TIM S.A.

Good morning, ladies and gentlemen, and welcome to TINASA 2024 Fourth Quarter Results video conference call. We would like to inform you that this event is being recorded and all participants will be in list and only mode during the company's presentation. There will be a replay for this call on the company's website. After TINASA remarks are completed, there will be a Q&A session for participants. At that time, further instructions will be given. Now, I'll pass the word to Vicente, head of IR. Please, go ahead, sir.

Hello and welcome to TeamSA's 4th Quarter 2024 Earnings Conference. I'm Vicente Ferreira, Head of Investor Relations. This video highlights our recent performance and the updated 3-year guidance. Afterward, we will have a live Q&A session with CEO Alberto Grizzelli and CFO Andrea Viegas. Please note that management may make forward-looking statements, and this presentation may contain them. Refer to the disclaimer on the screen and on our Investor Relations website. Now let's review our results.

Hello everyone, I'm Alberto Griselli, CEO of Team Brazil. I'm pleased to present to you a robust set of results in a dynamic year, when we overcame challenges and took advantage of our strengths to meet all of our targets. 2024 was marked by powerful cash generation, thanks to solid financial and operational results. We closed the year with service revenue growing 6.4% at the top of the guidance range. At this speed, we outpaced inflation even with a second half of tougher macro environment, an unfavorable comparison base. In the fourth quarter, service revenues grew 5.1%. Our revenues were driven by mobile services, which expanded by 6.6% compared to 2023. In mobile, highlighted the excellent performance of postpaid, rising close to 9% year over year. as a consequence of an expanding customer base with migration and a low churn of 0.7%. Our EBITDA ended 2024 increasing by 8% when compared to 2023, with another year of margin expansion. This shows the consistency and ability to operate efficiently. Our proxy for operating free cash flow grew close to 23% year over year, As a percentage of revenue, we reached more than 20% in 2024. Innovative offers, continuous infrastructure development, and service improvements supported these strong financial results. Behind our 3B strategy lays an idea of delivering what clients value the most. We are focused on providing exceptional customer value through network quality, affordability, and service excellence. Under best network, we focus on expanding 5G coverage across Brazil to migrate traffic and clients and start to impact clients' perception positively. We have more than 600 CD covers, 20% more than second player. As a result, 5G traffic has more than doubled compared to a year ago. For 2025, we will ensure consistency in network development while promoting the message of network quality leadership to consumers. The emphasis on technology innovation and network densification to address network gaps demonstrates a proactive stance in meeting customer needs and expectations as network quality becomes a core brand attribute. In Best Offer, 2024 was marked by innovation through content portfolio expansion while guaranteeing data monetization. We launched new concepts in postpaid and prepaid in parallel with turning an historical gap into a differentiation element. We expect to deepen our distinctiveness with digital ecosystem expansion and a renewed more-for-more approach. Innovation will again play a role in using next best action tools to personalize and revamp our prepaid go-to-market strategy. To deliver the best service during 2024, we use technology in our favor to maintain service quality indicators at the highest standards. Digitalization continues to be an important source of opportunities, and our new app should become a relevant driver for that change. In 2025, Customer Journey Evolution will continue aiming at reducing pain points and improving overall quality. A seamless experience in our digital channels, associated with Resolubility features and value-driven management of our clients, showcases Teams' dedication to providing tailored solutions that meet diverse customer needs. In recent months, we have seen growing concerns about Teams' ability to overcome challenges imposed by its mature peers and new entrants. but we are sure of our strengths in client attraction and retention, client monetization, and service and experience. TIM outpaced its peers, growing the postpaid base by 7.3% year over year, reinforcing the idea that net addition should be read relative to the size of the customer base and not only in the absolute number. We were the only large player to defend our market share in postpaid against the new entrants. As we've been explaining, nowadays this is primarily a game of migration and churn reduction. Thus, maintaining postpaid churn at low level is vital to have a strong client-based profile. Another area of clear strengths for TEAM is the monetization of its client base. We have the highest ARPU of the industry, above 31 reais, growing 6% versus 2023. To accomplish this, we combine more-for-more strategy plus upsell tactics to move clients up the ladder and cross-sell initiatives to expand our relevance in clients' pockets. Higher customer engagement also helps increase loyalty and consequently reduce churn. About 28% of our customers have more than one product. It is fair to say we have a diverse universe of metrics and sources when it comes to measuring care and service quality. There is the sector regulator, Anatel, private protection agencies like Reclamia Key, public consumer protection agencies such as ProCom and Consumidor.gov, and also internal metrics. When looking at the numbers from these different sources, it is clear the team has an outstanding resolubility being champion in most of them, solving the problem faster and according to clients' expectations. We still have room to improve when it concerns the number of complaints. We are the least complained about in some of these sources, but we have yet to close some gaps in others. Finally, we have the network evaluation. There is no doubt that TIM has the best network in Brazil. We start being present in more places than anybody else, both in 4G and 5G. And according to the recent report of OpenSignal, TIM was the most awarded operator in the mobile network experience report. We won seven out of 14 categories, leaving behind our peers. In this outstanding result, highlight that we are the number one operator in consistent quality for three years in a row. According to OpenSignal, this metric connects the most with clients' experience. The challenge we face for network, and you know well, is related to perception, but this is a marathon and not a sprint race. Consistency in having the best network metrics and consistency in communicating this leadership to consumers is essential. In sum, we have our strengths and work to ensure they remain a differentiating factor for teams. At the same time, we transform our weaknesses into opportunities to improve teams' overall operational performance even further. Now I will talk about areas of opportunity to generate new revenue streams. They are becoming more and more relevant to our mobile performance and this will be the case for 2025 and the years ahead. Throughout 2024, we were regaining momentum in the development of our digital ecosystem. Our 5G fund managed by Upload Ventures reached three investees, and more recently Minerva Foods became an LP. The arrival of a new major investor further strengthens the fund's pioneering performance within an innovation ecosystem. Customer platform projects are evolving accordingly and bearing fruits in different segments. In health, Cartao di Todos reached more than 160,000 families enrolled over the last six months. In education, Descomplica maintains a solid rhythm to reach 800,000 enrolments in courses. In digital and entertainment services, the EXA partnership reached an important milestone, with Team earning the right to subscribe to 27% of the company. Finally, our mobile ads and data monetization business rapidly expands as we integrate our proprietary inventory with Google and Meta and maintain a consistent rollout of Team Insights' new products. Another frontier for revenue growth is B2B IoT. Since the beginning of this project, we summed more than $700 million in contractor revenues. In 2024, we added $270 million in new contracts. Most of these contracts refer to three verticals. First one, agribusiness, where we have close to 20 million hectares covered with 4G. The second one, logistics, with highways representing most of the growth. And our coverage spans more than 5.6 thousand kilometers of roads. The third one, utilities, for which we sold more than 340,000 smart lighting units with connectivity services. During 2024, we focused on structuring sales processes and internal operations in a proactive approach to capturing market opportunities and becoming a reference among B2B clients of these verticals. For 2025, we need to further develop this opportunity, aggregating solutions and expanding our addressable market. We are working with a robust pipeline of prospective clients across various verticals, so the future looks promising. Now we move along to more financial details with our CFO, Andrea.

Hello everyone, I'm Andrea Viegre, CFO of TEE. I'm pleased to share that we ended the year with solid figures overall, confirming our capacity to increase cash generation and create more value for our shareholders. Once again, we delivered an EBITDA that grew more than inflation, with a 6.2% year-over-year increase in the fourth quarter. This contributed to a strong year, with an 8% year-over-year increase and a margin reaching 49.6%. After accounting for lease impacts, EBITDA after lease rose by double digits in 2024, with the margin expanding by 1.7 percentage points. This was a consequence of our efforts to conclude the decommissioning tower project faster than expected. and to renegotiate our contracts. It's worth mentioning that most of the fines were paid, with only a small part remaining for 2025. Our net income grew double-digit for the seventh consecutive quarter, consolidated a year delivering the highest organic net income in our history, reaching more than R$ 3 billion. Our shareholder remuneration achieved a new level, totaling R$ 3.5 billion, with a yield of 10%. Our consistent operational performance combined with disciplined capital allocation resulting in capex over revenues reaching 17.9%. This drove strong growth in operation cash flow, which increased by almost 23% year over year, with the margin expanding to 20.5% in 2024. Our balance sheet remains strong, supporting shareholders remuneration and future projects. The 2024 results reaffirm our ability and commitment to fulfill our promise, even in the face of challenge. Now back to Alberto.

Before we conclude our results discussion, it is worth recapping some ESG developments in 2024, confirming teams' commitment and highlighting partnerships and projects that generate positive social impact. Under the partnership with Geraldo Falcois, we have transformed Favela Marte into a fully connected 5G community. Illustrated teams dedication to bridging the digital divide. As always, our ESG initiatives are embedded in the company broad strategy. So we are testing FWA solution learning how customers and network behave in an actual network condition. In addition, we continue to perform outstandingly in multiple indexes and certifications. By integrating social responsibility into its core strategy, TIM enhances its brand reputation and contributes to long-term value creation. To conclude this section, it is worth highlighting that we met all of our targets. We stood at the top of the Service Revenue Guidance range with excellent postpaid performance. Check. A bid that grew above revenues with margin expansions. Check. CAPEX remained flat in the middle of the range. Check. Operating cash flow with a robust performance grew by more than 20%. Check. Last but not least, shareholder remuneration is confirmed at 3.5 billion reais following our proposal for the shareholder meeting to approve 2 billion in dividends. Check. Looking ahead, setting the stage for team strategy direction in the coming years, we reinforce our focus on sustainable growth by adding new revenue opportunities and putting renewed efforts into efficiency, reflecting a commitment to long-term value creation. Our updated plan reflects changes in macro and telecom market conditions. We evolve our priorities to extract the most from our four strategic pillars, mobile, B2B, efficiency, and broadband. Each area is supported by specific strategies aimed at enhance our value proposition in mobile, double down on B2B, extracting the most from our assets and resources, while monitoring for opportunities to complement or transform parts of our business. The emphasis on people, society and the environment underscores team commitment to responsible business practices. By prioritizing these areas, team aims to strengthen its market position and drive sustainable growth in a competitive landscape. With that, we introduce the new guidance for 2025-2027, remembering that our projections are always subject to revisions in the face of material changes in the macroenvironment and business development assumptions. Our strategic guidelines for sustainable growth focus on revenue and EBITDA progress with margin expansion. This is a combination of mobile corevolution, increased relevance of new revenue streams and renewed efforts in efficiency. Our investment plan points to a flattish capex despite forex oscillation and maintenance of the leadership status of our network. Once again, this reflects a commitment to efficiency and operational excellence. These dynamics translate into strong cash flow evolution with margin expansion. And this cash being generated is returning to shareholders in the form of interest on equity and dividends. Once more, we are upping our targets for that as well. Reaching the end of this video, I want to thank our entire team for delivering such robust results. We endured many challenges and found solutions to keep our ship in the right direction and running at a solid pace. Now, let's move to the live Q&A session.

Thank you, Alberto. Before proceeding to the Q&A, I would like to pass the floor to Alberto Griselli for initial remarks. Please, Mr. Alberto, the floor is yours.

Thank you, and good morning, everybody. Before we start the Q&A, just a remark on the material fact we just disclosed about CISIC Bank. Basically, we enter into an agreement that settles all the disputes, terminates the partnership, and monetizes our participation subject to some regulatory approvals. The settlement confirms the strategic importance of customer platform initiatives in generating value of the company and its shareholders. We will continue to work to expand the ecosystem of partnership, including new opportunities now in the financial services. Additional details of the financial economic impacts of this deal will be disclosed in due time. So we can now pass to the live Q&A session, please.

Thank you, Alberto. We will now start the Q&A session for investors and analysts. If you wish to ask a question, please press the raise hand button. Wait while we pull four questions. Our first question comes from Marcelo Santos from JP Morgan. Please, Mr. Santos, your microphone is open.

Hi, good morning, Alberto, Andrea, Vicente. Thank you very much for taking the call and taking the questions. I have two. First, on the guidance, what are the main macroeconomic assumptions embedded, like perhaps inflation effects? What are you considering to put those numbers? And the second is, if you could discuss a bit the outlook for prepaid and if there are relevant initiatives that you are planning of targeting to perhaps improve the trends that you can control. Thank you.

Sorry, Marcelo, I was in mute. So when we look at the guidance, basically this has been elaborated, our budget has been elaborated a few months ago when the situation was a bit easier on inflation, specifically on the other elements We are sort of aligned in terms of forex and GDP growth. But since the guidance has been issued basically today, over the last week, we've been working with more with assumption on inflation that are in line with the current trends, the one that we're seeing now. Of course, you know, there is a lot of volatility of inflation. of inflation. A few weeks ago, we were below five. Now we are below five. So we need to live with this. We are used to this deal with this since we operate in Brazil for a long time. But basically, the main difference was in inflation when we prepared the budget and we updated this budget on more actual numbers as we issued the guidance today or yesterday night. When it comes to prepaid, so our performance are basically driven by a number of facts. The first one is related to the immigration of customers from prepaid to control. So this is part of our strategy. And of course, these drain revenues from one side to move in a creative way on the other side. So the benefits of doing this, that the revenue becomes a larger revenue in postpaid and our ability to monetize postpaid and control It's better than in prepaid. Then there is another factor that is basically related to everybody, ourselves and our competitors perform this strategy. So if you look at the recharge market as a whole, it's decreasing over time. And so this is increasing as the market. So this is the context where we operate. In our case, in the fourth quarter, we have a tougher comparative base because in the same quarter of the previous year, We were issuing a price update from 15 reais to 17 reais. So this is explaining the intensity of the decline for the last quarter. And just anticipating a bit, also the first quarter of this year, it's a tougher competitive basis versus the first quarter of last year, because this year, for example, we have Carnival in March, and this tends to reduce the number of available days for recharge. Having said that, we have been working for a while now, on a revamp or turnaround of our prepaid business. We launched a new offer, a new communication campaign, as you probably remember, last year. And so we are working across the board on the offer, on the communication and on the channel and our own customer base to increase the performance of prepaid goings-for-all. This takes some time, but our commercial team is fully focused on that.

Thank you very much.

Our next question comes from Bernard Goodman from XP. Please, Mr. Goodman, your microphone is open.

Hi, good morning, everyone. Thanks for taking my question. Actually, I have two on my side. The first question is related to CapEx. Your guidance seems quite fair, but it's somewhat surprising that CAPEX remains stable, leading to a decrease in CAPEX II sales in the coming years. We have already discussed the topic of greater efficiency and the structural changes in the industry, but it would be interesting to understand more about the company's main efficiency levers. Is this level sustainable considering a higher exchange rate? And the second one is about your fiber operation. You mentioned that you are open to multiple options. I understand that the market's more challenging today and more competitive, but valuations also reflect these dynamics to some extent. In this context, what is your appetite in this segment? Would you consider selling the current operation as well, or is that off the table? Thank you.

Okay, Bernardo, let me go for the first one on CapEx. So when you look on CapEx, we have a number of levers, and I will start with the easiest one. So if you look at CapEx, first of all, a big chunk of this CapEx is network CapEx. So, as you know, we've been able to reach the largest 4G coverage a couple of years ago. We closed 2024 with the largest 5G coverage also. And once you look at the drivers of this cost going forward, primarily it's less about coverage and it's more about the quality of service and capacity. So this is the main driver. How do we address the efficiency of the CapEx deployment while maintaining the leadership in quality of the network service that we offer? Because that's the trade-off. The first one is primarily related to the way we negotiated already with our main providers of the 5G and network services, whereby we put together last year, we discussed this, I think, primarily one-to-one calls. a quite competitive tender where we were quite successful in lowering the TCO of our network cost. And by doing this, of course, we took some execution activities on our side, like the swap of the network on Sao Paulo that we are shifting from one vendor to another vendor. By doing so, we optimized the TCO. And so when you look at the numbers, $1 in 2025 will deliver more than $1 in 2024 because of the economies that we achieved. So this is the first driver. And this is primarily achieved because it's something that we did last year. The second one, it's primarily related to the assertiveness of the investment. So we got a quite... strong methodology whereby we allocate capex where we have or we expect to have commercial advantages. And we call this AAA approach. And so we align everything, capex, commercial, and communication in order to increase the efficiency of our capital allocation. Then you have your last comments about the risk of the forex related to our contract. I will pass this to Andrea to just explain a bit how it works for us.

Hi, Bernardo. We have a minimum exposure to exchange rate, considering that the majority of our contracts have exchange rate bands. So, as I mentioned, we have very little exposure to fluctuation of the exchange rates.

Going to your second question about fiber, so a few comments before articulating the answer on the non-organic option. So if you look at the market itself, as you rightly pointed out, the market is very competitive. There are a number of reports from the sales side highlighting this every month. So there is a lot of competitive, especially on price. So it's not very attractive irrespective of valuation because it's difficult to address this without a strong and widespread consolidation process. That is not happening at the end of the day. For us, it's a small business because it's below 4% of revenues and it's dilutive on our free cash flow generation. So our organic stance is basically to optimize the operation. Of course, when we say that we are open at all options, you have the option, one extreme where we consolidate and on the other extreme where we sell. And there are a number of variety of options in the middle. And when we say that we are open on all of them, that's we're looking at all of them. And so we just need to find the right target or the right moment to move forward with one of these options.

Okay, very clear, Alberto and Andrea. Thank you.

Our next question comes from Leonardo Olmos from UBS. Please, Mr. Olmos, your microphone is open.

Hi, everyone. Good morning. Thank you for taking the questions. I have a couple of them. The first one is, is regarding the C6 partnership. I know you cannot disclose how much are you actually monetizing of that partnership. We understand that, but it will probably be below what was on the balance sheet, right? So we may see a write-off that will likely be non-cash. But could that affect dividends, even though it is non-cash, even in a non-recurring base? So that's my question on the C6 impacting dividends. And the second one, unrelated, is if you could discuss a leasing, how much of the leasing is adjusted by IGPM? And what are the other inflation metrics that are used to adjust leasing? Thank you.

Leonardo, hi. So I will take the first one and then I will pass the floor to Andrea for the leasing question. On the first one, actually the monetization factor is there. So we are talking about 270 million in gross revenues that have been accrued over the length of the partnership and the other 520 million reais. And this is a positive impact on our cash. And I think that here the answer is we always say that we are going to generate more cash over time. So our cash flow are expanding and this is going to be a positive contribution on expanding. And when it comes to expanding cash flow, as you see in our guidance, we are increasing shareholder remuneration rates. concentrated in dividend and interest and non-equity. And therefore, we got something more now coming to us over the course of 2025 that was not in our guidance. So the approach is always the same. If we don't distribute 100%, you know this, because we are looking at opportunities in some verticals and some are business lines, but it's a positive on our cash profile.

Hi, Leona. Regarding to lease, as you know, these items, the major impact that we have in inflation, we are continuing to renegotiate all our contracts. And now we have a part in EPCA and a part in EJPM. But the major part is EPC. But we are continuing to renegotiate considering that we ended the commission program with the sites that came from oil, but we increased the network related to 5G. So we still have space to renegotiate these contracts.

Understood. Thank you very much. So, obviously, Andrea, the guidance already assumes all the current inflation situation, right? Very good. And very good answer on the dividend, Alberto. Thank you very much. Have a good day. Thank you.

Our next question comes from Vitor Tomita from Goldman Sachs. Please, Mr. Tomita, your microphone is open.

Oh, good morning, all. And thanks for taking our questions. We have two questions from our side. The first one is on the guidance. If you could give us a bit more color on the drivers for further margin expansion, given that your profitability is already quite high for the sector and given the inflationary pressures ahead. And our second question would be more on the balance sheet side. We have noticed the receivables increasing faster than revenue continually over the last three quarters, even though receivables had been growing more in line with revenue prior to that. Could you give us some more detail on the dynamics for receivables? Thank you very much.

Hi, Vitor. Relating to the guidance, as the previous guidance, we are confirming that we increased the EBITDA more than revenue. we will do this with the continuance of our productivity. We have a very good results in the last quarter in margin related and the margin expense will continue to happen in 2025. This will come with our continual focus to work in zero-based approach. We are uh looking for new opportunity in digitalization our process also uh as i mentioned regulation all the countries that is related to inflation and uh and the continues to see opportunities in in maker by initiatives uh Related to the free cash flow, the second question about the increase in receivable, this is the seasonality of our dynamics. Remember that we have a first semester of the year with a seasonality in the second semester with another seasonality. This is inside our expectations. We don't have any kind of... extraordinary effects that affect this. I don't know if I addressed your question.

Just a quick follow-up. Looking at the previous quarters, there was already an increase in receivables in the second and third quarters. So thinking more about the underlying trends there than just the seasonality.

No, sorry, if it's the seasonality, what? No, the seasonality of the app, because you see an increase in the third quarter and the fourth quarter, right? So, yeah, the second semester, and then we have, also we have an increase in the IoT receivables, because we increased the B2B, and the B2B have a very little different dynamics from the mobile, the customer, the consumer mobile. So we will see a near increase, but this is related to the increase of the IoT revenues.

Understood. Thank you.

Our next question comes from Fanny Kanumuri from HSBC. Mr. Kanumuri, your microphone is open.

Hi, all. So my first question is related to your revenue guidance. Is it fair to assume that most of this revenue growth that you have is coming from postpaid growth, considering that your fixed segment and prepaid segment continue to be under pressure? And what part of what percentage is actually attributed to the new initiatives that you have in terms of the revenue guidance? The second one is last year, there's been more challenges in terms of pricing up and giving more for more. Do we see that challenges continue this year? And is a price up possible for the next few years? Thank you.

Okay, fine, I will take the two. So when it comes to the growth drivers for the revenues going forward, there are a number of drivers that we are considering. So one of the big one is clearly postpaid. We're being performing well over many quarters, and we foresee this to happen going forward, driven by the price adjustment that we do. and I will come a bit more on this, on the rationality of the market, as we see now, the prepaid to control migration that will continue, and the intrapostpaid migration that is happening at double-digit rates and that continues to drive revenues up. So, yes, postpaid is an important driver for revenue growth. I think it is fair to add that there are two other important business lines in the revenue growth. One is related to the customer platform strategy that we just discussed at the beginning of the call, whereby we see monetization opportunities in the partnership that we are running, plus the new one that we are building. If you look at Cartao de Todos, for example, this is something that we launched some time ago. We have been tweaking the value proposition, and in the last six months, we brought in 160,000 subscribers. So it's a good number in our own assessment in terms of this progress of the thing that we're doing. We are open again to work on financial services. This is another large set of parties that we can work on. Then we got the energy. That is another priority. So the overall customer platform can contribute in our revenue growth going forward. The third one is the B2B business line, where we have been capturing revenues over the last two years. So it started basically the IoT solution from zero, and we will continue to push this going forward in the verticals that we identified, including an expansion of the portfolio and capabilities that we are offering to our customers. So I would say that when you look at this tree, And these three lines are the main revenue growth drivers. When you look specifically on mobile and the rationality of the market, we see and I see still a constructive market context. It is true. that last year there has been more, let's say, it's been a bit more erratic in the second quarter. So especially one of our main competitor has been rethinking some of the price up that have been implemented. It went down, but at the end of the day, it went up at the end of the year. So differently from last year, and you are right on this, at this time in time of last year, we were executing a front book price upgrade. that is not foreseen at this point in time in the first half. But the situation may change because we still believe that the market environment is being rational. Having said that, the back book price increase are happening in between the first quarter and second quarter, like last year. And I think this is being executed. The fact that we are not upgrading front book prices at the same time or at the beginning of the year can produce some, let's put it this way, some churn temporary increase versus last year because we are disaligning customer base and gross additions. But it's something that we know how to face.

That's not funny.

Yeah, yeah, thanks. Okay, cool.

Our next question comes from Cesar Devenso from Santander. Please, Mr. Devenso, your microphone is open.

Hi, Tim. Good morning. First of all, congrats on the particular results. My first question is regarding revenue growth and your revenue growth expectations. I would like to understand how much of this revenue This guidance would come from price increases. And regarding this, how do you see the company evolving in a competitive scenario? So do you imagine this team potentially being more aggressive? And my second question is regarding the C6 partnership. As you mentioned, the end of this partnership opens a path for you to operate again on the financial sector. Do you have anything on mind, anything you can disclose on this topic?

OK, so let's address the first one. So as I said, we see the market rationality still in place with some more erratic behavior in the last half of 2024. We are not planning to be more aggressive. We tend to try to be more intelligent in the way we monetize our customer base. And so I don't see more aggressiveness on our side. If you look at the drivers for revenue growth on mobile, especially on postpaid, we generally look at a balanced growth pattern that combines customer-based growth, and ARPO growth. And if you look at the way we grew in 2024, so if you look at the paper analysis of the evolution of our revenues in 2024, you will see that we moved on a quite balanced way in between the volume impact and the price impact. And you can see also that we managed to grow faster than our competitors in the post-paid. So price adjustments are important because they are an element of the P factor. But what we are aiming at is a balanced growth in between quantity, price, within price, price adjustments are important, as well as intra-plan migration. You don't see this because it's not disclosed, but the number of pure postpaid is increasing significantly because we are moving control also to postpaid. And it's a positive impact. on revenue growth for postpaid. So it's a combination of these factors. On FinTech, going to the second question, we just closed, we just settled with CXC, so we now analyze the options that are available in the market in the coming months. Clearly, the combination of financial services and telco is quite powerful. We believe it's powerful, so we believe it can be material again, and we will start working on this as the settlement with the previous partner is completed.

Perfect. Thank you. Our next question comes from Carlos de Ligurita from Itaú BBA. Please, Mr. De La Guerrera, your microphone's open.

Good morning, Alberto and team. Two very quick questions. The first one on costs and expenses, you're actually decreasing the selling and marketing expenses both year over year and quarter over quarter while growing revenues. Can you help us make sense of that, especially in this particular competitive context? And secondly, just follow up on C6. Do you have any timing as to when you can actually receive the proceeds from this ending of this partnership? Thank you.

So I will take the first one. I will leave Andrea on the second one. When it comes to the sales and marketing in general, a lot of, I will make some examples, a lot of improvement comes from digitalization. Digitalization is something that is proceeding across the board and across a number of activities. I will give you some example. This is basically primarily the main driver of the increased efficiency. When I talk about digitalization, I'm talking about digital recharges, digital sales. One of the latest examples that has been quite important was the PIX adoption within our postpaid customer base. PIX is a unitary cost that is lower than any other cost. And so we moved from zero to 50% over the last 12 months, a bit more than 12 months, over the last 18 months. And if you look at the call center, if you look at the ability for us to retain calls on digital channels are there. So this basically is the main driver behind the optimization of the sales and marketing cost. Looking forward, we still have opportunities and the opportunity that we are going to pursue going forward. An example, consider the customer relation. We are just issuing a new app. So the new app is being launched at the end of last year. It's in soft launch, so it doesn't address now 100% of our customer base. And the functionalities that we're going to put in the new app are going to be effective in improving the relationship with our customers, like for complaints. And therefore, by launching this, we are going to reduce further our customer service costs on the human side. So we got all these packages of initiatives within sales and outside sales, but within sales, this was the main driver of the reduction.

Hi, Carlos. As Alberto mentioned at the beginning of the call, we cannot give much detail on the effects of this statement. The 520 million is pre-tax, and all the balance sheet effects will come in the future quarters.

Okay, thank you so much. Super clear.

Just as a reminder, if you wish to ask a question, please press the raise hand button. Wait, I'll pull for a question. Our next question comes from Daniel Federle from Bradesco PPI. Please, Mr. Federle, your microphone's open.

Hi, good morning, everyone. Thank you very much for taking my questions. I have three questions, if I may. The first one, I would like to know if you are feeling any impacts from Nucel over the past 30 days since they started to onboard clients. Second question, if you see any structural reason for teams to grow less than peers or more than peers in mobile revenues going forward. And third question, Just to understand the impacts of inflation in revenue growth in the future, should we expect the higher the inflation, the higher the price increases, and then the higher the revenue growth? Or that's very simplistic and that's not the way you should think? Thank you.

Okay, Daniel. So coming to the first one, in terms of the impact on new back, we don't see it. And so that's a simple answer so far. When it comes to our growth in mobile, as you know, we have... more prepaid versus our competitors. So when I say that the recharge market is shrinking, basically this is something that since we have more prepaid revenues versus the others in the overall revenue composition of clearly this weights more for us versus the others. And that's the reason why we are deploying a number of initiatives, the B2B one that we discussed, the customer platform that we've been discussing in this call, to be able to maintain a sustainable revenue growth pattern going forward. When it comes to passing inflation to our customers, you know that we do this at specific times of the year. So we believe that we can pass inflation to our postpaid customer base. As a matter of fact, over the last years, you know roughly the extent of inflation they've been passing over. Of course, there is then a limit that it depends on how much demand is impacted by these increases. And this in turn has to do also with the overall economic context. And so the, you know, what is available for customers to spend. We are executing, for you to know, the price adjustment in a similar fashion this year versus last year. And what we do is that we look afterwards at the response of customers in terms of churn levels and collection curves, so our ability to collect. And this is a sort of empirical approach. As we go forward, we pass this and we check if demand is able to compensate for this adjustment. As for the year, we are going with the same intensities as of last year.

Very clear. Thank you very much. Sorry. Thank you.

Bye-bye. Ladies and gentlemen, since there are no further questions, I'm returning the floor to Mr. Roberto Grisali for his final remarks. Please, Mr. Roberto, you may proceed.

Thank you all. So I want to thank you everybody for participating in our call today. A special thank you to our team. We are fully focused on executing 2025, address the challenges that the macro scenario present, and also pursue the upside risk that we have in our plan. I would like also to invite you at Telecom Italia, Team Italia call the 13th, so in a couple of days, when we will have the chance to complement how we plan to create additional value to shareholders addressing a topic that we get questioned frequently. So thank you for participation today. And hopefully we'll see you again in a couple of days on Team Italia conference call. Thank you, everybody.

This thus concludes the fourth quarter of 2024 conference call of Team SA. For further information and details of the company, please access our website at team.com.br.ir. You can disconnect from now on. Thank you once again and have a wonderful day.