Good afternoon and thank you for joining us today to discuss the company's financial and operating results for the first quarter of 2023. A copy of today's presentation is posted on our website. For those who have not been able to do so, you may download the presentation from www.pldt.com under the Investor Relations section. Kindly note that this briefing is being recorded. Podcast of this event will be available on our website after the call. QR codes for the presentation, the MD&A, FS and the podcast are on the screen and in the confirmation notices e-mailed to you. In today's presentation, we have with us our Chairman, Mr. Manny Pangilinan; Al Panlilio, our President and CEO; Mr. Danny Yu, our newly appointed Chief Finance Officer; Attorney Marilyn Aquino, our CorSec and Chief Legal Officer; Mr. Shailesh Baidwan, President of Voyager Innovations and PayMaya Philippines as well as other members of the PLDT management. At this point, let me turn the floor over to Mr. Panlilio to begin the presentation.

Thank you, Melissa. Good afternoon to all and thank you for joining us today. I'm happy to report the first quarter result. But as you all know, the first quarter has been very tough for us, challenges that we had in the first quarter that we would do resolve at the end of the first quarter. In [indiscernible] I think last year, we also defined our purpose. I think first time we'll be able to find our process PLDT Smart. I just wanted to share that, we are a Filipino company inspiring tradition and meaningful connections to generation. That has been the purpose that we define as management and working with the entire organization also. We've also defined our vision and mission, as you can read them on the screen. Next page, please. So that purpose drives us in our key business priorities. We sustainably shape the market with innovation, with new products, even looking into new areas of business for PLDT. As we continue, obviously, to grow our core business, we continue to strengthen this, very healthy businesses that we have from Individual, Wireless, Home to Enterprise, EBITDA level still at the very healthy 52% margin in the first quarter compared to 51% ending 2022. And also, of course, that is part of our strategic pillars is to continue to streamline our operations, bringing cost to serve down, having more efficiencies and really being more productive as a company. So we continue to reinforce our core infrastructure, PLDT Smart, homes passed by the end of the period is 11% up. We're now hitting 17.2 million homes close to, I think, Jeremiah, about how many barangays about?

17,900.

About 17,000 barangays also out of the 42,000 barangays. And we continue to expand obviously our domestic and international fiber footprint, reaching now to 1.1 million kilometers. We're the fast and most extensive network in the country. The next page, please. And happy to share with you -- next page. Happy to share that we are still the undisputed fastest integrated network in the country. In Barcelona, during the Mobile Congress in Feb, Smart was awarded Philippines' Fastest and Best Mobile Network. Fastest for five years now, and then only two weeks ago, Ookla was in town and awarded PLDT as the Philippines' Fastest Fixed Network for five straight years also. So a lot of hard work and a lot of our CapEx, obviously, is getting -- going to the network, making sure that we have the most reliable and fastest integrated network. Next page, please. So our 2022 -- sorry, there's a typo here, 2023 Q1 performance, Holding the fort amidst challenges. We continue to strengthen the offerings in -- at Home, increasing our Fixed Line subscription despite the installation challenges that we face and the group -- the Home team is developing new product variations to cater to the varying -- I hope this is better. And then for Smart, maybe living more for today. I think the new tagline for Smart is Live More Today and really able to have stable revenues this past few quarters and the efforts of Francis to really strengthen the Smart brand because TNT is already very strong, so Smart -- strengthen Smart brand and the Mobile business. And also, again, offering more products in the market that also offer live events powered by our fastest mobile network. For Enterprise, continue to aspire to be the trusted partner for growth for our…

Good afternoon. Allow me to share PLDT's financial and operating results for the first quarter of '23. Next. Consolidated service revenue for the first quarter of '23 amounted to PHP47.1 billion or higher by 2% from last year. EBITDA for the quarter also rose 2% to PHP26 billion, an all-time high quarterly high. EBITDA margin remained strong at 52% higher than the full year margin of 51% in '22. Telco Core Income, excluding the impact of asset sales and Voyager grew 5% to PHP8.6 billion from last year's PHP8.2 billion. Next, please. Looking at the segment performance. Our Home business continued to be the main driver of growth with a 6% year-on-year increase to PHP15 billion. Fiber Only revenues rose by 14% to PHP12.8 billion. Our Enterprise business improved by 5% to PHP11.8 billion. In the phase of industry headwinds, our Individual business remained stable year-on-year registering revenues of PHP19.8 billion. Let me now go through the segments in greater detail. The Home Broadband business continued to show growth, albeit at a slower pace post-pandemic. The market remains underpenetrated. However, unserved demand is more at lower segments, thereby more sensitive to inflation. Fiber Home revenues now account for 85% of the total Home revenues, up from 81% for full year of '22. Home ARPU grew 3% year-on-year. Fiber net adds of 81,000 in the first quarter are more than three times that in the fourth quarter due to lower churn and higher migrations. PLDT's competitive advantages remain to be strong brand equity, superior network quality and having a fixed and wireless portfolio, which allows us to offer varied technologies and price points to address different markets. Next, please. We're also seeing strong emerging revenue growth drivers in the Enterprise business. Corporate data grew 7% due to higher fiber, managed IT…

Thank you, Danny. Good afternoon, everyone. So we are coming to our first year anniversary of the launch of Maya Bank. Last year in May is when we launched Maya Bank. And we're very pleased with the recognition that we've seen from customers, in particular, on the consumer bank side as you roll that out for us to be also recognized by external forums like the Forbes as part of the World's Best Banks only Digital Bank from the Philippines to make that list has been extremely rewarding. Just to remind, while we have the bank, which we put at the heart of our fintech ecosystem, we have two other large pieces of the business where the bank is now powering additional financial services. One of those is where we service enterprises, large, medium, small by providing them payment processing facilities. We are the number one merchant acquirer, whether it is Visa, Mastercard, domestic debit or QR, we process all transactions. And that is a large part of our business where we are, by far, the leader in transaction processing. On the other side of the house, from the consumer side of the house, we have the Maya app, which was erstwhile PayMaya, where we completely revamped the facilities, the customer experience and have been, again, very richly rewarded by the ratings that we have got on whether it is on the Android or on the Apple Play Stores with very high ratings. So we put the bank at the heart of our ecosystem, which was payments and now expanded that beyond payments into a fuller suite of services. On the next slide, if you look at our business on the merchant acquiring, which is what I spoke about, where we have a very, very large market share, where we…

Yes. Thank you, SB. Just as a few updates. First, SIM registration. As you know, it has been extended until July 25, 2023. But as of May 3, Smart has registered 44.7 million of its subscribers, roughly 67% of our base -- declared base before and over 80% of our revenues are actually coming from this 44.7 million. So we'll continue to work on this balance and hopefully looking for another 9 million to 10 million subscribers to July. On the Class suit developments, just to update, there have been two individuals, each presented by different law firms. They submitted separate motions to serve as lead plaintiffs for the Class suit. Total numbers of shares owned by the two is 37 shares, and the total losses claimed is only $263. So lead plaintiff and lead counsel appointed by the court. So PLDT will have the opportunity to file a motion to dismiss the U.S. Class Action after it is served a copy of the amended complaint filed by the newly appointed lead plaintiff. For the purchase of Sky Cable Corporation's broadband business, we've already filed a notice with the Philippine Competition Commission on 30 March 2023 and just awaiting to start Phase I -- of the Phase 1 review. Ongoing technical, legal and labor, finance and tax due diligence review is happening as we speak. So we're hoping -- I think we will be also sending some more documents further review and hoping for an approval soon after. Just on the sale and leaseback of the first set, Stratosphere 1, 5,907 towers, that was closed April of last year. As of -- after a year, as of 30 April, total number of towers sold and leaseback at 5,182 or 88% for a total consideration of close to PHP68 billion. We will include those additional 135 towers closing in this April, close to PHP1.9 billion. And the balance of the 725 towers expected to be transferred on or before August 23. And for Stratosphere 2, sale and leaseback of 650 towers in December and 1,112 towers. In March, we see clear -- we've already gotten PCC clearance for the transaction of Unity Digital Infrastructure, which is the 650 towers closed in December of last year. And we expect a closing of about 125 towers amounting to about PHP1.7 billion on May 2023. Sorry, for the typo. I think that's it, Melissa. Thank you very much.

We're now ready to take your questions. You may type your questions in the Q&A box in the upper right side of the screen. You may also click the Raise Hand button and wait for the moderator to call your name before you unmute your microphone. You may also send your questions via e-mail to pldt_ir_center@pldt.com.ph. Please indicate your name and company name so that we can back -- get back to you for any additional information you may need.

We have a hand raised from Arthur Pineda, Citi. Arthur, you may unmute your mic.

Hello.

Hey, Arthur.

Hi. Yes, thanks for the opportunity. Just three questions, please. First, on the Class Action lawsuit, if I may just clarify. Am I to understand that this is done in dusted at $263 and there's no subsequent case related to the CapEx, which is pending? The second question I had is with Maya. I do know that you've got PHP21 billion on your deposit base against a loan disbursement of just around PHP6 billion. What's holding the company back from more aggressively monetizing on the deposit base? Any guidance on the drive to profitability would be useful. And the third question I had is with regard to the SIM registration process. It seems like it's been quite slow in terms of registering the sub. So I'm just wondering, what are the key bottlenecks to this? Is there any risk that you could actually see a revenue drop off by the deadline in July if these are not addressed? Thank you.

Hi, Arthur. Thank you. Let me answer the third question first and then maybe the first by Attorney MaVA and second by SB. I think the process has been quite easy for us. Actually we've invested in the system to make it happen. That's why we're already at a 67% clip. What's coming out is really maybe your real active base of subscribers. We will obviously continue to push for the balance. But as I said, 67% of our base has been registered, which carries over 80% plus of our revenue. So we don't see -- on our part, we don't see any risk on the revenues as we're able to -- we're close to, I guess, maintaining the base that are really active for our Smart base. Our job is to be the primary SIM to -- in the market, and make sure that we're able to gain the customers unless Francis wants to add anything else. I think -- again, I think the process has been very, very simple on our part.

Just to add, I think the challenge, I think that all of us facing, all the telcos faces really -- we don't have a national ID like other countries. But again, we've been working closely with the NTC to provide solutions on that one. And the other challenge, of course, would be still going out there for subscribers who are, either not on smartphones or are not techy. It's really -- what have we done in the past few months, we've been very aggressive in really reaching out to them both online and on-site. And like as we said, I think we're quite confident that they will be able to secure our business.

MaVA, maybe you can answer the Class suit question.

Yes. The first question is whether they are the only holders of the depositary receipts that filed for our Class suit, right? And the answer is yes. They are the only ones that filed within the deadline set by the court. So no others joined the Class suit process. So that's it. And it's going to be a long process. We expect that the process of filing an amended complaint and motion to dismiss, and the resolution on the motion to dismiss can -- will take at least a year. So sometime next year in -- June next year 2024.

But obviously, Arthur, the amount is very, very small.

Yes, the lawyer fees are probably bigger than the --

Yes. Yes, They've already lost more. SB? Go ahead, MaVA. Do you want to add?

It's okay. I have nothing more to add.

SB?

Thanks, Arthur. So on your question on monetization. So first of all, a lot of the excess liquidity that we have, we are placing it in things like the BSP overnight deposits and other short-term highly liquid and zero -- close to zero risk assets. And those are yielding us today close to 5% to 6%. So that has been extremely helpful to us during this period of heightened interest rate in terms of being able to place that. But that has helped us to manage the kind of gap that we have between the loans and the deposit ratio. The second part I would say is that our deposits, the way we have designed the products, we call it the high-engagement banking for customers to earn the interest, they have to transact with us because we know that the transaction data is actually the richest way of us getting a data asset that tells us insight into the customer. If I know what the size of the electricity bill that you pay, the kind of transactions you do on a monthly basis, what are the purchases you make and what other transactions you do, that then goes into my credit scoring model. So our whole saving proposition is built around high engagement where in order to enjoy different slabs of interest rate, you have to do and show us more and more transaction and spend with us. That data is feeding into our proprietary in-house AI-driven credit scoring model. And that, in turn, is helping to drive the loans disbursement and you're absolutely right, at this stage, at a little over PHP6 billion, that loan book -- disbursement is still growing. But just to give you a sense, on the back of that transaction data, we have over one…

Understood.

Arthur, any follow-up questions?

That's very clear. Thank you very much.

Thank you, Arthur

Hussaini, you have your hand raised.

Yeah, hi. Thanks for the opportunity and good afternoon, everyone. Several questions from me. First is on the fiber adds or net adds of around 81,000 in -- at the aggregate level, it was a 33,000 net subscriber additions, broadband subscriber addition. Just wanted to understand, is this the new run rate? Or do we expect this to accelerate potentially going to second and third quarter? That's question number one. Second is on the CapEx. I understand that the CapEx intensity remains high. But just wanted to understand that over the medium term, where it is expected to settle down? Is Philippines in a different structure where CapEx intensity over the medium term will be around, say, 20% to 25%? Or can it go to, say, mid-teens kind of level, which we had seen in markets like Malaysia? And then just on the -- and just maybe one -- just one housekeeping. Is -- are we done with the tower sale? Or are there more towers, which could potentially be divested? Thank you.

Thank you. I'll have Jeremiah answer the first question, and I'll take on the second and third question. Go ahead, Jeremiah.

Thanks. Thank you, Al. Good afternoon. Thank you for question. I'll start off the question, I think you had kind of two parts to the question. One was around fiber net adds. The second one was you're looking at the total net adds across the PLDT base and across the technologies that we have. The 81,000 is -- what we are seeing is we are seeing an actually, on a couple of fronts, an improvement on a churn perspective. We mentioned it, I think, in the last full year results that in quarter three, quarter four, we were going through a cleanup. So we've seen our total churn actually start to recede, and actually start to go down. But what we have seen is we've actually had an impact in terms of our new customer acquisition. That's impacted on two fronts. The first one is, as you would note in the -- in our release, we have actually had a limited greenfield rollout in the first quarter. Part of that is because we have been very focused on CapEx cleanup, and we have actually diverted some of our attention from rolling out actually ensuring that we have taken stock of all of the CapEx deployment that we have had. The second one is we also worked on actually some tighter credit controls, so credit control process for new applications. I think it's been pointed out that we have seen a slightly higher default rate for our new customers. And we're looking to make some adjustments to see how we could improve on that to ensure that we maximize profitability. Both of those fronts are things that we're actively working on. So now that the CapEx crisis is well and truly behind us now. The network team are focused in on accelerating as much of that deployment as much as we can towards the latter part of this year. And the second one is we've made adjustments to that credit control process to ensure that we have that fine balance between taking on the right proportion of risk as well as making sure that we continue to get the growth available in the market. So we do -- that is quarter one. There's actually a slight increase from our quarter four performance, not quite at the same level as quarter three. Our ambition is to actually increase that. So I wouldn't say that we actually want to be staying at that level. It's our ambition to actually continue to drive that up back towards numbers that you've seen in the past.

On your second question, I think I don't think it's possible to have our CapEx ratios in the teams. I think what we're looking at is maybe somewhere in vicinity of 25%, 30%, maybe in the midterm, and that's the target. So we're bringing down to the level maybe of PHP55 billion in the next few years. But maybe 25%, 30% ratio is a more reasonable ratio for us. On the towers, I think we still have to complete, obviously, a lot of Stratosphere 1. We have pending about 750 towers yet to be sold and Stratosphere 2, total of 1,100 -- sorry, 1,012 on Portfolio 1 with Frontier and about 650 for Unity. We're still waiting approval for -- we got approval for PCC on Unity, and still awaiting approval for Frontier. But I think for now, we'd like to complete Stratosphere 1 and 2 first. And again, based on the chart I showed earlier, Stratosphere 1 will be completed, hopefully, by August 2023. So you expect Stratosphere 2 to follow suit maybe in the third, fourth quarter. So we'd like to focus on that. So the balance of 4,500 or so towers left with us. We have not had any internal discussion to sell more of that. We just want to complete what we've sold so far. I hope we've answered your questions.

Yes. This is very clear. Thank you very much

Thank you

Next question, VR, you have your hand raised.

Hello?

Hi, VR. We can hear you.

Hi. This is Aishwarya from JPMorgan. I have two questions. One is on the accelerated depreciation for 1Q, what is the recorded accelerated depreciation and also the breakdown for that? And the second thing you mentioned that the CapEx overrun budget issue has been resolved. So could you share more details on what the resolution was?

What's that? What's the latter part?

Accelerated depreciation breakdown. The second one, CapEx budget, this risk, what are the details for that.

Do you want to answer the first one?

For the first one, there's zero upside depreciation in the first quarter.

Good answer. I guess, for the CapEx overrun, when you say details, what do you mean by that? We've actually brought down that overrun to about PHP33 billion, and that's what we're working through for the next few years.

Okay. So that would be the CapEx overrun? PHP 33billion?

PHP 33 billion, yes.

Okay. And so if there's no accelerated depreciation, what are the adjustments which lead to Telco Core Income?

Can you show that slide? Well, the major adjustment on the Telco, are you referring to reported income? Or is it the Telco Core Income.

Yes, I'm referring to the Telco Core Income, like from the reported income, how do we arrive at that?

Can we show that slide again. Al, can we show that slide. Our Telco Core Income has PHP 8.6 billion. After taking out the losses of Voyager, it's down to PHP8 billion. Then you have nonrecurring items there, which include sale -- gain on sale of towers, that's about PHP 2.1 billion. There's also ForEx, derivatives and others of around PHP0.5 billion. Then you have MRP costs around PHP1.5 billion plus gain on sale of Mabalacat property of around PHP0.3 billion. So including tax effect, we reported net income, plus PHP9 billion.

Yes, that's helpful and congrats on the results.

Just to clarify, the PHP33 billion is the CapEx carryover net of advances to vendors -- for the four major vendors. So -- and we're negotiating with the other -- the nonmajor vendors this year to bring down also the CapEx carryover from them. The nonmajor vendors, I think, constituted at the beginning around 15% to 20% of the total CapEx for network.

When you say carryover, which year does the CapEx pertain to? Is this FY '23?

Yes. The PHP33 billion for the major vendors will be a carryover CapEx for 2023 and possibly 2024 depending on the completion of the projects, when the projects are delivered, then their book in the year of the delivery.

Okay. Got it. Thank you.

Thank you.

Arthur, you have a follow-up question?

Yes, sorry, just a follow-up question on the broadband side. You mentioned higher default rates and tighter credit controls for the broadband users now. Are you looking to launch prepaid broadband as well as per what your competitors have been talking about? I'm just curious because I know that your focus has been mainly on postpaid broadband. But if it does pick up, how quickly can PLDT launch a similar product?

I'll pick up with that one if that's okay, Arthur. We constantly evaluate the different product and proposition options that we do have. Prepaid is one of them that we have had a look at. But as you're familiar with prepaid, there is a difference in the way that the fixed network actually runs versus Mobile. So if you look at the fixed network to be able to connect up a home, we actually still have to do the last mile truck roll as well as the modem CPE, et cetera. When you look at all of those things kind of added together, then you'll -- it's actually quite a high starter kit you'll be looking at, which kind of defeats the purpose of trying to target a prepaid segment because more often than not, it's that segment that doesn't have the cash to be able to avail of those services. So it's one of those things that we are looking at, we're balancing and evaluating. Rather than just only looking at our fiber option, we are looking at a couple of things. Can we look at, say, for example, a lower price plan but still postpaid, bringing that in with greater value using our fiber plan. And alternatively, we also have the benefit of also having the Fastest Mobile Network. So we're able to offer fixed wireless to customers on a prepaid basis or a postpaid basis and targeting customers that perhaps may not be able to afford the PHP1,400, PHP1,500 ARPU area.

Okay. Understood. Okay. Thank you.

Thanks, Arthur.

Thank you

From the question-and-answer chat box, we have a question from Ken Gotianse of ATR on Maya. How much of the last fundraising is remaining? And when do you expect to close another round?

So yes, as I mentioned, we already have a number of businesses which are moving into -- have moved into segment EBITDA positive. But as we spoke, the opportunity for us to expand and grow the full footprint of our financial services, especially as we go into the Micro SME segment in a big way, which is massively underserved and also on the consumer side of the house as we continue to add products. So we had raised 200 million around this time last year. We do have a large part of that still with us. But as we expand and look at the opportunity over here, we are talking of those existing shareholders. We've also had outreaches from some of the other potential shareholders. So it is early at this stage for us to discuss what our plans are and progress on that front. We'll come back when we have more details. But as I mentioned, we have the existing shareholders as you're well aware, KKR, Tencent, IFC and of course, Smart, PLDT are all very much supportive of our growth plans and the support we need to deliver on the numbers.

There's a question from Stephen Gabriel Oliveros of China Bank. Hi. I just wanted to ask what is the reason behind the lower depreciation charges in the first quarter of '23?

It's basically savings from accelerated depreciation book in '22.

From JoJo Gonzales from PEP. Should we expect special dividends from pending tower sales in the same proportion as the previous tower sales? Or how would the proceeds of the future tower sales be used? Thank you.

Maybe not. I guess the proceeds will be obviously used for the CapEx and requirements.

There's a question from Zoran Filipovski. Is there an updated guidance for full year 2023 Telco Core Income? Is the growth rate for the first quarter Telco Core Income expected to be sustained?

Well, it's a tough question. At this point, we're also still settling down on all the settlements -- But basically, I think it will be north of PHP33.1 billion. It will be north of that. So we're working very hard and we're seeing some of the -- we're looking at the other expenses, which are still very high, like electricity and the like. So we're trying to manage some of the cost elements of the business. A lot of initiatives to really control costs. So I guess for now, we'll just say it's north of PHP33.1 billion.

Question from Francis Chua. On Internet service with workers and students returning to work and school, has there been a decline in connections or downgrade in plans? Do you see this as a challenging move forward in terms of growth?

I'll jump in with that one, Al, if that's okay. I think there's a couple of things in play that are actually still playing itself out in the marketplace. I'll start with number one, to your point, the pandemic is over, fortunately, and everybody is out and about. And so the burning platform with the need to get broadband in the home is perhaps not as critical as it has been in the past. Secondly, it is quite well documented that we have quite a lot -- quite high inflation and the pressure on the wallet is starting to affect a lot of households. The third element that I'll talk about is really the fact that if you look at the number of broadband households, our postpaid plan that equates for about six million households. When you look at the total penetration in the market, that's actually very, very high in terms of postpaid, probably beyond, say, for example, the total -- total pool of, say, credit cards or other sort of postpaid services. What that means is we are actually starting to push deeper and deeper into the households in the market on not only in terms of their affordability, but secondly, also with regards to their comfort level with regards to postpaid plans. All of these things are coming together, and it -- actually, we are starting to see some pressure on that front. And that's why we had -- as I had mentioned, there was some pressure for us to have a look at our credit policy to see what changes and tweaks we can make to ensure that we maximize. They need the capacity we have available to us to make sure that they are going to paying subscribers that are going to stay with us, right? So there is some of those elements in place in the marketplace. We are still seeing demand in the market, especially in areas where they're still underserved. So we are still seeing quite a bit of demand in the marketplace. So I think the challenge now is for us to get out there and say, for example, the greenfield environment, all being able to share competitive customers to show them that actually our network is far superior than their current service provider.

A follow-up question from Zoran [Mohseni] (ph) on Home Broadband. Can you give more color on the installation challenges cited in the Fixed Line, which was mentioned in the earlier part of the presentation?

From a color point of view, I think the -- as I mentioned, there are two things. You'll take note that in the first quarter of 2023, we deployed our 12,000 new ports, right? So those 12,000 new ports. When you compare that to the previous first quarters in the last two years, that's actually significantly down. We have mentioned in the past that we have seen a high take-up rate, an extremely fast take-up rate whenever we go greenfield. And that has been our strategy for the last two years. And when we don't have the greenfield deployments, you can see that whilst we're selling in the brownfield and there is still a market there, it is actually much harder, not only because some -- a lot of these customers have existing services but also because it means we are going deeper into the pyramid actually lower into the different socioeconomic sectors on that front. The second thing I mentioned was really in working with and trying to improve the level of defaults for new customers, we actually tightened up our credit policies. This is actually quite -- we were out in the market, and we asked for all customers to have 1 AMSF. So we actually ask all customers, irrespective of which area you're in to be able to provide a 1 AMSF. What we saw, quite frankly, was -- we saw quite a big hit in terms of our new connections. And that's simply because of the readiness for customers to be able to pay that AMSF. And as a consequence, we actually made a tweak to that policy, right? So we've actually made a change to that policy where we focused in on collecting that 1 AMSF in areas that we have seen the higher default rates, whereas other areas, which we haven't seen a sort of default rates were actually working back in terms of our original policy. We've seen our install volumes improve since then. So we'll continue to work on that front to ensure that we have the right balance between growth as well as managing any bad debt or customers that are actually not going to be long-term customers for PLDT.

Hussaini, you have your hand raised again.

Yeah, hi. Thanks again. Just going back to the previous question on fixed wireless as a potential option. I just wanted to understand, will it be on 4G? Or will it be on 5G? And just looking at your fixed wireless subscribers, which had been coming down to an extent, something similar is happening with one of your competitors as well. So I wanted to understand that does that proposition need a bit of reset before we see growth coming into that base once again. That's question number one. Second question is on the Mobile side. I just wanted to understand how is the competitive dynamics in the market? Is macro a bigger factor or competition leading to a softer growth? And just a bit of clarification, which is on figure -- sorry, on slide 22. If I see the base station count, even from 2021, it is relatively stable. So I understand from 2022 going to first quarter of '23 because of the CapEx overrun issue. But why is this stable even from 2021 levels? Thank you.

I might start with fixed wireless, if that's okay, Hussaini? I'll start with the fixed wireless question. We have also similar to your observation, fixed wireless numbers in total market has declined. We think that originally, the explosion in fixed wireless subscribers across the board was obviously, I guess, exacerbated by the pandemic. So everyone rushing to be able to get connectivity within the home. As we've increased our fiber rollout capacity, and we've actually seen that across all competitors, we've seen some correction in the marketplace. What we are doing now with fixed wireless is we are actually going to be using it for two main areas. Number one, we will be using it as a postpaid offering for our existing fiber customers. So it becomes a backup service to ensure that they have 24/7 365 days a year connectivity. And so it helps them support and ensure that they stay online as a family. The second market that we are actually using fixed wireless to target is going to be -- to reach areas where we currently don't have fiber. So as Al had mentioned, we currently have 17,000 barangays that we cover. But as you know, there are still about 42,000 -- not additional, but total 42,000 barangays in the market. So still at least another 20,000, 25,000 barangays that currently don't have any connectivity options. And that's where we're going to be leveraging fixed wireless to be able to get out there and reach out to those customers and connect those homes. Your other question that you asked was really is it going to be around 4G and 5G. At the moment, the current fixed wireless offering is leveraging our 4G network. That's not to say that we haven't had a fixed wireless offering with our 5G historically. We have actually had that. I think it was in 2021 -- 2022, sorry. But what we will be doing is actually revamping the whole portfolio, so you will have an option for different types of 4G devices as well as 5G. That will offer different levels of quality of service, as you would know, whether it's Rx diversity on, say, for example, some slightly lower end starter kits for fixed wireless, still leveraging the 4G network, but also having a much superior 4G devices as well to be able to give them the maximum bandwidth available as well as a range of 5G devices.

I'll give Francis the second question. Francis, please.

I'll take on your questions for Mobile. I think this quarter, there are two external factors that affected all the telcos. The first one is SIM registration. I think what we have seen this quarter is there was a significant reduction in new activation because of SIM registration. So I guess -- I'm sure that all the telcos were also affected in that same way. The second external factor would be inflation. Our inflation in January hit the highest in 14 years to 8.7%. That's more than double compared to the inflation we had same quarter of last year. And for the whole -- for February and March, we saw that the inflation remained elevated with February at 8.6% and around 8% in March. And I guess, and I'm sure that our competitors are also felt that affecting our subscribers, consumer wallets. Especially for our value brands, in our case, it's TNT. We really saw that they are more affected by these headwinds or this inflation. Now to what extent our competitors are affected? We have yet to find out when they release their results in the upcoming days.

What was the third question?

Actually, the competitive dynamics, macro or competition, that's already answered.

I thought there was a third question.

Hussaini, any follow-ups?

Yes. Sorry, the third question was on slide 22 on the base station.

The base stations count for 4G, 3G and 5G seems to have been relatively flat from 2021 onwards. I think that was your question, Hussaini?

Yes, for 2022, I think there was a focus on building out the fixed network in 2022 because we did have a lot of towers built, both for 5G and 4G. What we're doing now is looking at -- and if you compare the first quarter, obviously, not much have happened in the first quarter for us. So -- but moving forward, I think you will now see some new towers for the Wireless space. We're also increasing capacity for 4G/LTE, where the majority of our client base is on. We're trying to maximize where 5G is, trying to repurpose 5G stations that are not -- with very low traffic and use that for 4G, also use the spectrum for 4G. So these are the things that we're doing in terms of making sure that we're able to optimize the network. But yes, there was -- there was really -- that was intended in 2022 to really focus a lot of the investments on the fixed network.

Understood. It is very clear. Thank you very much.

Thank you

There are no more questions in the queue. Last chance to ask the questions. There are none. I'll now turn the floor over back to Mr. Panlilio for closing remarks.

Well, again, thank you very much for being here today. We look forward to AGM -- June 13, AGM. And again, thank you.

Thank you. If you have any questions, please feel free to reach out to Investor Relations. Thank you very much. This conference is over.