Recording in progress, Fourth Quarter Ended March 31st, 2024 Earnings Webinar. Present with us today is the senior leadership team of Bharti Airtel and Bharti Hexacom 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 your Zoom application to join the Q&A queue. The participants may click this option during the management opening remarks itself to ensure you 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 the question post-introduction. With this, I would now like to hand over to Mr. Gopal Vittal for his opening remarks. Thank you very much. A very warm welcome and, you know, to this earnings call. With me on the call, I have, Soumen, our CFO, Harjeet, Naval, and Akhil Garg. I want to start by thanking our investors for showing confidence in us through the recently concluded Bharti Hexacom IPO. This speaks well about the brand Airtel, about our execution capabilities, high standards of integrity and corporate governance. This quarter's earnings call focus will be on a stock take of FY 2024. In addition, I'll provide an update on the development of our strategy. A quick update on ESG. We were recognized globally for our ESG initiatives. We were awarded the Most Sustainable Emerging Market Telco as per Future Investment Initiative Institute's top 250 emerging market ESG ranking. We were also included in the S&P Global Sustainability Yearbook in 2024, in recognition of our sustainability efforts for the third year in a row. Finally, we were awarded ISO certification for over 27,000 sites across our operations, including our network MSCs by DNV, which is one of the leading global providers of accredited management system certification. We continued the momentum on our ESG initiatives. In an industry first in India, we partnered with IDEMIA Secure Transactions to switch from virgin plastic to recycled PVC SIM cards. The initiative will limit generation of over 165 tons of virgin plastic, leading to a reduction in CO2 equivalent of 690 tons in a year. On diversity, we made significant progress in FY 2024. The share of women in our workforce moved up by over 40% in just one year, and all our stores are now gender-balanced. Let me turn to our financial performance with a quick roundup on the full year 2024. Overall, we delivered another solid year. A consolidated revenue came in at just under INR 150,000 crore, and was impacted by currency devaluation in Africa. India performance was steady despite the continued absence of tariff repair. EBITDA margins were at 53.8%, a 1.6% expansion despite 5G costs. We delivered strong operating free cash flow. This is EBITDA minus CapEx of over INR 25,650 crore for India, despite the higher CapEx loading in the year. We paid INR 16,350 crore of debt. India net debt to EBITDA is now at a comfortable level of 2.86. We expect further debt reduction going forward. Performance continues to be based on solid execution, and we saw sustained growth across all businesses. We hit a lifetime high in revenue market share across all our businesses. On mobility, every single one of our circles gained share. We also saw green shoots emerging on DTH. I do want to underscore that we have a simple and very clear strategy, winning with quality customers, delivering a great experience for them, putting digital at the core of all we do, and stripping out waste. We expanded our network rapidly. We rolled out 5G at tremendous speed. It's now available across the country. We rolled out about 43,100 sites, network sites, and 55,982 kilometers of fiber. Our bet on NSA, which is a non-standalone technology, paid off. It didn't... It just, not only saved us CapEx, it also delivered superior experience, as evidenced, by the recognition from the likes of OpenSignal, which is an independent standard to assess the experience on networks. Moving to the quarter four performance in specific, we delivered a strong end to the year. We had strong revenues and operating margins, consolidated revenue of just under INR 37,600 crore, which was impacted by the Naira devaluation. India delivered a steady growth of 2.5% sequentially, with INR 28,513 crore of revenue. Adjusting for the impact of the Beetel acquisition, revenue growth was 1.7%. EBITDA margins came in at 53.6%. Again, if I adjust for Beetel, EBITDA margins were 54.1%. We had a strong operating free cash flow, about INR 6,800 crores, which is EBITDA minus CapEx. Yet our ROCE for India is 9.5%, which is extremely low for a business that is so essential to the digital spine of this country. Clearly, tariff repair is needed to set this right. A quick update on each of our segments, and let me start with the mobility segment. We ended the year on a strong note with 6.7 million REC net adds and 7.8 million smartphone net adds in the quarter. This was also supported by our structural efforts to fix the network experience. We saw mobile churn reducing from 2.9% in quarter three to 2.4% in quarter four. Postpaid net adds was steady at 0.8 million. ARPU came in at INR 209, and was impacted by one day less in the quarter. This implied that we added INR 16 to ARPU in FY 2024, the highest in the industry. This consistent improvement is led by three key drivers, and I've spoken about this earlier. Feature phone to smartphone upgradation, prepaid to postpaid upgradation, and driving higher share of wallet through data monetization, as well as growth in the penetration of international roaming. As an industry first, Airtel now offers one single roaming pack at one price point to travel anywhere in the world, as well as includes in-flight connectivity. Airtel 5G+ is now available across urban areas and select rural areas. We continue to expand our coverage despite no monetization in sight. 5G shipments continue to grow steadily, and we continue to gain our fair share, which is reflecting in our growing 5G base. As of March, this was close to 72 million. On broadband, we grew our customer additions by 1.6 million. However, there was some moderation in net additions to 360,000 in the quarter. Broadband is an area we need to do more work, particularly given the size of the opportunity. In line with our strategy, we continue to expand in the right areas. We expanded our presence to 23 more cities and added 2.2 million fiber home passes in the quarter. Second, our focus on convergence continued with simplification of our convergence propositions by bringing in over 22 OTT platforms into the Xstream app. 43% of all broadband customer additions are now on our converged plans. The third part of our strategy is fixed wireless access. We are live in 25 cities and currently streamlining the customer journeys. We will be at scale in the coming eight weeks. As stated earlier, this will only complement FTTH, which is fiber to the home, with focus on weak fiber areas. Let me turn to DTH. Our strategy of focusing on key markets of the South, of Maharashtra, and of Bengal, combined with our pivot to convergence, is yielding positive green shoots. Quarter four is typically a soft quarter. However, despite the adverse impact of seasonality, we grew our customer base by 9,000 in the quarter. On an annual basis, after two years of decline, we grew our customer base by over 200,000 net adds, the only operator in the industry to grow customers, to grow customers during this year. We also rolled out a moderate price hike in the quarter, which was due to broadcasters raising prices. This also contributed towards revenue growth. On Airtel Business, revenue growth in quarter four was 0.6% sequentially. On an annual basis, we sustained a double-digit growth despite headwinds in our global business. While the global segment continues to be soft and there are some conversations that are going on in terms of orders, the domestic business is on a strong footing and continues to grow at 18%-20%. Payments Bank is the other one I want to comment on briefly. Monthly transacting users at 67 million. The annualized revenue run rate is now over INR 2,100 crore. Deposits remain robust at around INR 2,800 crore, growing nearly 50% year-on-year. We also had the highest ever quarter-on-quarter growth of 22% on savings bank account balances. A quick update on our digital businesses. We're now delivering an annualized run rate of just under INR 1,900 crores. Our focus remains on CPaaS, on financial services, on IoT, on security, and cloud. These showed tremendous acceleration. We saw 50% revenue growth in the last fiscal. Airtel Finance is scaling up well and served 400,000 customers across loan and card products in FY 2024. We disbursed loans worth INR 2,000 crores. A quick update on all the five pillars of our strategy. The first pillar is really to shape the portfolio so as to give us resilience. This continues to be one of our strategic drivers. Africa now accounts for 25% of revenues, India Mobile at 59%, and India Non-Mobile at 17%. Over the medium term, we see strong growth tailwinds in non-mobile parts of our portfolio, homes, B2B, and digital. Africa continues to perform well on an underlying basis, with 3% sequential revenue growth in constant currency terms. Second pillar of our strategy is to really win with quality customers. As I talk about this, let me give you some texture across all parts of the market, our homes business, postpaid, rural, and B2B. On homes, the top 60 million homes in the country contribute 35% of industry revenues, and of these, broadband penetration is only 40 million, but growing. Each of these 60 million households have some relationship with Airtel. To capture this opportunity, our strategy continues to be expanding our fiber presence, driving penetration of our converged offers to build in stickiness by leveraging our digital targeting capabilities, and lastly, to leverage FWA, which is fixed wireless access, as a complement to fiber. The other critical focus area for us on homes is delivering a superlative experience. We're undertaking a structural program to overhaul our network infrastructure, right from the fiber access terminal outside the home to architecture-level fixes on our network. In addition, we are now refining our ways of working, so that we dramatically improve the craftsmanship of the work that our engineers deliver in the home. The fact that we have digital tools to monitor our SOPs and take live pictures to authenticate them using artificial intelligence, makes this scalable. On postpaid, our family plans continue to drive acceleration. We now have over 18 million credit-scored customers who we believe could move to postpaid. Supported by our deep digital analytics, our omni-channel journeys, and our small format stores, this segment is poised for growth. In rural, the last six quarters have seen a massive rollout of more than 33,000 sites. This deployment has met all our action standards, both in terms of absolute yield at the site, as well as our competitive performance. As I mentioned in the last call, there are many geographies where our market share is weak. This is primarily because we have lesser coverage here. We have commenced another round of expansion here to plug this gap. We expect to roll out over 25,000 sites, lower than last year, in the next couple of quarters. We are bringing to bear all our digital tools and data science for precise deployment, as well as deploying the execution best practices from our rollout last year to turbocharge growth from this deployment. For B2B, the market is large and adjacencies are driving the bulk of the growth. As I mentioned before, the top 500 accounts comprise 70% of this market. The emerging business segment, commonly called SME, has also started to grow after a couple of years of slowdown. There are three structural actions we are taking to capitalize on the opportunity. First, revitalizing account management to raise our sales team's capabilities to sell solutions. As part of this, we have taken all our account managers through what we call a master class. In addition, we have focused more attention on verticals of industries and created virtual vertical communities, so that we can learn from what some in the team are doing well. Second, we are fixing our network infrastructure with the aim to achieve best-in-class global standards of performance. Significant investments are being directed into this area. Lastly, we are investing in building digital products coupled with managed services. Our managed service facility in Pune is up and running. We are now looking to strike deep strategic alliances with a few top companies, so we can package solutions along with our own. Day before yesterday, we announced a strategic alliance with Google to gain a significant share of the Indian cloud market, which is expected to reach $18 billion by 2027. The third pillar of our strategy is the obsession to deliver a brilliant customer experience. There are two parts to experience which we focus on. First, the digital experience. Here, we've now developed four platforms for our B2C business, which is buy, build, pay, and serve. These are common journeys across all our businesses. These platforms power all our journeys as well as field force management in an omni-channel way. Second is the network experience. Here, we've taken structural corrections as well as leverage our digital tools and analytics to bring down mobile churn by a step margin. On fiber, there's a massive drive that we're undertaking to fix the structural issues which plague our network, be it network infrastructure or the quality of workmanship. I also believe that experience starts with our people. We think of Airtel as having only two types of people, those who serve customers, and those who serve those who serve customers. It is with this in mind that we had every one of our 20,000 people get out into the market and spend a whole day with our frontline people in March. We don't think of this as a one-off, but an ongoing ritual in the company. In fact, this exercise gave us a number of very strong ideas, ranging from digitization, network infrastructure upgradation, amongst others, which are being put to action now. The fourth pillar of our strategy is to use our underlying digital capabilities to incubate new digital businesses. As I mentioned before, we see Airtel in three parts: digital infrastructure, both the network as well as data, which I'll talk about in a moment, digital experience, and digital services. Our portfolio on digital services, which is Airtel IQ, IoT, Cloud, SD-WAN, and Airtel Finance, are all getting substantial focus and investment. One of the areas I want to give more texture on today is our secret sauce, which is data. Every telco worth its salt has a data infrastructure. We have taken this further and built what we call a converged data engine, which sits on top of this infrastructure and powers it. It is now extending into all our categories and geographies. The converged data engine specifically solves the following problems. Firstly, it has an existing data model, which is based on deep telco understanding, and is also TM Forum compliant. Telcos can simply use the data model as a starting point to make modifications based on their business context. This can be done in weeks as opposed to several quarters, if they were to do it on their own. Second, the CDE, which is a converged data engine, enables ingestion of all the data signals as aggregates across all the databases of a telco. Our ingestion core allows this to be an automated process while ensuring data quality and governance. Third, the engine comes with an inbuilt intelligence based on the data signals to throw up the next best action across sales and service for a customer, and is agnostic of the channel. Finally, it comes with an inbuilt CLM, which is a customer lifecycle management tool, that has patch-out integration capability across all push channels, whether it's WhatsApp, messaging, call, email, as well as pull channels, app or integration with other OTT platforms. The CLM also comes with the capability to generate feedback and optimize campaigns based on AB testing. The strength of the engine is that it comes prepackaged as a full stack solution. The best value from it is its seamless functioning across all parts of the telco. We're now rolling this into Africa, and are also in conversations with other telcos in the world. The fifth and last pillar of our strategy is War on Waste. This is really central to how we operate. FY 2024 saw us optimizing upwards of INR 2,500 crore of network cost. Network cost per site declined in absolute terms for the second time in the history of the company, despite massive mobile expansion of sites, 5G expansion and increased cost of power. This was enabled through on-ground execution rigor. We identified 60,000 high-cost sites, looked at the cost structure of every single site, and put together a plan to optimize cost of the site. The exercise required the leverage of digital tools, data science, and physical work to bring costs down. We continue to drive a focused War on Waste program and believe there is still headroom available for stripping out waste. To sum up, overall, it was another good year with growth across the portfolio. We have a lifetime high in terms of market shares across all our businesses. The momentum on postpaid, B2B, and homes particularly, is an area where more work is required, and we are focused on that. Our prudent capital allocation approach, coupled with strong execution, has been yielding results, with marginal improvement in return ratios even in the absence of tariff repair. Our investments are channelized to future-proof Airtel, with a focus on the outlined strategy, shaping a resilient portfolio, winning quality customers, obsessing with delivering a brilliant experience, all enabled by digital at the core and fueled by our War on Waste agenda. With this, let me hand over back to the moderator for the Q&A. Thank you very much, Gopal. We will now begin the Bharti Airtel Q&A interactive session for all the participants. Please note that the Q&A session will be restricted to analyst and investor community only. Due to time constraints, we would request if you could limit the number of questions to two per participant to enable more participation. Interested participants may click on Raise Hand option on your 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. Participants are requested to limit their questions to Bharti Airtel only until 3:30 P.M., as management will start the Q&A discussion on Bharti Hexacom after 3:30 P.M. With this, the first question comes from Mr. Manish Adukia. Mr. Adukia, you may please unmute your side, introduce yourself, and ask your question now. Yes, hi, good afternoon. Thanks for taking my question. This is Manish Adukia from Goldman Sachs. Firstly, just your outlook on competition and the industry structure. You've been seeing very strong subscriber additions, including 4G adds, and your revenue market share, like you said, has been at a lifetime high. Now, in your view, do you think this trajectory may slow down with the recent CapEx plans of Vodafone Idea, or asked differently, will Bharti have to push a little bit harder than earlier to continue being on the same market share trajectory? So just your thoughts there would be helpful. And the second, Gopal, on returns on 5G investments, and now CapEx has been elevated. You called out that you will have a new rollout plan of 25,000 sites in the next few quarters. So from an absolute CapEx standpoint, should we think about that not declining meaningfully in fiscal 2025 or staying at same levels? And I think you also said that there's maybe no visible monetization in sight for 5G in your opening remarks. So if you can just talk about how you think about medium-term monetization from 5G, that'll be helpful. I'll stop there, and I have a follow-up after. Thank you, Manish, for the question. I think let me take the second part of your question first. I think, you know, the return on 5G is, I would say we don't quite see it like that. I agree with you that there is limited monetization on 5G, but the way we see it is the overall return of the business. So today, all of the capacity investments are going behind 5G. We've stopped investing on any capacity investments on 4G, and therefore, I think the return that the industry really needs is predicated on tariff repair. And this is really the heart of the problem that we have today. Our pricing and tariffs are at an absurdly low level relative to any other part of the world. So tariff repair is sorely needed for return ratios to improve. Frankly, it doesn't come from. It doesn't matter which technology it comes from. The fact, however, is that 5G is a more future-proof technology, so to that extent, it is just about advancing CapEx that would anyway have happened. As far as the overall CapEx is concerned, we've always mentioned that FY 2024 will be a elevated and peak level of CapEx, and I expect to see clear moderation going into FY 2025. As far as the industry structure is concerned, I'm glad to see that, Vi has raised money, and I really wish them well. I think India will be well-served if it has three operators, three good private operators working there. Whether we need to push harder, we are pushing hard every day, so this is an ongoing effort. It's always been a brutally competitive marketplace ever since, I've been around and ever since the company has been around. So, you know, ups and downs keep happening, and it's a volatile market sometimes, but, you just need to be at the top of your game in terms of execution for you to continue to deliver sustained performance. ...Thank you for those responses. A follow-up to your tariff repair comment, right? And you called out that, let's say, today, you are closer to 10% return on capital, and for that to, let's say, meaningfully improve, there probably needs to be multiple large tariff hikes, right? So, like, how do you think about the path to that? I mean, do you think you would prefer to do multiple smaller tariff hikes over a period of time, or let's say one or two large tariff hikes? And what really needs to happen for that eventuality to really play out in the next, let's say, six, 12, 18 months? I think that, you know, we have done what we could. We have moved up the entry-level tariffs on feature phones. We have tried to sort of drive all the levers of ARPU upgradation across the multiple levers that we have, using lots of digital analytics. But at the end of the day, it is a competitive market, and, you know, repair will need to happen across the industries. You know, just us doing it, we could do it, we could lead it, you know, we could start it, but the fact is that if competition doesn't follow, then it will hurt us, and, that's a challenge. So we just have to wait and see when the time is right. My own sense is that you will need substantial repair in the industry. We're already at just over INR 200 ARPU. I think the right level of ARPU, even at INR 300, will still be one of the lowest in the world. So, there is substantial repair to be had in the industry. Now, how that happens, I think, I can't sort of guess, but we'll see how, how it plays out. I'm gonna try this one more time. So in terms of ARPU, do you think closer to INR 250? I think in one of the interviews, I think Mr. Mittal had mentioned closer to INR 250 by next year. Is that possible, or you think still too many moving parts to really say something concrete? I wouldn't comment on a specific milestone. I think all I'll say is that, you know, repair is solely needed in the industry. I think all the players need it, so it's not just, you know, one player or the other. The next question comes from Mr. Kunal Vora. Mr. Vora, you may please unmute your side, introduce yourself and ask your question now. Yeah. Thanks for the opportunity. First question, I wanted to get your sense on, like, how are you looking at the industry customer additions going forward for the next couple of years? And how do you see the distribution of that among the three players? And also, in terms of tariff hikes, I understand, like, already a discussion has happened, but, like, say, how much tariff hike do you think the customers can absorb, considering that mass consumption overall is not really doing well? Do you think that going from INR 200-INR 300, the customer can absorb that without seeing customer losses? I think as far as customer addition is concerned, I think we have we've seen a growth in smartphone shipments this year relative to last year. I had mentioned, you know, a few quarters ago, when the chipset shortages hit us and when chipset prices went up smartly or went up sharply, that led to increase in smartphone prices. The entry-level smartphone prices at the time used to be about INR 5,000-INR 5,500. That suddenly shot up to INR 8,000-INR 9,000. You know, we had conversations at that point as to the slowdown in upgradation. I had mentioned that, you know, it takes, in any consumer market, when there's a price shock, people take time to absorb the shock, because somebody who wants to upgrade a feature phone was, from a feature phone to smartphone, comes into the outlet, suddenly finds that the price has gone up, goes back. But then the next time they come around, they're determined to actually buy it, because now they're used to a new reality. So I think that's what you've seen in the increase in smartphone shipments relative to last year. That has obviously benefited us somewhat on smartphone additions. The overall REC additions that we've seen, the revenue adding customer addition that we've seen, is a function of the large-scale rollout that we have done. I had mentioned that in many places that we are going, where we are expanding, our shares are very low or almost non-existent. So to that extent, there has been some pickup on customer additions, as far as that's concerned. On tariff repair, how much can be absorbed? I would say, you know, we've seen several rounds of... Actually, two rounds of tariff repair in the last couple of years, and that has led to some SIM consolidation. Every time there is some increase, there is some SIM consolidation that happens. I would say, at best, it's modest. The upside benefit of repair is much, much greater than some SIM consolidation at the lower end. And, you know, the fact is that the digital and mobility today has become so essential to people's lives, that people will adjust their spends to deal with with any increase. The quantum of increase will need to be determined. Obviously, it will not go, you know, in one shot from INR 200 to INR 300. That's not gonna happen, but it will have a couple of rounds to actually get there, and so let's see how that plays out. Thanks, sir. And just in terms of timing, do you think, like, annual tariff hike is a possibility? Like, in the past, you've done, like, say, one tariff hike every two and a half years now. But do you believe that it can be quicker now? Well, Kunal, I think this question is being asked in different ways. I think, you know, I mean, I can't comment any more than what I've already done. Okay. Just second and last question on home broadband. Like, slightly- Sorry, Kunal, I think we lost you. ... Kunal, you may please unmute your side, introduce yourself, and ask your question now. Okay, sorry, I got unmuted, like, I'm muted. But, yeah, question was on home broadband. Wanted to understand, the slowdown in subscriber growth and the continued decline in ARPU. And are there any signs of the market getting saturated? Are the customers coming in lower plans? And, your thoughts on air fiber as well. No, I think the ARPU decline I wouldn't worry about, because the entry-level plans are slightly lower than the, you know, customers who have been with us for a long time, because they're on slightly higher, higher priced plans, and obviously get a lot more value as well. And so the entry-level plans are a little bit lower than than the base-level plans, and that's the reason for the ARPU drag. But broadly, I would say the entry-level plan for us is INR 490, which is really where it starts, and then along with content, it gets to INR 690 a month. Yes, I think that the whole broadband business needs to pick up trajectory. I have no concern at all on, you know, saturating penetration or anything of that, that sort. I think the combination of the rollout that we're doing, the ability to execute, to extract or to get utilization from the rollout, coupled with the full-fledged launch of fixed wireless access, is what we need to do, and get right, and this is really where we are focused. The next question comes from Mr. Piyush Choudhry. Mr. Choudhary, you may please unmute your side, introduce yourself, and ask your question now. Yeah, hi. This is Piyush from HSBC. Thanks a lot for this call. Two questions. Firstly, can you share your thoughts on incremental capital allocation with rising free cash flow? Like, how are you thinking about inorganic opportunities or dividend? Any, any thoughts around framing a dividend distribution policy? That's the first one. Secondly, can you share your progress on 5G SA deployment and FWA launch? You were saying in the next eight weeks, you know, this is the space to watch, so any color which you can provide on FWA, how that will complement the FTTH? Yeah. So I think both the questions, I think on the capital allocation, clearly, I think one, a place where capital will continue to be allocated is our transport infrastructure. That is something that will, you know, require investments for multiple years because of the growth of data and the fact that it impacts all our businesses, home, broadband, B2B, as well as mobility. We will continue to invest behind our enterprise business, our data center business. Wireless, on the radio side, will moderate with the massive rollout that we've done last year, both on 5G as well as coverage. And then, of course, homes will continue to get a step up in terms of overall capital allocated. We, we are looking at, you know, potential bolt-on acquisitions in the B2B area. This is an area where some of our capabilities on adjacencies can get strengthened. I have nothing to report right now, but that's something that we keep looking for opportunities that can strengthen our portfolio. On the SA deployment, I think, we have currently got a pilot going on in one state in the country. We're extending this to another circle as well. There are a lot of trials that are happening to see how this will work out. And like I said, I think the mid-band holdings are really a big and very, very priceless part of the overall SA strategy, which is the 1800 and 2100 band. Fixed wireless access, we've launched into 25 cities. We all have the outdoor CPE that's been launched in 25 cities. The reason I said that it will take time for it to scale is, the supplies of the CPEs from across the world. Some of it are flowing in as we speak. The fine-tuning of some of the customer journeys, and then, of course, training all our people across the board, all of this takes its time. So I would imagine in quarter two, you should see the full-scale impact of fixed wireless access. As of now, we are gearing up to make sure that the velocity of this increases. Like I've said, this will always be a complement to fiber. Where there is fiber, obviously we'll put focus on fiber, because the experience, given the better uplink and downlink and more resilient network that fiber has, will always be better than a wireless network. Given the unutilized spectrum on fixed wireless access from 3.5 GHz, clearly, FWA will be a very good complement where fiber is not reached. Thanks. Just on FWA, so can I confirm, you're doing this on NSA as well, and this is not an SA deployment? And also on capital- No, this will be an SA deployment. This will be an SA deployment. So FWA will be completely SA? Yeah. These 25 cities, you have already done SA? Yes, yes. Okay. We are moving to SA. We have not yet fully done SA. Some of that fine-tuning is also happening as we speak. Okay. On dividend? The next question comes- You know, this is, you know, obviously as we generate more cash, you know, combination of deleveraging and dividend will happen. I think it's too premature for us to comment on any dividend policy. The next question comes from Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now. ... Hi, Gopal. Good afternoon. Thanks for taking my question. First on the CapEx, we, you did, mention that there will be a moderation in the CapEx, but at the same length, you said that you still want to roll out, 25,000 new sites, fiber, transport, enterprise, home. I see investment growing all across and becoming more broadband. It also tells that this moderation will be more, moderate or, or, or it will be a slight decline than actually a major decline in the CapEx. Will that be a fair assumption? Well, I think I'm not, I'm not, Sanjesh, thanks for the question. I think, you know, I-- what I was saying is that capital will continue to be allocated on those areas. This has been, this has been going on for the last few years, so nothing has changed there. I think where the moderation will happen is really on wireless CapEx, which is where... Which, which accounts, by the way, for a large part of the CapEx. So to that extent, we do see a moderation going in into next year. Fair enough. Fair enough. But where do you think, Gopal, India will saturate in terms of fresh tower requirement? Because earlier we thought 300,000 would be enough. We are already at 320,000. We are talking of going to 350,000. Where do you think, India will saturate in terms of tower requirement? I think, coverage, Sanjesh, will, you know, especially if you start looking at rural areas, I think that will more or less saturate with this, with this rollout. I think what happens is, in many cities, the top 50-60 cities, you do see cities growing. So if you look at Delhi NCR, for example, Delhi NCR has grown so much in the last few years. So as some of these new build-outs happen, that's where you'll need more coverage. But that will be much more modest compared to the rollout that we've done. By the way, even the rollout that we're planning for this coming year or this year is much lower than the rollout that we would have done last year. Fair enough. Second question, again, is on the subscriber. You did mention, the smartphone increase, but Gopal, our, our 4G addition has not, improved materially. It has been healthy at 7+. We continue to remain there. The question is more on the net subscriber addition, where you are adding seven million, Jio is adding 11 million, almost industry has added 2% sequentially. Where are we going in terms of subscriber growth, and what is really driving this subscriber growth? Well, I think it's a combination of, you know, probably multiple SIMs coming in with multiple multiplicity of devices in urban areas, coupled with some growth in the new coverage sites that we've done, which is really the bulk of the growth that we've seen. So I think it's a combination of both. So what is sustainable subscriber growth, Gopal, in your sense? A 2%-3% annual subscriber growth should be a fair, fair enough assumption for annual? For the industry? For the industry, correct. For the industry, I think you're anyway seeing that sort of growth, right? I mean, you're seeing... Well, this quarter is a bit of an aberration, but if you go back and look at the last, let's say, 12 quarters, and you see what is the total customer addition, you're seeing that customer addition in the low single digits at the aggregate level. Got it. Got it. One bookkeeping question, Gopal, on the, on the 5G cost being recognized in the P&L. I see that there is an 80% reduction in the CWIP spectrum, which largely should be the 5G spectrum which we bought. So would it be fair to assume that at the exit month, 80% of the 5G-related cost is now reflecting in our P&L? Soumen, you want to take that? Yeah. So, Sanjesh, I won't- Hi, Soumen. I won't get into percentages, but largely it is done. A few circles are left, which will be done very soon, but the large part is done. In the same breath, is it also fair to assume that our depreciation, amortization, and finance costs are largely peaked out? No, because, when you do amortization, you don't do it for the full quarter. You do it based on with which month, what gets capitalized. So there will be a bit of moderation also for that. Probably say in another two quarters when everything is booked up- Yeah, yeah. Yeah. You are right. Then we are all through with all the cost recognition, right? Yes. Yes. That should be from my side. Thanks, Soumen. Thanks, Gopal, for answering all those questions. Thank you so much. The next question comes from Mr. Vivekanand Subbaraman. Mr. Subbaraman, you may please unmute your side, introduce yourself, and ask your question now. Hi, thank you for the opportunity. So, two questions here. One is on the tariff side, which is, one point that your competitor keeps making is that, the industry currently does not charge based on usage, and most plans are quasi-unlimited. Do you think that the industry will ever be able to move back to usage-based pricing in this, phase of tariff repair? And a related question on ARPU is, by when do you think 5G gets monetized? Because currently you are offering unlimited data for 5G users, and I'm sure that must be weighing on your ARPU. Second question is on, any trials or any success that you have had with the usage of millimeter wave for, for any sort of application, 5G for enterprise or FWA or any network debacle. Thank you. ...Thank you, Vivek. On the unlimited plans, I mean, I agree with you. I think I've mentioned this before. I think the architecture of pricing in India is quite broken, because people who can afford to pay a lot more are paying a lot less simply because of these unlimited plans, which are like, you know, effectively a one-size-fits-all plan. If you look at markets like Indonesia or Thailand or, you know, any of the markets in Asia, you'll find small, medium, large, extra large, and there's a pathway to upgradation. That, unfortunately, is not the case in India, but, you know, this is not something that we can do alone. This needs to be something that we would be happy to follow if this happens. On 5G, that's another problem, actually, with the free data that's running. Obviously, there is some headwind in terms of monetization, but again, it's a competitive market. We have responded to what we've seen happening in the marketplace, and hopefully at some point, you know, we will see if sanity prevails. Millimeter wave is still, you know, early days because we have so much capacity, so much unutilized capacity on 3.5 GHz. This is very, very good spectrum. We've got 800 MHz of very solid spectrum, and we are beginning to see some early experiments going on in some of the Western markets, particularly the United States, where millimeter wave is being used for fixed wireless access. Millimeter wave is, you know, unlikely to be used for mobile applications. It will be a lot more on fixed wireless access or some industrial use cases. But at this stage, given the abundance of spectrum and the abundance of capacity that you have on three point five, it's a bit early for us to start, you know, doing anything with it. We are doing a lot of trials to figure out what is the propagation, how does it work, et cetera, et cetera, but really nothing to report on a commercial basis. Okay, thank you. Just one last follow-up. How important is 5G for your scalability in the medium term, as you highlighted, of your non-mobile growth? Because you did mention about FWA... Sorry, millimeter wave primarily being used for non-mobile applications, including enterprise. Sorry, what was the question? Question is- I didn't catch the question. Yeah. So you, in your opening remarks, you said that there are strong tailwinds for non-mobile growth in the medium term. In that context, how important will 5G and millimeter wave be? And is there anything more that you can report in terms of 5G trials that you're doing with enterprises, where you can find use for such applications? That, that is still, still niche. I mean, a lot of the enterprise applications, we are running private 5G networks on, for several companies, almost eight-nine private networks that are now running. But it's still niche, it's, in the overall scheme of things. Fixed wireless access also will be relatively niche, because remember, the broadband business itself is about 5% of the overall company in India. So of that, fixed wireless access will be a small percentage. When I was commenting on the non-mobile business, I was talking more generally, because this part of the business, which is about 20-odd% of our portfolio, is a business that can grow much faster given the opportunity and adjacencies on B2B, the growing penetration of home broadband, the need for converged solutions, and of course, digital services. So that's really what I was commenting on. Okay, understood. Very clear. Thank you. The next question comes from Mr. Bhavik Mehta. Mr. Mehta, you may please unmute your side, introduce yourself and ask your question now. Hi, this is Ankur from JP Morgan. First question is, Gopal, if you can give us the 5G customers for the quarter, and at what point do you think the 5G penetration becomes meaningful for promotional pricing to stop? Again, just on the same line, do you think there will be a meaningful drop in paying 5G customers if promotional pricing comes to an end? I'll have a follow-up after this. Well, we have roughly 72 million 5G customers as of March 24. This is growing currently at the rate of 2-2.5 million every month, because 70%-80% of the shipments that are happening on smartphones are now 5G enabled. So to that extent, as people upgrade their devices, they'll naturally move to 5G. You know, as far as we are concerned, we don't distinguish between 5G and 4G. The only challenge, of course, is that because of free 5G that's running, a user who has access to free 5G data uses a lot more data, almost double the data that they use when related to if they don't get free data. So now, if pricing were to you know, if this were to be priced in, will they use the full double? I presume not, because people will calibrate some of the usage, but it'll still be meaningfully more than what's currently being used on just 4G. So I think that's the way we see. Understood. Just a couple of follow-ups on CapEx. You mentioned that you expect wireless CapEx to come down meaningfully, but maybe if you can comment about overall CapEx, because this quarter CapEx, you know, went a bit against trend versus what we saw the last couple of quarters, appears to be mainly from the enterprise side. Is that a one-off, and should we expect the trend we saw in the previous two quarters continue for the rest of the year? Yeah, I think on the, there was a little bit of a one-off on the enterprise side. Soumen will elaborate on that in a moment... and I'll hand it to him. But we expect the overall CapEx to moderate. I would not comment on a single quarter's CapEx. Look at the full year's CapEx. The CapEx is at an elevated level, and we had indicated this would be a peak year of CapEx. We do expect a moderation in CapEx in the coming year. Soumen, you want to just comment on the, on the one-offs in the B2B side? Yeah. So, our B2B business had a bit of one-offs this quarter, which is primarily related to fiberization. So we bought some fibers and some spends on the data center business. The data center business isn't a linear business, so, you know, you buy land, you build building, you put in the MEP. So it doesn't follow a rhythm, per se. Also, we do have some other large CapEx items. I'm taking this opportunity to explain. For example, on submarine cables. Submarine cables are large investments, which happens on milestones. So B2B will always remain a little lumpy because of these reasons, but otherwise it was a steady state, nothing exceptional. Thank you so much. If I can get a last one. You know, very nice to see the dividend being announced. If the FCF conversion keeps improving meaningfully for the next year, should we expect you to think about increment, you know, increasing incremental cash flows towards that end? Thank you. I think let's cross that bridge when we come to it. The next question is from Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now. Yeah, thanks. Thanks for taking my question again. I've got one question on enterprise side, Gopal. It appears to be there is a moderation in the growth on enterprise side, and it's for your peer as well. We have seen both on India and international, and, and, we also hear that there is an increased competitive intensity in the market. How do you see enterprise business shaping up? And, and again, you highlighted that you expect your domestic business to grow at 18%-20%, while the growth rate appears to be significantly lower than that, how should, how should we see that? No, Sanjesh, I think the domestic enterprise business continues to grow strongly. I was referring to that. I was not talking about a forecast for the business, but I was saying the domestic enterprise business continues to grow at 18%-20%. Okay. The problem has been in the global business side, and if you look at our portfolio, I think there are three parts to our business: data centers, which is about 10% of the portfolio, that's having a secular growth of 14%-15%. And then there is, of course, the global business, which is largely the wholesale business. It's OTTs, it's messaging, it's cables, and then there's a domestic business. The global business is about 50% of the portfolio. That's the one that's under pressure. Those are the ones where the OTT companies have cut back on some of the cable investments, order books on fiber build-out, and so on and so forth, and there's an overall broader optimization that is happening at that end. There's also some movement of messaging, traffic away from telco SMSs into an in-app notification on many of these OTT platforms. That's another trend that we see. But the domestic business is still growing strongly, and we feel that there's a big opportunity here in the domestic business because the adjacencies, which are adjacent to connectivity, are areas where we have very low shares, but they have some bearing, and they have some cross-linkage with connectivity. This is where a substantial amount of investment is currently going. That's really what I was trying to say. So, Gopal, can you give more color? Because 18%-20% growth domestic looks significantly faster than one of our listed peer, who grew at mid-single digits. So what is driving such a outperformance in the domestic enterprise business for us? I think it's a combination of all, all of the parts of it, which is connectivity in itself, where we've grown some share. The second, of course, is CPaaS, where some of our solutions that we have launched with our, particularly our Spam Shield product on Airtel IQ, that has some wins. There is there is some early... You know, the IoT has been a very big driver of our growth, and this is where we're trying to expand the addressable market beyond connectivity into both cloud and analytics. I think the opportunity for growth in all of these segments is still there, and yet we haven't even begun in the cloud area, which is where we signed this deal with Google recently. But that's another very large market. Will it be fair to assume that these growth rate are sustainable because the underlying trend still remains strong for us? I think let's see how that plays out. I think we would be, you know, I won't comment on where the growth rates are, but this market on the adjacencies is growing very rapidly. Core connectivity in itself is growing only at 6%-7% as an industry, but the adjacencies are growing very rapidly. Fair enough. Fair enough. That's it from my side, Gopal. Thank you for answering the questions again. The next question comes from Mr. Aditya Bansal. Mr. Bansal, you may please unmute your side, introduce yourself and ask your question now. Thanks for taking my question. This is Aditya Bansal from Kotak. Can you shed some more color on what factors led to significant decline in mobility churn? And can you also talk about the competitive intensity in the market, as we see MNP requests are still at elevated levels. So some more color on this would help. I think there's there are a lot of structural interventions that we are we are looking at. We've identified about 20-25 potential markers of churn. We have a program which is basically being tracked at, you know, we've divided the whole country into what are called grids, which are 1 km by 1 km grids. We have tooling to understand the experience at each of these grids. The sales and the network team work together to take charge of the grid and the experience of the grid. And at the back, from our network operating center, we look at about 20 markers, which have a whole bunch of things that I won't go into that detail to really identify what are the drivers of churn, because a large part of it is really related to the network. And, the focus of the team is to really get all of those experiences right, so that we cut our churn. So the structural actions that we've kicked in, about five-six months ago. The intensity in the marketplace on acquisitions continues to be high, and, you know, it surprises me as to why it is so high, particularly in a market where the organic growth of customers, if you take a longer term basis, is still very modest. But it's a competitive market, and, you know, some of this leads to churn, which is kind of rotational, because people buy a SIM and throw away the SIM. So we look at churn in two parts. We look at the quality of acquisition, which is the first four month of the customer on the network, and a tenured customer, which is after five months. Our churn efforts is really focused on month five onwards, which is tenured churn. Our first four months is all about quality of acquisition. We divide the churn into really two parts. First, four month, four months, which is noise and quality of acquisition, and then, of course, the general experience-related churn. Thanks, Gopal, for the detailed answer. Second question is on the pending calls on rights issue. Any update there? Like, is there a possibility of extension, or do we have to do it compulsory by September? I think we are, you know... Harjeet, do you want to take this? Yeah, sure, Gopal. Aditya, obviously, the guidance was three years, and we have about six to eight months left to that guidance. Our understanding is more a guidance, and we'll have to chew on what is the outlook for the free cash flows. So maybe by the next three to five months, we'll come out with a more formal, either a revised guidance or whatever commentary that we have to provide for the rest of the calls. Thanks, Gopal. Thanks, Harjeet. Thank you, Gopal. I would like to remind the participants to stay connected for the call for the next session on the Bharti Hexacom. Now, I would like to invite Gopal for his closing remarks for Bharti Airtel. Thank you very much for joining this call. I think overall it's been a satisfactory year. There's a big job to be done on several areas. We've talked about broadband, we've talked about continuing to do work on structural churn. I wanna thank you for all your questions. I wanna hand it back to Soumen for Bharti Hexacom. Thank you, Gopal. Saumil, over to you for your opening remarks on Bharti Hexacom performance. Good afternoon, everyone. Welcome to this part of the Bharti Hexacom earnings webinar. In its maiden quarter after listing, Bharti Hexacom delivered a great performance with about INR 1,868 crores of total revenues, an increase of more than 3.5% sequentially, primarily driven by mobility, which grew by upwards of 4% quarter-on-quarter. It was driven both by strong customer addition, data customer addition, as well as improvement in ARPU. Operating performance was healthy, with an EBITDA of about INR 914 crores. EBITDA margins were at 48.9% and improved close to by one percentage point quarter-on-quarter. Net income was at about INR 223 crores for the quarter. Operating free cash flow, which is, EBITDA minus CapEx, for the full year, was, at about INR 1,467 crore. Last year was the year of elevated CapEx, which is reflected in our network additions of about $4,000. Happy to report we have repaid about INR 1,500 crore of debt in Q4 and ended the year with a net debt to EBITDA of about 2.14. With this, I would request the moderator to open up, for Q&A. Thank you, Soumen. We will now begin Q&A interactive session. Due to time constraints, we would request if you could limit the number of questions to two per participants to enable more participation. Interested participants may click on Raise Hand option on your Zoom application to join the Q&A queue. The first question comes from Mr. Dayanand Mittal. Mr. Mittal, you may please unmute your side, introduce yourself, and ask your question now. Yeah, hi, this is Dayanand Mittal from JM Financial. Hi, good afternoon, Soumen, good afternoon, Naval. Thanks for the opportunity. A couple of questions, Hexacom. First, if you can just explain any particular reason which explains the sharp INR 4 jump in BHL's ARPU, vis-a-vis the modest INR 1 for Airtel, any specific one-offs there? Second, if you can just throw some light on what would be any rough guidance you would like to share on Hexacom CapEx for FY 25 and 26, and any net debt position that you would be comfortable with. Thank you. ... Thanks, thanks, Dayanand, for the questions. I think, you know, these two circles have their own uniqueness. And, what happened, one of the reasons, which is one-off, is Manipur. Manipur, a large part of telecom services was closed, and it reopened around the first week of December. So in last quarter, Manipur revenue was there only for about three weeks of the quarter, whereas this quarter it was there for the full year, full quarter. And we have seen, generally improvement in our data customers. So the upgrade story has played out better, in, in Rajasthan and in Northeast in this quarter. Difficult to comment how it will progress, like in Airtel also. We put in a lot of efforts to ensure that, we improve our, our AR, ARPU continuously, quarter on quarter. Some of the tricks work out, so we hope that this continues, but yes, there was a one-off. As far as guidance on CapEx is concerned, we don't provide a guidance, but like in case of Airtel, even in Bharti Hexacom, there will be some unwinding of CapEx during this year compared to last year. Just a follow-up on CapEx. Given the higher rural population in these two circles, is it possible that the CapEx might stay a bit elevated, even in FY 25, given rural rollout is still in progress? Or, FY 25 will see a moderation, like in case of Bharti Airtel? I would like to believe that this will see a moderation. Then the reason being, see, this, the rural rollout happens at various times in various places. So as I mentioned in my opening remarks, we have done about 4,000 sites last year in these two circles, which is a pretty large rollout. We will continue to roll out more sites, but it should moderate. Thanks a lot. The next question comes from Mr. Kirtan Mehta. Mr. Mehta, you may please unmute your side, introduce yourself, and ask your question now. Thank you, sir, for this opportunity. This is Kirtan Mehta from BOB Capital Markets. In your earlier opening remarks, basically, I think it was mentioned that the, particularly, I think it was in the Bharti Airtel, where we said that the 9.5% ROE is sort of quite less for the mobility kind of business. We see that number at 11.5% in Hexacom. And where do, would you want this number to be in the steady state? Would it be 12%-14% or 14%-16%? What could be considered as a sustainable ROE for this kind of business? Well, so Kirtan, I cannot give you a direction of ROCE or ROE for the business, but like any other investor, we would like this to improve. The Bharti Airtel is a mixture of multiple businesses, which has, mobility, of course, but also has some places where there is a lot of, rollout, a lot of churn, like DTH and, and homes. So it's a admixture of multiple businesses. I think, we would certainly like to see this grow. And as mentioned earlier in the call by Gopal, the tariff repair is, very important. It's very, very important for the financial health of the company. How much will happen, we will wait and see. Let the first round of tariff repair happen. We'll see how costs go. In the earlier part, there was also a mention around, you know, customer acquisition. There's a lot of money which is today spent on customer acquisition, and the quality of that acquisition is not great. So we will see how the industry shapes up, and hence, how the profit and loss of the operators shape up to deliver higher ROCE. But as of now, I really cannot give you a number that is a target, and once we achieve that, then everything will stop. No, it will be a continuous work. And as you know, you know, we don't only rely on tariff increase. We do a lot of work on war on waste, where we generate our fuel for growth. A large program this year, our network site costs have come down in some places. So a lot of work goes into finding that fuel, but, no, no target specifically for what the ROCE should be. Thanks, Soumen, for this color. The second question was about the, basically, the dividend policy. While we understand in case of the parent, I think it's a bit away from the perspective of the generation of the cash, but from our perspective, Hexacom perspective, I think we have already seen a dividend reduction last year. We are at 11.5% ROE. So how far we are from defining the dividend policy for Bharti Hexacom? So first of all, I would like to iterate that, reiterate that, you know, the dividend has increased a lot. Whilst on the face of it, it may seem that it has moved from INR 3 to INR 4 last year to this year, you must remember that there has been a stock split. So effectively, it has moved from INR 1.5 to INR 4. So there has been a significant improvement in dividend. Now, coming to, when do we define our dividend policy and all of that? I think, we still have some debt in our books, you know, bank debts, which we expect to get repaid, over the next, few quarters. Once, we get rid of the debt or come close to getting rid of the debt, we will evaluate as to how do we define our dividend policy. So till then, we would evaluate the profit, the cash generated, the amount of, future requirement towards debt and CapEx. Remember, we have got spectrum repayment, commitments as well. So there are a few things. Once we get a complete handle, we will evaluate of coming up with a, new dividend policy. Thanks, Soumen. Now, I would like Soumen to give his closing remarks for Bharti Hexacom. I think the listing of Bharti Hexacom shares was a great success, and we thank through this all investors and people associated for showing trust in the organization. It has been a great quarter, and we will work harder and better to improve our deliverables in the next year. Thank you. Thank you everyone for joining us today. Recording of this webinar will also be available on the websites of the companies for your reference. Thank you and have a great day ahead.