Q4 2019 Earnings Call

[music].

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 feel a VTR. Please go ahead.

[laughter].

Good morning, and welcome to do what you listen and I guess, who used to sell cementing best people.

At this time.

These people are in decent only mode.

Todays formal presentation materials can be found on the Investor Relations section. So he was to Latin America's website at Www Dot Emily's Dot com.

Following todays formal presentation instructions will be even for the question and answer session.

A reminder, these coal is being recorded.

Today's remarks May include forward looking statements, including the company's expectations with respect to each of them on future growth prospects and other information on statements or another historical fact.

Actual results may differ materially from those expressed or implied by these statements additional information on factors or risks that could cause results to differ is available in lids Latin Americas. Most recent peafiel form 10-K.

You would see Latin America disclaims any obligation to update any of these forward looking statements do we said any change in its expectations or into condition. Some weak any such statement. These based.

Question on these calls we will refer to certain non-GAAP financial measures, which are weak and started to the most comparable GAAP financial measures, which can be found India TNBC studies presentation on our Investor Relations website.

I would now like to turn the call over to our CEO mr. violent not yet.

Thank you Gevo and welcome everybody to a full year results presentation.

That's always a joined by senior leadership team for all across the region.

I will get them involved as needed during the Q any pulling up prepared remarks, I'm going to start by taking into all highlights and operating results for the year before finishing the strategic update.

Chris Noise, Oh, CFO will then follow up with a review of our financial performance and outlook what dreaming tree.

With that let's get straight to your questions.

Housekeeping, we will both be working some slides, which you can find on our website at www Dot LLS dot com.

Oh, starting on slide four because our key highlights for the.

We generated record operational results it off fix business, but 280 treat touted Archie you additions, which was 50% higher than in 28, two and driven by the strength of physician eating broadband products.

Mobile momentum has improved significantly as well, thanks to new propositions and a renewed focus for mccain's compared to creating very important lot subscriber losses. We added 124000 mobile subscribers in between 19, which was a positive swing of 200.

56000.

We also delivered a financial guidance fovea and I'm happy to say that does include it how old's yes.

P I need to revenue ratio and adjusted free cash flow.

Strong adjusted free cash flow performance of 223 million.

Comfortably beat the increase targets, we had said halfway through the.

Chris will give you more detailed data we continue to expand and strengthened our fixed and mobile networks with nearly half a million you upgraded whos not LT coverage move both naive to set.

Importantly, we continue to invest but with a discipline view underpins, which helped improve our capex to sales Richard between thank you.

Finally, we have made great progress without getting organic strategy.

The integration of your T.S. is progressing well be completed the disposal of officials business and we are looking forward to completing the acquisition. If he can tease assets in Puerto Rico, and the U.S. Virgin Islands.

In the next three slides I'll cover our trade business segments affects multiple and B to b.

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 20 liking that prior year.

Good performances across all reporting segments.

Cable and wireless continues to be an improving story, particularly in fixed Panama, Jamaica, and Trinidad driving 125000 additions in 20 like you.

All three a growing markets as the largest operation since year end up here.

As we focus on a fixed networks, we have significant opportunities at the market expansion and be drive increased penetration.

He got caught a de 30 point its strong additions in Chile, We trust over 50% higher year over year, that's relative cost or eco route improve speeds and enhanced products continued to resonate well in a growing lucky.

And in Puerto Rico.

Training 19 additions being line that that probably you reach what's a good performance a string 18 into the increase additions related to the hurricane recovery looking to the right hand side from a product perspective broadband list. Once again, the main driver additions representing nearly two thirds of the total.

Video represented nearly a quarter of additions as customer to know region continued to value. It as an important part of get bundle.

Moving to mobile and slide six representing just under 20% of Florida.

In Q4, we added 57000 subscribers across the group a significant improvement year over year I.

As anticipated our revitalize propositions in Jamaica drove improved performance at CNW, while VTR continued to add subscribers at a consistent rate.

For the full year, we delivered a positive swing of over 250000 net ads with similar story as Jamaica that adds with 118 to 39000, India and Chilean girls being the main drivers.

I don't lend the Bahamas saw year over year improvements in subscriber trends and we continued to see signs of stabilization and mobile subscription revenue plus CNW overall.

He focused on bringing faster speeds, our customers and on the right hand side you can see we now have leading that works with LTE subscribers growing strongly you over year, reaching 50% of thought subscribers a deanna between the United Kingdom.

Moving to slide seven and I'll be to be business, representing about 30% of our revenue starting with the less side of the slight beat to be delivered a good performance in Q4, and the full year with rebased growth of 7% and 5% respectively.

We had a particularly strong Q4 read some significant contract wins across the group, notably in polymer the Bahamas and on networks business.

This is a testament to our leading combination of fixed mobile substitution that with a lighter and extensive product portfolio and strong 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 Vince.

The graphic set up the slide shows that the majority of our BBB revenue comes from CNW markets, including our subsea operations.

As part of our efforts to integrate operational capability across LLC, we see significant opportunity to drive greater market share VTR Liberty, Puerto Rico and coveted Deca.

Turning to slide eight I wanted to spend a moment another leading that but at the steps we've taken to drive innovation, which we believe is one of our competitive advantages.

Looking at and that was for us and fix you added over 490000, new upgraded holds and training 19.

It's important to note that 85 to set of seven and a half million homes past have access to leading speed comparable to global benchmarks, either true HFC of fiber to the whole technology.

We are also focus on layering a leading in home connectivity experience on the net but two great Wi Fi coverage.

We delivered just to automotive technology and mesh network speech be offer customers.

60% of our customers in Puerto Rico, and over 80% in Chile, and access to a high speed modems.

Experts fix the strength of our mobile networks is crucial as we now have LTE coverage to more than 90% of the population in our markets.

Moving to the right up to slight and our commitment to innovation, enabling us to deliver the services customers decide.

In addition to differentiate in whole wife I experience. We have also highlighted our new Android based hub TV offering, which we recently soft lunch in Puerto Rico, and we'll be rolling out across our markets as part of for single video product strategy.

Hub TV is a product that serves as a central video content aggregator with access to apps or T.D. content and traditional IP video all over the sophisticated recommendation engine and Google does it.

Turning to slide nine and a focus on operations.

Our first talked about operational transformation, a year ago and since then.

Made significant progress.

Starting with the left hand side of the slide we have no establish a new operations center in Panama.

What is the big as opportunities to grow our business comes from maximizing scale by creating efficient and effective operations, we chose Panama as a location for news Calebasse Regional operations Center. As this was opened in July 29.

Well on track for approximately 200 employees there by the end of training training and members of my executive team it already be located there.

Oh operating model also allows us to steal key initiatives operation Center like our digital transformation of product development and mobile engineering.

In addition.

Yes, our finance and HR back offices there.

Moving to the center and write off the slight we've significantly improved results across a number of important operational metrics as we focus on sharing best practices on the slide we've highlighted the impact install meantime to repair number of truck rolls and installed early life failure Richardson.

Porn metric as he speaks to the quality of our installation product and drive customer experience, while reducing truck rolls.

The next step on our 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 leading proposition in the region.

On slide 10, I wanted to close by running through our achievements in training 19 and focus areas for Threed printing.

Hi, thank their results he has speak for themselves and summarize my previous slides.

Yes, we looked at training training babies, a mixture of continuing as we execute against our strategic priorities as well as a new opportunities for us to drive additional growth.

Yes revealed bill on the unified structures and culture as a group to share and skill expertise across the region.

Second we will continue to expand and innovate while focusing on capital efficiency.

So if a fixed footprint, we intend to bill upgrade approximately half a million halls getting 20 training.

Third as covered in the previous light, we will wrap up our Panama operation Center, leading to efficiency gains.

Fourth we expect to complete the acquisition of ATM piece, Puerto Rico, and you have Virgin islands businesses and begin integrating that into our group.

A couple of points to Nokia, we continue to expected transaction to close in Q2 2020.

We expect to incur the majority of integration costs within 18 months of completion synergies benefiting or C. F. I expected to start coming through from about a year after close and totaled approximately 70 million when fully realize.

Finally, Chris has made great progress with our 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 delivered on our financial guidance in training like.

As we look to 20 training, we have focused on continuing to deliver organic momentum and making it successful start integration of the TNT passage.

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 in 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 as subscriber momentum and improved b to b traction arguably topline advancements.

Moving to oversee yeah, we posted $409 million or a 2% rebased decline for Q4 and $1.54 billion of 4% Rebased growth with a full year.

Q4 rebates performance was adversely impacted by 64 million dollar insurance recovery benefit realized in Q4 2018.

P. any 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 Dorian in the Bahamas.

Moving to the bottom right, we generated $103 million of adjusted free cash flow in Q4, bringing our 2019 totaled $223 million and comfortably D. Our guidance for the year.

Our strong Q4 result 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 data being government customers earlier than we had previously expected and thus we would expect to see some trade working capital unwind in out.

Q1, 2020 cash flows.

On slide 13, we present, our segment results and I'll call out a few key figures starting with CNW a highlight for us without Q4 revenue CF rebased growth of 3% and 13% respectively. Both of which were our best results since the acquisition of C.

Thank you in Q2 2016.

With respect to our revenue growth a strong result, indeed, a de coupled with growth in residential fixed was only partially offset by a rebased decline of just 2% in mobile which was a substantially better mobile performance than our most recent quarters, our strong rebate those yet performance was supported by the affordable.

And she revenue growth as well as the benefit from reduced content costs, including the favorable impact of new programming agreements and a decrease in withholding taxes associated with third party suppliers.

These positive factors on the Q4 I see that growth rate were partly offset by the recognition of $13 million insurance settlements in Q4, 2018, and the adverse impact attributable to hurricane Dorian in Q4 2019.

Moving to VTR, probably keep that we delivered a solid Q4 and full year performance with Rebased OCF growth of 6% and 5% respectively. Despite the unrest in Chile and associated weakness of the Chilean peso.

Finally in the right.

Slide Liberty, Puerto Rico delivered fantastic results.

For the 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 senses split off two years ago, we've reduced our direct cost by 140 basis points and our operating cost by 80 basis points, both measured as a percentage of revenue either contributed to an LCF margin uplift up 200.

20 basis points as our margin has improved we have also driven our p. any additions measured as a percentage of revenue lower by almost 300 basis points since 2017.

Consequently, our LCF last Penny additions has improved by over 500 basis points to 21.2%.

The increase is a great start for outlay 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 of 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.

D.A., roughly 35% increase year over year in the fall, we refinanced our CPR and raise the incremental debt to finance the 18 T. acquisition and during 2019 and early 2020, we opportunistically refinancing endeavor use capital structure.

Improving cost and Penner specifically in January of this year, we refinanced 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 of 100 basis points to LIBOR plus 225.

The majority of our remaining maturities in 2024 or earlier are now concentrated within our due to our 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 and as he at PV additions and adjusted free cash flow.

On the far right at the 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, as 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 expect reduction in our PD additions from 18% of revenue in 2019 to approximately 18% in 2020 continuing.

Our trend of lower capital intensity.

For adjusted 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 spin off we will continue to innovate for our customers in terms of both products and service.

Levels, which we are dealing is down highlighted earlier and was 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 a successor evident in our as the F. margin expansion.

Once we close the transaction, we will begin integration of the 18 in key assets, which we believe will significantly enhance our U.S. dollar cash flows into coming years and finally, a core tenant of 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 answer session will be conducted electronically if he would like to ask a question regarding the company's operation. Please do sell by putting aside the star or asterisks keep followed by the digit 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 make sure your mute function is turned off to allow your signal to retire equipment.

Well 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 work at the investment strategy for the company have you sensitized the potential to accelerate broadband upgrade redeployment beyond the current plan accelerating capital and try to look at what that might bring for the company financially versus.

The current Keith and decision around that.

Hello, Michael Thank you.

Yes.

That's a question that we grapple with a lot and we have looked at ways, where we can actually expanded beyond the 500000 that we've talked about on.

On Newbuilds.

It's a little bit more complicated than just capital allocation requires moving a lot of from contract is the processes to support it I do we feel really good about the numbers that we have today and we are always going to look for opportunities to do more because we think the payback it's great. There obviously great.

The story is great and really I think one of the secret sauce of our company is you know how to bill we don't have itself and so we always look cheap opportunities there.

Thanks very much.

Our next question comes from James Ratcliffe from Evercore. Please go ahead.

Great. Thanks that too if I could first of all just on that it does it free cash flow waiting for 2020.

Toward the back half the or is that just working capital or is there other thing going on at the CF or capex RPP need issues line.

And secondly.

Area doesn't get a lot of attention, but Ah wireline voice adds were strong again in the quarter and you guys have been adding customers. There. If I can you talk about the strategy there and what's driving that growth at a segment than I think most people are looking out is that yes declining second overall thanks.

Sure I'll take the second quick there both in Atlanta, Chris do a jump in on to put one you don't the boys had <unk>. If you recall the 2018 do it the fourth quarter. We received some decline through the boys that we specifically targeted that and it's part of the bundling strategy. That's a single Standalone product voice.

No not really a growing product.

As a bundled strategy it starts to make sense and so we've been quite creative front, it and be area, where we've really focused on boards in Chile.

We are really the leading fixed voice provided.

And a yellow and this deal is done to really nice job in both retention as well as.

Like I said the bundling proposition.

Now back to the first question I'm going ask Chris to jump into.

Yeah Karen.

The the free cash flow they being 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.

The exception that there will be.

Working capital swing or unwind in in the first quarter for you would expect to see you know.

A negative working capital.

Out of the gate and also recall that in terms of our phase the new we do have significant amount of our interest expense reported that first and third quarters, probably here and I would expect that you 2020 relative to 2019 that our capex baby year won't be as backend it certainly today won't be.

Backend weighted as it was in 2019 to the payment cycle will be a little bit different comes and how it roll through the free cash flow.

Great. Thank you.

Our next question comes from Soomit Datta from Mistreat Research. Please go ahead.

Oh, Yeah, a couple of.

Questions on 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 I'm kind of movement down the how is that if it is impacting your business and how is that trended.

It 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 ago, so kind of never sort of four or five to seven to perhaps.

And then the second question is just on Panama.

The that there was some some sort of good numbers I think the the money services business was performing well I think the Coventry continues to be around still negative competitive dynamics. Unfortunately, we any close that your thing too to those competitive dynamics easing we kind of.

Any closer to having clarity on the consolidation process from a regulatory perspective and doing a who.

You know.

What do you think you'll know could be in that process. Please. Thank you.

Sure.

Our last but good morning, good to be ready to jump in here as well one the second question on the.

The consolidation Panama, we aren't 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 wildcard the regulated to come up with the out no specific 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 I don't know for sure no back to Chile, I'll ask you a multi jumping here because he can give you really good insight from the ground game.

Jim.

Yes, Thank you Bob.

Yes on the situation in the ground. After a you know very difficult or end of the year left here, mostly related to the disturbances to public order, we have seen more quiet a January and February.

Yeah, well some distance is still a cure and dump them off if you see piece in the in the country, we see no relevant effect in our businesses. Our stores are functioning normally today, our network is functioning normally and ER, we well weve.

And from from the end of last years to be prepare to.

Number one keep our into east a six number to keep our service company would be.

For our customers.

And and we are you know sort of prepared to face.

The good Q1, we see good demand in the market. These services are showing resilience, especially the broadband side. So we are about to enter into back to school season, you see there. So we are confident that we are in good shape to fix it.

Thank you you know and got you want to make some comments on animal.

Yes, he hello.

No I think look we've been operating it now really stringently, we've b to B enterprise, we really have or a hands on anything we really are moving forward phased strongly also in the SMB segment to be made some very clear.

Operating moves to SB speaking the last month, we just see fig leaf 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 close propositions and those positions now being it's in that you didn't take.

Competitive market, but still I you know, we're starting to see sustainable growth into revenues now I know that's helped me a movement there for so we're very confident that the bid on a good track all sleep on them.

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 I've a couple on Puerto Rico at a high level could you share your.

Ah timing for integration of the 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.

Filling Puerto Rico, and all that are not due to jump in yield so I'm I'm, John Ritter, Our general Counsel and we think we can do you know this deal will still close in the second quarters that indicated earlier and we are working closely with D.A.D. and how weekend.

Modified some of the products and really come up with a really nice bundled offering and not GE is leading that on our behalf underground. So 90, maybe you want to make a comment yet.

Oh, yes for sure about you I mean.

You know expenses to two is actually to grow the second quarter and the way our climate 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 compete could go rebranding.

As you know instead of a they'll probably be part of our integration with it seems you in our cobalt pretty cool to the PSC traditional foolish agreement, which we took approximately three years.

As you go through three year, who were basically you know or carve out from the systems are not work for me to piece. So we will actually start seeing.

Synergies or the robot to move to begin recall some come within a year. After we close the transaction.

I see your question, where we could see you know bundled product I think is just too early enough to food can talk about that but obviously you can imagine that school reportable shortly as we move forward.

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 and quantify the any onetime benefit in the Q4.

Yeah, sure and I can directly to the.

The press in the press release and in particular, Yeah. There's a couple of there's a couple of Peter I'm in the RC Yeah for.

Cable and wireless really geared have.

About 12 million of.

Reduction in programming cost related to relate it to run settlements that we reach with new agreements or with the programmers that you're cleared out from a yeah, yeah outstanding liabilities and we also had a 10 million in withholding tax Oh benefit.

Ah that we have with third parties at the passage of time.

Allowed us to.

Take off the liability, but those were the benefit.

The on the opposite side, we had the impact Hurricanes Dorian in Q4 that impacted revenue and as the up in those the app that where it's a 4 million dollar hit and then need Baghdad in cable while at a wake up 6 million.

And on a year over year basis as well. In addition, there last year in the fourth quarter in cable and wireless there was a 13 million dollar benefit our related beauty our insurance recovery. There. If you take those numbers together and opt out and then they almost Matt.

Now 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 Amar's remarks also Puerto Rico's growth rate was impacted by the 40 million $49 million benefit in Q4 2018 from the insurance recovery I mean.

It did hearing in Chile, Yeah, we did have not 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. Many cases, they kinda blend out when you look on a year over year basis.

Okay. Good.

Our next question comes from that's Yeah, Let me off from Barclays. Please go ahead.

Yes. Good morning thing to had a question about consolidation in the region tool to see one of <unk>.

Competitive in the region.

As announced two keys ready to sell Motorparts, partially entirely someone to tough it's when you look at the portfolio.

<unk> Penney geographies, where you can keep actually would make sense for you to look up or is this is probably going bitterly considering you're in the process of all of buying 18 to Puerto Rico and from a bomb cheapened up to help promotional Ben responded to be poorly.

General comments about bumps would be Super helpful. And then following up on truly if we if I if I understand the I'm sure you gave previously.

The events or the little bit of an impact in Q4, but the do I get to try to the you expect therefore things to two to recover from your perspective in terms of topline dynamic for the rest of the year, assuming obviously the attrition doesn't deteriorate again. Thank you.

Sure.

On the argue you're referring to the telefonica and numbers and.

We don't we don't comment on M&A, but are you would be silly, but do not always be hanging around the who for any potential opportunity inorganically in our region and.

And so that's probably all I should say about it but we were very knowledgeable about all those assets into the good assets in some areas some areas that currency issues, but we will be very smart about this and I think Chris and I wouldn't said before we are very disciplined on M&A activities and ER and one of the primary.

They said, we look at its a unlevered free cash flow per share a and it's got to be accretive to it.

In any transaction.

And I, both as stated that our goal, it's really not the got bigger Oh goes to create value just getting bigger is not that interesting threats are creating value is what really interesting to.

Your second question on Chile, I know that the two major sports, mostly <unk> is there on currencies not operational a game or indicated to you earlier.

You know our confidence in the business operations are doing grade of stores are doing great channels. The 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 the prospects where it 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 to do.

Do you actually stabilize the currency right now when you see the currency movement deployment to other things that's driving it it's not the social unrest its price of four out of the copper prices. It's grown a buyer who do try not to go a bunch of things that's driving that but the current people will settle and and things will get better, but operationally chilly out businesses.

Related fine thank you.

Thank you.

Our next question comes from Matthew Harrigan from Benchmark. Please go ahead.

Oh. Thank you when you look at the FX neutral or ARPU per customer relationship or Puerto Rico, and more importantly, cable <unk> wireless you're actually growing the 5% rescinded again, I know you're down Tuesdays hooked up a BTR. So it's considerably ahead of your U.S. peers and I know some excess.

He said evolving strategy in the middle income markets, but was there some sort of a novel here in Q4, because it there on the surface, but it seems like it's incredibly encouraging and I know you're out of work is used to that customer relationships, but when you look at the large installed base what do you actually see catches be bad and then secondly, putting on your old.

CTO had a from a C.G. days can you talk about how the advantages of having a quad play now or capability of everything in house are changing is as mobile and fixed technology evolves. Thank you.

Sure when the ARPU, which I do know in Puerto Rico for sure.

We started the price increases.

As it becomes available to it.

And in Chile, a lot a bit the movements I really look a bunch of bundling that's really on a per customer basis, that's what you see and but I'll tell you you're not been also clear internally. Our goal is unique in this company is to maintain our ARPU.

Stabilize ARPU, but really good that's because it business on bogging. This 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 take price increases because you just opened an arbitrage opportunities for not only a traditional competitors, but future competitors as well. So we are trying to drain on manages to be really focused on growing this business through the hard work of game, but im not the easy worker.

They can price increases.

Leave it at that no on the Quad play.

We are seeing benefits of the partly not as much as I'd like to a lot of area because primarily the mobile product prepaid.

I'll tell you in Puerto Rico.

Dan this future transaction.

The ATM tea business is more is 70% post group and you are going to see it be very creative in how we died that postpaid business to our triple play.

But then the rest of business. That's allows is my chief operating officer together with his team is working really hard on trying to move that prepaid business do postpaid when making some progress and we are getting very creative on looking at ways to make the prepaid business looked a little bit more like postpaid into hybrid way and then attack.

Touching it to a triple play and that experimentation if not it and we're going to work on it even more so in a 2020.

Thanks, Paul.

That.

We have time for one final question.

And our next question comes from the taught them he thought from Goldman Sachs. Please go ahead.

Hi, Good morning, there's actually do you ever gone from Goldman Sachs Silicon just a follow up question on relate to could Chile, we haven't been seeing some companies deploying fiber and speeding up investments in that market.

To offer a naked broadband so I guess my question is how just could not only affect your broadband business in that market, but also drive some courts cooking in there given the growing number off for OTI P. offers and the penetration of those servers. Thank you.

Okay.

Well then said it's got to now that's a good movie jumping in a bit it's rob on the fiber to the phone Bill you see most of that being built in the C and b areas. It is that previously we also have neglected, but I'll tell you on strategy has changed.

And we are now very aggressively building out who do those areas and the reason our strategy is changed is.

Primarily driven by the fact that our engineering and operations being have come up with a we build out at a cost point that is very attractive funds. Currently all these markets that previously we've got to avoid it we know jumping into because we think they didn't on it it's going to be really positive and we've proven that.

Technology, it's rather than booked operation and that matter of fact, if you look at back in the second and 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, there's a bunch of smaller fiber to the home guys coming up.

We think those those areas are great opportunity. It's worth it will go head to head with them and yellow and his team with the VTR Brent I'll tell you I personally went through some of those phones in some of those areas with now the Guillermo and customers are saying.

Why would the VTR Braylon you guys coming in you know.

You are good we want you guys and so we think it's been really positive not game or maybe you want to a couple things as well.

Yeah. Thank you it just to up the fact that we'd be competing with against fiber or for a deck. It now.

I know that inform you got five or the until five or the guy who fiber now the new comers fibers and yet we've all these competition in the market our consumer value proposition guide without brown, he's proven to be the when you factor and VTR continues to be not only the leader in market share, but also the literature additions a year or.

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And your your second Thanks Gamer and your second question of cut the cord cutting.

Cord cutting its happening everywhere in the world, but in our region specifically it is not as it hasn't accelerated like enhanced elsewhere, the linear product and especially with our new launch of a new hub TV. We think video it's not a nine product and while it's not a super growth product either like India.

Dave It it's not a dying product can be a very competitive on the video front and we are managing it and mostly through the proposition itself, the technology and the product offering but more importantly, the cogs on this product. This is a big focus for my operating team as well as a non Christian as finance be much work.

Okay perfect does a very helpful. Thank you for definite just like a second question. If I may you know related to Fourg in the overall Caribbean region. As you are getting close true over let's say most of the boxing these regions.

How is the you know the real penetration of those 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 a fourg remains under penetrated in most of our bleachers a best penetration as well. He of course is in Chile, a I think Bahamas, and suddenly Bahamas is pretty high but the rest a you know still pretty low.

Yeah in Jamaica is an example of just under 50% still.

We see huge opportunity for two reasons, one without the people consume more data.

And they get more in trend or entrench 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 customers who want the postpaid product.

People that can skew lots of data would rather have a postpaid product in a pretty big brother and our teams are working really hard on figuring out the right proposition did have people transition once the a big consumers a theater.

And that's why we really excited about L.D. My engineering team did they can as well to have done a really good job getting the carbon job no commercial gains are falling on that that to see how fast we can transition customers.

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That's very helpful. Thank you.

That 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 you everybody for joining this call me I'm really excited about how we performed in 2019.

We look forward. There's a good you in 2020 cryptic guidance on 2020 is caught on we think that you can keep that we also really excited about the 18 T. transaction, we will close that by middle of this year and a and I think like Atlanta, It's Rob I think we're off to the races.

So thanks, everybody and we'll talk to you again in 90 days.

Ladies and gentlemen, this concludes let me never any 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 America's website at Www Dot paralleling dotcom.

There you can also find a copy of today's presentation materials.

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