Q3 2021 Millicom International Cellular SA Earnings Call
Capex to sales will therefore ended the year at around 18% of sales.
It is higher than our historical average of between 16% to 17% and I know that this level of investment. This year has surprised some of you.
<unk> comment on that one this investments are paying off we're gaining market share in key countries. Our NPS scores are up across the board and we have strong subscriber and revenue growth in all countries.
I am too this capex intensity as a percentage of sales will go down next year for two reasons. One is simply the strong revenue growth that we're seeing and to also because many key investment projects are now winding down.
Indeed over the past two years, we have invested heavily to rollout our 700 megahertz network in Colombia.
We are well over two thirds of the way done with that by 2021. We will have also largely finished our <expletive> modernization programming et cetera on a mountain dew and Paraguay.
Lastly, we are also anticipated and accelerated purchases of key equipment. This year to protect the business from possible supply chain disruptions later this year and more importantly next year.
Let's now take a minute to look at our three largest operations beginning with Colombia on slide 11.
On the left is a network two years ago on the right is a network today.
Pictures tell the story.
For more than a decade since we entered the Colombian market our profitability in Colombia suffered from a lack of scale in mobile as you surely know it is next to impossible to be profitable in mobile with only 17% market share.
And this is what we have historically in Colombia.
That was one because we had a spectrum disadvantage.
Our years, the only player in the market without low frequency spectrum.
We have now fixed that and we are now the largest holder of 700 megahertz spectrum in Colombia.
We were also handicap because two we had a network disadvantage without low frequency spectrum, we could not build a competitive network today spectrum at hand, we now have fixed also for the network disadvantage to date ours is as independently measured the best network in Colombia.
Mm three because we also had a commercial distribution disadvantage without good network coverage. There was no point in scaling up our commercial distribution, but now with tons of spectrum on the best network, we have doubled the size of our commercial and service footprint.
We have ramped up our sales and marketing efforts opened up new stores added independent dealers and hired more shelves people.
Why because the historical barriers to growth those that I just described before the ones that kicked up profitability subdued no longer exist no doubt. This is a bold move but I want to message to be very clear. One this is the right move.
<unk> and most importantly, it is working we are winning subscribers share and most importantly revenue.
Three the fixed part of the investment is behind US the investment going forward is largely growth driven.
This is what slide 12 telsey.
One on the top left our mobile customer base is surgery, we added a quarter of a million postpaid subs just in the quarter. That's a new record on our postpaid base is up 36% year on year.
Two on the top right. Our revenue has in fact, we're getting both volume and revenue growth despite lower output in the market.
Now I want to let you know that we monitor the profitability of our growth constantly and consistently.
Our cost per gross addition is down and so these are early churn. So although our puds are lower we're adding good quality customers and as a result, we're getting what matters increased revenue it is working.
Home business continues to grow we added 32000 net customers and grew our topline copper network is now almost totally upgraded to cable fiber and copper customer base is now almost totally migrating as a result, we are now in solid and sustained growth territory in home in Colombia.
Just like we have done everywhere else, we're building a profitable business in Colombia by investing to gain scale in both mobile and fixed.
Now please turn to slide 13.
This is a snapshot of Guatemala simply said it is our largest and most cash generative the market.
Our customer base is growing very rapidly up 7% mobile and 30% growth.
Which is all organic.
Service revenue EBITDA and I'll CF grew throughout the pandemic and continue to show very strong growth in 2021, and what is a good and well managed two player market.
Now, let's take a quick look at Panama in cyclical peak.
We made roughly a $2 billion investment in Panama two years ago.
Today takeaways number one and an investment grade on gallery economy, with an improving industry structure and an economy that is going back to strong growth we have.
Sustain our market share in fixed and we have grown our mobile market share to more than 40% with solid customer growth in both segments with the integration successfully completed synergies delivered under the <unk> brand now very strong in Panama revenue on EBITDA are now both growing nicely on margins are expanding.
And here's the punchline, Panama is now our third largest operation with a run rate of about $300 million in EBITDA and about $200 million in operating cash flow, we are well on our way towards earning a very attractive return on the capital that we invested there. Thanks to all of you who supported us in creating.
Eagle Panama, let.
Let me turn it over to Tim to go over the financials.
Thank you, Mike I'm going to start on slide 16, with a bridge between our reported numbers in the last year in the segment.
From the top chart you can see reported revenues with just under $1 billion, but when you look at the business Holistically, and that's including Guatemala, and Honduras as it fully.
<unk>.
Underlying revenues were just over $1 6 billion.
Now to get to underlying service revenue, we exclude Africa, which was a little over 5% of our revenues today.
And the telephone equipment sales, which are not important drivers of profitability.
Slide 17, you can see that on a long term service revenue grew by eight 2% in real terms and eight 3% organically.
Remains solid across all segments in all markets.
Is the fifth sequential quarter of growth and represents some of the best sustained performance. We've seen since we started this transformation of medical into a leading Latam operations.
I can only say activity has continued to recovery in our markets remittances from the U S. Central America sustained double digit growth vaccination rates improved significantly in most countries.
Currencies in our markets were generally stable both during the quarter and over the past year.
This provided the basis for our strong performance in our consumer mobile business up circa 5%.
<unk> maintained double digit growth.
And we also showed positive growth in the <unk> segment.
On slide 18.
On Latam operations delivered positive service revenue growth.
Once again on Salvador registered the fastest growth of 18% driven by mobile and stemming from network investments. None of them are also had double digit mobile gain on network investment and importantly from it tends to growth in our <unk> business.
This resulted in a nine 5% overall growth no you heard about Colombia, and Guatemala strong performance that was up 6% to nine 2% respectively.
And both on the home and mobile growth.
So slide 19, you can see the EBITDA from our Latam segment.
$622 million this was up seven 1%.
Margin was stable at just over 40% and this was despite incurring higher sales and marketing costs associated with the mobile customer intake.
Turning to slide 20, we have the Latam EBITDA by country.
I'll start with Colombia, we saw a five 6% decline in EBITDA year on year I think it was explained this but to repeat this is due to a significant increase in salary with boxing expenses.
So this is what has driven very strong global customer intake during the quarter.
And has resulted in improved market share.
Otherwise credits was positive in all countries.
<unk> had its fourth consecutive quarter of growth driven by strong top line.
I caught them all of them kind of module at the double digit EBITDA growth again, and we saw positive growth through all of the operations.
On slide 21, we show the operating cash flow and this is all underlying EBITDA less capex for the group, including Africa.
Year to date as of the end of September our ICF is just below 1.2 for $1 billion.
We are now expecting to be above the $1 4 billion.
We are being guided to since the beginning of the year.
Now turning to our liquidity position on slide 22, we have reduced underlying net debt by $300 million and ship it to just over 5 billion U S.
That gives the proportionate leverage pumps to six seven times.
When leases and run it on net financial obligations are around $6 2 billion on a proportionate leverage of 281 times.
As you know we've made reducing leverage a key priority of the business. We aim to bring leverage down towards two times and on slide 23, you can see that when we brought our leverage down every quarter since it peaked at a high today.
Overall, we brought leverage down by nearly 50 basis points over the course of the it and we've been able to restart our share buyback program and on the license side of the slide you can see that we purchased around 0.8% of our share capital.
Is that at the end of the quarter and today, we're at just over 1%.
As a reminder, we've got authorization to repurchase up to $100 million.
Until the AGM in May.
And we expect to invest $60 million during this calendar year.
Remaining $50 million in the first four months of 2022.
So with that I will hand back to Mircea.
Thank you Tim before we take your questions. Let me take a few minutes to refresh everyone on our simple value creation model.
It starts with a very clear sense of purpose to make sure that all key stakeholders see value in what we do.
The first building block is our network centric organic growth strategy. The demand for connectivity is large in our markets. Our ambition is to turn that demand into services revenue growth in the mid single digits drive margin expansion as we have and grow our <unk> by about 10% every year.
The investments we have made over the past year. This is now well within short term reach the entire organization is working towards delivering on that very same ambition in 2022.
The second building block is our capital allocation strategy.
Starts with a healthy balance sheet and a clear focus on the Latin American region, where coming out of these harsh pandemic with more organic growth and lower leverage and we're not able to return capital to shareholders every year and we're not building new ventures that create value beyond our core connectivity business.
No money venture is already the largest fintech markets, we're investing more in it now than we have done in the past to accelerate its growth potential and capture the large screens the opportunity in our markets.
Because indeed, no one is doing mobile ammonia payments like return in your markets and this makes it a unique opportunity for us.
And a growing tower fiber and data center infrastructure also carries important strategic optionality for us to create value. It includes more than 9000 towers of dosing tier three data centers and approximately 270000 kilometers of fiber.
We now have projects underway to carve out both of these valuable assets from our core business and to manage them separately. This.
This trend will give us optionality to bring in partners for either venture to monetize or further grow both of them.
<unk> model is crystal clear and what it means for value creation.
Before I finish please allow me to thank and recognize our amazing team everyone individually and collectively because it is our vibrant culture, our unique sanmina tego, which gets the job done every day I'm in the right way for all our stakeholders, we're now ready for your questions.
Yeah.
Thank you Mauricio and simply remarks, we will now begin the Q&A session. As a reminder, if you would like to ask the question Cleveland is now by E mailing investors at Telecom Dotcom.
When I announce your name your line and make sure that your video camera is turned on.
Please limit yourself to one question and one follow up so we can give everyone an opportunity to ask a question. Today. Finally, please mute your line. After you ask your question. Our first question today will come from Sumit Datta at New Street research.
Yeah.
Hi.
[laughter].
Well.
Okay.
Okay.
So it goes.
My technical skills that are not very good and thanks very much for the thanks very much for the call.
Yeah, a quick first question please on inflation.
And energy costs, if that's okay. So we're seeing inflation and rising.
Rising across the region.
Presumably in some countries across the footprint more than others, but it doesn't seem to be evident.
In the in the Q3s, but I wonder as you look into 2022 do you see any kind of risks are there any particular markets, where you would want to highlight is that as a as an issue.
Okay.
Sure.
Start a little bit and I'll hand over to Tim because it's been doing quite a bit of good.
Good work on that and as you can imagine some mainland just gone through our budget process. So from my conversations on that.
And did it it doesn't come through the results today and that's because we're not hearing from the teams and our review significant.
These Mormon concerns organization, just doesn't really come up with at this point.
If you look at.
The official projections by international Monetary fund and others. It doesn't seem to be something that weighs heavily in the horizon.
Having said that.
We've been doing quite a bit of work ourselves internally to prepare for.
For an inflationary environment, particularly when it comes to pressures that affect worldwide supply chains and by that I mean at the group level were being buying as much as we possibly can in terms of equipment and Thats part of why you see us bulking up if you will in <unk>.
Opex there.
Somebody said internally, we started buying our Christmas campaign gets back in February and I think that turn out to be a really good decision because as you know there are shortages around the world.
And handsets.
A lot of a lot of equivalents I think we're prepared ourselves quite a bit for that.
At the group level.
As I said, we're not seeing a lot at the local level, but at the group level. We've been doing the things that you would expect us to do to better prepare for that environment and that is making use of our scale to mitigate any cost pressures already talked about loading up ahead of time, which we've been doing we've also been optimizing or all the reverse logistics as.
So that we have more equipment available simply from a circular economy point of view.
And we're pushing back on our vendors and optimizing specs. In addition, driving alternative vendors are strong.
To prepare the business for indeed, some some pressure at the group level.
Tim.
Any more insights.
No I think you've covered it pretty well like concurrently we don't we're seeing a lot of places with precious moments that sets and it's I think we're very aware of it.
And clearly lessened Arctic is not immune to the global inflationary pressures around that.
We've certainly seen a few central banks pushing rates up that Colombia has been particular moved its rates up.
But you know kind of.
The main areas, we will be impacted will be our people.
Employment costs we.
We don't see that coming through just at this point, you mentioned fuel, but bear in mind, Although obviously network is a key part of our business. It only really represents about five or 6% of our overall opex as a percentage of the revenues in the field components of that is a subset of that as well. So so you know kind of weird.
We're aware of it.
As you say, it's not very not at school the movie.
Yeah.
And in some countries are SMA like Columbia, We just took a price increase so we do have the ability.
To protect ourselves and our revenue.
This was crimson part of our business for sure.
That's clear thank you.
Quick follow up please.
This might be one for Tim but just on the.
On Guatemala performance is very good but on the dividend.
Are you a signal that you're looking to pay down gross debt is that I was a bit surprised by the one.
One that is not likely to be an ongoing policy.
Okay. Thanks.
No.
We when we redeem the $800 million bonus in Guatemala, we used a combination of existing resorts say, some new borrowings and also some loans from shareholders.
And we've just about finished paying off all of those loans, particularly the shelves. Once I think the last thing was actually up to that so in we've divested the caseloads paying down their loans.
And we will resume the dividend flow from November actually similar.
It's just it's just really.
The way, we chose to allocate the capital.
Okay clear thank you very much.
Thank you. Our next question will come from Marcellus contest at J P. Morgan.
Hi, Good morning, Thanks for taking my question I wanted to ask about the two operations that went a little bit softer, especially on the EBITDA side on daughters, and Paraguay, if you could.
Just more of you trying to boost our commercial efforts like like a doing Colombia or is this more competitive reason could you. Please throw some light on those markets. Thank you.
I mean, let me take those so I think they are similar but different animals small signal.
I think on duress.
You are saying you spent hubs.
What we the situation we had in Salvador, some three or four years ago.
It's a business that we're not happy with the performance we're getting that's for sure.
Yes.
But we're also taking all the corrective measures liquidated in El Salvador, some years ago. My Dad I mean, we're modernizing the network I made a reference to that on the prepared remarks, and we are pretty positive that that in combination with the fact that this is a two player market in which we are of significant scale.
Would allow us to correct for the shortcomings in performance that we see you know allude us today pretty positive that once we make those investments you know as I said that we've been doing on modernizing the network on <unk> will become a strong performer for us.
Otherwise a little bit different because I think Paraguay is is further ahead.
In the change conversion cycle, if you will.
We have made some significant investments in Paraguay, we have tons of scale and as we already said number of times on the call the toys in Paraguay.
And what we're beginning to see now in Paraguay is competition, becoming.
A more rational so it's more stable today still a difficult environment from a competitive point of view, but certainly much more stable than it has been in the past.
And if you look at the subscriber numbers in Paraguay.
You can see that the business and then the market Theres a lot more stable.
Even at venture to say that.
Is it stabilizing significantly and you'll see that our mobile market shares now stable or even slightly up because we're picking up subscribers in Paraguay.
We picked up 120000 this quarter they are up 7% and homes also becoming little stronger service revenue in Paraguay is modestly up.
I.
I think we're stabilizing significantly in Paraguay.
And obviously you said the EBITDA that Cogs level that we pay for the soccer rights in Australia began its a little bit weaker than it normally looks but that's very good because it helps us very much stabilized our business.
Okay.
Perfect. Thank you very much.
Thank you Marcello our next question will come from Diego Arago from Goldman Sachs.
Yes.
You bet.
The first question is related to their collective landscaping, our Columbia, especially mobile it seems that people have towards the other players are still let's say performing well despite any way I'm interested in the market towards just wondering if you can comment about our strategy and expectations in there and the second question is related to.
The shortage of semiconductors.
Let's say a global supply I guess are you seeing any potential impact on your Capex plan as we approach 2022 and also.
Maybe just a third question here sorry, any initial thoughts on the proposed transaction between Liberty.
And American modeling, Panama, I would love to New York.
So thank you.
Sure.
<unk>.
But the idea here Diego.
So on Colombia.
As you saw in the prepared remarks.
Given everything that's going on in the country, we think our performance and our Q2 was quite strong, but I think Q3 in Colombia is outstanding.
In terms of demonstrating that our strategy is working.
As I said on the call we set out to buy spectrum set out to build the network, we set out to increase our commercial distribution in the last year the full needed to be particular need that we do get the subscribers and to get the revenue.
That's happening as you can see on the numbers that would show up there go where we're up.
18% on their mobile subscriber base postpaid and particularly as our two record quarters. In this room was better than the last quarter with almost 250000 net ads and.
And about 110000 prepaid net adds so we're very happy with the way Colombia is performing.
As you can gather from from the prepared remarks the issue. We historically had in Colombia is that.
With such limited market share, we couldn't possibly be profitable. So our strategy is to find some scale.
And everything that is happening in the market is allowing us to gain that scale and you've heard me say that it's a volume game, which will allow us to pick up a little bit of market share and that's exactly what's happening.
But what I added and I think the numbers quite significantly show is that we've come out ahead on the revenue proposition despite lower outflows in the market.
So we're very pleased with the way Colombians working for US is exactly the strategy. We're supposed to do and if you add to that the fact that our home again the strategy that we laid out five years ago is also performing.
Christine.
Certainly what we're doing in Colombia, we really converted upon a copper as you know we're largely done without another customer net adds are strong and you're bringing revenue in Colombia homeserve revenue growth in Colombia is double digits.
I mean, if you look at what we're doing in Colombia today, we have both mobile and home <unk>.
We're the best network in the country. Our NPS results are significantly moving up if you look at the portability in Colombia, where clearly the winter and if you look at where we come out in the price versus quantity game, we've come out with increases in service revenue.
So overall very very pleased.
We're basically net winners in a competitive landscape.
Okay.
On the second question on 2022 I think the first thing I'll add in Tim's been looking at our budget and in a lot more details so I'll hand, it over to Anne.
But I'll tell you this.
In this business.
We've already.
Acquired a ton of our 2022 Capex right, if we hadn't done that.
It wouldn't be good events business so.
That's.
Not only loaded up in the fourth quarter of 2021, and that's partly why we keep saying that.
But we're going to load up in Capex this year.
But we're already putting the orders for 2022, so we can start affecting all of our 2022 Capex already.
<unk>.
And then maybe maybe Tim you can add a little bit to that before going to the Panama here just to give you.
Yeah.
The chip shortage is being kind of placing us for a while with bringing forward buying.
Big issue for Us takeaway set top boxes, that's probably the area, where there's been a post acute shortages handsets are a bit more fungible than Asia.
In network equipment, we have long lead times on that so it's been the we sold the weight the risk areas in the set top boxes with a lot of forward purchases in on that.
I haven't got the exact details, but we've probably committed at least half of our capex for next year already in terms of that contract purchase orders et cetera.
That's how we're trying to mitigate the risk here.
Alright.
And then.
Lastly, on an arm Panama matter.
Was part of our investment thesis when we went into Panama, If you recall two years ago.
Global market.
We have four players.
Couple of them with a size and a couple of land limitations on scale would eventually rationalize down.
What you're seeing is precisely that.
So that's been rationalized.
Three players from core so that was part of our investment thesis and as a result of that we think it's just a sensible thing for the country to do.
With that in mind. It just a further element of what was our investment thesis.
Okay.
Very helpful moisture and team. Thank you very much.
You bet.
Thank you Diego I'm going to read a question for Stefan Goffman at Dnb, having some technical issues on his question is if we are being cautious on our guidance at $1 4 billion. We are saying that we are targeting 18% capex to sales in 2021.
And that would put our Q4 capex levels higher than what we had.
In 2020.
He has been even if he puts the capex estimate into his estimate keep coming through and Lcs guidance, a little bit closer to one 5 billion.
Alright.
I'm going to give it a shot.
Tim is just going to cut out.
Body of data correct, Josh the the numbers. So I mean, let me give you the big picture here.
Alright, let's just be clear we are on track to be surpassing the one four okay. That's fair.
But everybody needs to understand that this year.
We aren't going to spend more.
More capex than we historically have to the tune of $100 million to $200 million and we've already had in this in this call conversations around why that is important but thats too to reemphasize that we are.
Finishing up the Columbia network.
Missed a female network modernization programs, we've talked about <unk> talked about Paraguay.
And those are all coming to completion. This year. So this year for sure we're going to be a little higher than normal to the tune of $100 million to $200 million.
As a result of that that Capex will sounds ratio is going to be around 18%. Now. These projects are not with us into next year.
And we've already bought a lot of the capex or secure them on the Capex for next year.
And so we're pretty comfortable.
Knowing that next year, our capex to sales ratio will come down to about 16% to 17% ratio that we've been talking about and I think thats. The most key and important point here is to understand that and I want to use the the moment to go perhaps a little bit big picture on this conversation rather than.
Spinning my head around the Q4 numbers.
I think what's behind all of this.
Is that the business model that we set out to put in place is coming to fruition pretty much right now.
But let me let me explain what I, what I mean by that we set out a model.
Ambition, if you will to achieve top line growth.
Where.
Pretty close to that if you do the math again star 2019 numbers, you'll realize that our service revenue growth this quarter was around 5%.
Is that mid single digit level that our model predicates.
Look at our margins, we have said some years ago that we seek margin expansion to get to EBITDA margins of around 40% in operating cash flow margins up more than 20%.
We've reached that.
We're there in terms of our energy margins of around 40% and their margin expansion of your print customer level. We're at margins profitability that are in the 20% to 25%. So the last.
Sooner for here and this is why the Capex conversation so important and the fact that it is coming down next year for the reasons that we've discussed now are significantly last shooting for here is simply that that target of operating cash flow growth of 10%, it's no longer something that sits out there horizon.
It's around the corner on the prepared remarks, I thought it was very clear in saying that where we're looking at it.
For the short term and that's all part of the equation.
So on that focus to be clear that we're getting to our target model very quickly into 2022.
Okay.
And Tim can correct now by Q4.
Is that that wasn't going to correct anything that I was going to give.
Give you a little bit more specifics I guess in.
Yeah, if we look at the components here, we talked about a high level of Capex and I know kind of the market generally doesn't believers, but we will.
Probably spend about $450 million in Capex in the fourth quarter now this isn't they suddenly spending that amount. This is to do with projects. We started in the first the second quarter, while we effectively get to acceptance and therefore the bookings that's why the number is higher.
If I look at the other part of the components.
I see no big sort of Red flags on the Latam EBITDA side, I think we've talked about that are performing well.
But you know as Ive got one area of caution that I'm, a little bit more concerned about that will be on the Africa EBITDA number for the fourth quarter and I realize we don't talk about it too much it's subject to a sale and purchase agreement, but it is still part of our numbers are they still positive mcf number on that.
It has been a significant impact on the MSS business because of the levy was imposed by the government, which is how that have an impact.
So you know kind of at the margin stuff and that will that will that will have an impact and I think that's been overall as we said you know we're now very confident that the number is above $1 4 billion, whether we kind of meet in the middle is the way you ought not to show that.
But suddenly we remain grace.
Optimistic about the Latam performance.
I'm good I'm, good al Joe Viola, Solvay, Mahalo, I'm going to I'm going to rain over wet pavement here.
Right.
Years' investment.
You know a higher than normal is what gets us to achieve the ambition in our financial cash flow model and as how we get to that services revenue growth mid single digits that we're already almost achieving this quarter into next year and it's how we get how we get to margin expansion and more importantly, how we get to that operating cash.
ROE target of about 10%.
The good thing about Stephens technical difficulties, they can't come back to us on this now and ask as a follow up.
Yeah.
Well. Thank you both I'm Gonna verbally asked another question for Bill Miller.
Just wondering if you could expand on the Fintech and money transfer business and how soon we can expect this to be an independent entity.
Alright good.
Craig Great question so.
Aye.
I take a look at our <unk> business, a little bit like the hubs, while we bought.
Back in the days when we talked about cable and we said, we're going to build a cable business and this.
This is pretty much where we are today, we built a $2 billion cable business phenomenal margins phenomenon services revenue growth and a lot of runway into next year.
<unk>.
Chico money is today.
Cable was three to four years ago.
When we put it out.
A toddler that we would build into a young independent.
Individual so what we have today with took our money as you know is already a pretty sizable fintech 5 million users $50 million of revenue with launched in five countries. So it's not that small but it hasnt received all the attention of something that's already a pretty pretty scaled up.
<expletive> could.
That's exactly what we're aiming to do.
Because we feel that we're barely scratching the surface of the fintech opportunity that's available in our countries today because the reality is no. One really is doing mobile financial payments in our markets I'm certainly not taking.
Taking care of these fintech opportunity.
So while we aim to do is first.
The preferred digital mobile platform in all of our markets. So that we still have that gap in financial payments digital mobile payments in our markets and for that this year, we'll be launching <unk> codes or coastal markets and reaching out to thousands of merchants. So.
We become a preferred digital mobile toxin that's point number one point number two of the strategy is to expand geographically, we've only launched in five countries not in the others, but in some of the countries, where we launch and we can relaunch more fortunately.
And then of course, the third layer of the strategy would be to expand into the other fintech opportunities with lending and insurance. So that's the overall picture of what we're trying to do with <unk> and the opportunities available to us because we have such significant impressions in the markets we operate.
With agents that cashing in cash out our existing prepaid business and as a result of that we can build a fintech that's tethered to the real economy.
The cash.
Machines, if you will that we have a little Atms that we have everywhere. So that's the vision for <unk>.
Your bill.
Doing today is we're been investing heavily in building out the team setting up this strategy pumping.
Pumping up the capabilities that we have both.
Both on the ideal level and others and by the way. That's also part of some of the investment that you're seeing in Q4 are much more than ever before because we're investing in table money.
And in parallel to that what we're doing is we're carving out the business. So that we have the optionality.
Potentially bringing a partner that would help us.
All of that business as I've said before I'm very enthusiastic and I believe we have tremendous opportunity to create another.
Value driver for us here.
Thank you Bill for your question. Our next question is from Stefan billing at Kepler and this is our last question I believe.
Okay.
Thank you hi, everyone.
Couple of questions.
From my side first of all.
Mr. Griffith you won El Salvador, if we looked at the cost base it seems to be still a bit elevated.
Elevated I think you have some.
Accruals or something like that in Q2.
Anything you want to comment on that.
Okay.
Oh Salvador is.
Just sticking incredible comeback story for us.
It is hopefully the template to what we need to do an undue does as I said earlier.
It's become our highest growth business and nominal N P S.
All of them the back of changing the network getting spectrum, putting a phenomenal team in place.
And if you look at the Q3 numbers keep getting better with net adds are up 13% if I recall correctly.
And EBITDA, that's not only double digits, but in the 20%.
No.
Going forward, we're going to kick in Salvador, putting the same recipe and plays on an arm because it really is working.
I think.
The elevated.
I'm not really too worried about the opex in El Salvador at the moment because the area that it's mainly coming through is dealer commissions and dealer commissions are associated with gross additions are they basically all to support the growth in the customer base.
That's.
The major.
The reason why it's slightly elevated but for me. This is good good good opex.
Thank you.
Next is on Colombia, I was just curious.
On two things there the Bogota region are you now.
Gaining good traction on the mobile side, thanks to the low band spectrum or is that yet to come and also if they're sending us on the potential cable reseller opportunity in Bogota lets you Tim Chair.
Yeah. So the answer to the first part is the pickup in strong pick up in subscriber largely postpaid in Colombia is broad based regionally.
Because we're not hub network that covers the entire country and yes, we are able to better serve these bogo timing.
We have a low frequency network available in but with us. So we are picking up subscribers overtime.
And it's more broad based.
Ross the country that it used to be so yes, we have corrected for a technical handicapped Lora network can be comfortably added bogota, but the net adds are coming from the entire country. Because we have also increased distribution. So that's the answer to the first part of your question the answer to the second part of the question is if you're referring to.
Deal between the net on a day rate.
We will create a fiber call about we get access to third parties and overtime that has run into some legal.
Problems in Colombia.
Don't know, whether they will be sorted out or not but that also leaves at today with the ability to itself.
Resell the fiber to third parties.
So that would get us there.
Fallback position.
What it means for us is whether it's a joint venture or not somehow.
Sometime next year, we would be in a position to buy.
Resales were resold to fiber services from either in a joint venture format today directly.
Sounds good thank you very much.
Thank you Stefan for your questions.
We have another question from Anders Wennberg.
He is asking if mercado libre is active in payments in countries like Paraguay, Bolivia, and Colombia, how do we compare to them in terms of mobile payment.
<unk>, there will be a potential buyer of the mobile payments in South America.
So listen Columbia of course is a little bit different Colombia is a it's a bigger marketing and one in which you did Carlo news.
So.
The opportunity for us for Tivo money exists in all of our countries. The one that has the most competition today is particularly Colombia everywhere else, it's pretty much a blue ocean for us too.
Compared to the digital payments space, because we have unique capacities and others don't really have we already know the mobile payment business because we've been in it for a while we're increasingly technology, increasing the distribution and Christina teams, increasing our platforms and obviously our product proposition.
In all the countries outside of Colombia, It really is a blue ocean for us to buildup diesel payments business no. One is doing it neither are other mobile operators.
It is strictly a fintech and as I said earlier, we have a unique advantage, which is the fact that we have a large takeover money distribution platform and it is not small it's about 20000 points in remarks that I've. Just described will relaunch, taking money and with stinker money can be cashed in or cash.
Style that basically connects our fintech to the real economy, and it's an advantage that nobody really has made we need to.
We need to make significant use of that.
And on the last little bit is just this is such a young tiny baby. So we're not yet thinking about who's going to marry it or take it away from us that may happen warms, when you sort of put put him or her through.
Primary school and high school.
Thank you Anders for the question.
That was our last question <unk> if.
If you'd like to make some final remarks I'll make the Sarnia.
Thank you so I think I'm really going to Joe random sort of Macondo era.
Jane over wet pavement.
Getting to the model that we wanted to create service.
Service revenue growth margin expansion and operating cash flow growth, it's now very very much around the corner.
I'm thankful to all of you in the story and I'm thankful to the team is putting it together and I'm pretty pleased that we were building a model that Dara.
Net operating cost for growth ahead of us. Thank.
Thank you for.
Just waiting for us to deliver on it as we are.
Yeah.
[music].