Earnings Call: Q4 2018

Feb 13, 2019

Good morning. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil 4th Quarter 20 18 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations. Thank you. Good morning, everyone. Thanks for joining us today to discuss our Q4 2018 financial and operating results. We have today on the line Mr. Daniel Hajj, our CEO Mr. Carlos Garcia Moreno, CFO and also Mr. Oscar Monjowski, our Chief Operating Officer. Thank you, Daniela. Thank you, everyone, for being in the call. I will pass to Carlos to make us the summary of the Q4 results. Thank you, Daniel. Good morning, everyone. Well, in the Q4, amid continued economic expansion in the U. S. And strong employment gains, renewed figures about impending interest rate increases by the Fed surfaced again, leading to a significant depreciation of equities and other financial assets and to the strengthening of the dollar against most currencies. Other than the Brazilian real that recovered by nearly 4% from its election driven lows, All other currencies in Latin America were down versus the U. S. Dollar, with the Colombian peso falling on average 6.4% from the prior year quarter and in Mexican peso 4.1%. In the Q4, we saw greater commercial dynamism in Mexico, Brazil, Colombia, the Argentina block, the U. S, the Dominican Republic, to name a few, With prepaid net additions surging quarter over quarter, as you can see in the chart, in all of these countries, say, Brazil and postpaid jumping in Brazil. So just to look at the chart, Mexico, we went from 100,000 prepaid net additions in the 3rd quarter to 550,000 in the 4th quarter. In Colombia, we went from negative 35,000 in the third to roughly 400,000 in the 4th quarter. And these figures, which are remarkable on a sequential basis, are also very strong if you compare them with the year earlier quarter. That's for instance, in the case of Mexico, net adds are up roughly 65%. In the case of Colombia, they were up 150%. And in the case of postpaid, the strong performance was Brazil. They added 1.2 1,000,000 subs in the last quarter, which compares to about 900,000 that they had a year before, okay? So they have very strong sequential growth of net additions, but also very important if you compare them to the results of the year before. Altogether, we added 1,500,000 postpaids in the quarter. And as you can see in the chart, they were mostly in Brazil and Mexico. On the fixed line platform, we gained 590,000 IGUs, principally in Mexico, Central America and Brazil. Now year on year, our mobile postpaid base exceeded the fastest rate of growth at 7.2%, as you can see in the chart, followed by fixed broadband with 5.6%. So postpaid at 7.2%, fixed broadband with 5.6%. Fixed voice and pay TV accesses declined by approximately 0.5% each. And in prepaid mobile, we had a major cleanup of our subscriber base in both Brazil and Central America, leading to a 4% fall in 2018 in spite of significant prepaid growth in the country that I mentioned earlier, Mexico, Dominican Republic, Holland, etcetera. Now we had revenues of ARS 262,000,000, which were nearly flat in Mexican peso terms from the year earlier quarter. Constant exchange rates, service revenues expanded 3%, roughly the same pace of service the prior quarter, as the acceleration of service revenue growth in Colombia, the U. S. And Argentina was compensated by a slight deceleration in Brazil and Mexico, stemming from aggressive holiday promotions that included large and lotness of data and airtime. EBITDA came in at ARS 70,600,000,000 in the quarter. And as with service revenues, it was almost last year on year in Mexican peso terms. Whereas at constant exchange rates, it rose 6.7%. The latter figure includes the net effect of the release of certain provisions in Brazil and some new charges in Central America. Correcting for these one off moves, EBITDA increased by 6.1% year on year in constant terms. Now by region, service revenues expanded faster in South America at 3.9%, as you can see in the chart with the green line, followed by North America, which is basically the U. S. And Mexico, growing at 3%, with stable growth in Europe at 1.2%, the yellow line, and declining rates in Central America, that's the red line, which is explained mostly on account of the situation in Nicaragua and Honduras. Mobile service revenues accelerated in the U. S. In fact, we had the best performance in at least 6 quarters, Argentina and the Dominican Republic. On the fixed line platform, Colombia, Chile and Ecuador maintained a positive trend. If we look at service revenue by business line, This mobile broadband and mobile postpaid were the main drivers of revenue growth for the company as a whole, increasing 9.5% and 7.9%, respectively, followed by mobile prepaid revenues up 3.2%. As you can see again in the chart, the red line, prepaid revenues stopped their decline, and they are now surging. There's been a very sharp acceleration of prepaid revenue growth. And if we look at the operations all throughout, most of the operations expanded EBITDA margins compared to the prior year. There's an important exception, which is Central America, which has a 4.4% decline in margin year on year. I think this can be explained essentially by one off noncash adjustments, mostly related to some tax provisions in Honduras. But as you can see on the right hand side of the chart, the reported EBITDA for Central America decreased 15.9%. However, if we correct for one off adjustments, and they were partly in the Q4 of 2018 but also partly in the Q4 of 2017 when we had released certain provisions, the net effect is 7.3%. And then if we compare with we look at constant exchange rates because there was some move in the currencies in Latin America in Central America, the actual organic reduction of EBITDA was 3.7%, not the 15.9% that was reported initially. Now in Mexico, mobile service revenue growth has remained stable. As you can see also on the chart, They've been hovering around 8% year on year. That's the blue line. But fixed revenues have trended down, okay? So they in the Q4, they were down 5.1% year on year. Continuing with first time in several quarters. With that stabilizing on account of strong increase of prepaid clients and the aggressive commercial promotions. So again, very importantly, in Mexico, for the first time in various quarters, prepaid growing pretax growing is growing faster than postpaid revenues. Now in the case of Mexico, again, fixed voice revenues accelerated their decline to minus 12.6%, which reflects continuous headwinds from long distance revenues, which have been falling for quite some time, although the decline is now much less because we have much less left of revenues, by the way. But we also had a substantial reduction of interconnection revenues on the fixed land side, driven by a 15% drop in rates and a 7% decline in traffic. Fixed broadband revenues are growing slightly less than 1%, as you can see on the right hand side. So these are the business lines that are growing on the fixed line platform. They are growing 0.8% fixed broadband. But corporate networks revenue, which had been declining, is now recovering fast. In this quarter, it posted a 3.1% growth rate from the prior year. In Brazil, fixed broadband revenue growth overtook that of mobile postpaid revenues with prepaid revenues on device. You can see the number one business line today in the field fixed broadband, but followed very closely by mobile postpaid. And now what you can see is that the prepaid revenues, which have been declining, have turned. They are affecting a very significant turnaround, and they may be accelerating. So that's also very important for Rafael. On the right hand side, you see that fixed voice revenues are falling at roughly the same rate. They have been relatively stable, around 18% decline. But pay TV appears to be recovering, okay? Pay TV revenues have been a significant drag on the fixed line platform. They seem to have bottomed, as you can see on the chart. And our operating profit increased by 25.6 percent to ARS 36,000,000,000, and our comprehensive financing cost was down 68% from the year earlier quarter ARS 12,000,000,000. A reduction that arises from the release of provisions is still linked to the judicial resolution of tax disputes, which our old subsidiary, Embraertell, had claimed that these COVID taxes should not be considered as part of the base for the computation of the ICMS taxes. We obtained a net profit of ARS 9,500,000,000 in the quarter, bringing the total for the year to ARS 46,000,000,000, which was 8% more than the year before. Our capital expenditures totaled ARS 152,000,000,000 throughout 2018, whereas our overall shareholder distributions, which are in share buybacks and net dividend payments, totaled ARS 21,000,000,000. We directed a significant part of our cash flow to the reduction of liabilities, directing a total of ARS 14,000,000,000 to pension obligations and ARS 42,000,000,000 to our net debt. So here, I'd just like to stress, whereas financial debt came down by ARS 42,000,000,000, that's the one that we overlooked when we are looking at leverage ratios. Part of the matter is that we actually directed $56,000,000,000 all in all to reduction of liabilities, and this is a number that the rating agencies look at. So they are not only looking at the financial debt but also the ones that we have on the pension obligations. So total amount funneled by America Movil to reduction of overall liabilities was ARS 56,000,000,000 in the year, which is a bit more than onethree of the total CapEx that we have, just to put it in perspective. Altogether and after taking into account foreign exchange variations on the peso value of our outstanding obligations, our net debt came down by ARS 46,000,000,000 from the close of 2017 to ARS 568,000,000,000, which is equivalent to ARS 1.87 times the year's EBITDA. Well, thank you for listening to the presentation. I would like to pass the floor back to Daniel so that we can begin the Q and A session. Thank you. Thank you, Carlos. We can start with the Q and A, please. Your first question comes from the line of Rodrigo Villanueva with Merrill Lynch. Your line is open. Thank you. Good morning, Daniel, Carlos, Daniela. My first question is related to Mexico. We saw Mexico ARPU increasing strongly, 6% year on year at MXN 150. So I was wondering if it's reasonable to assume that it will keep growing in 2019, particularly supported by the strong data usage that we are seeing and also particularly considering that, as you were mentioning, prepaid has been recovering in a significant way? That will be my first question. Thank you. Good morning, Rodrigo. Yes, I think we have a good increase in revenue in Telcel during the year. I think maybe 3 years ago when we start, we were at this ARPU when we have these big promotions in Mexico and that big reductions on prices will reduce maybe to MXN 120 something like that. And again, we are at MXN 150. So we have been doing good in the commercial. Even what Carlos is saying in the Q4, we grew like more than 60% our prepaid net adds. Postpaid has been growing very good during the year. And just what I can tell you, Rodrigo, is that we're still investing a lot in our network. We have the best quality. We have the best capacity. 4.5 gs has been very successful for us in Mexico. And I think that's the reason why people is preferring to be with Telcel. Our number portability is growing again. So I think we're getting good subscribers and good revenue for them, and they are using a lot our service. So I don't know if we can grow more than 150 because, well, there is the high end subscribers already have a package. Promotions has been increasing. But I think all overall in Mexico Intel Cellular, we're doing very good. Understood, Daniel. Thank you very much. And my second question is related to the pay TV license in Mexico. I was wondering if you could give us an update on the status of this process. When would you expect to get approval for this? Well, on the Pay TV, we have submitted the request and it is on the revision of with the IFT with Ifetel. So we don't know more than that. And also, we have another thing is the functional separation. In the functional separation, where in due process, there are certain targets that we have to be met during the year, during 2019. These targets are public. You can see all these targets, and we have to be ready by March of 2020. And as you know, there are still a series of legal proceedings initiated by us and other affiliates challenging IPETEL decision to separate the company. So those are the 2 processes that we have with the Ifetel is the pay TV and the functional separation and that's where we are right now. Perfect. Thank you very much, Daniel. Thank you. Thank you, Rodrigo. Your next question comes from the line of Walter Piecyk with BTIG. Your line is open. Yes. Hi. This is Joe Galone for Walt. Thanks for taking the question. Based on the commentary in the release, it sounds like investments and in particular in fiber will continue this year. And CapEx was up about 10% in 2018 to about $8,000,000,000 What is your target for CapEx for 2019? And how do you plan to deploy it? My first question. Yes. The target would be around 8.5 $1,000,000,000 for 2019, more or less what we think we're going to invest. We are putting fiber all around Latin America. We are at the fiber to the home and rings with fiber. And fiber is important for us, so we're putting a lot of fiber. And mainly, it's going to be for increasing our data capacity. We're also investing a lot in IT. Sorry, in data capacity, we're doing the new technology that is photonic that it's a new technology that will give us a lot more capacity at a better cost. So we're doing that in all Latin America. We're investing also a lot in IT, the digital transformation of the company in all the countries. So capacity on wireless, more coverage also on wireless, moving more for 4.5 gs. So all around is more or less what we are investing in 2019. Okay. And then Carlos, share repurchase activity appears like it was down again in 2018. And now that leverage is below 2, would you consider picking up that pace? Well, I think that what we have said is we are going to be likely more active distributions once we get to our target leverage ratios. I think that we're close to getting there at 1.88 in this quarter. I don't know if this is obviously all was a function of exchange rates, among other things. But I would say that we still need to do a little bit of delevering before we can think of all things. Okay. Thank you. Thank you. Your next question comes from the line of Matthew Niknam with Deutsche Bank. Your line is open. Hey, guys. Thank you for taking the question. Just to go back to Brazil and Mexico, I think for both regions, you talked about aggressive holiday promotions with large allotments of data and airtime. Was this typical holiday seasonality or is this something that's continued into the Q1? And then secondly, as a follow-up, I think in the past you've talked about targeting roughly 2 percentage points of margin expansion in both Mexico and Brazil. How should we think about that sort of pacing? Should we expect that to continue in 2019? Thank you. I think the promotions are due to the Christmas promotions. I think always been reduced in the Q1 of the next year. So and it's going the same way for this year. So but last year, the promotions were high. And still, I think we do intelligent promotions because as you see, let's say, in Mexico and in Brazil, the growth in wireless was good. If you compare with our competitors, our growth was also very good in the 4th quarter. So the promotions that we have been doing are intelligent promotions. In terms of EBITDA margin, as you see in Brazil since 2016, we have been growing like 1.5 points per year, 2016 to 2017, 2017 to 2018 and I think 2018 to 2019. So I think it could be also 1.5 points what around 1.5 points what we can grow in EBITDA margin in Brazil. And in Mexico, I think it could be the same. We think we can grow, depend a lot on the promotions, depend a lot on the aggressiveness of the market, but I think we can grow our EBITDA also. Thank you. And just to follow-up on Mexico. I just want to clarify a comment in response to a prior question. So ARPU, you think maybe would stabilize around the ARPU 150 level? Yes. I think it will stabilize at ARPU 150. It depends a lot on how the growth that we are going to have on the prepaid market. So the prepaid is starting to grow again. You know that the prepaid is less ARPU than the postpaid. And if prepaid starts to grow again, I think that smartphone is growing a lot, data is consuming a lot and also it's going to depend on the promotions that we do in the market. Thank you. Your next question comes from the line of Maria Elsvaro with UBS. Your line is open. Hi, everyone. Thanks for taking the question. So my first question is on capital allocation. You mentioned that the leveraging is still your priority. But do you see further M and A in the short term following your Guatemala and El Salvador deal announcement? Or do you think that cash distribution should be the most natural way for capital allocation after you meet your targets? And then my follow-up question would be on the CapEx. Given the recent investments that you made to upgrade your mobile networks, is it fair to assume that 5 gs is not going to require disruptive CapEx aisle for 2020 beyond? And what's going to be your strategy on 5 gs? Thank you. I'm going to start with this question. I think a lot of the things that we're doing and investing today are working for are pre-five gs. So fiber to the node, more fiber during the backbone, photonics, more towers. So all of these things, we are already investing in 2018, 2017, 2019. So we don't see disrupt CapEx in 2020 with the introduction of 5 gs. I think the CapEx is going to be more or less the same as it has been in the last year. So that's in the CapEx. And then the I think on the M and A side, it could have been a little bit different with shareholder distributions. There's always a little bit that is being done even though we have this deleveraging target. So for instance, we have been looking at some more things that we have done in Eastern Europe. There's a few things that are being done from time to time here in Latin America. There's nothing that is very material as an isolated transaction. I think the last two ones that were announced are very significant to the extent that they are in market consolidation that will tend to improve conditions in the market and that would allow us to very quickly extract synergies from these acquisitions. So I think it's very much a case by case situation, but it's also something in which we are not looking at anything that is value, that is transformational, but it's simply something that we add to the existing footprint that we have, which basically allows us to improve the efficiency of our operations in a given market. That's basically the scope. Perfect. Thank you very much. Thank you. Your next question comes from the line of Leonardo Almas with Santander. Your line is open. Hi, good morning. My question is regarding Telefonica Central America, the 2 countries you acquired from them, Guatemala and Salvador. The first thing is regarding revenue share in those countries. Aside from just taking almost 50% of market share, how much revenue share do you think you can get there? And then about eventual synergies that you could discuss with the 2 operations? Thank you. I don't have exactly the specific numbers. What I can tell you that for us to buy these 2 assets in Central America, it's very important. It's in market consolidation, a lot of synergies. All the market doesn't have a lot of spectrum, all the competitors in Guatemala. So give us the opportunity to give more 4 gs, give us the opportunity to give more data to expand our 4 gs coverage and capacity. So I think it's very important. The spectrum or the license is maybe it's more than what we have, what we buy. So for us, it's very important what we get in terms of the spectrum, subscribers and infrastructure because a lot of this infrastructure, we're going to consolidate and use it in the rest of Central America. So I think it's a very good acquisition that we get with these two companies. Okay. A quick follow-up on the spectrum theme, Daniel. Is there any opportunity for maybe savings since you're acquiring so much spectrum, especially Guatemala, which is a more scarce asset, is there any opportunity of saving, maybe reducing towers or any other type of savings from the spectrum side? Yes, of course. That's the synergies that we're talking about, and we're in the process of doing that. And of course, we're going to to have synergies in towers, synergies in platforms, synergies in infrastructure. And with these synergies, we're going to have more capacity and more coverage. So I think it's very good in market consolidation that we what we get in Guatemala and in El Salvador. Great. Thank you very much. Thank you. Your next question comes from the line of Alejandro Galestra with BBVA. Your line is open. Hi, good morning everyone. Thank you very much for taking my questions. First, the first question is regarding the Disney and Fox merger. Even though we We cannot hear you very well. We cannot hear you very well. Can you talk a little bit louder or Okay. I'm going to speak up. Yes. I'll speak up. My first question is regarding the Disney and Fox merger. Even though we're still waiting for the regulatory approvals in some key markets, how do you think this merger could impact your BP business and especially in Brazil? What do you think are the main driving forces behind the increase in the postpaid subscriber base in most of the countries that you operate? No. Really, I don't have any comment on that. So we buy content from all of them and we I don't have any comment on that merch. Okay. And could you please perhaps talk a little bit about the driving forces behind the increase in the postpaid subscriber base in most of your countries? And how do you see the trend going forward? What we have been doing and our strategy has been having to have the best networks all around the countries, coverage networks, 4.5 gs, moving to 5 gs in the future, have a lot penetration on the smartphones. And that is being very successful for us because a lot of subscribers are coming to our network. Number portability has been good. A lot of prepaid are moving to postpaid to get some benefits from that. And I think this year is going to be more or less the same. So people is using more the phone, is using more data, and I don't see any change on the postpaid base for 2019. So basically, you are not doing anything different? They are just coming in natural? Is that what you say? I don't hear you. Sorry. No, nothing different. Nothing different. So I think difference would be for best because every year, every day, we have a better network, a better quality, more speed, so more coverage. So that will be the only difference than what we had last year. If you could see, let's say, talking a little bit about talking a little bit, sorry, about Brazil, well, our footprint in 4 gs maybe doubled last year. So we have been investing a lot in 4 gs. So and that's what the market is asking and that's what we're giving to the market. So the perception of the brand of Claro, we right now Claro is very competitive in the postpaid market in Brazil, and that's why we have more than 1,000,000 net adds in the Q4. So that's very important. We 3 years ago have a little bit of coverage, but we have been putting a lot of fiber to the node, giving more capacity, more speed, 4.5 gs, and that is helping us a lot in Brazil. We have a very, very I think we have the best network today in Brazil in terms of quality and that's what the Anatel is saying their reports is saying. Thank you, Adrian. Your next question comes from the line of Ernesto Gonzalez with Morgan Stanley. Your line is open. Hello. Thank you for taking my question. My first question is, now that you have requested your PayTV license your Pay TV license in Mexico, sorry, how soon after approval would you expect to be able to offer triple play packages in Mexico? I think we can do it fast. We have the expertise in all the other countries. So if we have some commercial agreements with content, we have fiber to a lot of maybe 6,000,000 houses here in Mexico. So we can do this we can give the service fast if they give us the license, the permission. Great. Thank you. And just a second question. When do you expect to reach your leverage target? Just to have an idea of when we could expect higher shareholder distributions. Thank you. I think, again, it's always a little bit of a moving target because of the exchange rates. But at constant exchange rates, I think that we could be there this year. Great. Thank you. Thank you. Thank you. Your next question comes from the line of Guillermo del Toro with Bradesco. Your line is open. Yes. Hi, and thank you for taking my question. It is related to the fixed business in Mexico. And when looking at the IFT data, we see still a lot of copper based networks. So we were wondering just what is your strategy to compete with players that have more of a cable or fiber based network? And how are investments headed towards updating the network and how to balance that with your leverage targets? Thanks. Well, in the fixed work in Mexico, we've been investing through the years. And as Daniel mentioned, we have 6,000,000 home passes ready fiber to the home. And in the copper, we've been working to getting closer the fiber to the end user. So we have a BDSL technology in a great part of the network. And then we have ADSL 2 plus that is pretty close as well the fiber. So I think we've been working to get ready the network to really handle IPTV in fiber and as well in copper. As you see, the streaming video needs, let's say, 2 megabits per second to streaming video in IPTV. So I think the network is ready to really to deliver these products. Okay. And if I may just have a follow-up on the fixed infrastructure. What is the strategy for the bundled packages you're selling in Mexico considering the current services and the potential authorization for Pay TV as well? Well, we've been reshaping our packages in Mexico. Of course, always focusing and delivering the best speed on broadband. But we've been adding new value added services. You could see our packages includes Claro Video, Claro Ride, Security. We are bundling new services in order to make the proposal more oriented in the market. And in the adding pay TV, as you know, we have the experience of triple pay in different countries. So we don't have a proposal right now. We will wait until we have this commission to go. But we have the experience in other countries that for sure will be used in Mexico in the marketplace. Your next question comes from the line of Anze Brago with JPMorgan. Your line is open. Good morning. So I have a follow on question to Rodrigo, which is about the Mexican ARPU. In fact, I saw a deceleration in ARPU that in the beginning of the year was growing around 11 percent and now it's growing about 5%. What explains this deceleration during the year on the ARPU? Is there any accounting or is this more like a market? No, no, nothing to be on the accounting side. I think it's a different base. When you are at 120, then you can grow faster than when you are almost in 150. So I think 150 is a good ARPU for country of Mexico where we have a lot of prepaid subscribers and people is using. I think it could grow a little bit more as prepaid subscribers start to use more change for smartphone and use more data. So I think depends a lot it's going to depend a lot on the economy. If the economy of the country grow, I think we can grow also our ARPU. So competition also, I don't know exactly what those competition is going to do in the future, difficult to do, difficult to say and to understand. But I think all overall, Mexico is doing fine. We have very, very competitive prices in Mexico. So it's one of the more competitive countries in Latin America, maybe in the world. So it's the prices are very competitive. And I think with as I said, with the network, with the coverage, with the capacity quality that we have, I think we can gain more high end subscribers than can help us score the ARPU. So I don't know, Carlos, if you want to. Sure. Only one thing, Javier. I mean, if you look at ARPU in Mexico, for the full year 2018 over 2017, the increase was 8% exactly, okay? By the Q4 of 2018, it was 5.7%. But this basically means that this deceleration of ARPU growth is, to some extent, related to the change in the subscriber mix. Because if you've been looking at how fast we are growing, subscriber mix because if you've been looking at how fast we are growing postpaid and how fast we are growing prepaid, which is the first slide that I showed today, you will see that we are seeing increasingly a change in the mix of subscribers. So that already has an effect on the ARPU, which is the average of our base. So as Daniel said, always, there's a tendency for things to decelerate when you get to a certain level. But on top of that, I think that we have this expansion of prepaid revenues and prepaid clients. I think that it's very relevant to look at the growth of prepaid revenues, which I mentioned at the beginning of the call, have been growing for the first time in various quarters. They were growing faster even than postpaid revenues in Mexico, okay? So I think there's a lot to be said about this. I think there's a lot to be said about continued adoption of smartphones by prepaid. We've already seen a very significant surge in the adoption of prepaids in Mexico. But I think that we are still yet to see we still have yet to see part of the increase in the adoption of smart devices by prepaid, which is important from the point of view of prepaid clients and our interest in prepaid clients. And talking a little bit sorry, talking a little bit about the ARPU, I think you also very good news on Brazil. I think in Brazil, we have been able to grow our ARPU to BRL 17.5 In Q4 of last year, we have BRL 15.8. So we have been growing. We think we're really focusing in good subscribers, in subscribers that consume, who spend, and that will help us the growth in the ARPU. Now all around, I think, all overall, we have been growing our ARPU, Mexico, Brazil and other countries. Thanks a lot, Sameh. Thanks a lot. And if I may, second question would be Alexey. We saw in Brazil for the first time in a few quarters positive quarter over quarter growth in the wireline. So you reverted the quarter over quarter declines we have seen. What's behind this improvement in the wireline revenues that we saw in Brazil? Is it DTH, which is performing better or having less pressure? What is going on? Remember, Andre, when I presented the chart from Brazil, I know you got to see the charts. But you see that we show on the one side the service revenues on the right, okay, which are postpaid, prepaid and broadband, fixed broadband. They were all exhibiting positive growth year on year, and they are all showing very significant upward trends. And then the ones that we have on decline were fixed voice, which has a lot to do with long distance revenue that are being wiped out by technology, WhatsApp and other things. So they've been declining steadily. So the rate of decline has not increased. It's But the one that has also been a drag on revenues on the fixed line side was pay TV, and that seems to have stabilized and seems to be turning up. That's what appears in the last quarter. So yes, I think we see 3 business lines that are growing well, postpaid, prepaid and the fixed broadband. And then we see 2 that are a drag, but one of them likely to remain a drag, which is fixed voice. But the other one, Pay TV, probably becoming a positive contributor to growth down the road. Thanks a lot, Carlos. I was just requesting if someone can send us the presentation because unfortunately, we have not received the presentation, so it was harder to follow. Okay, sure. We will have it sent to you. But I think you can download it directly from the webcast. It's already in the webcast, Andre. Your next question comes from the line of Julio Arcega Royal Bank of Canada. Your line is open. Hi, good morning. Thanks for taking my question. In Colombia, we're seeing that some of your competitors actually they are pushing postpaid products. Have you seen higher demand for postpaid products in this market? So basically, can we see in the future a prepaid to postpaid migration process in Colombia as the one that we saw in Brazil? That's my first question. And my second question is regarding Brazil FTTH. Some of the competitors, of course, they are increasing their FTTH footprint. Can you give us some color on how the company is facing the competition against FTTH players? Are you upgrading your cable network to FTTH when your competitors deploy FTTH in your footprint? Thank you. Well, if you see the in Brazil, they segment the broadband in 2 markets, high speed broadband that is it's a product that is more than 34 megabits per second. And if you look at our market share on that market, we have 54% of market share. So we are competing against the companies that are building fiber to the home. So I think with DOCSIS 3.1, we have a good product to compete in that market. So we have a good market share in ultra broadband that they call in Brazil. So up to now, we feel that the technology that we have to defend ourselves against the fiber. But the new competitors, the ones that are growing is called the small competitors that are outside of our footprint. So they are selling broadband through radios or some of them as well with fiber, and they are growing pretty good in the marketplace. So and when you look at the combination, we are still having a good market share in fixed broadband. And in ultra broadband, we have 52% of market share. We're growing and adding something on Huatasca is Part of our investments in cable is to modernize, always give more speed our cable. In all the new cities, we are using fiber to the home test, of course. So all the new development that we are doing in the new cities, we are using GPON technologies. Okay. Thank you. And the question regarding the potential prepaid to postpaid migration in Colombia, as in Brazil, is it possible? What have you seen? Yes. I don't think there's something special in Colombia. I think all around Latin America, I think all around the world, they are moving from prepaid to postpaid. They start with the prepaid and then they start to use more and when they want to add something or applications or more data or other things they are moving to. So there's a lot of our subscribers from prepaid that are moving to post paid. So there's nothing special in Colombia, and I think it's similar to what we have been doing in all the other countries. Okay. Thank you. Your next question comes from the line of Mauricio Fernandez with Merrill Lynch. Your line is open. Thank you. Good morning, Daniel and Carlos, Daniela. Quick question on still on Brazil, everybody is expanding fiber on the telcos, I mean they're expanding fiber to Oscar's comment on the expansion of the smaller players as well. With Net having very large footprint, but cable, what are your plans to basically be able to remain competitive in broadband? Is it to have fewer homes or fewer customers addressed by node? Do you plan to deploy fiber to the home at the end of the day in a combination of cable you have? So I just wanted to hear your thoughts there, please. Well, as you know, in Brazil, we have this cable that is called HFC, that is a hybrid fiber and copper networks. So what we've been doing is using DOCSIS 3.1. So we are breaking up the nodes to get the speed. I don't know if you hear the news, but with TOCSD.1, you could deliver 1 gigabit speed per customer. So I think it's a great technology. Of course, you need to upgrade the nodes. As you mentioned, we need to break the nodes. But it's similar that you need to get fiber, the closer fiber. And another technology that is coming in place is called DCCAP that you could combine HSC networks and as well GPON networks in the same node. So that's a new technology that we are testing. So we need to get with fiber to the home that we don't see in the near term. But there is this new technology that allow us to combine both technologies. And all the new cities that we are doing in Brazil, we are using GPON. We are using fiber to the home as well. But we feel that both technologies are very competitive. So we don't see that one is an advantage of the Yes, in one of the and we've been getting closer fiber to the node. So we are at 200 meters from the houses, so with the HFC network. Yes. So that's Got it. And one more, if I may, Oscar. Have you seen have you either custom not from satellite, satellite, I think it's rather obvious, but from cable, you've seen customer disconnections, maybe due to OTT events or if you've seen customers trade down to lower ARPU or lower packages as a result in the last, say, 12 months? No. What we've been seeing is that the market is need is asking for more speed. You see the average speed 12 months ago in Brazil was 28 megahertz and now it's close to 40. So what we see in the market is that the market is asking for more speed. And I think the situation is video streaming in the house is my video uses 70% of the network. So and it's coming more HD, it's coming for sure, it's coming more 4 ks and the requirements will be more pushed to higher speeds. And we and Mauricio, we're giving more applications on that. We have now we have Claro. So we have a good bundle and a good package. But of course, I think there's a little bit of pressure because of a lot more offers and content that we're having, but we feel very competitive with our product in Brazil. So we are also having Well, the combo, we're having also good packages, lower price packages than what we have today to compete. And well, but we feel very good. The quality of our products are excellent and the perception of the people of net is very good also. We have more than 48,000 titles between now and now our product and Claro TV, and that's also very competitive against that. And in the future, we're going to give also bundle Netflix inside our product. So I think we're really competitive. Okay. Thank you all. Everyone. Thank you. Thank you. Thank you. Thank you. I will leave the call to Mr. Daniel Hajj. Thank you for being in the call. Thank you, Carlos, Daniela, Oscar. Thank you very much, everyone. This concludes today's conference call. You may now disconnect.