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Operator: Good morning, ladies and gentlemen, and welcome to Vivo's Third Quarter 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. [Operator Instructions] [Foreign Language] [Operator Instructions]. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depends on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. David Melcon, CFO and Investor Relations Officer; and Mr. João Pedro Soares Carneiro, IR Director. Now I'll turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Please, Mr. Carneiro, you may begin your conference.
João Carneiro: Good morning, everyone, and welcome to Vivo's Third Quarter 2025 Earnings Call. Christian Gebara, our CEO, will start us off by commenting on Vivo's connectivity and digital services performance as well as present our main ESG highlights for the period. Then David Melcon, our CFO, will give more details on cost and CapEx management, free cash flow generation, profitability for the period as well as an update on shareholder remuneration for 2025. With that, let me turn the call over to Christian.
Christian Gebara: Thank you, João. Good morning, everyone, and thank you for joining us today. I'm pleased to announce that Vivo delivered another set of strong results, presenting real growth across all key lines fueled by a powerful commercial performance and our relentless focus on customer experience. In mobile, our postpaid segment continues to lead the way with access growing 7.3% year-over-year. Postpaid now accounts for 68% of our total mobile customer base, which has reached approximately 103 million connections. On the fiber front, we have 7.6 million homes connected, an impressive 12.7% increase year-over-year, and our footprint covers 30.5 million homes nationwide. Total revenues rose by 6.5%, driven by consistent results in both mobile and fixed services. Mobile service revenues grew 5.5%, while fixed services saw a 9.6% increase. This balanced growth highlights the strength of our diversified portfolio and our ability to meet demand across multiple segments. EBITDA grew 9% year-over-year with our margin expanding to 43.4%. This reflects our continued focus on operational efficiency and disciplined cost management. As a result, operating cash flow reached BRL 11.2 billion in the first 9 months of the year, up 12.4% compared to the same period last year. Net income rose 13.4%, totaling BRL 4.3 billion, while free cash flow approached BRL 7 billion with a margin of 15.6%. These strong financial results enable us to return BRL 5.7 billion to shareholders by the end of September, reaffirming our commitment to sustainable value creation. Moving to Slide 4. We show how our top line continues to grow at a strong pace, driven by an increasingly robust and diversified revenue mix. In the quarter, total revenues reached BRL 14.9 billion, once again led by the solid performance of our postpaid and FTTH segments that grew 8% and 10.6%, respectively. These 2 pillars clearly demonstrate how high-quality convergent services can boost monetization. Our new businesses also continue to gain traction, now accounting for 11.7% of our total revenues over the last 12 months, an increase of 2 percentage points year-over-year. This evolution underscores the success of our strategy to diversify and modernize our revenue base, ensuring sustainable growth in a highly dynamic and competitive market. Now on Slide 5, we highlight the key drivers behind our continuous ramp in mobile. In the third quarter, we recorded our highest ever postpaid net additions, surpassing 1 million net access machine-to-machine and dongles. These outstanding results reflect the success of our value-driven strategy and reinforces our leadership in the mobile market. Postpaid access grew 7% year-over-year, reaching nearly 50 million customers, while 5G adoption continues to accelerate with more than 21 million customers now benefiting from our award-winning technology. In fact, in September, Vivo's 5G network was recognized by Opensignal as the fastest in the world for the second consecutive year. Customer retention remains a top priority. Postpaid churn ex machine-to-machine and dongles reached just 0.98%, a testament to the loyalty of our high-value customer base, though we still see room for further improvement. ARPU rose 3.9% year-over-year, reaching a record high of BRL 31.5, supported by upselling and growing demand for data. These results demonstrate the effectiveness of our customer-centric approach, our ability to innovate and the strength of our mobile platform as a key growth engine. On Slide 6, we explored the continued capabilities of our fiber business and its convergence with mobile. FTTH access once again posted double-digit year-over-year growth, continuing the strong momentum we've seen in recent quarters. This performance is largely driven by our flagship convergent offer, Vivo Total that saw an impressive 52.7% increase year-over-year. Notably, Vivo's convergent base already nears 62% of all fiber access. This reinforces the market's clear shift toward bundled solutions. Our fiber footprint also continued to expand. In the last 12 months, we passed over 2.2 million new homes, reaching a total of 30.5 million. The take-up ratio improved to 24.9%, reflecting stronger demand and better conversion. Churn continues to trend downwards, marking the fifth consecutive quarter year-over-year improvement. For Vivo Total specifically, churn is 50% lower than our already below market fiber churn, highlighting the stickiness and value of the offer. Today, nearly 85% of FTTH sales in our stores are done through Vivo Total. This not only boosts lifetime value, but also drives higher user expenditure with gross ARPU reaching BRL 230 per month for Vivo Total subscribers. On this plan, we have reached 1.7 mobile postpaid lines per fiber connection, a clear demonstration of how convergence supports both lower churn and sustained ARPU growth for mobile and fiber. Turning to Slide 7, we dive into how our B2C segment is evolving with focus on how new businesses are driving incremental value and enhancing customer monetization. Over the last 12 months, total B2C revenues reached BRL 44.1 billion, up 5% year-over-year. This growth is supported by both our core connectivity services and the expanding contribution of new businesses that grew 15.3% and now represent 3.1% of total revenues. Revenue per RGU continues its upward trajectory, reaching BRL 64.6 per month. This reflects our success in deepening customer engagement and expanding share of wallet. Looking at the breakdown of new businesses, we see strong performance across key verticals. Our video and music OTTs remain a major growth driver, with revenues up 19.9% year-over-year. Meanwhile, our -- one of our health and wellness initiative, Vale Saúde Sempre now has around 450,000 subscriptions, up 27% versus last year, with plans starting at just BRL 17.90 per month. In financial services, Vivo Seguros continues to scale rapidly, already counting with 600,000 insured devices, a growth of 42% year-over-year. Today, over 40% of our smartphones sold in Vivo stores are bundled with insurance, underscoring the relevance of this offer. These performances emphasize our strategy of positioning Vivo as a comprehensive digital platform, where connectivity is just the starting point for a broader ecosystem of services tailored to our customers' evolving demand. Heading to Slide 8, we highlight how our B2B segment is increasingly being driven by expansion of digital services. Over the past 12 months, B2B revenues reached BRL 13.2 billion, up 15% year-over-year. This performance was led by digital B2B that grew an impressive 34.2% and now accounts for 8.6% of our total revenues. Connectivity also continued to grow steadily, rising 5.6% in the same period. A major milestone this quarter was the signing of the largest IoT deal in the world with Sabesp. This partnership includes installation of approximately 4.4 million smart water meters in the cities of São Paulo, São José dos Campos by 2029. Vivo will also provide the platform to monitor and process the data generated by these devices, reinforcing our leadership in large-scale digital infrastructure. This combination of robust revenue growth and strategic partnerships positions Vivo as a key enabler of digital transformation across multiple industries. With regards to ESG, on the next slide, we reinforce Vivo leadership now with both new commitment to biodiversity and long-term environmental stewardship. This quarter, we launched the Futuro Vivo Forest, a 30-year initiative dedicated to regenerating the Amazon. This project will preserve 800 hectares of native forest by planting nearly 900,000 trees in the states of Maranhão and Pará, bringing back the local fauna in the region. Beyond its environmental impact, the initiative also brings benefits to the local communities aligning sustainability with social inclusion. The announcement was made during the Encontro Futuro Vivo, an event that brought together acknowledged leaders to reflect on the future life of our planet. It marks a new chapter in our ESG journey focused on long-term regeneration and climate resilience. In governance, Vivo continues to stand out. We ranked first place across all sectors in B3's Corporate Sustainability Index, ISE B3, and received recognition for excellence in Corporate Social Responsibility under the ISO 26000 standard. We were also honored with several awards this quarter. Vivo's Compliance Program was named Program of the Year at the Leaders League Compliance Summit, and we were recognized as the top company in TMT category in Exame Magazine’s Melhores e Maiores ranking. Finally, we are proud to be ranked sixth among the best companies to work for in Brazil by Great Place to Work and to be the only Brazilian company and the only one in our industry featured on Fortune's Change the World list. These achievements reflect our ongoing commitment to creating shared values for society, the environment and our stakeholders. With that, I will hand the floor to David, who will walk you through our financial performance for the period. Thank you.
David Sanchez-Friera: Thank you, Christian, and good morning, everyone. Starting with Slide 10, we take a closer look at the evolution of our cost structure and provide an update on the sale of concession-related assets. On the left-hand side, you will see that total cost reached BRL 8.5 billion in the quarter, up 4.6% year-over-year, growing below inflation for the period. This performance highlights our ability to strike the right balance between commercial intensity, operational efficiency and ongoing digitalization efforts. Cost of services and goods sold rose 9%, driven by the increase in service costs. This was due to the accelerated growth of digital solutions, particularly in the B2B segment. On the other hand, the cost of goods sold declined by 5%, benefiting from an improved margin profile in the sale of handsets and accessories. Operating costs grew just 2.6% year-over-year. Personnel expenses increased 3.2%, mainly due to the salary adjustments, which we partially offset with a more efficient management of our benefit programs. Our largest cost line, commercial and infrastructure rose slightly above 4% with higher commercial activity being mitigated by gains from digitalization. This quarter was marked by the acceleration of the sale of assets related to the fixed voice concession, resulting in a net gain of BRL 232 million, up from BRL 95 million in the same period last year. These gains include BRL 199 million from real estate and BRL 34 million from copper. We reaffirm our confidence in delivering BRL 4.5 billion in asset sales over the coming years. As a result, EBITDA grew 9% year-over-year, reaching BRL 6.5 billion with a 100 basis point expansion in margin to 43.4%. Moving to Slide 11, we highlight our operating cash flow performance. CapEx totaled BRL 6.9 billion in the first 9 months this year, up 3% year-over-year. Important, our CapEx to revenues ratio declined 60 basis points to 15.7%, reflecting our ongoing focus on efficiency and prioritization of high-return investments. As a result, operating cash flow before leases reached BRL 11.2 billion, a 12.4% increase compared to the same period last year. After leases, operating cash flow rose 15.2%, totaling BRL 7.2 billion with a 16.4% margin. This performance underscore the strength of our result profile and the effectiveness of our investment strategy. Looking ahead, we see significant potential to further optimize leasing costs. On average, there are 1.4 operators using the same towers as us. But in similar mature markets, this number exceeds 2 operators per tower. This opens opportunities for contract renegotiation and increased infrastructure sharing that will further enhance our ability to generate cash. On Slide 12, we present how our resilient operating performance continues to support profitability and cash generation. Net income for the first 9 months this year reached BRL 4.3 billion, up 13.4% year-over-year. This growth was consistent across all quarters this year, where we have been growing double digit, reflecting our solid execution and financial management. Our net cash position strengthened further, reaching BRL 3 billion at the end of September, a significant increase of BRL 1.7 billion a year earlier. Including IFRS 16 effects, our net debt stands at BRL 11.1 billion with a leverage ratio of just 0.5x EBITDA over the last 12 months, underscoring how robust our financial structure is. Free cash flow generation remains healthy, totaling BRL 6.9 billion in the period. While this represents a slight year-over-year decline due to some phasing effects, the third quarter already shows a 5.5% increase, signaling a positive trend. These results reinforce our ability to consistently generate value even in a recovering macroeconomic scenario. Moving to the last slide of the presentation, we reaffirm our commitment to shareholders' return. From January to October this year, we have already distributed BRL 5.7 billion to shareholders through a combination of interest on capital, capital reduction and share buybacks. In addition, we declared another BRL 2.7 billion in interest on capital to be paid before April 2026, further supporting our guidance to distribute at least 100% of net income for both 2025 and '26. Since the beginning of the year, we repurchased 48.4 million shares, equivalent to 1.5% of our current capital stock. Our buyback program of up to BRL 1.75 billion to be repurchased until February next year remains active and aligned with our capital allocation strategy. It's also worth noting that our share continues to gain market relevance, now ranking as the 34th most liquid share in the Brazilian Stock Exchange, an improvement of 11 positions year-over-year. These actions reflect our strong commitment to value creation and consistent shareholders' remuneration. Thank you. And now we can move to the Q&A.
Operator: [Operator Instructions] Our first question comes from Luis Chagas from XP.
Luis Chagas: Congrats on the robust results again. So my question regards mobile services revenues. So we saw a slight deceleration in MSR in this quarter. So how do you see the competitive environment in mobile did affect your performance in this quarter?
Christian Gebara: Thank you, Luis. Christian, okay, I will answer your question. And we grew 5.5% year-over-year. It's good also to split the mobile postpaid service revenue, we grew 8% and the prepaid minus 7.6%. Starting with the prepaid. The prepaid it's a better performance than we had last quarter that's signaling a positive trend. And even when you compare the quarter-over-quarter growth, there is a positive growth. So we are bringing up revenues in prepaid, while we keep migrating prepaid to postpaid. In postpaid, our growth was 8%. It's also a very strong growth considering the amount of revenues coming from postpaid. Out of our total mobile, we are talking about BRL 8.3 billion coming from the postpaid segment. And we had also the best net add performance of the last quarters. Now if you look back to the third quarter of '24 and we follow every single quarter, it's the first time that we surpassed 1 million postpaid net adds. So that's a strong performance. And the churn, if we keep it in the 1% level. If we exclude machine-to-machine and dongles, it's below 1%. At the same time, we've been able to increase ARPU in that around 4% when you compare year-over-year. So that's a positive result. Of course, there is always small seasonality impact of price increase. If you look back in August '24, we increased price for 40% of our hybrid customer base. And this August '25, we increased for the same segment, the hybrid, we just increased for 25% of the customer base. So going forward, although it's a competitive market, we have positive trends of mobile service evolution in the next quarters. I don't know, Luis, if there's anything else that you want me to address.
Operator: Our next question comes from Gustavo Farias from UBS.
Gustavo Farias: So 2 on my end. The first one on leasing, if you could comment further on the leasing efficiencies you guys are pursuing on specific measures and possibly, if possible, the timing we should expect them to start to have further impact -- higher impact on the leasing payments? That was my first question. And the second question, if you could give us an updated outlook for the sale of assets related to the concession migration? We saw most of it came from real estate. So how should we expect them to behave going forward in the next several quarters?
David Sanchez-Friera: Gustavo, thank you for the question. So regarding the first one on leases. I mean, the evolution of lease depreciation and interest accruals, I mean, remain consistent compared with previous period. In fact, if you look to EBITDA after leases grew even more than EBITDA before leases not in the quarter, but also in the full year. So for the first 9 months, around 2 percentage points, even more, 0.2%. I mean when we look about payments, there is always volatility across the quarters. But I think it's important to look to the number we have this quarter, which is around BRL 1.3 billion and this is consistent and is almost flattish compared to the fourth last quarters. So this is important because that shows positive trend resulting from the negotiation that we are having with the towers company. So for the coming years, it's difficult to talk about any precise quarters. But the information that we also show in this presentation has to do with the current tenancy ratio that in Brazil, we believe is quite low. We are talking about 1.4 tenancy ratio in Brazil. When we talk about other countries where they have the same number of carriers, we are talking about above 2 tenants per tower. So this brings opportunity to negotiate not only in terms of unitary costs, but only -- also being more rational in terms of deployment strategy, but more importantly, increasing the infrastructure that we share with other operators. So all the deployment that we will do in the coming years will be -- our aim is to maximize the compensation with the unitary costs and sharing more. So we are expecting also positive trends coming for the next year in this line.
Christian Gebara: Can I go to the second one, Gustavo, if you have any other doubts about leases, David can follow on or otherwise, I go to the copper and real estate.
Gustavo Farias: Yes. David was pretty clear.
Christian Gebara: So going to the second question, Gustavo. As we stated and now we restated, we -- from the migration, we will capture no benefits coming from the sale of copper, approximately BRL 3 billion positive cash effect, net of extraction costs from the sales of around 120,000 tons of copper and cable coating, okay? That was what we said and restate here again. And then additionally to that, BRL 1.5 billion proceeds from the sale of assets here, the real estate piece net of the mobilization costs, okay? So these are the 2 figures that we stated before. And now for the third quarter, we started delivering that. So we recorded like BRL 232.4 million, and that's divided in sales of copper, BRL 33.7 million and real estate BRL 198.7 million. That compared this BRL 232.4 million compared to BRL 95 million that we had 1 year before in the third quarter of '24. That is also what we anticipated the benefits of the migration are starting now, but it will ramp up and accelerate in '26 and '27 with the project expected to be completed in 2028. So if you compare also what we had in the next -- in the last year, copper was around BRL 63 million and real estate was BRL 32 million, adding to BRL 95 million. Now we had BRL 34 million actually in copper and BRL 199 million in real estate. Copper seems to be like in a positive trend and will be in a trend because we have been able to sell more and more and real estate, it depends on the asset that we sell each quarter. So adding to the BRL 1.5 billion that I described before.
Gustavo Farias: Christian, just a follow-up. So is it fair to think that the sale of real estate could be a little volatile based on what you commented, right?
Christian Gebara: You are right. Sorry, it depends on what we sell. And some quarters, we're going to see more and some quarters, we're going to see less. So this quarter was a good one to the total of BRL 1.5 billion, we are talking about around BRL 200 million, but we still have another BRL 1.3 billion.
Gustavo Farias: Okay. And about the copper, it should follow a more volatile or more stable pace of sales.
Christian Gebara: I think it's more positive evolution, positive evolution. We are going up. Starting next quarter, we will be in January that we are going to -- because as you know, we have 1.2 million customers connected to the copper. So what we are doing now, we are replacing to new technology, in this case, fiber and liberating the copper and the extraction will start in full speed starting next quarter. So we're going to see a positive trend in copper and a more volatile in real estate, although out of the BRL 1.5 billion, we talked about BRL 200 million here now.
Operator: Our next question comes from Marcelo Santos from JPMorgan.
Marcelo Santos: The first question, I wanted to go back to something that was asked first about the mobile, specifically on prepaid trends. I mean you mentioned that you had sequential growth, but actually, that's the second quarter of sequential growth in prepaid. So it looks like a different trend than we have been seeing despite you continue to migrate clients to postpaid. So can you talk a bit what's going on, on the prepaid? Is it something more like Vivo led some initiatives you're putting forward or the market is a bit better? Just want to know if you could throw us a bit some more color on the positive trends we are seeing in prepaid. And the second question is regarding M&A in the ISP space. So I would like to better get a feeling of what's your appetite for inorganic moves, specifically on the ISP space.
Christian Gebara: Right, Marcelo, we see a positive trend in the prepaid. Here is each company works in a different way. What we see here is the customer base that we have recharging every month is going up. Also, our ability to offer more data to our customer base is impacting and also digital services is impacting in a slight ARPU increase. So although there is a very challenging landscape for prepaid more competitive and also our strong migration to hybrid that has a negative impact in the prepaid revenue results. We see, yes, a positive trend for prepaid as well. As much as we see also a very positive in the postpaid, as I said before, net adds are in record numbers. Churn is in lowest levels. So the combination of both give us optimistic trend for mobile service revenue for the future. About ISPs, the specific question was how do we see -- can you repeat it, please?
Marcelo Santos: I just wanted to get a sense of your appetite for inorganic moves in the ISP space, whatever you can talk about this.
Christian Gebara: Okay. Great question, Marcelo. Like we reached like almost 31 million home passed in fiber. The number of customers that we have are also growing. As you could see, net adds of Vivo has been in the highest level and compared to the other players in a very strong gap in a positive gap for us and churn is going down. Also, we highlighted our churn level at 1.46%. But when you go to the Vivo Total fiber churn level is low as 0.7%. as you follow the market, that is a record churn level for any player in our market. So going forward, of course, we believe that considering the size of the Brazilian market that getting more homes passed is in our objectives. Brazil has 90 million homes, maybe 60 million are more addressable to a fiber deployment. And we have, at the moment, a little bit less than half of it. So we want to be in a more strong -- a stronger position in this market. So we could do that organically as we've been doing. We have CapEx for home pass in a very low level. We've been improving that, optimizing that. So we are talking about lower than BRL 200 per home pass. And we need to connect more over our own network. So the first one, deploying more network, we're going to do by our own, although we find a network that follows some of our criteria, technical quality and also not so much overlap with our network and in the right pricing. So far, we haven't found any like this. There is some movement in the market. Some of these assets, we already assessed and analyzed. We couldn't get to an agreement due to maybe failing in one of these 3 criteria that I just described for you. Also, we have the opportunity to penetrate more of our network. We have just acquired FiBrasil and still waiting for the antitrust final approval. Their take rate was around 16%, actually, our take rate over their network. But I do believe now having the full control of the network will allow us to improve this take rate closer to the one that we have in our own network that is around 25%. So it will be a combination of more network organically or if we find an asset that comply with the 3 criteria that I just described and more penetration in our own network. And this penetration will be following this very strong and positive trend that we have. As you could see, net adds are above 225,000 clients. That's the best result that we have this year, and we are in a positive trend because we are acquiring more customers and we are retaining more customers as churn level is in a very low historical situation.
Operator: Our next question comes from Lucca Brendim from Bank of America.
Lucca Brendim: I also have 2 from my side. So the first one is regarding concessions, a follow-up on the previous question on the migration. Not only talking about the assets that were being sold, but also on the synergies and efficiencies that you mentioned we would be seeing in terms of cost savings. Have you already started to see anything now? And how is the time line for those to be captured and we start to see them in results? And then the second one on B2B digital, it continues to perform really well. And do you guys think you should continue to see this pace of expansion? And what are the verticals within this segment that you think will be the drivers for the coming quarters?
Christian Gebara: So going to the first one, Lucca, yes, we're not giving numbers of this like saving related to cost efficiency. Of course, it will mostly impact our commercial and infrastructure line, but it will be captured gradually until 2028. We're not like showing like what's the number quarter-by-quarter. Here now, the focus is in trying to capture as quick as we can, what I just described before of the copper extraction and the sale of real estate that is required for that to migrate customers. We're going to do that as fast as we can, protecting the revenue, protecting the customers. And again, when we do that, of course, we're going to be in the end, capturing a lot of other synergies of people that are dedicated to that and other indirect costs that we have to deal with this concession. For the moment, we're going to be more -- giving more clarity in the number that we gave to the market that is the BRL 4.5 billion. Going to the second question about B2B. Yes, we are very positive about the evolution of the B2B digital services. As you described before, it has a very strong positive trend. If you look at the last 12 months revenues, it is a year-over-year growth of 34.2%. The areas that we see growth are the same. Cloud, important one. Here, we've been doing many things. We bought IPNET. So we're expanding our portfolio, trying to be much more diversified, going -- just not only having a very strong dependency in Microsoft, but adding Google, Oracle, among others. Also going up in the managed services. That's why these acquisitions, Vita and IPNET were essential because we could bring in some talent and certified professionals to help us in managed service, and we are looking to other assets. Then there is IoT messaging. I think IoT, we gave the great example of Sabesp. We see that the beginning of a huge opportunity in IoT. That's in the water business, but we also see in the agribusiness, and we are closing many deals there. So we grew 25% year-over-year in this line as well. Cyber is the one that had a very strong growth, but the volume is still lower, maybe is where we're going to focus in the future as well as a group and as Vivo, we see great opportunity for cybersecurity. And then there are other solutions and IT product sales that we also see a positive trend. So we do believe that the penetration of digital services in B2B through Vivo will grow. Today, on average, we have 15%. It's much higher in the top segments of our portfolio of clients, but we want to increase it much more in the SME segment. And we see huge opportunity to leverage our channel capability. We have 5,000 sales reps and of course, the brand and the combination of connectivity with digital services.
Operator: Our next question comes from Vitor Tomita from Goldman Sachs.
Vitor Tomita: Two questions from my side. The first one is that you cited the competitive environment when discussing mobile in some prior answers. Could you give a bit more color or a bit of an update on how you are seeing the competitive situation in mobile going into Q4? And my second question would be if you could give a bit more color on the topic also of sales and copper and real estate assets, but more from an operational standpoint in terms of communicating with copper users, as mentioned, moving them to fiber, mobilizing field teams to extract copper, negotiating real estate, et cetera. How has that execution side been going, whether there have been any surprises on that execution side relative to what you expected? Just so we can have a bit more of a qualitative view of how this is going?
Christian Gebara: Okay, Vitor, I will start with the second one. Okay, it's a good question. It's important to highlight that we've been doing that for a long time. It's not that we have started doing that. If you look at real estate, even during the concession period in the last years, we were able to get authorization from ANATEL and we sold important assets during the last years and that we needed to mobilize and take out everything related to the concession from the real estate, and we were able to do that. So we sold Martiniano de Carvalho that was an important building for us. We sold others in important neighborhoods of São Paulo. So we had already established a real estate process to analyze and evaluate and demobilize all the assets that we wanted to sell, and we continue doing that now with much more flexibility because we don't need more authorization to do that. Regarding the copper and the customer that you said, that's also a very good question. We did that in the past as well. It's not the first time that we do that. We were already very focused on replacing copper with fiber. But in the past, we needed to get full authorization of the customer. Now of course, we communicate, we explain the benefit of fiber. But in the end, if the customer doesn't want to, we have also the possibility to say that we are running out of any type of assistance to this technology that give us the right to replace it. Mostly what we see in most cases is that customers want to have the migration. We put in place a very robust process. We have a dedicated team in a PMO focusing on doing that. And what we see here is not only we migrate customers, but we also can see opportunities to upsell. An example of a pure corporate client that we offer fiber to the voice and we can also offer broadband and ended up having a much better ARPU with these customers. In other cases, copper plus fiber in a very low speed offering, we could also be able to offer upsell and also Vivo Total. So it's working pretty well. That's why it's giving us opportunity to sell important assets in important neighborhoods where we were like finishing, concluding the migration to fiber to all the customers that we have. I think -- I don't know if I answered it. Otherwise, I go Vitor, to the first question.
Vitor Tomita: Yes, that was clear.
Christian Gebara: Okay. Let's go to the first. Look, the market dynamics is, of course, competitive. It's not very different from what we saw in the previous quarters. We've been doing as we normally do, adjusting price based on the inflation and the period that we can do that, focusing a lot in customer experience to retain as much as we can, playing convergence in the best way, innovating in our offering. We just launched the Vivo Easy Lite that is based in credit card that has been a huge success. And we've been doing that in a very positive way, as you could see in the performance that we had in net adds. I think net adds is a great example of the trend going forward. For the first time, we surpassed 1 million customers in postpaid net adds and the postpaid churn is in a very low level. Now we're also able to increase ARPU. So competition is there. We have different competition depending on the region, being able to respond to that, both in prepaid, hybrid and postpaid and also playing strongly the opportunity to sell more service to the same customer, adding not only the fiber to the mobile, but also the digital services. Now our success performance selling digital services, mainly entertainment for these customers is also given here. We are reaching 4 million customers, both mobile and in some cases, convergent, in other case, just fiber that we are able to sell digital service. This is only one example of one digital service, but we are also able to sell others. We expect this positive trend to continue, keeping the very competitive environment that we have.
Operator: Our next question comes from Maria Clara Infantozzi from Itaú BBA.
Maria Infantozzi: I have 2 questions here on my side. So the first one, can you please provide us an update how you perceive the competitive landscape in the fiber business? It caught our attention that ARPU continues to fall for the second quarter in a row this time. And the second question would be related to CapEx. It also caught our attention the sequential increase this quarter. And with the integration of FiBrasil soon, how should we think about the CapEx evolution in the following quarters?
Christian Gebara: On the fiber, again, not to repeat myself, but it was a very strong quarter for us. We are talking about a revenue that's already BRL 2 billion with a growth of 10.6%. Net adds is also a record level. If you look back the last 5 quarters, that's the strongest one. And churn, if you look back many years, is the lowest one. When you talk about specific ARPU, here, you need to put into account. First, we are deploying new areas because we're expanding our network. Sometimes we have promotional entry offers. But more importantly is that we are selling 85%, if you consider just one channel, our stores, fiber with mobile in Vivo Total. And then there is a change in the allocation of ARPU because we're selling 2 services or more to the same customers. And we also stated here that on average, a Vivo Total customer has fiber, but has 1.7 postpaid lines. Add to that, that we also sell a lot of OTT, video OTT. So more than just looking at a specific service ARPU, we should look at the customer ARPU or we should look at the line of the absolute number of the fiber that, again, is growing double digits and is reaching BRL 2 billion per quarter. So we are very happy with our performance. As I stated before, we want to expand to more areas. We want to penetrate more our network. We want to sell more convergence to our fiber customers. And also, we launched new speeds, even 10 gigas as one of the last -- gigabytes one of the speed that we just commercially launched. So we also see opportunities to upsell in our customer base to 1 to 2 and up to 10. So the competitive scenario is hard. As you can see, we have thousands of customers, but I think we have assets and attributes that are very difficult to be replicated, and that's shown in our net adds that is well above the second player. Sorry, regarding CapEx, we are keeping the low intensity that we have right now, CapEx over revenues, and I think this should be the metric to look forward.
Maria Infantozzi: So even with the acquisition of FiBrasil, we should think about a continuation of the declining CapEx over revenue stream, right?
Christian Gebara: Yes. The acquisition, if it's approved, it's going to be less than 2 months, and it brings EBITDA and brings a little bit of CapEx. Operating cash flow impact is almost 0. It is slightly positive. Impacting CapEx is much more than replaced or compensated by the positive impact in EBITDA. So you shouldn't be worried about the CapEx impact of FiBrasil.
Operator: Our next question comes from Mathieu Robilliard from Barclays.
Mathieu Robilliard: I had 2 follow-up questions. One on the lease costs. which you are saying could be contained or decline. I was wondering if this is still due or linked to the acquisition of some of the Oi towers, and it was basically the prospects of continuing to rationalize your tower portfolio linked to that acquisition or it was something more structural? The second question was about B2B and more specifically data centers and cloud. Now that may be very euro-centric, my question, but certainly, what we're seeing over here is that with the geopolitical changes, sovereignty has become a big topic. And so a lot of countries and companies are thinking about having locally owned data centers. And I was wondering what was the debate there in Brazil and whether you guys had any data centers directly or plan to have in that context? And lastly, just to make sure I got the question about the fixed ARPU right or rather the answer. Are you basically saying that one of the reasons why the ARPU is down is because I guess there's a discount to the sum of the parts in your product and maybe you're allocating a bit more to the fixed business than the mobile business? I mean that's really an accounting question.
Christian Gebara: Yes. This is Christian here. I'll go to the last one, and then David will jump to the first and then I go back. Yes, there is an allocation decision here, and I addressed that when we talk about Vivo Total. If you look the number of customers that we have in fiber 7.6 million, 3.2 million are already in Vivo Total. And I guess that's looking at a specific service ARPU, considering that our strategy is driven by selling more to the same customer, convergence being the key element of this strategy is going to be hard because there is some allocation here. What is important is that in absolute numbers, we are growing revenues in double digits. And commercially speaking, net adds are in a very high level and churn is in the lowest level. Yes, and there is some accounting that may be impacting the distribution of revenues among the 2 technologies.
David Sanchez-Friera: Mathieu, this is David. So the first question about the leases. Look, this quarter, we have no impact from what you mentioned about other carriers that just left the business a few years ago. What is benefiting the trend is that before we were 5 carriers, now we are 3 here in Brazil. That means that we have -- we had to review all the strategy of sharing infrastructure that before we were sharing because we were 5, and now we end up being single tenant in a percentage of our sites that we see a big opportunity. So as I mentioned before, in the next -- let's say, in the next 3, 5 years, we are going to renegotiate a significant part of our sites where the contracts are about to expire. And therefore, we are prepared to face those negotiations with an approach where we can maximize the value in terms of return on capital, particularly to understand which are the strategic sites, which are the sites that we could pay less, which are the sites that we could share with someone who is just having a similar site, very near our existing infrastructure. So we will see synergies coming from this process that will be shown in our cash flows in the coming couple of years. So our plan is to continue showing positive numbers in terms of free cash flow. And we will keep you updated on the number that we have just shown this quarter. So we are talking about a 1.4 agent per tower compared to other countries where it's about -- it's above 2. We could be talking about specific countries where U.S., we're talking about 2.2. So here, the 1.4, we want to keep you updated to see how we are progressing, make this number higher, and this will fund all the new deployment that we need to have to keep having the best quality of 5G in Brazil.
Christian Gebara: Going to the second question. No, we don't see the same issue that you described in the U.S. Here, what we are like trying to have is a more diversified portfolio of vendors to have it much more spread among different players. Many players are now entering strongly in the cloud area, and that's good for us because we are the key commercial partner of all of them, and we have a relationship with customers that these players don't have. What we see some companies, they want to have a hybrid strategy, having some on-premise servers combined with a cloud solution, but nothing related to what we described it before at the moment here in Brazil.
Mathieu Robilliard: Okay. That's very clear. And just a follow-up on that. Do you guys have data center capacity? I mean, do you have infrastructure you own in Brazil that is important in size? Or is it essentially hyperscalers?
Christian Gebara: Yes, we have a sales leaseback that we used to have a data center that we sold, and we have an agreement to occupy part of this data center. Apart from that, we don't have other data center. We use other big players in data center, and we hire capacity from their data centers and resell it. So we have a commitment to use part of their capacity, but it's not ours.
Operator: The Q&A session is over. I would now like to hand the floor back to Mr. Christian Gebara for the company's final remarks. Please, Mr. Gebara, the floor is yours.
Christian Gebara: Thank you. Thank you all again for participating in our call. Just want to highlight the strong results that we just presented and more importantly, the positive outlook that we foresee, especially based on our strong and consistent commercial performance and our ability of monetize and retain customers in all services and in all segments. If you have any other additional doubts, please reach our team. Thank you again, and see you soon.
Operator: Vivo's conference call is now closed. We thank you for your participation and wish you a very good day.