Oi S.A. (BVMF:OIBR4)

Earnings Call: Q1 2020

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Jun 16, 2020

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to OASTS conference call. To discuss the first quarter of this call. This event is also being broadcasted simultaneously on the Internet via webcast, which can be accessed on the company's IR website. Dotcom.tr/ir, together with the respective presentation. I would like to inform that during the company's presentation, all persons will be only listening to the call. We will then begin the Q and A section when further extensions will be given. In case you need assistance during this conference, Please request the operator's help by pressing star 0. We also would like to inform that the conference call will be conducted English by the Ministry of the Company, and the conference call in Portuguese will be conducted via simultaneous translation. This conference call may contain some forward looking statements that are subject to known and unknown risks and uncertainties. That could cause such expectations to not materialize or differ materially from those in forward looking statements. Such statements speak only as of the day they are made, and the company is under no obligation to updated in light of new information or further development. I will now turn the conference over to mister Rodrigo, to you. Thank you, and good morning. Thank you, everybody, for participating in our call. And, as you know, we have postponed this call, so we could combine our first quarter 2020 results. Also with a summary of the JR plan amendments, which we just filed last night, paving the way we believe for new GCM and a new, future vision for the company as we have been telling since we, first announced our strategic transformation plan. We really believe that after announcing our transformation plan last year, the execution has been very solid And now what we're doing is we're taking a significant step towards moving the company, through long term sustainability. With a bold proposal, which we are confident, which will be well received. So let's start by moving to page 3, where, we look at the the first quarter results. Once again, we believe we achieved solid results in line with the plan expectations. And I believe that the first highlights continue to be the fiber results. At the beginning of April, we reached 1,000,000 FTTH customers reached in a milestone, which advanced the customer base for fiber, almost 900,000 subscribers during the year. And now we continue to maintain a very fast space in homes connected and homes passed. Just in April, we achieved a 97,000 new FTTH Homes connected. This, also led to, continued recovery in, the fiber revenues, looking towards the future in terms of compensating for the declining copper revenues. And we will see that later on. Also, on the postpaid, some highlights. We have maintained a very good, results in the postpaid, and, we 12% annual growth in postpaid revenues and a very good market performance. And finally, in terms of our B2B and wholesale, We also, continued the path that we announced in our plan. And in particular, in B2B, one highlight is that our IT corporate revenues continue to go up, significant, many, many shifting revenue profile, which have, a set would happen. In terms of funding, we had already highlighted this in our last call, but it's always worth noting that, the first quarter saw a significant improvement in cash position given the funding initiatives that we have, not only in the asset sales, but also in closing a bridge loan at the beginning of the year. And on the 3rd bucket of efficiency and simplification, we also continue to generate significant savings and in line with the target 40 year And this can be seen in a 7% reduction in our OpEx year over year. Overall, this all led us to the last pillar, which are the strategic options. Actually, this is where we advanced the most during the quarter, as we prepare the new vision for the future. And as we have been saying since last year, we paved the way for a new plan amendment, which we represented to a general credit meetings at the beginning of the second half. And this calls for everything we have been talking about in terms of a market process for, selling operations. For, doing a new vision for the company for having a full regulatory campaign in place for resolving our copper, issues and our concession issues. And in reality, for advancing the company towards where we believe it should be. So let's now take a deeper look at the operating results for the quarter before we actually talk about plan. Moving to page 4, we can start with the fiber results. And, the fiber results continues at a very strong pace. As we mentioned, we already achieved the 1,000,000 homes passed and almost 6,000,000 homes connected. Those are significant numbers. And if we look at the results expected for the end of the year, we said we would be in the range of 1,600,000 to 1,800,000 homes connected we believe it's possible to even, surpass the 1,800,000 getting closer towards the 2 million homes connected at the end of the year. And all of that continues to happen with an ARPU, which is in line with our plan. We, set in our plan that we would have an ARPU of close to 85 we have achieved the 84.5 HAIs in the first quarter 2020. And all of that has to be seen in the light of having new customers on board. So with all of the impacts of our pro form a revenue as we continue to connect a very high number of customers. Confirming our plan view. This also has improved significantly, our fiber revenue numbers. We are now over $200,000,000 in fiber revenues. And this is, a 700% increase, obviously, following her closely the path, of increasing dramatically the numbers of home homes connected. And when we look at the revenue breakdown for fiber, We see that even though we had an 8x increase in fiber revenues from first quarter last year, there is still a big opportunity here to continue increasing these revenue numbers because our B2B component of these revenues are still very small. So we see that in addition to all of the residential revenues, we have a lot of opportunities on the B2B revenues as well. Those results, they actually confirm our view of, resuming broadband competitiveness. And, as we can see next, we see that everywhere we bring FTTH, the results improve very quickly and dramatically. So on page 5, you can see that, not only, our results in terms of homes passed and homes connected keep improving, But when we look at all of the new cohorts of fiber deployments, we see that, the percentage penetration continues to improve in the new cohort in line with what we said would happen. So much so that, in our plan, we said that we would get to a 25% penetration rate by the end of 3 years. And, with our current plan, we are already getting to levels of 20% very soon after launch in a new given city. So we believe we are solidly in lines to achieve the 25% take up rate, which we said was a staple of our plan. After that, what we saw is that, when we were looking at our project. We started looking at the benchmarks for fiber implementation. And, in reality, after, the first quarter this year, we believe that we have become the benchmark for homes connected per quarter. As you can see here, we are comparing our numbers, both with the large US players as well as, the largest local players for fiber connections And we are by far the operator with the largest number of homes connected in the first quarter, almost twice the number of the largest, local player. And the pace continues to pick up, and we believe that even with all of the pandemic results, the fiber results haven't slowed down as we will see a little bit later on. Due to those results, we can see that in every city we enter, revenue continues to go up even with a sharp decline in fixed voice. So we can see in the cities where we have FTTH, our broadband numbers in terms of revenue are already going up. And, obviously, this continues to happen despite the sharp decline in fixed voice. And also in copper broadband, which we believe, will continue going down in line with the rate of decline of fixed voice. We recently launched, in addition to our current, Staple 200 meg offer, we recently launched the new 400 megabits per second offer keep leading, and this keeps changing our revenue profile as we can see on the next page. So on page 6, we can, reflect the results in terms of revenues for the quarter. And as a expected, and as I mentioned multiple times, we're still in the middle of a revenue shift. We can see that our our copper revenues declined sharply, and this is a result of a structural transformation of, trends both for consumer and for technology. And so we had a minus 27, almost 28% decline in copper revenue, as well as a minus 23 declining broad in revenue for copper, coupled with a slight decline in DTH revenues, even though it was less than market average. And all of that starts to be compensated now by the sharp increase in FTTH revenues, of plus 700% as we have already mentioned. When we look at the total profile of our revenues, then we can see that obviously, we are still impacted while we grow our FTTH base with a minus 12% overall residential revenue decline. But, all in all, we see that our fiber revenues now start to be very significant and in line towards the path of continuing to be able to, replace our lost revenues in copper and eventually bring residential revenues back to growth. In the first quarter of 2019, our fiber revenues represented a little bit over of our total residential revenues. In the first quarter 2020, it already represents close to 12% of all of our residential revenues. So very strong performance in fiber. And, we should remember that fiber is the core of our strategic plan moving forward. So those are very encouraging numbers. Well, let's talk next about our mobile results in page 7. So on page 7, we can see that the end of the first quarter started to show the first impacts, in the mobile segment due to the COVID 19 pandemic. Both in sales and in revenues, especially in prepaid. And we're going to talk specifically about those impacts a little bit later on down the presentation, But despite those, initial effects at the end of the quarter, we believe we had very good results overall in mobile once again. Starting with postpaid, we can see that we continue to have a significant increase of our customer base. We had percent increase in our postpaid customer base getting very close to the 10,000,000 subscribers. And this came with a reduction in churn and this game, obviously, with a much better revenue mix in terms of post versus free. Our customer revenues in postpaid continue to increase at a very fast pace over 12% increase in customer revenues from postpaid, And this, adds to us gaining two percentage points in, market share almost from first quarter 'nineteen to first quarter 'twenty. So dramatic increase, especially in a very competitive market, where we continue to show signs of a very strong performance given our innovative efforts and our smart, offers, for, for postpaid. On the prepaid, we know that the market continues to go down. And in particular, at the end of the quarter, and, most likely, as you we will see in second quarter, obviously prepaid was, hardly hit by the pandemic. But despite, the prepaid market going down, we were one of the operators which had the, the, the less dramatic decline in prepaid And this led us not only to maintain our market share, but to increase it slightly, even in a scenario of our contraction in the prepaid market. All in all, This led to our customer revenues being stable in terms of mobility, and with our ARPU going up due to the postpaid performance. So, let's look now at the next areas of focus B2B and wholesale on page 8. On page 8, we can see, both the results for corporate as well as wholesale. And, in one case, we already started to see the impact of voice already at the end of the quarter in the, in the case of corporates, both in the large corporates as well as in, the small and medium enterprises. With deep sea, very sharp impact in voice consumption. And those, obviously, still represent a significant amount of our B2B revenues. And, does this led to a minus 10% decline in B2B revenues overall. But when we decompose these revenues, we see that sharp increase in IT revenues. As you remember, we are repositioning our corporate offers with OI solutions And the OI Solutions, approach focuses, very deeply on our IT revenue, increased And, the results are coming. We had a close to 40% increase in IP revenues in B2B, and we believe this will help us not only to stabilize the B2B revenues, but eventually to bring them up as we continue to deregulate the data offers. On the wholesale space, this, a quarter marked a return to growth for wholesale as expected as we started to work on our new on our new offers of fiber to the ISP, fiber to the tower and fiber to the city, in addition to launching our franchise project where we just started a pilot, with the mob, telecom for franchise rollouts. All in all, our wholesale revenues, grew close to 7%. Marking the return to growth and, the good path towards our wholesale strategy that we have highlighted in our plan last year. So the plan results are in line operationally with what we expected on the business front, obviously with the small impact from COVID, that we, may expect to see in the second quarter as well in terms of corporate. But, all in all, in line with the, the strategic direction we back those businesses to be going. Now let's go to, our cost efforts in the next page. So on page 9, without getting to a lot of details, we can see that we have progress, in the metrics in pretty much all of the areas where we expect to cost reductions, sales and marketing, processes, business support, IT, and network and operations. Some metrics are worth highlighting. In particular, when we look at the simplification of our business, we see that we're almost 50% of the way toward advancing our customer base to flat rate, plans. We have, a 23 percentage points increase, a target for the end of the year. And we're halfway there in Q1, meaning that most likely we'll be able to achieve those metrics at the end of the year. As well, when we look at, the call volume in human customer service, we pretty much already achieved in Q1 alone the results for the entire year. So we are 17% down in terms of all volume and human customer service. Same thing happening in terms of the percentage of digital invoices in line with the plans for the year, which call for a 14 percentage points increase, and we continue to see improvements as well in terms of bad debt as percentage of revenues where we back to reduce 2 percentage points. We're slightly ahead of the curve with 30% achievement in Q1. We're 90% of our achievement in terms of percentage of our agile IT projects, we're a 100%, meaning that we already achieved the entire result expected for the year in terms of repairs by FTTH customer base, halfway there in terms of, the impact of, the use of our digital technician app in the first quarter alone. And now when we look at the second quarter, the results will probably be much better than that given the sharp increase in usage in all of our self-service applications. And so all of our metrics when we look at the details continue to show good progress. Those, progresses, in the metrics actually show in our OpEx. And, on the next page, on page 10, we can see that, all OpEx lines are down. And, this allows us to allow this to have a 7% decline in OpEx from Q1 twenty nineteen. And with that, we went back to improving EBITDA margin again from last quarter with an EBITDA margin that is approaching 32%, of all of our, OpEx efforts it's important to see that, we obviously know that our bad debt lines are, are something to be looked very carefully with all of the pandemic facts. But we believe that, even with the, impact of bad debt, we were able to contain it, pretty well given our, efforts on, the very good, and smart postpaid offers that we continue to maintain. On the next page, let's look then at our CapEx results for the quarter. So on page 11, in line with the the strategic plan that we have highlighted in line with the big shift that we'd said we would do in CapEx. Q1 was no different, and in reality, it accelerated this dramatic shift in CapEx deployments from, just a year ago. When we look at, our results in the first quarter of 2019, We had only 33% of, our CapEx applied to fiber and 30%. Yes. Almost a third of our CapEx applies to copper maintenance and copper CapEx deployments. At the first quarter 20, we see a dramatic shift already 60% of our CapEx went to the, to the deployment of fiber and only 15%, to copper. So a 50% reduction of the percentage of our copper CapEx. Obviously, we believe that we still need to continue evolving this percentage because, even though 15% is a big reduction from last year, we know that this, represents still almost R300 $1,000,000 in copper investments. And most of them to do regulatory obligations that we expect to manage bringing down with our our plan, we announced last quarter, which we call the copper de averaging. Finally, when we look at the CapEx and what, it allows us, going forward, specifically in terms of fiber, We see that we have increased our presence in terms of number of cities at the end of the first quarter to 112. We expect winter close to another 20 cities by the end of 2020. And, in particular, what our CapEx in fiber has allowed us is to have a very fast reaction time, actually 20 days time to market to start an FTTH commercial activity in a non planned city where needed. And we saw that in a city of these monopolies in Minas Gerais were in under 20 days, we were up and running with our commercial strategy to react to, competitive actions. So next, let's see after all of the results, in terms of our revenues, in terms of our costs, in terms of our CapEx, what the first quarter meant to cash. Moving to page 12, we can see that in terms of cash, we had a much improved short term position for the execution of our strategic plan. We ended the year with a cash position of 2,300,000,000 And after several events, in Q1, we ended the quarter of us with $6,300,000,000 in cash position. A amounting, in particular, to 2 big cash inflows, 1 for a bridge loan of BRL2.5 billion approximately and the other coming from the sale proceeds of Unitail, which, allowed us, to, consider of $1,000,000,000 out of which most of it was already received $1,000,000,000. And and all of that We continue to focus on, the noncore sale asset, asset sales processes. And, we talk a little bit more about those, in our GCM plans and the amendments we'll talk about. In terms of that, 2 effects actually happened during the quarter, which led our net debts to R18.1 billion dollars. The first one, was obviously, the, the assumption of the bridge loan of 2,500,000,000. And the second one, was the FX variation, due to all of the, fluctuations of the dollar exchange rate, in the middle of the pandemic up and down. With an impact at the end of the quarter of about 3,400,000,000 in terms of FX. But for the short term, even with this FX, we have maintained a short term hedge policy with all of the UNITEL proceeds that cover us, 99% of our short term, debt, exposure. Next, let's talk about the pandemic effects. And to begin with, on page 13, we had to talk about what was our strategy to face the pandemic. And, as we highlighted last quarter, the very first measure we took was, and the first priority we had to have was to protect our employees. And we did a number of things to protect our employees, starting with, a home office policy that cents close to 11,000 employees working remotely in the 1st 2 weeks of the pandemic effect in Brazil. And, obviously, in addition to that, we took a number of measures to protect our field personnel and our call center personnel And just as an example, we had acquired over 400,000 face masks and 25,000 liters of alcohol gel, to be used as EPI on a daily basis. In addition to that, we have launched an app to monitor employee health. We do constant employee health surveys to, monitor and measure everything that's happening with our team. And so far, the response has been very good Obviously, we know that, normality will take a while to return, but we have already developed a plan of return with several phases and having in mind, in particular, the most vulnerable employees and, been, doing everything in our power to protect those. Next, obviously, we focused on our operation and on our customers. And, first, we looked at our operation. We took all of the measures. It took to maintain our operations running smoothly. And now after almost 3 months, we can state very firmly that we are operating 100% on a normality. And even with all of the traffic increases, Our networks continue to perform extremely well. In reality, when looking at the results, we see that OI was pretty much one of the only operators that didn't have any impacts in terms of operations because we prepared for that. On our customers, we did a number of things, not only to reinforce our, virtual offers for technical assistance, for self-service, for getting in touch with customer service, but also in terms of offers, for payment alternatives and for alleviating a little bit the impact given all of the restrictions in terms of both mobility and reduction of income for everybody. As we mentioned at the beginning of the pandemics, we released the channels in our, CV offers. We increased the payment dates, for, postpaid We included the different data bonus packages on our prepaid packages. And as such, we believe we have alleviated a little bit the impacts to our customer base. And finally, society and government were also on the focus of our activities, especially by, providing access, and 0 rating for a number of government initiatives, in particular, the 0 rating to the government's emergency social income distribution program, which helped, bring the funds to, an, a, a big number of users with our mobile phones. And in addition to that, we have also took some steps to participate in corporate social responsibility efforts in particular, with our participation in the Zapido Bay initiative, which is a social digital wallet that has, brought funds to more than 8000 families in the most vulnerable areas of Brazil. But after all of those actions, what were the impacts to our business as well given the pandemics? We can see that in page 14. And first of all, we know that, obviously, the pandemic's brought impacts to our business, in particular, on prepaid and collections. Looking at prepaids, we know that the top ups were impacted, but the impact was reduced after emergency relief funds were distributed by the government And we can see that in the profile of all of the weeks when we compare January with April and then what, started happening after April. When we looked at, the beginning of April, end of March, beginning of April, we can see an almost 20% minus 18% top up results Those results continued negative in weeks 2 3 of minus 14 and minus 8. But in week 5, at the end of April, beginning of May, we saw a slight recovery owing to, the emergency relief funds of plus 2.5%. All in all, We see that the, top ups were impacted and prepaid was impacted, but, during the month of April and in particular, at the end of April, beginning of May, we started to see those results going back up again. In addition to that, we saw that the digital top ups increased dramatically compared to January, almost 60%. And the mix of top ups in digital channels also went up to 31% went up to 31%, compared to a 17% in January. So significant impact, of our digital offers. And, as we can say, a very quick digital transformation closing of our stores and 45%, which was not, very different for the entire industry as we already seen. It came with a reduction in churn as well. So our voluntary churn was reduced by, pretty much the same amount, minus 45.8%. On B2B, as we have already mentioned, we faced an impact in the consumption of voice, and we also faced an impact in terms of situation starts to go go back to normal in the second half. But lastly, on fiber, even though in the middle of all of this crisis, our fiber continued to show stellar results. We, continue to increase our growth sets in April where we reached a 120,000 gross adds. Our churn continues to go down, and we continue to have a record month in terms of sales. Obviously, this is, an impact of, the, need for broadband during the middle of all of this rises. But also we believe because our fiber product starts to be well known, starts to be appreciated, and starts to become a staple as pretty much one of the best, if not the best broadband offer in Brazil. With all of that, and I already mentioned, our network resilience it's important to mention that even with the 40% increase in all of our traffic, our networks remained okay during this whole period. And finally, in terms of collections, coming from all of this, we can see that we did have some impact in collections, in March, April compared to, what we will it was before minus 6 to minus 7%. But the beginning of May started to show some recovery of +3 to plus 4%. So yes, the impact was there, but we braced ourselves. We prepared our networks. We prepared our team. We, digitalized and accelerated the number of digital initiatives in the business. And, up to now, obviously, it's not without impact. But, we, managed to minimize pretty well the impacts of the pandemics in the business. So next, Let's look at the summary of the quarter before we move on to talk about the plan amendments and, the GCM that we see coming. In summary, we believe we continue to execute on the plan working on all of the multiple funds of, funding, operations, and efficiency and simplification. But when we look at the strategic plan pillars that we announced last year, We said that we had 3 key pillars of funding operations and simplification, but we also said we had the 4th pillar, which were the strategic options. In our last call, we said that we were preparing, preparing to file an amendment for a new general crisis, meaning expected to be, held in 60 days. And actually, this is exactly what happened last night. We filed our plan amendments, for a GCM, and this actually prepare us for long term sustainability And, we will talk then next about, what does this mean for the company? What is the plan amendment that we just file? What could we expect from the GCM? And, more importantly, where do we believe this will take us long term? So moving on to talk about our plan amendment and our GCM, let's go to page 17 where we start to tell a story of, how did we get here and where are we going? And, in order to understand the plan that we just filed, we need to understand the journey that this company has taken since filing for, judicial recovery back in 2016. And obviously, it was not an easy journey, especially because prior to filing for, the judicial recovery back in 2016, we knew that this company had multiple challenges. But in reality, after that, we see the transformation taking place in 3 phases And the 1st 1st phase was exactly not only the filing of the the judicial recovery, but the plan that came out of it and was approved at the beginning of 2018 and the beginning of the transformation. The 2nd phase of the plan took place when we announced our strategic transformation plan in the middle of 2019 and continuing with the execution in 2020. And the 3rd phase is actually looking towards the future in completing all of, the reconfiguration efforts and operations that we expect that we should take for us to maintain sustainability and look at value creation in the future with the consolidation of a new strategic model. So let's look in details with all of those phases and where do we believe they will need us. On page 18, starting with phase 1. Well, phase 1 was pretty much where we overcame important challenges in the contact of the judicial recovery. As as you all remember, when the company filed in 2016, It was a very tough period of, getting to an actual plan between 20162017 and the period was a period of, enormous challenges for the company. And the first one was survival, being very direct it was a matter of survival for the company of short term financial feasibility of operational continuity and this all required a governance change and a change in capital structure. And this was addressed with the plan that was approved at the beginning of 2018. It was the possible plan by that time, and the plan was executed. They the the issues were addressed And this is what allowed the company to start building a vision for the future. The judicial restructuring of Dabs in cash brought the cash protection with a debt reduction of, 35,500,000,000 in face value from almost 15,000,000,000 to, close to $14,000,000,000. It provided, in the beginning of 2019 with a to a $4,000,000,000 capital increase It brought the new governance to the company. It, prepared a company to be able to sell its non core assets. And overall, it also brought operational stability and recovery with a gradual resumption of investments. If we recall, back in 2016, there were numerous challenges also on the operational front. And those 2 years actually stabilized the company improve the operational the operations and allow the company to resume CapEx investments. When we look at 2016, It was almost an all time low in terms of CapEx of $4,800,000,000. It went up to $5,600,000,000 in 2017 and back to $6,100,000,000 in 2018, So it's still shorter where we believe the company should be executing CapEx, but gradually resuming CapEx, which is obviously key towards the future. And in terms of EBITDA, obviously, the EBITDA had been falling for a long time, but, between 2016 2018, this this rate of decline of EBITDA was alleviated a little bit given, all of, the effects of the plan. But after the plan was announced or started to be executed, with a lot of success, we should say, significant changes, both in the technological and the consumer environment and a delay in updating the regulation, led to the need to evolve the plan towards a real strategic transformation of the company. So the plan needed to be adjusted. And this is what happened in phase 2. So moving toward towards page 19, We can see that when we announced our plan, in the middle of 2019, we had 4 key components to execute And the first three dimensions of the plan were, to be executed already in 2019 2020. Which were asset sales, funding and cash to begin with, a strategic transition of the model, and a simplification and operational efficiency of the company. And this plan had as objectives. 1st, look at medium and long term sustainability. We should now be looking not only towards very short term, survival, but towards medium and long term sustainability. We also should be looking at short and medium term execution. So what we should be doing next immediately to be able to allow the company to move forward. Obviously, we, looked at funding and cash for investments in the transformation of our strategic model. And we have been executing pretty well on all of those fronts. So just remembering what we did here in terms of asset sales funding and cash, and we already talked about this numerous times, we had the unit sales sale with, with with, 1,000,000,000 in proceeds out of which 920,000,000 were already received. So we now uh-uh, have only 2 remaining installments of 40,000,000 to be received, and, they have been paid pretty much on time. We were able to secure a bridge loan at the very beginning of this year of a 2,500,000,000 ais. We continued with the real estate sale processes. Which, have already achieved a mark of 200,000,000, in particular, with 2 large pieces of real estate in, Hire Dejanejo and Santa Catarina. We were able to amass $3,100,000,000 in PSCOFINS credit with an estimated realization of a $100,000,000 per month, and this is, continues to be in progress. This is already being taken. On a monthly basis. And we were able to bring in the Sysdell proceeds of close to $670,000,000 of surplus distribution which has been paid in 36 installments of, close to 20,000,000. So in terms of asset sales, obviously, we still have many things to do But, we pretty much came close to 80% of the way, and, this was key to, securing this, short term cash position that is allowing us to execute the plan. We said that we needed to do a strategic transition of the model. And what does the strategic transition of the model mean It means that we had to look at each of our business components, in a separated way. We first had to look at what would be the core components of the business towards the future. And it all started with fiber. Fiber is what will allow us to, replace the entire copper revenue that's and sales and operations initiatives to bring our fiber business up to speed. When we announced our plan, at the middle of 2019, we said that we wanted to reach a 25% take up rate in 3 years and that we wanted to reach, almost 2,000,000 homes connected by the end of 2020 that we want to get to close to 4,000,000 homes connected in the 3 years of the plan. And members seemed very ambitious. After all, when we announced our plan, we had a a a very small amount of fiber customers and our plan was improving. But the fast forward, 1 year from that, we see that the execution has been there. We have made a transition. We know that the core business look of the company is working. The results have been stellar our numbers continue to improve quarter after quarter after quarter, even in the middle of one of the biggest prices that, we have seen in the next 100 years. And so we believe in the strategic transition of the model based on fiber, in particular, based on FTTH and residential broadband. But fiber also allows us to look at B2B and transform our B2B businesses from just being based on the old, a regulated copper, a product towards new products based on fiber, based on IT, and this is what we did when when we announced Star OIS Solutions. By announcing OIS Solutions, we started to shift the profile in B2B sales. We started to build a future towards understanding what will be required by our B2B customers, both large and small, and we started to execute. We looked at wholesale, and we realized that our wholesale has to be increased. It has to be accelerated. In the past, this company had a history of being a very important wholesale provider and still remains the largest and more important wholesale provider in the country. But we should accelerate the wholesale business because, we we should use our infrastructure as our key differential going forward. And, as we have, stressed and highlighted multiple times, We do have the largest physical infrastructure in the country in particular with fiber, and all of this is happening. Together with those 3 components, we also said that we would sustain the value of our mobile, and we have sustained the value of our mobile. Not only we have managed to achieve significant and impressive results in postpaid, but we have done that by maintaining the numbers credible player in mobile. And now with that, we believe that in the last 2 years, we have actually increased dramatically the value of our mobile business. And finally, we'll have to look at the, the areas where a reduction was coming either because it was a structural trend or because it was something we had to do, for our strategic plan going forward and our cash consumption and our economic value, going forward. And those were on the DTH side where we see that, a trend was coming, and we had to stop injecting cash in this business and convert all of the content efforts towards IPTV, which by the way is being done. And in particular in copper. We know that copper with fixed voice and copper broadband, is going down. It will continue to go down but we had to replace all of that with the 3 key core components of our business. And this is being done. So we believe we are, well into the middle of the strategic transition of the model and it's working. And finally, on the front of simplification, operational efficiency, we talked about this numerous times and the results are coming. As you see, the OpEx numbers continue to be reduced reduced on a quarterly basis. And we are focusing not only on, reducing OpEx on pretty much all of the operational fronts, but also on 2 key important steps for the company, which are a new structure, a simplified structure for the company given the core of our future. And also in a very, very targeted copper cost reduction project, all of the averaging project, where we start to to roll down and actually shut down a number of copper operations that don't make sense anymore consolidating users into stations and using alternative, technologies to reduce our copper exposure. And in reality, starting to look through a winding down the copper business which we believe will no longer be here, in a number of years to come. So with all of that, with our, execution actually going well, we could move to phase 3 of, the plan, which was the long term vision for a new company. And this has been, exposed on page 20. Phase 3, which start today and, actually goes well into 2021, is that with the execution adjusted to the challenges, Our transformation can continue toward a long term vision. We know that the environment has changed dramatically, so regulatory changes started to occur, but they're still in process. We've seen this acceleration of, technological consumption trends, as we mentioned. We know that the demand for high speed broadband continues to keep pace, and we need massive investments in fiber and infrastructure. Also in preparation for 5G is a very important infrastructure provider. And we know that, COVID-nineteen has impacted the economic environment But in reality, maybe with the potential opportunities in the recovery. And in the middle of all of that, we know as well that we need to optimize the company's financial model for the long term. We have adjusted the operational model pretty well, and we believe we have reached the execution and we will continue to execute on our operational model. But we need to optimize the company's financial model for the long term as well. With that, we believe that the long term strategic vision for the company brings a reconfiguration, it brings a new business model, a new company it will bring a new financial structure and a new operational structure. And when we look at how to execute that, we focus on fiber We focus on the residential business, corporate governance, wholesale customers, and we introduce a structural separation model, which we'll talk in detail in just a couple of moments. We expect, based on our plan, to be able to consolidate our mobile operation with the potential sale of the mobile business, we expect to evaluate partnerships for the evolution of TV and content And finally, we expect to get flexibility to execute the plan. And with all of that, what is our vision? In the next page, you can see what is our vision strategy and execution components. And it all starts with the vision, which is to enable the creation of the largest telecom infrastructure company in the country. At the same time, Massifying a services operation that bring fiber optics broadband, 5 g, and business services to the entire country. This vision is supported by 3 strategy pillars, The first one is that we have to have long term sustainability. And this long term sustainability will come with a new company model which has investment capacity, which has revenue generation potential and a long term sustainability. Next, we have to look at how we're gonna do that. And this goes towards the structural separation of the OI brand with the first part focused on the customer experience, with innovation, excellence, solution development, and then the face to our customers and, very focused on experience. And the second, on an infrastructure company, where we have a neutral network, which is comprehensive, robust, granular with better revenue predictability and better access to the financial markets. This is the area where we need to invest dramatically And by doing the separation, we believe we will achieve that. All of that will have a lighter, agile company focused on the future will help us seek market leadership in all of the areas where we play. It will make sense for our customers in particular in terms of innovation It will provide focus, and it will leverage and invest in the best network in Brazil. With all of that, we believe we'll have company that generates value and trust for pretty much all of our stakeholders. And what is the company that will merge out of this vision? On page 22, we can see that we have a configuration of the company after the structural separation where we have the main way with the OI brands, with the retail and business clients, with the corporate and government clients, with the copper wholesale customers with TV and content with value added services and trolls, through operations for field operations in Set hedging customer care operations in BTCC and has, a company, which is part of the group, which is the infrastructure company where we have the transport network, the FTTH network, and the entire wholesale business. This structural separation of the fiber infrastructure for a neutral network, we believe, You will unlock a lot of value for us for the market and for society in general. And how does it generate value? We can see on page 23 that the structural separation allows each company to focus the best on their core capabilities and core missions. On the infrastructure side, we would have an FTTH network, which already has more than 6,000,000 homes passed and it's fastly approaching 10,000,000 homes passed, and that can look towards looking at more than 30,000,000 homes passed in the future. We have a company with almost 400,000 kilometers of fiber, 43,000 kilometers of duct, fiber to more than 2300 Cities, and a wholesale business which has a wide label FTTH, connectivity and transport for operators and ISPs and which will be a staple in enabling 5 g in the country. As we mentioned, it's a robust network structure It will have better access to funding sources due to the independence, predictability of revenues and greater exposure to other operator operators in the market. And it will allow us to accelerate investments for network coverage and for infrastructure build out. On the client side, the old client co is focused on why it should be focused on customers. With the OI brands, both for residential and business, with all solutions for corporate customers, and still having a role in offer wholesale given that we'll maintain all of the regulated businesses under the OA client's goal. On the activities, We're focused on sales, marketing, customer care, innovation, and future. And on infrastructure, we continue to have on the client company the IPTV and DTH networks, the copper, and backbone and backhaul components, which will be managed by the infrastructure company. This company will have a service culture centered on customer experience, digital first, excellence, on offer differentiation, and we'll have a lot less need for CapEx investment, leveraging on the investment of a very comprehensive network of the infrastructure company. But when we look at this, structural separation, maybe a lot of people, are asking themselves, but, is this new and and could this really generate value, and our response to that is with benchmarks. On page 24, We can see that structural separation is not something new. It's something that already happened in several countries in the world. Structure separation and in summary is a reorganization of the company in 2 independent and complementary structures, 1, focus on a neutral network and infrastructure, and the next focus on service, a company focused on customers. Each one will have a lot of focus on its own segment operating more efficiently. It will enable market expansion and growth and will enable, in particular, much more effective use of investments on both sides. We see that structural separation is the reality in different parts of the world. Actually, across the world, across the globe, we have a very, very successful examples of structural separation companies in the UK, in Ireland, in France, in Spain, in Portugal, we have a Czech Republic, we have Switzerland, Germany, Italy, and, and Australia. So we have numerous examples and those examples actually generated very good results as we can see on page 25. When we bring structural separation, the structurally separated infrastructure company has the ability to attract more investors. It has the ability to accelerate CapEx and network coverage. It has the ability to serve multiple carriers so it spending its addressable market. And in particular, on the client company, it has the ability to establish a lighter customer structure, which customer centric and digital first. When we look at the shareholder value generation example of what this can generate, One of the examples actually look at the market caps, pre separation and post separation, and we can see that pre separation the entire company was worth 72, a check billings. And when we look at, several years later, the Cervco and the Netco each on their own has pretty much the same valuation of the entire company pre operation, which means almost 100% increase in valuation. And the return on invested capital also went up by almost 90%. And this is because of focus and because of the better structure, both in terms of operations, but as well as in terms of all of the financial metrics of each of the companies. In our case, where do we expect it can take us? And we can look at that in page 26. We expect that structural separation will allow for the acceleration of the fiber network deployment by infrequent by a big amount, by a great amount. We had our plan, when we announced our strategic plan last year, to cover 16 million homes passed in 3 years. We actually believe that with structural separation, we can look towards covering more than 30 million homes passed by the end of 2024. This is, twice the number of, homes passed that we had in our previous plan. It's a dramatic increase. Looking towards 2022, it means bringing the number up from 16 to 20, which is already a significant increase for 1st year operation. And when we look at the the HPs, we believe that the homes passed, which will already be built cannot be increased by a 140%. So as is, we had already very positive results But with the infrastructure separation, those numbers can go up significantly. And when we look at the cash flow, obviously, this will require in the infrastructure company an increase in the CapEx investments, but this period of initial investments we'll have a much higher EBITDA flow coming after we get into a scale of the infrastructure and the FTTH deployments. And when we look at the structural separation, the EBITDA numbers normally are much, much higher than the EBITDA numbers of an integrated company. And this will be followed by a high return phase with reduced CapEx and increasing EBITDA as we continue to build and already achieve, a very significant number of of HPs, which will require us no longer, a much much, accelerated investment in the future as we start to stabilize investment in home spend. This will allow a view for a new way. And when we look at the numbers that we expect this can generate for us, The new one will grow faster in a sustainable way as we can see on page 27. As we have in terms of some metrics for 2025, we expect that, the client call will be able to have over 7,000,000 homes connected, and the infraquel over 30,000,000 homes passed and over 10,000,000 homes connected. And this is obviously because the info call will be providing homes passed and services, not only to the client's call, but to, but to the entire market. And as we can see, the entire fiber market continues to go up significantly with small ISPs and obviously with large telcos as well. And we believe that our infrastructure will be able to serve all of those. On the revenue front, we expect a 21% increase in, the revenue metrics on the client call and over 23% on the infraquel towards 2025. And in terms of EBITDA margins, it will be 2 very different companies both with very healthy EBITDA margins for the CapEx investments they require. On the client's call, we expect the higher than 20% EBITDA margin, remembering that this is an asset light company focused on services and clients. And on the infraco, a over 60% EBITDA margin. Those 60% numbers are confirmed by pretty much all of our benchmarks. When we look at the benchmarks for infrastructure companies around the world, we see numbers that start on the mid-60s and go all the way up to the mid-70s. So we believe we're being conservative here and looking towards a very doable operation in terms of our metrics. And finally, in terms of a fiber operating cash flow of EBITDA minus CapEx at 2025, we can see that, the aggregated company here would be a dramatic improvement in terms of cash generation. With a combined metric of 4,500,000,000 of cash generated in terms of EBITDA minus CapEx by 2025. When we do that, the new world will benefit all of its stakeholders as we can see on the next page. It would benefit customers In all segments, from a best quality of infrastructure, from an increase in geographic market served, and a best experience in terms of having new services available. The telecom sector will also be benefited and large and small operators will have access to the robust and capital infrastructure that we have in an isonomic way, and this will avoid redundancy of investments. It doesn't make sense to build 2 roads 1 by the side of the next. And we believe this is exactly the case in terms of fiber. And, this single construction of fiber in the whole country will bring greater profitability for the infrastructure company But we will also bring best results for pretty much all of the operators. For employees and suppliers, we believe employees and suppliers will have companies which are financially stronger, more focused on their specific areas of expertise, and thus generating value for them. For creditors and shareholders. We believe we'll, with this, we'll be able to have a sustainable company, a growing company increasing the safety of, pretty much everybody's investments and, having more certainty for creditors and return to shareholders. And for society as a whole, we believe that mystifying infrastructure in the country will have gigantic economic and social development impacts through digital inclusion, higher economic efficiency of investments in infrastructure, and helping to bring everybody forward. But to pursue this, we know that the plan amendment and a new general creditor's meeting is needed, and that's a exactly what we have done with our filing last night. On page 29, we see that in order to implement this evolution of our business model, We need to amend our existing judicial reorganization plan, and a new general creditors meeting will be necessary which we expect will happen at the beginning of the second half. This GCM and the Splend amendment we will allow, in particular, the continuity of our plan execution, this, in in terms of looking for sustainability and value generation. It will also bring execution flexibility and future options for the company. Our previous plan and as much as it was, successful in and allowing the company to move forward, it still lacks some flexibility towards, going to our future options in particular in terms of asset sales and reorganization of our operations. The plan and the amendments of the plan We also bring an anticipation of debt payments, and this will reduce the risk for creditors, but in exchange, we'll benefit the company with better payment conditions. We are proposing with this plan alternatives for various creditors, including small ones. We believe we will optimize the capital structure of the company we'll reduce operational risks after all of the transactions are completed. And those are pretty much the objectives of, the amendments to the plan of the GCM approval. On the next stage, let's take a look at the key concepts of the plan amendment, starting with the asset sales and the creation of what we call the isolated production units or the UPI's. The plan calls for the creation of 4 UPI's, which are the, isolated production units which is an entity that exists in the Brazilian JR process. The first UPI is the tower's UPI, And we're talking about close to 700 mobile towers and 225 indoor sites with a passive infrastructure. And this will generate revenue, not only from us, but from other operators. It's a pretty standard deal in the market. And as we have announced already, this is part of our noncore asset sales. We are setting a minimum price of a 1,000,000,000 We're 100 percent of the shares of this UPI, and we will be selling this at the highest price. We have an M and A process that is being conducted by OI We already have proposals in. We will continue to negotiate towards those proposals, but the GCM and the creation of the UPI is what will bring certainty to the process and security to the new investors in acquiring those UPI. On the data center front, This is also, an isolated production unit part of our non core process. We have 5 data centers We have the revenue and contracts for the colocation and hosting businesses with B2B and with OI. And we have established a minimum sale price of R3 25,000,000 for 100 percent of the shares. In reality, this already represents a binding proposal that we have, which will provide a right to match to, the biggest binding proposal receipt which was already see enclosed during the M and A process conducted by the way. So here, we have a firm binding proposal that will be the base or the UPI auction that will take place in a stalking horse model that that we have highlighted before. Next, the mobile assets. Obviously, we have been talking about the possibility of a mobile sale for a long time because in strategic terms, we aren't the smallest player in the market, even though we are very efficient and have been having very good results. The UPI for mobile will include the complete mobile operation, including all of the active network, clients, and Spectrum. Elements of the active or passive transmission network are not included here, and all of those will be, in the infraquel, company. For, the mobile assets, we are establishing a minimum price of 15,000,000,000 for 100 percent of the shares and the sale will be conducted at the highest price in, a judicial auction or at our discretion, for the 2nd best bid if the risk of execution is lower with a maximum price difference of 5% if there is greater legal certainty in terms of both regulatory as well as competitive approvals to close this transaction. Obviously, we will only sell this operation if it makes sense for us. And we believe that the 15,000,000,000 minimum is a fair price given not only the amount of our assets, but the very good performance that our mobile business has been having recently and obviously all of the metrics and multiples that it can generate to a different company. And finally, the infraquel, the infraquel is a different type of UPI because, obviously, it will still be an isolated company. We will, execute the structural separation that we just talked about, but the infraquel will not be a full sale. We expect to sell between 25 to 51 percent of the economic capital of the infraquel, representing 51 percent of the voting capital of the company, And this will be towards the FTTH Network plus a lot of infrastructure with IRUs, with OSA, and Talamar, back on and back transport networks, which will allow the infra code to serve, not only FTTH networks and, and customers across the country, but wholesale customers with OI obviously being its main customers for fiber broadband and OI solutions as well. Obviously, as already expected and and announced, the infraquel will be a neutral network providing service to all players in the market. With a partial sale of the infraquel, or you will still retain a very significant and relevant economic participation in the company with, no less than 49% upon the sale. And, for the sale of the UPI infraquel, we're still not establishing a minimum price, but a minimum secondary distribution for the company of BRL6.5 billion for OI, followed by a primary of up to BRL5 billion and guarantee of dividends and other conditions for OI. In addition to that, the conditions for the sale of the infraquel we need to guarantee the execution of the investment plan with, an equity support agreement or an investment agreement for the, buyer. With that, we believe that, we will be able to have all of the flexibility required to move the company forward towards the new model. In terms of, the terms for the current plan, Page 31 shows some of the key concepts of of concepts of the amendment proposal to J. R. C. R. Plan to creditors. Starting with non financial creditors, where we have both in labor, as well as in small business classes 1 and 4 a proposal of payments, within 30 or 90 days after approval, of the GCM. Limited to 50 k per creditor in the case of labor, 35 k per creditor in case of the small business. This is, an important proposal because it because it allows us to settle with a large number of, creditors and, obviously, the creditors that need the the funds the most. In terms of financial creditors, we have 2 key classes of financial creditors with changes. 1 is the secure creditors, class 2 And in the case of class 2, we expect that upon the sale of, the mobile UPI, will have, a, prepayment of the entire secured creditor class or the prerogative, of the creditor to remain with the position in the company using its its existing credits, for, investments, either in OSA or in it in associated companies such as the infra call. On the banks and ECAs, we're proposing for early settlement of credits with a complete liquidation of the credit, with the discounts and payment in 3 installments. This will be linked to asset sales And, the plan will call for an a mandatory repayment of the credits. In the case, we have a minimum volume of resources through the auctions and the execution of our plan. There will be different, a differentiated option for creditors who provide new credit lines to the company and all of this is, explaining a lot more details in our plan amendment. For additional creditors, In the case of Anatel, we expect to migrate Anatel to a new legal ruling for addressing credits by adhering to law 13,988, which allows for bilateral negotiation of public credits between the public entity and the company And we also expect to adhere to, subsequent legal provisions that may be enacted in the future, allowing us to settle the credits for from Anatel and removing them from, DRJ. Obviously, this is contingent upon a SASO negotiation with Anatel NDAGU. And in other case, the Anatel credits would remain as part of, the plan as is. In terms of contingencies, we also expect the payment of up to 3 k with a waiver of any additional claims with within 90 days And finally, for suppliers, bondholders, and the general offering of class 3, we are introducing a possibility of prepayment through the of an optional mechanism of reverse auction to repurchase all of those credits with a discount. In terms of the bridge operations, Given that the our plan will require probably, between, 18 12 months, give or take to acute 12 18 months to execute. We're, including a mechanism to allow for bridge operations both in terms of a bridge to partially anticipate the proceeds from the sale of the UPI the mobile assets, UPI. As well as the flexibility for adding some leverage guaranteed by the shares of the new infra co UPI. And finally, the last concept, in the proposal is to bring the J. R. To closure upon closing the sale of the UPI, for mobile. Or if, we're able to do that before, if we required by OE and confirmed by the judicial reorganization courts. So all in all, we know that there's a lot to be done And, the company has been working very diligently, to, to having, its grip on pretty much everything that, is required to get there. And we have a timeline, of, when to expect, all of the things we described to happen in page 32. We start now in June with the filing of the judicial recovery plan amendment. And, we expect to hold our general creditors meeting in August we expect to conclude the towers and data center auctions in October. We expect to have the auction of the mobile assets, UPI, by the fourth quarter, together with the closing of the towers and data centers, moving on to the first quarter of 21 where we would have the, Infrecall UPI auction. Then on third quarter of 2021, we would expect to close the infrecall UPI process And finally, in the fourth quarter of 2021, given the probable long times for regulatory and competitive approval processes, we expect to close the mobile asset, the UPI sale. Obviously, this is just an anticipated timeline. It will depend a lot on all processes that take place. And, obviously, between now, when we filed our plan amendment proposal and the general crisis meeting, we will continue to discuss, with a number of players and creditors, and and stakeholders towards, not only explaining the plan, but being able to negotiate towards or what makes sense for the company. So in, August, we can have a successful general credit creditors meeting. In conclusion, on page 33, we know that up to here we have been firmly stabilizing our operations. We have been redefining our strategic model, and we were able to secure resources for a very strong acceleration of our fiber optics business, And this shows in the results that we have been having. But what we are proposing is an ambitious model, not only to accelerate growth but to enable the creation of the largest infrastructure company in Brazil in a sustainable way. We believe that our customers will benefit from more quality and coverage We believe that the neutral network carrier will efficiently accelerate fiber investment in the country for the entire sector. And in particular, we believe that this model will allow us to conciliate strong growth and the financial sustainability that, the company requires. In addition to the benefits for all the customers and the industry, We believe this plan will generate value. We will be finally able to generate value and trust for employees, creditors, shareholders, suppliers, and for society in general. And the last message we would like to leave with you before we go to the Q and A session, is that, this management team and this board of directors, which, looked at the company and started to to charter a new path for it, always with the long term sustainability and the long term value generation and mind, are extremely committed to executing this new strategic model with rigor, beads, and whatever it takes to be able to bring the company to a new successful, sustainable long term position. So all in all, we know that this is a lot of information We know that most likely there will be a lot of questions that will be answered as we move the process towards the GCM in August. And some questions which will be answered even after that as we execute our plan, but we believe we have a credible plan We have a feasible plan. We have a plan that can generate value for us and return the company to a sustainable position and being the largest infrastructure company in Brazil. With that, we conclude the first part of the presentation, and we believe we can move to the Q and A session. My recent government, we will now begin the Q And A sections for Invested Analysis. Remember that questions should be asked in English. If you would like to ask a question by the telephone, Please dial star 1. If at any point, your question has been answered, you may remove yourself from the queue. My fellow Sanchez from Josephine Wagon would like to make question. Hi, good morning. Thanks for taking our questions. We have 2. The first question is regarding the UPI. So now that you have formatted, the APIs that you you plan to, potentially divest. Could provide some, financial metrics or some a little bit more description, like how much did we die in each OPI, especially on the infrastructure core, like, how much of the EBITDA stays in the infrastructure call, how much stays in the client call, and also on the mobile company. That that would be the first, uh-uh, question. Any color in that sense? The second question is regarding the governance of the infrastructure call. How will that work? How will guarantee that its interest will be kept in mind when this company is going to be running independently. On your two questions, on the UPI, we obviously have worked with, a great level of detail towards, building the financial metrics for each of the UPI. Well, let's start with the first 2. Obviously, in the case of, data centers and towers, those are pretty standard in UPI financial metrics. And, obviously, when, when we look at the the market multiples in the past for those types of transactions, we we know what to expect they are very standard, and as such, that's why we have set the, minimum prices, as as we have. Based on the proposal that were already received, and and they are pretty much standard, UPI metrics, which in reality for the company only matter towards the cash that's going to be receiving, obviously, the commitments that it has in the future. We we should advance that, when looking at those 2 UPIs, this company has firmly looked at doing something, which probably was not done in many times in the past in sale processes, which is not to take very expensive, commitments towards the future just to increase the amount of cash that is brought in as part of the sale process. This is true for the towers, UPI, where we are committing to market numbers for, for, all of the rents for the, the, the towers. As well as, to the data centers where we're committing towards the usage that we know we will have and that we know we will need and and know more than that. So with that, I believe that on the first two, it it's a pretty standard financial equation, Marcello. On the the the mobile unit, obviously on the mobile units, this is part of, the process that we're conducting, with, the interested for and all of the details will become public when they become public. But when we look at the market multiples, we can look that, obviously, we know that OI has, internal multiples for EBITDA, which are lower than the market average. And and this is because obviously, we carry the entire weight of the company and the slightly smaller scale compared to the other players in the mobile but what we're doing with the UPI, and this is important for everybody to understand, is that we're not selling the Oui model entity. We're selling the mobile operation, and the mobile operation comes with pretty much a clean operation to whomever acquires it. And this allows us to look at the market multiples in terms of EBITDA and in terms of potential revenue generation, which will be not only in line with market, but we believe better than markets. And that's why we have set the minimum prices we have we believe that there is space to increase that, but, obviously, we needed to set a price, a minimum price, and this was based on our only on our internal analysis, but also on feedback we received from from the market and analysts. And, and so, obviously, this will be taking some EBITDA out from the company And as we have not disclosed, in detail, the EBITDA per segment in the past, obviously, it's it's, it's part of the the confidential process that is taking place. But, we should expect that this to, to, to, resume EBITDA market levels for the UPI of mobile which will allow us to get to the 15 digit. When we look at the the numbers internally, obviously, if you just, make a risk calculation. You can look at the volume of revenues for the mobile UPI and the mobile UPI represents out of the close to 20,000,000,000 revenues we have, it represents close to 77.5. And so it represents, less than half the EBITDA of the company today, give or take, especially because, again, we're not talking about internally the same level of, EBITDA margins that our peers have. Finally, let's go to the infra company and then we can talk about both the metrics as well as the governors. On the infra company, we know, that, we we shouldn't have an EBITDA which is, obviously, higher than 60%. And this is based on not only on all of our internal planning, business planning, but also based on benchmarks. Obviously, when we created this plan, we try to be conservative to allow for some some space for development of the plan going forward in terms of its implementation, but pretty much all of the benchmarks that we have looked at points to, between 65 percent 75 percent EBITDA for the infrastructure company. And this, when we look at the split of how would we split the EBITDAs and the revenues and all of the costs between the clients going to infraquel this pointed out to, a client's goal with a 20% EBITDA, and in cruise speed, in cruise mode. Giving, a, 50% to give or take, EBITDA margin for the combined operation, infraquel plus client Obviously, our plan details will be known, with a lot more color in terms of the numbers when they become public. But, in terms of the metrics and the margins, we expect that, on the client's call, the, 20 percent EBITDA without the weight of the CapEx and, with a much leaner, much, much lighter company, this will be able to compensate everything we must do initially on winding down the copper business. And, eventually, it will bring us to this level of cash generation, in, in, 4 to 5 years of, close to BRL2 billion. So it's a pretty healthy cash generation given that it doesn't require a lot of, of CapEx investments. On, the governance of the infrastructure company, and, again, Marcelo, sorry to not give you a lot more details than the ones that we're able to disclose, but, obviously, it will become known as we look in the details of the UPIs and the process becomes more public. But then in terms of the governance of the infrastructure company, we have made a number of things And obviously, there will still be a lot of discussion in this process because we have just started the public process for calling back and now we provided an info pack for investors, as of last week. And we have a number of investors, analyzing the infrastructure company process. But in terms of governance, a few things we have provided for in the process are: the first one, we will retain a significant economic position in the company of, no no less than 49% of the economic value, when we complete the process. In addition to that, we will have some obligations to, the new investors in terms of what are the minimal investment levels in terms of homes passed, and and homes connected that we expect? And, obviously, this means that, there will be already a planning place, towards, where should this infrastructure be deployed? In particular, to cover the original plans we already had and the expanded plans that we now have, but also to allow the security for the client company to be able to base its, FTTH, high speed residential and plans on infrastructure that he knows is gonna be there. Obviously, there will be room for a a lot of additional investments, a lot of flexibility to towards implementing new cities based on on, what is not mandatory, but there is core level of mandatory investments that pretty much, represents the bulk of the governance, at the very beginning. We obviously expect some natural provisions in some arrangements such as this, and having board, appointing a board member to the company. And also in terms of, at the very beginning, in particular, participating in the management of the company because in reality, the management, in particular, the operations and technology management will come from way. The governance details, will be part of the agreement. Will be part of the discussions with the new investors. But with that, we believe that, we will be able to especially look towards maintaining the level of operational excellence that we have been able to achieve thus far. And then be able to look towards the success in terms of operations and technology going forward. On the sales funds. Obviously, this company will have a lot of independence. So, obviously, we don't expect to control the sales of the infrastructure company. Especially given that the infrastructure company will be selling to pretty much all of the operators and the telecommunications providers in the country. And so we will have, flexibility. It will not be controlled by us. It will the new investors will have discretion towards directing their sales efforts in the market. And this is, what should happen in the case of a neutral infrastructure company. So all in all, very strong position in the economic, position, very strong requirements in terms of the obligations for the investment plan. Very strong saying in all of the technology and operations front and a lot of independence in terms of, the sales and marketing efforts of the new company. Okay? Thanks a lot for the comprehensive answers. A follow-up or or clarification on the margin. You said that the combined, infra cool and client cool would have a 50% margin on I don't know if it's, yeah, it's it's between it's between high 40s 50%. Something like that. Okay. Perfect. Thanks a lot. K. Thank you. Sense. Hi. With the big one team. Thank you very much for taking my questions. So, one one question that I have is, on the Anatel, that you mentioned that you were you were looking forward to negotiating with Anatel based on the new legislation that was approved recently, the 1398. And and my question, and and you and what has been accounting for the net present value of an anti theft debt for some time now, from from much lower number, which is natural given the restructuring And my question is, do you have any expectations on how much, renegotiating Anatel's debt under the new legislation? Would change the, the, the net present value of of of what you're helping accounting for as as Anatel, that So so that's that's my first question. And and also related to to wanna tell if you if you don't mind also commenting if it makes sense to instead of doing all the negotiations based on the legislation that was just approved, if it's worth waiting for, the new one, the the the PL6229, that is, you know, being discussed in Congress, that would give you even better conditions to negotiate with run and tell. Thank you. Thank you, Kadoop. Well, comprehensive answer here. First, as as you pointed out, we also we already have, 222, 222 parts, 2 pieces of that with Anatel. One of them, which is, part of the active that And, part of part of it, which is just administrative debt, with Anatel. The first one being the largest, the second one being, slightly, slightly over half of it. So when we look at at at the 2 trenches on, on the first one, which is, the depth that can already go towards, adhering to 13988. What we, have done is that we have done comprehensive analysis of, what would imply for us, getting out of the RJ conditions and, and then applying the 13, 988 conditions with, 84 months and up to 50% of discount on the total debt. And given that this debt, has a a lot of, of, interest, and and penalties applied, we will pretty much be using the entire discount's possibility of the 50%. So, we we know that the 50%, allows us to significantly reduce the debt as well on this this new 13988 arrangements. Obviously, when we compare that to, the the fair value of, what's in the RJ today, the there is a small difference, but we believe that there is a small difference in this difference, is worth it given the legal certainty and and and the end of disputes with Anatel that this will allow. And so we would be able to cut, our our debt in half. And remembering that even when we cut our debt in half, after that, we have to apply the 84 months And, with the 84 months, we go to close to where we were in terms of fair value. It's not exactly where we were. But it's close to where we were in fair value. And so, it's it's not dramatically worse, what we could get with maintaining the debt in, NDRJ. As far as, adhering to the new, regulations that make come out, especially PL6229, what we're doing in, in terms of the negotiation, and and our plan already allows for that And now we obviously, don't don't have anything in the the the law that would prevent this from happening. It is possible to first a deer to 13988. And then if, a new regulation comes out which would improve our conditions and our situations, we could, migrate, the existing negotiation to to this new regulation that can be enacted in the future. This is part of, a negotiating process, but it's something that, can be done. And, obviously, this would allow to reduce the, a fair value, pretty much. As far as the second part of the debts, the debts that, is is still not, and it's not inscribed, as, as active debt that's just with Anatel, per se, we have the same approach. We could either, again, migrate this to the bilateral negotiation. As soon as we inscribed it, Or in the case of the second port, there are additional options which the 1st wrench doesn't have, which is the first one to be able to work with Anatel with a new mechanism that the agency has been, discussing in particular the, obligation to do. They already got 75. And and this new, legal feature for Anatel actually would allow us to significantly reduce the debts by converting it into obligations of CapEx, into obligations of coverage, into obligations of service, which would be much, much better than having to actually consider it as part of that. This would become, pretty much investment obligations. And then compared to, whatever value was, considered in the RJ, this could be even much, much more positive than what we have in the RJ today. So this this is what we're we're doing. Remembering that, after the PL 6229 is approved, when, when, and if it is approved, we would be moving from a 50% discount and an 84% and an 84 month installment, sorry, to a 70% discount and a 120 month installment. So it's, it's it's it's a significant improvement that would be able to come even after our first negotiation took place and and and goes into effect. Okay. Perfect. Would you thank you very much. Can I can I ask you one one more question, on, on, you mentioned in the plan that you hope to negotiate with the banks and and DCAs a discount up to 60% of of the face value, which which is the which is the big discounts? It goes in line with what you have been accounting for. How how confident are you that you can, negotiate, this type of discounts when when discussing, during the crisis meeting? With with with these group of creditors, please. Thank you. Hadu, obviously, this is part of the whole proposal. It's not, not an easy discussion as we know, but at the same time, what we have considered when doing this, and and this is, those are the conversations that will have to take place between now and the and the GCM is that, first of all, we have to recognize the fair value of the debt. And the fair value of the debt is far from, from face value, given all the, the, the, the payment terms that we have. And, when when when negotiating, we have to 1st start on the fair value of the debt because, obviously, by doing what we're doing in, the GCM, we will be prepaying the entire debt. We will be eliminating the risk of pretty much 100% of, the ECAs and the banks. And, they would be monetizing 100% of the payments right now. This will be obviously crystallizing the fair value for us, but it will be, crystallizing the fair value for them as well. We're getting completely out of the risk. Right? And so that's that's the key, assumption and the key approach, when discussing this. Obviously, it will have to be discussed it will have to be, negotiated, remembering that the plan has to be approved by everybody. And, we have, several different classes. We have several different class 3 shareholders. It's not, just to one specific type of creditor to approve the plan. And, as, as it was the case in the previous plan as well, there will be situations where you have some, some creditors voting for, some creditors voting against, What matters in the end is that, the majority of the class ends up approving the plan. And that's that's what we're doing. Is, we're proposing something that, we believe, it's it's, equitable to, to pretty much all of the, the, the, creditors in the classes. And, that can be approved, we believe, after some negotiation. Thank you. Oh, hi there. Yeah. 2 or 3 questions, please. One, just to go back to the last question and the point of clarity on the bank and ECA debt, And if a 60% discount is voted through, and formally accepted at the GTM, Just to be clear, does that mean everybody then has to accept the 60% discount? Or or or could that be voted through, but you could still opt to hold out somehow just to to clarify that point, please. And thank you. Yeah. Go on, John. I'll I don't need to go. Okay. Thank you so much. Yes. Obviously, the, the provisions for the plan, call that, there will be, a, a general provision where the, creditors that, would have rights to cash slip in the current plan would be the ones, in affected by the prepayments, would be the one receiving this prepayment with the discount, and, they would have to take the prepayment with the discount. Obviously, we are including also other options for creditors as we highlighted in the conditions. And, in particular, one of the options is an option where if there is new credit that brought to the company, that would be part of the credit being protected at face value. So there are some options in the plan. And, obviously, the details are in the plan and in the amendment that we filed, but, what we're proposing is exactly that. The cash sweep that will be applied in the future will be applied now, but it would be applied to repay. It will be our our obligation to, to, to, to prepay this with, the call with the discounts to all the cash sweep creditors. Okay. That that's great. Thank you. And then just a couple more please. Just and looking at the split of the of the input code and the client code, you've you've not included back or in the input code, which I guess would be typically, you know, expected And and I was just curious as to is it is it to do with, you know, the the regulation of backhaul? I just wondered why backhaul was not included in the infraco? Yeah. Let's clarify that, Sumit, because, yes, backhaul is included in the infrequent. And, the way we're including the backhaul and the backbone in the infra code is by having, IRUs, which, in Brazil, are just, right of use contracts. With 100% of the infrastructure that remains, in, the client's goal in, in OI, itself. And are the way we're the the the reason why we're doing that is exactly why you have this described. It's just cause of a legal certainty and and and, being extremely conservative in the way we're approaching all of the assets. We know that the the new telecommunications law has already defined that, none of the assets, that are not used for the concession can be suited reversible, and when there are assets that are used by by, both the concession and additional services, just the piece of the asset that it's used by the concession services, should actually be considered reversible. And and in this, in this sense, we would have 100% of the rights to, drop down the assets of the InfraCo entirely, just remaining, the small percentage of the assets that are used by the concession. And just to give you an idea, out of our fiber backbone, less than 1% of our fiber backbone in hall is currently used for voice. So, it it's just a matter of having a very conservative approach. And instead of, transferring and dropping down the assets per se to the infra call, We're transferring rights of use to the infra call, which will be pretty much managing the entire asset. Okay. I didn't realize that. Sorry, Terry. Thank you. And then it's the, just just a final clarity as well from what I found just as regarding the, the monetizing of the input code, talking about a secondary sale of 6,500,000,000. When you talk about the 25 to 51%, that is that is a post money ownership. So that is the secondary sale when the primary reign, I guess, sort of diluting pro rata with with the other kind of shareholders. And then it's the final ownership is is the 25 to 50 on the satellites? Let let me let me give Camille the chance to jump in and I'll I'll talk about the structure in terms of the proceeds and what we expect out of the infra code. Because, again, we're in the middle of a competitive process for the infra code that we just started. And such, we, we, obviously, still needs to see what comes out of the market, but we have a defined our basis based not only on benchmarks, but on our own internal evaluations. And then we created a mechanism to address that in terms of the primaries and secondaries. Kamil, can you just verify, pursue it. Sure. Thank you, Rodrigo. So so the the mechanism for InfraCo, and as Rodrigo said, we just started a market sounding exercise we're waiting to get more inputs from the market, to maybe add more details, to the plan before the creditors meeting. But the mechanism that we have today is that offer has to guarantee a minimum 66,500,000,000 to OI in a in a in a secondary trench. Also, if you look in details in the plan, infra call is gonna be born, sort of, sort of, with debt, towards, or a mobile or telemart. Due to unpaid dividends. So it's a it's 6.5+2.4, roughly of proceeds flowing to the oil group. And and, and, also, as infrequent was born without, any additional debt, we wanted to give potential buyers, the flexibility to make their own assessment on the amount of primary proceeds that InfraCo needs to pursue its business plan. We have our own estimate that it could be up to 5,000,000,000 including the debt that needs to be, that needs to be repaid, but that could be conservative. So we wanna of investors the chance, to or or the potential, buyers to give, to to make their own assessment on how much primary proceeds the company needs. That's why there's flexibility there. We just wanna make sure, that whoever, wins, let's say, this control mistake in the UPI, is bound to make the necessary investments and to guarantee, the business plan. We have flexibility to we are maintaining flexibility to keep, between 75% 49% of the economic take, of the of info using ordinary and preferred shares. And, our idea is to is to be more specific on on minimum price as, as fund goes by. But if you, if you do the math there with, you know, a minimum 25% ownership, 0 primary and the 6.5, you'll probably get close to, where we expect to land on, you know, on minimum terms for for infra growth. Okay. Benjamin, this is somebody who would like to make a question. Hi. Hello. Good good morning, everyone, and thanks Thanks for the for the for the call. I have two questions here, as well. I mean, the first one, regarding the the the mobile operations, I will disclose the minimum value of BRL15 1,000,000,000 for this asset. So just just trying to to to understand here the rationale if you know, previously, I I would believe there will be easy to enter, the credit holders meeting already, with a former with a former, offer. But I guess, if the idea here is just to give a minimum value for this asset, so now you can call the meeting and you enter that we've or even, or the possibility of not having a, a formal offer in your hands. So just from the hear the the rationale for for providing the the value and, you know, with the with this meeting, taking place in the next 2 months. This will be my first one. And then my second one, in terms of CapEx, now it's been for coal and, and everything. How should we see, the CapEx for 2022, you know, especially once you stop investing, so much in the FTTH. So I guess that most of the CapEx will be related to the to the maintenance of the fiber. Just trying to understand where this CapEx would be, looking at 2022. Thank you. Thank you, Fred. Well, the the rationale for, establishing a minimum price for mobile at this point is that, obviously, for creditors to, prove a new amendment here. They need to understand what sort of proceed the minimum proceeds would be expected from such a process because obviously, we could not put up a proposal to sell, our mobile operations, up for vote in a GCM as part of an amendment without actually telling, for, for the, a minimum of how much we'll be selling it. Otherwise, it would be impossible for creditors to do their own analysis to understand if it may sense to vote for this proposal. So obviously, we have to do that. We have to include a minimum price. Obviously, it would be ideal to have already a binding proposal before that, but we're in the middle of our process yet. So we have to present a minimum price. Obviously, we base this minimum price based on our own internal analysis, our investment advisor analysis. And we believe it's something that makes sense, if you compare it by by multiple means, if you compare it by our own projections, if you compare it by market multiples, if you compare it by comparable transactions, if you compare it by a proxy of, what kind of, EBITDA generation potential this would have for additional companies. So we believe it's a fair assessment of a minimum value. And we have to provide it or else it would be impossible for creditors to, to analyze what would take place. And, obviously, providing a minimum value, allows us for the chance to, to have this minimum value considered by all of the multi players that are analyzing the asset at this point. And this is particularly true given that what we expected in terms of the minimum value, is obviously after the minimum value to sell it based on the highest bidder but we included the this this feature and, the amendment, which calls for, the possibility for the company to select a different proposal, which is a slightly, smaller than the highest proposal if it's within a range of, minus 5%. If this, second proposal has a more legal certainty in terms of regulatory approval. So, it's it's just a feature, Fred, for, the creditors to be able to, understand and analyze, if they're able to, to consider that this is something which would be worth before approving in terms of value seeds. As far as your second question of the CapEx of infrequent 2022, we, in our plan, we obviously had a plan that, called for significant CapEx, in, FTTH deployment all the way up until the middle of 2022, get into, 60,000,000 homes passed. When we look at the the current plan for the infraquel, we call for a plan that actually keeps up the pace and picks up the pace initially, even in 2020, and keeps up the pace in 2022. And it keeps up the pace of close to 5,000,000,000 between 45,000,000,000 again, in 2022, just for fiber. No, other CapEx involved just for fiber and infrastructure. And, obviously, remember that, there would still be, an additional CapEx for, for pretty much all of the other operations that we would keep at the client's goal. But just on the infraquel between 45 just for fiber, And, and, and, obviously, all of that is not, if not all the good portion of that directed to, the infrastructure self and obviously some some IT CapEx included in there. But, we will be able to maintain a significant base of CapEx and and and, obviously, this is the entire reason of the the structural separation to be able to maintain such a high CapEx, but, with a much higher margin and, and, obviously, it's a it's a different structure of company altogether. Perfect. We'll do it very clear. Thank you. Thank you. Ms. Maria Tereso De Vendi from Santander would like to make a question. Hi. Thank you for the call, Rodrigo and Camille, and for the detailed presentation. So I have two questions as well. Just to clarify on the info call, the the protocol is gonna consolidate a 100 percent of the fiber unit's revenue, EBITDA, the CapEx, and the leverage. So Ory is gonna recognize the a minority stake, or it's gonna be like a spin off or a listed company? How it's gonna be that structure in terms of deconsolidating the the the the the assets. And the follow-up question is on the is on you mentioned that upon finding the mobile sale, you could reach to a potential bridge low and to get the proceed before the closing. What would be the the capital allocation priority in that case? Would it be to further invest in the file in the Incercol? Thank you, Maria Ferrisa. In the case of the infraquel, yes, it would be a company that's part of the group, and for all regulatory facts, it's a it's a. Right? It's it's a company which part of the group and that, obviously, still should, should be considered for regulatory purposes as part of the group. But in terms of control and consolidation, yes, it would be a a minority state, even though we wouldn't have, again, a lot of the governance features to be able to sure what we're doing and and and how we move forward with our plan, until it takes place. And it, it, it takes off and, and now it's completely independent. And that would be, minority stake, receiving dividends and receiving, obviously, the the proceeds of that. And, when we look at the consolidated numbers, it would not appear in consolidated results, but it would appear in consolidated financials, right? As as far as the mobile sale, with the with the bridge, what we would expect is, actually, to be able to do two things is to be able to accelerate, part of, of, the, investment in, the infra call as well because we want keep the the rhythm very fast and and and and now the CapEx, at the very, very fast pace to continue passing the, the, infrastructure, increases we have for homes fast, homes connected, and also to, address all of the other obligations of the company. If you remember, the company in the next year or so, we'll still have negative cash flow because it's still ramping up our fiber revenues. And, we have to cover this in the process of, of cash generation. With the investments. And obviously, the the obligations of the plan, the the repayment of creditors, the obligations of the company, we we will require some cash funding, through the 1st part of the plan. And now this, the idea is that part of that would come from the breach of the mobile fail obviously, to to be completely, eliminated when, when the mobile payments took place. Perfect. Thank you very much for this. Thank you. Of Goldman Sachs, we'd like to make a question. Hi, Judy. Thanks for the call and resolutions on the operational results despite turbulent time for everybody's sake there. I have two questions here. First is with respect to the strategic OpEx reduction, how much of that is already concluded? How much of that is really bad and we've moved that impacted. We think in the near term, from from, COVID or any of the results expect for the next couple of quarters, right, where we see, some of these issues come into the numbers. The second question is post API's conclusion, assuming that the plan is approved in time and the time lines followed, what would the capital structure for the company look like? Post payment, what's left, in terms of debt? And I think we are seeing a little bit of the other questions as well, equity spend out versus which is a health component company security answer to more about the debt profile of the company, OpCo, after concluding this plan. Thank you. Thank you, Vido. Well, on the OpEx reduction, there's an interesting, effect of the COVID pandemic. And, you probably heard it before, and lots of people are saying that, the, the, the COVID has been the greatest, digital disruptor that, companies have faced in the last 10 years because in reality, it wasn't accelerator to many things that everybody wanted to do, but somehow we're not achieving. And in reality, when we look at the the impact in terms cost for us. Obviously, there are the, the, the direct costs of addressing the pandemics. And we have invested a significant to address, the cost of, APIs and the cost of setting the, remote to work operation. But compared to all of the, positive cost impacts of, of just the digitalizing everything, we believe that, it actually helps in this regard because, we increase the dramatically, the number of, of operations that are done entirely digitally, and and reduce the cost of a human because care, for instance, and reduce the cost of, calling technicians and talking to technicians in person. And now we increase the ability to sell digital invoices, and we reduced the paper, invoices. And, we increased the number of digital payments we increased the number of digital top ups without expensive commissions. And so there's a lot that was done which we believe will be permanent. We believe they won't come back in terms of cost reductions due to to the COVID. Obviously, other than that, we continue with our reduction program as is. We continue with our simplification efforts we know that the company needs to be lighter. We have done some measures already to transform our structure and to to bring the lighter structure to the company. This will continue as we analyze the processes. We are doing a lot of effort into automation. Automation alone, now we believe that, this year, we'll be able to get as close to $100,000,000 reduction in OpEx at the end of the year. We have continued to look at, reducing and simplifying our IT stack just to give you an idea with, in terms of a number of IT projects, we reduced the number of new IT projects from last year to this year by 75 and 75. And this was basically by 1st, not doing any more complex things with the plans and including features and including many different, IT changes, by simplifying our portfolio. As you saw in one of the metrics that we showed, we are moving towards a portfolio, which is pretty much flat rate based, removing complexity from that removes complexity from IT projects as well. And on the front of, the new fibers solutions and the new fiber services, we are almost starting a new IT stack from scratch to simplify it and then to reduce costs. So we're reducing costs across the board. And finally, there is one last aspect of cost reduction, which we emphasized in the last call, and now we now must then besides it yet again. And I I believe that, in the second half, we will already be able to show you operational results out of that. Is by reducing the copper costs, both reducing the copper maintenance costs as well as reducing, all of the CapEx costs associated with copper And this will be critically important for us. We believe that there is, as we have already mentioned before, in the range of $500,000,000 to $1,000,000,000 a year in cost reduction just on the copper side. So all of that goes unabated. We continue firm on our targets. We believe we will reach our targets to the end of the year. Remember that, our objective, as we announced last year, would be to get to the end of next year with a $1,000,000,000 OpEx reduction in, in annualized terms. So by the end of next year, 1,000,000,000 removed, from from OpEx on an annualized basis. We we believe, this year, we're gonna be more than halfway there already. As far as the, structure of the company financial structure of the company after the UPI conclusion, let me pass over to Camille. Okay. Thank you, Rodrigo. So so if you apply the provisions of the Vasimina, the plan is, approved as we have presented it today, if you apply the provisions of the of the plan and assuming that we raise enough, a secondary proceeds, which, in the case of the 15,000,000,000 for 15,000,000,000 for mobile and a secondary of 6.5 is already, pretty much enough. If you look at that at our at our debt table and we have that in the in the, like, the full, earnings release, the NDS, which is a class 2 creditor according to the plan, they would be prepaid, if they want, I mean, they they can opt to remain in the company, in different positions, but it's, you know, if they want, we need to prepay them. So that would disappear. Local banks and ECAs, would be subject to the the prepayments, discounts of of 60%. So we would, pay them down. That would make the company remain today with a with a bond, which in March amounted BRL3.7 1,000,000,000, the nonqualified facility, another 500,000,000 there's a general offer which the company has, the call options from the original plan. The call options require 15% today. Face value is 5.6, but fair value because of the call option is, is 700,000,000. And then there's the bridge loan that we raised in, in January, that the company has always mentioned that its intention to that there was always a bridge to a longer term that. So we intend to refinance that as soon as we, believe that the market conditions are appropriate, in the worst case scenario that we are that we don't refinance, that would be also, payable from the sale of mobile and that would, that would disappear. So just to summarize, we would remain with 8,700,000,000 of the bonds working with, you know, March 31st numbers, another 0.5 of the the nonqualified Then there's the the general offer of 5.6, but that that, because of the 15, 15% call option, that's a 0.7, billing highs. And then the the debentures, it depends if we prepay them. Or if we, refinance them, if we don't refinance them, that that would put, put us with slightly above 10,000,000,000 high, equivalent of of that. If, we refinance, then that would drive us to 13, 14,014,000,000,000 high. Understood. That's very clear. Thank you. And I guess in terms of the the next quarter given COVID, given the the shutdown of, you know, shopping centers across Brazil, potentially, you know, inform of layoffs type programs. Any specific impacts on personnel line or rent expenses that you guys foresee? Has been relevant and diverting from what you guys have originally planned on the strategic expense reduction plan? But we do expect some simplification there, but it's not due to, to the stores. In the case of the stores, what we did, was to, use some of the opportunities that we have, with the government programs to maintain support during the closures. And, obviously, we, also use the things such as the pay time off and and and the auto alternatives. But at the same time, what we did was we, got a significant portion of our store personnel and I started having them work remotely. And, you may ask how is this possible if the store is closed, but we started the program called the Vendankaza, the sale from home. And, obviously, we're trying to use, the team as fast as possible. We should see some simplification, but it's not based on just the stores. It's it's based on, pretty much the overall infrastructure of the company, when when bringing it simpler and, and, obviously, having a leaner structure in particular on the copper front. This is pretty much where we'll see most of the simplification taking place. Very good. Thanks very much. Mr. Danielle Sothers. Please please would like to make a question. Hello. Good morning, everyone. Thank you for taking my questions. The first one related to the mobile business I'd like to understand if if if there's any scenario that the company might accept a bid below the 15 billion guys and which would be, the income taxes that the company would incur in the case of a sale at BRL15 Billion. And a second question related to the to the EFRACO. Right? I'd like to understand how much of the value is coming from existing contracts like services provided or ad provided to the client co to the oil bio business or existing contracts in general and how much of the value is coming from new contracts that you're expecting to gain to gaps in the future. Thank you. Well, on the mobile side, obviously, we used a minimum price because we believe that this is what the company is worth and where we should be going with the proposals that we expect to receive. And, obviously, this is the scenario that has been planned. We have even, include this feature for, for the the the price difference, I mentioned before, but we believe that, where where we're gonna end up. There will always be, the creditor's, discussion, when, and if any additional scenario should be considered. We don't believe this would be the case. But there are features in the plan to consider that, with creditors. So it's not up to the company. The company has set a minimum price and cannot go below this minimum price that it has set. In addition to that, on your income tax question, we obviously know that this would generate some taxable gains. But, you have to remember that the company has a significant tax loss carry forward, right now, and, it's overall structure from both Telema and, and OSA. And, what we would be doing is, exactly to use those, those results that we will be able to compensate for for part of that. We wouldn't expect any significant impact coming from from from tax impacts due to the mobile sale. As far as the infraquel, Well, to begin with, we have to remember that the infra code, when it's born, it already has a significant part of the business. That, is already from the, what we call wholesale business already, up and running. It's not something that's being created scratch. It's, something that it has been there for a while. It has been operating. Oui has always been the largest wholesale operator in the market. And, we believe that, we would only be increasing this, with, with the focus from, from the infraquel. When we look at the all of the wholesale revenues, we're talking about a close to 2,000,000,000,000 business already today. So it's not something that, gets, gets, started and just has to start using OI as a as a main customers. Obviously, early in terms of the residential broadband would be the main customer initially would be the main customer for, for a while to come because we want to be a Zoet, the largest broadband player in Brazil. And, with that, obviously, we'd we would be the largest, customer from the infrastructure company, and we believe we have all that it takes to be able to achieve, as we mentioned in the plan, close to 7, even more than 7, million homes passed generating if you just make the very risk calculations with, even an increase in ARPU, we would have just from the residential business, on the OI side, a, a revenue on the client's goal of, between $7,010,000,000,000. Obviously, part of this goes back to the infrastructure company to compensate for the homes connected, the homes passed. But when we look at the plan, we do have, obviously, a significant part coming from, the other the other players in the market as well. We have included in our plan, as you saw from the presentation, goes to 30% of, this business coming from from, other players. And, and and and this would make up the entire picture for for the company looking forward. But the good thing about that, Danielle, is that no matter how you split the, broadband revenues in the company, if, only grows more than everybody else, obviously, the the InfraCo would still be receiving always, revenues and everybody else's revenues. But if, there's additional players that grow more than the value could be skewed slightly more towards the other players and not towards Joy. But in any case, we believe that given the significant amount of a fiber that he has. Given that, it's a non replicable. Given that, it doesn't make sense for players to build a 2 fiber infrastructure, one alongside the other. We believe that, the infrastructure company has pretty much a set market for self, all the way into, in, into the future. When we look at the existing revenue and we combine that with the revenue from from from other companies, other operators coming in, even in the short term, I would say that in the short term, probably the other companies will have even a a a bigger weight, on the infrastructure revenues than Oi because we're still ramping up or CTH revenues. So in 2021, we would expect close to 3,000,000,000, coming from from, other players because it 2,000,000,000 of wholesale, which already exists. And then, there's still another component coming from other players. So all in all, we do have a significant, business with other players. We would increase this business by, adding our very significant growth on FTTH And at the same time, we would expect the FTTH to pick up for the other players as well. Thank you, Rodrigo. And a third question, if I may, if I may, do you expect the client code to to born as a cash flow positive or a cash flow negative company? The client code? No. The client code will be born pretty much as a as a cash flow positive company. It will require we still have a year of transition. Remember that all the way up until we end all of the operations we expect. We're talking about, pretty much a year and a half of transition of the conclusion of all of the operations we expect to the end of 2021. And then after that, the client score becomes very, very asset light and very CapEx light. And so it starts to be a cash positive company. Obviously, in order to achieve that, we, we need to, reduce the burnout in copper and that's exactly what we're focusing on right now because out of the things that remain on, on Oi, which is a client for. Right? It's not that it's a there's a separate client client client coin or 1 in the same. It's just a one entity, which is a OE essay. And, obviously, as as part of that, we can measure EBITDA minus CapEx and and and that is is positive. And, and and this is because we have been spinning off all of the significant CapEx investments to Winfocal. And at the same time, ramping down significantly the consumption of cash coming from, from the copper CapEx. Hi. Good morning all. Thank you for taking our questions. We we have two questions here. First, on it's a good update. I think how is the network rollout is the epic deployment, of course, on to have the contract, the demand from the customer side. All the the the the CapEx ahead of the of the demand. And then I have to to to check how it's going to be the demand for it. Just to start with that, how's going to be the balance between CapEx expenditures and and revenue generation? That's that's the the reason for the question. That would be our first question. The second one, regarding the approval in the in the in the budget holders, you mentioned that, I don't even understand that all classes need to approve it or all that over, we need all classes need to approve the proposal. If you could qualify the extensions Sure. Well, Susan, on the, CapEx rollouts for the infrastructure company. If you recall, I mentioned the company is born with an investment plan already defined or at least a good portion of an investment plan already defined and that will have be part of the, investment, commitments that the new investor will actually bring to the company and, and, adopt and except when getting into the company. And by that, we do have a roll out, which is defined, especially to cover our original plan. So when looking at covering the original plan for FOMOI, this is a plan that will be entirely covered by the investment commitments that need to be addressed by the new investors. In addition to that, we do have a model and, we'll be discussing the details of this model with the with the, potential investors. And there are many but we're talking about a mix of, charging between, HPs and HCs. Obviously, the focus are are the H. C. But we also have a mix component based on the H. B. And there will be, a, a way of working with, potential expansion plans where there are some investment, in the HPs, which are covered by, by, guaranteed, take up rates and, and take or pay from, the clients. And there is a part, which is obviously, investment from the infraquel. And then on the H. C, obviously, it's just a firm commitment from clients in connecting homes. So it's a mix of both But at the same time, the the company starts is born with a plan which is well defined and that, has a significant, HP deployment plan already. As far as the approval from creditors, Susanna, it's the same rules of, the previous GCM, meaning that, the conditions for approving the GCM is that you need to have approval in every single class. And, in a given class, you need to have approval from the majority of class. And that's it. I mean, it's not that you need to have, all creditors approving, but you need to have majority in every single class. Very clear, Rodrigo. Thank you very much. If I may just ask a question regarding the DTA we assume that it will be, it will remain in under the client call. Is that correct? Yeah. DTHs, the, the, TV service remains under, way the client go, but that we mentioned in the presentation, what we're doing with DTH is we're looking towards the alternatives of, pretty much converting most of what we can into IPTV and at the same time looking towards potential partnerships to, to avoid the costs from from escalating in the future if there is a sharp reduction in customer base. So, we're doing the two things at the same time. We're migrating customers away from DTH to IPTV. And, we're, working in, towards partnerships that would allow us to maintain a a a healthy DTH business in the future. Perfect. Thank you very much for the information. Thank you. I would like to turn the fur over to the company for the final remarks. Thank you. Well, thank you everybody from listening through a very long presentation today. And we really appreciate that. We know that in addition to the first quarter results. So we we have to provide a lot of information on our plan and on our amendment proposal for the GCM. We know some of the concepts are new for us and are, elaborated, but, we we know that, we are very confident in what we are presenting. We know that, we believe in the execution of the company we know that, what we have shown in the last 12 months as far as execution of the core business of the company, gives us the rights to actually design such a plan for the future And we know that, all of the proposals that we have made, even though they will need to be discussed and they will need to be further understood we believe that they are the right thing for the company to do, and it's the right thing for all creditors as well to approve because this is what's gonna bring the company forward, and it's gonna sustain and generate value for pretty much everybody. So we're confident in the implementation We believe that the company will continue to execute. We'll continue to maintain its focus on the operational day by day But in addition to that, we'll now embark into this last step of our transformation journey, which we'll see a much improved company in our 18 months we hope, with a with a very sustainable and and, and, value generating future ahead of us. So thank you for, staying with us. Obviously, we will be talking a lot more about the plan and about the the developments of the GCM in the months to come. And we expect to talk with you very soon again about the results of that. Thank you very much. This concludes our access conference call. We would like to thank you for your participation. Have a good day.

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