PT Sarana Menara Nusantara Tbk

Good afternoon and hello everyone. Welcome to Bahana Securitas' corporate access group call. Thank you for spending your valuable time to join us today. My name is Nicholas. I am the research analyst covering telco, tower, and tech at Bahana Securitas. Today I will be serving as your moderator. Please join me in welcoming today's speaker, Bapak Hatono Tanu Wijaya, Director of PT Sarana Menara Nusantara and Chief of Staff. accompanied by Bapak Adam Givhary, Advisor of PT Sarana Menara Nusantara, and Group Investor Relations, who will present the company's full year 2025 financial result, operational performance, and outlook for 2026. Without further ado, Pak Hartono, Pak Adam, the floor is yours. Please, Pak.

Thank you, Nico. Hi, everyone. Pak Hartono is sitting next to me due to the technical glitch, so we'll be sharing the screen together. It's good that we're next to each other, Pak. Yeah. So Pak Hartono is our director and chief of staff covering the group investor relations. I'm advisor to this role. So let's start with what we have released for full year 2025 audited results. that we announced March, 2026, right before LeBaron break. So I'm gonna share my screen. Let's go through the press release that we prepared, and we're gonna go through the presentation for the full year. And after that, we will wait for more, if Hartone has more remarks on the result, and then we can go to Q&A. So as you can see here, we reach a full year operating revenue of 13.3 trillion, representing a 4.6 trillion increase for 2025 compared to full year 2024. EBITDA reached 10.97 trillion, growing by 2.5%, while net profit after minority interest stood at 3.678 trillion, an increase of 10.3% year-on-year. So we think the result is because we look at what we see, what we have, despite challenging industry and macroeconomic condition, we have to focus on our core strength while improving areas where we can see improvement for better results. We leverage our operational scale. We basically try to get more business by using our scale, you know, on power and fiber, and then maintain strict cost management and drive ongoing efficiencies. As you know, we have a lot of different types of businesses, and we try to combine where we can see synergies between assets that we have That has been the topic of management doing every week, you know, where we can see efficiencies and try to leverage higher utilization on our assets. So we are now given we have 170,000 kilometers of fiber. We have, you know, 35,000 towers. We see that we have one of the largest independent digital telecommunication infrastructure provider. And then we have the most comprehensive range of services. So it allows us to provide solutions for our clients to operate different conditions, including consolidation or mergers that we have seen recently during 2025. So the merger of Excel Asiata and SmartFriend, you know, which opens up significant opportunities. They need us because more than, you know, 50% of the network is on our towers, and they use a lot of our fibers as well. And then we believe, you know, with 5G, further service enhancement will require our involvement with our services and, you know, assets, tower and fiber included. So now we see what we expect for the next 12 months that firstly we see consolidation can strengthen pricing discipline. I know that for the past quarters we've been talking about pricing discipline. We think in the infrastructure space we are among the leaders of pricing discipline. you know, data yield remain, you know, relatively low, but what we provide to the industry is actually something very efficient, you know, compared to where people would, you know, go out of pocket, you know, spend their own capital to build towers and fiber. We believe we provide the value for money when it comes to their network enhancement or network expansion. So we think with competition becoming more healthier, and I think I invite everybody on this call to together monitor this, whether 4G and 5G monetization is improving going forward here. We see several signs of improvement, but hopefully for Indonesians, give that the unique position as the fourth largest country in the world. So we think we should be monetizing this position better for everyone for the telcos for the fiber users for the internet service providers you know and then provide better revenue mix better revenue growth and then better opex allowance that would work well for our ability to provide services and infrastructure second the continued acceleration of economic digitalization uh we are hearing you know because of the war you know, the government is, you know, requiring one day of a week that, you know, ISN, you know, the state apparatus to work from home or from anywhere, right? So that would drive further digitalization, similar to what we saw in COVID, right? Yes. So I think there is an increase of dependencies of people using internet, you know, wherever they are, mobile or wired internet. So data traffic is shown to be growing robustly over the years, like WG Tager. And we expect this momentum to continue. And then the potential rollout of 5G will further support this trend. I think just as a matter of personal observation, before Lebaran, I experienced very bad 5G. But now after coming down, spending holiday for two weeks, I noticed that 5G in Jakarta is getting better. So I think That shows that better penetration of infrastructure in places like Jakarta even would still require more investment and will be there for people who ever need infrastructure in many forms. Number three, Indonesia is still in the early stages of AI and cloud technology, which will drive up, will further increase data traffic and the demand for enhanced connectivity. We expect, you know, further traffic growth, and then there will be requirement for data centers, fiber optic, and power generations. We have E40 energy. We have also several other functions under E40 that Bahadur can surely add some more on later on during this call. And then number four, you know, operators continue to adopt a satellite financial strategies for towers, fiber optic networks, provision of clean and renewable energy. I think we see this trend to continue. I think the requirement, for instance, you know, they require more dividends out of telcos, right? That means, you know, capacity for sale should remain low and whatever existing infrastructure should be used more optimistically, you know, going forward. So that's what we see during 2025 and should hopefully continue until 2026 and future years. So I'm going to move, Pak Hartono, if you want to add something.

Yeah, I think Padang is already well summarized by you. Maybe you can see the highlights and the financial unless there is any discussion.

Yeah. So I'm going to go through the presentation for the fourth quarter full year audited. So people can see and then we can discuss together. And then So we have 36,000 hours as of last December. For those of you who have not seen or have not gone through this presentation, we have more than 170,000 fiber optic network. as of December, we still remain, you know, maintain a large percentage of our business model and the built-to-suit model for towers and fiber with long-term predictable cash flows. We maintain investment grade ratings with S&P, even though there was a change in the sovereign rating for Indonesia, but for us, we're still like, you know, with S&P triple B minus. And with Fitch, we have a stable outlook and no change in the sovereign ceiling so far with Fitch. And then for return on investment, 8.3%. Return on equity, 16%. Stock is included in many of these indices still. ESG footprint with IDX. And then we have a MSCI ESG rating maintained at single A. Sustainalytics scored us 24.2%. S&P 40. So that's what we have achieved so far when it comes to ESG profile during 2026, 2025 and others. And then I think for number one, capital management, I think we discuss this every week as a management team. Access to low cost of funding is discussed all the time. We want to be sure that we have the best cost of capital in the country, but the banking sector is pretty much liquid. So liquidity amounts was 1.3 billion dollar equivalent in rupiah mostly. You know, given banks are also having trouble to find other businesses that is as stable as ours. And then, you know, low risk business with digital infrastructure business, high demand, difficult to replace, as we have exhibited with Excel and SmartFriend merger. So, and then proven possibility of long-term irrevocable contracts. ESG conscious company, even smaller carbon footprint, I can say. We just discussed with many of our clients and we have been able to basically make the clients pay for their own electricity. So that should improve further our ESG profile in our tower business. now number four box number four the telecom space has come down to three players basically during 2025 as we all know with the most recent merger excel and smart friend and then you know opportunities for acquisition still exist we can discuss more later about this and then you know valuation today is um we have a annual free cash flow that funds capex dividend and share buybacks and we have been successfully consolidating assets that we see as a creative to the business EBITDA and IFFO CAGR 11.4% and 8.5%, ROE 2025 of 16% using the most recent numbers. What we intend to do is continue to invest our strong free cash flows using low cost of capital whenever we need to borrow. And then, you know, Indonesia is still at the start of 5G, if I may say. because we haven't heard anything when it comes to what is the timeline for 5G spectrum option. So we still think, you know, largely Indonesia is a 4G country. Penetration for towers is also still pretty much low. So I think, you know, for Indonesia, for the continuation of the trajectory is a matter of time. because the consolidation has happened. We've been in the business for almost 20 years and then, you know, for the longest time we can remember we were operating with more than 10 at the start of the business and now we have three total players. All intended are very eager to basically monetize whatever they have spent in 4G and 5G so far. So, and then prepare for new opportunities. I think, Hartono, you can add more later on. Obviously, for C, number one, you know, expanding product offering. I think for the past quarters, we mentioned about managed services, power as a service, and we now have come into green energy provision for our clients. And then, you know, strategy is driven by evolving customer needs, obviously. With high energy prices like now, it should be interesting for people to look into green energy, right, Harpono? Because we saw a panel, for instance, It's a matter of where we can find suitable property for us to invest in solar panels and then provide our clients and other types of customers, not only Telcos, with green energy going forward. Fixed mobile convergence is also there. We can talk about what we see for 2026. And 5G obviously represent another set of opportunities. So I'm going to skip this slide number five. So now slide number six, we have 36,000 towers, 247. I think I can say this number reflect majority if almost all of Indosat and Hutchinson relocation have been fulfilled. We have some carry over into 2026. So we expect a number of towers to increase for 2026 because of completion of Indosat Hutchinson relocation towers. probably in the hundreds, no longer in the thousands. When we spoke firstly about this, we still have about 1,400 to be completed during 2025. We should be about 400 by now that we should conclude to basically finalize the towers that we built for IOH relocations. So the location of the towers mostly in Java, Bali, NTT, and TB. Sumatra, approximately about, you know, 8,200. Kalimantan, 3,000. Maluku, Papua still, you know, with the lowest number of towers given density. So obviously we see this increase approaching that of Kalimantan is quite interesting because of the economic activity in that area, especially mining and then plantations. And then our towers on our fiber, where we have our fiber, you see the difference between revenue generating FTTP is basically where we charge our customers. And then FTTP kilometer pole is the kilometer of physical cable that we own under FTTP category. So as you can see, Java utilization is high, Sumatra is high. Balil Nusra, you know, is also high, you know, and in Kalimantan is lower, so the waste is a bit lower. You know, it's a function of density, basically, where we see our customers need fiber to the power as a means of data transport because of data traffic is increasing in those areas. And then, you know, our built by return strategy, we invest in built-to-suit towers. So in the form of, you know, various contracts, mostly for 2025 is relocations and then expand fiber optic network, FTTH, and then more slower growth in FTTH. FTTH, we expect to grow quite interesting. But, you know, when we say we have fiber, we can also use it for other types of business, such as connectivity. And then during 2012 months, we added 847 towers. So that's short of a couple of hundred towers that we need to conclude for Indosat Hutchinson. And then 6,789 kilometers of rapid new genetic fiber. We added 9,000 activations. We added 89,000 home connects and then 31,000 31,000 home passes, so very good execution on the HomeConnect side. Return that, you know, we mostly basically focus on protecting investment grade ratings, and then, you know, we maintain investment grade ratings. We distributed dividend 1.2 trillion during 2025, yeah, based on past partners' results. So diverse product portfolio. So we have 36,000 towers and 60,500 tenants as of December. Tenancy ratio 1.67. 53% of towers located in Java. Just in third quarter, I think this number is 52%, but we added towers more in Java. So that's also an interesting trend. Ending the quarter with 53% of towers located in Java. And then MNOs have a growing need for additional scope. And then fiber to the tower, we, you know, basically it's a function of our service to mobile network operators. So we have 22,400, 2,000, 2,024,000 kilometers of revenue generating by end of December. Network focus is to support surging data traffic. So if the traffic continues to increase, we are hopeful towers and fiber-3 tower to be more correlated to that situation. And then we continue to basically provide the FTTT leases under long-term contracts, non-cancellable contracts. and opportunity for higher utilizations with other fiber solutions for our customers, namely, you know, connectivity business. To the right, you know, we saw very nice growth in our connectivity business. Now it's over 25,000 activations. I think this number used to be below 20,000 by December 2024. So a very good growth in the connectivity side. FTTH also saw, you know, penetration reaching 14%. I think this number last quarter, third quarter, I mean, was about 12%. And now going into where we spend our money. In 2025, as you can see, the amount of towers for non-towers, capex for non-towers, is approaching that of towers. And then, you know, for towers, tenancy ratios, 1.67, you know, slightly higher than 2024. because we basically restructured some reseller contracts to become directly to our towers so we see in the past we did not count reseller as part of Tennessee ratios but with reseller being directly into our towers as part of the excel smartphone merger so Tennessee ratio can go up And then for fiber to the tower, I think we see impact of mergers. So a big decline to 1.79 from previous year, 1.84, but still at a very high utilization ratio, approaching 1.8. And now, our track record of consistent growth, we see Towers is aging a bit in terms of tenants. As you can see, the darker blue chart there. And then with Towers, you know, start to grow again after years of stagnant, you know, performance because of the years of indoor-side merger. And then, as you can see here, we were very busy with, you know, everybody is busy actually, hours and tenancies, how to manage. you know, 36,000 towers, the locations, you know, making sure we are basically getting what is our right under the context for towers and fiber has been the theme of 2025. That's why you saw, you know, 2025, a growth of 4% revenue. Basically, you know, we look back at what we have you know in past contracts and then we basically did a very thorough very diligent review of what we have in under our existing contracts with all of our customers and then there from there we take it that you know we can charge some money we can get away from certain penalties um you know even though the theme of 2024 2025 was mostly serving for ioh um relocations for towers here but we have been able to book higher revenue because of those very strict practices by management and then for fiber to the tower um the revenue generating revenue increased by a little bit um about three percent there so so seven thousand kilometers compared to 2024 and the number of activations under connectivity actually grow very fast, very quickly, you know, that's almost 9,000 activations during the course of one year, because we have been very aggressively utilizing our existing fiber. We opened up new places where we can reach closer to our customers with new offices here at Baha'u'llah. And then, you know, use our existing fiber as much as we can, work together with our We have many new names like Farnion in the past year. We have Romala, you know, basically helping us utilize our fiber and work together to identify a new location as opposed to working separately in the same market. Strong financial performance, you know, you see the towers have been quite stable. Actually, we each up a bit to 8.7 trillion. And then for the yellow bar, which is the non-tower, we actually increased almost 10% there. Cager. 7% for tower, the non-tower is almost 40%. If you look at the EBITDA growth, CAGR 11.5%, IFFO 10.6%. So actually, given still high interest rate environment, if I may say, during 2025, even though we were among the lowest cost provider when it comes to borrowing costs, We're still seeing FFO growing slower than EBITDA because of high interest rates environment in 2025. There were hopes actually in the market. I think as we all know everyone that there was a hope that for rate cut during the year, but it was not sufficient to make the FFO grow as much as we grew EBITDA during 2025. And then, you know, leverage 3.74 on this page, talking about our balance sheet. During the year, we paid down about 7 trillion. The money from price issue came in 5.5. So we paid more than what we received in rate price issue money, 5.5. So we paid down 1.5 more than from our own operations. um so leverage came down to 3.74 interest coverage ratio 3.9 and you know uh borrowing costs at the end of 2026 and 2025 was 6.0 percent if you remember this number used to be 6.5 at the start of 2025 so we cut down to 6.0 percent we i think we see um a very close resemblance of what we saw in policy rate cut in indonesia by bang indonesia um so we you know we use we you know utilize uh different types of borrowing structures going into the bond market going into the money market um you know with the banks um you know going into different types of structure Even though I don't remember seeing going into foreign exchange transactions during 2025, because Rupiah was so interesting to borrow in rather than going into Forex market and then hedge it back to Rupiah. So we use mostly Rupiah during 2025, basically. And then corporate ratings remain BBB minus with S&P, Fitch AAA, and then Fitch Global BBB threat. This is a summarized profit and loss. So I think when it comes to performance of the company, revenues, gross income, EBITDA, I think we have been exhibiting a very good performance, given where our competition is when it comes to this kind of metrics. Net income margins, 27%. I've been getting questions about tax expense. I can say it's rather difficult to project when it comes to tax expense, given different policies, you know, during different times of, say, finance ministers, financing strategy. So, we see, you know, very difficult, you know, to forecast tax expense, but we do whenever we see we paid more in certain years, like in 2024, wherever we no longer pay in 2025, so that should better reflect what we think is the taxation for the year, for instance. And then the financial position, I think these are, we have discussed in previous slides when it comes to our balance sheet, And then this is our cash flows beginning balance 940. We have basically adopted more stringent cash management policies starting 2023 basically. Whenever we have excess cash, we used to pay down debt, you know, or maybe make some down payments for future CapEx where we see more efficient to do it that way. That's why you see cash management is very stringent. Correction comes to almost 15 trillion. And then CapEx plus OpEx is almost 9 trillion. Interest expense is 2.788, which is marked below the run rate before, which is 2.9. And then cash surplus from operation, 4.1. Business acquisition is smallish, 579. And then right issue money, 5.5 trillion that I mentioned. And then loan proceed, you know, we paid down basically 7.2. So we paid more than we received in right issue money. And then we paid dividend 1.2. So ending the cash with 650 billion by end of December 2025. And then going to, you know, quarter by quarter analysis, 10%. year on year or as well as quarter over quarter. Basically, connectivity is the brightest spot that we have discussed with people before. The non-power segment under connectivity is the brightest spot for the company. We see consolidation playing a big impact on our power operations. But I think what we have also experienced that if we look hard and then work diligent enough that we are able to basically collect better what we should be able to collect from our businesses. And EBITDA, you know, 6.7% year on year and then 8.5% growth quarter of a quarter. And then net income attributable to parent, you know, 24% Q on Q increase, and then 26% year on year. Revenue analysis, 2.4, just by segment. And then the fiber to the tower, 10%. Connectivity, 4%. And then FTTH, 21%. And then total, we increased the business with 4.6%. Summary operational data, we have increased the number of towers 847, and then tenants increased by 2,500 because of the reseller becoming direct tenancy to our towers. Pivot to the tower, 6,700 increased kilometers, 3.1%. Creativity increased volume by 53% year-on-year. And then FDTH increased 53% because of past contracts that we delivered during 2025. Going into slide 23, this is very much relevant. What we have been able to finance, the sources that we finance out of the company is using mostly Rupiah. during 2025, and then exploration profile is looking like this. So we have very much, you know, we are preparing for a new bond offering, you know, to replace our 2024 TEUBE facility. It's in the works right now. And then we have maturing U.S.T. loan in 2027. But the maturing debt in U.S.T. have all been hedged with affects 15,000, respectively. While we are on this slide, I received a question whether we would get a forex gain or forex loss if rupiah continues to depreciate. For instance, today it's past $17,000 to the dollar. I think our response to that is that, you know, we do not have hedge accounting, which means there is not direct correlations between certain depreciation in rupiah with our P&L or appreciation in rupiah into our P&L. So only by the time we basically pay down the debt and we enjoy a positive mark to market, by the time we pay, then you see a positive result in that moment, in that quarter, for instance, when we pay down the safe debt. So assuming, for instance, in 2027, Rupiah maintained at 17,000 or 18,000 for this matter, so we should be able to achieve a positive up-to-market when we pay down the debt in the USD on this chart, the red one, $130 million notional amount. So hopefully the analyst or the listener who asked me the question is on this call, so he or she can basically get this response directly from us. Okay, Nico, I think that's all we have.

Yeah, so... Yeah, the 2025, despite of the challenge, the merger on the Indosat with Hatch and also Excel with SmartFriend. So we... still able to print the good result from the revenue, EBITDA, net income. This we achieve through several initiatives within our group, mainly synergy and then we, like Pak Adam said, that we carefully Looking at every line of the expenses, which one that we can optimize or synergize. So I think that's the additional comment from me.

Yeah, so it's a very meticulous exercise. There is not one particular area of the company that we can say as, you know, when it comes to this exercise that was saying that, okay, towers or non-towers, I think we really, we look at everything that we have in the company. So given The storm, you know, the busyness of mergers are behind us. So we use the opportunity to basically relook at what we have in various contracts. And this is the result we see for 2025 book that have been audited by Arsene Young. So now I think both of us have concluded. Nico, now coming back to you.

Okay, thank you for your insightful presentation. Now we are open for the Q&A session. If you have a question, please raise your hand so we can unmute you or write down your question in the chat box below. Please state your name and institution as well. To start with, we have a question from Sabrina. Sabrina, please unmute yourself.

Hi Nico, thanks for the opportunity and hi Pak Adam and Pak Hartono. Congrats on the good set of results. Only two questions from me. So the first one is, we actually noticed a meaningful Q&Q increase in the revenue from Excel smart contracts. Could you share with us more colors on the nature of these deals and what is actually driving the growth? And the second one is, as interest rates are likely to remain elevated for longer, how does the company plan to actually manage or balance its financing costs with ongoing organic expansion, despite we have seen some efforts of deleveraging and folio 25? Thank you, Pat.

So we, like we said, we really look at what we have. So several of the collections were actually taking place in 4Q, and then some additional run rate revenue also incurred during 2010. last quarter, fourth quarter. So I think going into 2026, we expect, given we are now, we'll be working very hard with Excel and SmartFriend to successfully create value for the merger. So we see us working more on the non-courses. Because they will need some restructuring on the non-tower side. So coming back to this question, so we expect for towers, again, before seeing some more upside, so we see towers to remain flat for now. And then we see additional incremental from the non-towers, which is fiber to the tower as required by Excel SmartFriend. And then we expect to see some increase in penetration rates, as well as some additional home passes business that we see during 2026. So this is also concludes discussion about what we see for 2026 here. so overall i think for you know for towers uh non-towers combined we see you know the company to book uh basically um low single digit revenue growth and then um ebita also and then net profit before we see additional upside. Because when we were discussing this, this was back when we prepared what we see for 2026. That was sometime in January, December times. So we are hopeful that we can update the market um what we see for the remainder of the year when we release our newer quarterly results because um we see a lot of noise right now at the moment when it comes to what we see as the outlook for 2026 i think the requirement of merging parties is actually like we saw in ioha so they see they want to see efficient use of assets efficient use of releases on whatever they want, right? But, you know, since I sell SmartFriend, it's focused also on 5G. So we see the need of 5G to be higher at this stage. Does that make sense, Sabrina?

Okay, I understand. And what about on the interest rates?

Yeah, on the interest rates, I just had coffee with banks. They also have problems lending. to various sectors in the country, even elevated oil prices recently, which did not come into our picture when we prepare our budget. So we think the bond market may see some movement, but the banks are not that facing easy times themselves to lend. So we expect the banks to remain liquid, in other words. This answer may come to you differently if you ask me before the war, frankly speaking. But just talking to the banks, when they need to find good credit quality borrower to lend to, they have problems because everything has gone up in price, inflation. And then, you know, that's why you see, you know, equity prices come down because people expect inflation to be high. And then even though we have taken out a lot of the risks from our balance sheet, like for instance, the fuel cost I mentioned in the first 10 minutes of our call, but again, the customers that have to bear those fuel costs, transportation costs, will face difficult times here themselves. Frankly speaking, we have not taken into account a very significant rate cut in our projection. Some cut, but not so much. So we see we have some buffers there. Yeah. Yeah? Yeah. So, for instance, around 2023, we were 6.1%. And in 2024, average cost 6.2%. 2025 is 6%, like we just presented to you. In 2026, we are hopeful we don't have to go, you know, fix something longer dated, you know, given liquidity is still abundant in the marketplace, in the bank's market, you know, especially. Does that make sense, Sabrina? In other words, I don't have an answer right now because, you know, during the last board meeting, we were not discussing about borrowing more. You know, we are pretty much well-funded at this stage. And then we only have to talk about new interest rate with banks when it comes to the need of, say, $5 trillion or $10 trillion of new facility with banks. Does that make sense? And VI rate has remained stable, 4.75, Sabrina. In other words, this quarter, maybe we don't see the impact yet of increased rates so much because of the war. The war only started at the beginning of March.

Okay, so it will be pretty much at the same rate from Fort Q, right? Probably slightly higher.

Probably slightly higher, yeah. Which means if it goes higher than what we saw in December 2025 or 6%, so that means the management has to work harder to find savings elsewhere. Yeah.

Okay, thanks, but I think maybe one last question. Can you share how many kilometers of fiber connectivity services were actually added or deployed in 4Q?

In 4Q, didn't you see in our presentation slide?

I think it was in there.

Operation numbers.

So, Sabrina, for the connectivity, the matrix that we use is not the length of the cable. Yeah. but actually the connection, the activation of the patients. So that's a metric for connectivity because different with ICTT, which is we build the customer by kilometer per month. But for connectivity is regardless how long the cable is, I think we charge them actually on the bandwidth, the dedicated bandwidth that we provide to them. So the measurement is not using the kilometer for the connectivity. Yes.

Oh, okay. Thank you. Yeah, because I was seeing the numbers on the slides for third queue, but it seems to be not there anymore for fourth queue. So that's why.

Oh, you mean the fiber run? You mean the fiber physical cable? Yeah. It's in slide seven. Everything is together. You just have to basically take out the FTPT. And then, you know, everything is in there. We just decided not to, you know, be too detailed about that one for the fiber assets.

Okay. I'll come back to the slide. Thank you, Pak.

Yeah.

Okay. Thank you, Sabrina, for the question. I would like to ask the next question. I think we all recognize that the 2025 result was partly driven by the tax. Can you please quantify normalized full-year 2025 earnings if we take out the tax expense volatility and what would be the effective tax rate that we should assume for 2026?

I think that's difficult, because when we see, say, for instance, in 2024, if you look at slide number 16, in 2024, there was a higher tax payment because of different opinions between our management and then tax office in 2024. So there was a slightly higher tax payment back then and then whatever we paid and then we just decided to expand it in that particular year. So 2025, you know, the numbers can increase, but, you know, to say whether this is a run rate, it's very difficult for us. It's a new tax system, for instance, core tax, right? So there could be different interpretations still about where, you know, the tax offices, the tax expense should be. It's an ongoing process, Nikul, just now. So I think I'm hearing if it's, you know, right now it's, I think, quite normalized tax rate, but no guarantee about that because of, you know, there's always a possibility of different tax opinion between us and tax office.

Okay, Pak. Thank you for the next question. Aurel, please go ahead and unmute yourself. Sorry.

Yes, thank you, Nicole. And hi, Pak Adam. I have three questions, Pak. My first question is regarding your reseller revenue conversion to direct revenue, Pak. Can you please explain more about this conversion and was this related to the XLS revenue growth?

Mostly, yes. Mostly, yes. So, you know, IBST was a reseller, but the tower was belonging to somebody else.

Okay, and the conversion, is it going to be one-off in the fourth queue or are we seeing for the conversion path?

No, not anymore. Not so much. So next year, 2026, I think we expect to see some increase in tenancy ratios because of Indosat start to, and then TACOMSET also start to basically expand. And then their past, especially with IO Asia, they no longer have, you know, relocation rights. So whenever they need new sites, it's going to be new code. in 2026. Okay, so a slight increase, not like a jump, but a slight increase. Under our base case, there's still a bit of an increase in tenancy ratios.

Okay, so the conversion is actually related to the IBSD contract previously, apa?

In 4Q, yes. Okay. And don't forget, yeah, when we say revenue would be a bit flat in 2026, it's excluding potential, you know, consolidation of subsidiaries or acquisition of additional shares of a subsidiary, you know. So, you know, because some of the transaction is related to corporate actions that have not been disclosed yet.

Okay. And can you please share the CAPEX guidance for 26, Pak?

Yeah, CAPEX should be around 5 trillion.

Okay, and can you share the allocation for?

Should be similar with what you saw in full year 2025 when it comes to split. Because we still have to, we expect to build new towers also for XLS, but not as in the tune of IOH relocations. So XLS, I think the required relocations is about 8,000 locations. But then a lot of that will be on existing towers.

Okay. And how many are supposed to be in the BTS form, Pak?

About 1,000.

Oh, only 1,000.

Yeah.

Okay, and the 5 trillion key parts already covering for that thousand development?

Yes, yes.

Okay, and my last question is on the potential upside from the FWA deployment. Can you share the color on that and the timing? Thank you.

um so at the start of uh fasting it was uh below 100 but now we see uh that number comes to about 400 uh coming from fwa collocations oh uh that's already being realized or that's for that's in the in the works to be realized you should be able to see some in our first quarter results i see and uh that's for the full year or only for the first cube only for the first key

Okay, and can you share what's the potential in the full year, Pak?

Nothing that we have received as final number in our management meetings yet. So they come in the batch of hundreds. Maybe if we talk again in one month, I'll be able to share more numbers with you.

Okay, and my last question is following up to that. So the low single-digit growth, Is that already including the FYR upside? Yes.

That's why you see the unexpected increase in tenant share ratios for 2026.

Okay, okay.

I mean, we assume always possibility of, you know, not too strong wireless market, you know, churn, you know, stuff like that. So, we can't always assume a positive net gain in tenancy ratios, you know, unless we see something different, materially different. So, we can be cautious in our assumptions.

Okay, thank you, Pak.

Yeah. Thank you, Aurel, for the question. Next, I will read out the question in the chat box from Tundi. Was there an increase in average tower rental rate in 4Q 2025? What was the reason behind this? Thank you.

Oh, yeah, that's a function of what Fahartana was saying, that we really look at what we have in ability to charge our customers, like, you know, occupancy of tower space that we have. originally stipulated in an original contract, and then they end up occupying with more equipment. So that's why, you know, you saw average lease going up. But what we see is that, you know, base rent, I think we're pretty much quite stable. I don't have the number with me right now, but should be around 12 million something in average lease rate for all leases, including collocations.

Okay, thank you, Junti, for the question. Thank you, Mark, for the color. Next, I will take a question in the chat box from Selfie. Wi-Fi and MyRepublic are expanding to fix wireless access. Will TYR become the tower partner for their FWR services? Yes. Yes. Okay.

I think we already answered that in the immediately previous question from Sabrina, I think.

Yeah. Oh, sorry.

Sorry. Yeah, and could you please give color on the revenue expectation and EBITDA margin? Thank you. We mentioned about what we see in 2026.

We have devised a budget for 2026 under which management will be operating. So I think, you know, still a single-digit kind of revenue growth. Similarly, with EBITDA, again, the major driver for growth is connectivity, as Fahad Panaj mentioned, because we see opportunities to basically cover more market under connectivity, under our own discretion. We are hearing off and on.

uh mobile wireless operators being hesitant about spending capex so that's why we think you know um 2026 will still be the better sport is from connectivity yes still uh connectivity connectivity is we feel that there's still a a room for quite an improvement uh utilizing uh the kilometer fiber print layout that we have across indonesia And also we see that the needs for the internet is increasing from year to year. So we see that connectivity especially will book quite a growth.

And then the growth from that connectivity, very strong growth from connectivity will lift. the overall performance for 2026.

Okay, thank you, Pak. Next, we will take a question from Eta, and then we will take one last question as we approach the end of the call today. From Eta, Pak, what is the pricing plan for power and fiber? What is the sustainable level in the industry? And then what is the typical power required in 5G?

I don't know. Answer for the fiber. For the pricing for the fiber is related to the FTTT, I think it's already bottom. I think we don't see any further decrease on that. For the connectivity, yes, we see that it's very natural the price will go down every year. however what we do is we don't we try to maintain the price uh instead of lowering the price we give them more bandwidth so the revenue is still remain the same yeah so that's our strategy for the fiber yeah yeah well i think for for towers i think um

Like, for instance, the new possibility of bigger volume with FWA. I think, you know, again, what I mentioned during the first five minutes is that what we've been trying to do is that, you know, same with fiber, with towers also. Rather than these guys, whoever wants to expand the network or improve the network, rather than them go out of pocket to build new infrastructure, using other people or their own capital i think we have the you know the flexibility of very efficient capex and opex outlay on a per unit basis uh i mentioned this several times i'm going to mention again for instance the number of people operating under towers even though it was we were 15 000 towers or 20 000 towers which they had come on the tower still 900 people more or less um so that provide a very high um you know tower count per uh per head count that we have under towers for fiber i think you know the same thing we if we reach certain scale we we've reached a certain scale with fiber optics um you know very good um margins um you know that we think we should be able to um outperform the competition Not to mention, we have also very good access to capital, as you can see in our performance. What we want to avoid is going out there and then try to propose a new business proposal. And then the pricing is off, meaning it's just too expensive or what we want to be able to provide is you know, earn the business by providing something very efficient. So if they do their own calculations, it's just better off to just lease. And that goes for collocation as well. So based on that, and we've been saying this for the many, many quarters already, pricing has been quite stable, you know. So I think, you know, about 12 million, for instance, for Taurus. So that's what we think, you know, should be the main focus of management going forward.

Okay. Thank you. And for our last question today from Andres Yantoro. Hi, Pak. Previously, you talked about acquisition opportunity. Can you give more details on that? Thank you.

Yeah. Nothing I can share actually. But, you know, you see some assets still left to be consolidated. you know, we will look at those opportunities very carefully. At this stage, frankly speaking, we are looking at something very strategic, you know, where we can enhance value to the whole franchise. We own several subsidiaries. And then, you know, I think one transaction is pending to conclude in second queue, but not much that we can say at this stage. So when we say revenue growth, it's not including transactions like that.

Awesome. Before we end the call today, do you have any closing remarks? Yeah.

So hopefully all of you will be able to see more of us, Fahartor and myself, talking about the business. It's just a matter of five weeks and the whole world is different because of the war. Right now, fortunately, we don't have a funding need that really necessitates us to basically discuss a new term sheet. Fortunately, Bank Indonesia did not increase BI rates, so that reflects the banking system liquidity. We also price a lot of our loans based on that policy rate, BI rate. with banks, the biggest banks in Indonesia also included, state banks, commercial banks, and still we have very much liquidity offering coming our way from financial markets, including banks. So I think we are in a good position if we are to launch a bond, for instance, because we don't have a financing need that is necessary for us to borrow at a much higher borrowing cost at this stage. I think this answer to Sabrina's question. I think for us, we are optimistically looking at where our customers are heading. Hopefully this work doesn't cause any more concern than what we already see in our other type of business in our daily lives.

Thank you, Nico. Great. We come to the end part of this session. On behalf of Bahana Sekuritas, I would like to thank you, Pak Hortono, Pak Adam, for the informative and interesting talk that we had today. And congratulations as well on your impressive results. And I would like to thank you, the audience, for your participation. We hope this presentation is beneficial for everyone. Thank you and see you in our next event. Thank you. Thank you, everyone.

Thank you, Nico. Thank you. Bye. Bye. Bye. Thank you. Bye.