China Unicom Limited (NYSE:CHU) Q2 2009 Earnings Call August 28, 2007 9:00 AM ET
Chang Xiaobing - Chairman and CEO
Lu Yimin - Executive Director and President
Zuo Xunsheng - Executive Director and Senior VP
Tong Jilu - Executive Director and CFO.
Good afternoon, ladies and gentlemen. I am Chang Xiaobing, Chairman and CEO of China Unicom Hong Kong Limited. Welcome to our 2009 interim results announcement. Let me introduce other members of our management team, Mr. Lu Yimin, Executive Director and President, Mr. Zuo Xunsheng, Executive Director and Senior Vice President and Mr. Tong Jilu, Executive Director and CFO.
Today's presentation includes three parts. First, I will share with you our overall performance for first half 2009, then Mr. Lu will report the operating performance and Mr. Tong will present the financial result. Finally, we'll open for Q&A.
Since 2009, the Chinese macro economy continued to face various challenges brought by the global financial crisis. After the restructuring of the Telecom industry and the insurance of the 3G license, the operators in China started full service operations, while industry competition intensified.
In first half 2009, although facing with complex market environment, the company actively pushed forward it's internal integration, leveraged on the advantage of full service resources, overall our mobile and fixed-line broadband business had achieve stable growth, while traditional fixed line business continue to decline.
In first half 2009, operating revenue was RMB76.319 billion, adjusted service revenue was RMB74.23 billion, down 3.3% year-over-year and basically flat compared to end of 2008. Mobile revenue reached RMB34.194 billion, up 5.7% year-over-year. Fixed-line revenue was RMB39.908 billion, down 9.7% year-over-year. In first half 2009, the company integrated the resources of mobile and fixed-line businesses. Improved its GSM network coverage aggressively, pushed for broadband access speed upgrade.
As a result our full service operations had achieved initial success. Percentage of value added services revenue to total revenue increased further and business structure was improved as well. Mobile revenue accounted for 46.1% of total revenue, up 3.9 percentage points year-over-year. Non-voice mobile service revenue accounted for 27.2% of mobile service revenue, up 1.9 percentage points year-over-year. Non-voice fixed line service revenue accounted from 47.2% of total fixed-line service revenue, up 5.7 percentage points year-over-year.
Since obtaining WCDMA license on January 7, the company focused its resources to deploy 3G network and 3G service commercial trial. At present, our 3G network coverage reached 285 cities or base stations over HSDPA with downlink speed of above 7.2 megabits per second, base stations at hotspot areas over HSUPA. Due to centralized procurements and synergy, the 3G investment units cost has declined significantly, which allows us to expand the 3G coverage from the original planned 284 cities to 335 cities.
On May 17, the company launched a 3G commercial trial in 56 cities. At present, the number of trial cities is expanded 268 and currently we have 315,000 friendly users using our 3G services and management. We have improved the network utilization efficiency, established centralized capital management centered on organization structure and team adjustments. Major management policies and business processes has been implemented step-by-step,
Due to the complexity of the internal integration the apparent synergy effects have yet to be seen. At the same time, we have noticed some positive changes brought by the integration.
In the first half of this year [net ads] of household and customers with bundles accounted for 34% of total mobile net ads. The rate of mobile subscribers with bundle services was much lower than the subscribers with standalone service.
In the second half of this year the company will launch tight-bundled services, featuring shared minutes, unified accounts and et cetera. At the same time, we will explore shared service platforms to improve subscribers' values and loyalty.
Next, I would talk about our overall thinking for the second half from the following three areas. First, integration and convergence will help create new opportunities. In the second half, the company will actively grasp opportunities arising from the industry restructuring, seize the markets demands from broadband Internet and mobile informatization, further integrate the network resources, promote innovations in technology, services, applications and customer cares and strengthen organization and processes to improve execution capacity in order to enhance shareholders' value.
Second, we'll adjust business structure to promote growth. New changes are emerging in the telecom sectors and is related consumer demands in China. Demand for voice services in some areas is approaching saturation, while there's huge potential for the demand of non-voice services.
To accommodate the investor and regulatory changes, China Unicom will continue implementing structural changes of its very businesses, boost the revenue contribution from non-voice business, as well as from other new business deployments.
Going forward, we will commercially launch 3G services to promote non-voice usage and to establish competitive advantage. For 2G business, we will continue to leverage on our full service advantages, to improve quality of subscriber growth and to promote healthy business development.
For fixed fixed-line broadband business, we will continue the network access speed upgrade to expedite business development and to increase its revenue contribution. For fixed-line voice business we'll focus on retention and voice value-added services to mitigate the rates of decline. Third, 3G commercial launch to establish competitive advantage.
In second half 2009, the company will expedite the 3G network deployment and commercial trial process. The target is to have 3G commercial launch in 285 cities on September 28, 2009. Upon commercial launch, our strategy is to develop leading position in three areas and adopt unified message in six aspects. Based on the commercial trial feedback, we will further refine the target subscribers. Optimize the pricing framework, speed up the channel development, conduct handset centralized procurement as well as encourage open marketing model in order to expand the subscriber sale.
For pricing strategy, we will further implement the integrated local long distance and roaming, all inclusive national voice tariff plan, optimize the proportion of data services in pricing packages and allow automatic upgrade to a higher package for wireless data card user, while exceeding the initial data buckets limit.
We will expedite to establish a nationwide unified online sales and customer care electronic platform in order to serve all direct and indirect channels. It is widely known that WCDMA enjoy clear competitive advantage in quantities and modules, at present 78% of global 3G terminal modules are based on WCDMA technology. We'll fully leverage all the value chain advantage to cooperate with reputable handset vendors to supply handsets on a sizeable scale. To attract well known brands to support our WO 3G service, we will introduce customized handset. At the same time, we welcome subscribers bringing their own handsets to signing up with us.
I would like to use this interim announcement opportunity to briefly talk about our progress on iPhone. China Unicom has reached an agreement with Apple and will officially launch iPhone in the fourth quarter in China. iPhone models include 3G and 3GS, the configuration of which will meet consumers needs in China and the purchase cost will be competitive.
We believe China Unicom's high speed mobile broadband network coupled with the differentiation that iPhone will bring about in terms of data capacity, we'll create a whole new communication and entertainment experiences for customers in China.
Thank you, Chairman, let me now present the operating performance of first half 2009, and the operating strategies for the rest of the year. In first half 2009, adjusted service revenue reached RMB74.23 billion in which mobile voice, mobile value added services, broadband and data recorded static growth with an incremental revenue of RMB3.3 billion. However, this did not completely offset the decline of RMB5.16 billion in traditional fixed-line business. The adjusted service revenue for the company was down 3.3% year-over-year.
Next, I will introduce the state of development for the various major businesses. In first half 2009, mobile business continued to grow. Service revenue was up 5.7% year-over-year in which voice revenue rebounded up 3% year-over-year. Net adds for GSM subscribers was 7.01 million with total GSM subs reaching 114 million, up 10% year-on-year. ARPU was RMB41.7, down 4.4% year-over-year. MOU was 248.9 minutes, down 0.3% year-over-year. These two figures were somewhat flattish when compared to second half 2008.
Mobile value added services businesses maintained growth momentum. In first half 2009, the company continued to improve the penetration of mature value added services such as SMS and cool ringtone generates new growth around GPRS services. As a result mobile value-added services continued to grow rapidly.
First half 2009 revenue for mobile value-added services business reached at RMB9.16 billion, up 16.7% year-over-year, up 2.5 percentage points year-over-year to 26.8%, as percentage of mobile service revenue.
The growth of value-added services primarily came from GPRS. Net adds for GPRS subscribers in first half was 8.76 million reaching an aggregate of nearly 14 million, up 81.4% year-over-year. SMS revenue was negatively impacted due to MRIT cancellation of differential pricing for sending on-net and off-net messages.
First half 2009 fixed-line, broadband and data communication businesses continue to grow with revenue of RMB15.33 billion, up 9% year-over-year. Of which revenue from fixed-line broadband was 11.73 billion, up 10.3% year-over-year. Revenue of data communication business was RMB3.6 billion, up 4.8% year-over-year.
Net adds for fixed-line broadband subscribers was 4.83 million reaching 34.91 million in total due to the limited growth in broadband contents and applications. Broadband ARPU was RMB60.2 only, down 13.5% year-over-year. However, this was relatively better when compared to second half 2008.
As the substitution effects from fixed to mobile intensified, traditional fixed-line business remained under pressure. Fixed-line revenue was RMB24.2 billion, down 17.6% year-over-year on a comparable basis, in which PHS revenue was RMB2.95 billion, down 29.3% year-over-year.
The number of local asset subscribers decreased by 1.2 million in first half 2009, in which fixed-line subscribers decreased by 0.03 million, PHS subscribers decreased by 1.09 million, local voice usage was 94.2 billion pulses, down 9.6% year-over-year.
ARPU for fixed-line business continued to drop in first half 2009. Fixed-line ARPU was RMB35.1, down RMB 5.1; PHS ARPU was RMB20.7, down RMB3.8.
To align with the long-term development goal of the company in the first half of 2009, China Unicom launched a new brand, a full-service brand Wo. Wo aims to improve perception, exemplifying our innovative corporate image.
We believe as the company is improving its network quality, product innovation, channel distribution as well as customer care, Wo will bring a whole new experience to subscribers and will create a refreshing corporate brand image.
In the second half of 2009, the company will adopt the following strategies for three customers segments. For individual customers, we will focus on coordinated and effective development of 2G and 3G businesses.
For 2G continue to employ the differentiating [development] self-strategy, improves subscriber structure, gain market share and strengthen package marketing of VAS, that is, GPRS for 3G, Chairman Chang has already given more details. I will not repeat here.
For wholesale customers, the company will implement full service tight integration, strengthens fixed-line customer retention, drive broadband business development for broadband access speed upgrade, promotes digital home application for the surrounding home gateway and lastly pushes forward informatization in rural areas.
For government and enterprise customers, the company will leverage the 3G technology advantage to promote vertical application includes total solution capabilities to meet customer's integrated communication needs.
At present, China Unicom is facing with an unprecedented business landscape. The management will fully integrate our existing resources, leverage on our advantages seize the opportunities communication industry upgrade and rising consumer demands.
China Unicom strives to enhance our market position and to maximize shareholder's equity by building new networks, operating new businesses and introducing new services.
Next, may I invite CFO, Mr. Tong Jilu, to present our financial results.
Thank you, Mr. Lu. Now, I'm going to present to you the financial analysis for first half 2009. Thank you, Mr. Lu. Let me introduce the basis of financial reporting.
China Unicom completed the acquisition of the fixed-line business in Southern 21 provinces in January 2009. Merger accounting was (inaudible) as it was the best combination under common control. Network access remained under the parent company, while a network lease agreement was started in 2009.
2008 comparative figures include all revenue and operating expenses of fixed-line in Southern 21 provinces, but excluding depreciation and amortization of the network assets and the finance cost for financing the construction of the networks. No lease fee is accounted for also.
We have adopted IFRS/HKFRS 8 "Operating Segments". The current interim segments report only reflex revenue and cost directly attributable to mobile and fixed-line business. Other expenses such as employee benefits expenses, depreciation and amortization of jointly shared assets, finance costs and et cetera. are presented as unallocated amounts.
In first half 2009 operating revenue reached RMB76.32 billion, in which service revenue was RMB74.51 billion, down 3.3% year-over-year on a comparable basis, flattish when compared to second half 2008.
For mobile business service revenue was RMB34.19 billion up 5.7% year-over-year, in which module value-added services revenues continued to grow rapidly, reaching RMB9.16 billion up 16.7% year-over-year. For fixed-line business service revenue was RMB40.19 billon down 9.7% year.
In broadband and data communications revenue was RMB15.33 billion, up 9% year-over-year. Revenues from growing areas such as mobile, fixed-line, broadband and data communications services accounted for 65% of China Unicom's total revenue up from 57% in first half 2008.
For first half 2009, total expenses for the company was RMB67.69 billion, up 1.3% year-over-year, down 5.3%, comparing to second half 2008. Operating expenses were RMB66.8 billion, representing 87.5% of total revenue, up 5.8 percentage points year-over-year, down 4 percentage points comparing to second half 2008.
Excluding the non-comparable items, such as the lease fee of fixed-line network in southern 21 provinces and a gain on the non-monetary assets exchange, the adjusted total expenses were actually down 0.9% year-over-year. The increase in expense items were primarily driven by network, operations and support expenses, personnel expenses as well as selling and marketing expenses. The decrease in expense items includes mainly general and administrative expenses.
In compliance with operating segments of IFRS/HKFRS 8, effective from January 1, 2009, China Unicom will no longer provide segments return for all income statement items. We'll only report revenue and cost directly attributable to mobile and fixed-line business. Other expenses such as employee benefits, expenses, depreciation and amortization of jointly shared assets, finance cost and et cetera, are presented as unallocated amounts.
In first half 2009, directly attributable expenses to mobile business grew by 5.9% year-over-year, fixed line of business however was down 10.5% year-over-year. Total depreciation and amortization was down by 2.6% primarily due to the PHS assets write-off in 2008 and 2009 CapEx has yet to become converted into fixed assets.
Network operations and support expenses grew by 17.1% year-over-year, because the expansion of network capacity and number of base stations cost higher expenses in water, electricity, fuel, site rental et cetera. Personnel expenses increased by 6.2%, mainly due to employee social security contribution. They increased as a result of government raising contribution base line.
Salary and marketing expenses were up 6.6% because of launching of the WO brand, and preparation of the 3G business. As a result, advertising fee grew by 17.2%. Due to intense competition and growth in the number of mobile subscribers in first half of 2009, GSM channel commission expense increased by 10.6%. G&A and other expenses decreased by 20.5%, showing the synergy effect after company's integration.
In first half 2009, adjusted EBITDA was RMB32.59 billion, down 15.1% year-over-year, up 7.8%, compared to second half 2008. EBITDA margin was 42.9%, down by 4.5 percentage points year-over-year up by 4.1 percentage points, compared to second half 2008. EBITDA margin drop was due to three reasons.
First, traditional fixed-line revenue continued to decline. Second, as network size and coverage increased in the first half of 2009, network operations and support expenses increased. Third, selling and marketing expenses increased as we have launched a new WO brand and are facing intensified competition.
Adjusted profits before tax was 9.23 billion, down 31.7 percentage year-over-year, up 59.7% from second half 2008. Adjusted net profit was RMB6.995 billion, down 33.2% year-over-year, up 60.2% from second half 2008.
As of June 30, 2009, capital structure remained stable, interest bearing debt was RMB31.76 billion, debt-to-capitalization was 13.4%, liability-assets ratio was 42%. Now, debt-to-capitalization was 10.1%.
In first half 2009, the company strengthened the centralized management and control of capital and cash flows, optimized debt structure to lower interest expense. As a result, finance cost decreased by 71%.
Going forward into second half 2009 to maintain a solid balance sheet, we will continue to implement two separate lines to inflow and outflow cash management and to optimize capital utilization to improve capital efficiency. Thank you.
Unidentified Company Representative
Okay, now, we are open for Q&A. Also, to enable more people to have a chance to ask more questions now, again, I would like ask everyone to limit your question to number of two questions.
(Inaudible) have two questions. The first one is about 3G coverage. How is the coverage of 3G services right now? Given that with this release that we only spent about one-third of the CapEx in the first half and also comments about that although the [priority] of cost of 3G WCDMA, we have savings, so is that means that we'll have savings for the CapEx this year? Also, given that if the subscribers increase very quickly whether our network can efficiently support our services?
The second question is about iPhone. What about the pricing and how we are going to sell? Whether it's going through the direct channels or indirect channels, whether there is volume commitment to Apple and whether the agreement is exclusive?
Unidentified Company Representative
About iPhone, we already singed a agreement with Apple and we will launch iPhone handset in the first quarter. Given that we have some [conflict] IT agreement with Apple and also with the details sales and marketing strategy, the company is also still under detailed study internally. So until we finalize on those detailed study internally. So, until we finalize on those detailed plan, we'll further disclose at that time.
On the first question about the 3G coverage, in the year earlier we had planned 284 cities coverage, and so far the is all the equipment, the quality and the pricing is very good.The price than the 2G equipments. Given that also in the market, the 3G, we're not sure the terminal, the penetration, how quickly that will at penetrate the market. How quickly that we will penetrate the market, but however the sign in the market, they show that a majority of the handset in the market being sold also supporting the 3G and the WCDMA, a lot of them already supporting WCDMA services.
So in sign of that in the second half we will increase the deployment of 284 cities to 335 cities and we will basically cover all of the provincial-level cities and also those very advanced developed county-level cities. So, with that we will cover around 50% of the population by the year end.
The CFO also would like to add that because of the 3G equipment savings now for the full year CapEx, although even an increase in coverage for increase in more cities, but overall CapEx will not increased.
Separate questions, one is for mobile. CapEx, the management just guided that the CapEx will not be increased. He would like to understand that for the next year, how much would be the CapEx and whether it would be increased? Further, how many 3G base stations are already deployed right now and what's the target for the next year? Also, in light of the mobile minutes, in the last couple of months it's been decreasing, given that we are going to launch 3G commercially in the fourth quarter, what is the management thinking of whether that will help us boost the net adds in this fourth quarter?
Also, right now, given that in all the cities the penetration is already very high, and whether Unicom will rollout the subsidy policy to encourage and attract more subscribers? The second big question is on the fixed-line. Given that the revenue decline is more than expected, and whether that's because of the PHS churn is very high, and of course in the voice revenue decline and also what about the ICT. What's the plan for the future?
Unidentified Company Representative
On the CapEx guidance given that this year, we have a big CapEx numbers. Especially also 2G CapEx has been increased. We have also invested a lot of big projects for this year. Next year I would say would not be bigger than this year, but we're not willing to say right now how much will it decrease because we still have a lot of projects like on the 3G on the fixed-line, we still need to invest.
So we will not comment how much to decrease right at this moment. So if opportunity rise in the next few months, so we will also decide in order to invest. On the coverage, right now on the 3G base stations, the plan for this year is to deploy 823 number of base stations for 3G this year, for the full year. We estimate that we may need to increase that number.
Also that include 297,000 sector carriers on the 3G base stations and that are covering around 300 million populations, but although that number were still changing very frequently. The overall objective is to have a combined 2G and 3G to cover 96% of the county level, the counties in China and also about 82% of the administrative abilities in China.
About the fixed-line revenue, the fixed-line revenue declined around RMB5.69 billion in the first half, in which 4.78 is the voice revenue decline and that's about 18.5% decline in the voice revenue. All other major item also including PHS revenue, PHS revenue declined around 1.22 billion and that's around 21.5% of the overall revenue decline and decline year-over-year 29.3%.
For the ICT, the revenue declined 1.66 billion and that's because of the way to adjust our strategy. Because although revenue of ICT declined around 76.8%, however, the cost expenses declined 78%, so that reflect that we are just in our ICT strategies to trying to increase the profitability. Okay, next question. Okay.[Chen Haofei]?
Two questions, first one is regarding the depreciation and amortization expenses. The number has showed decline in first half. He would like to ask management whether that number decline is temporary. How about the next, the second half?
The second is about the finance cost. Given that we are likely to increase our debt levels, whether the finance cost will increase in the second half. The second question is on the 3G and on the CapEx. Since that the 3G CapEx has been progressing well but others, for example, the fixed-line broadband and the 3G essentially in first half, the CapEx expenditures has been quite slow, has been low. So, whether that and how that would change in the second half?
Unidentified Company Representative
On the depreciation, the overall guidance is that, the full year depreciation will be around a similar level. Compared to last year, we may have a little bit increase because for the first half, depreciation had decreased about RMB600 million. For the second half, we expect that depreciation will increase around RMB600 million to RMB1 billion. So, overall, for the full year will be around similar levels.
On the finance cost, in the first half, is around RMB300 million. For the second half, given that for the full year, we expect we'll have around RMB63 billion overall operating cash flow, and for the CapEx needs for this cash outlay, we'll need around RMB80 billion. So in the second half, we were likely to increase around RMB220 billion loans. So with that, we still estimate that for the full year finance cost will still slightly decrease, but would not be weak.
Okay. For the progress of the capital expenditures for the first half, it is true that we have showed most of the capital expenditures on 3G. But for the other capital expenditures like on the 2G and the fixed-line, because every projects need a startup and the preparation period, so we still remain the same on the CapEx guidance on 2G and other items that would show up in the second half.
Evan has two questions. The first question is, that congratulation China Unicom will have products, and well, we have already deployed the publicity (inaudible) in over 200 cities. Also, in the first quarter, what is our strategy in terms of given that we have said earlier that our strategy is to trying to attract high-end customers and ARPU is around like 90.
So if you'd like to ask the Management, what is our target, what is Unicom's target on the ARPU for the 3G subscribers and also what is the subsidy policy for the handsets? Second question is, he would like Management to comment on the churn trends, how that changed from the first quarter to the second quarter?
Unidentified Company Representative
For the ARPU, we already have some feedback from the trial period. For example, for those subscribers because our original plan was around 150 yen and we have cut the price in half in the trial period. However, the actual average ARPU for those subscribers is already above 100 at this moment.
For the first half the churn rate is 3.75%, that's up around 0.67%. The main reason is, because of the intensified competition and also because of the macroeconomic changes, a lot of the migrant workers have left the coastal cities and migrated to other places. So that is the main reason for causing our churn to increase.
Okay, now on the subsidy.
Unidentified Company Representative
Regarding the subsidy policy, because in the trial period we did not use any subsidy policies, but regarding for the iPhone we were using the international, the regular conventional way. Based on the commitment level, contact commitment from the customers and that should determine the subsidy levels. If the customer uses more, have more usage then we will have higher subsidies and whether we will use large scale subsidies that is still under study.
Okay, last question. Okay, [Wendy].
Okay. The question is if you look at the other expenses, right now the multi-revenue proportion to mobile revenue as a percent of total revenue has been increasing, however in the cost items the cost for the fixed line expenses still seems very big. He would like to ask that how elastic of those fixed-line expenses is.
Unidentified Company Representative
Going over the CapEx breakdown, although we have a very high CapEx number, overall RMB110 billion. Within that actually if you look at the fixed-line transport network investments, we have RMB19.7 billion. Majority of those investments is actually commonly shared between fixed-line and a mobile.
Also, we have other big investments in IT systems, supporting systems and value-added service platforms. Those also are largely actually shared by the mobile and fixed-line networks.
For example, the IT and [BSA Systems], investments is RMB4 billion, and valued-added service platforms, the investment in RMB3 billion. Especially the value-added service platforms does actually mostly will be used by the 3G services. The real [pure], the fixed-line investment is actually only about RMB700 million. Okay. We have one question. [Helen].
Helen has two questions. One is on the WCDMA strategy. Given that we have a lot advantage in the mobile handsets in WCDMA, and also we have invested greatly in our WCDMA networks, and why not China Unicom to really to leverage on the handset advantage at this time to really lower the threshold for the subscriber signup on services, because advantage of handsets really maybe short lift in the next few years, and why not the company to lower their threshold.
Also you read the news about the recent the China Unicom, the tariff plans. The lowest package now we have is 98 yen and you asked whether that is true and what's the thinking for the second half.
Second question is regarding the fixed-line business. Its directly show a big year-over-year decrease and that's actually similar to what China Telecom reported yesterday and she asks whether the second half that decline will slowed down and what about 2010?
Unidentified Company Representative
For your first question, regarding the threshold on the enrollment of subscribers for the 3G and your suggestion have some rational basis, however, we'll also like to maybe continue to discuss with, for example in the (inaudible) market the ARPU is already very low, close into the average 3G ARPUs. If we really would like to use 3G to leverage on the non-voice, using the 3G to increase the non-voice revenues, if the voice business is going and then will have some further space for the price decline.
Right now, for example, in 3G services, a lot of services really the competing is primarily based on the pricing competitions and for the 3G services, its very easy for an operator to decide in a way to adopt the same strategy for the 2G. However, the likely result may not be good for us. So, the current the pricing strategy for us after our careful thinking is dynamic. We would like to based on the market feedback and we're trying to adjust accordingly. We firmly thing that for the 2G the average ARPU is actually the bottom line. The 3G ARPU should not be lower than 2G ARPUs. Unless the non-voice business is very hard for the 3G services that can show that we will have a lot of opportunities in the 3G.
Regarding, our current design of a pricing tariffs, we have adopted a nationwide unified pricing and that includes local, roaming, and long distance, it's all inclusive. If you exceed the certain bundle limits, we've already showed the per minute price. For this data pricing, we already have, for example, per megabytes. The price is only about RMB0.30 and that the level of decline is already greater than 90%.
So, overall we think that our price decline on the 3G, on the unit price level is already greatly reduced. So, also based on the global market and the great trend is that data will likely to be a good prospect for growth for the future. We'd like to just to follow that trends.
Unidentified Company Representative
Because the fixed rate strategy adjustment was actually started from the second half of the last year, so you think that decline of revenue of fixed-line will continue, but we think that rate of decline should have some improvement in second half.
Okay, that's all for today. Thank you everyone. Have a good weekend.
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