Good day, ladies and gentlemen. Welcome to KPN's Q1 2022 earnings webcast and conference call. Please note that this event is being recorded. At this time, all participants are in listen-only mode. We will be facilitating a question and answer session towards the end of today's prepared remarks. If you would like to ask a question, you may do so by pressing star one on your telephone. I will now turn the call over to your host for today, Reinout van Ierschot, Head of Investor Relations. You may begin. Thank you, and good afternoon, ladies and gentlemen. Thanks for joining us. Welcome to KPN's Q1 2022 results webcast. With me today are Joost Farwerck, our CEO, and Chris Figee, our CFO. As usual, before turning to our presentation, I'd like to remind you of the safe harbor on page two of the slides, which also applies to any statements made during this presentation. In particular, today's presentation may include forward-looking statements, including KPN's expectations with respect to its outlook and ambitions, which were also included in the press release published this morning. All such statements are subject to the safe harbor. Let me now hand over to our CEO, Joost Farwerck. Thank you, Reinout, and welcome everyone. We've made a good start to the year. In the Q1, our mass market service revenues continued to grow, supporting service revenue growth for the group as a whole. Growth was visible in all our mass market segments. SME continued to make a strong contribution, and we're on track to stabilize our total business segment service revenues. In consumer, fiber and our fixed mobile portfolio are delivering revenue growth every quarter. Mobile service revenues are growing, and in fixed the trend is stabilizing. Wholesale continued to show solid growth with revenues up 6%, supported by our successful open access policy. We rolled out fiber to 75,000 households, or if one were to include Glaspoort, the joint venture, 111,000 in the Q1. The investments we are making to our networks and services continue to pay off. For example, umlaut benchmarking expert recognized KPN as the best mobile network, not only in the Netherlands, but even in the world. All in all, this quarter we have seen encouraging service revenue developments with strong EBITDA growth and free cash flow generation. While we see the impact from rising costs due to inflation, these are reflected in our outlook. We remain confident to deliver on a full year 2022 outlook and ambitions for 2023. Now on the first of April, KPN informed the ACM about its intentions to amend wholesale access terms on our fiber network for eight years. ACM started the consultation, and once declared binding by ACM, this offer will secure long-term regulatory certainty for all market participants. We continue to make good progress against the strategic and financial ambitions of our strategy, Accelerate to Grow. We remain confident that this strategy will continue to create long-term sustainable value for all our stakeholders. In the Q1, like I just said, we rolled out 75,000 households. This figure is slightly lower than other quarters, mainly due to timing of project deliveries. Jointly with a joint venture, we now cover approximately 42% of the Netherlands with fiber, and we expect to reach around 80% of Dutch households by the end of 2026. Once we reach that point, we expect CapEx to come down to a much lower and sustainable level. As we continue to roll out fiber, our growing fiber footprint will result in an improved penetration rate for retail and wholesale. In effect, our retail fiber base is likely to surpass our copper base in this quarter, Q2. We see all this bearing fruit in our financials. Looking at our Q1 results, we currently generate about EUR 830 million of annualized fiber service revenues, and this number is growing rapidly. In Q1, our consumer fiber revenues increased by 90% year-on-year and surpassed our copper service revenues for the first time, driven by a growing base and attractive ARPU. All in all, fiber is clearly at the heart of our strategy to create long-term value for all stakeholders. Now let's take a look at the consumer segment. Adjusted consumer service revenues increased 1.5% year-on-year. This was supported by an EUR 8 million one-off correction in the Q1 last year. Corrected for this one-off, adjusted consumer revenues increased 0.3%. Since the Q3, we've been able to show consistent service revenue growth, and this has been driven by continued mobile service revenue growth, supported by solid customer inflow and the continued success of our fixed mobile convergence strategy. Customer satisfaction remains one of our top priority, and it has been pleasing to see our efforts pay off in that area. Now a deeper look into our Q1 KPIs. We saw solid fiber inflow reflected by 42,000 new fiber customers offsetting copper churn. This led to 7,000 broadband net adds. The rise in net additions was partly supported by the launch of new content in our interface, like Viaplay. Fixed ARPU increased 2.6% year-on-year. Combined and excluding the impact of the one-off correction I mentioned last year, this led to broadly stable fixed service revenues in the Q1. As you can see, the service revenue trend is somewhat weaker than seen in previous quarters, and next to a continued decline in legacy services and lower traffic, this is also due to a shift from growth to net revenue reporting of content packages. A small top-line impact, but none on margin generation. Nonetheless, underlying trends are improving as fiber broadband service revenues growth continues to more than offset the copper decline. We continue to see solid trends in mobile. Our postpaid base increased by 21,000, and our postpaid ARPU was broadly stable. Combined, this all led to a 2% growth in mobile service revenues. Now on to B2B. The overall service revenue trend in business is moving in the right direction, I would say. While there's still a slight year-on-year decline of 0.4%, this was significantly better than the previous quarters. SME is the main driver of growth, driven by solid commercial momentum in both, broadband and mobile. The performance in LCE and tailored solutions was in line with expectations, and as we highlighted already earlier, it will take us some more time to deliver the turnaround we expect to see in LCE. But with all the experience we have in SME, we know that this will happen not far from now. Business net promoter score remained at a positive level of +4. Customers continue to value KPN for the stability, the reliability, and quality of our networks and services. In B2B, that is a great number. Comparing ourselves to competition, there, the numbers begin with a minus. To improve visibility, LCE and tailored solution revenues have been restated a bit, with LCE service revenues now also including the revenues from core telco product from tailored solutions. The latter are now fully reflecting project-related work and bespoke services. Across the board, we are seeing improving revenue trends, and this combined with the year-on-year improvements in NPS means that we are confident that we will stabilize business service revenues by the end of this year. Wholesale. In wholesale, service revenues continued to grow solidly in the Q1, mainly driven by further base growth in broadband, and both in mobile. We added 14,000 broadband lines, 26,000 postpaid SIMs in the quarter. Now on ACM regulation. As we have said, our open access wholesale model is, as you've seen in the drivers of the fiber case, an integral part of our strategy. Through our wholesale activities, we support the digitalization of the Netherlands by fostering competition and innovation. Wholesale also allows us to further optimize network utilization and invest in the long-term quality of Dutch infrastructure. On the first of April, we informed ACM about our intentions to amend the fiber wholesale access tariffs. This initiative makes our open fiber network even more attractive for wholesale customers and importantly, offers consumers a wide choice of service providers. The amended offer secures competitive conditions and tariffs for a period of eight years. With this, we create long-term certainty for KPN and all market participants. This amended offer is conditional on ACM's decision to declare it binding. To do so, ACM has published this draft decision two weeks ago, which has been shared with the market for a consultation, taking a total of six weeks. With this, let me now hand over to Chris to give you more details on our financials. Chris? Thank you, Joost. Let me now take you through our financial performance. Overall, I'm pleased with the development of our key financial metrics this quarter. Our year-on-year growth numbers this quarter are somewhat inflated due to the EUR 8 million one-off non-cash correction in B2C fixed service revenues in the Q1 of last year. We excluded one-off number in the trend of a number of metrics to illustrate a true and fair underlying Ladies and gentlemen, one moment, please. Ladies and gentlemen, please hold while we solve the technical issues. Hello, Chris again. Go ahead. However, I guess we got disconnected. It's Chris again, so let me restart from the financial pages, page 12 of our presentation. Apologies for the disconnect. As I was saying, we're pleased with the development of our key financial metrics on this quarter. Our year-on-year growth numbers were somewhat inflated due to the EUR 8 million one-off non-cash correction in B2C fixed service revenues in the Q1 last year. We exclude this one-off in a trend of a number of metrics which illustrated true underlying performance. We will refer to the term underlying numbers to make the appropriate and fair comparison. Now let me highlight a few figures, key figures for Q1. Adjusted revenues increased 1.6% year-on-year, driven by growth in mass market service revenues, partly offset by lower service revenues from LCE and data solutions. Corrected for the one-off last year, the adjusted underlying revenues increased 1% year on year. Second, adjusted EBITDA after leases increased 4.5% year on year or an underlying +3.1%. This is driven by both higher revenues and a lower cost base. The EBITDA margin increased 130 basis points to 45.3%. In the Q1, cost savings from further simplification and digitization of the company were partly offset by inflationary effects, translating into EUR 8 million of net indirect operating savings. Thus absorbing, for example, some of the energy cost increases. With this, we remain on track to realize about EUR 50 million of indirect cost savings in 2022. Third, our free cash flow increased almost 70% compared to last year. This is mainly due to higher EBITDA and lower CapEx, and the latter is a result of inter-year phasing, partly offset by the phasing of working capital. More on the underlying cash developments later in this presentation. Our sustainable mass market service revenue growth has been driven by healthy trends across all segments. It also led to our group service revenues rising by 1.1% on an underlying basis compared to last year. This is an important proof point of our strategic progress towards sustainable top-line growth for the group. All three mass market segments contributed to the underlying 2.5% growth in Q1. Wholesale service revenue was up 6% year-on-year, mainly driven by broadband and mobile and some support from several smaller incidentals. SME service revenues grew by 9.3%, driven by the success of our CAPI and AIM portfolio, and partly also due to relatively easy comparison base. In consumer, our total service revenues grew by 0.3% on underlying basis. Within the segment, mobile service revenues continued to grow and recorded a 2% increase. In fixed, fiber service revenue growth is outstripping the decline in copper. As Jo said, fiber service revenues now exceed those of copper. However, the growth in total consumer broadband service revenues was still offset by declining legacy services and the effect from change from gross to net revenue accounting for content packages. Through this, all of it, we will report a small decline of fixed consumer revenues of -0.4%. If we look at the true underlying number, we adjust for the accounting change and for the revenue recognition last year. Our fixed service revenues would have been flat in Q1, with total consumer revenues growing about 0.8%. That's a better reflection of the underlying reality at consumer fixed. We feel confident that our mass market service revenues will continue to grow during the year. On cash. At EUR 206 million, our free cash flow was sustainably higher than last year, substantially higher than last year, and sustainably as well, and the margin improved to almost 60% of revenues. This improvement was mainly a result of EBITDA growth, lower CapEx from intra-year phasing, and lower cash interest paid, partly offset by the phasing of working capital. All in all, we started the year well in terms of cash generation. However, it's clear that we will not see a 70% growth rate in cash every quarter. If we strip out the CapEx delta for the last year that we see as temporary, we will, however, still see solid underlying and sustainable growth in free cash flow. Looking ahead, we expect to see some fluctuation in this number during the year, but simultaneously, we remain very confident to deliver on our free cash flow targets. Finally, we ended the quarter with a strong cash position, despite redeeming over EUR 600 million senior bonds with a 4.25% coupon in March, which will drive about EUR 25 million of interest savings for 2023. We continue to have a strong and resilient balance sheet at the end of March. As a result of the bond redemption and other corporate actions we took last year, our average cost of senior debt improved by more than 40 basis points year-on-year. In Q1, net debt declined by EUR 163 million, mainly driven by the free cash generation during the quarter. The leverage ratio of KPN stands at 2.2 times EBITDA, comfortably below our ceiling of 2.5 times, and we further enhanced our interest cover. Total liquidity remains robust at the end of the quarter. It consists of EUR 1.7 billion in cash and short-term investments and our undrawn revolving credit facility. This covers debt maturities for the next 3 years. Reassured by our current financial performance and good strategic progress, there's no change to our 2022 outlook, nor the ambitions for 2023 we gave you in January. We remain confident. To summarize, KPN had a strong quarter start to the year, explaining the success of our strategy. We see positive developments in consumer, SME, and wholesale. Our mass market service revenues continued to grow healthily. With B2B service revenues expected to stabilize at the latest the end of the year, but possibly already in H2, we are on the verge of sustainable top-line growth for the entire group. Our EBITDA and free cash flow margins continue to develop favorably, and we feel confident about the cash-generating ability of our group. To me, KPN demonstrates healthy margin, earnings, and cash flow resilience in these turbulent times. The fiber rollout run rate has maintained a good pace and has proven attractive return profile. However, this, KPN has now put itself on a path towards sustainably growing revenues, EBITDA, and free cash flow, and corresponding growth in shareholder returns. As such, we reiterate the outlook for this year, plus our ambitions for 2023, and are strengthened in our confidence when it comes to delivering on our strategy. Thanks for listening. Now let's turn to your questions. Thank you, Chris. Please, I'd like to remind you to limit yourself to two questions please. Over to you, operator. Thank you. Ladies and gentlemen, we will start the question and answer session now. If you would like to ask a question, you may do so by pressing star one on your telephone. The first question is from Mr. Keval Khiroya, Deutsche Bank. Go ahead, please. Thank you. I have two questions, if I may. Firstly, you've helpfully said that the inflationary effects in the business will be absorbed, but can you update us on the magnitude and source of those inflationary impacts across wages, energy, and any other areas? Secondly, I appreciate the new wholesale proposal is under consultation, but with this new proposal in mind, can you provide some color on how we should think about the short and medium-term growth prospects for the wholesale broadband revenues? Thank you. Okay. Well, thanks. On inflation, let me go through a few components. On wage, we have a CLA agreement that we set up last year in December that talks about a 2.7% CLA increase, annual increase. Plus, you know, people growing pay scale around 1.1%, so total wage costs will grow about 3.5%-3.7% during the year. On energy, we think the net effect is between EUR 6 million and EUR 8 million for the year, because we procured most of our energy for the year already forward. That actually, in terms of inflation, are the two most important components. Other costs are reasonably fixed. When it comes to our OPEX, I do see of course, you know, EUR 6 million - EUR 7 million of, and EUR 6 million - EUR 8 million of energy cost increase. That's something we should absorb, that we will absorb in EBITDA. Other areas of inflation mostly result in CapEx not an OPEX, where you see higher prices for set-top boxes, modems, et cetera, but we think we can absorb it within the current EUR 1.2 billion budget. For this year, the impact is relatively limited. As I said, our wages are locked in and energy prices are also locked in. The remainder of cost increases, we think we can also absorb with lower volumes of, for example, our FTE base is shrinking quite rapidly. We've lost year on year about 800 FTEs. Natural attrition is going up, so that should help. You know, productivity improvement should help absorb the inflation. When it comes to wholesale, growth prospects, yeah, I would think that the lower wholesale tariffs would support, higher penetration levels. What the exact number will be, I don't know. Today, we're about 14,000 new broadband that we added for the quarter. We've been around 5,000 a month for the past few months, for the last six months. I mean, with some fluctuation on average, it has been around that. So I mean, I don't have a crystal ball to see how much our wholesale customers are gonna sell more, but I think there's some upside from that number. 10%-20% growth is not out of the question. Not off, given the new tariffs. Of course, we need to see, it is for them to realize that. That's clear. Thank you very much. The next question is from Mr. Luigi Minerva, HSBC. Go ahead, please. Yes. Good morning. Thanks for taking my questions. It's on B2B. Obviously, the SMEs trend was very impressive this quarter, +9% year-on-year. I was wondering how do you see this developing in the next few quarters, whether it's sustainable or we should be more prudent? And then on the overall B2B inflection point, which you indicated would be in the H2 of the year, probably you are running a bit ahead of schedule. How do you see that evolving as well? And perhaps more broadly, on the impact on your B2B business from the economic outlook. You know, the situation is uncertain in some European countries. We are seeing signs of negative economic growth. You see signs in the economy in the Netherlands that may derail a bit the turnaround of your B2B business, you know. My other question is on the CPI pass-through. What are your expectations for July? For June, July, when you will increase prices? Thank you. Well, on B2B, we're happy with the developments with SME. That's in our strategy, and we worked on this for a very long time. 9% is a very strong quarter, but looking at the quarters to come, we expect good growth as well. Probably not 9%, but maybe somewhere a bit above 5%. We're doing the same thing in LCE. We started on SME because that's where 50% of the whole profit in B2B comes from. That is priority setting. Now in LCE, we're cleaning up the portfolio. We're moving to future-proof portfolio, migrating our customers there. We're pretty confident we can turn it around. Not sure if it's going to happen, Q1, Q2 next year, but we're on track. With taking into account everything we do in B2B, I'm convinced that we can make the total of B2B revenues stabilize and grow a bit end of the year, beginning of next year. That is all in the run rate, I would say. We have a very strong position in B2B market in the Netherlands. We're the largest player there. We see our economy growing, and of course, we also look at the future and how things develop. Until now, most of our customers are in good shape. They pay their bills. Of course, it can always become a bit worse. Where we are today, we don't see our customers moving into trouble. I would say that our customers and KPN, we're in pretty good shape, and we do not expect on the short term, problems there. CPI increase, that is, by the way, an announcement we will do next week. It's not a CPI increase, it's more a price increase we do every year. We look at what we do on the CLA, and we're also looking at what's happening in on the CPI. We, of course, will not follow the inflation rate of today when it comes to price increases, but we will make a step and announce that next week. Great. That's very helpful. Thank you. The next question is from Mr. Polo Tang, UBS. Go ahead, please. Yeah. Hi. Thanks for taking the questions. I have two. The first question is just about the phasing of EBITDA growth through the year. You've delivered a strong quarter with 4.5% EBITDA growth. However, your guidance for more than EUR 2.4 billion of EBITDA only implies about 2% growth in EBITDA for the full year. Are there any cost headwinds or any other factors to watch out for? And how should we think about the phasing of EBITDA growth as we go through the year? Second question is really just coming back to wholesale regulation. You cut wholesale broadband pricing by between 10%-30%, but do you see any risk that players such as T-Mobile Netherlands uses these lower wholesale rates to lower retail broadband pricing? Thanks. Yeah, Polo. Let me take your questions. On the phasing of EBITDA, you're right. Our growth for the year is about 2.3%. We're already ahead of that for now. That also aligns with our confidence with our guidance for the year. I think you'll see in my. You know, I don't have a crystal ball that's completely perfect, but I think you'll not see 3.5% EBITDA growth every quarter. Next quarter will be around, I think, 2.5%, 2.3%-ish, in line with the year. Q3 will be a bit lower due to comparisons with last year, and Q4 will be up again. I think if you look at the phasing of the year, Q1 was great. Q2 will be around, you know, where the year is. Q3, a bit less, and Q4 will go up again. Your question is fair. Wouldn't you then increase your guidance for the year? Not impossible. That's, let's first go through Q2. I mean, as you said, these are turbulent times. Luigi also said, these are turbulent times. Let's make sure we have a little bit more visibility in the year. We are confident with, you know, given what we said with our EBITDA targets for the years. You see some fluctuation in the quarters. On your question on wholesale, what will our wholesale customers do with the lower prices? Who knows? Our current presumption is that. I mean, look, T-Mobile increased their prices in the beginning of the year on wholesale, on broadband. Both lines they rent from us, but also lines they rent from other, you know, service providers, so on other fiber providers. I would presume that what they call the KPN tax will disappear. But for the rest, I think they're on a path to increase their margins rather than reduce their retail prices. At least that's consistent with the signal they gave in the beginning of the year when they increased their long-term 1 gig fiber pricing by over 10%, also the non-KPN line. Fair answer is, Paolo, I don't know what they're going to do. If I look at the recent trends and the announcements they make, I think they will take out the KPN tax, possibly, keep some of it to enhance their own margins, but that would be a shrewd way for them to use our costing to increase our margins and blame KPN. Secondly, I would think they would stick to a margin expansion strategy. To be fair, you'd have to ask them that question. Thanks. The next question is from Miss Nawar Cristini, Morgan Stanley. Go ahead, please. Thank you very much. I have two questions, please. Firstly, I wanted to ask about the impact of inflation on your FTTH rollout. How hedged are your FTTH rollout against inflation? I think in previous calls you have stated that prices are fixed. So I was interested to hear for how long, given that the rollouts continue till 2028. Are FTTH rollout prices fixed till then? So any color on this will be particularly helpful. Then I wanted also to ask about your guidance for 2023. Clearly you have explained that for 2022 the inflation pressure can be absorbed. For 2023, given that you are less and less hedging energy costs, so I guess that would be the main headwind for next year is around 1% of the revenues, which could be visible at the EBITDA level. Could you discuss mitigation points for 2023? Also it will be really interesting to hear your own assessment of the main areas of risk to 2023 numbers from an inflation perspective. Any other aspects that maybe we haven't discussed beyond labor costs and energy costs would be particularly helpful. Thank you. Yeah. On fiber, we build a plan which goes until end of 2026, and we build these plans together with the building companies, the contractors. In the future, you see some pressure on the salary costs, of course, but we also are innovating a lot together with these partners to make the whole process more efficient. It's our ambition to avoid cost increasing on fiber roll-outs. We didn't build a plan to connect 10,000 households. We build a plan to connect 3 million on top of the 3 million we already did. That is a long-term agreement we make with these contractors to create value. The portfolio, the order inflow on their side is super important for them. We are in good conversation with our partners to keep the costs more or less stable on the fiber rollout despite the inflation we currently see. Yeah, on the guidance 2023, Chris. Yeah, on 2023, I mean, it's early days to confirm our 2023. At this point we're confident on 2023. I would feel that EBITDA guidance will be there, will be met. Perhaps the mix will be a bit different. The mix may come more from revenues and less from cost savings if inflation continues as it is. Something that's not completely under control. I see our revenue trends being very favorable. They've been more favorable in this year than we expected, and the outlook for the year is also quite supportive. Next year we will incur, you know, easily 15 million in 2023 if energy prices stay where they are. We're looking at EUR 15 million or higher energy costs. Could be higher depending on where energy pricing lands. I'm We need to see where our CLA ends up for next year on labor costs. Our revenue trends are favorable. It means KPN is gradually becoming a growth company rather than a cost-cutting company. With that, you know, trend in the way our business runs, the business evolves, I think we are pretty confident on our meeting our ambition for that year. The mix might be different. Secondly, you know, we've got, you know, another 9 months to go for, to reduce our cost base, to reduce our labor force, to reduce energy consumption, to compensate for those higher costs. If the P goes up, we should reduce the Q. With that and a combination of good trends of service revenues, we're still confident on the 2023 EBITDA guidance. Ambition, to be precise. That's very helpful. Thank you very much. The next question is from Mr. Usman Ghazi, Berenberg. Go ahead, please. Hello. Can you hear me? Yes, very well. Great. Hi, everyone. I've just got one question, please. Just on fiber rollout. I mean, during the quarter, there was a development in The Hague where, You know, the city kind of stopped parallel deployments from KPN and ODF and basically divided the city up and told the operators to build, you know, in specific areas. I just wanted to understand if that is a development specific to The Hague, or could this approach be followed in other cities? If so, you know, what would be the implications? I mean, could it result in more sharing of networks between the operators, or yeah, any thoughts on that would be interesting. Thank you. Yeah. Usman, that is clearly an exceptional situation for The Hague only. In The Hague, we are more or less building fiber in 80% of the city. There was a lot to do on a third party rolling out fiber ODF in certain areas. We overbuilt these areas for two reasons. Their prices were too high for us to make use of their network. Secondly, the way they connect households is not good enough to our conditions at least. That gave a lot of rumor in the media. At the end, the mayor of the city asked us to clear it out. We came to an agreement, but that was really an exceptional situation for The Hague. For the rest of the Netherlands, we made our plans, we're rolling out. Our plans are focusing on 80% of the Netherlands. It's not that we're going to divide other areas with competition, because we aim for 80%. Thank you. The next question is from Mr. Ulrich Rathe, Jefferies. Go ahead, please. Yeah, thanks very much. I have two questions. First one would be on the competitive situation with this VodafoneZiggo. I understand they have potentially promoted a bit harder because they lost F1. But they seem to be saying we don't know the results yet. I think that they seem to be saying that they could see it worse net out this quarter than in prior quarters, and that would sort of match what you're seeing in terms of strengthening broadband and retail. My question to you is, how do you see that? Is that sort of fair share for KPN and you would expect that to continue? Or do you think there is a point at which the two major players should sort of even out a little bit? Because the risk, of course, is that VodafoneZiggo sort of starts wounded animal type behavior. I was just wondering how you see that situation evolving. My second question is a bit of a clarification on the ACM settlement. I mean, ACM raised issues in the broadband market. Now you made these voluntary offers which would settle them, but how does the cable regulation side look from that? I understand it doesn't affect you directly, but maybe indirectly for wholesale. I'm interested to hear how you see ACM sort of handling the cable regulatory side and broadband. Thank you. Yeah. On regulation, we more or less avoid the whole discussion on regulation by the move we made. It's a voluntary offer of KPN. ACM is using our offer for consultation. They don't have to go into the whole regulatory debate with us or cable. I think they will leave cable alone, in short. Let's wait until the outcome of the consultation process and we will know in four weeks from now, I would say. Yeah. On VodafoneZiggo, it's always a competitive market. Of course, when we introduced Viaplay for new customers for free, that was focusing on Formula One watchers, and that was unique for Ziggo only in the Netherlands until recently. That was something we launched successfully in the Q1. Now Ziggo came with a promotion. It's always good to understand how we all feel in the market, to put it that way. It was a promotion. They launched it for a couple of weeks and then changed it again. Every now and then we do a promotion, they do a promotion, but at the end, of course, I think the whole market is focusing on creating value. That's helpful. Thank you. The next question is from Mr. Konrad Zomer, ABN AMRO–ODDO BHF. Go ahead, please. Hi, good afternoon. Thanks for taking my two questions. The first one is on the fiber rollout in Q1, the 75K homes passed. Obviously, that's below your, let's say full-year target, which I seem to remember it being somewhere around 450-500K. Are you still comfortable with that number? Maybe you can be a bit more specific as to why in Q1 it was below the average for the year. The timing of certain projects, was that because of labor not being available through sickness, or was that because of, I don't know, a delay in regulation from municipalities or something? My second question is slightly longer term. You've referred a few times to your CapEx as a group coming down considerably post-2026. Can you share with us the order of magnitude that we should be thinking of? Is this like several hundreds of millions EUR of lower CapEx or several tens of billions EUR of lower CapEx? Just to get a feel will be very helpful. Thank you. Yeah. Konrad, on fiber, you're right. It was a bit low. If we wanna do what we planned for, we have to do a bit above 100,000 per quarter to end up on the 450. It is a bit of a traditional approach that the H2 is always better than the H1, which I regret by the way. I like a smooth rhythm of rollout of 110, 115 per quarter. But that's how construction works. Last quarter, last year was 120, if I'm not mistaken. Q4, Q1, you could also say it was a 100 and a 100. Maybe they pushed it a bit too hard in the Q4. I'm pretty confident we will meet 450. Together with the joint venture Glaspoort board, we will go above 600,000 households. I like a rhythm without peaks and so that is our ambition to run the programs. Every now and then, it comes in batches, you know. There's weather. At the end of the summer, there's a month of holiday for construction, so for four weeks, no construction. There's a bit of ups and downs. We know we will meet the plan. On fiber, we're pretty confident. Yeah. Konrad, on your CapEx post-2026, obviously it's quite a few years out. You know, think about it, you know, CapEx today is EUR 1.2 billion, consisting of, say, EUR 450 million in fiber and EUR 750 million in non-fiber. I mean, talking big numbers. You know, our job is to make sure that post-2026, the fiber number get ratcheted down pretty aggressively and non-fiber numbers stay flat. What the final CapEx number 2026 will be, I don't know. I mean, fiber will not go to zero. There will be new builds in that time. There will be some homes that want to connect, so homes passed or turning into homes connect or homes activated. There will be some fiber spent. The drop in CapEx will not be tens. It should be rather a three-digit number, with the assumption and our assignment to keep the non-fiber CapEx around EUR 760- EUR 800 mark. Okay, great. That's helpful. Thank you very much. The next question is from Mr. Steve Malcolm, Redburn. Go ahead, please. Yeah, good afternoon, guys. Thanks for taking the questions. I'll go with a couple, which I'm allowed. First of all, on mobile pricing, I think the CPI is baked into your contractual mobile pricing, which I think takes effect in October. Obviously, at current levels, that would be a very, very big price rise. Just wanna hear your thinking on that and how you think about sort of pro-promotional offers, 'cause I guess you run the risk if prices go up too much, customers spin down, you know, and you create churn in the marketplace. That would be very interesting to hear. Then just coming back to wholesale, when we sort of look at the volumes, it seems quite clear that most of the push is on ODF, I guess from T-Mobile. There's not a lot of growth in WBA/VULA. I mean, do you think there's been a kind of a hiatus, a strike, you know, ahead of this offer to the ACM? You know, if it is agreed, do you think we should see an improvement in those WBA/VULA volumes, which I guess, you know, helps on the sort of revenue mix side and helps think about our medium-term forecast on wholesale? Thanks a lot. Yeah. On mobile pricing, more or less, CPI is included in the contracts. Of course, these are short-term contracts, so it would be not smart to do an increase of 10% or something like that in our run rate. But most of the mobile customers expect a price increase around October, if I'm not mistaken. That is more following inflation than the consumer household price increase we announced midyear. You also had a question on effects of the Ukraine war if I'm not mistaken. I didn't hear that quite well. No, no. I was just, you know, how you think about that, you know, at the moment Dutch CPI is running double digit. I mean, you know, clearly it's been fine in the last few years because inflation's been very low. I guess consumers have barely noticed it. You know, I guess if mobile customers are hit with a 10-11% price rise in October, it'd be great for your revenue short term, but it might create some, you know, some churn along the way. I mean, just the thoughts you have on, you know, and sort of honoring that CPI link in October would be interesting to hear. Just a question on the wholesale mix. Yeah, yeah. The question. On mobile, I think it's first important to get a better view on the longer term CPI developments before we make a decision on the October price increase. Until now, yeah. We'll wait for that. On the flip side of that is that we also do negotiations with unions on the CLA. There we also look at what's happening on the inflation rate and how we can help our people. But we don't do it in the run rate only. We also do one-offs for our own employees. It's a bit also how far can you go on pricing to your customers and what do you pay your own employees on a price increase. That balance is also what we look for. Well, I guess the question is do you think you might sort of flex that CPI, that contractual CPI link? You might alter the contracts and you don't have any consequences? Well, again, I guess, Steve. Let's see. I think you know, I mean, we have the contractual right to increase the CPI. I think customers won't complain if we do less. I think, you know, doing less is always at our own discretion. I mean, we haven't made our call yet. As Jo said, we need to see what is fair. Where's the inflation at that point? Where is the inflation outlook at that point with our own cost? Then we'll weigh that in. I think we've got the discretion to go lower if we wanted to. Okay, great. Thanks. And on- On the wholesale volumes. Well, I guess most of the volume correctly sees an ODF, which I guess is the sort of the existing footprint. You know, the new footprint doesn't really do ODF. So I guess, you know, are you seeing, you know, wholesale operators kinda hold back ahead of this agreement, do you think? And if it is settled, should we expect to see, you know, a more balanced growth in the ODF and the VULA base, which I guess would help ARPU, would help revenue again? Well, I think, I mean, look, on ODF, certainly we need to be more attractive to others to rent lines from us. In ODF wholesale prices are going down. We think the VULA pricing brings the VULA products, you know, kind of in the same ballpark as ODF in terms of attractiveness, in terms of what the margin-making ability for third-party customers. We don't see them acting as of yet, but I mean the news is out for last two weeks, so it would be too early. But it's fair to assume that VULA now becomes a more attractive product to our wholesale customers than it was before. To [Gerald's point], do you see penetration going up? Yes, we see opportunities there. Could be ODF, but there are also definitely is opportunity in the VULA space. Okay. I guess an improving sort of VULA ODF mix should help overall wholesale ARPUs, right? The VULA pricing- It should, yes. The VULA is an active product. Yeah, yeah. VULA is an active product. Yeah. It just helps ARPU wholesale. I would say, I mean, ODF is old fiber and active broadband is more future fiber. Sure. The customers start moving to 500 MB or 1 gig or 2 gig or 10 gig. That is against a lower price point, but still very good ARPU improvement. Okay, great. Thank you. The next question is from Mr. Andrew Lee, Goldman Sachs. Go ahead, please. Hi. Good afternoon, everyone. I had two questions. One was on B2B and the read across from what we've seen in SME. The second question is just on, again, on your ability to monetize your digital infrastructure and basically raise pricing. On the B2B side, I guess we've all been slightly surprised by the degree of rebound you've seen in SME as you sorted out your tariffs, simplified your offerings in some cases. The question is, how much read across is there between what you've been able to achieve in SME, going from your declines to growth to that we're gonna see in large corporate? I get that you're guiding on overall B2B, but can you just give us an insight into the read across you see from SME into what you can achieve in large corporate? Any kind of sense on the timing of when the migrations are fully complete, that would be really useful. Secondly, I appreciate that you have inflation-linked pricing on wholesale and consumer mobile, that we met with one of your peers yesterday who also highlighted, look, if inflation is going to continue for some time, then maybe there's scope to formalize price rises elsewhere across the customer base. It's just thinking about your B2B revenues and contracts as well as your consumer fixed. Do you scope- Andrew? Andrew, are you still there? Mr. Lee, your line is connected, but we cannot hear you. I will start answering the questions and while Andrew is reconnecting. Is the line still active, operator? His line is still active, yes. Okay. Andrew, I trust you can hear us. Otherwise, you can always touch base with IR after the call. Well, if you look at that slide, the team is presenting on your screen, then, it's all about the run rate and how we run it, right? That's why we were pretty confident that we can turn around the whole SME thing. If you look at what we did a year ago, 132 moved up to 136. It's really that run rate step by step, improving 144 today. If we keep it stable, we already know that we will do much better than Q2 last year. Yeah, that's how we look at things. We built an environment called KPN One, in that our customers can click themselves for worksheets, for mobile, for connections and security solutions, and that all works out quite good. We expect that run rate to improve in the line presented here. Probably not every quarter will be as good, but growth is in there for sure. That's why we are so confident on SME. We do the same trick on LCE, what's presented there below. We're a bit behind there. We follow that run rate. We migrated, I think now 85% of the customer base to what's called KPN Complete and KPN Smart Combinations. Yeah, it's just name change for that. But same trick, different approach and different solutions, but more or less same idea. Improving that run rate step by step will also lead to growth. That's how we do it. It's really that's telco, running the run rate. The trend is your friend, I would say. Then there was a question on infrastructure, which I will hand over to Chris. I think there's a question on pricing, where we would formalize price increases to a board and just have a formal CPI-linked contract to all your customer, all prices. We'd love to have that. I mean, I think 75%-80% of our business has some degree of an inflation link. I had a very contractual There's a reference to, so that could be there. At the same time, you know, part of the business segment still experiences some price pressure. If you look at, you know, where's the most challenging thing in the LCE segment is look at the revenue decline. Half of it is, you know, our own migrations, the other half is, you know, some pricing pressure in the market. We'd love to do that. I say that we need to be mindful of where the market is in a competitive dynamics there. Given the fact that about 75%-80% of our business already has an inflation link, I think, to a larger extent, we're already there. Thank you. The last question is from Mr. Joshua Mills, BNP Paribas Exane. Go ahead, please. Hi, guys. Thanks very much for the questions. My first is actually another one on pricing and the second one was related to the CLAs. Yesterday, it's quite interesting, Telenet were talking about their own market research into where they see the opportunity to put prices up and where they believe there's a cliff in terms of customer acceptance. Their point was that when net promoter scores are good, yeah, you can sustain some price increases, but anything above 5% you see a real drop-off in net promoter scores. I'd be interested in knowing, firstly, how your own research into the customer base has planned that trade-out and how that's maybe changed year-on-year. Obviously, net promoter score is getting better, but we do see some evidence that price sensitivity is maybe going up. Thought that would be helpful. The second question is just a bit more insight into how these CLA reviews work. I think last year they were done in July. Is it July this year that the CLAs will be discussed again? Is inflation an explicit part of the framework for the discussion or simply a reference point that your employees look to when they're negotiating wages? Thanks very much. Look, Joshua, on pricing, interesting piece of research by Telenet. I mean, we're pleased with the NPS development of KPN. Our business has continued to go up quite aggressively or effectively to a good number. Interestingly, on our side, we had a significant increase in number of calls and number of client interactions due to Viaplay, and we kept our NPS high. Whether there's a link between pricing and NPS, that I don't know. I mean, I don't have that evidence, but it's an interesting point to make. Secondly, I think that probably customer resistance to price increase is not a static thing, it's dynamic. It depends on where you are in a cycle, where the customers perceive what is fair and unfair pricing. It's a fair point that Telenet has made it. You need to wait till next week for us to give a little bit more comment on what we want to do with pricing. I hope you can bear to wait one more weekend, then you'll know. The Telenet insight is, you know, not strange. What they say is not strange to us, put it that way. On CLA, what comes in there. Our CLA is a discussion on many parts, right? There is, of course, the monetary compensation to employers, to employees. There is training, there is education, there is time off, there's sabbaticals. How do you deal with the elderly population? Often it's a combination of various measures you do as an employer to deal with your employees, and wage increase is not the only component. It's an important component, but there are many more factors driving it. Look, inflation going up, it will certainly be a topic in the next discussion on the CLA. It will definitely have, you know, you know, an upward push towards CLA next year, but it's not the only thing that counts. The training, education, sabbaticals, dealing with elderly people, elderly workers is also an important part of those conversations. It's not a one-on-one transition. I would say our people are highly motivated. I mean, like Chris said, it's we do a lot in CLA, but we also do a lot to support our people there in one-offs because CLA increase of 2.7%, that's in the annual salaries. Then there's 1.1% on top of that to grow in scale. For instance, we gave all our employees EUR 50 per month additionally to work from home. There's the bonus payout we do. There's a lot we do for our, well, our own people. We can't look that much into the future, but we'll see what happens. The CLA counts for the whole year, by the way, not until mid of the year. Sometimes we negotiate the mid of the year. Sometimes we wait a bit longer. I think this time we will wait a bit longer because we wanna know where this inflation rate goes, and how the economy is developing. Great. Thanks. Maybe just one very quick clarification. Can you just remind us what the fixed line price increases have been over the last couple of years, just for reference? Bit of 2.5%. Great. Thanks. Okay. Thank you very much. That wraps up the Q1 call. If there's any further questions, please contact the investor relations team. Thank you very much. Sorry for the interruption. Does not fit a company like KPN to switch off in the middle of call, but sometimes it happens. Thank you. Thank you. Ladies and gentlemen, this concludes today's presentation. Thank you for participating. You may now disconnect your line. Have a nice day.