Telkom Indonesia (Persero) Tbk PT (TLK) 2019 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Telkom's Full Year of 2019 Results Conference Call. (Operator Instructions)

Please be advised that today's conference is being recorded. I would like to hand the conference over to your first speaker today, Mr. Andi Setiawan. Thank you. Please go ahead.

Thank you. Ladies and gentlemen, welcome to PT Telkom Indonesia Conference Call for the Full Year of 2019 Results. We released our full year of 2019 results on the 26th of May 2020, and the reports are available on our website, www.telkom.co.id. Today's presentation is available on the webcast, and an audio recording will be provided after the call for the next 7 days. There will be an overview from our CEO. And after that, all participants are given the opportunity to participate in the Q&A session.

Before we start, let me remind you that today's call and the response to the questions may contain forward-looking statements within the meaning of safe harbor. Actual results could differ materially from projections, estimations or expectation for -- during this call. These may involve risk and uncertainties and may cause actual results to differ substantially from what we discuss in today's call. Telkom Indonesia does not guarantee to any actions, which may have been taken in reliance of the discussion held today.

Ladies and gentlemen, it's my pleasure to introduce the Telkom's Board of Directors who are joining with us today: Mr. Ririek Adriansyah as President Director and Chief Executive Officer; Mr. Harry M. Zen as Finance Director; Mr. Zulehlfi Abidin as Network and IT Solutions Director; Mr. Edwin Aristiawan as Wholesale & International Service Director; Mr. Bogi Witjaksono as Enterprise and Business Service Director; Ms. Siti Choiriana as Consumer Service Director; Mr. Achmad Sugiarto as Strategic Portfolio Director; Mr. Faizal Djoemadi as Digital Business Director; and Mr. Edi Witjara as Human Capital Management Director. Also present are the Board of Director of Telkomsel, Mr. Setyanto Hantoro, as President Director; Mr. Heri Supriadi as Finance Director; and Ms. Rachel Goh as Marketing Director.

I now hand over the call to our CEO, Mr. Ririek Adriansyah.

Thank you, Andi. Good afternoon, ladies and gentlemen. Welcome to our conference call for the full year of 2019 results. We really appreciate your participation in this call.

Ladies and gentlemen, for the full year of 2019, our fixed broadband business IndiHome became the engine of growth and continue to demonstrate a strong performance. Mobile Digital Business also showed strong growth on the back of solid data traffic in line with 4G network quality and coverage. In the meantime, enterprise business experienced down as we deliberately reduced our exposure on low-margin business and partly due to security. For the full year of 2019, Telkom managed to book a 3.7% year-on-year growth in revenue to IDR 135.6 trillion while EBITDA and net income grew by 9.5% and 3.5% year-on-year, respectively, as a result of modest growth and total expense of 1.3%. Our EBITDA margin recovered 47.8% or 2.6 percentage point increase from that of 2018. Cash flows from operating activities reached historical high of IDR 54.9 trillion or jump by 20.3% year-on-year. Fixed broadband business through IndiHome became the growth driver, continuing a strong performance when revenue grew by 28.1% year-on-year. While in mobile business, Telkom service business grew strongly by 23.1% and successfully compensates legacy business to decline.

Ladies and gentlemen, during full year of 2019, our fixed broadband IndiHome posted a remarkable performance. IndiHome added 2 million new subscribers during the year of 2019 to reach 7 million of subscriber. IndiHome contributed IDR 18.3 trillion in revenue or jumped 28.1% year-on-year. In an effort to generate more revenues, we continue to push add-on sales such as upgrade speed, upsell to Triple Play, Minipack's packages, Movin' and additional set-top box. These add-ons contributed to around 13.6% of total IndiHome revenue in full year of 2019.

In line with the higher economic scale, we successfully improved IndiHome EBITDA margin from 25.6% in 2018 to 33.9% in 2019, getting closer to global standards. In 2020, we target to add another 700,000 new subscribers, lower than last year due to floods in the beginning of the year and also the COVID-19 pandemic.

Ladies and gentlemen, on the mobile side, Digital Business through provision of high-quality broadband connectivity and parity of Digital Services became the main growth engines. Digital Business increased significantly by 23.1% to IDR 58.2 trillion, driven by 22.3% increase in Data and 29% in Digital Services. In 2019, Digital Business accounted for 63.9% of total Telkomsel revenue, increased significantly from 53.0% for the same period a year ago.

In the mid-term, Telkomsel's legacy business continued to decline due to natural transition from legacy towards data together with the various OTT services. Overall, Telkomsel financial and business performance in the full year of 2019 recorded revenue, EBITDA and net income growth of 2.1%, 3.7% and 1.0%, respectively. EBITDA margin improved by 0.9 percentage point to 54% amidst declining legacy business.

Ladies and gentlemen, we continue our strategy to protect high-value customers by providing services according to very [positive] advantage. And at the same time, we pay a lot more attention to use market by giving attractive choices through digital channels. We keep investing to strengthen network quality and coverage to provide the best experience for our customers. We deployed more than 23,000 new BTSs during full year of 2019, all were 4G-based. By the end of 2019, Telkomsel's sales on-air BTS totaled around 212,000 units, 76.3% of which were 3G and 4G, which supported data traffic rate increase by 53.6% year-on-year.

Our enterprise business declined by 11.2% year-on-year as we intentionally reduced low-margin business and shifted our focus on more profitable services, such as data center and cloud and also to cyclicality of characteristic. In an effort to strengthen data center and core business, we are building more than 3,000 [rate] of data center, and the first stage is expected to commence operation in April next year. In the long run, we plan to build another 6,000 rate of data center.

Our Wholesale & International business segment recorded IDR 10.6 trillion in revenue or grew by 5.2% compared to the same period last year. This segment is the enabler for other segment in Telkom Group, in particular, for mobile business. After all, it's very important and strategic in providing internal support while at the same time also serve external customers, which is reflected in Telkom consolidated results. Wholesale & International business contributed around 7.8% of total consolidated group revenue.

In 2019, Telkom Group spent IDR 36.6 trillion of capital expenditure or 27% of revenue, mainly utilized to enhance our mobile and fixed line network infrastructures. In mobile services, CapEx was utilized to further improve 4G network quality and capacity as well as IT system enhancement. While in fixed line business, CapEx was primarily utilized to grow fiber-based access and broadband infrastructure to support fixed as well as mobile broadband business. A small portion of CapEx was assigned to other projects such as tower.

COVID-19 outbreak that we experienced since early 2020 has undeniable impact on the overall economy, including the telco industry. While we conduct our technical action to help alleviate the impact of COVID-19 crisis, we anticipate that our performance this year will be quite effective, especially in -- [prepared] toward at least the third quarter.

Due to high uncertainty caused by the COVID-19, we are still unable to provide any guidance for 2020. Nevertheless, since the end of the first quarter this year, we have been performing strict cost-cutting measures as part of our commitment to maintain profitability. In an effort to maintain network quality and coverage, we tend to spend CapEx of around 25% of revenue in 2020. That is ending my remarks. Thank you.

Thank you, Pak Ririek. We will now begin the Q&A session. When raising your questions, please clearly and state your name and your company. Operator, may we have the first question, please?

(Operator Instructions) Your first question comes from the line of Miang Chuen Koh from Goldman Sachs.

So 3 questions from me. Firstly, can we have an update on the mobile competition that we are seeing year-to-date. Has there been any significant change compared to last year?

Secondly is on your digital service. You talked about, obviously, that being a very key driver of growth. I'm wondering whether for Telkomsel, are they able to also monetize on some of those services, like, let's say, video streaming or mobile financial services? Or are we simply monetizing largely through selling data for that?

And then lastly, wondering on IndiHome, right? I mean what is sort of the normalized or longer-term EBITDA margins that we can probably get to? We're seeing obviously a very nice increase in margins last year.

I'm Rachel, Telkomsel. Just addressing your first question regarding competition. So if referring to year 2019 we see that none of the other competitors in the top 3 have achieved any significant monetization on data, which is pretty much stated (inaudible). In terms of the -- and also to take note that for additional data revenue, Telkomsel still managed to achieve a significant share in terms of the revenue for data. And pricing-wise, it still remains -- it was very competitive in terms of price in 2019, especially towards the end when you saw 1 of the top 3 operators here when going into unlimited, which pushed the RPMB extremely low. Question would be then what's next after the unlimited offering?

We also see in terms of competition, increased competition in ex-Java because of the expansion of our competitors’ network in ex-Java, and hence, it's how they will play the price game to achieve revenue share. In Java itself, we've seen it pretty stable, and it's something which could be an opportunity for Telkomsel. I hope the answer responded to your question on competition. From Telkomsel's point of view, we will continue to focus on renewals, on maintaining competitiveness in our network quality and also, especially in our high-value segments who are very concerned with quality and also the variety of packages and nondata services that we offer, which leads me to the mix point about, yes, we are monetizing not only for data, we're also growing in terms of our gaming business as well as our video business.

Okay. For the third question, at least for the next couple of years, we believe the EBITDA margin will gradually move towards mid-30 level, so around 35% level. And then we hope in the long run, it could be getting stronger as we've been strengthening the digital touch points, whereby make it easier for customers to reach us. And at the end, it would reduce the O&M cost, which helps the EBITDA.

Your next question comes from the line of Piyush Choudhary from HSBC.

A couple of questions. Firstly, the question for Ms. Rachel. For Telkomsel, is for 2020 and kind of medium term, is the strategy now to maintain the market share, revenue market share? Or is it to improve the revenue market share? And if you can share what are the initiatives taken to achieve such goal. And how has been the response to the By. U product, if you can share that?

Secondly, on the impact of COVID. Could you specifically share how is the impact on the nonmobile business, particularly the enterprise business? And thirdly, could you share what are the various cost-efficiency taken by the company to maintain or improve margin?

Rachel here. So address on your 2020 question #1 strategy. Regarding revenue market share improve or maintain, of course, as an organization, we always want to increase our revenue market share. However, we will always focus on sustainability and health of the revenue market share. So this is very much in line. Market share -- revenue market share leadership is key for us. And also that is supported by our aim to keep investing in our network to make sure the quality is very good because we will be focused on high-quality and high-value segment of our customer base.

And what are initiatives we have put in place so far? So you have seen how we have pushed out a variety of new products such as our (inaudible), which is our [specialty] packages as well as Combo Sakti. As well as in the Halo postpaid space, we've been pushing Halo. Kick!. I think in the first half of this year, these were the two -- top two that we've pushed out. And although the RPMB has declined, what has been very, very encouraging for us is that the ARPU has been accretive. So hearing it, it shows that there is demand for Telkomsel's network quality. There is still potential for growth in payload. So the pricing, what we have done in end of Q4 2019, is starting to reap results for us.

So to answer you, yes, we want to continue to maintain and improve our revenue market share. We've put in initiatives. We have variety, so slightly adjusting our P&D down by focusing on ARPU and growth in the high-value segment. And in terms of By. U, we are starting to see that the By. U base that come online is actually what we're going after, the digital segment. So their numbers aren't big but they're improving. And what is important to note here is that ARPU and the data utilization of the By. U base is actually high compared to the average customers. So that's what we have. Hope that answers your question.

Piyush, on the second question, you're asking about impact of COVID to which particular business?

Yes. No, specifically, within the nonmobile segments, if you could share what's the kind of impact you are seeing on the enterprise business, what should we expect in 2020?

Piyush, it's Harry here. So we have started to see a few events such as projects getting delayed or even getting canceled. And some clients have also either reduced their spendings or totally churn from some of our services, especially those who are in adversely impacted industry such as hospitality, transportation and property. There's also been some payment delay or request to restructure the contract as well as the payment. And also because of the lack of mobility of people, given the situation, delivery of the projects have also been delayed. We have been unable to determine the quantity of this as this is very dynamic but, admittedly, we have seen those things happening in the past couple of months.

Got it, Pak Harry. And on the cost initiatives, cost-out initiatives?

We've been doing various things. On the O&M as well as some of the personnel costs like training, some G&A costs. It is in our strong intention to keep the same kind of EBITDA margin and net income margin within this year as what we have in 2019 of the entire group.

Adding to Harry's explanation, I think in some, the marketing and sales activities with the current condition, we use more digital channels right now compared to before. So for example, non-traditional channel already [contributed] around [50%] of the total of the activities in the sales. This also impacted our cost of marketing and sales. We see this going to be sometime in the future, but it is the trend. Although we still also need to manage the tradition channel as we see the traditional also as part of the B2B business in the future.

Your next question comes from the line of Colin McCallum from Credit Suisse.

Two questions from me. First of all, just on IndiHome, you mentioned 700,000 target for this year. You also mentioned flooding, and I think first quarter was particularly bad. But other than that issue in first quarter, intuitively, one would have thought that demand would be quite strong given work from home and homeschooling, et cetera. So is it a kind of lack of end-user demand you're seeing in addition to the flooding? Or is it sort of difficulty accessing homes because people don't want engineers to come to their home to be connected because they're worried about the virus? A little bit more color on why the net add numbers are less than 1 million would be helpful.

Second question related to that, if you're only looking at 700,000 net adds, why would your CapEx to sales ratio not fall a bit more? I think it's falling from 27 to 25, you said, why would it not be falling more? Is it related to the data center build-out? If you could give us a bit more color on that, Pak Harry, that would be good.

And then third question, just kind of housekeeping one. The impairment charge of IDR 1.2 trillion, what was the background to that distributor? And what is the remaining book value that you have in your accounts? Is it likely that we'll face another impairment on that later? Those are my 3 questions.

Yes. Okay. On IndiHome, yes, Colin, the work-from-home and learn-from-home situations have helped quite a bit in terms of increasing our sales volume, but we are anticipating that this will not last forever, even for the new customers. We are anticipating that likely some of them will either reduce their subscription or operation from the new subscription that they just sign up. But you are also right that there's been some -- because of the spreading out of the virus, the mobilization of our technicians has somewhat been hampered as well. So we have not been able to operate throughout the country, especially in those we have here like what we call [rep zones]. So that's for the IndiHome.

In terms of CapEx, some other purposes are still there. The new one is, like you mentioned, it's the data center one that would cost us around slightly more than IDR 700 billion for this year. There will be some more CapEx next year. And also to enhance the traffic in Telkomsel, particularly in 4G. There's also some Capex we will spend for towers and for the for the IT enhancement, both in Telkomsel as well as in Telkom.

On the impairment charge, this is due to the decline of the share price of the company from more than IDR 900 by -- in the beginning of 2019 to around IDR 300 at the end of 2019. So this is purely an accounting statement that we have to do. But in the company's book itself, the book value -- the remaining book value still stood around IDR 500 million as per end of 2019. We are exploring ways to mitigate potential further risk with regards to this, but the reverse thing could happen, right? If the share price strengthened, then we will see some reverse thing to happen.

I think to Harry explanation on the CapEx, half of this CapEx basically are coming from Telkomsel. So we can tell you actually this mainly driven by the demand, and demand has been very much increase from year-on-year. In addition to demand, we need to maintain the quality we provide to our customers, so we -- for the [premium net] compared to our competitors. This based on all the aspects of our strategy, that's why we are -- I think -- we think that our CapEx range could be about the same this year because even with the digitalization trend with regard to this profit, we need to bring one more for the capacity and quality.

Your next question comes from the line of Arthur Pineda from Citigroup.

Several questions, please. Firstly, on the enterprise segment, what drove the big loss in enterprise in the fourth quarter? So you're basically booking segmental profits until 9 months and booked a massive loss in 4Q, even though there was a big jump in revenues. Can you give clarification there?

Second question is with Telkomsel. What can be done to address the revenue market share slippage? So if you look at Singtel's recent disclosure, you could see that revenue growth still lags versus peers. We know that your networks already far better versus everyone else, but what needs to be done so that you can grow alongside the market?

And last question is housekeeping question, were there any other one-offs booked for the period?

Arthur, I think -- Arthur, can I think on this one? I think during the -- you can see in FY 2019, we still have a growth in the [network]. We do experience I think decline in [revenues] in the network . Importantly, the focus for the customer sales is [in a particular segment]. Even further, I think you can see in the -- although we are not clearly release our third quarter of this year results, you can see for the Intel conference call that our quarter-by-quarter data increase [minor] (inaudible) in terms of revenue, and of course, maintain our quality of (inaudible).

Rachel, did you want to add some more color on that?

Yes. I'll address the point about -- sorry, I couldn't hear clearly. I'll address the point about Telkomsel's revenue market share. So overall, revenue share has dropped mainly because of our legacy, which is still in decline. As you know, compared to the other players, our voice revenues are significantly higher. However, if you drill down into the data and digital revenues, I think we are still doing quite well with a data revenue share of 62% amongst the big 3.

So for you to grow alongside market, we need to wait for the legacy revenues to be similar to what you have with your other peers?

It will continue decline. At the same time, we are also taking measures to continue to increase our network investments to try to drive up our data revenues as rapidly as possible to be able to make up for that decline in legacy as much as we can and also in other digital ventures that we have.

Maybe additional info from me. As you see, our network figure right now, only about 50,000 of (inaudible) has been remained. The rest is actually data we [guided in our network of 200]. This can actually -- most of investment are registered to the data. We do expect by growing of the [ballot] and also some additional service on this one. The long-term objective of us besides the segment of the legacy going to decline, we need to as well to maintain this quite stable and healthy margin, both in EBITDA that we announced and the products.

Arthur, for your first question on enterprise. In the fourth quarter, we have to book some additional provision for doubtful accounts in the business. I think that's part of -- most of the reason for the performance decline.

Pak Harry, is it possible to disclose what that number would be so we can better see the outlook for FY '20?

The provision in the fourth quarter?

Yes.

Slightly below IDR 400 billion. Around IDR 350 billion, INR 390 billion.

Okay. Understood. And are there any other one-off items being booked in the period?

Besides the impairment that we just talked about, there's nothing else.

Your next question comes from the line of Ranjan Sharma from JPMorgan.

A couple of questions from my side. Firstly, with the impact of COVID, have you seen any change in consumer behavior in the first quarter and also in like April and May? Have you seen a movement of customers between operators in consolidation, rising spend? If you can share any color, that would be helpful.

Second question is on dividend. Has there been an announcement made on it? And how should we think of the policy?

Lastly, can you share any update on any regulatory changes that might be impending in Indonesia?

Okay. Well, Ranjan, on the first question, impact of COVID and the change of customer behavior. Obviously, I already mentioned to you, for example, in mobile, now more people using the modern channel and digital channel, which is around 60% of total traffic happen in the digital channel. Second, actually, the tradition of the channel also was maybe [20%], they are not really operating. But with the digital channel that, I think, spread across the country. We still maintain to have the similar figure of (inaudible). I think if we see this one, we can see actually this is a good trend for us. Besides, in fact, we also still need traditional channel when we do affect the growth in the new business later on. And one is, I think, this traditional digital channel going to be in the future. And what is the impact also there to the customer? More now, I think the traffic itself in the customer base, they are consumed, the traffic actually at home. So I think, again, the traditional channel in the center of the, I think, cloud not necessarily becoming point of the transaction. There you see again digital channel to do this transaction. So I think a lot of the change in the customer behavior in which they are becoming much more digital now compared to before.

Yes. Maybe adding to that, we also have seen tremendous usage of Internet in our network through IndiHome. The latest data that we can share was 9.6 terabytes per second. That was by early April, which was 11% increase from mid-March when the pandemic literally started in Indonesia, so 11% increase in 2 weeks. And also in terms of sales volume or a new installation volume of IndiHome per day, at the end of March and in April until maybe the beginning of May, we saw like around 8,000 to 10,000 per day. Even though now has somewhat reduced to the, "normal level" of around 5,000 to 6,000 new installation per day.

For your second question, I'm going to -- on dividend, we -- as we speak, we have still been communicating with the Ministry of State of Enterprise in terms of the dividend that we will -- for sure, we'll announce it at our AGM on the 19th of June.

And in the -- adding to first question, on the, I think, some application that are very popular right now, like, Zoom, Teams and even our own application is becoming popular for many and actually, people really becoming more and more digital in doing their work.

Sorry, I had a question on the regulatory changes if anything is impending? I'm sorry, earlier, the line was unclear, but had you mentioned that there will be like 700,000 net adds on IndiHome this year?

Sorry, you're asking about number of customers or data?

Number of customers, net adds on IndiHome for this year?

Yes. That's -- the target of additional new customers in IndiHome for this year, which is around 700,000.

Okay. Last question...

Okay. On the regulatory, there's no new, I think, regulatory. The last one was in May [registration] and already submitted and implemented. The rest is we are still waiting on it as well. But I think we are [awaiting] with a new update on this one.

I'm not sure whether you are aware that there's a recent change in the corporate tax number. So starting this year, it would be 19% for publicly listed company. It has 40% floating rate.

On a private company, from 25% of income tax becoming 22% of income tax. That, I think, some incentive that government has given to the companies during this COVID situation.

Your next question comes from the line of from Prem Jearajasingam from Macquarie.

Two questions from me, please. First of all, following up on the regulatory question, given what COVID has done to the industry, do you think that there is an increased likelihood of industry consolidation taking place post-COVID or even as soon as 2020? Or do you think there's still too much uncertainty around the spectrum situation to pause this? And related to that, do you see the competition facing increased network issues and potential monetization issues given this COVID pandemic? And what do you think happens next on this front?

First, I am going to answer the number 2 question, the second on the -- how is the monetization. I think with COVID and with the growth of the data framework experienced by all the operators, we do expect that all the operators are already aware that we need some more capacity and quality as well, so they're [equal] these countries. With this -- I think with [ballot] thinking about monetization with, I think, profit margin that our competitor already met today, it is supposed to be kind of, I think, let's say, now for them, not a thing coming to more, let's say, intense competition in the pricing. It is better to monetizing this one. We already see one of the core competitors, although they provide the unlimited, but unlimited, based on the situation that customer needs to consume the main quota, which mean, still, they are thinking about, I think, monetization.

The other one, I know that they've started to reduce also the unlimited package because with this capacity demand, they need to invest more. I think without justified price, they're not going to make any margin. I think this supposed to be making a bit more rational thinking on how to monetize RPMB.

And I think the consolidation of post-COVID, it is difficult to answer the question. It is supposed to be from a long, long time ago. We believe that, I think, a maximum 4 of the operators is going to be better for the industry. The less number of operators becoming [healthy] in the industry as I think the players going to be more or less the same. We still believe this supposed to be based on business [based on our ability.] So whenever it is going to happen, basically, we support the industry consolidation because that's going to make the industry healthier. Based on, I think, from the decision or government, very interesting also what to expect [post-COVID].

Has there been any clarity with regards to spectrum in the consolidation process? Or is that still the big unknown?

I think still unknown on that front. But if you ask further, when we think about 5G, I think spectrum is supposed to be bigger. That can be also another reason for consolidation to happen.

Okay. Just to add some other point of -- on top of what was just explained. I think post-COVID, the need of the industry become healthier is in the bigger interest of everybody. So it means that there could be consolidation one of them, but -- and also can be something as, like, as what Pak Edwin mentioned is monetizing the (inaudible) in a better result. So we do expect that all the operators can be more rational in the competition.

(Operator Instructions) Your next question comes from the line of Niko Margaronis from Danareksa.

Two questions which arise from some news that surfaced from media. First is about potential monetization of towers and secondly, the potential partnership with Netflix. So if you can give us some color on these 2 topics and whether you believe if adding Netflix into your product portfolio would increase the ARPU.

And maybe one more question on -- we see that data yield for Telkomsel fourth quarter coming down, and we heard about Singtel commentary on Telkomsel. Is data yield came down further in first Q 2020? And, yes, and how to connect this with your argument that the competition will moderate going forward this year?

Okay. I'll take the tower questions. Yes. We are not in a hurry to do any monetization in our business. I think the way we see this business is somewhat different, probably compared to any other operators or any other independent tower providers. So we see it as an important enabler to support our business, particularly our mobile business. Having said that, we are open for any -- obviously, if there's any clear benefit from monetization but not in the near term. So -- but we do realize the importance of tower, especially when 5G comes around, whereby we need better or more density of towers if we have 5G. Okay?

Yes. Pak Ririek, basically, what are the options for you available? Is that widening your tower portfolio or taking it IPO? Or -- yes, what are the options for towers in front of you?

So we are basically open for any options. We are not -- we're not -- as of now, we're not seriously thinking any particular option. And as I said earlier, Pak Niko, we're not really in hurry to execute anything with regard to our business monetization anytime soon.

Okay. Pak Niko, and the second question is on the Netflix. We are in the middle of discussion with them. And so far, it's progressing quite well. Mainly the discussion was focusing on 2 things. One is on the compliance with the regulatory, and the second one is the protection of the subscribers. So I believe we are closing the gap between the 2. And once -- we're just in the -- (inaudible), we're going to be opening the access to Netflix, both in IndiHome and the Telkomsel.

Also, like your question on the part of our plans, it increased our portfolio, our ARPU. Yes, actually, video like YouTube and many other content is one of the direction of the existing data connectivity. Definitely, we like to provide, I think, a good option for our customers just for them to stay with us and also to increase the consumption of data, and also we make some also profits of these services. I think mainly other -- more besides of the video, we have games and, et cetera, I think, digital services in order to increase the ARPU that we have.

And your question on the third question about how is the other [in terms of] our product, I think, that when the -- probably that, I think, a year can be lower. That can been possible. What we are actually -- my focus is to increase the productivity of our customer base in order to increase the ARPU. As long as we can have that one way, and we have, let's say, the [first] package, daily package to our customers. Because we have the one, I think, demand on daily of people that [purchase the package]. In addition to this one, this also only operator when I said one day, 3 day and et cetera. This is going to increase, there, I think, the consumption of our customer. In digital, it's going to increase the ARPU in total. So we now sacrifice our profitability on this one but more, I think, kind of, creativity to increase, some of them and maintain the profitability because some of this capacity already this year.

There are no further questions at this time. I would like to hand the conference back to Mr. Andi Setiawan for closing remarks. Please continue.

Thank you, everyone, for participating in today's call. And should you have any further questions, please feel free to contact us directly. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may all disconnect.