Good morning, ladies and gentlemen. Welcome to XL Axiata's Earnings Call for the First Half of 2021 Financial Year ended 30th June. My name is Ajay, and I will be your coordinator today. During the presentation, all participants are on listen-only mode. Instructions will be given on how to register your question when we get to the question- and- answer session. As a reminder, this conference is being recorded for replay purposes. Now, we would like to turn the conference over to our host, Mr. Indar. Please proceed, sir. Thank you, Ajay. Good morning, everyone, and welcome to the call today. Firstly, just a small housekeeping matter. We have prepared a backup Microsoft Teams link, which we sent out for this call today. That link is in listen-only mode in addition to the main conference line. If you are using both the lines, please mute the MS Team link to avoid any audio issues. With me on the call today are Ibu Dian, our Chief Executive Officer, Pak Budi, our Chief Financial Officer, Pak David, our Chief Commercial Officer for Consumer, and Pak Abhijit, our Chief Commercial Officer for Enterprise and Home. Now, Ibu Dian will share the highlights for the first half of 2021, which will then be followed by the Q&A session. I will now hand the call over to Ibu Dian. Thank you, Indar, and good morning to everyone. We are happy to report a strong set of second quarter numbers despite the ongoing impacts of the COVID-19 pandemic and the weak Indonesia economy. This is due to the improving market environment, our right product strategy, seasonally strong quarter period, and also because of our network quality improvement. As a result of the consistent execution and implementation of our operational excellence strategy, we are on track to achieve our vision of becoming the number one converged operator in Indonesia. This quarter, we are happy to report a strong rebound in revenue growth, with our revenue growing 8% quarter-on-quarter in the second quarter, driven coupled with rising EBITDA as well, by 8% quarter-on-quarter due to cost efficiencies. Our net profits continue to rise as well, increasing by 23% quarter-on-quarter in the second quarter to IDR 395 billion. However, the situation on the ground has worsened drastically in the past month, with the latest unprecedented spike in COVID-19 cases resulting in lockdowns across Java and Bali. As a result, economic activity has been severely affected, with unemployment going up, which will result in incomes and consumer spending power being impacted. This current trend means there might be an impact to the industry which is worse than our initial prediction of a recovery in the second half. On a more positive note, COVID-19 has accelerated our transformation agenda for our long-term goal of becoming a fully digitalized operator. This is through a faster digitization of our business processes from the front end through distribution and our internal processes. This will create long-term benefits in the form of business and cost efficiencies. We also continue to execute on our strategy with a strong focus and on giving our customers what they want. Through our customer intimacy strategy, we are focused on giving our customers the best product and customer experience in the market and not just offering them the lowest prices. We also continue to develop our analytics capabilities, which enables us to successfully upsell our customers to better product promotions and always ensuring we deliver the right product for the right customer. Following the success of our Paket Akrab, being the first offer for families where you can share quota with your family members, we have further expanded on this with the recent launch of XL SATU Fiber. XL SATU Fiber is the first truly converged offering in the market, with a quota on both mobile and fixed, putting us further along our path of achieving our vision to become a truly converged operator. Although it is still in the early stages, we are seeing good traction from the market for this converged product, indicating strong demand for a product of this type in the market, especially in the current work and school from home situation. Positively, our investment in ex-Java continues to do well for us, and growth continues to be well ahead of Java growth rate, increasing its contribution to our revenue to 30% in second quarter 2021. Our investments that we have made, they are delivering returns and payback in line with what we had initially planned. We will continue to invest in ex-Java guided by our operational excellence principle and strategy and ensure that we can continue to see growth and deliver returns for our stakeholders. Our network roll out and upgrade continues to be on track, and thus, we continue to roll out our network on schedule with our BTS count now above 156,000, with 40% in 458 cities across Indonesia, with more than 65,000 4G BTS. The key now is that infrastructure deployment needs to be modified. What used to be thought as a temporary trend, such as work from home and school from home, is now becoming a more permanent part of living and working. Therefore, there is a need to invest in our network to ensure a high level of service is available for those both in and outside major cities. We have, therefore, started putting in more investment in these areas in improving the network quality that will support the business growth. This is in addition to modernizing both our active and transport networks as well as revamping and upgrading our IT systems. Our balance sheet remains strong with net debt to EBITDA of below 1x. We have no USD debt, and we have also secured committed facilities with the banks that we can tap anytime if we need additional funding. Last Friday, we announced that along with Axiata, we have entered into a non-binding term sheet with the major shareholders of Link Net, with a view to acquire a 66.03% stake in the company. At this point, we have not made any binding offer, and the transaction is still subject to due diligence and negotiation between the parties. If all goes well, we hope to enter into a sale and purchase agreement in around four weeks' time. This is the next step in our strategy and vision to become the number one corporate operator in Indonesia. We are well on track to executing that vision. We will make further announcements on this and when necessary. We would like to reiterate our guidance for the year. In 2021, we are guiding for revenue growth to be in line with market, EBITDA margins in the low 50%, and CapEx to be around IDR 7 trillion for the year. However, we expect our CapEx to be on the higher end of the IDR 7 trillion number due to the network investment we are making. Thank you. Let us proceed to the Q&A session. Thank you, Dian Siswarini. To ask a question, please press star one. To cancel, please press star. Please kindly but strictly limit your questions to only two and to allow other participants to raise questions. Should you need to ask more questions, you can go back to the queue by pressing star one again. We shall end the conference sharp 11:30 A.M. Jakarta time. Ajay, can we have the first question? We have our first question. This is the first question, comes from the line of Krishna from Jefferies. Hi. I didn't get you in. Yes, Krishna, go ahead. All right. Thanks for the opportunity. Just two questions for me, please. Number one, would you mind giving some update on XL Home and XL Fiber, especially how many homes passed added in second quarter, and also how many residential fixed broadband subs at XL added that month? What will be the targets for 2021 or perhaps for 2022 as well? Second question is actually on mobile product distribution. How could we impact from a recent mobility restriction? How different is the impact to XL this time versus the restriction back in second quarter 2020? Compare these challenges. If you just to take another one, when we look back at the cellular revenue growth recovery in second quarter 2021, any sense on how much of that growth coming from digital channels versus traditional channels? I guess I'm just trying to get some sense of customer behavior shift post-COVID-19 at XL. Thank you. Yeah. Thank you, Krishna. This is Abhijit. I'll take your first question, guidance on XL Home and Fiber. Our fixed broadband business, it continues to do well in the first half. As all of us know, this is driven by a strong demand for home internet services overall. We have now reached more than 580,000 homes passed. What we are witnessing is a very healthy penetration rate of 30%, which is an average penetration rate across our whole footprint. In particular, what we are witnessing is a strong demand ex-Java for this. Our ARPU remains healthy with this penetration rate, and this is north of IDR 250,000. We have recently launched, as our CEO highlighted, our first convergence product, XL SATU, wherein we approach homes with a convergence fixed and mobile proposition. This is the first step in our journey to become a fully convergence operator, offering bundling of fixed and mobile and driving conversions. I think your second convergence question was on mobile. I'll hand it over to David. Hi, Krishna. Answering your second question around the distribution challenges due to the lockdown, right? To the PSBB. It's true that there is a PSBB that we all know, and that has some impact in the traditional distribution. Some of the retail outlets might be closed, especially in certain areas. You know that the lockdown has not been homogeneous in whole Indonesia, so it has been more localized in certain areas like Jakarta, for example, and that we can see. Now, as you were saying, one of the things that we are seeing is that our digital channels are growing very healthily. I can tell you that it's double-digit growth from quarter-on-quarter. Most importantly, that's the user growth. Most importantly, the revenue that we receive from those digital channels is growing even faster than the adoption of the customers. Which means that the customers are coming to our digital channels, but they are moving more of the share of the wallet. We are getting the better customers, and part of the share of the wallet is also moving to digital. This is the trend that we are seeing. It is accelerated because of these lockdowns, et cetera. Yes, it is. It is a trend that it is already there, and it's quite consistent in the last few months. I don't know if that answered your question. Yeah. Would you be able to share how much of the revenues right now coming from digital channels versus traditional channels, actually, in comparison to pre-COVID-19 time? I cannot give you the exact split as of now. What I can tell you is that the growth in the digital channels, the revenue growth in the digital channels is more than double. It's double digits quarter-on-quarter. Absolutely. Thank you. Very helpful. Thank you. Thank you. We have our next question from the line of Arthur Pineda from Citi. Please go ahead. Hi. Thanks for the opportunity. Just a few questions, please. Firstly, on the CapEx side, I know you've maintained it at around IDR 7 trillion. Are you able to split out between fixed and mobile investments? I'm just wondering how that is trending. Just going back to the fixed line comments. Sorry if I missed it. You mentioned you have around 580,000 homes passed. What is your target or ambition for this into the next year? Give me a second. Okay. Let me start by addressing the second question, Arthur. Our target is to be the leading number one converged operator in Indonesia. To achieve that target, we launched our business two years ago, as you know, the fixed footprint, and we have a healthy footprint of around 580,000 homes passed. As you know, we have announced the first step of the Link Net transaction. We will progress according to that, and then we'll see where we reach and establish an ambition in the next few months. Yeah. Arthur, on the first question on related to CapEx, the split there. First of all, I give a glimpse on why we still call it IDR 7 trillion right now. Right now, we're seeing the traffic pattern in the last one year, post-pandemic. People going for work from home and less mobile right now. We're seeing that as a new normal. Then we start looking at invest more to strengthening our network, especially on the housing area in Jabodetabek and major suburb. Then we're also modernizing our network and also increasing our fiber footprint. As you know, as the data continue growing, then fiber footprint needs to become more and more a strategic investment that need to be done. Right. With that, with those situation, we continue relooking at our CapEx guidance. IDR 7 trillion is the number as of now, but we continue looking at this CapEx guidance. That's the baseline, yeah. On the fixed format or on the mixed format, it goes to fiber or how much goes to mobile. Currently, with the majority still goes to mobile because that's where the structure right now because of the demand. Right? Again, we're still looking at this CapEx guidance, and soon we'll say more. Hope that addressed your question, Arthur. Yes, sir. Thank you very much. Yeah. Thank you. We have our next question from the line of Foong Choong Chen from CGS-CIMB. Please go ahead. I had all from the two from the three on the mark next. That's it. Thank you. Foong, your line is not very clear, Foong. No, we can't hear you. Can you hear me? No, it's cutting in and out, Foong Chee Ting. Maybe we'll go to the next question first, and then we'll try and address yours. Come back in. Okay. We can take the question. Sure. Okay. Operator, can we go to the next question? Yes, sure. The next question comes from the line of Rita from J.P. Morgan. Please go ahead. Hi. Thanks for the call. My question is regarding the potential investment in Link. Can you share on how do you plan to fund the acquisition of Link? Also share the strategic rationale behind the acquisition. Also if you can share some color on the fixed network that XL has. Thank you. Rita, thank you. This is Abhijit. Let me address the strategic rationale first, and then I'll hand it over to Budi for the funding question. As we mentioned, our intent is to become the number one converged operator in Indonesia. We saw this vision about three years ago or so. As a first step of that, we decided to launch our own fiber business, which was an organic deployment, because we wanted to test the demand in the market and our ability and capability to scale the business. As I shared a few minutes ago, we have achieved a significant scale in our own fiber business. I shared the figures as well. Now the second step of this journey is to scale it even more, in order to drive convergence and become the number one convergence operator. As such, Link Net is considered to be a good company to acquire to help us scale and drive the strategy further. This is the strategic rationale behind acquiring Link Net. I'll pass over to Budi for the funding question. So, Rita, in terms of how we're going to fund the transaction at this stage, we're still evaluating all funding options. Along with Axiata, as you know, we're always trying to get the most optimum option that we could get in any front. Operational excellence in our DNA. We always try to squeeze anything possible with the optimum option available. You can name it, a rights issue, a bank loan, bonds, local, international, Sukuk, all we're exploring. We're looking at the most optimum. Soon we'll share more detail on that one. That's the status as of now, Rita. Okay? Yep, thank you. Thanks a lot. Yeah. Operator, can we have the next question, please? We have Yeah, the next question comes from the line of Sachin Mittal from DBS. Please go ahead. Yeah. I have two questions. Could you share with us the latest fixed broadband penetration in Indonesia, the latest numbers that you have with you? Secondly, the third question is, if we notice in most countries, fixed broadband ARPU is two to 3x, whether increasing of the mobile ARPU. Perhaps including the PPV components inside it. The difference is very high, seven to 8x. We are talking of more than IDR 20 kind of ARPU for the fixed broadband side. Could you throw some light, do you expect this overall fixed broadband ARPU to come down? Given that, why are the people willing to pay such a high premium for fixed broadband? Is it that mobile quality is bad or that the fixed broadband is very good? The difference seems to be simply too huge in Indonesia. Yeah in terms of the ARPU between mobile and fixed broadband. Could you paint some color here? What are your views on how the ARPUs are going to behave, given that penetration will rise for fixed broadband? Thank you. Thank you, Sachin. This is Abhijit. I'll take both the questions. Yes, Indonesia, unfortunately or fortunately, is among the emerging markets with a very low fixed broadband penetration. Right now it is hovering in the low double-digit teen figures, so around 10%-12%. I'm talking about the overall broadband penetration in Indonesia. Structurally, if you look at the market, there have been two major players in Indonesia. The first is IndiHome, Telkom group, and the second one is Link Net. The rest of the market is pretty fragmented, with a lot of players having very small market shares. The first is a low broadband penetration, which means there is a huge pent-up demand, which has been enhanced by the current COVID-19 situation. Secondly, only two major players in the market. If you also look at the geography of the country, it is extremely complex. It is not necessary that competitors compete here. As such, the players in the market have not felt the need to have a price-based competition. Hence what you see is price points are still high and the resulting ARPUs of the players are still high. Structurally, we still have the view that this is going to continue. The basis of competition in the market is still predicated upon quality of service, speed, content offerings, providing an overall good customer experience. The market hasn't matured to a level where there is intense competition and the overall penetration has crossed 40%, which is when typically you start seeing the basis of competition shift to price. We don't see a very high degree of ARPU decline or a price-based competition in the market. Abhijit, just a follow-up question because the question is, we are talking of an annual spending of almost $300 for the fixed broadband. You are looking at the fixed broadband ARPU. There is a question of affordability. Let us compare to even Thailand, right? Thailand has higher GDP per capita, but their broadband is almost 60%-70% lower than fixed broadband. Question is not about price competition, the question is affordability factor. Yeah. Does the affordability hurt the pent-up demand? That's the question, Abhijit. Yeah. When we talk about ARPU, one thing we need to understand is mobile and fixed are inherently and fundamentally two different businesses, right? If you look at the fixed business as a nationwide business, then perhaps that's not the right lens to look at it. It is a very localized business, and the nature of consumer demand and affordability differs geography to geography. Yes, you are right, an ARPU of IDR 20 approximately a month is still in the higher range. It's almost similar to some of the mature markets. At the same time, even in that demographic, there is a lot of pent-up demand. As I was saying, it's roughly 10%-12% penetration in the market. I think there's still some way to go before we start going out of that demographic, out of that geography and into other geography where the question of affordability starts coming into play. Got it. Very clear. Thank you, Abhijit. Thank you. Thank you. We have our next question from the line of Niko from BRI Danareksa Sekuritas. Please go ahead. Thank you very much. Congratulations for the good result in second quarter. My question is on the marketing expenses and overall for the EBITDA margin. EBITDA margin, you suggested would be low 50s for the year. Currently it's at 50%. My question is, in relation to your comment that marketing expense have increased year-over-year due to expanding distribution footprint. It appears that the marketing cost will remain high. Where Q1 and Q2 has been higher. Is this the trend moving forward? Do you see cost savings made in other OpEx lines? That's question number one. Number two, I missed in the introduction from Bu Dian. Was it IDR 8 trillion CapEx in 2022? What is driving the increase in that number? Thank you. Let me start with the first question. You are right. Our marketing and sales cost increased as a% of the revenue. That's a fact. There are different factors that have played in this. As you mentioned, we have mentioned in this, one of it is that we are expanding our footprint and digitalizing our footprint. That is part of the increase of the cost. In the second quarter, of course, you always have the Lebaran and seasonality that also brings it up. We have had also, in the last few months, a government school program that has also sucked a little bit of the marketing and sales expenses. Even a fourth thing that, as you know, we are now launching new products and new services like convergence, which is also a new line of expense. I think those are the reasons why the marketing and expenses has increased in this first half. We expect it to remain at the numbers that we are seeing at around 8% to 9%, most certainly in the coming months. Yeah. Niko, just to add on the whole structure of the OpEx margin impact on the margin. David explained about why we spend in marketing and sales in Q2 in the figures. Overall, as you can see, the figure, we managed to ensure that our OpEx are still in the right level. Year-on-year, our operating expense are lower by 2%. How we do it? Because we continue pushing our operational excellence strategy, where we make sure every single rupiah that we spend giving the most optimum return to the company. We continue looking at that daily even to make sure that every time we spend something, it give us more. How are we going to make sure we go with that? There are a couple of cost saving opportunity continue we're looking at that are giving us good traction to fund other activity like this marketing spending that we did. We have a few area, biggest one, as we explained before, cost saving coming more on the tower lease renewal, where we have around 30% sites coming up for renewal over the next two years. We're able to secure IDR 10 million rental cost tower per month from all tower provider. That give us a big lift to relocate the expense to other area that give us more faster return, like the marketing and selling expense. Those things that we're doing to ensure that we're still hitting the same margin level that we're aiming, which is low 50% level. Hope that address your questions, Niko. You also have questions on CapEx, right? Yes. The second question. Yeah. The second question is on CapEx 2022. For now, we cannot comment on what we're going to do in 2022 because probably nearer the term, we can talk more, Niko. Your question was on CapEx 2022, right? Yeah. Okay. Thank you. Yes. I think I heard Budi mentioning about IDR 8 trillion CapEx. Is that, or I misheard? Yeah. I think That's No. For 2021. Yeah. Actually, on any form of my speech, I was saying that our CapEx for this year will be on the high end of IDR 7 trillion. That was because, as also mentioned previously by Budi, we see that after now, more than 18 months entering the pandemic, we see that the new normal will require us to do some network investment modification. The trend that we saw that it was a temporary, working from home or school from home now become more permanent. We see that the traffic generated from the housing areas is now much higher compared to the business district. We would need additional investment this year, which will be higher than IDR 7 trillion or probably nearing IDR 8 trillion, because we will enhance the internet experience in those housing areas. Is that answering your question? Thank you, Budi. Okay. Thank you. Yes. Great. Thank you. Thank you. We have our next question from the line of Chen Foong from CGS-CIMB Securities. Please Please go ahead. Yeah. Thank you. I think No, Foong. Your line is too bad. It's very choppy. Can you hear me? It's cutting in and out, Foong. Is it possible for you to type the question maybe on the Microsoft Teams link? Clear, yeah? Yeah, it's still unclear. I will. I think it. Okay. I'll type my question now. Thank you. Thank you. Operator, can we move to the next question, please? Definitely, sir. We have our next question from the line of Jim Lim from RHB Investment. Please go ahead. Jim, your line is open. You can ask your question. Hi, can you hear me? Yes, Jim. Can you hear me? Yes, sir. Okay. First question is, what drove the quarter-on-quarter prepaid ARPU growth? Second question is, considering the geographical challenges in rolling out fiber in Indonesia, when Indonesia's 5G network is up, do you think 5G fixed wireless access will be more popular than home fiber when it is available in the market? Thank you. Okay. Regarding the first question, the QoQ, the ARPU, that will increase. You have seen that in general, the revenue has had a very good traction, right? This has come from different things. The first one is that some of the products that we have launched have behaved very well. Those products are the Akrab family Paket which are higher to Paket by definition. A second one that is working very well is the one focused on the youth segment. That is Paket Suka-Suka, which is also bringing higher ARPUs. That's number one. Number two is the Lebaran seasonality. Lebaran seasonality usually, this also happens. Revenue grows, but it is also an ARPU increase what we usually see. Number 3 is around our network improvements. There has been some network improvement that we have done that has allowed us to increase the traffic per subscriber and also the ARPU that they are bringing. The last one, I will also want to remind that we are seeing that competition is smoothening a little bit. It's not worsening. It's going in the correct direction, especially from the incumbent. The rest, it is still aggressive, but the incumbent has put a little bit more of, let's say, common sense or rationality in the market, which is also helping with the ARPUs in the market. I hope that I answered the first question on the quarter-on-quarter ARPU growth that is also linked to the revenue increase. For the second one? Abhijit. Yeah. Jim, this is Abhijit. I'll take your second question. I think geographical challenges are the same, whether you're deploying a fixed network or a radio network, right? We do have a complex geography. Now, if your question is, if I understood correctly, you were asking about 5G being more popular. If you're asking whether 5G will replace fiber infrastructure for fixed broadband, the answer is no. The evidence we are seeing, even from mature markets, is that when it comes to fixed broadband, to residences and enterprises, fiber is predominantly the first choice. I do think that it will act as a complementary technology, as and when it is launched in Indonesia, especially on the enterprise side. Does that answer your question? Okay, perfect. Thank you. Yeah. Thank you very much. Thank you. Thank you. We have on the line with Alex. Please go ahead. Thank you. I have two questions and congratulations on the great set of numbers. The first is regarding your growth in subscribers in the second quarter. It is strong, no doubt about it. I'm just wondering the impact of the episode. Would your growth have been stronger, or has it been slightly impeded by the movement restrictions currently implemented in Indonesia? That's my first question. The second question is regarding your potential acquisition of PT Link. I think it looks very good. In terms of valuation, EBITDA is lower than what XL usually would be trading. In terms of outputs for fiber, it is about 3x higher than your postpaid mobile rates. I'm just wondering, for your regulators in Indonesia, are there any potential risks that there may be a move to lower fiber rates going forward, similar to experiences in Malaysia? Let me start by tackling the second question. Since I'm sitting near the microphone, I'll grab it from David. Let's address the question on the fixed ARPU. As I was explaining earlier, Alex, structurally the market is different to Malaysia and other mature markets. We have two major players, and overall penetration is very low. It's in the 10%-12% range. Fundamentally, there is no reason for players to engage in a price-based competition. As such, we don't see any reason for anyone to start playing on price and consequently, reduction in ARPUs. If you look to the future, what are the challenges on ARPU in a fixed broadband business? They are typical, as you would see in any market, right, including pay TV, for example, or the way people consume content. It is shifting towards OTT, et cetera. These are typical challenges, and they are not unique to Indonesia, and we'll be addressing them as and when they rise up. Does that answer your question? Yes, thank you very much. One more, your growth mobile subscribers. Yeah, I will hand it to David. Correct. For the first question on the growth of the mobile subscribers, yes, as you mentioned, we are seeing a very healthy growth in our mobile subscribers. It's been already a few months that we are seeing this traction, and it's not linked to the PSBB or to the lockdowns. We believe for the fact that we see is that it's linked to our go-to-market strategy and strengthening of our digital services that we are offering. As I was saying before, we have launched a few digital services, family packages, Suka-Suka or Make Your Own AXIS in the youth that are having a good traction. We believe that the customer experience and the digital services that we are providing are allowing us to increase our market share, number of subscribers, faster than what was happening previously. I think those are the main reasons, but not the pandemic or the lockdown. Going forward internally, do you expect this kind of growth in the subscribers to continue, at least for the next one to two years? One to two years it's a long, but yes. We are seeing still that we are in a good growth momentum, and I expect it to still remain like that. Okay. Thank you very much. That's all from me. Thank you. I would like to hand the call to our host to read out the question from another participant. Thank you. Yeah. Okay. Everyone, Foong has texted me his question, so I'll just read them out. The first question is for Abhijit. With the potential acquisition of Link Net, does that complete the puzzle for XL to pursue its ambition to be the leading converged operator in Indonesia? Would there be other areas/infrastructure where XL would need to beef up with further M&As? The second question is for Pak Budi. He asks, the finance cost was lower than last year. What is the average interest rate on debt now versus a year ago? Did site renewals at lower rates also contribute or perhaps was the main contributor to the lower finance cost year-on-year? I'll take the first question. I think the journey to convergence is a long and complex one. The Link Net acquisition, it is definitely a big, strong piece of the puzzle falling into place. Right. Foong, your second question on the finance costs lower than last year. Yeah, that's right. Because last year, if you remember, our weighted average interest was around 7%, right? 7%-ish. That's the level that we were last year. We are able to get lower rates. I think it is also because of the situation that helped us. This year, we are looking at around 6.4% for the first half. That's the running rate that we have for the interest. It is lower. That's one contributor. The other reason for the lower finance cost, you are absolutely correct also about the lease rental for the financing. As I mentioned earlier, that we are able to negotiate it with the lower rate for the tower rental, so that also give us lower financing costs on this tower rental. Okay. Actually, the more question is whether you will also consider another Yeah. I think you can mention. Sorry, Foong. The second part to my answer on the pieces of the puzzle. Yeah, Link Net is definitely the first big piece of the puzzle to fall into place. Your question was, would we be looking at other potential M&A activities? We cannot rule it out, right? For us, it's a question of scale and becoming the strongest converged operator, and we will look at every single lever we can pull to achieve that ambition, be it organic or future M&A as well. I hope those two answers from me and Budi address your questions. Yeah. Operator, can we go to the next Q&A? The next question comes from the line of Niko again, from BRI Danareksa Sekuritas. Please go ahead. Yeah. Thank you again. It was mentioned at the beginning that the revenue from ex-Java is currently 30% contribution. What is the contribution to NX EBITDA or perhaps EBIT from ex-Java? Yeah. Maybe secondly, in regards to the latest comment, is that organic growth does it entail also in the mobile sector, or you refer to the fixed broad band only? Thank you. Budi. Also for Budi. Yeah, I'll go for it. Okay. Let me address the first question, Niko, on the ex-Java. You're right, it's around 30% now, the contributions. In terms of EBITDA, the majority cash flow coming from Java, because as you know, we just started our ex-Java investment in 2017. It's at third year, coming fourth year now for us. You know our operational excellence principle, where we always look at the payback area, where the payback somewhere around two, three years payback. Some of the area, most of the area already profitable. The EBITDA, the most contribution still coming from Java area. Niko, your second question was about organic growth. If it was stimulated by my response to Foong's question, then yes, I was alluding to our aspirations on the fixed side. When I said that we will pull all levers, be it M&A or organic. As for the mobile side, well, the story has been of organic development of network anyway. Right. Was that your question? Thank you for having me. Yes, that was the question. Can I go back to Pak Budi's reply, and may I ask, is the increase in the subscribers coming from ex-Java as well? Was this the driver in the growth of contribution? Yeah. How is this split on the subscriber growth? Let me maybe take that one. The subscriber growth has happened in both Java and ex-Java. We have seen positive traction in both. It is true that in ex-Java, the growth, the same like the revenue growth, has been higher than in Java. This quarter, the positive growth has been in both. Okay. Thank you, David. Thank you. We have our next question on the line of Piyush Choudhary. Please go ahead. From HSBC. Yeah. Hi. Morning. Thanks for the call, and congratulations for a great set of results. Two questions, please. On your earlier comment, can you expand on what kind of network improvements were done which have helped to improve mobile ARPU? It was not very clear. Secondly, can you comment on how has been the pricing environment in mobile services over the last one month when COVID-related restrictions have further relaxed? Any color over there would be helpful. Thank you. Yeah. Regarding the network improvement, well, first of all, I am not an expert in the network, so just start with it. We have improved our transport that was congested in certain areas. That has allowed us to increase the throughput and the traffic in certain areas, which has allowed our customers to upgrade their product and to work with the ARPU and to spend more in general. I think that's overall, in a nutshell, what has happened. To your second question, sorry, I didn't get it. Can you repeat it, please? Pricing over the last month. Mobile pricing over the last month. Yeah, how's competition? Okay. No. Regarding the competition prices. environment. Yeah, the competition environment. You know. Correct. I think, as I was saying before, the competition environment, it's a little bit smoother than before. Especially the incumbent has taken some steps in the correct direction. From rest of competitors, we can always expect a little bit more of aggressivity, but it's not worsening. I think it's moving to more rational areas. I think we are moving as an industry towards better pricing and better competition. Maybe I will add to David's answer on the first question in terms of network quality improvement. As mentioned by David, actually the first part that was improved is on the transport. What we are doing on the transport is actually removing if any congestion in the network by upgrading the capacity, but also by doing the fiberization. Currently our rate of fiberization, it has increased significantly if you compare to last year. That was on the transport part. The other improvement is on the radio network. In our radio network, what we are doing is actually doing the refarming. Now we are shifting the spectrum that previously utilized for 3G technology to be more in 4G. Because what we see is that now the 3G traffic is becoming less and less. We are step by step refarming those spectrum, the 3G spectrum to be in 4G. By doing that, now we have a much higher capacity for our LTE service. This capacity is actually translated to a better customer experience for our internet users. I hope that answered your question. Thanks, Dian Siswarini. This was very helpful. If I can ask, the fiberization of towers, how much we have achieved, and could you again share what's the medium-term goals over there? Secondly, on the spectrum refarming, is the exercise complete, or we are still in the midst of refarming from 3G to 4G? On the fiberization now is almost reached 50% level for our sites. For the refarming, for the major cities, almost done, but we're still ongoing to also implement that for the secondary cities and more smaller cities. Okay. Thanks a lot. Thank you. I now would like to pass back the call to your host today. Thank you. Okay. Thanks everyone. There are no more questions, thank you for your participation on today's call, and as always, do get back to us if you need more information. Please stay safe and stay healthy. We'll speak to you again next quarter. Bye.