Good morning, and welcome to Entel third quarter 2026 results conference call. Thank you all for joining us today, November 3rd, 2026. I'm Paula Raventós, Investor Relations Officer, and I'm joined by Marcelo Bermúdez, Entel CFO.
Hello.
Please note that this event is being recorded and that all participants will be in listen-only mode during the company's presentation. At the end of the presentation, we will open a question-and-answer session. You can send your question through the chat at any time. Before we start, please refer to the forward-looking statement disclaimer in this slide. Let me start with the nine-month picture, because it shows the consistency of our performance this year. In the first nine months of 2026, revenues grew 6.9% and EBITDA 8.7% year-on-year, with margin expanding 50 basis points to 28.2%. Net income reached CLP 86 billion, up 19%, equivalent to earnings per share of CLP 285. This growth came with discipline. EBITDA after leases reached CLP 521 billion, up 9.3%, and our EBITDA minus CapEx margin improved 70 basis points to 7.9%. These results show solid growth in both markets.
Chile will continue to lead the mobile industry, and in Peru, we continue to strengthen our position in a highly competitive environment in both markets. This reflects a value proposition that meets our customers' needs, backed by the efficiency management and financial discipline, which allow us to sustain growth and improve our profitability. Turning to the third quarter, we delivered another solid quarter. Revenues grew 5.7% and EBITDA 7.4%. EBITDA margin reached 29%, up 50 basis points year-on-year, and the highest level of the last five quarters. EBITDA after leases grew 8.2%. Net income during this quarter reached CLP 32 billion, up 5.3%, equivalent to an earning per share of CLP 108.7. Postpaid and fiber remain the engines of growth. Postpaid voice connections grew 7.6% year-on-year and 1.7% in the quarter. Fiber connections reached 542,000 connections, up 27%.
Let me mention the latest events for this quarter. First of all, shareholder returns. Our board approved yesterday an interim dividend of CLP 135 per share, totaling CLP 34.7 billion, charged to the profits accumulated as of September 2026, payable now on December 2nd. With this payment, dividends for 2026 total CLP 255 per share, a dividend yield of 6.2% at yesterday's closing price, among the most attractive in the market. Second, customer experience. For the second consecutive year, Entel ranked first in mobile telephony in ProCalidad National Customer Satisfaction Index on network quality and digital experience and 5G coverage. We also received the 2026 Customer Loyalty Award in both mobile telephony and home internet, granted by Alco Consultores and ESE Business School. Third, direct-to-cell, as the first operator in Latin America to launch direct-to-cell satellite service. Adoptions keep scaling.
We have over 3 million enabled customers in Chile and more than 2.5 million in Peru, where satellite traffic grew between April and August. This remains a clear differentiation to our value proposition and continue to support postpaid acquisition and loyalty. Regarding our operation performance, despite the competitive environment, we continue growth in postpaid mobile and fiber. In Chile, postpaid remained the engine of quality growth, increasing 4.7% year-on-year and 1.1% quarter-on-quarter, supported by a differentiated value proposition that includes direct-to-cell satellite coverage. On fiber, strategy in Chile keeps delivering fiber and TV ARPU growth, 27.8% year-on-year and 5.4% quarter-on-quarter, taking total fixed ARPU up 17%, supported by a stronger commercial execution, a rising share of convergent customers, and improvement retention. Legacy fixed wireless was down 54% as customers migrate onto fiber with other higher quality and lower churn.
In Peru, postpaid keeps expanding strongly, up 14.7% year-on-year and 3.4% quarter-on-quarter, driven by a solid commercial execution through our stores. Prepaid is down 12% year-on-year, reflecting the security-driven regulation restricting wholesale and street channel SIM distribution, although it recovered 6.9% in the quarter. On fixed, an important milestone. In October, in Peru, we launched the commercial rollout of fiber, following the agreement signed with WIN-NET on December 25. We expect this first contribution in the fourth quarter 2026. Regarding our consolidated revenues, despite the competitive dynamics in Chile and Peru remain intense with tactical discounts in mobile and especially in fixed. In that context, the third quarter confirms that we saw in the first half, we keep growing where it is profitable.
Postpaid and fiber and handset, which [financial with the right customer lower term provided] the different product mix that also is oriented to increase convergence in our service. We are happy that the strategy is really showing the numbers. Consolidated revenues were up 5.7% year-on-year. Mobile service grew 5.4%, a solid figure given the level of competition. Handset revenues grew 8.9%, and here it is a value story rather than a volume story. We are selling at higher average prices, at handset and component costs have been passed through, together with more financing. The inventory we built earlier in the year at good prices continue to give us a hedge in this market. Fixed revenues were broadly stable, up 8.7%. Putting aside home wireless, a legacy service we are running off, down 40%.
Fiber in Chile grew 18%, with B2B and digital were down 2.5%, mainly due to lower telco equipment projects and a one-off in corporate base. The mix has not changed much. Chile accounts for around 65% of revenues and Peru 35%, with more than 10 million mobile customers in each country. Now, I will turn to Marcelo to continue with the next slide. Please, Marcelo.
Thank you, Paula. As you said, it was a very good quarter, the third quarter, and also we have been seeing an interest expansion, not only in revenues, top line, but also in EBITDA, and also the EBITDA margin, for the whole year as of September. We are very confident that this is the result, as Paula mentioned, of our strategy based on customer satisfaction as a result of smart CapEx and smart investing in our network, both in Chile and Peru. That also translates for sure in the value proposition for our customers and the ability to post a higher ARPU compared to the rest of the industry. That means better margins. We expect that this is a sustainable strategy that we will continue to see, and we will talk about that in the next slides.
Basically, I want to point out that, as this chart mentioned at the left-hand side, sustained growth in terms of EBITDA and EBITDA margin in the last few quarters, growing year-on-year in terms of EBITDA 7.4%, which is very interesting, and also in the quarter a little bit below 5%. If we just see in terms of the trend in mobile margin, putting aside the fixed part that is dragging our margin because we are in the growth stage of fixed, we just see at mobile, we can see that we are at the level of 35.6%. If we compare that level of margin to the last year, same quarter, we will see a slight decrease of 0.5 percentage point.
That is mainly explained by the significant growth we have experienced in the sale and finance of a handset, basically, which come with a lower margin than the typical mobile service. The more we grow in handset sales and financing, normally that will drag a little bit our EBITDA margin, but it is a very profitable business in terms of ROI. If we take that aside, we will be at the same level in terms of mobile margins compared to last year. This is very good because we still are in a very competitive environment, both in Chile and Peru. We have been able to sustain our margins. We will see later that we have been keeping up some price increases, mainly in Chile, defending our position in Peru. I would say it was a pretty outstanding quarter for the company.
Similar results you can see in the middle of the chart, on the right-hand side, at least stable EBITDA margin in the range of 22.9%, with a slight improve compared to the last quarter and even compared to the last year, same quarter of almost 5%, in terms of quarter-to-quarter and 8.2% year-on-year. As we have seen in the last quarter, our net profit is growing a little bit above the CLP 30 b illion for the quarter. This is, if you compare to the last quarter, even to the same quarter of the last year, it is kind of in the same range.
We have been able to sustain and grow in the margin our net profit, putting aside the non-organic impact that we have in the last quarter of 2025, which is mainly, as we mentioned previously, deferred taxes related to a transaction within the group of our investment in Peru. So, pretty stable. Also, bottom line, which is also a very good and positive news. If we see the trend in revenues for both Chile and Peru, we will see normally a + 4.5% growing compared to last year. Quarter- on- quarter, also it is close to 0%, so a little bit negative. That is mainly driven by, as you can see, our almost flat compared to last quarter revenue coming from services, which is a slightly - 0.2%. Also, handsets compared to last quarter also was a little bit negative, and fixed is almost 0%.
That is a mix of, we will explain later, some short-term climate events that impacted the country in Chile in certain larger cities that has had some impacts in the growth for fixed services. Also, we have seen in the handset business already the impact of higher prices of terminals coming from the higher cost of memory chips that come into this equipment. So, we have higher inflation, so we see some industry and market pressures that have been really difficult to promote significant growth, but we have been able at least to sustain our revenues compared to the previous quarter. So, putting aside already for the next quarter, the climate events should be starting to see some improvement, also the Christmas season, et cetera. So, I would say that this was pretty normal in terms of revenue.
Same in Peru, you will see that compared to last year, we have 6.3% growth, but compared to second quarter, was mainly flat. So, we have seen both countries, because of activity, because of inflation, and competition, we have seen a flat top-line growth for different business segments. Still, it is worth noting the relevant growth we had compared to last year. The year-on-year growth in all of the areas are growing. Services is growing 5% roughly in both countries. Handsets in both countries around 8% to 9% growth. So, we expect that trend to help our cash flow, to help our financial position by the end of the year, as it has been as of September. In terms of margin, EBITDA margin and EBITDA for Chile, still very positive.
A little bit of improvement compared to the second quarter, was almost 3% growth and 3% also growth year- on- year, with an expansion, slight expansion in organic EBITDA and EBITDA margin, which is both 30.1% in terms of organic EBITDA margin and EBITDA margin organic 24.8%. In Peru, it is pretty much the same story with slight growth in quarter to quarter and a significant growth year- on- year of almost 15% in terms of EBITDA. That is very strong news. We have been growing in Peru, we have been expanding margins, and that is very positive given our strategy in that market. In terms of strategy, it is worth noting the trend in the share of revenue service in both countries.
You see mobile on the left-hand side in Chile. Basically, Entel has been after the second quarter of 2025, which was exactly more than a year from now, when we bought them at CLP 40.8 billion, we have been sustained every quarter growth in terms of revenue share, topping at 43%, which is the higher level from the series starting in second quarter 2024. That is very good news for our operation in Chile. Also in Peru, you can see we are above the third quarter of 2024. Still, we are at the highest revenue share, pretty much the same of the second quarter 2026.
We have been able to sustain our growth in both markets, our revenue share, and the same for the market share, since our revenue share shows the impact of higher ARPUs we have been having mainly in Chile and also some in Peru, in the way of lower discounts. In terms of forward, the same strategy that I mentioned, the focus on customer service, network quality, has been really sustaining a very strong positioning of Entel with lower churns. We have a gap, a relevant gap. You see the dark blue line, porting for the second quarter 2026, which is the last figure, 0.78x for Entel, which is a significant gap of more than half of the porting of the rest of the industry. We have been able to even widen a little bit compared to last year that gap. In Peru, we keep our position.
You can see that although the industry had, compared to the third quarter of last year, increased in general terms of the industry, the porting, we have been able to keep it down, not that different compared to a year ago. This is very strong also for our performance. On the right-hand side, you can see ARPUs for Entel. We have the third quarter at the top of the chart. It is around a little bit more than CLP 10,000 , which is a 4.2% growth year-on-year in terms of ARPU. Widening the gap compared to the rest of the industry. They have been, some of them increasing in the margin, their ARPU, and the one player that is a little bit below.
In Peru, it is a little bit more stable than in Chile, but still Entel has been able to increase almost 7% year-on-year in terms of ARPU, with a very significant gap against the lower part of the market and narrowing the gap against the leader, which is the red one. This means for the mobile services, very good news, strong quarter, strong year. In terms of fixed business, Paula already mentioned our very significant growth, mainly in fiber. We have been growing 17.8% in total in terms of RGUs year-on-year. Only for fiber, that growth is higher, it is 28.2% year-on-year. That means our strategy of really covering and capturing mainly with a focus of convergent customers is working.
We have been able to increase our connections, our market share in terms of connection already posting 12.5% compared to when we started at the second quarter of 2024 with around 10%. You can see also in the right-hand side, already we have almost 61% of our fiber customers are convergent customers. That is very important for our strategy. That means a much lower churn. You can see that we have a decline in churn of 68 basis points year-on-year at the end of third quarter 2026, mainly because of the quality of customer that we are bringing to the company, which are in a large portion are convergent customers. In the bottom of the chart, we put a very interesting chart, which is, what is the impact in terms of churn of, for example, a mobile customer that normally has a 1.9% churn?
What happened to that churn when that customer is convergent, meaning that he also has fiber with Entel? We can see that that same churn goes down to 1.5%. That is a 0.5 points drop. The same when you see it from a fixed customer, let us say, for example, fiber, that has a 2.6% churn rate normally. If you put that customer on, he also contracts, he or she contracts also a mobile service, that churn goes down to 2.1%. So, when we are bringing mainly convergent customer in the range of 61%, hopefully it will be higher than that means that we have more customers that are willing to remain with the company, that are happy with the service we provide, see a one single service provided by one company, that means a lower churn at the end.
The ability also to keep up our prices strategy, not relying solely on discounts to bring customers and keep them for a while. So this has a huge impact also in terms of profit margin. Also, I mentioned in this call a lot about the quality, our value proposition for our customers, and one of the pillars of that strategy is the quality of the network. It is important for our customers because you can see in the left-hand side, our presence in 4G and 5G, which is basically much higher than the rest of the market or the industry. Today in 5G, basically we have a presence of 61% compared to an average of the rest of the industry of 52%. The same in 4G, with 84% presence, which is 10 points higher than the rest of the industry.
That translate in a different measure, that is the ECQ, which is the Excellent Consistent Quality. It is a measure that compares sometimes different players, and Entel has been leading that ECQ for a long time. We have a significant gap against the rest of the industry. We have been growing, and we were able to keep that level in the third quarter. Same for in the right-hand side for different measures of overall experience, 5G experience and coverage, consistency, which is an overall assessment of in different dimensions. Entel also leads in most of all of those dimensions, and leading the industry as a whole. Peru is also a very interesting story. We have been growing significantly in 5G presence. You can see that we have 37% of presence in 5G. It is very far from the 29% of the rest of the industry without Entel.
That also translates, you can see in the middle chart, a strong 73% ECQ, much better than the rest of the players in Peru. That also translates in overall mobile network experience in their different dimension, where we have a very strong ranking in each one of the dimensions, compared to the rest of the players. In both countries, we have been really being able to capture a strong quality of network means strong and better service, means better experience for our customer, and means the ability to capture better ARPUs and better margins and growth as part of the total market of the industry. Normally, we tie that to our CapEx level. We provide some kind of guidance. You know that given normally we use the CapEx and the investments in network as a competitive lever.
Normally, when we are able to adjust in the margin the level of CapEx given the competitive dynamics in both countries. For this year, as of September, total CapEx to revenues consolidated are around 14.4%, with Peru higher than Chile because it's in a different stage of growth and deployment of 5G, and also working in certain improvements also in the 4G network. Chile still at a different stage of development on maturity of 5G. It's not over yet, but it still can adjust a little bit its CapEx. For the year, at the end of year, we will expect the overall CapEx to revenues be around 15%, which is very positive for our cash flow. We'll see that later in the coming slides.
For the near future, we said in the medium term, thinking about 2027, 2028, we should be adding to this 15% one more percentage point to reach around 16%, given the rollout we have to do in Peru of fiber, continue to roll out in Chile the growth in fibers, and some investment also in terms of 5G and 4G in Peru and Chile. That's basically development of our mobile network. That is important because it provides a significant advantage in terms of free cash flow, I would say, and the ability to keep up with a strong cash position and dividends. I wanted to touch that also is one of the reasons we are keeping up with what Paula already mentioned, the dividend we just announced last night. Basically, it will similar to the level of dividends we paid last year.
We're keeping a very steady rate of dividend payout. In terms of overall cash flow, we are comparing this chart, the nine month of 2025 compared to 2026. As you can see, the cash available at the beginning and end of the period, we ended September with CLP 256 b illion, which is around same figure in dollars, since it's close to CLP 1,000. Which is not that different compared to the end of September of 2025. It's a little bit better, so we have been keeping some cash in cash. I just want to point out that EBITDA is expanding with pretty stable IFRS 16 leases. In the nine month of 2026, you can see a little higher working capital that is mainly related to Transitory build-up of inventories related to handsets.
We strategically advanced purchases, both for Chile and Peru, of handsets at the beginning of the year. That was, I would say, a very good decision. We built up inventories in advance of the spike in prices that we have been seeing in terms of the higher cost of handsets. That is one of the reasons that we have been able to increase our margin in that business, because we pre-purchased at the lower cost handsets for both markets. Still, that buildup of inventory as of the end of September is still higher than the figure we expect by the end of the year. After the Christmas season, we should expect a reversal of that buildup, and that will have a very positive impact in our free cash flow by the end of the year.
We should normalize at least half of those $ 86 million of working capital, mainly in inventories. It's a mix of that, what I would say, half is a mix of inventories, and also we built up during the first nine months of the year much higher accounts receivables coming from the growth in financing. We expect that to remain by the end of the year, so we should see some cash generation coming from the reduction of inventories and additional revenues coming from the terminals Christmas season by the end of the year. In terms of CapEx, I mentioned not much news for the rest of the year, so this, I would say, is a good picture of what we would expect for the year. Proportionally, we will continue to grow in the same range, our CapEx.
The good news also is you see the net cash, the green line at the end, compared to last year. We are seeing a very small net cash flow for the period, but considering dividends for CLP 42 b illion. So, before dividends, it will be around CLP 50 b illion. Even though we are going to pay now in December around CLP 40 b illion in dividends also, we expect additional cash generation for the fourth quarter. We would end up with a positive net cash flow for this year as a whole, even after dividends. We expect to keep up a strong cash position, which also helps our net debt EBITDA ratio. No surprises in terms of gross debt, growing a little bit compared to the last quarter, mainly inflation-related, normally, which occurs every quarter.
But in the net cash, you see there was a slight decrease compared to the previous quarter, and very healthy 2.35x net financial debt with IFRS 16 to EBITDA ratio, lowering every quarter in this area. That also sustained our ratings from credit agency. We still see very positive for keeping up those ratings. In terms of net financial debt, no news. We still have, by the end of 2028, one maturity. We should be looking at certain actions to deal with that by the second quarter of 2027. So, for now, we have enough liquidity, and we feel comfortable with these maturities. To finalize, four takeaways. We talk about our revenue growth a little bit below 6%, EBITDA growth 7.4%, with also 5% growth in net income. Strong performance given the industry situation, which already we all know. It is very positive.
Also, in terms of improving margins, you can see the EBITDA margin went from 28.6% in the third quarter of 2025 to 29%. There is a slight improvement there also. We have continued the expansion in our mobile fiber business, expanding our revenue share, market share in that industry, at least in Chile, where we are already. Paula already mentioned that we are starting in Peru for the first quarter of 2027, we will be up and running. We are finalizing all the first stages of that deployment, but basically, the growth will come from Peru pretty soon. In terms of CapEx, I mentioned in the range of 15%, I would say, I do not think it will go above that by the end of this year. As I mentioned, net debt is down a little bit, which is also good news and a result of the positive cash flow.
That is basically it.
Thank you so much.
We are open for questions. Paula, thank you.
Thank you, Marcelo. Thank you. Now we will open for questions, but before that, I am pleased to invite you to our Investor Day on November 19, where our management team will share more details of our strategy for the coming years. You can register through this QR that we are putting in the slide. Now we are open for questions. Please, can you send it through the chat? We are waiting for that.
Okay. There is a first question regarding direct-to-cell. The usage increase is clear, but could you comment on the revenue from direct-to-cell? This is a hard question because normally we are seeing an impact of direct-to-cell in customer capture and lower churn. So there is not a direct relationship in terms of revenue. There is revenue because of the upselling we have been seeing. Since we have a $19.9 plan, including direct-to-cell, we saw customer moving from the plan that was below that, the $16.9, from $16.9 to $19.9, and we have not seen a move from plans above CLP 20,000 to the one I mentioned. So it is only upselling and not downselling. So that is positive news from revenues, and also we have been measuring a lower churn of customers that have direct-to-cell. We also see an impact in positive revenues.
Customer, 10%, given the figures we have, around 10% of new customers that we bring to the company declare that they are choosing Entel because of the direct-to-cell service. Those are customers that normally we would not have. So the answer is in different buckets, so I cannot answer that directly. But the overall figures that you see in top-line growth, lower churn, and margin growth are related also to direct-to-cell.
Yeah.
The second question is, how much improvement in EBITDA margin would come from RGUs reaching equilibrium? Normally, we will see by 2027, we should expect $ 10 million or CLP 10 billion improvement by year. Same for 2028. So we will see that improvement in EBITDA from negative, less negative in 2027, and being positive, I would say almost positive in the whole year 2028. We expect in the January 2028 or December 2027 already the marginal EBITDA from fiber turning from negative to positive and being break-even. So that is basically it.
We have another question from Marcelo Santos.
Could you comment about the competitive intensity in Chile? You mentioned intensified competitive dynamics and tactical discounts.
Yeah. Basically, in Chile, we have been living for the last years in a very stiff competition environment. What we have seen this year, and we have mentioned this before in the previous calls, that the intensity of competition in terms of pricing, we see it a little more mild than previous years. As we saw, that is being translated into higher ARPUs. We also have seen, although that may vary in month to month, in certain specific tactics from certain players, little or less need to provide higher discounts. Actually, for a certain period, most of the industry abandoned the discounts, or at least certain players. We have been very cautious in the level of discounts, and that is translating better ARPUs.
The short answer to that is that we see there's still competition, but for this year, we see a little bit more, I would say, intense than the previous years.
There is another. You provide an interesting data point, 1.9% mobile churn versus 2.6% versus fixed churn. Conceptually, it is often that the inverse is true for many providers, lower churn in fixed than in mobile. The reason for Entel diverging here has to do with the multitude of competitors in the fixed space in Chile?
Yeah.
Yes.
I just want to answer one other question was previously the economics of fiber in Peru, they will be similar to Chile. I would say so. It is pretty similar. Same structure. We are using pretty much the same approach to customers. The customers are converging the same as in Chile in terms of the neutral network we are using. I would say the economics shouldn't be that different. I wanted to clear that point. In terms of churns, normally the intensity of competition in fixed in Chile is very high. You have more players than in mobile, and the churn rate is higher because of that. But the industry has been working on how the discounts are being applied. Normally, we used to have discounts that after the month six would normally come to the regular price with a strong bill shock for our customer.
We have been, as Entel, some other players have replicated that, moving to a 12-month discount. So when you apply a longer term, normally you will see a lower churn. Normally, at that level, customers are more used to the service, are less willing to really move from one operator to the other. So, yes, we do see higher churn rates in fixed. That is changing, but I would say given the number of players that are today competing in fixed, we will expect to see for a while at least higher churns than in mobile.
I think that we do not have more questions. Thank you to all of you for joining us today, and we will hope that you can see us in our Investor Day on November 19. Thank you for joining us today.
Thank you.
Bye.