Good afternoon, everyone, and welcome to Vodafone Qatar financial results investor call for the first half of 2026. I'm Pauline Abi Saab from the Investor Relations team.

On this session, we have Sheikh Hamad bin Abdulla Jassim Al-Thani, our Chief Executive Officer, and Masroor Anjum, our Chief Financial Officer. We'll start as usual with a presentation from our CEO on the financial and operational performance highlights, followed by an update from our CFO on the financial performance for the period ended 30 June 2026.

After the presentation, we'll open the floor for Q&A, where you can ask your questions by virtually raising hands. Today's investor presentation is available on this webinar and on our website under the Investor Relations section.

Please note that this session is being recorded, and also note the usual disclaimer on slide number 2. To begin, I now hand over to Sheikh Hamad.

Thank you. Good afternoon, everyone, and thanks for joining us today.

I'm pleased to share another strong set of results for the first half of the year. Despite the challenging operation environment, we continue to execute our strategy with discipline, delivering healthy growth, record profitability, and meaningful progress across our strategic transformation initiatives.

We are very pleased with our performance during the first half of the year. Our service revenue increased by 9.3% year-to-year year-on-year basis, while total revenue grew by 3.1% on year-to-year basis.

Most importantly, our net profit exceeded 400 million riyals for the first half, which represents a record for us. The continued strength of our service revenue demonstrated that our core business remains healthy, and that we continue to create value for our customers while growing our market position.

The difference that you can see between service revenue growth and total revenue growth was primarily driven by temporary delays in enterprise project, affecting non-service revenue. These projects are now back on track, alhamdulillah, and we actually got even more awards during the Q2 project Q2 quarter.

Our 22% growth in net profit significantly outpaced our top-line growth as you can see, reflecting continued operational excellence, cost optimization, and automation initiatives. We continued expanding and upgrading both our mobile and fixed networks while executing one of the largest technology transformation program in the company's history, as we mentioned last quarter.

A program of this scale would typically take between 5 and 6 years. We challenged ourselves to complete it within 24 months.

Today, more than 40% has been already delivered, with remaining critical projects already under implementation. This transformation will reposition us as a company to become a technology company while creating the foundation to monetize AI across our operations and deliver AI-powered solutions to enterprise and consumer customers as well.

Just to give you an example when we tested some of those improvements: we managed to take some process that could that usually takes 8 hours down to 2 minutes, and another one which is a customer-facing process which used to take between 5 and 6 days down to few hours. These efficiencies will continue to scale across the business, and you can imagine the benefit that we can get both from efficiencies and to improve customer experience.

Our business continuity our business continuity plans were successfully tested during the period. Apart from from temporary logistics and project delays, which we now have resolved, operations continued without material disruption.

We diversified logistics channels, increased inventory for critical components, and doubled our international connectivity capacity to ensure uninterrupted customer service, especially by terrestrial cables. Despite these additional costs, we still delivered 22% growth on net profit basis.

We continue to see significant growth opportunities through expansion of our high-value customer segment and healthier industrial price environment. Sustainable pricing will definitely become very important for us as an industry in the country to ensure that we are properly properly monetizing the future technologies, especially that 5G monetization has fallen short of global expectation.

We mentioned earlier the way that we do it is that we avoid, let's say, continuing with expired discount. Usually our industry is using discounts for acquisitions, but then later, after the expiry of the offer, they should go back to the rack rate.

Unfortunately, there was a behavior in the country, as a market, where people continue to retain, or operators continue to return retain customers at the discounted price. Sometimes, it's on an average of 30% to 35%.

We took initiatives in the last 24 months, and we have been removing those discounts, although that if we lose some of the customers, but as you can see, those removal of the 30% discounts to 35% discount flows directly down to the bottom line, and this is actually one of the driver of the improved also profitability at the bottom line. We hope that this continues because this is benefiting us as an industry and getting us ready for the future telecommunication technologies and to monetize it in the right way.

We are also working very closely with the regulator and the industry participants to stop illegal telecommunication resale through unauthorized Wi-Fi Wi-Fi voucher operations. We believe those activities have some impact on our prepaid revenue during the first half of the year.

We are actively working with them to ensure that this illegal resale of Wi-Fi via consumer products is stopped. Hopefully with this collaboration will will improve, definitely, inshallah, the the profitability of our telecom, especially the prepaid.

We continue expanding our ICT and managed services capabilities, while our fintech business remains profitable and continues gaining momentum. Additional digital platforms for both enterprise and consumer markets are progressing well, and we look forward to share more detailed information about those in the upcoming meetings.

Overall, we delivered another period of strong service revenue growth, record profitability, continued operational efficiencies, and meaningful strategic process, as you can see. We remain confident in our ability to create sustainable value for our customers and shareholders.

With that said, I'm going to transfer now to our CFO, Masroor, to take you over the financials details. Thank you.

Thank you, Hamad. Good afternoon to everyone joining us today.

I'm pleased to take you through our financial results for the first half of 2026. The half-year picture is a straightforward one: profitable growth in every part of the business, delivered through the same disciplined playbook we have been executing over recent years.

Let's talk about the headlines before we go deeper. Service revenue maintained robust growth of 9.3%, supported by sustained momentum across consumer and enterprise.

Overall revenue also continued its positive momentum, registering an increase of 3.1% year-on-year. On the cost side, our efficiency agenda kept working for us.

OPEX intensity came down on an underlying basis by another 0.5 percentage points to 21.6% versus the prior year. Put growth and cost discipline together, and the effect on profitability is clear: EBITDA up 10.6% at a margin of 44.9%, and net profit climbed 22% year-on-year.

Finally, our financial position remains robust. Underlying free cash flow grew 14.7% year-on-year, underpinned by effective working capital optimization, while net debt declined by 139 million riyals year-on-year.

Now turning to slide number 7, but before discussing the detailed financial results, it is worth noting that the first half was impacted by a few temporary geopolitical and resulting supply chain-related challenges. These include: lower visitor and roaming activity; softer prepaid customer acquisitions due to reduced inflow into the country; logistical constraints affecting handset shipments and project delays, as mentioned by Hamad earlier; and certain additional resiliency costs incurred to strengthen network redundancy.

Importantly, we saw a meaningful improvement in these trends through June, with visitor activity recovering towards prior-year levels and alternative logistics routes now in place. What is particularly important to highlight is that despite these temporary headwinds, Vodafone Qatar continued to deliver strong growth across all key financial metrics.

Furthermore, as market conditions normalize, these factors are expected to reverse, providing additional upside to the business going forward. Now turning to the results themselves: total revenue grew by 53 million riyals, representing a solid 3.1% increase year-on-year.

This growth was driven by a strong 9.3% increase in service revenue, with both mobility and non-mobility segments contributing to the performance. We will discuss the key drivers underlying growth in service revenue in more details in the next slide.

Equipment revenue, as I mentioned earlier, declined by 81 million riyals year-on-year. As noted, this reflects shipments and logistical constraints rather than any weakening in underlying demand.

With alternative transport routes now in place, we expect a gradual recovery in device sales through the coming quarters. Total expenses declined by 2.4%, as lower equipment volumes more than offset higher revenue-related costs.

Operating expenses, although, increased by 4%, reflecting network expansion, investments in growth initiatives, and resiliency-related costs, as mentioned earlier. Importantly, OPEX intensity continued to improve, demonstrating our ability to scale efficiency while investing for future growth.

Supported by strong service revenue growth and disciplined cost management, EBITDA increased by an impressive 10.6% year-on-year to reach 810 million riyals. Finally, this strong operational performance translated into an even stronger bottom-line outcome, with net profit increasing by 22% year-on-year to reach 401 million riyals.

Now let's zoom into the key drivers of service revenue growth on slide number 8. Postpaid revenue sustained its upward momentum, up 5.9% year-on-year, underpinned by an 8.7% increase in postpaid subscriber base.

This momentum reflects how our enriched portfolio and continued focus on customer experience are translating into acquisition and retention. Turning to ARPU: consumer postpaid ARPU eased modestly, driven primarily by lower mobile termination rates this year, softer roaming revenues, and plan mix.

On the enterprise side, competitive pricing pressure remains there, a dynamic we have flagged consistently. While we await broader return to market rationality, we continue to prioritize profitable retention and bidding selectively rather than chasing volumes.

Taken together, these factors resulted in a 3.5% year-on-year reduction in overall postpaid ARPU during the second quarter. Now, prepaid revenue remained broadly stable at 284 million riyals during the first half of the year.

As mentioned earlier, Q2 performance was impacted by the ongoing geopolitical developments, which resulted in lower visitor and transit customer volumes, as well as reduced inflows of new residents into the country. Combined with the normal summer seasonality, these factors led to a 2.1% year-on-year and 1.2% quarter-on-quarter decline in the customer base.

On ARPU side, Q2 ARPU declined by 3.1% year-on-year and 1.8% quarter-on-quarter, adjusted for the number of days. This is primarily due to the reduction in high-value visitor and transit customers, who typically generate above-average prepaid ARPU.

The lower contribution from these segments, driven by the same geopolitical factors affecting customer volumes, weighed on the ARPU performance. Looking ahead, we expect visitor activity and new-to-Qatar additions to normalize once geopolitical conditions stabilize, providing supportive backdrop for customer base recovery while maintaining healthy ARPU levels.

Lastly, wholesale, managed services, and fixed delivered strong year-on-year growth of 18.8%, driven by three key factors. Number one: continued expansion of our fiber footprint has enabled sustained growth in our fixed customer base, resulting in higher fixed and broadband revenues.

Wholesale revenues continued to grow strongly, supported by increased activity across both low-margin and high-margin services, reflecting the resilience and diversification of wholesale business. Managed services revenue benefited from a one-off contribution of 9 million riyals during the quarter, providing an additional uplift to the segment performance.

Overall, this segment continues to be the primary growth driver of service revenue for the company. Turning to key ratios on slide number 9, this slide demonstrates the continued improvement in our cost efficiency and profitability margins.

Starting with OPEX intensity on the left-hand side, we continue to see a positive trend. On an underlying basis, OPEX intensity reduced further to 21.6% in the first half of the year, compared with the underlying intensity of 22.2% in FY 2025, reflecting an improvement of around 0.5 percentage points.

This improvement has been achieved despite continued investments in network expansion, customer growth initiatives, and business scale-up. It reflects the impact of disciplined cost management, tighter control over discretionary spend, and the continued benefits of our cost optimization program.

Moving to EBITDA margin on the left-hand side, the trend is equally strong. The EBITDA underlying EBITDA margin, which excludes equipment and one-off, improved to 49.3% this year, up from 48.6% in FY 2025.

This represents a further improvement of 0.7 percentage points and shows that the business continues to convert revenue growth into stronger profitability. Importantly, reported EBITDA margin also improved to 44.9%, compared with 43.2% in FY 2025, an increase of 1.8 percentage points.

Overall, we continue to expand margins through operational excellence. Revenue growth is being supported by disciplined cost execution, enabling us to absorb network and business expansion costs while continuing to improve profitability.

Moving to capital expenditure on slide number 10 now, this slide highlights how we continue to invest in the business while maintaining a clear focus on profitable growth and shareholder returns. CAPEX for the first half stands at 170 million riyals at an intensity of 9.4%.

Importantly, our investments remains focused on areas that directly support long-term growth, including network expansion, fixed infrastructure, capacity enhancements, and technology modernization. We continue to apply a disciplined capital allocation framework, ensuring that investment decisions are aligned with long-term value creation and sustainable, profitable growth.

On the right-hand side, the benefits of this disciplined investment approach are reflected in our profitability and returns. Net profit margin increased to 22.3% this year, improving by 1.9 percentage points compared to FY 2025.

Similarly, return on equity increased to 14.9%, up by 1.3 percentage points over the same period. Now turning to cash flows and net debt, this slide highlights the continued strength of our cash generation and balance sheet position.

Starting with the free cash flow: the reported number for this year is 344 million riyals, compared with 375 million riyals in the same period last year. However, it is important to note that FY 2025 included a one-off collection of 75 million.

Excluding that, the underlying free cash flow increased by 44 million riyals, or 14.7% year-on-year. This reflects stronger collections and continued discipline in working capital management.

On net debt, we have seen a significant year-on-year improvement. Net debt reduced from 424 million riyals to 285 million riyals as of June 2026, representing a reduction of 139 million riyals.

This improvement was achieved despite the FY 2025 dividend payout and despite long-term investments made during the quarter, which is separately shown on the chart. On an underlying basis, excluding the investment, net debt stood at 196 million riyals, reflecting a 54% reduction versus last year.

This is also reflected in net debt-to-equity ratio, which reduced from 8.7% in June 2025 to 3.8% in June 2026, an improvement of 4.9 percentage points versus the last year. Overall, business continues to generate robust operational cash flow, supported by strong collections and disciplined working capital management.

This has enabled us to fund dividend commitments, absorb strategic investments, and still materially strengthen the balance sheet year-on-year. Turning to the five-year trend view of our key financial performance indicators on slide number 12, this slide demonstrates the consistent strengthening of business across revenue, EBITDA, and net profit.

Service revenue has reached 1.59 billion riyals this year, representing a CAGR of 6.7%. This reflects sustained growth across our core revenue streams and continued expansion of the underlying customer and service base.

Total revenue has also followed a strong upward trajectory, reaching 1.8 billion riyals over the same period, with a CAGR of 5.8%. Moving to profitability: EBITDA reached 810 million riyals this year, reflecting a CAGR of 8.2%.

EBITDA growth has outpaced revenue growth, which demonstrates operating leverage in the business, meaning that incremental revenue is increasingly converting into stronger earnings. The most significant improvement is visible in net profits, which increased from 216 million riyals to 401 million riyals, representing a very healthy CAGR of 16.7% over a long period of five years.

Overall, business has delivered consistent and compounding growth over the last five years. Service revenue and total revenue have grown steadily, while EBITDA and net profit have grown at a faster pace, demonstrating the strength of our operating model and the ability to translate growth into higher profitability and shareholder value.

On slide number 13, we have included the summary P&L. I think we have already talked about majority of the variances.

Enterprise equipment and other revenues declined mainly because of the handsets and the project delays mentioned earlier. Earnings per share, EPS, also grew in line with the net profit.

Now turning to FY 2026 full-year guidance on slide number 14, I'm pleased to say that we are maintaining the guidance that was communicated during Q1 investor call. We expect continued top-line growth in mid-single digits, supported by sustained momentum in the mobility segment and ongoing expansion across fixed and managed services.

While the broader regional environment has introduced some short-term volatility, the impact on our business remains limited and manageable. We expect to maintain EBITDA margins above 43.5%, supported by disciplined cost management and continued flow-through of revenue growth.

On an underlying basis, we anticipate full-year net profit growth in the mid-teens range. Lastly, CAPEX intensity is expected to range between 14.5% to 15.5%, with investments focused on expanding mobility coverage, scaling fixed network infrastructure, and advancing our technology modernization agenda.

Overall, the first-half performance reinforces our confidence in the full-year outlook, and therefore we are maintaining the same guidance as provided in Q1. That's all from my side.

As usual, the balance sheet, detailed statement of income, subscribers, and ARPU details are available in the appendix. This concludes my review, and now back to Paulina.

Thank you, Masroor and Sheikh Hamad. Now we can start with the Q&A session.

Please raise your hands virtually to ask a question, and I will open the microphone for you. We'll take the first question from Yong Wei Lee.

Yong, please open your microphone.

Hi.

Hello.

Thank you for that presentation and for taking my questions. I have just two questions which you may have touched on a little bit, but I need a bit more details.

The first one is on your second quarter GP margin. It was helped by a fall in interconnection charges, and you did mention that actually to help with the stability, you have increased actually partners on the interconnection side if I've heard you correctly.

Now at the margin level which you've been reporting, would this be a sustainable level for the rest of 2026 and maybe possibly into 2027? The second question is regarding your broadband roaming and managed services, which had a robust growth.

Maybe could you just elaborate if this is a sustainable rate despite mentioning that you had a one-off collection of 9 million riyals? I just want to get a feel for what the ongoing numbers could be for the future quarters.

Thank you.

Could you please elaborate more on the second question?

The second question is on your broadband services and managed solutions. It had a very strong growth rate in 2Q.

Just my question is on the sustainability, what sort of run rate should we be seeing going forward, or can it continue at this pace? Because you did mention there was a one-off collection of 9 million riyals.

Got you. Masroor, would you take the first question?

Yes. Regarding GP margin, there are two factors.

One is the volume of handsets, which came down in Q2, and that positively impacts the margin because handsets business is a low-margin business. The second is that as part of our cost optimization program, we continue to rationalize our direct costs, including the international interconnect cost and the roaming costs, and these things do flow through to GP improvement.

Whatever improvement we have got because of the second factor, rationalization of the costs, is going to be sustained into the future, and that's an underlying GP margin.

For the second question, definitely broadband and fixed services is going to continue to grow because we are still growing our footprint. We believe we were focusing more on certain areas during the last few years.

Now we expanded in into other areas that was wasn't under our footprint at that time, definitely we are expecting to grow, and those areas are in the high-value segment, definitely we are expecting to continue to grow there. This is one.

Second relates to the managed services: we mentioned earlier is that under our new strategy, we see the business going or growing into three pillars: telecommunication, which we would like to definitely continue to grow into the high value, and make it as lean as possible and as efficient as possible to generate value. The second vertical is ICT/managed services, and the other is the XTech, or the digital services.

The second one, which is ICT and managed services, it's a focus for us. We focus to ensure that we are capable.

We are not into the business of just, lift-and-shift, where we basically partner with someone to deliver and we make 5%, 7% margin. No, we are getting into the engineering part, project management part, and development part into those services.

We are very happy about the performance because we continue to gain experience into this. As I mentioned, we continue to receive awards during the last quarter.

We received big awards, and I'm not talking about single-digit millions; we are talking about double-digits million projects. Those will not be delivered maybe delivered partially this year, but the second year, I mean the year next year will be definitely finish some of those projects.

It is not nothing it's not like a one-off for us. No, we are actually focusing on creating big pipeline when it comes to this, especially when it comes to private networks, which unfortunately the country wasn't, adapting initially.

Now we got into this business, and we believe especially government companies or Q companies have seen the value, and they started already investing, and we are already bidding on some of those projects. Actually, I just signed a submission just before I come, 5 minutes before this meeting, another submission to one of the big entities relates to private networks.

We believe it's going to grow. We believe it is an area where we can diversify away from telecom, although that it has partially telecom, but we added more value, which is having a decent level of margins.

When it comes to digital services or the XTech, which we called, which include fintech and the others, we are already focusing on it. Unfortunately, we are not able to share anything more, but what I can share to you what I as I mentioned, I believe, in my section is that our fintech is already profitable.

As you know that fintech when it comes under the telecom usually takes long time to become profitable, and many of them unfortunately fails. We are in the profitable phase, and we believe that we can continue to grow, and we can bring value into this.

This is I hope that I have answered your question.

Thank you. Would you be able to share how large is broadband as a percentage of that segment?

Unfortunately, we took a decision for competitive reason not to mention it now. Hopefully, I think maybe in the next few quarters, definitely we'll have to share that.

It has become very significant for us.

Yes, thank you. That would be very helpful because it is a big growth segment, and to have a bit more granularity on which part is causing it, whether it's broadband or ICT or digital services, that would be helpful going forward.

Thank you.

Definitely, but what can I share with you is that almost they are equivalent to each other. Very close to each other.

ICT is going to be big part. We are focusing on it.

Right. Great.

Thanks.

Thank you.

We'll take the second question from Madhvendra Singh. Madhvendra, I opened the microphone for you.

Please unmute yourself.

Can you hear me okay?

Yes, we can hear you. Please proceed.

Thank you very much. Thanks a lot for taking my question, and congrats on strong set of numbers.

I have two quick questions. The first is on your handset sales during the quarter.

I understand the reason why they have fallen, but how do you see that impacting your business going forward? Smartphones probably are the big drivers of data consumption and growth, do you see that becoming an issue if the weak handset sales trend continue in the future?

At what point do you see that becoming a challenge for the business in terms of, continuing your data consumption growth trends you have seen so far? That's the first question.

The second question is a related question as well: how are you seeing the consumer behavior evolving, especially in the prepaid side? Have you seen any recharge behavior changes, or, is fewer visitors impacting that segment?

If you could give some colors around, how the trends have evolved quarter-on-quarter, because I think second quarter is more stable in terms of the potential, trends and so on. It will be good to understand.

Thank you.

Thank you very much. For your first question relates to the handsets: you can see everyone walking in the street with handsets in their phone, and definitely everyone wants the latest or something advanced to be able to use AI capabilities and the latest hardware performing devices.

No, I don't anticipate that this is going to be decline. The reason for the slowness at the beginning was because there was no devices at certain point of time.

Initially, we had only Apple, where we actually focusing on it to bundle it with not to bundle it, to sell it to our customers. Unfortunately, they used to ship in a certain way from a logistic perspective.

It took us long time, almost till May, till to agree on a different route, which now we have two. We have the normal one that we used to do, and we have another one which is terrestrial through Saudi Arabia, which started already receiving.

We believe that this is going to catch up, and we will be in the right track, back to the right numbers as previously we used to perform. The secondly thing, I believe we have disclosed it, we already signed an agreement with Samsung, where we become an authorized distributor even for their flagship handsets.

We announced it, and we believe also this is going to create a big impact when it comes to handsets. Regardless, handsets is lower margin compared to other service and managed services, it's not really the focus for us.

It's something that helps the business because if the customers are able to use their phones or their devices more, they will definitely consume our services. It's actually a secondary product for us; it's not the main for us.

However, we believe that it will continue to grow back and the catch-up, we believe actually it's going to catch up at the before the end of the year. This is what we believe, yeah.

Just to confirm also something to you: July have already recovered to the previous numbers. Whenever we received the devices at the end of May, early June, July have already recovered.

The second thing which relates to your prepaid behavior: we believe prepaid is going, inshallah, to go back. As I mentioned to you, there was an issue with illegal resale, where people is using Wi-Fi voucher system illegally, sometimes even not the camp itself, they use it in farms.

Imagine people labor, which is approximately 35% of the company country, when they go back home, there are people who are using consumer products that is designed only for consumer. They latch it to a Wi-Fi network, and they already make them pay illegally for such a services.

Later, basically the customer think, "Okay, I'm going to use the Wi-Fi if I am in the camp. I'm going to spend money because it's unlimited," although that the experience is bad, but it's unlimited, but they pay.

This definitely payment impacted us during the last few months, as you can see it from the ARPU. We believe this is very temporarily, because during the conflict, when people used to be only in the camps, we believe that, since they are in the camp, they are using the Wi-Fi.

As they go back to where they work, definitely their spending on telecommunication services will go back. I'm not so worried about it, especially that the regulator, the CRA, have taken very firm, let's say, position to stop this illegal resale for unlicensed, let's say, entities.

This is one. The other thing which we need to be very much aware about: during this conflict, definitely airplane, airline got impacted.

Thank God it's recovering now, which the inflow of visitors and even new to the country got also impacted. We believe that we started seeing in the last two weeks, we see a big spike in the positive way, I hope that this will continue to grow.

We are not much worried about it when it comes to prepaid with the behavior that we can see, inshallah. I hope I answered the question.

Thank you very much. Very helpful.

Thank you.

Thanks.

Another question from Abhishek Sukhatme. Abhishek, please unmute yourself.

Hello? Am I audible?

Yes, hello. Please go ahead.

Good afternoon, gentlemen, and congratulations on very good set of numbers. I have one question regarding this managed service revenue: is it possible to disclose the split between the consumer and enterprise connectivity?

Maybe if you can throw some light on this segment will be really helpful, contract duration, what is contract duration on enterprise side, their churn, backlogs, just to understand the sustainability of this segment going forward, as most of the revenue is coming, more than 30% of the revenue is coming from this managed service revenue, which is really a good growth engine. That's it.

Thank you.

Okay. Definitely, as we mentioned earlier, we will look to enhance our investor call presentations to include more details onto this.

However, what I can mention to you is that some contracts are 10 years, some of them is 5, 7 years. We don't do lift-and-shifts, where low margin, but the contracts are long usually in its behavior.

Usually, I can say on an average 4 to 5 years, but we have some of them is 10 years, 6 years. This is something, become a common for us.

This is what we can share now. Definitely we'll take your input and feedback into consideration, and we'll definitely look how to enhance the presentation.

However, managed services is only for consume enterprise. You mentioned about consumer; we don't do consumer managed services.

All right.

Just to add to that, that one 9 million one-off was not a one-off project. That was a catch-up of revenue that we have recognized for the last few months.

It's not there was a one-off managed services project that came and went away. It's going to be a sustained project going forward as well.

I'll add something to this. We are very conservative, to be honest, when recognizing revenue.

Sometimes, as mentioned by This is actually a very small part of a bigger project. Till we are very comfortable of the customer's acceptance, then later we go and recognize the revenue.

This time, but again, we are very conservative when it comes to recognizing ICT businesses or enterprise business. That's why sometimes you will find one-off such as this, which relates to one of our biggest customers, and when we make sure that he fully accepted it, then later we recognize the revenue.

We have additional question from Yong Wei Lee. Yong, please unmute yourself.

Hi. Yes, this is Yong Wei from LRI Investment again.

Thank you for answering my earlier questions. I just had a follow-up on now your CAPEX on the cash flow side.

I'm just trying to reconcile from your slides. You mentioned the first half CAPEX is 170 million, but I'm seeing on your cash flow statements the figure is 228 million.

There is a difference of 58 million. I was wondering if you can just help me reconcile that figure.

Thank you.

The CAPEX that we mentioned in the slide is the sort of accrued CAPEX, what we have incurred. In cash flow is the cash outflow, which includes definitely some of the payments related to CAPEX incurred last year, some of the CAPEX that we incurred during Q1.

That's the gap, that's the difference. Would you be able to give some

other than using OPEX intensity as a guidance, if you were to give an absolute figure, would you be able to give a range or a number what that full-year CAPEX would look like on the cash flow statement?

That should not be more than the overall CAPEX for the year. Because every year we are in this cycle that we spend some CAPEX in Q4, the payment of that comes in in Q1 and Q2 of next year, and then again in Q4 this year, we will again incur CAPEX that will not be paid within this year, that will be paid next year.

Overall, the cash outflows remain within the bounds of the overall CAPEX guidance that we give.

On that basis, would it be fair to say that on an annual basis going forward, that CAPEX number should gradually be falling off?

No, this is a different question. We have given the guidance for the CAPEX intensity of this year, which is 14.5% to 15.5%, and what I said is the cash CAPEX will also range in this within this range, will not be significantly different.

Regarding next years, we have not given any guidance as of now. We can probably talk about that during Q4 analyst call.

Let me add something to Masroor. As we mentioned that we are expanding our networks, and although that we have a full country coverage for the last two years, but sometimes there are new buildings coming up, and in order for us to enhance the customer experience in those building, we do in-building solution, IBS solution.

This will definitely help our customers, especially in high-rise building. That's why we continue to expand in this.

I believe so and but to be honest, when it comes to telecom, with the exception of in-building solution, we believe that investment, CAPEX in telecom in the next 3, 4 years till the new technology comes, will continue to drop. Because we already have a nationwide coverage for the last three years.

Now we are just fixing, if there is blind spot somewhere here or there, or enhancing, for example, the coverage in the sea, in some of the islands. We don't think that we need that much to spend in the next few years.

CAPEX intensity, we anticipate for the telecom, we anticipate it to continue to decline. This is one.

When it comes to overall CAPEX, including IT, we mentioned that we are doing at 5 to 6 years transformation project within the 24 months. Without those transformation projects, to be honest, our CAPEX would be maybe perhaps 13% or even less.

Those transformation projects, which definitely we will gain, let's say, the benefit from them on bottom line and top line, inshallah, in the next few years, will definitely is going to do it in is going we are not going to spend the same in the next few years. Overall, because telecom we are not going to continue to spend as much from an intensity perspective, and we are not going to have those major projects in going forward, we anticipate that it will definitely, and this is our aim, to drop it below 13% going forward within the next few years.

Thank you. Perfect,

thank you.

I don't see any further questions. Since there are no further questions, I would like to thank you all for attending today's call.

We'll keep you updated on all our upcoming investors calls. Please feel free to contact Investor Relations team if you need any further information.

Thank you.

Thank you, everyone. Thank you for attending.

Goodbye.