Good day, and thank you for standing by. Welcome to PT Indosat Tbk first half 2024 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to our first speaker today, Pak Indar Dhaliwal, Head of Investor Relations. Please go ahead, sir. Thank you, Amber. Good afternoon, everyone, and thanks for joining us today. With us on the call today, we have Pak Vikram Sinha, our Chief Executive Officer, Pak Nicky Lee, our Chief Financial Officer, and Pak Ritesh Kumar, our Chief Commercial Officer. I will now hand over the call to Pak Vikram for his opening remarks. Over to you, sir. Thanks, Indar, and good afternoon, everyone. I would like to start my presentation by giving a recap of our strategic goal that we presented at our Capital Market Day. If you all remember, as we said, we have four key focuses. Number one, double down on core, and when I say so, especially beyond metropolitan cities. Number two, growing our home broadband business. Number three, unlocking the potential of AI. And that is linked to what we always say, whatever is connected needs to be secured, which is securing the nation. With the ultimate focus on putting the power in the hand of our customer, as we seek to empower Indonesia. In the first half, I am pleased to report we have made progress on all four initiatives. Our cellular revenue grew by 13.4% year-on-year to IDR 28 trillion. This was led by strong growth in rural, and importantly, we are growing both our subscriber base and our RPU. Our home-broadband customer base has increased to 345,000 customers, with our home passes at around 1.5 million homes. We have signed strategic partnership with both NVIDIA and Google, and this will drive us on our AI North Star, which I will walk through in more detail later. Finally, with our partners Cisco and Mastercard, we have taken steps along the journey to securing the nation. On our financial numbers, I am pleased to report that our focus on sustainable profitability has seen our EBITDA increase double-digit by 18% year-on-year to IDR 13 trillion. Our normalized net profit in the first half is at IDR 2.7 trillion, showing a strong year-on-year increase of 112%. Since the merger, we have spent $1.6 billion on cumulative CapEx, building a world-class network experience and keeping customers at the heart of everything we do. This has led to reputable third parties such as Tutela, Opensignal, recognizing our strong network, which is now very strong in core, excellent consistency and quality, very, very strong on gaming experience, as we also see our Net Promoter Score, which is a measure of customer satisfaction, increase steadily. We are blessed to be in Indonesia, where we still see a huge opportunity for Indonesia and IOH. Indonesia remains under-indexed relatively to other nations, as you can see from the slide, as both ARPU, as a percentage of GDP, and mobile data consumption is the lowest among regional peers. As customers increasingly focus on reliability and experience, we are committed to deliver that world-class experience to realize Indonesia's potential. Finally, I want to share our AI North Star, which will continue to drive our business forward in the next few years. We are well on our journey to become an AI-native telco, where we embed AI in the core of everything we do, which will allow us to move forward, becoming an AI-native telco, where we will establish an AI business line for enterprise companies in Indonesia. Finally, we will play our role in becoming an AI nation-shaper, where we will develop national capabilities through the Center of Excellence and Talent Development to bring Indonesia on the forefront of the AI revolution. This ends my introduction, as I'll now hand over to Nicky for the financial presentation. Thank you, Pak Vikram, and good day, everyone. I'm delighted to report our strong results for the first half in 2024. Our revenue grew 13.4% from IDR 24.7 trillion to IDR 27.28 trillion. This growth was underpinned by robust demand for data and connectivity services, driving revenue growth in rural, and we also get a significant uplift in home-broadband revenue. We have been consistently delivering this proportional growth in EBITDA, and there is no exception for this period, as the expansion in EBITDA was up to 18%, adding IDR 2 trillion year-on-year to IDR 13.4 trillion for this period. Our continued efficiency drive helped to raise EBITDA margin further by 1.7 percentage points from last year to almost 48% for the first half. Below EBITDA, our net normalized profits more than doubled from IDR 1.3 trillion to IDR 2.7 trillion. This massive improvement was driven both by top-line growth as well as cost-efficiency realization. We are also continuing to deleverage our balance sheet, with our net debt to EBITDA being trimmed further from 0.45 times to 0.36 times, reflecting strong cash flows generated from operations. If you go to the next slide and focus just on our quarter-on-quarter numbers, we were able to deliver growth, as mentioned by Pak Vikram earlier, at both revenue and EBITDA levels, with a quarter-on-quarter improvement of 2.2% and 6%, respectively. Both normalized and reported net profit was significantly higher than those of the first quarter. The improvement was 14% and 11%, respectively. Moving on to cost, while we are generating good growth at the top-line level, we have continued to put a tight squeeze on our cost. Total spending on cost of services and OpEx dropped 1.2% quarter-on-quarter. Comparing to last year, the increment was 9.6%. This has reflected mostly a 3% impact from cost growth up due to the new distribution model, and another 3% for the extra lease line required to deliver enlarged home-broadband revenue services and also to meet other additional demand. These things are not new for this quarter, but it will show up in the year-on-year and create some distortion. Below cost of sales and OpEx, D&A is up by 7% quarter-on-quarter. It has included a one-off adjustment of IDR 150 billion. The delta would become around 3% excluding this adjustment. You would have noticed other operating income drop year-on-year from IDR 624 billion to IDR 81 billion. That's because of a one-off income relating to our car sale in the first half of last year. On a quarter-on-quarter basis, the movement is to do with FX volatility, and there's also a little bit of equity results pickup from our associates and JV. Onto our CapEx. CapEx capitalized tends to be a bit low in each one, and it shows in this semester too, with a CapEx capitalization of IDR 4.5 trillion. We are fairly confident that we will catch up as we have done in the previous years and get closer to our IDR 20 trillion guidance for the full year 2024. As mentioned earlier, we have trimmed our net debt. It was down from IDR 9.4 trillion to IDR 9.8 trillion to IDR 9.24 trillion, which represents just 0.36 times of our EBITDA. On a quarter-on-quarter basis, the net debt has grown, and it was to do with a number of items. There's a dividend payment of IDR 2.2 trillion. There were also a number of lumpy payments totaling around IDR 3 trillion relating to a new car lease payment given towards the first half, final income tax for 2023, and also spectrum fee payment of approximately IDR 146 billion. There's a quick update on our financial performance. Happy to pass the time to Pak Ritesh. Good morning. Good afternoon, everyone. I will just talk about how the business is progressing. Very happy to announce that we have been able to increase our subscriber base this year as well by 0.9 million. With subscriber base increase, we also have seen a growth of our ARPUs by around 10.5% to IDR 38,000. As we keep on talking about empowering every Indonesian and giving power in the hand of consumers to decide their uses and what to buy and how to play in the digital arena, we have introduced our app, which is focusing on super app kind of thing. Now we have increased this app around 5.9 million in the first half of the year. Data traffic continues to grow by 13.4%, which is a sustainable growth in line with our revenue increase. Next slide, please. So what we have observed, whenever customers are shifting towards our application, we have seen lots of digital services getting sold through app and that resulting into higher ARPU. On average, the ARPUs on app is 1.8 times than the overall ARPU. The more number of customers getting into our own app, we'll continue to see ARPU growth, and that strategy is working well for us and will continue to focus on own app penetration. Very happy to announce, as Vikram also said, and Nicky also talked about realization of our capital expenditure. We are keeping customers in the center of all the investment, and that is how we have consolidated our core. Happy to announce that we have completed that consolidation. As a result, customers are getting faster download speed, lower latency for a better gaming and live video experience. Yeah, to make sure that we are getting closer to our customer when it comes to higher internet speeds, we are happy to announce that we have reached 1.5 million home passes, and our subscriber base increase over last year has been from 17,000 to 345,000. So that's all from the commercial side. We'll give it back to Indar. Yep. Thank you, Amber. Can we move to the Q&A? Certainly. We will now open the floor for questions. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Arthur Pineda from Citi. Please ask your question, Arthur. Hi. Hi. Good afternoon. Three questions, please. Congratulations on your numbers. We've seen very good performance operation. I'm just wondering what can be done to improve the liquidity of the stock given that its free float is relatively limited. So the challenge is that we do find a lot of global investors a bit reluctant given the liquidity. I'm just wondering what can be done to address that. Second question I had is with regard to 5G licensing in Indonesia. If you can just provide us with an update, what are your expectations on timing and terms? Last question is with regard to broadband. I'm just wondering why we're not seeing faster pickup on broadband. You actually mentioned you had 1.5 million homes passed, but when you look at net adds on a quarter-over-quarter basis, it's only around zero. I think it's only around 6,000 net adds on a Q&Q basis. What are your bottlenecks here? Where can we see that acceleration to your targets? Thank you. Hi, Arthur. This is Nicky. Thank you for your question. For the first question, the management team has been looking at different ways to improve the liquidity of the stock. And in fact, we have also engaged shareholders in the discussion because to address this, we will really need the shareholders taking some actions. I don't think we can announce anything here at the moment, but you will find out more later on. So we are trying our very best to look at all the different initiatives. And we are open to any ideas. Yeah. Thanks, Arthur. This is Vikram. Just to build on what Nicky said, I think we also get a lot of requests, and then we are working with our shareholder to see. And before the end of this year, you will see at least some steps in that direction. Now, coming on to your next question on 5G licensing in Indonesia, the way we look at things is that we expect the 5G license to be somewhere next year, but the real investment cycle will start from 2026, which is good for Indonesia. We have seen from all over the world that 5G, the ecosystem play, the more and more ecosystem is ready. And then from our side, from ensuring that readiness in terms of our backhaul fiber, we'll be ensuring that all those things are there. I have to say, the policymakers in Indonesia have been looking at it in a more mature manner. What we want to ensure is whenever 5G comes, we are ready to monetize it. It should not be just a speed game. On timing, specifically, it is looking like license and all next year, and then we'll see how it goes. Yeah. Thanks, Arthur, for the question. On home broadband, we continue to expand in new areas, and some of the home passes have come later this year. What we have done also, we are trying to make sure that we are building a robust field system, which is actually giving us profitable customers. So we have taken some action, and we see from now on some proper increase on our subscriber base in coming months. We have already completed the distribution infrastructure, and we are taking some corrective steps to make sure that we are building built-to-suit kind of home passes are coming in the areas where the competition is lesser, and we are going to brownfield or greenfield kind of area. But first half of the year, we have seen around IDR 500 billion revenue coming from home broadband already. Just to add to what Ritesh said, first six months, our focus was on consolidating what we brought from MNC Play. So I think that is all in place. In quarter three, we'll consolidate the whole billing system. That will give us a lot of power for us to add value to the customer. And our engine on the sales organization and all is ready. So we are in a good shape now, but you will see the scale-up happening, especially from quarter four. Understood. Thank you very much. Thank you. Our next question comes from the line of Marissa Putri from UBS. Please ask your question, Marissa. Hi, management. Thanks for taking my question. So I have two questions. Firstly, we used to have 40,000 Q2 ARPU target, and given how the last two quarters have been trending, are we still keeping this target for the year? What's the management strategy to achieve that? And is there any price increase done on the ground, especially given increasing competitive intensity recently? Secondly, apologies, I seem to miss out on the one-off cost that you mentioned for Q2 2024. Can I get details on all of these and their impact on the EBITDA and profit as well? Once again, please. Thank you. Yeah. So thanks, Marissa, for the good question. So actually, we had set ambitious target one year ago when our ARPUs were around 33,000. Now we are close to around 38,000, 39,000, which is around a 20% increase. We'll get to a 40,000 ARPU level. It is a milestone, and actually, we are going into rural areas to get the customers. And our majority of the growth is coming from rural area, and that's where customers are actually a marginal customer. They are actually testing our network. And what we have seen here, they are getting enough confidence to convert our SIM into primary SIM. And that's where we are quite confident. But I think this is the journey, not the destination. We continue to improve than yesterday. All the levers are in place, for example, more digital services, better customer service, and giving what customer wants rather than what we want to sell to them. We'll continue doing that, and it's a journey. I'm sure that we'll reach 40,000 soon and 45,000, 50,000 coming years. Yeah. But that's the journey, not the destination, Marissa. Yeah. Marissa, on cost, first of all, if you look at the number on a Q1Q basis, cost of sale and OpEx overall actually dropped by 1.2%. So we're in a good place. On a year-on-year basis, there have been some development. We changed our business model, and the way we book those costs also need to be followed. And as a result, certain costs are required to be grossed up and booked accordingly. So there's around 3% impact on hitting our year-on-year comparison. Out of that, it's a 9.6% delta. And then there's another 3% purely because of more lease line requirements to support our home broadband business as well as other demands from our customers. So those are the key reasons explaining why there are deltas between quarter and quarter and year-on-year OpEx and cost of sale. Noted. Thanks. Thank you. Our next question comes from the line of Henry Tejo from Mandiri Sekuritas. Please ask your question, Henry. Hi. Yeah, thank you for taking my question. So perhaps two questions from me. First, regarding the marketing expense that increased quite a lot in the past few quarters. So just curious, how does the management review all the marketing expense spend in the past few quarters? I mean, does the subscriber acquisition metrics become the priority, or is there any metric that the company sees from these higher marketing activities? And then my second question, perhaps related to the ARPU question from Marissa. So just curious whether IOH has increased the product price in the first half. And then related to that, so just curious whether, basically, how do you sustain the ARPU uplift trend if IOH hasn't increased the product prices in the first half? So that's my two questions. Thank you. Yes. Good question. Yes, there is a plan to increase our prices. We have been able to increase ARPU by providing customers the products which they want to buy. And that's where we are focusing more on high-value base. And that is why if you look at our subscriber base growth, it is also there. At the same time, we are growing ARPU. So both the denominator is also increasing, and revenues are also increasing. As I said, it is basically coming from the rural area, so it's bringing down the overall ARPU because of new acquisition. But existing customers continue to believe and trust in us, and we see healthy improvement in ARPU. But if you look at our EBITDA, it is growing 18% year-on-year. That means we have been able to be more efficient in the market. Coming back to the cost, I think there's home broadband, which is also coming into the picture as part of the cost. As Vikram also talked about many times, that we are building our distribution into deep rural areas, wherein we are coming up with 2,000. We have already rolled out around 2,000 small distribution points. And that's where we see the cost. But the results will be fruitful in coming quarters and years, wherein we will have a sustainable growth that will also help us in bringing our ARPU up. Because what we are trying to make sure is that even in deep rural areas, customers should be able to replace their SIM cards. So that's the investment which we are making, which we believe is the right way of doing business for sustainable growth. Henry, if I can just elaborate on Ritesh's answer on marketing cost. As I mentioned earlier, if you look at last year's number against this year, there's a bit of distortion because of the way we're booking on the cost. Specifically on marketing, 1.8% of the increment is to do with accounting, not spending. If you take that away, we would be below 3%. Okay. Perhaps one follow-up question. I think, sorry. Please go ahead. Yeah. So Henry, I think you asked some very good questions. I think I've put it on my deck also. If you look at the opportunity, whatever you look at in terms of GDP to the kind of ratios or consumption per user, if we compare it with our peer countries also, there is a lot of opportunity. What we need to do is to give good experience to our customers so that they are able to use more and do more productive things. So there's a clear opportunity, and that is why I always say that Indonesia, in terms of market, we see clear opportunity in terms of both price going up, in terms of usage going up. Okay. Thank you, Vikram. Perhaps one follow-up question. I think Ritesh and you, Vikram, mentioned several times about how IOH is focusing on tapping the rural areas, etc. So just curious, how does it relate to the subs space increase? I mean, if you look at on a year-on-year basis, the subspace increased like 1 million, right? So just curious how we related the subspace increase with the marketing expense that we booked and also all the focus on the rural areas, building all these distribution channels, etc. Yes. So I think Ritesh tried highlighting, but let me give you more specifically. Rural incremental coverage, which we have got, and we are in a very unique position because of merger, and now core integration has also happened. Initially, it was MOCN. So the physical site earlier, pre-merger, Indosat used to have around 28,000. Now I have close to 50,000 physical sites. And most of the benefit has come on the rural area. But this happened at a rapid pace. Do I have the direct distribution network to educate and serve those customers? The answer is no. And this is where we are building these direct distributions, where we are able to educate the customer, also serve them in terms of SIM swap and all. You will not believe in Indonesia, there are places where people have to travel 50 km if they have lost their SIM, if they just need to do SIM swap. And that is not good. So we want to make sure that we are able to provide them the right service and right experience in the villages where they are. And for that, you have to create these self-service distribution models, which is very unique, which we are doing. So these are investments which we are doing, and we don't want to drive numbers in terms of just SIM card. We want to have real customers behind every SIM which we are selling. So whether it is 1 million, 2 million, but you will see very progressive. And that is why we are the only operator where you see both customers and ARPU growing. Our focus is to do healthy, sustainable growth. Some of these investments in rural, when we are doing on distribution, the results will follow, and it will follow over a period of years. We just want to do it properly. Yeah. To add on to that, look at there are many customers who are actually using SIM cards, one handset and two SIM cards. They have consolidated SIM cards into many urban areas. The growth is coming from rural areas, and that's what we have seen. This model is working well for us, and we strongly believe that this is the model which can help us sustain the growth in coming quarters and years. Okay. I think that's clear. Thank you, and best of luck for the second half. Thanks. Yeah. So I think we received a few questions from Niko Margaronis from BRI Danareksa on the webcast. So I'm just going to read them up. I think, Nico, your first question on subs was answered by Vikram and Ritesh. Your second question was, we see a lower Lebaran seasonality compared to last year. What is different from last year? Is there weaker consumer sentiment from spending? And would you say there is increased competition from your peers? Your second question was on, can management give some color on the recent news about the sale of fiber assets? What is the book value of the assets, and should we have a higher dividend expectation? Let me start, Nico, with the second one. I think we are in the early stage of our strategy. Once we have more clarity, we will let you know. But we have also promised to our shareholders in terms of coming up with a dividend policy. So we are working on that for sure before the end of this year. We will come up with that. But our approach is a very progressive approach in terms of business, which is sustainable, and in terms of dividend policy also. I think coming on to the first one, Nico, if you look at our year-on-year revenue growth, it is 13%. This year, Lebaran was a mix of quarter one and quarter two. So overall, we don't see much challenges. But yes, one of your observations is right. There is a bit of a weaker consumer sentiment in terms of spending. I have to tell you, we are the least impacted because as telco, our product is more primary. When I talk to my friends in the financial sector, banks, FMCG, yes, and then we have also seen it a little bit. We are expecting this to improve as we go along into quarter three and quarter four, especially after October. Okay, Nico, I hope that answers your questions. Amber, can we go to Arthur, who is the next question on the call? Certainly. Next follow-up question comes from the line of Arthur Pineda from Citi. Please go ahead, Arthur. Yeah. Hi. Sorry, I forgot to ask this question. I'm just curious about the guidance where you're keeping the industry growth around mid-single digit and slightly faster than that. Just wondering, it seems to be quite conservative considering that you're already seeing double-digit growth on your first half numbers. But maybe this comes down to your comments. Are you seeing that slowdown into the third quarter and fourth quarter, or this is just conservative? No, the key factor on guidance is closer to 50% EBITDA, Arthur. So I think we are staying same to that. So that was the more than revenue, we look at EBITDA growth. We want to make sure we do sustainable revenue, which is flowing into EBITDA. So on EBITDA, we are very consistent, and we feel strong that we'll be closing closer to 50%. I think in the capital market day, we have given a long-term guidance of five years. And I think that is quite—I'll not say conservative. It is ambitious. And we have to grow a lot of new business lines. We have to keep doing well on our core. But we don't see anything slowing down. We see progressive quarter-over-quarter. Yeah. Understood. Okay. Thank you. Thank you. As a reminder, to ask a question, please press star 11 on your telephone keypad. Hi, Amber. We have another question from the webcast, so I'll just read it out. The question is from Aurelia from BNI Sekuritas. The question is, what is the update so far on the GPU as a Service business? When will it be launched? And also, are there any updates on the AI Center of Excellence? Yeah. Thank you, Aurelia. This is a very good question. So we will be launching on the 21st of August, GPU as a Service. And also on AI Center of Excellence, you will hear more in August. We are very committed. The good news is we are seeing a lot of good interest, especially from the financial sector, oil and gas. And it is giving us more confidence. So as we spoke about our ambition of being an AI-native Telco, these sovereign cloud, these will be all new business which will be able to scale up. Especially next year, it will start contributing significantly for overall EBITDA. Okay. Thank you, Aurelia. I hope that answers your questions. I don't think we have any more questions on the Q&A queue. Maybe we'll just give another one minute to see if there are any last-minute questions. Otherwise, we will close the call for today. Thank you. Once again, to ask a question, please press star 11 on your telephone keypad. I am showing no further questions, and I'll turn the conference back to Pak Indar for closing comments. Okay. Thank you, Amber. Thank you, everyone, for joining us today. As always, if you need any questions, please do get back to me, and we'll speak to you again next quarter. Thank you, everyone. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.