True Corporation Public Company Limited (TRUE) Earnings Call Transcript & Summary

Good evening, good morning, and good afternoon, everyone, to everyone on the call joining us today. Welcome to True Corporation's earnings disclosure for the first quarter of 2024. My name is Naureen. I'm the Head of Investor Relations. With us today is our CEO, Khun Manat; our Deputy CEO, Khun Sharad; and our Co-CFO, Khun Nakul. Our presentation and additional materials have been e-mailed out as well as available on our website. [Operator Instructions] With that, I'd like to pass over to Khun Manat to start our presentation.

Okay. Thank you. Thank you, Naureen. Good evening, everyone, and thank you for joining our Q1 '24 online meeting. It's a privilege to share the incredible progress and dynamic developments at True Corporation with you all today. We have embarked on 2024 with a robust start, driven by the seamless integration of our operation and the strong dedication of our team. During 2023, we focused on fostering a performance-driven culture through strategic cultural integration leading to significant financial achievements and quarterly improvement in our performance. I'm proud to report at our fifth quarter that we have 5 consecutive quarters of EBITDA growth and a remarkable turnaround to profitability with just a year post amalgamation ahead of our expectations. All these achievements were driven by growing revenues, continued cost discipline and progress on synergy realization. Our proven strategy are leading to tangible outcomes and putting us well on the path to accelerate profit in a sustainable manner. As we move forward, our strategic direction is guided by 3 key pillars: our must-win battles delivering a world-class customer experience, establishing ourselves as the digital growth champion and ensuring future ready performance. Let's dive deeper into how we're excelling in each of these areas. Starting with our commitment to providing an unparalleled customer experience. Our dedication to delivering #1 world-class customer experience is evident through our extensive AI-powered initiative to now. We have modernized over 3,700 sites, effectively doubling our 5G network's top speed and achieving the widest coverage across Thailand. We also maintain our leadership in 5G subscribers reaching 11 million at the end of Q1. This positions us as the preferred provider for tourists and migrants, our leadership in this connectivity. Our proactive AI monitoring system ensure high network reliability, continuously improving customer support and driving an increase in NPS quarter-over-quarter. Our AI-driven omni-channel service seamlessly support our customers whether they are with True or dtac, no matter what service they want to use across our shops. But our pursuit of excellence does not stop there. Let me share with you how our sustainable future-ready network is essential to delivering this world-class customer experience. At the heart of our network operation is the business and network intelligence center so-called BNIC, which continuously monitoring and analyze network performance across Thailand. Utilizing AI for anomaly detection, we can identify and address abnormalities quickly, ensuring high network reliability, especially during peak times like New Year and Chinese New Year, Songkran without major outage. On the sustainability front, nearly half of our network sites are equipped with AI-powered energy saving solution achieving up to 15% energy savings. We are exploring new technology like smart breakers to potentially double the savings, reinforcing our commitment to environmental responsibility while maintaining exceptional service quality. This advancement serves as a strong foundation for our digital growth initiative. Moving on to our second must-win battle as enriching ourselves as the #1 digital growth champion. We have exciting developments for both business and consumer. For businesses, we're delivering almost 50% growth our digital solution revenue through advanced managed services, AI capabilities and pioneering API system that integrate telecom solution into a business application. On the consumer front, we are integrating our Everyday Living Tech with 360-degree insight to deliver an exceptional experience. We're focusing on enhancing the experience for the digital nomad group for -- who travel for leisure while working remotely from anywhere anytime. We are driving Thailand as a top destination for digital nomads in popular tourist cities such as Chiang Mai, Khon Kaen, Ayutthaya, Songkhla in cooperation with the Tourism Authority of Thailand. This effort aims to provide outstanding experience not only to Thai resident but also for the international travelers and migrants and customers both True and dtac. Now let's switch to our third must-win battle, the #1 future-ready performance. Central to this effort is the development of our digital citizens. Our workforce who are not only equipped with digital skills such as AI co-piloting, digital marketing and automation, but also possess deep understanding of data for [ AC ] and are ready to drive future organizations. These digital citizens are the change agent who will move our organization forward in the digital era, leveraging their expertise to innovate, optimize process and deliver unparalleled customer experience. We doubled our digital citizen since the amalgamation and set a target of 5,000 digital citizen by end of 2025. True has [ relayed ] an innovative mindset, we have organized hackathons and leadership developmental camps [indiscernible] by implementing quarterly incentive KPI. By investing in our people and cultivating a future-ready performance. We laid the groundwork for sustainable growth and long-term success. As we continue improving in digital growth and future-ready performance, it's essential to recognize the role of sustainability and responsible AI practice in our journey. Last March, we highlighted how AI underscore many of our strategy initiatives for 2024, and sustainability is no exception. When it comes to climate action and energy, we are not limited to our own operations. We are also encouraging our vendors and suppliers to set climate targets as per the SBTi. We held our first supplier forum to set them on this journey and provide them with the [ free GSG ] data platform for all of 2024. Moving to the social aspect. We use AI in some of our social projects such as the Elephant Smart Early Warning System in Kui Buri National Park, which use cameras and AI to track elephant movement and minimize human-animal conflict. Our LITTLE MONK project and [indiscernible] promote ethics in Thailand future workforce of the digital era, ensuring that the next generation is well prepared for the challenge and opportunity of the digital world, also adding the merit to the country. Governance is becoming an increasingly important topic for sustainability, and the DGSI Index have stated they will begin to look at AI governance in their corporate, social responsibility framework. True Corporation has put in a robust governance framework for our use of AI, including an ethical AI charter with 5 key points. We have an AI Governance Committee to review the charters, implement [ patience ] in parallel to other ethical concerns such as data privacy and data protection. We will continue to engage with stakeholders to keep improving this framework. We will continue to [ less the buy ] on sustainability and maintain #1 position to uplift the quality of life for Thais and transform Thailand into a digital economy. Now I'd like to hand over my presentation to Khun Nakul. So over to you, Khun Nakul.

Thank you so much, Khun Manat. Let me start by giving the financial highlights for the first quarter of '24. As you can see on the screen, the service revenue has improved 6.2% on a year-on-year basis and a 1.5% improvement Q-on-Q. The OpEx, though it's not visible on the screen, has reduced 13.4% on a year-on-year basis and roughly 7% Q-on-Q. As a consequence, the EBITDA has improved 21.3% on a year-on-year basis and almost a 5% improvement this quarter. This is on top of a 5% improvement that we saw in the previous quarter as well and marks the fifth consecutive quarter of growth for True Corporation. As a consequence of this, largely because of the improvement in the operational performance, we are pleased to announce that we report a normalized profit of THB 0.8 billion for the quarter. At the same time, because of a good operational performance and slight improvement in our net debt, the leverage is down to 5x, which is roughly a 0.7x improvement from last year and 0.2x improvement quarter-on-quarter. Now if I go into the details, when we go into the service revenue and the total revenue development, the service revenue has improved 1.5% on a quarter-on-quarter basis, driven by strong business performance across mobile, online and pay TV segments. The service revenue has also increased roughly 6.2% on a year-on-year basis, thanks to our 4 consecutive quarters of growth in service revenue. The product sales, as you can see from the right-hand side has declined 24% Q-on-Q due to seasonality. I'd like to remind you that the iPhone sales are highest in the fourth quarter because of the launch in September of '23, and that's why the seasonality has had an impact. And hence, as a consequence, the total revenue has declined 1.9% on a quarter-on-quarter basis from the lower handset sales. All in all, there is discipline in our performance management, which is leading to continued top line improvement. If I then move on, on a quarter-on-quarter basis, we registered a 0.7% growth in mobile service revenue. If I go from right to the left, the blended ARPU and prepaid ARPU remained flat, while the postpaid ARPU improved THB 2 or roughly 0.5 percentage points quarter-on-quarter. The blended ARPU has improved 2% on a year-on-year basis, with prepaid improving almost 7% while the postpaid ARPU has improved 2% on a year-on-year, a gradual and a steady increase. As far as the subscribers are concerned, 1.5% quarter-on-quarter decline is what you see in the subscribers. In prepaid, it is mainly due to our focus on quality acquisitions. This is something that we have explained in the previous rounds. Postpaid subscribers declined 1.9% quarter-on-quarter for onetime cleanup of nonrevenue generating subs. And as a consequence, the total subscribers on a year-on-year basis, though, have increased 1.2% even after the decline quarter-on-quarter. The mobile service revenue as a consequence has improved 0.7% Q-on-Q and has improved 5.2% on a year-on-year basis. If I go on to the next segment, which is the online or the broadband business for us, the subscribers in Q1 '24 have had a similar impact of a onetime cleanup of nonrevenue generating subscribers. These were done towards the end of the quarter. Normalized ARPU, which is taking into account or taking away the effect of the subscriber cleanup that we did towards the end has improved THB 10 on a quarter-on-quarter basis. And this is coming on account of the reduced discounts that we have started to offer to the customers and also upselling existing customers to higher packages. The online ARPU has increased 9.2% on a year-on-year basis, again, a steady increase that you see every quarter. And as a consequence, the online revenue has improved 2.5% Q-on-Q and 7.9 percentage points on a year-on-year basis. If I move on to the next segment, this is the TV business for us. There is a 23.9% increase in the pay TV revenues from the higher music and entertainment revenue. The subscribers have marginally declined. That's been the similar trend that we see in the previous quarters, and the ARPU has slightly improved. But if you see, the subscription revenues has slightly declined from THB 1.2 billion to THB 1.1 billion. However, total revenues on the pay TV has improved 23.9%, as I mentioned, largely because of the music and entertainment revenues, which are seasonal concerts that happened. I would like to mention that these concerts do have a positive margin on the EBITDA. Then as far as OpEx, something that we are quite proud of because we have been showcasing a quarter-on-quarter improvement on the OpEx, there is a 7% Q-on-Q decline in OpEx from amalgamation-related synergies, efficiency measures amidst lower cost of sales because, of course, the handset sales are lower. The regulatory cost has increased 8.9% Q-on-Q due to higher effective rate of fees to NBTC. The network cost, I would like to mention here, has remained flat quarter-on-quarter despite an increase in the electricity tariff, which was offset by savings on account of the network modernization program, where we continue to improve our network by reducing the number of sites and hence, the cost also reduces as well in the process. The cost of sales declined 21.9% in tandem with the lower seasonality related to the product sales. The SG&A declined 8.9% again on our Q-on-Q, which is benefited by synergies from optimization of commission, from marketing spend optimization and synergies, and also the lower bad debts, which is the effort that we are putting in, in terms of improving our collections, taking learnings from the best of both sides and trying to improve the collections and hence, the bad debts have improved as well. Also, keep in mind the fact that we have focused on quality subs. We have also seen a reduction in the commission expense, which indicates the fact that we are moving towards profitability. Our cost of providing services has also declined 1.2% Q-on-Q, even though the total service revenue has improved on a quarter-on-quarter basis. And as a consequence, the total OpEx declined 13.4%, mainly benefited by the synergies from amalgamation and focus on structural improvement in our efficiency measures. If I move on to the EBITDA, THB 1.1 billion improvement again in EBITDA this quarter, which marks the fifth consecutive quarter of growth, which is primarily led by synergy realization. There is a 4.8% Q-on-Q improvement in EBITDA driven by top line growth and also synergies. Approximately 40% to 50% of Q-on-Q EBITDA improvement is contributed by synergy realization. The EBITDA has improved 21% year-on-year, which is obvious because there is 5 consecutive quarters of growth. And the EBITDA to service revenue has also improved to 57.2% in Q1 on '24. And as you can see from the chart, there is a gradual improvement that you see each quarter. If I move on to the profitability, it gives me immense pleasure to announce that we have showcased a turnaround in the business within 12 months with THB 0.8 billion of normalized net profit in Q1 of '24. There is a THB 1.2 billion improvement in the normalized net profit, which is primarily coming on account of the fact that there is an improvement in operating performance, which is the improvement in the EBITDA that you saw in the previous slide. The net profit in Q1 was negatively impacted by known factors, which is the onetime effect of THB 1.6 billion pertaining to the impairment of redundant assets related to network modernization, something that we had highlighted when we did the write-off in the fourth quarter of '23. And as a consequence, you're aware that the net profit is showing a negative THB 0.8 billion, however, normalized is profit of THB 0.8 billion. We're also aware that Q4 '23 was impacted by the big write-off of THB 10.9 billion and hence, was a loss of THB 11.3 billion. The CapEx in this quarter was reported at THB 3.6 billion. Now if I move on to the net debt profile as at Q1 of '24, as you can see from the left-hand side, there is a THB 17 billion improvement in the net debt from first quarter of '23 until first quarter of '24. The leverage as a consequence of the slight improvement in the net debt and primarily on account of the significant improvement of 21% in the EBITDA has gone down from 5.7x to 5x, which is a 0.7x improvement over the last 1 year. It is worthwhile to mention that if I annualize my fourth quarter EBITDA, assuming the same level of net debt, the leverage will be down to 4.7, which is a 1 turn reduction from the last year. The debt maturity profile you see on the screen on the right-hand side. I would also like to mention that it is publicly available that there is going to be an upcoming debenture issuance with subscription period between May 23 to 24 and 27th of May 2024. My last slide, I would like to explain this in a little bit more detail. These are the 2 operating matrices that we had indicated as far as the guidance for 2024 was concerned. One was service revenue and the other was EBITDA. On the first column, you see the FY '23 service revenue and EBITDA, which is THB 158.7 billion and THB 85.7 billion. The second column you see is Q1 annualized number, and let me explain this. If I annualize my first quarter EBITDA and exclude the impact of onetime revenues like music and entertainment, which is the concert that we had this quarter, and eliminate that from the revenue as well as from the EBITDA, we are going to land act, for indicative purposes only, THB 163.5 billion on the revenues and THB 93.9 billion on the EBITDA, which is a 3% and a 10% growth, respectively. If I then compare it with the guidance that we have given for '24, the guidance was 3% to 4% on revenue and 9% to 11% on the EBITDA, so we are on track to achieving the guidance for the year '24. With that, I end my presentation and pass it on to Khun Naureen, who will entertain the questions from you. Thank you.

Thank you, everyone. We have a fair amount of people waiting to ask questions. Let me jump right into it. [Operator Instructions] We start with Ranjan.

Two quick questions from my side. Firstly, starting off where you ended on the guidance. If you normalize -- your update for EBITDA is already at 10% growth on the first quarter. Why not change the guidance unless you see some risks to further growth in earnings in the coming quarters? So that's the first question. The second is on the dividend side. Now that you've broken even on an underlying earnings basis and you're free cash flow positive, could we expect a dividend payment for FY '24 onwards?

Thank you, Ranjan. Khun Nakul, I believe both questions are for you.

Yes. Thank you so much, Ranjan. Nice to hear from you. Yes, the slide was quite clear that we are on course to meet the guidance that we had for '24. To be very honest, we would like to see the next quarter as it unfolds. And if we continue the progress that we have seen and the one that we have spoken about in the previous quarters, where we aim for a Q-on-Q improvement in our operating performance, we will consider revising the guidance in the next quarter. But things are looking good because we are hitting 5 consecutive quarters of growth on the EBITDA. Then the question on the dividend. As we have explained earlier, the dividend policy is at least 50% of net profit of separate financial statements of True Corporation subject to availability of cash flows. Even though True Corp, on a stand-alone basis, still has positive results with a high leverage, we've maintained that we would like to see profitability at a consol level, something that you mentioned as well. As mentioned in our guidance, True is expected to be actually profitable on a normalized basis for '24. We've already reached that in the first quarter. And any decision on the dividend is going to be taken, which is going to be subject to the approval of the Board once we finalize the full year of 2024. So we'll keep you posted on how it unfolds.

Okay. Then we move -- sorry, Ranjan, I'm not sure if you're asking anything. Okay. Okay. That's good. Then we move on to Wasu.

Congratulations on the outstanding profit in this quarter. So I have quite a few questions, 6 questions in total. The first one is quite simple. What would be the amount for issuance in May this year? That's the first question. The second question is about the mobile revenue. So the revenue grew by 0.7% Q-on-Q. How did you grow the mobile revenue Q-on-Q when the ARPU is flat and the number of subscribers is down? So that's the second question. The third question, that is also related to the subscriber trend. Did the subscriber decline time have anything to do with the NBTC forcing Thai people to register their sim cards if they have more than 5 sim cards? The next question is about the SG&A trend going forward. Can True's SG&A drop further now that the SG&A level is on par with Advance's SG&A in terms of the [ bagged ] amount already? And the next question is about the network side modernization. So in the fourth quarter, I believe you eliminated like 2,500 towers, but in the first quarter, the numbers go down to 1,200 towers. So what caused the slowdown in the tower elimination in the first quarter? And next question is about handset margin. Your competitor, AIS, mentioned that in the first quarter their handset margin improved significantly year-on-year and Q-on-Q, thanks to the government subsidy it received. So with that government subsidy, they did not have to offer a lot of handset subsidies [ by themselves ]. So why did not you benefit from the same tax scheme by the government? And finally, why was the CapEx so low in the first quarter? That's all questions.

All right. Okay. Thank you. Let me ask Khun Nakul to start with some of the questions. We will just mix them up a little bit. Okay. Maybe we start with the bond.

Yes. Khun Wasu, thank you much for the questions. Seven questions in all, right? So let me take some, and then I'll pass it on to Khun Sharad. Issuance of bonds in May, I think that was your first question. We have not yet announced the amount of bonds that will be issued in the month of May, but the dates have already been mentioned. But what we have indicated is the debt maturity profile, which indicates that roughly THB 51.7 billion of bonds need to be refinanced -- or sorry, need to be -- are actually maturing in the remaining part of 2024. What we have done in this quarter is we actually got an approval by the Board only recently that we've got an approval for a Japanese yen loan of roughly USD 700 million, which is going to be drawn down sometime in this quarter. So that's actually available with us as well. But the extent of the bond issuance has not been disclosed as yet. Please wait for us as we will announce this further soon. Then your next question on the mobile revenue growth of 0.7% when the ARPU and this ARPU is flat and the subscribers are down. There is a little bit of nuance in this. As I mentioned, the reason why the subscribers are down on the postpaid and the prepaid side, postpaid, as I mentioned, was some onetime cleanup, which happened towards the end of the quarter. So it wasn't like there, throughout the quarter, it happened actually right towards the end. And also our intervention that we had taken with respect to focusing on quality acquisitions, we started this pivot to happen sometime in March. So that's why even though the end subscribers are showing a reduction, but the reduction happened towards the end. Also, if you see the ARPU, and I think the ARPU side is a bit interesting, the prepaid ARPU is flat at THB 109. But keep in mind, there is a 1 day less in this quarter, which means that there is a 1.1% improvement already in the ARPU. And as far as the postpaid ARPU is concerned, there is a 0.5% improvement of THB 2. So there is a quarter-on-quarter underlying basis, of course, improvement in postpaid and even though prepaid is flat, but we know, based on [ equated ] days, it is actually growing. But the blended is because of the mix of the subscribers. That's why it shows a flat number. So if you keep all of these factors in mind, then you will lead to a 0.7% growth in the mobile service revenue. Then on the subscribers, I'll pass it on to Khun Sharad a bit later, but let me take the fourth one on the SG&A. You were mentioning that it has dropped further. Yes, it has, and it continues to be a good story for us. You're also mentioning that this is comparable with AIS. I think we need to take this with a pinch of salt because I cannot definitely confirm that the way both operators classify some of the heads of expenditure or even the structure of operations of the 2 companies are so similar that you can just do a line-by-line comparison and say whether it's the same or not. The same will go for network cost as well. So keeping that in mind, I would say that we have done well so far, I mean, THB 8.2 billion reduced to about THB 5.9 billion. This is year-on-year reduction. And we'll continue to work on improving our different heads of expenditures, including SG&A as well as we aim to deliver the guidance that we have for the year. We do not give a specific guidance on each of the heads, but please be rest assured that there should be a gradual reduction in all of the expenditure line items that you see, barring for seasonality here and there. I think the next one was -- no. The next one is the network modernization. We'll -- again, I'll pass it on to Khun Sharad to answer. But on the AIS handset margin, I think you're comparing the handset margin between us and AIS. I think we did explain in the previous quarter that the accounting of both companies as far as the handset revenues and the handset cost is a bit different. And hence, we cannot compare the AIS handset margin with True handset margin. I mean to be very transparent to you, even dtac and True had different accounting ways or different ways in which the handset revenues and handset costs were accounted for. So you cannot compare with the margin of the 2 companies and say whether 1 is higher or 1 is lower. What I can confirm to you, that the subsidies that are there on the handset that are being sold to the market are almost exactly the same, barring tactical offers that both operators keep on giving from one time to the other. So the subsidies are actually almost the same that's there in the market. So hence, the handset margin should not be different between the 2 operators. So it's just an accounting difference that's actually there. Your last question is on the CapEx being low for this quarter. Yes, it's THB 3.6 billion, but also, Khun Wasu, keep in mind that fourth quarter CapEx was THB 12.6 billion. So obviously, we did a good amount of investments towards the end of fourth quarter. As you remember, we got an approval of the network modernization program from the Board towards the end of second quarter. We started to roll out towards the end of the third quarter last year. And hence, there was a bulk that was actually purchased in the fourth quarter. So we were busy rolling out from what we had actually purchased in the fourth quarter of last year. So that's why the CapEx number looks small. I confirm to you that the CapEx guidance for the full year of THB 30 billion remains intact, which includes the integration spends as well. So with this, I pass it on to Khun Sharad to take the 2 questions, please. Question number three and question number five.

First one is subscriber decline, and the other one is network modernization.

Sure. Thank you, Khun Nakul, and thank you, Wasu, for really appreciating our good efforts. That's certainly motivating for the team. Coming back to your question about subscriber decline. So as Khun Nakul explained, we have been focusing on quality acquisitions, and that is the prime reason. At the same time, we are compliant on the NBTC regulation on prepaid ratification and we are following the course. We have been, I think, majorly done with it, but this will go on as we move forward in subsequent months in order to follow the regulation. We have been even also making the robust ratification process, simplifying it, so then making it easy for customers to smoothen the journey. Coming to your question number five, which is about slowdown on network modernization, I think let us reiterate that we have prioritized also smart city project alongside of single grid. And having said that, we have, of course, a bit of a delay in overall program, but we are covering up in quarter 2. So hopefully, we will be able to meet up to the targets we have set for single grid. And just to remind all of us that this project is so important for us in terms of meeting the expectation of our customer in terms of delivering superior quality experience. At the same time, synergies are also linked with that. So we have an eye on both of them. Hopefully, we'll be able to cover up most of it in quarter 2. Thank you.

Thank you, Khun Sharad. Thank you, Khun Nakul. We move on next to Piyush.

Yes. Congratulations to the management team. A few questions. Firstly, on mobile ARPU, Nakul, you have explained the subscriber were taken out in the month of March. So can you tell us what is the exit March month ARPU? And how should we think about mobile ARPUs going forward? Any levers or any steps which you have taken to improve so far in the first quarter, which should reflect in second quarter? Secondly, on broadband, what is leading to subscriber base decline in first quarter? And when should we start seeing subscriber base stabilizing in the broadband segment? And lastly, the minimum wage hike, which is being proposed to be implemented from October, I know it's still not implemented, and it has to pass through. But if it is implemented, from a cost perspective, what could be the impact on the company? And what are the potential benefits on the revenue side because that would lead to more income in the hands of consumers?

Thank you, Piyush. So I think I'll pass on all 3 to you, Nakul.

Okay. Thanks for the question, Piyush, and thanks for appreciating the performance. A lot of hard work has been happening behind the scenes. The blended ARPU is flat, right? But as we've explained, the postpaid ARPU has improved 0.5%, which is better than the competition. And then at the same time, the prepaid ARPU is, on a reported basis, is flat. But like I mentioned, if I normalize for the number of days, it has improved 1.1%. Q1 is a seasonally low quarter, I mean, seasonally low in the sense that there are lesser number of days, I mean, 92 in fourth quarter and 91, which, of course, has an impact as far as prepaid business is concerned, but at the same time, we could still see growth in mobile service revenues of 0.7%. I'd like you to remember, Q1 '23 actually showed a decline of 1.6%. So if you just do a year-on-year comparison, when Q1 '23 was a decline of 1.6%, Q1 '24 has improved quarter-on-quarter by 0.7%. If we were to equate the similar number of days, then actually the growth in our mobile revenues would not have been 0.7%. It would have been around 1.1%. As I mentioned, individually, the ARPU has grown. The ARPU rationalization, thus far, as we have mentioned many a times, has been primarily with respect to the new acquisitions, where prepaid, you've seen the market taking a lot of interventions over the last 4, 5 quarters in actually removing the unlimited plans and trying to optimize the data usage -- not the usage but the amount of data that is being offered and so on. Our focus as far as existing customers is concerned is how we can continue to upgrade our customers with premium content, EPL and King of Sports. We are the leaders of content in the market with lifestyle product offerings beyond connectivity solutions such as entertainment; combo packs, which are catering to preferred streaming content from the customers, something like UP2U that is being offered, which allows customers to select lifestyle offers for their own choosing, giving discounts on food outlets and I can go on and on. So we're focusing as far as that aspect is concerned to increase the ARPU. This not only improves the ARPU but also ensures the stickiness. But to your question, what is the exit ARPU for March, we do not break down into the respective quarters. But what we can do confirm to you, that you should definitely see a gradual improvement in the ARPU barring seasonal effects here and there because we are confident on our ability to execute our program in terms of uplifting the ARPU, but it's not going to be a significant increase that you probably have seen in some of the other markets. Then your next question on the broadband subscriber decline. So I did mention very briefly, but similar to the postpaid, the decrease in broadband is also on account of a onetime cleanup of nonrevenue generating subscribers that we've had this quarter. Again, this happened towards the end of the quarter for us, and this is onetime. We do not expect something similar to happen in the subsequent quarter. I do want to mention that if I exclude this onetime decline that has happened, which in case of broadband is roughly, if I'm not mistaken, around 85,000, then we do have a positive net adds on underlying basis in the online business. So we bucked the trend that was there in the previous quarter. This quarter, we have a positive net adds, and we continue to expect the net adds to be -- I mean, to be positive in the subsequent quarters as far as this online business is concerned. And then your last question was on the minimum wage hike.

Maybe we past it on the Khun Sharad.

Yes. Khun Sharad, do you want to take this?

Yes, sure. Thank you. So your question around the impact from minimum wage, what we can say is that our value chain is above minimum wage, and we expect minimal impact to the cost line. However, we expect revenue benefit due to expanding customer wallet for sure. Thank you.

Okay. Piyush, if no follow-up, okay, all right, then we can move on to Khun Pisut.

Congratulations on the good set of results. This is Pisut from Kasikorn Securities. May I have 4 questions? The first one is about your subscriber cleanup. I just want to make sure that the cleanup was completely completed in the first quarter without any spillover to the following quarters. This is my first question. My second question is about your other service revenue that grew a lot on a year-on-year basis from the first quarter last year. Was it any seasonality on that and any specific reasons on that? And will this trend continue in the [ following ] quarter. My third question is about your sustainability of the number like profit? Second quarter and third quarter tend to be a slow season for the domestic consumption in Thailand if I'm not mistaken. Do you think the weaker spending seasons and possible backloaded OpEx and CapEx for the later part of the year would bring you down to the normalized loss making in [ some ] quarter of the year? And my last question is [ recurring ] and upcoming auction. It would be great if you could share your thoughts about the time line of the auctions, especially your 2.3 gigahertz and also the 3.5 gigahertz and a possible change of the cost structure after the spectrum auctions that you can -- you may have. What would be happening if your roaming agreement with NT expire, but the auction could not happen prior to that? That's all for me.

Thank you, Khun Pisut.

Okay. Khun Wasu, thank you so much.

Khun Pisut.

Khun Pisut, sorry. Actually, I expected the first one to ask the question to be Khun Pisut, so I mean, that's why. Sorry. So your first question on the subscriber cleanup, okay. Let me explain this a little bit because this is a little bit -- I'm getting a lot of questions there. So essentially, what has happened is, just to explain why this is not going to happen again, is that certain things or certain connections for internal use of True Corporation and dtac were historically counted for many, many years as external customers, which is something that we've identified recently and which were historically -- yes, we saw historically reported as subscribers. So since we've identified these customers for internal use, we know that we do not count these revenues in our revenues, but we count the subscribers. So that's why these have now been removed from the definition of subscribers for us. And hence, as a consequence, we have taken it out. We do not expect this to have any other impact in the subsequent quarter. This is onetime. This is done and dusted. Then your second one on the other service revenue, which is higher on a year-on-year basis. Yes, it is definitely higher on a year-on-year basis. Besides, what we do on the mobile and the online and the TV, there are certain other revenues on the digital side, which is something that the company continues to focus on. So yes, there are ad hoc seasonalities here and there depending on new products or new customers that we contract, but we do expect the trend that you see roughly THB 0.8 billion to THB 0.9 billion actually carry on from here in the subsequent quarter. So it should not go to the levels of what you've seen previously last year. So there has been a growth and THB 0.8 billion, THB 0.9 billion levels is something that you should see in the future. Your third question on the normalized profit. Yes, we are profitable this quarter on a normalized basis, our endeavor as we have maintained for a few quarters now. We aim to grow quarter-on-quarter on EBITDA. And as long as our aim is to continue to grow EBITDA on a quarter-on-quarter basis, of course, barring extreme seasonality effects, there might be a change in the EBITDA growth trajectory, but we do not expect to go into loss situation. That much I can confirm to you. Then on the auction, Khun Manat, over to you khrap.

Okay. Thank you for the question. About the auction, we have some courtesy discussion with the NBTC. And right now, NBTC is in consideration, and I believe that the time line of the auction will issue and release to operate this year. And I believe that we can see this thing in early Q3.