Good day, thank you for standing by. Welcome to Telkom earnings call, full year 2022 results conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll 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. I'd now like to hand the conference over to Pak Edwin Serpiady, VP of Investor Relations. Thank you. Please go ahead, sir. Thank you, Emelyn. Ladies and gentlemen, welcome to PT Telkom Indonesia conference call for the audited result of year 2022. There will be an overview from our CEO and followed by the Q&A after the session. Before we start, let me remind you today's call and the responses to question may contain forward-looking statements within the meaning of safe harbor. Actual results could differ materially from projections or estimation and may involve risks and uncertainty that may cause actual results to be different from what we discuss today. Ladies and gentlemen, it's my pleasure now to introduce Telkom board of director who are joining us today. Mr. Ririek Adriansyah as President Director and CEO. Mr. Heri Supriadi as Finance and Risk Management Director. Mr. Herlan Wijanarko as Network and IT Solution Director. Mr. Bogi Witjaksono as Wholesale and International Service Director. Mrs. Venusiana. Mrs. Venusiana as Consumer Business Director and Enterprise and Business Service Acting Director. Mr. Budi Setiawan Widjaja as Strategic Portfolio Director. Mr. Muhammad Fajrin Rasyid as Digital Business Director. Mr. Afriwandi as Human Capital Management Director. Also present are the board of directors of Telkomsel. Mr. Hendri Mulya Syam as President Director. Mr. Mohamad Ramzy as Finance and Risk Management Director. Mr. Derrick Heng as Marketing Director. Mr. Adiwin ahyu Basuki Sigit as Sales Director. I now hand over the call to our CEO, Mr. Ririek Adriansyah, for his overview. Thank you, Edwin. good afternoon, ladies and gentlemen. Welcome to our- Please remain on the line. Your conference will resume shortly. Please continue. Hello, Amber. Yes, we can hear you. Please continue, sir. Okay, thank you again. Good afternoon, ladies and gentlemen. Welcome to our conference call for the updated full year of 2022 results. We appreciate your participation in this call. Year of 2022 was marked by economic recovery, post-pandemic strife that hurt most of the people around the globe. Indonesia also managed to establish healthier and stable economy in 2022 by growing at 5.3%. With the database successful in curbing the inflation effects as compared to global peers. This foreign economic situation gave significant positive effect to Telkom's business initiatives to create breakthrough and innovation. Our grand strategy, Five Bold Moves, ensure to create company's competitive advantage while keeping overall company's performance in line with the target. The progress of Five Bold Moves, especially the acceleration of fixed mobile convergence or FMC, implementation would be the most critical moment for us to successfully capture opportunity in digital telco faster. We hope that the first initiative implementation of the Five Bold Moves could trigger the development of other initiatives. Along with the transfer of IndiHome as part of the commercial product of B2C segment managed by Telkomsel, Telkom also concentrate on B2B side of the business by enhancing the B2B capability through organic and inorganic growth. Our initiative in Infraco will support B2B and B2C business by providing common connectivity infrastructure to achieve CapEx and OpEx efficiency. On data center and cloud, we currently have 2 hyperscale data center project while our B2B and IT services concentrate on cybersecurity platform and integrated IT services. Lastly, on the establishment of digital initiative, we will capture more digital investment, create equity story to attract external funds and maximizing ecosystem with the tech giants. In the full year of 2022, Telkom still maintained growth in revenue and EBITDA with the increase by 2.9% and 4.3% respectively. Also, the net income decreased by 16.2% by factoring out the unrealized loss from investment in GoTo and accelerated depreciation after tax. However, the operating net income still posted growth of 7.7%. The biggest revenue contributions get dominated by mobile and fixed broadband segment due to more rational competition and successful cost leadership. Amidst heavy competition, but toward more rational way in mobile segment, Telkomsel still maintain healthy growth in revenue of 1.8% year-on-year with EBITDA margin slightly decreased by 0.5% at 56.7%. Digital business remain the engine of growth spotted by the focus on maintaining dominance in network supply. This segment recorded positive performance with a 6.9% year-on-year growth by IDR 72.9 trillion, an increase in its contribution to total revenue at 81.9% from 78% year-on-year. Ladies and gentlemen, fixed broadband competition in Indonesia is still dominated by IndiHome due to extensive network dominancy and its presence throughout the nation. IndiHome's contribution to the total consolidated Telkom's revenue has been steadily increasing to IDR 28 trillion, all by growing at 6.4% year-on-year. As of fourth quarter of 2022, the blended ARPU of IndiHome was stable at IDR 268,000, with the additional new customer of 700 MHz and 11,000, adding up its subscriber to 9.2 million customers. Enterprise business segment has been experiencing a turnaround strategy towards more sustainable revenue growth. As of full year of 2022, enterprise segment still grew by 0.1% year-on-year in revenue to IDR 19.2 trillion as we are integrating data center management under an internal business segment. One of the implementation of the Five Bold Moves is the data center and cloud business initiative. We arranged data center and cloud business domain into one single entity administration under wholesale. In term of PoP growth, enterprise segment still managed to show significant growth in fourth quarter of 2022 at 9.3%, with B2B IT digital services and enterprise connectivity solution are the biggest contributors. We keep strengthening our capability in cloud business, including to build strategic partnership with the global tech players. Meanwhile, wholesale and international business segment also grew healthy in 2022 by contributing IDR 15.4 trillion in revenue or increased 8.2% year-over-year. The driver of wholesale revenue growth was driven by outgrowing international wholesale voice business and our digital infrastructure business. Wholesale keep expanding and reinforcing its infrastructure by participating in subsea cable projects that span across east part of Indonesia all the way through West Coast of U.S. territory. Our 75 growth moves continue to take its effect towards positive development. Among these positive development are completion of FMC business transfer, consolidation of data center business, strategic reorientation of B2B IT services, and company's readiness to implement five growth moves. Some otherwise implementation of our strategy are as follows. We put so much effort and audits to roll out the fixed mobile convergence or an FMC initiative and managed to transfer IndiHome business to Telkomsel's management on B2C segment. FMC initiative acceleration is a very strategic step toward dominating mobile and fixed broadband business as we combine saturated market in mobile competition and less intensive competition in fixed broadband to cater for more target market in internet business. FMC will create stickiness to customers while also could create CapEx and OpEx efficiency on the group level. Convergence of fixed wireless and fixed broadband technology also enable Telkom to create product differentiation and better customer experience to grab more market share in our lower level income segment. We hope that by the end of the first semester of 2023, our FMC initiative could be executed upon the approval of all shareholders, including minority shareholders. We plan to administer to AGM simultaneously, minority independent shareholders AGM with the agenda of FMC initiative voting and regular AGM for all shareholders. Telkom is expanding heavily on data center and cloud project. Currently, we have a new hyperscale data center project in Batam with the cooperation with Singtel and Medco Power. Besides the ongoing project of hyperscale data center in Cikarang, Bekasi, which already finished its first campus at a total capacity of 25 MW. The new hyperscale data center project in Batam is in collaboration with Singtel, and not only intended to add capacity for domestic demand, but also to capture spillover demand from Singapore and surrounding neighbor countries. Our competitive advantage as Siemens TC and the ability to accommodate wide variety of customer future business decision needs, such as edge computing, 5G services, blockchain and other GS solution would give a good choice for enterprise customers. In an effort to foster our ESG strategy, such as reducing carbon dioxide emission, our hyperscale data center in Cikarang is equipped with a solar panel to supply electricity, particularly in office and common area within the complex. We are now in the process of acquiring PLN, our state-owned power company, renewable energy certified. ESG concept is also implemented, in the construction of hyperscale data center in Batam by inviting Blue Gas energy provider to participate on the project. This structure hopefully could guarantee the continuous supply of eco-friendly energy for the generation of hyperscale data center Batam electricity supply. Since Telkom is seriously building ESG strategy for company sustainability, more ESG initiatives could be found in Telkom sustainability report. That is the end of my remarks and thank you for your kind attention. Thank you, Ririek Adriansyah. We will now begin the question and answer session. When raising your question, please speak clearly and state your name and your company. Amber, may we have the first question, please? Thank you. Just a reminder, to ask a question, please press star one one on your telephone. To withdraw your question, please press star one one again. Our first question comes from the line of Kelsey Santoso. Please ask your question, Kelsey. Good afternoon, management. This is Kelsey Santoso from Goldman Sachs. Thank you for the opportunity. First question for me is on guidance for full year 2023 when it comes to revenue, EBITDA margin and CapEx for both Telkom group as well as Telkomsel. My second question would be, in Q4, we saw prepaid subscriber declining less than what we saw in Q3, but what led to the weakness in postpaid subs? My third question would be, ARPU did see healthy increase in Q4, what led to this increase? Thank you. Thank you, Kelsey. This is Heri Supriadi from Telkom. I will Yes. EBITDA margin, and then, what is the CapEx for the group and also for Telkomsel. First, on the revenue, are we going to address the revenue growth around mid to high single digit in the group level? We do expect that margin, the EBITDA margin going to be the same that we did last year or this year. On the CapEx side, we do expect the CapEx to be spent around 22%-25% of the revenue with the distribution of CapEx, 40% goes to mobile, and then 35% goes to basically fixed broadband, and the balance goes to data center, and then subsea cable and satellite. That's I think the composition of the CapEx. For Telkomsel, please, Pak Ramzy, please to explain. Yeah. Thank you, Pak Heri. For Telkomsel guidance, on the revenue side, we have some low to mid single digit growth in term of revenue. Also about the CapEx, we will allocate almost the same as the previous year in around 14%-15% of the revenue. On the next question, Pak Budi. On the prepaid subs decline, we actually align with our strategy where we protect our market conduct with healthier product. In this strategy, obviously there's natural change that's happening on the market. We are focused on more healthier subs in this case. If you can see that result also in healthier ARPU, as well as improving our maintaining our RPMV. With that, I think, the market healthy market conduct also being followed by others competing. We need to add more color to the ARPU healthy increase. If you look at the positive performance, it's really our right pricing implementation. We have promoted healthy conduct towards renewal of behavior, as well as customer value management, which we call CVM. It really led to this improvement of ARPU. You could see there's also an increase of traffic. The RPMV is our main key driver which we monitor very closely to help us to indicate the productivity of the healthy sub. At the same time, we were able to manage the declining of the legacy revenue through very personalized offers, so that customers will find relevance in our offer. We will continue to focus on this driving of market repair. We will continue to nurture the experience, retention, and digitalization of the customers. Okay. Hope that answer your question. Thank you. Our next question comes from the line of Hussaini Saifee. Please ask your question, Husseini. Yeah, hi. Good afternoon, and thanks for the opportunity. A few questions from me from my side. The Telkomsel revenues have stabilized in the last two quarters. Just wanted to understand how should we see the market share going forward for Telkomsel. Second is on the Orbit revenues. Just wanted to understand where the Orbit revenues included in Telkomsel revenues, and what was Orbit revenues and subscribers at the end of 2022. Finally, on spectrum auctions and any update on the spectrum auctions and timing related to that. Just a housekeeping question, were there any one-off cost bookings in Q4? Thank you. Okay. Thank you for the question, Husseini. On the revenue side, actually along with the relaxation of the people mobility post COVID-19, and also the potential of digital economic growth, I think we should expect to grab more opportunities supported by better economic conditions. However, we will also monitor the development of the market including on the macro, as well as the inflation impact on that side. On the strategic action that we have implemented as already been mentioned before, actually we will maintain our market relevancy and protecting our dominant market share position, as the current, at least about 50%. In term of the second question about the Orbit revenue, our Orbit revenue already include in the broadband revenue recognition. Currently, our Orbit revenue is to serve the area that have the requirement of the broadband but not easily accessed by the IndiHome coverage. Yeah, we've updated the spectrum auction. Last year November 2022, we have been officially announced as the winner of 2.1 for the five mid and we use currently for the 4G. I think last February we just completed the refunding on our 2.1. As I mentioned before that we use 4G or 5G for the 2.1. Related to the 700, I think we are still waiting from the announcement from the government. Hopefully, first half this year or second half this year that the government will announce for the auction for the 700 spectrum. I think that's all from my side. Okay. On the cost side, there's no one-off cost, book in the last quarter of 2022. That's, I think, our answer on your question. All right. Thank you. Our next question comes from the line of Chung Chin Fung. Please ask your question. Hello, can you hear me? Yes, please go ahead. Yeah. Yep, okay. Good afternoon, everyone. Thank you so much for the call. A couple of questions from me. Firstly, on the mobile subscribers, decline of 11% in FY 2022, can you help me understand a little bit more on the impact that it has had on your revenue and the EBITDA for Telkomsel? I mean, are these revenue generating subscribers that we have lost? If so, what sort of ARPU were they at? You know, in terms of the impact on the EBITDA, I'm thinking here that these subscribers probably were buying a SIM card and you were incurring costs on those SIM cards and dealer commissions. Net, net at the EBITDA level, was it a net positive or a net negative from losing these customers in FY 2022? That's question number one. Second question for IndiHome. I wanted to get your thoughts on the outlook for net adds this year. Any plans or do you think there's any room to raise prices on the dual play packages? If we are banking on add-ons, you know, what is the average speed for IndiHome subscribers as of the fourth quarter? My third question, how many staff retired in FY 2022? You mentioned that there was quite a fair bit of natural retirement. How many are expected to naturally retire? In terms of salary increments, what are you budgeting for FY 2023? Yeah. Those are my three questions. Thank you. All right. For the mobile subscriber decline, as I explained before, this is as a result of our market prepare and active conducts, which we actually focus on our healthier subscribers. As your question is that we are have a positive impact since the subscriber decline is the one that are actually not healthy or the ARPU are in the low ARPU. Basically, this will help us to improve our ARPU as you also see the result. In term of EBITDA, it's also impacting since with this, you are right that this also impacting how we manage the cost, especially on the SIM card. To add some color on the impact of EBITDA, actually it has some positive impact to us. Actually on the acquisition cost is much lower before we entered this strategy to have better and healthier market share. Thank you. Okay. On the IndiHome, the outlook of net add in 2023, by assuming that we're going to complete the fixed mobile conversion by 1st of July effectively, we're going to have around, let's say, 1 million additional subscribers for home broadband basically. That can be a combination of fixed wireless access and also fixed broadband. Any plan to room to raise price on the dual play? Actually, we are plan to improve the quality to improve the stickiness. That's our plan. That's going to already give us a value add in our opinion, because we are also facing quite intense competition in some areas or cities, yeah. What is the average speed of IndiHome subscriber? 30. around 30 meg per subscriber. On the your last question on how many staff going to retire in 2022. The normal retirement in 2022, around 300. In 2023, I think about the same number that going to retire. Pak, if I can just quickly follow up, what would you be budgeting for in terms of salary increments this year? I mean, would we need to adjust the salaries upwards quite a fair bit for higher cost of living? Oh, if I can add one more question on dividends, will Telkom be proposing to pay dividends based on the operating net income or on the reported net income? Okay. On the, I think on the salary, we can say actually we basically have natural increase based on the inflation rate. I think our basically our salary already competitive in the market. We pay also based on the performance. What is the performance going to be that are going to add some bonus on that one. I think that's how we see the salary, yeah, increase. On the dividend, we're going to. Of course, we need to pay dividend based on the, what is the reported net income. We do calculate what is the dividend supposed to, dividend yield supposed to be in order to competitive in the market to the investor. We're going to calculate what is the yield that's supposed to be get provided to the shareholders. Based on that one, actually, we're going to increase the dividend% this year compared to what we did last year. What we're going to propose is dividend payout ratio based on the reported net income around 70% to 75% to 80% of net income. That's what we're going to propose. This with this, although based on the, I think, reported net income, this going to increase compared to last year, I think. Okay, understood. Okay. Thank you so much, Pak Heri. Yeah, thank you very much. Thank you. As a reminder, to ask a question, please press star one one on your telephone. Next, we have a follow-up question from the line of Hussaini Saifee. Please ask your question, Husseini. Yeah, hi. Thanks once again. maybe just one follow-up question on the recent partnership of Telkom with Ericsson on 5G, and it was linked to fixed wireless access. maybe if management can throw some color on that side, that what will be the priorities on of the 5G rollout, and how will it be monetized? Will the focus be more on the mobile side or will be on the fixed wireless access? Thank you. Okay. I will a bit related to the our partnerships with Ericsson for the 5G for the FWA. Currently, we work together not only with Ericsson, also with the platform to try that use the millimeter wave in the high frequency band, 26 GHz in two cities. The result is good, yeah. The other one related to the 5G rollout. Currently, we are selecting deploy 5G based on the business feasibility and economic market condition, and also we take a look at the spectrum radius that we have, also relevant use case and device availability in each city. Currently, we already have around 284 5G BTS, more than 40 cities that we focusing on, mid to high residential area and also in the path enterprise packaging. That we did last year, we worked together with the Freeport, develop a smart mining with the 5G Standalone. We do the digital township ecosystem with the Jababeka as well as there also we deploy 5G showcase in Mandalika. At G20 Summit. I think that's all related to the first G. Thank you. Thanks, Pak. Just to confirm, is the trials being done on millimeter wave spectrum or 3.5 GHz spectrum? The related question is, any timeline of the 3.5 GHz spectrum auction? Yes, we use the millimeter wave, but for the 3.5 GHz spectrum, we are waiting from the government and from ICT minister. The timeline for the spectrum auction. Not yet. Not yet. Not yet clear from the government. Understood. Thank you very much. Bye-bye. Thank you. Our next question comes from the line of Aurelia Satyabudi. Please ask your question. Hi. Thank you for the opportunity. Three questions from me. I would like to follow up on the revenue breakdown guidance that has been stated. For the group level, it's mid to high single digits, but Telkomsel is low to mid single digits. I would like to ask what's the driver to achieve this higher revenue growth in 2023? That's the first question. The second one, I would like to ask on the update regarding the FMC integration with Telkomsel. Do you have any specific timeline on when this will be completed? What, what is the stages that's currently being conducted by both IndiHome and also Telkomsel? Probably you can share more about the structure that's likely to be implemented during the integration. My third question will be on Telkomsel. How much has the company increased for mobile data pricing year-to-date? Or maybe do you have any color on, you know, the range that we are looking at in terms of the increase in terms of mobile data pricing? Thank you. Okay. Thank you, Bu Aurelia. First, on the revenue outlook breakdown, I think my colleague already tell you about the revenue of in mobile. That's going to be around low to mid single digits. Then, I think what we do expect from IndiHome, the same growth rate like we did last year. Then, we also going to have, I think healthy growth coming from our tower business as well in this one. Mm-hmm. Also having some business in data center that we do expect to grow around 15% year-over-year. Some remaining business also to grow, for example, in the enterprise and so on. That's in combination going to be at the growth around mid to high single digits of revenue. On the FMC update. Currently we are in the, let's say, final stage of the negotiation with Singtel. Soon, if we close that one, as also stipulated as our obligation to the market, we're going to basically announce in the market whenever we get to that agreement and all the government that we need to follow on this process of transfer of our business to Telkomsel from IndiHome. This, I think, that's what we can to you about the process of, I think. Mm-hmm. transaction itself. During the process, in order to smoothing the implementation of the... what we already planned in this integration, we also already established not only team that carry this corporate action, but also to go to the market strategy. We already run this team jointly with Telkomsel in able to to make the maximum execution by the time this business can be integrated. That's about the FMC update. I think in the mobile data pricing, my colleague, Derrick, going to give the explanation on this. Yeah. Thanks, Heri Supriadi. Just to add more color to the increase of mobile data pricing. If you look at Q on Q, we saw positive traction from the increase of digital business revenue. That was a +4.8% Q on Q. Data revenue was a +5.7% Q on Q. From an ARPU, blended ARPU perspective, we are looking at a +1.3% year-on-year, +7.3% Q on Q. Even with this, we had an increase of payload of +18.7% year-on-year, +3.6% Q on Q. The payload per data user is around 12 GB. If you look at this, we are still seeing positive traction as prices, data prices in Indonesia is still low. We will look at ways to continue to drive market repair. At the same time, we want to simplify and drive product differentiation and scaling up content to be more relevant to our customers, and so as to provide similar services in accordance to market needs. That's all, Aurelia, for now. Yeah. Thank you so much. Thank you. Pak Heri, Pak Derrick. All the best, guys. Thank you. Thank you. Once again, to ask a question, please press star 11 on your telephone. All right, I'm showing no further questions. I'll turn the call back to Pak Edwin for closing remarks. Thank you everyone for participating in today's call. We apologize for those whose questions could not be addressed here. Should you have any further questions, please don't hesitate to contact us directly. Thank you. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.