Good day. Thank you for standing by. Welcome to PT Indosat Tbk first half 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. You'll hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Indar Dhaliwal. Thank you, Indar. Please go ahead. Thank you, Desmond. Good afternoon, everyone. Welcome to the call today. With us today we have Pak Vikram Sinha, our CEO, Pak Nicky Lee, our CFO, and Pak Ritesh Singh, our CCO. I will now hand the call over to Pak Vikram for his opening remarks. Over to you, sir. Thank you, Indar. Good afternoon, everyone, thanks for joining the call today. We recorded another strong quarter in quarter two, with our revenue rising 7% quarter-on-quarter, while EBITDA grew 2x of revenue growth, 14% quarter-on-quarter. This brings our H1 2022 revenue to IDR 25 trillion, with a EBITDA of IDR 11 trillion, both rising double-digit year-on-year. Importantly, our focus on profitability means that our EBITDA continued to grow 2x than revenue. We also continue to be net profit positive for the 10th consecutive quarter, recording IDR 983 billion in normalized net profit this quarter, bringing our H1 2023 normalized net profit to IDR 1.3 trillion. Some of the other highlights in the second quarter are our EBITDA margin, which increased by 3 percentage point to 47.6%, while we added 1.5 million subscribers this quarter, with our ARPU growing 9% quarter-on-quarter. As we mentioned in the last quarter, our network integration is complete, but we are still yet to realize the full synergy benefit, and we are on track to realizing the full benefit by year three post-merger. We continue to focus on the initiative we highlighted last quarter, which are core integration as well as ICT system and business process improvements. Finally, allow me to give some more additional flavor on what we are doing to grow our ARPU, which rose 9% quarter-on-quarter in quarter two. Aside from organic growth, we are also implementing some initiative which we believe will add value to our customer and help to increase ARPU further. We are driving higher usage through our own app, where customer is using the app tend to be higher ARPU than average. We are heading towards 35 million app customer, and we see a very strong traction there. Our customer value management tool, powered by data analytics, enhance the value proposition to our customers, such as unique offer. Finally, our digital service offering, which add a lot of value to customers, especially customers deciding what they want. With this, I will now hand over to Nicky for the more detail on financial presentation. Over to you, Nicky. Thank you, Pak Vikram. Delighted to present our stellar financial performance for quarter two, 2023. Our overall revenue grew 6.6%, from IDR 11.9 trillion to IDR 12.7 trillion. This growth was underpinned by the enlarged customer base, as well as strong uptake of data services, particularly over the Ramadan festive season. We also have all of our cylinders firing, as MIDI and Fixed Telecom also provided very good growth, both on year-on-year as well as on quarter-on-quarter basis. More details on this will come later. On the back of strong revenue momentum, realization of synergies and optimal cost management, EBITDA is up by 13.6% to IDR 6.1 trillion from IDR 5.3 trillion in first quarter this year. It is also the highest quarter-on-quarter EBITDA growth after our merger with Three Indonesia. As mentioned by Pak Vikram earlier, our EBITDA margin reached new highs to 47.6%, 3 percent stage point improvement from the first quarter. Our net profit on normalized basis, after stripping out tower sale gain and other one-off, is IDR 986 billion. improving by 243%. This massive improvement basically captures the entire EBITDA improvement, meaning that our costs below EBITDA stay flat while business continue its expansion. Net Debt to EBITDA ratio increased a bit from 0.33 times to 0.445 times. This reflects the payment of the dividend of around IDR 2 trillion and some seasonal tower lease payment made in the second quarter. Moving on to the next slide. Well, I'm going to move on to our first semester results. EBITDA improved much higher rate at 24% compared to last year, thanks to the 9.5% revenue growth, as well as keeping OpEx at the same level as last year. With the improved profitability level, EBITDA margin widened by 5.4 percentage points to 46.1%. We have conducted one-off resources relating to data center and towers, respectively, in 2022 and 2023. If we look at our normalized profit summarized on the slide, it has grown a massive 7.5 times from IDR 149 million, first half of 2022, to IDR 1.3 trillion. Really pleased with our all-around strong performance from top to bottom lines. As mentioned earlier, all of our three business segments are performing very well. Cellular attained 6.5% quarter-on-quarter growth, while Media and Fixed Telecom for the first half grew 16% and 26%, respectively, over the same period last year. Moving on to cost. Our OpEx was flattish for first half of 2023 against last year, as well as on a quarter-on-quarter, second quarter versus first quarter basis. Apart from cost control and synergy effect, we also benefited from some timing difference in our spending pattern, as our spending this year will gear more towards the second semester. We will be completing more projects in the second half, and as a result of that, we will spend more sales and marketing charges, expenses, when we roll out new areas, and also more project costs are expected to be incurred to support new enterprise projects. These costs will bring in extra revenue for sure, but the favorable impact will be fully felt in the next semester and going forward. In terms of our other operating income expenses, as mentioned earlier, we booked one-off profit for data center transaction in first half of last year. It amounted to IDR 3.5 trillion. For this year, we also had one-off gain to a smaller amount of IDR 0.7 trillion, which is related to power sale. That explains why the other, the net other operating income dropped this year. Let's take a look at our CapEx spending so far this year. First half spending stood at IDR 4.3 trillion, which is 9.2% more than the same period last year. For second quarter, it was a bit subdued, with booking of IDR 1.9 trillion, smaller than IDR 2.4 in the first quarter. This is more an issue of timing difference. You probably recall we had a similar pattern last year, we expect CapEx spending and booking to catch up in the second semester of this year. For the same timing difference issue, our CapEx to revenue ratio is quite low for both first half and second quarter this year. We expect the ratio to rise in the second half. On to our balance sheet. As mentioned earlier, our net debt has grown a bit because of dividend and seasonal payments. Our net debt to EBITDA ratio has gone up a little bit, 0.33 to 0.45 times, but still at a very, very comfortable level. That's a quick summary on the financial performance. I'll pass the time to Ritesh. Thanks a lot, Nicky. Good morning, good afternoon. I'm Ritesh, I'm part of the team here in India. As a company, we are focusing on adding more subscriber to our base, and we have seen our subscriber base in quarter two over quarter one, and we have crossed 100 million mark. While we increase our customer base, our another focus is how do we extract more from the consumer? That is why we are focusing them more towards our digital services. For that, it is important that we should keep on pushing the app, and that's where we have seen a growth of around 2.5%, which is higher than the subscriber base growth. While doing so, we are not compromising on our pricing strategy. Our pricing remains stable, we have seen a data traffic growth of 8.2%, and ARPU parallelly increased by 8.6%. Not only we are focusing on depth of our subscriber, and also we are focusing width of the subscriber to make sure that we are. Thanks, Ritesh. I think overall, you know, we're feeling more confident. We see that the industry is, is moving in the right direction. With this remarks, I'll hand over back to Indar. Okay. Thanks, Vikram. You need to press star one one on your telephone. To cancel your request, you can press star one one again. Please stand by while we compile the Q&A roster. First questions comes from the line of Piyush Choudhary from HSBC. Please go ahead. Yeah, hi. Good afternoon, and congratulations for a very strong results. A couple of questions. Firstly, on mobile ARPU, which has increased sharply quarter-on-quarter, could you help us to break up the component of ARPU increase? What, firstly, how much is it driven by tariff hike, and secondly, how much is driven by this organic increase, where customer is spending or these digital initiatives which you are taking? Secondly, within this ARPU, has all the initiatives already reflected in second quarter, or there is a residual impact, and we should see further ARPU improvement going forward? That's the first question. Secondly, Telkomsel has launched their fixed mobile converged product. What is the likely impact of that for the industry and Indosat? Could it pose a risk where, you know, high-value customers of Indosat might churn out, or, or how do you think this evolution? Thank you. Hi. Hi, Piyush, this is Vikram. Let me start on ARPU, and then Ritesh can add to it. I, I think, in my opening remarks, I spoke about, one of the most important driver is, app customer. We have seen that, you know, we, we are growing very fast on, on our customers from the overall base using app customers, and this is one of the things. Second, on, on the network side, you know, with integration getting completed, with the kind of experience and capacity, we saw it during Lebaran month also. We were able to cope up, and also the improved indoor experience, so that is also driving. Third, I think the initiative which Ritesh spoke about, the digital services. We have started looking at how many of our customer is using digital services, and that is something we believe will continue to grow, and it will give us upside. Coming on to price, I, I think, as I said in my remarks, we see the whole industry moving in the right direction when it comes to price. There is lot, much more opportunity to make sure that, you know, we focus on value to customer. With all these things, I, I'm more confident that we have more room for ARPU growth. We, we had taken a target of 40,000 milestone by first quarter next year. I think we feel more confident that we are heading in the right direction. Ritesh, you want to add anything? No, Piyush, thanks for the question. It's coming from all across, as Vikram said, data services users, and driver is app users, from where we can sell, more data services. The second one is, our, customer value management. What we have seen, the% of customer in our base. To your next question on fixed mobile convergence. I think these are all opportunity for us, and we see this as a clear opportunity. I have spoken earlier also that Indonesia has 75 million homes, and today the penetration is only 13%, 14%. There is a need to make sure that, you know, when this grows up from a level of 14, 15 to 30, IOH play its part. We've started this journey with our HiFi product, and we see a lot of upside opportunity there. Got it, Vikram and Ritesh. This is very clear. If I may ask one more thing, just on the, you know, margin side, EBITDA margin side, which has improved quite healthily. Any kind of risk or potential headwinds to this margin improvement in the second half which you are foreseeing, any kind of cost pressures which we should be aware? Hi, Piyush, this is Nicky. As mentioned, earlier, some of our spending may go up a bit in the second half of this year. Then, we will also have, our synergy, more synergy effect getting into the book. In terms of risk, if we only focus on the downside, there will be more OpEx, some of which you can look at it as like a investment when we expand our distribution footprint, then we will be getting some benefit, more subscriber, which will benefit not only, the second half of, this year, but it can have a negative impact on our short-term results. Just to add, Piyush, I think on our guidance, we have increased. We are more optimistic that, you know, we will be on the higher end of forties. When we started the year, we were looking at mid-forties. Then also synergy value, there is a lot of more opportunity for us, and that is progressing very well. What Nicky said, we are also investing on growth, so we want to make sure whatever is needed to ensure that we have sustainable growth on 2024 onwards, we will invest on those things. Got it, Nicky and Vikram. This is very clear. Thanks a lot. Thank you for the questions. One moment for the next questions. Next up, we have the line from Hussaini Saifee from UBS. Please go ahead. Hi, good afternoon. Thanks for the opportunity, and again, congratulations on a very good set of results. Three questions from me. First is on the non-mobile revenue growth, MIDI and Fixed Telecom, which posted a very strong growth. Can you add some color, what drove that growth? What we should expect going into 2nd half and maybe next year within this- those segments? The 2nd question is on the guidance, again, good to hear that you raised your EBITDA margins guidance. On the revenue side, which is expected to grow in line or above industry. Just wanted to get your view on what is your expectation of industry growth. Lastly, on the 2nd half, increased spending. Maybe a bit more color that if the marketing spend or the distribution spend is increased, what is the risk that it may trigger some competitive reaction from your competitors? Thank you very much. Hi, this is Vikram. Let me, let me start with the industry. I think, you know, we believe that the industry is heading towards 6%-7% growth, there is more upside opportunity, you know. We believe that Indonesia has an opportunity of double-digit industry growth as we go along. This year, we are, you know, looking at 6%-7%, and the way things are for us, for sure, you know, we are confident of growing in line or little higher than the industry. Now, coming on to your question on marketing and distribution, I think, the point which Nicky was highlighting, after integration, suddenly, you know, we have close to 48,000-49,000 sites. For us, you know. Then just to give a perspective, what that used to be 27,000-28,000 physical site. From there, we have moved to close to 50,000. You can understand how many more, much more, infrastructure sites we have, and these sites are all fully loaded, after integration with all the spectrum which is needed, 900, 1,800. So we are, we are investing on the rural area to strengthen our presence, so it is nothing to do with competitive intensity. It is all about serving each site. It is about making sure that we monetize every site. And, and that is the right thing. This is nothing called risk. These are the right thing to... We are not in a shortcut, quarter-on-quarter business, so we will not cut corner on those things, and that is what Nicky highlighted. It is, it is nothing to do with any competition or any distributor, margin. All those things, we keep moving it in the right direction. On your MIDI, I think, you know, Indosat and both Mentari is a very strong brand. In fact, you know, we are seeing some good traction there, and we believe that these growth are sustainable. There are some seasonality, some, some big accounts, some big deal, but on annualized basis, we believe that, you know, this kind of growth will continue to happen in 2024 also. Understood. Thank you very much. This is very helpful. Thank you. For the questions. As a reminder, to ask question, please press star one, one. One moment for the next question. Next on the line, we have Arthur Pineda from Citi. Please go ahead. Hi, thanks for the opportunity. Several questions, please. Firstly, a housekeeping one. On the depreciation, amortization seems to have declined a bit quarter-on-quarter. Is this a new benchmark owing to the lease cancellations? Just wanted to get some clarity on how that will trend. Second question I had is with regard to broadband. Indosat in the past mentioned a push to broadband via an asset-light strategy. Are you able to expound on this in terms of targets and execution plans? Third question is, again, on broadband. What are your thoughts on fixed mobile convergence? Is this really a product which you think can be leveraged on? I guess my, my, my question here is, given that the market's quite prepaid in nature, is this something which can actually be leveraged upon, or you think broadband as a separate business from, from mobile? Thank you. Hi, Arthur, this is Nicky. Thank you for your question. Let me take the first question first. You, you're correct. The D&A charges for quarter two is more reflective of the level of spending going forward. Of course, we will be rolling out new sites, getting new fiber leases, et cetera. Those will... Spending will cause a further increase in D&A going forward. On the movement between the first quarter and the second quarter, if I may give you more color, is that while we were going through the site integration, moving processes, we had to take up some short-term lease costs in the first quarter. After we completed the project at the end of Q1, we weren't required to spend as much, so now things are going back to normal. Yeah, this is Vikram. On, on the fixed broadband, I think, directionally, our approach is to get to double-digit, 10% market share, you know, because when you look at the market here, there is one dominant with more than 80, and then it is very fragmented. It is important that if IOH is participating, we get to scale soon. You are right, we have taken an asset-light approach. Then there are two things which we are trying to do there. One, we have close to 80,000-85,000 km of fiber, which is all across Indonesia, connecting our site, how we can leverage that asset and, and with partners, get to home passes. We are looking at a lot of things. You know, some of the options are, you know, on, on working with, towercos and also fibercos on, on creating home pass for us. Early results, we have seen that if we are keeping the product simple in terms of easy to install, faster experience, all those learning we are getting. How we get to scale, in terms of, some of these home passes, you will have to wait a little more to see. We are in the discussion with, some of our partner, strategic partner, so hopefully very soon, we'll be able to give you color on that also. As of now, we are still committed to get to a double-digit, if not in 2026, by 2027. Having said that, you know, for us, as you rightly said, more than FMC, we see this as a good opportunity on home broadband, you know. We looked at this home broadband opportunity from both angles, from FTTH and FWA. For us, having a good share on the home will be important. We are not putting too much of our mind on FMC, and as you said, it is a prepaid market. What is important is we have a home broadband, both FTTH and FWA, and we are able to give a simple and reliable solution to our customer and to all the Indonesian when it comes to home opportunity. Very clear. Thank you very much. For the questions. One moment for the next questions. Next up, we have the line from Aurellia Setiabudi from BNI Sekuritas. Please go ahead. Hi. Thank you for the opportunity. Just one question from me. Would like to get some color regarding the subscribers. It is very strong, recording at 100 million as of the second quarter. It's a 1.5 increase on a quarter-on-quarter basis. On the last earnings call, Pak Vikram, you mentioned that the... There's kind of like a seasonality that, you know, in the first quarter, and then you, you did expect this to kind of, like, recover in the second quarter ahead of the Ramadan. It appears that the increase is quite sticky for the second quarter, at the 100 million level. What is the outlook for the remaining of the year? Thank you. Yeah. Thanks a lot, Aurellia, for the question. It's a very valid question, and we are building our distribution infrastructure in the areas where we already have network, and we've got benefit of integration. As Vikram spoke about, we have already integrated the network and we are making sure that we are going to the areas where we have the opportunity of getting more subscriber. Going forward, we expect the subscriber numbers to continue growing in H2 as well. Yeah. Just, just to add to Ritesh, I think I want to remind, all of you that January, we made a very bold move of putting the same price, you know, to IDR 25,000. In December last, the same price used to be in the range of IDR 5,000 to IDR 10,000 to IDR 12,000, and we took it up with a lot of discipline. That is why, you know, we saw on first quarter, some of these rotational churn. We wanted to make sure that, you know, we, we don't participate in that. Then in quarter two, when we see number going up, it gives us more confidence that, what Ritesh said, that, we will be able to grow our customer in a more sustainable manner from here. Just for a follow-up question, Pak, if I may. In terms of the low productive subscribers, do you still see that in your portfolio, or should we expect this to... Actually, like, when the subscribers number kind of, like, increase, that's, you know, we're pretty much all the productive customers? Really, I think, we don't see any customer, as a strategy, as a low customer. A customer may be a low value for me, but he might have a potential of giving us more wallet share because it's a multi-SIM environment, and people might be using some other number on their other SIM slot. Dual-band handsets are like, a dual SIM card handsets are quite in number in Indonesia. We are actually strengthening our contextual marketing platforms and AI-driven tool to make sure that customers are getting the real time offer, when they require, and to make sure the number, the low-value customer keeps on getting converted into mid-value to high value. That strategy has been working well for us, and we'll try to do more of that going forward. Very clear, Pak. Thank you for the answers. Thank you. All the best for the remaining of the year. Thanks. Thank you for the questions. As a reminder, to ask question, please press star one, one. One moment for the next question. Next on the line, we have Niko Margaronis from BRI Danareksa Sekuritas. Please go ahead. Hi, good afternoon, and congratulations for the results, Pak Vikram, Pak Nicky, Pak Ritesh. My question is on the competition front. How do you see also the upside of improving prices from, I note, I noticed that you mentioned about the 25,000 package? What is the roadmap going forward? Do you see room to improve further the price level? Or is it mainly going into new areas and improving your network, and then people start, you know, consuming more data on your network? Yeah, basically, yeah, is it, is it two way, two ways to, to improve the ARPU, or is it, you know, trying to monetize the, the, the, the good network that you have right now? Yeah. Thank you. Hi, Pak Niko. I think a bit of both what you asked for. Yes, with our improved network and improved reach, we will keep adding customers, especially to new areas and geography, where we did not have network, and network has come here. You will see customer growing, and also you will see ARPU growing. Coming on to ARPU, it is a mix of few things which we have highlighted. One is the initiative, which we are taking by keeping our product simple and giving the value, giving the digital product which our customer want. Second, also, we very strongly believe that Indonesia as a country, has the opportunity to grow at least 8%-10%, and especially data revenue, we see there is an opportunity for industry to grow 15%. Customers, they are looking for value for money. You know, our products are more primary. It is not a commodity. It is even, you know, helping them do a lot of productive work at a fraction of a cost. We have been listening to our customer, and we are trying to make sure we give them a more reliable and good experience. There is opportunity of increasing some of the rebuy and some of the other pack, and then we'll be keep looking at it. We make sure, at the same time, we ensure that customers see the value. Yes. Yes, Pak Vikram. There is also, there is still potential here to also raise prices. I mean, is the consumer-- Do, do you see the consumer, more prosperous, currently? What is your, what is your view, Pa? Yes. Pak Niko, thanks a lot for this question. If you look at our pricing strategy, what Vikram has talked about in quarter one, we increased the prices. There is a clear-cut strategy behind that. What is that strategy? That strategy is that we should not incentivize a customer to buy SIM card again and again, rather than buying recharges. As a, as a strategy company, we have decided that we'll incentivize existing recharges more, and we'll not try to give incentive to acquire new customer. We'll give SIM card to the customer who actually need it. The moment we see face behind every SIM card, we'll see revenues going up continuously. We want to have a long-term sustainable growth, and hence, we'll follow the strategy going forward, which has been giving us results for last three, four months. Yes, first quarter, we, we see some drop in customer, but it's back. With this strategy, we'll continue to grow on revenues and ARPU. Thanks. Thank, thank you so much. Thank you so much. Thank you for the questions. Once again, to ask question, you can press star one, one. At this time, there are no further questions from the line. Allow me to hand the call back to Pak Indar for closing. Okay. Thank you, Desmond. Thank you, everyone, for your participation in the call today. As always, if you need more information, please reach out to us, and we'll speak to you next quarter. Thank you, everyone. That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.