Far EasTone Telecommunications Co Ltd
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Far EasTone Telecommunications Co Ltd
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Welcome, everyone, to Far EasTone's 2020 First Quarter Earnings Conference Call. [Operator Instructions] For your information, a webcast replay will be available within an hour after the conference is finished. Please visit www.fareastone.com.tw under the Investor Relations section.
And now I would like to introduce Mr. Gary Lai, the IR Officer. And Gary, please begin.
Thank you, everyone, for attending Far EasTone's First Quarter 2020 Results Conference Call. Today, our President, Chee; and CFO, Sherman, both here participating in this call with us.
Before Chee's presentation, please pay attention to the safe harbor statement in the first page. Let me pass to Chee, please. Thank you.
Okay. Good afternoon, everyone, and welcome to our call. I would like to start our first quarter review with the market condition, so as the chart in Slide #3 on the left. So the market mobile customers in terms of the number of subscribers, and this is according to our NCC data, it has been like 29.2 million for 2 quarters in a row, so it's pretty much stable. And then on the other hand, FET Far EasTone, we continue to grow our postpaid customers, okay, and then at 1.2% year over, okay?
And then in terms of the mobile number portability, it also cooled down, which is a good thing in a way because the postpaid churn is lower. And then also that means the competition among the telcos is also cooling down, okay? So on the right-hand side, we keep hitting the record-low churn rate. The March -- the 1-month number as I understood from my team, was like 1.06%, so it's even lower than this average, like 1.29%, okay?
All right. If you turn to the next page in terms of our operational performance. As this has been reported recently in newspapers, talk about the ARPU or the number of subscribers, we have been taking over the lead in terms of the ARPU value for both blended and also postpaid. And then we -- for ourselves, we really look at the postpaid with more focus, okay? It is now at TWD 713.
And then in terms of our customer satisfaction, so according to the third-party survey, our customers, FET subscribers, their satisfaction with our network is better than the other telcos, their own customer satisfaction with their own network. So -- which is a good thing, but then that also tells us we still have some work to do, so hopefully more people will know about our quality of our network. And then eventually or over time, we'll get more subscribers to come to in our network, okay.
All right. In terms of our new economy, we have seen very impressive growth. So first quarter 2020 over the same quarter last year, we grew 44% in our overall new economy revenue. And then on the right-hand side that we show several areas especially on the enterprise side. And so for our cloud service for the first quarter, we grew 220% year-over-year. And then even though we did acquire Nextlink in March last year, but then Nextlink itself, they have a 140% growth. So this is a very solid cloud service growth at FET together collectively, including the subsidiary company performance together.
And then for our IOT, we have almost 500% growth. And then in terms of the system integration, the SI area is double digit, 11% growth year-over-year. And then in the security area, it's 58% even though with the virus. So some of the projects, we were delayed in terms of finishing it because the clients wouldn't want us to bid some at that time, so it delayed some of the project conclusion. But then even with that, we still show 58% of growth for the first quarter. Okay.
So now talking about the COVID-19 virus impact. As everybody knows, the virus spread is more contained luckily or under control in Taiwan. We are very blessed for that.
And then there's still impact, right, across the board. And then for FET, I think in telecom industry, we are less impacted than some other, like in the restaurants or tourist related and then some of the manufacturing, right, and then because of supply chain and all that. So we are actually relatively okay, but still we are feeling the impact. So for example, the inbound/outbound roaming traffic, right, and then also the revenue, although that itself only account for a very small percent, like 1% of our service revenue, so the decline there is not -- compared to the total revenue we have, is not as significant.
And then also the prepaid card revenue, we also see the decline just because there are less visitors. Either tourists or business people, it's just less.
And then -- but then the major reason for us to fall short on achieving our revenue target is really mostly due to the device sales, right? And then that is because for several months in a row, there were just no new handset models became available for us to entice the customers, either with bundled offer or just plainly sell the devices. So we definitely have resulted in lower device sales and then also the bundled sales. So for the gross adds, so that impacted our revenue for first quarter.
But then in terms of the devices supplies, the good news is they are catching up, so before summer. And then there will be more phones that will become available for our 5G launch in summer. So that is definitely something we keep a close eye on, okay? But for everything that we know at this point, the supplies are coming, okay. The supplies are coming. Okay.
And also, then that's all kind of more on the negative side. But then because of the virus and the people now -- not only people, the industry, right, the enterprises, they definitely see the need for remote working, the -- for video conferencing. And then -- so we do have increased enterprise demand for video conferencing or related digital capability solutions. So we got lots of increase and also increased number of orders in this area for our enterprise. And then also, there is a request for more bandwidth because more people are now working from home or more remote working kind of need. So that did give us a little bit uplift.
And then we also, as more people now, they really cannot have much entertainment. They cannot eat out or they couldn't eat out. They stay at home. And so what do they do, especially after the Chinese New Year, I remember when the first kind of breakout. So we do see the data usage, right, surge up. And then overall, it's increased about 10%. But then when people during peak hour and all that, you do see like we probably have more congested periods of time. So we do get more complaints from the users, just because they were not used to be staying home that long. And then also the indoor coverage is always a little bit more limited than the outdoor coverage, so we see more complaints.
And then now if you ask me, so the more data usages are resulting in the more dollars, not quite so. And because if you remember, we have the famous unlimited data plan, right, and then the TWD 499. So that really hurts us. This is where you could see, you could use more revenue and then if the volume goes up. But then that wasn't quite a case because a high percentage of our subscribers were on those unlimited data plans.
Okay. All right. And with that, I'm going to turn to Sherman, my CFO, to talk about some financial details for your information.
Good afternoon, everyone. Now let's turn to Page 9. Let's look at some percentage numbers here. First is the EBITDA margin and percentage. The EBITDA for first quarter this year is TWD 7.003 billion, but the margin percentage gets higher to 36.1%. One of the reasons is the revenue shortage come from handset sales, which is lower margin. So because of that kind of a revenue decrease, so we still have a good EBITDA margin percentage.
And then for net income, actually our first quarter net income is higher than last quarter, and that is -- that gives us an even higher net income margin, that is 11.2%, for the same reason as EBITDA margin.
Now the next page is our financial result. And for the total revenue for the first quarter, we have TWD 19.389 billion. That is 97% of our guidance achievement. And our operating expense is TWD 3.74 billion. That is 5% lower than our guidance. And our EBITDA as we explained previously, it is higher, 2% higher than our guidance. And the net income is 3% higher. And our EPS, TWD 0.67 is also TWD 0.03 higher or 3% higher than our guidance.
Next page, let's look at our financial status. Our cash and cash equivalent is okay. But if you look at the total borrowing, I think the highlight is we significantly increased our total borrowing from last quarter's TWD 35.5 billion, now it's TWD 69.1 billion. That is because we have to pay TWD 40 billion for spectrum, 5G spectrum early this -- first quarter this year.
And our shareholders' equity increased from TWD 70.6 billion to TWD 72.78 billion. That's a normal increase because of the earnings made in first quarter.
And our net debt to EBITDA increased from 0.91x to 2.17x of EBITDA, but however -- but we still have a very sound financial standing and our liquidity, everything is okay.
And our free cash flow is TWD 7.095 billion for the first quarter. If you look at last year, it's TWD 15.256 billion. We -- the reason we have a very high free cash flow on first quarter, so the reason, one is we have tax return from tax bureau. That's the part one. And second is our CapEx spending for the first quarter is lower than the planning. It's only TWD 1.0 billion. And another reason is our significant reduction in working capital from reduced accounts receivable and reduced inventory. So that's why we have a very strong free cash flow for the first quarter, but that is like onetime event.
Good. And then that's the end for the financial highlights. I'll return the business update to Chee.
Okay. So although this is the first quarter, and I figure for those that highlight we already have received, and I might just share them with you just to be timely. So this highlight is some of that happened in second quarter, so I just renamed it to the year-to-date highlights for you.
And then as you might have heard that we have won the DJSI Best Mover for Telecom Industry award. And then we also ranked among top 5 companies for 2019 Corporate Governance Evaluation by Taiwan Stock Exchange. This is 6 years in a row.
And then we were also approved for a 5G business plan and security plan and received construction permit from the NCC, and we already started our initial phase rollout, okay? And then we also signed our first 5G enterprise network client. I believe this will be the first probably among the telcos, and it's a leading tech company.
And then we also supported NCC and our CDC effort to contain the COVID-19 virus. So we actually provided a cloud and network infrastructure to ensure this eMask ordering system is scalable, and then we -- and so they can cope with the anticipated demand.
And then on the other hand, as some of you may have heard, that we have geofencing capability, that we were helping the CDC to track down to make sure those quarantined folks stay where they should be. And then we actually have provided very good support, and it was over 99% accuracy. And if I may add, as I understand, we are the best on the pie in terms of the service. Okay.
And then for our second quarter focus, of course, we're going to continue to build out our 5G network. And so -- and then we still on the same schedule for summer launch. And then so we're going to start our prelaunch warm-up activity soon, okay?
And then we will continue to enhance and enrich and accelerate our digital services. As you see, our new economy in general, right, grew 44%. That includes the digital services as well like our EC, which is still small. But then we are encouraged to see the kind of growth, and we just need to do better and do more.
And then on the other hand on the ICT side, you saw some of the numbers I shared with you. So I think inevitably with the global economy, since we are part of the global economy, I would say eventually, we probably will see some of this slowing down. But then until then, we still continue to work really hard on our enterprise-related, ICT-related business. And then so like even with 5G, we had previously several PoCs. And we will try to nail down all those some deals as well, and so we won't slow down. And then we will optimize our channel strategy to drive the 5G adoption.
And then also, as we do see, it's getting more challenging to see the growth in revenue with all this global economy and then the local economy situation, and then so it's extremely important that we control and then cut our costs and expense. And then so that is -- and here I put it at the bottom. Actually for my internal communication, that is our top one item. We want to make sure every employee of FET understand for every penny that we spend, we really need to know that it is really worth the effort, right? So we are very cautious about the cost and expense, and we're doing everything to make sure the money is well spent and for the kind of return that we're expecting.
With that, I think that concluded our presentation, and then we welcome your questions.
[Operator Instructions] And the first question is coming from James Wang of UBS.
So I’ve got 3 questions. The first question is just around the operating cost curve. So I've noticed that service revenue, so that excludes the hardware revenue, that's down 1% year-on-year. But EBITDA is down a lot more, it’s down 6%. So just wondering what's driving the operating cost to grow faster than revenue? Is that mostly 5G related, or the costs associated with the data capacity increase the President talked about?
The second question is just around the new economy business. That's been growing very strongly, but could you give us a sense of the profitability of that business? So win share from the incumbent, the concern will be you are sacrificing margin or potentially making losses in order to do that. And also apart from price, how are you differentiating versus the incumbent?
And the third question, just around the mobile business. So we've come to the 2-year anniversary of when the TWD 499 plan was first launched. So how are you incentivizing these customers to stay with you for another 2 years? Are you offering further discounts? And what proportion of the customer base has already -- have you already moved on to the new plans?
Okay. I'll answer the first question on the operating expense. Actually, it is lower than our budget by 5% because the handset sales is lower than our expectations. So actually, we saved quite some handset commissions and bundling subsidies. That is the reason.
If we compare year-on-year, actually the first quarter's operating expense is higher than last year because we still had some hiring on second half last year, so actually, our head count-related operating expense is higher than last year. But because of the handset sales lower than expectations, so that caused some savings from our operating expense.
And for the second question?
Yes, so the new economy, we are looking at on the ICT side, the gross margin is about 13% for the first quarter. And then on the digital services side, the gross margin is actually higher, and it's close to 50%. So the average we are looking at is about 30% for the new economy, okay?
And I think you have -- did that answer your question for the second one, sir?
Yes, yes.
Okay. And I think the third one you are asking about the TWD 499 is going to be the second anniversary. And then people that signed for 24 months probably due for renewal or churn, right, and then what are we doing to cope with that? So the timing is such that this is also where we are actually asking our subscribers to consider the 5G. So that is kind of combined together with our 5G offers, so like an early bird offer. So this is looked at not just like in -- from one angle because everybody knows, and then everybody would expect because of 5G, there will be different offers. So we kind of combined this together.
Now in terms of exact number or percentage of how many that are up for renewal, that we don't really -- I don't have a number off-hand. And also, I think one common practice is you don't really wait until the expiration or the expiration date to do the renewal. People do it sooner, so are you using 2 months ahead or 3 months or 4 months? So that number can change. So we -- I don't think we have that number. I could ask, but I don't have it handy.
But then to answer your question in a short way, we are combining all these together with how we are going to encourage our subscribers to sign up for 5G as early bird. So those are kind of considered together in our offering design.
The next question is coming from Danny Chu of Bank of America.
Just 3 quick questions. First actually is more so about the 5G. Earlier on, you mentioned that due to the offering of the unlimited data plans, that limit the company's ability to monetize the revenue opportunity. So should we assume when 5G is launched, at the very beginning, the company is not going to offer so-called unlimited mobile data plan under the 5G offering? That's my first question.
Second question actually is about the CapEx budget. The company budget, about TWD 10 billion this year for CapEx. Given with the coronavirus, more and more people are working from home, and potentially going forward, that would be the trend as well. Should we assume the CapEx budget for this year as well as going forward will be changed because of the working habits being changed as well?
And last question is in terms of the increased borrowing taken up by the company, can we have a rough idea of roughly what is the interest rate that we are paying?
Okay, for the first question, that's a tough one, yes. And then if you ask me, I would say -- well, no more unlimited, I wish I could just say that. But then as you know, there are 5 telcos here, right? So setting the price in has a lot to do what the market said it will do, which will be our peer, Chunghwa. And then -- but then I think every telco understands the pain. And also my personal concern is really, there are still many applications yet to be seen that will be developed for taking advantage of 5G's big bandwidth, right? So when we talk about unlimited, we really don't know what we are talking about. And that is like you write a blank check. So that is my concern when we just offer unconditional unlimited data plan.
But then instead, I think or in lieu -- knowing today, we actually have the usage pattern, right? So for Taiwan, we have a role and actually we made it in the news, right? Taiwan is the top 5 telcos in terms of the data usage, right, globally. So it's like a 23 or 20-something gigabytes per month, right, or almost 30. So it is high, but then still that is a number. So you know at least you can reference. It's a good reference point.
But then for 5G, from what we already saw in Korea, we know it definitely has increased their data usage. But they also did not offer unlimited. Or actually, their unlimited was very high price, and it was not a popular plan in Korea. So they -- the jump there is still pretty limited because it's kind of contained in a way. But then if we continue unlimited, you don't know how much more bandwidth that this is going to drive up the usage.
So I think spectrum is very scarce resource, and then it really should be best utilized. And then when we know how we are using it and if there are alternatives, people should look at what is the best optimal way of doing it. So as I advise my team, we shouldn’t just go out and then offer unlimited because there are so many unknowns. And I really don't think that telco as a whole should do that either, and we should be very careful before anybody offers that. That is still my position. But then now would I change if all my peers are offering it or can I just like stand alone? I don't think so. So -- but it is certainly not something [indiscernible] to offer an unlimited plan. Okay.
Then for the second question about CapEx, our CapEx plan for this year is still unchanged. And we still plan to spend TWD 10 billion, and then a significant portion of that will go to 5G.
And on the interest rate, our corporate bond interest rate, the latest is around 0.7% and depends on different lending facilities. I would expect a reasonable interest rate to be between 0.8% to 1%. I will be surprised if we have to borrow anything above 1% interest rate. So I would say lower than 1% should be our borrowing rate.
Yes. And I think there is a second part of your second question about the CapEx, is that going to be affected by the working habits? If I understand you correctly, actually, the fact that more people seem to be accepting or more companies are accepting the remote working or remote conferencing kind of work style, that actually would accelerate the enterprise needs or demand for digital transformation. We're needing more capacity from a telecommunications perspective. So for us, that means that we should invest more. So in terms of the CapEx influence, if you -- I think if anything, it's positively correlated. And not because of the remote working, we will reduce our CapEx, if that's you were alluding to.
[Operator Instructions] And now we'll have Jack Hsu of SinoPac for questions.
I have 2 questions. My first question, could you give us more color on your convertible bond, further details. So when will we finish the whole process and will file the convertible bond?
And my second question is about -- so what's our trend for our 5G deployment? I mean do we plan how many FET stations will play in this year? How many FET station will deploy until the end of the next year?
For the first question, convertible bond. Right now, we don't have any plan to issue. We have – there is more than sufficient banking facility available.
Okay? And regarding 5G deployment, as I mentioned, we already started the deployment. And then to pass what's required by NCC, you need to have at least 250 stations. But then, of course, we will have more than that, and we are looking at 1,000 for this year. As to the exact number for next year, it really has something to do with how is the market responding, right, so we can adjust. But then eventually, we want to see our 5G network will cover our entire 4G network. But then just remember, even before it's completely covering the 4G network, the way that the network will be used is 4G plus 5G. So it's never like a 5G alone, it's not enough. It's on top of 4G, which we already have plenty of spectrum.
So to answer your question, we are looking at 1,000 for this year. And then there will be another few thousands next year, but the exact number really has to depend on the demand and then the competition and all that. So I cannot give you one specific number.
It's very helpful. And just one follow-up question. We are -- we can mention the Korean telco experience. So I'm interested because of the Korean telcos in last year, Korean telcos when they deploy their 5G network as soon as possible. But as I know, at the second half of 2019, they find the -- they just stopped their goal to expand their 5G network and actually the base station, the deployment. Because they're concerned the ARPU cannot grow as fast as they expected. So will we also want to think this kind of scenario will also happen in Taiwan in the year or not?
Okay. Well, if the COVID-19 did not happen, I would say to compare with Korean because they were ahead, a full year ahead of Taiwan, right, in terms of launching the 5G service. So we were looking at them as one of the early starter and see how they were doing. And then also just like when 4G started, and Taiwan was behind then the rest of the world in adopting 4G. And then we actually had an advantage when after you launch and the adoption rate is pretty good. So we already anticipated because 5G, we're still considered as one of the early ones to deploy so -- Taiwan, I mean. So in that case, there may be a risk of being early. And then the new applications that may be attractive to the consumers may not be that many, and then that will be the case.
And then, of course, because of the COVID-19, certainly the entertainment itself is not really #1 thing on people's mind. Or maybe after all this, everybody needs some good entertainment.
But then, one thing I do see is because of this pandemic, and then people see the way -- the new way of working or communicating is really different. And then so for those that were questioning why do we need from 4G to 5G. Just the fact that people know now that the digital transformation, the need for that, for a company to go digital in order to really take advantage of the telecommunication kind of technology, they understand it. So Bill Gates actually put it himself that because of this COVID-19, and then it would accelerate the digital transformation by like 10 years. This was his words, word by word. And then so we do see that.
And then as I have been saying, Far EasTone is not only doing the consumer business, we also serve the enterprise as well. So that's why you see a lot of our new economy growth came from our enterprise side, and then so we do see the demand. And we have -- we even have companies that they were suffering from the COVID-19, they have to put people on furlough. Then they still they ask us now, can we help them with some automation or with some AI, with some smart manufacturing, things like that. So you see enterprise is responding to this differently. So I see they definitely see the need for more advanced technology in terms of the communications, and that's the business we are in.
Now on the other hand, for the consumer, even for myself because I -- my husband is in the States and my 2 daughters are going to stay there, with 4 of us in 4 different places. And when we use the line, that over the top and then like we were doing the, what do you call, video chat and then we are singing the happy birthday together for my husband. And then we were like out of sync. And then I would say, "Okay, let's do it together." And then it took me a second, I said, "This is the delay." This is why -- what you're talking about, 4G to 5G, then you won't have this problem. So even on the consumer, this technology will really bring you together and zero out the physical distance for you, right?
So -- and I hope and I think that is the case, too, more people because of this situation, understand the importance of the telecommunications technology. And just because 5G is more advanced than 4G, some people are already accepting it, but then they are assessing and not focused on what kind of new entertainment, or is the speed of downloading a video fast enough for me? And they see the general need for telecommunication just because of this COVID-19. That changed everybody's life kind of forever. People start seeing that. I think that kind of brightens the light for them, little light for them.
[Operator Instructions] And the next question is coming from Billy Lee of Crédit Suisse.
I've got 4 questions. The first question is a follow-up question on the previous one about the rolling off the TWD 499 customers. I understand you said that you are going to ask them to sign on for the early bird 5G plan. What are the other options for the customers if they are not interested in 5G early bird plan at the moment yet? That's my first question.
And the second question is about the operating cost guidance. I noticed that in the year, in the beginning of the year, you are expecting operating costs to go up because of the 5G launch. Would the COVID-19 change your operating cost assumption in any way? For example, are you going to cut more costs in response to it?
And the third question is about the enterprise demand that you talked about driven by the COVID-19. Will you be able to give us some example of like the financial profile of this kind of business, for example, like the revenue and the margin and profitability kind of metrics? I just want to get an understanding of how this is going to drive the overall revenue in the midterm or long term.
And the last question is about -- in regards to a slide that you talked about. You said you have got a new tech company on both for enterprise applications. Would you be able to disclose a bit more about what kind of applications? Was this Taiwan? And any financial details or some kind of basic overview would be helpful.
Okay. So thank you. For the first question about rolling off the TWD 499 customers, offering or encouragement to sign up for 5G, of course, is just one of the options. And then for those that will -- they would like to stay on and then I think we do honor the TWD 499 and we may let them -- we give them option of continue with that. I can double check with my marketing officer on that, but then I think that definitely is one of the options, right?
And then in terms of the #2 on operating cost guidelines, is it affected by the COVID-19? I would say yes, more or less, a little bit. Because in terms of our campaign or strategy on 5G, this is different time now, right? So this is not like when we didn't have this, we probably will have big bang kind of events. But then hey, people are being affected. And then so this 5G may not be the most important thing on their minds. So we will be more subtle in terms of introducing our new service. So then that will affect how we would do the campaign and all that, and then that will probably help us save some costs. So I think in that regard, it does affect a little bit. And then certainly not to spend more money, that's for sure, okay, if that answer your question.
And your third one is about the enterprise demand that I mentioned about we saw some uplift there or more demand uplift. I don't have exact numbers that I could give you, but then given that it's more drawing on the traditional telecom kind of communication, the facility. So I would say that, that will fall under our higher margin because of that tech on our network, the asset that we already have.
So I would say the margin will be reasonable, like 30% if not more. But then of course, it depends, right? Every company may have different needs. And on top of it, we may need to add some other integrated solution or application, but that all varies. But then the bottom line for the communication piece, that is drawn on our core business. So the telecom part, the margin will be higher.
And then for your #4, the one that I mentioned that is our first 5G, the -- it is a private network that we are -- we have built for this client with a dedicated [ ring ] for them. And then we set up the infrastructure for them on-site on-premise. And in terms of the contract value, I would like not to disclose it. But then we are pleased with -- because it is our first and because we were ahead, right? And then we were prepared ourselves for the -- what can we offer the industry when they see they have a need for private network, but then without necessarily getting a dedicated spectrum to their own. So we offer 4 models, and then we went out and then contact these hero customers in certain verticals. So we were responded with many interest, and that's why we had quite a few PoC. And this is the first one that we converted the PoC to a real contract, which we are pleased with.
There will be more to come, for sure, potential later.
Is that enough? Okay. All right.
Yes, yes.
And the next question is coming from Sara Wang of Morgan Stanley.
I just have one question about the new economy business. So we have a new goal on this business segment, say, the current very high growth rate. Do you think this is still sustainable? Or do we have a target, say, what percentage of revenue contribution will the segment be going forward? Or is there any data point that you make sure that how much of the new economy contribute to our total revenue now?
Okay. For the first quarter, I think it accounts for about 14.7%. And then our -- we do have a target for this. For the new economy, we are looking at 15% of our total revenue this year. And then so for first quarter, we were really close, 14.7%.
Got it. And maybe just one follow-up question. So I believe all this new economy revenue will be included under the enterprise business or enterprise revenue we just discussed about. So would you please also share maybe what percentage of revenue does the enterprise business contribute?
Okay. So first of all, the new economy actually consists of the enterprise, those like IoT, ICT and then private networks and all that. But then we also have our CIoT and also our e-commerce type of value-added digital services on the consumer side. So it's now, all of it, is for enterprise. But then to answer your question about our enterprise revenue target, we are looking at 25% this year.
And maybe just one small follow-up and how -- what's the number for the first quarter, for enterprise revenue contribution?
Okay. Let's do a quick calculation. We can do that. I believe it should exceed it because our enterprise really did very, very well. First quarter, they overachieved across all financial indicators, the revenue, the EBITDA, net income.
[indiscernible].
No, she was asking the enterprise revenue account for the total revenue. [indiscernible].
[indiscernible].
New economy...
No. New economy...
Sara, we'll probably give you this number off-line, just to give you a more accurate number, okay?
Okay.
Thank you very much.
[Operator Instructions] There are currently no questions. I'll pass the call back to Mr. Gary Lai. And Gary, please proceed.
Thank you, everyone, for attending our first quarter results conference call. See you next quarter. Thank you very much. Bye-bye.
Thank you.
Thank you. And ladies and gentlemen, we thank you for your participation in Far EasTone's conference. There will be a webcast replay within an hour. Please visit www.fareastone.com.tw under the Investor Relations section. You may now disconnect. Goodbye.