Grupo Televisa S.A.B. Q1 2023 Earnings Call
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Yes.
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Good morning, and thank you for your patience.
Call is scheduled to start at 12 P M Eastern time.
Rescheduled from its 11 11 am time a.
A few days ago again, the conference will start at 12 P. M. Thank you for your patience.
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Good morning, everyone and welcome to Grupo Televisa's first quarter 2023 conference call.
Before we begin I would like to draw your attention to the press release, which explains the use of forward looking statements and applies to everything we discuss in today's call and in the earnings release.
I will now turn the call over to Mr. Alfonso that Gotcha co Chief Executive Officer Grupo Televisa. Please go ahead Sir.
Thank you Kevin.
Good morning, everyone and thank you for joining US with me today are Tony.
<unk> CEO of cables, <unk> CEO of Sky and Carlos Phillips CFO of Grupo Televisa.
During the first quarter Grupo Televisa's consolidated revenue reached 18, and a half million pesos, representing a slight year on year decline of half a percent.
Operating segment income reached <unk> 7 billion pesos equivalent to a year on year decrease of three 4%.
Revenue growth at our residential operations in cable.
Our other businesses segment was partially offset by declining revenue at Sky and.
Our enterprise operations in cable.
We ended March with a network of 19 million homes after passing around 290000, new homes. During the quarter. We also delivered more than 290000 fixed <unk> net adds in cable ending the first quarter with 16 million fixed <unk>.
We are confident that our wide geographic footprint and solid competitive position will allow us to keep delivering solid <unk> net adds and gaining share of RG use throughout 2023.
Our cable has been relatively stable over the last few quarters, but we expect it to increase slightly from the second quarter in the second quarter due to the price increases we implemented earlier this month.
This.
Our ongoing cable <unk> net add momentum should add.
Allow us to accelerate revenue growth at our residential operations.
While we continue to face a challenging environment and our enterprise operations and cable we're determined to stable license business throughout this year.
Our guide we believe in the transformation of measures implemented during the second half of 2022 will allow us to gradually achieve sequential operating and financial improvements over the coming quarters.
But on your own lease will elaborate on the operating and financial performance.
Each of our core consolidated segments in their remarks.
Now let me walk you through the let me say Univision first quarter results released yesterday morning.
The company delivered another solid quarter with revenue of $1 $1 billion growing 6% year on year, while EBITDA of $361 million declined by 10%.
Meaning investments related to the new exclusive content sporting rights marketing and technology increased following the allowance.
Advertising and subscription services.
During the second and third quarters of last year, respectively.
It is important to highlight that all of you said Univision to EBIT declined during the first quarter represents a sequential improvement driven by lower screening losses, excluding the benefit from nonrecurring revenue in EBITDA related to the monetization of the World Cup right.
And very strong political advertising due to midterm elections during the fourth quarter of last year.
During the quarter revenue growth at the Liza Univision was driven by solid increase in consolidated advertising and subscription and licensing revenue of 6% and 7% respectively.
In the U S advertising revenue increased by 2% year on year or 5%, excluding political and advocacy, where we benefited last year from COVID-19 advocacy related spending.
We continue to outperform the market, which according to Magna declined 6% during the first quarter, leaving us with eight percentage points of outperformance.
This reflects a revamped approach to advertising sales with a broader portfolio of solutions that includes both linear TV and streaming.
In Mexico advertising revenue growth of 14% year on year was driven by the appreciation of the Mexican peso.
In both linear and streaming and the 2023 calendar year upfront.
Where we secured record advertising commitments.
In local currency terms advertising revenue in Mexico increased by 4% year on year.
Consolidated subscription and licensing revenue increased by 7% driven by growth in both the U S and Mexico.
This growth was primarily driven by the launch of <unk> premium subscription streaming tier in the U S growth of 5% also reflects the subscriber declines in traditional mvpds in line with the market.
That was partially offset by growth in virtual Mvpds in Mexico growth of 13% was driven by the appreciation of the peso.
This growth in linear subscribers and higher pricing.
In local currency terms subscription and licensing revenue in Mexico grew by 4% year on year.
Regarding <unk>, we're extremely proud of what we have accomplished since fully launching our <unk>.
Tier screening platforms last year.
Revenue for the first quarter was very strong, particularly considering how young the platform is mix.
<unk> is already the largest Spanish language streaming platform in the world.
Our engagement metrics were equally impressive with 26% growth in total streaming hours per user over the course of the quarter.
This is remarkable considering that the comparable period had the World Cup.
To sum up we are optimistic with the start of 2023 from both an operating and financial perspective, and maybe you said Univision.
We grew revenue across all business lines and geographies.
The U S advertising revenue continues to outpace the market, reflecting growing advertiser recognition of the power and value of our audiences as they ship share away from an overspend general market.
In Mexico, the reach of our linear and streaming platforms.
And then making them the best choice for advertisers.
This was evident in our record setting upfront.
In addition, <unk> first full year lives represents a very powerful growth engine for our company with very encouraging increases in engagement and consumption great momentum with advertisers and continued narrowing of losses as we progress towards profitability.
Now, let me turn the call over to Daniel C O M P.
Thank you very much I'll functional.
We are very happy with the continued momentum in operating metrics and quality of service on our residential operations in cable during the first quarter of 2020, just let me provide some highlights net adds grew by 290000.
To use the fifth consecutive quarter with close to 300000, RGA Loopnet apps.
<unk> totaled $1 3 million fixed <unk>, the highest quarterly figures in the history of the company.
Even exceeding the Covid lockdown.
While our churn remained stable.
Is it a trend in broadband net adds continuing with 85000, an uptick over the previous quarter. Although slowing video continues to be a success story, we added 31000 video <unk>.
Distribution agreement with VIX continues to gain traction.
Our product mix remained stable triple play packages account for close to two thirds of our double.
Double play adoption continues to grow underpinning our broadband net adds.
This is our highest margin service. So we can keep enhancing its product offering.
We expect to past 900000, new homes this year slightly surpassing last year's smart, while keeping our capex at similar levels to last year in shortly.
The realignment and simplification of our product lines the improvement in quality of service and customer experience and our homes passed expansion plans continued to translate into record levels in almost all of our operating and our quality of service metrics.
We started a year ago and our residential operations work to regain RG use a subscriber growth to solidify our market share while keeping our stable we continue to achieve that.
These strong operating metrics in the residential segment have begun to translate into revenue growth acceleration. Moreover, on April 1st we implemented a Friday in price increase which should contribute to improve our financial indicators.
Our focus will be on containing churn, while maintaining the level of growth.
Our residential operations revenue growth accelerated to 4% in the first quarter of 2003 from 0.9% in the fourth quarter reported EBITDA increased by one 4% in the first quarter of <unk> 33, compared to 1% in the fourth quarter of 'twenty two.
Enterprise operations, which account for roughly 10%, 12% of our cable segment continued to face headwinds in revenue and profitability revenue fell by 4% in the first quarter EBITDA figures were also affected.
The content cost we embarked on a company wide structural cost cutting program along the following three pillars. The restructuring of our enterprise operation includes taking advantage of technical synergies between the residential and the enterprise operations, which are quite important I mean towards mobile nvme solution.
Yes.
Revamping the product line for Middle enterprises that had been historically underserved and offer huge potential there.
The commercial restructure includes content in regions in Middle America.
Rationalizing stores on a nationwide basis, optimizing our sales force between in house sales personnel and all types of distributors.
And the back office and internal organization pillar includes optimizing office real estate fleet management software licensing and optimizing technical installation.
We are also going through a bottom optimization of all of our capex investments and process visa.
These efforts should contribute to improve our free cash flow generation in the short and medium term.
Over the coming quarters, we expect residential RV unit adds to remain at similar level to those of the last few quarters, while residential operations revenue growth should accelerate due to the price increase.
And two there are still challenges in the enterprise segment, which requires structural changes that are in the process of implementation.
Before turning the call back to our first of all let me say that we are confident that the expansion to selective locations over the last couple of years the price increase in our residential operations and a solid product and quality of service should allow us to keep growing during 2023.
Thank you now let me turn the call over to <unk> CEO of Sky.
Thank you everyone. So let.
Let me share with you an update on Sky, It's first quarter operational and financial performance.
Starting with our Dth business, the New Commission scheme for our sales force, we introduced lots of timber intentionally reduce gross adds to improve service quality.
In this regard we have already seen an increase in customer payment rate, which will bring better revenues with less acquisition cost altogether. These newest skin is leading to lower capex and so higher return on investment.
Unfortunately during the rollout of the process.
Oh these newest game, we experienced some implementation struggles which led to 7000 postpaid cancellations. This quarter. Nevertheless, this is a one off effects.
Furthermore, this quarter, our sales were impacted by email that'd be ration of the provisioning platform. This upgrade very close to end of life, what's required to update our technology and also I said preparation for the transition to cloud.
<unk> is nearly completion, we expect to see significant improvements in our ability to serve our customers more effectively and efficiency efficiently.
In addition.
One of the positive outcomes of the work on promotions, what's their substantial growth in blue to go our OTT business.
During the quarter, our number of customers that use that old T. T for free during the event are now paying a monthly subscription fee that represents a net gain of 75000 new customers.
Now moving to new business opportunities. This month, we have relaunched the mobile offer we work with a more competitive value proposition and the new marketing campaign. Besides later this quarter, we will launch they already announced new fixed broadband service in partnership with D. C.
Both under a single family brand Sky.
Even a small stake of these two massive market will have tremendous impact on sky financial.
Now, let me walk you through our financial results for the quarter.
It is worth highlighting that when excluding the effects of the workup on Q1 seasonality revenues remained stable on a sequential basis for eight consecutive months.
Having said this on a year on year comparison revenues declined 11, 7%.
Reaching <unk>, one 7 billion pesos driven by their subscriber base dropped partially upset by March 'twenty, two price increase to prepay video customers.
Operating segment income decreased by 13, 6%, reflecting the before mentioned, though revenues partially upset by a decline in the cost of goods salts.
The ratings segment income margin for the quarter was 34, 5%.
Last year.
We developed an ambitious simplification program aimed at improving efficiency and streamlining operations throughout the entire organization.
This program has a projected full year impact of over 600 million pesos as of March 47% of the in identified savings were implemented are now in a deliberate process.
On the Capex front, we invested $42 million during the quarter, which represent an outstanding 23% decrease year on year I'd.
As I mentioned in our previous call in 2023, we're tired of getting a material decline in capex compared to 22.
The lower capital intensity is mainly a result of those measures we have taken to improve return on investment.
As a result.
EBITDA minus Capex grew 12% year on year from 739 to 832 million pesos this quarter.
Before turning back to the phone so I like to emphasize that we remain confident in our ability to reverse the topline a downward trend and achieve year on year growth by Q4 this year.
Our confidence is grounded in the comprehensive transformation of measures we are implementing.
Which includes.
Together with the sorry stronger drug portfolio, now, adding mobile and fixed broadband services.
Best in my lifetime value management field surveys and customer care transformation change management management initiatives and our robust efficiency program.
Thank you Louise to wrap up bare metal and I are optimistic about our operating and financial growth prospects for 2023.
Televisa and Univision, the very strong trends already announced both in the U S and Mexico and the first full year life of our global streaming platform should allow us to deliver solid revenue growth for the third consecutive year, particularly excluding the nonrecurring benefit related to the <unk>.
The decision of the World Cup rights in Mexico, and Latin America, and very strong political advertising due to midterm elections in the U S. In 2022.
And as Grupo Televisa the strong cable RV unit adds momentum over the last several quarters and price increases implemented earlier this month should contribute to accelerate residential revenue growth of over the coming quarters, partially offsetting inflationary pressures in our cost structure.
In addition, we are implementing a cost cutting program at our cable operations. Finally got Sky, we are targeting to reach a sequential inflection point in revenue over the coming quarters, while improving free cash flow generation now.
We are ready to take your questions. Ken could you. Please provide us with instructions for the Q&A.
We will now begin the question and answer session.
That's a question you May press Star then one you touched on phones.
If you're using a speakerphone please pick up your handset before pressing the keys.
Let me turn your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question will come from Lucas Chanos with UBS you May now go ahead.
Hi, good morning, everyone and thanks for having my question. So my first question I had is in the last call you talked to the closer to the hearing a proportion of 17%.
Th bushes, but that's okay.
How you see slide from the fourth quarter.
Do you think.
Braintree.
And my second question is regarding chip progression competition that you can reach.
So how do you see.
Pension teach a place and where do you see the competition. Thank you.
Hi, Lucas, yes as to our network.
Ill.
I'll leave it to <unk> to expand on this but what is very important to focus on is that we have a very competitive network.
Over 19 million homes passed.
We currently have.
Those 19 million out of which two thirds is either fiber deep or fiber to the home and we are.
Our already upgrading to DOCSIS three one so this allows us to provide high speed internet.
Of up to one gig so I knew exactly we have a very competitive network, we have been investing.
On it for a long time and Thats a result.
Being able to deliver those speeds. So we feel very confident about our Netherlands I'll leave it to you to talk about the network in general in further detail and also about the regions, where we are competing.
Thank you and thank you everyone. So just just to provide further color on what are the ones who has already said we are very confident on our network. Besides the speeds.
Let me let me also say that the quality of our service I think creek are quite importantly in the last year just to put some numbers further in we expect we expect to close by the end of 2023 with 20% of our network being PTH fiber to the home.
We expect to have fully deployed.
31% of the network with 31 with Green with DOCSIS, three one which allows us to do to provide one gig immediately but it's unfortunate said overall our network is either two thirds of our network is either fiber to the home or fiber.
Fiber to the curve, which allows us to quickly upgraded to one gigawatt quite ready. So we're very happy with the way our network is functioning both in terms of the mix between FTE th and a high speed HFC and the quality of our service.
Service rig.
Guarding your second question, let me just remind you that in 2021, we had a very large home pass expansion of 2 million homes.
But in 2020, we also had 870000 almost 900000 and we plan to expand in 2023. Another 900000. So this is quite a substantial expansion plan. During this job in the last in the last three years for the last three years.
And what we're seeing is penetrations in cities between you know after about 12 to 18 months penetration in cities oscillating between 12 and 20%.
Hi, Yes competition is of course, where all of the players are but there are some cities, where we are expanding where not all of the players are in the same city and we are expanding faster I hope that was clear in your answer.
I think it was very clear thank you.
Okay.
Our next question will come from tail mobile edge with Schroders you May now go ahead.
Hello, Thanks for taking my question. It's on broadband pricing you mentioned price increases that can you elaborate a little bit play is kind of what magnitude.
Do you subscribe to the base and what percentage of the base. If you see more price increases going forward as well.
And then related to that you mentioned that revenue growth in cable is to partially offset inflationary pressures. So.
That's only partially use that doesn't mean that overall inflation is going to be having the upper hand, or how should we interpret that.
Thank you Tito for your question.
Turning to answer is and what has to do with that.
Our price increases that took effect in April and also inflationary pressures.
Thank you very much.
Okay.
Okay.
Okay.
Yeah.
April .
He did not apply.
Same price increases to all of our plants.
The price increase is dependent on the package in the region to keep us competitive vis vis our competitors.
The price increases were oscillated between 30, and 40 and 40% was equivalent to an increase in our booth in the low to mid single digit digit range soon.
Since we implemented a price increase three weeks ago as expected we have seen a slight increase in churn related to the to the increase however, as with past increases we expect it to be temporary and we have in place.
Very aggressive a.
Retention program.
Our sales have remained at the sale and at the same level because our.
We increased our prices to the base, but not our introductory prices because our our introductory prices for new customers has proven very competitive and we want to keep it that way and the environment.
Now all of our all of the players are very vigilant on pricing. So we're remaining competitive by region and by package and I think we're being as successful as I said at the beginning.
Our gross adds for the quarter were the highest in the history of the company. So we hope that we.
We can continue down this path moving forward.
Alright, thank you.
Staying on that do you think that grows that's mainly came from market share gains off from genuinely new connections.
I'm sorry could you repeat your question I could not understand it.
Do you believe that your gross adds were mainly from market share gains in other words from competitors or do you think those were genuinely new connections first time subscribers.
It's a mixture of both it's a mixture of both it depends on the market it depends on the package.
As I mentioned at the beginning of the answer we have an aggressive expansion plan, but we also have 19 million homes passed so it's a mixture of both.
Sure Alright, okay.
The other question was on inflation should I repeat that.
I mean, we are on I mean, the whole world is under inflationary pressure.
But inflation is not across the board. So as I said, we the increase that we had is in the low to mid single digits.
But at the same time, we are in order to keep our margins and to maintain our profitability. We're in the middle of a structural cost cutting program to keep our the margins and the profitability going and.
So where we're balancing out the inflation vis vis the competition that we face on the ground.
Alright, thank you.
Okay.
Our next question will come from Carlos.
Oh, my God alone with it as well.
You May now go ahead.
Thank you. Good morning. This is Carlos if you got a tough for me, though is just two quick questions. First if you could provide an update of the mobile active users base for Biggs.
Secondly.
For Sky after they cleaned up the subscriber base. If you could provide a sense of what is the current mix between prepaid and postpaid users that'll be useful. Thank you.
Yes. Thank you Carlos for your question I guess as to.
As to VIX.
I would like to say that.
On the <unk> side.
It has been in the market for three quarters.
And we're very encouraged SaaS.
And engagement metrics have been exceeding our initial expectations.
Of course, the Qatar World Cup with a major contributor to the success of <unk> in Mexico, and Spanish speaking Latin America. As you know we had the rights for some exclusive games and other programs.
And so this event, though the World Cup with key event to attract millions of monthly active users to the platform.
During the World Cup the service saw peak streaming activity with more than 5 million devices for a single game with zero technical issues, which was a huge accomplishment for us because it's a new platform.
Being such a young.
Service.
Of course, not experiencing any technical difficulties with 5 million devices.
Being activated for a single game was great.
We're very happy to confirm as I mentioned before that.
This is now the largest Spanish language streaming app in the world.
Such a short period of time.
Now as to your question regarding <unk>.
Kpis for Avon and Thats, what services and in general for <unk>.
We believe it's too early to share more details.
The service has been live only for I mean for less than a year and we would like to have more time in the market to have more evidence regarding.
Potential trends, so we want to be really.
Really serious about the information that we provide in respect to the service its a very important platform for us and a very important business.
We are very encouraged about what we're seeing as I mentioned I guess twice now VIX is now the largest Spanish language screaming up in the world.
But.
It's too young to be predicting where to be sharing information, which could be misleading.
As to your second question has to do with with Sky, Alaska at least to answer it.
Yeah, I think you'll find some currently oh at the end of March.
They make so prepaid postpaid D T H E B 737.
Do you have any prepaid.
But pete but postpaid represents.
Around 40% of the th our revenues and this is by the end of the quarter I say just yet.
But as I'm also as.
He was he did we implemented a price increase we announced it already it would be.
Effective the first of May.
I at this price increase goes from 20 to 50 basis, making an average of five.
On the 5% onwards. So is this this composition would change it in the future.
Okay.
Yeah.
Our next question will come from Fannie and <unk> Mori with HSBC.
Go ahead.
Thanks for taking my question. So my first question is on the possibility of increasing your buybacks you know considering the shale plays that are 17, that's a looser and a high.
Hi, cashed out in the street see Oh, you're discussing anything on increasing your buyback fund off of any capital allocation that you're discussing going that would be helpful.
But also second question Daniel.
Yes.
Thank you for your question as to buybacks, we have been buying back stock.
Have been subject to blackouts, especially.
Have been subject to blackouts, especially.
Lastly, I mean towards the end of last year because of.
All of them.
Situation, but catalysts can share with us the details of what we have been doing last year and this year.
Yes, it's funny.
Just like you mentioned in terms of our capital allocation as you know our priority for now is to reduce leverage but our sponsors.
As I mentioned, we have been doing share buybacks to take advantage of the undervalued price of our stock.
Since last year, we spent around $75 million in buyback.
This is approximately a little bit more than 70 million Cpus.
Since August which is approximately two 3% of our of our shares outstanding.
Going forward, we're likely to keep repurchasing shares to take advantage of the share price, but we will keep doing it opportunistically.
Okay.
Sure. The second question is pertaining to the profitability target at PV you in that I'd tell you. We're taking division has stated that they are delaying the scaling profitably they expect <unk> profitability to be delayed by a couple of quarters.
How does it impact any design them solve for it you know that there was any targets or the expectation of dividends from inside your innovation going forward.
Yes, Hi, again.
I guess, you're referring to what was announced yesterday in respect to profitability.
And I would say that base.
Basically our thesis regarding the two tier streaming.
Ecosystem is.
Providing to be.
Proving to be correct as you might remember we launched a two tier.
<unk> ecosystem.
First of the three tier has been the main source of net subscribers for the premium tier and this quarter. It delivered about 60% of those subscribers up from 50% over the last two quarters.
And we.
We finally had enough time in the market to evidence some churn data.
Still early but about 20% of our gross subscribers, where reactivation from users who turns into the free tier.
Which we acquired while monetizing them from advertising so while our thesis around the product design has been validated and were happy about that.
Have more than five.
We market that product to consumers.
I would say that from the start we marketed the two peers separate brands Big and <unk> plus.
And given that the product design or Biggs is unlike anything else that we have seen in the market consumers didn't understand and we had two tiers in the same app.
Had the impression that there were two separate products. So discounter, our efforts to realize the benefits of a two tier ecosystem within one app.
And what we have done then.
The transition to one brand in March in which we materially reduced marketing for <unk> plus to simplify.
So we are now ramping up a new campaign for the single biggest brand.
One brand to tears therefore.
I'd say that the performance of the market will take time to optimize so.
Very important.
Which has effectively evolved the timeline on that.
Subscriber growth path and.
To answer your question. This change combined with of course, the macro driven softness in the AD market will likely push the breakeven of our overall streaming business back a couple of quarters, which would be a remarkable in any event.
We are continuing to see the quarter over quarter sequential improvement in streaming losses than we projected including in this quarter, where we are following a blockbuster World Cup.
And absorbing the seasonally soft first quarter ad market.
As a result of the change we made.
In the marketing strategy and the product itself.
We will see.
Small delay.
We're seeing quarter over quarter sequential improvement so we're very happy about that even though.
Visibility will happen a little later than we.
Originally predicted.
And and how does this impact your plans for let's say in terms of leverage or in terms of dividends that we expect from marketing machine going forward.
Yes of course, we were planning on deleveraging Televisa and Univision and that's part of the plan.
And.
Of course as to the dividend question you asked.
Now focused on investing in our platform investing in the growth.
A big piece that is a huge bet for us.
We believe that because of all the assets that we have including the library value be.
Including the factory of content in Mexico, which is the most prolific.
And efficient factory of content in Spanish in the world and all of the assets that we have.
Including.
Our advertising and marketing capacity in both Mexico.
States in Latin America, we believe that this is.
Im pretty sure bet and we're very confident about its success. So what I would say is that.
We're not focused on.
Paying dividends, rather we are focused on investing in this platform and making this.
A real success for us.
Yeah, Okay. Thank you.
Yeah.
Thank you.
Our last question will come from Luke Brendan with Bank of America, You May now go ahead.
Hi, Good afternoon, everyone. Thank you for taking my question. So I have two questions here. The first of the first of them and it's related to Sky.
If all the new programs that you have been announcing for the for the division what can we expect in terms of a timeline in terms of timeline for us to see some sort of a user base stabilization or how can we think about that going forward and then the second question. If you could give us an update.
Or any changes in timeline for the potential spin off of the other businesses. Thank you.
Yes.
Thank you Luca for your question Alaska leads to go into further details, but what I can tell you is that we are seeing.
Already as capitalization and the subscriber and user base.
Sky.
So I'll ask Luis to.
Give you the details.
As to.
So your second question I'll ask Scott to Ms Phillips to answer it.
Please.
Yes. Thank you for the question.
These are.
Two different situations. So it's it's a well we T M D T H I would take a need for what we see on on new products. So on Dth in after the cleanup of the base and after improving quality of shell, we're starting to see a fast decline in in a in a quarter to quarter our churn.
Prepaid in particular from Oh, this quarter to next or Sandwich youth.
Minimal off 15%. So this is a very good very good news on it it could imply a trend going forward. This is still far from our gross ads. So it would take us some time to stabilize prepaid but at least the last of base will be.
Gradually reduce.
On the postpaid side.
Again this quarter, we had a one off effect that I said.
Explain.
We're going back to that.
Previous levels of of the World Cup, so that that means 60 to 65000.
Sharon Costa myself block customers in and in.
In the quarter, which is going back to a flat customer base in postpaid slots catching my base.
Reducing churn will apply not only our base 70 station, but also revenues.
The second part of the of the I'm, sorry, the new businesses.
On one hand cellular phone and sending about services are offered only to both take customized and you know that this was the Saturday he's not only adding stickiness to that to the problem, but also adding revenues.
So this will also help our customer base too.
To be more.
Loyal and to reduce churn I saw another tool to reduce down I'm finally, launching broadband we have around 30% to 40% of our postpaid base.
Well, we are able to offer.
A free broadband solution that means.
Man you know that most of the chart. We are having these days is because these guys are oh addressed by our competition with cable.
And those customers preferred to have I brought that now we are in their condition from a.
Two weeks from now we would be in conditions to offer to our own customer base. The solution. So this wouldn't it be another tool of protecting our customer base.
Did you see chair, so altogether will not only.
Help us to stabilize base, particularly at phosphate base looking forward, but also.
Growing buffet and stabilizing in prepaid.
Sydney in postpaid in this year, and then stabilizing probably next year and in prepaid.
Gautam. This is Ken you answered.
Question. Please.
Luca in terms of your question about the spin off.
We announced the spinoff late last year since that time, we've been working on our internal reorganization and procedures to execute the spin off but the timing is really more subject to regulatory approvals, we've been working on finding the appropriate documentation.
We expect to have approval from the regulators in the coming months, but we don't have an exact date yet.
As soon as we have it we will inform the market, but that's the point at which we are today, we're still expecting it obviously.
Coming months.
Okay very clear thank you.
This concludes our question and answer session I would like to turn the conference back over to Mr. Fones with agriculture for any closing remarks.
Yes, I'd like to thank everyone for joining us today.
As always feel free to contact us with any additional questions you may have.
Thank you.
Okay.
The conference has now concluded. Thank you for Tim Page presentation, you may now disconnect.