Good day, thank you for standing by. Welcome to the Telkom Earnings Call, first half of 2023 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be 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 Mr. Edwin Sebayang, VP of Investor Relations. Please go ahead, Pak Edwin. Thank you. Ladies and gentlemen, welcome to Telkom Indonesia Conference Call for the audited result of second quarter 2023. There will be an overview from our CEO and followed by Q&A after the session. Before we start, let me remind you that 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 estimations, and may involve risk and uncertainty that may cause actual results to be different from what we discuss today. Ladies and gentlemen, it is my pleasure to to introduce Telkom's 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. Honesti Basyir as Group Business Development Directors, Mr. Herlan Wijanarko as Network and IT Solution Director, Mr. Bogi Witjaksono as Wholesale and International Service Director, Mrs. Venusiana as Enterprise and Business Service Director, Mr. Budi Setyawan Wijaya as Strategic Portfolio Director, Mr. Muhamad Fajrin Rasyid as Digital Business Director, Mr. Afriwandi as Human Capital Management Director. Also present are the Board of Director 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. Adiwinahyu 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 conference call for the unaudited second quarter of 2023 results. We appreciate your participation in this call. Second quarter of 2023 was considered as one of the significant milestone for Telkom Group towards the implementation of Five Bold Moves. On that quarter, to be exact, on the 27th of June 2023, Telkom has signed a spin-off agreement with Telkomsel that initiate the segregation between B2C and B2B business. On the B2C business, Telkomsel will concentrate on improving the synergy with IndiHome to be the strongest fixed mobile convergence, or FMC, operator in Indonesia. By having the FMC initiative, Telkom Group is very confident to monetize revenue uplift, CapEx and OpEx efficiency to create EBITDA uplift, starting as early as the second semester of 2023. On the other hand, Telkom will concentrate on B2B business that covers the monetization of its fixed broadband and enterprise segment or IndiBiz, enhancement of its network infrastructure to form infraco company, establishment of seamless data center company by Telkom Data Ekosistem, improvement of B2B IT services by synergizing Sigma Cipta Caraka and regional division, and exploration of digital business prospects by creating digital ecosystem nurtured by Digital Business Directorate. The market of B2B business Indonesia is promising, and some of the prospect could become Telkom's future engine of, of growth. Therefore, in order to nurture B2B business prospect in Telkom to become tangible revenue and profitability generator, just recently, Telkom initiated the development of Group Business Development, or GBD, Directorate, led by a director. Indonesia enterprise and B2B business market is tremendously promising, with several prospects having the potential to drive Telkom's future growth. This strategic move enable Telkom to proactively seek partnership, foster innovation, and capitalize on growth opportunities within B2B sector. By creating innovation and strengthening collaborative relationships, we are ready to create a dynamic ecosystem that drive mutual success and secure a thriving future for both Telkom and our valued business partners. On our financial performance, as of second quarter of 2023, Telkom could maintain revenue growth by increasing 2.1% year-on-year, and on quarter basis, we could grow our EBITDA by 2.1% year-on-year, while our quarterly net income went down 1.4%. This period, we have additional spectrum cost from our last spectrum obtained in 2022, which in the future will have positive impact on service, quality, and capacity. In the report net, net income, we also got the impact from tax treatment because of the opportunity gain from GoTo shareholding. Mobile and fixed broadband still dominate the revenue growth contribution. On the mobile business, data, Internet, and ID service grew by 6.1% year-on-year, while IndiHome contributed 4.0% year-on-year growth. Mobile business continued to contribute positive growth on revenue by experiencing 1% growth year-on-year, supported by growth of digital business, driven by healthy growth of data and digital services. Telkomsel topline growth still absorbing the impact of natural transition of legacy toward data as we manage this prolong the tails through personification initiative in order to have more value packets for customer needs. This EBITDA margin could be maintained at 56%, mainly due to revenue growth and successful cost leadership program. Digital business remain the engine of growth, supported by the focus of maintaining dominance in network supply. This segment recorded positive performance with a 7.4% year-on-year growth to IDR 37.7 trillion, and increase its contribution to total revenue at 85.6% from 80.5% on the same period last year. Telkomsel maintain the concentrate on customer value management, with a customer base at 153.3 million in 2Q 2023, increased from 151.1 million in previous quarter, with improved productivity and quality of the customer, as indicated by higher payload and payload of data user and solid ARPU growth from IDR 45.3 thousand in first quarter to IDR 49.7 thousand in 2Q 2023. Through healthy conduct, Telkomsel with a strong fundamental base, reflected to the growth of the payload, aligned with the improvement of productive customer, as well as ARPU and revenue. Like in Telkom, the penetration of fixed broadband in Indonesia still pose a big opportunity to grow. The FMC initiative continued to progress in second quarter, marked by the signing of spin-off agreement between Telkom and Telkomsel on 27th of June. This initiative will enable Telkom Group to compete more aggressively in term of existing customers acquisition and grab new subscribers. Fixed broadband competition, Telkomsel will prepare a massive strategy that involves cross-selling, upselling, and product differentiation using FWA and FBB technology. During the first half of 2023, we continued to maintain our position as the market leader and recorded revenue of IDR 14.4 trillion, or growth by 4% year-on-year, where its contribution to Telkom Group revenue increased to 19.6%, compared to 19.2% at the same period last year. As a result, a higher economy of scale and effective marketing strategy, EBITDA margin of IndiHome was relatively stable at around 50% in second quarter 2023. We recorded around 316,000 additional customer during first half of 2023, brought the total subscribers 9.5 million by the end of June 2023, or increase 7.2% year-on-year. Around 66% of total customer were on dual-play package, while the remaining 34% were on triple-play. We are more selective in getting new customers to ensure customer credit quality. Indihome plays important role in building digital society, as the service cover 501, or 97.5% cities or districts throughout the Indonesia. Indihome ARPU in the second quarter of 2023 was slightly declined to IDR 860,000, due to more customer prefer to subscribe the dual-play package. Indihome has become the market leader, as meaningful portion of the customer is on high-income customer. To maintain the sustainably growth, we are aiming the other lower income segment also for services across Indihome's customers. Along with the economic recovery in Indonesia, enterprise business segment also grew in a positive correlation. As of first quarter of 2023, the enterprise segment successfully grew by 7.8% year-on-year and is anew to $4.5 trillion. Good growth enterprise connectivity business, digital solution, and satellite business. This achievement mark a successful strategic alignment of enterprise segment business and hope to be in positive territory throughout the year. On the wholesale and international business segments, it also experienced positive growth in the first quarter of 2023, by contributing $4 trillion in revenue and increase 4% year-on-year. The driver of wholesale international business revenue growth was driven by international wholesale voice business and outdoor infrastructure businesses. We believe that the consistency of implementing the Five Bold Moves strategy will be our key for Telkom Group to sustain the existing in the digital transformation business Indonesia and regional peers. After spin-off of the agreement on the FMC initiative, we continue to pursue other strategy, especially in Telco B2B sector and some important moves on Five Bold Moves are as follows: On June 27, 2023, after approval from minority shareholders to anonymize a decision of FMC independent AGMS, Telkom and Telkomsel finalized signed spin-off agreement, this Telkom agreed to transfer its IndiHome business to its controlled subsidiary, namely Telkomsel. As a result of this transaction, Telkom's shareholder position increased from 65%-69.9%, whereby Singtel, as the minority shareholders, diluted the share in Telkomsel from 35%-30.1% after capital injection of $250 billion from Singtel to maintain a stake around 30%. The purpose of the spin-off itself is to maintain the competitiveness and superiority of Telkom, increasing the competition in the Indonesian telecommunications sector on retail segment. This is also expected to accelerate the equalized penetration process, broadband services for all people throughout the nation. In the spin-off agreement, it is also stated that Telkom and Telkomsel agreed on the wholesale agreement for the infrastructure provision, TSA 1 for fixed broadband service provision, and TSA 2 for IT system service provision. Telkomsel and Telkom will be prioritizing in cost efficiency, with no duplication of investment for the deployment of cellular and fixed network, and ultimately will create synergetic economies. As part of our solutions and to capture the opportunity in B2B, Indonesia Business Telkom has launched what we call as IndiBiz on Digiland 2023 exhibition in Jakarta. IndiBiz is the solution for digital ecosystem solution for business to support micro and small-medium enterprise or MSMEs in Indonesia goes global. IndiBiz stands on strong four pillar, which is platform solution for digital services, collaboration with a startup and its developer to focus on supporting solution for MSMEs, collaboration with a financial institution of MSMEs financing. Lastly, collaboration with MSMEs community to improve their productivity. In the near, near future, Telkom will accelerate B2B segment transformation to its seven regional division throughout the nation to support MSMEs and local municipal government and the digitalization. Telkom has been pushing infrastructure value and unlock efficiency initiative. Telkom will continue to explore new Infraco and infra-sharing potential. This initiative aims at optimizing, consolidating Telkom's CAPEX and efficiency, quality improvement, and revenue growth. We expect all Telco infrastructure asset can maximize the valuation as well as to achieve the strategic differentiation. In Infraco initiative, we will have a new entity in charge of managing Telkom's fiber asset. This entity will be established this year and start running the business next year. By having Infraco, we can make our fiber network position more neutral and can be used by the external parties. Moreover, with this initiative, we believe Telkom can optimize asset utilization and market penetration, tackle the Telkom business challenge, and create business value that meets investor expectation. As we move forward to enhance competitive advantages, sustainable competitive growth, and higher valuation, we are still in the process of restructuring our data center business by consolidating the business and asset under one entity called PT Telkom Data Ekosistem, with a NeutraDC as its name. Data center and cloud remain as one of the areas that become our focus, as the demand is growing significantly with the rising activities in digital business players. The presence of our neutral carrier and cloud facilities, supported by supreme network and backbone, is our key competitive advantage to lead the competition in data center business. With our integrated network, we are able to accommodate our customer future business digitalization needs, such as edge computing, 5G services, blockchain, and other digital solutions. During the first half of 2023, data center and cloud recorded IDR 137 billion in revenue. As of June 2023, we have a total of 30 data center facilities, 25 are domestic and 5 overseas, and spread out across the 4 countries Indonesia, Singapore, Hong Kong, and Timor-Leste. Our data center has ideal load capacity up to 42 MW. Locally, NeutraDC operate three enterprise data center and one hyperscale data center with a classification of Tier 3 and Tier 4. Our data center business provides several products and solutions, such as shared colocation, dedicated colocation, working room, cross-connect, smart hand, and DC interconnect. Our tower subsidiary, company Mitratel, is now the biggest tower provider in Southeast Asia, with a position of more than 36,000 towers. In the first half of 2023, Mitratel tenancy ratio improved to 1.9, compared to 1.6 at the same, at the first quarter 2023. Mitratel also enjoys a site diversification, with around 58% of the tower are located ex-Java, while the remaining 42 are located in Java. Therefore, we believe that the tower business still has opportunity to grow, driven by increasing demand for mobile data and the upcoming 5G technology implementations. On a stand-alone basis, in first half of 2023, Mitratel recorded revenue of IDR 4.13 trillion or grew 10.8% year-on-year, driven by tower leasing revenue. EBITDA and net income grew by 16.1% and 14.7% year-on-year, respectively. Both EBITDA margin is expanding to 81.2%, increased by 3.7 PPT. Net income margin is at 24.8%, increased by 0.9 PPT. Collection and a number of tenants grew by 19.1% and 24.6% year-on-year, respectively. Mitratel has demonstrated a strong financial position with a relatively lower risk ratio at 1.8x net debt to EBITDA. This allows the company in securing growth opportunity while also providing stability to shareholders. Mitratel is also expanding to the fiber to the tower business as part of its strategy to strengthen its product portfolio to become a digital infrastructure company. Mitratel also strengthened the fiber optic business by deploying 16,628 km organically in the first half of 2023, bringing the total fiber optic length is 2,769 km by end of the first half of 2023. That is ending my remark, and thank you for your kind attention. Thank you, Pak Ririek. We will now begin the Q&A session. When raising your question, please speak clearly and state your name and your company. Operator, may we have the first question, please? Thank you, Pak. 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. Our first question comes from the line of Piyush Choudhary. Please ask your question, Piyush. Hi, this is Piyush from HSBC. Good afternoon, and thanks for the call. Two questions, please. Firstly, in the non-mobile segment, we saw EBITDA margin has dropped to 45% in second quarter versus 48% in first quarter. What is driving such margin decline? Because within the segment, we, we see IndiHome EBITDA, and Mitratel EBITDA has been stable, which implies the other businesses, EBITDA margin has fallen significantly. Any color over there? Secondly, on Telkomsel, congratulations on the launch of Telkomsel One brand. Could you help us understand what's the strategic objective here? Would it be to gain market share by providing bundling discount, or it is more of a retention strategy to defend market share in the high value segment? Also, any one-off cost due to this integration, which can come in the subsequent quarters? And finally, on the Telkomsel One, when would the cost synergies start to kick in in the financials? Thank you. Thank you, Piyush. Heri speaking here. On your question on the non-mobile segment, why the EBITDA margin is declined, there's some reason also. First, on the, as you may aware, allowance for bad debt, although it is smaller compared to it was in the first quarter of this year, it is still quite high anyway, around tens. This is because we are in the process of conservative recognition of the cost and also revenue, especially coming from the enterprise segment. This number going to be determined among the years as we start to finalizing the administration and also the strengthen the collection. Overall, this going to be in line with the revenue growth in terms of the allowance for bad debt. The second, the reason coming from the interconnection. The interconnection a bit will, as you may aware, some technology substitution coming to these services, for example, coming from tech, like WhatsApp and so on, replacing the basically the legacy coming from interconnection. This make the business quite having lower margin, although the volume is still there. This is the like competitive, the margin becoming smaller. That's why you see the cost of interconnection go higher compared to the revenue, but it is still profitable business. The other cost coming also from the I think from enterprise as well. Some of the, I think, content that we need to basically procure for the service also, resulting the growth along with the revenue. These are among the factors that affecting the non-mobile business EBITDA margin. Toward the end of the year, as we explain previously, this cost supposed to be in the better state, so the margin that we can generate are going to be better then. Hi, this is Derrick. I will continue to add more color on Telkomsel's strategy on IndiHome and FMC. With the FMC's initiative, we want to enlarge the penetration of home broadband throughout Indonesia. We have launched more valuable proposition, faster product and services, as we have termed as Telkomsel One. We enhance the experience for our customers with one bill, one app, one touch point, one solution, which is new to our, for our customers, which we call it, unbreakable internet. The offers that we have introduced in the market include 1 GBPS package, and we have a hero product of 100 MBPS with including new features such as Wi-Fi calling. Yeah. On the number two, on how we looking at the cost synergy, I think we've been identifying this since the beginning, and since we got one, moving new to Telkomsel. The systems cost, the items that we have identified as an immediate, cost efficiency that we can manage. First, on the surface and channel integrations, we see there's a bigger resources for the serving, both mobile and fixed, that immediately we can eliminate. We have GraPARI and Plasa Telkom, who manage duplicators that we can actually eliminate. On top of that, I think we also can efficiently manage the cost center and care. With the managing the channel as one, as Derrick pointed out, we have now MyTelkomsel have already been able to serve not only Telkomsel customers, but also IndiHome customers. Having said that, of course, with more time that we adopt the channel as one, that also will be efficiently managed. On top of that, we're also looking at the efficiency of the asset, where we are now looking at how we can manage the CPE and device sourcings, both for fixed wireless access, which is Orbit that we have, and also, and CPE that we have for IndiHome. That can be efficiently managed on the investment side. On top of that, in term of channel and go-to-market executions, we're also looking at more cost saving on how we efficiently incentify our channel. Not to mention that we continuously, efficiently platform costs that we are able to simplify, that today we have duplication on board billing, how we serve the video service platform. Going forward, of course, it is something that we continuously, will reduce from time to time. Got it. Thanks, Pak Heri, Derrick. Can I just confirm the cost synergy will, will start kicking in from the second half of 2023? Would, would that be a fair estimate? Yeah. In some of the cost synergy as... This is Ramzy. Yes, as we already also put it in when we do non-deal roadshow, we expect the total synergy that we will get from this initiative would be around IDR 5.6 trillion in the next five years. For the immediate, I think we expect to be fair for this first year, it's about IDR 500. It comes from the platforms that already been mentioned by Sigit, as well as the group market alignment. Basically, the saving or synergy that Pak Ramzy just mentioned, you can see in the group level, there are some efficiency coming in the parent level, and also the subsidiary, some, resulting from the Telkomsel. Thank you, Pak Ramzz. Thank you, Pak Heri. Thank you. Our next question comes from the line of Arthur Pineda from Citi. Please ask your question, Arthur. Hi. Yeah, this is Arthur from Citi. Several questions, please. Firstly, on the OpEx line, when you look at your competitors, you're seeing well-controlled OpEx and rising margins, and you're seeing some pressure on your margins on a Q and Q basis. What accounts for this, and what can be done to address this? Of course, you're seeing O&M, personnel, cost growth as a problem. I, I know you mentioned a while ago there's some issues on, on receivables. Can this change into the second half? Even mobile didn't see an improvement, unlike your peers. Second question I had is with regard to your fixed mobile convergent savings. You've mentioned around $0.5 billion target synergy this year. Is this cost reduction, or is this inclusive of potential cost savings, which we may not really see filtered through to the margins on basically things like CapEx? Last question I had is with regard to guidance. Having seen the first half trends, how do you see guidance for the remainder of the year? Thank you. Okay, thank you, Pak Arthur. Heri speaking here. First, on the pressure and the margin, if you see from key on key, as previously mentioned, some cost is quite conservative recognition procedure that we apply, especially in the enterprise. That rising year-on-year of the allowance for bad debt cost, for example. And then, personnel cost include the, the, the cost of, I think, some tax related, tax benefit that we provide to the employee. This is going to be also normalized over the years. We... We do expect the growth of the, I think, personnel cost going to be- ... slightly lower, or lower compared to the cost that we recognized during the first half. The other costs are also, we may see the benefit coming from, for example, in the spectrum cost coming this year. Actually coming since November last year. The this year start in January, of course. This is going to basically reduce the need for us to invest more, I think, network infrastructure as compared if we don't have that additional spectrum. Along with the time, along with the time that we basically use the spectrum more, the cost going to be, the benefit going to be actually going to be enjoyed by us. That's going to be, betterment in term of, maintain stability of the, growth of the expenses itself. By having that scenario, as, we explain, here, actually, we expect we can see the benefit from the stability of the margin until the year end and, stability of the growth year-on-year of the, the cost that, we mentioned. That's, I think the, about the, the, the, the cost, figure in the second half, and we do expect this going to, make our margin betterment, stable in the, second half and toward the year. In term of the synergy, the synergy, basically coming from both sides. It is coming from the top line, additional subscriber that we expect coming from the fixed mobile convergence, as well as some, I think, synergy in term of cost reduction coming from re-eliminating the redundancy cost, and then also some CapEx efficiency as well. So this, for the first year, we expect we can recognize around IDR 500 billion of the cost saving or synergy. In 2027, as mentioned by Pak Ramzy, is around IDR 5 billion-IDR 6 billion, combined of the CapEx and then OpEx, as well as in the revenue side. I think that's the figure. The last is just about guidance, how we see what is the remain of the years. We already explained basically the business potential. The, the challenge that we have right now, if you see from the figures, Telkomsel still record quite good revenue growth in the digital connectivity. In the same time, for example, in the Telkomsel case, they are suffering by the around 25% of legacy decline. This limit the growth overall becoming only 1%, but in the digital connectivity, it is quite healthy. Provided that exposure to the legacy is still quite high, we see that I think Telkomsel going to be improved in the second half, but this going to still also upset by legacy decline until we finally coming to the, I think, quite stabilized amount or contribution coming from the legacy. By having this situation, and then some, I think we do also expect FMC can provide some value added in the, we start to gain benefit from FMC the second half. We expect some improvement from that. Coming from, I think enterprise, I think the growth supposed to be stable until the year end. From Mitratel, they already recognized the revenue growth around 10%-11%. We believe this going to consistent toward the year end. While having that situation, actually, we see actually that the revenue, in term of revenue in the group level, we see the, the growth of revenue going to around low to mid single digits because of the situation. In term of margin, we believe we're going to do our, of course, maximum level cost leadership in the second half of the year, while try to pursue the revenue side. We able to maintain the stable margin as we have today, 50+ of EBITDA margin and around 17% and plus in the net income margin. That's going to be our target still. The last on the CapEx, of course, some of the objective of FMC and also our objective to have, I think, value added in term of the CapEx efficiency. We do expect the spending going to still around 25% of revenue of the CapEx that we're going to spend this year. Basically, only in the top line, we have a bit change in the guideline, but in the mid line, how much we're going to spend in the CapEx remain the same. Sorry, just to clarify the comments on the margins for the second half, you mentioned stable margins. Are you referring the full year margins to be stable year-on-year, or are you saying? Yes. first half margins with the second half? Yes, we try to stabilize the margin full year until comparable to previous. Got it. Okay, thank you very much. Thank you, Madhu. Thank you. Our next question comes from the line of Hussaini Saifee from UBS. Please ask your question, Hussaini. Yeah. Hi, good afternoon. Thanks for the opportunity. Several questions from me. First is on the Telkomsel revenues, where we had seen some softness or market share decline versus your competitors. I understand that legacy is one part of that, but do you see your competitors becoming a bit more aggressive or gaining market share in the ex-Java region? The related question is that, the data volume growth of Telkomsel, which is around 7%-8%, is significantly below compared to the competitors at around 15%-20%. Wanted to understand what is driving a slower data volume growth. The second question is on IndiHome. The growth is softer compared to the previous quarters. I just wanted to understand that, how should we see the second half for IndiHome, in terms of, customer additions? Any, any color on, will the, will the focus will be more on, fixed wireless access customers or a combination of IndiHome or fiber and wireless access customers? Finally, Telkom is focusing or going to focus more on B2B business. The focus will be more on the collaboration. Just wanted to understand that will there be any initial investments required to grow, B2B business? Thank you. Hi, this is Derrick. I will address your questions. You know, with regards to competition, competition continue to remain rational. We see all operators focused on profitability and long-term sustainability. However, we see aggression in some areas, which translates to price competition, and that's aligned to average expansion outside Java and offering subsidy pricing with higher quota. Telkomsel, we will continue to lead the healthy conduct, and we focus on profitability. With a true CVM, selective increasing pricing, and we want to monetize data traffic and improve the renewal journey. Yeah. Our initiative is to drive smart acquisition, to defend market share align with profitability. If you look at our last Q, we have grown 0.5% Q on Q, over 153 million subscribers. We've applied consistent, healthy market conduct with smart customer acquisition strategy. We've optimized CVM. We focus on renewal. If you look at the customer base, we have improved productive and quality of our customers. That's indicated by the growth payload and the strong ARPU growth, which is a +9.8% Q-on-Q, and +13.1% year-on-year. That's aligned to our strategy to lead healthy conduct, drive market repair, and industry pricing rationalization. Your thoughts on payload. You know, traffic will still grow positively, aligned with our network quality improvement and increasing productivity via CVM, FMC, and product simplification. In addition, with the initiatives of healthy conduct and high-quality subs, we will continue to drive productivity and ARPU improvement in the long run. We want to manage pricing in a very prudent manner. Payload growth align a managed sustainability in terms of yield. I hope I've answered your question. And, uh- IndiHome side, I think, going forward, what we see the growth is in the various layers. One, on the how we capture the additional of home additions. It is more combination between Fixed Broadband and Fixed Wireless Access. The way we see it, we continuously drive the adoption of Fixed Broadband, while Fixed Broadband, where it is available. On top of that, the growth of revenue is also coming from driving the ARPU up on the high-value customers. Where we see that today, our hero product that we just launched is 100 Mbps. We're pushing towards higher speed, higher ARPU in high-value segment, including the addition of combination between Telkomsel, fixed and mobile in the Telkomsel One product. On top of that, to also accelerate the penetration, we use the Fixed Wireless Access to address the competition, as well as to address the market penetration where our Fixed Broadband is not available. We also use Fixed Wireless Access in order to address an interim solution before we can actually serve the Fixed Broadband. With that, I think our weapons to really attract the customer and address the customer's home broadband penetration will be complete if we compare to our competitors. We believe that will be a source of growth for us. Mm-hmm. ... on your question, when Telkom focus on B2B, how will the, the investment looks like? If we see the B2B, the base of the B2B, of course, we have connectivity. We still invest on that one. Of course, it is similar to basically fixed broadband with the focus on the enterprise subscriber, of course, on this one. Above that one, there's some, I think, cloud facilities that we need to prepare on that one. Mostly actually coming the solution that some of that we come with the agreement in the form of a partnership with our partner wio provide such cloud, I think, solution. Pak Budi, maybe you want to add some? Thank you, Pak Heri. This is off the floor. We also invest on the data center, since we also have started to the groundbreaking of second hyperscale data center in Batam to capture the speed offer demand from surrounding countries, including Singapore. We also expected that we can have additional capacity more than 21 MW this year. Thank you, Budi Thank, thank you. If I can have a couple of follow-ups. On the Telkomsel side, just wanted to get your view, as the focus is more on monetization, do you see opportunities to further or maybe increase some prices in the second half? On the IndiHome, just wanted to get your view that, how would you characterize the competition in the market right now? Means the softer IndiHome growth in first half, was it because of elevated competition, or was it because of more selective subscriber, or new subscriber, addition? This is Derrick. I will address your question on what would be the potential price increase opportunities. You know, Indonesia has one of the lowest data pricing in the world. We saw 2022, we did, Telkomsel let the market repair. We have done pricing rationalization. In fact, during Lebaran, we did more for more from a pricing monetization perspective. What is good is we, we see all the operators adjusting pricing, but we have done it in a smart manner. We done it through CBM to address customer preferences, their requirements, and in order to deliver better experiences. In fact, we have many options for our customers, based on products, customers' preferences. The impact of the adjustment will impact in stages, whether is it from a prepaid mechanism perspective, personalization, rotational churners or, or dynamic competition in various areas. This is how we see opportunities where we can acquire better pricing through smart CBM. Yeah. Would like to Sigit, would like to add on that and also answer the IndiHome question. On the mobile side, I think the way we see it, we are always being consistent on industry growth. You can see from the first half result for ARPU, RCA plus, and increase, AP and also the CPR are there. We always demonstrate ourselves are aligned with the industry growth when it come to the data. Now, I think, Derrick already discussed on the service. On the IndiHome side, what we see, I think the market competition today, we are seeing, of course, some aggressivity on certain cities. They are very selective when they entering the market. The way we see it, on those competition market, of course, we always need to par with the competition. Today, I, I think the IndiHome price is actually in the right situation. If you see from the average pricing of 30 Mbps, is almost the same. Now I think the game, we need to change a little bit. We shift gear to higher monetization on the higher speed, higher value customers, while we also penetrate to the rest of the market. That one, I think we use the new product, campaigning the higher speed, with the affordability level that we have. With that, we believe that IndiHome, with the penetration that we have on the, on the network side, we're gonna help that to increase the value. On top of that, some of the market, we are actually very high market in terms of share. Certain city, we don't have the competition. In that conditions, we can help to penetrate better and monetize it. Understood. This is very, very clear. Thank you very much. Yeah. Thank you. Our next question comes from the line of Ranjan Sharma from JP Morgan. Please ask your question, Ranjan. Hi, good afternoon, and thank you for the presentation. A couple of questions from my side. Firstly, if I can just go back to the cost discussion. I'm seeing O&M costs up 9% quarter-on-quarter, personal costs are 10% of quarter-on-quarter. I'm sorry, I missed a part of the discussion on why the costs are up so much, if you can revisit that. Second question is again, on if I look at your P&L, you have recorded, like, IDR 288 billion of non-operating expenses. If you can kindly explain, like, where that where that comes from. The last question is more strategic. Starlink seems to be getting licensed in a number of countries, more, most recently, like Malaysia. If they were to get licensed in, Indonesia, how would that impact your broadband strategy for, for IndiHome? Thank you. Okay, this is Ramzy. To respond to your question about the cost side, on the O&M cost, yes, we have some incremental due to our investment in the spectrum, and it costs to the additional about IDR 70 billion a month. It will be a good cost because we will need it to provide more capacity and coverage to our customer, without having to have some significant incremental in the CapEx side. The other part is also the- Sir, sorry to interrupt, but the, the, the spectrum cost, where did they start from? It starts from last year because we acquired the additional spectrum for 2100 MHz. Yeah. I'm making a quarter-on-quarter comparison versus first quarter, so that will not affect your cost comparison from the first quarter to second quarter. Yeah. I think on the, on the year-on-year basis, yeah, as mentioned on the spectrum side, because last year, we haven't spent on that one. The other part is on the personal cost, because since last year, there is some new new tax decree from the government on the in-kind benefit tax, that last year we recognized that in the fourth quarter. This year, we, we start to recognize since earlier this this year. At the end of this year, it will be catch up, and it will be normalized on the personal cost, especially on the Telkomsel. It will be at around of 5%-5.5% growth rate. Can you come back to the cost again? Like, because, you explained it via spectrum, but that will not have an effect on a quarter-on-quarter comparison. Why are the volume costs up so much from the first quarter? Okay, I think, let's, Pak Ramzy, collect the, some more information on, on that, question. Then, on the second question, in the profit and loss, you mentioned, about, non-operating expenses. How much you refer the, the number is? 1 minute. 288 for the second quarter. Okay, in the second quarter. It is mainly coming from the interest and also coming from the exchange, foreign exchange, net loss. Because we have, for this case, foreign exchange loss, we have in our book around $651 million. During the same time as you compare to the closing of the year 2022, the rupiah strengthened to USD. USD is bring us to recognize some unrealized loss coming the change of the foreign exchange compared to our currency. That why we still recognize some non-operating expenses on this. Okay, thank you. Last question on Starlink. For Starlink, the only operator that already engaged Starlink in Indonesia is Telkom. How we manage the, the Starlink in Indonesia? As Starlink right now, the license has already been published by government, is only for the backhaul services, not for the consumer services. For the backhaul services, Starlink will be used for the backhaul of the cellular, for the remote, extra remote areas, and also for the IndiHome backhauling. We, we, we, we strategize that Starlink data consumption which will be increasing significantly, as well as the data consumption of IndiHome and cellular, being increasing significantly. Sorry, my question is more around the consumer, consumer side, right? Because, in many countries now they're providing direct services to consumers. They're licensed in 60 countries or so. If it gets licensed in India, how does that affect your IndiHome plans? Government still not publish the re- the license for the consumer business for Starlink Indonesia. Okay. I think, let me, let me add, on, on that point. I think, let, let assume our worst scenario is, where the government gives Starlink, the license on the B2C. I think, the price point will be different, between Starlink. Even if they lowering from what they have now is about $100 per month. ... even if they're well to halfway, it is still higher than, than the, the ARPU of IndiHome. I think they are serving a, a big different, different segment. Then, on the speed also can be different between satellite and Telkomsel Orbit. I think the two are, are not really head to head directly competing, but they, they have their, their different, different clear market segment. Okay, thank you. Thank you. On the cost, as I highlight, I see the, on the O&M cost, quarter-on-quarter basis growth about 0.8%, but in this year-on-year basis, it's growth about 6.6%. Most of that growth comes from the additional cost, that we have to pay on the additional spectrum in 2100 MHz as well as in 2300 MHz. On the, on that point, I think I would like to highlight that, if we, if we, normalize that, I think the growth on O&M, just around 2%. And it's still aligned with, with the additional of the capacity and payload growth that comes to our network. Looking at different numbers, because I've seen 9% growth quarter-on-quarter. Maybe I'll send the calculations after this call. Sure. Yeah, sure. Yeah. I think we go about more detail on that one after the call. Thank you, Ania. Right. Thank you, Ranjan. Our next question comes from the line of Aurelia Setiabudi from BNI Sekuritas. Please ask your question. Hi, thank you for the opportunity. Just a few questions from my end. I would like to touch on the number of Telkomsel subscribers, which have been seeing positive growth in the second Q. So I want to ask, what is your take on the subscribers going forward? Should we expect this to growth momentum to continue, or are we going to see some more stabilizing at current level? Second part of my question is that you added about 2.2 million of new subscribers in the second quarter. If we look only on the mobile data subscribers, it only added about 252,000, or about 11% of the new subscribers. If you can share a bit of comment on, on this, as pattern that we see, would be very helpful. Following this, on the ARPU, a nice jump of about 9.7% quarter-on-quarter. With the mobile subscribers increasing only about 252, should we expect this driven by the existing subscribers? If that, if that's the case, how do you see, like, the new mobile subscribers spending kind of like pattern there? Thank you so much. We are very sorry if the suddenly the line will be off, because we have already reached the limit for the time. you can... Yeah. This is Derrick. I will address your question. First, on the Telkomsel subscribers seeing positive growth. Yes, we have managed to grow 1.5% Q- on- Q, and this is a testament of applying consistent, healthy market conduct. We have demonstrated smart customer acquisition strategy, we've optimized our customer value management, and we focus on renewal. That results in the number consolidation from healthy, productive subscribers. From a ARPU perspective, we see stable customer base with improved productivity and the quality of customers, as you could see from the growth in terms of payload and ARPU growth, right? That was already a context to how we consistently drive healthier conduct and industry pricing rationalization. Telkomsel will continue to focus on improving high-value customers, monthly and high renewal, and a substrate package to address different customer requirements, customer needs, via granular marketing initiatives. Moving forward, we will continue to push ARPU with customer productivity. And of the ARPU increase, we will look at festive as well as price adjustment opportunities. For fair assumption, the ARPU level we see will be stabilizing in, 2 H 2023. All right. Thank you. We have reached the end of the question and answer session. Thank you very much for all your questions. I'll now turn the conference back to Pak Ririek for closing remarks. Thank you everyone for participating, today's call. We apologize for those whose questions could not be addressed yet. Should you have any further questions, please don't hesitate to contact us directly. Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.