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

Please join us as we honor the legacy and memories of her Majesty Queen Sirikit, the Queen mother of Thailand. Good morning, everyone. Welcome to True Corporation's earnings disclosure for the third quarter of 2025. My name is Naureen. I'm the Head of Investor Relations. With me today are our Group CEO, Khun Sigve; and our Co-CFO, Khun Nakul. Documents related to our third quarter earnings are available for download on our Investor Relations website.[Operator Instructions] With that, I would now like to hand over to our Group CEO, Khun Sigve.

Good morning to everyone and [Foreign Language] to our Thai colleagues. Thanks for joining us this morning for the Q3 call. Before I go into the quarter, I want to take a recap of what I also have talked to you about in the previous quarters, outlining the key focus areas of our information agenda. First, we want to win the Thai market by leading in customer experience. We'll do that through network modernization that you have heard us talking about several times by utilizing also the rich spectrum that we got in the last auction. We want to do it through a major product simplification, and we want to do it through a customer journey redesign. Secondly, we want to stay focused on what we call customer value management, focusing on the healthy customer base we now have in our core connectivity business, but also moving to relevant products beyond our connectivity portfolio. And we will do this with leveraging our partner ecosystem. And thirdly, we want to transform true to become a flatter, agile organization, powered by AI and automation and with that, build the foundation for an organization driven by innovation and efficiency. I have been in this job now for -- yes, close to 8 months. So let me take also a look back over the first 9 months of this year. We are nearing the end of an integration journey between True and DTAC. And it's important to remind ourselves that we have spent most of the time on that integration journey in the last quarters. Most of the synergy projects are now completed, and we are transitioning ourselves into transformational programs. We have captured substantial cost synergies on this journey. Actually, we are ahead of the original plan that we had when we announced the merger. But we are not done yet, and I can ensure our shareholders that our financial discipline is going to continue. The external environment has been tougher in the last 9 months than what we anticipated. Macroeconomic indicators have worsened, as we all know, more than what we had in our plans when we started the year. The tourist segment is down quite significantly, and the migrant workers have also declined more than what we expected when the year started. And as you know, our market share in those two segments, it's higher than the general market share. So we have been affected more. And in addition to that, we have also faced some unique challenges, including the network outage incident we had in May that impacted customer experience during the second quarter. Given these headwinds, we are taking what I call a prudent approach to our full year guidance. And Nakul will talk more about that in the financial section. However, despite these challenges, our core business fundamentals are now improving. The groundwork we have laid out in the past quarter is starting to show some results. Customer touch points are improving. Churn is reducing. We have also started to see a more active drive of our ARPU through our customer value management project and our organizational focus is sharper. We have already initiated several transformational programs. This is driven by what we call cloud and AI first in everything we do and also a zero-touch operation. This goes now from network modernization to digital-first customer journeys. These are long-term plays, but the direction I'm seeing so far is clear and promising. We, therefore, remain confident in delivering also of our midterm targets, which we are aware of. We will give you more insight into this transformational projects when we are presenting our Q4. Q3 marked a major operational milestone for us. And I'm saying that because of our completion of ASEAN's largest tower integration. This is a significant achievement in our post-merger journey. We now have merged two networks into one, delivering a seamless experience across both True and DTAC legacy networks. We have started to deploy 70 blocks of the 2,300 megahertz spectrum. EBITDA came in at THB 27 billion, reflecting an 8% year-on-year and an 8% quarter-on-quarter improvement. And service revenues reached THB 41.3 billion. We have also -- and that's why I call it a milestone quarter. We have delivered on our dividend commitment with the announcement of a maiden interim dividend of THB 0.19 -- or THB 0.19 per share for the first 9 months of 2025. We also plan to go to the shareholder meeting next year with a full year dividend after we have finished the Q4. This underline our focus on delivering shareholder value even in the midst of the transformation where we are. Overall, I therefore see this quarter we now have behind us, reflecting a turning point. We are moving from integration into transformation while keeping financial discipline. Let me then go a little bit deeper on the network and the modernization of the network. Starting with the middle box of this slide. Pre-amalgamation, True and DTAC had separate footprints. Now under the one network, both brands benefit from a unified infrastructure, a leap from 35,000 sites and 25,000 sites, respectively, now to 43,000 sites combined. This marks a 23% increase to access for True customers and a big 72% increase for our DTAC customers. No other that their customer experience on network is significantly better. The network modernization is also giving us a significant uplift in the 5G performance. We have, as you also can see on this slide, modernized 18,500 sites, which have improved both coverage and quality. 5G speed that our customers are experiencing has been -- has increased 23% and the bandwidth is up 98%. These improvements are not just technical metrics. They translate into a better customer experience, faster downloads, smoother streaming and more stable connectivity. And we see that coming through our NPS score -- network NPS score. Our coverage leadership is not clear. We have 99% of the population coverage nationwide with an even higher coverage in the key economic zones like Bangkok Metropolitan area and the Eastern Economic Corridor. We have also added the 10 extra megahertz we got on the 2,300 megahertz spectrum and further enhancing our 5G capacity speed. This additional spectrum, the 10 megahertz, coupled with our modernization efforts ensures that we are future-ready and capable of handling growing data demands going forward. Going forward, we will position ourselves as the leading 5G provider in Thailand and we will lay the foundation for future innovation into digital services, AI and also beyond connectivity products and services. Reinforcing the leadership that we want to take in what we call beyond connectivity. Because as a part of this strategy, we think there is a room in this market to do more than just revenue from the base connectivity services. In this journey, we are taking learnings from other markets when we are implementing this strategy. We plan to introduce these services in partnership with our partners. So let me then go through two examples, and we will talk more about this also in the next quarter presentation. Starting with cybersecurity. A year ago, we launched True Cybersafe. It's a cyber protection service that is automatically provided to all our customers in all the packages, and we do that for free. We see that is an important part for us to protect our customers. To date, the true CyberSafe have already protected our customers from over 2.2 billion fraudulent leaks. Building on the success we saw when we launched this a year ago, in June, we also introduced a paid cyber service that extends cyber protection from -- to also the customer devices, not only the network. This paid offering has been well received and has been important in driving bundle upsells. While the numbers are still relatively low, we see a potential in growing this further. We now plan to introduce an even more premium cyber product that we will monetize in this quarter. Another example of what we do, it's hyperscaler partnerships. To accelerate our digital cloud and AI readiness, we have started to form strategic alliances with technology partners. And this is different from a buy and sell type of arrangement where we basically are only purchasing cloud consumption. This is a strategic partnership agreement for the years to come. And the first out is with Microsoft. Our core ambition with these strategic partnerships is to become an AI-first organization. The immediate effect of an agreement like we just announced with Microsoft is to reduce cloud costs across our operation. But it's also to significantly expand our capabilities through a joint go-to-market strategy. This means we are expanding both our technical capabilities and our commercial reach, which is essential to secure competitive advantage and the market leadership in the AI area. So with that, I will hand over to Nakul to go through the financials.

Thank you so much, Khun Sigve. Good morning, good afternoon, everybody. Let me walk you through the financial results for Q3 of '25. First, the financial highlights. Firstly, on the service revenue on a reported basis, we record a negative 0.6% year-on-year and a plus 0.5% quarter-on-quarter. However, normalized for the two effects: one, reduction in national roaming revenues from NT as well as the impact of the network incident, the service revenue would be positive 0.5% on a year-on-year basis. Secondly, on the EBITDA, as Khun Sigve has mentioned as well, we registered a strong 8% growth, both on a quarter-on-quarter as well as on a year-on-year basis. We record another quarter of good profits, the third consecutive quarter now on a reported basis, where the profit stands at THB 1.6 billion and the normalized profit, excluding the write-offs that we have recorded in this quarter because of the network incident -- because of the network modernization is THB 4.6 billion, which is growing THB 400 million quarter-on-quarter. As far as the leverage is concerned, we record an improvement in leverage on a year-on-year of 0.2x. However, an increase of 0.2x, which is as expected because of the lease accounting that we've done. I'll explain in a little more detail in a subsequent slide. And last but not the least, as Khun Sigve has already mentioned, the interim dividend, which is THB 6.6 billion at THB 0.19 for 9 months performance of the company at 125% payout ratio with more to come for the fourth quarter to be approved by the shareholders. Then as far as the annual savings that we get on account of the spectrum acquisition. So this is important for you to know because the effect of this is recorded in multiple line items in the P&L. So let me walk you through this. Firstly, as far as the expiry of the spectrum and actually then the purchase of spectrum from the NBTC has resulted in a positive impact on the P&L of THB 5.3 billion. So firstly, as far as the EBITDA is concerned, it benefits THB 7.1 billion -- then the below EBITDA impact, which is the amortization, which is basically what we are paying for the spectrum, THB 26.4 billion amortized over 15 years, that works out to THB 1.8 billion. The net effect of the two is an improvement in the net profit of THB 5.3 billion. Second, with the capitalization of assets which are transferred to DIF and lease back, there is a THB 3 billion improvement on an annualized basis on the EBITDA and a corresponding impact in the amortization as well. The net effect on the P&L is expected to be nil over a period of the life of this lease. And hence, as a consequence, the net impact of these two effects is a positive on EBITDA of THB 10.1 billion and a positive on net profit of THB 5.3 billion. Please note that these numbers are compared with the full year of '24 and are actually an annualized effect of this benefit. What we get in this quarter is a 2-month effect because we got the spectrum effective August 4. Then if I move on to go deeper into the financial performance. Firstly, the service revenue. The service revenue improved year-on-year on a normalized basis, normalized for the onetime incident and the lower domestic roaming revenues. If you can see from the left chart that you see on the screen, it's a negative 0.6% and a plus 0.5% on a year-on-year and quarter-on-quarter basis. Normalized for these two effects, we would have grown 0.5%. Then if you look at the service revenue development over a period of time from Q3 '24 to Q3 '25, if you see the different businesses, the mobile business has registered a decline of THB 400 million, but that's primarily on account of the reduction in the NT roaming revenues, which is roughly about THB 300 million of this effect. Then the online business and the TV business have registered some growth, and I'll explain this in a subsequent slide. As far as the total revenue is concerned, of course, you see on the screen is a decline. But as you can also see, the big decline is coming on account of the network equipment rental revenues, which have declined, as you can see on the screen, which is basically coming on account of the acquisition of spectrum, which you also saw in the previous slide that I had explained to you. The product sales have increased 6% on a Q-on-Q basis with the launch of the iPhone, and this is as per our expectations as well. Then to go deeper into the numbers as far as the mobile service revenue is concerned, as I had mentioned, the year-on-year is impacted by the lower domestic roaming revenues. But if you see the middle chart first, this is the subscriber growth. There is a negative 1.3% quarter-on-quarter and a negative 4.8% year-on-year. The subscribers in Q3, as has been mentioned earlier, were impacted by the churn from the network outage incident and the biometric registration. Why the network outage incident, let me address upfront, has an impact in Q3 is because of the definition of subscribers, which are based on 90-day active. So even if the incident occurred in Q2, the effect of the churn of the subscribers is going to be impacted in Q3. And if you recall, we had already guided this when we did the Q2 presentation. As far as the year-on-year decline is concerned, it's coming on account of a combination of many factors. Number one, the macroeconomic trends are poor. There is lower tourist inflow into the country. And last but not the least, is the focus on acquisition of good quality customers that has resulted in this decline. As a consequence of this, if you see the ARPU has developed quite well. The blended ARPU has improved from THB 219 to THB 220, which is a 1.8% improvement quarter-on-quarter and also a 5.7% improvement on a year-on-year basis. Postpaid has obviously declined, as I mentioned, because of the impact of the network incident. So it has declined to now THB 421. But then at the same time, the prepaid ARPU has registered a good growth of 11.6% year-on-year to THB 130 and a 4.2% on a quarter-on-quarter basis. As a consequence, you see the mobile service revenue is negative 0.4% Q-on-Q and a negative 1.2% year-on-year. And as I had mentioned, normalized for the two effects that I am speaking about, it would be flat on a year-on-year basis. Then I move on to the online business. We've registered a 2.5% growth in online revenues, which is primarily driven by subscribers. If you see the second chart in the middle, the ARPU is more or less flat on a year-on-year basis and slightly declined by THB 2 in this quarter. But at the same time, we've registered 12,000 net adds in Q2 and a 2% growth in subscribers on a year-on-year basis. As a consequence, the revenues have grown 1.2% quarter-on-quarter, which is coming on account of higher contribution from corporate broadband and year-on-year is a growth of 2.5%. The ongoing improvement in subscribers and ARPU are actually resulting in this increase in the revenues that you see on this slide. Then let me move on to the TV business. There is a 3.2% year-on-year growth in Pay TV revenues, which is driven by seasonal concerts, while the subscription revenue, as you have seen in the past, has remained under pressure. If you look at the subscribers, the decline that you see is as expected. This is organic decline that is happening in a linear pay TV business. But if you look at the revenues, there is an increase that you see of 17.7%. That is primarily coming on account of this other line item, which is basically the music and entertainment revenues, which are seasonal in nature. The subscription revenues, as you can see, already factor in the decline that we see on EPL, but that has a corresponding slightly positive impact on the EBITDA because you will see the cost has declined more. Then if I move on to the next slide. Now let me move on to the OpEx. There is a 21.6% decline in OpEx, which is benefited by the acquisition of spectrum and an overall realization of the synergies. The regulatory costs have increased 8.5% due to the full year effect of the rate change pursuant to the expiry of the spectrum, as I had explained to you previously. The network cost has declined 16.3% year-on-year and 14.2% on a quarter-on-quarter basis, benefited by two things. One, of course, is the acquisition of spectrum and the lease accounting that we have done. And the second is because of the network modernization benefits that we have absorbed into the numbers over the last few quarters. The cost of sales have increased 4.4% and 5.4% on a year-on-year and Q-on-Q basis, respectively, in tandem with the product sales. The SG&A has declined 6.2%, benefited by the synergies by slightly increasing 2.8% quarter-on-quarter, primarily on account of slightly higher bad debts. The spectrum rental costs, which should be linked directly to the network rental revenues that you saw on the revenue slide, have actually declined 72.2% on a year-on-year basis and 68% on a Q-on-Q, which is benefited by the acquisition of spectrum and the net effect is actually positive to the EBITDA that you saw on the slide that I shared previously. As a consequence, the total OpEx, excluding depreciation and amortization, has actually declined 17.7% on a Q-on-Q basis. And this is primarily the reason why the EBITDA has improved 8% Q-on-Q as well. Then let me move on to the profitability metrics. Firstly, the EBITDA improvement of 8% on a quarter-on-quarter basis is primarily driven from the acquisition of spectrum. Now we registered an EBITDA of THB 27 billion, which is a THB 7.5 billion improvement since amalgamation. If you remember, Q1 of '23, our EBITDA was THB 19.5 billion, and now with THB 27 billion, there is a THB 7.5 billion increase. As a consequence, the EBITDA margin to service revenue stands at 65.3%, which is a 5.1% improvement from last year and also a 4.5% improvement in this quarter. The EBITDA margin is expected to further improve because Q4 will be 1 month additional impact from those accounting effects that I spoke to you in the beginning of my presentation. Let me move on to the net profit now. Third consecutive quarter of net profit in this quarter, THB 1.6 billion in Q3 with a normalized net profit of THB 4.6 billion. If you see from the left to right, from THB 0.8 billion of reported loss in Q3 of '24, now we are looking at a THB 1.6 billion of profit in this quarter. The breakdown of this is the following. There is a THB 2 billion improvement in the EBITDA that you've seen over this period, as I had mentioned earlier. The depreciation and amortization has increased by THB 700 million, partly coming on account of the effect of the accounting adjustments that I spoke to you about. The finance cost has improved THB 500 million, thanks to the reduction in debt and the reduction in the effective cost of debt, which I will explain in a subsequent slide. And of course, the other items effect, which is the effect of the write-offs that we've done has actually reduced over -- as compared to Q3 of '24 versus Q3 of '25. And as a consequence, we report THB 1.6 billion of profit for this quarter. If you look at the CapEx to sales, we are looking at about 14.3% CapEx to sales for the 9 months of 2025. This is 15% in this particular quarter, CapEx of about THB 6.9 billion -- sorry, THB 6.9 billion, and approximately 30% to 35% of this CapEx is primarily coming on account of the network modernization. Then let me move on to the leverage. We have registered a healthy improvement in the leverage, as you have seen in the past, but let me first focus on the middle part of this presentation, of this slide. The effective interest rate has declined further by 0.1% from Q2 of '25 to Q3 of '25. And on a year-on-year basis, it's improved 0.2%. And that's because our cost of debt has improved and also the fact that the total debt is also going down. That's why the effect you see in the interest expenses. But if you see the leverage, this has gone up by 0.2x on a quarter-on-quarter basis. But if you just go deeper into the numbers, it is the lease liabilities, which has gone up from THB 90 billion to THB 111 billion. That's primarily on account of the accounting effect or capitalization of the assets that were transferred to DIF. The effect of that was THB 25.1 billion in this quarter. So you can do the math as far as what is the net effect of the two. We've also issued some debentures of about THB 14.25 billion at a weighted average cost of 3.1% in Q4 of '25. And that's why you see the effective cost -- effective cost of debt is actually going down quarter-on-quarter and also on a year-on-year basis. Last but not the least, we have refinanced, as you know, THB 126 billion in 2024 and further THB 74 billion already in the 9 months of '25 and only THB 15 billion is actually pending, which is already issued in terms of debentures, as you can see on the screen. Then to round up my presentation, last couple of slides, 9 months '24 performance versus 9 months of '25. If you look at the total revenues, it's a decline of 3.3%, but that's primarily coming on account of the spectrum rental revenues. But if you look at the service revenue, it's negative 0.2% on a year-on-year basis. The total OpEx has declined 11.6%. And as a consequence, the EBITDA has improved 6% for the 9 months of '25 versus 9 months of '24. And the net profit has also improved THB 6.8 billion on a normalized basis during the same period. Then let me end my presentation talking about the interim dividend. As Khun Sigve already mentioned, the Board of Directors have approved an interim dividend of THB 0.19, which works out to THB 6.6 billion for this period. The record date for this dividend is going to be 18th of November '25, and the payout is going to be 3rd of December of 2025. This is 125% payout ratio. As management, we are committed to sustainable and progressive dividends with semiannual payments, interim and final, which means that there is going to be a final dividend based on the fourth quarter results of the company to be paid out next year. We've also taken this opportunity to revise the dividend policy, which is there on the screen, to pay no less than 50% of the net profits on a semiannual basis based on the consolidated financial statements of the company, subject to the legal reserve and also the compliance with the laws and regulations. With this, I hand over to Khun Naureen to take the questions, please. Thank you so much.

Thank you, Khun Sigve and Khun Nakul. Let us move on to the questions on Zoom. [Operator Instructions] Let me first start with Piyush from HSBC.

Firstly, congratulations on completing the network integration exercise and made in dividend. I have two questions. Firstly, on the mobile, could you share some insights on how are the trends in October after the outage incident and now kind of recovery in tourism? Are you seeing customer additions happening? So outlook for the mobile segment, both on customer and ARPU would be helpful. And secondly, on the broadband side or online, your subscriber addition has dropped to 12,000 per quarter from what used to be 25,000, 26,000. So what led to the decline and again, the outlook over there because the gap between your addition versus your peers has kind of widened on the broadband side?

Nakul, can you handle the mobile and then I will do the broadband.

Sure, Sigve. As far as the trends in the mobile business is concerned, of course, as we had mentioned Piyush in the past, we've been impacted by the network incident in Q3 that resulted in the negative subscriber additions of about 600,000. If you remember, we had guided that we will be negative 500,000 for this period. So it's slightly worse than what we had shared earlier. But we do expect to bounce back, and that's on account of a couple of effects. Number one, now we have a significantly better network as what we had in the past. And I think Khun Sigve had shared a very big detail on what has happened on the network modernization and also with the better results on the spectrum. Second, we are building advanced customer value management capabilities that is also going to help us in terms of the revenue growth. As far as trends in the fourth quarter are concerned, we do expect a positive net additions in the subscribers, and we feel that the worst is actually behind us, and that should translate into positive growth on a Q-on-Q basis as far as the total mobile business is concerned. And this is also reflected in the guidance that we have shared for the year, which is actually a 0% to 1% growth, even though we feel that we are going to be on the lower range of the guidance.

Just to add to what Nakul is saying on the mobile side, we know that our network is significantly better, but we also understand that it takes some time to also change the perception of the network. So in the fourth quarter, you can expect us to go out and be much more loud on the network improvements that we have done such that we also can deal with that perception gap that we have to reality. On the broadband side, of course, we are not happy with these numbers at all. But you have to remember that what we prioritized on the network side was the mobile network. We have not prioritized CapEx going to the online network. And the online network, it's an old legacy network where we have a need to do investments. So going into next year, you will see us that using some CapEx into then also fixing the online network. So that's one reason of it. The other reason is that we are not good enough on the entire customer journey on our broadband customers. So we are also reshaping that now going into next year. So what you can expect and it will take some time for us to fix this. I must admit that as it took to fix also the base we have on the mobile side. But going to next year, we think that we will be very competitive in terms of the gross adds, very competitive in terms of the churn on broadband and also on ARPU development going forward. So that's the reason for the online performance in the third quarter.

Okay. Thank you, Piyush. We'd like to move on to Khun Pisut.

First of all, congratulations to your results. I have 2 questions. The first one regarding your mobile revenue. After you completed the network integration and basically, you have the bigger spectrum portfolio than your competitors. But look at your mobile revenue is only flattish in third quarter versus 6% growth year-on-year from your competitors. Just want to hear from you about what's going to happen after you completed what you did and also the -- first of all, October trend in terms of the mobile revenue. And also what's your plan for first fourth quarter and also 2026 that how can you regain your market share of the mobile revenue? That's my first question. My second question is about your dividend. As your dividend policy is a semiannual basis, this means should we expect you to declare the final dividend from the full year financial statement? And also as you pay more than your net profit, I mean, 125% going forward, should we focus on your payout ratio or your nominal dividend per share that you're going to pay in the future? That's 2 questions for me.

Yes. Let me take the first one. Well, it's a good question. But of course, it takes time for us to deal with 2 things that happened in the second -- happened in the first 9 months of the year. One was it's now first that the network experience is actually much better. And we now have, as I said, to go and also build the gap between reality and the perception of the quality of our network. So that's what we're going to do in the fourth quarter. In addition to that, it cost us quite a lot with the network incident, and we got churn out of that, as Nakul also said. And it has cost us also the reduction of the tourists and the migrant workers. So that's why you see the third quarter coming out as it is. Now I see that we are coming back on the revenue growth. And I don't want to give too much guidance into what we have seen from -- in October, but I see that we are bottoming out and coming back on both subscriber growth and revenue growth. So Q4, you can expect us to then come back from kind of bottoming out from what we have seen in the first part of the year. So -- and that's why we keep our full year guidance. Dividend?

Yes. Thank you for the question, Khun Pisut. Yes. So as far as the dividend is concerned, yes, I will confirm that there is going to be an annual dividend or a final dividend that will be paid for the year 2025 based on the fourth quarter results of the company that needs to be approved by the shareholders next year at the AGM. And we stick to the dividend policy, which is semiannual payments going forward. Then we paid above net profit, yes. But this is also an exceptional dividend that we're paying for the first time. This handsome dividend that we have paid is a reflection of the hard work that the company has done over the last 2.5 years since amalgamation and also which is then represented as a reward that we are giving to our equity shareholders who have stuck to us during this period. We reiterate the dividend policy that we have of at least 50% of the net profit on a consolidated basis. But please also keep in mind, while we have taken the reported profits during this period, we also have a big normalization on account of the write-off. So if you exclude the effect of the write-offs, it's actually well within less than the 100%. So yes, that answers your question.

Okay. Thank you, Khun Pisut. We move on to Arthur.

Two questions. Going back to the dividend payout, I'm just wondering how you think about what the appropriate payout level would be? You do have a 50% minimum payment, which seems to be quite low, but you're obviously paying much higher 20%, 25%. What are the factors that you consider in deciding on what actually to pay out? Second question I had is with regard to broadband. I mean there's, of course, a bit of a gap versus AIS on this side. I'm just wondering what needs to be addressed? What are the bottlenecks in this business? And how quickly can you narrow the gaps on this side?

I think I can address your questions. I cannot give you any more guidance on the dividend than what we already did a 50% payout. And we will then discuss with the Board and also with the shareholders when we have the full year result also on what dividend we should pay in the fourth quarter. So -- and that may vary from year-to-year, but the dividend policy is clear. On the broadband, what needs to be fixed is basically 3 things. One, we need to replace some of the legacy network that we now to frequently have outages with. So we are going to invest into that. We are already doing that, trying to do it district by district, such that the network experience, it's similar to what our competitors have. Two, we need also to be more granular in the way we do the sales here, meaning that more granularly going into areas where we see that there are customers that are either underserved or that none of the competitors have a good fiber solution. So we are changing also the way we do our sales organization. And the third part here, it's what I call a little bit to fragmented end-to-end customer journey from when you order to you get an installment, to you get help with the indoor WiFi, but also to deal with replacing some of the boxes or some of the routers that we have in the house. So we are doing all this together. And that we haven't really prioritized that. And I hope you understand that what we have been through the last 2.5 years is a tremendous exercise in itself to focus on the mobile network to get our organization together as one, starting to be more competitive again on the mobile side, and we haven't really prioritized the broadband area. So that's the reason why we are where we are. Going into next year, we will see a gradual improvement. But I don't want to give you any guidance on exactly how that's going to play out quarter-by-quarter. But of course, we want to have -- take our fair share of the market, and we don't see why we shouldn't be able to add similar number of customers as our competitors do going forward.

Thank you, Arthur. Can we please request Wasu.

Khun Naureen, Khun Sigve, Khun Nakul. So the first question from me is about the mobile subscriber trend. So I understand that the fourth quarter is a high season for the Q-on-Q mobile subscriber growth. But if you look beyond the fourth quarter of this year into next year, when do you expect True to start leading subscriber on a sustainable basis? So that's the first question. The second question is about the short-term SG&A outlook in the fourth quarter. I understand that the fourth quarter is a high season for marketing activities. But how much should we expect the SG&A to rise Q-on-Q in the fourth quarter of this year? And I'm asking this question because if we look at last year, SG&A actually dropped Q-on-Q. Those are my questions.

I think, Nakul, you can address those questions.

Sure. Thank you, Khun Wasu. Good to hear from you. As far as the mobile subscriber trend is concerned, I think I already answered this in the beginning. We expect the subscriber growth to happen in fourth quarter for the following reasons. One is a seasonally high quarter for us. Second, we have a better network, even though as Sigve mentioned, the perception is going to take a little bit of time for it to catch up. But at the same time, we have advanced tools on CVM, and we have a better network that we can take advantage of. So we expect the subscriber trend to be positive in fourth quarter. As far as the SG&A outlook is concerned, yes, you are right that Q4 last year, there was a decline quarter-on-quarter, but that was coming on the back of the synergies that we were realizing. And as you saw from an THB 8 billion or THB 8.5 billion, if I remember the number correctly, from Q1 of '23, now we are down to some THB 5.1 billion levels. So it has gradually declined quarter-on-quarter every year over the last 10 -- every quarter over the last 10 quarters. As far as the trends that we expect in Q4, I think the levels that you see right now of THB 5.1 billion, maybe a plus/minus of THB 100 million is what you should see as far as the numbers is concerned. But don't look at the OpEx on a stand-alone line item basis. Look at the guidance that we have given to the capital markets as far as the EBITDA is concerned. We stick to the guidance that we have given that it's 0% to 1% in terms of our service revenue and about 7% to 8% in terms of the EBITDA growth on a quarter-on-quarter -- on a year-on-year basis. So let's look at that, please. Thank you.

Just adding a little bit on the mobile subscriber side. So you have -- if you look back again over the nine -- last month, one, we took a position early on to stop aggressively selling gross adds, which we saw churning out later. And now we have a much more healthy base than we used to have, and that's why you see churn going down and ARPU going up. That, I will say, is mostly over. And unfortunately, the market is reacting to the same thing. Secondly, we had a network incident that hit us on subscriber, but that going to the fourth quarter should not be a problem anymore. But thirdly, also the combination of fewer tourists and fewer migrant workers and more rigid registration -- SIM registration of prepaid customers. All those 3 things also hit the number of subscribers. But again, the result of that is a more healthy customer base that we can grow on going forward. And that's why we are quite confident that, as Nakul says, that into the fourth quarter, you should see the subscriber growth also coming back.

Thank you, Wasu. We move on to Khun [ Jin ].

I have 2 questions. The first one, now you have completed your network modernization process. Can you give us some guidance on the CapEx to sales going forward? Should we expect it to stay allow this area or maybe decline because your 5G already cover 95% of the population. And the second one, you have cut so much cost. But then if you look at the SG&A in the third quarter, is about THB 7.4 billion at [ THB 6.1 billion ]. If you look at the breakdown, in particular, your marketing expense is still much higher in advance. I wonder whether that's come from different accounting or that you still have plenty of room to cut your marketing expense going forward?

Thank you for the question, Khun Jin. Yes, we are closing the network modernization exercise. We've already guided on the CapEx to sales. I mean, first of all, CapEx number for 2025 is expected to be around THB 30 billion. And as we have shared previously, CapEx to sales is gradually expected to go down to 13 to 14 percentage levels by 2027. And this is CapEx as a percentage of sales, which excludes network rental revenues. Secondly, with respect to the SG&A, and I'm just looking at the slide that we have shared with you, the selling and admin expense is actually THB 5.1 billion that we have right now. So I mean, I'm not sure where the THB 7.4 billion is what you have seen. But we have shared in the previous question as well. The SG&A has gone down significantly over the last 10 quarters, and that's thanks to the excellent effort that has been done on the synergy realization, the controls of which we have shared with you previously. Now this is the steady state kind of a level. And to be honest, if we are registering a good growth in revenues, the selling expenses, which are directly linked to the revenue should go up as well. And this is what we are happy with. The per unit expenditure is what we want to see should gradually go down. So a volume-related increase is very much okay with us. The per unit reduction is what we want to see. So that's what I would want to mention about the SG&A cost. Thank you.

Thank you, Khun Jin. Since we have some time, we will circle back. Piyush, would you like to ask a question?

Two follow-ups. Firstly, as your network modernization exercise is completed, do we expect any more one-off asset impairments to happen going forward or that's behind us? Secondly, on the CapEx side, Sigve, as you mentioned, you have to step up CapEx on broadband. Is it part of the outlook which has already been shared? Or do we expect kind of CapEx to increase next year driven by this fiber broadband investment?

Yes. Thanks for the question. The second part, no, this is included in our guiding on CapEx. On the first part, you can address.

Yes. Again, Piyush, thanks for the question. The network modernization is complete in October. But as far as accounting books is concerned, by 30th September, it was not fully recorded in the books. So we expect roughly 200, 300 sites to be recorded as far as the month of October is concerned, and that should have an impact of roughly 1.2 million per site as you have previously seen. Other than that, I think Q4 is a seasonal month where we do an annual impairment exercise across all our assets or across all our investments that are there. So there may be some impairment that can come out of this, but the amount of this is not expected to be in the lines of what you have seen in the past.

Thank you, Piyush. Khun Pisut, please unmute yourself.

Two follow-up questions for me. The first one is on your depreciation and amortization expenses that gone up in third quarter from the second quarter. And you already mentioned about the lease accounting. Could you please make it sure that the trend of the D&A expenses in the following quarters will be pretty much the same in the third quarter or it continue to go up? That is my first question. The second question is about your guidance. As you maintain your guidance unchanged. But if you were to achieve your full year guidance, is it that your fourth quarter service must -- may have to grow about 2% to 6% year-on-year and EBITDA is going to be even higher at 10% to 14%. This is what you have the number -- this number in your mind.

Please, Nakul these are some difficult questions so you need to handle.

Okay Sigve, let me take that. Yes, Khun Pisut, thank you for the questions. The D&A, as you would have seen, it's increased THB 1.3 billion in this quarter. But firstly, THB 0.8 billion of this increase is coming on account of the spectrum amortization and the effect on account of amortization of the DIF cost, which is coming out of EBITDA into the amortization line. The remaining THB 400 million, THB 500 million increase is basically on account of 2 factors. Number one is the depreciation that have recorded on the assets that we have capitalized in Q2 and also in Q3. And the second is on account of the depreciation on some network inventory that was already in use. So that's roughly about THB 300 million. This is a onetime in nature. So this is not expected to be there in the future. And I think the rest you can see what should be the trends of the D&A. What I would also want to mention on this, but it is linked to the second question that you have asked is basically on the guiding. As we have -- as Khun Sigve mentioned, that we are a little bit cautious as far as the fourth quarter because of the multiple things that we have shared already. So even though the guidance is 0% to 1% on the revenues, we are saying that we will be at the lower range of that guidance. So don't look at the broad range here. We are already guiding at the lower range. And based on that, we are confident that we're going to reach those level of numbers that we have already indicated to you. Please also keep in mind that the guidance that we've given on the revenue is excluding the effect of the NT roaming decline. So please normalize that in your numbers. Then on the EBITDA, I think one thing is important for us to be aware of that in Q3, we have 2-month effect of the accounting effects, both on account of spectrum and the other is on account of the capitalization. Q4 will have 1 additional month effect. And that 1 additional month effect is roughly THB 800 million as far as the EBITDA is concerned, and that's how you will do the math and you will be able to see that the EBITDA guidance is pretty much in range, again, on the lower range of the number, na ka.

Thank you, Khun Pisut. We next have Khun Minling from Alpha Absolute.

I have 2 questions. First is about the dividend that you say you're going to pay half by half, the semi dividend payment. But this time, if I calculate back for the first half of the quarter, the payout ratio is about 7% -- to 7%. But if we combine it all together for 9 months, it is 50%. So I would like to confirm that this time you pay -- I mean, based on the first half or based on the 9-month period? And the second question is about the spectrum of 2.1 gigahertz and 3.5 gigahertz. I would like to know that which one you prefer and the 2.1 gigahertz still the backbone of the company's spectrum since 3.5 gigahertz will be on shelf soon...

Nakul, take the dividend question.

Yes. Maybe you should look at the numbers again, Krab Khun Minling. As far as the dividend is concerned, we've looked at the 9 months profit of the company and the payout ratio is 125%. And let me just say once again, the payout ratio is higher because this is the first dividend of the company, and we want to reward the shareholders who've been with us since amalgamation. Please also keep in mind the profit is already impacted by the onetime effects, which is basically an accounting effect and a noncash item. Then -- and we've already given the dividend policy, which is at least 50% going forward na ka. So Khun Sigve, over to you on the second one.

Yes, I'm not 100% sure I understood your question. But I think if you look at our spectrum portfolio now, we are very, very pleased with actually having now spectrum in all the different bands, both low-end, mid-end and also high-end. So I will say that all of those bands, it's the backbone of the company. When 3.5 gigahertz comes out, and we don't know when, of course, we will look at that as well. But currently, we are trying to pull all the spectrum into giving a superior experience, both on 5G that I talked about, but also on 4G. And that's why I'm very happy with a very rich spectrum portfolio we have now. So we are well served with what we have. And that's why I'm saying that when it comes to the 3.5 gigahertz, we will definitely look at that also, and it's very much about the price and the mechanism around that auction when it comes.

Okay. Thank you, Khun Minling. Next, we need to make this the last question, Khun Nuttapop from Thanachart Securities.

Two questions, please. The first one is on the cost side. So let's say, in big picture, since your network modernization has been completed. So apart from the full quarter, full year normalization, something like that, should we expect this kind of cost items are already being normalized and should be more like contained rather than sizably decreasing, let's say, next year or next few years and apart from interest expense that you have room to stay -- and just one minor question. Where actually EPL [ horse ] booked? Because I think in your cost breakdown chart, we cannot see much of a dip or it's already replaced or offset with other new [ horse ]? And second question is on -- I know we don't talk much about market share recently, but since Advanced has reclaimed the #1 market share in mobile, should we expect you to change or accelerate your strategy in growing revenue? Or it will be like you already communicated that it's more like may I call catch-up play after the year that you more focus on monetization and that this will be the time that you try to reap out the benefit of your investment?

Yes. I think you can take the cost, and I can talk about the market share.

Sure. Thank you for the question, Krab. So there are 2 parts to your question, if I understand correctly. Firstly, since the network modernization is complete, are these cost levels normal? The answer is yes, except to the additional 1-month benefit that we'll get on account of the spectrum accounting and the DIF accounting that we've done. So that needs to be factored into the numbers. And then those OpEx levels are going to be steady state for us. So we have realized the synergies, and that's the steady-state numbers. Again, also, if you remember, our management philosophy is to grow EBITDA faster than revenue. And while we have not spoken about '26, '27 numbers as such, we've already given an indication of the EBITDA margin to service revenue, which should reach 67%. And if you go with that philosophy, the OpEx should be managed better as compared to the growth in revenue. So -- and that's going to be the philosophy of our company going forward as well. And this is something we have done very well in the past. On the EPL cost, I think this is booked in the line item other cost of providing service, which has reduced from THB 4.5 billion in Q2 to THB 4.3 billion in Q3. So while EPL cost decline is even more, there are 2 factors that need to be kept in mind. Because of the music and entertainment revenues that we booked in this quarter, roughly THB 400 million, THB 500 million, there is an increase to that effect as well, of course, because to get the music entertainment revenues, you need to spend some cost. So that cost is booked here, even though it is positive for the margin. And the second is some part of the EPL savings have already been invested into further content. And I just want to reiterate what we have said in the past, the impact of losing EPL is not expected to be negative on our bottom line. Thank you, Krab.

Yes. And on the market share, after having been in this industry for a while, I have learned a couple of things that I think is relevant to answer your question. The first thing is that this is a unique market because despite the macroeconomic headwinds, despite the tourists not coming back, this market is actually growing. And when I see the combination of what AIS does and what we do, this is a growing market despite that. There are not -- and that cannot be said about a lot of other markets that we actually have an industry growth based on the connectivity that they are currently providing. That is a big, big plus. And that should not be destroyed. Which means that I am not going to allow the company to aggressively change to take market share. Why should we do that? That will just take down that growth, the industry growth. But of course, we don't want to lose market share either. So going forward, we want to make sure that we are a responsible player in this market where we are growing the industry as such, but we are also growing our own revenues at the same time. So that is the strategy. The second thing is that you can -- and we will talk more about that when we have our Q4. You can think about us having an accelerating growth strategy. What do I mean by that? Because accelerating growth is both on the top line, it's on the EBITDA, but it's also on the net profit, which means that it's not only about growing subscribers and growing revenues. It's also to continue to take down your costs, including the investment that you have. And the accelerated growth strategy we have is actually that our plan is to grow all 3 lines, if you can say that. And we think that in this market, there is also a quite significant cost reduction opportunity going forward, not least due to new technology being deployed. So that is what we are currently focusing on, and that is what we are going to focus also in the year and the years to come.

Thank you, Khun Nuttapop, and thank you, Khun Sigve and Khun Nakul. And for everyone who joined us today, we will end our call now. In case we have not answered any of your questions, please reach out to me, and we will get back to you as soon as possible. Thank you.