Earnings Call Transcript
AMERICA MOVIL SAB DE CV/ (AMX)
Earnings Call Transcript - AMX Q2 2022
Operator, Operator
Good morning. My name is Drew, and I will be your conference operator today. At this time, I would like to welcome everybody to the América Móvil Second Quarter 2022 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations.
Daniela Lecuona, Head of Investor Relations
Hi, thank you. Good morning, and good morning to everyone. Thank you for joining us today to discuss our second quarter financial and operating results. We have on the line, Mr. Daniel Hajj, CEO; and Mr. Carlos Garcia Moreno, CFO.
Daniel Hajj, CEO
Thank you, Daniela. Good morning, everyone. Carlos is going to make a summary of the second quarter of 2022 financial and operating results.
Carlos Garcia Moreno, CFO
Thank you, Daniel. Good morning, everyone. The trend towards higher interest rates in the U.S. dollar market that began in March continued unabated in the second quarter as inflation fears dominated sentiment with both short and long-term interest rates rising. By the second week of June, long-term rates peaked and began a downward trend as markets shifted their focus towards the negative impact on economic activity that would be derived from substantially higher short-term interest rates. By the end of the quarter, the dollar had appreciated against all major currencies in our region of operations, including the Mexican peso, the Brazilian real, the Colombian peso, and the Euro. We ended June with 306 million wireless subscribers after incorporating 12.9 million subscribers from the acquisition of Oi in Brazil. Organically, we had net additions of 3.1 million, which includes 1.8 million postpaid subscribers. Brazil led the way in terms of postpaid growth, having added 779,000 subscribers followed by Colombia with 272,000. We gained in the quarter 1.3 million prepaid subscribers, of approximately 350,000 coming from Mexico and Colombia, both more or less equal, and 257,000 from Brazil. In the fixed-line segment, we connected 186,000 broadband, of which half came from Brazil, 38,000 from Eastern Europe, 25,000 from Central America, and 20,000 from Mexico. In terms of active growth, mobile postpaid was the main driver, growing at 7.9%, followed by mobile prepaid at 4.2% and fixed broadband at 3.5%. Fixed broadband access continues to decline on a year-on-year basis, although the former seems to be on an improving trend. Our revenue reached MXN 217.4 billion in the quarter, 3.3% more than in the year-earlier in Mexican pesos terms, with net service revenue expanding 4.5%. At constant exchange rates, the latter increased 4.9%, excluding Argentina because of high inflation rates. Including that effect, services revenues were up 4.2%, excluding that effect. Both prepaid and postpaid revenue growth rates were similar in the quarter, approximately 8.5% once the Oi's clients had been accounted for. With 20% mobile service revenue growth, 13.7% without Oi, Brazil was our top performer, as our Eastern European operations posted 9.6% growth; Mexico, 8.8%; Peru, 7.5%; Dominican Republic, 6.9%; and Austria, 6.2%. Broadband revenue was up 3.3%, a similar pace to the first quarter, whereas corporate network revenue growth increased to 8.9% from 4.9% in the prior quarter. The decline in PayTV revenue moderated somewhat to -5.3%, mostly due to improvements in Brazil. The strong performance in broadband revenue expansion was notable in the Dominican Republic at 15%, Eastern Europe at 11.3%, and Puerto Rico at 10.4%. Nonetheless, it must be pointed out that Argentina is executing the fastest actual goals in this area. Second quarter EBITDA totaled MXN 82.7 billion, a 4% increase in nominal terms and 4.2% at constant exchange rates, with the EBITDA margin rising 0.2 percentage points to 38%. EBITDA expanded 10.3% in our Eastern European operations, 8.8% in Brazil, 8.6% in the Dominican Republic, and 5.2% in Mexico. Our operating profit of MXN 41 billion in the quarter resulted in a net income of MXN 13.7 billion after comprehensive financing costs of MXN 18 billion, which approximately half were net interest payments. Throughout the first half of the year, our operating cash flow, which already reflects our working capital requirements, fully covered our capital expenditures amounting to MXN 65.6 billion. We raised MXN 43.8 billion in net financing in the period that helped us fund MXN 19.6 billion for the purchase of Oi and a price adjustment related to the sale of TracFone and MXN 11.6 billion in labor obligations. Shareholder distributions of MXN 16.3 billion in share buybacks were partly funded by MXN 3.2 billion in dividend income from our KPN and Verizon stakes. Given the high seasonality of our working capital requirements, we foresee a reduction in the second half of the year. Our net debt excluding leases stood at MXN 414.7 billion at the end of June, a MXN 7.1 billion increase relative to December. It was equivalent to 1.36x net debt to LTM EBITDA. Approximately MXN 55 billion in debt obligations will be transferred to Sitios Latinoamérica upon its spin-off from América Móvil, which we expect to take place in this third quarter. With that, I would like to pass the floor back to Daniela for the Q&A.
Daniel Hajj, CEO
Thank you, Carlos.
Daniela Lecuona, Head of Investor Relations
Thank you. We can now begin the question-and-answer session.
Operator, Operator
So our first question is from Alejandro Gallostra. Your line is now open. Alejandro, go ahead.
Alejandro Gallostra, Analyst
Thank you. Good morning, everyone. Good morning, Daniel, Carlos, Daniela. I have a couple of questions about Brazil. The first one is about the mobile business. We have seen the company reporting stable ARPUs in Brazil on a sequential basis, following the integration of Oi subscribers. Although I expect ARPUs to decline slightly in the subscriber mix. So could you please explain what is behind the receiving ARPU this quarter? This is my first question. Thank you.
Daniel Hajj, CEO
We don't hear you very well to answer. Can you repeat it, please, because we don't hear you very well.
Alejandro Gallostra, Analyst
Sure, I will repeat the question. In spite of the mobile business in Brazil, since we have seen the company reporting stable ARPUs in the country on a sequential basis, following the integration of Oi's subscribers, although I expect the ARPUs to decline slightly in the new subscriber mix. So I was wondering if you could explain what is behind the increase in ARPU in Brazil this quarter?
Daniel Hajj, CEO
Nothing new. I think what you see this quarter in Brazil is that we grow partly because we acquired the subscribers from Oi around 12 million subscribers, somewhat evenly distributed between postpaid and prepaid. The organic growth, excluding Oi, was very good, around 14%. That's what we have. And we have a very good subscriber base. We’re still doing our combos. We are also maintaining a very good network. With number portability, we're gaining subscribers. So overall, I think we are doing a very good job in acquiring both prepaid and postpaid subscribers in Brazil, and that's why the ARPU is stable this quarter.
Carlos Garcia Moreno, CFO
As you point out, Alejandro, I think that we had already witnessed a slight decrease in ARPU in the first quarter. And this is basically continuing in the second quarter, but it's a little bit higher. Yes, the numbers even after incorporation of the Oi subscribers indicate we've had a 2.1% increase in ARPU to an average of 22.
Alejandro Gallostra, Analyst
Okay. Great. Thank you. And my second question is related to the fixed telecom business in Brazil. Since a few days ago, the CEO of a competitor in Brazil described a difficult competitive environment in the fixed broadband market in the country, mentioning high household penetration and market prices that do not provide an adequate financial return on this business segment in his view. Nevertheless, you and other firms in Brazil continue rolling out FTTH in the country. So could you please share with us your views on the competitive environment in broadband? And what are the opportunities for financial returns that you see in the fixed telecom business in Brazil to justify upgrading your cable infrastructure to FTTH in the country? Thank you.
Daniel Hajj, CEO
I don’t know exactly what those delegates mentioned, but the fixed broadband market in the country is indeed challenging. We are facing competition as many companies have been expanding fiber to homes over the past three years. Regional ISPs are putting up fiber as well. However, we operate a full telecom business that includes broadband, TV, fixed services, and corporate services, along with the new applications we are developing. Deploying fiber for us presents a good opportunity to create bundled services and expand in the Brazilian market. There are still areas where we have not yet rolled out fiber, but this quarter we entered 24 new cities in Brazil, where we will either deploy fiber or start 5G services. This gives us two ways to provide broadband, ensuring we deliver strong telecom services to our customers. It’s a competitive environment with many ISPs, but we are performing well, achieving good penetration in our network and maintaining a solid average revenue per user. Overall, we are pleased with our growth in Brazil.
Alejandro Gallostra, Analyst
Thank you, Daniel. Thank you, Carlos.
Daniel Hajj, CEO
I think the conditions for a company like Claro are different than the conditions for local ISPs in Brazil. Our offerings include all services, and we have access to financing. I believe the rollout will differ substantially between what they started doing three or four years ago compared to what they will achieve in the next three years. Financing will also have quite a different landscape. So let’s see how the broadband market unfolds in Brazil.
Alejandro Gallostra, Analyst
Okay. Thank you for your comments.
Operator, Operator
Our next question comes from Alejandro Chavelas from Credit Suisse. Your line is now open. Go ahead, Alejandro.
Alejandro Chavelas, Analyst
Hi. Thanks for taking the question. Just a couple. The first one on TracFone. Can you tell us what the pricing adjustment you mentioned was? What was the amount? And also on Sitios Latinoamérica, do you seem to be very confident that you can complete it in the next, let's say, two months? Why are you so confident? Have you had any feedback from the authorities or something? Or have you progressed on any front that leads you to be so optimistic about completing it in that timeframe?
Daniel Hajj, CEO
Yes, regarding Sitios Latinoamérica, we are optimistic. The approvals have been advancing in all the countries, and we’re optimistic that we can have the spin-off in the third quarter, yes, that's true. Things are moving along quite well. That's why we're optimistic. So we think that by the end of the third quarter, we can finalize the spinoff. And regarding TracFone, Carlos, I don't know if you want to explain.
Carlos Garcia Moreno, CFO
What happened with TracFone is that besides the purchase price, there was to be an adjustment based on working capital changes in particular. We had an unexpected change because the closing of TracFone took place in the middle of the month. We estimated that it would be completed in November, if I'm very correct. So there was an adjustment that was estimated, and we received an additional amount beyond the stated price. Eventually, this additional amount was essentially given back because by December, we had the complete financial estimates.
Alejandro Chavelas, Analyst
Okay. I don't know if you mentioned that, but I couldn't hear very well. What was the initial amount?
Daniel Hajj, CEO
I think it was around $200 million that they gave us and then we returned that.
Carlos Garcia Moreno, CFO
That was essentially returned.
Alejandro Chavelas, Analyst
Great. Thanks so much. I have a follow-up just on Brazil on the wireless segment on mobile. Now that you have successfully integrated the old subscribers, how are you seeing the competitive environment? Are you already noticing market repair? Do you see players trying to win market share or maintaining stable market shares? What are your thoughts on Brazil in the mobile segment?
Daniel Hajj, CEO
Well, we acquired the subscribers, and we're making all the adjustments in our infrastructures, in IT and everything. This will take around three, four, or five months more to be fully integrated. But what we can see so far is that with the Oi subscribers, we're experiencing positive number portability trends. We're net gainers on that. More Oi subscribers are migrating to Claro than leaving it, so that's what we have been experiencing. It's still early to draw conclusions since it's only been about a month and a half, maybe two months since the integration, but we're confident because we have a very good network with great coverage and speeds, plus the brand is performing well. Our numbers indicate that we're performing strongly in wireless in Brazil.
Carlos Garcia Moreno, CFO
Beyond the Oi integration, América Móvil gained 1.8 million postpaid subscribers, with Brazil contributing nearly 800,000 net additions. We are having excellent subscriber growth and at the same time, seeing an increase in activity.
Daniel Hajj, CEO
Overall, we are executing very well on the Oi integration. We believe we'll gain more subscribers from portability than what we'll lose. Our network quality, capacity, and excellent commercial execution help contribute to this positive outlook. We're satisfied with our performance in wireless in Brazil, as indicated by our numbers.
Alejandro Chavelas, Analyst
Thanks so much for the answers.
Operator, Operator
Our next question comes from Carlos Legarreta from GBM. Carlos, your line is open.
Carlos Legarreta, Analyst
Hi, thank you. Good morning. Just two quick questions. The first one on CapEx allocation. I just want to confirm that you are maintaining your guidance of MXN 8 billion for the year? And secondly, I guess this is a more general question. But I think it’s very commendable that in most of your core countries, say, for Colombia, you have managed to expand margins. This is within the context of inflationary pressures. So I guess my question is, how are you managing to achieve that, given that you are not being aggressive on pricing? That would be my second question. Thank you.
Daniel Hajj, CEO
On CapEx, I think we are on track with the budget we’ve set, which is around MXN 8 billion. This includes some frequencies if we have any to acquire. But basically, the CapEx is expected to remain at around MXN 8 billion for this year, which is more or less in line with last year's figures and the projections we have for the next year. We cannot include frequencies in that CapEx. Regarding Colombia, I find the results particularly positive because even though we slightly reduced our EBITDA, we significantly grew there. This quarter, we added 610,000 net subscribers, which is 60% more than last year. We had 272,000 postpaid and 340,000 prepaid subscribers. So the growth was very impressive. Of course, this required some more financial outlay in customer acquisition costs, but overall, we have been performing very well in both prepaid and postpaid segments in Colombia.
Carlos Garcia Moreno, CFO
To add on top of what Daniel is saying, notwithstanding the challenges presented by inflation, as you mentioned, I think working EBITDA margins are increasing in Brazil, Mexico, Austria, and Eastern Europe. We are experiencing growth across some of the major operations that the company has. Colombian operations were a slight decline, but it is more than compensated for by the strong growth we’re seeing in our other key countries.
Carlos Legarreta, Analyst
Thank you, Daniel, for that insight on Colombia. Go ahead, go ahead, Carlos.
Carlos Garcia Moreno, CFO
Just to reiterate what Daniel mentioned, we are observing overall strong growth in broadband revenues, and it’s worth noting that the increases in major operations are solid, despite the inflationary challenges. Our growth in broadband revenue stands strong at 3.5%, compared to 3.1% last quarter and 3.0% in the previous one, showing consistent improvement.
Daniel Hajj, CEO
The revenues are increasing, and our strict cost control measures are helping us manage expenses effectively. Additionally, we have a digital transformation initiative that’s shifting processes to digital, substantially reducing our costs. In América Móvil, we have comprehensive policies for digital operations, which are helping to control costs and improve EBITDA margins in our core countries.
Carlos Legarreta, Analyst
Thank you.
Operator, Operator
Our next question comes from Diego Aragao from Goldman Sachs. Diego, your line is now open.
Diego Aragao, Analyst
Yes, thanks, good morning, everyone. The first question is about the joint venture in Chile. Could you please provide the latest update on the regulatory approval status? Thank you.
Daniel Hajj, CEO
Not too much to share right now. We’re advancing. I think we are doing okay with regulators and we expect to complete the merger in the fourth quarter. That’s the timing we currently have.
Diego Aragao, Analyst
It sounds good. Thank you. And I guess the second question is actually just a brief follow-up on the previous one regarding TracFone. I'm sorry, I couldn't hear the answer clearly. Could you explain the adjustment that was made?
Carlos Garcia Moreno, CFO
What I was explaining is that besides the purchase price for TracFone, there was an adjustment that must be made based on changes in working capital and net debt. We estimated the adjustments at the time of closing, which was set for the middle of the month. We received an extra payment above the purchase price for this adjustment. However, as the financial results were finalized, some of the estimates were proven incorrect, and we returned what was advanced as an adjustment payment. So that’s essentially what occurred.
Diego Aragao, Analyst
Okay, understood. Thank you.
Operator, Operator
Our next question comes from Leonardo Olmos from UBS. Leonardo, your line is now open.
Leonardo Olmos, Analyst
Hi, good morning everyone. I have two questions on mobile in Brazil. Sorry to delve back into this topic. But hopefully, we can have some fresh insights. So number one, regarding the ICMS change, the tax reduction that happened in Brazil. Do you see this as an opportunity to increase, perhaps, share of wallet by reducing prices for your customers, thus potentially boosting net revenues? What are your plans there that you can share with us? The second question relates to what you mentioned before regarding 5G in the context of broadband. Are you considering FWA for 5G? Do you see that as an option? Is it too expensive due to equipment costs? How do you view FWA's role in Brazil?
Daniel Hajj, CEO
Regarding the tax adjustment, I think it presents a good opportunity to increase the share of wallet for our customers. This is something we could pass on to our customers, enabling them to purchase more data or additional services. I view this as quite significant. As for the fixed broadband, yes, we’ll implement 5G fixed as well as wireless 5G services. We have a comprehensive rollout plan that encompasses both. Notably, there are locations in Brazil where fiber networks are not yet present, so we view this as a viable solution. In places where fiber is not feasible or where consumers prefer a cable-free alternative, 5G fixed services could offer an effective solution. There’s strong demand, and I think this new product will be successful throughout Latin America. We currently have around 3 million fixed wireless subscribers across the region.
Leonardo Olmos, Analyst
That's very interesting. You're the first company to publicly discuss that opportunity, which is exciting. We look forward to hearing more about it. Have a good day, everyone. Bye.
Daniel Hajj, CEO
Thank you.
Operator, Operator
Thank you. Our next question is from David Joyce from Barclays. David, your line is now open.
David Joyce, Analyst
Thank you. A couple of questions, please. First, you continue to show improving churn trends in a number of countries like Mexico, Brazil, Colombia, and Ecuador. What would you attribute that to? And how much further do you think that can improve? Secondly, could you remind us or provide an update on when you believe you'll achieve full 5G rollout in your key markets? Thank you.
Daniel Hajj, CEO
Well, churn is a crucial indicator. It signifies customer satisfaction, highlighting that we're providing good service, quality coverage. We aim for the best networks across Latin America, which is reflected in reducing churn rates. In Mexico, for instance, we already have 40 cities equipped with 5G, and it's performing well. Many customers appreciate the 5G experience, and a portion of the ARPU increase results from users migrating to 5G plans. We anticipate primarily focusing on major cities for 5G availability by year-end. Brazil is also aligned with this plan. We can expect significant 5G rollout in places like Mexico and Brazil by year-end. The timeline will largely depend on the availability and acquisition of necessary spectrum in various countries.
David Joyce, Analyst
Great, thank you very much.
Daniel Hajj, CEO
Thank you.
Operator, Operator
Our next question comes from Fred Mendes from Bank of America. Fred, your line is now open.
Frederico Mendes, Analyst
Hello, good morning everyone, and thanks for the call. I have two questions as well. The first one, again back to the mobile segment in Brazil. It looks like in this quarter, once we exclude Oi, your ARPU increased by close to 6%. That would imply almost a double-digit pass-through of price in our calculation here. So just wondering if that's the case. If this is accurate, are you already seeing the benefits from having three plays instead of four? I believe you already mentioned something similar in a previous question. That would be my first inquiry. My second question looks at Telmex, which appears to be experiencing service revenue pressure over recent quarters. Is this indicative of increased competition, or perhaps demand for broadband is diminishing now that people are returning to work, causing some pressure in recent quarters? Thank you very much.
Carlos Garcia Moreno, CFO
I believe that you are correct. The ARPUs have improved due to market repair, especially as we see some consolidation occurring in the market. This development has been bolstered by the high inflation we are currently experiencing in Brazil. We’re already seeing inflation figures around 12%. It’s important to note that this market environment contributes to our growth.
Daniel Hajj, CEO
Regarding your second question about Telmex, we're actively upgrading subscribers to fiber. Over 50%, maybe even 60%, of our subscribers are moving to the fiber network we're expanding. The broadband revenue is growing at 3.5%, indicating growth momentum. As for corporate business, Telmex performs well overall. While there is greater competition, particularly affecting copper services, we're transitioning many users to fiber, which is strengthening our position.
Carlos Garcia Moreno, CFO
To further add to Daniel's explanation, broadband revenue growth has been steady, with a slight increase to 3.5% this quarter. This trend has shown improvement over the past few quarters, while revenue from our copper networks remains volatile, leading to fluctuations in overall revenues. Corporate networks are growing consistently, though income from voice revenues continues to face challenges.
Frederico Mendes, Analyst
Okay, very clear. Thank you for that insight, Daniel and Carlos.
Carlos Garcia Moreno, CFO
Thank you.
Daniel Hajj, CEO
Thank you.
Operator, Operator
Our next question comes from Marcelo Santos. Marcelo, your line is now open.
Marcelo Santos, Analyst
Hi, good morning. Thanks for taking my question. I wanted to delve deeper into the fixed wireless strategy, where you aim to launch broadband using 5G in which countries? Is the idea to transition clients from legacy networks, or do you think this product will compete with fiber providers?
Daniel Hajj, CEO
No, not all of Latin America has fiber. We currently have around 3 million fixed wireless subscribers throughout Latin America. This isn't a new strategy; it has been effective. We are rolling out a solid broadband network to areas lacking coverage. Regarding 5G, our new infrastructure will scale with market demand and yield competitive pricing. Many consumers in places like Austria opt for wireless technology to avoid in-house cabling. Thus, this can create demand for this new, cable-free product, which could be successful in Latin America. We're enthusiastic about the 3 million fixed wireless subscribers we serve.
Marcelo Santos, Analyst
Perfect. And my second question would relate to the ICMS in Brazil. You're clear that you plan to pass that to prices. But are you creating some offers to try and retain that financial benefit for América Móvil? Will you be providing additional services to encourage spending?
Daniel Hajj, CEO
Currently, we don't have anything specifically planned, but we are considering the best strategies for our customers. We will see what develops, but if we ultimately reduce prices or not, I believe customers will likely spend more in telecommunications due to the reduced ICMS.
Marcelo Santos, Analyst
Perfect, thank you very much.
Daniel Hajj, CEO
Thank you.
Operator, Operator
Our next question comes from Andres Coello from Scotiabank. Andres, your line is now open.
Andres Coello, Analyst
Thank you for taking my question. Could you provide any color on taxes effectively paid in the first half of the year? I believe taxes paid rose to MXN 31 billion from MXN 15.5 billion last year. Was there anything extraordinary about this? For instance, was this connected to profits from TracFone's sale? Also, I wanted to check on the recent slowdown in buybacks. Could you provide an outlook for buybacks for the rest of the year? Thank you very much.
Daniel Hajj, CEO
Regarding taxes, what we effectively paid in the first half of this year compared to the last year is attributed to the missed payments for fiscal years. Payments for the previous fiscal year had to be made at the outset of 2021. The substantial foreign exchange losses recorded in 2020 allowed us to offset tax contributions. Therefore, the projections changed significantly in 2022 based on the absence of similar FX losses occurring during 2021.
Andres Coello, Analyst
Yes, thank you. So the taxes related to the TracFone — the sale of TracFone are impacted last year, right? They were paid in November of last year, and they impacted this year, the TracFone taxes?
Carlos Garcia Moreno, CFO
I think the TracFone taxes will mostly be paid at the time of the sale, which happened in November. These factors wouldn't directly impact the first half figures — these pertain to payment obligations from prior fiscal years. We also have long-standing taxes owed from 2020 stemming from FX losses suffered that year.
Andres Coello, Analyst
Understood.
Carlos Garcia Moreno, CFO
Okay, and regarding share buybacks and costs, I believe our decisions revolve around cash liquidity. It impacts how we approach share repurchases this year, but we’re committed to maintaining that throughout the entire year, taking our dividend payments into account. We're not anticipating any major M&A activity since we acquired Oi this year. Any excess cash generated should continue supporting our leverage equilibrium while distributing returns to our shareholders.
Andres Coello, Analyst
Understood, thank you.
Operator, Operator
Our next question comes from Walter Piecyk from LightShed. Walter, your line is now open.
Walter Piecyk, Analyst
Thank you. Daniel, I’d just like to follow up on the last comment. Going back to 2021, the pattern of your share repurchase activity increased in the second half of the year and slowed in the first half. I understand that you sold TracFone, resulting in a drop in free cash flow. Is the slower buyback activity reflective of seasonal patterns for distributions or share repurchases? Or is it due to the decrease in TracFone's contributions to free cash flow?
Carlos Garcia Moreno, CFO
Walter, there is an established pattern of higher cash flow in the second half compared to the first half. Seasonal factors play a significant role in that. Additionally, the capital demands on our working capital have increased substantially during the initial few months. So typically, the first half is less active than the second. That said, we recorded more buybacks in the first half of this year compared to the previous year. Furthermore, we expect higher dividends this year relative to last year.
Walter Piecyk, Analyst
Okay, thank you. Just to clarify on that, I want to ensure I understand — given that TracFone has impacted free cash flow, will you maintain a similar buyback pace throughout the second half as in previous years, or do you anticipate cutting back?
Daniel Hajj, CEO
We're closely monitoring our budget and will adjust CapEx as necessary. We're continuously evaluating the impact of the dollar's strength and the general economic outlook. If demand doesn't warrant high capacity, we won't allocate unnecessary capital. We aim to ensure that CapEx yields returns that make sense for us.
Walter Piecyk, Analyst
Great, thank you very much.
Carlos Garcia Moreno, CFO
I’d like to add that our dividend for this year is expected to witness approximately a 10% growth in dividend per share. Unlike previous years, we plan to make a single installment in August rather than two installments.
Walter Piecyk, Analyst
I appreciate that insight. Thank you for considering alternative structures for dividends. Many income investors would prefer a quarterly dividend structure.
Carlos Garcia Moreno, CFO
We will review that and keep you updated.
Operator, Operator
Our next question comes from an analyst at HSBC. Your line is now open.
Unidentified Analyst, Analyst
Thanks for taking my question. I have a couple of questions. The first one is that at the group level, the service growth rate was much higher than EBITDA growth this quarter, but that is something we have not seen for a long time. Given that the macro remains very difficult, do you see EBITDA growth lagging service revenue growth for the remainder of the year? That's my first question.
Daniel Hajj, CEO
The service revenue growth was 4.9%, and EBITDA growth was 4.2%. So it’s not a significant disparity. Both have been performing well. But yes, as you've mentioned, varying inflation levels across countries can lead to different impacts on EBITDA. We have managed solid growth in both service revenues and EBITDA this quarter, which I consider commendable.
Carlos Garcia Moreno, CFO
As previously stated, the 4.4% EBITDA growth is consistent with last quarter's results. Our EBITDA margin remains slightly above last year at 38%. This increase corresponds to revenue growth exceeding 4%, which in turn yields a solid EBITDA performance.
Daniel Hajj, CEO
To further reinforce our growth strategy, we added 3.1 million commercial subscribers this quarter. This position is vital to our operational success.
Unidentified Analyst, Analyst
Yes, thank you. My second question is regarding the markets where you're struggling with EBITDA—specifically Peru and Chile. How do you see the quantitative dynamics there, and how do you expect EBITDA to evolve going forward?
Daniel Hajj, CEO
In Chile, the competitive environment has indeed been very challenging. We lost some revenue because of increased competition and some clients no longer purchasing from us. However, we are working hard to reduce costs and gain market share, particularly in the wireless segment. We are optimistic about our strategies in the wireless division. In Peru, our sole focus is on acquisitions and capital expenditures surrounding equipment subsidies, which are slowing down our profitability. If you look at last year’s figures, we've made more significant investments to sustain growth. We remain focused on corporate business, and we plan to enhance our penetration within the fixed segment.
Unidentified Analyst, Analyst
Thank you.
Daniel Hajj, CEO
Thank you very much.
Operator, Operator
I now turn the call to Mr. Daniel Hajj for final remarks.
Daniel Hajj, CEO
Thanks to all of you for being on the call, and thank you to Carlos and Daniela. Thank you very much.
Carlos Garcia Moreno, CFO
Thank you all. Have a good day.
Operator, Operator
This concludes today's conference call. You may now disconnect.