Good afternoon, ladies and gentlemen. I am the moderator for this webinar. Welcome to the Bharti Airtel first quarter ended June thirtieth, twenty twenty-three earnings webinar. Present with us today is the senior leadership team of Bharti Airtel Limited. I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. Post the management opening remarks, we will open up for an interactive Q&A session. Interested participants may click on Raise Hand option on their Zoom application to join the Q&A queue. Participants may click this option during the management opening remarks itself to ensure that they find a place in the queue. Upon announcement of name, participants to kindly click on Unmute Myself in the pop-up screen and start asking their question post-introduction. With this, I would now like to hand over to Mr. Gopal Vittal for the opening remarks. Thank you very much. A very warm welcome for our earnings call for the quarter ended June 2023. With me on the call are Soumen, Harjeet Kohli, Naval, and Sunil Taldar. Let me start by giving a quick update on our business, and I want to start with ESG. During the quarter, we were recognized by the Economic Times as well as BW Businessworld for our sustainability practices and leading the charter in India. Let me give you a few examples on the progress we've made, especially on our green agenda. Nxtra now utilizes renewable energy for 41% of data center energy needs. That's a big jump from 32% a year ago. 43% of our network sites are now green sites. These sites consume less than 100 liters of diesel in a quarter, versus 420 liters on an average for other sites. The rural site expansion we've undertaken is leveraging green energy for 35%-40% of requirement. Such initiatives have helped us reduce our diesel emissions in the network by almost 48% per terabyte of data, and this is over the last 2 years. In addition, we continue to double down on our agenda to drive diversity in the workforce, as well as make Airtel a safe and secure workplace. Let me turn to our financial performance. We've delivered a strong competitive performance this quarter. Consolidated revenues grew by 4% sequentially to a shade under INR 37,500 crore, so INR 37,440 crore, precisely, powered by a strong India performance. India revenues grew by 4.5% sequentially to INR 26,375 crore. EBITDA margins were at 52.7%. This is an expansion of 0.5% from the last quarter, aided by the continued momentum on the War on Waste program. Let me talk a little bit on this program. This quarter, we really focused on our network costs. Our network cost takeout program has been delivering a very strong outcome. Network OpEx for India declined by 0.5% despite our rollouts. In effect, for the first time in the history of the company, the operating cost per site per month was actually lower than what it was in prior quarters. This was done through a combination of identifying very high-cost sites. I had referred to this a quarter ago, that we've identified over 50,000 sites that are more than INR 100,000 per month in terms of network OpEx per site. Our teams have visited every one of these sites. We've put in place bespoke solutions that include either solar solutions or better cut batteries, sometimes reconfiguring the site, rental negotiations, or indeed, even relocating the site. This is really what's helped us take this cost to set a new baseline on the network OpEx per site. The company generated operating free cash flows of INR 4,827 crore for India, despite the elevated CapEx. Our CapEx, as I've highlighted earlier as well, continues to be front-loaded at about INR 9,300 crore for the quarter. While the full-year CapEx is more or less in line with the INR 28,000 crore-INR 31,000 crore guidance that we've given for the year, you must also remember what this CapEx is for. It is really for future-proofing Airtel. 5G radio rollout, transport infrastructure, broadband rollout, and data centers, each of these is a massive opportunity for future growth. At the same time, despite the elevated CapEx, our net debt to EBITDA for India is down from 3.43 in quarter four of last year to 3.19 in quarter one of this year. In fact, I do want to mention that in addition, we prepaid INR 8,024 crore of relatively high-cost DoT liability. Our growth was broad-based across our segments: mobility, homes, and Airtel Business. This underscores the simplicity and execution of our strategy. Focus on quality customers, deliver digital at the core, and strip out waste. More about this a little later. Let me switch to a quick update on each of our segments. In the mobile business, we added 5.6 million 4G net adds. Postpaid this quarter saw a significant acceleration and contributed to almost 26% of the overall net adds for the quarter, coming in at 833,000 net adds. The ARPU got to INR 200 versus INR 193 in quarter four. This, as you know, is the first goalpost we set for ourselves a few years ago. We are now looking at getting to the next goalpost, which is a longer-term goalpost of the target of INR 300 ARPU. The movement in ARPU we've seen reflects the power of our premiumization approach that I've talked about earlier. What is driving this premiumization? Feature phone to smartphones gives us an ar-- upgrade of feature phone to smartphone gives us an ARPU upside. The 5.6 billion 4G net adds is a clear ARPU upside there. Prepaid to postpaid is one area where the ARPU pretty much doubles. The third area is really data monetization. This is really driven through a very, very strong mix of contextual targeting, sophisticated data science, and simple digital journeys. Data consumption by itself gives us, again, a significant upside. Then there is international roaming, where we've simplified our journeys dramatically, simplified our pricing dramatically, and we have doubled the penetration of international roaming on the prepaid side. The combination of all of this, every single lever adds up to this ARPU journey that we've been on. Of course, the last part is the movement that we made on the INR 99-INR 155 price point, which has also given us a small upside. Let me turn to broadband. We've continued momentum there with more than with about 413,000 net adds. We're now present in 1,225 cities, up from 983 last year. There's an intense focus on driving sales force productivity, which has improved significantly, by almost 20%, through a mix of digitization and execution rigor. In the DTH segment, we lost 28,000 customers, largely due to seasonality, led by the pullback of cricket in the Hindi belt. If we de-average the performance, our core southern markets continue to do well for us with positive net additions. We've put together a market-specific strategy to address this issue, as well as stepped up focus on the convergence portfolio, which gives us an ARPU upside with increased customer stickiness. I'm specifically referring to Airtel Black. Today, 25% of our DTH acquisitions are happening through the converged plans. At the same time, in the DTH segment, we did grow ARPU sequentially, aided by our price simplification and flow-through from the market price increase in quarter four. Airtel Business has been a strong performance. We grew sequentially by 5.6%, and growth was broad-based across segments and products, so both the core as well as adjacencies. We're starting to see momentum in adjacencies. We won multiple deals during the quarter. In SD-WAN, we won 2 large multi-year deals from banking customers. In the cloud, we won a multi-year deal from a state government for supply, installation, and commissioning Exadata servers and migration of existing applications with data. CPaaS continues to look strong, and data centers continue to fill out fast, even as we ramp up the build-out of fresh data centers. On the payments bank, for the first time, the bank reached a quarterly revenue rate of INR 400 crore. Deposit growth remains robust at 48% over last year. Annualized revenue run rate now stands at over INR 1,600 crore, versus just about INR 1,500 crore in quarter four. On the digital businesses, we're now tracking well with an annualized revenue run rate of about INR 1,200 crore versus INR 1,000 crore at FY 2023. Market tailwinds continue across focus play areas. These are CPaaS, financial services, and I will talk a little bit about this in a moment, security, particularly cybersecurity, which is a growing threat, as you know, and cloud. Now, let me turn a little bit and underscore what I've said in the past on the future of Airtel. If I look at Airtel today as a company, we're already generating an annualized run rate of almost INR 19,000 crore of operating free, free cash flow, despite a front-loaded and elevated CapEx. Going forward, we expect this to only improve given ARPU growth, organic customer adds, premiumization, portfolio resilience, our focus on cost, and CapEx moderation after the elevated front-loading we have today. This underlying future is really based on five fundamental strengths, and I do want to again underscore these strengths. The first is our portfolio resilience. Africa today accounts for 30% of our business, India Mobile is about 54%, the underlying performance of both continue to be strong and has significant upside. The homes and enterprise business constitute the balance, whose contribution has been increasing steadily over the years, with the tailwinds that we have in those markets. Both these businesses have tremendous market momentum. Our investments will be channeled to where the growth is, making the portfolio even stronger and even more resilient. The second strength that I want to talk about is our brutal focus on quality customers. Like I mentioned last quarter, we see this through the lens of two big geography opportunities, clear segments. One is rural, and the other is the top 150 cities. Let me start with rural. As you know, we identified 60,000 high potential villages for expanding our network to win our fair share of 4G net additions. This expansion continues to be in line and is delivering as per expectation. In fact, it's delivering modestly ahead of expectations, both on the revenue per site as well as lower on the operating cost per site. The reason this is so is that it is really driven by digital tools and data science to plan the network in a precise, optimal manner. This, coupled with our execution rigor, is giving us results. Let me now turn to the top 150 cities, which is the second lens through which we look at the quality customer opportunity. In the top 150 cities, more than 80% of the postpaid, broadband, converged homes, and in fact, 100% of the B2B opportunity is concentrated. Our focus is to win these cities by bringing the full power of the Airtel network, our channels, and all powered using digital tools. For the top 150 cities, let me provide more color around each of our segments. Let me start with postpaid. We double our ARPU every time a customer moves from prepaid to postpaid, we have multiple levers that we look at. One is a proposition lever, which is the family plan. Almost 65%-70% of our users now are on family plan with very low charts. 5G is a very strong pivot to actually entice the customer and make them come onto our network. The third part is really a quiet rollout of more stores, of our own stores, into neighborhood catchments, which is where the opportunity is. All of these three levers are continuing to kick in strongly. The second area in the 150 segment, in the 150 city opportunity, is homes. The rollouts here continue, and today there are 25.6 million home passes. Our One Airtel transport planning is the focus for rolling out fiber here. We are leveraging data science to estimate demand across all our businesses, our homes business, our mobility business, and our B2B businesses, and rolling out in a much more coherent way. This will ensure that there is very, very minimal customer leakage of a situation where there is no network available or, or no fiber available. In addition to that, it ensures very efficient economics. Second part is the convergence, continues to be the proposition around which more than a third of our high-value homes today, which are on Airtel Black already. As I mentioned, the family plan continues to grow. With increased fiber capacity, therefore, our focus is now on really sales force productivity. The third area of the 150 cities is in B2B. We're doing two things here. First, we are really setting the go-to-market right for our top accounts. As I mentioned before, the top 500 accounts contribute to a majority of the industry's growth, and we've really started strengthening the go-to-market by allocating our top account managers to these accounts, upskilling them, strongly engaging with customers leaders to understand their needs better and solving for it. The second part is that in a competitive market, experience is a key differentiator, and therefore we are investing behind building and upgrading to things like flapless networks, which are very, very high quality, low latency networks that are enterprise-grade in key pockets. We're also simplifying and digitizing our processes, as well as shoring up our capability of our teams on the ground. The third strength that I want to talk about, pan Airtel and Airtel wide, is our obsession with delivering a brilliant experience. As you know, quality customers want a quality experience, and so one of the things we've done is we've changed the metric of measurement to interactions. Any interaction, whether it's happening on social media, on the web, on the app, in the call center, on email, or in a store, is a signal for us for a potential fault. This has infused fresh energy with the new leadership that we've announced in the experience side. The focus here is on structural solutions on the network at an architecture level, end-to-end simplification and digitization of processes for more proactive solutions, as well as more transparent communication in the channels that matter, at the time that matters, and in the language that matters to our customers. To enable this, we continue to build and deliver on four key platforms: buy, build, pay, and serve. Each of these platforms is exposed in an omni-channel manner across our channels and is powered by our underlying foundational data layer. Initial results are encouraging, with mobility interactions having reduced by 14% over the last 2 quarters. By the way, this also lowers the cost to serve. Broadband and DTH numbers are also tracking well, and the learning from mobility is going to accelerate the rate of decline in these businesses. The fourth strength I want to talk about is digital, which is now deeply embedded across Airtel. As I mentioned, we see Airtel in 3 parts. The underlying foundational layer is what we call the digital infrastructure layer, which is really the network that we have, but even more importantly, the data infrastructure that we have, where we've invested in the last 5 years. The second part of our stack is digital experience, which is a buy, build, pay, serve journeys. The third part of our stack is our digital services. All our digital services ride on the two lower parts of our stack, the digital infrastructure and experience, and I've talked about this in my earlier comments on this call. These digital services now that are built on top of these two layers span ads, Airtel Ads, CPaaS, Airtel IQ, IoT, cloud, and now SD-WAN as well. In addition to this, we've just recently launched, in the last few months, lending in the form of Airtel Finance. Let me try and give you some color to this business, which I'm quite excited about. Airtel Finance has just about begun testing waters in the marketplace in the last few months. The interesting thing is that this whole opportunity is only predicated on our underlying data infrastructure, so we are not carrying any balance sheet risk. It's just predicated on the underlying data infrastructure, and we've developed three capabilities. One is a proprietary lending model. We're reaching out to the right user with the right... You know, typically, reaching out to the right user with the right offer is a challenge that most NBFCs and banks alike are faced with. What we've done is created an AI and ML model that deciphers over 2,000 patterns to help our partners improve their underwriting and fraud detection capability. Additionally, this also helps identify a customer's propensity of taking a credit product. We've built a recommendation engine that uses state-of-the-art models to recommend the best offer to the user in real time. Over the last few months, our models have been tested by various banks and NBFCs and have shown good results. As a consequence, our partner banks and NBFCs have started leveraging our models to reduce their portfolio risk. The second part of this capability is a digital lending platform. Extensive and elaborate processes, along with heavy documentation, makes the lending process extremely cumbersome for users. Along with this, challenges such as lack of privacy, lack of trust, a fragmented experience, all of this act as a deterrent for customers to access credit products. To solve for this, what we're doing is digitally owning the entire customer life cycle, starting from discovery to post-purchase loan management and repeat purchase. This platform can quickly onboard multiple partners and product lines. The digital onboarding for consumers and post-purchase journeys are built on the platform, which utilizes our data capabilities in real time to always bring the best experience to customers. The post-purchase journey on Airtel Thanks app means that once the customer has taken a financial product, he or she can manage their credit product on Airtel Thanks app instead of downloading the bank or NBFC application. This post-purchase journey also helps in driving cross-sell and upsell to existing customers. The third part of this is our collections platform. We're also handling collections. Here, we utilize features like a pre-call allowance announcement, so just before the call is getting connected, there's a reminder for those not paying EMI on time, along with leveraging data for early warning signals to decide on collection strategies. Collections done by us for our loans originating through our platform provides a consistent experience to our customers, and our performance on first bucket telecalling collections is more than 96%. Using this, in literally the last few months, Airtel Finance is disbursing loans at a run rate of INR 450 crore per quarter. This is literally the last three months, and we believe this has enormous potential for growth since we have exposed our offer to a mere 5% of our total user base. We're also distributing credit cards on the platform and are already at a run rate of 260,000 cards per year. We haven't scaled this yet, given some teething problems around experience, particularly on fulfillment, and we hope that these will be fixed soon. The notable thing about this is that all this generates a net profit of almost INR 75 crore annualized since it involves just 35 engineers working on the data model. This is just one example of how the data infrastructure comes alive in the form of digital services. On B2B, our ongoing investments in cloud, CPaaS, undersea cable route expansion through partnerships is testament of our confidence in the growth opportunity. The additional stake purchase of 20.6% in Lavelle Networks will strengthen our presence in SD-WAN market, with accelerated growth in the medium term. The fourth area I want to talk about is water and waste. This is now deeply embedded into the company, and we take pride in our frugal culture, but thoughtfully done to attack key areas of waste. I've already talked about the network, network takeout, where we've been able to reduce our OpEx per, per site by 7% in the last few months. A second area is our CapEx prudence. The way we roll out a new site, or indeed a 5G site, is based on a very granular understanding and data science using multiple data sets. As an example, we're already seeing 30% offload of data onto 5G networks as devices come in. We hope the device picks towards 5G changes rapidly to increase this offload. As a consequence, our capacity investments into 4G are now down to zero. The last, and perhaps most important strength that we depend on, is our culture. If I were to sum up the culture of Airtel in just one word, it is this: ownership.... Our people behave like owners. It is their company and their money. This is a priceless aspect of the Airtel culture, which makes us unique and very, very difficult to replicate. In sum, I would say the company is set up for good momentum. We've delivered yet another quarter of sustained solid growth and competitive performance. The company's already started hitting strong cash flows, and we see this improving going forward. We believe we are setting ourselves up for success. A future-proofed Airtel with a resilient portfolio and a clear strategy of being focused on quality customers, delivering a great experience, putting digital at the core, stripping out waste, and all of it backed by a culture of ownership. With that, let me hand over back to the moderator for questions. Thank you, Mr. Vittal. We will now begin the Q&A interactive session for all participants. Please note that the Q&A session will be restricted to analyst and investor community. Due to time constraints, we would request if you could limit the number of questions to 2 per participant to enable more participation. Interested participants may click on Raise Hand option on their Zoom application to join the Q&A queue. Upon announcement of name, participant to kindly click on Unmute Myself in the pop-up screen and start asking the question post-introduction. The first question comes from Mr. Kunal Vora. Mr. Vora, you may please unmute your side, introduce yourself, and ask your question now. . Thanks for the opportunity. This is Kunal Vora from BNP Paribas. First question is on how do you see the impact of JioBharat phone on the feature phone market? Would you look to produce a similar device? Like, if you can share your experience with device offers in the past, like you had one with Karbonn few years back. I would say that it's, it's early days. I think that, you know, even when it was launched last time, we did see an impact. At that point in time, the feature phone market was much larger than what it is today. Today, the feature phone segment accounts for about 18% of our overall revenues. More importantly, it's only once in four years that a customer chooses to replace the feature phone. The pricing of this device is slightly higher than the cheapest feature phones, which is competitive. It's early days. I would say that our agenda is, is straightforward. We continue to focus on our upgradation from feature phones to smartphones. That's where we are doubling down, actually doing a lot of bundling, doing some modest cash backs in the form of loans to customers, with a locked device. Because we believe that ultimately these feature phone users must upgrade to smartphone. That's really where our focus is. We would not be launching any such device. I think our feature phone user is on a 2G network, and our focus really will be on upgrading them to a smartphone. Like, why would you not do it? I mean, like, why do you see a reason to not go for a device like this? Because, you know, largely these devices are only used for calling, and you're already. We don't need to get into this device segment. That's already there in the form of a feature phone. If we didn't have a 2G network, then that user would be excluded, then we would look at it. We all have a 2G network, and we have feature phones in the open market, which even today are getting shipped out. Sure, sure. Second and last question, if you can share your thoughts on 5G monetization, and if you can provide any data on how many users, what kind of usage, what proportion of volumes are on the 5G network now? Like I mentioned, I think, Kunal, we are seeing about 30% of offload. In a site where there is both 4G and 5G, depending on the devices and depending on what the traffic is, we see up to a 30% offload of these of this traffic from 4G networks to 5G networks. It's still early days because the overall installed base is still low. It's 14%, 15%. It's not grown at the rate that we were expecting it to grow. Even today, shipments of smartphone, 5G shipments are only about 48% of the total shipments, so it's still moving slowly, and it will take time for the full upgradation to happen. The way I think about monetization, as I mentioned, is at an aggregate ARPU level. For us, the monetization levers is, you know, feature phone to smartphone, prepaid to postpaid, data monetization, and finally, of course, if there is a tariff increase, then that gives you a monetization as well. The CapEx that we are putting in is largely on 5G. We are not putting any 4G capacity CapEx, other than the rollout of rural sites, which is really a coverage-related CapEx. The way we look at monetization is that the CapEx that's going... Of course, at this point, it's elevated CapEx because of the front loading that we've done in the first quarter and perhaps in the second quarter. If you look at it from a more medium-term perspective, given the CapEx will sort of even itself out, the percentage of CapEx that's going in as a part of revenue needs to be at the level which can be sustainable and which leads to then monetization at an aggregate ARPU level. Okay. Thanks, Kunal. I'll come back in the queue. The next question comes from Mr. Piyush Choudhary. Mr. Choudhary, you may please unmute your side, introduce yourself, and ask your question now. Hi, good afternoon. This is Piyush from HSBC, and thanks for the opportunity. Two questions. In the postpaid segment, could you help us understand what factors are driving subscriber addition? Is it new port-ins only, or your own prepaid subscribers are also migrating to postpaid? The outlook for postpaid additions going forward. Second question is on your rural expansion program. Can you give us a progress and how has been the response as you roll out new sites there? Thank you. As I already mentioned in my opening comments, I think postpaid, we believe is a big opportunity. Today, about 6% of our users are on postpaid. If I look at markets like Thailand, that number is well past the teens. If I look at markets like Brazil, it's almost 40%-50%. The upside opportunity in postpaid is clearly high, and I think India, over a period of time, will start moving more and more towards postpaid. That has to happen. The, the, the levers of growth for us are: number 1, of course, is prepaid to postpaid. That's 1 lever of growth, where we see an increase in ARPU. The second lever of growth is switching a user from a competition to us, and I think 5G tends to play a role, where the, the early adopters of smartphones who are looking for a 5G network, you know, prefer us. So that's. I think, there's an opportunity here because one of the players has not launched 5G, so that's clearly an opportunity. The third opportunity is really around what we saw with Verizon almost over, over a decade ago, which is the great success that they had in those years of the family plan. I think over the last 6 years, 7 years, we've been quietly working on the family plan, which really helps, because once the, you know, the main member of the family is there, the child or or the teenager in the home comes onto the same plan, and invariably that customer may not be an Airtel customer. It could be from anywhere. The last part is the go-to-market, where really we are, as I said, spreading our stores closer to the point of consumption, closer to the catchment, and that helps us actually get more access and, as a consequence, increase postpaid penetration. In the rural area, I think, we are kind of 60% through our rollout now. This has gone very, very well, actually. The revenue per site, the action standard we have set for ourselves, we've, we've been able to marginally beat it, and the cost per site also is lower than what we thought it would be. Again, this is through the ingenuity that our teams have displayed on the ground. Combination of solar solutions, better batteries, no diesel. Diesel completely eliminated to zero in many places. Across the country, we see the traction being strong. As a consequence, I think we will conclude the rollout perhaps by around November or December. Got it. If, if I may ask on the postpaid, is it possible to split, let's say, not in this quarter only, but last 3 quarters or 4 quarters, what is the port-ins contribution? We don't provide that information. I think, we will not... We, we don't, we don't look at it like that, because sometimes, you know, whether it's a port-in or whether it's a new customer or whether it's a, a new addition, it really doesn't matter as long as they become-- it becomes the primary SIM where a lot of consumption is happening, and they are pleased with the experience. Got it. Thanks a lot. The next question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now. Thanks. Thanks, Gopal, for taking my question. First, on the 5G side, one of your peer has said that they are through with the 65% of the rollout, it appears that in the first stage, they will be doing 175,000 towers. Where are we in comparison, as far as the 5G rollout goes? That's number one. Associated question is, on each side, when we deploy the 5G, what is the kind of data capacity upgrade we do?, that's my first- . I think that the second question, I don't have the precise numbers. I, I, I think Shamim may have the number on the data capacity upgrade. It's a very substantial increase that happens almost about 5-7x, but I think Shamim will probably be able to give you a better answer on that. On the, on the first part of your question, Sanjesh, we are not in any race here, right? I think I've mentioned before that the Non-Standalone technology allows us to get a 30% improvement in coverage. Today, we are pretty much in all across urban India. We're also going into rural. But at the same time, we are also very carefully watching, with some concern, that the, the impact of 5G is not necessarily moving the experience needle at all. It's not that people even realize that they're getting speeds of 200-300 Mbps, given the fact that the applications that they use on this little device that we carry in our pockets is really messaging or, you know, some video or some browsing. As a consequence, 4-6 Mbps is, is more than adequate and is at a point of indifference beyond that. If you get more than 4 Mbps, you're at a point of indifference, unless you're downloading a heavy file or playing, downloading a heavy game or something like that. I think we are in the game fully, the way we look at the deployment is really to make sure that we are giving a seamless experience regardless of the technology. A great data experience right across the city, a great voice experience right across the city, and continue to offload 4G capacity investments into 5G, so that we don't spend a single dollar on 4G anymore, and all our investments are geared towards 5G. That is really how we approach this, this stage. , Soumen, any comment on the capacity? , yeah. It would be in the range of about 4-5 times for similar bandwidth in 4G. you mean, if we, if we deploy all the spectrum that we have bought or, the same blocks that we have put it in the 4G? For the same block of spectrum, whatever is the capacity of 4G, 5G would have a capacity which is roughly between 4-5 times. Let me try and explain this in a different way, Sanjesh. On an average, we have about 50-60 megahertz of spectrum across the country deployed on 4G. You know, the petabytes that we have on our network, right? You also know that we're still not a congested network. We still have headroom for further capacity, even on a 4G network. Let's assume that the capacity utilization is 60%-65%, which means that based on the petabytes that we are pumping out, you can see what is the upside on that same branch of 50-60 megahertz. Here you've got 100 megahertz of spectrum. Number 1 is a double of the spectrum, so you can straightaway double that, right? Number 2 is it's more spectrally efficient, so you get another 50%-60% increase in that. Therefore, I think that there is a long, long runway for 5G to start filling up. It's a very empty network, and it will remain so for, for, for some time to come. Is it fair to assume that once we have enough capacity in the urban area, our capacity intensity will will significantly reduce, and we may reach the global level of 18%, 19%? Is that a fair assumption in the medium term, not immediately? Well, I, I don't want to give you a guidance on the CapEx intensity over medium term. I mean, we would love to get to those, those levels that you mentioned. The fact is that, you know, capacity investments, once you pull up, put out a 5G radio, will be very, very limited. The only requirement will be over time as more and more applications come out. Remember, this is a game of applications. It's not a game of 5G radios. If you have the same video applications, the same browsing or chat applications, you don't need 5G, 4G suffices. Those applications need to come in, and as applications come in, you will have more densification of the networks. I think we less capacity investments in the medium term. In the long term, you may have capacity investments coming from millimeter wave, for example, but that's still many years away because that ecosystem is not even has not even begun today. Thanks, Gopal. Just continuing on that millimeter side, Reliance Jio has said that they are looking at 4G slicing as a tool, which, which is allowed in the SA, and they want to deploy FWA, and they want to accelerate their growth in the fixed broadband. Considering that we are on a Non-Standalone, will that limit our capability to transition to FWA? No, I want to disabuse... No. No, Sanjesh, firstly, let me disabuse you of that notion. I think there are two parts to the question. One is FWA itself, and the other is slicing. I think Non-Standalone also allows you to do slicing. You know, the 3GPP standards are clear about this. There have been experiments that we have already carried out. It does allow you to do slicing. You know, if those applications, you need 15 different slices at some point in time, yes, you need standalone, but that's nowhere in the horizon. At best, you'll have 1 slice on FWA or 2 slices. These kind of slices are totally possible in a NSA network. Second, remember, the spectrum is unutilized. It's a network that is empty, you know, even if you slice it, what is the value? Because it's an empty network. Whether if you give it, you give a small slice or you give a whole slice, it doesn't really matter. I would say that that is still perhaps in the distant future, as the networks fill out, that you slice and so on and so forth, but technically, you can slice even on an NSA network. Second part to your question is FWA. As I mentioned before, the economics of FWA are still not attractive because the cost of the CPE. See, you need two things. You need the router in the home, which you need for whether it's fixed or it's FWA. Right. You need a CPE in the case of FWA. In the case of fixed, you need fiber going there. If you see the cost for connected home pass in our network today, it's about $90. The cost of a fixed wireless access CPE is about $160. It's almost double of that, which means that it's economically unattractive to go FWA at this point in time. Now, can the price of FWA come down? Yes, possible, but the real game there is the cost of the chipset, which is the one that's really, really very high right now. The third point I want to make is that we are ready with FWA. We are doing our trials. We've ordered FWA boxes, and we are, in fact, already launched. We've just announced actually yesterday, or was it today, that we are piloting this in two cities to start with to assess the opportunity. Clear, clear, Gopal, that was clear. Last question, I know it's the third one. Apologies for that. On the network OpEx, one of the reason why our network OpEx on an overall basis is low, that we are still not charging for the 5G cost, whether it's a power cost or a rental cost. Is that the fair assumption? Once those costs start showing up in a P&L, what kind of- No, no, no, not the cost, the 5G cost, not the 5G cost. Now, Soumen, you want to talk about that? . Sanjesh, we have started. As the rollout is happening, progressively, more and more circles will come and get charged out. The process has already started from this quarter. Because it is an NSA, it is put on the same infrastructure, the incremental costs are very low, started already from this quarter. Soumen, just to clarify what you're telling, what you're telling is that some of the 5G related OpEx cost has already been booked in the P&L in this quarter? Yes. We will go by circle, circle as we roll out, but it has already started coming in this quarter. As well as, amortization and interest costs? Well, yes, as I said, progressively they will come, but some of it has started coming in this quarter. Oh, that's fair. Fair. Thanks, Gopal. Basically, just to clarify, we have a policy of as we reach a certain threshold of rollout, we start, you know, putting it all in the P&L. A few circles have already reached that level, and more and more will keep reaching that level. Clear, Gopal. Thanks, Gopal and Soumen, for answering all my questions, and best of luck for the coming quarters. The next question comes from Mr. Vivekanand Subbaraman. Mr. Subbaraman, you may please unmute your side, introduce yourself, and ask your question now. Hello. Thank you so much for the opportunity. I have two questions. The first one is on the mobile operations. Despite churn declining, steadying, on a quarter-on-quarter basis for the last several periods, we are seeing that the SG&A cost remains high and seems to have spiked up in the current quarter. One, an explanation for that. Second key question is on balance sheet priorities and potential uses for the uncalled rights money, given that, given that now you are generating ample amount of free cash flow. In this answer, if you could also discuss about the targets in terms of balance sheet leverage that you would like to maintain, that will be helpful. Thank you. Soumen, you want to take it? Gopal. SG&A, we have, especially around B2B business, there is a seasonality involved in Q1. If you look at trends, you will see that season Q1 typically spikes. You would see a normalization of this in Q2, Q3, Q4. Nothing new in this year. It will keep on happening, one of the major reasons is certain things which happen in the B2B business. On the rights call bit, I think, we are currently adequately sufficient in terms of cash requirement. As a matter of fact, as Gopal mentioned in his opening call, We have already generated about INR 4,500 crore of operating cash flow, operating free cash flow. Harjit, if you would like to add on the leverages bit. Hello, thank you, Soumen. Vivekananda, I think leverage-wise, we are about 2.6, 2.7, as Gopal and Soumen mentioned, on the consolidated basis. We've actually now this time given also the segmental leverage. If you see performance at a glance, you will see console and also India, I'd say. In the shorter term, I think clearly, the leverage in India is above 3. Overall leverage is 2.6. India is generating free cash flows. Gopal mentioned about the last few quarters. At the same time, if you see last year, we did spend about INR 43,000 crore in buying spectrum for 5G and some fortification. I think cash flow should go to reduce leverage. Historically, we've stayed conservative on leverage. It demanded us to go where we were above 4 for a few quarters, and now materially coming down. I think our target's not very hardcore, but still are closer to 2 on an overall consolidated basis, not closer to 3. In the, in the short to medium term, the use of cash is essentially to delever. Also, create granularity of sources of financing and reduce the cost of financing. Not a very hard-coded target. The direction is clear: use cash to delever materially. Some bit of returns are there in the market through dividend. In the shorter term, there is no necessity to call for rights, residual monies, but that's a very fabulous available line of equity that is available to us. Just one follow-up on the first answer. Soumen, the SG&A cost for the mobility business, are, are you saying that it would have moderated in the current quarter despite the India SG&A cost rising sequentially? Is that what you are saying? , it would have been almost at the same level sequentially. Okay, great. Thank you so much, and all the best. The next question comes from Mr. Aditya Suresh. Mr. Suresh, you may please unmute your side, introduce yourself, and ask your question now. G ood afternoon. This is Aditya Suresh from Macquarie. Gopal, first, strong execution and follow-through on your clearly articulated strategy. My first question actually is a fairly basic one. As you follow through on your premiumization path, I'm keen to understand how you think about your ARPU trajectory going forward. Do you see a, more like a steady compounding profile? I appreciate you, you may not be able to give specific numbers, but any qualitative comments on the profile would be great. , I think, it, it's a good question, and, you know, a big increase in ARPU can only happen with a, with a reset of the tariff table. As you know, we are at the lowest levels of the world, both in terms of rate per GB on data, as well as average revenue per user. On both, if you were to plot it, rate per GB of data on the X-axis and average revenue per user on the Y-axis, India will be at the bottom left-hand corner relative to all the other markets in the world, including markets in South Asia or sub-Saharan Africa or anywhere in the world. The big increases will really come from a tariff reset. Within the confines of the challenges that we operate with in a competitive market, we have several levers. Like I mentioned, I think prepaid, feature phone to smartphone, you get a ARPU upside. The entry-level feature phone, price plan is at INR 155. The entry-level smartphone pricing, where you offer meaningful amounts of data, is INR 239. You do see almost a 50% jump as people move from a feature phone to a smartphone. And that is a function of how many users moved in a certain quarter, so you could do the math and arrive at what ARPU you can get. The second source of growth is prepaid to postpaid. And there again, you see almost a 50%-60% jump in ARPU. Actually, more than that, probably 75% jump in ARPU. If we can drive the postpaid net additions up from the 830,000 numbers that we've done this quarter to even higher than that, then again, you see a shift in ARPU. The third source of ARPU is data monetization, and I did mention this in the, in the past, where, you know, the moment the data allowance runs out, on an impulse basis, we offer a GB of data, 2 GBs of data, 5 GBs of data at, you know, multiple price points. Just imagine at 10:00 P.M. or at 6:00 P.M., you run out of data, you get a message right there at 5:58 P.M., knowing that, you know, you're gonna run out of data, to buy a pack on impulse. This has become a very meaningful source of ARPU increase for us. That's the third lever. The fourth lever is international roaming. As we drive the penetration of prepaid, particularly, because postpaid international roaming penetration is high. Prepaid was very low penetration. In the last 3 months, we've doubled it. There's a tremendous emphasis and focus on this to simplify journeys, simplify pricing. We have one plan, basically one price plan across the world. It's called a One World plan, and it's blended across different countries because, you know, we have bilateral deals with these, with these operators around the world. We blend it to arrive at a simplified pricing, with the use of a lot of digital channels, digital mediums, including our app, WhatsApp, and all of that, to offer messages on a very customized basis, at the point when the customer lands in the airport, to actually buy that particular plan, and so on and so forth. All of these levers really are being driven hard. On postpaid, like I said, you know, once you get a family on, then you get, you know, sometimes users coming from competition as well. Again, there's an ARPU upside. All of these levers actually help us get, get, you know, some organic movement in ARPU. I think this quarter has been good. At INR 7, of course, there was a day extra, which is about INR 1.5, but even organically, we did see a significant amount of ARPU upside on account of all of these levers that were playing out. No, it's clear, right? So steady increases each quarter, every quarter, as these levers play out in the background rather than it being step changes which generate headlines. That's, that's clear. Thank you for that. The second question, Gopal, is on operating leverage. Now, with your comments around your focus on network operating expenses and your comments now on ARPU, and that, that steady increase is going forward, should we expect a higher state of incremental EBITDA margins over the next couple of years? Maybe as a supplement, and then this ties back to your, your comments around free cash flows as well, which I agree with, any comments on what this means for your return on invested capital? Thank you. Well, I think, you know, this business is a largely a fixed cost business, so we, we love to see the operating leverage kick through. At this point in time, I think our cost program will continue very aggressively. We still have way to go and room for stripping out further costs in the INR 75,000-INR 1 lakh category of sites, OpEx per site per month, so we are looking at some of that. If there is a tariff increase, of course, almost all of it flows through outside of taxes into the bottom line. You know, barring some of the capacity investments that get made, there's the strong operating leverage, particularly in the case of, you know, where, where you have an unutilized network. The rural expansion, you have costs because you're rolling out sites, you're also getting revenues. To that extent, I wouldn't think that it would be EBITDA accretive. The operating leverage as a whole business must kick in. I can't give you a number, I can't give you a guidance because we don't do that. I would say that we would be doing a job that we would not be satisfied with if we don't get operating leverage from the incremental revenue that we generate. That's a target that we, we look at very, very closely. Thanks, Gopal. Thank you. The next question comes from Mr. Yung Juen Yeoh. Mr. Yung, you may please unmute your side, introduce yourself, and ask your question now. , thanks. This is Yung Juen from AR Capital. Just curious on the ARPU. Could you give us a little bit more color on the medium-term- Mr. Yung, please unmute your side, introduce yourself, and ask your question now. . Hi. Am I audible? Yes. Yes. You are. Can you give us a bit more color on the medium-term targets for your ARPU? You mentioned 300 being a longer-term plan. You know, excluding the tariff hike, with all the levers that you've described, Mr. Yung, we're not able to hear you. Please unmute- No, no, Deepti, Deepti, I can hear. Deepti, I can hear, it's fine. Ask your question now. Deepti, we are able to hear. Deepti, we are able to hear well. Please let him continue. . No, no problem. Just curious if you can give us a bit more color on the medium-term outlook for ARPU. INR 300 obviously is the, the longer-term plan, now it's INR 200. With all the levers that you've described with, you know, postpaid and, and, and, and what, what you've just said, you know, how should we think of the next few quarters in terms of ARPU uplift? Thanks. Well, I'm afraid I won't be able to give you a number there. I think that, you know, like I said, suffice it to say that we would be disappointed in ourselves if we don't see some improvement in ARPU, you know, equating for days and all of that on an organic basis, every, every few months. I would... I'll just leave it at that. Right. In terms of the postpaid subscriber adds, the 800,000 this quarter, you know, that's, that's higher than the last two. I think it was 700 last two. Is, is, is that a, a new level that, that, that we can expect, or, or, or we feel that that actually can increase, you know, quarter-on-quarter? I think that, this has been, this has been the highest postpaid net addition that we've done ever. I would say July has begun, begun strongly, so I hope that we continue to keep this going. Right. Okay, thanks. With this, I now hand over the proceedings to Mr. Gopal Vittal for closing remarks. Again, thank you very much for the engaging questions. I think, as I, as I mentioned, I think, it's been a, it's been a good competitive performance this quarter, and I look forward to seeing you in, in, in the coming in the coming quarter. Thank you very much. Thank you, all. Thank you everyone for joining us today. The recording of this webinar will also be available on our website for your reference.