PT XLSMART Telecom Sejahtera Tbk

Good afternoon, ladies and gentlemen. Welcome to Accel Axiata's earnings call for the first nine months of the financial year ended September 30th. My name is Inder and I'm the head of investor relations for Accel Axiata and I will be acting as your coordinator today. There will be a short presentation where all participants will be in a listen only mode. Instructions will be given on how to register your questions when we get to the question and answer session. As a reminder, this session today is being recorded for repay purposes. With me on the call today are Ibu Dian, our Chief Executive Officer, Pak Budi, our Chief Financial Officer, Pak David, our Chief Commercial Officer for Consumer, and Pak Abhijit, our Chief Commercial Officer for Enterprise and Home. Now, Ibu Dian will share the highlights for the first nine months of 2021, which will then be followed by the Q&A session. I will now hand the call over to Ibu Dian.

Thank you, Indar, and good afternoon to everyone. We are happy to report a good set of third quarter number in a tough quarter, which was impacted by the COVID-19 Delta surge that happened in early July and associated movement restriction. This result is due to good traction of our products in the market, supported by our improved network performance and also our strategy. As a result of the consistent execution and implementation of our operational excellence strategy, We are on track to achieve our mission of becoming the number one conference operator in Indonesia. The key highlights in the third quarter and first nine months are as follows. Our revenue grew sequentially for the second consecutive quarter, rising 1.5% Q on Q due to strong product traction in the market. EBITDA improved as well. increasing by 1.5% Q on Q with healthy margins maintained above 50% in the third quarter of 2021. Our profit sustained and as a result, we recorded 300 billion rupiah in net profits in Q3 2021, bringing the first nine months of this year to net profits of 1 trillion rupiah. We managed to add 1.2 million customers this quarter while still maintaining our ARPU at 37,000 UPR. We remain the most data-centric operator with 95% of service revenue from data and 92% smartphone penetration. Both are industry-leading metrics. Finally, we continue to sustain network investment with 4G now in 458 cities and areas with more than 69,000 for GPTS. So this slide showing an update of what has happened in Q3 and onwards. The consolidation in the industry will be positive for competition as it has created a more balanced industry structure. We continue to progress with our transformation and digitalizing our business process with emphasis on automation and business efficiency. This is something that was accelerated by pandemic as well. We also continue to be on the path of achieving our vision to be the number one converged operator in Indonesia with the launch of XL Satu Fiber, which is the first product of its kind in the market. Positively, Market momentum is returning with both the consumer confidence index and the mobility index showing a bounce in September 2021. We see this as opportunity for a further market recovery and better performance in Q4 and heading into 2022. The more digital way of life is also an opportunity for us as an internet service provider. There are also risks to performance which include a COVID-19 resurgence with new variants which would derail the positive momentum we are seeing and rising inflation which could hurt consumers' spend. These are some key indicators, both finally and operationally, and as we discussed before, all of our metrics are moving positively in the right direction. with revenue, EBITDA, PAT, number of subs, as well as ARPU. We remain focused on customer centricity, which is putting the customer first, and as such, have developed a proper segmented approach for our customers. Our Excel brand is focusing on families, which is the most relevant and remains an untapped opportunity in Indonesia. Thus, our Paket Akrab, which was launched in Q2 and allows for sharing of quotas between family members, is to address this segment's needs. We have further expanded on this with the launch of our Excel Satu Fiber Package, which offers a comfort play for families in Indonesia and is the first of its kind in the market. Meanwhile, our Axis brand is focused on the youth segment and offers customizability of products to allow this segment to tailor, make their own experience. Both brands continue to do well in the market and within their respective segments. Customer segmentation is one part of our strategy. But this goes in tandem with giving our customers a fully digital experience as part of our overall transformation. And this is also to support our aim to move away from only price gain. This is where we have gone end-to-end in automating and digitalizing our business process from digital touchpoints and digital care at the customer's front end to a more efficient digital distribution where channels are digitalized and aligned, plus the offerings are seamless. Finally, on the back end, as network automation to ensure that this is done on end-to-end basis across the business. Network development remains a key task where our BDS count is now above 153,000, with more than 69,000 4G BTS, and our 4G services is available in 458 cities and areas. Fiberization also continues to be a focus as we prepare for the investment on 5G, where close to 50% of our end sites are fiberized. Finally, our guidance for the year. We aim to grow our revenue in line with market, but we aim to continue our strong momentum to finish the year on a good note. EBITDA margin guidance remains for low 50%. While we have raised our CapEx guidance to around 8.5 trillion rupiah, as these investments will be made to strengthen network quality in all areas, and particularly where changing traffic patterns because of the pandemic have become the new norm. Thank you, and let us proceed Thank you Budhian.

Okay everyone, just a quick instructions. To ask a question, please press the raise your hand button and you will be added to the queue. When we call your name, please unmute yourself and ask your questions. We request that if you are asking a question, please put your full name and company name to allow us to identify who you are. Please strictly keep your questions to a maximum of two, and this will allow other people to ask questions. We shall end the conference call sharp at 3pm Jakarta time. Our first question is from the line of Sachin Mittal. Sachin, please unmute yourself and ask your question.