Good day and thank you for standing by. Welcome to Indosat Tbk First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
I'd now like to hand the call over to your first speaker today. Indar, please go ahead.
Yes. Thank you. Good afternoon everyone, and thanks for joining us today. With us on the call today we have Vikram Sinha, our Chief Executive Officer; Nicky Lee, our Chief Financial Officer; Ritesh Kumar, our Chief Commercial Officer. And we also have our Chief Marketing Officer Vivek Mehendiratta who joined us in October last year, joining us on the call today.
I will now hand over the call to Vikram for his opening remarks. Over to you, sir.
Thanks, Indar. Good afternoon everyone. Let me start my presentation by sharing with you the highlight of our Q1 performance. Despite a challenging market environment in first quarter of the year, we managed to deliver a progressive set of number for the quarter with most financial and operation metrics including quarter-on-quarter. We added 700,000 customer this quarter and more than 1.3 million data unique users as we see positive momentum on our subscriber base. This is supplemented by our ARPU rising 0.8% quarter-on-quarter to IDR 39,200.
Revenue was slightly weaker during the quarter due to challenging market environment, seasonality, but we performed well on the equal-day basis. The biggest positive is that both our EBITDA and net profit grew by 1% and 6% quarter-on-quarter respectively, reflecting our focus on profitable growth.
I have put something important in the slide, something which we have been consistently highlighting since our merger, is the need for Indonesia to realize its potential and grow its mobile ARPU, which still remain under-indexed relative to the region, and very affordable as a percent of GDP.
As an average USD 2.4 ARPU, it is important for us to realize this potential, and IOH is ready to play its part by offering a world-class network and customer experience, and pursue more sustainable pricing in the market. We have seen positive ARPU momentum continue in Q1 2025 where we have consistently grown our ARPU for the last 5 years from a level of below IDR 30,000 to now close to IDR 40,000, which is an increase of 32% over the past 5-year.
Our initiative we have implemented will continue to drive our ARPU growth through the rest of 2025 and beyond. This is through our implementation of AI across the business, which allow us hyper-personalization initiative as well as smart CapEx and distribution as our revamped postpaid product, IM3 Platinum, which is seeing good momentum.
Finally, we have taken a bold step towards further sustainable pricing where the SIM card price have been raised to IDR 35,000 across both brands. This will promote rational and real subscriber net addition.
AI continue to be a core part of our DNA, guided by our AI Northstar. As I spoke previously, part of our AI Native TechCo is embedding AI in across all parts of our business from the customer experience to network experience to smart CapEx. Our AI TechCo business is also doing well with revenue contribution to start in Q2, and we are confident of delivering USD 35 million net new revenue in 2025. The new batch of NVIDIA GPU GB200 have been ordered and the service will be operational by Q3 2025.
That ends my presentation, and I will now hand over to Nicky for more detailed financial presentation.
Thank you, Vikram, and good afternoon, everyone. As mentioned by Vikram, we achieved progressive results for the first quarter in 2025. Overall revenue, IDR 13.6 trillion for first quarter, fell by 3.5% mostly due to 2-day less in the quarter and low season effect. On the same-day basis, the normalized change is around 1.4%.
Below revenue, we have maintained our strong operational efficiency and profitability as we have reduced our total cost of services and OpEx by 2.2%. This helped to uplift EBITDA by 0.6% to IDR 6.4 trillion and also EBITDA margin up by 1.9 percentage points.
Going down the profit and loss, we got one-off gain of around IDR 250 billion, propelling net profit to IDR 1.3 trillion, up 27% from Q4. Excluding one-offs, the normalized net profit is IDR 1.2 trillion, up 6% quarter-on-quarter. And I will provide more details on these items later. In terms of net debt-to-EBITDA ratio, it dropped further from 0.4x to just 0.36x, reflecting primarily team's effort on deleveraging our balance sheet.
If we move on to the next slide, focusing on the first quarter performance against the same period in 2024, reported revenue fell by 1.9%. Again, if we normalize for one extra day in 2024, which is 29 February 2024, the 2 quarters actually came in with similar revenue. And in terms of reported basis, this revenue movement also explained why EBITDA dropped 1.4% year-on-year.
The lower OpEx this year helped to cushion the impact on EBITDA level and also improved EBITDA margin by 0.2% to 47.2%. Moving on to the bottom line, we got an improvement of 1.3% as the one-off provided an uplift to the bottom line.
Let's move on to look at our cost. As mentioned earlier, we have managed to reduce our cost. And if you look at the individual lines, essentially we have spent less across all lines when compared to the last quarter. Cost of sales experienced a 2.2% year-on-year increment primarily due to higher partnership costs associated with wholesale business, which were in line with the corresponding revenue movement. However, on a quarter-on-quarter basis, we saw a 5% decrease, largely attributed to reduced installation costs and partnership costs associated with media and wholesale business, which typically peaks in quarter 4.
Personnel cost reduced by 16% year-on-year and 15% quarter-on-quarter mainly driven by lower bonus and incentives. And this has also included IDR 88 billion reversal of bonus provision following the actual payment in the first quarter. We have also seen significant reduction in marketing expenses by 20% and 21% year-on-year and quarter-on-quarter respectively. This is attributable to lower level of activities, also with more focus on digital marketing.
On G&A, it dropped by 5% year-on-year and 3% quarter-on-quarter, coming mostly from lower PR and also cost optimization impact. In terms of depreciation and amortization, it increased 5% year-on-year, primarily driven by the addition of fixed asset, our continued investment in network and also right-of-use assets. On a quarter-on-quarter basis, these expenses were relatively flat.
In the first quarter, we have significant one-off gains from reversal of tax provision following a win in the tax Supreme Court decision in the company's favor in the amount of IDR 157 billion. And we also get gain on disposal of dismantled assets around IDR 100 billion. These gains and provision reversal contributed to a total other operating income of IDR 303 billion in first quarter. This reflects a sharp turnaround from Q1 2024 and Q4 2024, which recorded other operating expenses of IDR 11 billion and IDR 61 billion respectively.
Let's take a look at our CapEx. CapEx booking has increased year-on-year following some project bookings slip from Q4 to this quarter, but it only amounts to 20% of our full year guidance for 2025. We do expect we will catch up in the subsequent quarters in the year.
Net debt, up from IDR 6.7 trillion to IDR 9.3 trillion year-on-year due mainly to mostly timing of payment leading to working capital movement, repayment of tower colocation incentives and also funding for network rollout. On a quarter-on-quarter comparison, it dropped by over 10% as payments are lower for Q1 generally. And that's a quick summary for finance section.
Now I'll pass the time to Pak Ritesh.
Thanks, Nicky. So quarter 1, we have seen a growth of around 0.7 million customer. ARPU also increased 0.8% to IDR 39,200 now. And good thing is that we have been able to gain our data unique user in quarter 1 over quarter 4 by 1.3 million. Data traffic, we have saw some degrowth because of 2 days lesser in quarter 1 over quarter 4 and also some seasonality.
Next slide, please. Our commitment towards keeping empowerment to Indonesia and keep on bringing good quality network experience for our consumers, we continue to invest our network, what Nicky also talked about CapEx investment. And we're also including AI to make sure the customer experience are being well taken care of, and we are putting the right investment in the right place, focusing on customer satisfaction.
So that's all from my side. I'll give it back to Indar.
Thank you, everyone. Desmond, can we go to the first question on the question-and-answer queue?
Certainly. [Operator Instructions] Our first question comes from Piyush Choudhary from HSBC.
Could you talk a little bit about the outlook on mobile revenue growth on the back of recent initiatives which has been discussed? When should we start seeing the impact of new starter pack, et cetera? Secondly, EBITDA has significantly -- yes, EBITDA has improved quarter-on-quarter due to significant cost discipline. But a lot of these costs which have come down are discretionary in nature. So can we check the sustainability of this cost going forward and outlook for the margins?
Piyush, this is Vikram. I think what I spoke about in terms of fundamental, when you talk about mobile revenue growth, which is our core business and which is very important for us, the most important thing I want to highlight that there are 2 parameters which is in the right trajectory. One is the base movement and second is the ARPU. We will see this improving month-on-month. This time, Lebaran was also end of March. Especially March, we saw things coming back from a consumer sentiments also. And we have taken action on starter pack, which will help bring more discipline not only for us and also for the industry. All these things on starter pack, which we are doing, will start reflecting from June. So I think what we see is a more progressive performance with the right trajectory here onwards on the core business.
In fact, on guidance on EBITDA, I will request Nicky to share more on detail. But we stay committed on the guidance which we have given on 10%, mainly because of 2 reason or 3 reason. One, core, we want to make sure we grow ARPU. And I've spoken about it in my presentation. There's a clear opportunity. As an industry, as an Indosat, we clearly see there's an opportunity. And all our AI initiatives, our data modeling, our whole thing, it takes some time. And again, we have been in this for 3 quarter. We have put use cases. Next quarter, there will be more use cases coming in. But once your models and your platform is ready -- we have taken a platform and domain approach -- then the use case scale up happen fast and the approach is reusable. So we can do a lot of scale up at a fraction of a cost.
So one is growing core. We stay committed on that. Second, EBITDA growing faster than revenue. We still have opportunity. We want to have cost leadership for growth. And then you will see that continue that whatever revenue we are doing will -- we are very mindful that it has to flow into EBITDA. So we want to make sure from the core side also we are driving EBITDA growth faster than revenue.
And our AI business, what I spoke about, will start flowing in from -- mainly from third quarter, fourth quarter in our P&L. It will show up on MIDI revenue. And what we have already booked, we just need to start delivering. It will contribute to around USD 35 million. And these also comes with anywhere between 55% to 60% EBITDA margin. So when I put all these 3 things together, in a challenging environment also, as management team we stay committed to our guidance of 10% EBITDA growth. But I'll give it to Nicky on specific on Q1 questions.
Piyush, thank you for your question. I think in terms -- if I would split your question into 2 parts, one is on the cost of services and OpEx. So the only item I highlighted in terms of like accounting changes is in relation to the bonus reversal. But still, we get a pretty good cost management impact across all the other lines. So we are seeing a lot of these good work would be sustainable.
Yes, below EBITDA at the other operating expenses, we get some -- again, some good input on managing tax issues as well as disposing some equipment that we don't need, right? So it's not a one-off thing for that. We continuously look at what equipment we don't need and we dispose it and booking profit on that. So it's -- the amount would go up and down, but it's not a kind of a one-off exactly.
We still see a lot of opportunities going forward in -- across all the core lines or network, how we can optimize power consumption, deploy technology to reduce our -- not even beyond -- not even in OpEx. I remember we discussed about CapEx saving in the last quarter. So we are using AI for ways to optimize our network investment and make sure we only invest at the right time in the right place, right? So all these things, we are seeing the benefits. More and more, we are getting the confidence that we will be able to drive cost down a bit, more definitely improving our efficiency going forward.
If I may clarify one thing, in the mobile segment, you have reported subs have gone up quarter-on-quarter and ARPU has also improved sequentially. But if I look at cellular revenue, that is down quarter-on-quarter. Can you help us reconcile this?
Yes. Thanks, Piyush, for the question. See, the ARPU reflects on the average number of quarter. While the subscriber at the end of quarter, how many subscribers what we have. So during Q1, our subscribers started to increase from March and majority of the growth came in the month of March, wherein we have added subscribers. So that's how the number is stacking up.
Our next question comes from the line of Ranjan Sharma from JPMorgan.
A couple of questions from my side. Firstly, the adjustment that you have talked about on the SIM card, is that broad-based across the country? And can you also share if other competitors have followed through as well? Similarly, are you only making changes to the start-up packs or have there been any adjustments to the renewal plans as well? And lastly, on the AI CapEx side, can you help us -- can you remind us how much capital you are deploying in 2025 and 2026 to unlock those revenues?
Ranjan, this is Vikram. So first on the SIM card, on 15th March, we implemented and then I think within 2 days, we saw everyone in the market. And it is broad-based across. I think the good thing is it is bringing simplification in the industry. It is -- for us, it is both the brand and it is across the country. And same we have seen for others also.
So next on that, are you making changes? Yes. So this is Starter Pack. Now when you look at our quarter 4 capacity in terms of data traffic and then you see our yield, so we have been started using hyper-personalization. So we have been very rational on managing our traffic yield, which is more sustainable and which moves in the right direction. So we have not taken any headline price increase on the rebuys and all. We feel there's an opportunity. But overall, consumer sentiments were also very soft. So we have been managing our data traffic, our yield for growing more sustainably through all these hyper personalization for now.
Third question is on GPU. I think 2 things I want to call out here. Last year, we had invested because our data center partner is BDx, where we have 25% equity. So we don't have to put any CapEx on that. It is all done by our data center for data center requirement. Where we put CapEx is on the GPU.
So this year, we have ordered GB200. It is around 120 million. And the good thing is we have locked the customer. It is a multiyear contract. And then also, we have taken a very conservative approach on execution and all. So these are very value aggregating contract customers which we have closed. And then you will see the impact of it coming Q3 onwards. This year, it will be only 4, 5 months. But next year onwards, you will see a full year impact of these contracts and business on AI cloud.
Okay. If I can have a quick follow-up. So with the changes that you have made in terms of pricing, how can we think of mobile industry revenue growth in 2025?
These are early days, Ranjan. We have to be cautiously optimistic. But at least on the SIM card implementation which we have done, we will see a benefit coming from June onwards. But I think let's wait for one more quarter. Personally, we see the right projection, but we should wait and watch more in terms of the industry revenue price.
Our next question comes from Sachin Mittal from DBS.
Pak Vikram and Pak Nicky, just to follow up. So you said 120 million CapEx has been incurred already on the GPUs, right? I mean, is it a full year or is the CapEx incurred so far? That's question #1. And 2 other questions, mainly on the cost side, 16% reduction in personnel cost, which we saw. Do you think this is sustainable because of the base of the level which we are seeing this quarter? Are these sustainable levels of personnel costs, and also on the marketing side?
And the third question is on the EBITDA. When I look at the EBITDA by adding the depreciation and amortization to the operating income, I get much higher, not IDR 6.4 trillion, but IDR 6.7 trillion EBITDA. So what am I missing here in terms of why the math doesn't work in terms of adding? Is there some kind of one-off or some changes there that EBITDA seems to be understated if we add the operating income and D&A?
Vikram, if I can start and then you can supplement. On the first question, depending on what we get -- what new business we will get on the GPU side, we may need to buy. Basically, what we are trying to do is not to buy GPU in advance, but then we will secure customer order first. So depending on what customer would order, then we will buy the GPU type accordingly from NVIDIA.
Just so you're clear, the customer order and contract, we're talking about long-term contracts. So we will make sure we get all of our investment plus a reasonable return on these contracts. So potentially, we may need to incur more, but that's what we think for 2025.
So before -- just to add on this, Sachin, I think this is something, is a new business for us, but we are seeing -- because we got our factory up last year, and we got with H100 and we got support from NVIDIA on the allocation of GB200. So this 120 million, we locked the customer. It is a 3 plus 2, 5-year contract. And then we are getting it here, and it will be ready for service by July.
And as Nicky said, our approach has been, especially for regional global customers, to lock the customer first and then lock the data center readiness. We have strategic partners on data center. And then make sure that we order. So that is the approach which we are taking.
Sachin, coming to your second question, as I highlighted earlier, we have a bonus cost reversal in first quarter. Except for that, I think whether it's personnel or other marketing expenses, you also mentioned across different quarters, there will be some volatility. But overall, we see the cost base to be sustainable.
There is also a question on EBITDA. So I think Indar can help you may be working offline to -- basically there are certain items in other expenses that we need to be taken out. But we can work with you offline, Sachin.
Next question comes from Sukriti Bansal from Bank of America.
A couple of questions. Firstly, on the GPU-as-a-Service, you mentioned that once you get orders from customers, that's when you start ordering the GPUs from NVIDIA. So, just to be clear, is the customer is asking incrementally for GB200s? What kind of use cases? If you can elaborate just a little bit, are those customers using these advanced GPUs for? And also, you mentioned these are long-term contracts, but as new chips start coming in, given they are demanding for newer NVIDIA chips, will they -- do they expect you to keep progressing to newer NVIDIA GPUs over time?
And also, is there also any condition from NVIDIA given that you have a partnership with them that you have to buy certain GPUs from them or could it be anywhere from 0 to any number that you wish to buy?
And secondly, on the dividend, can you give any kind of a time line on how you'll be progressing to the 70% payout by 2027? What kind of growth will we be seeing over time?
Nicky, you can start with dividend and then I'll come to GPU.
Okay. I was hoping you will do that first. It's okay. So on dividend, I think you're referring to the dividend policy we have published. So basically what we try to do is to give the guidance that we will be paying dividend on a progressive basis in terms of both the amount and also the dividend payout rate with the expectation that we will continue to improve our business performance and deliver more profits going forward.
But what -- see, last year, the payout ratio is a little bit below 50%, right? So what we are seeing in the space of 3 years' time from year '24 to '26, then we will be improving -- we'll be closing this 20% gap. Exactly how much in which year we will need to figure out depending on different factor, which we also mentioned in the dividend policy note. So we'll need to see, but 70% will be what we expect to pay out for the year 2026.
Sukriti, this is Vikram. So coming on to your first question on GPU, I think what is important to understand is that last year we got our sovereign AI factory. And in NVIDIA, we work very closely on making sure that the factory was up in October. What we saw, there are 2 kind of demand. One is domestic use cases. And for that sovereign domestic use cases, first you need to have the factory. So when we got the factory, we have seen some early wins, small number in order from banks, from mining companies, even some of the other start-up companies. But the quantum of demand and the quality of power, which is needed is not as advanced as GPU. So all the Indonesia domestic demand, it is on L450. So we are putting most of the use cases which is domestic on L450.
There are a few of them who are on H100. But for GB200 and all, these are regional customer and these demands are training demands. The power of GB200 is cost per token is less than H100. So these are customers who -- so one of the example of this customer is they do weather forecasting at scale for Asia. So some of these customers, when they train their data, they want the most latest one. So once we get the request, we lock the customer and long-term contract. We have taken a very conservative approach on depreciation. I think Nicky can give more detail, but we have been taking a very conservative approach.
In future -- the first contract is locked. In future, if they want something upgraded, they have to buy and order new one. So that is how it progress. Specifically, NVIDIA and Accenture, they are working very closely with us on helping us scale our sovereign AI factory. The help and support they are giving is how to create more domestic demand, more domestic use cases, especially with inferencing coming in. So that is where we are investing lot of time with them, and they are giving us lot of support.
In terms of depreciation for these GPU chips, we are using 5-year. The actual useful life is significantly longer than that. So we have taken a relatively conservative treatment on that.
On question number 3, there is no commitment for us to buy whatever type or whatever number of GPUs from NVIDIA.
Our next question comes from Arthur Pineda from Citi.
Two questions, please. Firstly, on the GPU business, you've mentioned $35 million in revenues booked over 4 to 5 months of operations this year, and these are multiyear contracts. Am I to understand that the revenue contributions from these contracts would basically more than double into the next year when you get full years' worth of booking or do the bookings tend to be lumpy? Second question I had is with regard to mobile. When we look at this, it's down Q-on-Q, even though you have a seasonal peak of Lebaran in the first quarter of this year. What's driving down the revenues? Is this due to competition or re-consumption? Or are you seeing market share loss given activities from competitors?
Yes. So mobile revenue, as I said that in the month of March, we saw towards the end of the month some growth coming as part of seasonality of Lebaran. So we got some benefit in. But quarter 2, we will see some improvement coming as against what is happening on SIM card price from IDR 35,000, as Vikram also talked about in the month of June. And we don't see any competition activity going up during the month of Lebaran, to be very honest. I think things are stable, much better than what used to be before.
So coming back to GPU business, you are right. So what we see this -- when I say 30, 35 -- is just part of this year. Full year 2026, '27, these customer and the contract will deliver around USD 65 million revenue, close to USD 40 million EBITDA, both in '26 and '27.
Our next question comes from Aurellia Setiabudi from BNI Securities.
Congratulations, management, on the strong results in the first quarter. I would like to touch on the mobile business. I understand that the ARPU is being calculated as an average of the quarter, which was amazing at IDR 39,200, while the January, February number was supposedly to be on a weaker side. And I would like to ask on the color, moving into the second quarter, especially after the peak season of Lebaran, how would you see the ARPU trending towards the month of April onwards and especially with the increase in the startup pricing?
Again, thanks. I think this is a very good question. I think Ritesh explained, but we are cautiously optimistic. We see progressive trend because Lebaran also, we did not see the full Lebaran impact. It was split, in fact, more on quarter 2, less on quarter 1. So we are cautiously optimistic. Our clear focus is to have progressive. And if you look at my presentation, I've explained that the ARPU in Indonesia is under-indexed. So it is important that we deliver good network and customer experience, and we will be partnering with a lot of digital services to grow ARPU.
If I may have one more follow-up question. Regarding the strong ARPU that we see in the first quarter and also moving into the second quarter, would you be expecting this to be -- the growth of ARPU will be coming from the ex-Java region? Or it's still quite a balance between the growth of stabilizing ARPU in Java and also the growing business and presence in ex-Java?
No, I think coming from outside Java also, reason being we are improving our network. And as Nicky, Vikram also talked about that we are improving our customer experience. So we have seen outside Java the usage per customer is growing up. So that's where we are more confident that nationwide we keep on increasing our ARPU.
And then if you can comment on your spending or market share in Java?
We cannot go to that detail. But marketing expenditure, if you mean, then we are using more tools internally for marketing tools. And also with the Circle way of working, we are more mindful and more have control on the on-ground activities. That's where the efficiency coming in, wherein Nicky also talked about that those are sustainable ones. So that's how we see them efficiency in marketing cost, yes.
We have a follow-up question from Ranjan Sharma from JPMorgan.
Just quick 2 follow-ups. Firstly, can you remind us what percentage of your revenues comes from starter packs? And second is if you can give us an update on where we are with respect to the fiber restructuring that was announced last year.
So around 4% to 5% revenues come from our starter pack, Ranjan.
What about fiber and carve-out?
Fiber carve-out, we are still in the process. I think quarter 2 end, we will have more update. So the process is progressing well, and then we are seeing significant interest on our fiber carve-out project.
We also have follow-up questions from Piyush Choudhary from HSBC.
Just 2 questions. Firstly, any kind of update on the spectrum auction time line pricing, if you can update on that? Secondly, in the first quarter, media revenue is down year-on-year. Though small, like it's down 0.5%, but if you can tell us like what's happening in the enterprise segment and the outlook for it without excluding the GPU-as-a-service, just the core enterprise segment outlook?
Thank you, Piyush. I think this is also a very good question. So 2 part to it. I think especially the -- when we talk about MIDI, our subsidiary, Lintasarta and Indosat B2B, we have seen some softness on -- slowness on especially government projects, but still we are confident that the core revenue for MIDI will be close to double-digit growth. And on top of it, when you have AI services, I've already spoken about it. But what you see now is a little bit of seasonality. And June onwards, it will pick up. We see a very strong line on B2B, at least we have to plan for 6 months. So we see a very strong pipeline coming up.
Okay. The second question was spectrum auction time line. So what I'm getting is that this year, 1.4, 700 and 2.6. So we will wait for the more clarity. We have got very positive signs that government is very mindful of how spectrum has to help the industry, but we have not got any specific detail. So I'll not be able to comment on pricing. But broad time line, what we are hearing that these 3 spectrum will be coming this year. The first one will be 1.4 megahertz and 700 and 2.6.
Our next question comes from Sukriti Bansal from Bank of America.
A couple of follow-ups. Firstly, on the ex-Java expansion, you are still expanding. But in terms of competition, are you seeing lesser expansion from competition given they've undergone merger and are probably going to proceed towards some network integration? Is that impacting competition in ex-Java for you? Has it come off slightly?
And second, on EBITDA growth. I think you did provide some clarity on the 10% growth outlook. But if you could just broadly talk about what percent of this 10% growth could come from ARPU growth, what would be cost optimization and operating leverage broadly, that would be very helpful.
And also, if I could just squeeze in one more question on the GPU-as-a-service. You mentioned regional operators or regional use cases. Are there also some MNC or U.S.-based use cases, which could see some risk from the AI diffusion framework?
Let me start with the last question. So the good thing is whatever customer and contract which we have closed, it has no risks, anything in terms of compliance because Indosat for us, compliance and governance, our shareholder, both OG and CK Hutchison, they are very supportive on making sure that we are 100% compliant on these things. So there is no risk at all. We just need to deliver. What happens in future on AI diffusion law will define how much more we can close and grow in these contracts. So we'll have to wait for June if some changes are happening on AI diffusion. But as of now, all these are secured. It is compliant with AI diffusion laws, all regulation.
On EBITDA, I think I'll repeat the same thing. I think, first, we want to grow core revenue. And when I say core, it is ARPU and sequential positive growth on base. And cost leadership, what you heard from Nicky, we have started using a lot of initiatives, not to cut cost, but to be more efficient on how we do the same thing with less. So, whether it is on CapEx, we have seen some win. There are a lot of other things on digital marketing, even on distribution. So we want to make sure that EBITDA is growing faster than revenue. So that whole piece supported by GPU-as-a-service, which will flow. But still this year, it will be small. Mainly it will be driven by core business on ARPU and sequential base growth and a very well-managed cost. We have some more opportunity on cost optimization on IT side and all, which is progressing quite well.
And the first one, we are too focused on making sure we drive our agenda. So I'll not be able to comment more on competition and what they are doing. But for us, we have a clear plan. We see clear opportunities across. And yes, ex-Java, we have to serve across Indonesia. People have expectation from Indosat that it should work everywhere.
We will now take the next follow-up question from Arthur Pineda from Citi.
Two questions from me. Can I ask about the mobile pricing trends for top-ups? Were there any increases on top-ups for 1Q through 2Q by yourself or your competition? I know you mentioned that starter packs have been increased, but I'm just wondering for the 96% of the business, is that actually improving?
Secondly, on broadband, can we get some color on this business? If I look at fixed revenues, that's down year-on-year, flat Q-on-Q. Are you not seeing any pickup in fixed broadband? As I recall, you had aggressive market share targets on this. I'm just wondering why it's not growing faster considering the low broadband penetration in Indonesia.
So what we can see, Arthur, is that on data packages, industry is more rational. That's what we can see. And we are actually looking at -- from our side, our product strategy point of view, we are looking at ARPU accretive pricing. And that's where we can see -- like Vikram also talked about the moment we increased the SIM card prices, it was being followed by the industry. So we keep on focusing on delivering good service and keep on focusing on making sure ARPU is going to the right direction by giving them right pricing, what they want and also more digital services.
On fixed broadband, it was in stress this year, but we are committed to achieve our number of around 100,000 net adds for 2025.
I'm just trying to understand, when you say data accretive packages, are you actually seeing direct price increases in the market or is this basically an upsell that you're seeing in the market? Has anyone been actually raising rates? Normally, we see that going up towards Lebaran, but it seems like we didn't see that this year.
So 2 way of looking at things, Arthur. One is increasing the prices. Second one is, are we being rational? That's what I mentioned here, right? For example, some product is giving some benefit, which is not good for -- but we can see there's some rationalization happening on the benefits which are going. Price hike, as we said that we are actually looking at our product strategy, which is more ARPU accretive products, more hyper-personalization. And what comment we can make here is we can see lots of rationalization happening in the market.
Understood. Apologies for interrupting, Vikram. I don't know if you're responding toââ¬Â¦
So I wanted to help you understand. I think the SIM thing, which we are doing, it is not only 4%. It was pulling the core revenue also down. When you have a lot of SIM in the market and when SIMs are getting sold like recharge, it really bring the table down for the core business also. So I think SIM, June onwards, at least that will benefit more rebuys. So overall, that will help move industry in the right direction.
Second, just building on what Ritesh said, your observation is right. There was no headline price increase, but there are a lot of rationalization on how to optimize. If you are giving something which you can manage it better, it is getting more scientific, at least in our case. So that is what we see now. And as I said, we have to be cautiously optimistic. We see that industry, at least March onwards, is moving in the right direction.
We have come to the end of the question-and-answer session. I would like to hand the call back to management for closing.
Okay. Thank you, Desmond. Thank you, everyone, for joining us on the call today. As always, if you need any further information, please reach out to myself. Otherwise, we'll speak to you very soon. Thank you very much, and have a good day. Bye.
That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.
