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Edited Transcript of ORDS.QA earnings conference call or presentation 1-May-19 11:00am GMT

Q1 2019 Ooredoo QPSC Earnings Call

May 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Ooredoo QPSC earnings conference call or presentation Wednesday, May 1, 2019 at 11:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Ajay Bahri

Ooredoo Q.P.S.C. - Group CFO

* Andreas Goldau

Ooredoo Q.P.S.C. - Head of IR

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Conference Call Participants

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* Dilya Ibragimova

Citigroup Inc, Research Division - VP

* Herve Drouet

HSBC, Research Division - Head of EEMEA Telecoms, Media and Technologies Equity Research

* Myriam Chaabouni

AlphaMena - Analyst

* Ziad Itani

Arqaam Capital Research Offshore S.A.L. - Associate Director

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to Ooredoo Group First Quarter 2019 Financial Results Investor Call and Webcast.

I now hand over to your host, Andreas Goldau, Ooredoo Group Investor Relations. Sir, please go ahead.

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [2]

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(foreign language) Hello, and welcome to Ooredoo's financial results call. My name is Andreas Goldau, and I am in charge of Investor Relations. As part of today's discussion, I'm pleased to introduce Ajay Bahri, our Group Chief Financial Officer; and Mansoor Al-Khater, our Chief Strategy Officer.

We start with an overview of the group results followed by a Q&A session. The presentation is available on our website at ooredoo.com, as well as on the webcast. Please do note that the usual disclaimer on Slide #2 applies.

So to begin, I now hand over to Ajay.

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [3]

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Thank you, Andreas. Thanks to everyone for joining today's call. Start on Slide #4. During the first quarter of the year, while revenue grew in local currency terms in the market, in Qatari riyal, it was down by 6% to QAR 7.2 billion as a result of macroeconomic and currency weaknesses in some of our markets and reduced handset sales.

We continued with the cost savings initiatives to optimize our offerings and deliver value to our shareholders and customers. Group EBITDA reached QAR 3.2 billion, an increase of 4% compared to the same period last year.

EBITDA margin improved to 44% compared with 40% during the corresponding quarter in the previous year, mainly due to effective cost management, reduced cost of sales due to lower handset sales and, in addition, there was a 3% positive impact from the new IFRS 16 accounting standard for leases from 1 January 2019.

We see data playing an increasingly important role across all our markets, and as such, we've been working carefully to create new and innovative ways to monetize data and create value for our customers. I am pleased to report that data revenues during the quarter accounted for 50% of overall group revenues, amounting to QAR 3.6 billion.

Ooredoo Group recorded a net profit of QAR 420 million, down 13% compared to the same quarter of last year. Excluding foreign exchange impact, net profit would have been up by 8%.

Next slide. Group revenue, QAR 7.2 billion, was down 6% compared to the same quarter last year, like I said, mainly driven by lower device sales, currency depreciation and performance decline from Myanmar and Algeria in local currency terms. I would like to take this opportunity to highlight that we are beginning to see year-on-year growth in Indonesia as the market stabilizes following the introduction of the SIM card registration regulation. I'll touch upon this more in our slide on Indonesia.

EBITDA was up 4% to QAR 3.2 billion mainly which reflected the effect of the IFRS 16 accounting. Our EBITDA margin grew to 44% compared to 40% in the same period last year with a 3% positive impact from IFRS 16, as explained earlier.

Slide 6, net profit. Net profit declined 13% compared to same period last year, primarily due to reduction in net foreign exchange gains. In first quarter of 2018, foreign exchange gains amounted to QAR 166 million, whereas in quarter 1 2019, the gain was QAR 77 million. Excluding the foreign exchange gain, net profit increased 8% year-on-year.

On Slide 7. Let's take a look at CapEx and free cash flow. CapEx was up 17% to QAR 1.1 billion, representing our commitment to delivering the highest quality of coverage in the markets we operate in as well as our ambition to deploy the latest technologies and standards in connectivity.

Our investments have positioned the company for future growth, mainly 5G and 4G deployment and digitization across our key markets. Furthermore, our global sourcing strategy enabled us to optimize CapEx by taking advantage of Ooredoo Group's scale. CapEx represents intangible CapEx and excludes licensee obligations and right-of-use assets under IFRS 16. Free cash flow declined 9% to QAR 1.5 billion, impacted by the increase in CapEx.

Next slide, please. Despite an increase in our customer base in most of our verticals, on a group level, total customers declined 25% to 112 million. This is a result of the cleanup of our customer base in Indonesia, post the introduction of the new SIM regulation last year. We have discussed this in detail in the previous quarters. Despite that, revenues in Indonesia increased 6% in local currency during the quarter as we target higher-value customers.

Slide 9, net debt. I'm pleased to report that we have a healthy and well-balanced debt profile. Net debt increased 6% to QAR 27.7 billion, impacted by the implementation of IFRS 16. Our net debt-to-EBITDA ratio is at 2.2. Without IFRS 16 impact, it would be 1.9x, which is within our long-term guidance of between 1.5x and 2.5x.

Group debt remains mainly at the corporate level, largely in Qatar, followed by Indonesia and then a smaller percentage allocated to the other opcos. As a reminder, debt at the opco level is kept primarily in local currency.

Let's move to Slide 10. As you can see, our Q1 2019 revenue mix of a full year guidance range of minus 3% to 0% growth, this is mainly a result of reduction in handset sales. EBITDA growth stood at 4%. Adjusted for IFRS 16, it would be down minus 3%, slightly better than the full year guidance of minus 4% to minus -- minus 7% to minus 4%. We maintain a disciplined CapEx approach, a higher performing efficiency program and strict cost management.

Let's move on to operational review of all of the opcos. Slide 12, Qatar. In the home market in Qatar, we maintained our #1 position supported by our leading network infrastructure, which is ranked among the fastest globally. We continue to lead the global race to provide 5G services in more than 90 5G sites live across the country. Financially, revenue was down slightly due to reduced handset sales. However, underlying service revenue remained stable during the year.

Pre-IFRS 16 EBITDA margin is 56% supported by a favorable mix between service revenue and handset sales as well as improved efficiencies and cost optimizations across the business. Sequentially, revenue was lower due to higher layer projects and handset revenues in Q4 2018, while EBITDA margin improved.

During the quarter, we demonstrated our commitment to innovation by conducting the world's first international 5G call from Qatar to Kuwait.

Let's move on to Slide #13. Indosat Ooredoo's top line performance is showing further signs of recovery, leaving the negative impact of the SIM card registration regulation implemented in 2018 behind us. Revenue increased 2% compared to the same period last year in rial terms. This is an indication that the recovery is well on its way with our new approach following the introduction of the new SIM market regulation.

Improved customer loyalty and lower churn rates resulted in revenue growth despite a reduction in our customer base. EBITDA increased 10% faster than revenue due to cost optimization initiative and positive IFRS 16 impact. Sequentially, the revenue was down 1% due to seasonality while EBITDA pre-IFRS 16 has improved by 12%, supported by continued cost-saving initiatives, while Q4 '18 had a one-off marketing expense. Operationally, we expanded our 4G-plus network to 422 cities and a 4G network coverage reaching 81% of the population.

Slide 14, Iraq. In Iraq, due to increased price competition, revenues were flat at QAR 1 billion and EBITDA decreased 12% due to increased spending on sales and marketing activities. As a result, the customer base increased 10% to 14.2 million in quarter 1 2019 compared to quarter 1 2018. Sequentially, revenue was lower due to seasonality and increased competition while EBITDA margin pre-IFRS 16 is higher. Q4 '18 included certain year-end provisions as well.

On Slide 15, let's discuss Oman. Ooredoo Oman continued to report robust financial results with growth across the board. Growth was supported by a focus on digital enablement as we cater to the changing needs of both business and consumer customers across Oman. To maintain our digital competitiveness, we launched new services and products designed to elevate the customers' digital experience.

During the quarter, Digital Shahry was launched alongside a new app of businesses giving customers increased flexibility along with new channels to interact with Ooredoo Oman. Year-on-year and sequential quarter's revenue and EBITDA were relatively stable.

Let's move to Slide 16, Kuwait. Year-on-year, revenue declined by 15% due to lower handset sales. We reported significant EBITDA growth of 46% to QAR 210 million and margin improvement from 18% to 31%. EBITDA margin growth was driven by lower handset sales, positive IFRS 16 impact as well as improved efficiencies and cost optimizations across the business.

Ooredoo Kuwait's customer base increased to 2.5 million in Q1, up 13% compared to Q1 2018. Sequentially, revenues lowered by 5% due to lower device sales. Q1 '19 pre-IFRS 16 EBITDA is lower due to one-off cost provision reversals as was explained for Q4 2018.

Slide 17, Algeria. You will see that the situation in Algeria continues to be challenging with difficult economic conditions and political instability as well as the devaluation of the Algerian dinar, a persistent price war and an overall shrinkage in the market. As a result, Ooredoo's total revenue in local currency declined 9% year-on-year. Operationally, we maintained our mobile data leadership by providing the greatest 4G coverage in the country by reaching over half the population in all 48 wilayas. Our customer base increased 4% to 14 million during the quarter, supported by the launch of the La Gold promotions targeting high-end customers. Sequentially, revenue in local currency declined by 3%, while EBITDA pre-IFRS 16 improved by 1%.

Slide 18, Tunisia. Tunisia delivered another robust set of results this quarter. We maintained our leadership in the mobile market and grew customer numbers by 7% during the quarter. Revenue also grew 7% in local currency terms during the year. However, in rial terms, revenue was down 15% as a result of the strong depreciation in the Tunisian dinar during the year. Growth was driven by mobile data as well as fixed and international revenues in local currency.

EBITDA grew 23% in local currency terms mainly as a result of increased revenues and IFRS 16 impact. Revenues were grossed up for royalty tax, and the full year impact was reflected in Q4 2018 as explained in the last quarterly call. As a result, sequentially reported revenues declined. On a normalized basis, revenue grew by 7% sequentially in local currency.

Slide 25, Myanmar. Despite the market entry of a fourth operator, Ooredoo Myanmar increased its customer numbers by 20%, supported by our strong brand recognition. Ooredoo Myanmar generated revenue of QAR 260 million during Q1 2019 compared to QAR 355 million for the same period last year, impacted by the depreciation of the Myanmar kyat, which declined 12% year-on-year and aggressive data pricing in the market. Pre-IFRS 16 EBITDA is breakeven due to aggressive price competition and customer acquisition costs despite other cost-saving initiatives. Sequentially, revenue was flat.

Looking ahead, we remain cautiously optimistic about revenue recovery and starting from mid-Feb 2019, the regulator asked operators to stop top-up bonus promotions to be in line with the price floors they recommended. This has led to some improvements in the market.

This concludes the presentation. I now hand it back to the IR team.

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [4]

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Thank you very much, Ajay. Before we start on the Q&A session, just a reminder that we are still planning our Capital Markets Day in June. Final details to be decided very shortly and we keep you updated on this.

If the operator could now explain how to ask questions over the phone and over the webcast.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question is from Herve Drouet from HSBC.

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Herve Drouet, HSBC, Research Division - Head of EEMEA Telecoms, Media and Technologies Equity Research [2]

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Yes, can you hear me? Hello?

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Operator [3]

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Yes.

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Herve Drouet, HSBC, Research Division - Head of EEMEA Telecoms, Media and Technologies Equity Research [4]

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Just a couple of questions on my side. The first one is the EBITDA margin in Qatar. We saw the significant jump, 56%. Just wanted to see if it's mostly due to IFRS 16 for this margin improvement, or if there are other reasons for the improvement?

In Algeria, wanted to get a bit more in terms of your view when we could see the weakness in the other Algerian telecoms market when you think we could see some sort of stabilization and when you think operations can start to be turned around in that country? Do you think it's something that may happen this year potentially? Or do you think it's more further away?

And also I was wondering if you can give us as well any updates in potential spending, additional spending on CapEx or in terms of frequency acquisition in the different countries you are operating?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [5]

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Okay. Thank you for the question. The first question on Qatar EBITDA margin. As you see on Slide #12, that pre-IFRS, we've said the EBITDA margin was 56%. The 1% benefit is coming from the IFRS 16 savings. Another factor is lower handset sales. But if you look at the absolute increase in EBITDA, if you take out 1%, that is due to cost efficiencies in the country.

As far as Algeria is concerned, I think we are also anxious to see stability return to the country. As you are aware, there's economic and political instability today in the country. And we believe it will take a little time before the stability returns to the country. I think following political stability, we would expect economic stability as well, which, of course, will get reflected in the stability of the telecom market as well. So we're cautiously optimistic that things should get better as we progress during the year.

Spending of CapEx for frequency acquisitions. As we speak right now, there's no active acquisition of frequency as we speak. If you talk about our license renewals, the -- one of the major license renewals would come in Iraq in 2022. So that one's the first major license renewals on the cards.

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Operator [6]

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Our next question is from [Delawi Foardi] from [Lewis Cells].

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Unidentified Participant, [7]

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Just a sort of broad question in terms of how are you looking at the markets that you currently operate in. Given the difficulties you've had in terms of sort of flattish growth, where do you see growth in these markets? And would you have any interest in exploring new markets or exiting some of the ones that you're currently in? Can you just give us an idea around the strategy of the business?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [8]

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I think the issue that you have highlighted is an issue for the whole industry, not just specifically for us as Ooredoo. And as you are aware, the industry itself is going through a lot of changes right now. One of the focus of the industry is around digitization right now, and that's one area where we are also focused, and speed of implementing that is different in different markets.

And as far as the portfolio itself is concerned, right now, we are focused on the portfolio we have. We are not actively looking at other M&A opportunities as we speak, as we've said in the past. What we've also said is that if there is a opportunity which is really value accretive as an exception, we might look at it. But we're actively not looking at M&A activity either to enter or exit.

What we are open to is in-country consolidation, as we speak, if there is an opportunity. And there's opportunity available to everyone in each country where there are multiple operators, some of them have opportunities, but in the past, some regulatory constraints were there to implement easier.

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Unidentified Participant, [9]

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So Turkey is definitely off the table?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [10]

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Yes, actively we're not looking at Turkey now.

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Operator [11]

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Our next question is from [Dalal Darweesh] from Arqaam Capital.

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Unidentified Analyst, [12]

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I just have one question on Algeria. Can you please tell us what is the percentage difference between the official foreign exchange rates and the black market rates?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [13]

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We can only comment on the official rate. What we report to you is based on the official rates. So the rate for Algeria for USD 1 is DZD 118.7. So that's the rate that we are using. DZD 118.7 for the quarter.

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [14]

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Just for your reference, we have all the exchange rates at the bottom of the opco slides in the footnote there.

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Operator [15]

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Our next question is from Dilya Ibragimova from Citigroup.

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Dilya Ibragimova, Citigroup Inc, Research Division - VP [16]

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Dilya Ibragimova from Citi. Just a quick question on Iraq whether you have any -- whether there is any update on the licensing renewal, either timing or cost? And what is your view on the fourth license process that seems to be ongoing that the government is doing some consultations with external parties to put together another proposal? Do you think there is a risk that the new player may be offered an exclusivity as your license is coming due? And how would you approach that? So that's my first question.

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [17]

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The -- like I said, the Iraq license is one of the major licenses coming up for renewal in 2022. So generally, discussions with the government start a couple of years before that. So maybe next year, some discussions are going to start. But we don't expect any finalization any time soon for that.

Now, as far as the fourth license is concerned, we don't have any update official on how that is progressing. However, our view is clear that currently the 3 operators are covering the country well. And as far as the exclusivity is concerned, we have no indications that anything like that is on the cards as we speak.

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Dilya Ibragimova, Citigroup Inc, Research Division - VP [18]

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And just staying on Iraq, a quick question on the capacity, network capacity and growth. It seems like the revenue, there is some slowdown in growth and the CapEx has been slow for yourself and the competition. Is -- how do you see growth going forward? Is there enough capacity to drive growth? Or for now, it will just be more harvest of the network that you have and just maintaining the returns as they are until you get more clarity on the licensing?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [19]

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Okay. Right now, as you know, in Iraq, only 3G is there. And data growth is still continuing, which is offset by voice decline. I think in the country, there's huge opportunity of growth of data, especially if 4G were to come into play. And that's one thing which is also actively being talked about, and although I did say our license extension is for 2022, but discussions for 4G could happen before that. So there is no cutback on CapEx spend; it is driven by the needs in country. And as they amend their requirements, we intend to maintain our network leadership there.

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Operator [20]

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Our next question is from Ziad Itani from Arqaam Capital.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [21]

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First of all, on the other income. This foreign currency gain of around QAR 82 million, this is coming in from where? Is it from the devaluation of the Myanmar kyat because you have debt there or what?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [22]

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Basically, during the quarter, the kyat had depreciated. It had done in last year in quarter 1 as well. So last year, the impact was much bigger. So although the impact in foreign currency is in all -- a lot of markets, the majority of the impact is coming from Myanmar in this quarter as well as Q1 2018. But just on the appreciation of the capital, not a depreciation.

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Myriam Chaabouni, AlphaMena - Analyst [23]

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So why do you have a gain -- if the currency -- you have debt in which currency there?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [24]

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The outlook -- they have the tables and loans in dollar terms and that's why, if it appreciates the kyat foreign exchange gain, the reverse happens when the currency depreciates.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [25]

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Okay. And also, on the other income, you have something, miscellaneous income of QAR 1 million or QAR 3 million, that's 1/4 of your total net income. What is this, if you want to model for it, for example?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [26]

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Let me go to the note that you're referring to, to be more -- it will be around QAR 65 million total other income, right? And the big movement comes in foreign currency, which is QAR 82 million versus QAR 172 million. And the other movement which you're talking about as major in the miscellaneous income, a lot of these are one-offs, income, sale of assets, sometimes sale of investments, which happen here. But the material movement in that below-the-line item is coming from foreign exchange in this quarter.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [27]

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So within the miscellaneous income, you have also FX impact?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [28]

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The tax impact will not be in miscellaneous income. You said tax is it?

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [29]

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No, no, FX.

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [30]

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Oh I see. FX is part of the -- the FX impact is in what we say is foreign currency gains. If you look note #4 of the financial statements, there's a special line for foreign currency. So all the FX goes in that line item. The same as income we've got other items in different opcos, sometimes there are one-off income and benefits, sometimes from asset disposals, which are covered here. For example, in some countries, there were some frequent reforming and they got some equipment benefit as a result of that. So things like that get into miscellaneous income. But the movement which you see, the large movement is foreign exchange over there. Miscellaneous is -- miscellaneous by its very nature is something which cannot be clubbed into something else.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [31]

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Sure, yes. And just final question on Qatar. How much did you get in spectrum on 3.5 gigahertz? And when can we expect this to sort of start to impact the operations?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [32]

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Okay. I think, again, I'll reconfirm the number. I think we've got 100 already at 3.5. And the impact of that in terms of 5G revenue is, obviously -- they come once a full-blown launch of 5G happens, right now it is more like a showcase. And limited rollout, like there are only just above 90 sites have been rolled out. So the benefit of that would only come as we start expanding the network on 3.5.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [33]

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And do you see this as a potential threat on the fixed segment revenues as, let's say, competition can make usage of this to gain market share on the fixed? Do you think of 5G?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [34]

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See what happens. See fiber long term is cheaper to deploy and more efficient as well. So I think in countries where there is no fiber, I think that's an opportunity in those countries to use 5G as an alternative to fiber where fiber is already deployed in all the households like in Qatar. I think cost-effective-wise, fiber will be definitely long-term better.

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Operator [35]

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We have a follow-up question from Dilya Ibragimova from Citigroup.

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Dilya Ibragimova, Citigroup Inc, Research Division - VP [36]

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Just a quick question, please. On 5G in Qatar, how many base stations do you -- have you already? How many sites do you have there already sold? And what are your plans for this year and next year? If you could quantify that, it'd be great.

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [37]

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See, right now, we are just over 90 sites. We like to highlight it in our presentation as well. And I think the future deployment really depends how we see things going in terms of handsets as well and also how we see demand and use cases for 5G going forward.

Like I said, right now, it's more a showcase, and be innovative and be the leader. So I think we've achieved that already. We also had the first international call between 2 countries in the world, which was between Qatar and Kuwait done by us. As you know, the World Cup comes here in 2022 in Qatar and we'll be at the forefront of all known telecom technologies for that. So this should be seen in the context of that long-term vision which the company and the country has here.

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Operator [38]

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(Operator Instructions) We have a follow-up question from Ziad Itani from Arqaam Capital.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [39]

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Yes. So just on Kuwait, it seems there is overall a strong decrease in device sales in that market. What is the reason behind this? Did the regulator intervene? Or is it a change from the strategy of, let's say, telecom operators there? Or is it just a demand factor?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [40]

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I think a little bit of demand factor as well. In the previous year, the iPhone demands were much higher. And I think as customers, you know that the iPhone X hasn't had the same amount of traction as the other models. So I think it's -- and very often, if competition's also not pushing handsets, then it goes down. But we believe this, it can change during the year as new models come out.

Having said that, the benefit that we see in Kuwait is because of stabilization of prices there, which is benefiting all the operators, and that's why you can see improvement in margins for 2 reasons, one is a revenue stabilization and lower handset sales. So both of these have contributed to higher EBITDA margin.

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Ziad Itani, Arqaam Capital Research Offshore S.A.L. - Associate Director [41]

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Okay. So the regulator basically did not intervene to stop any handset subsidies?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [42]

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Not that I am aware of. There were no such interventions.

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Operator [43]

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(Operator Instructions)

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [44]

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Maybe in the meantime, we take a few questions from the webcast here. Can you tell us what are the questions there?

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Operator [45]

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So we have a question from [Al Rayan Investment]. You have CapEx guidance of QAR 5.5 billion to QAR 6.5 billion for 2019. What are your funding plans for this CapEx?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [46]

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See, CapEx funding is done independently by each of the operations themselves, with the exception of Myanmar, which is where the EBITDA is still low. So first, funding is the answer to all the opcos except Myanmar.

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Operator [47]

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Another question from (inaudible). What are your funding plans? Do you expect to do any issuance this year?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [48]

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As far as this year is concerned, we do have some refinancing up in the cards, for which we are not planning to access the debt capital markets. So as of now, no plans to go to the debt capital market this year.

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Operator [49]

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Another question from EFG-Hermes. Are you experiencing any pressure on growth in Qatar because of expat departure? Is that the reason why you reduced handset sales? If not, should we expect handset sales to increase again throughout 2019? How is the operating environment (inaudible) in Qatar?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [50]

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Okay. See, as far as the expatriates are concerned, I don't think there's a material impact. The overall population are relatively stable and expected to actually grow as we get closer to the 2022 expansion starts happening.

Handset sales, like I explained for Kuwait, similar impact in Qatar as well, where iPhone sales were lower than what we've done in previous years. Also, in terms of sales of handsets, who are wholesale in nature in Qatar, which is not impacting our direct customers as well. Having said that, during the year, as we go ahead, one could expect some increase compared to what we did in Q1 for handset sales.

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Operator [51]

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A question from [Damec Investments]. Could you please give us more color on operational aspects in Iraq, competition and CapEx?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [52]

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See, Iraq, competition has intensified during this quarter. And as a result of that, you can see the revenue growth which we were witnessing in the previous years is not there this year. And at the same time, as data revenue is growing, voice revenue is declining. And with growth in data revenues, there's need for more transmission, which have impact on the cost. So intensified competition from what we saw in last year. And the CapEx deployment is as usual. There's nothing unusual on the CapEx side. We will continue to invest in CapEx like I answered for a lot of the previous questions.

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Operator [53]

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Another question from [Damec Investments]. Growth potential and [A&P], market share gain plus possibility in Iraq?

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Ajay Bahri, Ooredoo Q.P.S.C. - Group CFO [54]

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In Iraq, we are the leader as far as revenue market share is concerned. Customer market share, we are the leader. I think we're still maintaining that leadership position for revenue. The dynamic which can happen in the market is, apart from 4G, an extension that really depends on the licensing of 4G. So that can add a new dynamic to the market there. But as we speak right now, we intend to maintain our market leadership in the country.

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [55]

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Okay. These are all the webcast questions. Do we have any more live phone questions, operator?

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Operator [56]

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We have no further audio questions. Back to you for the conclusion.

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Andreas Goldau, Ooredoo Q.P.S.C. - Head of IR [57]

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Great. Then I would like to thank everybody for joining today's call. Please refer to the Ooredoo Investor Relations website for additional updates and follow us on Twitter @OoredooIR, and feel free to contact the Investor Relations team for further information.

We look forward to your participation in our next update, probably around the 29th of July. Thank you again for joining, and your continued interest in Ooredoo.

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Operator [58]

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This concludes today's conference call. Thank you all for your participation. You may now disconnect.