Telefonica Brasil S.A. American Depositary Shares (Each representing One Common Share)

Good morning, ladies and gentlemen. Welcome to Vivo's first quarter 2025 earnings call. This conference is being recorded and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening the conference during the presentation. And then, we will start the question and answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Mr. Christian Gebara, CEO of the company, Mr. David Malcolm, CFO and Investor Relations Officer, and Mr. João Pedro Soares Carneiro, IR Director. Now, I will turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Mr. Carneiro, you may begin your conference.

Good morning, everyone, and welcome to Vivo's first quarter 2025 earnings call. Christian Gibada, our CEO, will walk us through Vivo's performance in connectivity and digital services, as well as present our ESG highlights for the period. Then, David Melcon, our CFO, will give more details on cost and capex, free cash flow generation, shareholder remuneration, and lastly, an update on our fixed voice migration process. With that, let me turn the call over to Christian. Thank you, João.

Good morning, everyone, and thank you for joining us today. The first quarter of 2025 was marked by growth both in operations and financially. Starting with our post-paid service, we reached over 67 million customers, achieving a yearly growth of 7.7%. In fiber, we continued the trend of double-digit growth, increasing our customer base by 12.9%. Our total revenues increased 6.2% with mobile service revenue growing 6.5% and fixed revenues expanding by 6.2%. This consistent evolution showcases the growing demand for our services. Profitability remains a key focus, with EBITDA increasing 8.1% during the period. Our operating cash flow reached R$3.8 billion in the quarter, growing 12.7% year-over-year, accounting for almost 27% of our total revenues. Furthermore, our net income grew remarkably by 18.1% year-over-year, reaching R$1.1 billion. We began 2025 with a solid distribution to shareholders, with payments already amounting to R$2.6 billion. This commitment underscores our confidence in sustaining strong financial performance and meeting our guidance for the upcoming years. Moving to slide 4, we display how our revenues are outpacing inflation driven by double-digit growth of our flagship services. Our total revenues for the first quarter of 2025 reached R$14.4 billion, with mobile service revenue being led by postpaid and fixed revenues by FTTH and B2B digital services. We highlight our postpaid and fiber revenues, which are the cornerstones of Vivo's successful convergence story. Together, they represent 73% of our service revenues, with both growing above 10%. Additionally, our new businesses are consistently gaining share in our portfolio and significantly contributing to our growth. This underscores our strategy of moving away from being solely a connectivity provider to a hub of innovative services. These solutions drive net additions and enhance our market positioning, assisting us in meeting the demands of our customers. On the next slide, we dive into the impact of our successful performance in mobile. Our total mobile access reached 102.4 million in the quarter, with hybrid plus pre-postpaid access growing by 7.6% year-over-year to over 48 million customers. This growth features the success of our upselling initiatives, which have effectively transitioned a significant number of customers from prepaid to hybrid and from hybrid to pre-postpaid plans. Our 5G access has doubled since March 2024. This widespread adoption underscores our commitment to providing cutting-edge technology to our customers. Moreover, our post-pay churn has remained very low over the past years, reflecting our ability to retain high-value customers despite increasing prices. This reduced churn, coupled with a steady increase in mobile ARPU, highlights the positive financial impact of our strategic focus on post-paid services. Overall, our strategy of migrating customers to better plans is translating into customer loyalty and ensuring we remain at the forefront of the industry. On slide 6, we provide our insights on the performance of our fiber operations and convergence with post-paid. We have categorized our FTTH line into three segments. VivoTotal customers, convergent customers not in VivoTotal plans, and standalone Fiverr customers. VivoTotal is ramping up its shares in our FTTH customer base, achieving a remarkable growth of 77.4% year-over-year. Meanwhile, the other two categories are migrating to our fully convergent plans, bolstering both our Fiverr and mobile businesses. as the lifetime value of Vivototal's users is much higher than that of customers in standalone offers. Recently, we introduced new Vivototal plans that include partnerships with leading OTT platforms like Netflix, Globoplay and Disney+, adding even more value for our subscribers. In terms of homes passed with FTTH, we expanded to almost 30 million homes, while boosting the rate of net additions. This achievement is driven by the lowest FDTA churn rates we have ever seen and by our commitment to offering the best services on the market. Moving to the next slide, where we detail all B2C new businesses and their positive impact on average spend and lifetime value. Veebo's 57.2 million individual customers generated over R$43 billion in revenues in the last 12 months, with an evolving monthly average of R$63 per customer. Our new business segment has shown incredible performance across various industries, growing 18.6% year-over-year, reaching R$1.7 billion and representing 3% of our total revenues. This growth confirms our commitment to diversifying our offerings and meeting the various needs of customers. Furthermore, we have made significant strides in the market of accessories for smartphones and other devices. On March 21, 2025, Vivo acquired i2Go for up to R$ 80 million, reinforcing our presence in this segment alongside OVIIN. These efforts are part of our broader strategy to enhance customer lifetime value and ensure that our customers continue to benefit from our comprehensive and differentiated value proposition. Moving to Vivo's B2B performance on Site 8, we registered another double-digit growth, exemplifying how our focus of being a one-stop shop for businesses of all sizes is paying off. With 12.3 billion reais in revenues, B2B already represents 22% of our business. This outstanding performance is largely driven by our digital B2B segment that saw a yearly growth of 25.5% and now accounts for 7.7% of forward revenues. Notably, the cloud segment experienced a significant increase of 38% year-over-year as Vivo continues to prioritize the digitalization of customers. The success of Vivo Empresas highlights our position as the leading technological partner of Brazilian companies, serving 1.8 million B2B clients with over 5,000 sales representatives who market a replicable portfolio that spans from mobile and fixed connectivity to state-of-the-art digital solutions and equipment. Now let's move to our ESG highlights for the period. I'm excited to share that Vivo continues to excel in sustainability and social responsibility. We were recognized as the leading Brazilian company in the Dow Jones Basing Class Index and placed sixth among the telcos in the world. Additionally, we are prominently featured in B3's Corporate Sustainability Index, highlighting our leadership among Brazilian companies in ESG practice, as well as being part of CDP's Climate A-List, highlighting our transparency and climate ambition. On the environmental front, our Futuro Vivo platform showcases our commitment to environmental protection with a special focus on the Amazon rainforest. We also launched a campaign at Lollapalooza 2025 called Raízes Vivas, which provided immersive experience on native Brazilian cultures as well as raising environmental awareness. In terms of a diversity, our training program has reached a new milestone with 56% of selected candidates being black employees and 11% having a disability. Vivo was also recognized as number one in Anatel's accessibility ranking for our efforts to support customers with disabilities. Lastly, I would like to invite you to check out on our investment relations website the main ESG highlights of 2024. With that, I hand the floor over to David to comment on our financial performance. Thank you.

Thank you, Christian, and good morning, everyone. Turning to slide 10, we present the evolution of our costs. We began 2025 with costs growing less than the inflation for the period, reinforcing our ability to maximize cost efficiencies. Our cost of services and goods sold increased by 4.8% year-over-year, where the cost of services grew 7.7%, driven by the greater demand of our B2B services, and the cost of goods sold remained almost flat, as we are constantly improving the margin profile of the products we sell. Cost of operations grew 5% year-over-year, with the evolution of all main lines under control. The commercial and infrastructure expenses returned to a normalized expansion level in the first quarter as it was expected. Additionally, the growth seen in personnel and G&A was completely offset by the decrease of 3.6% year-over-year in provision for bad debt, thanks to improved collection processes and the essentiality of our service. Moreover, the other revenues and cost lines registered and expensed in the quarter mainly driven by reduced sales of copper. Looking ahead, it's important to mention that the sale of copper and real estate will gradually resume in the coming quarters, providing a positive support to this line and to our result as a whole. Overall, our ability to maintain costs growing less than inflation led to an EBITDA margin expansion of 70 basis points. On slide 11, we detail our increasing CapEx efficiency. In the first quarter this year, we observed a slight year-over-year decrease in investments with a significant reduction in CapEx over sales by 0.8 percentage points. We also present qualitative research On our investment allocation, as most of our mobile capex was dedicated to expanding our 5G presence, which now covers 62% of the Brazilian population across 519 cities. On the other hand, over 90% of our fiber capex is focused on connecting homes, thus accelerating our network monetization. We emphasize that around 76% of our investments are specifically allocated to business growth, as we have a wide range of opportunities to generate shareholder value. Thanks to our CapEx efficiency, our operating cash flow has shown impressive growth, increasing 12.7% year-over-year and 15.4% when excluding leasing effects. Margins are also showing a positive trend, up considerably in both metrics. This consistent focus on efficiency and strategic investments position us well for continued financial health and operational success. Turning to slide 12, we present our outstanding net income growth at low debt level that protects us from high interest rate scenarios. Starting on the left, Net income for the quarter increased by 18% to R1.1 billion, benefited by our strong operating performance and optimized financial results. Our financial debt remains under control with a net cash position of R2.7 billion at the end of March. Considering leases, net debt amounts to R12.1 billion, equivalent to 0.5 times the BPA of the last 12 months. Our cash flow generation remains extremely robust despite a year-over-year decrease. This annual comparison was mostly impacted by a timely mismatch related to the payment of regulatory fees that the previous year were partially paid in April and this year are fully paid in March. Our last 12 months' free cash flow yield remained close to 10% our free cash flow accounted for 50% of the revenues we recorded in the quarter. These results highlight our continued focus on maintaining a strong financial position while generating substantial cash, ensuring we have the flexibility to invest in high-return projects and provide attractive shareholder returns. Turning to slide 13, we discussed how we are meeting our shareholder remuneration guidance of distributing no less than 100% of our net income in the coming years. By the end of April 2025, we had already paid out R2.6 billion to shareholders through interest on capital and share buybacks. Additionally, we are committed to distributing another R2 billion from the capital reduction approved in December last year, beginning our 2025 remuneration to R4.6 billion so far, with more to come in the year. We are also focused on increasing the liquidity of our stock. We are proud to announce that our stock is one of the top 50 most liquid shares in the Brazilian stock exchange, raising 17 positions in the B3 Negotiability Index since March last year. This ensures ease of trading and a strong market presence. Lastly, as part of our strategy to enhance liquidity, we successfully completed an operation for a reverse stock split followed by a forward stock split on April 14th this year, doubling our share count and therefore positioning our share nominal price on a more attractive range. This will keep you updated on the final step of this operation. Moving on the last slide of our presentation, we are excited to share the successful conclusion of our migration to the authorization regime of our fixed voice service in the state of Sao Paulo. This is a key moment for Vivo and the telecommunication sector in Brazil. On April 11th this year, Vivo and Anatel signed the single term of authorization, officially transitioning from concession regime to authorization. This milestone marks the beginning of a new area where we can fully leverage the benefit of this transformation. Financially, this transition unlocks significant value. We anticipate around 3 billion reais from the sale of copper based on current market prices net of extraction costs. Additionally, we estimate to capture around R$1.5 billion from the sale of our real estate assets net of demobilization costs. We also foresee the potential for recurring savings through cost efficiency related to the reduction of maintenance and network expenses, mainly due to the complete decommissioning of our copper network and real estate premises. These savings and benefits will be realized gradually, reaching the full potential by the end of 2028, positioning VIVO for sustained growth and increasing profitability. The next step of the transition involves migrating copper-based fixed-void services to advanced technology that is already underway. All in all, this achievement is an evidence of our commitment to innovation and excellence. ensuring that we continue to provide unparalleled services to our customers across Brazil. Thank you, and now we can move to the Q&A.

We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please press the button Reaction and then click on Raise Hand. If your question has already been answered, you can exit the queue by clicking on Put Hand Down. Our first question comes from Bernardo Gutmann with XP.

Hi, good morning everyone. Thanks for taking my questions. My first question is about the sustainability of margins. You had a solid margin increase this quarter. What are the key efficiency levers the company is working on to sustain or even expand margins? And my second question is on prepaid. We saw a significant drop this quarter, and it would be helpful to understand how much of that was driven by migration versus lower recharge volumes. What are the main reasons behind this weaker performance? Thank you.

Hello, Bernardo. I will start with the prepaid. Yes, the main reason behind is the migration from prepaid to hybrid plans. So, as you saw, we did it very aggressively, and so we reduced the prepaid customer base. And always there is, like, a negative impact on that, no, because normally we migrate the customers with more spending power to post-place plans, no, and so that's, in the end, it's impacting the revenues in the prepaid. But if you look in the combined way, the evolution is very positive, no, and also if you see how much post-paid is already represented, no, so out of the 9.2% billion that represented this quarter as mobile service, we already have almost 8 billion in the postpaid revenues. So that's the trend and the trend of continue to migrate. I think we've been very successful doing so. And that's the main reason behind the evolution of the prepaid revenues. And the EBITDA, as you know, it was a very good quarter, as you just described, an increase of 8.1% in the absolute number of our EBITDA, reaching 5.7 billion. Here is, of course, there is the positive performance of our revenues. Now, so we've been able to capture this revenue growth, reducing costs. Now, I think here the main reason is digitalization, both in the customer care and back office tasks that we are incorporating a lot of technology, you know, AI, for instance, is part of it. But also, we've been also very good in using our app, you know, that we reach 27 million users, our Vivo app, That is driving not only customer care, but also sales. There's a lot of sales, mostly of our migration is done through the app. We also increase in the sale of fiber, and we also, as you described here also before, there's a lot of OTTs that we sold, and most of them are sold also through the app. so digitalization is still there's room to grow so we believe there is a lot to be still captured in our effort to reduce costs through digitalization and revenues continue to grow so if you look also You asked about EBITDA, but even operating cash flow, that's positive because the new business that represents more than 10%, we are growing. Sometimes there's lower margin with no capex expenditure. So we are very confident that we are following the right strategy to continue to increase everything above inflation.

Very clear. Thank you, Christian. Thank you.

Our next question comes from Marcelo Santos with J.P. Morgan.

Hi, good morning. Christian, David, João, thanks for taking my questions. The first question is regarding if you could provide a bit more color on your back book price increases this year. How do these compare to the last years? Like, I don't know, maybe timing, magnitude, percentage of the base affected. So that would be the first question, some more color on these price increases. And the second question is if I could get your current stance on M&A. So we see that you have been – sorry, can you hear me? Yes. The second question would be just the current stance on M&A. So you have been very active on like smaller deals with digital services. Would something on the broadband area also be considered by Vivo? Thank you.

So, Marcelo, there is a lot of – you asked about the back book. So, just to remind everyone, our front book, we made price adjustments in February 2025. So, there was around 7.7% in post-paid and run, 7.3% in hybrid, and 6.7% in Vivo Total. So, that was the front. Going to the other one. So, in post-paid hybrid, we started the price adjustment in the back book. in part of our existing customer base in April. So we did around 78% of our customer base of postpaid, 5.7% increase. So 78% of the pure postpaid, 5.7% in April. So you don't see these numbers in March on this quarter. And then in hybrid, we did at 64% of our customer base, 7.2%. Okay, in fiber, We did January, we applied an average price adjustment of 4.5% to 14% of our customer base. We do more in June. And Vivo Total, we did 2.9% of 100% of our customers in the first quarter of 2025. So compared to what we did last year, the percentage is smaller then because the percentage The incremental that we had next year was a little bit higher. But that's what we did. So some of it is not still captured because it was in April, most of the phosphate and hybrid. And part of the increase will be also done, as I said, in August for phosphate and hybrid, what we didn't do in April, and also in June for fiber that we didn't do in January. So that's the summary of that. So the M&A, can I go to the second one, Marcelo?

Yes, very comprehensive answer on the first. Thank you.

Thank you. So, yes, we are looking both, you know, small M&As and digital services. So, as you just described, we bought IPNet. That was the one in cloud for B2B. We bought i2Go in accessories for smartphones and other devices. Yes, we are always looking for consolidation in the fiber market. There are different type of companies. small, mid-sized ones. Some of them are very regional, very local. Others are already with a national footprint. And here, again, we need to focus on those that the overlap is not that high. The quality of the network is the one that we want. And also the price point that is attractive for us. Now, we've been saying that home pass or average cap is 150 to 200 reais. To connect is 800. So, in here, the deal is more in the cap of connecting customers. We've been doing that very effectively. We're expanding our footprint in the last quarter around HP's home pass more than 500,000. And we are connecting. We had the net ads of 211,000 fiber customers. continue to be number one, strong leadership in market share of net ads, and reduce insurance. So, again, we do believe that there is room for consolidation, but we haven't found so far a target that would comply with all the criteria that I just described to you.

All right. Crystal clear. Thank you. Thank you, Marcelo.

Our next question comes from Gustavo Farias with UBS.

Morning, everyone. Thanks for taking my questions. I have two on my end. The first one about the concession migration, we didn't see it happen in Q1, but given the migration underway, do you anticipate any pressure, margins, or CAPEX in the short term as a consequence? And the second one, looking at cash flow, if you could bring more color on the dynamics of leases and working capitals we saw in Q1, and if that should normalize the full year. Thank you.

So, Gustavo, no, there is no pressure on the financial indicators that we just described for the migration of concession to authorization. Actually, we decided to give you more color on what we expect of the positive impact of the sale of copper and the sale of real estate. So, we estimated based on the quantity of copper that we have. the quality of the copper that we extract. And that's why we gave this number of 3 billion reais starting this year. But maybe the highlight of the impact will be 26, 27. And the same with real estate. Note that we are talking about sale of different type of real estate that we have, depending on the migration that we have to make on the customer that's still copper to fiber. But anyway, very positive impact, and there is all the numbers that we just presented, that David just presented. They were net of all the costs involved in migrating, removing equipment from real estate, and also doing destruction of the copper. So no other impact, as we just said before. regarding free cash flow that we will follow.

Hi, Gustavo. So regarding the question on free cash flow, during the last few years, we have consistently shown a very strong cash flow. However, if we look across quarters, there is always some rationality. This quarter, we have a strong free cash flow margin of almost 15%. But the working capital is mainly impacted from some delay facing of payments that have to do with regulatory taxes that the previous year we ended up paying in April, and this year we pay in March. This is something that should be compensated in the coming quarters. Regarding looking at the evolution to the leases, the first comment I want to make is that if you look to EBITDA and EBITDA after leases, you see that both are growing very strongly, 8.1% both. However, when you look to the payments, there is always, again, some volatility. We keep negotiating with the Towers companies better conditions, and sometimes that requires some cash payments. So it's difficult to analyze the effect on one quarter for the last 12 months. But in this particular quarter, if you look to the total amount we pay in terms of principal and interest, we pay 1 billion 249 million real, that even though is higher than the previous year, this number is lower than the last two quarters. This gives you an idea of the trends that we might be able to achieve for the coming quarters. And just the last comment here is that we have some specific initiatives in place to reduce the cost have to do with tower leases that should benefit future trends.

Very clear. Thank you very much.

Thank you. Thank you.

Our next question comes from Luca Brinjin with Bank of America.

Hi, good morning everyone. Thank you for taking my questions. I have two on my side. The first one is a follow-up on Bernardo's question. He asked about what happened to prepaid in the first quarter and what I wanted to understand is what do you expect for prepaid going forward? Are you guys seeing any space for price hikes in prepaid, or is it still difficult? And in terms of revenues, what can we expect? Is this the level of decline we should expect for the remainder of the year? Should we see an improvement? How are we looking at this? And the second one, regarding broadband, how are you seeing pricing dynamics? We continue to see Other competitors also having some trouble increasing offers in the front book. So how do you think this should be going forward? Do you see also space for price hikes in the front book for broadband? Thank you.

So prepaid, we believe it's going to keep the trend. It's not going to go worse. Always there is like opportunity for pricing, as we've been doing in hybrid on plus paid. but I cannot tell you about any decision that I may take commercially speaking. So we're going to continue working very hard on migrating customers, the best customers, to hybrid. We've been doing that in a very good way. So the idea is to continue with the same strategy and always trying to offer new services, even for prepaids. So we're expanding entertainment, we're expanding health, we're expanding services, financial services like insurance. So we are also working a lot on the CRM of prepaid to be able to capture more value out of not only the traditional core, but also expanding the sale of digital service to this customer base as well. So what we're seeing is that we are gradually increasing our customers that are recharging with us, so we can offer more and more benefits as well to keep loyalty. So we are doing many benefits with body bonuses, example of one that just partnership with them, giving points to customers who have a higher top-up with us and remain with the same recurrence. So that's part of the strategy. I cannot share a lot more about our commercial decisions for the future. But, again, the migration will be the driver for us to keep customers with the recurrency of the hybrid. Now, here, I don't know, the second question was about pricing. Sorry, can you repeat this?

Yeah, on the dynamics of pricing for broadband going forward, if you see space for front book offers and how you're seeing also the competition. Sorry, continue.

Yes, please. Go ahead. Sorry, Luca.

Okay. It's about the dynamics for the pricing for broadband going forward. How do you see it on your end and also on competition?

Yeah, I think we have a slightly different strategy from competitors. As I said, in January this year, We are just 4.5%, 14% of our customer base and may increase the second round in June. But as I said also, Luca, 87% of the sales that we have in our stores, they represent an important part of the sales that we have with Fiverr. We are doing VivoTotal. So, we are driving the market to a different dynamics. Now, we are very focused on convergence. And, of course, we are also upselling with high speeds. Now, we are launching. Now, we have like the 600, we went to 700. Now, in some areas, we are offering also 600. One giga speed. We are expanding also Wi-Fi with more devices now. And Wi-Fi 6 is also differentiation of our offering. So it's difficult for me to answer in one line what's going to be our strategy. It's a very segmented strategy driven by the best experience of Wi-Fi and also with convergence. So I think we've been very positive at achieving that. And also that's why our revenues in fiber increased. It already represents almost $2 billion of our quarter revenues, and it's growing over 10%. That's the same growth that we have also in post-pay. So the combination of the two is what is driving our revenues up, and we continue being very segmented and precise in the price increase, always benefiting customers who have more services with Vivo.

Very clear. Thank you.

Thank you. And the front book also increased price, so that's also important to highlight.

Our next question comes from Vitor Tomita with Goldman Sachs.

Hello. Hello, good morning, all, and thanks for taking our questions. Two from our side. The first one is on the migration. Now that you are starting to migrate concession customers to newer technology to prompt them to migrate before dismantling the networks, any initial view on how well that is being received initially, on how we need to migrate, and the pace at which you are planning to go over these migrations? And our second question would be a bit of a follow-up on the fiber point. Besides the pricing point, do you see any updates on your growth strategy for the fiber segment in terms of potential expansion of homes fast? Do you still see much room to extend coverage there, either organically or by M&A, as you discussed in another question? Thank you.

So, Vitor, it's been very successful. We are piloting a lot of migrations, and it's been very successful. As I said before, we have 1.2 million customers in copper, in basically voice, because the one that is still in XDSL is a very small part of it. We're talking about 155,000 customers. So, the ones that are with voice... When we have fiber, we've been working in a very industrialized model to migrate customers with minimal hassle from copper to fiber. So very positive that we can do that in a very fast way. So up to now, it's doing very well, and then we may give you more results in the next quarters. So very positive about our ability to do it very fast. So that's why we are putting the highlight of the impact in 26, 27, because with our ability to migrate customers and liberate corporate and the real estate that is assigned to provide the services. Regarding expansion of our fiber network, we continue in a very accelerated pace. We had 26.8 in the end of first quarter. Now we have 29.6 million home paths. Last quarter, the first quarter, the one that represented results, we We built 500,000. We continue to penetrate our network, and we had accelerated net ads in the first quarter compared to the first quarter of last year. And we continue to build, but, of course, we are very attentive of M&A opportunities. Again, Victor, it's not easy to find what we're looking for. So while we don't find, we build. If we find, we may stop building so much. But at the moment, we continue building. But I think there are opportunities that we're looking at them with a lot of focus. And again, they need to follow and comply with the criteria that we have. Overlap. technical quality of the network, but also of the CPE, because if I need to replace all the CPEs, my CAPEX is much more concentrated in the CPEs. And finally, the right pricing. Very clear. Thank you very much.

Our next question comes from Fanny Kanomuri with HSBC.

Hello, can you hear me?

Yes, Vahim, please go ahead.

Yeah. Thanks, everyone, for taking my questions. So the first question is regarding competition in mobile. Are you seeing some kind of increased competition from regional operators or new cell, at least on a regional basis? My second question is regarding the use of cash that you have from the sale of copper and real estate. What are the planned uses that you have for the cash that you'll get over the next three years? Thank you.

Stephanie, mobile is always very competitive, but I think as we highlighted, we've been growing very positively in the additions of post-paid. In the number of access of 5G, we also gave a good number that we are also, again, going up. So if you look, for instance, now post-paid access compared to the other year, we grew 7.6%. In M2M and Dangos, we grew at 8%. We have a reduction prepaid, of course, because that's due to the migration. Our pool also is increasing at 3.5%. And the postpaid churn is, again, at the level of 1%. And our ability to migrate customers from prepaid to hybrid or hybrid to prepaid continues. Very positive and very accelerated. What we migrated one year ago was increased by 18.3%. So, yes, it's very competitive. But, again, I think we have a right strategy, very well segmented with all the portfolio that can compete. give to customers a selection that is not only based in the mobile, it's merged with the fixed, it's merged with the digital services, and it's merged also with the quality and the customer experience that we give in all points of interaction that we have with our customers. So that's what we have. And, of course, we have also MVNOs coming up, but I think Vivo can differentiate itself by the superior quality and perception of value proposition that we offer. So that's what I would answer about the mobile. The second one was about the remuneration. Yes, here what I can share with you, Fanny, is that we're going to keep remunerating our shareholders a minimum 100% of net income. So last year it was above 1.05%. This year, we're going to follow with the guidance of minimum 100%. Net income increased already 18%. We made many payments of interest this year, and already also we share buyback. We already announced some other interest on capital for next year. So, like, for just this year, in 2025, we already paid shareholders R$2.6 million, R$2.2 in outstanding interest capital declared in 2024 that we paid in April. And we have 326 of share buybacks. And on July, we will pay 2 million of capital reduction. We already declared, as I said, 500 million reais that we're going to pay before April 2026. So that's what we're going to do with the proceeds. And, again, we want to also have the flexibility, as was asked before, to continue to be active in M&A, in digital services, and why not in fiber assets, if you find something that complies with the criteria that I described before.

Thank you. Very clear. Thank you.

The question and answer section is over. We would like to hand the floor back to Mr. Cristian Gebara for the company's final remarks.

So thank you again for everyone to participate in our call. As you could see, very strong results in line of our strategy of growing the new technologies, highlighting that more than 70% of our service revenues is related to mobile and fiber, and both we are growing above 10%. Digital services in general, B2C and B2B, more than 10%, and also with the double-digit growth. And again, with EBITDA growing way above inflation. And again, as we described here, the concession with good returns on the sale of copper and real estate for the next quarter. So if you have any additional doubt, please reach us. And our investor relationship is also at your disposal. Thank you and talk to you soon.

FIVO's conference is now closed. We thank you for your participation and wish you a nice day.