Megacable Holdings

Good morning and welcome to MedCable fourth quarter and full year 2020 earnings conference call. With us this morning from MedCable, we have Mr. Enrique Umane, CEO, Mr. Raimundo Fernandez, Deputy CEO, and Mr. Luis Zeta, CFO. Let me remind you that the information discussed in today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Mayor Cable undertakes no obligation to update or revise any forward-looking statement. I will now turn the call over to Mr. Enrique Yumuni, sir. You may begin.

Thank you very much. Good morning, everyone, and thank you for joining us today. Due to a larger subscriber base and a linear cost structure, during the fourth quarter of 2020, Mayor Cable was able to increase its net income at a double-digit rate. despite the challenging environment of the year that was marked by the deep economic slowdown caused by the COVID-19 pandemic and the new government support from small and medium businesses. In this sense, during the quarter, the subscribers to all services in the mass market continued to upwork the upward trend shown through the year, driving a significant annual increase in IAUs, the largest in the last nine periods. Regarding our turn rates, they remain at very healthy levels, decreasing significantly on an annual basis. As Megacablet subscribers seem quite satisfied with both rendered service and first consequently, we mean to follow a close monitoring of these metrics in order to swiftly adapt our operations to the customer needs. The force behind the financial positive results lies in the ongoing efforts to achieve a more efficient operation as reflected in the yearly EBITDA growth rate higher than the revenue growth. Giving more visibility on the progress of our strategic project, this week we celebrated the launching of XView+, our new generation platform for video on demand and linear TV with an interface able to reproduce all the content of the most popular over-the-top platforms without the need of switching between apps. This means that our customers are able to access all the content of such platforms without ever leaving XViewPlus, using one single search engine, which is ours. It is important to note that, although official launching took place a few days ago, The startup was properly made in the fourth quarter with the service rendered to a portion of subscribers. In this sense, we are quite pleased with the favorable user's review, as this proves a good reception for this additional service. An important development to remark is the investment of over $100 million already made in order to build this market differentiator which will foster incremental sales of our service bundles in the coming quarters. Turning to the GPON migration project, as of the end of 2020, we had already transferred more than 100,000 subscribers to the FTTH network, a significant breakthrough that was made possible thanks to the efficient deployment of CAPEX conducted over the last year, which is already having an impact for some of our subscribers. For 2021, we anticipate moving forward with the migration of subscribers, expecting its conclusion towards year-end. Without any doubt, once completed the full migration, it will represent a significant milestone in our crusade to become the best service provider. With a structured network capable of supporting the highest bandwidths, with one of the best rates of availability and reliability. It is important to note that according to our smart and efficient investment policy, we already have an established plan to carry out the redistribution of the replaced HFC infrastructure, thus also deducing cap-based figures for the coming periods. On the MVNO side, during the fourth quarter, we pursued an aggressive and successful campaign towards product positioning and demand stimulation of this service. Efforts that have yielded results as it comfortably surpassed its target of subscribers set for the year 2020. In this regard, for 2021, we expect to widen the target of MVNO subscribers and we will pursue to offer this service not only for active subscribers, but to the general public as well. Before concluding, although we expect that the further enhancement of the quality of our services by means of moving forward with GPON migration coupled with the launch of XView+, will enable us to maintain this growth momentum during 2021 and beyond. We remain aware of the challenges of the current juncture, so we will continue to closely watch the evolution of main operating metrics. With this, I conclude my remarks. Raymundo, please go on.

Thank you, Enrique. Good morning, everyone. We enter into the fourth quarter with the strong focus of consolidating an iconic year for megacable storage, as we have faced with the health contingency, one of our greatest challenges so far. Support by the fundamentals of our industry, highlighting its resilience and its status as essential for modern times, as well as by our customer-centered service, we were able to continue to increase our subscriber base despite the headwinds. The quarter was characterized by outstanding 7% growth in the mass market segment revenue, support by higher revenues in the three services, While in the corporate, MetroCarrier returns to double-digit growth since the impact of the cancellation of the project Connected Mexico has been left behind. On the Internet side, we were able to further enhance our service penetration in the most prominent markets that we serve, driven by our boosted bandwidth capacity and surging demand for high-speed Internet. These services achieved sequential and annual growths of 2.8% and 13.3%, representing net ads of 96,000 and 413,000, respectively. We expect this positive performance to continue, in line with the increasing demand for internet, confident that our strategic investments will strengthen Megacable's position in this segment of the market. It is important to remind that, since last quarter, Broadband represents our service with the largest number of subs as this surpassed the 3.5 million mark. Turning to video, at year end it recorded over 3.4 million subscribers following the 188,000 net additions registered against the same quarter last year. On a sequential basis, it increased by 51,000 net additions also. Furthermore, XView posted more than 104,000 net ads during the quarter, thus reaching almost 1.2 million subs. It is important to note that, pursuant to our commitment to deliver richer experiences to our subscribers, we remain determined to enhance our offer with additional services, such as our recently launched XView Plus platform. Separately, telephony once again was boosted by our bundle sales approach, reaching 2.6 million subscribers after recording 115,000 net ads on a sequential basis or 496,000 on an annual basis. All in all, the fourth quarter of the year represents our second best reporting period this year, just behind the back-to-school season that was featured by the deployment of comprehensive triple play promotions. Particular outstanding was the performance achieved at the MVNO. As this service outperformed our projections, posting 66,000 quarterly net additions, those surpassing by more than 20,000 subs, the 150,000 target set for its first year of operation, with 174,000 subscribers record as of December 31, 2020. Therefore, we feel quite optimistic with the penetration achieved so far in the MVNO and the positive feedback received from the clients, paving the way to further increase its participation in the revenue mix. On the short rate front, in broadband, we record a 1.6 rate. In video, 1.7%, and the rate corresponding to telephony was 2.1%. These figures prove the effectiveness of our successful customer-centered approach and based in class operation. In line with the information, REUs increased 13% year-over-year to over 9.5 million. Likewise, unique subscriber increased 8.4% on an annual basis, almost reaching the 4 million mark, with an REU per unique subscriber of 2.43 compared to the 2.33 posted as of the end of 2019. Meanwhile, ARPU per unique subscriber slightly decreased 1% to 405 pesos and remained almost flat versus the figure recorded as quiet, as a considerable portion of new subscribers opted for most affordable packages before the prevailing environment of slow economic activity. It is worth noting that this item was also affected by a new way of calculation that excludes the revenue from the mobile services. effective as of this quarter, aiming at improving the transparency in the information for each services. Under the previous model, ARPU per unique subscriber will have been 409 pesos, though recording a sequential improvement. In the breakdown by service, ARPU for the three services remained practically unchanged on a sequential basis, while decreases in ARPU of 2%, 4%, and 5% were recorded for broadband, video, and telephony, respectively, when compared to the fourth quarter of 2019, given the change in the mix previously mentioned. Moving to the corporate telecom segment, MetroCarrer and MCM kept showing the recovery signs observed over the past quarter, as the former continued benefiting from higher demand of services and the reactivation of collections after concluding supporting measures aimed at contingency. MetroCarrera in particular has recovered from the cancellation of an important project and has returned to the growth levels of previous years. We will continue working to maintain and increase these levels, supported by the growth and positioning of the company. On the other hand, in the ongoing implementation of austerity measures and the prevailing approach of Provence for the development of new projects, OLA continued with lower figures compared to 2019. Given service and contracts were not renewed or were canceled, mainly in the government sector. Sorry about that. Towards 2021, we plan to reach more and more customers with high quality and attractive commercial proposals, leverage on our revamped network, and incremental operational efficiency. With this, I conclude my remarks. Now I would like to hand the call over to Luis, who will provide a bigger picture of financial results.