Q4 2022 Grupo Televisa SAB Earnings Call

Good morning, everyone and welcome to Grupo Televisa's fourth quarter and full year 2022 conference call before we begin I would like to draw your attention to the press release, which explains which explains the use of forward looking statements and applies to everything we discussed in today's call and in the earnings release. Please note. This event is being recorded I would now like to turn the call over to Mr.

Alfonzo, the English Shah co Chief Executive Officer of Grupo Televisa. Please go ahead Sir.

Thank you Kevin Good morning, everyone and thank you for joining us.

With me today are Pat but on your own <unk> CEO of cable Luis <unk> CEO of Sky and Scott Phillips CFO of Grupo Televisa.

Last year was marked by several milestones both at Grupo Televisa and Televisa and Univision.

We are confident will allow us to deliver sustainable topline growth and free cash flow generation in 2023, despite a challenging global macroeconomic environment.

At Grupo Televisa we.

We finished last year with almost 19 million homes passed after passing around 1 million new homes.

Throughout the year and delivered more than $1 2 million of fixed <unk> net.

Net adds in cable or over three times. The <unk> net adds we had in 2021.

We ended 2022 with almost $16 million fixed RG use. Moreover, we are confident that our wide geographic footprint and solid competitive position will allow us to keep delivering strong <unk> net adds in 2023.

We redefined our sales commission model and rebalanced, our channel mix up Sky, which will allow us to materially.

Materially improved sales, while indeed going forward this.

This will help us stabilize our subscriber base and overall revenue streams at sky, while materially reducing opex and Capex intensity, we expect sky's free cash flow generation to improve significantly beginning in 2023.

We also announced the plan to simplify further our equity story by spinning off our other businesses, including the soccer team America <unk> got the gaming operations in the publishing and distribution of magazines, creating a new controlling entity that will be listed on the Mexican stock exchange.

We keep making progress on our corporate optimization process.

Putting a headcount reduction of approximately 3% of our workforce.

This will help us maintain our solid profitability levels in 2023.

And we reduced our total leverage by around $800 million.

Allowing us to have significant savings related to net interest expenses.

At Televisa and Univision on January 31, we closed the merger of our content assets with Univision solidifying the worlds, leading Spanish language media and content company.

<unk> without comparison in the global media landscape exclusively focused on the massive market opportunity that exists with our global Spanish speaking audience of almost 600 million people.

On April 1st we launched our completely redesigned and enhanced advertising video on demand service VIX featuring the worlds most extensive Spanish language video offerings with over 100 channels video on demand and over 40000 hours of content in its first.

Including our classic Novellas Mega Kids news content soccer, and new and exclusive original programming.

<unk> has already been in the market for three quarters, and we are very encouraged as users and engagement metrics have been exceeding our initial expectations.

Qatar World Cup was a major contributor to the success of <unk> in Mexico, and Spanish speaking Latin America, I would say it was a key event to attract millions of monthly active users or <unk> to our platform during the World Cup.

Service saw peak streaming activity with more than 5 million devices for a single game with zero technical issues, which is remarkable for a series of service as young as VIX.

We are very happy to disclose that VIX is now the largest Spanish language streaming app in the world with more than 25 million meu's on its three tier alone.

On July 21, we launched our subscription video on demand as lawn service Big plus in the U S. Mexico and most of Spanish speaking Latin America, giving subscribers access to the broadest most premium Spanish language content ever offered on and Thats What service featuring.

More than 10000 hours of AD free premium entertainment programming in its first year and up to 7000 hours of live sports.

While VIX asphalt has only been in the market for less than two quarters. We are very excited about the opportunity that we have.

Pardon me it seems that our speaker has disconnected please hold momentarily, while we reconnect our speaker.

Yeah.

[music].

Pardon me, we have reconnected our speakers the floor is yours.

Thank you very much Chuck I don't know what happened, but sorry for that.

Our Televisa and Univision on January 31, we closed the merger of our content assets with Univision.

Defining the worlds, leading Spanish language media and content company.

Business without comparison in the global media landscape exclusively focused on the massive market opportunity that exists with the global Spanish speaking audience have almost 600 million people.

On April 1st we launched our completely redesigned and enhanced advertising video on demand Avon service VIX, featuring the worlds most extensive Spanish language video offerings with over 100 channels be it the on demand and over 40000 hours of content in its first year <unk>.

<unk>, our classic Novellas Mega Kids news content soccer, and new and exclusive original programming.

<unk> has already been in the market for three quarters, and we are very encouraged as user engage and engagement metrics have been exceeding our initial expectations.

The Qatar World Cup was a major contributor to the success of <unk> in Mexico, and Spanish speaking Latin America, I'd say it was a key event to attract millions of monthly active users or may use.

During the World Cup and the service saw peak screaming activity with more than 5 million devices for a single <unk>.

Service as young as VIX, we're very happy to disclose that because he is now the largest Spanish language screaming up in the world with more than $25 million and they use on its three tier alone.

On July 21st we launched our subscription video on demand as Vod service Big plus in the U S. Mexico and most of Spanish speaking Latin America, giving subscribers access to the broadest most premium Spanish language content ever offered on and Thats, what service featuring more than.

10000 hours of AD free premium entertainment programming in its first year and up to 7000 hours of live sports.

While this has only been in the market for less than two quarters. We're very excited about the opportunity. We have ahead of us.

<unk> was awarded Apple TV App of the year in 2022 globally. The first Spanish language App to receive this recognition and Google place best apps of 2022 in Mexico.

Our content factory continues to produce kits that resumes in both the U S and Mexico and is now powering our market leading streaming platform as well as our linear networks in the U S. Our share of Spanish language primetime audiences.

<unk> 262, 4% in 2022 from $62 two in 2021, despite the fact that our closest competitor at the Spanish language World Cup exclusive rights and that is programmed several franchise series during the fourth quarter of the year.

Moreover, our share of total primetime audiences in the U S went up to six 4% in 2022 from six 1% in 2021 in.

In Mexico, our free to air audiences and primetime beat our closest competitor by 105%.

This allowed us to grow our share of all the answers and Mexico by two percentage points.

In mid 2022, we closed another incredibly successful U S upfront volume grew double digits to the highest levels. We have produced in seven years, despite having tough comps from last year's upfront.

For the second consecutive year pricing held in line with the market in the high single digit range Importantly, we grew in both linear and streaming.

Unlike other media companies, we were able to leverage growth in ratings and audience on linear.

Demand for VIX came from our existing linear advertisers, where the bundled rate approached an outstanding 70% as well as for new digital first advertisers.

<unk> digital digital budgets, where there is secular growth in that.

As a key opportunity for us as we are executing on it.

Our early success is also solid proof of the quality operating we made with this new product and new brand.

Advertising commitments in the U S increased in the mid teens, leading us to be optimistic about our advertising revenue growth prospects in the U S.

Finally, we have successfully completed upfront negotiations with our customers in Mexico with a plan growing by mid single digits year on year, making this upfront the largest in absolute terms in our history.

We see this as a solid upfront outcome, given the global economic slowdown and tough comps from last year due to the World Cup. We are confident this upfront will help us deliver advertising revenue growth in Mexico for a third consecutive year evidencing the strong the strength of our advertising platform.

Yeah.

Moving onto Grupo Televisa's consolidated financial performance in 2022 consolidated revenue reached 75, and a half billion vessels representing year on year growth of two 2%.

While operating segment income reached 28 billion pesos equivalent to a year on year decline of four 7%, mainly driven by the amortization of costs related to the transmission rights and production of the world.

Quarter results consolidated revenue reached $19 1 million vessels, representing a year on year increase of one 6%. While operating segment income reached $6 7 billion pesos equivalent to a year on year contraction of nine 9% also.

Cost primarily by the nonrecurring costs and expenses related to the World Cup at Sky.

Adjusting for this group at the latest full year and fourth quarter of 2022 consolidated operating segment income, what's got fallen only by one 5% and two 6% year on year respectively.

Revenue growth in cable and our other businesses segment was partially offset by declining by declines of revenue at Sky. However, as we have discussed in previous earnings calls last year was transformational for Sky and we are confident that in 2023 this business will experience.

<unk>, a strong rebound, especially at the EBITDA levels. In addition, our expansion plan and cable worked very well last year, allowing us to gain market share of RG use while keeping our <unk> flat.

Okay.

<unk> will elaborate on the operating and financial performance of each of our core consolidated segments in their remarks.

Now, let me walk you through the Televisa and Univision is 2022 results released yesterday morning.

The company's full year pro forma revenue increased by 13% year on year to $4 7 billion.

Marking the second consecutive year of double digit revenue growth.

Pro forma EBITDA of $1 7 billion.

Was $4 million higher than last year fully absorbing the peak year of screaming losses.

We view Televisa and Univision 2022 overall results as a remarkable achievement, considering the lounge of VIX, and VIX, plus which illustrates the power and uniqueness of our combined assets as well as the focus and discipline of our execution.

Moving on to the fourth quarter. So let me say Univision delivered very robust operating performance with revenue of $1 $5 billion growing 22% year on year, while EBITDA of $504 million increased by 5% despite higher screaming investments followed.

Following the launch of <unk>.

During the quarter, the very strong revenue growth at Televisa and Univision was driven by sub licensing the World Cup rights in Mexico and others.

Finished speaking Latin American countries.

I would contribute that with almost $150 million and solid increases in consolidated advertising and recurring subscription and licensing revenue of 10% and 9% respectively.

In the U S advertising revenue increased by 14% year on year, reflecting growth in both linear and streaming as well as record political revenue that increased 80% compared to the 2018 mid term election.

In Mexico advertising revenue growth of 4% year on year slowed compared to an increase of 10% in the first nine months of the year, Despite solid World Cup advertising revenue.

This reflects the fact that in 2021 advertising revenue was pushed forward.

Towards the end of the year when advertisers returned to the market. Following COVID-19 driven pullbacks still it is worth mentioning that the World Cup advertising revenue in 2022 increased by 9% relatively relative to that of the 2018 World Cup.

Excluding revenue associated with the sub licensing of the World Cup.

<unk> and licensing revenue increased by 9% driven by growth in both the U S and Mexico.

In the U S growth of 4% was mainly driven by the inclusion of <unk> subscription revenue.

In Mexico growth of 20% benefited from strong content licensing revenue the inclusion of <unk> subscription tier and linear subscription price increases while linear subscribers grew modestly.

For the full year cash flows provided by operating activities of Televisa, and Univision, where $343 million. Despite absorbing significant investments in the company's new streaming service six including new original premium content sports rights marketing and technology.

To sum up we keep executing on our strategy strategy to optimize and modernize our traditional media business, while creating a market leading streaming platform with superior economics and less on a full year of operations. This has allowed us to deliver another year of stellar performance of Televisa and Univision.

In the near term despite the macro headwinds we have a fantastic setup into 2023.

Now, let me turn the call over to <unk> CEO of cable.

Thank you Alfonso residential operations of our cable segment achieved a banner year in operating metrics and quality of service.

We provide some highlights for the fourth quarter and full year 2022.

Net adds grew by 301000 fixed revenue generating units or do you use the fourth consecutive quarter over 300000 RG use for a total of one 2 million fixed net adds during the year.

Gross adds for the year were $4 8 million fixed RG use the highest figure in the history of the company, even exceeding the lockdown year of 2020.

We added 53000 <unk> used for a total of 292000 video net adds in the year. This is the highest full year gain since 2015 and with this game.

We are very confident that this will continue forward.

The positive trend in broadband RG use net adds continues with $78 for a total of 335000 broadband net.

Net adds in the year.

<unk> gained since 2018, excluding the pandemic our product mix remained stable.

Triple play packages account for close to two thirds of our SaaS.

Double play package is continuing to grow which underpins our broadband net ads. This is our highest margin service. So we continued to enhance its product offering.

We added 61000 subscriber.

Fifth consecutive positive quarter for a total of 246000 subscribers added in the year the highest gain since 2022.

To sum up the strategies implemented the re alignment and simplification of our product suite and the improvement in the quality of service and customer experience. Our homes passed expansion spend have translated into a banner year in almost all operating metrics, reaching record levels are second only to $2 20.

We implemented a bottoms up simplification of our product design systems, the new building block modules allowed us to quickly create and modify new products and adjust prices at a more granular level at the same time, the simplification provides more flexibility to our customers to pick their preferred combinations, but going back to.

Basics with easy it's easy to choose your package.

The year long strategy to improve our quality of service that included the digitalization of our customer experience five or training of our technicians will focused investments to improve our network and strengthening of our best in class customer service call Center is starting to pay off.

Our net promoter score reached its highest level since 2018 and on broadband and pay TV. The net satisfaction score placed us at the top of our competitors for the first time.

Consistent they remain at the top of the Netflix speed index occur.

According to the Federal Telecommunications Institute EG continues to have the lowest complaints per 100000 customers in all services versus our cable competitors and our average response time is the best by far and has remained so for the past two and a half years.

We surpassed our original 700000, new homes passed goal for 2022 and finished with 875000 without adjusting our Capex. This is on top of the 2 million homes passed we felt last year.

Happy to report that by the end of the year, we reached 12% penetration in a major city and close to 20% in several medium ones.

The goal, we set a year ago in our residential operations was to regain RG use and subscriber growth.

<unk> market share, while keeping our stable and we have achieved that for the full year. Our ARPA has remained stable.

Going forward. These strong operating metrics in the residential segment will begin to translate gradually into revenue growth acceleration.

Our residential segment revenue growth was 0.9 for the fourth quarter and $2 five for the full year on EBITDA. We continued implementing cost containment efforts, including head count optimization, despite a growing client base and higher sales.

Better procurement practices and lower construction costs that have allowed us to surpass our new homes expansion plan without adjusting capex. This allowed the EBITDA margin to remain stable at $42 nine for the year at the residential sector.

Enterprise operations, which account for around 13% of total cable revenue.

Strong headwinds in both revenue and profitability.

<unk>, a tough comparison base for the fourth quarter for 'twenty, one was the highest the best quarter in the history of our enterprise because of the nonrecurring grass Valley's core projects.

Revenue fell $4 nine year on year.

EBITDA figures were also affected by this we are implementing a structural adjustment in the enterprise segment that will cut costs and capex to improve margins and profitability in 2023, including a significant head count reduction synergies neutral residential segment on expand on external plant maintenance and network monitoring.

Over the coming quarters, we expect residential <unk> net adds to remain solid at similar levels to those of the last few quarters, while residential segment revenue growth will continue to improve gradually.

And there are still challenges with the growth in the enterprise segment.

So we would expect to begin to incorporate new projects going forward.

Before turning the call back to iPhone. So let me say that we are confident that the expansion of patterns to selective locations in 'twenty, one as well as the expansion plan.

During this year has allowed us to deliver solid operating results and should continue to do so.

2020.

Thank you Patrick Daniel now, let me turn the call over to reasonable CEO of Sky.

Thank you Franco.

As you May recall sky is undergoing a comprehensive transformation process today I will provide you with an update on the progress and accomplishments so far.

So give you an overview of sky and fully operational and financial performance.

In 2022, we placed special focus on improving return on investments.

<unk> will replace several low performing products, such as Scott classical with Sky Silver HD and we're also make radical changes in channel mix and could meet your motor for dealers. Both initiatives are already showing improvement on a quiet customers value.

Furthermore, recently, we launched a prepaid premium package called Pogo gold that offers.

And that channel lineup, featuring Sky's exclusive sports content.

With this product, we aim to upsell high value prepaid customers and initial results are promising.

Additionally, I'm happy to announce that earlier. This year. We signed you are reselling contract with D. C. Mexico, leading internet provider. This collaboration will enable sky to offer high speed broadband service that is both reliable and competitive to those of our customers looking for an integrated offer.

Beyond easy coverage.

Especially to prepaid customers, we will continue offering fixed wireless.

The in service in partnership with all the time.

I thought you announced in our previous call. During Q4, we launched a new mobile service build over AT&T and either replacing the nonperforming Bluetooth Telecom Sal envy and of all the time.

The body purpose season is building on both partners.

The bonds are very competitive voice and data price points for mobile service together with an attractive upgrade is sky video content. This year, we are starting to see promising growth by the end of this quarter, we expect to have over 15000 customers.

The leverage on the Sky has strong brand awareness, we have decided to further expand the brand's sky to all our new products initially in mobile in broadband.

Brand consolidation will result in a stronger product portfolio with a streamline unaffected communication.

With regards to our content offering during the 2022 FIFA World Cup in Qatar.

I stood out of the solar platform, we'd complete coverage of all 64 matches I've made history by becoming the first pay TV operator in Mexico to broadcast live event in fall Kay and greatly contributed to our positioning as the leading sport providing in the country.

As well as the gathering valuable customer information through mandatory registration.

Now let me provide you with an update on our financials.

Strategy.

Previously mentioned Sky is focusing on improving sales quality through a channel that makes it a islands are not all new sales Commission model.

As announced in Q3, we implemented a major change in Sky sales Commission model transitioning from an upfront payment system to a new customer revenue share model.

This new approach provides incentives for dealers to improve product mix and in <unk>.

Hence customer tenure.

I'll now shift to discuss our operating performance.

During Q4, we experienced a significant increase in postpaid additions fueled by incentives generated by a new sales Commission model and incremental demand from the World Cup. Meanwhile, postpaid churn decline.

As a result, we experienced positive.

Postpaid net adds for the quarter for the third time in two years.

On the prepay site additions decrease as plan and prepaid churn remained stable. However, since in July we discontinued one of our prepay reactivation promotions due to lack of profitability.

We recorded a 402000 additional cancellations in the year 197000 of them in Q4, although.

All of these customer base cleanup impacted the number of cancellations had no effect on revenues, nor EBITDA I'll, let me emphasize we fully completed this cleanup during 2022.

In broadband we experienced a loss of 27000 or do you use during the quarter due to a combination of declining sales and high churn levels.

Actually driven by network saturation and lack of network expansion from out of town.

As a result, we lost 409000 odd you use during the during the quarter.

And Tim in terms of financial results revenues declined seven 7% year on year and operating segment income decreased 24, 7% year on year on year, primarily due to the mentioned lower revenues and the amortization of 930 million pesos.

From the World Cup rights.

Excluding this one off effect operating segment income what are falling 13, 8% year on year, reaching 36, 1% margin.

It is also worth mentioning that despite this year on year decline Dth revenues in Mexico, representing three quarters of total revenues had been totally flat for the last seven months a positive indication of top line stabilization.

On the Capex side, we closed the year with a total of $192 million. This represents a 21% year on year drop and a decrease of 400 basis points in capex to revenue ratio from 23% previous year to 19% now.

This positive result is mainly due to the measures we have taken over the year to improve service quality, hence the return on investment.

We experienced this positive trend to continue.

In 2023, bringing our capex to regular rate capex to revenue ratio below 17% for 2023 asset.

And before turning back to Alfonso let me emphasize that 2022, what's that a transformational year for sky.

The implementation of all of all strategic initiatives together with the nonrecurring costs and expenses related to the workup mid last year looked particularly challenging steel. We are confident that this year sky will experience a strong rebound in EBITDA and Capex was low we show with them.

Digit drop.

Thank you Luis.

Moving on consolidated capital expenditures were $860 million during 2022 in line with our guidance, even though we exceeded our <unk> homes passed target by 25%.

For 2023, our Capex target is $820 million.

Which includes $620 million in cable to Paas close to 1 million homes with fiber upgrade our network increase our subscriber base and support growth.

And the $160 million deployed in Sky.

$40 million in our other businesses.

Regarding share repurchases, we have invested more than $50 million to buy back shares over the last six months.

Going forward, we're likely to keep repurchasing shares to take advantage of cash in hand, and overly undervalued stock.

Finally, I am happy to report that our board of directors approved the payment of a regular dividend in 2023. This will be presented for approval at our annual shareholders meeting.

To wrap up Bernardo and I are optimistic about the operating and financial prospects for 2023, both at Televisa and Univision and Grupo Televisa.

At Televisa and Univision, we will continue to execute our strategy to create a business like no other and our stellar performance with double digit revenue growth for two consecutive years.

Demonstrates the power of our new lead formed company our content factory in Mexico continues to produce blockbuster content that resonates.

Through our linear networks, both in the U S and Mexico and is now power.

Our market leading streaming platform.

<unk> has been fully launched and is now the definitive leader in the Spanish language streaming in less than a full year of operations.

Growth and profitability in our core business has been more than offsetting the investments we made in VIX, while the strength of our combined assets in the U S and Mexico sales lead us to estimate <unk> will reach profitability by the end of 2023.

With this we will achieve what our global streaming peers are projecting we'll take them four to five years.

And our Grupo Televisa ongoing strong RV unit adds momentum driven by our expansion plan should contribute to accelerated residential revenue growth at cable over the coming quarters, particularly as we implement a regional pricing strategy.

While sky and in the enterprise operations and cable faced challenges in 2022, we're convinced that the strategy is already implemented will contribute to improve their operating and financial performance in 2023.

Now we are ready to take your questions. Chuck Please provide us with instructions.

Yes, Sir we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.

And the first question will come from Fred Mendes with Bank of America. Please go ahead.

Hello, Good morning, everyone and thanks, Thanks for the call I have two questions. The first one I know the I think the company.

It's relatively small, but I think that was a higher impact in this quarter because when I look at your consolidated Grill for cable was one four but when I look at that and if so are the group four zero point finally, I think the price segment actually declined so the consolidated growth was significantly higher than when I look at both our boards.

Visual search you can explain a little bit of data company.

My first one.

Then on the second one I think a patent.

Tony also national debt.

So relatively stable Oh cable, but once I look for example, and that adds net adds were strong.

Only that adds on broadband are there was a growth of 6% to 7%, but they grew up on cable is close to 1%. So just trying to understand the difference between a.

Friday stable Resourcing some downgrades in the plan anyways, just trying to understand the dynamic. Thank you very much.

Yes.

Thank you Fred for your questions I'll ask Carlos to elaborate on the first one has to do with the intercompany accounts. It has to do mostly with everything in the sky and easier doing together, but he can expand on that yes, that's correct Fred I suppose what I'm, saying.

When you look at the inter segment operations. There was an increase in the fourth quarter that has to do is in France, where we're seeing increased b to b activity between cable and sky. So thats. The other one and I am not sure of your question was directed to inter segment operations or whether it was within cable, but within cable as well in.

The fourth quarter, we had an increase between the network operations and the air missile activities intercompany. So thats. The other the other element that youre seeing within cables note within this segment of cable.

And to your second question on Alaska also better turning to expand what I'll say, but as we all know cable has a regional business.

If you look at.

The total country, we are looking at stability in terms of.

Now if prices.

But Don you mentioned, our <unk> is flat.

Even in this very competitive environment. So that's very good news, but he can expand on this.

Thank you Alfonso.

As you said, our Oracle has remained stable the way to reconcile the differences between.

The organic growth and the revenue and the revenue growth and I'll emphasize that part that one has to look at the at the Msos segment not at both the Msos and enterprise. Because then the difference becomes even bigger but there is a difference within the <unk> segment and it has to do with other revenue.

That is not due to organic to organic notably.

There is a there.

There is an offsetting advertising and there is the share of over the top.

Consumption has increased this year. So that is that is why that has changed now as <unk>.

So said.

Yeah.

This is a regional and a very tactical business and we are in an inflationary environment. So we don't see any prices moving downwards at all and that's why this has remained stable and we will continue to monitor tactically and regionally moving forward what to do next and these numbers should.

Converge.

About the same in the future I don't know if that was clear.

Perfect Super clear, thank all fossil Carlos Stefan thought it very clear thank you.

Thank you Fred.

The next question will come from Leonardo Olmos with UBS. Please go ahead.

Hi, Good morning, everyone I hope everyone is well.

Can you please.

Let's say how much of your cable homes pads are connected to fiber to the home.

And how do we expect the proportion of HFC and it's F. Dth should be in the future to evolve in coming years.

Do you have a plan to get to 100% of subscribers connected Dth. That's my first question. Thank you.

Thank you Leo.

Tanya we will take your questions.

Thank you and now for your for your question.

As a matter of <unk>.

Policy and guidance all of our Greenfield investments and expansion plans, Ireland FTP H. So all of our new cities and in fact within the cities. When we have a large expansion plan, we're doing it through SDP H, we closed the year with 17% theft Dth, we expect to close.

Next year by a little over 20% to FTP H. However, it is very important that we are doing a very.

Upgrade.

And modernization of our HFC network today, we have over 10% of our network is DOCSIS three one which can provide one giga of speed by the end of 2023. This number will be 40% So our network.

It's a policy that <unk> has been following for a very long time to keep the network.

In pristine condition.

And our HFC network will be in a one gigawatt, 40% of it we'll be one gig ready, which is all the speed you need in Mexico, and the FC Th will continue to expand because almost all of our expansion over 85% to 90% of our expansion is done in dth.

Yeah.

I hope that we are here.

Yeah.

Yeah, but it makes a lot of sense. Thank you.

My other question is if you could provide I know you mentioned that for example, you just mentioned the carpool flat in a very competitive environment is very good news of course.

We agree could you. Please provide more color on that may be on what we don't see for example, while we don't see on your competitors' websites are they providing discounts are they calling clients and offering discounts below the line that we cannot see if you could provide some color are there some regions that are more competitive.

Yes.

Thank you Lou.

But Daniel.

We will add to what I have to say, but of course, it's a regional play.

As he was describing very tactical so it depends on and.

Are there regions particular series depends on the competitive environment.

Locality, so but I'd.

As you were saying.

<unk> was flat, which is great news and.

And we have seen stability in terms of our prices, but Tony can give you more color.

Thank you. Thank you I'll pencil in in some in some market. The most competitive market is when all the players are and there are a few cities where that is the case that is the most competitive one but we have we have kept our offer.

Stable net.

Nationally speaking.

For the last year, and a quarter and most of our competitors have also kind of done the same and that's why I think the <unk> has remained stable in the course of the year as I also mentioned last year in Mexico and in the rest of the World was an inflationary year. So that is it that is making us all look at our options.

Moving forward, but I think we don't see any.

You mentioned them like under the counter or something discounts, we are definitely not not doing that and we're not seeing that in our competitors either.

Thank you very clear always a pleasure talking to you have a good day bye bye.

Thank you.

The next question will come from Marcelo Santos with Jpmorgan. Please go ahead.

Hi, Good morning, Thanks for taking my questions. The first question is if you could please comment on the progress of two new regions.

How is that taking place.

The second one if you could provide an update on the spin off of the sports and gaming assets. When should we expect that is there any new development in that front. Thank you.

Thank you Marcello.

Don you can touch on.

The answer to your first question and then ill address the second question.

Thank you.

As you know we had a very large at 2 million home expansion plan on top of almost another $1 million for 2022, and we're hoping for another $1 million. This year. So this is a continuing a continuous process.

Areas, where we have expanded.

In one one of the major areas, we have reached 12% by the end of the year, but in many of the other markets.

Smaller markets that we also expanded we are almost reaching 20%. So were very enthusiastic about these results.

Our priorities moving forward is to try to look again, very tactically and very strategically where we think we can.

In our set up the network and penetrate the market the fastest so we're very we're being very selective on locations.

The hub levels and that's that's what we did in 2022 and with good results and we will continue to do that in 2023.

And as to the spin off of us.

Other businesses, we have worked.

On the financial side too.

The performance for the spinoff company.

So everything is ready and we have submitted for approval before the Mexican Securities Commission. So.

We believe that this will happen we can close on that in the first half of the year.

Closer to the summer, but it's all at southern subject of course to getting that data.

And that approval and it's taking longer than we expected.

Perfect and just one clarification on the first question you said that this year you hope to expand its one 2 million homes.

No no no one close close to 1 million close to 1 million.

Okay perfect. Thank you very much.

Yeah.

The next question will come from Carlo <unk> with <unk>. Please go ahead.

Hi, Thank you all good morning, and thanks for taking the question.

Just two very quick ones.

First one perhaps for Greece.

You mentioned that you will start offering.

Guy.

So I'm just wondering if you could.

<unk> done that because that seems to make a lot of sense.

Wondering who are your target and what are your expectations.

And the second about cable if you're thinking about rising prices.

Right.

Or not at all thank you.

Hi, Carlos.

Louisa and paper Toner can take the first one of course as you mentioned it makes a lot of sense.

For sky to to sell Ec's broadband products.

It's something that.

We're paying a lot of attention and putting a lot of effort into makes all the sense in the world with.

Our client base the subscriber base at Sky has.

So.

The pet owner and Luis can kind of expand on that.

Thank you for saying thank you for the question I'll take the first part.

We've been struggling to protect our customers from the let's say attack from the cable operators and this is mostly because they offer a bundle is not just about the TV service, but also because.

Pay TV companies cable companies offer a.

Our bundled between cable and television services that are very attractive to customers.

It is interesting to highlight that.

Around 70% of our postpaid base.

<unk> passed by some kind of a fiber or or or ultra broadband.

Infrastructure, so we've been able to protect our customers mainly due to the content, we offer and the customer experience we offer.

Having said that we we thought that would be also important for us to have.

A bundled offer where we can we can offer to our customers, but particularly and this is part of your the answer to our postpaid customers.

Bundle with a broadband offer.

40% of our postpaid base is already passed by ECA tranche structure. So our main goal will be offering these customers.

A bundle together with a dth offer now putting together and broadband from from EC infrastructure and this is.

We believe this is key for protecting our customer base.

Additionally, reducing churn.

Of course, we also have some postpaid using Italian infrastructure, which is not exactly a good experience for these customers and we will be offering. These customers that are taking a broadband from us but this is all the time broadband by E C.

This is about a 19000 postpaid customers that are already enjoying broadband, but we believe that it would be very attractive for them to have to move from.

Wireless broadband fixed broadband offer by easy.

So altogether four floors for Sky this would be a retention tool.

Upgrading and cross selling tool for our customers and.

And the same time, we see that this will improve.

The take up rate in EC and of course, the return on investment for them.

We will go into a revenue share model in which we take all the commercial activities and an easy take all the way back in activities, including field service and installation. So we are really optimistic on this.

And and as I said that the benefit will be for our customers.

Grupo Televisa customers.

Thank you Louis and Pepitone, you will take the question that has to do with.

Price increases.

Thank you Alfonso before before I do that let me just.

We have with with our lease.

At <unk>, we are very very very happy with this with this initiative.

It's a no brainer and we will I think this is going to work both what is going to work well for both companies. We have a lot of overlap where they have customers and we have customers. So I think it's a win win situation for both companies and we're very happy with that.

Regarding regarding whether we're considering price increases and I said it is.

Tactical business.

We're being very careful as to what the competitive environment regionally it and we will continue to do so but we are in an inflationary environment.

Mexico, unaware a pad and inflation of close to 8% last year and.

Information that will be lower but similar this year. So we're looking at it very carefully and tactically and we will decide and be opportunistic about about.

Price increases, but always keeping.

One thing to increase our footprint and our presence on the ground.

Thank you. Thank you that's very clear.

The next question will come from Sumit Datta with New Street Research. Please go ahead.

Hi, there yeah. Thanks, very much a couple please.

Production of MB table debate, so make it properly.

As we understand that was rejected could you give us an update on how youre thinking being sort of I guess close to three months and start.

Since that time so.

I appreciate it might be difficult to tell us exactly what youre planning, but if you could give us a.

Steer on how youre thinking about the situation.

That would be very helpful. Please.

And then the second one is on <unk>.

Tel Aviv University on kind of really impressive and I use the 25 million number.

It'd be great to get a bit of a sterile.

Maybe what exactly that definition of M. A U S. In terms of people just kind of logging on goals do you need to look on a few times to be to be defined as many of you.

What is the usage.

She uses one several of them.

And how much how.

How much was impacted by the World Cup and I guess ultimately is is there any way for us to really sort of take that number and think about what it means from a revenue perspective any.

Any help around that would be will be super helpful. Thank you.

Yeah. Thank you Sumit.

For your questions always very good questions.

So as to your first question that has to do with America. So frustrating for us when something makes so much sense, but.

As you may recall.

After several years of holding discussions with with.

Them.

And also their financial advisors.

On November 14 last year, we submitted a nonbinding offer to the board and as you might remember this is considered a stock for stock merger.

Have all of our cable assets into Mega Academy and.

We included a premium of 19% for may recover to shareholders and that merger meant that.

Maybe a godless shareholders and Televisa would own.

45% and 55% of the combined company respectively.

So we felt that.

It was a great deal for everybody the offer also contemplated that.

Mkay, regardless shareholders would receive a special cash dividend of.

Approximately $15 billion vessels one five.

And as you might also remember we wanted to create a public vehicle.

On a pure play.

Cable in Mexico So.

We offered garlic to remain as a publicly listed.

Company as the surviving entity of the merger and so we strongly believe that when we proposed.

I was going to deliver.

<unk> benefits for both companies and of course for our shareholders.

This would create by far the leading cable operator in Mexico.

As we made public we we estimate the creation of.

More than 55 billion pesos in net present value for.

For the combined company from just for from <unk>.

Synergies.

9 billion pesos annually.

And this had to do with of course cost reductions, but more specifically in the optimization of Capex.

So unfortunately on December 12.

Our board of Mega government rejected our proposal they said in their letters that they rejected this proposal in its entirety.

Yeah.

So.

I think the market clearly understand the industrial logic, but.

We proposed.

And what we offered and the benefits that this would create but unfortunately also make our godley has insisted on terms and conditions.

We strongly believe it wouldn't be in the best interest of Televisa shareholders.

And therefore, neither we nor our board of directors.

Are willing to accept.

Those terms.

So again unfortunately.

We could not.

Do that deal.

As I have been saying I mean would it made all the sense in the world. It's so frustrating after so many discussions in years.

When financial advisers going back and forth, but.

We now have turned the page and earn 100% focused on executing on our plan.

Expanding to a selected locations.

To increase our share of RG use.

We will of course be very disciplined in terms of capex deployment.

Our maintaining our our pool and.

Of course on the pricing strategy in each locality in Mexico.

In essence, we have turned the page and now we are.

Back to executing on our plan.

Which is looking great.

So.

As to your second question has to do with.

With Televisa and Univision and one has to do with with.

With the launching of our streaming service.

The trends, we're seeing are great.

As you mentioned, we reached $25 million.

In the us.

And this is only a partial year of operations.

I think it took bluetooth five years to get to $25 million of menus.

So so.

Very quickly we have become the largest Spanish language streaming service in the world and we're very happy about that.

We are actively and very encouraged about <unk>.

Selling advertising on the.

The Eva platform, we're selling that advertising.

Premium.

And so that's looking good and we will continue growing this year.

And as to the subscriber base.

<unk> also grown rapidly both in Mexico in the United States and.

In Latin America.

As to.

The MAA use.

When you go into the into the platform.

As a user.

And of course, you have to provide the platform with.

With data you become a user in there if you go in once a month you consider then the Mou.

Okay. Thanks.

Just a quick follow up on the on the Mega company situations like it sounds like there was a they they kind of come to them.

And also can you can you give us any sense as to what were the kind of red lines around but not.

That proposal and why why it lets them all thing from your perspective.

Yes.

<unk>.

I wouldnt like to get into the details what I can say is that.

That.

In essence, what they were insisting on asking for where terms and conditions that.

Are not in the best interest of Televisa shareholders, but even more than that.

Do not comply with best corporate governance practices for public companies.

Okay.

Very helpful. Thank you very much.

Thank you.

This concludes our question and answer session I would like to turn the conference back over to Mr. Alfonzo.

Mr. Alfonzo, an English excuse me for any closing remarks. Please go ahead Sir.

Thank you very much for participating in our call. If you have any additional questions. Please call Robert.

And our team and we'll be happy.

To answer them.

Have a great weekend.

Okay.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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