Ladies and gentlemen, thank you for standing by and welcome to the Telkom's First Half of 2020 Results Conference Call. [Operator Instructions] Today's conference is being recorded. I would now like to hand the call over to first speaker today, Mr. Andi Setiawan. Thank you. Please go ahead.

Thank you, Rachel. Ladies and gentlemen, welcome to PT Telkom Indonesia Conference Call for the First Half of 2020 Results. We released our first half of 2020 results on the 7th of August, and the reports are available on our website, www.telkom.co.id. Today's presentation is available on the webcast and an audio recording will be provided after the call for the next 7 days. There will be an overview from our CEO and after that, all participants are given the opportunity to participate in Q&A session. Before we start, let me remind you that today's call and response to the questions may contain forward-looking statements within the meaning of safe harbor. Actual results could differ materially from projections, estimations or expectations voiced during today's call. These may involve risk and uncertainty and may cause actual results to differ substantially from what we discuss today. Telkom Indonesia does not guarantee to any actions, which may have been taken in reliance of the discussion held today. Ladies and gentlemen, it's my pleasure now to introduce Telkom's Board of Directors who are joining with us today, Mr. Ririek Adriansyahas President, Director and Chief Executive Officer; Mr. Heri Supriadi as Finance Director; Mr. Herlan Wijanarko as Network and IT Solutions Director; Mr. Dian Rachmawan, as Wholesale and International Service Director; Mr. Edi Witjara as Enterprise and Business Service Director; Ms. Venusiana as Consumer Service Director; Mr. Budi Setyawan Wijaya as Strategic Portfolio Director; and Mr. Muhamad Fajrin Rasyid as Digital Business Director. Also present are the Board of Director of Telkomsel, Mr. Setyanto Hantoro as President Director; Mr. Leonardus Wahyu Wasono as Finance Director; and Ms. Rachel Goh as Marketing Director. I now hand over the call to our CEO, Mr. Ririek Adriansyah, for his overview. Please, Par-Ririek.

Thank you, Andi. Good afternoon, ladies and gentlemen. Welcome to our conference call for the first half of 2020 results. We really appreciate your participation in this call. COVID-19 pandemic continued to impact the economy as the concern of the wide spreaded of the virus resisted people's social and economic activities. As a result, like in many other countries that started to experience GDP contraction -- initial GDP in second quarter 2020 declined by minus 5.3% compared to second quarter of last year. For Telkom Group, the impact of the pandemic was seen particularly in enterprise segment. However, fixed broadband in the home and wholesale business continued to grow well and prevent the group's revenue from a steeper decline. Although overall Telkom Group's revenue decreased by 3.6% year-on-year to a IDR 66.9 trillion, at the same time, we could control the expense so that we successfully improve overall profitability. EBITDA margin improved to 51.1% in the first half of 2020 from 47.8% in the same period last year. In the bottom line, normalized net income margin improved to 17.3% from 16.0% last year. Ladies and gentlemen, in mobile segment, we continue our journey of transformation in digital business as [indiscernible] grows, along with cost leadership and initiatives. The Digital Business grew by 13.5% year-on-year to IDR 31.9 trillion and now accounted for 72.4% of the total revenue, increased significantly from 62.2% a year ago. The growth of Digital Business was driven by 105.1 million data users that generated around 4,200 petabyte of data traffic or grew by 40.3% year-on-year. This implied 42.8% in Data user consumption to 7 gigabytes per data users. Furthermore, IndiHome continued to show positive performance by posting revenue of IDR 10.4 trillion during first half of 2020, grew by 19.1% year-on-year. The group was mainly contributed…

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

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

This is Piyush from HSBC. Two questions, both on mobile. Firstly, could you elaborate on your strategy to launch this unlimited plants in 60 cities -- 60-plus cities? And what's the likelihood of such plants being launched nationwide? And how do you assess the risk of further escalation of competitive intensity? Secondly, in mobile, now, the legacy revenue composition is down to 26%. So when do you expect the pace of decline in legacy to start moderating and does data revenue growth could contribute to overall growth. So any insights over there would be helpful.

Piyush, I'm Rachel and I'll take your questions. I'm Rachel from Telkomsel. So on 2, first of all, I think we have seen -- with regards to the unlimited plants that we have launched, I'll just come from this point of view that you've seen that both Java and ex-Java have experienced a form of market share decline as a result of competition, and as a result of COVID-19 impact, where it is the impact on consumer purchasing power. So we see that consumer wallet spend has been increasingly subdued in the mass segment due to this prolonged impact of COVID. And in this environment, we have recognized that affordability is a very important decision for them including brands that they will use. We saw that market share movements were pretty prominent in Java, where our competitors have had network coverage, right? And then the convenience of switching was hence quite easy and lower cost for customers, right? And we still, at this point, believe that we should keep the premium pricing, and this premium price is up, 50% above XL and 70% above Indosat per price per meg. And as you pointed out, why do we launch the unlimited product in 65 cities? We have been very specific and selective in terms of where we launch based on 3 very important customers -- 3 very important consideration. Number one, customer affordability index; number two, competitors offer in those markets where we're seeing shift of market share away from us; and third and the most important factor that we consider is the Telkomsel's significant competitive advantage, which is our network strength and capacity. And this remains our strategy as of now. We continue to keep starting these 3 factors, affordability factors of the customers, competitors' movements in there and our…

Yes. Rachel, just on the pricing premium. So what kind of pricing premium are you, like, on a sustainable basis, you think is feasible for the competitive strengths, which Telkomsel brand has?

Right. Okay. So I think as a market leader, we really do not wish to destroy the market surprise premium because we need to make sure this industry stays very healthy. Right now, I believe the price for max about 50% above XL and 70% Indosat. This is almost like a product of what we do. I think our focus will really be making share affordable. We maintain our market share, and we fill up our network. So the price gap would be a consequence of those other important factors, strategic factors.

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

I just have 2 questions. One on, first of all, the IndiHome business, which did very well. Have you found -- once the COVID-19 lockdowns have eased a bit, have you found that the churn on IndiHome has picked up? Or have you found that once people have enjoyed broadband home, they want to stick with it? And therefore, are you considering any change to your guidance for the IndiHome subs for the full year? That's the first question. And then second question is on the cellular side. And I guess a question for Heri. Given what we just heard from Rachel, it sounds like the real problem here is the very low pricing of the competitors, which you can only then have a certain premium to them. I get that. Has Telkom's view changed in terms of supporting any change in regulations such that if there was consolidation among smaller players, they would be allowed to keep the spectrum? I ask this because I think that's been a factor in the past. And I would imagine Telkom in the past would have been maybe quite comfortable with that issue remaining in place, but given that clearly, the industry needs consolidation, would you be prepared to be more supportive of the idea of if there is consolidation that the players can keep the spectrum. I'm just interested in your view on that.

Hi, Colin. This is Heri Supriadi from Telkom. I try to answer your first question on the IndiHome, growing very well so far. And what is the impact of the COVID to this business? As you may see, the growth of the revenue, around 19%. And then the customer base around 25% year-on-year. That reflects a healthy market. And people really now make kind of IndiHome because most of people still work from home and also learn from home. So the demand is pretty well. And in terms of churn, what I can basically say to you. Now we put kind of -- people need to deposit in terms of when they first becoming our subscriber. So this going to prefund the churn. And then we have a better quality of the subscriber base. We do expect this going to be a -- first, from the demand side is good. Second, we apply more, I think, stringent way of, I think, presenting from churn. In total, we do expect this going to contribute very good above revenue and also margin for our interim business. I think the second question you addressed today, I think my colleague from Telkomsel about, I think, industry consolidation. I would like to ask Hantoro to answer that one.

Okay. On, this is Setyanto from Telkomsel. So Telkomsel believes that any M&A and consolidation will lead to healthier industry as the number of players will become lesser, the intensity of the competition will be lesser and operator will tend to be more rational on the pricing. But we believe that it will take quite some time for the consolidation to happen. And we believe that the government actually already put some effort on regulation to support this and Telkomsel as one of the player, of course, supporting this and very supporting of this as long as it can help the industry to become more healthy.

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

Three questions, please. Firstly, on the sales and marketing costs, it seems to be rising when your competitors are actually seeing decline. In fact, other -- the end markets are also seeing declines in 2Q. What's driving this uptick? And do you see this as sustaining into the next few quarters? Second question I had is with regard to Telkomsel and the unlimited offers. How do you see this impacting competition? Are you seeing any reactions from the smaller players? And what happens next with the smaller players cut prices or rate allowances? Or do you think that's simply not likely? Last question I had is on the regulation side. I'm just wondering what your expectations are on the Omnibus Law? What provisions do you think could impact the sector?

Hi Arthur, I try to answer your first question on the marketing cost or expenses. I think we have quite a good marketing cost in which we can see the decline of that time. This is because of I think fewer event that we can do on field, in field or on the marketing activities. And more people do their -- purchase our product or services by online. So we use more the digital way with our own channel and also our partner channels. So this led to the more efficient of marketing costs. If there's any bit increase only during the, I think, Ramadan festive in which we promote more usage during that time. So in general, I think we're going to see the marketing expenses this year going to lower compared to last year. This trend going to be until the end of the year. And Second question may from -- Rachel, again, can...

Ok. Fine, Heri. I'll take the second question. So your questions regarding reaction from smaller players after unlimited. Well, I just want to reinforce that Telkomsel is probably the last player in the market to launch anything related to unlimited because we've been holding back for a long time. Of course, the smaller players respond but I just want to highlight again the points I shared earlier that the reason why we're launching unlimited is because we have a network advantage. We do have a lot of capacity out there. And these are costs that really incurs CapEx. We have capacity out there. There's a customer demand for Telkomsel's network and the factor here is affordability. So we continue to be focused on what is affordable for a customer, the one who use Telkomsel's network. And those will be the key considerations of how we respond to the competition after this. I hope that addresses your question.

Understood.

I may ask you like this but, Arthur, I think we don't have any, let's say, objective to create any price war. We do have capacity. We, I think, try to retain our customer base to make them more productive with the ARPU that we targeted. In the same time, we also do expect that our competitor also becoming still rational, as the price they apply today even can't create actually the return on their business I do expect they also still have a bit rational on this one.

Yes, yes. And to add-on to Heri, even with our unlimited pricing, we remain rational and as an average, is still a premium above the other.

Understood. Yes. The third question was on the Omnibus slot.

On the Omnibus, so actually, it's not yet -- it's not yet decided by the parliament, but we don't see any direct impact to us as a group. But if there is something that can support or endorse the consolidation happen in the cellular industry, it will be good. Other thing is with regard to the network sharing, I think, on the network sharing, if there is something on that, that is support for next 5G network development, I think it will be a good for the industry. But until now, we don't see any result of the discussion in the parliament.

[Operator Instructions] Your next question comes from the line of Niko Margaronis of Danareksa Sekuritas.

Yes. This is Niko from PT. Danareksa. My first question is about the margins. The same -- for the second quarter above 50% for the group and Telkomsel 60%, are this sustainable? I mean, is there any delayed booking? So is it from cost savings? That's question number one. Number two, with regards to Disney+ and Hotstar launching in Indonesia, is there some special partnership brewing with Telkom? And is it only for mobile? Or is it for mobile and in the home? And maybe if you can give us some more clarity with the terms of this agreement, any agreement there is. Yes -- and yes, first questions, please.

Okay. Thank you, Niko. On the first question, you gave to us that in the group, Niko, we have a margin now, it is about 54%. Our guideline in the previous quarter was about 50% plus that we mentioned that time. Actually, we still hold that up for season right now. The reason for still seeing that one to be a bit more conservative. First, we still don't know how far this profit is going to impact us in the -- how long it's going to impact us because some, I think, purchasing power from our customer also being impacted by this one. So from the revenue side, despite we tried to maximize any potential, both from cellular and also from the fixed-line business. I think there's some risk coming from the demand side. Anyway. The second thing, actually, on the cost side, of course, we always try to maintain our cost in the more manageable level. Operation and maintenance, I think the cost quite in the good grip in which most of, for example, in the cellular we already cover about 95% of the, I think, our population. Most of the capacity going to be collocated. That's going to be kind of increment, only slightly incremental to our operation and maintenance costs despite the speed of additional number of BTSs or network elements still the same like previous share. On the other hand, on the -- I think on the fix line, we already have half of the investment already there. Home -- I think Home-passed already quite a lot. And then some additional expenses and investment that we need to make is in the last mile. This also already captured some of the, let's say, our mine costs. Plus additional costs that we can manage. For example, in the marketing, we try to be more digitalized. And I think more effective to reach customers by using our data, plus promotional activities or even in the field. So that makes the cost of marketing also quite controllable. This -- in the end, we do expect going to bring us to the margin about 50% plus. So that's what we can sell to you, Niko. The second? I think on the Disney+, Telkomsel going to be the first to going to launch this, I think, partnership with Disney. We in the Telkom also in -- still in the negotiation stage for our IndiHome content on this one. If, Rachel, you can I think sell some additional info on this, please?

Yes, we do, Heri. I'll take one on this on Disney. So to your question, actually, Disney has had a longer relationship with IndiHome than Telkomsel because over -- IndiHome, they have been offering Disney TV channels, [ as new Joe ], as well as Fox Sports channels. However, those on IndiHome so far have been focused on more of the English-speaking community and at higher prices. In the partnership with Telkomsel because this is mobile base, and it's much wider and mass appeal. The collaboration we have with Disney Hotstar is to bring quality entertainment to the masses. Hence, the difference is at number one, it's sopped and docked in Bahasa Indonesia. The price point -- the selling price point that we agreed with Disney Hotstar was at much lower price point to make it affordable for the mass adoption. And it will also include local Indonesian production as well as all Marvel, Disney movies, Disney animated movies, Pixar, [indiscernible] general entertainment shows and they're also tolling a lot of very popular Indian content in this. So the reason why Telkomsel has launched here IndiHome is because of the technical integration between mobile and Pixar that are done quite differently, but the discussions have already commenced and ongoing between IndiHome and Telkom for now. I hope that addresses your question?

Maybe I can add answer for the IndiHome. As Rachel said, actually, with the Disney Kid channel, National Q and Fox Sport, we already have on linear bases. With current business strategy, IndiHome still need to maintain those linear channels while also we're preparing new product as Heri said, that we will have -- we have with Disney, but now on preparing because we need to avoid the offer [indiscernible] in linear channel and on-demand service.

Your next question comes from the line of Choong Chen Foong of CIMB.

A couple of questions from me. For Telkomsel, with the Unlimited Max having launched for about 3 weeks now, what have we seen in terms of the subscriber and revenue traction so far? And then my second question, for the 2,300 megahertz auction, I think the regulator trying to put in place for the second half, the Telkomsel has interest and would it be allowed to join the auction? And then my third question, I wanted to ask about, on the cost side, were there any one-off cost items for Telkomsel in the second quarter? And for IndiHome, as you have reported, EBITDA margin further improved Q-on-Q. Can you provide some color as to what cost decline and whether this is structural in nature? Those are my 3 questions.

Okay. I'm Rachel from Telkomsel, I think your first question regarding how we have seen the market respond with regards to Unlimited Max program. So in the 65 cities that we have launched -- hello, can you hear me clearly?

Yes.

Okay. So with regards to Unlimited MAX launch in 65 cities in just the last 17 days or 20 days, we are seeing acquisitions improve. Double digits. We are seeing even existing customer base revenue is positive. And ARPU point of view is also satisfactory. So it's too early for us to tell. Let us monitor this. And perhaps for the next earnings call, we can give you a more comprehensive report.

Yes, Rachel, if I can just follow up, when you say ARPU was also satisfactory, you mean to say that there was some enhancement or uplift to the ARPU?

Yes. Because in these cities, we do have existing customers in those cities. So we have also been able to push out personalized combo subsidy unlimited plans to existing customers, which then is a product that encourages them to do like a top-up on top of what they're already paying for as the base package. So with that, we're able to encourage an uplift in ARPU.

I see. Okay. Yes.

Yes. Foong, this is Setyanto from Telkomsel, about the 2,300 megahertz auction. Spectrum is always considered as limited resources, and it is the government territory, including the -- any auction plan or potential price of the spectrum. But Telkomsel will see the opportunity to gain the potential spectrum is always a good opportunity for us. So we always fit for that opportunity with full consideration of business value of it. So flexibility and the importance of cost avoidance will become the major consideration for us to set or to propose the price for that auction.

Okay. But just a follow-up. Do you -- yes, sorry, just a quick follow-up on the 2,300 megahertz, do you see that if you were to secure this block of spectrum as an opportunity to aggregate that with what you already have and then use that for 5G?

That is also one of the main consideration when we propose for this auction.

Yes. All right. Got it. Leonardus Wasono;Director of Finance: Okay. And on number three, I'm Leonardus from Telkomsel actually. If you look at the Q-on-Q, our cost in Telkomsel is slightly high because we allocate the cost for the marketing cost, which is to preparing for the festive -- Lebaran festive. And on operation and maintenance costs actually also increased comparing Q2 to Q1 because there is some additional of our 4G BTS, making the cost for the transmission increase. And then in the depreciation side, actually, because we also put additional network for 4G. So there is some increasing of -- for the depreciation because the impact of new accounting treatment IFRS 16, so impact to our depreciation costs also in this. So in the Q2, there is no any one-off costs that happened in second quarter.

Okay. On the last question from you, Foong, on the cost -- margin of IndiHome, yes, it is improved from time to time. As we continue to increase our size in terms of -- we have more economic upscale. In the same time, we also able to reduce the cost of marketing during this period. So that's also contributed to the improvement of margin. So we do expect this along the time going to betterment. So that's about the margin in the IndiHome.

Okay. And if I can just throw in one more question from the -- from what I can see from the info memo. You mentioned that Mitratel's tower acquisitions will become a strong foundation for the tower value unlocking that you said is planned to be materialized in the foreseeable future. Can you provide more color on this?

Okay. Thank you on that one. I think so the main reason is by unlocking this tower from Telkomsel to bring to Mitratel, Mitratel more independent tower company rather than, let's say, our competitor try to, let's say, lease in from us directly. So by sending this tower to them, make this tower becoming, I think, open for opportunity for a new, I think, co-location and so on. This is going to give, I think, better value to Mitratel as they're building the condition, more tower they have. And also, I think we do expect they be considered as like other tower company with better multiple compared to, I think, Telkom. Currently, we are trying to -- I think, the follow-up fundamental to this. Last year, we did acquire tower from our competitor, basically, the tower. And then additional tower from Telkomsel can bring this Mitratel is becoming one of the biggest tower in the country. So we do expect this by giving more, I think, opportunity to Mitratel to also increase the tenancy. Overall, there's going to be a better money for the group and the new story of the valuation for the, I think, some of parts to the group.

Has that been -- has Mitratel acquired towers from Telkomsel? Or is that a future plan?

I think today, actually, Mitratel -- we're using Mitratel to basically lease out some of towers, let's say, more than 2,000 towers of Telkomsel to others operators through Mitratel. So that's the current situation right now. But by, I think, identifying more opportunity and also balance to our, I think, consideration to the internal need and also competitiveness, actually, we can basically explore more value coming from the tower that are currently about 17,000 with Telkomsel. Some going to be transferred to Mitratel, it's going to be, I think, another value driver for the group.

Your next question comes from the line of Kresna Hutabarat of Mandiri.

Kresna from Mandiri. Two questions for me, please. My first question is on the fixed side. Can we just get some color on the strong interconnection income growth in the first half 2020. Is this strong growth sustainable in the second half of the year as well? That's my number one question. And second question is on the mobile side. I suppose stock also can try counter the pressures in the mass segment by encouraging higher spending in the high-value segment. And which one sharing -- I mean, what are the initiatives taken by Telkomsel to drive ARPU growth in this high-value segment during this COVID-19 pandemic? Maybe related to that, particularly on the mobile video side. And how do you see this use case as engine for traffic growth at Telkomsel and also the ARPU growth at Telkomsel? Would you mind sharing some color on mobile video user penetration at Telkomsel today and perhaps the data consumption intensity in comparison to those users who are currently not regular mobile video users?

Kresna, on the first question of the interconnection strong growth in 2020, I think mostly because our subsidiary Telkom Indonesia International doing wholesale for their employees and mostly is coming from that one, creating more traffic to their business. We do expect this game going to continue until the end of the year. Of course, if we think about year-on-year, it is also different on how is the -- I think traffic of the Voice itself. I think this came quite healthy for this time. So we do expect this is going to continue until the end of the year.

Understood.

Okay. Thank you, Heri. Yes, Krishna. So that's a great question on HPC. So how we will grow ARPU? And it's an amazing question because this is exactly what we're doing is encouraging higher spending in the higher-value segment. There are 2 methods for using, one focus on just to on our network. So we are pushing out unlimited boosters as well as personalized below the line combo packages to our high-value segment customers. And in our last couple of months of pushing this, we have seen increase in ARPU compared to an average. So that is one way of increasing ARPU by [indiscernible] existing HPC base. But more importantly, what we are doing is we're accelerating and doing more intense engagements with digital partners. So digital partnerships are very important because it brings Telkomsel closer to the reason to use quality data network. So leveraging again on our network capacity and quality, you see us working, for example, Displey+ is one of the first [indiscernible] setting up. So we'll continue to work with more global and local entertainment creators and owners. In areas of video entertainment, in areas of gaming, even in areas of essential services platforms, for example, education, work from home and even with global social media content creation platforms. So these are the other segments that we have already started working on, and you'll see them coming out in the months ahead of us because we see that the users of this kind of video and game and social media platforms, the payload per sub is multifold compared to someone who's not using them. So this is basically our strategy a head. In terms of the numbers, I think we can follow-up with you to provide more detail. I hope that answers the question? Thank you.

Your next question comes from the line of Chad Summer of Fidelity.

I'm Chad from Fidelity. Just 2 questions. The first one is, what is your most important KPI for your mobile business, especially in terms of top line, so if I say, if you have to choose revenue market share or year-over-year mobile service revenue growth, which one is more important for you? That's my first question.

So I think the most important one is about our revenue share in the industry and also the better revenue growth. That is for the future of our business.

Yes. So if I'm allowed for a follow-up on that. Yes, I understand that both are very important, right? But I guess as long as you try to defend your revenue market share, unless smaller players stop investing in network, maybe competition will just go deteriorating in the future, right? So I'd just would like to know, as long as you're -- you can keep year-over-year mobile service revenue growth, are you happy, even though you may be losing revenue market share a little bit or you definitely don't want to lose any more revenue market share?

So let me put it this way, in our core revenue, it is legacy and broadband revenue, content data revenue. We'd like to maintain it as it is, we do defend it not necessary to increase it, but we will defend it. But on the digital side, we -- our plan is to make our digital revenue as our growth driver. So basically, if you divide it, it is core and digital. In the core, we want to defend and the digital, we want to increase.

Okay. And then my next question is what is the key difference between By.U, which you introduced about 8 months ago, if I'm not mistaken, and today's new unlimited plans? I guess, the biggest difference is By.U is not unlimited, but much cheaper in terms of unit price and unlimited is unlimited, right? But even after you introduced By.U, you couldn't defend your market share and your mobile service revenue growth slowed down significantly, right? So is there any difference? Why do you think this time is different in terms of, let's say, marketing strategy to better defend your market share?

By.U is the product that we segmented for the youth. So the main difference of By.U with our other product is that it's all the provisioning and everything in By.U is using our digital channel. And we are quite successful on that because the absorption of youth market of this product is quite good and the ARPU of this product is considerably higher-than-average ARPU of our customer, while for the Unlimited MAX, I think Rachel can add on that.

Yes. So just to reinforce By.U point of view is that By.U is like purely digital, jaby millennial customers, everything is done online, right? You don't see By.U packages or products at the mom-and-pop shop or any of the typical outlet that -- traditional physical outlets that we have. So whereas for unlimited, it was very much more of the mass segment. So you can find the unlimited packages in the traditional physical stores. So that's the key difference between a By.U play and our key unlimited play stores.

Your next question comes from the line of Vangana Letra of HSBC.

My question relates to Telkomsel dividend payment for 2019. I see that your dividend, you've cut down quite significantly from last year to -- from 2018 to 2019. It's a big poll. Can you help me understand what was the thought process behind this fall in dividend? And I'm talking only Telkomsel dividend.

Okay. I think like this. First, the best line of their revenue also quite big in the previous year. And then we have a special dividend we provide to the shareholders. So this time, I think the -- especially dividend, we don't have that special dividend. So the dividend that we pay is quite normal about 95%. So because the dividend payout ratio -- the difference.

Okay. Let me ask this again. So I'm looking at it from a perspective of total dividend without really getting into the breakup between ordinary and special. And I guess the total dividend is the function of the total balance sheet size. And I see that on Telkomsel, your net debt number, very low. It's a very healthy balance sheet. So I'm still struggling to understand why would the evidence...

The reason is like this, any dividend basically that we pay above 100% of the net income in the particular year that we set a kind of special dividend for us because that's above the net income. So sometimes, whenever we see that EBITDA cash position is quite strong and also we see it actually more efficient to get some external financing to our balance sheet, we do written back the -- I think, the cash to the shareholders. That's the reason of why in particular year, can be higher than to -- compared to another year.

But I see that your payout ratio has come down very sharply compared to some 90% or 100% in the past 4 years. This year was just 58%. So what do you plan to do with all the excess cash that's sitting on the Telkomsel balance sheet?

Okay. Maybe my colleague later on wing, are going to put the detail to you on this one. But I think I talk about the general policy that we have so far, we do have a -- based on the -- I think the need of investment that Telkomsel need to put to continue the business with a healthy, I think, investment. We see that about 95% -- 90% to 95% of the net income can be served to the shareholders as dividend. And the company also, Telkomsel, can borrow money coming from the external, from the bank and so on, to make balance sheet more healthier. That's the policy. So basically, we continue to answer that, I think, competitiveness, sustainability in terms of investment going to continue in Telkomsel and also keep the balance sheet still healthy. So during the time, we see that 95% of dividend that Telkomsel used to pay is quite up. Okay. So I think that, in general, the way we have treated the dividend of Telkomsel. Sometimes if they have more cash on the balance sheet, and then they have paid special dividend. For the more detailed calculation, you ask, I think my colleague going to direct to you to give some detailed explanation.

Okay. Just 1 last question from my side. So could you tell me what was the CapEx at the Telkomsel level for 2019? And what is your expected CapEx for 2020?

Okay. So actually, look at the CapEx to 2019 and 2020, we have the small amount so which is around 13.5%. Or if you come back with our revenues, around 13% to 14% of our revenue. We maintain the CapEx because we need the expanding of the 4G. So it is enough for us to spend and see what is the revenue that we can mean it. So if you look at 2019 and 2020, actually, we have that spending CapEx is similar.

And what was it in 2019?

IDR 13.5 trillion.

Sorry, did I get that right? IDR 25 trillion?

IDR 13.5 trillion, around 13% of our revenue.

Your next question comes from the line of [indiscernible] of Schroders.

Just 3 questions from me. Can you explain more on the latest news that the government wants to provide a very cheap data to the people? And then what's the impact to Telkomsel? And secondly is, your subscriber number, the latest one is 160 million, if I can recall. It is still declining. How concerned are you on that? And what's the company strategy in -- basically on the subscriber because I noticed based on the call with [indiscernible], they are having a big increase on subscriber which means the revenue base for them going forward. And can you share your latest guidance on the top line and also bottom line for this year?

Okay. This is Setyanto from Telkomsel. Yes, we heard about the government plan to provide very cheap Data for people. Actually, it is special for the student and college student, yes. Basically, if the -- from our point of view, as long as it is wide listed by the government. And the data consumption is for specific educational content. It will be good for operator like us because we can add more load to our network. It mean our network utilization, it will be good. And at the same time, we can control that it will not cannibalize our regular data consumption. Yes, for the subscriber, Rachel, please, can you elaborate on that?

So in terms of the subscriber base, we are seeing a consolidation in the market actually is a contraction, overall, due to competition due to SIM card registration, and et cetera. So I think -- so this is also a time where we are seeing our customers who usually multi SIM, reduce their multi SIM card. So as the market leader, the numbers will surely be shrinking. But what we have continued to focus on will be ARPU of our customer base, which is a healthy customer base, growing the payload and data revenue growth. Yes. So I think that should be the main focus, not just sub based on its own.

Okay. On the guideline of top line and bottom line. I think with respect to the situation that COVID-19 that are still uncertain when it's going to be contained, how long is going to be contained and then how much the impact to the economy as a whole, I think what we may say to you, this still kind of consideration to what in which we are quite difficult to, let's say, predict how long and how deep it's going to impact our business. But in the top line, definitely, we are still quite opportunistic, for example, in the IndiHome, try to capture as many as possible, the, I think, quality subscriber that are available in the market. I think that's what we try to maximize. In the same time, for example, in the middle line, we try to manage the costs in the cost of marketing and also try to find a way of, I think, in more efficient in operation and maintenance of our equipment. That's going to bring us to, I think, quite stable in terms of spending. In the end, we do expect this going to still bring us to the healthy business parameters, both in the top line and also bottom line. And so definitely come to the margin that we want to give.

Okay. And can I have 1 more follow-up questions on your unlimited plan? So I understand there's only like 65 cities. But can I confirm how much of that total area to your revenue? Is this very small? And if I hear correctly, so you think the impact of the cheap education Data will be positive to your ARPU? That's all.

Okay. I think the first question with regards to unlimited. For unlimited in those 65 cities, it shows the revenue contribution from those 65 cities at this point, is double digit, but very low compared to the rest of the country. And that's why we have the capacity to be able to provide unlimited in those places.

And sorry, if successful, are you going to roll it up to more cities?

We will come back to the same 3 principles of -- we continue to feel the power of the market because of the COVID, the prolonged effect of COVID on customer affordability. So we look at customer affordability, what he can afford. We will look at our network capacity and availability in those locations and also the competitors' offers. And based on these factors, we will then make a position whether we will continue to expand this in more cities or not. Just to underline the point that price war is not on our mind, it's more of making sure that we can provide data to our customers and growing our data revenues.

Your last question comes from the line Norman Choong of CLSA.

I have 2 questions, both also on mobile. So I just want to go back to the focus on affordability and subscriber share. Can I check how was the traction of [indiscernible] because this bundle is being launched, I think, right in the middle of COVID as I think is supposed to be quite attractive. Or is any chance that this quota has kind of a grow your traffic by 13% quarter-to-quarter, but kind of drag down your EBITDA yield quite significantly? Or how does this compare to the unlimited plan that we see a few weeks ago. My second question is there's another product that's being launched, this is called Orbit. This is suppose to be a data point between IndiHome and mobile. Can I check how has that product been the way? These are my 2 questions.

Okay. I'll take your first question regarding [indiscernible]. So [indiscernible] was the product we launched actually back in February before the COVID operate in Indonesia. So for this particular product, our target segment was from very low ARPU segments who had affordability concerns. That's why it's short validity, but high quota, right? So as of now, the take-up from for this product is still less than 10% of our total Data revenue base. However, we see more than half of this revenue coming from those who are previously known data users and previously, who barely even had -- very, very low data ARPU. So an overall accretive ARPU. So it is -- it has been a successful product for us to be able to reach out to the extremely wallet sensitive or rather small wallet segment of customers. It is not diluted. And the segment we're going after is very different from the unlimited segment. I hope that answers...

Rachel, can I follow-up on this? Is there any possibility that you can share the user of [indiscernible] like a rough estimate of -- is there a down-trading from your existing Data plan into daily and weekly? Or those are just are from migration from SMS and Voice into Data?

We have a mixture of those customers who are previously non data and those who are absolutely new, email, that means new cards. And also those who have extremely low ARPU. So as a combination of those is a net-net gain in terms of accretive ARPU for us from base of customers using [indiscernible]?

Yes. I think Pat, Norman, if you want to pull the question on that one, we can do it directly after the call, I think. Our colleague will assist you on that one.

Yes, Pat, my last question on Orbit.

Yes. Actually, the Orbit is -- the product profile for fixed LTE. So this is the segment that after profit is rise. So it means the people who want to use the wireless -- the WiFi model, but because it cannot be covered by IndiHome, so they use the wireless product. So we call that wirelress Orbit. So far, if we look at our performance Orbit actually quite good, the response of the market. We are providing the product where the WiFi is not coming. So there is some synergies also with IndiHome to segment the product of the WiFi that is not offered. So I think for us, because we also have the limitation of our 2,300 -- our LTE. So I think we only just offer from 2,000 -- LTE for 2,300 spectrum. So at the moment, we saw for the fixed LTE who have already covered by 2,300 megahertz spectrum.

I see that. So my follow-up on this is there's still no disclosure on Orbit anywhere. So the revenue is this under Telkom or Telkomsel?

So the Orbit? Under Telkomsel.

As there are no more further questions, I would now like to hand the conference back to the presenters for the closing remarks. Please go ahead.

Thank you, everyone, for participating in today's call. We apologize for those whose questions could not be addressed yet. Should you have any further questions, please don't hesitate to contact us directly. Thank you, everyone.

Ladies and gentlemen, that concludes today's call. Thank you for participating. You may now disconnect.