Good day and thank you for standing by. Welcome to Telkom Full Year 2023 Results Conference call. At this time, all participants are in 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 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to Telkom SVP Corporate Communication and Investor Relations, Pak Ahmad Reza. Please go ahead, Pak Ririek. Thank you, Amber. Ladies and gentlemen, welcome to Telkom Indonesia conference call for the audited results of full year 2023. There will be an overview from our CEO followed by the Q&A after the session. Before we start, let me remind you that today's call and the responses to questions may contain forward-looking statements within the meaning of the Safe Harbor. Actual results could differ materially from any forward-looking projections or estimates and may involve risks and uncertainties that may cause actual results to be different from what we discussed today. Ladies and gentlemen, it's my pleasure now to introduce Telkom's board of directors who are joining us today. First is Mr. Ririek Adriansyah as the President Director and CEO, Mr. Heri Supriadi as the Finance and Risk Management Director, Mrs. Venusiana Papasi as Enterprise and Business Service Director, Mr. Bogi Witjaksono as Wholesale and International Service Director, Mr. Budi Setyawan Wijaya as the Strategic Portfolio Director, Mr. Honesti Basyir as the Group Business Development Director, Mr. Herlan Wijanarko as Network and IT Solution Director, Mr. Muhamad Fajrin Rasyid as Digital Business Director, Mr. Afriwandi as Human Capital Management Director. Also, we present the board of directors of Telkomsel: Mr. Nugroho as the President Director, Mr. Mohamad Ramzy as Finance and Risk Management Director, Mr. Derrick Heng as the Marketing Director, Mr. Adiwinahyu Basuki Sigit as the Sales Director. And now hand over the call to our CEO, Mr. Ririek Adriansyah, for his overview. Please pardon me. Thank you, Reza. Good afternoon, ladies and gentlemen. Welcome to our conference call for the audited full year 2023 results. We appreciate your participation in this call. The competition in the telecommunications business in Indonesia during 2023 scored an improvement and consolidation among mobile telco players and moved toward positive ambiance. As mobile and fixed broadband are still our revenue contributors, the more rational pricing behavior in 2023 was also reflected in our financial performance by still growing both in revenue and net income. Moving along to year 2024, the political tension in Indonesia is said to be lessened in the second semester of 2024. This situation will be the catalyst for the telco industry to grow more aggressively and also an opportunity for Telekom to increase its valuation. Telkom Group is consistently implementing fixed mobile convergence and, in the meantime, preparing data center modernization and InfraCo value creation to take the opportunity in 2024. After the spin-off of IndiHome to Telkomsel, known as the FMC Initiative, Telkomsel has been performing quite well in synergizing with mobile and fixed broadband products through some brilliant initiatives such as effective cross-selling, customer value maximization pricing, product differentiation and substitution, as well as actions in CapEx and OpEx disbursements. This could be seen from the mobile customer subscriber takeoff, acceleration in fixed broadband customer growth, and enhanced customer loyalty. On the data center modernization, we are in the process of searching and finding the best potential partners that could bring technology and capital. As of first quarter of 2024, the Telkom data ecosystem has successfully become the only entity that manages Telkom Group data center business after several assets transferred from other business units and subsidiaries. For the whole year of 2023 audited financials, it showed that Telkom Group revenue grew by 1.3% year-on-year to IDR 149.2 trillion, with the EBITDA at IDR 77.6 trillion and EBITDA margin of 52%, decreased slightly from the previous year due to the allocation of spectrum costs and electricity expenses. Net income grew by 18.3% year-on-year to IDR 24.6 trillion due to no accelerated depreciation and less mark-to-market effect by Q2 in 2023. In the full year of 2023, Telkomsel recorded positive consolidated revenue growth as compared to the previous year, with good profitability levels supported by growth of digital business both in mobile and fixed broadband. The result could be seen that Telkomsel mobile and fixed broadband revenue increased by 15% year-on-year to IDR 102.4 trillion, consisting of IDR 13.2 trillion fixed broadband IndiHome and IDR 89.1 trillion from mobile business. Digital business revenue of Telkomsel grew by 7.6% year-on-year to IDR 88.5 trillion, becoming the most significant contributor to Telkomsel's top line, while legacy business voice and SMS in 2023 at IDR 10.7 trillion, representing the sharp decline from the previous year at minus 33.8%. We are of the view that legacy business will continue to taper off, while the growth of our mobile business revenue will be more significant. Digital business segment recorded positive performance and increased its contribution to total revenue to 88.0% from 81.9% last year, driven by healthy growth of data and digital services, the source of future growth. We are committed to deliver diversified value-added services and innovative products, including digital lifestyle, digital advertising, and digital enterprise and solution IoT business. Telkomsel has successfully increased the mobile customer base at 159.3 million in 2023 as compared to 156.8 million in the previous year, with improved productivity and quality of customers. To defend our dominance in mobile competition, Telkomsel increased its capacity and quality in West Java, launched Telkomsel Lite and by.U products. Its capacity and quality, Telkomsel Lite is a strategy to gain back Telkomsel dominance in the Java area, while by.U is a position to retain youth customers and encourage them to use the numbers consistently until they become productive and spend more budget to utilize the numbers. After the injection of retail fixed broadband business by merging IndiHome, Telkomsel continued to take the advantages of synergistic impact on the converged mobile and fixed broadband products. In less than one month after the legal Day One, starting first of July 2023, we launched a new product called Telkomsel One as a commitment in continuing the implementation of the FMC Initiative, which will further encourage equal distribution of digital connectivity and a wide selection of customer-centric packages and multi-screen approach initiatives to content optimization. Under Telkomsel, it has successfully accelerated new additional customers IndiHome B2C with the amount of 425,000 with the ARPU of 253,000. We are committed to continuously improving our services and serve broader customer base while maintaining high standards of quality and value that our customers expect. We really care about customer experience usually and hope to find customer stickiness to our services. In the full year of 2023, wholesale and International Business segment contributed revenue to Telkom Group in the amount of IDR 16.9 trillion or grew by 9.6%. Of the amount growth mostly comes from the international wholesale voice from Telin and New Zealand and infrastructure business from NeutraDC. So it's a subsidiary of PT Telkom Data Ekosistem. The growing data center business of Telkom started to contribute high revenue and growth even though the amount is relatively small to our consolidated revenue. As of full year 2023, data center and cloud business booked IDR 1.9 trillion of revenue or grew by 14.8% year-over-year. Through subsidiary PT Telkom Data Ekosistem with NeutraDC as the brand, we have a variety of data centers including hyperscale data center, enterprise data center, and edge data center, of which each of them has its own market sector. As of December 2023, we have a total of 32 data center facilities, 27 domestic and five overseas, that spread across four countries, namely Indonesia, Singapore, Hong Kong, and Timor-Leste. Our data center consists of an IT load capacity of 42 MW with an average total utilization level of 70%. In order to expand more aggressively on this DC business, we plan to do both organic and inorganic activities. We are also starting to unlock the DC capacity by looking for strategic partners, preferred global data center players, while improving capacity and utilization. We already prepared some actions, including appointing business consultants and selecting financial advisors, and hope to complete the unlock data center business this year so that our expansion in data center business could be growing more rapidly. In our InfraCo initiative, at the end of 2023, we have established a company named PT Telkom Infrastruktur Indonesia that later on will be the only subsidiary of Telkom to organize and manage infrastructure facility business. The company will be dedicated to create additional values through enhanced network utilization, capital and optimization, et cetera, with new investment to further your network service offering and improve operational efficiency and strategic partnership creation. Throughout 2024, the new InfraCo entity will serve as a managed service company for Telkom fiber assets, with a specific focus on optimizing network utilization through the provision of wholesale fiber to home services for wholesale B2B. Later on, step by step, Telkom will transfer its fiber assets to the company so that it can cater both internal and external demand for connectivity. During 2023, our subsidiary Mitratel has successfully added 2,596 towers and 5,403 tenants, resulting in improving tenancy ratio to 1.51 compared to 1.47 in 2022. Mitratel also keeps its dominance as the largest tower provider in Southeast Asia. In addition, Mitratel enjoys diversification as around 58% of towers are located in outside Java, while the remaining 42% are located in Java. With this unique proposition, Mitratel could enjoy equal revenue growth opportunities to support Telkom Group B2B and B2C business. In terms of revenue, in full year 2023, Mitratel recorded revenue of IDR 8.6 trillion or grew by 11.2% year-on-year, driven by tower leasing revenue. EBITDA and net income grew by 12.7% and 12.6% year-on-year, respectively, with the EBITDA margin expanded to 80.5% or increased by one percentage point year-on-year and net income margin to 23.4% or increased by 0.3 percentage points year-on-year. tower-to-tower fiberization is currently becoming our prospective revenue engine growth and part of our strategy to strengthen product portfolio to become a digital infrastructure company. Mitratel achieved significant growth in fiber optics by adding 15,880 kilometers throughout 2023, resulting in a total network length of 32,521 kilometers. In the full year of 2023, enterprise segment recorded IDR 18.2 trillion in revenue, with B2B digital service and enterprise connectivity solutions as the biggest contributors. We strengthened our capability in cloud business, including to build strategic partnerships with a global technology player. Following the spin-off of IndiHome to Telkomsel, enterprise segment launched a new umbrella brand, namely Indibiz, in the third quarter of 2023 to focus on securing SMEs market. Indibiz provides connectivity solutions as well as digital platforms and categorizes the service into Indibiz for shophouse, Indibiz for multifinance, Indibiz for school, and Indibiz for hotels, supported by regional resources for B2B digital IT service business. On government and enterprise markets, we offer solutions such as government digital solutions, e-Pro Government platform, office digitalization, and industry ecosystem solutions. We are also offering B2B connectivity products to support our various product solutions. That is the ending of my remarks, and thank you for the kind attention. Thank you, Pak. We will now begin the Q&A. When raising your question, please speak clearly and state your name and your company. Operator, may we have the first question, please? Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kelsey Santoso from Goldman Sachs. Please ask your question, Kelsey. Yep. Good afternoon, management. This is Kelsey from Goldman Sachs. Thank you for the opportunity. A few questions from my side. Firstly, could you provide some color on full year 2024 guidance, including your group and Telkomsel revenue growth target and EBITDA margin, as well as the CapEx for this year? And then my second question is, on mobile, what led to our poor weakness in Q4? It would be great if you could give the latest update on the mobile competition. And my last question is, on the cost side, we saw personnel and G&A expenses spike in Q4. So for personnel costs, is this related to any one-off at the year-end? And for G&A, in the info memo, you mentioned that it's due to transformation costs. So assume that it's referring to the FMC. How should this trend in 2024? Thank you. Okay. Thank you, Kelsey. This is Heri. I first address your question on the guidance of full year 2024 for the group and Telkomsel. First, on the group side, the revenue is expected to grow by mid-single digit, and then we're going to have EBITDA around 50%-52% EBITDA margin. And then on the CapEx, we're going to spend around 22%-24% of the revenue. I think, Ramzy, you can have color on the Telkomsel guideline. Yeah. Thank you, Kelsey. This is Ramzy from Telkomsel. In Telkomsel, our guidance in terms of the revenue growth would be in mid to high teens post-IndiHome integration. On the EBITDA margin, around 46%-48% as we implement a satellite approach adoption. And on the CapEx to revenue ratio, we will have around 14%-15% to revenue. Yeah. That's about the I think the guideline for 2024 with the company as a group and also Telkomsel. On the CapEx, further to the CapEx that we spend around 22%-20% of the revenue, it will go to mobile around 40% and then fixed broadband around 35%. And the balance goes to data center and other businesses. Okay. Okay. That's the kind of question. This is Kelsey. This is Derrick from Telkomsel. I'll answer your question on mobile ARPU. So we are accelerating penetration and maintaining competitiveness by acquiring new households, particularly by addressing affordability concerns through the lower ARPU products while we want to offer high-quality services. Our focus is on profitability. So our future growth will be driven by customer productivity. We want to optimize our network. We want to drive customer loyalty and stickiness. And ultimately, that will help us to drive the ARPU uplift while maintaining our leadership position in market share. Okay. The third question on some of the costs, the first cost you addressed is in the personnel costs. Actually, there are some causes of the personnel cost increase. First, which is natural. From time to time, we need to adjust by inflation for the basic salary. The second, I think, tax policy coming from government on the natural benefit that we need to apply in the income tax of the employee. The third is some, I think, benefit for the long service of the employee. That is kind of periodically. Whenever employee achieves 10 years, 15 years, and 20 years, we need to give some benefit as well, allowance for that. And I think that's most of the I think the cause of the increase in the personnel costs. And then in the G&A, G&A costs, mostly as you also already pointed out, it is coming from the transformation costs, transformation related to most of the, I think, corporate action we did last year, both in the corporate action and also the, I think, the way we do this monitoring and controlling the transformation itself. This year, as we see that most of the corporate action has already been done last year, the trend of the costs coming from the professional fee is supposed to be decreased compared to last year. I think that's about the costs. The other costs in the operation and maintenance, some costs are coming from the content that we provide along with the connectivity services in the enterprise side. This is coming as the cost that we need to also absorb. That's mostly, I think, the costs that happened in the last quarter of last year. Yep. Thank you, Pak. Appreciate it. You're welcome. Thank you, Kelsey. Our next question comes from the line of Marissa Putri from UBS. Please ask your question, Marissa. Hi, management. Thank you for taking my question. So I have three questions. Firstly, in terms of your numbers, can you provide some details on why the group booked a negative IDR 1 trillion revenue from the IndiHome enterprise business in Q4, whether it has anything to do with the transfer of IndiHome to Telkomsel or maybe InfraCo establishment? Also, how big is this impacting to your EBITDA net profit numbers in general? Secondly, you launched Telkomsel Lite this year. There was also a push of by.U product. Given that we are now seeing two consecutive declines in both ARPU and data volume per data subs, would it be fair also to assume there has been some change in your mobile strategy, which would also point to potentially more intense competition, especially in the lower end of the market? And lastly, your guidance of mid-single digit growth compared to the current 1% growth, which part of the business you're expecting to be lever for growth on the top-line side? And I guess your margin guidance would also imply some decline to flatish margins. With such top-line growth target, what cost item you're expecting to increase in 2024 then? Thanks. Okay. I think on the revenue from enterprise, basically, when we did, I think, transfer the IndiHome to Telkomsel, part of the enterprise connectivity, we used, I think, the brand of IndiHome. Because of this, we also booked the gross revenue in Telkomsel. So this is intercompany transactions. So when you see from the segment-wise, it looks like the enterprise is declined. And actually, it's not as though we mentioned the IndiHome still grew around 2.7%. In addition to that, I think, bookkeeping side, actually, some of the subsidiaries are still ongoing of, I think, turnaround. So we do more selective business, I think, acquisition for the, I think, the project that's coming to the enterprise. So this is becoming more conservative in the growth and some correction in the growth in the subsidiary as well. That's basically the main reason of the enterprise, I think, revenue we book declined compared to last year. And then on the third question, before we go to Telkomsel, which part of the business that could provide the mid-single digit growth in our business? Actually, 75% of our business is actually coming from, I think, the consumer side that's currently managed by Telkomsel. We see actually both mobile and also fixed broadband able to provide with the mid-single digit growth as well on this one. So the other part of the business, of course, coming from enterprise and then wholesale business, still provide almost similar figure or slightly higher than that. For example, in tower business and international business and also enterprise, we expect kind of improvement this year. That all together will provide us with the basis how we come to the mid-single digit of revenue growth. I think in the EBITDA side, we do expect that we, of course, can beat this, I think, guideline, 52%, the margin that we have today. We do expect, I think, the competition is still manageable. And also, we can do some, I think, stringent cost control. So I think we do expect around 52%-53% supposed to be a target we want to achieve. Yeah. I think speaking from Telkomsel here, we'd like to share our view on how our strategy on Telkomsel Lite and also by.U. I think we believe that we need to address various segments of market that we have in overall markets. And basically, Telkomsel Lite and by.U is our strategy to address both selectively mass market segment as well as the youth. With these both product portfolio that we have, we have carefully selected the market who actually have been very competitive to make sure that our affordability and also competitiveness are maintained in the market. I think from the ARPU decline point of view, we believe it is a balance between how we maintain the market share situations and also trying to still provide the profitability. If you see from the price perspective, I think the Telkomsel Lite positions, we always maintain the price point while we're actually giving the more bonus in the quarter basis. So basically, with that, we believe that we can attract more towards the mass market segment as well as youth with the by.U and also Telkomsel Lite. Thank you. Got it. Thank you. All right. Thank you, Marissa. Our next question comes from the line of Arthur Pineda from Citi. Please ask your question, Arthur. Hi. Hi. Hi. Thank you. Several questions, please. Firstly, on Telkomsel, what's causing the quarter-on-quarter drop in external mobile revenues when your peers are growing by mid-single digit levels on a Q and Q basis? I know in the past, you used to mention the legacy revenues, but now your revenue ratio on legacy versus total seems to be very aligned to that of your peers. So I'm just trying to understand why there's that drop in ARPU and drop in revenues. Second question I had is with regard to the margins. Can you help us quantify what would be the transformation-related expenses on the FMC? I recall last year you mentioned the target was around IDR 0.5 trillion in synergies back ending in the second half, yet costs have actually expanded and margins have dropped in the second half. Are there any one-off bookings? And what are the related target synergies for FY24? And lastly, maybe if you can just ask about the asset spin-off plans, what are the timelines for potential strategic investors for data centers and maybe the fiber business? Thank you. After this, Derek, I'll address your two questions. For our QoQ, legacy decline of -52.2% QoQ, that's actually due to a continued natural decline and a one-time adjustment from the IFRS implementation on legacy business post-integration. So this one-time adjustment only applies in Q4 2023, and it will not be reflected in the next quarter. And you'll be back to normal run rate. So we see this continued natural transition of legacy towards data, and we will project it to be stabilized for the next one and two years with the current rate, along with our initiatives to manage this decline as well as to prolong the tail. And your thoughts about how we are accelerating the profitability? In Q1 and Q2, the ARPU declined by -4.3%. As we are investing and we are securing the future of. Is this really this balance between customer quality as well as profitability? Okay. On the, I think, synergy that we expect to be achieved from fixed mobile convergence, actually, this year, we do expect we can hit around IDR 1.5 trillion. This is coming from the combination of the revenue uplift as well as the cost synergy that we can achieve. Along with that, also, we're going to have, I think, a synergy coming from CapEx efficiencies as well on this one. So that's, I think, about the synergy that we target in 2024. And is there any one-off cost in 2023, if I'm not mistaken, your question on this? But Arthur, I think if we see the cost that's coming quite new in 2023, basically coming from the cost of spectrum 2,100 and 2,300, which is coming by the end of 2022. So basically, we book around IDR 868 billion additional spectrum costs in 2023. The other cost that we make consider, I think, kind of one-off, the cost of the electricity of data center because of, I think, energy price increase, around IDR 300 billion. But the cost has already been adjusted right now by the agreement with the customer. They are going to bear the cost. In 2024, we do not expect that we're going to have this one-off cost so far that we see like that. Number three, asset spin-off timeline for data center and fiber business. Pak Ririek, Pak Honesti Honesti. So regarding our timeline for data center unlock, we are in the process to hire the business consultant as well as the professor for that. Sorry. Sorry. The line is really bad. Is it possible to put the mic nearer? Sorry. The audio is quite bad. Is it clear now? Oh, much better. Yes. Thank you. So regarding our timeline to unlock the data center, we are right now in the process to hire the business consultant as well as the financial advisor. Hopefully, the unlocking process will start in this first semester, and the transition will be closed at this end of this year. So about the fiber business, we just set up our subsidiary to transfer assets for our fiber optic to the new subsidiary. But for this year, this new subsidiary is only to manage service for all Telkom fiber businesses. In 2025, we have a plan to transfer all the asset fiber to this company. And after that, we see that opportunity if we can also find the strategic partner also to invest together with us and growing together. Thank you. Thank you. So sorry. Just on the first point, it was mentioned there was an IFRS adjustment, which resulted in the reduction in revenues. What is this about? And any guidance what the actual growth would have been like if we were to look at it on a like-for-like basis versus prior quarters? Yeah. Arthur, this is Ramzy from Telkomsel. As you may see, the Q on Q legacy declining around 52%. Actually, it is because of the implementation of the IFRS 15, especially for the legacy from our post-split. It will be only one-off this last quarter. Throughout 2024, it will be back to normal. We expect that the declining rate is around 28%-30% on the annual basis. Okay. Thank you. Thank you, Arthur. Our next question comes from the line of Henry Teja from Mandiri Sekuritas. Please ask your question, Henry. Yeah. Hi. Hello. This is Henry from Mandiri Sekuritas. Thank you, gentlemen, for the opportunity. Perhaps two questions from my end, please. The first is about the IndiHome business. I think Heri mentioned before about the IndiHome enterprise business, how there are some turnarounds in this business, how to be more selective in terms of the enterprise segments, etc. But if we talk more about the B2C business segments in the IndiHome, we highlight that the IndiHome booked more than 2,200,000 net subs in the last two quarters. But it seems like the revenue growth on the Q on Q basis is not aligned with this IndiHome B2C subscriber adds. So could you provide more color on that? What are the drivers for this sluggish IndiHome revenue growth on the Q on Q basis? And then the second question for the Telkom itself, we highlight that the company booked more than IDR 500 billion of the unrealized loss in the fourth quarter, which is due to the MDI investment. Could you provide more colors on that? Any other main driver for this unrealized loss in the fourth quarter? Thank you. Okay. Maybe I go to the first unrealized loss that is coming this year. Actually, we booked around IDR 118 billion loss coming from the fair value of GoTo. In addition to that one, some investing in MDI, we need to do also the kind of, I think, fair valuation based on the method that has been also, I think, audited by our auditor and also external parties on this one. So it is supposed to represent what is the closest to the real value at that time. So based on that one, several investments we need to do, I think, book some loss because the valuation is lower compared to last year. So the amount in total, including the GoTo, is around IDR 700 billion. So that's the, I think, about our investment in the startup or digital company. Yeah. I think let me address the IndiHome consumer part questions. I think, as you mentioned, I think in the first half of last year, we actually booked additional new about 245,000, which is improving compared to the first half of last year. I think from the revenue side, what we've seen so far, I think in the consumer side, we can grow the Q-on-Q basis on 0.3%. Part of the revenue impact is actually besides the additional new that we have growth in terms of the IndiHome, we're also doing some promotions and also bonuses that we can give. So I think the impact on the revenue is not as much as the additional. However, I think we believe it is a one-off discount that we can give to the customers to attract, to have the additional addressable market that we can attract and capturing the penetrations. But in the long run, it will still be reflected in the revenue growth on our fixed broadband business. Okay. Thank you, Pak, for the explanation. All right. Thank you, Hendry. Our next question comes from the line of Piyush Choudhary from HSBC. Please ask your question, Piyush. Yeah. Hi. Good afternoon. Thanks for the opportunity. I have several questions. Firstly, in the mobile, subscriber additions have been quite strong in the last two quarters. But if I look at service revenue in the fourth quarter, it was flat sequentially. Just trying to understand if you can dig deeper and help us understand what is happening there. Is it cannibalization of existing subscribers to new plans, or is there a decline happening in the old subscriber base, and that's why this, even despite new subscriber growth, not leading to any revenue growth? Any light over there? And what is the outlook for mobile ARPU going forward? And in light of this Telkomsel Lite plan, which you have launched recently, what is the outlook for mobile ARPU? Can it further drop from here? Okay. Piyush, Derrick, I would like to address your questions. Yes. The declining ARPU in Q on Q basis is basically due to how we applied the right pricing initiatives across our customer segments. And we wanted to stimulate customer productivity. And we were addressing additional segments like the youth and the selective mass market customers. So going forward, we expect ARPU to be stabilized along with the improvement of customer productivity. Yeah. I think we have shared about when we launched Telkomsel Lite, it is really an initiative where we see opportunities to grow our market share in selected areas where we deem that we have that ability to grow. Plus, from a network perspective, we are still able to optimize the network utilization. So this is a segment that we will be focusing at as well as by.U, which is our youth segment, the customers of tomorrow. So these two segments will help us, in our perspective, to grow market share while balancing profitability. Yes. I would like to add some more color on the revenue side. I think if you take a look on the broadband and digital businesses, we even grow 7.7% on Q on Q basis. Basically, it's also driven that our impact on the revenue flat in the quarter four is basically because of the decline on the legacy and one-off that we have mentioned before. So in terms of aligning on how we grow the customer base with the right approach on the segment addressing to the market, we've seen that, I think, the traction on the quarter-on-quarter basis in terms of broadband revenue is still on the right track. And even further, I think we've seen there is a good positive momentum that we have gained along the way in this year even after we launched the Telkomsel Lite. And it gives us the confidence to continue to drive the market share that we can gain from the especially on the market that we have seen that we have room for us to grow and gain the market share. So if I may ask on this Telkomsel Lite plan, what percentage of industry customer base or what percentage of your customer base this footprint has an overlap with this new Telkomsel Lite plan? Because you're saying it's selective, right? So if you can shed some light on that. And secondly, on IndiHome, earlier, there was an expectation there will be cost synergies coming in the second half of 2023, right? But we saw margins actually drop in the fourth quarter at Telkomsel level. So what happened is these synergy benefits delayed, or? Yeah. If you can shed some light there. Thank you. Yeah. So I think on the Telkomsel Lite plan, when we talk about the selective targeted market, we basically believe that there are certain cities that we carefully select that we can actually gain the market share through the competitive plan that we have in the Telkomsel Lite. And I think if you see from the price point angle, as I mentioned previously, we keep maintaining our price point, but I think giving the bonuses both on local bonuses and also the new inbound bonuses that we apply only for the new subscribers. So basically, we believe that although probably in the youth side, when we use the Telkomsel Lite approach, it will be impacted. But in terms of ARPU impact, I think it is not that big compared to actually drop in terms of the ARPU because of this Telkomsel Lite approach. So far, I think what we believe, especially on Java markets, these Telkomsel Lites have been positively progressing on how we actually attract the competitiveness against the peers. Yeah. Yeah. Maybe I'd like to add to that, Sigit. This is Derrick. So Telkomsel Lite also supports our FMC strategy, looking at family members. So we want to really increase penetration through these multiple layers of segments. And we want to leverage the brand and our portfolio to grow the unserved segment. So the goal is really ARPU accretion from productivity and volume increase. So that's our strategy. Yeah. To add on the synergy, as we already explained in the previous quarter, actually, we realized certain synergy that we expected on the cost side. At least, we realized about IDR 100 billion cost synergy that comes from the optimization and the closing of the outlet, both from the existing Telkom Plaza or Telkomsel Gallery. It is more than 280 now till December. And also the content cost that we spent previously on the two different channels from Telkom and Telkomsel and also contribute some cost. On the uplift in terms of revenue, we also recognize some uplift revenue both on the cross-selling and also upselling as we now more understand about the customer. And also, we try to provide the convergent offer to the customer who is likely to have the same ID that owns both fixed and also the mobile. If you look at the quarter-over-quarter basis, some of that reflects to the improvement in G&A cost that in the last quarter declined about 3.7% and also the cost of service. But it is still early as we will continue certain initiatives towards the synergy value creation. And as mentioned by Pak Heri, this year, we aim at at least about IDR 1.5 trillion both from the revenue uplift as well as the cost side. So Pak Heri, if there are cost synergies, then why is the guidance more of a flattish margin year-over-year in 2024? Is there any other cost headwind which you can massage, or this is more of a conservative guidance, and you do expect margins to improve? Actually, we don't expect any kind of new cost coming to quite coming as a surprise this year, yeah, except for, let's say, the cost, for example, if we have new spectrum, which is not in our discussion today. But this is more, as you mentioned, to the conservative guidance. We do believe this is supposed to improve next year, the cost situation. I think that's what I can say, Pak Piyush. Okay. Thanks a lot, Pak Heri. Thank you. Thanks, everyone. Thank you, Piyush. Our next question comes from the line of Norman Choong from CLSA. Please ask your question, Norman. Norman, your line is open. Please ask your question. Okay. We have lost the line of Norman. Maybe you would like to press star 11 again. We'll take our next question from the line of Sukriti Bansal from Bank of America. Please ask your question, Sukriti. Hey. Hi. Quick, three questions from my side. Number 1, on the transformation-related cost, how come a large part of it is being booked in 4Q and not in 3Q when the IndiHome spinoff actually happened? Both on marketing and sales expenses for Telkomsel, which have increased 15% quarter-on-quarter, and at the Telkom level, G&A expenses, which have increased 33% quarter-on-quarter. Why is this a 4Q phenomenon? I'll come to my answer. Okay. I think on the cost transformation-related, besides IndiHome, we also did several, I think, consultancy with regard to the Five Bold Moves. That's also ongoing up to year-end. Even when we did the transfer of IndiHome to Telkomsel, actually, we are not only focusing on the process of the spin-off itself, but also basically, we need a kind of PMO to ensure all the business process can be smoothly run by Telkomsel. And also, we try to find, I think, some room for improvement as well whenever this business is run by Telkomsel. That's, I think, about the cost, why it also happened in Q4 and Q3. Yeah. To add to Pak Heri point on Telkomsel side, I think especially on the marketing and sales expense in Q4, this is due to, I think, seasonality. First of all, I think we believe that Q4 has been, we're trying to capture the demand on the seasonality. And on top of that, after the mergers, we're trying to also accelerate our fixed broadband penetrations to really boost with many and various new initiatives that we believe it will help us to capture and increase the penetration of the fixed broadband itself. I think on top of that, we also enhance our digital capability and also along with how we also manage the promoting beyond the connectivity, which is also the content and also services that we have. Understood. Got it. Is there any progress you can share on cross-sell targets for the FMC? You had mentioned that there are about 3 million households which have only IndiHome but not Telkomsel and about 8 million households which have mobile only but not IndiHome. Is there any progress you can share in terms of where we are now? Yes. Yeah. Sukriti, I can share our half-year outcomes. So we had a solid half-year post-integration of IndiHome from the convergence perspective. When we started after commercial day one, which was at 37.4%, we have now reached 44%. And that has been a smooth integration of how we are able to do cross-cell and to serve our existing customers without any disruption. Thanks. Got it. Understood. And thirdly, on Telkomsel Lite, you mentioned that there are specific areas and cities which you're aiming from these packages. Any further light you can share on which particular areas? You mentioned Java, I think. Is this more a Java-focused initiative, and where are you seeing most traction? Yeah. I think on the Telkomsel Lite strategy, as we mentioned before, we believe that we have addressed the mass market segment selectively in the specific area. Mainly, it's in Java and some of the cities outside Java as well, which we believe, I think, the competitions are actually comparable against the peers. And we also believe that our network competitiveness and also room for us to grow are actually available for us to actually push further with giving up some of the bonuses within the same price that we have, I think. On top of that, I think Telkomsel Lite, what we believe also will help us to improve our brand's perceptions in terms of how we can address the mass market segments instead of how we're going to continuously focus with both Halo and also Prabayar for high-value customers segments. And I think what Derrick mentioned on the FMC strategy, we would like to also stress out again. When we have this FMC, we realize that we cannot only focus on high-value customer only, but we also have to address both youth as well as the mass market segments, which we believe within the family, we also have to have that to be covered. And with Telkomsel Lite and also by.U in place now in the markets, we believe that we have addressed that, and we will use that for us to continue leverage our mobile penetration using our FMC strategy, which I think will shoot to continuously increase not individually ARPU, but hopefully, will improve the ARPU per household or ARPA, we call it. Got it. Thank you. And just one last thing. Any further clarity on 5G auctions? Can we expect them still at some point this year? And any timeline that you're expecting? Yeah. So Nugroho here. To answer the question on the strategy of 5G auction, yeah, tentatively, it's going to be in Q2 or Q3 this year. And rumors said it will also come with some incentives, so it will be good for the industry. Let's hope that it will happen that way. All right. That's all from my side. Thank you. Thank you. Thank you, Sukriti. Our next question comes from the line of Ranjan Sharma from J.P. Morgan. Please ask your question, Ranjan. Hi. Good afternoon. Thank you for the presentation. I have a couple of questions. Maybe I can take them one by one. First question is on these new plans which help you target more of mass market segment and a more competitive in nature. How have you selected the areas to launch these plans in? So that's the first question I want to talk here. Yeah. Ranjan, just to share the Telkomsel Lite strategy, we want to address opportunities that we could still increase our market share. So we have increased our product competitiveness, but we will ensure that there is the ARPU pull upward trend. If you look at what we are offering, it is the same price point, but we are offering more local quotas in our product. So that will help us to address the principles of a healthy market conduct. At the same time, we want to increase our subscriber base and growth. So it is a targeted rollout. We want to make sure that we optimize relevance, and we will achieve yield as compared to our competitors, yeah. As just now we mentioned, it is part of our FMC strategy to target the different members of the household. So beyond the head of the household, we want to have our plans to reach out to other family members. So this is aligned to our strategy to increase penetration of the different layers of segments to cement our FMC cross-sell and upsell strategy, yeah. I think to add some color on how we select area, we believe, I think of course, we're looking at how we can always address the competitiveness against the peers. Number two, we also select the area where we have the room for us to grow in terms of payload growth as well as the network competitiveness against the peers as well. And I think what we also seen that the progress so far has been good and positive traction on our end. And we believe this is the right strategy as we also address the complementary segments as we go along. Thank you. Thank you for that. If I can just follow up on that, a lot of focus of the discussion on market share, competitive plans, but also profitability. We've seen Telkomsel EBITDA margins sorry, Telkomsel EBITDA decline by 3% in one quarter's time. And I think the guidance is also improvements in the coming period either despite higher customer numbers or revenues. So is it that you're going to see some costs which go up further this year or that these are basically very low-margin products that you're offering for competition reasons? Yes. In terms of the margin, as we already explained earlier, there's also some cost due to declining in legacy. But as we see the third quarter compared to the fourth quarter, actually, the margin is around 46%-47%. As we provide the guidance for this year, we aim at around 46%-48% in terms of the base margin. This will come on the normalized impact of legacy as well as the initiative that we already been run on the cost efficiency, especially not only in the FMC side but also in the other areas, which include at some point in the network operation as well. Okay. And if you can just share, I think your earnings are down this year. Should we expect the same level of dividend payment as last year, or should we expect around 70%-80% payout? Okay. Thank you, Pak Ranjan. On the dividend, as we used to say to you and also other analysts, the EBITDA that we used to pay around 60%-80% of net income. Our net income, as reported, grew by 18.3%. So we do expect to still pay with the same dividend payout ratio. With that, we do expect that we can, I think, pay a higher dividend per share. You want to pay a higher dividend per share in 2023? We will propose that one. Okay. Thank you. Okay. Great. Thank you, Ranjan. We have reached the end of the Q&A session. Thank you very much for all your questions. I'll now turn the conference back to Pak Ahmad Reza for closing comments. Thank you. And thank you, everyone, for participating in today's call. We apologize for those whose questions could not be addressed yet. So if you have any further questions, please don't hesitate to contact us directly. Thank you. Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.