Telecom(US:TEO)2021-03-10 23:50Financial Data and Key Metrics Changes - Telecom Argentina's revenues for fiscal year 2020 totaled $3.6 billion, with a year-over-year decrease of 6.5% in constant pesos [7] - EBITDA reached $1.2 billion, resulting in a 34.1% EBITDA margin, which remained high despite the challenges posed by COVID-19 [7] - Service revenues amounted to almost ARS 284 billion, reflecting a 6.3% decrease in real terms compared to fiscal year 2019, while inflation was 36.1% year-over-year [29] Business Line Data and Key Metrics Changes - Mobile subscribers in Argentina decreased to 18.7 million, with a loss of approximately 228,000 subscribers compared to the previous quarter, primarily due to a decline in the prepaid segment [8] - Broadband and pay TV clients remained stable at around 4.2 million and 3.5 million, respectively [8] - Fixed voice subscribers totaled 2.9 million, with 2.7 million convergent unique customers [9] Market Data and Key Metrics Changes - The mobile revenue share increased to 38%, while broadband revenue accounted for 21% and pay TV revenue for 20% [30] - The average mobile internet usage reached over 4.3 gigabytes per user per month in 2020, indicating strong demand for mobile services [32] - In Paraguay, Núcleo generated $190 million in revenues during fiscal year 2020, with a significant increase in broadband subscribers [34] Company Strategy and Development Direction - The company aims to be 100% digital, focusing on integrating operations and creating an ecosystem of platforms to enhance customer experience [11] - Telecom is investing in IoT, fintech initiatives, and digital transformation projects to drive revenue growth [19][20] - The company is cautious with CapEx, planning a minimum of $350 million for maintenance and potential increases depending on economic conditions [60][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining margins through price adjustments and operational synergies, despite challenges from inflation [56][67] - The company is optimistic about its ability to adjust prices in line with inflation and is focused on cost control [67] - Regulatory challenges, particularly regarding price controls, are expected to impact future pricing strategies [71][72] Other Important Information - The company successfully refinanced $777 million of debt and extended maturities, improving its capital structure [12][46] - Telecom's cash flow generation was strong, with operating free cash flow amounting to approximately $583 million [45] - The company has initiated the deployment of 5G mobile sites, with plans for significant expansion in 2021 [64] Q&A Session Summary Question: Can you comment on the wallet initiative and its current user size? - The wallet project has over 4 million prepaid wallets and is set to launch in mid-2021, leveraging existing customer bases and transactions [54] Question: Are the price increases sufficient to sustain margins? - Management is confident that price adjustments and operational synergies will help maintain margins [56] Question: What percentage of mobile clients use over 1 gigabyte of data? - More than 90% of postpaid customers and nearly 100% of prepaid customers use over 1 gigabyte of data [58] Question: What are the plans for CapEx and 5G rollouts? - The minimum CapEx for 2021 is set between $350 million and $500 million, with plans to deploy over 250 5G sites [60][64] Question: What is the current status of average discounts across products? - Average discounts have decreased to about 30-35% of the customer base [65] Question: How does the company plan to comply with Central Bank regulations regarding debt? - The company has refinanced over 80% of its 2021 bond, minimizing pressure from regulations [68] Question: What is the outlook on price regulation going forward? - Management is optimistic about being able to adjust prices in line with inflation, despite regulatory challenges [72]