPG Group for over 20 years, and he has decided it's time to move on. I thank him for his considerable contribution to TPG, and it has been a great pleasure for me to work with Steve during the merger integration where he has brought the finance teams together and produced the first set of results and annual report of the merged company. I look forward to working with Steve during a smooth transition to his successor, which we will announce in due course. As we move through 2021 and reflect on last year, 2020 was a year that shaped us. We have clear priorities to complete the merger, fast track the deployment of our 5G network, maintain our focus to provide great services to our customers, drive financial performance and build a strong company for the future. We are privileged to be in the telecommunication industry, which was so critical to the lives of Australians throughout 2020. The challenges in 2020 were significant. The mobile market contracted for the first time ever due to global travel restrictions, and we also were impacted by the ongoing migration of services to the NBN. We navigated these external challenges while completing the merger, integrating the 2 businesses and recovering from the merger approval delay and 5G vendor restrictions. Our 2020 results demonstrate that even during a period of unprecedented challenges, the company fundamentals are strong. As the merger was effective from 26 June 2020, reported figures for the 2020 include 12 months of the company formally named as Vodafone Hutchison Australia, combined with 6 months and 4 days of TPG Corporation. The group's reported revenue increased 24% to $4.35 billion and EBITDA increased 18% to $1.39 billion. Reported net profit after tax was $734 million, which includes a one-off $820 million accounting credit to income tax expense. Pro forma results, which simulate what the group's results would have been if the merger had been effective throughout 2019 and 2020, so that pro forma revenue decreased 6% to $5.52 billion, and EBITDA decreased 10% to $1.79 billion. Our people are our greatest asset, and they have been essential to the support of our customers and to deliver for our shareholders during our merger process. Canning has already touched on our results for shareholders, including the dividend. Last year, we helped more than 220,000 customers in financial hardship throughout initiatives such as Vodafone, $10 Stay Connected plan and other relief measures. We also maintained a strong focus on providing a great experience for customers. From a cultural integration point of view, I am pleased at how well our people are working together to deliver our strategic priorities. Together, we are building a new culture at TPG Telecom. It will be a culture with customers that they have of one-off, which encompasses the best parts of 2 businesses. In a physical sense, have brought our people together, including the consolidation of 4 office buildings in Sydney and Melbourne, and our hybrid working model is supporting our people to be at their best, providing a flexibility and safe working environment. In closing, we have moved into 2021 with increased momentum and confidence. We are already 1/3 of the way through 2021, and we are tracking well against our forecast for the year. The merged TPG Telecom is a better and stronger company for customers, shareholders and our people. Thank you to you, our shareholders, for your continued support.

Thank you, Iñaki. I will now pass to Trent to explain the procedures for today's AGM.

Thank you, Canning. Ladies and gentlemen, the Notice of Meeting was distributed to shareholders, and it is proposed that the notice of meeting be taken as read. Today's AGM is being held online via the Lumi platform. This allows shareholders, proxies and guests to attend the meeting virtually. With the exception of guests, you have the ability to ask questions and submit votes. You may submit questions at any stage during the meeting, and we will answer at the appropriate time. Voting on each of the resolutions will commence when Canning opens the polls. In accordance with the company's constitution and as set out in the Notice of Meeting, the Chairman has determined that voting on each of the resolutions will be conducted by a poll. The results of each of the poll will be released to the ASX and will be available on the company's website as soon as possible after the meeting. Before the vote is taken for each resolution, the proxies for and against the item will be displayed on your screen. Note that these figures will be as at the closing time for receipt of proxies at 10 a.m. Sydney time on Tuesday, 4 May 2021. As set out in the Notice of Meeting, the Chairman will vote all directed proxies in accordance with the directions provided by shareholders and will vote all open proxies in favor of all resolutions. This includes proxy votes held by the Chairman, which will be voted in favor of item 2 on the adoption of the remuneration report, unless specifically directed otherwise. In accordance with the Corporations Act, other than in relation to the proxies granted to the Chairman, all directors, key management personnel and their closely related parties are not eligible to vote on this resolution and will abstain from voting. In order to provide shareholders with enough time to vote, the Chairman will shortly open voting on all resolutions. At that time, if you're eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring up a list of the resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit submit or enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time the Chairman declares voting closed. Questions can be submitted at any time, and we encourage you to do so. [Operator Instructions] We ask that you keep your questions short and to the point so that as many shareholders as possible have the chance to ask a question. If you have a question already prepared, please submit it now so that as many questions as possible can be answered. Please note that your questions may be moderated or if we receive multiple questions on the same topic, they may be amalgamated together. I will read out the questions received and the Chairman will either answer it or pass it to the most appropriate person. We may rule out questions not relating to the business of the AGM or those that are out of order. We will, however, endeavor to answer all questions in the allocated time. Thank you. I'll now pass back to Canning.

Thank you, Trent. We will now move to the formal business of the meeting. The first item of business is the receipt and consideration of the 31st December 2020 financial report for the company and the reports of directors and auditor. No vote is required on this item of business. A copy of annual report has been made available on the company's website and will send to those shareholders who requested a copy. I will take the annual report as received and address any questions regarding this item. Trent, have we received any questions?

Yes, Canning. We have a question. I'm just waiting for it to appear. The question, Canning, is what level of net profit after tax are you budgeting for in 2021?

So Iñaki, can you answer this question?

Yes. We do not provide guidance at this point.

Chairman, there are no further questions in relation to this item.

We will now move to the 5 resolutions being put to this meeting, and I would like to formally declare the polls open. The polling icon will soon appear on your screen, so please submit your votes at any time. I will give you a warning before I move to close the voting. I will now deal with agenda item 2, the adoption of the 2020 remuneration report. It is a pleasure to present shareholders both the TPG Telecom 2020 remuneration report. A summary of the report was included in the Notice of the Meeting. An important part of our strategy is to ensure our approach to remuneration for executives support short- and longer-term alignment between employees and shareholders. Executive pay is detailed in the remuneration report and reflects 2020 being a year of 2 halves with VHA being the reporting entity in 2020 until the merger. Following the merger, executive remuneration has shifted to a new single approach that links our purpose, strategies and remuneration principles. The Board has worked to get the balance right between delivering value for shareholders and incentivizing and retaining the best talent. The new STI scheme includes a balanced score card of measures. Performance against each measures will be disclosed in the 2021 remuneration report. With the exception of CEO, all executive KMP remains on the formal STI and LTI schemes until 1st January 2021. The CEO's new contract becomes effective on 1st July 2020. And at that point, he moved on to the new STI scheme, which includes a deferral in the form of deferred shares right. KMP remuneration target is benchmarked against the ASX 11-50 peer group and set out or below median overall and for fixed remuneration. For directors, the structure of the remuneration fees support the retention of the independents and the fees were determined with reference to the median of the ASX 11-50 peer group. There are no remuneration increase proposed for KMP of directors in 2021. We consider that the remuneration framework that we have established for the merged company create alignment between employees and shareholders in a way that is consistent with the expectations of shareholders. Please note that a vote on item 2 is advisory only and is not binding. However, any discussion on this resolution and the outcome of the nonbinding vote will be taken into consideration by the Board. A vote exclusion applies to this resolution as set out in the Notice of Meeting. The resolution and proxies received are set out on the screen, and I welcome any questions regarding this item. Trent, have we received any questions?

Yes, Canning, we have received one question in relation to this item submitted prior to the meeting. The question is has the company received any support from the government by way of JobKeeper payments?

Again, Iñaki, can you answer this one?

Yes. Thank you for the question. I can confirm that no employees of TPG Telecom have been put on JobKeeper or any other state funding.

There are no other questions received in respect of this item.

We will now move to agenda item 3, the reelection of Frank Sixt as a Director of the company. Frank's biography is set out in the Notice of Meeting. I will now ask Frank to address the meeting briefly regarding his reelection.

Thank you, Chairman, and good morning, shareholders. I really do wish I could be there with you today. I've been a director of companies in Australia for the last 20 years. And up until last year, would have been there at least 3 or 4 times a year and very much enjoyed that privilege. I'm a lawyer by training. I've been an Executive Director of many of our groups, public companies since 1990. In particular, I have been involved in our telecoms businesses around the world, which, at various times, have included MNOs in the U.S., the U.K., Europe, India, Indonesia, Asia, Hong Kong and of course, for many years in Australia. As the CK Hutchison Group's Finance Director, I've focused for a good many years on financial management and accounting and reporting for telecoms businesses, non-telecoms finance. And I've also been involved in several large telecoms mergers. So I hope that you will support my reelection, and I look to bring such skills as I have to our wonderful new company in the coming year. Thank you very much.

Thank you, Frank. The resolution and proxies received are set out on your screen, and I welcome any questions regarding this item. Trent, have we received any questions?

Canning, no questions have been received in respect of this item.

The next agenda, item 4, the election of Tony Moffatt as a Director of the company, Tony's biography is set out in the Notice of Meeting. I will ask Tony to address the meeting briefly regarding his election.

Thank you, Chairman, and good morning, shareholders. It's an honor to have been asked to serve on the Board of TPG Telecom as a Nonexecutive Director. I'm a lawyer, like Frank, with 30 years of experience. Most relevantly, I was the General Counsel for the premerger TPG Telecom businesses, a role which I performed for about 20 years. I was privileged and I am proud to have been part of the team that grew that business until the merger with Vodafone Hutchison Australia in 2020. In the course of that work, of course, I gained a strong understanding of the telecommunications business in Australia, and I was closely involved in the many mergers and acquisitions and other strategic transactions undertaken by that company. As a result, I have a good knowledge of that side of our business and believe that with that history and my legal experience, I can make a valuable contribution to the Board of our company. With your support, I'd be excited to be able to continue to serve the company as a director. I'll now pass back to you, Canning.

Thank you, Tony. The resolution and proxy received are set out on your screen, and I welcome any questions regarding this item. Please note that under the arrangement disclosed in the scheme implementation in 2018, the affiliates of CK Hutchison and Vodafone Group, who holds 50.1% of the shares in TPG are required to not vote on this resolution. This is by agreement as the term of merger. Trent, have we received any questions?

Canning, we've received no questions from shareholders in respect to this item.

The next agenda, item 5, the election of Jack Teoh as a Director of the company. Jack's biography is set out in Notice of Meeting. I will ask Jack to address the meeting briefly regarding his election.

Thank you, Chairman, and good morning, shareholders. My father, David founded the original TPG Telecom business and grew it from this very -- from nothing into one of the largest companies in Australia. My family is a very substantial shareholder in this business, holding a stake of approximately 17%. We continue to have a very close interest in the performance of the business and want to be involved in its continued success. In my business life, I have been involved in technology and retail businesses. I have a strong interest in which technologies can drive change in markets and create opportunities for growth. I am a Director of Tuas Limited, whose business involves the provision of telco services in Singapore, through which I gain insight in some trends and innovations in overseas telco markets. I also believe in the benefits of there being a diversity of views available to the Board. In that regard, I bring a younger viewpoint to the Board, which I consider to be very important, having regard to the demographics of our customer base. I would be honored to have your support to serve -- continue to serve all the shareholders as a Director of the company. Thank you.

Thank you, Jack. The resolution and proxy received are set out on the screen, and I welcome any questions regarding this item. Please note that under arrangement disclosed in the scheme implementation in 2018, the affiliates of CKH Hutchison and Vodafone Group who hold 50.1% of the shares in TPG are required not to vote on this resolution. Again, this is by agreement as set out of the merger. Trent, have we received any questions?

Yes, Canning. We've received a number of questions on this item. The first question, what skills does the Chairman feel that Jack Teoh brings to the Board? And how does this complement the current Board skills matrix?

Well, Jack is a businessman and part of the Teoh family, he will bring experience in technology business and overseas telecom -- and his overseas telecom experience through his role on Tuas Limited. And also he is young and he will also bring a younger experience perspective to us. And I think we all need it.

The next question is for Jack Teoh. There are a number of questions here, which I'll read through. How many shares in the company do you own in your name? Are you a member of the Australian Institute of Company Directors? Have you completed the 5-day company directors' course run by the Australian Institute of Company Directors? In their biographical information, the other directors standing for election, Mr. Sixt and Mr. Moffatt list their academic qualifications. Do you hold any degrees from a recognized university? And finally, do you know the difference between current and noncurrent liabilities? What is the difference? Jack? Canning?

Yes?

Would you like to -- this is actually for Jack. I think it's directed directly to Jack. So we might ask Jack if he wishes to respond directly.

Sure. There's a few questions there. So I'll answer a few. Am I a member of the Australian Institute of Company Directors? And I'm not. Have I completed 5-day companies' director course? No, I have not. Yes, I am aware of what the difference between current and noncurrent liabilities are.

And Jack, one final question there, just to make sure we do ask them. Can you tell us what degrees you hold from university if any?

Sure. I have a degree of commerce from the [indiscernible].

Thank you. I'm just waiting to see, Chairman, if there's any further questions on this item. There is one. We're just waiting for it to be displayed. So further questions for Jack directly. I'll read them out and then Jack can respond. Since 26 March 2021, how many Board meetings or meetings of any subcommittees of the Board have you attended? Prior to attending the Board meetings, did you discuss the proposed business with either of your parents? Following each Board meeting you attended, did you talk to either of your parents on what was discussed at the meeting? Did you follow the events last year concerning the commission of inquiry into the Sydney casino license of Crown Resorts? Did you, as a director, take away any lessons from that inquiry? Your biographical details indicate you're a Director of Total Forms Proprietary Limited. That company's website suggests that 2 of its clients are TPG and iiNet. Have you declared any related party transactions to TPG? I might ask Jack to respond directly.

So I have attended one Board meeting currently, I have attended one prior Board meeting. I have not followed the Crown Resorts commission of Inquiry. I am a Director of Total Forms Proprietary Limited and any -- and we have declared every related party transaction to TPG.

Canning, there are no further questions in relation to this item.

I would now like to move to agenda item 6, the issues of shares and performing rights to the CEO and Managing Director, Mr. Iñaki Berroeta, under the [indiscernible] and long-term incentive plan. The directors have voluntarily decided to seek shareholder approval for equity-based allocations to the CEO in the interest of transparency and good governance, even though it is intended that subject to shareholders' approval, the shares will be acquired on the market. As set out in details in the Notice of Meeting, this allocation related to short-term incentives for 2020 and long-term incentives for 2021. The resolution and proxies received are set out on your screen, and I welcome any questions regarding the item. A voting exclusion applies to this resolution as set out in the notice of the meeting. Trent, have we received any questions?

Yes, Canning, We have received one question prior to the meeting. I'll read it. With the performance rights payable to Mr. Berroeta under the STI component, a result of the previous flawed remuneration structure with a no pay calculation, does the Chairman feel that this is appropriate? And if so, why?

I will ask the Chairman of the Remuneration, Dr. Helen Nugent, to answer this question.

Thanks, Canning. And thank you for the question. Look, we understand that for -- because of the nature of the merger, that the remuneration report was complex. We work very hard to be both fulsome and transparent. The DSRs that are proposed to be allocated do not relate to the first part of the year. And therefore, the question of it being related to the previous system is not as relevant. The deferred STI relates to 40% of the allocated STI for the second half of the year. That was set by a mix of both quantitative and qualitative measures that were considered very carefully by the Board. We apologize if it's opaque. We'll certainly be doing our very level best to make sure that the targets are clear for next year, and we'll be reporting against them. We've gone to shareholders for the DSRs, which will be purchased on market in the interest of transparency. There was no need for us to do that. So we ask for your support in relation to this. Thank you.

Chairman, we have no further questions in relation to this item.

Ladies and gentlemen, in approximately 2 minutes, I will close the voting system, please ensure that you have cast your vote on all of the 5 resolutions. I will now pause to allow you time to finalize this vote. [Voting]

So 1 minute has gone. 2 minutes gone, 30 seconds left. That now concludes voting, and I formally declare the polls closed. As mentioned earlier, the results of this meeting will be announced to the ASX as soon as the votes has been counted and verified. I would now like to welcome shareholders to ask questions or make general comments. I will now pause to allow you time to take any questions or comment.

Chairman, we have 3 comments so far -- 3 questions so far, so we will start -- I'll start reading them out while we wait for others to come through. The first question is what is TPG doing of mature aged workers and people with disabilities.

Sure. Iñaki, can you answer this question?

Yes. Thank you very much for this question. TPG Telecom, we are committed to create a culture of diversity and inclusion. And as such, we are constantly making sure that our policies and practices in place support this idea. These policies include areas like recruitment, development and promotion, remuneration, training, and it's also something that we measure regularly and report to senior management.

The next question we have is what kind of products is TPG going to introduce for people with disabilities and senior Australians?

Sure. Iñaki, can you take this one out?

Yes. Thank you again. We do have already support in place for customers to meet these individual needs.

Just one moment while we're waiting for the next question. The next question is have the small cells networks in various capital cities that TPG installed prior to the halt of its 4G network rollout being integrated into Vodafone's network?

Again, Iñaki, can you take this one?

Yes. Thank you for the question. As I mentioned in my speech, we had integrated around 400 small cells. We began this integration actually on day 1 of the merger; and as I said before, as today, we have roughly 400 small cells integrated. All of these small cells are mainly in Sydney and Melbourne. And the effect that they have on our network is to help with coverage and also some capacity in certain geographical areas on these cities.

The next question received, what are your plans to increase the turnover in Queensland, in particular, Brisbane and Gold Coast? These areas require more active sales, improved sales staff. In the past, Queensland has been a far better contributor and can be once more with the growth it is achieving ex COVID.

Iñaki?

Thank you for the question. So definitely, Queensland is a significant part of our business. We do have a number of many, many customers in Queensland, in Brisbane with a big part of our enterprise support. And therefore, it is for us in a strategic area to serve. The 5G rollout is actually going very well in this state. And for those of you that are able to experience the network in Gold Coast or in Brisbane, I think that this is something that will drive a lot of adoption by many customers, and we continue to -- as I said, we continue to take the development of our business in Queensland as a key area.

The next question is actually a comment to Steve Banfield. Some of us will miss your clear explanations of the business and finances of the previous TPG. Thank you very much for that kind comment for Steve.

It is very nice. Thank you.

The next one is another comment. Please consider associating the name TPG Telecom with voice as well as data.

Thank you. Thank you for your comment.

We have a few more questions coming through. TPG Telecom has had an excellent working relationship in the past with the AFR, the Australian Financial Review. Can this be reviewed perhaps better communication from your promotions area?

So Iñaki will take this one.

Yes. Thank you for the question. We have an exceptional relation, working relation with AFR. And we are also working on increased investor relations activity in general, and that also includes our close relation with AFR.

And I understand this may be the final question. Vodafone have a large number of kiosks in Myer shopping centers. Can more TPG-labeled products be promoted in these kiosks?

Iñaki?

Yes. Thank you for the question. Look, I think that one of the biggest assets of this group is to have a very strong set of brands. Each one of these brands are loved brands by their customers. And each one of these brands also addresses particular segments in the market. So the way that we look at our brands and our channels is to make sure that what we are doing is creating a good portfolio management of all these brands and addressing these brands in those markets where they are attractive. That means that sometimes, we will go into retail with brands that maybe we had not in the past. But traditionally, the way that we have operated is that the presence of physical retail was done mainly through the Vodafone brand. And this is part of our journey on maximizing the value of all these assets is to look at these opportunities that you mentioned and take those decisions around where to better maximize the value of these brands in the future.

Chairman, that -- they are all of the questions we have received.

That concludes the business of the meeting, and I now declare this AGM closed. Thank you for your time, questions and your continued engagement and support. Thank you.