Liberty Latin America Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn the call over to Vinod Karup, Interim Chief Technology Officer of Liberty Latin America.

Good morning, and welcome to Liberty Latin America's third quarter 2021 investor call. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the investor section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for a question and answer session. As a reminder, this call is being recorded and will be available under the investor section of our website. Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical fact. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K and the most recent Form 8-K filed with the SEC, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which such statements or information is based. In addition, on this call, we will refer to certain non-GAAP financial measures which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under the Investors section of our website. I would now like to turn this call over to our CEO, Mr. Balamay.

Thank you, Vinod, and welcome everybody to Liberty Latin America's results presentation for the third quarter of 2021. I'll begin with our group highlights and operating results before handing over to Chris Noyes, our CFO, who will provide a review of the company's financial performance. After that, we will get straight to your questions. As always, I'm joined by my executive team from across the region. I'll get them involved as needed during Q&A, following up prepared remarks. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. Starting on slide four and our highlights, we delivered 84,000 fixed RGU ads in Q3. representing our strongest quarter of the year so far. This continued our momentum from the first half, and we've now added nearly a quarter of a million RGUs year-to-date. CNW Panama and CNW Caribbean and Networks drove the majority of additions. In mobile, we had another strong quarter, adding 74,000 new subscribers, about half of which were post-paid, We also saw good initial contributions from our mobile operations in Costa Rica, which we acquired from Telefonica on August 9th. As we've previously highlighted, new build and upgrade plans are a core element of our growth strategy, and we continue to build aggressively in the third quarter, taking our year-to-date homes added or upgraded to approximately 600,000. About 99% of these ads have been through fiber to the home technology. Free cash flow is our key focus, and we delivered a strong performance in the quarter with year-to-date adjusted free cash flow now at $149 million to the end of September. We are clearly on track to exceed our guidance of $200 million this year, and Chris will cover this further in his section. Finally, we have made some important inorganic announcements with the acquisition of America Mobile's Panama operations and a 50-50 joint venture with America Mobile in Chile, both of which are expected to close next year. These transactions will enable us to improve our networks and customer propositions, including delivering converged solutions in Chile, whilst also generating significant synergies and value for our stakeholders. Turning to slide five in our fixed consumer business. On the left of the slide, we present our quarterly RGU ads since Q1 2020. This shows the initial impacts of COVID-19 and our recovery since then with consistent additions through this year, culminating in Q3 strong performance. In terms of our markets, CNW Panama was the main driver for the group's third quarter results, adding 30,000 RGUs, which was more than Panama had contributed in the entire first half of 2021. We have invested in our networks and products in Panama and are pleased to see operating results coming true. CNW Caribbean and networks also delivered another strong quarter with 25,000 net ads, led by Jamaica, which has now added 100,000 RGUs over the last 12 months. Puerto Rico and Costa Rica continued to grow their subscriber bases in Q3, led by broadband RGUs, which contributed over two-thirds of their combined total ads. Chile remains intensely competitive. However, we have reported another quarter of stable subscriber numbers and are excited about the potential for a joint venture with America Mobile, which I will cover later in the presentation. On the right of the slide, we have shown our new build and upgrade progress over the same period. we remain committed to investing in our networks and product offerings to deliver greater access to high-speed connectivity solutions for our customers and have already built or upgraded 50% more homes in the first three quarters of 2021 than we did through all of 2020. Importantly, nearly all of our bills is now fiber to the home and we continue to plan on deploying this technology for the rest of our bills. Moving to slide six and our mobile performance, again, we have presented quarterly evolutions from the beginning of 2020. In the upper part of the slide, the chart shows the significant impact of mobility restrictions on our operations in the first half of 2020 and our subsequent recovery. In Q3, we included for the first time the mobile operations which we acquired from Telefonica in Costa Rica. We are in the early phases of integrating our businesses in Costa Rica and are pleased with what we have seen today from what is now our largest mobile operations in terms of subscribers. In the period during the quarter under our ownership, Costa Rica contributed 37,000 mobile subscribers. Of our other markets, CNW Caribbean and Networks and CNW Panama were again the largest contributors to the group's results, delivering 24,000 net ads each. In aggregate, we added 74,000 mobile subscribers in the quarter with a blended ARPU of $15 across our base. On the bottom of the slide, we present our post-paid ads over the same period. We have been successful in building momentum in postpaid through targeted promotions, including our nascent Converge offerings. Costa Rica and Puerto Rico are our largest postpaid markets, and they led the group in Q3 with 15,000 and 40,000 ads, respectively. CNW Caribbean and Networks and CNW Panama have also been steadily growing their postpaid basis, adding 16,000 postpaid subscribers in aggregate during the quarter. next to slide seven, and our B2B operations. In the bar charts, we break out the performance for CNW Caribbean and Networks, CNW Panama, and Liberty Puerto Rico over the past two years. These segments include the majority of our B2B operations, representing over 95% of total B2B revenue in the third quarter. On the far left, we show CNW Caribbean and Networks revenue with the subsidy components split out. The subsea business has been consistent throughout the period and slightly higher in the latest quarter. This speaks to its resilience, which is further reinforced by its U.S. dollar rating. The non-subsea B2B operations in CNW Caribbean and networks were impacted more severely by COVID-19, but are steadily recovering and off their lows. Next to CNW Panama or MassMobile in the center. Panama was one of our most severely impacted markets in 2020 and early 2021, but the segment is now back to pre-COVID revenue levels, and we are looking for further progression from here. Finally, delivery Puerto Rico. This chart shows the scale of B2B operations we acquired in the AT&T transaction, as the Q3 2021 figure includes B2B operations we acquired net to the B2B asset we disposed. With our converged propositions, we believe this can be a growth driver for Puerto Rico. On the right of the slide, we have broken out our B2B customer segments and provided an indication of their respective sizes. Finally, to slide eight, and a review of the inorganic progress we have made. Before going through some of the details, I want to share how excited we are about these transactions. We've always said the best M&A are in-country transactions, where they solve for product gaps or improve existing offerings, clear generation of synergies, create scale to strengthen our market positioning and propositions, and most importantly, ability to drive meaningful free cash flow growth. Moving to a bit more detail, on the left of the slide, we've outlined the rationale for our announced 50-50 joint venture with American Mobile in Chile. Through this transaction, we will combine a strong fixed operator with a strong mobile operator. This new company will have scale to provide all communications needs to both consumers and businesses. We plan on investing in more fiber to the home, increase 5G coverage, strengthen our B2B propositions, increase our digital channels, and possibly partnering with other operators on our network. the combined business plan to generate significant synergies of over $180 million. And we feel that this transaction makes sense for Chile, where the combined company will only be the third largest provider behind Intel and Telefonica, and hopefully a catalyst for more consolidation in that market. We expect the transaction will close in the second half of 2022, and I've also noted some key elements of the structure on the slide. Tending to the right of the slide, we also announced the acquisition of American Mobile's Panama operations. This transaction will consolidate the market from four to three players. This will create a healthy situation for all three remaining players. It will also bring scale to CWP on both consumer and B2B propositions and distribution. It improves network coverage and customer experience. And, as with the Chile transaction, we expect to generate significant synergies. Note that this acquisition will be funded at the asset level in Panama. In addition to these announced transactions, we were pleased to complete the acquisition of Telefonica Costa Rica operations in August. Integrating this mobile business with our fixed operations at Cabletica will enable us to create compelling product offerings for our customers, as well as drive synergy benefits. We are also making progress with the integration of our Puerto Rico operations, where we are one year into a three-year plan and recently completed an important milestone as we rebranded fixed and mobile operations to Liberty. Overall, as we approach the year end, we are focused on delivering our guidance targets and establishing a platform for sustained organic growth across our operations. We are also working diligently to integrate operations we have acquired as well as to close the transactions announced. We remain confident that together, these actions will create additional value and position us to deliver adjusted free cash flow growth in the coming years. With that, I'll pass you over to Chris Noyce, our Chief Financial Officer, who will talk you through our financial performance before we take your questions. Chris?

Thanks, Fallon. One housekeeping item to start. We closed the Telefonica Costa Rica acquisition on August 9th, so their results are only in for a portion of this quarter. Our reported revenue increased by 34%, or about $300 million. to reach revenue of $1.19 billion in Q3, helped in large part by the positive impact from acquisitions. On a rebase basis, our revenue grew 3%, led by strong year-over-year performances in Costa Rica and Panama. From a product perspective, our residential mobile business picked up steam and delivered rebase growth of 6% in the quarter, while residential fixed and B2B also grew. On a year-to-date basis, rebase revenue maintained a consistent 4% growth rate. Turning to adjusted EBITDA, we posted $446 million in Q3, reflecting reported growth of 24% and flat rebase growth, consistent with our Q2 statement regarding lower expected rebase rates in the second half of the year. Cost increases varied across certain markets, but in aggregate, we experienced a combination of higher direct costs including programming, enroaming, and higher operating costs. Similar to revenue, our year-to-date adjusted EBITDA rebase growth was 4%. Slide 11 summarizes our revenue and adjusted EBITDA performance by operating segment for Q3, and the bottom of the slide displays year-over-year adjusted EBITDA results. Beginning with CMW Caribbean and Networks, we reported $435 million of revenue, or 4% rebase growth, led by double-digit revenue growth in Jamaica. Mobile revenue performance was the largest contributor to our top-line progression, with rebase growth of 9%, reflecting modest recovery from COVID and early success from our focus on converged offerings. Additionally, we experienced year-over-year rebase revenue growth of 3% in both B2B and fixed residential. Adjusted EBITDA was $182 million, or up 3%, on a rebase basis in the quarter, as both direct and operating costs increased year-over-year, caused in part by higher activity. Next, cable and wireless Panama. Q3 revenue and adjusted EBITDA grew 9% and 11% on a rebase basis, respectively, delivering revenue of $129 million and adjusted EBITDA of $48 million. Momentum is building in Panama, led by rebase revenue growth of 15% in B2B and 10% in residential fixed, while residential mobile posted modest growth over Q3 2020. On residential fixed, we have added 70,000 RGEs in the last 12 months, with roughly 40% of these in the current quarter, which should help propel growth into the fourth quarter. Highlighted in the middle of the slide is Liberty Puerto Rico. We reported revenue of $359 million in adjusted EBITDA of $142 million, representing modest rebase growth in Q3 of 2% revenue and 3% in adjusted EBITDA. In terms of revenue, our legacy fixed operations once again grew double-digit year over year, while Liberty Mobile declined as subscription revenue growth was offset by lower equipment, B2B, and roaming revenue. Adjusted EBITDA was impacted by higher costs, principally in the areas of roaming and programming and labor on a year-over-year basis. The sequential decline in adjusted OEBDA from Q2 was due in large part to lower net roaming and greater losses from equipment sales. We also incurred integration costs of $2 million, which we assume will step up considerably in the fourth quarter. Turning to VTR, Q3 revenue of $193 million in adjusted OEBDA of $65 million was reflect rebase declines of 5% and 18% respectively. Sequentially, our results in U.S. dollar terms reflect an average depreciation of the Chilean peso by approximately 8% in Q3 as compared to Q2. Consistent with prior quarters, our year-over-year rebase revenue decline was largely due to volume losses and ARPU declines in broadband. Compared to last year, adjusted EBITDA has compressed faster than revenue due in part to much higher programming costs relating to the return of live soccer matches. One positive in the quarter was that BTR's adjusted EBITDA in Chilean pesos was marginally positive to the second quarter results. Ending with Costa Rica, including the mobile assets for about 50 days of the quarter, we generated a revenue of $77 million of rebase revenue growth of 11%. This top-line performance was driven in large part by a combination of mobile and broadband growth, reflecting the increases in subscriber bases over the last year. We reported adjusted OIBDA of $24 million, reflecting rebase growth of 13%. In the quarter, the Telefonica assets contributed $41 million of revenue and $11 million of adjusted OIBDA. Integration activities should begin to ramp in Q4. On slide 12, we reported P&E additions of $232 million for Q3 and $599 million year-to-date. Our spend equates to 20% of revenue for Q3 and 17% of revenue for the nine-month period. The increase in quarterly spend was due in part to the significant expansion in our new build activity, which is up threefold in terms of homes passed and or upgraded as compared to last year. We will continue to have elevated capital spending in the fourth quarter, reflecting our investments in network subscriber growth and integration, and are on track to deliver full-year P&E additions of approximately 18% of revenue. With respect to adjusted free cash flow, we delivered our fourth consecutive quarter of positive free cash flow with $56 million in Q3, bringing our total to roughly $150 million for the nine months. we are currently tracking to exceed our $200 million guidance figure for 2021. On slide 13, we have broken down our consolidated results by revenue. Roughly 65% of our reported revenue at Q3 is U.S. dollar, U.S. dollar linked and or pegged. Importantly, Puerto Rico and Panama account for 40% of our total revenue, and that will increase post the Colorado acquisition in Panama. Additionally, post our JV in Chile, Overall value will still be impacted by the trajectory of the Chilean peso theoretically, but our consolidated and reported results will be U.S. dollar oriented to over 75%. In comparison to other publicly traded operators in the region, this U.S. dollar mix we believe is a key positive differentiator. Moving to our financing metrics on slide 14. During Q3, we funded the acquisition of Telefonica in Costa Rica with local debt borrowings and cash from LLA and our 20% partner. And in early October, we completed a roughly $600 million eight-year refinancing in CNW at a fully swap rate of about 4.4%. This results in over $14 million of annual free cash flow savings beginning in 2022. At September 30th, including VTR, which is held as an asset for sale on our balance sheet, We had $9.2 billion of total debt, $1.1 billion of cash, and $1.2 billion of availability under our revolving credit lines. We had gross leverage of five times and net leverage of 4.4 times, inclusive of VTR. Our ratios will fall slightly after adjusting for a full quarter impact of Telefonica Costa Rica. Our maturity schedule in the upper right remains long-dated. And finally, an important development that we discussed in Q2 is that we restarted our share buyback. We repurchased $10 million in Q2. We doubled that in Q3 to $20 million and have definitely continued into Q4. Through Q3, we have $60 million remaining under our current repurchase authorization, which expires next spring. Turning to slide 15, as we have highlighted today, we've been very active in the quarter. We are executing on our plan to drive future value to both customers and shareholders, driving subscriber revenue and adjusted EBITDA growth year-to-date, expanding our network investments, and making strategic non-organic moves, which we believe are highly accretive and which strengthen our product offering for our customers. We are on track to deliver our 2021 guidance targets on new builds, P&E additions, and most importantly, free cash flow, which is a key metric for us and how we run our business. Given the share weakness we have seen over the last few months and our view on our free cash flow trajectory and relatively quiet near-term acquisition pipeline, we have ramped up our buyback activity, capitalizing on what we believe is a valuation disconnect and a high capital return opportunity. In Q4, we are focusing on customer acquisition, new build, digital implementation, and integration activities, which should set the stage for our 2022 performance. With that operator, we are ready to take questions.

Thank you. And if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. As a reminder, that is star 1 to ask a question, and we will take our first question from Jeffrey Voldercheck with Pivotal Research Group. Please go ahead.

Good morning. I had a couple of questions on Puerto Rico. I was hoping you could provide more color on the wireless revenue decline. Is it fair to say that's mostly COVID-related? And then if you could give any color on when you guys intend on rolling out a converged offer to consumers in Puerto Rico, that would be helpful. And I had one follow-up.

Good morning, Jeff. Let me maybe address that a bit, and then I'll ask Najee to jump in here. The wireless business in Puerto Rico is actually doing really well. we actually added postpaid subscribers in the quarter. We did have some headwinds, but it's not really COVID-related. It's bouncing around a bit on roaming. Some of the equipment sales moved off a bit, but we're quite bullish on that point. And on the converged side, we've already started our converged offerings, but we're going to improve even more so once the system's cut over to outside. Najee, do you want to add on to that?

Yeah, sure, Bon. Good morning, Jeffrey. Yes, I mean, to echo Bon's point, for us, the fundamentals are very strong. If you look at service revenue, both sequentially and year over year, it's growing. There's some volatility a bit on the roaming, as Bon discussed, as well as equipment revenue. As you know as well, you know, the iPhone was launched, you know, Late September, the peak was in October. People usually hold their purchase until the new phone comes in. So there is a seasonality. And as you know, in most cases, it is also a negative contributor as well when it comes to corporate revenue. The roaming, I think, was expected. There is seasonality. And more people are traveling as well, which in some cases adds expense, in some cases reduces revenue as well. For the convergence, really excited about the way this is unfolding. As Abana had mentioned, we did converge our brand on September 28th. The feedback has been really positive. Not only our offer are converging now, but our sales channels are converging. So customers that are walking into our retail stores today are able to purchase both fixed and mobile products. initial results are really positive. And again, we're just literally, you know, four weeks into this. So really excited, you know, very optimistic about the future from that perspective.

Thanks. And then is there any update on your subsea assets? You were thinking about selling a portion of that. I think you were going to let us know in the fourth quarter. Is that not happening? You're still thinking about it? Any update would be great.

Well, Jeff, you can clearly see that business is a very good, strong business, very stable and predictable cash flow. We've been thinking about some of the parts of it and giving better and more clear line of sight to it. I expect that in our February call, we'll give you a very clear view on what our plans are on that asset.

Great. Thank you very much. Sure.

And up next, we'll take a question from Michael Rollins with Citi. Please go ahead.

Thanks and good morning. I'm curious if you could discuss when you have fixed and mobile convergence in the market, what are the typical revenue or margin advantages over not having that level of convergence?

Sure. There's a few drivers for the convergence. Clearly, the bundle gives a better ARPC for the average revenue per customer. Secondly, it improves the churn as well. And, you know, thirdly, especially in our case, where we have a lot of prepaid customers, FMC, this convergence actually moves a lot of our unpredictable prepaid customers to a postpaid customer. or even in some cases, even kind of a hybrid post-fade. But the goal really is to, you know, get the customer to stick with us longer, create value through the bundle, have them see or actually experience a much better service from us, and theoretically also a better value for them. And it is working, and it's working very strongly. As Najee pointed out, in Puerto Rico, we started that, and We're seeing not only green shoes, actual growth. I mean, you look at our fixed business, one of our best performances last quarter, driven a lot by FNC as well. Costa Rica, you know, we just acquired the Telefonica asset, and it is working now already with our Cabletica business and Telefonica's business, and that combination. We are launching some very innovative products. In cable and wireless, our general manager there has introduced really innovative FMC products. And we are seeing the success as well, moving the prepaid to postpaid. That's why we're driving it. And clearly, margin improves as well as predictability of that cash flow.

Thanks.

All right.

And up next, we'll hear from James Ratcliffe with Evercore ISI. Please go ahead.

Morning. Thanks for the question. Two, if I could. First of all, on the margin front, I know there's a lot of noise in the data with COVID plus M&A and the like, but can you help us look through that to what the underlying margin trends look like, particularly at cable and wireless, and how much more room do you have to run in your cost reduction work there? And secondly, fixed telephony continues to be surprisingly strong. Can you talk about what you're doing with that product? What's the impact in terms of ARPU and churn and what the strategy around it is? Thanks.

So on the cost margin scheme of wireless, and my general manager there, Inga, is on the call as well, and I'll ask her to maybe provide some thoughts on the cost reductions that she's taken on. We think there's going to be margin expansion there on two fronts, one on the OPEX side. We've actually also improved on the COGS side. And then clearly, as time goes on, even on the CAPEX as well, we expect a few more points in the combination of all those three cost segments. And Inga has done some really good work, both at the center as well as in the islands in driving some of the cost reduction. So maybe, Inga, if you want to comment on that.

Yes, good morning, Bell. Good morning, James. Indeed. So we really look at it line per line, business line per business line. We really work through every single aspect of whether it's the OPEC side or whether it's the COF side. really looking for the return on investment. And we've really started that work in the last two years. And next year, we will continue. And also in the next quarter, we will really do, we'll continue to drive that piece of, like Bell said, both in markets and at the center. And there's clearly some room to improve that side.

Thanks, Inge. And then on your second question on fixed telephony, You know, this is an interesting thing. I mean, clearly this product is not, you know, a super growth product. But we found still a way where customers, you know, through the bundle, you know, kind of an innovative pricing proposition, getting our existing customers to just add on voice to the service. You know, you can imagine the gross margin on this is like close to 100%. And so we, you know, we've just taken the advantage to – to drive more and more of it, and it's working in some areas. We're not counting on this as a growth drive for our business. We don't count on this in our LRP as a driver, but when you get it, you take it. And we saw an opportunity, and we put our salespeople on it, and we were able to put up some good numbers.

Great. Thank you.

And once again, to ask a question, press star one.

And up next, we'll hear from Sumit Dada with New Street Research. Please go ahead.

Hi, guys. Yeah, thanks for the presentation. A couple of questions, please. One just on Chile, please. You talked about the subspace kind of stabilizing a little bit, but the broadband ads are particularly weak, I think. So we've seen accelerating... broadband losses through this year. So I just wondered how you thought about the momentum in that business. And again, as a kind of joined question, how do you see the deal you're doing in Chile kind of helping on the fixed side in particular? And I guess also, is there anything you can do before that deal closes to help the broadband business? So that's one question. Please, maybe I'll wait for the answer and then just go with another one.

Sure. And I'll ask Vivek to jump in here in a bit as well. You know, the broadband business there has been all over the map. Our gross ads on broadband are really good. There's some leakage, clearly, and that's why the net ads went off. But there's three things that we're doing. One, we're improving our retention on broadband, and we're getting a lot more creative on that as well. Two, as you can imagine, we are repricing a product, and you can see that in our EBITDA. And that has also slowed a lot of the churn part of broadband. And third, we are going to re-vector some of our sales team. Not some, a lot of our sales team to now focus just specifically on broadband. And so you'll see some numbers turning on there, but I'll tell you, we are adding, gross ads are coming in still strong on broadband. It's just the churn level. So we are trying to address The next stage, the churn part of that broadband proposition. Vivek, would you mind adding a bit more to that?

Yeah, thanks, Balan. Thanks so much for the question. Yeah, I think as Balan said, you know, really focusing on the churn side of the equation, which continues to be challenged with the competitive intensity here. As our competitors continue to expand the footprint, you know, our churn improvement initiatives, we've seen reductions in technical services, calls, truck rolls, etc. So those should have a lagging effect so that we should see the upside up churn in a while. But we've been having some record months on gross ads. I think, given the seasonality, we've seen like probably the best gross ads you've done in the last few years on the broadband side, of course, also fueled by some of the new build we have added into the market. So I would say the competitive intensity continues to be difficult in the marketplace, which is kind of reflected in the numbers, but the opportunity for continuing to add broadband subscribers is still there.

Okay, that's great. Thank you very much. Can I follow up, please, just with a quick question for Chris, actually, on cash flow? I think the integration costs are coming in a little bit lower this year. Could you just give us a quick update, please, on as we move into 2022, what will the delta be between integration costs this year and next year and also then synergies? So what would be the movement to free cash flow from the combination of all those things, please?

Yeah, without, I mean, we're obviously still working through our plans for next year and the budget process. In terms of integration as it relates to Puerto Rico, what we've communicated is we expect Q4 integration to be around $10 million. So that's a little bit of a step up from where we've been year to date. So that would bring the total to roughly $15 million. On the cost side this year, I think as of today, we would expect it to be higher integration costs. next year in 22. A lot of the hard work that Najee and the T&I team are doing around the mobile core and things of that nature happen during the year next year. So I'd expect to step up there. I think CapEx, we continue to spend CapEx on integration, and that will stay pretty constant, I think, in integration land next year as well. We'll have more detail on some of the synergies and views as we kind of finish the outlook for Puerto Rico when we report in February.

Okay. Great. Thanks.

And we'll take a follow-up question from Jeffrey Voldercheck with Pivotal Research Group. Please go ahead.

Thanks for letting me ask a follow-up. I had a couple on Chile and this VTR Claro deal, which Given how competitive it's getting, it looks particularly smart transaction. I guess, what are the regulatory milestones we should be looking for? The deals moving towards getting approved. I guess that's the first question. You're lighting up a lot of two-way enabled homes in Chile right now. Is that something you can modify so you aren't sort of overbuilding your future network or it's already kind of built in? And then third, are there any opportunities post-deal to potentially like monetize towers or anything like that that we're not aware of? Thanks.

I'll answer question two and three. And John Winter, our general counsel, is working really hard on the regulatory front. We'll take on one. On the new bill, we will continue to aggressively build out fiber to the home. And clearly, Jeff, you know, we can't coordinate with our partner yet. So we're not coordinating with them and you know, and overbuilding them or them overbuilding us. We're doing our own thing. And until the deal closes, but we're really bullish on the new bills. And, uh, and I think Chris may have mentioned it. I don't know if he did, uh, that we are in a lockbox, uh, situation right now after the signing. And, uh, so, you know, all spending is really JV spending at this point. And, uh, so we, uh, you know, we are just charging ahead. Um, You had a second question. What was the third question again? I forgot.

Towers, yes. Yeah, towers. Yeah, the towers.

You know, not much of the towers. There won't be much towers. I mean, you can imagine tele-sites and what they've done with that. We are not expecting any, you know, much activity in towers. Now, we do own some towers as well, but there's nothing to write home about. John, you want to talk about the regulatory?

Yeah, sure. Thanks, Balan. So we filed with the regulator at the end of last week the formal application process. We had already been working with our partner and the regulator on that. So that got filed formally. So that kicks off the phase one process, which will take about 45 to 60 days, maybe 90 days to get through and answer all their questions. we do expect that it will go on to a phase two given kind of the competitive environment and everything in Chile. But, you know, we feel good about the approval process. We feel good about the advantages this will bring to Chile and the consumers. So eventually it will get closed. It's just a longer process in Chile, and we're still expecting closing in the second half of next year.

Thanks, Jack. All right. Thank you very much.

Thanks, Jeff. And there are no further questions in queue. I'll turn the call back over to Balaner for additional remarks.

Thank you, operator. And I do want to thank all of you on the call. And just to reiterate, you know, we feel good about the quarter. I mean, strong operational growth, organic growth in RGU's, good numbers on postpaid and fixed. I would also say that our new bills, we're really excited about the new bills, and we continue to do that. We're really leaning into our thesis. The cash flow numbers that Chris talked about, clearly meeting and exceeding guidance on that front. And as you pointed out as well, Jeff, on the call, some really smart M&A decisions and transactions that we executed on this last quarter. So for all those reasons and more, we remain really bullish about this business and in the future for LLA. Thank you so much for all your support and have a great day.

And this concludes today's call. We thank you again for your participation and you may now disconnect.