Q2 2020 America Movil SAB de CV Earnings Call
Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines will again be placed on musicals. Thank you for your patience.
[music].
At this time I would like to welcome everyone to the American Mobile second quarter 2020 conference call and webcast.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question answer session.
If he would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question press the pound key.
Thank you now I will turn the call over to Miss Daniela Lecuona head of Investor relation lesion.
Good morning, everyone. Thank you for journeys PK, PD gold Amerykah multi quarter Twentytwenty financial and operating.
We have today on the nine stores I need Sosh deal. It certainly looks like him where do you know you go through.
Got a little bit field.
Thank you are going there. Thank you everyone for being in the second quarter, Twentytwenty financial and operating report and Carlos Garcia Moreno, you're going to make a summary of the of the results. Thank you.
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That's you're on your good morning, everyone.
<unk> for Dr., Mark actually become rates.
Goldman number can be work helocs coconut water economic on production coming from local merchants.
I'm going to sort of corporate banking buyers.
You bet on curve announced a huge I'm wondering what's pretty response from Goldman.
Before I could talk show.
Not only for conducting financial markets.
I Love weeks, when you reach muscle security called the second quarter.
I really think second month, where you're going out.
That's good for told her needs appreciate your him because he stuck with young adult occurred.
Sure Dan So got from your own Luxembourg answer.
We got to recover if you're not old exceptional because often done through them.
Because I'm not each multiple point this is conducting store.
Got any rate murky, but certainly the Colombian they're competing in them.
Oh got booked sharply into first quarter.
Okay. Perfect example, nine.
Okay.
So could be into second quarter.
Right, because we all know what region Richard welcome them up.
The corner and make sure.
I will return to help bridge.
I mean, you've talked in our commercial banking.
Walking on account of the closure of shops simple from occurred thinkers.
I'm talking to be companies generally cook to mobility nature can be month for more widespread.
Okay, there were no larger more than.
[noise] subscriber.
Oh, okay.
Okay.
Most of her instruments being or alternative for the base.
No one exception, Colombia, I'm kind of come off.
I would have <unk> wants to come here and be cool nights for can be pretty quick.
You quit you all know workloads.
He said metrics connection April checkpoint, the U.S. and Colombia.
We try to lucky border to Congress doesn't like each.
He said before her talk a little more important Mexico 1.7 million so.
No 1 billion.
On the quote on walk in my life at approximately 450 comes on each.
Yeah. Congrats on districts that certainly is getting full going up you people can you ballpark like.
Every operation importing any quick compliance except for clinical monster.
They're worried about whatever you've collection for board nine from food producers are appealing coffee, which accounted for over 90 completing these collections.
250000 to become more comfortable.
We ended June.
38.
Yes.
Your next in line.
Which includes aren't going to 7 million lighting subscribers.
Maybe one and done this line are you years.
Yeah, no, but I would put long up Richmond money to conclude scripts nice no more towards your core.
Oh second quarter revenue totaled 252 billion put it.
I'll start you from a year earlier quarter to your 0.6 person.
Perfect women burden 40 preparing for fan favorite burden increased it seems like how for shrinking metric on for systems.
Well I'm not comfortable spark.
The baby <unk> parenting definitely going on as we all over the year, which wasn't books you might get picked up in person.
So to Brooklyn, New York equal.
Well the operation So Mark redemptions.
That's perfect for itself will be confinement ritual.
It also because people were more.
Sure in full got 15 actually most of Brinci.
Uh Huh [laughter], excluding I can see no you're in fact in case, how are you talking about the loan.
Heavy burden goodwill airport.
The Georgia or there will be more black on breaking Dupont's. Please proceed.
Those coming from the declined one because I mean, 1.7%.
He said arrangements every doesn't know.
Oh from lost 5% because the first quarter two too often feel for good person exactly.
We felt that somebody got Rick can you talk to be couldn't find that match was put in place throughout the region.
Hello.
Hi, Good morning, <unk>, almost every bird walk no down sharply from Dupont.
This quarter.
Going forward person.
But if you don't go longer we perform if you can put more buttons recruit guilford point that puts it on a full point they put into <unk>.
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I Wonder if we got blocks one you go read what more do you need that would be great. All the time of Britain's once told me my nose real point sort of in the first quarter two my number 1.7% into second quarter, mostly on the California picking the buttons.
In Colombia.
Good luck burdens actually extended weaker mental 9% awesome. That's in part because can you kind of cool.
Regeneration in my once every granite wash, what you're going to become prepared on both revenue from certain important crane, that's going fine members <unk>, we got to be.
Breeding revenues were up there could be there's not been mentioned find something funny people.
Chargers, most shopping award to truck, including a long call from it goes hampers.
Do you <unk>, most Columbian critical contributors have more.
Excluding that people want to go maybe comparable.
Both Big limited walk a little Dom Lytswitch local I'm not going to pay as you probably economic difficulties they worked difference.
That's great that's more than become sockets that causes that's got to close on the fundamental friction.
Shopping is continuing to check yourself or would you look at school, even you've got the centered on moving that up as I could you feel good okay.
Regarding the close both line up and find a lot.
It is wonderful again, given the economic difficulties doesn't really going.
Once you're also but it looks good turnkey the systems.
But at this point decline in both the growth rate.
But you know followed up on them.
Equipment chairs Lamadrid hurting twice.
Bottoming Mitra enough because he dropped pumping buck, but could we really remainder of two quarter.
We spoke about February on PGR for he'd be wafer kinda group, the greater than its increasing Karen wondered person very much in bandwidth, but you could see because your two quarters.
We don't do one exception or not we'll operations both of these bolt on driven increases quarter.
Well, we're live much your present operations, including both Nick level, who did not recur all performed when we did very well picking up speed.
Second quarter he'd done for the two points individual principles, that's helped a thoughtful night because it sometimes the EBITDA margin times as 1.7 percentage points keeping people that person.
Welcome to check books.
3.3%, reflecting like deep, but the vehicle merchant arrangements like back on your.
I brought about reductions in network or to be applied from generally first.
Our operating profit jumped in regard to 40.9 billion pixels.
I kept bring about I met coal, but could be from tencent could be second quarter.
There are allowing for nothing cost freezer, and Pete you're going to be professionals, which were 6.3% nowhere to end the year in your core.
I would net profit grew more than two Teddy bear some sort of insurance I could be kicks Dorchester graveyard.
Well I fell 40 person on the same quarter nothing.
At the end of June I wouldn't read that from southern corner inside the comparisons <unk> 677 business picks up the talks with them.
[music].
Which replaced him on board games, which can be bought yourself you already know that's something.
Yes.
Good luck for one point 39 times EBITDA.
There were probably your mix and one of your food.
Got it okay I wouldn't have to trim down 8.3, big number it's something that you must have you.
No we can't forget bold Oh, God awful a lot of corporate capital expenditures from democracies country, because that's what I can be bought 2.2 billion pencil performed well that they will related obligations.
Mexico.
So these returns kimbell performed one person.
Most of their own accounts of molex, if he's got a new something from a deficit symbol principally component.
I know, 2.5% Inc. second quarter.
Thank you very near shoring up they loved decline quarter over quarter.
In brucie.
Most they'd veterans, who could be bigger but ceiling.
So every time you little bit presenting for each one year in the quarter.
Do down from there were some of the first quarter last month, and there's quite a remarkable.
It's both on revenue and give them credit.
I think we think there will be first and second quarters.
Oh, Yeah ball.
When do a lot on outstanding jumping didnt, though it's rough all good form 10% year here.
Maybe the my team reaching 40%.
I'd tell you could have nothing.
A final note on Colombia.
Well the younger pressure and go there that's a multi.
I mean, my vision did manage to Prefund recurring revenues on both the ball, but not fits on platforms at four point that because I'm not going and then Cushing.
<unk>. Thank you very much where you can do called I wouldn't know luggage little but do I mean gosh. Thank you.
Thank you Carlos.
What kind of start with the two any.
At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad, we'll pause for just a moment to compiled acumen a roster.
Your first question comes from Walter pay check with light Chad Your line is open.
Thanks, just a question on the obviously the very strong performance of margins of Tracfone in the United States, you talked about a repricing going back to January size I assume that the margin was.
Benefits from some catch up from the first quarter two when we think about Q3.
Where you don't have that kind of the benefit of the first quarter, what should the margins look like in that in that U.S. business.
And can you talk a little bit more about.
Kind of which carriers gave you that benefit or is it across the board based on the competition it's in the market.
When.
I think we have a very strong quarter in truck phone not only in their carrier cost I think we have also a very strong performance in there in that same sacking net dot say I think we have more than hundred <unk> 200000, net that seem to quater. So I think we'd all day.
Okay.
Or what the U.S. he's giving.
And I were prepay the market. These growing it goes and Oh, we have a very good quarter. There that we we have and discussions fan relations with our cost Cardenas.
But the cost of service and Oh, we have a reduction in that cost stuff off off day of the service.
And that we've got being negotiating that through.
All this year at the beginning of these here and there is starting from first off or January so we've been nietzschean to second quarter, but starting first quarter. So I think youre going to see so also benefits in third and fourth quarter. As you are saying also know so our.
We're working with all of them reviewing with all of them and a went that's mainly what a I can say no.
So Daniel did did the margin was the margin helps from some catch up credits from from Kinda back during the pricing from the first quarter or is that really the new margin that you're going to operate out this 15% I'm not work I've worked gossiping werent catching what we already are what we caught in the let's say we cover around 100 on Fannie Mae.
The or dollars at that we pulled from beef in that second quarter on a $65 million from first quarter $65 million from second quarter. So that's more or less don't started the numbers and I think we're going to add more lives. The same in the third and in the fourth quarter.
Great. Thank you.
Thank you.
Your next question comes from the line of Rodrigo Villanova Your line is open.
Yes. Thank you.
Good morning, I have three questions inside my first one needs to be into a level it but it'll be more on the potential opportunities to create value from the towers.
Would you be considering this you know what's really we pulled aside sports and he's like construction and also are you continuing to do these with the vast majority of the 60000 towers.
You can you own I'm, good luck and not the default on questions. Thank you.
Hey.
On the thought worse.
Rodrigo the only thing that I I can say on the only thing that we got to they use we got we own 60000 towers.
In Latin America, adding Europe and.
We're in the licensing the different alternatives to give value to the shareholders. As we said I'm too to reduce how worried that so we don't know he said, there's gonna be spinoff, where we're going to sell them. We still does not know exactly if there's going to be in all the countries or only in some of the country. So we are I'm not lysine.
Where do they analyzing what is the best the thing to do to two to four all these assets and to give body of tool that will show called US all the 60000 I wish that we stopped nothing I don't it's not because I don't want to say anything else is because we still don't think.
Anything we aren't really really I'm not leising different I'm starting up.
[music].
Understood then you have come to <unk>. The second question, which would then to walk away.
And to accomplish around the world, let's see.
Distribution, while we're equipment corporate networks.
Includes person funded with government <unk> <unk>, it's gonna toward that end markets.
Yes, sure we dose inputs interest for the alternatives that could we use them it up and then transporting a mix.
Potential what we've been uptime.
What.
We're not hearing anything this day to day I still don't feel today, we are not hear anything about a ban why wait in the rest of Latin American countries, we've talked hearing some thinking but I feel but nothing for my little case or spin hearing some news, but nothing for my from the government.
So that's the only place where we're hearing something.
They are talking about Fiveg, so steel, we having hot and we haven't take up the C shown in Fiveg. So all in for GE three G. there's nothing.
And that's everything it's okay. So steel we don't know what to do there's another bendorf said there. There's some small unsold Nokia 80, axon. So still a lot of competition. So there's a ban on why wait we still have oh there.
ER Bettendorf done that that we can do so yeah, I think what we saw excellent.
Technology bought the steam we don't know if there's going to be.
Something in the older let them country snow.
On the central <unk>, <unk>, Oh, sorry in Austria, where are you seeing Nokia I saw you don't think there's a problem there. So in Europe. We are in Fiveg. They only gone through where we already because were making besting some were doing something fiveg bought.
They only need that see shouldn't that we already take these nokia in in Austria. So there's no problem over there.
Understood. Thank you very much on it on the final one.
Regarding operating performance in Colombia, as Carlos mentioned, he was pretty strong.
Let's go to questions a called crises and I was wondering because to do tend to concepts like a willingness to invest in that I'm excluding Betsy.
You would expect to complete their environment to change.
No in Colombia concerning the military partners acquired is operational supplement that I.
Thank you very much.
Well I I think we've had been doing big improvements in Colombia throughout the last two years.
Yeah, Colombia has been improved not only in Beijing in in one segment were improving in phosphate were improving in prepaid incorporating customary seems big seen broadband and TV. He did they only if they only gone through where we grow in TV also so we have being a an improving I look through.
The last a year two years, maybe two years are starting to work very hard on the last year, we have been improving we change I looked out what organization, we have been investing.
Hey, good, though but there so I I don't think it's only one thing I think we're making a lot and we do know everybody that we have the auctioning <unk> in the beginning of the year, we saw man frequencies and we're going to have a new competitor that keeps a warm and wet.
When we won't new competitors, maybe it's going to change a little bit is gonna be more competition in day or prepay the ample space in the mobile site.
I'm sure it's gonna be a more competition, but I think were prepared we set up very good brand. We've had good distribution we have a.
Hey, Barry quite meet the got box heap D.. So we are prepared to compete in Colombia further.
One of the Super Cool. Thank you very much on this.
Thank you rather.
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Your next question comes from the line of Alejandro Gallostra Fund MBA. Your line is open.
Oh hi.
Hello.
Oh.
Oh.
To scrap steel.
So needed to be at mobile business.
You mentioned a deceleration.
He mobile revenue growth.
Either boom.
The push speech segments.
I wasn't isn't different perspective behave differently, we stopped postpaid.
Most of the People's attention.
So perhaps you can either.
<unk>.
Putting an explanation of why isn't the case that European well, maybe provide this we still decent all bleak Tom.
On the second question here, so we need it could be booklet operations, which has proven to be very easily ceiling. This quarter.
But the performance has been quite decent among countries I know perhaps.
Could explain it differences.
The performance so nothing operations Mexican personal put up some people think.
Yes, I think it yeah.
Prepay the ample space.
Our deferred in a different in the markets on the yard behaving defendant.
Well, it's if you compare lets say, Mexico on but I see I think it Mexico, we have more than 54 cents. If I were started beach revenue in a prepays and a at 44 cents on phosphate. So that's why we stopped being more sheep in their revenue because.
At the beginning April and May prepay the people in.
We have a lot of.
Stores close.
We shot in Mexico, when the all around Latin America people were knocked out there how says so if the west the fed and the F., it's very difficult to said well whether I'm not a lot of corn three in April we gave song back I chest to help people with the SEC pandemic, so ill let let's.
Say, an example in Mexico, we gave back up that catch Paul Let me go up on deal that we gave a.
Free calls for 15 days for free and a there's around that 28 million patches that we do in in in in in April So well, that's what is happening and a bread in may and enjoying this starts to two to grow a little would be to recoup at 18 that prepaid site different theme, but I've seen.
Tim Brasil, only 2025 core Centrify where revenues are.
ER, our prepaid and the rest are phosphate then what is happening in phosphate postpaid. These different people at least is starting to read those their plans. If they have a 500 special plan. They want to go to do at 400 special plan or <unk> or reduced their geeks or they are taking they'd be being careful.
We their money so we're seeing some reductions on the edge on on that on their rental their plan. So that's I'm in the other side. What do you work on Etsy is that you are going to have a lot to a bad debt in day in day in that phosphate. So there's going to be people, who are gonna stay with.
With that job I'm, maybe they are going back on sand and not paying use some of that have they have a build so that's more or less how weve been it's gone not BK fab, a pretty based on I'm phosphate bad all through Lucky in America.
In their broadband I think all around we're doing both the tenant mix.
Good to hear <unk> 64000 named a in the seem to three months say, a but I feel 100000 broadband subscribers.
In Colombia, we also do very good all over at all in we have been growing our where net dot So oh, Oh broadband bought Oscar Oscar if you can.
Talk a little bit more on on the on the on that brought on site. Please.
[laughter] [laughter] Juno, given given that pandemic.
Pushing to people working from home.
Quite a missile bandwidth into homes has been increasing the.
Very much so people into home is doing.
No taking classes.
Working from home.
I wrote off a is streaming be view on gaming so that I think that bush broken those were what they need I mean should we are getting these near that I'm not only needed I've said that.
So somebody asking for more bandwidth you know you know the comps.
Thank you are correct.
Yeah.
Thank you the 11th.
Thank you.
Your next question comes from the line of Marcelo Santos from JP Morgan.
Your line is open.
Hi, Good morning, Thanks for taking my question I have to.
The first quick please provide some view on how things evolve during the quarter, you mentioned, a little bit or how the casino.
Apron me or prepaid was lowered so could you expand a bit and talk how how prepaid full speed.
Evolved how things ended in June just so do we could get a feeling else how the trends should shape up for the third quarter. Since the first question. The second question would be regarding your appetite for enemy. So whatever you could color you could provide on that so we have.
Well some assets unsafe, especially in Brazil. So.
If you could provide some updates on that'd be very good. Thank you.
Yeah.
[noise] prepaid and postpaid I think.
What you, let's talk a a especially in in prepaid US I said people is staying home in April and May So a where with the reduction in same talk that prepaid cards or were higher than what we're seeing in June and July so as they occur.
I don't know me are open on the start than to be more open on we have more stores and then the retails are open we're seeing that the prepaid is just starting to two two to grow while it would be from what we have seen in a pretty Len and I may So that's all over at all in.
In in Latin America students. Some countries are opening faster than the other one saw the once our opening and then returning to close a needle beep. So.
Okay.
Stated that we are a little bit on short time, though for what the when we're going to have all they can know me open a totally open as we used to have at the beginning of the year. So its deep at NTT noted in the postpaid side, that's I said.
And people lease or reducing their ARPU trying to two to take care of them are about their money there rented they don't want to pay if they don't use that they are staying at home. So maybe they use more the white body and on that that makes them feel that the that the they don't need.
Yeah, the X amount off from geeks that they have been their plan. So that's why they are reducing a little bit, but I think all over it all everything is will never be Darren I. So what we used to crap at the beginning of the year, he's going to take a little bit talk time.
It takes time also for the economies to recover to open bought I think everything is going to return on the M&A when you're talking about all he came but I've seen we are.
We are aware.
And that were interested in India. So for those who will be a good feet. We do next then I think in next then we shot.
All the synergies Dawn I think through the mostly on the synergies Dawn I think at the end up that year. We're gonna have almost all of the synergies dong except for that I wish that we need to read those are some powers that we are ready shops or extra thought where does get ready cuff bought at all or.
The rest of 15 or geez, we've got being doing very well.
With that frequencies that we get our very would also help us to talk more capacity and the if we can do we the only two cost more costumer sun the and ER on capacity also would it be equal. So we are interested and we're going to participate in day in day or E auction for them.
All been site.
Thank you very much I.
Thank you.
Your next question comes from the line of Diego I regularly with Goldman Sachs. Your.
Your line is open.
That's a lovely no problem with somebody else. Thank you for taking my question I guess, it's a question so feel really body more put so much in Brazil woken up to them. They feel is for such a strong performance and mobile I mean, we would call Oh go to trial, it's like the post for me.
The job.
Towards groupon goods, but I'm, hoping you on your Uh huh.
My first question. Thank you.
I can you repeat it because I don't hear you very well can you be talk a little bit louder. Please.
Yes can you hear me well, sorry, yeah, a little bit better yes.
Okay. Yes. So so was just wondering if you can walk us through building dealers for goal would be.
The Brazilian market.
People are two mobile.
If you can compounded the girls.
Such as like the full speed leaks or in terms of like the prepaid we charge at the grades and calibrate your plans and compound how youre you're on your group.
You know what.
This quarter.
Very helpful.
Yeah, I think in Brasil were doing great to I think we have a great platform its and I I cannot only talked about the mobile I. I think our mobile platform. These great. We have been increasing capacity he doing more cabrera such a speed these very important.
But I feel and we're moving also on doing.
I I left off or being seen the network to give up very good speed 40 G. Four point Fiveg. So we are investing I'm, we're doing very good thing, but I see also in day in day in day peaks platform. We felt by also great platform, we have a at 10 30 million.
Household spot.
Lot of broadband base TV, a great that platform of pay TV and also we got very goes the management team place on both a threat they to support that so overall, we are doing good and indeed water.
We also reduce.
And I'm not only embarrassingly North America more right, we have been increasing and reducing increasing efforts to reduce cost and expenses. So I think that's something that we have been doing very well and California to gain market share lets say, even but I feel impulse baby in the first.
Better I think because their revenues were growing 54 cents year over year. So it was an excellent that first quarter I think second quarter. The still very goes a growing I I think it's around 8% I don't remember exactly what the.
Only in the <unk> 11.8.
Sorry, sorry.
More importantly, there's an 11.84 cents always steel is working and I'm doing very good were making a where bundles with that big.
A broadband and TV. So we have a good lot to form and we're reinvesting bid on we're managing very well aware we're company Nextel Gevo sold so both frequencies to two to give more capacity on the speed to their customers. So on overall and as I don't think Theres only one thing I think all over it on where.
Doing very good.
Okay. Thank you Danielle and I guess I'm. My second question. These are related to your market.
If I can just a.
Follow up and bees, when I look to the region, but our like several let's say moving parts that lead me to believe that margin trial.
Some room to expand.
For instance, a you mentioned using competition some of the market's ripe industry consolidation or even like the rising off infrastructure players in London, and lastly, but no lease to let's say digitalization trends. So what we'd like to hear from you. How do you see these trends impacting American small deal and how much.
Do you expect to benefit in terms of margins going forward.
Thank you.
I think I think cardless wants to answer or do you want me [laughter].
[laughter] I could tell you couldn't come you lose sight of because I I can tell you a little bit about their margins I think the margins growing time so for centric.
All around Latin America, because two things first we have less at that service revenue.
Wes mainly a growing and their equipment revenue watch reducing a lot. So that's why they they day margins grow, especially let's say in in Mexico, knowing that their margins grow because equipment revenue were down the other important thing.
Is that where as I said, reducing I'm, making big airports to reduce cost and expense. That's very important a yeah were moving a lot more to the beach the lights order I wear network out where sales are where were trying to do everything BG data. So we're working very hard though night.
<unk> on that I need to also go not read those as the expenses and Ah.
Well as you said M&A seen Latin America, well, we're seeing a new competitor in Colombia, both Fannie, but I've seen maybe if only if if if it is gonna be sold then the itself and then there's going to be less competitive machine, but I've seen so all over.
All these moving.
Interim directionally in one country another direction on see another phone three bought all over it all in I think Oh, we're marching scan can cotton can go that way we have being.
Having their margins growing a little beat on growing I would I be felt so no, but I don't know Carlos if you want to say something else.
Okay.
I think though.
Right.
Anything more to go up.
It is important and probably most of.
Furthermore, there where there's significant good thing Paul cool.
Some of them are what money you can direct will be probably finish onto page on all the body. So for me.
Oh really cotton.
Moving on there.
More Uh huh.
Or is it too concerned like we want that we're facing it each oh more.
Origin wind up out from coffee culture, So, we'll probably be talking from but.
I think there for something but also came down significantly because of the coupon.
I couldn't make sense in something like North American buddies more commercial related Oh, sorry temporary reduction we also can now working sometime.
But but we aren't seeing a.
You know a commensurate a if you look at the EBITDA margins.
<unk> increased by because it doesn't hurt, but I'd be comfortable with everything we cautioned equipment. Good well, we try to talk with your markets.
From a.
And one more thing that I want to at least Oh, so he's going to depend a lot on their economies. Okay. The it let's see how the economy. So all around Latin America are gonna be case, and also let let let's see let's see a how how how those beast a pandemic he's going every salto out for.
<unk> till the end of this year on the next one so it's important to.
Okay.
That.
That's helpful. Thank you.
Good.
Your next question comes from the line of Fed Mendez Bradesco. Your line is open.
Hello, Good morning, everyone and thanks for the call I have I have two questions on pretty much. The same line here I just just just don't forget it better understanding of these strong an x. for dual Max I, especially want broadband six which is 63000 or just the you know a other companies already reported was.
Also on the Internet ads were also quite smoke in the second fuel. So my impression here is that the penetration must be service isn't queasy. So just want to come from which you used to be de skwarek instead of more like a gaining market share from what it looks like with the size of that market is increasing.
But then also you can give us.
I'd break it down the net adds if it's more toward 50, G.H. or are you being able to gain clients weve, which coffers.
It would be my question because image.
Oh, sorry, you went to answer that.
But yeah, you're talking to write them in.
Has been increasing penetration.
We are getting it net gains from fiber as you know I missed what from copper. So I, we said travel huff from from fiber.
I mean from copper or just totally right what we've seen into market is the other penetration is increasing.
Perfect perfect in close ended and if I just try let me just sort of just for a follow up I do understand that close to 25% to 30% off yard match works or they might school. He's already F.C.G.H. Just wondering if you should have a lot your guidance, but just on that.
<unk> off you know two plant should continue to aggressively grow a these much work already now that they may focus would be more towards the leveraging the company's theres also deploying couple of starts a sea change. Thank you.
Well you know.
In the you know the situation that we haven't even we are focused really on migration of customers and improve their penetration within it.
In the next month.
Thanks, very much I think you done nothing.
Thank you.
Your next question comes from the line of Maria Acevedo with Santander Bank.
Line is open.
Thank you very much every one of my first question is a follow up on the topic or you just comment what do the topic just try to do for 2020.
I think the Queen group you do you see them to to be a little bit more rationally cuts defending your the 20% you mentioned on the first call.
And the follow up question would be on Fiveg, you launched the first and you should who's been good deal do you think the five Jean Marc in a few is gonna be on consumer mobility is there room to charge a premium four or five just services or and do you see it as a substitute your fixed wireless access what how is gonna be to Fiveg strategy protocols.
Thank you very much.
Thank you on the topic [laughter]. It we have been reviewing that's a I think we're going to reduce their capex from there.
And our forecast that we felt for this year, yes, we're gonna reduces still we don't know exactly how much.
We're going to reduce that we're still reviewing and seeing how are those that traffic is gonna be cave and they're also to say snow because part of our capex see some capex related to their sales so nicox, new <unk>, new new new customers, social we're going to see how much as they were not.
Putting anything there so we're gonna see how much how would those that these going I became so it's still we don't know we are a company that the most Boston where flexible so we're going to use a undo what is necessary to do bought with things that we can reduce capex from the forecast that we.
Scott, but at this year. So that's mainly in Fiveg I think as were doing something in Brazil.
And five G.'s will not work a it's it's a it's a very good question I hope, we can might pop on and on sell a little bit more at the higher price that fiveg is on Fourg and threeg, but it's also going out they spent a lot on competition on what they'll say I'm I'm I'm costumers and also for.
Oh Jeez, one now work for that being said wireless profit. So that's sort of what the maintain shenice and that we're going to that all around Latin America. So that's that's what the weaker.
Thank you very much just a quick follow up a good about capital allocation priorities would you also consider a potential network spin off one how do you see those matchbook Sheridan do you happen to be locked them. Thank you.
No we're not considering a network a spin off at this moment, we thought we haven't can see there anything there and.
Well I think a in some in someplace else makes sense to have a assure network in other ones doesn't make sense, maybe in their rural area, where there's going to be a small tropic make a little bit the offense to two to two to make sure networks in there the no other places where the.
Growth piece, and then you'll have to why they're not capacity they'll send makes sense for AWS.
But to a we are not considering to spin off any part of our network.
Thank you so much.
Thank you.
[laughter].
Your next question comes from the line of Carlos like around that with GBM. Your line is open.
Hi, Thank you good morning, I'm, sorry to go back to the U.S., Please and I just want to understand this new agreement what's it.
<unk> Gulf.
As a consequence of the M&A between two model and sprint or what was the large enough. Thank you.
And I don't think it's related to something especially I think at a decent.
Reduction in cost fees related to the marketing the U.S. and that the.
I I wear a where carriers want us to be more.
At two to two to be more aggressive sometimes seen that market to create better plans on to react faster.
Two to two that's all that's mainly what we stopped.
Maybe maybe I don't always see mobile and sprint's marriage or will help us to to these I don't know, but the two either wasn't related to pass okay. We got being discussing these and we these calls. These every year. So every year, we have been discussing new plans new rates, a and that's something.
Got that that sets us up happens D.C.C. sign.
Okay.
Okay. Thank you this particular or anything like a follow up.
Perhaps were off kind of and just the broadband additions of 64000 don't seem to be.
Great number given that the past quarter, who might have more than 100000.
Let me start reporting is over 250000.
Flurry of issues.
I think maybe there's a difference you to turn policy does that explain just such a large difference between the numbers.
Okay.
The competition.
Yes, we changed a little bit the.
The policy Ofone collection in order to elaborate network, so you're right.
Okay that makes sense. Thank you.
Thank you.
Thank you.
Your next question comes from the line of Ernesto Gonzales with Morgan Stanley. Your line is open.
Hi, Thanks, so much for the call just one follow up on the margin expansion. Although if you could give us more color on what is the percentage that comes from lower equipment sales how much comes from Paul seasons.
On cost savings homage to expect structural how much from temporary items. Thank you.
Got it.
I don't have a key here as they I think what do we have been having a good negotiations on capex or we have being having also reduction on the cost of fat, let's say sales to reduction of cost off or marketing reduction no cost off or all over at all that cost.
On expenses related to the operations and we have increased our cost in the bad debt. So even in a we have been having more at home collectibles done what we used to cap.
So what I don't have a country by country bought that as I said, we have a very well the airport on on producing at cost so.
I don't know if that's clear so I, but I don't have it.
Specifically for four country on how much better segment I don't have it here.
It's fair to think it.
Thank you.
Your next question comes from the line of Valentin Mendoza, well spend aren't your line is open.
Hi, Good morning Goodman. Thank you very much for taking my questions, but looking something I'm doing so I have a couple of them regarding your Mexican operations. The person one has to do means you could give us an update on the lunching.
Psyche, we've seen some headlines.
You're ready to launch in Brazil, but I I just want to know what are the plants up to date for Mexico.
And then Uh huh.
Yeah, I think in Mexico.
Fiveg is gonna be delay I think a week, we're gonna have some at its best things maybe testing.
We ended the year bought the we're not gonna Hot like GE. These year I think its but we're going to have fiveg onto next year, all out where network.
He is working excellent and giving every or with all these locked down and I'm using also I lopped off or people using broadband wireless growth run through in their home is working excellent. So.
I think at five GE is gonna be ER and moving to two next year. We're gonna have some testing so at the end of this year, but we're gonna more five to two deals in next year in mix.
Thank you very much.
So my question has to do with.
So you could share your dose your your thoughts regarding the interest.
And being knows Mexico open them walnuts, either very aggressive immersion strategy because.
And also that you've seen some customers switching to lower cost funds I.
I was wondering you're planning to address these with the probably some forms.
Good day gives lunch or what's your thoughts and looks like.
Well I think yeah.
If you have to N.B. I know swell, it's more competition in the market, but we have two and be a notion that you know what we have been having seeks nbn knows a for the last two years. So there's another two that are coming in the squatter bought the we already have like a six or seven M.B. I know there.
It's more competition of course, but I think we have the best network deep if they're they're entering with that I'll time, I think still I was done dosing type the coverage that you need for the mobile service, maybe they have a good sotheby's seen their home, but when you go out and move then I don't think that's the best sorry be.
So a week I've also very competitive plans, we have 199 specialist plan, yes, I only me David Bowie shouldn't be meet that the data and sort of your limit that voice on limits that social networks SMS on limited and with some day. That's all we are also competitive I know of course.
More competition asked a then.
We're having more competition then is to but I think we're prepared to compete.
Thank you very much.
Thank you.
Due to time constraints. This was the last question.
I'll now turn the call back over to Mr. Daniel has for final remarks.
Oh, just a thank everyone to be for being in the call.
Thank you.
This concludes today's conference call you may now disconnect.
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