Good afternoon, ladies and gentlemen. I'm Vaidehi Sharma, the moderator for this webinar. Welcome to the Bharti Airtel Limited and Bharti Hexacom Limited Second Quarter, ended September 30, 2024 E arnings 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 Zoom application to join the Q&A queue. The participants may click this option during the management opening remarks itself to ensure 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 the question post-introduction. With this, I would now like to hand over to Mr. Gopal Vittal for his opening remarks. A very warm welcome to this earnings call for quarter two twenty-five. With me on the call today, I have Shashwat, our newly appointed CEO designate, Soumen, Harjeet, Naval, and Akhil Garg. Let me start by giving some texture on the organizational announcement we made yesterday. Our objective through this change is to bring in a fresh crop of younger leaders into key positions to run the India operations. This move symbolizes world-class succession in best-in-class companies. Shashwat, the newly appointed CEO designate, and will take over the role of MD and CEO on January one, 2026. Shashwat joined us in 2018 from Hindustan Unilever. Over these last six years, he has been given a series of well-thought-through and planned experiences where he has created impact. He led the entire consumer marketing across all our segments, mobile, broadband, and DTH. In addition, he was responsible for partnering with functions to shape the digital agenda. Since 2023, he has run the operations as Chief Operating Officer. This rich experience across various parts of our business makes him a very strong candidate to lead Airtel well into the next decade. In the next one year, my job will be to fully ready him to take over as MD. As you can see, all of this has been a very well-planned succession. I will be stepping up to the role of Vice Chair and MD for the year, for this year, 2025, and eventually as Executive Vice Chair for Bharti Airtel. My job will be focused on four areas. One, to mentor and groom Shashwat, so that he's fully ready to lead the India business in 14 months' time. Second, I will take on some of the roles that Sunil plays today across the group, specifically driving synergy on digital, procurement, talent, and network strategy. We believe this will add capacity to the group. Third, I will spend time scaling some of our incubation and growth areas, digital services, financial services, and data centers. Finally, I'll also provide broader oversight across our overseas operations. In addition to this, I've also agreed to continue as Vice Chair for GSMA as the nominee of Airtel for an additional two years, so that latest developments related to technology are assessed and relevant parts brought back to Airtel. I want to clarify that I'm fully committed to the Bharti Group, and I have no intention of taking on anything outside the group. Let me now turn to the performance and update on our strategy. A quick background on ESG. In our ongoing commitment towards ESG initiatives, I'll share the latest progress. We solarized over 3,500 sites in the quarter and about 24,800 sites in the last five quarters. Our efforts to reduce environmental impact have led to a savings of over 2 million liters of diesel per month over the last two years, resulting in approximately 5.8 tons of carbon CO2 emissions eliminated monthly. This has been achieved with the deployment of lithium-ion and valve-regulated lead-acid batteries and other measures. We recently collaborated with Nokia for energy-efficient solution and practices to Airtel's mobile network and expect to reduce Airtel's carbon emissions by an estimated 143,000 metric tons of CO2 annually. Nxtra has achieved a 4% reduction in Scope one and two emissions compared to FY twenty-one, despite a 25% increase in power consumption. We have over 220 megawatts of renewable energy usage, a 41% increase over FY twenty-three. Nxtra also saved over 160,000 tons of CO2 emissions via various initiatives. We are proud that all our hyperscale data centers have reached IGBC Gold certification, reflecting our commitment to sustainability in construction. Women participation in Nxtra also increased 30% in FY 24. We maintain transparent disclosures on ESG, and we are proud of our high standards of governance and ethics. Let me give you some highlights of our performance. We delivered a solid quarter. Consolidated revenue of INR 41,400-odd crores. India revenues were strong, with about 8.7% sequentially to just over INR 31,500 crore. EBITDA margins came in at 54.8%, an improvement of 1.1%. We delivered the highest ever quarterly operating free cash flow, which is EBITDA minus CapEx of INR 11,000 odd crore. CapEx for the quarter was INR 6,250 crore. The strength of our balance sheet is a testament to prudent CapEx and commitment to trim high-cost debt over time. During the quarter, we prepaid another tranche of DoT spectrum dues pertaining to 2016. In the last five quarters, we've prepaid over INR 32,000 crore of high-cost spectrum dues. India net debt to EBITDA now stands at 2.6, compared to 3.1 a year ago. I also want to clarify the position on net debt in India. On a reported basis, the net debt has gone up by INR 6,000 crores. All of this was related to spectrum that was procured in June, which was received during this quarter. In addition, do note that we paid out INR 5,000 crores of dividend from our cash generation. We continue to have solid execution and razor-sharp focus, which is the foundation of our consistent performance. All businesses are delivering market share gains. I also want to underscore our effective and simple strategy, which has consistently delivered results, quality customers, delivering a brilliant experience for them, putting digital at the core, and relentlessly focusing on operational excellence and stripping out waste. We continue to expand our network. We rolled out about 5,000 network sites, over 9,800 route kilometers of fiber in the quarter. We have deployed recently purchased spectrum to turbocharge our network across three circles. We're delivering the best experience in India, and that truly is the obsession for us. So we believe our focus and obsession was endorsed by the recent results on Opensignal, a crowdsourced network experience platform. Airtel was awarded all five awards on 5G network experience on Opensignal, a testament to the hard work done by all at Airtel. A quick update on each of our segments. In the mobility business, we experienced a loss of 2.9 million customers due to SIM consolidation, triggered by the tariff repair, but this decline was milder than what we observed in earlier rounds. As we've seen in the past, these trends normalize over two quarters, and we've already seen that normalization happen through the month of October. We've already seen a trend reversal with customer adds. We added 4.2 million smartphone customers in the quarter. Postpaid net adds remained steady at about 0.8 million. Flow-through of tariff increase is as per expectations, and we expect the full benefit to be reflected in the coming quarter. ARPU came in at INR 223, compared to INR 211 in quarter one, maintaining an industry-leading growth. At the same time, the ROCI of the India business is still very low, at 11.2%. The only way to improve this is further tariff repair. Underlying ARPU drivers remain intact: feature phone to smartphone upgrades, prepaid to postpaid upgrades, data monetization, and international roaming. We continue to expand our 5G coverage. We ended the quarter with a 5G user base of 105 million. 5G shipments continue to grow, and we are gaining share. In the broadband segment, we added nearly 600,000 customers, a step jump from previous quarters. Our FWA expansion is yielding strong results. During the quarter, we rapidly expanded our coverage of FWA. This is also driving the addressable market, and the expansion for our Wi-Fi services. We are now live in more than 2,000 cities, with, through a combination of fixed wireless access and FTTH. In the DTH segment, we lost over 500,000 customers in the quarter. This is largely impacted by pronounced seasonality. Our simple and differentiated strategy continues to drive share gains, even in a challenging industry. Airtel Black, our converged offering, plays a key differentiator in the marketplace. Customers on Airtel Black plans have grown by about 65% in the last one year. Our Xstream offer, which is the OTT bundle, along with linear content, has seen strong traction with 55% growth in the customer base in the last one year. Airtel Business, our revenue growth in quarter two was 3.3% sequentially. The domestic business is showing strong traction, with growth coming from both connectivity and emerging segments. The global business has seen an improvement in customer discussions on upcoming business, but that has yet to translate into firm orders. Our engagements with large global customers for potential deals is moving as per expectations. To boost our global connectivity offerings, we signed an agreement with Sparkle for Blue-Raman submarine cable systems capacity between India and Italy. The margin impact is attributable to the changing revenue mix, with incremental growth driven by new and adjacent businesses, and these are businesses with low CapEx. On our digital businesses, our efforts are channeled to improving and driving growth in CPaaS, financial services, IoT, security, and cloud. Airtel Finance is shaping up well, and we believe there is significant room for growth in this space. Let me just share a few details here. Airtel Finance has served over one million customers till date across various financial products. We are trending at an annualized loan dispersal rate of INR 3,000 crores, and our AUM stands at INR 2,500 crores. We continue to partner with leading NBFCs to scale our loan portfolio. We will be expanding the portfolio across various financial products with partners. In line with our vision of a financial services marketplace, fulfilling needs of our customers with the trust of the Airtel brand, we've launched multiple products, including fixed deposits, where we partnered with small finance banks and NBFCs to offer attractive rates. Going ahead, we'll be launching embedded insurance as well. We're building Airtel Finance as a strategic asset for the group, and we'll keep investing in and growing this business, which has synergies with our core business. Finally, the payments bank. The monthly transacting users stood at just over 85 million, actually a shade under 86 million, with a strong growth of 20% sequentially. The annualized run revenue run rate is now over INR 2,600 crores, growing 58% year- on- year. Deposits remain robust at over INR 2,950 crores, growing by 43% year- on- year. A quick update on our strategic pillars. First is really building a diversified portfolio to give us more resilience. Africa now accounts for 25% of revenues, India Mobile is at 60%, and India Non-Mobile is at 15%. Africa continues to deliver strong constant currency growth of 7.7% sequentially. Going ahead, we see strong growth potential in our non-mobile portfolio, homes, B2B, and digital. Second is to really win quality customers, and let me quickly give you an update on the growth drivers in each of these segments: homes, postpaid, rural, and B2B. Broadband penetration in the country, as you know, is only 42 million, but growing fast. We believe this can grow to about 80 million in the medium term. Of these 30-40 million new homes, Airtel has a relationship that can be leveraged to drive more services. To capitalize on this opportunity, we are focused on three areas. One, is to expand our coverage through FTTH and fixed wireless access by entering newer markets and fiber dark areas to expand the addressable market. Two, to simplify the go-to-market with uniform pricing of our Wi-Fi offering across technologies, activating alternate channels for installation and servicing, strengthen store presence, and scaling delivery capacity. Having stitched the initial teething issues, our focus is now to drive productivity across the channels. We're seeing strong traction in our customer addition momentum. I do wanna reiterate that fiber will always offer a superior experience, and our expansion plan is predicated upon eventually converting our fixed wireless access to fiber once fiber reaches the location. This is driving continued fiberization. We now have over 33.5 million home passes, and continue to add over 1.5 million home passes every quarter. The third focus area is on bundling entertainment along with convergence through Airtel Black. This is yielding positive results with about 50% of our broadband acquisitions on Black plans. We believe this has significant headroom for growth going ahead. To further strengthen our entertainment portfolio, we announced a partnership with Apple on TV and music. On postpaid, as I mentioned earlier, our focus is on 80 million potential customers who we believe could upgrade to postpaid. We wanna seize this opportunity with continued efforts on simplifying our journeys, deepening our retail footprint, along with our flagship family proposition. We further deepen our retail footprint with a store count now at 1,650. We continue to enhance customer experience for international roaming, with competitive plans and coverage across the world. Our rural expansion over the last two years has contributed to revenue market share gains across circles. We've rolled out more than 39,000 sites, with continued expansion underway to cover the gap in five key circles. Extensive use of digital tools and data science, and our razor-sharp execution, delivered desirable results. We believe that a bulk of the expansion is now done, and our focus going forward is to sweat our deployment. In B2B, the growth opportunity is large, with 90% of incremental growth coming from adjacencies. We have three focus areas. First, continue to strengthen our go-to-market approach and build sales capabilities. This is really driven by instilling rigor within our sales teams through comprehensive training programs designed to equip them with the skills necessary to effectively sell solutions. Second, to build products and tailored solutions for industry-specific needs with accelerated investments in CPaaS, IoT, cloud, and security. This will help us lock customers for long and enable us to win higher share of wallet. The third area of focus is on creating future-ready infrastructure that delivers good customer experience. As I had mentioned earlier, we have a blueprint for our fiber expansion, and the same is reflected in our fiber deployment, which is nearly 100,000 route kilometers in the last two years. We're investing in digital tools aimed at improving our delivery and assurance processes, ensuring a brilliant experience for our customers. The third pillar of our strategy is the obsession to deliver a brilliant customer experience. Over the years, we've significantly increased use of data science and digital tools to deliver a superior experience. Our framework and experience is founded on two principles: the platform approach, with four key platforms for our B2B2C business, buy, bill, pay, and serve. These are now yielding strong results on customer journeys in an omnichannel way. Second, is our network experience. Our digital mindset keeps us at the forefront of technological changes and enables us to use data science and digital tools across the network layers. The most recent one is the launch of India's first network-based AI-powered spam detection solution that will significantly solve the issue of spam calls and messages. This proactive approach not only safeguards our customers, but also enhances their overall experience. We're using AI algorithms based on a real-time analysis of 1 trillion records a day to identify potential spam calls and alert customers before they answer. The implementation of the spam call protection solution has already shown promising results, and initial data indicates that it has significantly reduced the volume of spam calls. Our solution has been able to identify over 100 million potential spam calls and more than 3 million unique spammers in the network. The fourth pillar of our strategy is to build and leverage our digital capabilities. Digital is deeply embedded in our operations and pivotal to our strategy. Our digital service offerings, including Airtel IoT, IQ, Cloud, Security, SD-WAN, and Airtel Finance, all of which are getting significant attention and investment. I'll give you a quick texture on security and our strategy around it. India's security market has undergone a remarkable transformation, marked by substantial growth, which underscores the escalating significance placed on fortifying digital defenses in the face of evolving threats. We've now tied up with Zscaler to make sure that we have a very strong security proposition for customers. We're also partnering with, you know, other managed services, offers, so managed services become a very important area of focus. We're monitoring and recovery services. This encompasses advanced SOC with complete cyber defense and recovery services using next-gen analytics and breach assessment platforms. Our customer base in both these services has doubled, with strong revenue growth in last year and expected to sustain the momentum going forward. The fifth and last pillar of our strategy is water and waste. This is core to our operations. We take pride in fostering a frugal culture that prioritizes efficiency without compromising service quality. Despite an addition of over 75,000 network sites in the last two years, our diesel consumption on towers saw a reduction of over 2 million liters per month. Over 58% of our network sites are now tagged as green sites. Over the last two years, we've saved over INR 50 billion on network OpEx. We continue to identify areas to drive cost efficiencies. To sum up, overall, it was a good performance with consistent share gains. In mobile, the full benefit of tariff repair will accrue over the next two quarters. The postpaid opportunity is large and will continue to get focus. Homes, our effort is to expand the addressable market with fixed wireless access, sustain our home pass expansion, and drive convergence. B2B is expected to regain growth momentum going forward. Our financial prudence and sustained deleveraging continue to strengthen our balance sheet. We believe that the industry is still delivering sub-7% ROCE, and this needs to substantially increase. Our investments are channelized towards building Airtel into a strong digital services player. Our focus will continue to be around winning quality customers, delivering a brilliant experience to them, and putting digital at the core of all we do. All of this will be done with a frugal mindset and prudent capital allocation. With this, let me hand over back to the moderator. 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 analysts 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, participants 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 till 3:30 P.M., as the management will start the Q&A discussion on Bharti Hexacom from 3:30 P.M. onwards. With this, the first question comes from Mr. Piyush Choudhary. Mr. Chaudhary, you may please unmute your side, introduce yourself, and ask your question now. Yeah, hi. Thanks a lot for the call. This is Piyush from HSBC. Two questions. Firstly, on homes, we saw acceleration in subscriber addition, right, partly led by FWA. Can you talk a little bit about how is the customer response on FWA, the user experience and unit economics, comparing FWA versus fiber broadband from Airtel perspective? Secondly, on CapEx. CapEx has dropped substantially year-on-year to around 22% of revenue in Q1. Is there any seasonality, or should we expect similar levels of CapEx intensity going forward? Thank you. So, Piyush, I think on the acceleration, I think we there, there's a big job to be done on homes. We have stepped up our net addition, as you know, in this quarter, and that's satisfactory. But still, there's a long way to go because we're not as competitive as we need to be. And you will see, you know, consistent work from us to improve this over the next two quarters. We're activating all of our channels across, not just the broadband channels, but our mass retail channels, our DTH channels, to make sure that all of this actually drives broadband. In terms of customer response, I would say that, you know, given the rather empty nature of the 5G network, it's a good response, and it's a good experience. We're able to deliver the speeds that we're promising, both on uplink and downlink, and we don't see an issue. We've done a lot of modeling to see at what point do capacities get a little bit more constrained. We're using that and have put in place algorithms to make sure that our rollout of fiber goes in on priority into those places where we believe in the next one year or 18 months, we could see some challenge in terms of our fixed wireless capacities. As far as the unit economics is concerned, the unit economics are now comparable between both FTTH and FWA. We've been able to work with the OEMs and the chipset manufacturers to dramatically bring down the cost of the fixed wireless access CPE. As you know, the router is the same for both the technologies. But now, with the CPE cost having come down, the cost per connected home pass, whether it's fixed wireless access or fiber, is more or less similar, and we are determined to try and see how we can bring that down further. On CapEx, yes, you did see a moderation, largely in quarter two. This is normally a seasonally poor quarter. I've always said that this year you will see a moderation in overall CapEx for the year, and that we stand by. We haven't given a specific guidance, but you will certainly see CapEx going down from last year, which was an elevated year of CapEx, given the massive rollout of sites as well as 5G. Thank you. Sorry, was there a second question? The next question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now. Hi, Gopal. Good afternoon. This is Sanjesh from ICICI Securities. Thanks for taking my questions. First is on your role, where you said that you want to more digital side of the business when you in your next role. What exactly are we looking at within the technology which fits well with Airtel what we are doing, and what is the expected path there in the digital journey? Yeah, Sanjesh, thank you for that question. I think my overall remit will be to provide oversight across our operations. Also to drive synergies across in terms of procurement, talent, network synergy, digital tooling. I think India is ahead of where Africa is, and we need to make sure that Africa gets to the same level. So we've already begun that process over the last four quarters. We have a tech committee discussion every quarter with the Africa teams. So that's the second area. The third area that I was mentioning was broadly in terms of the incubation and growth of some of the new initiatives that we started. For example, we have a payments bank business which can be scaled. We have a financial services lending business, and the financial services vertical by itself can scale. As you notice, this is core to our business. This is not a core to our business, but this is a very close adjacency to our business. Similarly, you have other digital services which are largely run in the B2B space. For example, cloud. We've talked about it last year. We have made an investment to develop our own cloud. We are one of the largest cloud players for our own private needs. We have now signed off an investment which is underway, which we will take to market in the next few months, where we'll be able to solve the problems of workloads that may not need such elastic requirements as the public cloud offers, but to do it in a way that is more economical. So I think we'll have a full proposition around cloud, the combination of, you know, alliances with some of the hyperscalers, coupled with our own cloud and a managed services portfolio, which sort of sits on top of that. So that's the second area of focus. Data centers is an area where we need to make sure that we step up and get some growth. So these are some of the areas that I will look at in addition to the oversight across our operations in the group. And finally, I continue to be on the GSMA board for the next two years. And, you know, that always helps, not just the travels to see all of these telcos, but really to bring back some of the new developments that are happening and what could change, and what it is that we need to do to keep an eye on what's going on. I think this was a role Sunil used to play many years ago. This is a part of the role that I'm gonna take on in this new capacity. That's clear, very clear. Any revenue target for Airtel in your mind, where you want to take digital as a proportion of revenue within Airtel's ecosystem? Sanjesh, you know I won't be drawn into that answer, right? You'll hold me responsible and ask me every quarter. No, but is there any target in your mind? I mean, just a number here. It's gotta be, it's gotta be meaningful. Sanjesh, it's got to be meaningful. I mean, we're a, we have a large revenue pool in the business, and if it is a, you know, a revenue opportunity that is tiny, then in the larger scheme of things, this will not get enough attention. So it's got to be meaningful over a period of time. Got it. My second question is on the 5G. We still had a 15 million addition on the customer side. The prices for the 5G effectively has gone up from 1.5 GB pack to a 2 GB pack. How has been the adoption as the people hesitant to upgrade from 1.5 GB plan to 2 GB plan? We know that we had a decent addition, but just want to understand how is on the thing on the ground in terms of customer addition. Do you think this number will sustain beyond this quarter? So, Sanjesh, broadly, we, you know, with the tariff repair that happened in the last few months, we did not actually see any significant downtrading. We were able to hold on to the user base and sort of move them into the right plans. We're also doing a lot of... We have a lot of intelligence to identify who's a likely user, who needs to be on the 2 GB plan, using a combination of the device that they have, their usage characteristics, as well as their propensity to pay. So given that, I think we've been surprised about the lack of downtrading, which we were expecting. We were expecting two things that happened with the tariff repair. Number one was a greater amount of SIM consolidation than we saw, and the second was a greater amount of downtrading. Both those have not materialized, so we are better than our action standards on both fronts. That's, that's very clear. Thanks. Thanks, Gopal, for all those answers, and best of luck for the coming quarters. Thank you. The next question comes from Mr. Kunal Vora. Mr. Vora, you may please unmute your side, introduce yourself, and ask your question now. Yeah. Continuing on the previous question, just wanted to understand, regarding this, 5G usage, 5G, 5G users. So how many customers have taken the two GB plan or they are topping up with the INR 51 top-up, which you have? The 100 million-plus 5G customers, would you say that all of them are doing this? No, I mean, it's never possible in a market like India, where every single user who you offer a plan will take it. I mean, there's always that reality has to be, you know, tempered by what actually happens in any category, it's not just our category. I would say that, you know, the only thing I would say is that we are consistently growing this because, you know, this is one of the drivers of our ARPU. As I've always mentioned, the drivers of ARPU growth for us. Number one is prepaid to postpaid. There, we've seen consistent net adds over several quarters now, with this 80 million pool of customers that are still to be tapped into. The second is data monetization, which means that when the moment the allowance runs out, you're able to upgrade them to maybe a, you know, data pack to be bought on impulse, or in effect, for constant breachers, to upgrade them to the next nearby plan, which is a 2 GB plan in this particular case. And that has been a very big driver of our ARPU growth outside of tariff repricing. If you keep tariff repricing aside, that's been a big driver of our tariff repricing, of our ARPU growth. The third, of course, is international roaming, where the penetration is still very low, and again, that's another driver of ARPU growth. So I think those drivers... And then finally, feature phone to smartphone upgrades, Kunal, which also the driver of ARPU growth, because the moment a user moves to smartphones, you do see a jump in ARPU. So the combination of all this is what has led to, you know, ARPU increase over several quarters. And I don't believe that that changes in any way going forward, because the upside or the headroom for a combination of penetration growth, as also the user base of feature phones going to smartphone, is still large. And, you know, international penetration, penetration on prepaid or international roaming prepaid, penetration on prepaid is very low. It's growing, but it's still very low, and the upside is massive. I mean, I would say it's in the ballpark of 11%-12% on prepaid international roaming, but that's grown from 7-11 in the last few quarters. So the upside is very large, and it's the same that would apply for data monetization, whether it is the 2 GB plans or whether indeed it is a user running out of data after having breached their allowance. The number of users who actually take these data packs is a tiny fraction of the overall breachers. So again, the upside is large, and it's consistently growing. Understood, and what are your thoughts on the next tariff? Like, the demand currently seems to be generally weak across sectors. Do you see a possibility of raising tariff further in next one year? I think time will tell. I mean, all I would say is that if, you know, and this is my favorite subject, which is that if you, if you take the two axes and plot the rate per GB and ARPU on two different axes and put all the countries of the world on that graph, you'll find India at the extreme left on both. We are much lower than Sub-Saharan Africa, much lower than Bangladesh, much lower than Indonesia, and so on and so forth. So the opportunity to take up tariffs over a period of time is high. Equally, I think the architecture of pricing, as I mentioned before, needs to change, where you do have an ability for customers to upgrade from low, medium, high and super high in terms of plans. And I think that's the part that also would change, and then that will naturally play to ARPU upgrades. Understood. And just lastly, your thoughts on AGR dues after the curative petition was rejected. Are you pursuing the matter with the government for any further relief or, it's a done deal now? No, I think that was the last recourse there on this particular matter. Soumen, I don't know whether you want to add anything. No, I think the curative petition has been denied on the grounds. I think there is a review petition pending, and the moratorium period is yet to start. So there are things which can happen, but as of now, the status is what you said, that the curative has been rejected. Understood. That's it from my side. Thank you. The next question comes from Mr. Arun Prasath. Mr. Prasath, you may please unmute your side, introduce yourself and ask your question now. Good afternoon, Gopal. Thanks for the opportunity. My first question is on the unit economics. You spoke in the earlier answer about the FTTH versus FWA. Did you include the cost of spectrum utilized in FWA as part of the calculations when you say that it is more or less the same? No, because, you know, that, that spectrum has anyway been used for consumers, and it's been used for handheld devices. So to that extent, it doesn't include the, the spectrum, because that's a sunk cost which anyway is serving the mobile business. Okay, understood. Now, if I look at the enterprise margins, my second question is on the enterprise margins. It's gradually decreasing over the last six months. What could be the reason towards this? It's a mix change or it's a competitive environment? How should we read this? I think, you know, the mix of our business today, if you look at it, 50% of our business is the global business. And again, that has different parts to it. There is messaging and voice. There is also data. Each of those has different margin profiles. The second part, generally the global side of it, which is the 50% business, is more profitable. Then there is the domestic business, which is about 40%, and 10% is data centers, which has a slightly different margin profile. Within the domestic business, connectivity typically tends to have very high margins. But remember, here, there's CapEx involved. And then when you start looking at things like, you know, CPaaS, cloud, security, et cetera, these tend to have lower margins, but they're also places where growth is much faster. So I think the challenge for the business, or the objective for the business, is to really step up the growth in the business and not worry, you know, singularly about margin, but really worry a lot more about absolute profit growth, because that's where the market is going. That said, there's a work to be done, and again, that's a second opportunity for the business, is to look at every item of, you know, expense in the business and try and strip out as much of waste as possible. So I think you have to look at it. It's a portfolio of different businesses, some of which are facing headwinds, particularly on the global side. And equally, there is a growth in this business where 90% of the growth is happening around adjacencies with a different margin profile, but with no CapEx, and therefore, the EBITDA actually more or less flows through to EBIT. So I think we have to, you know, this is a business where the portfolio is being retooled as we step up the growth of this business. All right, understood. So, is it fair to assume that to deliver this kind of, say, 8%-10% growth, our margins will further reduce if we have to keep up with this growth? No, I think we will. We have to try and see what we can do to step up our growth. I think that's really what we need to do. And then, to do that, deliver the growth without sacrificing margins, which sub-segments you would want to focus more? No, for example, let's say cloud. If you were to have a roaring success in cloud, remember, there's a large part of the growth in the industry that's happening on cloud. You got to grow cloud. That will have a slightly lower margin profile, but it's a very large growth driver. Mm. I think the question that you've got to ask is: Are we able to grow, and are we able to grow profitably? And then, finally, one last question on the earlier project of adding 25,000 rural sites. Where we are in this project? Is it site additions still at 25,000, or are we revising or are we mostly done with this? I think a lot of the rollout would be completed this year. So most of the rollout would be completed. I think there'll be some little bits and pieces left over in three or four circles where we are behind, but outside of that, a large part of that rollout will be completed. So the 25,000 we're all assuming, sir. Before this year, most of it will be completed. Okay, got it. Thanks. Thanks, Gopal. All the best. The next question comes from Mr. Manjeet Buaria. Mr. Buaria, you may please unmute your side, introduce yourself, and ask your question now. Thank you. This is Manjeet from Solidarity Investment Managers. Gopal, I had two questions. The first one was, you know, immediate ARPU target, 300, which you have clearly made. But if I think longer term, let's say, 20 years, you know, what is the fair place of ARPU growth from a management perspective? Is it like something which is slightly above CPI inflation? You know, what metric do you guys think about really long-term ARPU growth, in terms of industry structure and their customer elasticity? Look, I think it's, you know, I think first, our first port of call is to really get to 300. This round of tariff repair has taken us, you know, partly towards that direction. But, you know, if you step back and look at it, I mean, this is a, this is a category where people spend 5-6 hours, you know, on their phones, and it pretty much runs a very large part of their lives, whether it is entertainment, it's shopping, it's commerce, it's studying, it's working. And, you know, to have, the cost of a subscription for a whole month, being lower than going to a cinema to watch a movie ticket, a movie, right? Seems a little paradoxical, given how central this is to people's lives. So yes, I think at least the... You know, if we have to aspire for continued investment in this critical infrastructure, this is a heavy CapEx business, we have to aspire for continued investment and really put the best technologies out there, which is what we are committed to doing, then yes, we will need to certainly be, you know, constantly looking at ways and means by which we can take up the ARPU so that the return on capital becomes respectable in this industry. So I think that's really how I would, I would frame it. But is there any quantitative level where you say, given all the CapEx requirements 7%, 8%, 10% long-term is what makes it feasible, or there's nothing like that to say today? No, at this point, I think, you know, this is just we've just gone through one round of tariff repair. We should wait for it to fully settle. But, clearly, there's more to be done in this market. I think the current economics are still quite poor and really need to improve dramatically. Just the second question, Gopal, was, you know, you talk about a lot of new initiatives, but the fact is, you know, mobile and broadband business will generate a lot of free cash flows over the next five, ten years, right? Is there any initiative which you think over the decade can become at least 40%-50% of the cash flow size of these two businesses? Because only then we'll be more than eager on value creation, else you are more like a mature business. So, you know, I was just curious about that, how you think on that. That's all from my side. No, I think that's a good point. You know, today, the telecom business has got to a point, at least the mobile business got to a point where it's a big cash generator. The B2B business is also a good cash generator. Our broadband business is a fast, rapidly growing business. But the assets that we have in terms of our digital infrastructure, the strength of our balance sheet, as well as the data that we have of our users, both B2C and B2B, along with the relationships that we enjoy with our customers and the fact that we're able to serve-... You know, three hundred and fifty million users, over, you know, five hundred of the largest companies and half a million small and medium businesses really gives us a lot of confidence that using the strengths of our business, we can actually look at, you know, having interesting businesses around it, which are pearls on the side. Now, whether they actually deliver the same kind of cash flows of the telecom business, that's a different model. And therefore, you know, time will tell, but I do believe that the opportunity to grow these, these new businesses is very, very massive. And I think the company is more ready to commit investment, both in terms of people, time, capacity, and money, to make sure that these businesses grow. Thank you. The next question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now. Yeah. Thanks. Thanks again for taking my question. Gopal, one question on the FWA. Now that there is an acceleration, we have seen a significant acceleration for Jio as well in the fixed broadband subscriber addition. Do you think, for you, it will be more interesting to transition to standalone 5G earlier than what we have anticipated earlier? Sanjesh, we are moving to standalone 5G on FWA by December. We're in the midst of doing some trials, and we want to just test whether we are able to get better uplink performance with SA for a fixed wireless access, because it's a static network, so those trials are underway, and by December, we should have fixed wireless access on SA. That's our current plan. Will it be absolutely required for us to transit to 5G standalone to add a meaningful number of customers? Or do you think FWA is just a stopgap, and we will eventually- No. Move this customer to FTTH? No, no, no. Hang on. I'm just saying that I think on our mobile side, the decision or the choice to move from NSA to SA is a function of the load on the spectrum bands. The moment spectrum bands get more released, you'll be able to move more and more spectrum onto 5G, and therefore move ultimately at some point in time in the future to an all-standalone network. That is the game plan, the roadmap that will happen over a period of time, take three years, four years, or whatever it is. The second part is that there are use cases that we can deliver using standalone, not necessarily across the whole network, but on certain bands, on certain areas, for certain use cases. For example, enterprises. We are already serving a few enterprises on standalone networks. Fixed wireless access is a good use case where the standalone network, you know, the hypothesis is that if we use a standalone network, we have a better uplink performance. That hypothesis needs to be proven and tested. It also will give you the capacity to slice the network for standalone as mobile traffic builds up. So those are some of the reasons that move that we are moving in that direction. If you look at all telcos around the world, take the U.S. telcos, whether it's T-Mobile or whatever, they have both hybrid network. They have NSA and SA. So this is just software. I mean, the radios are the same, the baseband units are the same. Everything is the same. You need a standalone core, and you need software to be able to steer a particular use case or a particular area onto standalone. So if I understand, we will still work on non-standalone at least in the near term for the consumer side of the business. And for the FWA fixed broadband side of the business and enterprise, we may look at rolling out standalone wherever it is required. Is that the way to think? Yeah, that's the way to think, but I think just one level above that, Sanjesh, the way to think about it is, what's the best way to deliver the right experience for the user? And there, I think, you know, now if you look at OpenSignal, five out of five awards, we have won. So what we are doing, there seems to be something working. Wherever we need to deploy standalone, we will. And like I've always said, at some point in the future, all our NSA networks will move to SA. The question is, there's no need to hurry into it, because if you hurry into it, you end up paying almost INR 30,000-40,000 crores to buy a sub-gigahertz band. You don't need it, because we already have sub-gigahertz. So we have a mid band, which is very powerful, which we are using as a combination with the 3.5, that gives us the geographical reach and coverage reach, and allows us to operate on an NSA mode. Now, at some point, as those mid bands free up and 4G traffic begins to drop, and more and more 5G traffic is carried on our network, as devices come in, those spectrum bands will get released, and band by band, you can move to SA. So that's really how it works. Got it. Got it. Just one last question on this. Sorry, I'm being... On the fiber side, that it also means that we will need to lay out a lot less fiber than what we anticipated, at least from the home pass perspective, in the tier two, tier three city. Will it limit our CapEx on the fiber side of business? No, Sanjesh, we are continuing to roll out 1.5 million home passes every quarter. Nothing has stopped there. Ultimately, fiber is the best way to deliver broadband experience. I mean, you have fiber straight to the home. It's, you know, better concurrency, it's better uplink performance, better downlink performance. Mobile radio spectrum is always a shared resource. So fiber will be the best way to deliver it, but that does not mean that fixed wireless access doesn't have a role to play. It has a role to play where fiber is not there, and that's really what we are after. And at some stage, we'll move that to fiber as more and more rollout happens. Very clear. Very clear. Thanks, Gopal, for patiently answering all those questions, and so on. The next question comes from Mr. Ali Asgar Shakir. Mr. Shakir, you may please unmute your side, introduce yourself, and ask your question now. Yeah, thanks for the opportunity. I hope I'm audible. Gopal, you mentioned in your initial remarks that you have had a very strong free cash flow, if not for the, you know, spectrum acquisition in this quarter, as well as the, you know, dividend payment. So if I add back both of them, you should be doing somewhere close to about eleven to twelve thousand crores, plus obviously the tariff hike and other growth benefits. So should we expect, in a way, in the next one year, give or take, about INR 40,000-45,000 crores of deleveraging, you know, in Airtel? Or do you think there are any other opportunities in terms of CapEx, spectrum acquisition, or standalone, or anything that we are not building in the ongoing CapEx? So I will, you know, let me take the CapEx part, and if Soumen can add more texture to the cash flow, maybe. I think last year was a peak year of CapEx. We have said that we will have a lower CapEx this year. Where is our CapEx going? Our CapEx is going on transport, which is consistent over the years, so that part will just keep going for the next five to 10 years. We'll keep building our transport networks, both electronics as well as fiber. The core network has a small component of CapEx that will continue to get investment as this keeps growing, as traffic keeps growing. There is some B2B side, which is cables and things like that, which will get investment. There's some investments in data centers, investment in broadband. These will all continue to get investments. Radio CapEx, which is wireless CapEx, there was a big bump up that we saw in the last few years as we rolled out new spectrum bands, where we acquired spectrum in sub-gig band in some circles. We had a historic amount of rollout of 4G networks across the country. That has seen CapEx. And of course, we've seen 5G rolling out across the country, and all of this has taken substantial CapEx of our overall CapEx. So the rollout is more or less done. That will come down. 4G capacities, we are not investing anymore. Then the only question is 5G. And 5G, we roll out as and when we see devices, as and when we see fixed wireless access demand. So a combination of that is what we use as an algorithm to say this is a 5G rollout. That is going to be modest, and it will keep rolling out over the next three to five years. So the reduction in CapEx will come from a reduction in wireless CapEx. One place which will get some investment is on the cloud area, which we've already invested this year, and we will see how that shapes up over the coming years to continue investments there. So. But that's a new growth opportunity, and that will, like we discussed earlier, that is a fast-growing area and should give us more growth in the B2B segment, should that investment materialize. Just to add on the operating free cash flow. I think, earlier, the way you adjusted for spectrum prepayment and dividend payment, and that is the way to look at it. We should be consistently delivering that kind of a cash flow, except for some changes, seasonality in CapEx, which will not be very large, so you can consider that right. Understood. There are no new other investment opportunities that free cash flow should be deployed, right? We should focus on this INR 40,000-45,000 crores of deleveraging. See, it will be a combination of reduction. We still have some spectrum, which is high cost, so that will happen, which will be a part of deleverage, and that is driving the CapEx. Understood. Very clear. Thank you. Thank you, everyone. I would like to remind participants to stay connected on the call for the next session on Bharti Hexacom. I would now like to invite Gopal for his closing remarks for Bharti Airtel. Thank you very much. I think overall, you know, I would sum up by saying that it's been an overall good quarter, and the flow-through of tariff increase has been in line with our expectations. We've seen a step up in broadband growth. There's more to be done there. B2B needs to step up, but competitively, we are doing well on B2B. And finally, on, you know, the announcements we made yesterday on organizational change, I think we have a very solid and structured plan over the next fourteen months, and that really stands the company in very good stead. And as I had mentioned at the outset, I will continue to be deeply involved, not just for the 14 months, but well beyond it. I'm totally committed to the Bharti Group. So thank you very much for joining this, and over to you, Soumen. Thank you, Gopal. With this, I would now like to hand over to Mr. Soumen Ray for his opening remarks on Bharti Hexacom performance. Good afternoon, everyone. Welcome to the Bharti Hexacom Q2 FY 2025 E arnings Call. Let me start with business update before I move to the financial performance. During the quarter, we turbocharged our network, with deployment of additional 15 megahertz of spectrum that was purchased in the June 2024 auction, the deployment happened in this quarter. We also accelerated our expansion of our Wi-Fi offering, both between wired and FWA across key cities in both circles. This expansion will enable us to cover close to about three million additional home passes or households. We have significantly increased our customer acquisition in the homes segment over the last quarter on the back of this expansion. Moving on to financial and operating performance. We have delivered a revenue of close to INR 2,100 crores, growing sequentially by about 9.8%. The smartphone customer addition was about 143,000, as compared to about 703,000 in the previous quarter. Overall customer base was impacted by the tariff repair, which is a normal trend whenever this happens. We expect this to get normalized over. It has already started unwinding, and we expect it to normalize in a couple of quarters. We reported yet another quarter of industry-leading ARPU growth of 11.3% to INR 228. EBITDA stood at INR 1,046 crores, with an EBITDA margin of almost 50%. Net income for the quarter was at INR 253 crores. Cash generation for the quarter was robust, with operating free cash flow, which is EBITDA minus CapEx, at about INR 600 crores. Consequently, net debt to EBITDA improved to 2.03, despite addition of the spectrum debt of close to INR 1,000 crores. With that, I would request, I would hand over to Vaidehi, and request it to be opened for Q&A. Thank you, Soumen. Due to time constraints, we would request if you could limit the 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. With this, the first question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now. Hi, Soumen. Thanks again. Just one on the seasonality side of it. We had slightly lower growth when you compare to Bharti on the mobile business side. Is it that the Hexacom has much stronger H2, because Rajasthan attracts a lot of in roamers during the second half? So for us, it is fair to believe that Hexacom will have a much better H2 and a tariff flow through in the H2? Thanks, Sanjesh, for the question. No, I don't think that it will be drastically different from what you have seen in the parent company, Airtel. You see, Rajasthan and Northeast is a little more price sensitive, more rural, and hence, because we are now talking of what, about 0.5% or 0.4% growth. Because, I think, Hexacom mobility has grown by about 9.9%, whereas Bharti Airtel has grown by 10.3%. So directionally, they are both similar. I think if you look at the customer reduction, REC, the revenue earning customer reduction, in percentage terms, that would be 40-50 basis points higher in case of Bharti Hexacom, which is the mathematical explanation. But business-wise, I think Rajasthan and Northeast is behaving exactly like rest of the country. A little more accelerated by, as I said, point three, point four, percentage points, which is nothing to read about. Flow-through would be similar. Your point on, in roamers, yes, of course, Rajasthan sees an influx, and from November onwards, it starts, continues till February. So there is a possibility of a higher growth because of in roamers, because then Bharti Hexacom will be charging to Bharti Airtel for the services provided. But traditionally, it has not been very large, and, hence, I would just be a little tepid. Directionally, you are correct, quantum-wise may not be very large. Very clear. Second, you did mention in your opening remark that you have put to use the 15 megahertz of spectrum, which was bought in the June auction. Now there is no material CWIP left for Hexacom, right? But I would correct that, and I'd say there is no spectrum CWIP of Hexacom. Yeah, yeah, sorry, spectrum CWIP. I meant that. I mean, of course, the millimeter wave continues to be there, but whatever we have purchased now, everything has got capitalized and put to use. From here on, our amortization should almost remain flattish, right? Barring next quarter, where you will have a full quarter impact, I understand that. But from there on, do you think amortization should flatten out? Yes, the amortization should flatten off, subject to the millimeter wave. Other than that, as I said, there is no CWIP. So whatever you see in Q3 should be the run rate of amortization for Bharti Hexacom going forward. Got it. Got it. That's, that's, that's it from my side. Thanks, Soumen. Since there are no further questions, I request Soumen to kindly give his closing remarks. I think, Bharti Hexacom has done very well, compared to the market, in terms of holding on to customers, ensuring that the mobility business grows at almost double digits. What is heartening is a very strong jump in the homes business. Homes business is under leverage compared to some of the other players in the industry, and the organization will continue to work on driving homes even better. With that, thank you, and for joining, and wish you all a very happy Diwali. Thank you very much, Soumen, thank you everyone for joining us today. Recording of this webinar will be available on the company websites. Wishing you all a very happy Diwali.