Earnings call transcript: True Corp revises guidance in Q2 2025

True Corporation (TRUE) held its earnings call for the second quarter of 2025, revealing a modest improvement in service revenues and strategic updates amid challenging market conditions. The company, currently valued at $141 million in market capitalization, has seen its stock decline over 56% year-to-date. Despite the positive market reaction to earnings with a 0.92% uptick, True Corp revised its full-year service revenue growth guidance downward, citing macroeconomic challenges. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations, with analysts maintaining a moderate buy consensus.

Key Takeaways

• Service revenues increased by 1% year-on-year to THB 41.4 billion.
• EBITDA remained flat at THB 25 billion.
• Revised full-year service revenue growth guidance from 2-3% to 0-1%.
• Stock price increased by 0.92% post-earnings call.
• Successful spectrum auction and network modernization efforts highlighted.

Company Performance

True Corp reported a slight increase in service revenues, driven by a 5.6% improvement in blended average revenue per user (ARPU). The company achieved revenue of $179.36 million in the last twelve months, with an impressive gross profit margin of 82.72%. However, total revenue saw a decline due to seasonally lower product sales. The company’s focus on network modernization and digital servicing has positioned it well in the competitive telecommunications landscape, despite the challenging macroeconomic environment in Thailand. InvestingPro subscribers can access 10+ additional key metrics and insights about TRUE’s financial performance.

Financial Highlights

• Service revenues: THB 41.4 billion, up 1% year-on-year.
• EBITDA: THB 25 billion, remained flat.
• Normalized profit: THB 4.2 billion.
• Blended ARPU improved by 5.6% year-on-year.

Outlook & Guidance

True Corp revised its full-year service revenue growth guidance to a range of 0-1%, down from the previous 2-3%. EBITDA growth guidance was also adjusted to 7-8% from 8-10%. While current EBITDA stands at -$33.66 million, analysts remain optimistic, with price targets ranging from $1.50 to $3.25. The company aims for a long-term EBITDA margin target of 67% by 2027 and plans to reduce CapEx intensity to 13-14% by the same year. An interim dividend, exceeding 50% of net profit, is planned. For detailed analysis and comprehensive financial metrics, investors can access the full Pro Research Report on InvestingPro.

Executive Commentary

Group CEO Kun Sigve highlighted the company’s unique spectrum portfolio, stating, "This is going to strengthen our competitive edge going forward." CFO Kun Nakul emphasized the company’s commitment to long-term transformation, noting, "Our long term guidance of the company remains unchanged."

Risks and Challenges

• Macroeconomic pressures in Thailand, including a downward GDP forecast and declining tourism.
• Political instability due to border conflicts between Thailand and Cambodia.
• Potential impact of reduced gross additions and subscriber losses on revenue.

Q&A

During the earnings call, analysts inquired about the recent network outage, which was attributed to a power switch center failure. Questions also focused on B2B growth potential and subscriber losses, with management committing to operational efficiency and cost discipline as key priorities.

True Corp continues to navigate a complex operating environment, leveraging its strategic initiatives and spectrum assets to maintain its competitive position. The company’s revised guidance reflects a cautious approach amid ongoing economic uncertainties.

Full transcript - True Corporation PCL (TRUE) Q2 2025:

Noreen, Head of Investor Relations, True Corporation: Good morning, everyone. Welcome to True Corporation’s Earnings Disclosure for the 2025. My name is Noreen. I’m the Head of Investor Relations. With me today, Group CEO, Kun Sigve and our Co CFO, Kun Nakul.

We also have with us today a few of our analysts in the room. For Q and A, we will be taking the questions from the room first before we move on to the questions on Zoom. To ask questions on Zoom, please raise your hand or you can put your questions in the chat box. I would now like to invite Kun Sigve to start the presentation.

Kun Sigve, Group CEO, True Corporation: You, Corinne, and good morning to everyone. Sort of to our Thai audience. And it’s good to see some analysts in the room, and also good morning to all of you that are online. I’m also, together with the team, going on a roadshow later, then I will meet more of you. So I will start with some of the strategic and operational updates.

And then as usual, I hand over to Nathal to go through the financials. Let me start with this slide, the key four key highlights. Starting with the spectrum auction. As you know, we had a spectrum auction on the June 29, where four spectrum bands were awarded to two qualified bidders. And I will come back to what that means, but I’m very pleased, I can say already, that we secured 70 megahertz on the 2.3 megahertz band and 20 megahertz on the 1,500 band.

I also need to mention the unfortunate network outage that we had in the quarter, and it did impact our top line performance for the quarter. It happened on the May 22, where we faced a power outage in one of the main switches, which led to disruption of voice and data services nationwide. It was very unfortunate, and it was also unprecedented. But I want to confirm that it had nothing to do with the ongoing network consolidation. We have now done a thorough risk assessment and analysis of the incident, including a review of suppliers and mitigation activities have been implemented.

In the point below there, speaking about the normalization effects. Compared to the first half of this year, we see an intensifying macroeconomic challenge in Thailand. The GDP forecast is down. Tourism has declined beyond the expectations we had when the year started, which has then also impacted several business segments. And of course, the quite recent escalation of the border conflict between Thailand and Cambodia has led to further political instability and further concerns about the second half of this year.

However, as said on this slide, when we are normalizing for the impact of the network outage and also normalizing for a lower NT domestic roaming revenues, our service revenues and EBITDA remains stable. All these factors combined, the macro and the business performance, we have decided to revise our guidance for the full year of 2025. And Akul will talk more about that in details. Last but not least, we have an ongoing growth focused transformation. And as always said also said in the first quarter, our overall strategic ambition remained unchanged.

The focus for the first two years have been to after amalgamation has been on the integration and takeout costs. Now we are embarking on a more holistic long term transformation program. This, you can expect, will give results on both revenue growth and cost efficiencies in the quarters and the years to come. The transformation agenda will be focused on three key areas: it’s customer experience, organizational transformation and expanding the digital portfolio while, at the same time, protecting our core. Let me then go a little bit deeper on the spectrum.

As I said, I’m very pleased with the successful spectrum auction. We acquired 70 megahertz of 2.3 spectrum for NOK 21,800,000,000.0, and we also acquired 20 megahertz of the 1,500 megahertz spectrum band, costing us NOK 4,600,000,000.0. And we made a 50% deposit of NOK 13,200,000,000.0 on the July 29. And as of August 4, the licenses have been awarded to us, and we are now very satisfied with holding Thailand’s leading spectrum portfolio. And you see that on this slide.

I will say, having been in this industry for quite a while, I will say that we now have a unique spectrum portfolio, where we have plenty of spectrum both in the high end, the middle band and also the low frequency bands. This is going to strengthen our competitive edge going forward. This spectrum portfolio, in combination with us now coming to an end of the modernization of the network, we have now modernized 18,005 sites in the third quarter. And our customers will see a direct benefit out of this, combined with the spectrum portfolio, of a 17% higher capacity on four gs from the additional 10 megahertz we got on 2.3, which also allows us to reform the 2.6 spectrum megahertz spectrum that we have, reform that to be used on five gs, which, again, can deliver 2.5x faster speed five gs speed. Despite the external factors, as I said, the top line stays stable and the profitability is sustained.

We have been through a quite tough quarter. It’s a lot of headwinds. Some of them due to external factors and some of them also due to the network incident that I talked about. But on a normalized basis, we are able to stabilize. And that’s what you see on these slides, where we have also showed you the normalized service revenue, EBITDA and also the net profit.

We reported service revenues of 41,400,000,000.0 for the quarter and normalized for the incident, the network incident. Our service revenues improved marginally from the first quarter and improved by approximately 1% year on year. On EBITDA, we reported NOK 25,000,000,000, which normalized, again, would have remained flat as compared with last quarter. Meanwhile, our profitability sustained its momentum with a normalized profit of NOK 4,200,000,000.0 in this quarter. I know that you have a lot of questions to bring in a slide on that.

Last year, the Thai Telkom, our assets, this doesn’t really make sense, 40,000,000 gross adds in a market that is fully penetrated. And there are basically very few new customers. So we took actions to put a stop to this because we saw most of those 40,000,000 gross adds being rotational churns driven by new promotions. We also needed to put a stop to distribution of channel incentives resulting in customers throwing away old SIMs and buying new ones just in order to earn higher commission in the distribution. On top of this, we also see that our customers don’t see a need for having both the True and Detach SIM anymore and can combine those two SIMs into one.

And as a consequence of these actions, we see a 48% reduction in gross adds and a 35% improvement in churn. And at the same time, we have saved 19% in commission costs. I think this was the right thing to do, But of course, it has hurt us in this transition period. Now we have a more solid customer base that we can use for base management and grow on top of that. Let me then move into transformation.

This is the same slide that I showed you in the last quarter. So a quick recap on what we talked about then as the driving forces for our transformation long term transformation journey is about customer experience, is about organizational transformation, is about protecting the core. Today, I will talk go a little bit deeper into customer experience and organizational We have done a massive consolidation of our two networks over the last two point five years since amalgamation. Now we have the most modern network in Thailand because not only we have merged two network into one, we have also used that opportunity to buy the latest network equipment. This single network project will not be completed during this quarter.

And as a result of this, we can already see a significant improvement in our download speed, especially in the Greater Bangkok area and also in the economic corridor in East. Going forward, our focus will be to constantly work on even more granular network experience when it comes to both coverage and speed. This also includes indoor data connectivity. The other thing we are focusing on is our shops. We are progressing on our omnichannel experience for all our customers.

One example of that. In March, we launched a one app for both D Tech and True customers. We now have app for the customers. We have app for the retailers. And those apps, are using to offload some of the manual services that you had to go to the shops or cold call centers in the past.

The plan here is to then take most of these services being served digitally. As a result of this, we already now, after some few months, see that we have moved 19% into a digital servicing, which means and it’s saving costs. Another example, as also mentioned on this screen, is the call center. We have taken a holistic approach to how we can serve our customer better through improved automation in the call center, but also to systematically address customer pain points. In the quarter, we see this is resulted actually in a 30% reduced wait time for our involved customers that are served by human agents.

The rest is being done digitally. Since the amalgamation and now turning to the organization. Since the amalgamation two point five years ago, we have reduced the workshop workforce with approximately 40% of our FTEs. We have a long term ambition of creating a significantly more efficient and future proof organization. What this means is to simplify the organizational structure, remove silos, flattening the organization with cutting down on layers, introducing automation of manual work but also to change the way of working.

The first step we did on this was when I took up the group CEO position back in March. The next step, we announced yesterday, and the new organization will be implemented from September 1. We have made a structural change in the senior leadership layer of the organization, simplified it, made it more focused and flatter to increase to enable increased empowerment and flatter execution. The new organization is designed to deliver strategic priorities, especially focused on growth areas in the B2B and the Home segment and the Broadband segment. At the same time, where we are looking at transformational enablers within technology, such as IT and AI.

Going forward, you can expect us to continue steps in our organizational efficiency and the modernization journey. So that was some of the strategic and operational updates. Then I hand over to Nakul.

Kun Nakul, CFO, True Corporation: Thank you so much, Kunsegwe. Good afternoon and good morning, good evening, everybody, who is on the call. Please allow me to walk you through the financial statements for the quarter. First, the key financial highlights. As Kunsegbeh mentioned, the service revenue is a negative 1.1% on a year on year basis and a negative 0.6% Q on Q, normalized for the network incident and also normalized for the decline in domestic roaming within NT, we have registered the growth Q on Q and year on year.

The EBITDA is a 2.6% growth on a year on year basis. Again, normalized for the incident, the growth would have been higher. And on a Q on Q basis, we are negative 1.2%, also would have been a growth if you were to normalize for the incident. We are proud to report the second consecutive quarter of reported profit of ZAR 2,000,000,000 and a normalized profit of about ZAR 4,200,000,000.0, which of course is normalized for the onetime effects that you are all aware of. The leverage continues to improve, a 0.7x improvement on a year on year basis and 0.1x on a quarter on quarter.

We have a leverage now of 4x as at Q2. Let me then walk you through the details of the top line, starting from the left to right. The service revenue declined 0.6% on a quarter on quarter basis. And like has been mentioned a couple of times before, is basically coming on account of the network incident. Normalized for the incident, we would have registered a growth both year on year and Q on Q.

If you see the details of the elements of the service revenue from Q2 ’twenty four to Q2 ’twenty five, even though there is a decline of 1.1%. And of course, if you were to normalize for the incident, the decline is basically on a reported basis coming on account of mobile and pay TV segments when the online business has shown a growth on a quarter on quarter and also on a year on year basis. If you look at the total revenues, the total revenue declined mainly because of seasonally lower product sales and the network rental revenue. And the network rental revenue, as you are aware, it’s going to go down gradually and eliminate completely beyond August 3 as we continue to migrate customers from eight fifty. There is a corresponding and even higher reduction in the cost as well, which is what I will show you in the OpEx slide.

So the net effect of this is positive for us. The product sales declined 21% Q on Q from seasonality. If I then go deeper into the mobile service revenues, like I had mentioned, normalized for the incident, we would have shown a growth of 1% on an year on year basis. If I look at from the right to the left, as you can see, the subscriber sorry, the ARPU development has been quite decent. The blended ARPU improved 5.6% on an year on year basis and 2.3% Q on Q to 02/19.

Postpaid ARPU declined marginally 0.2% Q on Q, that’s basically on account of the network incident, while prepaid ARPU improved 3.4% on a Q on Q basis. For the full year, the prepaid ARPU has actually shown an 11% increase, which is primarily the reason why the blended ARPU has also increased 5.6%. The subscribers, however, we’ve had a 2.6% decline in the subs, mainly from three reasons. Number one, the tourist inflow is lower in this quarter. Second, it’s because of the weaker macroeconomics.

And third is because of the network incident. The 5.8% decline in the subscribers is due to the focus of quality on subscribers that Kunzig Bay had explained and also the macroeconomic trends, which, as you all know, are weaker. Then if I go on to the online business, there is a 2.8% growth in online revenue, which is driven both by improved ARPU as well as by the subscribers. There is also a 1.7% growth in online revenues due to higher contribution from Consumer Broadband, a 0.3% improvement in ARPU and a 0.4% improvement on a Q on Q on a Q on Q basis and a growth in the subscribers as well. The ongoing improvement in subscribers and ARPU have resulted in the increase in the online revenues, and the numbers are for all of you to see.

As at the end of for the second quarter actually, now we have an ARPU of $5.26 baht from this business, which has improved 1.1% on an year on year basis and 0.3% Q on Q. Then I move on to the Pay TV. There is a decline of 12.5% year on year, which is mainly coming on account of the seasonal concerts. As you know, they are seasonal in nature. So sometimes there is an increase, sometimes there is a decline, which you can see from the numbers as well.

And as we all are aware, the linear TV business is under pressure, so the subscription revenue continues to marginally decline on a quarter on quarter basis. We report about 1,100,000 subscribers in the Pay TV business as at the end of 2025, which has shown a 12% decline year on year and a four percent Q on Q, very similar trends that we have seen in the previous quarters. Then moving on to the OpEx. There is an 8% year on year decline in OpEx coming from ongoing synergies, operational efficiencies and financial discipline. Let me walk you through each and every element in a little bit more detail.

The regulatory cost increased 11.4% year on year due to the change in full year effective rate pursuant to the expiry of the spectrum arrangement with NT. You would have seen a similar trend in Q1 as well, so that continues for Q2 and going to be the same in Q3 and Q4. The network costs, however, declined 7% on a year on year basis and 3.3% Q on Q, which is benefited by the reduction in the electricity tariff, which showed a marginal decline and also on account of the network modernization, where we continue to, actually modernize our network, reduce the number of towers and hence reduce the amount of consumption of electricity as well and including the operation and maintenance expenses. The cost of sales have decreased 4.2% year on year and 20% Q on Q. This is in tandem with the product sales.

Worthwhile to note that the subsidies that we give to the consumers is pretty much the same levels as you’ve seen previously. So the margin is more or less stable on a Q on Q, slightly improving year on year. One of the good stories that you’ve all appreciated us in the past is the SG and A, which has declined 12.4% year on year. This is benefited by a lot of factors, including synergies, including operational efficiency initiatives and so on. There is an increased marginal of 2.4% Q on Q, which is on account of higher bad debts and consulting costs, which primarily was on account of the spectrum auction, which, as Kunzegu mentioned, was quite successful for us.

The other cost of providing services has declined almost 10% year on year and 5% Q on Q. This is where the effect of the cost decline comes from the migration of traffic from $850,000,000 And like I mentioned before, you saw a similar effect on the revenues as well. The net effect is positive for us. And as a consequence of all of this that you have seen, the total OpEx, excluding depreciation and amortization, has declined 5.9% on a Q on Q basis. Then I move on to the profitability matrices and specifically on the EBITDA first.

There is a 2.6% growth in EBITDA, which is coming on account of improvement from the ongoing realization of synergies and the financial discipline, even though if you remember the top line was a bit of a struggle, which is pursuant to the network incident. The EBITDA improved 600,000,000 year on year, which is again 2.6%, though declined 1.2%, which is primarily on account of the impact. Once again, normalized for the impact, we would have been stable on EBITDA on a quarter on quarter basis. The EBITDA to service revenue, has increased 2.2 percentage points on an year on year basis to 61% for Q2 twenty twenty five and though it’s declined, of course, zero point four percent zero point four percentage points because of what I had mentioned earlier. It is worthwhile to note that, since amalgamation, the EBITDA for the company has improved $500,000,000 Now with respect to the net profit, like I had mentioned before, we report a second consecutive quarter of reported profit, which stands at $2,000,000,000 in 2025.

Normalized for the onetime effects, the profit would have been $4,200,000,000 pretty much similar to the levels that we had seen in the previous quarter. The one time effects have been disclosed here and let me just walk you through briefly. The net profit was negatively impacted by two one time effects, which is actually amounting to about 2,500,000,000.0, which is pertaining to the network modernization, that is about ZAR 1,700,000,000.0. And the asset impairment related to eight fifty megahertz shutdown, which is that’s about ZAR zero point seven billion. So these two effects contribute to ZAR 2,500,000,000.0.

And normalized for this, the profit would have been 4,200,000,000.0. Our finance costs continue to decline quite well on a quarter on quarter and on an year on year basis, and I will show you the effective interest cost in a subsequent slide. But for the full year, the decline is about 12.4%, and that’s basically mainly coming on account of the reduction in interest expenses. The depreciation and amortization has also improved 3.2% year on year, which comes on the back of the network modernization and the write off of assets that we have been doing for the last few quarters. The CapEx for this quarter is about $200,000,000 and I must mention here that almost half of this CapEx is pertaining to the network modernization exercise that we have been doing over the last since amalgamation, basically.

Then with respect to the net debt, there is a $33,000,000,000 reduction in the net debt over the last one year and a 0.7x year on year reduction in the leverage. As you can see from the middle graph, the effective interest rate has improved from 4.2% in 2024 to 4% now, which has also shown a 0.1% reduction on a quarter on quarter basis. And that’s basically coming on account of the fact that we have been able to improve our cash flows, reduce our debt and also reduce the effective cost of debt because whatever refinancing that we are doing is at a rate of interest which is lower than the current debt that we have refinanced. We have issued debentures of about ZAR18 billion in the month of August at a weighted average cost of 3.4%, and that basically explains why the effect of effective cost of debt is going down because if the new rounds are at 3.4%, then the average cost is going to continue to go down. Worthwhile to mention something that we are very proud of.

We have refinanced $126,000,000,000 during 2024 and also $53,000,000,000 so far in the 2025, which gives an indication that the remaining PHP36 billion that has to be done for the second half is quite small as compared to the efforts of the past. Also worthwhile to note that PHP18 billion of that PHP36 billion is already done from the dimensions that we issued in the month of August. Then let me show you a picture of the 2024 and compare it with the 2025. If you look at the total revenues, of course, there is a decline of 1.4%. But if you look at the service revenues, excluding the anti roaming, there is a decline of 0.3%.

The total OpEx has worked quite well, almost a 7% reduction in 2025 as compared to 2024. And as a consequence, the EBITDA has improved 4.8% on a year on year basis. Please note that the EBITDA is going to continue to benefit from the change in the spectrum regime because now from an amortization model, which is reported above the EBITDA, we’re going to move to a CapEx model, which is going to go below the EBITDA. And I think Kunzigwe had mentioned that, that this is going to result in a GBP 7,100,000,000.0 benefit to the EBITDA on an annualized basis and GBP 5,300,000,000.0 on a net income basis for the full year. Of course, the impact for 2025 will be smaller because it will be a five month impact.

The net profit after tax has improved PHP 5,300,000,000.0 from 2024 to 2025, and normalized profit has improved PHP 6.3 Then let me round up my presentation with the guidance. Couldn’t Sigve mentioned this, but let me walk you through the numbers. We had indicated a guidance of 2% to 3% growth in service revenues in 2025, which now stands revised to 0% to 1% considering the first half of the year and the macroeconomic headwinds and the impact of the incident and the lower tourists that I have witnessed in the country. The EBITDA is marginally changed from an 8% to 10% growth to a seven percent to 8% growth. But the EBITDA, of course, is going to continue to benefit from the savings on account of the spectrum arrangement change, the synergy realization and the financial discipline that we have shown so well over the last many quarters.

CapEx and the net profit remains unchanged, but we would like to make a very strong mention here. There will be an interim dividend payout in the 2025, which is going to be more than 50% of the consolidated net profit of the company, which is, of course, going to be subject to the Board approval. Thailand allows for interim dividend payout each quarter, so that’s why there is going to be an interim dividend for the second half of the year, which will be discussed when we announce the third quarter results. But because of the change in the EBITDA and more importantly, because of the fact that our cash flows are impacted by a 50% of the spectrum payment of the spectrum that we won, which was different from what we had considered earlier when we had given the guidance because at that time, we considered only a 10% payout, and now we have paid out 50% of the spectrum that we won. The leverage has changed marginally from a less than 4x in 2025 to a less than 4.1x.

And basically, this 0.1 turn is on account of the higher spectrum payment only. Last but not the least, even though there is a revision in the short term guidance considering the headwinds that we have, we reiterate that the long term guidance of the company remains unchanged. And let me mention the guidance for you once again. The EBITDA margin for 25% is expected to land at 63%. This is as a percentage of service revenues, excluding IC.

This is expected to increase to 67% by the ’27. CapEx intensity is expected to taper down from a 16% of CapEx to sales and sales here are basically service revenue and the device sales. This is going to taper down from 16% to 13% to 14% by ’twenty seven. And the leverage, which was marginally adjusted to less than 4.1x in ’twenty five, is expected to go down to 3.2x levels by the ’7. So we reiterate, there is no change in the long term guidance of the company.

With this then, I hand over back to Kun Sigve for the closing remarks, please. Thank you.

Kun Sigve, Group CEO, True Corporation: Yes. Thank you, Nakul. I just want to close off with this slide, briefly talking about the focus the management team now have. And as I said, we are really focusing then on the transformational long term journey. So on the customer side, when the network with the spectrum advantage we now have is starting to kick in, we will we see that we will be able to, in the end of this year, deliver a very, very good connectivity service.

We have also now started a project on customer value management, and we’re planning for seeing some value out of that going forward as well, where we are able now to take the customer base that we have and grow their value from those customers rather than just fueling growth with gross adds. We are also looking at driving growth in the B2B and in the Home Solutions segment or the broadband. The B2B segment, in my view, is underserved in Thailand. Only 7%, 8% of our revenues are coming from the enterprises and the SMEs. It should be higher than that.

And we see a potential now to give new services and products to those B2B customers. The same on the broadband segment. We are not happy with the development so far this year when it comes to connectivity, and we want to accelerate that as well. We are now in the midst of fueling our brand with a clearer brand position, including also a shop consolidation. And last but not least, you can expect us to continue our financial discipline, where we will continue to take out cost going forward.

And you saw the EBITDA guiding we have in the coming couple of years. That’s going to come from additional transformational activities. So that’s the focus we have in the coming few months. And with that, I think we are ready for some Q and As.

Noreen, Head of Investor Relations, True Corporation: Okay. Thank you, Kunzigbeh, and thank you, Kunzigbeh. Let me repeat the questions for Q and A first as many of you have joined us a little bit late. We will be taking questions from the analysts in the room first before we move on to the questions on Zoom. The Zoom queue is already shared in the chat.

So I open up to questions. Kunpisut?

Kunpisut, Analyst: Hello. Thank you, everyone. Congratulations on your result. I have about five questions. The first two is about the numbers.

You’re talking about the DIF, that after the conversion from the right or level to the ownership of DIF, you will have the EBITDA upside by about $3,000,000,000 a year. I just want to know about the net profit impact that from my understanding, the TFIS 16 may have you booked below the EBITDA cost that higher than the EBITDA that you can have. Could you please give us some color on this one? My second question is about your guidance. If I subtract your full year guidance with the first half, your operating performance, It seems like you’re going to indicate the revenue growth that higher than the first half, for example, minus 1% to in the first half to 1% to 2% or to 3% for the second half on a year on year basis.

What make you so confident given the fact that the economic backdrop in the second half is going to be weaker than the first half. And also, you may have to have some impact from the EPL losses that you may have to subsidize to your customer or you may have to lose some customers. That those are the first two questions about the number. My third question, let me check. Okay.

It’s about your content strategy in the medium to long term. You lost the exclusivity of the EPL, but you secured the exclusivity for the other sport program like a be in. What I’m afraid is about the war of the exclusivity for the content between you and your competitor. Could you please assure us about this thing will not happen? Because you used to mention that you try not to overpay for the content.

Yes, I I start saying something different from you have said in the past. Please correct me if I’m wrong. The second one is about the let me think about, okay, the thing that because looking into what resources that you have, I mean, in term of the spectrum bandwidth and you have lower number of subscriber. If you divide the number of subscriber with the amount of the spectrum, you will have the much, much bigger spectrum bandwidth per subscriber than your competitor. My question is how you are able to translate this into CapEx saving in the future or faster than your competitor revenue growth in the near future?

I think that’s my fourth question. My last question is that it seems like given that you’re quite excellent job high performance over the past couple of years after you complete the amalgamation. What do you think the market has not fully aware about how good that you are, I mean, now and also in the near future? That’s my all questions.

Kun Nakul, CFO, True Corporation: Thank you.

Kun Sigve, Group CEO, True Corporation: Well, can you take the two first of all, and then I will try my best.

Kun Nakul, CFO, True Corporation: Sure. The first two, number one is on the DIF and the second one is on the guidance. So, Kun Pesud, thank you. On the DIF, you rightly mentioned, there is an improvement of $3,000,000,000 in the EBITDA, but there is going to be a negative effect on the net profit in the initial years. This is specifically nuanced due to the accounting standard because when we create a lease liability to the extent of ZAR26 billion in the books, we need to record an interest expense on the lease liability, which is higher in the initial periods, which actually tapers down in the latter periods.

So in the initial periods, definitely, this is going to be negative to the P and L, roughly about ZAR0.2 billion, ZAR0.25 billion in a quarter. Then your second question on the guidance. Of course, the first half, as we have shown, is about negative 0.3% on an year on year basis. And if we have to actually deliver in accordance with the guidance for the year, which is 0% to 1%, then second half has to be a growth. But the one reason that has impacted us in the first half is the network incident, which is roughly 1% of the revenues for the second quarter.

And of course, there is going to be some impact of the network incident in Q2, but it’s going to be lesser than what is there in Q1. So hence, as you will see, on a Q on Q basis, we expect an improvement in the performance of the company because the network incident impact is going to be lower. The second, we are going to continue on what we have done so very well in the past in terms of how we have grown the ARPU. Of course, we have focused on high quality subscribers. And as a consequence, as you have seen, our ARPU has grown quite well, both on a quarter on quarter and on a year on year basis.

And we’re going to use the more for more concept to actually deliver an improvement in the ARPU as well in the quarter. The online business has continued to show an improvement. It improved Q on Q. It improved on a year on year basis. And hence, that is going to fuel the momentum of growth in H2 versus H1.

And as we transform our business with a better spectrum portfolio, we feel that with the CVM capabilities that we have, the customer value management, we can monetize our subscriber base much better than what we have done in the past. So all of these things are going to contribute to second half being slightly better than the first half.

Kun Sigve, Group CEO, True Corporation: Okay. Let me address the content question. In my view, this EPL is a little bit overhyped. If you look at the EPL cost versus how many customers are really looking at EPL, I think you find an imbalance. So what we are now focusing on is then other sport rights.

And I think that our TV content can still be called the king of sport because we don’t have the EPL and we don’t have the TPL leader. We need the Thai football league, but we have a lot of other sports content. So we are going to focus on that. And we are going to focus on Thai content, being soap operas or being serious or being content that is consumed from the Thai consumers in a much bigger volume actually than the EPL used to be. You can expect us not to move into a content war.

There may be a kind of positioning war, where we are focusing more now on the Thai, what I call it, mass content, whereby competitors is focusing on the more high end EPL content, but that’s fine. I’m not worried about that. We need to we will always be having a financial discipline on the content and the ability to monetize the content as we have with the rest of the business. That’s very, very clear. We don’t see the content game creating a war or us buying exclusive rights to content that we cannot monetize.

I think the EPL lesson we made from that is underlying what I’m saying now. Then on the spectrum. Yes, I think that the combination of the new network that we have and the spectrum portfolio that we have, including also the 10 megahertz extra we got on 2.3 and our ability now to refarm the 2.6 into five gs is going to give us a very, very good network position. I’m not I don’t want to compare to our competitors, but I want to compare to ourself. And I see this now already coming true.

And I think we have a network position now where we can combine both coverage, speed, four gs and five gs speed without any capacity seeding on that, but also a continuous network experience in a very good way. I expect us to come and surprise actually our customers with the network experience in the end of this year. And that’s what we’re going to do. And of course, the investments we have done now also into the single grid, where it’s not only to combine two network into one, but also to do that with the most modern equipment that we are installing is going to help us also going forward when it comes to the cost base. So we already have a CapEx guiding, and that’s why we are confident on that CapEx guiding, as Nakul said.

And I think that going forward, network will definitely not be a disadvantage for us rather the other way around. On the last point, well, what is the analysts or the investors, what do they not see? I don’t want to comment on that. I can just comment on what we plan to do. And I think you can expect us to increase the growth on the online segment, also the broadband segment.

You can expect us to do better on the B2B segment than we have done so far this year. You can expect us to start developing our postpaid customers in a more for more concept, where we are also putting services on top of the connectivity. And you can expect us to embark on this transformation program that I’m talking about. And here, I take with me a lot of experience I have from Telenor that this long term transformation program where you are utilizing new technology, being automation, being no touch as a no touch operation, being AI, being cloud, will, over time, have significant OpEx savings. And that’s what we’re going to do.

And that’s why I’m talking about continuous OpEx savings, both in the network domain, in the distribution, meaning the way we are handling the shops, being in on the IT side, but also being in organizational modernization. That’s what you can expect us going forward. And I’m very confident that we’ll be able to do that, not the big one off tickets as we have done the last two point five years. Those are over because those OpEx reduction were related to the synergy effects. Now I’m talking about a much more holistic, granular, long term transformation project, which then, over time, will enable us to continue to take down costs, being OpEx but also being CapEx.

Noreen, Head of Investor Relations, True Corporation: We move on to Kum Keejapat from Wahlaan Securities.

Kun Sigve, Group CEO, True Corporation: I can take the dividend. You can expect us to pay dividend in interim dividend in the end of this year, as also Nakul said. We also have a very clear dividend policy and that we are paying at least 50% of our net income in dividend going forward. But I don’t want to give you any more exact number than that. You can expect that dividend payout for our shareholders will be something that is very important for us.

So basically, there are two financial parameters here that are very important. Dividend is one of them, a sustainable dividend policy going forward that you can trust us delivering on. Another one is to continue to take down the net debt to EBITDA number as we also talked about. And then we will figure out are we going to going forward paying out dividends annually or biannually, but we haven’t made any decisions on

Kun Nakul, CFO, True Corporation: Yes. Let me take your first question, Kunke Jipat. This is on the subsidy of 100,000. Let me just make it clear and remind everybody that we had 200,000 customers who were using EPL with us. And of course, not all those 200,000 customers were mobile customers.

So a fraction of those 200,000 were actually mobile customers. This offer of 100 baht or 100 subsidy was offered to our mobile customer who were actively using EPL. So and then you can do the math. If it’s 100 baht being offered to those customers, for them to be staying with us, it is actually going to be a net benefit for us because we will not lose them to competition. So that’s the math behind the logic of why we decided to subsidize the 100 baht for those customers.

So any impact of this is already factored into the numbers. Let me also reiterate to you that we do not expect any negative impact to our bottom line from losing EPL. 200,000 customers is what we had. 20% of those 200,000 customers are premium TV customers. We do not see churn on those customers higher than what we had anticipated.

So far, the trends are very well in control. And EPL on a net basis means content cost minus the revenues was always positive, means we were spending more than what we were earning. And hence, we still believe that even with the impact of EPL, the net impact on P and L is not going to be negative for us. Thank you.

Noreen, Head of Investor Relations, True Corporation: Yes, we move on to Dawei from Morgan Stanley.

Dawei, Analyst, Morgan Stanley: Hi, it’s Tawai from Morgan Stanley. Three questions. First one is, I might have missed this, but have you explained what actually was the reason for the network outage? And have you already started to see some recovery in terms of like subscriber additions post in our outage incident? And do you actually need to do some CapEx maintenance with regards to that?

That’s the first part of my question. The second part is dividends versus deleveraging. Why not actually just focus on deleveraging? And what’s the why is there urgency or priority on dividends as well? And lastly is, you actually have any ROIC targets?

Yes.

Kun Sigve, Group CEO, True Corporation: On the first one, as I also said, it was a power outage that took down the switch center. That was what happened. That was very unfortunate. And of course, we are now mitigating that. We’re looking at even more robust alternatives when we have a power outage.

So there will not be any additional CapEx going into there. It’s more that we look at backup solutions, which are even better than what we actually had that took down that switch center. So that’s what will happen. On the dividend, well, I think we get as many, what should I call it, answers on this as we talk to a number of investors. Some of these investors say what you are saying, pay down the debt first.

We are not really focused on dividend. Others say that we are very focused on dividend. From our side, I think we would like then knowing that we are now having a net positive profit, we want to start paying out dividend because I think a lot of our investors really appreciate dividends, and we have to do it in a sustainable way, as I said. And I think it’s possible to combine it, both paying down dividend and continue to take down the leverage with debt. So it’s that combination, I think, we now have found as a good balance.

And that’s why we have both those two financial parameters going forward. So I don’t think that we should do eitheror. Our policy is to do both. And with that, I hope that we will satisfy most of our investors.

Kun Nakul, CFO, True Corporation: I think your last question on the ROIC, we do not have any externally communicated ROIC targets. The long term guidance is something that we’ve already disclosed to you, which is basically EBITDA margin to service revenue, CapEx to sales and also the leverage. Thank you.

Noreen, Head of Investor Relations, True Corporation: You. Any further questions from the room? Thank

Analyst: you. A few questions from me. Starting from the mobile things. About both the subscriber loss and also some of the you mentioned tourism impact, I was calling them cross border visitors, either Myanmar, Laos or Cambodia. Try to gauge how much was that in your revenue portfolio, in mobile revenue, basically, tourism and cross border, if you can like some ballpark number for us?

And including subscriber loss as well, let’s say, billion sub loss this quarter, do you think how much is that from those negatives? Just want to clarify myself that it’s not an organic loss or kind of like the loss of market share, something like that for the mobile segment. The second one is on the NT roaming, the mobile revenue one, not the year. So can you recall us, will that continue to decrease to zero? I believe no.

Or how would that stabilize or that it will be at a new normalized for us? And yes, also sorry, the third one is on eight fifty megahertz shutdown. I believe there is one change in accounting related to these things you already mentioned. Will we have more impairment? Will we have more cost saving or something like that in terms of the third quarter that will happening?

And sorry, I heard news on two gs, three gs shutdown coming back again too. Can you comment on that? Would that be positive? Would that be negative for your customer base, for your operations, something like that? And lastly, I agree with you on the B2B thing that we are quite underserved.

How do you see that? Is that lack of knowledge by Thai small companies, meaning they are not realized that this will help them cost saving, better optimizations, etcetera? Or it’s just budget constraint that we need economy to recover before that smaller players can accelerate the investment for better operation again? Thank you.

Kun Sigve, Group CEO, True Corporation: I’ll take the last one and then you can take the first follow-up.

Kun Nakul, CFO, True Corporation: Thank you so much, Konradapop. Let me take the first four. On the subscriber loss, the $1,200,000 that we had in the quarter, let me break this down for you. Approximately 400,000 subscribers is actually on account of the lower tourists because we’ve seen obviously a gradual reduction on tourism in the country. You’ve seen the numbers from TAT already.

So approximately 400,000 is that. Then the next big effect on this is basically coming on account of our lower gross adds. As Kunsigwe explained, we are reducing the high gross and a high churn behavior in the market. So that obviously has a contribution to the subscriber reduction in this quarter. This is also coupled with the effect on the weaker macroeconomics because macroeconomics are weak.

The consumption levels in the country are compromised. So that obviously impacts the gross adds. And roughly 300,000, which is the last amount, is actually the impact coming on account of the network incident. So this is the breakdown of the 1.2. Your next question on the NT roaming, will it be zero?

Well, yes, it’s been declining on a quarter on quarter basis as you have already seen. Very difficult for us to answer whether this will be zero. But as NT continues to migrate traffic to another competitor, this is gradually supposed to go down. I cannot tell you whether it will be zero or not. It depends on how much traffic is still being used from our network as far as NT is concerned.

Then, if I understood your third question correctly, is on the write off of $850,000,000 And do we expect anything in the third quarter? Was that your question? Okay. OpEx saving after the expiry of the $850,000,000 Yes.

Analyst: I would say whatever numbers that are related to that $850,000,000 apart from this.

Kun Nakul, CFO, True Corporation: Apart from, okay, I understand. So for $850 as we have maintained in the past, we were paying roughly about $2500000000.0.20 20. And because we do not use that spectrum anymore, we haven’t actually purchased the spectrum in the auction. So this is a pure saving on the EBITDA, on the income, on every parameter that you can see.

Analyst: Yes. Just that I saw you have some impairment of the eight fifty megahertz in the second quarter, which quite surprised a bit because that ahead of the actual Sure, expiration,

Kun Nakul, CFO, True Corporation: sure. Yes. So that I can explain. So the impairment that we’ve recorded in the second quarter is pertaining to the dismantling cost of the assets and the assets that are actually pertaining to $850,000,000 Some part of this cost has been booked in Q2. Another is going to be booked in Q3 because as we have mentioned in the past, so we will write off the net book value of the assets that will be transferred to DIF.

And as we have disclosed, these assets will be moved I think Kunpisur also mentioned that the assets will actually move to DIF. They’ve actually moved already to DIF on August 4. And whatever is the net book value of the assets is going to be impaired in Q3. To be transparent with you, the impact of this is roughly going to be around 1,000,000,000 in Q3. Then, fourth one, do I take it, Consegway?

Yes, this is on the two gs, three gs shutdown. Yes, one of the technology to be shut down is in our plans. We haven’t made any official announcement to this effect as yet. And please wait to hear more more from us as we actually finalize the timelines and the plans on when this can be done. I can just say that, of course, the investments can be optimized, but the savings will not be that significant, just for you to know.

Over to you.

Kun Sigve, Group CEO, True Corporation: But it will then when we do it, it will then further free up spectrum that we can use for four gs and five gs. On your last question, the B2B underserved statement that I had. I don’t think that has to do neither with the budget nor macro nor with the customers. I think it has to do with the way we offer these services. So part of it is kind of legacy thinking.

Also, mobile operator used to be a consumer operator, where we are connecting people to services for the first time. And that’s basically the way we have traditionally or historically handled the B2B segment also, selling connectivity to an SME or a corporate the same way as we sell it to the consumers. So that we need to get out of. We need to rebuild the sales team, which is thinking differently. So that’s one.

The other one, it’s technology. Now you have new technology, which enables you actually to sell services. Take one example, the software defined networks, where you can kind of build on top of that just traditional connectivity. Private five gs network, where you’re building on the customers’ enterprise specification is another example. Cybersecurity solutions is a third example.

Taking the IoT platform that we have now, but also move up the value chain to offer analytical services is another example. And all this is possible due to new technology. For the SME segment, of course, you need to find a model where you can scale this across, and we are looking at that. The third element here, I think, is partnerships. Because in the B2B segment, you should avoid building up all this yourself.

That would just add cost and complexity. But you can work with partners where you basically can either resell services in the customer relationship you have with partners or you can value add those white label basically some of the services that you buy from partners and then you sell it to the customers. So that’s where I see a big room to grow in the B2B segment. And I do see that some of the Asian markets are doing this better than we do here in Thailand. Not and even if you think about some of the European B2B businesses, operators in Europe, they are more advanced on this.

So we will take some learnings. And that’s why I’m saying that I think B2B has a growth potential.

Noreen, Head of Investor Relations, True Corporation: Thank you. Let me move to the questions online. Piyush, if you could please turn on your camera and your mic.

Piyush, Analyst: Yes. Hi. Good morning. Can you hear me?

Noreen, Head of Investor Relations, True Corporation: Yes.

Piyush, Analyst: Yes. Thanks a lot for the opportunity and all the explanations and detailed presentation. Three questions. Firstly, in mobile, you have shared what has led to the drop in subscribers. But have you reached a level from where we can start seeing positive additions?

So if you can share the outlook on subscribers in mobile as well as ARPU. Secondly, you mentioned about recent organization changes, which would be effective from first September. Could you share some more details on what has been changed? And how do you expect it to improve the operational performance? And thirdly, on the spectrum auction, which concluded with a good outcome.

Can you share a bit more details on your network rollout plan, both from coverage and capacity perspective using two thousand three hundred and fifteen hundred?

Noreen, Head of Investor Relations, True Corporation: Thank you, Piyush. This needs to be the last question. So Kunzigwe?

Kun Sigve, Group CEO, True Corporation: Yeah, you can address the first one on subscriber growth. Sure, Sigve.

Kun Nakul, CFO, True Corporation: I’ll take the first one. Thanks for the question, Piyush. On the subscriber trends in the second half of the year, let me first also mention that, of course, there is an impact of the network incident that we have seen in the second quarter. But, because we have a definition of subscriber that goes with a ninety day inactivity, so there is going to be a further impact in the subs, which will be seen in the third quarter. That’s going to be roughly around $500,000 ballpark here and there.

So we should expect that number to come in Q3. However, at the same time, we are not done with the high gross and the high impact that we have taken in the past. We will continue to go for financial discipline and reduce this behavior, which is not healthy for the market. We do expect that the trends are going to improve as we go forward. So you should see some back to growth maybe towards the end of the year, but maybe quarter three is going to be still kind of a decline.

On the ARPU, again, the more for more, we’ve shown you a healthy development of the ARPU over the last few quarters, and I think that trend you should expect to continue. Of course, when we reduce the high cross, high churn behavior in the market, ARPU improves as well. And going with the more for more concept that Segway actually explained quite well in the past, we should see an improvement in ARPU. This is on the mobile. You will see the same on the online business as well.

So I’ll now hand over to Segway.

Kun Sigve, Group CEO, True Corporation: Yes. On your organizational question, I’ve basically done three things. One is that I have removed the layer because currently, we have two presidents and CEOs taking that away such that now all the chiefs are reporting directly to me. That’s a simplification. The other one is that I have lifted up B2B as a position reporting directly to me and the same with Home.

And that’s back to what I said. I see both those two areas, broadband and B2B, as growth areas for us. And the third thing I have done is to separate out IT from the technology such that I have now one network, one IT, and I’m also going to appoint a Head of AI to drive top down our AI activities. So that is what it is. On the spectrum auction, the detailed oven network rollout.

Well, the first we do now is to utilize this additional 10 megahertz we have on 2.3. And as you remember, we are currently using 60 megahertz, and then we got another 10, and this is helping us with the four gs capacity. That we do as we speak. So that will have effect already in the coming few months of this year. The second thing we do is then to refund the $2.6 so that we can put five gs on the two point six network.

That will also happen at the end of the year. And the third thing we do now, when we are almost finished, the single grid consolidation, is to start to be much more granular, where we also go into a look at are there any white spots or blind spots? Can we improve also the indoor coverage? And we do that very granularly, basically area for area. So those are the three things that we are doing.

Kun Nakul, CFO, True Corporation: If I may just add, we have already given the guidance to you on the CapEx, so that remains unchanged. Thank you.

Noreen, Head of Investor Relations, True Corporation: Thank you, everyone. We have run out of time. Thank you for everyone who’s joined online. We will get in touch with you to take the questions we have not been able to answer. And for everyone in the room, thank you for joining us today.

Thank you, Kunzigbeh and Konakol.

Kun Nakul, CFO, True Corporation: Thank you. You so much.

Kun Sigve, Group CEO, True Corporation: See you on the road soon.

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