Company Representative: Joining in today's call are our CEO, Yasir Azman, and our CFO, Awtor Rezwan. Before we begin, please note that the recording of this call, along with other earnings release presentation, financial report, and documents pertaining to the results will be available on the Investor Relations section of our website. Like every quarter, we will be conducting a Q&A session on Microsoft Teams following the presentation. Invitations have already been shared with our investors for the call at 5:30 PM local time today. If you would like to participate, please send your email address during the call, and we will ensure you are included. With that, let's get it over to our CEO, Mr. Yasir Azman, to tell us more about the quarter.
Yasir Azman: Good morning, everyone, and thank you for joining us for our Q3 2026 earnings call. I am Yasir Azman, Chief Executive Officer of Grameenphone. Let's start with the call with some industrial and macro updates. According to the latest reports from our regulators, the telecommunication industry in Bangladesh recorded a total of 191.1 million subscribers as of August 2026, reflecting an increase of around 1.3 million subscribers since June 2026. During the same timeframe, mobile data users also increased by 1.4 million, reaching 122.3 million in May 2026. A little overview of the macroeconomic landscape. The point-to-point inflation rate has eased in September, but it is still high at around 8.3%. The foreign exchange reserves stand at $31.2 billion, and taka showed modest appreciation against USD in September, trading around BDT 122.7 to 123 per USD.
Yasir Azman: The World Bank and ADB have revised down Bangladesh's fiscal year 2026-2027 growth forecast to 3.4% and 4.0% respectively. Let me start with headline for the quarter. We are back to growth. We saw the business turn the corner sequentially in Q2, and in Q3, we built on that momentum, returning to modest year-over-year revenue growth after two quarters of decline in 2026. More important than the growth itself is what sits behind it. This was a broad-based improvement. Our customers base is strengthened, data users continue to grow, and data consumption remain resilient even after the Eid peak. Voice also performed better than expected, supported by the commercial and product initiative we have in place now. For me, Q3 is not only about returning to growth, it is about seeing several parts of the business moving in the right direction at the same time.
Yasir Azman: We still have more work to do, but the progress gives us a stronger platform as we move forward. Second, we are expanding our combo portfolio to meet customers' evolving data consumption needs, supported by the next-gen network we are building. This includes expanding our 700 MHz deployment to strengthen indoor coverage alongside investment in network quality and future capabilities. I will discuss these initiatives in the following slides. Third, we are advancing transformation to simplification and digital engagement. We are reducing complexity across our systems, portfolios, processes, while developing easier digital journeys for our customers. I will also share more on our progress and the intended benefits shortly in the latter part of the presentation. The last point I would like to highlight is the encouraging policy shifts towards a more enabling environment for the industry.
Yasir Azman: The Finance Act 2026 signaled a constructive direction from the ICT, digital, and telecom sectors, recognizing their contribution to connectivity and economic growth. The withdrawal of the fixed BDT 300 SIM tax was another welcome step toward rationalizing sector-specific taxation and supporting digital inclusion. Lower statutory deposit requirements for tax appeals also help businesses exercise their legal rights and pursue the resolution of longstanding disputes. While the direction is encouraging, there is still significant room for further progress. Particularly, telecom taxation remains well above global and regional benchmarks, leaving substantial room for reform. We hope to see this positive momentum continue through constructive policy dialogue to enable continued investment, broaden digital inclusion, and support the sustainable growth for the industry. With that, let me now turn to how we are translating these opportunities into stronger customer engagement and starting with our portfolio and network.
Yasir Azman: Our strategy brings together two priorities: propositions that meet customers' evolving needs and the network experience to support their usage. Simple. During the quarter, we expanded our data and combo portfolios and enhanced selected longer validity packs to better meet customers' evolving needs and encouraging greater data usage. Combos contribution to service revenue increased 21% year on year. In Q3, we had digital channels. We are central to this strategy, delivering 55% of combo revenue. We are supporting combo adoption through greater visibility and consistent communication across our digital channels, including MyGP. Alongside these commercial initiatives, we are expanding our 700 MHz deployment to strengthen indoor and wide area coverage. Indoor coverage has improved by 4.4 percentage points, while 700 MHz band is playing an increasing role in supporting customer data needs. We also added more than 700,000 new 4G data users.
Yasir Azman: Together with our existing holdings across low, mid, and high-frequency spectrum bands, this deployment gives us a comprehensive spectrum portfolio to support coverage and capacity needs, delivering a more consistent data experience across Bangladesh. Our transformation agenda focuses on reducing complexity across technology, processes, and portfolios to build a more agile and efficient business. By simplifying how we operate, we aim to respond faster to evolving customer needs and deliver a more seamless experience across channels and in communication platforms. The four examples on this slide show how that ambition translates into changes across our systems, infrastructure, product portfolio, and customer journeys. First, we are simplifying our application landscape. We have reduced the number of applications from 100 in 2024 to 65 today, a reduction of 35%. This reduces the complexity of maintaining and integrating multiple systems together.
Yasir Azman: Further initiatives across customer management, product platforms, and integration aim to bring the total to 55 by 2028, representing a 45% reduction from the 2024 baseline. Second, we are preparing to move applications onto a single secure in-country private cloud, consolidating infrastructure currently spread across more than 13 vendors. The platform is ready, and integration testing is underway for the first 10 priority applications ahead of production migration. This will provide a more standardized environment designed to simplify operations and enable faster changes. Third, we are sharpening our portfolio to improve profitability and focus resources where we can deliver greater customer value. We have streamlined our core offerings by removing products with limited profitability and discontinued selected underperforming low-value B2C products. Alongside this, we are developing digital services that complement connectivity, including GP Cloud for storage and backup, and GP Shield for protection against online threats.
Yasir Azman: Fourth, we are addressing the causes of friction in customer journeys. Through root cause analysis and collaboration across teams, customer complaints declined by a record 16% in Q3 compared with Q1, with substantial reductions in several recurring complaint categories. Sustainability remains integral to how we create long-term value for our customers, shareholders, and communities we serve. Our commitment to Bangladesh's digital future goes beyond connectivity. We want more people to have the skills and confidence to benefit from the opportunities technology creates for us. During Q3, we launched phase II of our Digital Inclusion for Marginalized Communities initiative. Building on the 3.3 million people educated in the first phase, we aim to reach an additional 4 million people across eight vulnerable communities, with women representing 70% of the participants. The program will also equip 500 young people with market-relevant skills and connect them with economic and employment opportunities.
Yasir Azman: We are extending this ambition into AI. Our OneAI Student Pack is especially curated to help students explore AI tools, apply them in learning, and develop capabilities for future opportunities. We are also pleased that Grameenphone Academy received Telenor AI&I 2026 Award. The team delivered more than 70 hours of advanced AI learning content to tens of thousands of learners in under eight months. The learning community has grown to more than 80,000 active participants, with over 40,000 certifications achieved in less than a year. Alongside digital inclusion, we continue to advance our environmental commitments and support communities facing immediate challenges. Our procurement process for 200 gigawatt hours of renewable energy annually is progressing, with the request for quotation process underway at this moment. This remains an important step forward in our long-term decarbonization ambition. We are also adding renewable generation within our operations.
Yasir Azman: Our newly deployed 325-kilowatt solar installation at the Sylhet data center is expected to generate approximately 304 megawatt hours of electricity annually and avoid around 178 tons of carbon dioxide emission each year. Our commitment to communities also means responding when support is most urgently needed. With the Bangladesh Red Crescent Society, we delivered humanitarian assistance to flood-affected communities in Chittagong, reaching more than 50,000 people. These efforts reflect our continuing responsibility to reduce our environmental footprint while supporting the resilience and well-being of the communities we serve. Let me now take you through our financial performance for Q3. Our performance this quarter reflects the balance we are working to achieve, returning to growth, protecting our profitability, and continuing to invest for the future. Like I mentioned in the highlights, that we are back to growth in our top line.
Yasir Azman: In Q2, we saw a clear sequential recovery in the business, but year-over-year, we are still declining around 3%. In Q3, we returned to modest year-over-year revenue growth of 0.2%. This is an encouraging step, although sustaining and strengthening that growth remains our priority. We maintained a disciplined approach to costs, focusing on operational efficiency while continuing to invest in network quality and customer experience, which resulted in a broadly stable EBITDA year-over-year. Our ongoing simplification initiatives aim to deliver further efficiencies over time. On the bottom line, NPAT declined by 0.1%, demonstrating the resilience of our operating model. The operating cash flow for the quarter stood at BDT 18.2 billion. The year-on-year decrease was primarily reflecting increased CapEx to support continued network investment and future growth.
Yasir Azman: Year-to-date CapEx to sales ratio stood at 12.3%, focusing mainly on 4G network and fiber connectivity expansion, along with 700 MHz spectrum deployment. Alongside investment, we remain focused on returns generated by our capital. ROCE improved to 26.6%, increasing both year-over-year and sequentially. The task ahead is to build on the return to growth, use transformation to improve efficiency, maintain a disciplined approach to investment and cash generation. Now I will invite our Chief Financial Officer, Otto Magne Risbakk, to take you through the financials in detail.
Otto Magne Risbakk: Thank you, Yasir Azman, and welcome to all the listeners from Asia. A very good afternoon to you, and a good morning to the listeners from Europe. I will now take you through the financial part of the Q3 presentation, and I will start with the revenue metrics. That is where the performance begins. Let me start with the subscriber part, which is the graph on the top left side of the presentation. In the third quarter, the third quarter was a good quarter in terms of subscriber growth. We ended up with almost 87 million subscribers at the end of Q4. If I can take you a little bit back, in the H2 2025, we did not perform well, and the subscriber base decreased to below 84 million.
Otto Magne Risbakk: In the Q1, we had to rebuild the customer base, and that is what we did, and we increased it up to 86.3 million customers. In the Q3, we have continued the journey, and we now, like I said, have almost 87 million customers. The increase is also very positive in terms of the composition. In the Q3, we have seen a continuation of the growth of data customers, now reaching 53 million. This increase has come both as a consequence of less churn and more gross adds. So it is a very healthy mix that we see underneath, underpinning the growth of the customer base. Let me now move to the right side of the graph on the data usage. In the Q3, we saw the trend with data usage growth continuing, and we reached a growth of almost 12% in the quarter.
Otto Magne Risbakk: We have seen that trend consistent also in the Q2, and it is up to a single-digit kind of growth that we have had previously. So we definitely see a much stronger push for data consumption, supported also by a lot of commercial initiatives, including the introduction of bundles. We still think there is a lot of potential in the Bangladesh market for data growth. As you know, most of the neighboring countries have up to 50 GB per month or even more, so we are trailing behind those markets. But we expect this trend to continue in Bangladesh. Moving down to service ARPU, or minutes per user. We did have, in the previous quarters, a stronger trend of decline, a structural decline of minutes. It was approaching almost 10% decline year on year.
Otto Magne Risbakk: We have been able to limit that decline in Q3, and now it's about 5%. We have done that again through a series of commercial initiatives, also supported by the bundle. I think both for the data consumption and the minute consumptions, the bundles give consumers much more convenience buying everything in one pack instead of two separate packs, and it's also leading to higher consumption. That's what we see. We will continue to focus strongly on bundles. This increased better performance in terms both of data usage and lower minute decline, you can see on the bottom left graph, where we see that the minute, sorry, that the ARPU is almost stable year-on-year. As you recall, in previous quarter, we have had a stronger decline on ARPU. Now we see a stabilization of the ARPU.
Otto Magne Risbakk: To sum up on the revenue metrics, we now have a larger customer base, which is more digital and is using more data. Our focus going forward, going into Q4, is to continue and focus on monetizing that stronger momentum that we saw in Q3. So now over to the next slide on revenue. In Q3, we see a good trend again. In the last quarter, as you recall, I presented that we saw progress on the revenue metrics. We didn't yet see it on the revenue. This quarter, we saw that the good trend we had on revenue metrics, on subs and usage in Q2, in Q3 is also translating into revenue growth. Now over to revenue. Just as for the metric, we saw improvement on the subscribers and the ARPU.
Otto Magne Risbakk: We see that also on the revenue. As you recall, in the previous quarter, we had negative growth of -3% and -2%. This quarter, we are back to growth with a revenue of BDT 40.2 million and +0.2%. This growth is driven by a series of positive factors, as I mentioned previously, with subscriber growth in digital, growth in data, and better performance on minutes. I would also like to mention a few other areas that have supported our revenue this quarter. We started our rollout of 700 MHz spectrum band in Q2, and we have continued full force in Q3. As you know, the 700 MHz spectrum has a much longer reach coverage and also is much better on indoor. We see that the customer response is very positive.
Otto Magne Risbakk: It's early days, but we are very positive to the further strategy of rolling out more 700 MHz. We also have done a series of initiatives on the commercial side to support the revenue. Notably, too, we have increased our footprint, commercial footprint, in particular with branded store. We see a positive effect of that. We have also reintroduced certain products on the middle side, the lower denomination. We see there is a demand for that. We are doing a series of other adjustments on the commercial side, which in some leads to a very positive development. Q3 is a meaningful step in the right direction in terms of revenue. Now in Q4, we have to continue and capitalize of this momentum and drive further growth.
Otto Magne Risbakk: So now over to the slide where we summarize the cost development and EBITDA and other financial metrics. Let me start with the cost slide. Cost management has always been a strength of GP, and I think it continues to be so. If you look at the cost graph on the top left side of the graph, you can see that costs remain stable at BDT 16.5 billion in Q3. That is in an environment with 8% to 9% inflation and strong pressure from the energy shock. We have been able to absorb all those tensions with our cost management, which includes, as I have said in previous quarter, both short-term tactical moves and also longer-term structural elements.
Otto Magne Risbakk: If you look at the graph on the left side, the blue side, you can see how the cost continues to fall in an environment with strong and high and rising inflation. Definitely, we see that the trend going forward, that we expect there will be continued pressure on energy cost and cost, so we will have to maintain this focus. Going over to the EBITDA, we see a good performance this quarter, back to growth again, zero flat EBITDA for the quarter, compared to -6% the last quarter and -1.5% in Q1. So the good development we have seen on the revenue side with back to growth and the strong cost management that we have seen in this quarter allows us to maintain a margin of almost 59%. Perhaps I could add a little bit on the cost side.
Otto Magne Risbakk: This good performance in Q3 is not a one-off. You can see that for the full year, we have been able to maintain the cost flat. On a year-to-date basis, costs for Q3, costs are down with 0.2%. So now let me comment on EBIT. As you can see on the graph on the bottom left side of the page, EBIT increased with 0.7% to BDT 14.6 billion. In addition to the positive effect from EBITDA, we have been able to contain and manage capital allocation and investment in a good way over many, many years, and that is now resulting in lower depreciations. So, I am very confident that you will see a continued positive development also on the EBIT. So now over to the last graph on the page, to the ROCE on the right side of the page.
Otto Magne Risbakk: As you can see, ROCE improved to 26.6%, up 0.9% to one year ago. This underlines our strong operating performance with EBIT increasing and good capital management. So now let me go over to the page with net profit. Starting with the top graph, you can see that net income of BDT 7.5 billion for the quarter remained broadly stable compared to the last year. This is after several quarters of negative development. So you can see that the strong operating performance we had in this quarter with higher revenue and cost levels, which are very strictly managed, is resulting in a positive development also on net profit. This reflects the resilient operating performance combined with a very sound capital structure with very low debt.
Otto Magne Risbakk: If you look at the bottom graph, the components of the NPAT, net income, you can see that it is mainly driven by higher revenue and cost management, whereas the other items moved very little, leading to a flat net income development of the year. We see this Q3 as a stabilization of net income, and like I said in the previous graph, with the strong momentum we have on the customer side, and also good momentum of the usage, our focus is now to monetize this positive momentum so that we can also see a positive development on net income in the coming quarters. Let me comment on the CapEx and cash flow and the net debt. In this quarter, you can see on the left-hand side that we have continued to invest strategically in our leading network and network operations.
Otto Magne Risbakk: We had a CapEx of BDT 5.5 billion for the quarter, and we have now reached BDT 14.5 billion year to date in the Q3, which is more than we had for the full year last year. We also expect to continue to invest in the network in the Q4. If I comment on the middle graph on the cash flow, you can see that it remains very high, BDT 18 billion, and a margin of 45%. It is a little decline compared to last year, but that is mainly due to the higher CapEx. We are very proud and pleased with being able to maintain this high cash flow level. You can see on the right-hand side, on the net debt, that we continue to maintain an almost debt-free balance sheet.
Otto Magne Risbakk: This strong balance sheet is allowing us to continue to invest in our leading network and also to fund dividends with cash flows generated in the company. If I can summarize the financial presentation of the Q3, one, we return to a modest growth. We see that we have good momentum on the customer side and on the metrics, so now our focus in the Q4 is to monetize the momentum we have created on the customer side. Second is we protected profitability thanks to good cost management. With the global tensions we see and the energy shock, we know that we have to continue to focus very strongly on cost in the Q4. Finally, we are continuing to invest in a leading network, and we will continue to do so also in the Q4.
Otto Magne Risbakk: That concludes the financial part of the presentation, and I will now give the word back to Azman.
Yasir Azman: As we close, I would like to leave you with three priorities that define our direction. Number one, sustaining growth momentum. Our return to growth in this quarter is encouraging from different dimensions, and now our focus is on making that progress sustainable. We will continue adapting our propositions to customers' evolving needs, deepening data engagement, and expanding combo adoption. The opportunity ahead lies in translating the strength of our customer relationships and network into consistent, profitable growth. Second, delivering efficiency through AI and digital transformation. We are simplifying our technology landscape, sharpening our portfolio, and removing frictions from our customer journey. As we move forward, AI and automation will increasingly support how we operate and serve our customers. Our ambition is to build a business that responds faster, uses resources more effectively, and delivers a consistently better experience. We expect the benefits to develop progressively as execution advances.
Yasir Azman: Third, continuing to invest with a long-term perspective. Our network, spectrum, and digital platforms give us the capabilities to support Bangladesh's growing demand for connectivity. We will continue making disciplined investments that strengthen customer experiences and long-term competitiveness. Realizing the country's digital potential also requires collaboration. We will continue working constructively with governments, regulators, and our partners towards an environment that supports investment, innovation, and wider digital participation. Thank you for your continued trust and support to Grameenphone.
