Q1 2021 Mobil'nye Telesistemy PAO Earnings Call
[music].
Ladies and gentlemen, and welcome to the conference call of mobile Telesystem.
And our customers' request this conference will be recorded.
As a reminder, all participants will be in a day.
And then.
After the presentation there'll be opportunity to ask questions.
And if any participant has difficulty hearing the conference. Please press sake flow zero on your telephone operators system.
And I'll hand, you over to fully net worth Yamaha.
The rest of and Investor Relations, who will lead you through this conference.
Please go ahead.
And welcome everybody to total day events could discuss MTS still score to 'twenty to 'twenty, one financial and operating results. If we will stop and I must remind you that except for historical information.
And any comments made during the school and May constitute forward looking statements important factors could cause our actual results to differ materially from those contained in our projections or forward looking statements this and.
And children imply certain risks and also to a discussion of wish I available in our annual report and form 20-F on the materials, who have just revisit debate.
MTS Disavows senior obligations to update and you previously made forward looking statements spoken on this conference call or make any adjustments to previously made statements to reflect changes in risks I also wanted to mention that following the sale of and the reason we have folded the remaining portion of integration revenue interest on their services.
For your convenience, we have retrospectively restasis, our profit and loss statement and our summary financials filed which is available on our IR website together with the press release and presentation from the school.
Today's presenters on.
So I have a nickel life, President and Chief Executive Officer, and Mexico looks too long on what's supposed to vice president for telecommunications and the risk on your skin Vice President for Finance and then he actually lots of Vicepresident for financial services and seal for MTS Bank, who will stick and rush and they will kind of fleet so low.
Let me turn this over to slava to kick us off.
Thank you Paulino and.
To everyone joining the call today. Since this is my first call as CEO I wanted to start with just a few words about where we are today and where we had it going forward.
Overall, our strategy remains unchanged.
We are continuing to execute on our two pronged approach to build out and ecosystem of digital services, while maintaining mobile market leadership.
Looking ahead, you can expect to see continue as we move forward and that strategy at.
At the same time, we are going to put a sharper focus on concentrating our firepower.
To rapidly reach commercial scale, among promising growth vectors context matters, and Russia consumers preferred local content and corporates preferred domestic solutions as a telco. This is frankly unique opportunity and we are going to take full advantage of it.
I am pleased to report we are off to an excellent start in 2021 consolidated group revenue for the quarter was up five 5% year over year to nearly 124 billion rubles with solid contributions from all four of our verticals, notably areas beyond connectivity contributed more than one.
And third of the total upside with Fintech, leading the way followed by cloud and digital solutions as well as media.
Turning to the leap day waterfall for the quarter group adjusted EBITDA was up six 7% year over year supported by solid contributions from.
From core services.
And which more than offset headwinds from the loss of high margin roaming revenue as well as a material contribution from MTS bank and other factors.
A few words on digital news first I'd like to welcome all busy Barba, Vice presidents for ecosystem, developing and marketing going forward Olga will be leading our efforts to further refine our ecosystem products services and bundles and overall.
Overall, we continue to see robust uptake and engagement across the ecosystem over the past three quarters revenue from ecosystem clients has increased from around 19% and 23% of total would be to see revenue that's compared to ecosystem client penetration at less than 16% of the subscriber base and Q1.
So we still have a long runway for sustainable growth.
Turning to product users of our ecosystem subscription MTS premium are up around 50% over the past six months.
Earlier with made this available for free to high end subscribers that meant a minimum spending and thresholds and Q1 was shifted to paid on the model for new ads. While also revamping the offer to more generous benefit package that includes unlimited data and a higher tier of video on demand content.
Our loyalty program and MTS Cashback continues to drawing new users topping 11 meal and registered participants and Q1.
On the upside we have reached nearly 25 million active users of our self care hop on my MTS more than half of all smartphone users and on the network.
This remains a critical gateway and into our ecosystem, which is reflected in the <unk> of my MTS users being more than 10% above average.
We are also seeing good traction with new tariff, our new one stop shop subscription that combines mobile connectivity and digital services.
Based on our cohort tracking we're seeing higher <unk> than our previous flagship tariff, which was cultural Fisher.
And more than 30% above the BDC average with the upside roughly evenly spread between <unk> and retention and we're also seeing high engagement.
With the majority of new adds to net debt if actively customizing their plan instead of opening for the default configuration.
And Fintech, we reached $2 6 million and bank clients with open accounts deposits and loans and encourage lee year over year growth and daily banking clients outpaced total clients, which is in line with our focus on increasing the frequency of customer interaction.
Turning to media at the end of Q1, we approached nearly 3 million OTT users nearly tripling from just a year ago historically, our OTT offering was a mobile first half with smartphone users accounting for the vast majority of users. We are now seeing robust diversification across platforms for example, active smart.
Active users have increased more than 10 times since last summer and today make up a significant share of facilities.
In April we reached a major and medium milestone with the launch of a radical redesign of our OTT platform, which has been rebranded as key on.
And this is a truly compelling and differentiated home entertainment experience Q on features hundreds of linear TV <unk>.
Thousands of licensed on demand titles and for the first time, a select slate of exclusive content, which we're calling Q on originals.
To give a bit of color these are not.
Low key web serials, but rich storytelling across drama comedy series as well as documentaries and feature films were also pioneering a new format, which we called <unk>.
Gifts of use flexibility and choosing between episodes for flu and fueling.
As we execute on content, our top priority is managing our spend and a deliberate manner keeping a laser focus on return on investment and business kpis around engagement retention and lifetime value.
We're being very active and showcasing and promoting the platform we've launched nationwide advertising and we're seeing good resonance with leading celebrities media outlets and social media Influencers. We estimate we reached tens of millions of impressions and just if your first two weeks in terms of engagement, we are already seeing higher.
<unk> installs, but that said, we're still less than a month's out since launch and we will hold off on sharing more details until we have a longer trend line.
Looking ahead Q1 will be a foundational component of our ecosystem. The media market is poised to be disrupted as the secular shift to OTT gains momentum and.
And the long term, we think we can be a top three player and Russia with the user base of <unk> and U S.
On that positive note, let me hand, it over to NASA for telecom and B to B update.
Thank you slot on in Q1, and we'll continue to see robust dynamics and core communications and mobile connectivity service revenue and rationalize the up two 3% to eight two <unk> on the back of solid domestic demand growth.
And the deceleration from Q4, largely reflects a high base from relatively early data from adjustments in 2020. There was also a negative impact on comparable basis from the extra leap day last year and it.
Addition will continue to seek financing from year over year headwinds from the pandemic related drop in international enrollment and revenue despite seasonality.
Looking ahead.
<unk> <unk> headwind to EPS or even the revised beginning in Q2 on lava comparable.
Although even in our most of them to be six Tomatoes, we expect full year roaming to remain well below pre pandemic levels.
And our free months active subscriber base, and Russia tick slightly downwards to seven to eight 4 million.
<unk>, our core focus from subscriber quality and in Q1, and we saw healthy dynamics and a loyal customer base, those with us 12 months or longer as well as our market share of day. Thanks.
And we expect to continue to differentiate and away from connectivity as a standalone service and <unk>.
Deepen engagement and blend and through services and bundle offerings.
And fixed lines in Q1 was successful and sustain our momentum in broadband.
<unk> revenue was up seven 5% year over year, when excluding California residential broadband net adds also continue to assess and H towards 4 million fiber is a top priority and we continue to invest and our backhaul and <unk> net book So they will offer gigabit.
And in more than 30 rush and Ctrip.
We'll also continue to execute on our <unk> project to build our connectivity.
And socially important facilities, such as schools and medical clinics and in March we issued our first very first social bond to help fund the project.
Overall, we're on schedule to achieve the goals, we set last year and we are now executing on the third and final phase.
This is a further demonstration of our commitment to help build and exclusive digital future for all members from <unk>.
Yeah.
And the retail we saw strong double digit growth of 16, 4% year over year in sales of handsets and accessories.
And this is likely reflects a spike in demand due to the timing of device upgrade cycle.
Also continued to execute on our channel diversification strategy.
E Commerce sales doubling year over year in Moscow, and we have launched new showrooms and some of the city's most highly trafficked shopping districts. This storage provides 80 Trish on Phoenix Peters with dedicated zone of gaming and banking variable devices and smart home get you on.
On the product side, we recently launched data plus device bundles together with Samsung.
And <unk> at boosting our subscriber conversion rates from device sales.
And across our network, we're making good progress on enhancing touch point and quality Wilkins for transaction and Steve topping 17.
And finally, a brief update on EBITDA as you know less do you watch and precedented time for digital acceleration at the global level. This year, our customers are continuing to embrace digital transformation and this is a trusted partner in that process. We were proud to recently meet Cognize index custom.
<unk> Walt awards is providing the best B to B cost and experience for Telecom service and Russia.
And Q1, and our cloud and digital solutions vertical row rapid double digit growth with revenue up nearly 30% year over year.
And so continue to be a leader in the private LTE for enterprise clients and promising indicator towards future <unk> projects.
Let me hand, it Julia for since you have a date.
Placebo and listen.
And so those two cash it but it's there is Sydney as a statistical offensive and Pittsburgh.
And we should schedule, but niche low predominantly focused on you with most recent gross you skew Banca <unk> given that guidance.
But then from gross to post COVID-19.
Zero.
Thank you and this Jeff.
And I'm happy to present, a strong Q1 results for <unk>, Dx and MTS bank, but so I would like to note that based on full year data MTS bank with recognized as the eighth largest crush and bank by credit card portfolio and the number one bank in terms of point of sale loan growth.
And the answer to and got them and for those of them, partly diluted net realizable witness and strategic focus on reaching some sort of a kind of.
Quarterly per day.
Good evening.
So those kind of get at least as per the bullet book Bloody new option for this.
And that would the moraine east <unk> at this time.
And thank you Tien tsin Huang with continues steadily executed on our strategy with a focus on developing digital channel in Q1 for the first time, we reached more than half of all loans product sales through digital channels.
Just a year ago this accounted for less than a quarter of all sales.
Get on curtailment and retail at whole foods, and the liquidation channel could you get them to do which there is zero from individuals and entities split percentage.
Good good.
And if your room raise on our models and it gives them on facility.
In the first quarter, we saw healthy dynamics and our retail loan portfolio grew <unk>, 5% year over year before provisions, which served as the key driver from overall credit actually on growth.
And my phone euros per credit on productivity and switch to the bonds and the Brazil.
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Total failure with EC pay per center.
Offshore, but it's on Lauder holders, which can really do.
Kilometre mission and the hospital system.
The volume, we can snippet of some of the dual which 30 day.
She is the people of Louis flow the budgets, both in and out of the probably.
Because it's intended to capital the Sip book mentions machine. So it's not representative so to speak and put us on a per square foot per SKU.
On the back of this loan gross and the lack of additional provisions and for example, we saw year and get some damage last year net interest income and the first three months of the year grew 14% year over year to 4 billion it'll move net fee and commission income increased 69% year over year, reaching over 2 billion.
And that will move contributing <unk> five percentage overall operating income before provision.
Moreover, GM Commission income accounted for more than half of total retail operating income before provision and.
Net income increased to nearly $1 5 billion rubles and return on equity reached double digits, 16% versus 5% and the year ago quarter on.
And with this capability because it needs and opportunities to get on quarterly Smith, Deputy President of logistic each day to.
Right.
I wasn't sure from a significant within our February Metrial person moving.
Moving to China from Cisco.
And in particular.
And with each other.
Many of these.
Excuse me on a switch from a more positive note.
And I will just shift to digital photos Houston facilities needles and device me listening placenta.
The key blood and in percentage, particularly from fourth day.
Monthly getting on with considerable excuse me.
<unk> zero and jewelry facilities.
It's not a ceiling and double tissue could you give us a sale to their express homes.
Close to pretty exclusive retail loan portfolio declined to five 2% from five 4% quarter ago in the retail segment cost of risk increased slightly to eight 3%, reflecting the extra issuance of retail products and provisioning for the expanding loans petroleum on this.
Share of nonperforming retail loans declined to eight 8% and Q1 versus 19, 5% and Q4 overall the bank remains committed to a conservative approach to resource with year end NPL coverage extends and at 160%.
Capitalism and enough when you sit and that's up from the comfort and importantly, Toledo, and the regulatory and and there might even debt such as ticket and.
And on your input commodity.
Good.
Good day facility and us put us in the previous months two.
To meet and as opposed to capital with revenue and his name on them in a material dribbling Institute them on book of display and in person.
What do you mean at the comfortable level of capitalization and.
Total fleet.
And 1.0 capital adequacy ratio stood at 13%.
Which reflects a healthy safety margin above minimum regulatory requirements of <unk> five percentage.
Moving and strategic was mostly students from those and non issue as clients commodity route system and executive meetings group and this.
But it would seem to be that on <unk>.
Looking ahead, we see promising growth opportunities and we are continuing to expand our customer base and realize ecosystem synergies with MTF and I'll, Let me give the gross lumpy.
Okay.
Thank you Leah.
And first quarter group net profit decreased eight 8% year over year to $16 2 billion rubles.
Net profit was supported by higher income from our business operations, including solid performance at performance at and testing as well as the positive impact from a decline and cost of debt on a year over year basis in.
In addition growth was constrained by a high base effect and the year ago quarter due to a significant non cash impact from FX effects and operations with derivatives. Excluding this last factor.
Net profit increased $19 five percentage year over year.
And now a few words on Capex.
And at our last call in March we announced the higher Capex plan for 2021.
There are three major factors driving debt increase first and six drag and equipment procurement.
The second deliberate investments and new growth areas and the third short term on location for a major <unk> projects in Moscow.
In line with the outlook, we gave you capital expenditures and the first quarter amounted to $29 3 billion rubles.
Got this higher capex intensity as a temporary and ramp up as we invest and our future northern view around rates and.
And this context.
Free cash flow, excluding MTS bank and cash proceeds from the sale of Vodafone Ukraine stood at 11 3 billion rubles. So the first three months of the year.
Turning to the balance sheet.
And so as the regime.
Has made great progress in optimizing our debt portfolio and meet the lower interest rates and vitamins, we have seen over the past few years and as I mentioned, we recently issued the company debuted social bonds, which are in line with the social bond principles was the international capital Markets Association.
We were happy to see very high engagement during the book building <unk>.
Including from smaller institutions and retail investors and total who had nearly 3000 orders versus the few dozen or so large fixed income investors debt that we see in a typical insurance.
At the end of the first quarter, our gross weighted average interest rates stood at six 3% with.
We believe we timed our refinancing actions will and we feel good about our debt position now that rates have begun to increase.
Moreover, we continue to enjoy healthy tenor and our leverage remains at a very comfortable level of one five net debt to EBITDA ratio now I will hand, it back to <unk> for his closing remarks.
Thank you on rate.
I am very encouraged by our performance and results we delivered a strong start in Q1 and we are on track to deliver solid results for the full year. At this time, we are reaffirming our existing full year outlook that we gave you back in March of at least 4% growth and revenue and OIBDA and Capex of 100 to 110 billion rubles.
That said there could be some potential to revise this later in the year and particularly depending on how much trouble and roaming resumes.
Summer.
Turning to shareholder returns in March the board of directors authorized a further 15 billion rubles.
Stock buybacks this year and we've already spent more than 5 billion rubles on the program.
In addition, the board has recommended a full year 2020 dividend of $26 and Sichuan rubles per ordinary share to be approved by shareholders at the AGM in June we continue to target a total regular dividend pay out in 'twenty, two and two on above the 29 five for both so we paid and calendar year.
2020.
Finally, I'd also like to highlight.
On the highlight the board recently set up a dedicated ESG committee aimed at strengthening corporate governance, environmental initiatives and corporate and corporate.
Social responsibility.
And we recognize ESG as an increasingly important factor for investors and their decision making process.
And we are committed to enhancing our transparency and disclosure around ESG.
So with that let me hand, it back to fully and therefore the Q&A.
Thank you Slava.
And thank you for the rest of the speaker and we'll take questions. Please be aware there may be a slight delay for completion and operator with debt, let's open the lines for questions.
Thank you Doug will go on in Africa.
And on some session.
If you have a question from speakers please.
ROE and one on your telephone keypad now.
Keith.
Once you're on a must have and announce you can ask your question.
Your final question is on such low does your TTC.
<unk> zero and choose to call to your questions.
And using speaker equipment today, please Mr. Han said before making a reflection.
The amendment please.
Jim.
On the first question. Please proceed is from Ivan Kim Your line is no.
Go ahead.
Yes, good afternoon.
Three questions from me if I may.
Firstly.
And you raise prices.
And then on February March.
And and all of it and sell it to where its price and Jarrod two did you see either from research suggests prices higher as well.
And from them.
And the start of the year as the first question.
The second question.
<unk> is on.
Factors influencing EBITDA. So can you please comment on <unk> on <unk>.
Sure.
Other factors influencing EBITDA year on year, this quarter, and whether we can expect and it.
And consumer.
And the remainder and the remainder of the year.
And just probably a technical question on your.
<unk> subscribers.
Thank you.
So and you can you. Please repeat the first question, which related to pay the OTT subscribers.
Yes, just comment on those because you saw the total number of OTT subscribers.
Just wondering how many of those are.
Bart.
Are they all paid or some of them are eligible for <unk>.
For the service was on their subscription thank you.
Okay, Ron and I will take the first question. This is on us.
And.
And responsible for telecom so usually on the clinical market there was a practice.
And I will make and PRASM fixation revenue.
The year section and this is a common practice fall to the commentary to us to do that begin on the yes on the first quarter.
Did it on at least on this quarter. So as you mentioned correctly and of.
February beginning of March.
So.
I would call it on the market.
And also review process and the first quarter.
Yes. This is andre.
The second question with regard to the factors on EBITDA there.
Positive impact on the EBITDA from other factors price.
And we really relates to the effect of one off provision in Q1 and 2020 debt.
And resulted in a luby's and the first quarter on a year over year basis. Overall, we expect the impact from this transition to be overall neutral and the first half of the year.
And the last question I think it's the most difficult because.
It's really difficult to define what is the paid OTT subscriber I will explain why.
If you look at.
Common market practice you would for example, see that there are users of Yandex plus that have access to key and the poorest.
And is whether those guys. Our paid users are not they are paying and we have the similar very similar practice with.
Net premium service.
And other bundled services so.
And this terms I can tell you that.
We are not we are not looking for OTT users that will not bring and the value to the company, including by the way, including the advertising.
Revenues that could come we don't have this system now but.
I think and.
On line.
OTT operator is looking into the system again, it's becoming it's becoming more popular because of the possibility to target this advertising, which makes it much more.
No.
Commercial commercially viable so.
And the number of subscribers we report they usually include.
Subscribers debt get.
Revenue to the company through different channels, but.
They are not free users generally thats maybe it.
Little long, but.
Sure there is not as easy as it looks.
Okay, great. Thank you very much for this and that led us.
Full up on.
The provision.
Andre.
And so did I understand correctly and you said that overall is going to be neutral for the first half so there will be some.
Yes, I'm not sure how to to understand that so there will be some negative impact on the second quarter or.
Hey, I mentioned it is actually if we compare this year to the previous year debt it would be neutral yes.
The comparison because it was the low base of 2020, when they need this provision and therefore, you see now this positive impact and if we compare the first half of the year of 2021 to 2000 22020, it would be neutral that debt with I mentioned.
Okay. Thank you.
Thank you. The next question is from Alexander <unk> of Renaissance Capital. Your line is open. Please go ahead.
Yes. Thank you.
Questions from my side.
First one.
On the assumptions were on.
And your room and forecast for this year can you in mind.
And what sort of outlook you have for orders and revenue by the quarters if possible.
I understand what sort of a potential upside from this half.
And I have a little <unk>.
More or less.
Core geographies and one travels.
And Stuart.
And Thats a gross question second question is.
And on your mobile retail networks, and I was a bit surprised to see the second quarter of accrual on the number of the store, which I think is the big theme.
<unk>.
And to what <unk> been seen before.
And that's basically the long term target the mobile and retail network optimization means and tax. So I'm just wondering what was driving that whether it's sort of on that timing FX on fuel.
And so.
Or do you feel that.
There might be some.
Competitive depletion, which really prevents you to optimize and that warm throw on there.
And this drug question is again on key on can you. Please indicate the scheme of the confidence and investments releases from Q1, this year and we'd be and then yields and then your fleet.
Each day.
Wired to achieve your goals from the number of users and <unk>.
Sure.
Pump fleet position on the market.
And related and Thats, what what do you think could be the key issues.
And with E on.
These targets.
Okay, well I'll take the first question.
And on.
Roaming revenue forecast of course, we never made any.
A firm assumptions from that we are generally.
Assuming that rather conservatively and that's what was reflected in my part of presentation. So.
And nothing, particularly it would be pure speculation to.
And to set a date when this goes.
Well the limitations will be lifted.
Second question goes to NSF.
Regarding the retail network and Internet.
We understand and appreciate that you are very careful with all the figures we provide for Brazil, and so you are very careful and calculation, but I just want.
To address your attention that actually those small fluctuations, which is less and 2% does not reflect any strategy behind that and this is actually normal.
And normal normal operational business, which sometimes require make some some shops to be closed because the way our tuition for new wood locations and in some regions is required to lower for example, let's call it the channels like local dealer.
And local distribution and invest more in our own retail chain and wishes more quality and Thats why I asked.
And I cannot just debate.
Such a huge attention to those small figures before and again, we'll repeat that right. Now we are very stable in terms of non move.
On our storage in the coming.
Piyush, I mean, and the climate and quarter I'll hop per year, we don't plan any big optimization and as it was announced one a year ago and we actually are.
Read that as a promise in the coming.
Monster and we don't expect any and optimization as soon as we have and our plan through the strategy and we'll definitely share with you.
Because that will be something behind that I mean, the standard right now and this is just a smaller duration offing switching doesn't reflect any kind of changes from the standard.
And on the third question on a scale of current investment we are not and closing the particular.
The exact figure, but I can tell you that.
And it's it's not from breaking.
Being very accurate with.
With those investments and.
And the same time they are included in our overall.
Cup expense so.
And it's all in there and it does and doesn't change much so.
Okay.
Yes, and Rick.
Got it and then.
Issues were and potential challenges.
And might be.
And provides more details on that would be great.
Okay.
Well I think challenges for key on success could be only.
If we go into Swat analysis, I would say that given the start the the possibility that our.
On the regionals would be really bet is off the table now it looks that.
This goes very well and.
Of course, the competitive environment is there we have we have a player that is able to spend a lot of money on debt. We have another player which is able to to redirect a lot of search traffic into their platform.
And we are playing on.
On this market with with our own opportunities and I believe currently the best team of <unk>.
And of making of making regionals and at the same time we've developed.
A very strong product team and you can see that.
And the product itself, so I'm pretty confident that we.
We are set.
And for growth on this market.
Okay.
Okay.
Okay.
So we go to the next question is from Henri <unk> from Morgan Stanley. Your line is open.
Go ahead.
Thank you very much I had a few.
Questions actually firstly all day.
Follow up on the price increases beginning of the year can you I mean, you've been doing price increases now I guess for from <unk>.
Can you talk a little bit what you.
And in terms of customer reception on price increases any change and chi.
No.
And I think different from from from last year, and then I also wanted to follow up on key on I guess and your content investment and foresee when we think about the content investment and I realize you can't give us some expense numbers, but.
Is 2021 sort of the beginning and the content investment is ramping up from here or are you sort of investing quite a lot now it's against operations going and from here the content investments should be stable to sort of coming down a little bits and small directionally I guess and then perhaps expense.
Numbers, and then and then I guess bigger picture.
Question on content investment I think if you look globally, most telcos to try to invest and content hubs.
Hubs sort of changed your minds.
I guess the latest one AT&T.
Two sort of now.
Time Warner investment can you, maybe talk a little bits and parts why.
What do you what do you think youre doing differently or whats different with with MTS and why we.
Shouldnt be worried about the I guess and lack of success.
And from other telcos trying and trying the same thing.
And so much.
Okay first of all thank you for interest and questions.
The first question is easy.
Easy to answer I think we came.
Quite a few years ago with came through mobile, which allows us to do those price increases very trust and a very transparent way and we see that our subscribers. Appreciate this way they always have time and.
And we suggestions.
How they can change therapy, if they won't don't want to stay on the tariff that is being increased and therefore.
And the last two years or three years, we don't see any reflection on NPS.
After our price increases so we are confident that we were doing that.
Very accurately and we monitor.
All changes afterwards, so I'm pretty confident we have relocated here.
On.
On Q on content investment.
I would say that.
In comparison, with 'twenty, and 2020 'twenty, one the investment good.
Okay go higher and maybe by a notch, but not much and.
<unk>.
And then if we see this.
Going well it will pretty much continue on on the same level, because we would have kind of what we have.
Mobile of how often and how many wells.
Regionally, we have to get on the market to keep.
The interest of this is new subscribers and the interest of existence of service and it seems working so far.
And going into the last question on on AT&T time Warner and.
This.
Dilemma that everybody has I would say that our solution is very different from <unk>.
And from the duration when when telecom is purchasing and existing.
Content.
And.
Provider because.
The idea behind fund and provider is to have the most.
Wireless distribution possible.
Eliminating this distribution to one operator will really decrease its value and this is the basic problem behind us.
Our cases very different because we are we're not playing to conquer the world with that we are making very specific investment into it.
Enough local content to <unk>.
Constantly increase number of.
And number of subscribers.
Scrubbers on the platform and then we're keeping them there both with the product excellence and existence of on.
<unk> and the libraries of course include libraries that we purchase from majors and libraries that are created with our own content and I think debt.
This difference is the most important and.
And we see this mobile.
And.
Can really work out.
No.
That's pretty much it.
Okay. Thanks, very much COVID-19 can you also can I.
And perhaps follow up in terms of investment.
<unk>.
And the significant sort of opex investment as well.
This.
Your content strategy and drag on EBITDA margins.
Finally on the topic. Thank you.
No not really.
And as being very very moderate now.
The application is being.
Done by our own teams we have.
Core off the platform from a big vendor, but then we again, we create all the all the systems are rounded by ourselves and.
There will be some opex, but only when the subscriber base will grow so it's sold dynamic and.
On the positive impact I would say.
Thank you very much.
Thank you Linda are no further questions. So as a reminder to ask a question you have.
Zero and one on your telephone keypad.
Yeah.
Please proceed to another question that is from on kind of just of UBS.
Please go ahead.
Hi, and thank you for the presentation.
Couple of questions if I may.
One is a follow up on even sub debt question. So.
And maybe I completely misunderstood on the answer but when you when you kind of.
Look at the similar annual numbers.
And.
And.
If I look at the one offs from last year, then and the second quarter of 'twenty. One you had even more one offs and debates and and <unk> 71, and so when you say flat and.
Year over year on a semi annual basis does it indicate that we're expecting from kind of negative one offs and.
And the second quarter of 'twenty, one alright.
Alright.
On the spending Thats correct and maybe there is something else.
And so any clarification would be appreciate it second question if I may on MTS bank. So very good numbers this quarter.
Are you.
And I'm confident that you can maybe keep your return on equity yet.
Maybe double digits this year before you get to Europe.
20% target in 2023 and <unk>.
Net debt target that you still think is achievable without any capital increase and maybe finally in terms of net promoter score you mentioned.
And the progress on their book.
And what are your competitors on the on their capital markets Day recently was saying that.
Their net promoter score is going up while the net promoter score up the entire market and that would mean you as well is going down. So can you clarify if that's something that you are also seeing on the way that you perhaps measure net promoter score differently.
Or what the trajectory is part and link.
For for MTS. Thank you very index.
Andre Thank you very much let me start with the first one however, actually there is no much I can add that already said debt.
Based on our assumption for the first half of the year actually the fact of the 2021 to 2020 would be neutral on this specific other item.
That's actually.
And there is placebo gross per bank book, particularly on that yet.
And we spoke to and intrusive.
Uh huh.
And then we do move to the concept.
And so those nationalism and shift more seamlessly connected with small things operating from demonstrable Hudson.
Well, thank you very much and your specific question on the bank.
Delivery.
To answer this.
We do expect a return on equity for the bank will remain and the double digit area by the end of this year.
And could be taken as the low teens lay around like 12%.
And so as convenient as a city and other states.
And I'm glad I'm curious mismatch book, but when I go on with <unk>.
Okay.
And I suppose it's winter 'twenty three targets would have.
Recently, we announced them so we remain on track.
And because it from a capital and closing.
And this from an organization.
So it would either on yeah.
And I don't know months comes to moving to regulate the positions seating.
To date <unk>.
And the contingency and then.
<unk> mobile.
Good.
And so this is the formula mutation the.
On the bond issue loans.
So quickly from Australia should be utilization from Logan, which is there is typically arena.
And for the potential capital.
<unk> injection, so additional capital injections and a lot will really depend on the.
And the regulators initiatives is currently we see are the regulators and some of the regulators initiatives on.
And wait towards potential cooling down on the retail of the retail market.
So for this year, we do not have any specific plans to increase to increase the bank's capital and for the next year, we still do not have enough.
Certain through enough clarity on what the regulator will do.
Yes.
I just wanted to add on that debt.
We really hope that the fintech is going to grow and we see that.
It's growing really fast and if we see that that growth continues and at really healthy rates, we are ready to to support it with the with some additional.
<unk> financing.
But again nothing that would really.
Like a debt drastic change and our figures, but giving that ROA.
Roy is growing I think there is a possibility.
So.
Yes.
So I'll take that question on and so actually we don't comment.
Information on which was mentioned by competitor, especially then we don't know.
And <unk> also reported it's referring to.
That's why it's difficult to comment and on the overall, we see that NPS on the market as brick and mortar.
And mostly due to pandemic mode.
Sure.
And which has happened and falling for the last year, but this is the only.
And with you so and that's why we don't comment on the island and come into final competitors.
Thank you very much maybe and if I may one follow up because there were no no other questions and the line.
Can I just clarify I believe there was a comment during the presentation about capex being temporarily higher is this is just a way to say that 2021 is it kind of one off here or is this a multi multiyear.
Thank you you think.
Any clarity would be appreciated.
Yes, Andrew Thank you very much that's actually was a part of my speech.
But I wanted to mention is that it's not going to be and you run rate for the future and yes, we expect debt for the next years.
And that might be Lowe, and it's too early actually to give any guidance or whatever but that's debt.
And that's our understanding and the moment.
So the one year one year like would be.
Working assumption.
This is what Andre said I'm sorry.
Thank you very much.
Thank you. So another question that comes from on that.
No.
And from that.
Please go ahead.
Hey, good afternoon. Thank you very much I will have a couple of questions.
The current book to your OIBDA module.
Correctly, Joe and that if we exclude the shift from probably even of last year.
And we get them on.
And on <unk> com.
Flip and often you get on yes.
And if I correctly understood your comments and what could we expect and it sounds so for year on year on margin trends going into the next nine months of this and this is my first question and my second question, a little bit on a little bit you guys and your music subscribers I see that this slightly down.
Just from the standard called this direction no debt.
So what do you expect in the future should work on.
This is Jim.
Our promise and part of your major.
Moving forward and my final question listen Clay and Mr.
<unk> and once.
The product users issue could you repeat that please.
And.
Yes on the thank you very much I'll take the first.
Question on this foundry in terms of OIBDA margin actually we do not.
And provide any guidance on the EBITDA margin and frankly speaking on our business.
We are not so much focused on the margin itself. We are more focused on the numbers and therefore, therefore actually you can refer to the guidance that were giving for free for OIBDA plus 4% growth on a year debt was six two so that's the answer to your first question.
Okay.
Frankly speaking on music subs of subscribers.
Net.
Really.
And I didn't see any major changes there I can follow up on that later.
But nothing drastic change there and.
This is not core to MTS media MTS media is currently <unk>.
<unk> on.
On.
On line.
But on.
On.
Music subscribers, we have several directions and working with music one direction and partnership with.
45, <unk> and it's probably not included in this number and we also have we're still have partnership with Apple music and we have our own application, which is also partnership application. So again.
And again I will check on that but.
Nothing major on this business happened.
Last year.
Year.
We did not disclosed and multi product users number this quarter.
And so.
Well no.
It's growing but.
And we didn't have this exact number.
Thank you Raj and May I. Please ask you a bit more on your major revenue.
In terms of share or from <unk> and <unk> and.
And television revenues and peak flying on anything.
I mean, we share.
And our fixed line or anything you gross came from TV and.
How does it compare to the overall signal increase.
And not income sorry, Buddy.
So.
I understood I understand the question, but.
We cannot answer it and going forward, so it would be more and more difficult to to diversify.
Revenue is coming from different business lines, because everything is coming and bundles and the way you.
The attach revenue for this bundled to different business as.
As very artificial so it's really impossible to say, which part goes who comes from fixed line, which which part of them. So TV sorry, but.
Everybody with one debt because.
Due to realize.
Your cost efficiency, but.
First of all it doesn't work this way.
And then final question when can we expect and you just call us in terms of your results by business segments.
And.
Well continue acuity pre specify what do you mean by results from these new business segments.
Does it just closed for your business segments in terms of results presentation on buying.
The Orexin is a major shift.
Digital.
Okay.
And we are we're in a little bit.
Bundles here at this table, because we are giving the results.
And of our business lines.
So that's why I asked you to specify the question.
Oh.
What I mean for example, your major revenues digital revenues given the.
Laser for and you they're at home and I would be interested to understand when we can see is there anything as by day that makes sense.
At this stage and you don't just close here and media revenue is sort of if I'm missing something.
We will we will.
Process flow request and.
Come out with some solution but.
I think that again given that most of the services are given and bundles and this was.
And it will be pretty much artificial but.
We will try to help you. So we will consider it thank you.
Okay.
And this is probably not.
As we have given this message.
And look like the radio on time to the market.
<unk> idea behind ecosystem exactly on.
Billion.
Specific ecosystem.
Surrounding that helps specific at all and each clients, let's say and Youre, saying the services in the bundle.
Some of the services can be absolutely profit and most other services, which do increase the life of our clients will increase the NPS, which MTS, which is associated from the disclaimer can be.
And the seasonal for example, evenly from negative what is really very important for US is that this type of bundling and.
Right the longer life as outlined in the <unk> results in the high <unk> customer.
Customer lifetime value from this perspective, Goldman and silver for less and implementation our strategy it would make less and less sense to Baker to give you and break down between the divisions, especially at the level of the profits which had generated by just getting.
But thank you Lee as you may see we keep on increasing the transparency and then.
Fulfillment of our disclosure to best understand how long the business our business evolve and to make you understanding of how the whole ecosystem.
Here is the kind of more.
Okay.
More friendly and more water off balance in terms of understanding.
Thank you and a much for your comments.
Yeah.
And.
Thank you next question is from Slava drags on small Goldman.
On Flex your line open. Please go ahead.
Yes. Thank you very much from a call one general questions from me.
There is a quite a large spike and inflation across the globe and it looks like rush and Walton exclusion here.
Do you see any inflation and FX, putting pressure on either topics on the opex side and the medium term debt, we should be aware off and so which lines can be most effective. Thank you.
Okay.
As you know since you're you're mentioning that this is a global effect of course it has influence on.
And on every company and probably every person, but I would say that we see any specific in terms of capex and everything we have long term relationships with our vendors and.
I don't think debt.
We have something specific to our company with this regard no just as everyone else.
Yes.
Okay. Thanks very much.
Thank you on for next.
And as from Hong Kong.
<unk> of UBS. Please go ahead. Your line is now open.
Hi, Thanks.
Thanks for your patience.
Hello, and your last quarter results. There were press reports that you need maybe spinning off your towers into a separate company and we have.
One of your competitors, especially being very vocal about trying to do something especially and may be debt.
Most regions of Russia, and when it comes to network sharing et cetera is this something that you're here.
And kind of ready to comment on and and what potential paths that you'd be most interested and when it comes to.
Some kind of infrastructure sharing our deals et cetera.
Yes.
And I'm very very easy answer we are looking into all opportunities.
And we are very closely.
And what's happening on the market and the.
Market.
Nothing happened yet we realize theres a lot of negotiations and this this area and of course, we are on doubtful debt, but we're not ready to disclose anything yet.
But can you maybe say and the past MTS has been game on.
As opposed to this is the situation of the debt right now from your perspective, maybe that the market is kind of on more.
Or a level playing field when it comes to coverage network quality et cetera, and something you would consider at all today.
Compared to five years ago.
Okay.
I can only repeat what I've already said of course life's going on and we are.
Yeah.
This is going on and we are looking at opportunities and.
And.
Whenever we are ready to.
You disclosed any news for you we will do that day.
Thank you very much.
Thank you as there are no further questions.
Good luck on back to you.
Okay.
Ladies and gentlemen, thank you very much Felicia and as usual, we will make a replay of this call available on our IR.
Patients and your future interest have any further questions. Please and marks just the phase III Shelton Investor relations for BDSI.
Our index of cell phone lines.
In the meantime, the associated interest and MTS and wish everyone the escalation and base.
Ladies and gentlemen, thank you for your attendance this call and thank you.
You may disconnect.
Okay.
And.
[music].