Good morning. On behalf of Telecom Argentina, I would like to thank everybody for participating in this conference call. The participants of today's conference call are Roberto Nobile, Chief Executive Officer, Gabriel Blasi, Chief Financial Officer, Fernando Balmaceda, Director of Investor Relations, and myself, Solange Barthe Dennin, Manager of Investor Relations. The purpose of this call is to share with you the results of our third quarter ending September 30, 2020. If you have not received our press release or presentation, you can call our investor relation office to request the documents or download them from the investor relations sections of our website located at www.telecom.com.ar. This conference call and presentation is being broadcasted and can also be replayed through our investor website at institutional.telecom.com.ar/investors/. I would like to go over some safe harbor information and other details of the call.
We would like to clarify that during the conference call and in Q&A session, we could mention certain forward-looking statements about Telecom's future performance, plans, strategies, and objectives. Such statements are subject to uncertainties that could cause Telecom's actual results of operation to differ materially. Such uncertainties include but are not limited to the effect of ongoing industry and economic regulations, possible changes in the demand for Telecom's products and services, the effect of potential changes in general market and/or economic conditions, in legislation, and the impact of the outbreak of COVID-19 on the global economy, and specifically on the economies of the countries which we operate, as well as on our operations and financial performance.
Our press release dated November 9, 2020, a copy of which was included in a Form 6-K and sent to the SEC, describes certain factors that may affect any forward-looking statements that could be mentioned during the call. The company has reflected the effects of inflation adjustment adopted by Resolution 777/2018 of the Comisión Nacional de Valores, CNV, which established that the re-expressions will be applied to the annual financial statements for the intermediate and special periods ending as of and including December 31, 2018. Accordingly, the reported figures corresponding to the nine months of 2020 included the effects of the adoption of inflationary accounting in accordance with IAS 29. In this presentation, we will also include figures in historical values, which are easier to understand. Our press release is complemented by our earnings presentation.
The audience should read the disclaimer contained in slide one and two of the presentation. The agenda for today's conference call is described in slide three and includes our business and financial highlights. We will end the call afterwards with a Q&A session. Now let me pass the call to Gabriel Blasi, our CFO, who will start with the presentation.
Thank you, Solange. Good morning and welcome to everyone. Slide four shows a summary of the company's figures as of September 2020. During the first nine months of 2020, Telecom's revenue totaled $2.7 billion. Revenues measured in constant pesos decreased 4.6% year-over-year. EBITDA totaled $1 billion, implying a 35.8% EBITDA margin, growing in constant pesos 2.4% year-over-year. Our mobile subscribers in Argentina amounting to 18.7 million, decreasing in approximately 150,000 subscribers when comparing with the previous quarter due to a decline of around 250,000 subs in the prepaid segment that was partially offset by an increase of close to 100,000 clients in postpaid. Broadband and pay TV clients increased, totaling around 4.2 million and 3.6 million respectively. Fixed voice subscribers, without considering IP telephone lines, amounted to 2.9 million.
Thanks to our successful commercial strategy focused on the bundling and upselling of our products, we currently have 1.8 million convergent unique customers, with 43% of our broadband customers having a mobile bundle. Going to slide six, we summarize our main achievements so far during this year. Telecom has been able to refinance and reduce an important portion of its debt, exchanging its 2021 bond plus refinance debt with multilateral agencies. Our capital structure has been improved and our future debt maturities have been extended with only $150 million approximately for 2021. OPEX has been reduced substantially and our collection have improved since 67% of our clients are paying digitally. Our collection period has been normalized when compared to the delays we had at the beginning of the pandemic. The local soccer activity, which we stopped billing, will return in the fourth quarter, thus improving our revenues.
In addition, we are working on other projects such as IoT, fintech, and personal cloud that will be added to our revenues. We continue being under a scenario where we cannot increase prices until year-end. What we have done in our financial debt, CapEx, and relationship with our clients have allowed us to be resilient to this situation, keeping a sound EBITDA margin. We continue with slide six, presenting our digital transformation roadmap. Telecom is undergoing a transformation process with the target to be a 100% digital company. We are not only converting our systems in order to integrate all our operations, but we are also creating an ecosystem of platforms leveraged on connectivity, which allows us to manage and up-scale product and services, with focus on the digital and convergent customer experience, and also to the B2B business.
There is also a deep cultural transformation that promotes autonomy, collaborative work, and the application of DevOps and agile methodologies. A good example of this was the recent implementation of Mi Negocio Personal, which was formed by a multidisciplinary internal team. We are working on a simpler architecture for our systems and platforms in order to achieve additional efficiency. During the last three years, we have cut in half our legacy system from the Telecom and Cablevisión merger. In order to get a better understanding of our clients' consumption habits, we are adapting our system to incorporate analytics and big data capabilities. This will allow us to customize our commercial offers and enhance the customer experience. We are envisioning a great future for the IoT business. Our target is to be the number one exchange-to-exchange value provider of our IoT products and services in all segments.
Currently, we have developed a strong portfolio of our IoT solutions, and we have a strong partnership with Nokia, supported by its worldwide IoT network grid, WING solution. In the next slide, we go over the progress of our main IT transformation projects. Let's turn to slide seven, where we present our FAN and Switch initiatives. Regarding our main BSS transformation projects, FAN, we have continued with the migration process, and 1.3 million lines have been added. We achieved five migrations during the pandemic, which were also the largest in the industry. Currently, a total of 6.7 million customers can enjoy this new digital experience, which offers a unified invoice and service process. We expect to complete this process by the end of next year. Switch is our new digital channel front-end that includes e-commerce and self-service solutions that give our B2C customers a convergent experience.
It has an intuitive interface that summarizes the client's products and information in accordance with its profile. Through Switch, our clients use more our digital channels. In slide eight, we continue with a brief summary of our Cloud Foundation and 4UP programs. The objective of the Cloud Foundation project is to integrate the different public cloud platforms with Telecom's processes in order to achieve additional efficiency, process automation, and business flexibility. The final objective is to enhance the company's physical data centers with higher virtual cloud capacity. We are also implementing a payment microsite hosted in the AWS cloud. Telecom is the first company in the world to successfully implement S/4HANA Central Finance with Central Payments and Credit Management all together. On July 1st, we have concluded the digital core implementation, and post-go-live support has been done. Slide nine shows our products evolution in Argentina.
On the mobile segment, postpaid subscribers have increased 2.6%, while prepaid subs have decreased 4.5%, increasing our postpaid share. Fibertel, our customer base, increased 0.7% year-over-year, mainly growing in the HFC and FTTH segments. Pay TV ARPU paid accesses have grown 1.6% year-over-year, mostly leveraged on our Flow platform. Fixed voice ARPU, the reduction of accesses has continued, mainly in traditional fixed copper lines, while Fibertel IP accesses have increased by almost 210,000. Slide 10 shows the evolution of our service revenues. Service revenues total more than ARS 197 billion, decreasing 3.6% in real terms versus nine months 2019, in a period where inflation reaches at 36.6% year-over-year. Our revenue breakdown as of September 2020 shows an increase in mobile revenue share and a lower share of broadband and Pay TV revenues when compared with the previous quarter.
The breakdown results are as follows: mobile revenues, 38%; broadband revenues, 21%; Pay TV revenues, 20%; fixed telephone and data, 15%; equipment sales, 5%. Our main drivers of growth in mobile and broadband are explained on slide 11. We have been able to keep almost constant our customer base and also register growth in the usage of our products. Postpaid mobile and broadband are two of our main pillars of our performance. As of September of 2020, postpaid subscribers amounting to 41% of our total customer base. The chart in the upper left shows the evolution of the competition landscape, wireless, per month during the last year. Personal is in blue color. Positive numbers show incoming clients and negative numbers show clients lost against the competition.
As mentioned, the growth in this segment has been mainly supported by our convergent offers to cable TV and internet subscribers that were not mobile clients of the company before. Mobile internet usage has also increased, reaching an average of more than 4.1 GB per user per month in the first nine months of 2020. We have continued increasing the speed and capacity of our broadband customer base, leveraging on our strong HFC network and responding to the higher usage of our fixed networks. Considering our different broadband technologies, we can observe that clients have been migrating to the more efficient ones. CapEx are mainly geared to continue upgrading our network, which have shown to be extremely resilient to the increase in traffic during the lockdown due to COVID.
In addition, there has been an important growth in broadband speeds, considering that 58% of total subs have a speed between 50 Mb and 300 Mb as of the end of the third quarter of 2020, compared to 33% in the same period last year. In slide 12, we show the evolution of our Flow product and how we have been able to increase its penetration. Flow is our IP video platform with a better experience as it has currently reached 94 million views during the third quarter of 2020, 5 million connected devices, and a high level of usage as our customers use Flow for an average of almost 9.7 hours during the third quarter. We have almost 1.2 million Flow boxes inside homes and 1.3 million Flow apps, thus advancing towards the objective of network digitalization. Additionally, we continue to add value to our Flow platform.
Starting in November 2020, we are integrating the Disney streaming service. Flow and Personal customers will be able to access Disney+ for the first three months free of charge. Let's move to slide 13, where we can find the summary of our international operations in Paraguay. We consider our presence in Paraguay through Núcleo as another driver to growth given our strong market share. Paraguay's improving economic situation, Núcleo's ability to finance itself in the local market, and the implicit hedge in US dollar that we have seen, there are no restrictions to convert Guaraníes local currency into US dollars. Núcleo, our subsidiary in Paraguay, on which we hold 67.5% stake, registered around $ 142 million and $ 62 million in revenues and EBITDA during the first nine months of 2020, respectively.
Browsing services accounting for almost 43% of the revenues, followed by voice with almost 21%, data with almost 10%, Internet 8%, and TV services with almost 7%. As of September 30, 2020, mobile customers total 2.2 million. Clients of Billetera Personal, a mobile financial service that our subsidiary provides, reaching 275,000. Fixed Internet services subscribers amounting to 118,000. In the pay TV segment, Flow customer total 20,000 and Personal HD 62,000. The fixed network deployment in the main cities of Paraguay has been increasing rapidly during 2020, reaching 447,000 homes passed. Additionally, Núcleo's Internet subscribers total 118,000, increasing 3.5 x versus the same period of last year. I will now pass the call to Fernando Balmaceda, who will go over our financial performance.
Thank you so much, Gabriel. Turning to slide 14, we show the evolution of local inflation. As of September 2020, the year-over-year increase in inflation has been 36.6%. During the third quarter of the year, inflation has been 7.7%, accelerating slightly when compared to the last quarter, but still well below the third quarter of 2019. The breakdown that we are including shows that the most important percentage in the index comes from food and beverage, transport and clothing, among other items, where the share of communication services in the CPI amounts to approximately 2.8%. In slide 15, we can see that for the nine months of 2020, consolidated revenues on nominal terms grew by 38%, reaching almost ARS 189.9 billion. When analyzing said figure adjusted by inflation, revenues amounted to more than ARS 208.2 billion, showing a decrease of 4.6% in real terms.
Service revenues showed a 39% nominal increase in a context where prices have been frozen since May 2020, being mainly driven by mobile revenues, which grew more than 6% in real terms when comparing the nine months 2020 with the nine months 2019. EBITDA increased by 46% year-over-year in nominal terms, thus generating an EBITDA margin of 36.2%. EBITDA margin in real terms was 35.8%. The company performed well in terms of cost controls. Operating costs before D&A decreased almost 8% in real terms versus the nine months of 2019. The company performed a very efficient cost reduction policy. The only exception being interconnection and transmission costs, which increased mainly to the rise in FX rates. Slide 16 shows the company's EBITDA evolution and the impact of the reduction in operating expenses.
There was a positive contribution to the EBITDA margin due to the reduction in handset costs, which decreased 29% in real terms, mainly via lower sell-out. Operating efficiencies were also obtained both in programming and content costs, maintenance and material expenses, commissions, and advertising. On the other hand, interconnection costs increased in real terms, mainly due to their dollar component, while bad debt expenses also increased above inflation. The final result was a 250 basis points increase in EBITDA in real terms when compared to the nine months of 2019. In slide 17, we can show the evolution of our collections and non-performing debt. We can see that the collections through digital channels have increased to 67% of total collections from the 50% observed at the beginning of this year. Additionally, the gap of real collections versus our forecast has decreased substantially.
The beginning of the COVID-19 lockdown, the level was almost 30% negative. Currently, our collections are at a normal level and have been possibly influenced by extraordinary collections in our B2B business. Despite that, the general level of non-performing debt in our retail business, debt has increased during this year due to the effect of the COVID-19 lockdown. As of the end of September of 2020, has moved to more normal levels, decreasing 2.3%, being 2.7% in June 2020. In slide 18, we can see that the company's operating income totaled almost ARS 19.4 billion. EBIT has decreased 1% in real terms as the decrease in D&A and disposal and impairment of fixed assets was slightly higher than increase in EBITDA. Operating margin in real terms was 9% of consolidated revenues, stable from the figure observed a year ago.
Considering historical figures, the same margin has increased to 22% from 19% in nine months 2019. Net loss registered in nine months 2020 was ARS 1 billion, decreasing in more than ARS 16 billion from the same period of last year, mainly reflecting lower FX losses due to the appreciation of the peso and the lower impact of the income tax. In slide 19, there is a summary of the company's CapEx during the first nine months of the year. Telecom has invested almost ARS 35 billion. This amount is 37% lower when compared to the same last year's period. Having almost finalized most of our system changes, catching up our infrastructure during the first two years after the merger, our CapEx program will continue evolving according to Argentina's economic growth, network performance, and customer requirements of new services.
Technical CapEx were mainly composed of installations and customer premise equipment or CPE. The balance was allocated network and technology and our two international operations in Paraguay and Uruguay. During the third quarter of 2020, more than 50 new mobile sites were deployed and more than 300 existing sites were modernized. Moreover, we continue to increase the capacity of our HFC access network, mainly through segmentation of areas, focusing particularly in the AMBA region. 1.4 thousand FTTH blocks were enabled, reaching more than 180,000 new home passed with FTTH during the first nine months of 2020. Personal's network has achieved the highest excellent, consistent quality and fastest median download and upload speed in Argentina, and the second fastest mobile network in terms of download speed in all of South America.
Slide 20 describes our cash flow generation when comparing the first nine months of 2020 with the same period of 2019. As of September 2020, the operating free cash flow amounted to approximately $509 million. The increase in EBITDA and the reduction in CapEx mainly explain the additional $71 million in free cash flow when compared to the nine months of 2019. Slide 21 shows our key figures for the last 12 months as of September 2020 in constant measuring unit. Company revenues amount to almost ARS 280 billion, while EBITDA amounted to ARS 96 billion. EBITDA margin was 34.3%. Our gross debt amounted to ARS 171 billion as of September 2020, decreasing 7.7% from December 2019.
The company has been able to generate an important amount of cash and short-term investments amounting to ARS 39 billion, from which more than ARS 16 billion have been invested in local bonds and notes. Net debt amounted to almost ARS 132 billion. Our net debt to EBITDA ratio was 1.37 x. Slide 22 summarize the latest financial transactions that the company has overtaken. On August 6, 2020, Telecom concluded an exchange offer of its outstanding 6.4% notes due in 2021. Holders validly tendered $362.2 million of notes due 2021. The acceptance rate was 77.74%, high enough to demonstrate our solid credit profile and structure of the exchange offer. An additional amount of $135.4 million of notes due 2025, new money, was raised to repay our loan with Deutsche Bank, London Branch, and CPPIB Credit Investments Inc.
In summary, the company issued $388.9 million of new amortizing notes due 2025, with a new coupon of 8.5% payable on a semiannual basis. On September 22, the company announced that it had successfully refinanced its loans with IFC and IDB Invest for an amount of $129.3 million. In the case of the IFC loans, 85% of principal that has to be paid in 2021 was extended between 24 and 48 months. For the IDB Invest loans, 85% of principal that was to be paid in the fourth quarter in 2020 and in 2021 was extended between 24 and 66 months. The company partially repaid $40 million of the outstanding amount on the loans. Due to the above, the company has considerably optimized its capital structure. Slide 23 shows the breakdown of our financial debt.
Total outstanding debt as of September 2020 amounted to more than $2.2 billion. Our debt profile and capital structure has improved significantly after the exchange of our 2021 notes and the refinancing of the IFC and IDB loans. Our maturities in US dollars are within a range of $400 million-$500 million between 2021 and 2022, and have been strongly reduced until the maturity of our 2026 notes. Slide 24 summarizes the latest regulatory decisions regarding the telecommunications industry. In May, due to COVID-19, our industry has agreed jointly with ENACOM to freeze the tariffs of our products until the end of August 2020. On the other hand, all companies in the industry were not required to increase salaries until August 2020. In August, Decree 690-2020 extended the price freeze until the end of 2020.
The decree also declared ICT services as an essential public service, and it has been approved by the National Congress. Up to date, the regulation is still pending. Both inclusive and reduced services plans are being provided to clients. In the case of the reduced services, they are only provided to clients who have not paid their service during a period of 90 days. It's worth mentioning that during March 2020, the executive power issued a decree, which determined the temporary suspension of the interruption of fixed and mobile telephony, internet, and cable TV services in the case of non-payment until the end of September 2020. This was then extended until December 2020. Having concluded with the presentation and before going to the Q&A session, let me pass the call to Solange for a final remark. Thank you.
Thank you, Fernando. With the presence of our CEO, Roberto Nobile, we are more than pleased to answer any questions you may have. Before we start, we would like to remind you how you can address your questions during the Q&A session, which will be open immediately. Please send a message to IR Telecom Argentina through the Q&A menu, identifying yourself and stating that you have a question, or alternatively, use the Hand button to let us know that you have formulated a question. We will let you know when it is your turn to speak, we will unmute you so you can proceed with your questions. Thank you. The first questions we will receive are from Rodrigo Villanueva that make the following questions.
Would you please share with us an update on potential conversations with the government to be able to raise price of Telecom services in 2021? The second question is, assuming the government does not allow you to increase prices to offset the negative impact of your cost structure from inflationary pressure, which alternatives are you considering? Finally, there is a third question that it says, could you please share with us your CapEx targets for 2021? Where will you be focusing your investments?
Okay. Good morning, everyone. This is Roberto. I will try to be very conservative on the information that we can share with you. We, as an industry, are having negotiations with the government, with ENACOM, which is the regulator of the industry, trying to consider how to implement the decree in terms of giving the industry the incentives to keep on growing and to keep on investing. That means that we, as an industry, together with the government, are working on trying to define the targeted customers where we should try to focus in terms of a special product, like an entry-level product for certain services, and trying to free up the public service decree to the rest, like high or premium services such as broadband or mobile. We are optimistic that we will be able to increase prices.
We do not know how far from the real inflation rate we will be able to do the catch-up, but we're still working on that. We are very optimistic that we will be able to increase prices during 2021. That is something that we all agree upon. We don't know yet how we will schedule those increases, and we need to keep on discussing the rates of increase. Regarding the second question, that was if we assume that we do not have any price increase. We do not assume that. On the other hand, we still have a lot of room to grow in terms of reducing promotional discounts. The industry has been very aggressive in terms of competition and trying to gain market share. In that marketing activity, most of the customer base have a promotion or a discount in the price.
I believe that if by any chance formal prices will not be able to be increased, if that could be a possibility, which I personally don't believe it, we'll have enough room to work in a less competitive environment, I would say. Therefore, we will be able to increase prices through taking away discounts or being less aggressive in terms of promotions. The third one?
This is now related to the CapEx target for 2022.
CapEx target is around 76%, 77% of our revenues, and we will try to keep it that way. We've been investing about 20% 16%. 17%. 16%. 17%, sorry. 17%. Can you hear? No, no. 17%. We have been investing more than 20% over the last two years. That was due to a catch-up of CapEx that was not done previously by the former telecom company, the incumbent. Also, we did a lot of CapEx to integrate and make one network out of the two companies, and trying to integrate also the IT platforms. That CapEx will be reduced to this target of 17%. We would love to make it 18% or 19%, but that will also be aligned to the possibilities that the company have in terms of financing and price increases.
Okay. The following question has been posted, Marcelo Santos from JPMorgan . Marcelo, please go ahead.
Hi. Can you hear me?
Yes, perfect.
Great. Thanks for taking the question. My question was on the mobile performance, which if you look sequentially, I think it was quite good despite the price freeze. If you perhaps could comment on this and talk some of the initiatives that led to this performance. When I compare the sequential growth in mobile versus the fixed line, it actually was good. The second question is about Paraguay. Would you share your longer-term goals, especially when it comes to the fixed broadband product there? Thank you.
On the mobile, we have been very successful in trying to convert prepaid into postpaid. That is probably the main reason why our performance has been good. If you take a look into the COVID, in the lockdown period, prepaid customers have stopped charging their service because they are at home. They are not commuting. They are not going to work by public transport because public transportation is locked down, too. Basically, the strong thing is on the postpaid, where we have been working very heavily, trying to migrate pre into post and keeping the revenues pretty stable, I would say. Going back to Paraguay. Paraguay, today we have almost 33% market share in the broadband services. That has been a successful story because we were coming from zero. In one year and a half, we were able to grow to 120,000 new customers.
As far as we are moving forward, we believe that we can keep on growing very fast during 2021, especially considering the gap of service between our service, FTTH service, and our FTTH network, new network, compared to the competitors. Tomás?
The following question we received is from Pedro Soares, who is asking one question on prices and cash flow. What was the impact of the Decree 690 on the third quarter business? Is it possible to have a better sense of that? Looking ahead, what are the company's perspective for 2021?
Probably we can share the answer with Gabriel. I will start, and then Gabriel can complete it. The decree is asking us, No, to keep customers that are not paying.
Okay.
That's the main problem that we have, and we have between 600,000 and 700,000 customers in that situation. If we compare that number to the number that we had in 2019 in bad debt, that is probably around 30% increase. Basically, the difference between last year and this year is that we are not eliminating the customer from our customer base, and the customer is still using the service. The amount is probably a 30% increase in bad debt compared to last year. If we look at the final numbers, we have come from 2.4% bad debt.
3.8%.
From 2.7% to 3.8% bad debt. That's probably the number that we should look at, and that's the main impact of the decree. Tomás.
Going to the following questions we received from Andres de Luca. He is asking, the 2021 bond maturity is beyond the BCRA measure, but could you please provide us with an update about how you are thinking about the remaining 2021 maturity if the BCRA measures are extended? The second question from Andres is, can you also provide an update on the competitive environment in Paraguay?
Okay. Well, regarding the maturity, the first thing is our interpretation is that as the original maturity of that debt was $500 million, and the present outstanding is $100 million, it is included. That debt has been already refinanced. The company has already complied with that rule, although we are behind that reach, as the rule is extended up to March, and the maturity of the bond is after that. Regarding how we can cope with that maturity, it's interesting to see that the total maturity that the company has next year in dollars is that plus about something less than $50 million of transactions related to vendors, which in one case of them have preferred a foreign exchange channel because it's related to a multilateral agency. We think that, first of all, the risk on that is very low.
Besides that, the company still has about, in dollars in Argentina, $50 million, and also has a very strong cash position and always the ability to go to the market and refinance as we have been doing during all this year in probably the hardest environment that we can imagine. Now we are also developing additional credit lines that we expect to announce pretty soon that will also give us additional room, not depending only from international capital markets or from the local capital markets, but we can issue very easily the amount related to the maturity of next year.
Okay. I will go back to the previous question. The target for 2021 in terms of bad debt, we are considering something closer to 3% instead of 3.9%, because we believe that this whole situation of pandemic will go probably until March or April of next year, and then slowly going back to previous levels. We are targeting a 3% bad debt for next year. Going back to Paraguay. Paraguay, we have a very competitive market. Basically three major competitors. We were the only one that were able to increase ARPU, increase revenues, and increase EBITDA. The competitors, I'm not going to mention them, but they are losing, basically, EBITDA. They are very aggressive trying to sustain their market share and therefore, being very aggressive in subsidizing devices and that type of things. We are very conservative on that.
We're not that aggressive, and we are making sure that we have a long-term business. We are trying to keep on growing month after month.
We have the following question from Agustina O'Donnell from IR Partners, that says, "What should we expect in terms of dividends for next year?
Well, regarding we, as you know, this public information, an assembly has been set and will take place next Friday. I think that we'll need to wait to that event to see what's the decision of the shareholders assembly about this.
Okay. We receive another question from Andres de Luca, which says, "Cost-cutting initiatives were quite strong during the quarter. How much more room do you see to cut costs?
Thank you for the question. Not much. I think we have tried to squeeze all that we can. Of course, when you reduce costs that much, you are losing something. We are reducing OPEX that is not necessary. It's OPEX that is necessary. Marketing. Our brands are not speaking, and we need our brands to start talking again and trying to reach all our customers with our value proposition. There are a lot of things that under this, I would say, crisis, have been cut down. Many of them need to be invested in the timeframe. We have started to achieve synergies coming from the merge. For example, by the end of this year, we will have all our mobile customers in one platform, one CRM platform that has a lot of benefits in terms of cost, in terms of holding time, in terms of first call resolution.
There are a lot of good things that are coming out from the projects that we are deploying. I believe that these type of things, we will keep on doing them as long as we keep on deploying the new systems, the new applications. Probably by mid-2021, we believe we can finish the migration of all the conversion customers into the Salesforce platform, and therefore, that will allow us to keep on working on the synergies. That should be important. Throughout the last two years, we have reduced headcount by 10%. We have a lot of third parties that we need to keep on reducing as long as we start deploying the new systems.
Just to illustrate what Roberto has mentioned, we can remember that prior to the big surge of the COVID in Argentina, the company margin, EBITDA margin, as of March, was nearly 39%. That give you an idea in a different environment without that problem being completely exposed, an idea of the potential of the situation with a situation improvement in the economy in general and the normalization of the activities. Thanks to all the investment done.
The following question we received from Cesar Medina from Morgan Stanley, where it says: "Can you please quantify the current magnitude of promotional discounts? What would ARPU would be if 100% of the existing promotions are eliminated?
Thank you, Cesar, for the question. That is impossible because to eliminate the discounts 100%, that means that there's no competitors, there's no competition in the market. That is something that will not happen. Today, we used to have between 20% and 20-something% discount on conversion services, and today that number is closer to 30%. I believe that we can reduce that gap. You know that going into a conversion bundle needs a discount is part of the value prop, and probably we can reduce the whole promotion from closer to 30% to closer to 20s%.
The following question is from Alex Reddy, where he asks: "Can you discuss your plans for liability management in 2021?
Okay, Alex. In fact, as I mentioned, for 2021, I will say that there is not too much to do. From the original $1 billion of maturity, we only have in dollars $150 million. From that, $100 million is the bond. We have $50 million in cash in our cash position today. We have the ability to go to the capital market, both locally and outside, if that's the case. For the other $50 million, it's related to vendor financing, which are lines that we have constantly renewing. Also related to some ECA agencies. We don't foresee a problem behind that. Also, we have the ability of tapping the local capital market where we can get, I will say, in the range of $100 million per quarter, with the present liquidity situation pretty easily. Also we have most of the banking lines.
We are using today about a third of the available banking lines beside the position that we already have in cash in local currency. We don't foresee a significant risk from the financial side for 2021. Of course, it will depend on the market. It's always a constant point of analysis, and if the market provides opportunity, if the economy gets better in Argentina, the vaccine allows a better outlook in general, we can consider continue working on the future maturities. As of today, the total debt book of the company, with the reduction of those $200 million that Fernando mentioned, is yielding a 7% yield, and we want to keep that type of cost control.
Thank you, Gabriel. The following question is from Akbar Kauser. He asks: "Hi. I want to get a sense of the affordability level of your customers. What percentage of your customers do you believe is dollarized and can withstand significant price increases?
It's a difficult question. All our customers are in pesos. They are not dollarized because we have a pesos economy, a pesos -denominated economy, so it's not the dollarized one. For the most part of our customers, they are and they have been able to pay throughout the lockdown without any problem. Basically, the strongest thing about our service is that we are really essential today, and probably that need of connectivity will remain after the lockdown, after the pandemic. I think that the service is resilient to, I wouldn't say price increase, I would say price inflation adjustment, because we are not working, and as long as you have seen throughout the quarters, we have been always able to keep prices with inflation. We have not been going beyond inflation.
Probably, if we can change the mix of products and go into products of 1 gig or other premium products, we can increase the price because the value prop is increased.
If we take a look at the whole business, we believe we will be able, and our customers will be able, to keep on the inflation adjustment. That has always been the real thing, and what we have been able to demonstrate throughout so many years.
Thank you, Roberto. The following question, we'll receive it from John Mohu, who said, "How do your reduced services compare to those of your competitors? What kind of measures are your competitors taking in response to the tariff freeze?
How do you compare?
Sorry, I repeat again. How do you reduce services compared to those of your competitors, and what kind of measures are your competitors taking in response to the tariff freeze?
No, basically, that's ruled by the decree. All the competitors are reducing the product to the product that is requested by the government. We are sharing the same reduced product as the entry level or, we should say, the non-pay product. There's no difference in that. I don't see any other difference.
Thank you. The following question will be from Alejandra Aranda. Alejandra from Itaú, if you are hearing us, please go ahead.
Hi, can you hear me?
Yes. Perfect.
Okay. Roberto, there was a little bit of break up in the line. Could you confirm the percentage of your client base with promotions on the average discount? Then I was hoping to get a little bit more color on the competitive landscape. You said that some of your competitors were not being quite rational. I'm wondering, even in a world where you could increase tariffs next year, what would be the pushback from your clients and the need to extend promotions going forward? The last question that I have is on personnel and severance cost, and how should we think about it in the next few months?
Okay. You mentioned many things, Alejandra. The first one was? The promotions.
The promotions.
Percentage.
The percentage.
We talk about a 30% average discount for our customer base. It has always been around 20%. That's the gap that this whole thing has produced in the last quarters. The second one was the competitive landscape. On the mobile side, the competitive is as you saw in the presentation, month by month, the port in and port out activity has been important. We, I would say, are the less aggressive of the market and trying to keep balance, especially in this moment in time, not to push portability. Portability means discounts. We are trying to pull down our own activity. The real truth is that the other competitors are not cooling down the activity right now. I believe that they will start cooling the activity very soon, because we are in a very difficult economic situation.
On the severance, I saw that one of the major cost reductions was in the labor cost. That is due to a reduction in severances during the year. Last year, we have agreed with many employees to accept or to negotiate leaving the company. This year, that situation, because the economy of Argentina is very bad, it's very difficult to find someone that wants to leave the company by its own sake. That is one of the reasons why the severances have been very low.
Thank you, Roberto. Are you okay, Alejandra?
Yeah. Going forward, what are you expecting for 2021?
The same as this year. As long as the whole economy of the country does not improve, it is very difficult to find people that wants to leave the company, being paid the severance, and trying to start a new business outside. People will try to keep it this way and without leaving. I believe that the number will be very similar to this year.
Okay. Thank you.
Thank you, Alejandra. We have a final question from Nicolas Giannone that is saying, considering the price freeze and perhaps following up Cesar's question, does the regulation consider lowering discounts as changing prices, or it is just points at the list price?
The decree is based on general prices. The real thing is that the major effect on the discount is that all the new customers will not have the promotions. Promotions are not part of the decree. Promotions are still and always be part of the company's commercial decision. You can sell a product at 100% price, or you can sell a product on a three-month discount price at, I don't know, say, 70% of the price or 50% of the price. That's a commercial decision, and that's not part of the decree.
A final comment from Andres de Luca that says, "Thanks to everybody, and congrats for the results.
Thank you. Thank you very much.
Thank you.
Having no more questions, we thank you very much for participating in our quarterly conference call. Please do not hesitate in contacting our investor relations department for any further inquiries you may have. Good morning to all, and have a nice day.