Earnings Call: Q1 2020

May 18, 2020

Good morning. On behalf of Telecom Argentina. I would like to thank everybody for participating on this conference call. The participants on today's conference call are The purpose of this call is to serve the first of 2020. If you have not received our press release or presentation, we will call our Investor Relations office to request a document or download them from the Investor Relations section of our website located at www.telecom.com. The conference call and presentation is being webcasted and can also be displayed to our investor website institutional.telecom.comortayback/investoristia. I'd like to go over some some harbor information another detailed conference call. We would like to clarify that during the conference call and on future performance, plans, strategies and objectives. Such statements are subject to uncertainties that supports Telecom add on certain operations to the former airlines. But uncertainties include, but are not limited to the effect of ongoing industry and economic regulations, positive changes in the demand for telecoms, travel and services the set of potential changes in general market and or economic conditions in legislation and the impact of the outbreak of COVID-nineteen on the global economy and specifically on the economies of the country, which we operate, as well as our operations and financial performance. Our press release dated my CFO team to 2020. A copy of which was included in the Form 6 K consent to the SEC despite certain factors that may affect any forward looking statements that could be mentioned during this call. The company has reflected the effects of the inflation adjustments adopted by the resolution 77718 of the Comician National Lloyes, T And V, with the studies that the Eric's version will be applied to the annual financial statements for Intermedia and special period ending up and included December 31, 2018. Accordingly, the reported figures corresponding to fiscal year 2019 included the effect of the adoption inflationary accounting in accordance with US29. In this presentation, we will also include figures in historical values which are easier to understand. Our press release is complemented by our earning presentation. Galya should read a disclaimer contained in slide 1 and 2 of the presentation. The agenda for today's conference call is its 1st slide 3 and includes our business and financial highlights. We will end the call with a Q And A session. Now let me pass the call to Gabriel Lassi, our CFO Who will start with the presentation? Good morning, everybody. Thank you so much. Moving to Slide 4, it shows an outlook on the golfing figures for the first quarter 2020. In the 1st 3 months of the year, Telecom revenues totaled $974,000,000. Revenues measured in constant pesos decreased 4.5 year to year and 0.7% compared to last quarter. EBITDA totaled $6,200,000 implying a 35.1 percent EBITDA margin growing in constant pesos 2.5% year over year and 15.9% compared to last quarter. Our mobile subscribers in Argentina amounted for 18,800,000, reducing in 245,000 2019, basically on prepaid steps due to seasonality and the beginning of the quarantine period that we will discuss later. On the other hand, we added 34,000 postpaid subscribers during the same period. Global and pay TV clients also experienced slide reductions, totaling around $4,100,000 $3,500,000, respectively. Fixed voice has drivers without considering IP telephone lines amounting to $3,100,000. Thanks to our successful commercial strategy, Focus the development lead and selling of our products, we currently have 1,700,000 of convergent unique customers with 41% of our broadband customers having a mobile panel. Moving to Slide 5, shows the evolution of our service revenues. Service revenues totaled almost ARS 59.6 billion, decrease in 3.3% in real terms versus first quarter 2019. In a period for inflation which is 48.3 percent year over year. The share of Communication Services International CPE approximately 2.8%. Our revenue breakdown as of March 2020 keeps the same percentage share as before. Except for equipment sales, which were strongly impacted by a reduction in the consumption of durable goods but still with a positive margin. Mobile revenues, 37%, broadband revenues, 22%, pay TV revenues, 21%, fixed telephone and data, 15% equipment sales, 5%. Our main drivers of growth are explained on Slide 6. As you can see from our performance in service revenue growth, We have been able to continue reducing the gap between inflation and real ARPU figures, which currently around 10% below inflation. While I've been able to keep a steady our customer base. However, postpaid mobile broadband and our IP video platform for inflow as the main pillars of our business. In the first quarter of 2020, postpaid subscribers accounted for 41% of the total customer base. The company has just a positive subscriber inflow in this quarter reflecting our efforts to optimize the quality and capacity of our mobile network. As mentioned before, This segment has been growing steadily mainly due to our convergence offers to cable TV and internet subscribers that were not mobile clients of the company before, showing that a result of the 2000 customers coming from our competition. Mobile Internet usage has also increased within an average of more than 3.8 gigabytes per user per month. In addition, there has been an important growth in broadband speeds 52% of total subs have speeds between 50 and 200 megabytes compared to 17% by the end of last year. On the other hand, our prepaid subs were down 2% due to seasonality when compared to the last quarter of 2019. And were also affected by the quarantine period. Our product flow has delivered solid results. We have more than 1,000,000 owns, advancing towards the objective of network digitization. We keep on improving the speed as capacity of our broadband customer base, leveraging on our strong AFCC network. Now let me pass the call to Roberto Nomele, our CEO, and we go over the following section. Thank you, Gabriel. And hello to everyone. In Slide 7, we are describing serious adoptions that we have taken you to COVID-nineteen in our processes and corporate governance. We have adopted the home office system for the majority of our staff. Telecom decided to implement the home office system before the local government imposed the mandatory lockdown. And in less than a week, more than 10,000 people were working from their homes. Telecom took care of its employees in advance and this was well received by all our workers. We have granted more than 10,000 notebooks to our employees. We are using Webex teams and Microsoft teams to connect a moment with more than 3000 simultaneous users online. We have reorganized the way our technical people works in terms of home visits and interventions on public roads in order to minimize the exposure of our technical staff taking extreme sanitary measures to avoid spreading the virus. Our call centers continue working under a home office system, attending more than 7,500 calls at the same time and more than 200,000, daily calls. All our main transformation programs such as SAP, S4, which, we internally called for up, CRM provisioning billing and collection for mobile and cloud play denominated fund, those programs are still in construction The fund program is still in construction with Salesforce, velocity, IBM, and BlueWalls. And all of them are moving forward normally. For us, it's going live at the beginning of July and the 3rd migration wave of more than 1,500,000 mobile subs will be taking place by the end of this month in the fund program. Regarding the company's corporate governance, a telecom crisis committee was in place before the COVID-nineteen, fully impacted Argentina after COVID-nineteen, The frequency of the committee's meetings was increased and medical specialists were integrated to the group. We continued on Slide 8, with the main actions we have taken regarding customers and investors. COVID 19 accelerated the process of converting telecom into a pure digital company in a very short timeframe. We have implemented several digital payments alternatives that were not in place prior to COVID-nineteen, and we have also allowed our customer to solve their technical problems on a digital basis. Moreover, in order to guarantee our business continuity, we have reinforced our networks and systems to guarantee the performance and quality of all our services. All, for example, all our network operation center is monitored and handled from home. We have normally continued with our investor relations activity. We have done several digital meetings with shareholders and debt holders. Since international flights have been suspended, we will continue to do so. In addition, we will participate in any phone calls or virtual meetings arranged by financial institutions. On April 28, we have done our first shareholders meeting on a virtual basis, including and inviting all shareholders to participate, which has proved to be a success. Moving to Slide 9, we present here some regulatory demand and solidarity actions we have taken in the context of the COVID-nineteen. On March 1, 2020, Telecom increased its prices on an average of 10% to all the products. Due to COVID-nineteen and after the constructive dialogue with the government, we agreed to put on hold the increase of prices affecting the most vulnerable customers reducing our basic fixed phone and prepaid mobile prices. We also agree not to increase any of our prices of April, May June. Additionally, the executive power issue decreased number 3 11, 2020, on March 24, which determined for a certain group of clients defined therein, the temporary suspension of the interaction in case of non payment of fixed and mobile telephony, internet and cable TV services among others. In the case of fixed or mobile telephony, internet and cable TV services companies will have to maintain a reduced service for the period of 180 calendar days, and must inform the Enercon the price is established for the reduced services. We are working to comply with the regulation and to provide set minimum services to our customers. This regulation would be in place until May 30, but could be postponed. In addition, we took a series of actions of high social value in the context of a health emergency, such as we are providing connectivity to 16 outpatient hospitals around the country and also to the government COVID-nineteen central hub located in Technopolis. We have increased the capacity of the telephone lines that are dedicated to receive calls related to COVID 19. In addition, we have also given connectivity free of charge to portable medical equipment donated by Unitek Blue Company. We've granted 0 rating mobile data when accessing any content used in National And Province educational sites, as well as in the platform segimos Educando from the minister of Education. We're doing the same with well across other organizations and many hospitals and health centers around the country. An important number of our employees are working in a program that takes care of elderly called Major Equinados, from the city of Buenos Aires as volunteers. We have also helped fundraising for Syama's Uno, a social program that supplies food to the lower income population in the Great Buenos Aires area. We are offering educational programs in our own website www.notreluar.com. Ar, while our product flow has more educational and entertainment content for all families. We have opened the OTT IP video platform to all cable vision subs, no matter the product they have. During the 1st month of quarantine in agreement with folks, we freed up the access to Fox Premium content to all videos apps. In Slide 10, we can see some metrics regarding the evolution data traffic due to COVID-nineteen. The aggregated traffic of the network grew almost 50% in just 1 week after the quarantine was initiated. The company keeps on increasing capacity of the network according to customer demands. Said capacity normally increases 40% to 50% per year and is usually deployed 1 year in advance. Thanks to our previous investments, the network could outperform the quarantine peak. Traffic from our international connections grew more than 50%. We have been able to expand all our international internet gateways by 40%. This represents approximately 20 percent of the content that our customers consume. And 80 percent of the data consumed by the households comes from servers that are hosted in our data centers. In these data centers, we have the contents of our video streaming platform flow, together with the Netflix, Facebook and Google YouTube, caching program platforms, which traffic has increased more than 45%. In the broadband distribution network to homes, download traffic increase by 50%, while upload what we call upstream traffic grew by 75% with peaks of 2 30. Regarding mobile services network, voice traffic grew 50% mainly due to higher number of calls with a longer average duration. Data traffic grew by 20% on average, while in certain areas, mobile networks faced higher demand according to the poor quality of the households broadband connection. In Slide 11, we continue with the breakdown of traffic by service. Customers are making intensive use of connectivity. We have registered picks of usage in apps related to video conferences social networks and entertainment. We can highlight that video calls and conference grew up as a tool for working from home and recreational use such as to connect with family and friends. WhatsApp has shown an outstanding increase voice calls through the mobile network and experience experiencing a higher usage and average duration per call and later in entertainment content, like video games, social networks and streaming, are rising at a very high speed. I will now pass the call to Gabriel Blasi, who will go over our financial performance. Thank you, Roberto. We will go over the impact that the business trends just described by Roberto generated in our financial. Turning to Slide 12. We've got some remarks regarding the evolution of inflation. As of March 2020, the year over year increase in inflation has been 48.3%. While during the 3 1st months of the year has been 7.8%. The related prices have increased 37.9% year over year, and 5.2% during first quarter 2020, thus generating a decrease in the general inflation index. The breakdown that we are including shows that the most important weight the index comes from food and beverages, transport and clothing, among other items. Furthermore, the share of communication services in the CPI amounts to approximately 2.8% being very low. In Slide 13, we can see that for the first quarter of 2020, consolidated revenues on nominal terms, grew 44%, reaching almost ARS 61,000,000,000. We're analyzing set fear adjusted by inflation revenues amounted to almost ARS 33,000,000,000, showing a decrease of 5% in real terms. The company has been trying to offset the inflation impact on our revenues and costs and an inflation as of March 31, 2020 amounted to 48.3 percent. Sandeep's revenue showed a 46 nominal increased by mobile revenues grew more than 58 when comparing first quarter 2019 in fourth quarter 2020. EBITDA increased by 53% year on year in nominal terms, thus generating an EBITDA margin of 35.8%. EBITDA margin in real terms was 35.1 percent. The company performed well in terms of costs controls. Operating costs before G And A decreases almost 8% in real terms versus the first quarter of 2019. In Slide 14, we show the company's EBITDA and the impact of the different components of revenues and costs. There was a positive evolution of handset costs and operating costs were lower in real terms, as well for instance, operating efficiencies were done in programming and content costs. Administration costs also registered a good performance. On the other hand, fees for services maintenance and materials included in commercial costs increased about inflation. This for services increased as a result of higher cost of public sectors, surveillance and training, while maintenance and year cost decreased mainly due and optimization is in the consumption of materials. The final result being a 240 basis points increase in EBITDA in real terms when compared to the first quarter 2020. Let's move to Slide 15. Where we can see that the company's operating income totaled almost ARS5.8 billion. The EBIT decrease in constant measuring unit is explained by an increase in D And A and disposal by the impairment of these assets, which increased almost 10% in real terms year on year. Mainly due to an increase in D And A in real terms. Operating margins reached 9% of consolidated revenues While in historical figures, the same margin has increased to 22% from 19% in first quarter 2019. Net income in first quarter 20 20, increasing more than ARS 2,600,000,000, mainly reflecting the reduction in operating costs and a positive income from FX gains in the next financial results. Now I'll pass the call to Fernando Varmacera, our IR Director. Okay. Thank you, Javier, so much. In Slide 17, you can see our cash flow generation when comparing the first quarter 2020 with the first quarter 2019. During the first quarter 2020, operating free cash flow amounted to approximately $81,000,000. We had an additional working capital requirement due to salaries paid in advance, and payments to vendors, made in advance, thus explaining the reduction in our free cash flow when compared with the first quarter 2019. Turning to Slide 18. We show our key figures for the last 12 months as of the quarter 2020 in constant measuring unit. Company's revenues amounted to more than 122,000,000,000, while EBITDA amounted to almost ARS 84,000,000,000. EBITDA margin was 33.1 percent. Gross debt amounted to ARS 121,000,000,000 as of March 2020. The company has been able to generate an important amount of cash and equivalents. Having a net debt of ARS 134,000,000,000 and showing almost no variation in real peso terms when compared with December of 2019. Our net debt to EBITDA ratio was 1.6 times. Slide 19 shows the breakdown of our financial debt. Total outstanding debt as of March 2020 amounted to $2,600,000,000. The company's financing strategy has been to absorb their liquidity in pesos that we currently have in the local market. Despite 10 or so between 30 to 90 days, interest rates having decreased and makes sense for us to cancel dollar denominated debt with peso debt. Finally, in Slide 20, we summarize the ladies financing transactions that took place during the first quarter of the year. In March, the company entered into the following transactions. 1, a peso denominated bilateral loan with Banco Macro for amount equivalent to $62,000,000 which matures in September 2021. 2, a new disbursement for Pimbera credit facility, which amounted to $10,500,000 and a new series of nuclear notes, which was issued in Guaranias, for a $15,400,000 equivalent, which matures in March 2025. In the first quarter of 2020, new overdrafts in pesos were closed for a total amount of dollars $144,000,000 equivalent. Having concluded with the presentation, and before going to a Q and A session, let me pass the call to Suraj for a final remark. Thank you, Fernando. With this, now we are more than pleased to answer any questions you may have. However, before we start, we would like to remind you how you can address your question during the Q And A session, which we will open immediately Please send a message to IAS Telecom Argentina through the Q And A menu, identifying yourself and stating that you have a question all alternatives, use the hand button to let us know that you want to formulate the questions. We will let you know when it's your time to speak and we will unmute you so you can proceed with your questions. Thank you. We have a question from Rodrigo Villanella, please. Rodrigo Villanella from Ernie. Go ahead. Rondido, we can't hear you. If not, we can follow with the following question and we proceeded in with the Okay? Okay. Here we have some questions from Marcelo Santos from JP Morgan. Good afternoon. I hope you are all doing well. We have two questions. Could you please discuss the drivers behind the efficiency gains on personnel? 2nd, Could you please provide more details on price increases executed during the quarter and the second quarter outlook? I repeat again. The second is, could you provide more details on tariff increases executed during the quarter? And the second quarter outlook. Okay. Well, regarding efficiencies, there are not only efficiencies as of personnel. But really the biggest part only, but all the all the efficiencies are related to the company as a whole. Of course, this might be appreciated differently in a different product, but is part of the process of change that we have been starting the last 2 years by the very significant investment in systems. As part of that. Remember that the company has almost completely deployed our central finance system. We are now in the following 2 months establishing S4HANA for the whole company. We have also already deployed success factor for the management of personnel. Also, we have deployed Ariba and other facilities related to the different aspects of expenses, of general expenses on the company. And this is remember because of the SAP universe and the different applications, all that is allowing us to transform the process to more digital. We continue with that reengineering Second aspect, which is relevant in terms of a cost impact, is that if you might recall on the operational side, it's very relevant, the impact on the devaluation on the cost of the sites as having the foreign exchange rate with a minor movement. This has helped in terms of keeping those costs. More control. Also, it's important to address a process of discussion with the programming related to the COVID situation that is going to impact in the near future. Allowing to reduce that burden until the situation normalizes. But most of the savings are related to the general operation of the company as part of the implementation of the recent energy synergies that the company was devoted to establish. Okay. Hi, everyone. This is Roberto. Just to add on what Gabriel was mentioning, we were already planning a difficult year for this year. So all the areas, all the durations were already, putting in place, programs to cut cut off additional expenses. So this was part of our plan for this year. And we started right in January doing so. And we have been very, very careful on all the OpEx and also the CapEx as you have seen in the latest numbers, for the quarter. Going to the question number 2, details on tariffs increase and on sector and further, outlook. The price increase was done in March, first. We, as I mentioned, it was around 10% for was a 17% on mobile services. And the 10% for all the fixed services, either video or broadband. Talking and dialoguing with the government, especially after COVID 19 was was initiated. We agreed upon putting on hold the price increase for prepaid and also for fixed telephony. Those were the two products that we consider that were hitting or were harming or could harm vulnerable sectors of the society. And so we agree with the government and with the rest of the industry to put on hold those price increases. And that's it. The outlook for the second quarter will be no price increase because we have also agreed that during this emergency crisis, we will not increase price. That's Yes. Okay. So we will go to the following participants. So we've got some questions from what he said. We've had seen significant voice and data traffic increases across countries, including Argentina. Have you been able to monetize it or do you expect these toxic trends to continue once the COVID, lockdowns are lifted Yes. Then there's a Yes. They just are the ones that are there. Okay. It's, it's very difficult to monetize data, data tracking increase. Our products are built up on flat fees for data traffic. So that's, that's, that is something we, we cannot do. On the prepaid, we we've seen that the quarantine has lower the prepaid data consumption because people are locked down in their homes and they're not using their mobile services during the lockdown. So we will, we'll, we see, a lower data traffic on the prepaid side. And on the mobile, it's only 20% increase. And that's already included in the product itself. So we cannot do any data, collecting the data revenue out of it. The following questions we received is from Santiago Petri, what he wrote in. Could you please clarify your U. S. Dollar debt maturities for 2020 2021. It is domestic U. S. Dollar debt or international domestic debt Do you have any issues accessing US dollar to service your debts? Put a sovereign default challenge your debt maturities in U. S. Dollar. Many thanks for the call. Okay. Thank you, Satya, for the question. Well, let's there are several details on it. At the total date of the company, as may recall, is in the range of $2,600,000,000. Most of the dollar debt is, is dollars outside Argentina. I mean, we don't have local debt in U. S. Dollars at the moment. From the last part of this year up to now, the company the new debt of the company has been done over pesos. At present, around 12% of our total outstanding debt is nominated in pesos. Regarding the ability to go to the market and buy, the dollars necessary to repay our debt. We have no problem at all. We have been doing this for almost almost because we have several rollovers related to investment acquisitions, to the to the Colombian or commercial relations that the company has, roaming, etcetera. And we haven't had any type of forum accessing the foreign exchange market to comply with our obligations. Regarding the impact of a default on this capacity, well, this is, of course, is a very difficult statement in terms of telecom, we think that, of course, if the country defaulted, it default completely without having, at the same time, a conversation regarding the evolution of the sovereign debt, This may harm the liquidity of Banco Central in the medium run if no solution is achieved. But as far as conversation move forward and the solution is moving ahead. It should not be a problem for any of argentine corporates. If the situation worsens, of course, not specifically for telecom, but for all the corporates in Argentina, for any any other one who might need to access to the foreign exchange market. I have a clear all the aspects? Yes. Okay. Thank you very much. Then the following questions we have is Tom, if he's on the floor, he said, how will telecommagendinos balance its near term maturities Okay. Well, thank you for the questions. Regarding yes, I think that also was included in in Santaro's question, and I didn't address it. Regarding our profile of maturities, yes, at present, we have about a year $1,000,000 of maturities next year composed a $460,000,000 of the 2021 notes. And the rest are several payments of different banking, banking, obligations. We have, we have, different ways to address this maturity. Number 1, as you may recall, the company has a liquidity reserve that was established with the purpose of different liability management that we tried to do during the last part of last year. And of course, we have intentions to pursue that if the market help us to do so. 2nd aspect, we have issues And I think that we didn't mention that in the period, an additional $150,000,000 from IDB and $75,000,000 of a local bond was the first time that telecom went to the local market. All that took place in this period showing that there is room or even in this environment, there is room and space for for a for issuing local capital market and use those resources to replace a other day. In specifically speaking of the maturity of next year, we have several directions to cope with that. 1, of course, continue to talk with the banks. As I mentioned, we have already issued $150,000,000 of room from IDB. And Fernando has mentioned $25,000,000 of a new loan that was granted in the period in U. S. Dollar from abroad. But specifically referring to the big maturity, the capital market maturity, we are working towards 3 different directions. One is, one is, and of course, we will be more than happy to have your feedback in this we have seen a room for a transaction. I will we have been requesting a transaction similar, the one that Aeroporto of Mill has done. 2nd, second, I would say, 2nd direction that we are working is just a pure exchange of the assumption of the one for a new one, for a new bond. And the other one is in a different type of structure. And we continue, of course, to tap our different sources. So of additional funding. But the message is, of course, with the recovery or a partial recovery that Argentine assets has suffered in the last week. We have already issued a result and probably we are going to move forward in the next in the next stage. We have another local transaction very likely if the market is there. Hey. We have another question from Georgia Jordan from S And P Global Market Intelligence. Could you please comment a little on the Paraguay fixed service operations and how they perform in 1st through 2020? Sure. And our white has deployed 8000 books on FTTH. Last year. And we are planning to increase to double that size this year. We, we have already more than 70,000, build on customers on our FTTH brand new network. And we are growing at the pace of almost 10,000 new customers every month. This COVID-nineteen has been a very important moment for us because it allowed us to to move forward and keep on growing because our service is much better than the our competitors. And we can offer, more, bandwidth that our competitors do. So it's a huge opportunity and we are running the operation at full capacity. We can we move from 6000 new customers per month to 10. And we're operating at full capacity. We don't have more, manpower to to keep on growing, but we are keep on growing at that pace. For now, my questions are from David Nambula. Nambula. Sorry. What are the current plans to repay the 2021? If the bond market is not open, what are the options? Then the following question is when do land next price increase and by how much? And why decline in subscribers in most segments is this expected to continue because of the weak macro? Low end subscribers, which we get free services. What person does not develop? Regarding regarding the the the debt, I think that most of the options, I have already comment on the on the prior question. Just to recall, we may use our liquidity. We may use local funding both banks and local capital market funding, and also international funding from other sources that we will continue to work on in spite of the and in the case, the capital market is not there. Fortunately, and I'm very, very straightforward on this. The market has been, even in this situation, been a transaction has been always suitable for us. As you may know, the main issue here is the cost. Our total cost of debt is 6 percent, and we make a significant effort to keep it very low. Regarding in press release, No, no, we we are discussing with the government, freezing in price increases. Right now we have already agreed upon April May June with no price increase. We are still discussing that. The government wants to extend this, to postpone this period. And we're still in the in conversations. The real thing is that the economies is it's very difficult. It's going through difficult times. We don't know the extension of this crisis. If this is released by theendofJune, we can probably see a possibility of recovering people going back to work and people starting to, to start, receiving or collecting money, salaries. Said that, we don't see right now a huge problem. Unless the crisis is extended. If the crisis goes for long, we will have more problems. Today, we are collecting on April, we were able to collect 82% of the receivables. So actually, we have an impact in collections. For the most part, the impact was hit by the the lockdown of the financial system. Not only the banks, but also the the cash kiosks that will collect receivables for us. This has been resolved. So now we are collecting that those receivables, but we are starting to face a new problem, which is that, domestic households are running out of cash. So that's a new, a new challenge that we have and something we are trying to tackle. The real thing is that we have and we will comply with the government, decree we will not cut services for people who won't be able to pay, but that service will be reduced to a minimum product. That minimum product will give the user the ability to connect, communicate, and do some things that not will not be able to do everything that we used to do. So we, we believe that, depending on the extension of the crisis, We need to be close to our customers. It's much easier to to recover a customer that is with us that, need to to spend a lot of money trying to recover a customer that has already left. So we will take a very close look at customer performance. And we really need to to go through all these pandemic crises. So now we will I have Miranda. I will just you. Thank you, Salange. And, Roberto, this is a question for you. You just talked a out, people seeing their their income reduced significantly. Could you comment a little bit on the trends that we're seeing in terms of people looking to switch to cheaper products, cutting back on the expenditures that they make on premium products, Have you been seeing any any of those things, that could affect the 2nd queue? Thank you, Alejandra. No, we haven't seen anything like that. The good thing is that people are spending much less in a lot of things trying to keep their expenditures on food and our service. So that's the good thing. But depending on the extension of the crisis, that could be a problem and we need to take a look at that. As of today, we don't see changes in our customer base from premium packages to low end packages. We don't see that. But we are very, very aware and taking a close look at of any change in their behavior. Okay. And the the second question that I have is in terms of broadband. I've noticed that on the past two quarters, there was a decline on the number of subscribers. Could you open that number a little bit and let me know if that was mostly on all clients coming from Ahmed? Are those clients of Fibertel Could you give us more clarity on that trend? Yes. Remember that we have our HFC customers HFC, cable modems, fibertail, and our old copper network, which is the ADS cell technology and what the old adnet, what we call fiber to the light. Unfortunately, we are losing some some customers on the copper network, the copper network is not overlapped necessarily to fiber tel, where we are overlapped, we are transferring those customers to the preferred network. In this case, it's either HFC or FTTH. But where we have no overlap, we might lose customers because they, they are getting a 3 megabytes, per second service. So any competitor could take it away. We are seeing a reduction in ADSL Technology and an increase in FTTH and HSC. Okay. Thank you very much. Can I ask a last question? I don't know if you said this because at one point, my connection was very bad, but Could you remind me the amount of CapEx for this year and how much that would probably decrease because of COVID? Okay. We were expecting a CapEx for total year of $500,000,000. That was half the CapEx we did last year and less than it had from the previous year. So actually, it was a very restricted CapEx, because as I mentioned before, we were expecting a difficult year So everything was already there. In February, and the beginning of March, we, we were planning to increase our CapEx in $100,000,000 from $500,000,000 to $600,000,000 And that was because the quarter was better than what we were expecting. That additional CapEx has been put on hold again. So our plan for this year, we are still keeping the $500,000,000 CapEx. That's the that's not affecting the major programs transformation and programs that we are running, which has to be with IT, full management on the OSS platforms. I mean, we are trying to keep all the transformation programs alive and doing the least that we can do on on the other side. Okay. You're welcome. And there is a follow-up question from what he said, the commitment with the government authorized prices in second quarter 20, include any type of potential benefit on the OpEx side, And the second question that it will have is it's already a lien that has just been covered because it has Could you please share with us your CapEx target for 2020? So far this year, they all have invested 16% of sales will be returned with Brazil for 2020 votes in absolute and relative terms. The first one. The what we are discussing with the government will be released probably this week. So I will not make any comments on that. You will see it tomorrow probably. So the following question is from Sam, Eby Bonda, what he said. Sorry for that. Conversation. Confirm your cash interest payment in 1st June 2019. Also in your presentation, there are 2 CapEx figures, 8,700,000,000, Page 17, and $9985,185,000,000 on page 16. What is the difference between the 2 CapEx figure? I think that thank you for the question. I think that the difference is related to IFRS accounting. That's right. And regarding terms of the payment of the interest. Yes, of course, if we have the if we have legal ability to pay the company base. Specific and on the first question, the the difference are the right of use that are going to IRS are the ones that I'm not consider, therefore, a CapEx in under that. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes, sir. So I should repeat the second part question. I don't know if I will, I understood it properly. Could you please confirm your tax interest payment in 1st Q 2020 1st Q2019? Okay, the amount. I will give it. We will continue and get back to you when we look for that figure. Basically, the way to calculate it is we, as Nade mentioned, we have a 6 percent per annum interest payments. So you can put Radarad doing that number during the year. Our cost of debt on average, it's between 6% 6.5%. But the easy way to do it is to provide out the number in terms of our net debt or gross debt? We will give you the exact figure. Then we have the following question from Marcelo Santos. You mentioned that you were able to connect 82 percent of receivables on April. How did that look like in a normalized period such as last April? I think that Roberto already mentioned, to give you some color on this, during the 1st week of the quarantine, remember that Argentina has a very significant part of the economy that moves in cash. When I mean cash, I mean bank notes on the physical payment. So the 1st week of the quarantine with the people, she's unable to to go to these different payment sites or to get the physical cash, the amount of cash collected decreased very significantly. Immediately, the company prepared a lot of measures, including we developed a microsite with the ability to fully pay those to fully pay with other means, it just to give you some color. We transfer we were able to transfer in 15 days. 1,000,000 customers who historically pay always physically to digital payments. A part of that also was helped by the normalization in terms of different services and different possibilities during the quarantine were open and normalized between them, the banking services that people disabled to go to the bank requesting a prior time schedule to go. And all the effect that all those effects together make a significant reduction for from, from that original situation. At present, this is yesterday, the amount of of lag between a connection, depending on type of service, depending the cycles might be lower up to a 5% but as Roberto mentioned, what you put on top of this, the effect of the delay because of credit issues, it might go up until they allow to figure meaning 10%, 12%. We are looking at this very, very carefully and in very detail, it's difficult to give you a more precise outlook because we foresee some credit problems to give you some color, 50% of our customers, all we pay after a claim from the company after they got in 30 days delay. But as today, we cannot cut any service, but bring them to the more reduced service. There is no history to give you more color on this. But we think that the company although this is important that of course might affect because of the change in the the change of payment of the holy column we made affect the holy column as a whole and has been addressed by the government by pouring money in different aspects we expect some increase in the working capital required to move forward. It's difficult to give you some precise figure on this probably by theendofthismonth, we will have the 1st 30 days, but still, we need because of the lack of delinquency rates that generally have like 60 to 90 days, we still need at least a couple of months. To have a deeper view or a most precise view on this. But at the same time, we are doing an generating all the all the adjustment in our processes to keep a strong track on this and to guarantee the best collection that we can. With the limitations that we have explained. That it says, can you confirm your current liquidity position and how much on your cash to some side? Well, I will say that we haven't varied that from the last position, but that we mentioned is already stated in our financial statements on just we'll say that we have to the to our historical cash position. I will say about near 100 additional equivalent dollars, but in pesos locally, which are held locally in what is called for the common resilience, the short term peso currency. Unless we have another question So we don't have no promo for the question. So or will we conclude this call? Please, if you have any further questions, please contact us, we'll be more than happy to answer any doubts that you might have. Have a nice day. Thank you very much.