Q3 2020 Millicom International Cellular SA Earnings Call

[music].

Ladies and gentlemen.

Thank you for standing by welcome to the Millicom third quarter 2020 results conference call. At this time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press Star then one on your telephone keypad.

As a reminder, this conference call is being recorded if you require any further assistance. Please press Star then zero at this time I would like to turn the conference over to Mr. Michel Morin. Thank you Sir please begin.

Thank you Howard and good morning, everyone and welcome to <unk> third quarter 2020 results call as usual, we're going to be making some references to some slides which are available on our website. So to begin. Please start on slide two for our safe Harbor disclosure and as usual, we will be making forward looking statements which offers.

We involve risks and uncertainties and which could have a material impact on our results.

And then on slide three we define the non I have for EPS metrics that we will be referring to throughout the presentation and you can find reconciliation tables in the back of our earnings release as well as on our website.

So with those disclaimers out of the way, let me turn the call over to our CEO Maui Maui.

Thank you Michelle good morning.

Afternoon, everyone I do hope you under law.

Thanks, Dave good.

Oh.

As you know it really come throughout the pandemic, we chose to stay fully committed to our long term purpose as you can see on slide five.

This performance is well known by you, but each one of our 23000 employees.

It means that Rob. This pandemic. We have won kits are increasingly engaged motivated and productive and two we have kept our communities next to precisely because of the commitment from all our employees those into front line and those in the back offices. Thank you for listening to this call.

And our service means that we have been up and running we DAPL 24, seven everyday because of this commitment from our employees.

And because of our rapid deployment of our lineup product. We have kept every single one of our users connected during the pandemic and we're proud of this.

How much of this you will see that our paying customers are coming back and a to go brand is emerging out of this crisis strengthened more relative to our communities.

Please turn to slide six for the key points of our call today.

One we had record customer net adds during the quarter both in mobile and cable are.

Our cost reduction efforts.

As we protected our user base on our market leadership position to this user growth, particularly mobile helped drive strong revenue and EBITDA growth in Q3 sequentially from Q2 EPS.

Yet we still have a long way to go to get back to pre covered levels, but the trends during Q the worse positively strong.

Three password generation was also strong in the quarter as a result, our plans to protect the operating cash flow for the year each form trucks and we further reduced net debt during the quarter.

And most importantly, even if we prudently held back from Capex condemning we also continue to invest strategically on for the long term positioning ourselves well to bounce back rapidly from this crisis pads.

Let's look at some detailed point by point, starting with slide seven.

In mobile we added a record 1.7 million users in the quarter.

He is a very strong come back and we're now back to the same mobile user base. We had at the end of March when the law comes were put in place in our market.

Our prepaid business came back, particularly strong repaid using the the main driver behind our strong revenue growth come back in Q3.

Simply said from users that are home the first thing to do let's turn on their mobile phones.

As you know, we chose our commercial and distribution of service layers on the streets precisely so that we could come back quickly on strong because we are doing now.

We also had solid net adds on postpaid for the quarter with a net gain of about 140000 customers.

No there were still down about 300000 postpaid users compared to pre corporate level.

Many of the east coast customers actually cautiously move to prepaid.

Yes, we do expect that it will take a few more quarters for us to react quickly to switch cars backdrop to postpaid.

We also had record EBITDA.

Business this quarter, we added a record 157000 customers in the quarter.

Subscriber count is now about 62000 higher than it was at the end of Q1.

In fact, if you look at our HFC customers almost 100000 more customers today than we did at the end of March. This strong performance is common firstleap from strong demand for broadband, which is bringing us new customers.

Lead from an early decision to walk for Latam Carter.

Minimum businesses.

This product has allowed us to keep our promise to provide connectivity to our community.

Retains a good relationship and an overall relationship with our customers.

Very expensive disconnection reconnection cost during the pandemic and after the pandemic keep our real turned doubled down on protect our customers.

This was holds for the right thing to do for our customers and for our communities. In this time of need on our brand is continuing and will continue to benefit further from this in the long term.

Now please turn to slide eight.

These record net adds produced a 4% uptick in services revenue in Q3 compared to Q2.

Again, we are still well below peak levels in terms of Brent.

And metric integration is still ahead of us, but they come back in Q3 with strong, adding about $50 million of revenue and growing 4% sequentially from Q2.

We have also been keeping a very tight control on costs as a result, almost all of that incremental revenue is going to the EBITDA line, which grew 7% in Q3 compared to Q2 I.

I want to be extra clear much is still uncertain.

On the news on over the last couple of weeks certainly highlight that but we did see the business begin to come back in Q3.

Now please turn to slide nine for a closer look at our organic service revenue growth and what is behind that in this quarter.

That's just one on the left hand side of the page is that the improvement in this quarter was broad based every one of our markets showed a solid improvement year on year growth in Q3 compared to Q2.

On the right hand side of the page.

Message. This improved performance came in part from our mobile business from prepaid in particular as I already mentioned.

Growth in home remains strong in the student in Q3 by the positive and about the same as in Q2.

But as you know net cable subscription business revenue followed the user base. So our increase subscriber base in the quarter EPS Okay.

Okay, then we'll see growth in home business retention rate going forward.

Maybe on the other hand, and as we expected is still challenging with revenue down 8%.

A weak economies and our markets are taken a toll on many of our SMB customers. Many have had to shutdown either temporarily or permanently.

So no better be recoveries in the numbers of this quarter.

Recovery is still to happen.

Well to begin and we expect this recovery will take some time to come through.

Sure on this slide you showed a strong come back into the system business, but not all of our business lines are recuperating, just yet and there's still a lot of uncertainty for us going forward.

And that is precisely why we remain so very focused on cash flow and reducing leverage because you can see on slide 10.

Over six months ago, we implemented our climate action plan, which you know very well.

I had a hard target to keep operating cash flow EBITDA minus capex laughed at around $1.4 billion.

This slide simply shows you that we are right on track and we are confident that we will deliver on that goal.

We also told you that we would prioritize net debt reduction but is the second point on this slide on the right.

Now brought net debt down by 240 million feet Q1, and we will sustain this focus on for now.

Now I would also like to give you some color on our key countries, starting with luck and now slide.

Slide 11.

Similar continues to perform very well.

People rushing to be a market in which we hold a strong market position north.

We will continue to invest the money market leadership.

Growth as you know the governor, but did not what kind of country a superior from other countries did and that is one of the reasons why the impact our Q2 numbers limited and its also one Q2 services revenue will have shrunk back to positive growth.

Throughout the year, we'll continue to invest in both our mobile on our business.

To drive efficiencies and digital adoption.

In mobile we added over 300000 users who are based in the quarter. Our base is now about 20000 users high value was recovered.

Demand for residential cable has also continued to grow throughout the company. We added 36000, new customers in Q3.

Why the number of minutes we.

You too.

Now, let's go to slide 12 for a look.

The macro level.

Hi, Matt is the wealthiest country in Central America, and one of the reasons we're investing.

So confident that in Panama.

Told the pandemic in Panama has been amongst the hardest with its mark on being one of the most severe and its GDP expected to control contract almost 10% this year.

Against this very challenging back. So we have continued to execute on our game plan on integrating the acquisitions extracting synergies protecting our market leadership on fixed and expanding on mobile and we are extremely extremely pleased with our underlying operating your toll.

Subscriber counts tell this story impressively well in home, we have continued to see solid and consistent growth in our broadband Internet subscriber base, we're solidly holding our market share position and leadership on fixed.

And then a little bit more in mobile we have now celebrated the one year anniversary of our acquisition.

We have modernized network rebranded the business and extended our market leadership.

Indeed, our customer base has expanded and mobile by about 5% over the past year, reflecting a strong bounce back in Q3 of the economy began to reopen.

And we're also picking up new customers from cross selling mobile services to our cable customers. As you recall. This was precisely the cross selling opportunity that our acquisition plan identified I will spin it off.

And the punch line in Panama is our dollar denominated costs, reducing the robust.

We have generated $160 million of pretty over the past year, even though we have some.

Something creation costs, and taking a coveted which we have not pursing.

This is most visible in our b to B business, you kind of has been very hard in the beginning of the content.

It would be the area as a group that did not recovering three compared to Q2.

So all in all we're not just firing on all cylinders.

But very pleased with the underperformance there, particularly in the PCB segment.

Hello.

Okay.

13, we are regaining some good coverage from anthem do prolonged as well.

The mobile site.

Or greater network by 1000 sites.

The 700 megahertz perfect when we bought earlier this year.

Remember that right now that are just older 700 megahertz equal.

Which gives us better penetration in the area were previously on spec.

Spectrum. They just hoping you can expand coverage.

Second the soul into traffic areas in which we have uncovered.

You can see that we had about 450000 mobile customers in Q3.

Hi, this is related to increased mobility for sure.

Our gross adds score.

Scores are higher in the area or redeploy the network, which is a very promising sign.

The home, Colombia, we continue to expand our cable network, adding about 6000 home purchases. This quarter. This is a bit less than usual, but very consistent with our technical delay network brought you in corporate so that we've been focused on filling the existing headwinds for a better return on capital more.

Cash really critical here and that is exactly what we did we added a new cloned up more than 80000 fiber customers this quarter.

However, penetration higher helping us because we're comfortable this year im sure, particularly in hard chief marketing, bringing capability in Colombia.

This strong user looking close is it good for the section.

Fiction and presentation focusing belongs to investment can you to make beginning on slide 14.

The growth in our fixed broadband business is a key driver of long term shareholder value creation for our business.

Let me say that difference we are in the business of creating shareholder value by increasing to generating long term value customer relationships.

Cable is all about.

Year to date, we have built an additional 300000 fiber cable home passes thats here today. This is lower than our typical run rate of about a million per year simply because during the condemn inc., we shifted our focus to building our existing network.

And I'll just show you the positive results for Colombia for the whole region through sold equally positive.

Year to date, we have added about 174000, new fiber cable customer relationships.

About half of those in Colombia, and the rest split between Bolivia, Panama and what came out.

That's year to date 174000, new fiber cable customer relationships and had positive year to date.

Interestingly, we increased inflation fees during this quarter and to minimize churn down the road at void that bed, hopefully drive better industry practice for the long run.

Our focus this year on increased network penetration, which is up significantly year today is helping us drive better operating leverage cash flow and return on capital.

Going forward from governments do continue to open up their economies, we will gradually ramp up our home built backup again as broadband demands continues to stay strong and we will of course continue to keep an eye on our medical contrition rich.

And in mobile you can see on slide 15 that we continue to move forward with a very strategic investments, we've been making to upgrade our net mobile networks we.

We have added over 1100 points of presence this year, mostly you, Colombia, how upgraded 4000 sites and the poor countries, where we have been deploying new spectrum holdings are modernizing networks. These network, our basic time, both coverage and capacity and improve both user experience on co creating efficient.

In Colombia as you saw this is already providing key to improving our competitive position.

Turning investments this year, how centered in a more focused cable fiber network rollout and the mobile network is functional organization that I just talked about.

There are two other areas, where we have been focusing significantly one CECO money and the other one is our digital roadmap, but talk about people money first on slide 16, we.

We have been.

Quietly building, our mobile unit money user base.

We now have about 5 million people money users in Latin America.

About 20% over the past year, and yet only a fraction of our overall mobile user base.

Usage is increasing dramatically the number of financial transactions and Tigo money has more than doubled over the past year and.

So how the volumes that the platform is not transacting people money is not transacted well over two and a half billion dollars annually.

How many companies are going to be simple value add service for our customers to revenue becoming business in America with high potential for us.

And of course, we look forward to updating you on our strategic progress from Tivo money Latin America in the coming quarters.

Lastly, we have continued to invest.

Look significantly forward in digital adoption.

You can see the progress on slide 17 simply.

Simply said the pandemic has forced many of our customers to embrace the use of digital tools and tenants are digital iridium has allowed us to respond accordingly, just under six months since the beginning of the pandemic digital collections are up 50% you sales are up more than 80% and digital prefigure those are up 60% we.

We have also re purpose, our corporate responsibility programs to better support our communities digitally during the time, Randy our mass that's going to cause program, which means connect the teachers was initially rolled on in Bolivia, where we train 140000 teachers on the use of state of the art form an educational tools during the condemning.

The program was so successful that we have expanded it to what commodity hardware on product line and we're looking to expand the program to all our operations in 2021.

This program is an additional source of pride for many of them were personally involved with the program.

Part of this I'm going to do a culture that you ever heard you talk about four and you'll continue to hear me talk caught in the future.

Let me turn it over to team over the financial quarter.

Thank you Chris you signed.

So I'm going to start on slide 19, with the bridge between our reported numbers on the Latam segment.

From the top of the chart you can see how the total revenues were just over $1 billion, but when you look at the business Holistically and Thats, including Guatemala, Honduras is fully consolidated our underlying revenue was just over $1.5 billion.

To get to the underlying latch on service revenue $1.3 billion, we exclude Africa, which now is little over 6% of our revenues.

Telephone equipment sales, which then also an important driver of profitability.

So on slide 20, you can see that Latam service revenue fell by 3.1% on an organic basis compared to Q3 last year.

Well look at it as actually a bit more detail on the next slide.

EBITDA was down 5.6% organically, but again as Mike highlighted.

On a sequential basis compared to Q2, I'll bet, the service revenue and lower bad debt.

No operating cash flow, which is EBITDA minus capex was a little down but on a year to date basis almost exactly in line with last year and on track to meet our target for the year.

So on slide 21, you can see that while service revenue fell by 4.7% in real terms and 3.1% organically, what's better than Q2, as we saw improvement in economic activity and.

In all businesses across most markets and as much as coincidence.

Mainly driven by the improvements in mobile B to C, which declined by 4.3% and that is considerably better than the 11% had drop we saw in Q2 again, let's see how I explained this was largely as a result in the prepaid business rebounding reflecting.

As the easing of Locums, primarily.

Our home business continues to show year on year growth again broadly in line with what we saw in Q2 and B to B also in line with Q2 down 8.5% add where we seeing weakness in the small and medium size enterprise solutions.

On slide 22, and again as much has highlighted we've seen an improvement in all the operations compared to last quarter, but we are still down in most operations with the exception of Guatemala and were still below pre crisis levels.

The relatively stronger performance in Guatemala, It was up 3.9% organically is driven by an improvement in prepaid.

And the continuing strength of the home business.

Colombia, where we were broadly flat organically with a good performance in home offset by local NBC.

On mobile it was better than it looked last year in Q3 was still booking haven't tell revenue.

To that company filing for bankruptcy this.

This is the last quarter, where this will be a factor.

So.

Dollar terms also we reported revenues of 11.4 cents during the quarter and again this is entirely due to FX.

Now also facing ethics headwinds with Herbalife web hosting service revenue was down 15.2%.

Excluding the FX impact and the one offs we saw in the last year numbers. Our service revenue was down just under 2% and this is a significant improvement compared to the last quarters.

So on slide 23, we got the Latam EBITDA by country again, we have seen sequential improvements with cost saving measures benefiting most markets.

Guatemala continues to meet the way were 3.2% year on year growth plus.

Plus elsewhere the pitcher largely reflects the revenue impacts discussed in previous slides.

Now I want to turn to the balance sheet on slide 24.

And you will have seen that we have been very active and specifically we have cold the comm sell bonds in Guatemala.

That was almost expenses and I'm, saying, we will refinance that with a combination of local currency bank loans.

Listing cash resources on some channels in London.

We've also taken advantage of favorable market conditions to issue a new bonds maturing in 2031, and this will replace an existing bond that matures in 2025.

Now the impact of these and other measures needs without average maturity is now 6.4 years and the average cost of debt is quite 0.7%.

And you can see from the slide we.

Really have very little in the way of refinancings before Twentytwenty four.

Let's finish off on slide 25, looking at our current debt and leverage position again aligned with our strategy of preserving cash and paying down debt.

We've reduced our underlying debt by.

$239 million in the last six months.

Our underlying debt net debt is now at $5.7 billion, giving us proportional leverage of 3.16 times.

When leases are added to our financial impact to our net financial obligations.

Ill now a shade under $7 billion and the proposed to leverage including leases at 3.29 times as.

And with that I'd like to turn back to wish him to wrap up.

Thank you before.

Before we take your questions, let me recap.

Recap the key messages first our customer is growing again.

In mobile prepaid we are pre probably levels.

Spirit was still up from work do and the home continued growth through at this spike that permit.

Investor base user growth will drive Tomorrow's revenue growth the key.

Moving to our Q3 numbers.

Second revenue and EBITDA improved in Q3 compared to Q2, we still have a way to go before we get to positive year on year growth and we know this from them. It is stock from over but we are getting back on track and we remain positive.

Yet very cautious third we admitted priority through an endemic to protect our cash flow and to reduce our net debt you know that we're well on track to do with the $1.4 billion of operating cash flow that we guided to works and we continue to reduce net debt in the quarter and fourth we continue investing we're doing so in the areas that are aligned with.

Our long term strategy and in ways that position us to bounce back strong there's an ever condemning passes and you can already see that starting to happen in our Q3 results and we're all doing these things with a clear sense of purpose and with that we're ready for your questions.

Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue simply press the pound cake.

Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.

Our first question or comment comes from the line of Stefan Conference from Dnb Bank. Your line is open.

Yes, Hello couple of questions case.

First.

Included in your target to Keith.

Operating cash flow stable wants to cut cost with at least 100 million ads to cap.

Capex with 200 to 300 million.

And so far we have only cut capex with some the 75 million yet today.

And with the current improve develop development are you still aiming to cut capex to be six cents or have you changed that targets if you.

Capex capex to that extent, the operating cash flow target do seem conservative.

And secondly.

And next year, you have increased competition in Colombia with Walmart.

Like it launched.

How are you preparing for this increased competition or you.

Looking more towards converged offerings in that market.

Or any other payment that you can.

That would be appreciated thank you.

Yes.

I think the second great great questions, which we had a couple of hours to address that.

Both.

Let's start with the first one I think John joins the team and I can do a good job of that ill start off just generically what's happening.

We're managing the business.

Up to about 1.4 on literally on a weekly basis.

We see that we have room to put a little bit more capex into the business, while still delivering 1.4, we go ahead and do it.

Particularly if we see the broadband demand is happening quite strongly as we see it happening.

So we actually Havent has what I call a good counter of them which is.

We we can put a little bit more point capex into the business this year.

Try to position ourselves better for one of them is over and still deliver upon for that's what we've been doing and I will be we've been able to do that because we've been so strict on cost cuts.

Significantly and because this is the most important.

On the part of our concept from the.

The way, we just signed up.

We decided with the knowledge that we as a company and we have one way or the other it's pretty quickly.

We can slow down pretty quickly ramp up pretty quickly, which means we can as we can keep our calls on what's happening in the markets and that's exactly what we're doing.

We're cutting back on costs significantly, but we remain.

Thank God forbid if we need to and as a result of that we are pretty confident we're going to get on 1.4 and be able to.

Invest into the business anything EPS over that.

With that ill hand, it over to Tim for more and more details.

Yes, yes.

I would only add one quick one I mean, you know our costs I think as Mers has set up costs are running a lot lower than we had anticipated at the time that probably down at the start of the $170 million in the last six months.

Some of that is activity related some of it is FX Bucks a lot of it is also management and.

Much has said if we can find excess savings on the cost side, then clearly we want to invest and continue to invest in the business provided we can deliver that that 1.4 of operating cash flow.

Not too much too yes.

Yes, perfect. So long on the second step and I think you've you've seen as over the course of this year.

Really put the full close on our ability to drive.

A better business in Colombia, and that's really the overall answer to your question I'll go into detail in a minute, but over the last all throughout the condemning we've been building the 700 megahertz in what.

We just showed you the numbers.

Today is actually much more than 1000 closer to 1200 us as we speak today, the number of additional sites, which switch Eva indoor coverage.

And that geographical preference any gives it a better user experience, which is already significant just.

Just last week, we were we were unable to that.

The best performing Fourg network in Colombia by Patella on this as we made public in Colombia also increased our commercial distribution network significantly so in Colombia, because now we have more points of presence and that's just not does not mean network, but it also means commercial now.

So we were really.

We're really focused on the opportunity and this is a key point I'm going to make to your second.

For the first time.

Many many years because we bought the spectrum, we're putting it to use with the network investment and the commercial distribution investment behind it.

We completed two world of Challenger in this marketplace with the tools to succeed.

We only have 15% market share on mobile in Colombia.

18% market share yet today, we have a very very strong fixed base and it's grown we have a brand that works and we're investing in the network revenue distribution, which effectively means we can now play other challenges with all the tools fix on mobile and Youre right versions is really important.

With this deal we will have the frequency and the spectrum to play with and hold the tools with only 15% mobile market share, which effectively means in our minds, we're ready now to be a challenger mobile now the last thing I would make you last point I would make to you is yes, we're preparing for the opportunity to be a tough.

During the new competitive environment in Colombia, which by the way we manage the co pay market as it has been for the last 10 or 15 years performance effectively replacing the position that until at so we think mobile convergence with an investment that we're putting into the network and mindset that we can be a tonnage over 15% mobile.

Market share, we actually feel like in Colombia, we have the tools that we never out in the past.

[music].

Okay. Thanks.

Reassuring.

Thank you good question I don't know where we're focused.

[music].

Thank you. Our next question or comment comes from the line of Marcelo Santos from JP Morgan Your line is open.

Hi, Good morning, Thanks for taking my question. The first question is about the sequential improvement in booties into Dita, which which was pretty strong I just wonder if you could comment a bit on that the second question is about the lifeline clients do you still have a large basin lifeline and excluding or is it.

Most concentrated in El Salvador do we have potential to see this come back in the following quarters decide they'll salvadores. Thank you.

Yes, so long believed.

We.

We were happy to see him up sell off the business not only stabilize in Q3, but also come back strongly to growth.

And I think.

We had strong mid October mobile very strongly at odds on hold no doubt very strong quarter in Bolivia, a lot of that was a result of.

The strong come back from from the difficulties, we have put in place the.

Moving on product and believe me out during Q2, and we were able to put that in place at the end of Q2. So could Q3 short term come back, but we're also beginning to see and this is important our seller over you're going to see bill DBS stabilize.

Much more than it has for the last 18 to 24 months. This is I think the key point and believe they are going forward with.

We had political uncertainty in Bolivia, and then we have the pandemic in Bolivia the elections.

Last week are helping provide a clear path towards certainty in Bolivia, there was a clear winner in the first round with a clear mandate from our position as a result of that the social unrest and the political instability in Bolivia seems to be coming back.

And then.

The head of the New government you President Shih, most former come in eastern and Central banker. So I think its position is helping provide stability on economic terms as well and I think thats exactly what will be needed.

Yes.

[music].

So we're we're handle that there's going to be renewed stability in Bolivia now on the lifetime customers, which I think is a is a good performance rich.

Yes, I can answer I would assume you make wrong technical points and I think it comes into a lifeline products because we introduced lifeline very late in Bolivia, and that we took a very high bad debt charge in Q2.

So a lot of the impact.

Was lower bad debt, just we would move to normalized levels in Bolivia and in fact in most countries. So I would use the outlier was a Q2 EBITDA rather than where we are today.

Yes.

Yes.

Yes. Thank you to my further health and so I'll make two or three points on up sell on the life and customers I think.

The first two are as generic if you will.

Tom This is turned out to be a.

It's very good tool for us not only through the pandemic.

At a tool that we think has merit going forward and we will continue to use going forward for the exact same reasons that it was helpful. During the pandemic, which I already alluded to we're not going to get them. It is a helpful tool for us to keep going forward and you kind of matching why is it starts paving a way for us.

To manage.

Retention, then churn and the relationship with the customer in a most cost effective and cash flow accretive way for us.

If you recall.

We don't count indignant subscribers. This lifetime opposed from any more subscribers in the subscriber count that we report to you to their pool that sits out hi, crush unchartered counts. We also don't book any revenue from the backlash subscribers.

So we believe we have also kept our financials relative to clean but that effectively managed our settles you can think of these as a door medical is.

Is that we keep at lower levels of course now them during the pandemic, but that we're using to bring back subscribers and youve seen during Q3, we brought back a ton of those but most importantly, we've added a ton of new customers to the base because were at higher levels than we were before.

As a result of that this is a good tool and most importantly, something that we continue to use going forward I hope that helps a lot.

Thanks, Gary Horton, Thank you very much for the answers.

Thank you. Our next question or comment comes from the line of Peter Nielsen from ABG. Your line is open.

Thank you very much.

Yeah, just just two quick ones firstly.

You have on previous calls sort of a slave to.

The sort of post will be to Genesis, which your markets will face you're now seeing a issue should we showed good recovery in Q3.

So just could you give us any qualitative indications on how you see the coming quarters with the sequential improvement as service revenue trends continued you, perhaps a bit more optimistic or stabilize facing for next year or.

Are you still sort of equally cautious as you have been in previous quarters, and then just a quick one for Tim Tim you are interesting comments about investing.

Anything above the 1.4 billion.

Yes, we should interpret that that you will come in at the 1.4 billion operating free cash flow this year and not about.

As you will continue to invest in Capex is that correctly understood. Thank you.

Okay.

Yeah, we'll build we'll get to those same you can that you can start working on on on the 1.4.

[laughter] on the first one on the covered one does this actually two pieces, Peter and they're really really good question one is.

What is your outlook for carbon in our markets and as a result of that what is our outlook more generally.

And they're somewhat distinct but very few terminated.

So what what happened during Q3 of this year is that our economies began to slowly opened up and that cost increase mobility.

Other countries.

The lockdowns have been gradually being east I should say that they have being east, but they have not totally disappeared.

And mobility is not yet.

And the percent of what it was before the recovery levels, we estimate depending on any countries that is somewhere between 6% to 80% of what it was so there's still some coverage recuperation still to happen in our markets. Despite the strong prepaid results that you saw during Q3.

Now with regard to the buyers in our markets, it's still spreading.

Largely stable in most of our markets.

As of today and we look at is obviously on a daily basis.

We're not seeing any second wave coming back into our markets. It does not mean that its not possible.

But we're not seeing the surgeons or coming of a sexy waving the numbers at least yet.

Now more importantly going forward.

This is according to our assessment on how to upset the outlook going forward.

The key element for us is that the.

The recipe of a locked down.

Markets, which we use very very severely.

For a lengthy period of time, we've made this point.

Over and over it.

It's a recipe that going forward.

I'll say this argues that they won't have.

Political supportable visco maneuvering room lean cemented in such a hard for severe manner going forward.

We don't expect EBITDA. There secondly, we won't see it at this point, but we don't know certainly don't know we don't expect that the lockdowns.

Can be put in place are or will be put in place in such a hot manner by the way before and I think the recipe in our countries will now err on the side of keeping the economy's open.

And the recipes will have a lot more out of economic predominant than anything else.

Now having said that.

What we have learned there.

In this environment is that.

Keith can change very quickly and in a very uncertain minor.

And I know and I will tell you. This was I think it's important for everybody to understand.

[music].

Our Q3 was better than our Q2 in every country, we already said that driven mostly by prepaid.

Prepaid came back strongly about prostate and BBB are still to be and how strongly on Wednesday recover if function of the macro recovery. It's a function of how about the damage was that a function of how long the health crisis stage onto the need for no further markdowns in our crunchers.

I don't know every month.

This past quarter production was last six months has been a bit better than the previous month. It has been very gradual and therefore, we remain very cautious going forward.

We do have a more positive outlook for 2021 than we do or 2020, we surely do but we also have a very cautious approach to things going forward because the key word here.

The balance between the short term on the long term and if anything they're not doing this crisis, you've seen as we're investing for the long term. We note that broadband is that product, but highly managed kind of long runway, we see it short term, but we did see a long term.

We also need to manage the shorter term and we're doing that very very cautiously.

Because the key word here is uncertainty.

Peter and that uncertainty comes from one the mobility.

Could come back.

To the macro we'll certainly have a way on our performance whether its the dominance is going down to the economy or the fiscal constraint at our governments are going to have.

Three teams need to be Wynnewood comdata come back. This is a function of when the economy will recover we don't know doctors yet.

So what we have learned is that being as a business leadership group really good.

Navigating that uncertainty is the key to this and I think what we have learned on but we have demonstrated in our corporate side still.

Still ongoing has great governance.

And we have shown and we think that keep it is just a great ability to react.

To the short term quickly on the way down quickly on the way up and I think thats the key to our success, while we continue to invest in the long term outlook is as much color as I can give you and with all of that but keep you will find that our entre to the 1.4 to pick up I could give you is completely consistent with that.

Yes, that's right that's right.

Liam kind of we needed a new north star when that Lincoln, which hits, we realized we needed to protect cash flow would you sense monies leverage and.

And that's where we've decided we will maintain the cash flows tool and the same as last year that was an important target for us it remains the important target for us Peter.

And now you know kind of I said on my earlier answer I think we've probably done better on costs than we had.

Originally thought we could do.

For variety of reasons.

And on the Capex side, we you know we continue to have NPV positive project, we have pools to what we have suspended.

And and to the extent, we can generate more cash flow.

We will want to execute on those NPV positive athletics, particularly.

If we can see viability in.

2020, wanting to add to speak with Tencent, It's it's.

We remain cautious as mature set but then to the extent, we can see opportunities add that will deliver returns for us and we can still deliver that will put full we will we will do that.

That's helpful. Thank you both thank emotional figure to give us.

Thank you.

Thank you. Our next question or comment comes from the line of Frederic Lisa from Deutsche Bank. Your line is open.

Thank you Hello jump the man I have to say you that turning back one year performance always good I.

I have a few questions. If I may lift that you had EPS of slice on digitalization and could you sort of elaborate a little bit more on that because I think this is one of the interesting part stat.

Even though it's dreadful with the pandemic it probably spurious innovation at the same time.

Couldn't so so I'm interested to hear a little bit more behind the scenes sort or what what is happening what you see what is unexpected on the good utilization train for you in your countries.

Another technology a questionnaire.

Fixed wireless access if that's something you would consider some alternative or one of the tools in the tool box to pass even more homes, even quicker on the fixed side. So it will be interesting to hear that kind of.

A discussion thank you very much.

Yes, great question, essentially offsetting some digital I think there's.

There's there's two bits to my answer to that one is.

We were ready.

With our digital planned and very focused I think we have shown it to you a couple of years ago. When I presented the first lives on how we were going to go about our digital first platform and how we were going to focused on the commercial activities.

And because we were ready and we had a centralized crude that was driving support for the operations, we were able to capitalize on that needs immediately.

We've already shown you the numbers so we didnt start from scratch in with them, rather we turned a real aster to capitalize on it.

And the numbers show that and most importantly, I think is.

The fact that the.

The pandemic did give us confidence to go out and do it.

I'll give you. One example that one of the.

Distribution teams came up to me during the and then you guys said before it would have always been a little bit concerned to put money into any given digital channel that we already had up and running because we felt like we would be taking away money from a non digital channel that was proven and demonstrated to work.

The realities are independently that non digital channels simply did not exist.

So we never we didnt have a conundrum anymore. It wasn't a trail we just put the money into digital and we saw it work. So that's what happened, we where we have the opportunity to need to go digital as a result of that we saw that happening and will continue to drive the current.

Focus of our digital strategy, which is very commercially driven so what you've seen us income as digital is effectively the distribution channels and the service layer channels. That's what our current thinking about digital is and this has been our thinking for the last few years and we are very happy that we have put a focus on.

Based at this point in time, because that's the first wave that really matters are going forward.

Digital I'm not sure exactly when we're going to put it in place it's going to have layers of data analytics artificial intelligence to put the network to be more efficient and to put a relationship with the customers on a digital platform that can use data analytics application intelligence. It is a matter of the 80 20.

When we are comfortable that we are completely maximize the commercial focus of our digital strategy today.

The reason the reason, we think reward our wives is because we choose not to focus on and our focus has been on digital as a commercial and service tool.

Our next stage is going to be.

How do you use digital for data analytics on the use of artificial intelligence to make us a more digital platform.

Not highly related of course as you can imagine with the.

The use of our digital platform as a platform for new services.

Fixed wireless access we do use it.

Tom.

Sporadically.

EPS certain markets.

Please.

Friction seeks.

Products, there that we may eventually want to roll out fiber cable too.

Particularly in Panama.

And in Colombia, we have used fixed wireless access to determine whether there's enough demand for broadband product sufficiently so so theres economics for our fiber cable rollout.

All right. Thank you.

Thank you. Our next question or comment comes from the line of Joanna Ahlquist from Scandinavia Scioto. Your line is open.

Yes, Hello, Thank you and just questions. If I may the first one and relate to you touched a bit.

On sort of what you expect.

Going forward in kind of the macro consequences for it I'm just wondering if you can elaborate a bit on what countries do you expect to see.

The toughest natcos difficulties in the aftermath of the come that make steadily we assume there will be no more locked down where do you see the greatest Vic in that sense and then if you have seen or expect any tax consequences in any of the trends you said your questions and then.

A quick one pit to Tim that Slatted only bad if you can give us a number on how much the bad that's left in this quarter. Thank you.

Okay.

Yes.

I'll start in with number two then move onto number one I hand, it over to Tim because he can weigh in on the back of us as much as I can.

On the tax consequences, we've debated internally quite a bit as you know in every country around the world.

The reaction to the pandemic has just taken a big toll on on fiscal accounts. So on the one hand, you would think well then governments are going to be more touch constrained and as a result of that they may do for some of the bigger companies to two.

The more burden.

But on the other hand in recently.

Similarly in our economies has realized how important digital connectivity is to their citizens and as a result of that they have a counterbalancing argument. We are counterbalancing argument that basically says.

Be careful taxing the sector, particularly now in academic and going forward. If you really want this to be the driver of your digital economy going forward.

Turning to uncertain, where exactly that's going to land on how effective we are going to be in saying prepare for the sector because.

While you're going with it.

On the macro side.

I think the key word but on a bit uncertain tax rates because these projects.

Central America has been excellent in.

In terms of.

It's capex.

And in terms of the remittances.

Remittances went down in April and start to come back in May and year to date, just about every country in Central America has seen renewed growth in remittances.

Which has certainly held up those economies.

And and the reason the reason I hesitate a little bit here is because one of the things to learn about our economy is.

How much the informal sector really ways and.

And how resilient this economies are up in formal level.

And that's why it's important for us have such a good portion of what's happening on the ground. So.

So we we do more and this is the reason we're cautious and we are very very.

[noise] Embolden, if you will by the Q3 results and by how resilient our subscribers have turned out to be and under great demand that we see going forward, we do where we are.

Need to be cautious and with that 100 on the team to expand on back to Ken.

Okay and last question.

Yeah.

And then I just think quick comments on tax actually we had a very low tax charge in Q3, when I suppose the question, but just to explain it.

Now to some extent that is lower withholding tax, but but I expect to see at that kind of normalization in Q4, so favorable tax charge for the year is going to end up somewhere between 202 hundred $50 million on an underlying basis realized it wasn't a question you answered, but I just wanted to get that in so I don't understand.

And then on the bad debt I mean, I don't what to give exact numbers roughly speaking in Q2, but how bad debt charge was twice the normal level.

And in Q3. It was a third is the normal level. So what was happening there was some write back of charges, we took in Q2 and a normalization.

Of the level, and frankly, I'm expecting Q3 to be more or less back caps.

On the level.

Challenge.

And in terms of countries that are now I think the one mentioned I've already made it.

Two four weeks ago.

The level of uncertainty around Bolivia concerned at all I think today, we have less less uncertainty that we dig our.

Politically.

Four weeks ago. So I think that's that's the one thing I would call out in terms of any specific country.

Thank you very much.

Thank you. Our next question or comment comes from the line of Sumit data from New Street Research. Your line is open.

Two questions please log too.

Just on the Tico money I think you've got a slide.

In the slide deck this time.

Well, what do you have before recently alone, but seems like there's a little bit of focus a lot could you give some sort of thoughtful way you see the.

This was coming over the next year or two and I say that in reference to some initiatives were seen in the region, particularly in Brazil with the wireless companies beginning to push into this direction and beginning to move all for not just looking at payment could also moving into credit so I wondered.

Just whether you had any perspectives on that kind of one to two year view there.

And then secondly, please just rollover on the balance sheet for Tim I apologies I dropped off the call I'm not sure if I missed this but just on cost tamala.

I understand that the local debt is being paid off that.

And there is as low as pivotal and payment coming out to ultra low cost low this quarter.

Is that all so far this year I was just like you said there seems to be kind of tend to kind of.

De lever that.

Particular operation, but it's already got relatively low leverage so I understood all of that correctly, and maybe you could give a bit of perspectives on what's.

What's happening is that asset thank you.

Yes, so Tim has a master's degree.

Financing so.

Pick up for sure if you're laughing at me here.

And Kigo money.

Uh huh.

Youre right.

I would say, it's a little bit of bookings I would say its large focus that we're putting into to your money.

We have over the last.

Two to three years put a lot of focus on it.

We've just been doing meeting at kind of quiet and.

And.

Forceful yet focus that way.

Just to give you an idea of what the business is today.

It's it's small for me to come on.

It's.

You know.

Could do on a yearly basis and of course, it's difficult to analyze given probably but it could do somewhere around $40 million to $50 million on a yearly basis today. So.

So it's small for us, but it certainly is large in terms of revenue compared to many of these Latin predicts that youre, referring to so it's a small within hours, but in comparison.

Importantly, it's profitable for us because of all the synergies of participating within our larger group and the mobile subscriber base that we already have.

And then is growing very rapidly before call. It probably has only accelerated adoption and usage.

Today it is.

Almost exclusively the payment model.

With some very small exception the product why where we do lending, but its assembly or.

For our own subscribers are.

For their mobile users. So we're lending credit for our users, but it's a way for us to start leaning a little bit more about that that model going forward.

And typically to what we do we want to really learn how to walk very very strongly on the payment before we go broader into financial services, which of course is the is the the medium to long term ambition. If this works out that way is beginning to find out on the Trump.

They have taken money summarized in one minute.

Sure.

And just on the quarter mile a balance sheets and mean.

Simply what happened there was we have an $800 million.

US bonds will 44, a bond and it was almost expenses financing and it was at 6.875%.

And as you know, we just issued at 4.5%. So you can see that was that we live in a lot of money on the table.

We have been considered refinancing that's in the market potentially.

Gosh similar scene, so cash generative and we found that there were some local currency financing available.

And that kind of reasonably attractive prices that.

And given that is our strategy to too much currency, where we can and.

We decided that we would simply refinance now using a combination of and cash resources in Guatemala local currency financing and then there was a small element of channels alone as well just to and to do that so as a consequence of that obviously they've been presenting cash over the last couple of quarters as to the cash dividends.

What you see in the cash flow is lower but.

No I'm kind of purchases from our perspective, because we're looking to reduce leverage across the group and whether we do it in Guatemala, We did some wells some capex it was relatively neutral to us.

So and so thats really whats been happening there and so that.

Thank you.

We have time for one more question. Our final question or comment comes from a lot of Matthew Roadblock from Barclays. Your line is open.

Good morning, and thanks you.

[laughter].

And then.

The part of the deal earlier this year.

Sure Matthew I cannot hear you.

Can you hear me now.

Yes, much better.

Sorry.

I had a quick question eliminate so as we used to talk to.

How could the deal at the beginning of the year I guess, because the price you love to have been negotiated didnt reflect the new reality.

Just wanted to to two of your view on to weather at this stage, we still believe M&A, which is.

Not the rights.

Focus because you just lots of uncertainty you you're measuring in their bets or conceptually if dying trusting.

Deals out there and that is something that you would consider.

The second one kind of linked to quickly fairly is we saw.

In El Salvador.

Two of your peers to part of the deal because the regulator was imposing very tough remedies and I was just wondering.

If this kind.

Kind of approach that we've seen in El Salvador is it's something that we should not expect to be exploring there are countries, where you operate as being.

And we're being very receptive to consolidation and then going Unfortunately more to the European way than the us way.

Or is that an unfair generalization Glendale lastly, if I can and any comments on competitive environment to parkway. Thank you.

Sure.

So some of these are fairly fairly quick to respond.

Important, but Chris so on the M&A.

The simple straightforward very rapid question is M&A is not a focus of ours today we.

We are focused on weathering the crisis successfully as we seem to be doing.

I think the crisis is over by any stretch of the imagination. So we think we need to continue to be focused on that focused on delivering the operating cash flow growth synergies and integration and on reducing our debt. So that's squarely our focus today.

On on whether El Salvador present things that.

[music].

For the region two words, a harsher view on consolidation I don't think so at all Mackie I think it's an isolated specific country discussion.

Listen I think that is you know we did quite a bit of M&A and others did throughout the region and Central America over the last couple of years and on all of those when quite quite well quite.

Quite successfully and in some markets, we created better industry structures like we did in Panama.

Equity in Guatemala, and as a result of that I don't think there's a trend here if anything I'm actually deliver the offices going forward long term.

Which is the more government you realize that they do need strong digital highways and they do need investment because as you point out it becomes the more they are going to realize the strong industry structures to repay industry structure is not core to our industry structure players I think that way is just too.

Obvious for responsible governments not to recognize they'll sabato matter internationally matter that's my view.

And Unfortunately, I wrote down numbers, the but I didnt exactly right downside on the fuel savings bail.

Bail me out here.

Competition in Paraguay.

Oh, all right positioning.

I mean I'm.

We plan.

We are generally speaking.

We've seen competition in Paraguayan 22, and it can be a little bit more rational that was in 2019, and you can imagine, but I hesitate a little bit to say this because I don't want to do.

And the reason I think thats the case I.

I think it has a lot less to do with permit other than some Argentina continue getting into some of their competitors I think largely has to do with the fact that.

We defended our market share.

Although that was painful for a period of years for a period of months or couple of years seem to the marketplace is certainly should US ended very strong message that we are going to be in the marketplace going forward and we expect teach out.

This market with rationally and I'm, sorry to treatment are lessened.

Very aggressive competition in parallel to that more than anything else.

Great. Thank you very much very helpful.

Thank you I'd like to turn the conference back over to management for any closing remarks.

Well I just want to thank you all for participating on the call today.

Where it where we're coming back we're in a good track.

And as you know we need to balance that we need to balance the short term with a long term investment cautious net levels going forward.

We do thank you for participating today and paying attention to everything we do and we look forward to being on the call with you next quarter.

Thank you, ladies and ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.

[music].

[music].

[music].

Thank you Howard and good morning, everyone welcome to our third quarter 2020 results call as usual, we're going to be making some references to some slides which are available on our website. So to begin. Please start on slide two for safe Harbor disclosure and as usual, we will be making forward looking statements.

Which obviously involves risks and uncertainties and which could have a material impact on our results.

And then on slide three we defined non I afras metrics that we will be referring to throughout the presentation and you can find reconciliation tables in the back of our earnings release as well as on our website.

So with those disclaimers out of the way, let me turn the call over to our CEO My we still.

So.

Thank you Michelle good morning, and good afternoon, everyone I do hope that you're one of your loved ones are all staying safe and well.

As you know millicom throughout the pandemic, we chose to stay fully committed to our long term purpose as you can see on slide five.

Its purpose is well known by you and by each one of our 23000 employees.

It means that Rob this pandemic, we'd have one kept our into each stage engage more debate and productive and two we have kept our communities next it precisely because of the commitment from all our employees those into one line on those in the back office just thank you for listening to this call.

And our service means that we have been up and running we DAPL 24, seven everyday because of this commitment from our antibodies.

And because of our rapid deployment of our Lima product. We have kept every single one of our users connected during the downturn and we're proud of it.

How much of this you will see that our paying customers are coming back and that people brownies emerging out of this crisis strengthened more relative to our competitors.

Please turn to slide six for the key points of our call today.

One we had record customer during the quarter, both mobile Carole Park.

Our cobot reaction [laughter] or user based on our market leadership position to this user growth, particularly mobile helped drive strong revenue and EBITDA growth in acute sequentially from Q2 EPS.

Yet we still have a long way to go to get back to pre copied levels, but the trends during Q3, where spots, particularly strong.

Three password originally was also strong in the quarter as a result, our plans to protect the operating cash flow for the year each arm trial I'm, referring to the reduced net debt during the quarter.

And most importantly, even if we prudently healthbox we copy soon and then we also continue to invest strategically on for the long term, what's between ourselves well to bounce back rapidly when this creditsights PIMS.

Let's look at some detail point by point, starting with slide seven.

In mobile we added a record 1.7 million users in the quarter.

He's a very strong comeback and we're now back to the same mobile user base. We had at the end of March when the law comes were put in place Mark.

Our prepaid business came back, particularly strong repaid using the main driver behind our strong revenue growth come back into Q3.

Simply said when you search Nektar home the first thing they do let's turn on their mobile phones.

As you know, we chose our commercial and distribution distributors layers on the streets precisely so that we could come back quickly I'm strong as we're doing now.

We also had solid net out some quotes paid for the quarter with a net gain of about 140000 customers.

No were still down about 200000 boes per user compared to pre corporate level.

Many of these quotes good customers actually cautiously move to prepaid.

Yes, we do expect that it will take a few more quarters for us not to react quickly to switch cars backup to posting.

We also had record I've been home business. This quarter, we added a record 157000 customers in the quarter. Our subscriber count is now about 62000 higher than it was at the end of Q1.

In fact, if you look at our HFC customers almost 100000 more customers today.

We'd be at the end of March. This strong performance is common firstly from strong demand for broadband, which is bringing us new customers and secondly from an early decision to walk for Latam quarter minimal.

Okay.

This product has allowed us to keep our promise to provide connectivity to our community. We came to a good relationship and an overall relationship with our customers avoid very expensive disconnection reconnection cost during the pandemic adopted them.

Keep our real churn level now I'm protect our customers.

This was also the right thing to do for our customers and our communities in this time of need on a brand is continuing and will continue to benefit further from this in the long term.

Now please turn to slide eight these.

These record net adds produced a 4% uptick in services revenue in Q3 compared to Q2.

Again, we are still well below peak levels in terms of breadth.

Im not sure compression is still ahead of us, but the but Q3 was strong adding about 50 million of revenue growing 4% sequentially from Q2.

We have also been keeping a very tight control on costs as a result, almost all of that incremental revenue is going to the EBITDA line, which grew 7% in Q3 compared to Q2.

I want to be extra Peter much is still uncertain.

On the news on over the last couple of weeks certainly highlight that but we did see the business begin to come back in Q3.

Now please turn to slide nine for a closer look organic service revenue growth and what is behind that in this quarter.

That's that's one on the left hand side of the page is that the improvement in this quarter was broad based every one of our markets showed a solid improvement year on year growth in Q3 compared to Q2 right.

Right hand side of the page.

The key message. This improved performance came in part from our mobile business from prepaid in particular as I already mentioned growth.

Growth in home remains stronger that Didnt in Q3, and the positive on about the same as in Q2, but.

But as you know net cumulative business revenue, although that user base. So our increase subscriber base in the quarter you book.

So, let's see growth on business, we definitely going forward.

Maybe on the other.

And as we expected it's still challenging revenue was down 8% weaker economies. Your markets are taken a toll on many of our SMB customers. Many have had to shut down either temporarily or permanently.

So no better be recoveries in the numbers this quarter.

Recovery is still to happen.

Well to begin and we expect this recovery will take some time to come through.

In short on this slide you showed a strong come back into the business, but not all of our business lines are accumulating just yet and there's still a lot of uncertainty for us going forward.

And that is precisely why we remain so very focused on cash flow and reducing leverage but you can see on slide pack.

Over six months ago, we implemented our probably action plan, which you know very well.

I had a hard target to keep operating cash flow EBITDA minus capex laughed at around $1.4 billion. This slide simply shows you that we are right on track and we are confident that we will deliver on that goal.

We also told you that we would prioritize net debt reduction that is the second point on this slide on the right. We have now brought net debt down by 240 million.

We will suspend is focused on for now.

Now I would also like to give you some color on our key countries starting with.

Slide 11.

Well Im Harlequin continues to perform very well.

Table Roshan could be a market in which we hold a strong market position will continue to invest in my opinion.

Leadership to sustained growth.

As you know the government did not really.

Yes from other countries.

That is one of the reasons why the impact on our future numbers limited and its also why Q3 services revenue will have shrunk our inbox often rob.

Yes, Kevin will continue to invest in both our mobile on our business.

To drive efficiencies and digital adoption.

In mobile we added over 300000 users who are based in the quarter. Our base is now about 20000 users.

Recall that.

Demand for residential cable has also continued to grow throughout the amendment, we added 36000 new customers.

Quite the number of net out.

You too.

Now, let's go to slide 12 for a look at.

The macro level.

I don't know is the wealthiest country in Central America, and one of the reasons we're investing.

So confident that in Panama.

Total endemic in Panama has been amongst their hearts with its locked on being one of the most severe and its GDP expected to control contract almost 10% this year.

Against this very challenging back, but we have continued to execute on our game.

Integrating acquisitions extracting synergies protecting our market leadership on big Sonic spending on mobile and we are extremely extremely pleased with the underlying operating results.

Subscriber count how this story impressively well.

We have continued to see solid and consistent growth in our broadband Internet subscriber base were solidly holding our market share position and leadership on fixed and.

And then a little bit more in mobile we have now celebrated the one year anniversary of our acquisition.

Yes, modernize the network rebranded the business and extended our market leadership.

Indeed, our customer base has expanded in mobile by about 5% over the past year, reflecting a strong bounce back in Q3 of the economy began to reopen.

And we're also picking up new customers from cross selling mobile services were killed.

As you recall.

Largely it across any opportunity that our acquisition plan identified on the spin it off.

The punch line in Panama, our dollar denominated customers increasingly robust we have generated $160 million, putting over the past year, even though we are.

Some penetration parks and taking their carpeted, which we have not proceed.

This is most visible in our b to B business kind of has been very hard hit at the beginning of that and then.

It will be 20 area the group that did not recovering three compared to Q2.

So all in all we're not targeting often does that.

But very pleased with the performance there, particularly in the B segment.

Hello.

Okay perfect.

We are regaining discovered some new prolonged as well.

<unk> expenses.

Brendan or greater network.

Hi, good I'm going to garner protector, we bought earlier this year.

Remember, though right now that are just older 700 megahertz equal.

Which gives us better penetrations in the area were previously on spec.

Maybe just a little bit hoping expanded coverage.

Initial into tropical areas in which we have.

You can see that we had about 400000 mobile tumors in Q3.

This is related to increased mobility for sure.

Our gross adds.

Of course, all having the areas.

Redeploy the network, which is a very promising sign.

The whole in Colombia, we continue to expand our cable network, adding about 6000 home passing this quarter. This is a bit less than usual, but very consistent with our technical delay network brought you in corporate so that will be focused on filling existing network for a better part of it all electric.

The trick here and that is exactly what we did we added a new prolonged up more than 80000 fiber customers this quarter, starting with Medicare penetration higher helping hospitals or hospital. This year, particularly in Argentina are bringing capability Hello.

This strong user.

It's a good story for the section.

Section the presentation accompanying loan investment can you to make beginning on slide 14.

The growth in our fixed broadband business is a key driver of long term shareholder value creation for our business.

Let me say that differences, we are in the business of creating shareholder value by increasing the generating long term value customer relationships.

Cable is all about.

Year to date, we have built an additional 300000 fiber cable home passes but year to date. This is lower than our typical run rate of about a million per year simply because during the content make we shifted our focus to building our existing network.

I'd just show you the positive results for Colombia for the whole region through sold equally positive.

Year to date, we have added about 174000 fiber cable customer relationships.

About half of those in Colombia, and the rest split between Bolivia, Panama and whatnot.

That's year to date 174000, new fiber cable customer relationships and had positive yet today.

Interestingly, we increased the installation fees during this quarter and to minimize churn down the road at boycott bed, hopefully drive better industry practice for the long route.

Our focus this year on increased network penetration, which is up significantly year to date is helping us drive better operating leverage cash flow and return on capital.

Now going forward Gordmans do continue to open up their economies, we will gradually ramp up our home built back up again as broadband demands continues to stay strong and we will of course continue to keep an eye on our network penetration rates.

And in mobile you can see on site team that we continue to move forward with a very strategic investments, we'll be making to upgrade our net more on that.

We have added over 1100 points of presence this year, mostly you Columbia, and we upgraded 4000 sites and the core countries, where we have been deploying new spectrum holdings are modernizing networks. These network, our basic fund both coverage and capacity and improve both user experience an operating efficient.

In Colombia as you saw this is already providing key to improving our competitive position.

Sorry investments this year, how centered in a more focused cable fiber network rollout I know in the mobile network is functional organization that I just talked about.

There are two other areas, where we have been focusing significantly one just stick on money and the other one is our digital roadmap, let's talk about people money first on slide 16, we.

We have been very quietly building, our mobile unit money user base.

We now have about 5 million people money users in Latin America.

About 20% over the past year, and yet only a fraction of our overall mobile user base usage is increasing dramatically the number and thats what transactions Tigo money has more than doubled over the past year and.

So how the volumes of the platform is now constructing people money about transacting well over two and a half billion dollars annually.

How many properties our bodies being a simple value add service for our customers.

Hey, becoming businesses.

With high potential for us.

Of course, we look forward to updating you on our strategic progress them to come on in Latin America in the coming quarters.

Lastly, we continue to invest significantly forward digital adoption.

You can see the progress on slide 17.

He said the condemning has forced many of our customers to embrace the use of digital tools and our digital readiness allowed us to respond accordingly, just under six months since the beginning of the pandemic digital collections are up 50% you sales are up more than 80% and digital prefigure those are up 60%.

We have also re purpose, our corporate responsibility programs to better support our communities digitally during the time they are made.

That's going to cause program, which means connect that teachers was initially rolled on in Bolivia, where we train 140000 teachers on the use of state of the art form an educational tools join to condemn.

The program was so successful that we have expanded it to Buck Caguas product right and we're looking to expand the program to all our operations in 2021.

This program is an additional source of pride for many achievements were personally involved with the program.

Part of this I'm going to do a culture that you ever have you talk about four and we will continue to hear me talk probably in the future.

Let me turn it over to Tim over the financial quarter.

Thank you rich.

So I'm going to start on slide 19, with the bridge between our postpaid numbers on the Latam segment.

From the top of the chart you can see on the total revenues were just over $1 billion, but when you look at the business Holistically and Thats, including Guatemala, Honduras is it fully consolidated our underlying revenue was just over $1.5 billion.

To get to the underlying Latam service revenue $1.3 billion, we exclude Africa, which now it's a little over 6% of our revenues.

Telephone equipment sales, which are not an important driver of profitability.

So on slide 20, you can see that Latam service revenue fell by 3.1% on an organic basis compared to Q3 last year, we'll look at that you get more detail on the next slide EBITDA was down 5.6% organically, but again as Mike highlighted it was upon.

On a sequential basis compared to Q2 on that to service revenue and lower bad debt.

On the operating cash flow, which is EBITDA minus capex was a little down but on a year to date basis almost exactly in line with last year and on track to meet our target for the year.

So on slide 21, you can see that well sell service revenue fell by 4.7% in real terms and 3.1% organically was greater than the Q2 as we saw improvement in economic activity.

And in all businesses across most markets that is much less coincidence.

Mainly driven by the improvements in mobile B to C, which declined by 4.3% and that is considerably better than the 11% drop we saw in Q2.

Let's see I explained this was largely as a result in the prepaid business rebounding reflecting.

The easing of Lockdowns, primarily.

Our home business continues to show year on year growth again broadly in line with what we saw in Q2 and B to B also in line with Q2 down 8.5% where are we seeing weakness in the small and medium sized enterprises.

On slide 22, and again as much as highlighted we've seen an improvement in all operations compared to last quarter, but we are still down in most operations with the exception of Guatemala, and we're still below pre coverage levels.

The relatively stronger performance in Guatemala, It was up 3.9% organically driven by an improvement in prepaid and the continuing strength of the home business.

Colombia, where we were broadly flat organically with a good performance in home offset by local NBC.

On the mobile was better than it looks last year in Q3 was still booking have until revenue.

To that company filing for bankruptcy this.

This is the last quarter, where this will be a factor.

So in dollar terms also we reported revenues of 11 point folks and down in the quarter and again this is entirely due to FX.

We're also facing FX headwinds with horribly web hosting service revenue was down.

2%.

Excluding the FX impact and the one offs we saw in the last year numbers. Our service revenue was down just under 2% and this is a significant improvement compared to the last quarters.

So on slide 23, we got the lunchtime EBITDA by country again, we have seen sequential improvements with cost saving measures benefiting most markets.

Well I can model that continues to lead the way with 3.2% year on year Greg.

Wallace elsewhere the pitcher largely reflects the revenue impacts discussed in previous slides.

Now I want to turn to the balance sheet on slide 24, and you will have seen that we have been very active and.

Specifically, we have cold the comp sale bonds in Guatemala that.

That was our most expenses and I'm, saying, we will refinance that with a combination of local currency bank loans.

Turning cash resources on some shall dilemmas.

We've also taken advantage of favorable market conditions to issue a new bonds maturing in 2031, and this will replace an existing bond that matures in 2025.

Now the impact of these and other measures needs without average maturity is now 6.4 years. The average cost of debt is 5.7%.

And you can see from the slide we really have very little in the way of refinancings before Twentytwenty four.

Let's finish off on slide five looking at our current debt leverage.

Again aligned with our strategy of preserving cash and paying down debt.

We've reduced our underlying debt by.

$239 million in the last six months.

Underlying debt net debt is now at $5.7 billion, giving us proportional leverage of 3.16 times.

When leases are added to our financial or two on the financial obligations. These I'll now a shade under $7 billion for folks who leverage including leases at 3.29 times.

And with that I'd like to turn back pretty much have to wrap up.

Thank you before.

Before we take your questions, let me recap.

Recap the key messages first start customer is growing again.

In mobile prepaid we're probably.

Probably levels.

Spirit was still up from work do.

Home continued growth despite the permit.

Second today's user growth to moderate revenue growth.

The movement in our Q3 numbers.

Second revenue and EBITDA improved in Q3 compared to Q2, we still have a way to go before we get to positive year on year growth and we know this pandemic is far from over but we are getting back on track and we remain positive yes.

Yes, very cautious there we admitted priority through an endemic to protect our cash flow and to reduce our net debt you know that we're well on track to do with the $1.4 billion of operating cash flow that we guided to worse and we continued to reduce net debt in the quarter.

And fourth we continue investing we're doing so in the areas that are aligned with our long term strategy and in ways that position us to bounced back strong they are than ever.

Passes and you can already see that starting to happen in our Q3 results and we're all doing these things with a clear sense of purpose and with that we're ready for your questions.

Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue simply press the pound key.

Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.

Our first question or comment comes from a line of Stefan Golfing from Dnb Bank. Your line is open.

Yes Hello.

Questions case.

First.

Included in your target to keep that.

Operating cash flow stable wants to cut cost with at least 100 million ads to cap capex with the 200 to 300 million.

So far we have only cut capex with some 75 million yet today.

And with the current improved does matter a lot development are you still aiming to cut the capex to be six then or have you changed that targets.

Yes.

Cops Capex did not extend the operating cash flow target to seem conservative.

Thanks, Ken.

And next year, you have increased competition in Colombia with Walmart.

Like to its launch.

How are you preparing for this increased competition or you.

Looking more towards converged offerings in that market.

And now the caveat that you can.

That would be appreciated thank you.

[music].

Thank you Stephanie great great questions wish we had a couple of hours to address that.

Both.

Let's start with the first one I think John jointly seem what I can do a good job of that ill start off just generically what's happening.

We're managing the business.

To that 1.4 on literally on a weekly basis.

We see that we have room.

To put a little bit more capex into the business, while still delivering one point or we go ahead and do it.

Particularly we see that broadband demand is happening quite strongly as we see it happening.

So we actually having a has what I call a good counter of them which is.

We we can put a little bit more foreign capex into the business this year.

Try to position ourselves better for win them over and still deliver once before that's what we've been doing and I will be we've been able to do that because we've been so strict on the cost cuts.

Significantly and because this is the most important.

A part of our constitution.

The way, we just signed up.

We decided with the knowledge that we as a company.

One way or the other is pretty quickly.

And we can slow down pretty quickly ramp up pretty quickly, which means we can keep our calls on what's happening in the markets and that's exactly what we're doing we're cutting back on costs significantly, but we remain rock God forbid.

If we need to and as a result of that we were pretty confident we're going to get on one floor and be able to.

Invest into the business anything over that.

With that ill hand, it over to Tim for more details.

Got it yes.

I would only add one quick one I mean I'll call costs I think as much. He has set up costs are running a lot lower than we had anticipated at the time.

Let me down at the start of the $170 million in the last six months.

Some of that is activity related some of it is FX Bucks a lot of it is also management and.

Much has said if we can find excess savings on the cost side, then clearly we want to invest continue to invest in the business provided we can deliver that that one point score of operating cash flow.

Back to your question.

Perfect. So on the second step and I think you've seen over the course of this year.

Really put both closed on our ability to drive better business in Colombia, and that's really the overall answer to your question I'll go into more detail in a minute, but over the last all throughout the condemning we've been building the 700 megahertz at what.

We just showed you the numbers.

Today is actually much more than a 1000, it's closer to 1200, those extra space a number of additional sites, which youve indoor coverage.

On the geographical preference and it gives us a better user experience, which is already significant.

Just last week, we were we were April.

The best performing Fourg network in Colombia by to tell on this as we made public in Colombia also increased our commercial distribution network significantly so in Colombia, because now we have more points of presence and that's just not does not mean network, but it also means commercial now.

So we were really.

We're really focused on the opportunity and this is a key point I want to make to your second.

For the first time.

Many many years because we bought the spectrum, we're putting it to use with the network investment and the commercial distribution investment behind it.

We completed two world of Challenger in this marketplace with the tools to succeed.

We only have 15% market share on mobile in Colombia.

10% market share yet to date.

We have a very very strong fixed space and it's grown we have a brand that works and we're investing in the network and distribution, which effectively means we can now play other challenges with older tools fix on mobile and Youre right Virgins is a really important part of this deal.

The frequency and the spectrum.

On all the tools with only 15% mobile market share we took effectively means in our minds, we're ready now to be a challenger mobile now the last thing I would make to your last point I would make to you is yes were preparing for the opportunity to be a ton during the new competitive environment in Colombia, which by the way.

It remains a competitive market as it has been for the last 10 or 15 years as well.

I mean, effectively replacing that position, but I can tell hot so we fixed mobile convergence in investment that we're putting into the network and mindset that we can be a challenge over 15% mobile market share, we actually feel like in Colombia, we have the tools that we never had in the past.

Okay. Thanks.

Reassuring.

Thank you for your question I tend to work off those.

[music].

Thank you. Our next question or comment comes from the line of Marcelo Santos from JP Morgan Your line is open.

Hi, Good morning, Thanks for taking my question. The first question is about the sequential improvement the bodies into EBITDA, which which was pretty strong I just wonder if you could comment a bit on that and the second question is about the lifeline clients do you still have a large base on a lifeline excluding or is it.

Most concentrated in El Salvador do we have potential to see this come back into following quarters. Despite those salvador. Thank you.

Yeah, So long believed.

We.

We were happy to see him up sell off the business not only stabilize in Q3, but also come back strongly to growth.

And I think.

We had strong net apps on the mobile are very strong at odds on call no doubt very strong quarter in Bolivia, a lot of that was the result of.

The strong come back from from the difficulty putting in place the buyback.

I have on product and believe you have during Q2, and we were able to put that in place at the end of Q2. So could the Q3 show a strong come back but we're also beginning to see and this is important so the role that you're going to see people DBS stabilize.

Much more than it has for the last 18 to 24 months and this is I think the key point and we'll give you that going forward.

We had political uncertainty in Bolivia, and then we have that pandemic in Bolivia the elections.

Last week are helping provide a clear path towards certainty in Bolivia, there was a clear winner scourge alone with a clear mind it from a position as a result of that the social unrest in the political instability in Bolivia seems to be coming back.

And I'm the head of the New government you President Shih, most former column in eastern and central banker. So I think its precision its helping provides stability on economic terms as well and I think that's exactly what we'll do that needed a promising.

[music].

So where were handled that theres going to be renewed stability in Bolivia now on the lifetime customers, which I think is a is a it's a good point rich.

Yes.

I would certainly make wrong. Thank you.

I think it comes into a lifeline products, because we increased lifeline very late in Bolivia, and that we took a very high bad debt charge in Q2, so a lot of the impact.

Was lower bad debt, just move to normalized levels in Bolivia and in fact in most countries. So I would view the outliers Q2, EBITDA rather than where we are today.

Yes.

Finally, our own.

Yes, thank you or Tim that's very very helpful. So I'll make two or three points on up sell on the life and customers I think.

The first two are as generic if you will.

This has turned out to be a.

Very good tool for us not only through that and then they bought a tool that we think has merit going forward and we will continue to use going forward for the exact same reasons that it was helpful. During the pandemic, which I already alluded to on our it could then it is a helpful tool for us to keep going forward and you can imagine why it just starts paving a way for us.

To manage.

Retention, then churn on the relationship with the customer in a most cost effective and cash flow accretive way for us.

If you recall.

We don't count anything that subscribers. This lifetime opposed from any more subscribers and the subscriber count that we report to you. So there are pulled up to about five question chartered accounts. We also don't book any revenue from the backlash subscribers. So.

So we believe we have also kept our financials relatively clean what that effectively means more settled you can see.

Come visit the door medical is.

That we keep at lower levels of course now them during the pandemic, but that we're using to green box subscribers and Youve seen during Q3, we bought back a ton of those but most importantly, we've added a ton of new customers to.

To the base because right higher levels than we were before.

As a result of that this is a good tool and most importantly, something that we continue to use going forward I hope that's helpful.

Thanks, that's very helpful. Thank you very much for the answers.

Thank you. Our next question or comment comes from the line of Peter Nielsen from ABG. Your line is open.

Thank you very much.

Just just two quick ones firstly.

You have on previous call is sort of a slave to the.

These sort of post Corbett to Genesis, which your markets with face you're now seeing a issue should we show a good recovery in Q3.

So so so just could you give us any qualitative indications on how you see the coming quarters with the sequential improvement as service revenue trends continued you, perhaps a bit more optimistic or stabilize facing for next year or are you still sort of equally cautious as you have been in previous calls.

Yes, and then just a quick one for Tim Tim you interesting comments about investing.

Anything above the 1.4 billion I guess, we should interpret that that you will be coming at the 1.4 billion operating free cash flow this year and noted above.

As she will continue to invest in Capex is that correctly understood. Thank you.

Yes.

Yeah, we'll we'll we'll get to those Tim you can that you can start working on on on the 1.4.

[laughter] I'm the first one on the Comet one does this actually two pieces, Peter and they're really really good question one is.

What is the outlook for cobbett in our markets and as a result of that what is our outlook more generally.

And they're somewhat distinct but very interrelated.

What happened during Q3 of this year is that our economies become too slowly opened up and that cost increase mobility across our confidence.

But the lock them.

Gradually been.

I should say that they have been easy, but they have no totally disappeared.

And mobility is not yet.

As a percent of what it was before the recovery levels, we estimate depending on any country that it's somewhere between 60% to 80% of what it was so there's some cobbett recuperation still to hop in our markets. Despite the strong prepaid results that you saw during Q3.

Now with regard to the buyers in our markets, it's still spreading.

Largely stable in most of our markets.

As of today and we look at is obviously on a daily basis.

We're not seeing any second wave coming back into our markets. It does not mean that its not possible.

But we're not seeing the surgeons or coming out of second wave in the numbers at least yet.

Now more importantly going forward.

According to our assessment on how to upset the outlook going forward.

The key element for us is that the.

The recipe of a locked down.

Our kids, which was used very very severely.

For a lengthy period of time, we've made this point.

Over and over is.

It's a recipe that going forward.

I'll say this argues that they won't Hobbs.

Politically supportable visco maneuvering room lease amount that in fact, the hard versus your manner going forward.

We don't expect even if their second wave.

At this point or we don't know certainly don't know, we don't expect that the lockdowns.

Can be put in place are or will be put in place in such a hawk manner by the way before and I think the recipe in our countries will now err on the side of keeping the economy is open.

On the recipes will have a lot more out of economic predominant than anything else.

Now having said that.

What we have learned.

In this environment is that.

Can you can change very quickly and in a very uncertain manner.

Now I'll tell you. This we think it's important for everybody to understand.

Our Q3 was better than our Q2 in every country, we already said that driven mostly by prepaid.

Prepaid came back strongly about postpaid on B B are still Julie how strongly on Wednesday recover it function off not to recover its a function of how about the damage was that a function of how long the health crisis stays on even there are no further markdowns in our crunches.

No every month this past quarter MCCSR would last six months has been a bit better than the previous month. It has been pretty gradual.

Therefore, we remain very cautious going forward.

We do have a more positive outlook for 2021 that we do or 2020, we surely do.

We also have a very cautious.

Approach to things going forward.

The key word here is that.

Balance between the short term on the long term if anything they're not doing this crisis, you've seen as we're investing for the long term, we know that broadband is that product, but how do they manage kind of a long runway, we see it short term, but we did see a long term.

We also need to manage the shorter term and we're doing that very very cautiously.

Because the key word here. These uncertainties are Peter and I got on certain comes from wanting to mobility.

Could come back.

The macro we'll certainly have a way on our performance whether it's the dominant looking down to the economy or the fiscal constraints that our government you're going to have.

Three things need to be Wynnewood comdata come back. This is a function of when the economy will recover we don't know doctors yet.

So what we have there and is that being as a business leadership group really good.

Navigating that certainty is the key to this and I think what we have learned and what we have demonstrated in our public filings.

Still ongoing has great governance on.

We have shown that we think the key producers to other great ability to react.

To the short term.

Quickly on the way down quickly on the way up and I think thats the key to our success, while we continue to invest in the long term.

He is as much color as I can give you and with all of that I think you will find that our entre to the 1.4 that feels like I'm about to give you a clinic consistent with that.

Yes, that's right I'm sorry.

We.

We needed a new north star when that when Cobiz hits, we realized we needed to protect cash flow would you sense monies leverage.

Thats, where we decided we would maintain the cash flows pool and same as last year, how is that important target for us. It remains the important target for this beta.

No you know kind of I said on my earlier.

We probably did better on costs that we had.

Regionally, we could do.

For variety of reasons.

And on the Capex side, we you know we continue to have NPV positive project, we have pools to what we have suspended.

And to the extent, we can generate more cash flow.

We will want to execute on those NPV positive athletics, particularly.

If we can see viability in htwo.

2021 to add to Steve's attention. It's we remain cautious as much has said but.

To the extent, we can see opportunities that will deliver returns gross and we can still deliver that will 0.4, we will we will do that.

That's helpful. Thank you both thank emotional hesitant.

Thank you.

Thank you. Our next question or comment comes from the line of Frederic Lisa from Deutsche Bank. Your line is open.

Thank you know jumped the man I have to say is it turning back one year performance always good I.

I had a few questions if I may a lift that you had a few slides on crude utilization.

Could you sort of elaborate a little bit more on that because I think this is one of the interesting part stop.

Even though it's dreadful with the pandemic it probably as far as innovation at the same time.

So so I'm interested to hear a little bit more behind the scenes sort or what is happening what you see what is unexpected on the good utilization train for you in your contracts and other technology question. It.

Fixed wireless access if that's something you would consider as an alternative or one of the tools in the toolbox to past even more homes, even quicker on the fixed side. So it will be interesting to hear that kind of.

Discussion thank you very much.

Yes, great question, essentially crediting touch on digital I think there's.

There's there's two bits to my answer to that one is.

We were ready.

With our digital plan, but very focused I think we have shown it to you a couple of years ago. When I presented the first lives. How we were going to go about our digital purse platform and how we were going to focused on the commercial activities.

And because we were ready and we had a centralized group that was driving support for the operations, we were able to capitalize on that needs immediately.

We've already showing you the numbers so we didnt start from scratch in with them, rather we turned a real aster to capitalize on.

And the numbers show that and most importantly, I think is.

Just the fact that the.

And then did give us.

That ends to go out and do it.

I'll give you. One example that one of the.

Distribution change came up to me.

And then he said before you would have always been a little bit concerned to put money into any given digital channel that we already had up and running because we felt like we would be taking away money from a digital channel that was proven and demonstrated to work than.

The reality is during the pandemic that non digital channel simply did not exist.

So we never that we didnt have a conundrum anymore. It wasn't a trader we just put the money into digital and we saw it work. So that's what happened, we where we have the opportunity the need to go digital as a result of that we saw that happening and will continue to drive the current.

Focus of our digital strategy, which is very commercially.

So what you've seen us think called digital is effectively the distribution channels and the service. They are channels. That's what our current thinking about digital is on.

This has been our thinking for the last few years and we are very happy that we have put a focus on this at this point in time, because that's the first wave that really matters.

Forward.

Our digital I'm not sure exactly when we're going to put it in place it's going to have layers of data analytics artificial intelligence to put the network to be more efficient and to put their relationship with the customers on a digital platform that can use data analytics application intelligence. It is a matter of the.

80, 20, when we are comfortable that we are completely maximize the commercial focus of our digital strategy today.

The reason the recently, we think we have over eight.

Why is that because we chose not to focus on and our focus has been on digital.

Commercial and service tool.

Our next stage is going to be.

How do you use digital for data analytics on the use of artificial intelligence to make us couple of digital platform.

Highly related of course as you can imagine with.

The use of our digital platform as a platform for new services.

Fixed wireless access we do use it.

Sporadically.

EPS certain markets.

Pretty good.

For the.

Thanks.

Products, there that we may eventually want to roll out fiber cable too.

Equally important.

In Colombia, we have used fixed wireless access to determine whether there is an optimized for our broadband product sufficiently so so theres economics for our fiber cable rollout.

All right. Thank you.

Thank you. Our next question or comment comes from the line of Joanna Ahlquist from Scandinavia Skava. Your line is open.

Yes, Hello, Thank you.

James questions. If I may the first one and really you touched a bit on sort of what to expect going.

Going forward in kind of the lack of consequence, okay. So I'm just wondering if you can elaborate a bit on what can we expect 50 so.

The toughest macro difficulties in the math that from that make steadily we assume there will be no more look down when do you see the greatest risk in that sense.

And then if you have seen.

And the tax consequences in any of the trends.

So.

And then a quick one pit to Tim that flat is that if you can give us a number on how much the bad debts lets say this quarter. Thank you.

Yes.

[music].

I'll start in we're number two then move on to number one handed over to Tim because he can weigh in on the backlog as much as I can.

On the tax consequences, we've debated internally quite a bit as you know the every country around the world.

The reactions that and then sticking a big tall on just collect counts. So on the one hand, you would think well that governments are going to be more touch constrained and as a result of that they made.

For some of the bigger companies to tool.

More burden.

But on the other hand.

Hi, Tim.

Certainly in our economies has realized how important digital connectivity is to their citizens and as a result of that they have a counterbalancing argument we have a counterbalancing argument that basically says.

Be careful taxing the sector, particularly now in a pandemic and going forward. If you really want this to be the driver of your digital economy going forward.

It's uncertain, where exactly that's going to land on how effective we are going to be insane prepare for the sector because.

There with it.

On the macro side.

I think the key word behind it is uncertain tax rates is cautious.

And trying to make as being very resilient.

In terms of.

It's capex.

And in terms of the remittances.

There are some instances when down in April and start to come back in May and year to date, just about every country as the primary c. and renewed growth in remittances.

Which has certainly helped out those economies.

And then the reason the reason I hesitate a little bit here is because one of the things to learn about our economy is.

How much the informal sector really ways.

How resilient this economies are being foremost level.

And that's why it's so important for us have such a good pulse on what's happening on the ground.

So we we do more and this is the reason we're cautious.

And we are very very.

[noise] Embolden, if you will by the Q3 results and by how resilient our subscribers have turned out to be an undergrad demand that we see.

Going forward, we do where we need to be cautious and with that I'll hand, it will continue to expand on back to Ken.

Okay and last question.

Yeah.

I just make a quick comment on tax actually we had a very low tax charge in Q3, we like this wasn't your question, but just to explain it.

Now to some extent that is low withholding tax but.

Expect to see at that kind of normalization in Q4, so they will tax charge for the EPS is going to end up somewhere between 202 hundred $50 million.

On an underlying basis realized it wasn't a question you on it but I just want to get that in so I don't understand.

And then on the bad debt I mean, I don't want to give exact numbers roughly speaking in Q2, but how bad debt charge was twice the normal level.

And in Q3, it was a first the normal level. So what was happening there was some write back of all charges, we took in Q2 and a normalization.

Of the level, and frankly, I'm expecting Q3 to be more or less back at normal level.

Oh challenge.

I mean in terms of countries are high now.

The one mentioned I've already made it too.

Q4 weeks ago.

The level of uncertainty around the Vivia concerned as all I think today, we have less less uncertainty that we dig politically.

Politically.

Two weeks ago. So I think that's that's the one thing I would call out in terms of any specific country.

Thank you very much.

Thank you. Our next question or comment comes from the line of Sumit data from New Street Research. Your line is open.

Two questions. Please we'll all do.

Just on T.K. money I think you called a slight.

In the slide deck this time.

Well, what do you have before recently, but seems like there's a little bit of focus a lot could you give some sort of thoughtful way you see the.

This is coming over the next year or two and I say that in reference to some initiatives you have seen in the region, particularly in Brazil with the wireless companies beginning to push into this direction and beginning to maybe hopefully not just looking at payment could also moving into credit so I wondered.

Just whether you had any perspectives on the kind of one to two year view there.

And then secondly, please just rollover owns a balance sheet, let's say like apologies that dropped off the call I'm not sure if I missed this but just.

Tamala.

I understand that the local debt is being paid off that.

There is as low as if it doesn't pay little coming out to so costs low this quarter and is that all so far this year as you said that there seems to be kind of tend to kind of.

De lever that.

Particular operation, but it's already got relatively low leverage so if I understood all of that correctly, and maybe you could give a bit of perspective.

Well toughening of that asset thank you.

Now for Tim has a master's degree.

Financing so.

Take that for sure if you're talking about here.

Google money.

Okay.

Youre right.

I would say, it's a little bit of bookings I would say smaller focus that we're putting into tivo money.

We have over the last.

Two to three years, but a lot of focus on it.

We've just been doing any kind of quiet and.

And.

Forceful yet focused way.

Just to give you an idea of what the business is today.

It's small for me to comment on it.

Who do you on a yearly basis and of course, it's difficult to analyze given carve it but it could do somewhere around $40 million to $50 million.

On a yearly basis today so.

So it's small for us, but it certainly is large in terms of revenue compared to many of these index that you're referring to so it's a small within hours, but in comparison.

Certainly it's profitable for us.

Be comfortable that senior judge of participating within our larger group and the mobile subscriber base that we already have and is growing very rapidly before profit probably has only accelerated adoption and usage.

Today.

It is.

Almost exclusively.

Payment model.

With some very small exception the product why where were doing then being better since then or.

Our own subscribers.

For their mobile users so we're lending credit for our users.

But it's a way for us to start lending a little bit more about that model going forward.

And typically to what we do we want to really learn how to walk very very strongly on the payment before we go broader into financial services, which of course is the is.

He is a medium to long term ambition. If this works out that way is beginning to pan out on the CHMP.

Yes.

They have to go money summarized in one minute.

Sure.

And just on the cost to Molla balance sheets, I mean has simply what happened there was we have an $800 million you.

U.S. bonds will fully for a bond and it was almost expenses financing.

It was at 6.875%.

And we just issued at 100% secrecy that was we live in a lot of money on the table.

We had been considered refinancing that's in the bond market potentially.

Similar it seems so cash generative and we found that there was some local currency financing available.

Thats kind of recently attracted prices that and given that is our strategy to too much currency, where we can and.

We decided that we would simply refinance that using a combination of cash resources in Guatemala local currency financing and then there was a small elements of channels alone as well just to and to do that so.

As a consequence of that is obviously they've been presenting cash here in the last couple of quarters as so the cash dividends that you see in the cash flow is lower but.

No.

Kind of purchases from our perspective, because we're looking to reduce leverage across the group and whether we do it in Guatemala, we do it somewhere else it some extinguished relatively neutral to us.

So and so that's really what's been happening there.

Yes.

Thank you.

We have time for one more question. Our final question or comment comes from a lot of Matthew Roadblock from Barclays. Your line is open.

Good morning, and thanks you.

Okay.

And then.

The top of the deal.

Okay.

Sorry, I cannot hear you.

Can you hear me now.

Yes, much better.

Sorry.

Had a quick question on M&A. So it's when you stepped up.

Output deal at the beginning of the year I guess, because the price you love to have been negotiated it didn't reflect the new reality, but I just wanted to to two if you. If you will to weather at this stage, we're still believe M&A.

So.

Not the rights.

The focus because you just lots of uncertainty you you're managing your bets or conceptually if dying trusting.

Deals out there and that is something that you would consider.

The second one kind of linked good luck with fairly is we saw.

In El Salvador.

Two of your peers, coupled with the deal because the regulator was imposing very tough remedies and I was just wondering.

If this kind.

Kind of approach that we've seen in El Salvador is it something that fish meal expected. This morning.

Our countries, where you operate housing.

So we are being very receptive to consolidation that then going unfortunately more to the European weigh them to us way.

Or is that an unfair generalization then very lastly, if I can and any comment on the competitive environments in park right. Thank you.

Sure.

So some of these are fairly fairly quick to respond.

Important, but Chris so on the M&A.

This simple straightforward very rapid question is M&A is not a focus of ours today we.

We are focused on weathering the crisis successfully ourselves as we seem to be doing.

I think the crisis is over by any stretch of the imagination. So we think we need to continue to be focused on that.

Just on the living you're putting cash flow growth synergies on the integration and on reducing that debt. So that's squarely our focus today.

On on whether El Salvador present things that.

For the region two words, a harsher view on consolidation I don't think so at all I think it's an isolated specific country discussion.

Listen I think that is we did quite a bit of M&A and others did throughout the region and Central America over the last couple of years.

On all of those when quite quite well quite.

Quite successfully and in some markets, we created better industry structures like we did in Panama.

Equity in Guatemala, and as a result of that I don't think there's a trend here if anything I'm not sure I believe the opposite going forward long term.

Which is the more government to realize that they do need strong digital highways. They do need investment because we see important part of the accounting change the more they are going to realize that need strong industry structures to repay industry structure is not harder five industry structure players I think that way is just too.

Obvious for responsible governments not to recognize their sub.

How about on matter into congratulated matter that's module.

And Unfortunately, I wrote down numbers the editing.

Exactly right a downside on that well see a lot of bail me out.

Yes.

Competition in Paraguay.

Oh, all right positioning.

Okay and then.

We bought him.

Generally speaking.

We've seen competition in Paraguayan 20, let me give me a little bit more rational that wasn't 2019 and you can imagine that.

Hesitate a little bit just say this because I don't want to do.

And the reason I think thats the case.

I think it has a lot less to do with permit.

Some Argentina continue giving them some of their competitors I think it largely has to do with the fact that.

We depended on market share.

Although notwithstanding falls for a period of years for a period of months or couple of years seem to the marketplace is certainly should EPS ended very strong message that were going on in the marketplace going forward and we expect being shot.

This market rationally I am sorry that treatment.

Lessened.

Very aggressive competition in product to that more than anything else.

Okay great.

Great. Thank you very much very helpful.

Thank you I'd like to turn the conference back over to management for any closing remarks.

So.

Well I just want to thank you all for participating on the call today.

We're we're coming back we're on a good track.

And as you know we hit bottom that we at the bottom of the short term with a long term investment cautiousness levels going forward we.

We do thank you for participating today and paying attention to everything we do and we look forward to being on the call with you next quarter.