Telefônica Brasil S.A. Q3 FY2025 earnings call

• Mobile: Postpaid access grew 7.3% YoY, postpaid now 68% of mobile customer base; 5G adoption over 21M customers; highest ever postpaid net additions. - Fiber: 7.6M homes connected, 12.7% YoY growth; Vivo Total grew 52.7% YoY, convergent base near 62% of fiber access. - B2C/B2B New Businesses: Video/music OTTs up 19.9%, Vale Saúde Sempre subscriptions up 27%, Vivo Seguros with 600k insured devices; B2B digital B2B grew 34.2%. - ESG: Launched Futuro Vivo Forest initiative, ranked first in B3's Corporate Sustainability Index, received multiple awards. - Cost/CapEx: Total cost up 4.6% YoY, below inflation; EBITDA grew 9% YoY to BRL 6.5 billion; operating cash flow BRL 11.2 billion in first 9 months.

Mobile: Postpaid segment access grew 7.3% year-over-year, accounting for 68% of total mobile customer base (approx 103 million connections). Mobile service revenues grew 5.5%. Postpaid net additions were the highest ever, with over 21 million customers benefiting from 5G. Fiber: 7.6 million homes connected, a 12.7% year-over-year increase, with a footprint covering 30.5 million homes nationwide. Fixed services revenues grew 9.6%. Vivo Total (convergent offer) grew 52.7% year-over-year, and the convergent base neared 62% of fiber access. B2C: Total B2C revenues reached BRL 44.1 billion, up 5% year-over-year. New businesses grew 15.3%, with video and music OTTs up 19.9%, Vale Saúde Sempre having around 450,000 subscriptions, and Vivo Seguros counting 600,000 insured devices. B2B: B2B revenues reached BRL 13.2 billion, up 15% year-over-year. Digital B2B grew 34.2%, with significant growth in IoT, cloud, managed services, and cybersecurity.

• Shareholder remuneration: Distributed BRL 5.7 billion by end of September, declared BRL 2.7 billion more to be paid by April 2026; buyback program active. - Asset sales: Target BRL 4.5 billion in asset sales over coming years; Q3 net gain from asset sales BRL 232 million. - Free cash flow: Totaled BRL 6.9 billion in period, slight YoY decline but positive trend in Q3.

• Macroeconomic uncertainties affecting future results. - Volatility in real estate asset sales due to varying assets sold each quarter. - Competitive environment impacting mobile and fiber segments' performance.

Q: Congrats on robust results. How did competitive environment affect mobile services revenues this quarter?

A: Mobile services revenues grew 5.5% YoY. Prepaid had better performance than last quarter, postpaid grew 8% with best net add performance; churn below 1% excluding machine-to-machine/dongles, ARPU up ~4% YoY.

Q: Comment on leasing efficiencies and asset sale outlook for concession migration?

A: Leasing efficiencies show positive trend with 1.4 tenancy ratio in Brazil; asset sales target BRL 4.5 billion, with real estate sales volatile and copper sales expected to increase.

Q: On prepaid trends and M&A in ISP space?

A: Positive trend in prepaid due to recharging customers, upselling data; on M&A, considering organic growth and potential inorganic moves in ISP space if assets meet criteria.

Q: Follow-up on concessions, cost savings, and B2B digital?

A: Cost savings from concessions to be captured gradually until 2028; B2B digital services growing in cloud, managed services, IoT, cybersecurity, etc., with opportunity to increase penetration in SME segment.

Q: Competitive landscape in mobile and fiber, execution of copper migration?

A: Competitive in mobile, focusing on customer experience, convergence; fiber growth strong with high net adds and low churn; copper migration process well underway with robust execution, upselling opportunities.

Q: Fiber competitive landscape, CapEx with FiBrasil acquisition?

A: Fiber competitive but with strong net adds; CapEx to revenue ratio expected to continue declining even with FiBrasil acquisition.

Q: Lease costs, data centers, and fixed ARPU?

A: Lease costs to be optimized with tower portfolio rationalization; no data center sovereignty issues in Brazil as focus is on diversified vendor portfolio; fixed ARPU impacted by convergence and allocation of revenues between mobile and fixed services.