Q4 2019 Earnings Call
Good morning, ladies and gentlemen, thank you for standing by today's call is being recorded I will now turn the call over to the remote Ponce CEO of VTR. Please go ahead.
[laughter].
Good morning, and welcome to use it to Latin America full year 2019 investor call.
At this time.
Thank you systems are you getting older smoke.
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I would now like to try and the cold over to our CEO Mr. violent night.
Thank you gave us.
And welcome everybody got full year results presentation.
That's always a joint thought my senior leadership team from across the region.
Well get that involved as needed during the Q any pulling up prepared remarks, I'm going to stop by taking you through all highlights and operating results for the year before finishing the strategic update.
Chris Noise, Oh, CFO will then follow with a review of all financial performance and outlook what 23.
After that well get straight to your questions.
Housekeeping you will both be working some slides, which you can find although website at www Dot Alley dotcom.
No starting on slide four key highlights for the <unk>.
We generated record operational results enough fixed business, but 283000 odds you additions, which was 50% higher than even 20 aging and driven by the strength of needing brought that products.
Mobile momentum, it's improved significantly as well, thanks to new propositions and a renewed focus for lucky's.
Compared to 20 aging baby important lots subscriber losses, we added 124000 mobile subscribers in between 19, which was a positive string of 256000.
We also delivered a financial guidance for here and I'm happy to say that.
It does include Oh, yes.
Yeah, and each of revenue ratio and adjusted free cash flow.
Oh strong adjusted free cash flow performance off 220, Treme gives you.
Comfortably be increase talk a bit headset halfway through the yet.
Chris will give you more detailed data we continue to expand that strengthen a fixed and mobile networks <unk> nearly half a million you upgrade it holds about LT coverage move both 9%.
Importantly, we continue to invest it would be that discipline view on vintage, which helped improve our capex to sales reinsurance treaty like you.
Finally, we have made great progress without inorganic strategy <unk>.
The integration of your guess is progressing well be completed the disposal lafosse seashells business and we are looking forward to completing the acquisition. If he can tease assets in Puerto Rico, and the U.S. budget Islands.
In the next three slides I'll cover all three business segments of fixed mobile and B to B.
On slide five we show a fixed business, which represents half of <unk> total revenue.
That's a group we delivered 91000 mall RG <unk> additions in 2019 than the prior year.
Good performances across all reporting segments.
Cable and wireless continues to be an improving story, particularly in fixed.
Jamaica at Trinidad driving 125000 additions in 20 Nike.
All three of growing markets at the largest operations in CNW.
As we focus on a fixed notebooks be a significant opportunities as the market expansion that'd be drive increased penetration.
VTR called the teacher reported strong additions in Chile, We trust over 50% higher year over year, that's probably think coaster. He called me out of speech and enhanced products continued to resonate well with a growing lucky.
An important Rico.
Screening 19 additions were in line with that probably you reach what's a good performance just when he came into the increase additions related to hurricane recovery looking to the right hand side from a product perspective broadband was once again the main driver additions representing nearly two thirds of the total.
Video represented nearly a quarter traditions as customers in our region could you need to value. It is an important part as good bundle.
Moving to more balance like six representing just under 20% of far revenue.
In Q4, we added 57000 subscribers across degree a significant improvement year over year I.
That's anticipated all revitalize propositions in Jamaica drove improved performance at CNW, well VTR continued to add subscribers at the consistent Reid.
For the full year, we delivered a positive string of over 250000 net ads because it's similar stories, Jamaica that adds <unk> hundred 10 to 39000, India, and Chile and grow as being the main drivers.
I don't lend the Bahamas saw year over year improvements in subscriber trends and we continue to see signs of stabilization in mobile subscription revenue plus you end up you overall.
We focus on bringing fastest speed sell customers and on the right hand side you can see we didn't know half leading that works with LTE subscribers grew strongly you over year, reaching 50% of our subscribers at the end of screening banking.
Moving to slide seven and I'll be to be business, representing about 30% afar revenue starting with the left side of the slight b to B live it good performance in Q4, and the full year, but rebased growth of 7% and 5% respectively.
Yeah, particularly strong Q4 read some significant contract wins across the group, notably in polymer the Bahamas, and I'm networks business.
This is a testament to our leading combination of fixed mobile substitution that was a life threatening extensive product portfolio.
<unk> customer service.
As in prior quarters of B to B business continues to grow steadily driven by increasing demand for data and managed services, partly offset by legacy product headwinds.
The graphic and set up this slide shows that the chartier thought to be revenue comes from CNW markets, including our subsea operations.
Part of our efforts to integrate operational capability across LSV received significant opportunity to drive greater market share VTR Liberty, Puerto Rico and public eco.
Turning to slide eight I wanted to spend a moment another leading that with other steps, we're taking to drive innovation, which we believe it's one of <unk> competitive advantages.
Looking at and that was for us and fix you added over 419000, new upgraded homes in 20 like.
It's important to know that 85 to settle plus seven then they have committed holds bass have access to leading speed comparable to global benchmarks you to true HFC fiber to the whole technology.
We are also focus on layering a leading in home connectivity experience other than that but true free Wi Fi coverage.
We delivered just draw modem technology and mesh network speech be off a customers.
Nearly 60% off on Customising, Puerto Rico at over 80% in Chile access to a high speed modems.
It's fix the strength of our mobile networks is crucial that we now have LT coverage to more than 90% of the population in all markets.
Moving to the right up to slightly commitments to innovation, enabling us to deliver the services customers decide.
In addition to differentiate in home wife, I experience. We have also highlighted new Android based hub TV offering, which we recently soft launch in Puerto Rico.
We'll be rolling out across our markets as part of sort of single video product strategy.
Hub TV is a product because serves as a central video content aggregator with access to apps or T.D. cut that a traditional IP video, albeit a sophisticated recommendation engine and Google has it.
Turning to slide nine and I'll focus on operations.
First talked about operational transformation, a year ago and since then.
Made significant progress.
Starting with a less 10 Cytof Thislife, we have no establish a new operations said in Panama.
What does it because opportunities to grow our business comes from maximizing scale by creating a fishing and effective operations. We chose Palomar that's a location flood news scalable regional operations Center as this was open in July 29.
Well on track for approximately 200 employees that by the end of between 20 and members of my executive team it already be located there.
Oh operating model also allows us to scale key initiatives, you know operation Center like digital transformation, a product development and more about engineering.
In addition.
We have a finance and HR back offices day.
Moving to the center and write off the slides, we significantly improved results across a number of important operational metrics that you focus on sharing best practices on the slide we've highlighted means that installed meantime to repair number of truck rolls and installed early life failure, which he said he.
Pointed metric as he speaks to quality, you find installation product and drive customer experience, while the reducing truck rolls.
The next step on a journey is to leverage our digital platforms and leading products to improve sales and customer experience.
Reaching our ultimate vision, it's a multiyear project, but we continue to make progress towards our goal of creating a differentiated and meeting proposition in the region.
Well, it's like guess I wanted to close by running through our achievements in 2019 and focus areas by 23.
I think as he sells kids speak for themselves and summarize my previous slides that we looked at 2020 days a mixture of continuing as we execute against our strategic priorities as well as a new opportunities for us to drive additional growth first reveal deal on the unified structures and culture and a group.
Sheds keala expertise across the region.
Second we will continue to expand and innovate while focusing on capital efficiency.
Jumped up a fixed footprint, we intend to bill upgrade approximately half a million homes in training training.
Okay. That's covered in the previous slide we will wrap up pedal operation center, leading to efficiency gains fourth we expect to complete acquisition of 18 piece, Puerto Rico, and U.S. Virgin Islands businesses and begin integrating getting to a.
Couple of points to north yet we continue to expected transaction to close in Q2 23.
We expect Inc.
The majority of integration cost within 18 months of completion synergies benefiting or do you have I expected to start coming true from about a year. After closing totaled approximately 70 million when fully realize.
Finally, Chris has made great progress without balance sheet over the past here and we will continue to look for opportunities to strengthen our position.
Overall, we made good progress against our strategic priorities and deliver on our financial guidance in 20 like him.
That's me look at 20 training, we have focused on continuing to deliver getting momentum and making it successful start integration of <unk> assets.
The steps should set the foundation for continued growth and adjusted free cash flow development in the coming years.
With that I'll now pass you over to crystallize Chief Financial Officer, who will talk you through our financial performance before we take your questions Chris.
Thank you Alan I'll begin on slide 12, and summarize our financial results starting with the upper left we reported Q4 revenue of $975 million and 2019 revenue of $3.87 billion. These results reflect rebased growth of 3% for Q4 and.
2% for 2019 subscriber momentum and improved B to B traction art Feely topline Dan Smith.
Let me go see yeah, we posted $409 million or 18% Rebase decline to Q4 and $1.54 billion, a 4% rebased growth for the full year.
Q4 rebates performance was adversely impacted by 64 million dollar insurance recovery benefit realized in Q4 2018.
T V additions totaled $722 million or 19% of revenue for 2019, including $229 million or 24% of revenue for Q4.
The relatively higher spend in Q4 includes $16 million of restoration costs related to hurricane door, yet in the Bahamas.
Moving to the bottom right, we generated $103 million of adjusted free cash flow in Q4, bringing our 2018 total Q2 hundred $23 million and comfortably, beating our guidance for the year.
Our strong Q4 results was supported by favorable straight working capital movements, including robust collections within cable and wireless at the end of the year in particular, we achieve some collections from larger b to B in government customers earlier than we had previously expected and thus we would expect to see some trade working capital unwind in hours.
Q1, 2020 cash flows.
On slide 13, we present, our segment results and I'll call out a few key figures starting with seen Debbie a highlight for US was out Q4 revenue as CFO rebased growth of 3% and 13% respectively. Both of which were our best results since the acquisition of C.
Have you in Q2 2016 with respect to our revenue growth a strong result in b to b, coupled with growth in residential fixed was only partially offset by a rebase decline. It just 2% in mobile which is its daschle better mobile performance than our most recent quarters our strong lead.
Base those yet performance was supported by the aforementioned revenue growth as well as the benefit from reduced content costs, including the favorable impact as new programming agreements and a decrease in withholding taxes associated with third party suppliers. These positive factors on the Q4 I see us growth rate were partly offset by the rack.
Commission $13 million in insurance settlements in Q4, 2018, any adverse impact attributable to hurricane Dorian in Q4 2019.
Isn't that each I, probably keep that we delivered a solid Q4 and full year performance was rebased OCF growth of 6% and 5% respectively. Despite the unrest in Chile and associated weakness of vigilantism.
Finally on the right of the slide Liberty, Puerto Rico delivered fantastic results that we see a 40 year was once again about $200 million at the margin approaching 50%.
Q4, rebased growth of negative 43% was entirely attributable to the benefit from the Puerto Rican portion of the insurance settlement referred to on the prior slide.
Moving to slide 14, we wanted to highlight the progress we have made on several important metrics sensors split off two years ago, we've reduced our direct costs by 140 basis points and our operating cost by 80 basis points those measured as a percentage of revenue either contributed to an mcf margin uplift up 202.
20 basis points as our margin has improved we have also driven our TV additions measured as a percentage of revenue lower by almost 300 basis points into 2017. Consequently, our CFO asking any additions has improved by over 500 basis points to 21.2%. This.
The increase is a great start for L. away and we remain focused on delivering our medium true objective on this metric to the mid twentys as a percent of revenue as we target further cost efficiencies and reduced capital intensity.
Turning to slide 15, our balance sheet remains strong as our debt has an average maturity six and a half years as adjusted for the January refinancing and over 90% is due in 2024 or beyond we also finished 2019 with $2.3 billion in.
Liquidity, a roughly 35% increase year over year.
In the fall, we refinanced our CPR and raise the incremental debt to finance the ATM T. acquisition and during 2019 and early 2020, we opportunistically refinancing endeavor use capital structure, improving cost and tenor specifically in January of this year.
Well you refinance CNW is 1.64 billion dollar 2026 term loan with a $1.5 billion 2028 term loan and a $150 million 2027 senior secured notes importantly, we achieved a borrowing cost reduction in the term loan.
And at 100 basis points to LIBOR plus 225.
The majority of our remaining maturities in 2024 earlier or now concentrated within our DTR credit pool, which will be a near term focus of ours.
Moving to our guidance as valid mentioned earlier, we achieved our 2019 public targets you know CFP any additions and adjusted free cash flow.
On the far right up to slide we have laid out our 2020 public guidance targets, excluding the agency assets and we'll revisit our targets as needed post closing that transaction for 2020 us yet we expected to lever low to mid single digit rebased OCF growth as compared to 2019.
Our 2020 Rebased growth is expected to be adversely impacted by nonfunctional currency exposure in several of our markets for P. any we expected reduction in our key any additions from 19% of revenue in 2019 to approximately 18% in 2020 continuing.
Our trend of lower capital intensity.
Well it jumped to free cash flow, we are targeting approximately $150 million for 2020, despite the headwinds associated with the depreciating Chilean peso the phasing of our collection activity as noted earlier and cash outlays, especially in Q1 associated with our more intensive capital investment activity.
In Q4 2019.
As it pertains to our quarterly phasing, we would expect our adjusted free cash flow to be significantly weighted towards the second half of the year.
To wrap it up we're intently focused on driving value for our stakeholders, including our customers our shareholders and our employees, we're focused on delivering our guidance targets, which we have done each year since our split off we'll continue to innovate for our customers in terms of but products and service.
Levels, which we are dealing as ballan highlighted earlier, and which will set the foundation for continued topline growth.
We will continue to drive increased scale through our Panamanian operation Center and optimization of our business processes early signs of success are evident in our Lcs margin expansion.
Once we close the transaction, we will begin integration of the 18 key assets, which we believe will significantly enhance our U.S. dollar cash flows in coming years and finally, a core tend to have this management team is that as we continue to pursue the levered equity strategy, we will remain disciplined and how we allocate capital to end.
Hands shareholder value.
With that operator, we're ready to take questions.
A question and answer session will be conducted electronically if he would like to ask a question regarding the company's operations. Please do so by putting aside the star or asterisks key celebrate the kitchen, one on your touched on top.
In order to accommodate everyone. We request that you ask only one question with one follow up if needed.
If you are using a speakerphone. Please thanks for your mute function is turned off to allow your signal to reach our equipment.
We'll pause for just a moment to give everyone an opportunity to signal for question.
Our first question comes from Michael Rollins from Citi. Please go ahead.
Hi, Thanks for taking the question when you look at the investment strategy for the company have you sensitized the potential to accelerate broadband upgrade redeployments beyond the current plan.
Celebrating capital.
And im trying to look at what that might bring for the company financially.
The current.
Indeed sticking around that.
Hello, Michael Thank you.
Yes.
That's a question that we are grappled with a lot and.
We have looked at ways, where we can actually expand.
Beyond the 500000 that we've talked about on Newbuilds.
It's a little bit more complicated than just capital allocation requires moving a lot of.
Contract is the processes to support it I think we feel really good about the number its W. Have today and we are always going to look for opportunities to do more because we think the payback it's great. Their hours degrade. The story is great and really I think one of the secret sauce up our company as we know how to build and we know.
How did so and those who we always look cheap opportunities there.
Thanks very much.
Our next question comes from James Ratcliffe from Evercore. Please go ahead.
Great. Thanks to if I could first of all just on that.
That's a free cash flow waiting for 2025 toward the back half the or is that just working capital or is there other thing going on if you will see half or Capex PPD additions Lauren.
And secondly, I got area doesn't get a lot of attention, but Ah wireline voice adds were strong again the quarter and you guys have been adding customers there is.
Can you talk about the stride you there and what's driving that growth at a segment that I think most people are looking out and say, yes declining segment overall thanks.
Sure I'll take the second question, both in Atlanta, Chris do a jump in and to put one you know on the boys that <unk>. If you recall the 20 or 18 due at the fourth quarter be we're seeing from declined to 40 said weve surgically targeted that and it's bought a bundle strategy. That's a single standalone product voices.
No not really a growing product, but at a bundled strategy. It starts to make sense and so we've been quite creative point, it and be area, where we've really focused on what she didn't know Chile, where we are really the leading fixed voice provided and Doug you demo and his team.
He has done a really nice job in both retention as well as as well like I said the bundling a proposition.
Back to death Bretts question, I'm going ask Chris do jumped into.
Yeah parents me the free cash flow raising you know certainly is gonna be much much more weighted to the second half in particular, the Q4 similar to what you saw in 2019 now with the exception that there will be you know are working capital swing or unwind.
In the first quarter. So you would expect to see you know a a negative working capital out of the gate.
And also recall that in terms of our phase media, we do have a significant amount of our interest expenses sorted that first and third quarters I'll be here and I would expect that in 2020 relative to 2019 that our capex baby be year, it wont be add back and it certainly today won't be at backend weighted.
It was in 2019 to the payment cycle will be a little bit different terms and how it rolls through the free cash flow.
Great. Thank you.
Our next question comes from Soomit Datta from New Street Research. Please go ahead.
Oh, Yeah, a couple of.
Since I'm on operations. Please won't just in in Chile.
Could you give us an idea how things all from the street so to speak given we've been hearing about the social unrest and.
Kind of movement down the how is that if it is impacting your business and how is that trended into the first quarter.
And I just because of that will just generally in terms of competitive dynamics do you think you can get the the Chilean business back to the kind of growth rates. It was showing no. So long goes that kind of never sort of four or 5% perhaps.
And then the second question is its just on Panama. The there was some some sort of good numbers I think the the managed services business was performing well I think the Coventry continues to be around still negative competitive dynamics. Unfortunately, we only close that usage.
In two to those competitive dynamics easing, we kind of any closer to having clarity on the consolidation process from a regulatory perspective and and doing though.
You know.
What do you think your role could be in that process. Please. Thank you.
Sure.
Well, that's a good morning, good to be ready to jump in here as well one of the second question on the.
The consolidation in Panama, we are actually quite excited about that the mobile market down four players needs to go down.
The government passed a law last year it took a while could the regulated you come up with the out now that's a big really actually did one last year and it's just been amended its met effect.
Right and we think it's very favorable to.
To consolidation that and I suspect something could happen next 12 to 24 months Uh-huh for sure no back to Chile, I'll ask you alluded to jump in here because he can give you really good insights.
On the ground game.
<unk>.
Yes, Thank you Bob.
The situation in the ground after a very difficult or into the year left here, mostly related to the other services to public water. We have seen more quiet a January and February.
Well some distance is still cure and dump them off if you see piece in the <unk> in the country, we see no relevant effect in our businesses. Our stores are functioning normally today, our network is functioning normally and Ah, we what we learn from from being.
Good luck for years to be prepare to.
Number one keep our into east a fixed number to keep our service continuity.
For our customers.
And ER and we units that are prepared to face.
It would Q1, we see good demand in the market. These services are showing resilience, especially the Brooklyn sites and we are about to enter into back to school season. Two there. So we are confident that we are in good shape to fix it.
Thank you you know in good you want to make some comments on a Panama.
Yes, he hello.
No I think look we've been operating it no really stringently, we've beat to be enterprise, we really have or a hands on it doesn't really moving forward fairly strongly also in the SMB segment to be made some very clear.
Operating moves SB speaking the last month, because he speaks to be really really have fantastic growth into lost here and b to C. Mobile E. A very challenging competitive environment, but I think we've we've gone with very clear propositions and those positions now bring us in that you can take.
Competitive market, but still I, you know, they're starting to see sustainable growth in the revenue snow and that's what we were therefore, so we're very confident that that we had on a good track also bottom line.
Thank you again.
Hopefully that covers it next spring.
As a reminder, please press star one to ask a question. Our next question comes from Kevin ROE from ROE equity Research. Please go ahead.
Thank you.
Couple on Puerto Rico at a high level could you share your.
Timing for integration.
The 18, P., Puerto Rico business for instance, when we could start seeing a bundled product in the market between fixed broadband and mobile.
Sure Hey, Kevin.
So in Puerto Rico, and all that are not due to jump in yield so I'm I'm John video General Counsel and we think we can do you know the deal will still close in the second quarters that indicated earlier and we are working closely with they didn't d. and how weekend.
Despite some of the products and really come up with a really nice bundled offering.
Not G leading that are not being up in the ground. So Nike maybe you want to make a comment yet.
Oh, yes for sure, but yeah I mean, that's about says you know expected to production to grow the second quarter and the way our plan laid out today is we will likely start integrating our brand within six months and within a few of those 12 month, we have to complete the rebranding.
And as you know instead of a real publicly part of our integration with it seems there not cobalt and cool to the PSC traditional foolish agreement, which will take approximately three years.
As we go through three year, who were basically you know a carve out from the systems in the network for me to D.. So we will actually start seeing.
Synergies as a robot to move to begin the call some come within a year after we close the transaction.
I see your question, where we could see but you know bundled product I think is just too early now to recoup could talk about up but obviously you can imagine that's going to be part of a shot.
We will forwards.
Thank you and one quick one quick one for Chris I'm. The consolidated most T.F. number you reported for Q4, if you could just walk us through the end and quantified the any onetime benefits in the Q4.
Yeah, sure I'm and I can directly to the.
Yep.
The press release and in particular, yeah. There's a couple of there's a couple of piece there any urgency up for.
Cable and wireless you read your now Bob.
About 12 million of.
Reduction in programming cost related to related to our settlement that we reach with new agreements with with programmers that you'll cleared out from a yeah, yeah outstanding liabilities and we also had a 10 million.
In withholding tax Oh benefit that we have with third parties at the air passage of time I'm allowed us to you a pick off the liability, but those were the benefit the on the opposite side we had.
The impact of Hurricane Dorian in Q4 that impacted revenue and there's the up in note the app that what's a 4 million dollar.
Yeah, and then need or bad Daddys gave all while at a wake up let's fix Maria and on a year over year basis as well in it did Sharon you know last year in the fourth quarter in cable and wireless there was de Ya 13 million dollar benefit related to the insurance recovery.
Great job you take those numbers together and opt out and then they almost not out from a growth rate perspective in the fourth quarter. You know in addition, if you look across the group and I think I've made it clear my remarks also Puerto Rico's growth rate was impacted by the 40 million $49 million.
Benefit in Q4 2018 from the insurance recovery and in addition in Chile, We did have a much impact from the social unrest, where we had a $2 million credit in that business. So you know obviously lots of different puts and takes spot.
Yeah in many cases, they you know kind of blend out when you look not on a year over year basis.
Okay great.
Our next question comes from that so let me off from Barclays. Please go ahead.
Yes. Good morning. Thank you had a question about consolidation to reach into obviously one of <unk>.
Produced in the region.
As announced thought this was ready to sell monetize portion and probably some of your childhoods. When you look at the portfolio other penny geographies, where things keep actually would make sense for you to look hubs or is this can begin bitterly considering your into process of job of buying it shouldn't see Puerto Rico and from UBS.
Cheapened up to a professional Ben we maybe should be poorly until general comments about bucks would be super helpful.
Then following up on truly if we if I if I understand the I'm sure you gave previously.
The DRAM said, a little bit of an impact in Q4, but the do I go to try to the.
Do you expect there for things to two to recover from no perspective in terms of playing dynamics for the rest of the you're assuming.
The situation doesn't deteriorate again printer.
Sure.
On the argue you're referring to the Telefonica a number on it.
We don't we don't comment on M&A, but do you would be silly, but they're not always be hanging around the who for any potential opportunity Inorganically you know region.
And.
And so that's probably all I should say about it but we were very knowledgeable about all those assets and do the good assets in some areas some areas that guarantee issues, but we will be very smart about this and I think Chris and I said before we are very disciplined on M&A activities and in one of the primary.
Ah things that we look at its a levered free cash flow per share a and it's got to be accretive to it or in any transaction.
And I. Both are stated that our goal, it's really not to get bigger Oh goes to create value just getting bigger is not that interesting threats are creating value is what's really interesting to us.
Second question until late I, you know that situation, but mostly it's there on currency not operational game or indicated to you earlier.
You know our confidence in the business. Our operations are doing great Upstarts is doing great a channel to fine it's really a currency issue for us so and we feel very confident in the economy and in that country and the end to prospects were both medium and long term and other currencies will settle again.
He.
The Central Bank in Chile has committed and they haven't completed yet.
Spending money do.
You actually stabilize the currency right now when you see the guarantee movement, it's a whole bunch to other things that's driving it it's not the social unrest that no price if warranted the copper prices, it's grown up on because in China to go a bunch of things that's driving that but the currencies will settle and I think will get better, but operationally Chile businesses.
Really the fine thank you.
Thank you.
Our next question comes from Matthew Harrigan from Benchmark. Please go ahead.
Well. Thank you when you look at the FX neutral or ARPU per customer relationship, Puerto Rico, and more importantly, cable <unk> wireless you're actually growing the 5% Cindy I know you're down to seize that DTR. So it's considerably ahead of your U.S. peers and I go to some extent.
Do you kind of volume strategy in the middle income markets, but was there some sort of a dog.
In Q4, because they're on the surface, but it seems like it's incredibly encouraging and I know, you're adding word to use that customer relationships, but when you look at the large install base I mean, it can't you see catches be bad.
Secondly, putting on your older CTO had a from a C.G. days can you talk about how the advantages of having a quad play malware capability of everything in house are changing as its mobile and fixed pick all to the balls. Thank you.
Sure when do you have put side you know in Puerto Rico for sure.
Not at that price increases.
As a it's it becomes available threats.
And in Chile, a lot of bid the movements are really a function of bundling no. That's really on a per customer base. If that's what you see and but I'll tell you a they're not been also clear internally. Our goal is in this company is to maintain our ARPU.
Stabilize ARPU, but really good that's been the business on blogs that.
With that this is how we want I want my manages to think about the problem we want to grow this business.
Based on Bugging, you got to be very carefully continued to big price increase it could you just opened an arbitrage opportunity for level your traditional competitors, but future competitive situation. So we are trying to drain on manages to be really focused on growing this business through the hard work of gaining blogging not the easy work of Jeff.
They can price increases.
Neither that no under Quad play.
We are seeing benefits of the partly not as much effect like do in lot of area, because primarily the mobile product is prepaid.
I'll tell you put a recur a bad but its future transaction.
The ATM key business is more than 70% postpaid and you're going to see us be very creative in how we thought that postpaid business to a triple play.
But then there rectified business. That's allows as my Chief operating officer together would see team is working really hard on trying to move that prepaid business do postpaid, we making some progress and we are getting very creative on looking at ways to make that prepaid business looked a little bit more like post paid in a hybrid ready and then attack.
Matching it to our triple play and that experimentation that started and we are going to work on it even more so in a 2020.
Thanks, Paul.
But.
We have time for one final question.
And our next question comes from the start to me talk from Goldman Sachs. Please go ahead.
Hi, Good morning, there's actually do you ever go wild from Goldman Sachs Silicon just a follow up question on relate that to Chile, we haven't been seeing some companies deploying fiber and speeding up the investment feedback market.
To offer a naked broadband so I guess my question is how just could not only affect your brother gonna business in that market, but also drive some courts cooking there given the growing number of <unk> ODP offers and the penetration of those servers. Thank you.
Okay.
And then said it's going to now that's a good movie jumping in the bid as well under fiber to the phone Bill you see most of that being built in the C and D areas. It with that previously we also have neglected.
I'll tell you our strategy is changed and we are now very aggressively building out into those areas and the reason our strategy is changed is.
Primarily driven by the fact that our engineering and operations team has come up with a we build out at a cost point that is very attractive and currently all these markets that previously we've kinda avoided we know jumping into because we think the we didn't on it is gonna be really positive and we've proven that.
Acknowledge the its while they've gotten built operation and as a matter of fact, if you look at back in the second to third quarter glad to be made a press release that we're expanding our new bills in Chile.
Primarily because we want to target the theory, so yes, you're right. That's a bunch of smaller fiber to home guys coming up.
We think does that built area, it's a great opportunity. It's worth it will go head to head with them and Guillermo and his team the BTR Brent I'll tell you I personally went to some of those homes in some of those areas with now that gamer and customers are saying.
Why would the VTR brand and you guys coming in yeah.
You are good we want and you guys and so we think it's been really positive not game or maybe you want to a couple of things as well.
Yes. Thank you it just to up the fact that we'd be competing with against fiber for dig it now I know that telefonica fiber the Intel fiber the guy who fiber now the new commerce fibers and yet we've always competition in the market our consumer value proposition tied without brown.
He's proven to be the when in fact, VTR convenience to be not only the leader and market share, but also a leader in each your ambitions a year over year.
And if you're a second thanks Gamer and your second question of cut the cord cutting.
I think it's happening everywhere in the world, but in our region specifically it is not as it hasn't accelerated like you'd have to outstrip the linear product.
And especially with our new launch of a new hub TB, We think video it's not a dime product and while it's not a super girth product either like in the old days. It it's not a dying product can be a very competitive on the video front and we are managing it mostly true the proposition itself the technology and the product offering.
But more importantly, the Cogs on this product. This is a big focus for all my operating team as well as Oh, good to know finance be much work.
Okay perfect gives a very helpful. Thank you for that and I just like a second question. If I may you know related to four g. the overall Caribbean region.
You are getting close true over let's say most of the boxing these regions.
How is the you know the real penetration up Ddos service among your customers them. How you think you know the abusing its into technology should trend in the next couple of years. Thank you.
Sure you know Fourg remains under penetrated in most of our bleach is a best penetration and where do you have quickly C.G. like a I think Bahamas, and suddenly Bahamas is pretty high but the rest a you know it's still pretty low.
Yeah in Jamaica is an example is under 50% still.
We see huge opportunity for two reasons, one without the people could you more data.
And they get more and trend trench with the product itself and secondly, with that more data consumption, we see an improved ARPU as well and it certainly makes it more interesting for customer do want to pull speed product.
People that can skew lots of data would rather have reports big product in a pretty big brother and our teams are working really hard on figuring out of the right proposition do have people transition once the a big consumers of theater.
And that's why we really excited but L.D. my engineering team did pick any books have done a really good job getting the coverage out no commercial gains are floating on that that did see how fast we can transition customers.
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That's very helpful. Thank you.
I will conclude today's question and answer session I'd like to hand back to Mullen, there for any additional or closing remarks.
Sure. Thank you operator, and thank everybody for joining this call. We are really excited about how we performed in 2019.
We look forward to a good you into any green Chris its guidance on 2020, its pardon me think.
We can keep that we also really excited about the T.D. transaction, we will close that by middle of this year.
And and I think like Atlanta, as well I think we're off to the racist. So thanks, everybody and we'll talk to you again in 90 days.
Ladies and gentlemen, this concludes live I mean, they've already Latin Americans full year 2019, Investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin Americans website at Www Dot allele dotcom. There you can also find a copy of today's presentation materials.
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