America Movil, S.A.B. de C.V.

Good morning. My name is Drew, and I will be your conference operator today. At this time, I would like to welcome everybody to the America Mobile Second Quarter 2022 conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, press the star key followed by two. Thank you. Now I will turn the call over to Ms. Daniela Laquona, Head of Investor Relations.

Hi, thank you. Good morning. Good morning to everyone. Thank you for joining us today to discuss our second quarter financial and operating results. We have on the line Mr. Daniel Sash, CEO, and Mr. Carlos García Moreno, CFO.

Thank you, Daniela. Good morning, everyone. Carlos is going to make a summary of the second quarter of 2022 financial and operating report. Thank you, Daniela. Good morning, everyone. The trend towards high interest rates in the U.S. dollar market that began in March continued unabated in the second quarter with both short and long-term interest rates rising. By the second week of June, long-term rates peaked and began a downward trend as markets shifted their focus towards the negative impact on economic activity that is really derived from substantially high short-term interest rates. By the end of the quarter, the dollar had appreciated $1.6 million including the Mexican pesos, the Mexican reais, the Colombian pesos, and the euro. In the end of June, with 306 million worldwide subscribers, after incorporating 12.9 million subscribers from the acquisition of oil in Brazil. Organically, we had net admissions of 6.1 million, which includes 1.8 million posted subscribers, and Brazil led the way in terms of supported work, having added 339,000 subscribers, followed by Colombia with 272,000. We gained in the quarter 1.3 million people subscribers, of which approximately 350,000 came from Mexico and Colombia, more or less equal, and 257,000 from Brazil. In the pipeline segment, we connected 186,000 broadband accesses, of which half came from Brazil, 38,000 from Eastern Europe, 25,000 from Central America, and 20,000 from Mexico. In terms of package growth, mobile postage was the main driver of growth at 10.9%, followed by mobile prepaid at 4.2% and 5.5%. Our revenue reached 217.4 million pesos in the quarter, 3.3% more than in the yearly quarter in Mexican pesos. With net savings revenue expanding 4.5%. At concept exchange rates, the latter increased 4.9%, excluding Argentina because of its high inflation rates. So it's 4.9% between the impact from the incorporation of former oil clients and revenue from May 1st. Including that effect, savings revenues were up 4.2%, including that effect. Both brief and post-earning growth rates were similar in the quarter, approximately 8.5%. once the oil clients are taken into account. With 20% mobile service revenue growth, 13.7% without oil, Brazil was our top performer. As I will add, Eastern European operations posted 9.6% growth, Mexico 8.8%, Peru 7.5%, the Dominican Republic 6.9%, and Austria 6.2%. Broadband revenue was up 3.3%, a similar pace to that of the first quarter, where corporate network revenue rose, increased to 8.9% and 4.9% in the prior quarter. The decline in pay-per-view revenue moderated somewhat to minus 5.3%, mostly on account of the improvement in basics. The top performance in broken ground expansion was in the Dominican Republic at 15%, Eastern Europe at 11.3%, and Puerto Rico at 10.1%. This slide does not include Argentina because of its organization. Nonetheless, it must be pointed out that Argentina is exhibiting the fastest action goals in this area. Second quarter EBITDA totaled 82.7 billion pesos, a 4% increase in nominal trends, and 4.2% in constant exchanges, with EBITDA margin rising 0.2 percentage points to 38%. EBITDA expanded 10.3% in our Eastern European operations, 8.8% in Brazil, 8.6% in California, and 5.6% in Mexico. Our operating profit of 41 billion pesos in the quarter resulted in a net income of 13.7 billion pesos after the comprehensive financing cost of 18 billion pesos, which approximately half were net income spending. Throughout the first half of the year, our operating cash flow, which already reflects our working capital requirements, fully covered our capital expenditures in the amount of 65 or 60 billion pesos. We raised 43.8 billion pesos in net financing degree, a fund, 19.6 billion pesos for the purchase form, and a price adjustment related to the health platform, and 11.6 billion pesos in labor obligations. Shareholder distributions of 16.3 billion pesos in share buybacks were partially funded by 2.2 billion pesos in dividend income from our KPM and the license base. Given the size and tonality of our working capital requirements, we foresee a reduction in the second half of the year. Our net debt excluding interest stood at $14.7 billion at the end of June, at $7.1 billion in increase relative to December. It was equivalent to 1.36 times net debt to APM Unita. Approximately 55 billion pesos in debt obligations will be transferred to Central Latin America upon stream of American mobiles expected to take place in this . With that, I would like to pass the floor back to Daniel for Q&A. Thank you, Carlos.

Thank you. We can now begin the question and answer session.

At this time, I would like to remind everyone in order to ask questions, please press star, then the number one on your telephone keypad.

We don't hear you.

Apologies. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. So our first question is from Alejandro Galostro. Your line is going to be open shortly. Your line is now open. Alejandro, go ahead.

Thank you. Good morning, everyone. Good morning, Daniela, Carlos, Daniela. I have a couple of questions about Brazil. The first one is about the mobile business. We have seen the company reporting stable outputs in Brazil on a sequential basis, following the integration of all its small subscribers. Although I expect the outputs to decline slightly in the new subscriber mix, This is my first question. Thank you.

We don't hear you very well. Can you repeat it, please? Because we don't hear you very well.

Sure. I'll repeat the question. It's about the mobile business in Brazil. Since we have seen the company reporting stable outputs in the country on a sequential basis, following the integration of all its mobile subscribers, although I expected outputs to decline slightly on the new subscriber mix. So I was wondering if you could explain what is behind the Brazilian outputs in Brazil this quarter.

Oh, nothing new. I think you know what we have this quarter in Brazil. In Brazil, we grow tarts because we get the subscribers from oil, around 12 million subscribers, four and something on post-paid and the rest in the pre-paid. The organic growth besides oil was very good, around 14% is what we had. And we have a very good subscriber base. We still are doing our combos. We are also having a very good network. number portability, we're gaining subscribers in number portability. So all over all, I think we are doing a very good job in the prepaid and postpaid subscribers in Brazil, and that's why the ARPU is stable this quarter. As you pointed out, Alejandro, I think that, you know, we had already had a flat increase in ARPU in the first quarter. And this is basically containing the second quarter. It's a little bit higher. And yes, it is the final numbers even after the incorporation of the oil price. Yes. So we're having a 2.1% increase in NAFTA to 22 rand.

Okay, great. Thank you. And my second question is related to the fixed outcome business in Brazil. Since a few days ago, The CEO of Collado Brazil described a difficult competitive environment in the fixed global market in the country, mentioning high household penetration and market prices that do not provide an adequate financial return from his business segment, in his view, obviously. Nevertheless, you and your other firms in Brazil continue rolling over FDTH in the country. Could you please share with us your views on the competitive environment in broadband and what are the opportunities and financial returns that you see in the fixed outcome reasons in Brazil that justify upgrading your cable infrastructure to FTPH in the country? Thank you.

Well, I think the... I don't know exactly what Ostellix said, but it's true. The big broadband market in the country is a difficult market. We have been having other competitors and a lot of companies putting fiber to the home for the last three years. So there's other competitors left behind. Let's call them the other competitors that have been growing. They are regional. The ISPs, a lot of ISPs are over there and putting fiber, but I think in our case, We have all the telecom business also. We have broadband, we have TV, we have PIC, then we have corporate, and we have all the corporate applications and new services that we're doing. So for us, It's, I think, a good business to do fiber, to make the combos, and to grow in the Brazil market. We still have some areas where we haven't had some fiber, and we're putting, I think, this quarter, we're entering 24 cities, new cities in Brazil, and we're going to do it In fiber or in the other side, we're going to do also 5G. So we have two different ways of giving broadband. And we're going to start maybe this third quarter to do more 5G in Brazil. So with the fiber plus the 5G, I think we have a good telecom service for all the customers, and I think it's been a good business for us. Although what Felix is saying that the broadband market is very competitive, it's true. It's a lot of competition, a lot of ISPs, a lot of regional competitors, but we're doing okay. I think we have a good penetration in our network. We're penetrating very good all these new homes that we're having, good outputs. So all over all, we're okay on what we're doing in Brazil.

Thank you, Daniel. Thank you, Carlos.

Thank you. I think the conditions for a company like Claro are different than the conditions for the ISPs in Brazil. I think it's totally, we have all the services We have access to financing. I think it's going to be different what the rollout, what they are starting to do three or four years ago than what they are going to do the next two years. The financing is going to be different. So let's see how it's going to behave in the next years, the broadband market in Brazil.

Okay. Thank you for your comments.

Thank you.

Our next question comes from Alejandro Chavales from Credit Suisse. Your line is now open. Go ahead, Alejandro.

Hi, thanks for taking the question. Just a couple. The first one on traction, can you tell us what was the pricing adjustment that you mentioned? What was the amount? And also, you seem to be very confident that you can complete it in the next, let's say, two months. So why are you so confident? Have you had any feedback from the authorities or something? Or have you progressed on any form that leads you to be so optimistic about completing it?

Yes, on the city of LATAM we are optimistic. The approval has been advancing all over all in the country and we are optimistic that we can have the spin-off in the third quarter. Yes, that's true. We are optimistic and things are moving so that's why we are optimistic. We think that in the third quarter, end of the third quarter, we can have the spin-off done. And on the platform, Carlos, I don't know if you want to explain. What happened with platform is that besides the purchase price, there was to be an adjustment that was based on changes in working capital in particular. And there was an expected change because the closing of platform took place in the middle of the month. It was, I think, the 23rd of November, if I remember correctly. And so there was an adjustment that was estimated. And then based on that adjustment, we received an additional amount beyond the state . And this additional amount eventually was basically given back because by the time that we had been using financials, the complete financials, it seemed that the estimate was not so accurate.

I don't know if you mentioned, because I couldn't hear very well, but did you mention what the amount was?

I think it was around $200 million, what they gave us. Okay. And then we returned that. That's not what I'm talking about. It's always for a mortgage price, and then we basically returned that.

Thanks so much. I have a follow-up. Just in Brazil, now on the wireless segment on mobile, I don't know, now that you have successfully integrated the old subscribers, what are you seeing in terms of the competitive environment?

Are you already seeing market repair? Do you see players will try to win market share or will keep a stable market share?

What are your thoughts on Brazil in the mobile segment?

Well, we acquired the subscribers, and the subscribers are moving and making all the adjustments in our infrastructures, in IT, and everything is going to take around three, four, five months more to have everything done. But what we can see is that we... In the OE subscribers, we're having positive number portability. So we are net gainers on that. So there are more OE subscribers that are coming to Claro than leaving Claro. So that's more or less what we have been seeing. It's too early to see because there are only one and a half months, maybe two months on that. But we're confident. At the end of the day, we have a very good network. We have very good coverage and good speed. And the brand is doing very well. So in Brazil, as you see, the numbers that we have, we are doing very good in wireless in Brazil. And beyond the OE clients, I think what I mentioned at the beginning is that we gained 1.8 million postage, of which Brazil was the main contributor, because Brazil generated nearly 800,000 net additions. So this is over and above what we are getting by way of . So we are having very, very good subscribers. And at the same time, we are having . All over all, we are executing very well what we need to do on OI. We think that we're going to get more subscribers in portability than what we're going to lose. We have a very good quality of the network, capacity, good commercial execution. So we're doing okay. We're happy the way we're doing wireless in Brazil. And the numbers that we're showing say that.

Thank you. Our next question comes from Carlos Ligureta from GBM. Carlos, your line is open.

Hi, thank you. Good morning. Just two quick questions. The first one, on CAPEX allocation, I just want to confirm that you're maintaining your guidance of $8 billion for the year. And secondly, I guess this is a more general question, but I think it's very commendable that in most of your core countries, say for Colombia, you have managed to expand margins. And this is within the context of inflationary pressures. So I guess my question is, how are you managing to do that, given that you are not being aggressive in pricing? That would be my second question. Thank you. On CAPEX, I think we are in the budget that we have, 8 billion, plus some frequencies, if we have some frequencies, but the CAPEX is going to be 8 billion, around 8 billion for this year, and it's more or less what we had last year and what we are going to do for the next year. And then we can add frequencies in that cathex. And on Colombia, it's very interesting. I think in Colombia, for me, the results in Colombia were very good because even that we reduced a little bit our EBITDA, the growth that we have in Colombia was excellent. We have 610,000 net tax in the quarter, 60% more than previous year. We have 272,000 postpaid subscribers. 340,000 prepaid subscribers. So the growth was very good. Of course, that cost us a little bit more in expenses in acquiring the customers. But all over all, with this competition in prepaid in Colombia, postpaid in Colombia, we're doing very good. Wireless, all over all, we're doing very good. And on the peak side, Well, we are also not gaining as. There's a lot of ISPs over there also. But I think we're doing good. We're doing also the combos, the quadruple play, the triple play. And that's doing the EBITDA is more than 40%. So I think Colombia is doing very good there. Thank you, Daniel, for that color on Colombia. Go ahead, go ahead, Carlos. Just to say that notwithstanding the issues of inflation, as you mentioned, I think working in the margin increases in Brazil, in Mexico, in Austria, and in Eastern Europe. We're seeing it in Peru, etc. So we're seeing increases in some of the major operations of the company. And as Daniel pointed out, Colombia was a slight decline, but it took more than a concept for by the increase in... 60% more than the private union. No, I mean, I perfectly understand that. I think my question was more directed at How are you achieving to have these margin expansions in these core countries? Like I said, except for Colombia, which I know is a different case. Because as you can imagine, most of our clients ask if the margin expansion will be sustainable in this environment, given that you are not fully passing on the burden on inflation through wireless pricing, at least that we're aware of. Yes, well, the revenues are growing, the revenues are helping, and we have a very strict cost control and expenses, taking out expenses, and we have something that we call digital transformation, that we're moving a lot of things to do digital, and that is reducing a lot our costs. So we have a big policy in America Mobile to do everything through digital, and that's helping us to reduce costs and expenses. So it's what we have, and that's why we are... increasing our editors in these four countries. Thank you, Daniel and Carlos. Thank you.

Our next question comes from Diego Aragua from Goldman Sachs. Diego, your line is now open.

Yes, thanks. Good morning, everyone. So the first question is related to the JV with Lilac in Chile. Just want to get, you know, the latest on this one. So if you don't mind just to provide, you know, what is the status on the regulatory approval, that would be great. Thank you.

No, not too much to say. We're advancing. I think we are doing okay. We are moving with the regulators over there. And I think that we expect that in the fourth quarter we can do the merge. So that's more or less the timing that we have. Thank you. And maybe the second question. Yes. Yes, as you know, last month we finished Panama and as we said in the results.

Sounds good. Thank you. And I guess the second question is actually just a very follow-up on the previous one regarding track phone. I'm sorry, I couldn't hear well the answer. So would you mind just to explain again the adjustment that was made? Thank you.

I was explaining that besides the purchase price, there was an adjournment to be made based on changes in working capital. At the time that we made the closing, which was the middle of the month, we had made an estimate of what this adjournment would be, and we got paid an additional amount over the purchase price for this adjournment. financial statements were made up and so on. Some of these statements were not correct, and we basically have given back what was advanced from adjustment payments. So essentially for that.

Okay, understood. Thank you. Thank you.

Our next question comes from Leonardo Olmes from UBS. Leonardo, your line is now open.

Hi, good morning, everyone. I have two questions on mobile in Brazil. Sorry to go back on the subject, but hopefully we can have some fresh discussions on it. So, number one, the ICMS change, the tax reduction that happened in Brazil, do you see as an opportunity to increase Maybe share a wallet to take some of the reduction to your price to increase net revenue. What are your plans there that you can share with us? And the second question is regarding what you mentioned before about 5G in the context of broadband. I'm not sure I got it right, but Are you considering FWA for 5G? Do you see that as an option, maybe cheap option, maybe too expensive because of the equipment cost? How do you see FWA playing out in Brazil? Thank you.

First, the tax that they are talking about, seriously, it's... I think it's a good opportunity to increase the share of wallet for the people. This is something that we pass to the people. Then if we are not going to pass them to our end customers, then I hope they can buy more data or more megas or something else. So that's something that I think... it can increase our share of wallet in Brazil. So that will be important. Second, on the fixed broadband, yes, we're going to do 5G for fixed, and we're going to do 5G also for wireless. So we'll have a program and infrastructure... rollout rollout of 5g and that includes to give in the phones and also in fix so we have we're still gonna do fiber to other con to other cities in brazil As I said, we do 24 new cities in this quarter. And we also want to do, so there's going to be an alternative for our customers to have 5G in broadband or fiber in broadband, depending in the place, depending in the neighborhood, depending in a lot of things. But we can do all the technologies in Brazil. Yes.

that's very interesting and that is the first company to openly talk about that and that opportunity so very interesting looking forward to hear more about that have a good day everyone bye thank you thank you thank you our next question is from david joyce from barclays david your live line is now open thank you a couple questions please first uh you continue to have improving churn trends

in a number of countries like Mexico, Brazil, Colombia, Ecuador. To what would you attribute that, and how much further do you think that can improve? And then secondly, if you could just remind us or update us on when you think you'll have 5G fully rolled out in your key markets. Thank you.

Great. I think churn is a very important indicator. It means that the customers are happy. It means that we're giving good service, good coverage, good quality. So we hope and we're working a lot on having the best networks, the best quality and coverage all around Latin America. And I think that's working because, as you said, the churn is being reduced. In Mexico, specifically in Mexico, we already have 40 cities with 5G, and it's been doing very well. People like it a lot, and part of the increase in output is because people live moving to 5G plans, and 5G plans are giving you more, but you have to pay a little bit more. So that's more or less what we're seeing, and I think at the end of – maybe Colombia is going to take a little bit more of time because we don't have the frequencies, Chile a little bit more, but the rest I think we – in the main cities we can have 5G at the end of this year. Mexico, Brazil, we are going to have at the end of the year a good rollout in Tai Chi. Austria, we already have in Austria. Peru, we already have something in Peru. But depending a lot on the spectrum also. It depends where in which countries they are giving a spectrum or setting a spectrum, then we're going to roll out 5G very fast.

Great. Thank you very much.

Thank you. Our next question comes from Fred Mendez from Bank of America. Fred, your line is now open.

Hello. Good morning, everyone. And thanks for the call. I have two questions as well. I mean, the first one, again, back to the mobile segment in Brazil, it looks like in this quarter, you know, once you exclude Oi, you're up close to 6%. That would be almost like a double-digit pass-through of price. in our calculation here. So just wondering if that's the case, and if this is the case, if you've already seen the benefits from having a three-place instead of a four. I think I already mentioned something close to that in a previous question. That would be my first one. And then my second one, looking at the max, It looks like that over the last quarters, the service revenue has been under pressure. So just wondering if that's a signal due to the higher competition or maybe because now people are returning to work. And then the demand for the broadband is not as strong as it used to be. And then it's putting some pressure in the recent quarters. Thank you very much.

I think you're right. I think outputs have been firm on account of the market repair, as you see now some consolidation of the market. And that has been helping in the context of very strong inflation that we are seeing currently in Brazil. I think the last number yesterday, I think, was up 12%, no? so uh i think uh we are now uh saying that it's important to try to keep up with the regulation and this has been this is uh uh showing us what we get what was the second question very very very clear carlos thank you uh the second question is about the max

At least once you look at the service revenue on a quarterly basis, it looks like for the last two years, the pressure is around minus three. And there was a pickup by the end of the last year, positive. So just don't know if this pressure comes from a higher competition on broadband, or maybe that's just lower demand now that with the supposedly the end of the pandemic, people are returning to work.

I think on Telemix what we're doing is we're running more Fiverr. We're moving more subscribers to our Fiverr network. So I think more than 50, maybe 60% of our subscribers are moving to the Fiverr that we're running out. On broadband, the revenue is growing 3.5%, so we're starting to grow on that. And in the corporate segment, I think Telmex is doing very good. So that's more or less what we have in Mexico in peak. So there's more competition, of course, but we're rolling more fiber, we're doing more households and we're moving a lot more subscribers that we have in copper to fiber and that's giving us a good churn and I think to add to what Anneli is saying, basically, you know, if you see growth and driving growth, moving slightly up, it's 3.5 percent this quarter, last quarter was 3.1, and the previous one was 3.0. So it's been steady and improving. The last two quarters, what you see is corporate networks. Business is stronger and intends to be more volatile. These quarters, it was slightly positive 0.1. Prior quarters were negative 1.4. The prior quarter was positive 5.5%. It's a bit more volatile. So steady growth and revenue growth. Corporate net worth is in the aggregate good, but it tends to be more volatile than the quarterly growth basis. And then what we're seeing is at both revenues, at both revenues, you know, with any incumbent, you'll see some headwinds in both revenues, and those will continue to be there. But the amount that is left is much less than used to be there. Perfect.

Very clear. Perfect. Very clear, Daniel and Carlos. Thank you. Thank you.

Our next question comes from Marcelo Santos. Marcelo, your line is now open.

Hi, good morning. Thanks for taking my question. I wanted to dig a little bit deeper into the fixed wireless strategy. where you aim to launch broadband using 5G. Which are the countries you aim to launch that? And is the idea to steal clients from legacy networks, or do you think this product will be competitive against fiber players?

No, I think there's no fiber all around Latin America. To start with this, we have like around 3 million fixed wireless subscribers through Latin America. So this is not new. We are doing good. And it's where they have bad networks, bad broadband networks, or there are no networks in these places. And we have these ones in 4G. So I think that with 5G, the new boxes, if the new boxes are, when there's economy at the scale and we have good prices on the 5G boxes, I think 5G would be also a good product For all these places, low densities, no good networks, not fiber, difficult to roll out fiber. Some people, let's say in Austria, there's a lot of these products because people don't want to have cables inside the houses. So they put the box, and then you don't have to cable all the household. It's a different, it's a new product, and I think it's going to be very successful in Latin America. We already have around 3 million subscribers in this big broadband. It's here, Latin America plus Austria we have.

Perfect. And the second question would be about the ICMS in Brazil. You're very clear that you're going to pass that to prices, but are you creating some offer to try to keep somehow that money inside America Mobile, like something to take advantage that the customer will now have a little bit of savings and try to sell him something extra? Are you creating something specific to try to capture that?

No, we don't have anything specific. specific at this moment, but we're working and thinking what will be the best for our customers. So we will see what will be the best. We're still thinking what will be. But all over all, if we give or don't give anything to the customer, I think the customer is going to pay less. And I'm sure that he's going to spend more in telecom by reducing this ISMS.

Perfect. Thank you very much. Thank you.

Our next question comes from Andres Coelho from Scotiabank. Andres, your line is now open.

Yes, thank you for taking my question.

If you can give any color on taxes effectively paid in the first half of the year. I think taxes paid were increased to 31 billion pesos for 15.5 billion last year. Wondering if there is anything extraordinary impacting taxes like profits connected to the sale of track funds. Also, second question, please. We have seen a certain slowdown in buybacks in the last few weeks. If you can comment on the outlook for buybacks for the rest of the year. Thank you very much.

I think in the case of the taxes, the effectively paid taxes, what you see for the first half of this year compared to the first half of last year is that it is in the first half, as you know, it's in the first quarter. you make the tax payment corresponding to the fiscal year or the fiscal year. And at the beginning of 2021, we have to make the payments for the full taxes of 2020. And in 2020, we have quite substantial foreign exchange losses and that allowed us to offset these losses against taxes. So there was less of a permanent taxes on account of that at the beginning of 2021 as compared to 2022 because in 2022 we haven't had this issue. We didn't have these kinds of effects losses during the year 2021. I think that's it. yes thank you so the the the taxes related to the track phone to the sale of platform are impacted last year they were paid in november of last year they were paid this year the traction taxes i think the tax on taxes were for the most part paid at the time of the second phase and that is not the case in november so that that is not could not appear in the first half numbers for those of you in the first half numbers understand the statement of the past fiscal year and we look at the taxes for the year 2020 and the taxes for the year 2021 in Mexico on account of the of the year 2020. Understood. And the other question has to do with the share buyback and question. Correct. We've seen a certain slowdown in BILACs in the last few weeks. You can comment on the outlook for BILACs for the rest of the year. I think we don't focus on a median pace. I think it has a lot to do with the liquidity. We have a scan. We have We will be basing our share value throughout the year. That's what we've done always. And it has basically to do with whatever excess cash we expect we will have cutting our dividends. We are not seeing anything important in M&A. I want to say that we're not buying anything more than what we've already acquired before for the second half of the year. We are not seeing, as I said, anything extraordinary, so whatever council we can edit, you know, should allow us to stay where we have said we would stay in terms of leverage, and it works with the distributed share funds. Understood. Thank you. Thank you.

Our next question comes from Walter Pysik from LightShed. Walter, your line is now open.

Thank you. Daniel, I'd just like to quickly follow up on that last comment. I mean, if you look at 2021, the pattern of your share repurchase increased in the second half of the year.

And then it slowed down in the first half of the year. I realize that you sold track phones. You lost some free cash flow right from selling TracFone. But is the first half of this year compared to the second half of last year in terms of share repurchase activity, is that more a function of the seasonality of how you do distributions to shareholders or share repurchase, or is it the fact that TracFone dropped out the free cash flow, so you just had a little less free cash flow to spend on share repurchase?

I think throughout the year, we tend to have all things equal in the first half of the year and second half. I mentioned that the capital is very seasonal in America. It demands a lot of funds for months of the year. And then it tends to normalize throughout the rest of the year. So typically, first half tends to be and less intense than second half, all things equal. We did have more share by the first half of the year than we had last year in third or tenth. So that's clear. And we're going to have more business also this year than last year.

OK. Thank you. Sorry for that. I just want to be clear on that. Just going back to an earlier answer on CapEx, Daniel, you mentioned that you can still intend to spend $8 billion this year or next year. The dollar has been very strong against the currencies in all of the markets that you operate. I think a lot of people are concerned about the global economic outlook. At what point if at all, like if the dollar continues to strengthen or if the economic outlook gets worse, do you consider maybe paring back on your capital investment to adjust for what's going on with currency and economic outlook?

say i think you are right we have already do the budget and all the analysis for this year but we're open to see what's going to happen next year also depending on the demand the the demand is not so high then we don't have to put too much capacity so we're going to be open and of course if we don't need it we're not going to put capex that we don't need so the capex that we're putting has to give us some return and that's what we're looking for so we're open and we don't have anything done what I said is that we have an average of 8 billion but remember that in 2020 we reduce that because of the pandemia and then 2021 we do that 2022 we're gonna do that but we don't know exactly what's going to be 2023, and we're open to the data. Yes. Great. Thank you very much. One last thing on the distributions. I was saying that for this year, I think it's 10% increase in . And I suppose we are paying everything in one installment in August. I appreciate that.

And my only feedback for that is I think that investors, at least income investors, I think seem to prefer rather than once a year, one quarter a year, maybe the consideration of a quarterly dividend. I mean, I appreciate everyone loves to see growth in dividends, so that's a very big positive for sure. But maybe a quarterly dividend as opposed to once a year might be, you know, a possibility in the future for 2023. Just a thought.

You know, we'll review that and we'll keep you posted. Thank you.

Thanks, Carlos. Appreciate it.

Thank you. Thank you.

Our next question is from Pani Kanemuri from HSBC. Your line is now open.

Thanks for taking my question. I have a couple of questions. So the first one is that in the group level, the service growth, the service revenue growth was much higher than EBITDA growth this quarter. But that is something that we have not seen for a long time. Given that the macro remains very difficult,

Do you see that your EBITDA growth would be, you know, lagging so we can only grow there for the rest of the year? That's my first question. Well, it wasn't too high because the service revenue was 4.9% growth and the EBITDA 4.2% growth. So it's not a big difference, no, on that. And as we discussed a little bit, it's also depending, the revenue is going well. And the EBITDA, it depends a little bit on cost and expenses, inflation. We have a lot on that in all the countries, different inflation, different increase. increases in different countries, but I think this quarter we maintained very good our EBITDA. I think it's good. We still grow a lot. As I said, in Colombia, it was also a 60% growth, and with the 60% growth, we have more costs selling costs and acquisition costs. But I think all over all, our service revenue and our EBITDA has been growing well. Yes, and I presented it earlier in the last . And this corresponds to a margin that is slightly higher than where we were last year at 38%. So I think it's a higher margin with higher revenues, and that's And growing well with three organically, we have been growing 3.1 million subscribers in the quarter. So we're still growing very well. Commercial, sir. Commercial, sir, yes. Thank you. So my second question is regarding the markets that are struggling in EBITDA, basically Peru and Chile. So, how do you see the competitive dynamics there and how do you think that EBITDA will evolve going forward? Well, in Chile we are not doing well. I think the country has been very competitive and difficult. Also, we lose a little bit of revenue because we used to have an NDNO1 and they put the network and then they are not buying from us, so we lose a little bit of revenue over there. But we're working. We're reducing costs and gaining. I think we have a good quarter on the wireless. We're going to see what does the competition and the market do. But I think we're starting to gain, again, market share in the wireless side. And we need to improve more on the commercial side. I will now. Sorry, on Peru, what's our outlook on Peru? If you see Peru, everything is on acquisition and a little bit on subsidies on equipment. So if you stake out that, we're growing, our revenues are growing well, and we have to take advantage of that market. So we think that There's growth in the market. We're going to go there and we're going to try to take that growth there. So review carefully and see that if you compare this year against last year, this year we have more acquisition. The only thing that increases in cost and expenses is the acquisition cost and a little bit of subsidies in post-paid and that's all. The rest I think we're doing very well in Peru, growing also in the peak size. So Peru in my view is doing well and that's where we want to go, grow the company and grow the readiness. Thank you. Thank you very much. Thank you.

Now I turn the call to Mr. Daniel Hash for final remarks.

I'll just say thanks to all of you for being on the call, and thanks to Carlos and Daniela. Thank you very much. Thank you all. Have a good day.

This concludes today's conference call. You may now disconnect.