America Movil SAB de CV
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America Movil SAB de CV
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Good morning. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil Third Quarter 2020 Conference Call and webcast. [Operator Instructions]
Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations. Please go ahead, Ms. Lecuona.
Thank you. Good morning, everyone. Thank you for joining us today to discuss our third quarter results. We have today on the line Mr. Daniel Hajj, CEO; Mr. Carlos Garcia Moreno, CFO; and Mr. Oscar Von Hauske, COO.
Thank you, Daniela. Welcome to the third quarter results. Carlos is going to make a summary of the report.
Thank you, Daniel. Good morning, everyone. Well, following the massive monetary and fiscal stimulus introduced throughout the world in the advent of the pandemic. The third quarter saw a rebound in economic activity in most countries in our region of operation, and little of the volatility that was present in the prior 2 quarters. With the exception of the Brazilian real, which continued to deteriorate the U.S. dollar. The main currencies in Latin America did not see much change over the period.
As confinement measures began to be lifted towards the end of the second quarter, an improving trend became apparent on commercial activity.
We added 3.2 million wireless subscribers. 1 million of them postpaid and 1.4 million prepaid. Brazil led the way in terms of postpaid growth after adding 1.8 million subscribers followed by Austria with 241,000 in Colombia with "2,000".
In the second quarter, we had lost [indiscernible]. As for the prepaid gains, Mexico obtained the most with 1.2 million, with Colombia and Ecuador contributing approximately 300,000 each. Peru 237,000 and maintained 129,000.
We recovered several of the prepaid subscribers that were disconnected in second quarter as mobility was restricted and making recharging difficult. In the fixed line segment, we gained 446,000 new broadband clients with every operation in Lat Am, supporting an increase in accesses. Only Austria and Croatia, among all our operations, presented disconnections.
Colombia and Mexico led the way with over 100,000 accesses each. In Mexico space, it doubled those of the prior quarter. Altogether, mobile postpaid and fixed broadband remain our main areas of access growth with the deployment increasing 5.7% year-on-year and the later 5.2%.
Our prepaid subbase is still down 3.2% from a year before. While fixed voice and PayTV accesses are falling around 4% each. Our third quarter revenues rose 4.7% in Mexican peso terms from a year before, to reach MXN 260 billion, as service revenues expanded 5.4%.
At constant exchange rates, service revenues were up 1.5%. Roughly twice as fast as in the preceding quarter. On the back of continued strong performance of fixed broadband revenues and recovery of mobile prepaid revenues, those most affected in the prior quarter in the midst of the lockdown measures implemented to our Latin America.
Mobile service revenues accelerated to 3.5% from 2.3% in the second quarter, while fixed line service revenues maintained a 1.4% pace of decline. Across our operations, voice MOUs rose 11%, while mobile data per user was up 41%, all of which resulted in a 5% increase in mobile ARPUs at constant exchange rate.
Mobile service revenues were [ lowered ] by prepaid revenues, which goes from plus -- it rose to 2.5% from minus 2% the prior quarter. Our posted revenue decelerated somewhat to just under 5% year-on-year. Equipment revenues bounced back sharply, and we moved on to a more forceful commercial activity. The continued decline in fixed line revenues took place at the gains of share in fixed broadband revenues from a pace of plus 7.3% to, one-off, plus 9.1%, were offset by new revenue losses in fixed-line voice and PayTV revenues.
EBITDA was up 10% in the third quarter from the year earlier quarter to MXN 86.5 billion. The EBITDA margin remained at 33.2%.
At constant exchange rates, EBITDA increased 7.2%, more than twice as fast as it had in the preceding quarter with Puerto Rico, Mexico and Dominicana, posting important advances.
Mexico has improved from minus 10% in the second quarter to plus 1.3%. While Dominicana's increased from minus 5.5% to plus 5.8%, an 11 percentage point swing in both cases. And it's important just to note that both countries have a high share of prepaid clients.
Our EBITDA margin, 33.2% were 1.6 percentage points higher than in the earlier quarter. Our operating profit shot up 18% to MXN 45 billion and was the driver of a 45% increase in our net income, which totaled MXN 19 billion. Our operating cash flow totaled MXN 164 billion and allowed us to cover our capital expenditures, which amounted to MXN 91 billion, and to reduce financial and labor obligations in the amount of MXN 62 billion, including a MXN 47 billion reduction in our net debt.
Our capital expenditures in the period were directed to securing adequate capacity in our networks and maintaining good quality of service. At the end of September, our net debt-to-EBITDA ratio stood at 1.38x on the IAS 17, slightly less than at the end of June. All throughout this year, and in spite of movement in foreign exchange rates, we have kept our leverage ratio at or below 1.93x on the -- all of these.
Looking at Mexico, prepaid revenues bounced back to plus 1.1% from a minus 4% decline in the second quarter, with fixed broadband revenues accelerating to 6% from 2%. On the back of the above, EBITDA recovered sharply from a 10% launch in the second quarter to plus 1.3%. As for Brazil, posted revenues continued to excel, posting a 9% increase from the year before, with prepaid revenues rising 5%, the same pace they have shown prior to the pandemic.
On the fixed line platform, broadband revenues continue to perform well, expanding 6.8% and maintaining a stable trend. While the decline in PayTV revenues accelerated to minus 15.6%.
Colombia was the only country for our service revenues expanded on both the mobile and the fixed-line platform in the third quarter, almost at the same pace in each one. Both prepaid and posted revenues expanded at rates similar to those seen in the first quarter, whereas fixed broadband revenues remained at a 15% growth pace and PayTV revenues continued to accelerate to 10%.
EBITDA increased 3.4% in the quarter on the strength of the revenue increases and the reduced need to provide for past due collections. Regarding Austria, both fixed and mobile revenue declined slightly. We later [ delayed it 1x ] by reduced roaming revenues as turns to the country's write-off on account of the pandemic. In spite of the above, the company's adjusted EBITDA before restructuring, shot up 4.7% on reduced interconnection and roaming charges as well as savings on several other fronts.
Well, with this, I would like to conclude the report. I will turn the floor back to Daniel. Thank you.
Thank you, Carlos, and we can start the Q&A.
[Operator Instructions] Your first question comes from the line of Rodrigo Villanueva of Bank of America.
Can you hear me well?
Yes.
Perfect. So my first question is if there's any update that you can share with us regarding the potential alternatives to create value from your towers? Anything related to timing, amount of towers or type of transaction, and it would be very helpful.
Rodrigo, well, what we have been saying on the tower transaction that we have around 60,000 towers in America Mobile. And we're working to -- on the regulatory, on the legal to see what is the best thing to do. We have like 15 countries. So in every country it's different. So we're working on that. And we're analyzing what's the best way to give value to the tower. So we have nothing concrete to say right now, but we're working hard, and -- to have that as soon as possible.
Understood, Daniel. And secondly, I mean, the Mexican government appears to be willing to raise the price for spectrum, particularly in frequencies expected to be used for 5G purposes. So I was wondering if you could share with us how relevant this is for AMX. And if there's anything that you can do to prevent this from happening?
Well, we have been following that discussion in the Congress, in the Senate. We are not agreeing on that. I think they shouldn't raise any -- on the spectrum. So it's very expensive right now. And the only thing that they are going to do is to delay 5G if they are going to do that or increased prices in the other side. So Mexico, at this time, is at the highest levels of spectrum. We're paying a lot of money, and we are not agree on that. We're following the discussions. We don't know what is going to end on. What they are saying is that they want to increase the 800 megahertz frequencies. What they have been in discussions. So we don't know exactly what is going to end on. But we are on favor that we are really -- we don't think that's a good idea.
Your next question comes from Diego Aragão of Goldman Sachs.
Yes. I have just 2 short questions about Brazil. The first, if you can please share your expectations about M&A in the countries. I mean you signed up like an agreement with TIM and Vivo. So if you can just provide like an overview about the next steps and your expectations in the mobile space? And secondly, if you can also share your expectations regarding 5G spectrum auction that apparently, it should occur in the beginning of next year. But if you can share anything on this topic, that would be great.
Well, on Brazil, first of all, I think we have a very good quarter in Brazil, still growing very good on postpaid subscribers and also in prepaid. So the revenue in our wireless operations are doing very good. In broadband, we are also doing excellent in Brazil. On Oi, I think we feel that the action -- the final action will be before end of the year. We don't know exactly the date, but we feel that's going to be before the end of the year. And the spectrum for 5G, well, I'm hearing rumors that they said that it's going to be in the first quarter of next year as you are saying. Other one says that in the middle of next year. So we don't know exactly when we're going to have the auction. But right now, in Brazil, we have very small amount of our network within 5G. So we are -- already launched 5G in a very small town part in Brazil. So we are moving on that direction. And I think next year, we are going to see that we're going to have 5G there.
In the other side, our -- with the Nextel purchase, we already integrate the company. We do a very good integration, and we are doing very well on wireless gaining postpaid market share every quarter. So that's more or less what we have been doing in Brazil.
In the other side, we have been cutting cost all around Latin America. Also in Brazil, we are being and trying to be more digital company. More digital, is saving a lot of costs over there. We're working on that direction and putting money and a lot of work on that.
That's very helpful. And just a follow-up on the postpaid in Brazil because it will indeed quite strong. So what I was curious to understand
what are those customers coming from? I mean, do you feel that is this still a trend of prepaid shifting to postpaid? Or do you believe that you are gaining share from competitors?
I think all. There's a lot of our prepaid moving to postpaid. Of course, that's something. Prepaid from other companies moving to postpaid and also postpaid from other companies moving. We have a very good network, and we have been showing that for the last year. So that's been very, very good.
And also, you can see in number portability, we're gaining more than any other company. So that's -- we're getting all these postpaid subscribers.
Your next question comes from the line of Arturo Langa of Itau BBA.
I would just like to look at your thoughts on your intention to reduce debt, maybe potentially the sale of towers in Southern America will help. But the intention is still to reach 1.5x net debt EBITDA? And if so, how can we think about cash distribution to shareholders once it reach at this level? Is the intention still to increase distribution to shareholders? And if so, what levels of yield be on mine or maybe what mechanism maybe for share buybacks? And that will be my first question.
And then my second question is related to Colombia, how you see the arrival of WOM in the country? And specifically, would you be interested in offering roaming services to WOM, like what you did for them in Chile. That would be my 2 questions.
Well, on the first question. I mean, I think with the sale of platform to Verizon by the time it closes, that should bring -- that alone should bring us down or would bring us down to 1.5x net debt to EBITDA. So whatever is obtained from the disposal of the tower, the standard disposal of some kind, it would be something that would further reduce our leverage.
I'd say that in addition to this, we have a strong cash flow, and we are expecting to -- for this cash flow to remain well this next year, the next couple of years. So I think from a leverage standpoint, we feel that we are in very, very good shape. This is something that the rating agencies is very, very much in touch with, have ratified to all. We are in very, very good shape financially. And we think it's important particularly in times of so much economic uncertainty. And we are living through today to navigate with a lighter load of debt than would normally be the case.
So I think that it's important, again, given the uncertainty, it serves to be somewhat more conservative on the financial structure of the company.
And can you repeat the second question, please?
Yes. Yes, sorry, Daniel. Just your thoughts on the arrival of WOM into Colombia. And they have big obligations in terms of network rollouts. And it's in discussion right now is those could be achieved via roaming agreement, which you might be willing to provide. And you guys did after roaming agreements to WOM in Chile. So I was just wondering what are your thoughts on the arrival of WOM into Colombia are and how will you manage that?
Well, I think we know WOM, as you said, they are in Chile, and they are aggressive. So we have been preparing the company for maybe all this year. So we are putting more capacity, and we're working to be prepared when WOM starts. And that's something that's -- nothing else I can say that we like to compete, and we're going to compete in Colombia and also is Tigo and Movistar over there. So we haven't had any roaming agreement until now with WOM. If that's your question, we haven't had anything there with -- they haven't do anything with us. So we're working. You know that we gain the spectrum in Colombia, and we're working to fill all the consumers -- to all the investments that we need to do and to put the capacity and the network in the small towns that they are required.
So we are doing very well in Colombia. We are growing in prospects, growing in prepaid, growing in TV, growing in broadband. So we're really doing very well there. So we have a converge platform, and Oscar can talk a little bit more on what we have been doing in Colombia.
Thank you, Daniel. Yes, as you mentioned, we are a fully integrated company in Colombia. We've been doing quite well on mobile, but more in the convergence. So we deliver all the set of products. So fixed-broadband, fixed-line, mobile, PayTV in different flavors. And as well, we started, 3 years ago, a focus on enterprise and all the cloud services that we deliver there.
So we are more telco-integrated solution that has any connectivity, and we've been really successful in that market on an enterprise side.
So it's going to be more competition, but we feel that we are in a very good position.
Your next question comes from the line of Walter Piecyk of LightShed.
Daniel, the trend for ARPU has been pretty positive since 2017. I understand that some of that is postpaid, prepaid mix, but clearly, LTE usage has certainly had an impact. Obviously, COVID gave you a little bit of a headwind the last couple of quarters. But when you're looking at 2021.
Assuming we have some type of COVID recovery at least health wise, but maybe not economically. Do you think that across your markets, especially the big ones that you can get back to ARPU growth?
And then 2 kind of additional questions as it relates to that, which is, can you give us an update on what is the mix of LTE traffic today? And kind of a capital CapEx outlook because your CapEx supposed to get down a lot this year. Is there going to be kind of a return to CapEx investment based on some of this LTE growth?
Yes. Well, what we have been seeing in this -- 2 things are very important with the pandemic. The pandemic show us that our networks are really strong. So we handle all the traffic in all the countries that we need. So people move from offices to houses and then a lot more in houses, in broadband, in wireless, in WiFi, they see a lot more TV. So all these trends looks very good in our network. So we have a very strong network, and that's because the last 3 years, we have been investing a lot on that. The focus on photonics, in the backbones, in the last mile. So that's very important, and we're very happy. We have been doing a lot of testing all around Latin America, and we have been the best network in most or maybe all of the countries. We have been doing very good on that. So that's very, very important.
So other thing that what happens during the pandemic is that it accelerates a lot the digital for payments, for shopping, for studying, for everything. So looks like people is going to use more and more and more on that. So I don't know what is going to happen on 2021.
What I can tell you is that people is using a lot more telecom. Telecom has becoming more and more important every day. And with this lockdown, accelerate a lot the digital -- in the digital side. So we're doing that on the CapEx. I'm going to talk a little bit about the CapEx this year.
Well, I think the CapEx is going to end reducing maybe 30%, 25% to 30%. We're going to reduce the CapEx from our original CapEx this year. Because we -- also because execution, because in the lockdown, it was very difficult to execute. Also because we take out some projects that we don't need, and maybe we're going to delay that. And we're working right now to see what's going to be the CapEx for next year. So still, I don't know what will be the CapEx, but the CapEx of this year is going to be around $6 billion instead of the $8.5 billion that we have there. So that's more or less what we have, ,part execution because of the lockdown, other ones because we delay some projects that we don't think or we don't need at this moment.
That's a pretty big decline. I don't -- it didn't seem like usage declined that much. So I mean, at a minimum, shouldn't you think that CapEx -- I mean, I know you don't want to give a CapEx guidance for 2021 now, but is you're down that much this year, should it at least be flat in 2021? Is it -- would it be reasonable to assume that?
To compare with this year or compared with our original CapEx?
When I look at 2021, if it's $6 billion this year, I would assume that at a minimum, it's going to be flat, if not up in 2021 from that level.
Hey. From that level, it's going to be higher, of course. It's going to be higher. But we're working. I don't want to advance anything, but it's going to be higher than this year. But…
Maybe not at the $8 billion from 2018 and 2019. I got it. Okay.
Okay. I don't -- you know other things that has been really interesting is that, well, there's a lot of suppliers that are helping and reducing prices and moving with new technologies. And there is a lot that we have been doing there. So also is helping us on that. So what I can tell you right now, very important that with the $6 billion we haven't lose anything. So we have a lot of capacity. Very good quality.
And in the commercial side, in the variable CapEx that is -- it's 100% done what we need. So we are not stopping anything on that. So that's important. So we're not going to stop growth. We're not going to stop capacity. We're not going to stop quality. We're not going to stop, very important, all the digital things that we are doing in the company. So that's very important to that…
Just one quick follow-up, Daniel. And I apologize for the third question, but it's related, is when you say execution, does that mean you're using like different radio vendors like Fujitsu or Airspan or whoever, rather than the traditional guys? Or is it just that pricing is coming down from the Nokia and Huaweis of the world?
Well, there's new vendors, plus maybe not in radio, but in other things. There are new people entering in some of the new technology. So it doesn't have -- radio is -- it's a very small part of our CapEx. So it's a lot on backbones, a lot of photonics, a lot on digital, fiber. There's a lot of things in the CapEx. It's not only radio core virtualization, so there's a lot of things related to CapEx.
Your next question comes from the line of Marcelo Santos of JPMorgan.
There are 2 actually. So the first is about to pick up in broadband ads in Mexico. I just wondered if you could talk a bit about the sources you mentioned, the agreements with OTTs, but also is there some demand from COVID coming in? And what do you think about the sustainability of this higher growth in broadband?
And the second question is about Brazilian weakness in the fixed line, which you comment is more on PayTV. Is it limited to DTH? Is this also suffering cable? What's the outlook here? How much more of decline could we have on the DTH?
So your first question around the Mexico broadband. What we've been doing is upgrading all the speeds of our customers that have been keeping the loyalty from our customers. Another thing is that we've been migrating from copper to fiber as soon as we can within the market. And the third one is that we launch a new set of packages that include several add-ons with the broadband. And I think it has been very well received from the market. We -- and there is a pickup, as you mentioned, around the COVID. All the people working from homes need more speed, but there is more people connected to the network. That's another thing that happens. Not only in Mexico, we see this in all the countries.
On the Brazilian side, as you know, PayTV is decreasing the revenues, as Carlos mentioned, 13%. But what we see is that when you look at the total market, the total market is decreasing in Brazil. So there is downgrades in some of the customers, given the economic condition in Brazil. But what we are doing is to develop a new set of products that it's more like an entertainment hub moving just the PayTV, regular PayTV, and we believe that included add-ons and more functionality to the PayTV, we will could stabilize the revenues in the near future.
Your next question comes from the line of Cesar Medina of Morgan Stanley.
I have 2 questions related to the -- your deleveraging process. I mean one is other than the towers that you're working on, how should we think about other stakes, as in, for instance, there's been news regarding KPN? And once you reach to that 1.5 level, what's next? I mean, should we expect and distribution to shareholders, buyback dividends more on that front? I appreciate your thoughts on that.
Well, first, on your question on KPN. So we know this Swedish private equity fund that is the rumor over there is we don't know nothing. We know that from the media, so we don't know what is going to happen there. Of course, there's going to be consolidation of cost, there's going to be consolidation in Europe, but we don't know nothing about that.
And on the financials…
Okay, I think as regards in our -- as we have the KPN shares listed of -- responsible for sale, some asset disposal for sale. It is reflected as a market or securities. They are indeed marking on securities. And that would not change our net debt, okay? So even potential divestment of the -- our KPN stake won't have any impact on the levers.
The -- as I was pointing out, I think we have -- on the one hand, the cash flow that is providing us ample room to reduce debt. We have done so far this year. We mentioned nearly MXN 50 billion cash reduction of net debt. And we expect, by the time the platform transaction closes, we expect to receive initially $6.3 billion more. So that really would take us a long way to about 1.5x or even below the 1.5x net debt to EBITDA.
But as I was saying, I think there is so far a great uncertainty in the world. I've noticed you're familiar with the latest IMF forecast for the world, but basically, we have several countries not coming back before we were in 2019, until 2 or 3 or 4 years from now, okay? So I think this is still somewhere -- the early part of this, call it, related crisis. And we think it pays to remain conservative and to -- as I was say, to navigate a slight lower of debt. It's easier -- things are uncertain. So that's what I would say to it.
Your next question comes from the line of Carlos Sequeira of BTG Pactual.
So my question is, does AMX has any plans to overlay it's coaxial cable network in Brazil with fiber and fiber-to-the-home technologies? I know you have a big cable network operation there. And I was just wondering if you have any plan to overlay it at some point.
Ladies and gentlemen, we are experiencing technical difficulties. The conference will resume in one moment.
And it seems the speakers are back on the call. Feel free to begin the Q&A.
Sorry, we're back. Thank you. We pushed the wrong button, sorry. Yes?
Do you want me to make the question again? I can do it again.
Sorry. Yes.
Yes. Okay. So my question is if AMX has any plans to overlay its coaxial cable network in Brazil with fiber or fiber-to-the-home technologies? If not now, at some point in time? What is -- how you see the cable network in Brazil versus the possibility of upgrading to fiber management?
Well, as you know, in Brazil, we have a HFC network. And what we've been doing is to upgrade both networks to [indiscernible]. Since 2 years ago, all the new cities [indiscernible] it was with fiber. So we have compasses already with fiber and GPON. We believe that these [indiscernible] will deliver the speed that we need for the market is in the next years. And then all the new cities we will be building fiber systems.
Of course, there is a lot of room. We don't have network, and we are analyzing ARPU across those markets in the future.
[Operator Instructions] Your next question comes from the line of Chelsea Colon of Aegon.
I was just wondering if you could provide a little bit more color around the performance in [Chile? I'm just wondering how much of this performance is do you think is due to competition in the market versus the effects of the pandemic? And if you could also just remind us of what technology you have on the mobile and fixed side in Chile?
You're talking about Chile?
Yes.
No, no. In Chile, we have the same technology in mobile that we have all around Latin America, we have 2G, 3G, not 2G -- it's -- I think it's almost 0, but 3G and 4G and 4.5G. So that's the technology that we have. In fixed, we also have fiber-to-the-home. So what we need in Chile, Chile is doing a little bit more difficult on the country as the lockdown has been on and off. And we need to improve there. So I think we are putting and execute better. So we are working on that. And I hope that we're going to see better results in the next year.
So it's not something about technology. I think we are well prepared on the technology, very good also in mobile, in PC, incorporate also data centers we have. So we need to execute a little bit better.
So the market is also very difficult there. Prices have been going down and popped up. Nothing else to say. We need to execute better.
And what is your exposure to the SME segment in Chile?
What is your what? Sorry, we don't hear you.
Your exposure to SMEs in Chile?
I think we are in a good position, but Oscar can talk a little bit about what we're doing on the corporate side in the small and medium enterprise also.
Sure. I mean it's small medium enterprise is an excellent segment in the market. And we've been seeing in the small business, but this enterprise are looking for more digitization, more cloud services, more applications, they do not know to help them to have online, to have a store in the digital work. So what we've been doing is bundle all these products and services to deliver to the small business. And on enterprise, if you look at the change of value from the connectivity to the end of the chain, you have connectivity on the [indiscernible] security, you have data center, you have business analytics, you have [indiscernible], and then you have [indiscernible]. So what we are offering on those markets is a fully integrated solution in the market, not only key ports on connectivity. We want to bring value to the customers to improve then the productivity or increase in revenues is more business-oriented proposal, not only connectivity. And we've been working setting up all this portfolio in the last -- within 3 years ago. So I think we've been very well assessed in the market more as an aggregator than only in connectivity.
Your next question comes from the line of Maria Azevedo of Santander.
Congratulations for the strong numbers. I have 2 questions. The first one is a follow-up on the question on CapEx. Do you think that network sharing, open run and those initiatives can also help the optimization of CapEx? And how much do you expect to spend with 5G spectrum in 2020 and 2021?
And then the second question is about a trend about monetizing subscriber base and some of the companies are talking about digital wallets, and you launched some initiatives of using prepaid credit as digital wallet? How big is that opportunity in Lat Am?
Well, I think in terms of 5G, I don't have a number on how much we're going to invest on 5G next year, but we're going to have -- we're going to have 5G in some of the countries next year. It's going to depend a lot on the spectrum. Let's say, when does Brazil is going to launch the spectrum, when those other countries are going to some spectrum in other ones we already have the spectrum. So we're working in 5G, and we can have 5G launch prices in some countries next year. So we have not…
Network sharing. I think network sharing help but it helps in some places. So I'm not a fan of network sharing, let's say, in in big cities by an example, okay? Because in big cities, you are always investing more new technologies, a lot of capacity and then you have to grow the capacity and put more and more because of the usage both network sharing in rural areas where the growth is not so big or in places where you don't -- you need more COVID accidents, a lot of capacity, I think it's a very good idea.
I mean that's the way we feel and what we think is important. So of course, network sharing is a good idea, but depending where and with whom you put us now, okay? So that's what we feel.
On the wallet, Oscar can talk a little bit what we have on digital wallet?
Yes, yes, we develop a product around digital wallet, it's called Claro Pay. And what the functionality that is within the Claro Pay is that when you put cash in or cash out different sources from credit cards or from the deposit -- as you know, in Latin American country, there is a lot of use of cash. So getting into that to digitalize that interaction should be great. And it's an application that is an ecosystem that reduce the uses of cash. But as well, you could pay third-party services like telephone to recharge the prepaid mobile phones. And we are on the process of resonant right now. So we are developing more seasonality. But we are ready to go this Claro Pay product.
There are no further questions at this time. I hand the call over to Mr. Daniel Hajj.
I just thank everyone for being in the call. Thank you very much. Bye-bye.
This concludes today's conference call. You may now disconnect.