VIV - Earnings call transcript Q1 2021 | Telefônica Brasil S.A.

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Operator

Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to the Telefónica Brasil First Quarter 2021 Earnings Conference Call. Today with us representing the management of Telefónica Brazil, we have Mr. Christian Gebara, CEO of the company; Mr. David Melcon, CFO and Investor Relations Officer; and Mr. Director. IR Plaster, Luis

Securities call a that with the can be there for There have company’s After on are remarks site, slide the will over, this facility replay Internet will be Harbor being let a the Reform instructions that me Litigation simultaneous also be be any website. a the webcast At of made [Operator given. forward-looking further question-and-answer time, presentation session. are www.telefonica.com.br/ir. under mention Safe the Instructions] on We accessed the a statements XXXX. of that will on Before Act proceeding,

Forward-looking on the information on company’s and available. and assumptions statements are currently management based beliefs

future industry performance. involve general expressed could on also future guarantees the statements that depend and company’s may events economic understand circumstances differ should not from that and Forward-looking to may conditions, could to occur factors statements. risks, other Investors affect such forward-looking and results materially and operating They future. are results in the conditions or therefore assumptions, of cause in uncertainties those not relate because they

Mr. Now, conference. you the I to Brasil. over Luis may Investor will Relations Telefónica of begin conference Plaster, your Director Mr. turn Plaster,

Luis Plaster

Thank XXXX divided The first call morning in welcome will two quarter you. Good earnings to our be and of conference call. parts.

CFO, flow figures, First, digitalization our our our CEO, will more the free remuneration. initiatives, and Melcon, in initiatives operating space, and shareholder main will digital ESG cost go and Christian structure, color then David Gebara, give financial CapEx and highlights, cash over on you

over it to hand Now, I Christian.

Christian Gebara

core customer with broadband BRLX year-over-year, we to In XX.X%. totaled at operational quarter quarter calls. revenues. now we subscribers, X.X with total In are thank growth. Vivo’s its for billion best accelerating. due XXX,XXX base million impressive to postpaid And the to billion, Core are dynamics the quarter, increase billion delivered total higher morning, pillars and including sustainable our and adds an posted XX% operating total revenues thanks free fixed. We strong growth postpaid already we the net to FTTH XX.X% of billion, access, year-over-year margin XX.X% mobile million BRLX.X overall a Vivo. X.X cash closed beginning products. base and represent we best-in-class of of momentum million. since highest the the total you In shareholder of saw and elevated Thank up than characteristic this XX customer started break for our and X.X% of the quarter threshold another joining and of rate, everyone XX BRLX.X fiber, revenues remuneration return our Good financial FTTH ever The improve single additions, year-over-year. our first flow stands to taking total, XXXX. and you, to combination are market revenues the of X.X% quarter EBITDA a performance our and up grew net Consumption first quarter, discipline revenue X.X% performance a take XXXX earning strong and XXXX was Plaster. to of

BXB cutting-edge services total Slide through and a we of Vivo, we dividend high-speed combined which differentiated program. best have we digital interest customers. deliberated of shares capital, million offer our capital. X, year, continue built evolution million XX in on and the BXC buyback and we with have Furthermore, of on are X.X of growth going mobile this resumed continued of equivalent in the due the a represent just quarter and businesses. to the this telco more experience. want BRLXXX products core to To-date, company’s connectivity months. On traction fixed offer share factors At in far treasuries, So of than They forward of represents positive records our last a total to yield both returns X.XX% main X.X% improve for

to life that needs, all digital made on of customers. businesses whether cybersecurity advise, Non-core our they for their and were because XX.X% solutions be Our less less mature aim for that our cloud is mainly down customer year-over-year business. deliver content, that relevance up or technologies are have

Selfie, the in with driven mainly wireless increase ‘XX that handset our of the to an X.X% and X, prepaid achieved mobile the BRLX.X performance ongoing by revenues, revenues on revenues Turning first of grew recovery XX% as Slide Postpaid, of such Disney sales X% and year. to than billion year-over-year, quarter plans +, which ARPU co-branded of close increasing were a In that last our Spotify a and quality deeper Netflix, customers. for content Vivo higher set selection we relationship highlight driving offer

younger XXX% digital digital increasingly focus Alok. together of on digital mobile Vivo Easy Vivo amount and is your benefits and the customize we where data, according Additionally, experience co-created needs. we can with DJ other Easy users, voice, services we plan to

an customer jumped prepaid of the quarter in XX.X% and Digital are a increased the and behavior. year-over-year. higher recurrence encouraging recharging Looking of X.X% positive top-ups seeing our we at was number base, trend customers shift in

journey as quality market maintain March network segment mobile share improving to to leadership Turning of on Slide the us XXXX. focus solid customer Vivo’s allow and in XX.X% with X, the

its and trends additions quarter, of seen Our fourth customers, the engagement XXXX. and level reaching journey increased When customer level this quarter is in lower churn to positive Convergent up at similar levels X.X%. previous highest repeated boosting volume the trajectory quarter postpaid The and stood family record since lifetime plan value. XX% XXX,XXX net looking postpaid continues at of

was of services. we proud XX.X%, year-over-year given a significant fiber XX.X% broadband advancing of are to year-over-year. we sales present expansion by driven of impressive enhanced strong XX.X% Accordingly FTTH and and Turning of to OTT to XX% that ramp our business year-over-year footprint, demand see with up increases, core ARPU with bundles high-speed growth FTTx evolution revenue the up activations. for were new fixed up revenues, continue the revenues the an revenues digital IPTV

of to and that the practically that is revenues are again. quarter growth new process year-over-year doubled invest result Cloud and X.X% opportunity a environment. in to confirming engaging in with are thrive positive companies sign revenues profound was to This data Another promising relevance gaining gradually year-over-year. a a large starting companies in return ICT the BXB this rose in digitalization

in we first is from posted in Fibra for adds This what offering. UBB we a after the of had and accelerated what is are net its Moving higher to homes more speeds over than a of last and demand options. the time XXX,XXX. strategy Vivo times capture and it saw twice year wider a fiber harvesting and variety Slide same to rapid experienced sizable opportunities demanding customers expansion At X, FTTH premium passed of we quarter. before a years record well-executed last quarter, X.X In the Vivo content

or above BRLXX. more able that, In XX% XX% megabits. reaching XX.X% of bundled net than of fact, increase were Moreover, around additions Convergent our our at ARPU by were are we OTTs FTTH speeds With gross to XXX additions with customers.

the by allocation. multiple up Slide according rollout our On further progressing our setup color right accelerating show Vivo, give the X.X plan. that’s our waiting are hand In we we enhanced to consolidate side of time of accelerate fully and is second X partnerships XX, and our partnership of passed, network X, to half neutral fiber Brazilian Telefonica agencies the more the expansion April now at is were CDPQ and slide, to further expected us year operational Anti-Trust This addition, FiBrasil the aimed initiative homes on allow FTTH FTTH we and million fiber evolution and on company approvals the Anatel. the the by European and deployment. from will of between Infra CapEx received FiBrasil, reducing and to we that year-over-year On on be top leadership. market

creating customer few ones a unmatched ecosystem. label, client channel base are new brand, manage all the passed of further some is with expect in use increased that X.X with progress we building over years, Vivo loyalty in passed fiber more to FiBrasil homes and a will service to remunerating digital its it million mention space, cities. Vivo’s Combining showed network. like recurrent The carved as to and resulting build capillarity, the digital taking revenues. out would our will the to most of such for our reach services. higher both for four I million we add We base, partnerships and of our players Big customer of set we growth and start and greenfield to X with Data capabilities FiBrasil telco capital aim than and engage platforms brownfield relevant the and homes objectives complement activities while commercial from

on V, e-health. which of is platforms those centered One Vida is

have the world, one signed another health creation in with agreement of which largest the a a companies Vivo. our represents marketplace just of step – We binding around to Teladoc, telemedicine the

and to include a through give been attract drugstores and players symptoms more patients. appointments, without engine be health on established in partners pre-screening other to an than and plans. plan initial digital XX,XXX make certificates, as has to its discounts Our intelligence grant provide and people exam requests schedule will of and services private focus The prescriptions platform and set is such immediate of doctor nationwide, artificial

platform present based of our support assistance strategic of the one key of the on important to and program the tech we engagement in partnerships Moving with the loyalty country. and for the in right an side marketplace most Dotz, BXBXC CDF, one hand Brazil home slide,

financial inclusion, for cash out to customers via that plans whose transfer to customer’s bills and for like Play, equity great the also like services are part Google the bank segment. plan prepaid making do companies recharge allows Not both. probably Uber, service Vivo to of champions our own about its launch enthusiastic apps about excited growth Spotify. of to not stakes we this recent account. of our and This their recurrence that customers initiative prepaid our very are but XX, allows focusing life Vivo are credits banking paying the This have your have up be Slide promote in combination very in top a Pay, digital executing on grasp and strengthening purchasing transactions a We Talking of carry only prospects with of is businesses mobile on digital we journey Pay. are account about financial

Additionally with loan origination personal its progress, our delivering consistent platform Vivo quarter-over-quarter. have been Money, doubling spread digital is XXX%

with I Slide digital Vivo’s launched a would most and to that scale for of like to the To help help ESG still propose and environmental the XX% partnership by up affected Hunger us created other bring and campaign, the stimulate Falcoes the our our life marketplace footprint key credit downturn, support that a offers social card vulnerable is to of having the activity. On in Gerando families raise we Cheia. in-store back highlight benefit to funds fulfilling economic on United Itaucard, believe that of XX, as co-branded comment the important commercial will with we Finally, kits purchase in food to Panela Vivo most to closer. Itau participating cash we are NGO, Movimento Against

the in also regarding rights, the diversity This donated Fundacao Vivo’s and Vivo partners, employees, our donates kit the Telefonica and the the first validate with sphere, practice the measures the market. social the every social which certificate implementation compliance is in human by For our to the supplier all ISO the Also of company of employees, on encompasses of sector society. impact with alignment initiatives XXXXX best Vivo two Brazilian more.

the up In the to generate in Maraba plant to X,XXX power solar is year, proud XX which megawatts the capacity of of state per of of northern to by we end in addition, first the consumption located power Brazil This power we Para. our out and region units. plants XXX has on year. used plan announce having It renewable in are the hour of be the XXth will running energy our

social sustainability, which poll and people by Finally, compared XX of we call by our Merco are financial bringing rated balance highlights. economic, the performance I to positions our to the now us These of jumping together. purpose our based take initiatives CFO sector the XXXX. environmental on through over enhanced the David, to best contributes and conducted main and to turn the as repetition having the

David Melcon

going efficiency On remained we unremitting This and measures quarter first good of morning transformation. saw on significant cost Slide point digitalization up simplification important Thank everyone. by our in is how the XX, is result and a ramp the stable of a our out mix year-over-year. you, through efforts. also that It’s cost and our focus to Christian

streams underpin a go revenue to and already diverse of new digital revenue dropped increased trends. we’ve services. and These encouraging of handset revenue fast accordingly on telco price we in is year-over-year the find some OpEx quarter office XX%. linked base. million and key relevance segments operating a hub. Vivo’s non-quality value where this and and catalyst the company specific These launching our and our usage are resulting the higher BXB the elimination longer and offers service X.X% supporting of business. was due already BXC XX% to significant by BRLXXX have and directly goods are a and of sold toward efficiency-oriented becoming More year-over-year. the with alternative services these of customers’ the of positive Cost investing wrong they enhancing a we to set needs. and recovery tracking benefited our XX, In and mindset contracted reduction a illustrate content for BXB pure processes the engagement, that simplification and XX% this increase of and year a the have cost for adapt to year-over-year, billing, present before, growth customers to costs constantly In of from peculiarities efficiency show growth growing in of transparent cost enhanced sales, commercial on Network detailed Christian back as XXX digital account from cost decided On December centers, As channels. and and effort since is to are total initiatives. figures executing by shift quarter than focused that X.X% a savings performance the digitalization quarter driven Slide how Vivo the model view collections of automated connectivity. cost impact XXXX we mainly compare been related digital journey customer beyond first and more we how this had the saved to ever-changing average a assertiveness cost operations customer processes to an result and front to increased our expenses no robots

and jumped commercial payments added from We XX.X are up X.X e-care customer digital E-billing preference for of App channels. year-over-year XX.X XX.X and users percentage also collections. points pre to digital year-over-year seeing impact digital now through of XX% a same unique Vivo considering significant period. percentage the sales, on Online its and year-over-year million the evolution new rose and platforms represent million. have in example, using migrations now XX%, penetration activity XX% FTTH of to it’s shares post the all point Shifting

but growth related quarter on to to first was previous CapEx in Slide and quality first driving grew seasonality billion quarter dedicated the to XX, XX% to we investment The gain. mobile data when the continue activities. XX% consumptions forward-looking accelerate while evolution to impacted CapEx transformation continue investments to set is underlying of the is focus BRLX.X Moving by and and commitment to our compared In year. quarter of FTTH fiber

the to connecting deploy quality than Vivo the cope to and resulting record Christian also cities than Fiber-to-the-site ever pace data more continue XX top evolving additions for customers in incremental at backhaul out. We coming FTTH in expected of a have XX% net like and bigger similar traffic fiber sites is pointed more with years.

comprehensive is position. With unique a footprint and that sized fact continental and have XG in in a privileged the the country Vivo of like advent Brazil, we the most fiber

XXX accelerate already XG about opportunity progressing RAN share our also the a mobile maximize growth. less We consolidating This for with are sharing has to operator than sites I like would update with combination ongoing pilots capture value best have brief Tim. cities the in aim agreement with and to of this at and coverage additional very our network well. inhabitants XX,XXX assets

flow lower equivalent billion We to higher on were dividends The BRLX.X will expected remuneration. profit year. present we BRLX.XX and quarter by on income our X. strong rollout Slide partially XX This by and as we advancing XG quarter depreciation BRLX the share Regarding net tests free almost per on XX, offset billion for by amounting impacted reported of as payment to and that capital income net intend the to in third XXXX cash take billion place a backed year total BRLX.X expenses are generation. interest is by financial the and On BRLX.X and of robust consistent switch-off, October shareholder tax. billion be paid this will follows: this July

that of hand capital the BRLXXX declared show on income. on we net interest year-to-date, right the based side of this already we year slide million On have

share have In company’s growth result BRLX you. acquisition in a X.X% moving at positively in management. expand diversifying us XX, sound allowed Vivo’s our improved a first balance to addition, a flow in the we buyback sheet quarter Slide representing of increase due operating mobile OI’s And Q&A. giving strong X.X digital our program can to of by fund stood total unique continue Net million cash as cash result, position The actively our invest now move and the solid relevance the core March engagement X.X% position Treasury executing customers’ and portfolio, and is assets businesses year-end. we to of billion financial to metrics. Vivo of To capital. to conclude This year-over-year financial expected Thank life. and as shares us the free

Operator

Santos, first Instructions] [Operator you. JPMorgan. comes from question Marcelo Our Thank

Marcelo Santos

questions. Hi, morning. had Thanks taking for I two. good my

had this You lower mobile? you if the environment little growth comment on a first could quarter. a please in competitive The bit bit

to adds, second very you should to and year? is the throughout the strong more the question And the wonder of fiber-to-the-curve base ads there competition And from something we had just competition? Thank DSL do coming subscribers? strong these or I from expect about is the fiber-to-the-home are So, adds, conversion continue with you.

Christian Gebara

Marcelo, Hi, is Christian. this

little and I important with just strong a highlight impacting pre-pandemia year, a COVID But with I to would impacted all days. about prepaid So, mainly had results January the are last highlight first with in question, It’s we that that decrease postpaid had growth in that we profit. this It also Also was aid and February compared XX this important growth. the our the direct thereby this activity X%. grew quarter; in quarter has a quarter. March the commercial this But bit that not situation, government mobile year would to we first, talk think what in the the the also said, and we even handset. we first started there last that comparing mind customers topping-up. impact the quarter in the highlighted and was not your is This was with in for that and but lockdown then we just top-ups X% strong I bear have the

as customers XX we lockdown accelerated. grow and also increase even XX%, performance. they handsets XXXX was all this the was of very days revenues, quarter more also could a the The the but in had flat in terminals, and percentage I was XXXX. postpaid the of accessories, net adds last said the And considering very before comparing all and a pandemia So the topping-up year to the had good good growth that of

is also churn to So without million, That since very the highest with for If the high this net look that’s number in controlled. I machine-to-machine XXX,XXX. up extremely machine-to-machine postpaid to number at was close very, adds if you very it X.X XXXX. is the add numbers

made the increase situation impact think last there is was it’s year. the market September I and the in a So that of of price also more

in as in of FTTH, growing we was questions if mobile, year quarter been the Consider in FTTH no with a may we I vary commercial in this that just well. this bit So, to and then this quarter part lockdown to are you have considering little lot. trend activity, price a the you that strong what the I’ve FTTH. go don’t But although more has positive had everything performance there increase revenues. mentioned

I number. the we’ve two things you think As is know, beating been every to quarter previous There here consider.

we few network that network. would home million that expand quarter ago we our we XX we said, pass. are Today, years this as expanding with ended First, our

Now we this network. are occupying

the first that’s So mover.

an demanding of course, offices Vivo good and very now their us they because nature. a of giving our have one homes here million ultra These city on in BRLXXX,XXX. come Second, the people connection because broadband ended stand are that in accelerated reached of different Brazil, with in much out customers and we that customers the demand leadership from, depending net and FTTH more X.X debt and has quarter no

time. Some greenfield. cities are that the for entering of launch cities. cities first we It’s are Most greenfield we the

were customers these people So, before. not

So from competitors. we of are all customer competition, type capturing new

were Some is of you can of cities, back slanted. Paulo nature, but of give is are We is just some Depending on the forward an there a the in that come FiBrasil, they new city but DSL, of assess with and the lot is our to going also greenfield there and greenfield. them or be to less new are going don’t what some overlay missed already them overlay to Sao Vivo, of competitor there and FTTC. is more figure

is this and there in overly substitution is case, So no no legacy there technologies. of

Marcelo Santos

you. Great. Thank

Operator

comes Our Cristian from Faria, BBI. question next Bradesco

Cristian Faria

for questions. I morning everybody. taking Good have two. Thanks my Hi.

First is and attributes related like. the to

And the total the the the is agreement for doing saw to XXXX. credit If companies – looking regarding increase quarter the by the if can so if so user the question other other that So you initiatives and telemedicine we Dotz this in a can technology. the with growth – in we continue see compensated connection base the company. related new new to for

we Thank in composition presentation expect and revenue, you. the total? the XXXX the the in in looking what can for of So terms

Christian Gebara

you I think think to getting Cristian, got the – about. Just more have if I okay, first question, the one Cristian I’ll just I second what the what question first answer questions about here better try is

you legacy non-core mature are you net I is the and and the business call think our and of all are revenue. side mobile relevance if it – XXXX see in business, in of we fixed more in XX%. our revenues represented revenues revenues, the fixed xDSL now in it They the the in And a that voice, much fixed non-core total total XXXX quarter represents reducing little the what bit also now technologies. same how consider when less DTH like and XX% not – they than

what it’s advanced mobile is what fixed XX%. here So we or new BXB question, and DTH, FTTH businesses call your and from for decreasing legacy voice, growing is adding from data yes, and revenues and is coming yes, are replacing replacing that’s the non-core it’s combined DSL,

fixed the and the perspective Our business quarter-over-quarter. improving why in you that figure is that’s see

Here of the represented in the in positive a essence is FTTH that over core the revenues, numbers quarter that because deals, making of something the you the and more BXB what growth. see the each maybe impact is quarter-to-quarter this changes of of replacement is there replacement but revenues legacy

number RBLX the is If billion represents you very consider If number. add is a just with that in IPTV FTTH this revenues, FTTH. to strong that’s quarter combined in that very I what already note

We or service. XX% revenue coming are the than XX% already to from this more total talking

one fiber. not accelerate is this our beyond and but there. to services It’s replacement our go give more we we all to the partnership, signed reach FiBrasil, and that footprint that improving one we with revenues to happen CDPQ the the the will etcetera, the also with So and us is that only the American fiber have with of related continue Tower, because network going franchise

what connected so support it technical Now, who support doubts little they CDF connecting relates in with we it bit are have need question. the to and gives second and signed they to a a homes. very When contract their people

selling interact we automate But to are selling help and customers to also their we’re fiber. So service whole. a to

deal, platforms in that’s to on comes type we different a this presenting with to want the is the related and connected beyond of can company. Dotz today more deals of that prepaid give perspective what I We more our with and CDF them one hybrid are So beyond this engagement fiber, here. it’s home customers. our build

it’s use of And top-up service to if So use going then to same expenditure. and recharge be Vivo point Dotz. are they be and sell up because they profitable, my I going also going connected they more the to going Dotz. loan they for are platform, have to get give to you and about more good current to Dotz are can Money have because our it’s that’s I said customers engagement and the going with to also The are

world to the give of digital our already So thing is companies, and be time going talked to only telemedicine we in able opportunities to before, the we us the trying to ecosystem. companies of of the share institution. that Teladoc, one about binding partner. are generate us first the have around both This health value efforts two the not we health announcing in third And communication the we that agreement joint is partnership with that we are interest largest just signed today

going increase the with partners our value open bidding our Vivo our a customers to real engage to are create customers, we’re to Data, base, brand, drive other lifetime these and customers our customer footprint, to We Big leverage platform. Again, on our capability of ecosystem.

partnerships So all I it, going don’t the perspective, some and know that’s your one new is but partnership be ones. the the maybe general of and different fiber of results answered if because new both I of to sum I the questions, first missed the

health, talking Dotz, in are about this just call, CDF. So, we

the and Money, talking Vivo are co-branded Pay about Vivo Itau. with We also

do we are we to delivering. forward this single may that to have open and are announce we create ecosystem going every quarter around We more perspective the that more because the that’s connectivity

deals offices, homes, in So, cybersecurity. connectivity doing not the mention to that cloud we also are

get plan are like offices So beyond for with Vivo Rappi we same that The others. data companies home, also for many also it’s mobile is partnerships to also digital segments on Easy digital blending Uber, and our Dotz. large and the Spotify, and

Cristian Faria

thanks. Okay,

Christian Gebara

the And of about ask we it’s also base. the customers, customer like number

bringing. the the it’s more think we are of that customer I base value

bringing that increasing service. beyond our combining more are ultra customers we ARPU adds are I also services positive that think connectivity net we it’s for important core is number but because the to in together with is say the broadband, the new

Cristian Faria

Thank you, Cristian.

Operator

Gomez, question Banco next Victor from Our comes UBS.

Victor Gomez

Congratulations revenue in Telefônica? a everyone. Easy you it give morning, acquired? any the you. on Thank us for you Good the the worked color Will a the have earn company results. stake revenue About a – partnership, company? new Vivo Will for how you share can

Christian Gebara

to proposition We are the value going beginning service a to so a not the is, going a have to we It’s just to now sorry. agreement. we’re What signed What sell payment. a trying say in JV that’s do prove market to the monthly and binding to is far. check

going a build we’re customers. recurrent here our what adapt try to So ability services is have and also to to to

the you them that a give e-health payment customer platform. to will access have So monthly

And here. in when all benefits other have get already not depending that but and large, you medium the to that Now, type them marketplace. plans service have type with together we on of of appointments some of some hire that small, only give may we telemedicine this some on don’t are they color I I may partners they in we also have included, doctor know putting

physical of may type other considering even in having benefits stores other we like or there. So, they also have have a to they also because diagnostic discounts and services related partnership drug any doctors are

so details the other together use stake going where because marketplace. you drugs prescribe on also digital to in Vivo we early may all and possible JV for digital this and capabilities, partners to planning give a in digital putting a agreement, it’s customers now or position give also the be this the and of too bringing in marketplace. point, at exclusive Brazil, we’re perspective that Teledoc to Teladoc to will need our powering in together this even is buy, we’re It’s do some together agreement about the binding prescription, the company. information with some that that, increased So objective in partners a the results analysis you having have can And also they depending

around to are the describing promote Alterra some of leverage portal health one content services to all in and that related largest to content monthly wellbeing capabilities, included and channels content – we’re the going and the to payment also with is well-being portal create the we in the our a have – that that going also We’re our V and customer. very including of Vida health ecosystem and to this Brazil just

Victor Gomez

That’s you. perfect. Thank

Operator

Pactual. Our comes from BTG Sequeira, question Carlos next

Carlos Sequeira

Hi. an Good X Vivo One the is, for please. you of what match instance? morning very is the start the a second, cannot Christian, competitors? And that on depending give not costs why competitors and gigantic these these for So that’s sharpen which gigabit that David that and speeds the on base, will on high, And of packages, first one, some assuming not is increase us to and wondering team. Vivo’s per much marginal question one. we my type idea your tremendous know the leveraging I’m on service. – for promoting can the have as cost just client questions. FTTH pressure second put – if Thank couple, I you a to taking

You’re that of question these you. you’re adding Thank just you doing for of type road, Just and is, if looking years expect services? view to really, every fantastic what more – maybe share your these the My you idea not it’s a represent maybe a your Vivo’s how great services question goal type more can much job with it’s quarter. us is an down doing business? of X or on services

Christian Gebara

Carlos. Hi

additional we to XXX cost is a question, high just megabits. such speed And there will think first customers. the For offer we to I launched –

to So so. we more be very customers rational to which do to and do pay to we are willing it need how

offer SMEs, can now BXB Even in BXC the not X We they we that that. have as in it. companies require more are megabits in have to In room also place. an XXX So this giga. already for every and the

pay cost for megabits. In there and careful be need offer the the some XXX is and is that’s you also our to to right such is the to case customer. very of pricing. speed and be market We’ve also this need been is we to As conservative impacted cost now. pricing be and important and hope offer able value the about technology conservative to ones careful the to We the depreciate also willing to said, we involved give

they pay customer that they kids let’s and in So they we home And segmenting in to to because at some either to that the price thoughtful the speed And are are are way living homes and are more. so. pay demanding. maybe places about schools because very very the doing willing to because where large there, need, base had and customers we offering live now homes our then that are a right way more, they and do it’s that want country-side very that high to offices they need have there now are more who there talk are in a people

value the I in respond have relationship on we a a to nature it’s services speed just minimizing Not have hear BXB, are we the most the as megabits, the IT, huge difference. of other more BXB part going have. don’t also That that’s that cost BXC already of difficulty digital giving with a that of customer. hard we with that’s pharma, the technologies defining the demand to most digital and customer that megabits, good to megabits and we at the we’re this find a call cybersecurity from In service XXX solution one different. and the have of demand that of to balancing much already solutions. color real goes the taking So second that of customers not XXX and or but start XXX very additional services above the

of So we customers. our services penetrating BXB in are and most digital leveraging

size customers, BXB. of of types customers different are there in So

difficult top from fiber types we’re sold of segment years. pyramid the I in XX% very Disney+, percentage percentage, need to going distribute the and I In the to sold, and number digital both in services think sales X growing. number, will the look tell already services if build I that the is you In two of be just BXC, also almost the is all of customers. you and we’ve I the but rep would workforce the but said believe care. care customer understand very the this Netflix, well-known also the to that And brands. So high people’s our BXB it’s have by penetration taking and

services, service our that may be also think our I will every I very very And have connected together core So, customer they think with people bought not ne something to high. mentioned to ability can it are entertainment, in together that bundle fiber X years single we technical branded service just Vivo gaming, their it the connectivity I That’s that CDF. is a Guru. support support, and also a to goes can our core digital is be that that that

customer customers We us. base our we the we of launch that. Guru for care. have should can there has pyramid the customer that I plan – will a the only business also new In are already included toward and this think are percentage believe high charge relationship totally their connected that the always not we –- in of Vivo with

I because hybrid of no a when but talking service to the of I’m the value new customer with there spent prepaid I’m of money a going recharge. value selling the with base, be similar it prepaid my So plan bundle, they V, launch customers I’m is about bundling to because Vida this to course that not

business. So new it’s a

that in stake itself. it its add because business and value I because you in have a may have value a new by this selling So and two new I’m can sides different company

this education going sure. maybe I So for service direction, for see sure, financial health

new a the of it’s I’m different new business. launching type not platform, I’m ecosystem. So combining;

BXC, platform. is business that I once it’s I to combined, you is it’s detail what we Vivo is if how and fourth has and like launching don’t to new a a on Netflix we will will have many quarters, that value totally share clarity what fiber I bundled BXB, in business differentiated that at that because like and plus other V, the new certainly we give but a it’s moment. that be numbers, more long Vida color and Money there So answered explain about can do, more business that’s what the the do things new the know is the versus

Carlos Sequeira

much, very Very you Thanks. Christian. Thank clear.

Operator

Our comes next JPMorgan. question Marcelo from Santos,

Marcelo Santos

I two the questions. follow-up. Hi, have for thanks

expansion. fiber the in is one first The

in the for couple overlapping like of We fiber are players networks difficulties to plans? for years. execute question. fiber seeing risk see passed expanding to players expand is of to fiber first What think plans market Brazil? the potential in or the all do not in that’s And the the with you homes next you do their aggressively And be

OpEx? could going savings And on Thank that is How get the be CapEx much would question to second The have you shutdown. or you. you’re more XG that?

Christian Gebara

we home XX XX.X have to already have at announced million passed in we the quarter XX million. fiber, to aim first Marcelo, We announced that least close We XXXX. by million.

mobile. We and have in the we base largest have highest customer the the share market

market. We have the to assets leader all be the this combination of the in

we confident is So plan. huge. our Brazil are very about

have a we ultra-broadband think I gap digitalization. in homes

consider that’s market addressable be and you target the homes million, if of going by So offices that’s XX to fiber. million market XX

have market a or technology discovered on this players, they are by of today fiber. corporate Some smaller that the some is not

in be bear So that we this may mind. is the number

The overlapping aiming XXXX ‘XX. there. of think to risk get So I for now we are to is

but deals an networks, because tenant, have not think of They neutral additional someone network. and a you is some to they good, occupy anchor there behind these that that to needs the it’s mentioned I are just tenants. tenant need

the profitable overlap. So for that be controlling think this and very come to through ones and should I be network not wise to

co-control. So in a company we have our we that case,

going So get. we may define cities be and what target try be professional will the as we to are as to we

doing that the we’re to do Although are have before And the and we base we stake. a we we at lot as we’ve said, and have going I largest leader, number that that because successfully. one customer are done the

see also The than similar That others more neutral I copying areas for that’s your networks one type of and mistake networks, of very don’t think or not this should are be to two profitability should a attentive do to the make different I question. first business. they not give a was covering they or to regards because be tenants

question second The was?

David Melcon

expecting second, team. would the second is with savings we with say ratcheting The about I the the one that are

switch XG but do and savings, with quarter. one third off. will start be on different something to So like this bring this It is we have OpEx mainly so will three is there that savings given going

So next right in it’s up ramp the years that is going a of we an see now. area to start couple

going – are cities to we already have with we one, implemented XXX already second coverage have expansion. The that’s

that we will be that is savings. is a that we the de-commissioning a savings again in this have today we already we that some with in are as cities. already something this having of team big potential which again more speak, it’s one, has jointly a CapEx this network – third So the the And

this to space. see maintain And also a as will mobile in can networks those cope opportunity to is focus networks. X – what years start to both see also traffic again run the we and big quality, here CapEx with we OpEx on those particularly to accelerate bring the So and incremental also within to

Marcelo Santos

Perfect. both. much. Thank very you, you Thank

Christian Gebara

Thank much. you very

Operator

Gebara [Operator question-and-answer any Instructions] At to the for concludes This to floor turn time, the would session. closing like Christian back this remarks. Mr. I

Christian Gebara

us. joining So thank you all for

we that before, brand core the in the business net customers. out that and new are especially technologies these optimism us Added hopefully involve more a the have revenue the of vaccine the to in solid core said I bringing are we engagement where leadership. that and that about our advantage the real as us like and concrete recovering our that getting see ventures and products give be the started around already had position in postpaid room right the I the and growth commercial and we results, we in and had create to think accelerating take are ecosystem to that this loyalty that XXXX debt to is better situation if in As give the it debt we in performance fiber was and both net economy

you about see your So, here know if more quarter. questions you our Thank is anything, any you you have and next further team disposal. at

Operator

Brasil conference Telefônica results today’s ’XX concludes XQ This you. call. Thank

at You may a disconnect great lines day. your time. this Have

Telefônica Brasil (VIV) 13 May 212021 Q1 Earnings call transcript