Tim S.A. (TIMB) Q1 2026 Earnings Call Transcript

Good morning, ladies and gentlemen. Welcome to TINSA 2026 First Quarter Results Video Conference Call. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TeamSA remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given.

Hello, I'm Vicente Ferreira, Investor Relations Officer of Team Brazil. Welcome to our earnings call. We will review our recent results and the evolution of our strategic plan. Then, open the floor for a Q&A with CEO Alberto Griselli and CFO Andrea Viegas. Before we begin, please note that management may make for the looking statements. So please refer to the disclaimer on the screen and on our Invest Relations website. Now, let's review our results.

Hello everyone, I'm Alberto Griselli, CEO of Team Brazil. In early 2026, we prioritized execution amid rising external volatility and increasingly unpredictable conditions in Brazilian telecom. The year began with relevant M&A activity, preparation for a spectrum auction and new below-the-line offers, among other minor news. Despite that, mobile remains rational in broad terms, so much so that operators were able to recover inflation during these first months of the year. For TIM, clearly outlining our priorities has been essential. We aim for disciplined growth and cash flow generation as we advance our strategic initiatives. To summarize, in first quarter 26, we finalized the agreement with V8, are close to completing the iSystem deal, rolled out our annual mobile offer updates, enhanced our new B2B approach and consolidated our broadband recovery. On top of that, the first quarter confirms our consistency of our financial performance and strengthens teams' long-term foundations. From first quarter 26 financials, I want to highlight service revenue growth of 6.5% year-over-year, driven mainly by mobile and supported by continued improvement in fixed. Mobile service revenues grew 5.6%, confirming the resilience of our core business. Profitability also evolved positively. A bid grew at a solid pace and the bid-after list increased 7.8%, reflecting efficiency initiatives and disciplined cost management. At the same time, operational cash flow grew 16.8%, reinforcing the strengths of our cash generation. These results reflect consistent choices around commercial discipline, cost control and capital allocation. To provide further insight, let's discuss our recent mobile performance. Postpaid remains the main contributor to growth. In the quarter, postpaid revenues increased 7.5% year-over-year, supported by customer-based expansion and disciplined monetization. We continually adjust our go-to-market strategy to achieve balanced growth and profitability, attract suitable customers, manage earn and offer sustainable propositions. In prepaid, revenues are still contracting year over year, but since a part of this loss is self-inflicted by pre-to-post migrations, we see for now stabilization in the pace of decline as good news. We continue to work on prepaid offers to better monetize them while improving the customer journey. Our 3B strategy, Best Network, Best Offer and Best Service, continues to drive our consistent performance in mobile. In Best Network, we are advancing network swaps in Brasilia and Belo Horizonte, modernizing over 1,400 sites and benefiting 3 million customers with the upgraded 5G. These upgrades improve capacity, quality, operational efficiency and strengthening the foundation of our mobile business under an AI-supported network. Under Best Offer, our Big Brother Brazil sponsorship supported brand engagement and commercial attraction during the quarter, translating visibility into tangible business impact. And in Best Service, the My MyTeam app remains central to our digital strategy. The app reached 18.4 million monthly unique users and expanded its role in customer interaction, sales and recharges, contributing to a more efficient service model. Our 3B strategy will continue to be developed to deliver results in the mobile core, while we also seek new revenue opportunities through partnerships. At the end of the quarter, we closed a partnership with PicPay, the third largest digital bank in Brazil, marking our return to financial services through an ecosystem-based model. This partnership brings together two strong brands and massive rich platforms to build a unique value proposition for clients with the potential to create significant value for both companies. BigPay brings scale with 67 million accounts, 550 billion reais in consolidated TPV and strong engagement in digital payments. By joining forces, we aim to enhance customer engagement, increase interaction frequency and create cross-selling opportunities through simple, fully digital journeys, ultimately delivering a more complete and integrated experience. Next, I'd like to turn to broadband and share recent developments. In first quarter 26, the fixed business continued to show operational improvements. Revenues were up for the second consecutive quarter, supported by ARPU growth and by the fourth consecutive quarter of positive net additions. These results reflect better execution, improved sales quality, and a more disciplined commercial approach in selected markets. If broadband is a game of consolidating our recovery, B2B is about acceleration and delivery. As you all know, B2B has become a key pillar of our strategy to diversify revenues and expand beyond traditional connectivity. Our focus continues to be on connectivity-led solutions particularly network as a services and iot across verticals such as agribusiness utilities logistics and industry in the quarter contractor revenues reach approximately 1.1 billion reais representing 30 percent year-over-year growth this performance reflects both new projects and the scaling of existing contracts supporting by our capillarity technical expertise and discipline execution. A relevant milestone this quarter was our partnership with Axia. Together we will implement the first hydropower plant in Brazil with 5G connectivity. This project illustrates how advanced connectivity can support safer operations, higher efficiency and new digital use cases in critical infrastructure, reinforcing our position in utilities and energy. Another strategic step was the acquisition of V8. This transaction adds capabilities in cloud, data, analytics and digital solutions, along with strong relationships across corporate accounts. By combining V8 expertise with team scale and connectivity assets, we expand our ability to deliver more integrated solutions and accelerate cross-selling opportunities. Since we are talking about technology, I want to give you an update on our Artificial Intelligence initiatives. Our AI program is becoming increasingly more transformative for the company, changing the way we do our daily activities, the way we hire and manage our people, and the way we plan and roll out our products. We are adopting agentic AI and other AI-based solutions across the organization to run a range of tasks with varying levels of complexity. Productivity gains are becoming more pronounced. Endless results in areas such IT shows gains of above 20% in software development. Faster cycles, lower IT costs, and improved system performance are supporting the first days of a long-term transformation. Additionally, we are expanding our partnership with Google and Microsoft to deploy AI solutions across the entire organization while managing token usage through FinOps approach. Looking ahead, our priorities remain clear. We will continue to strengthen our mobile business by improving network quality, evolving our offers, enhancing service, while expanding our ecosystem through partnership. We will sustain operational improvements in broadband, and in B2B we will continue scaling capabilities through connectivity, digital solutions, and V8 integration. The first quarter of 2026 demonstrates our unwavering commitment to progress, innovation, and disciplined execution. We are building sustainable values step by step, and we are well positioned to seize future growth opportunities. Thank you for your continued trust and support. Now, let's move to the live Q&A session.

Thank you, Mr. Alberto. We are now going to start the Q&A session. To ask a question, please click on the raise hand button. If your question has already been answered, you can leave the queue by clicking on the put hand down button. Our first question comes from Gustavo Farias with UBS. You can open your microphone. Hi, everyone.

Thanks for taking my questions too on my side. So the first one about VA tech and B2B in general. What could we expect on this line in terms of growth going forward? Just a consultation. Is this line already embedded in the guidance for the year? and, well, in general, how are we thinking about B2B, both organically or inorganically going forward? The second question, if you could comment about margins, okay, how are you seeing the pace of margin expansion going forward? So in the quarter, we've seen some headwinds on OPEX, So if you could help us separate what are the recurrent effects from the seasonal or one-off effects, maybe roaming costs, maybe renegotiation of contracts with our companies, it would be very helpful.

Hi, Gustavo. So thanks for the question. So let me address the first one and then I will hand it over to Andrea for the margin expansion. So when it comes to our revenue growth, as we outlined in our strategic plan in the beginning of February, we got three vectors to support our revenue growth going forward. We got clearly the mobile core business, the broadband expansion, and the B2B expansion. So the B2B expansion, the B2B vertical, has been growing overall over the last years at a double-digit rate. Clearly, our base is relatively small within our total revenues, but the growth has been going forward at a double-digit rate. And we expect this to continue in the coming quarters. Clearly, this year, we finalized the closing of V8 in January, and therefore, we have the V8 contribution starting in February. So, we have around 40 million already in our numbers for February and March this quarter. and V8 is also on a growth trajectory and so we expect to contribute to the double-digit growth but on a larger base and to your question if this is included in our guidance yes the answer is yes it is okay Gustavo if it's clear then andrea can address the margins for you yeah it's very clear thank you hi gustavo related to the margin this quarter we have some pressure in opex as you see

we have two major impacts one is in the interconnection and in the connection we have two impacts and international homing that is a seasonal impact we always have this in the first quarter and the in our in our interconnect cost so this quarter is the higher one the second is the in providers providers we mentioned before we launched the controlling plans with the stream in the beginning of the last year, and the cost is a result of the growing of this plant. The second impact is in bed depth. Bed depth will have a higher level than the previous quarter. We have more pressure in the bed depth. This is related even to B2C and also to B2B, a consequence of our macro environment. and for the second quarter we expect the continuity to the pressure especially because we have a price up in the first quarter related to the towers atc as we announced in the the last quarter we have this renegotiation with american tower the negotiation impact several several lines was a structure where you're going to negotiation we're talking about more than 8 000 towers and more than 40 contracts one of the impact we have impact in the reduction of our debt reduction of the lease we also have a reduction change of the rate so we have several impacts one of them is a one-off in this quarter is related to the deferred revenue but is another expense when we sold the tower our towers to American Tower, around 4,000 towers, we received 900 million reais. This again was deferred during the period of the contract, around 20 years. When we were in negotiation with American Tower, this contract related to this sold also was included. And this period was reduced in about two years, in the average of two years. So with two years less, we have the positive impact of less time to defer this gain. So this is the impact that we have in this line of other income. We have another impact in the leasing, another positive impact in the leasing referred to incentive. So, as I mentioned, we have several impacts to relate, several positive impacts related to American Tower. I'm sorry that was a long explanation, but I don't know if it was clear, but...

Yeah, very clear. I can add one point in terms of margin expansion. So, clearly, we are going to expand our margins in the coming quarters.

And you have, as Andrea said, something seasonal, seasonal something that is more related to the macro environment or the price up like bed debt and at the same time there are a number of initiatives that we are working on on leases and on cost to keep optimizing the productivity of our company thanks for the answer just a follow-up if I may related to how we could think about margins margin impact coming from this consolidation of VA tech, I'm assuming a different margin profile, potentially more dilutive than the overall connectivity business. Is that correct to assume?

Yes, it's correct to assume. So V8 is dilutive in terms of it's not coming with an EBITDA margin like the mobile business, but it's accretive on the bottom line.

So at the end of the day, on the EBITDA margin, you have a dilutive effect because it's specific of business so your assumption is correct all right perfect thank you all our next question comes from luis chagas with xp you can open your microphone hi guys uh thank you thank you for taking my question so from my side i have two questions so the first one is how do you perceive the current competitive landscape in mobile and the second question regards fiber your fiber results have

been proven sequentially would you consider mna or jvs to accelerate growth in this segment and how do you see the current environment in terms of mna deal opportunities thank you so let me start with with the competitive landscape so the competitive luis landscape it's constructive and on above the line broadly rational of course there are a number of discussion because you know this rationality it goes up and down and there was some let's say noise in the in the in this first few months of the year but overall it's a remain rational so I think that there are a couple of milestones that happen already and some that needs to happen and so the first one that I think it's a it's a good development is the price up in pure in price up in pure postpaid in the front book so just remember everybody the purpose paid remain roughly unchanged during the course of 2025 with the exception of some one competitor increase it and two of us didn't do it and so it's good news that this year a few weeks ago we increased our entry price and clearly all the other plans over around 10 reais so we moved from 120 to 130. One of our competitors already implemented the front book adjustment I think in February and the third one moved along a few weeks ago also moving the the entry point from 120 to 125. So this I think it's a good message in terms of market rationality and it's above inflation in general. When it comes to the next milestones to look for is the control, so the hybrid plan. So the hybrid plan is something that we did last year at around June, and we are planning to – we are assessing to implement this again this year for the third quarter, let's say in a safe mode in terms of hybrid plan, and we would expect that it's something that everybody's considering, and so I got a positive outlook in my mind related to this. On prepaid, I think that we are considering a number of options to make it balanced, because if you move up control then there is something to be considered to be done in prepaid something is already being implemented on our side below the line and we are looking at opportunities to do this in a more for more approach on the ATL front as well so this is for the competitive landscape if it's okay Luis I will move to the other one yeah it's okay okay thank you okay so when you move to the fiber I think that our priority now is to come to the closing of iSystem that is pretty close and the integration of iSystem in our operation this will further support our organic plan because we're going to have control of the network in some key markets like Rio de Janeiro in Sao Paulo So this is the short-term priority related to the fiber. So the incorporation of the iSystem deal is going to close pretty soon. And in terms of non-organic, I think that here the question is, we have been analyzing opportunities, we are analyzing opportunities. is a mixture between strategic value, commercial value, and the impact on our role, P&L, and the cash flow projections. So we are looking for an accretive deal if this needs to happen. So we are assessing, but there is nothing defined yet. I don't know if Andre you want to add something on the broadband. No, it's okay. Luis, good for you. Yes, thank you. Very clear.

Our next question comes from Maria Clara Infantosi with Itaú BBA. You can open your microphone. Hi, everyone. Thanks for the opportunity.

So I have two questions from my side. The first one is related to AI. It's called our attention, the focus of your speech and the potential profitability expansion coming from AI and the opportunities in terms of growth. in the report so can you please elaborate more how we should think about the opportunities coming from AI going forward and the second question is related to the peak pay partnership announcement can you please elaborate more on how should we think about this partnership what is the opportunity here and the potential going forward thank you with the peak pay and then we'll end over to Andrea for the artificial intelligence in general productivity.

So, PicPay is a partnership that fill a spot in our customer platform strategy related to the combination of telco and fintech. So, as you guys will recall, we already had an initiative that has been running for years with the previous digital bank and we consider that as a creative to our revenue revenue and cash flow generation and that was an equity partners the peak pay difference saying the fact that we are in a different phase of the market and the partnership is commercial the idea is is it's pretty simple so we want to create a value proposition for our customers and peak pay customers that is better than the standalone value proposition and the cross upsell our customer basis generating revenue growth or commission payments and loyalty because we know that when we cross upsell different packages to our customers, they tend to be more loyal. This is proved. And at the same time to develop lower customer acquisition cost channels for people to cross upsell on our customer base and vice versa. So this is the idea behind the partnership and we're going to work with the two different brands and So we are associated the brands in the value proposition to our customers, and we are looking for a commercial launch in the third quarter of this year.

Hi Maria Clara, related to AI opportunity, as you know, we are working for the past two years. Now we are expanding the adoption of AI, rolling out two agents in the key verticals, and we We define two priorities, call center and natural operation, especially in the part of maintaining. And also we are using agents to help some staff parts, like legal areas, human resorts, also the fiscal area, and we are now starting to use agents also to collect. So we are seeing the benefits. It's not a game change, but it's showing we are seeing positive impacts and our expectation is that this continues to improve and improve our productivity. But we are doing, we're very careful because all these initiatives need CAPEX and we only are the initiatives when the the counts proves uh positive so uh it's why i mentioned it's not a game change but it's a continuous improvement in our productivity i don't know if you want to i think it's uh it's okay unless maria clara is some follow-up questions yes very clear thank you so much our next question comes from rogerio

Araújo with Bank of America. You can open your microphone.

Hello Alberto, André, Vicente, Luisa. Thanks all for the opportunity. I have a couple here. First one inside the other operating expenses and revenue line where you recognize the gains with American Tower. There is also higher legal provisions of 115 million reais this quarter versus an average of 55 in in the past couple of years if you could please talk about the potential recurrency of these incremental provisions and and the reason for for that and second question is regarding leases is there a strong potential for further lease renegotiations going forward or most of that has been done if you could also say like uh for example american tower have you done already all the contracts have been renegotiated same for for IHS so if you could talk about that and also on leases there is an incentive included in lease payments of 66 million this quarter. Will that amount remain over upcoming quarters, maintaining the level of lease payments, or is this one-off and link it to quarterly renegotiations? So if you could also talk a little bit about this recurrency. Thank you so much.

Rogero, let me start with the lease as with a general view, and then we'll pass to Andrea for incremental information on the leases and the other question. So when you look at the leases, basically we are working with three main approaches to keep optimizing our cost, remembering that the cost, they suffer an increased pressure that is coming from network expansion and inflation. And in order to control this driver of cost increases, basically we are working on three different approaches. The first one is the negotiational approach, like the American Tower one, the deal that we close with them, the renegotiations that we finalize with them. And the second one is the IHS that you mentioned, whereby basically we go on a make versus lease approach. And the third one is sharing with other competitors. And so what is the status on each one of them? When it comes to the negotiation approach, we finalized the negotiation last year, and the benefits are appearing from this year onwards we still have a couple of negotiations ongoing with other partners and this will be information that we'll release in the coming quarters if we manage to finalize the negotiation and the impact is going to be similar in logic to the American Tower one. The make versus lease approach is going to be implemented over time, and therefore we substitute leases with capex and the overall economic analysis, it is positive for the capex one, and this primarily is going through the objective of towers in area where a tower company have less interest because there is less ability to have two tenants like for example some of the regulatory coverage and the b2b segment and we also develop an ultra cost solution that optimize our capex investment and the third one is the more medium term approach that is related to the sharing that you know we are discussing with one of our competitor we did some progress but we can enlarge the scope of this agreement both in terms of number of competitors and the scope within the competitor we are working with but i would say that this is going to kick off more in the medium term because it needs time to be executed because basically you need to optimize and move electronics from one tower to another so it takes a bit more time so this is for the general approach in terms of lease control management.

Hi Rogério, complement the lease information that Alberto said we have a one-off of six five minutes payment in lease, this is also a reflect of HEC agreements as I mentioned before, we have several impacts. So this is a one-off and was in this quarter. What we have with ATC that is recurring is the downsides in the lease that we have with them. So this will be a recurring impact. Considering the other income that you asked, so we have a positive one-off that was ATC also that i explained was the the fair revenue and we are it will have some impact also uh impact in the provision a provisional increase is a normal course what the event of analysis that we have and it also is a one-off so you can expect that in the second quarter this line will be um we will return the patch that we're not going to have. I don't know if I'll address.

Well, that's very clear. Thank you so much, Hope.

Our next question comes from Fani Kanomuri with HSBC. You can open your microphone.

Hello. Thank you for taking my questions. The first one is on what is the reaction from the customers after you had increased your prices this quarter? Are you seeing an increase in churn? And the second one is regarding the recent 700 MHz auction. How does that change your comparative scenario in mobile? Thank you.

Let's start with the churn one, Fanny. So, as we mentioned in the previous call, we executed back book prices in between the first quarter, second quarter. So, the impact on churn, it's expected. AND BASICALLY THIS YEAR WE NOTICED A SMALLER INCREASE IN THE VOLUNTARY CHURN THAT IS SLIGHTLY HIGHER VERSUS THE PREVIOUS QUARTER BUT IT'S STILL IN THE RANGE OF 0.8, THIS IS THE NUMBER THAT WE SHARED WITH YOU GUYS IN PREVIOUS EARNING CALLS, BUT IT WAS AN INCREASE IN INVOLUNTARY return that then is reflecting also a bit in the in the context of the the macroeconomic in the bad debt so generally speaking this impact is higher in the first quarter and then tends to phase down in the second quarter and so this is what we are going to expect going forward and the end of April, it's already showing some sign of this trend happening. At the same time, you see that the effect is more pronounced in our postpay net additions in January. There was a lower number, it was 30K, then it moved up to 50. In March it's moving up to 80. We closed April. April is going to be higher than 80. So, basically, we are ramping up back to post-price-up impact. When it comes to – this is for the first question, Fanny. When it comes to the 700 MHz frequencies, this frequency sort of crystallized a situation whereby some of our competitors are – so this frequency, I don't know if you guys remember, there's already been assigned in secondary use to the small ISP last year. So, some of them are already using this frequency to provide voice services or extend 5G services to their customer base. So, from a practical perspective, these frequencies are already being used, and therefore the auction crystallized the use from secondary use to primary use. As the press has been reported, Connexus, this is the association of the mobile operators, and Telcomp, which is the association of the ISP, have a number of objections related to the way the auction is being carried out and so there are legal proceedings happening related to the overall auction mechanisms and clear results thank you to your funny our next question comes from mature robillard with barclays you can open your microphone hello good morning thank you for the

presentation um i had a few questions um the first one was on energy costs now i understand you do not disclose your energy costs but obviously there's quite a bit of volatility in some of the prices at least globally i also understand that you have long-term agreements but maybe if you could give us a bit of color in terms of what potential impact we could see if the situation stays as it is at the tier rates. Are you edged? Are you in long-term contracts? That would be helpful. The second question was on Tower. Just to follow up, can you clarify if you have caps on inflation for your leases? And the third one was a bit brought on D2D. Obviously, we're seeing a lot of players launching D2D services across different countries. I think you guys also have an agreement with one of the potential providers just wanted to see how how interesting you thought this this vertical could be in brazil thank you so matthew let's do you want to address the the energy and uh and inflation yes and sorry matthew i didn't i didn't get your last question yeah okay d2d is in direct to device um direct to cell so sorry okay cool yeah yes okay uh hi matthew i let's let's start with energy we um we don't disclose very much the energy cost but

we have we we work with three lines of energy we have the normal contracts the open market then we have the the what we call mercado livre that's when you buy a package and we have the third one that is how do you say the farms of um energy plant for a renewable generation so With these energy plants, we have long-term contracts and this also is included in our lease costs. These energy plants give us a very good gain and protect us through the energy with the open market. In Brazil, we have a lot of impacts related to rains and what we call red flag here because the government that consider these tariffs. So the energy plants protect us to this kind of lack of predictability. So we are starting to invest in the energy plant three years ago, and now we have half of our costs of energy in this kind of plant. That is also one of pressure that we have in leasing, but we have a positive impact between the general cost of energy.

There is an important issue that we launched last year which is called auto generation whereby we will extend this predictability, this control in a wholesale agreement to a larger proportion of our overall energy consumption and this project is in the process of being implemented and so the expectation is going to be live by the end of basically in the four quarters this year so we're gonna be farther edged versus price potential price increases then yes there is sorry on this there is a gasoline that it runs on on generators as a backup solution and we made sure that we provided some, let's put it this way, safety buffer for months to come.

Okay, so if I got it right, about 50% of your volume consumption, I don't know if it's the cost, but it's basically under the energy plan scheme and that will increase throughout the year above 50%.

Yes. Yes. Related to the tower inflation, we have all the contract is have inflation rates, we have the impact. What we work very hard and our goal is always have to at least increase the inflation. In other words, we observe the impact of the volume, because we have more towers related to the expansion of our network, but our goal is to increase leases at the maximum the inflation of the year. So we observe the volume driven.

Okay.

Thank you. and as for as for d for the satellite d2d solutions so this is clearly something i think that we see as interesting in a continental country like brazil uh because clearly as the the as of operators uh we provide coverage to a limited surface area within the country and therefore it's something that is potentially interesting. Now the point is that while from a fixed broadband the product is up and running and it's something that it's already gaining share in Brazil for the same reason of continental The D2D solution, we understand that in the current format, it's a niche value proposition. And therefore, here, I think that the big question is the cost of this sort of agreement versus the benefits they will deliver to the value proposition. So this is something that we are looking at, because today is basically, and if you look at the launches in many markets, it's something that is very specific, very segments in remote areas with text-like sort of capabilities. This is going to change in the years to come, so it will become more appealing, and therefore, I would guess that the cost-benefit analysis is likely to change over time.

Makes sense. Thank you very much.

Our next question comes from Marcelo Santos with JP Morgan. You can open your microphone.

Hi, good morning to all. Thanks for taking my questions. The first question is regarding the higher delinquency. You said that you expect this to continue in the next quarter. Would that prompt a more cautious credit analysis and potentially a slowdown in postpaid ads as you seek to control this? because we saw the the bad debt we also saw the the npls the one to 30 days npls that had a big increase so just wanted to say to understand how you're going to react to this and the second question is a bit more technical is about the the deferred revenue uh regarding the renegotiation with atc when you look at that line like in the past you always had a certain revenue on that line so uh it's it's just a part of the 80 83 million that that is known kind of one-offish like you're to continue to have a level but below just wanted to understand how this 83 million are going to go

forward given that you had this in the past hi marcel uh rate related to the bed depth as i mentioned yes we are seeing a more pressure of bed depth in this quarter a consequence of a deterioration of payment of our customers b2b and also b2c more b2c and what we and i mentioned that we expect uh the pressure continue because we have the price up in the first quarter so as a consequence as always we have the price up a consequence we have a bad app continuous the You mentioned another thing about bad debt?

On the bad debt, let me just put another piece of information. So, Marcelo, basically how we deal with it. So, basically, because it's a credit, he was talking about the credit. So, you have a number of different mechanisms to control it, and clearly the credit analysis is one of them. And then there are also some offer construct you can think of, like really more on plans on credit cards, for example, on prepayments.

So there are a number of things that we are implementing already and assessing to cope with the current scenario. just to finalize on this so uh related to the the other income when we saw sold the the towers for american tower this um again was around 900 and 900 million reais was deferred during the period so each month a month since 2018 we have around 4.5 millions in this line so this was for 20 years beginning in 2018 when we were making the agreement with ATC this part of the contract the contract that relates to the towers sold was reduced we in around two years so this reduction of two years is the impact that we have now once that we have two or two years less we recognize this uh around eight millions related to the 24 months that will because our contract will end it sooner than we expect so we recognize this in this one-off operation i don't know if i address your so going forward it should go it should go back to the for a 4.2 because you also the commission some towers so it will not be anymore 4.5 will be around between 4 4.2 so this will continues from as always we always have just 13 millions impact each quarter related to this line but this quarter we have 30 million million plus around the 87 seven something okay no crystal crystal clear on the ATC on the higher delinquency impact on growth so I better

I understand that you have some options that you don't need to toughen credit analysis, but is it reasonable to say you'll be a bit more cautious in adding? Could we expect some pressure on ads, or we cannot say that?

No, we couldn't say that. I say we're going to try to be more intelligent and selective. That, I would say, is rather than cautious. So if you look at our net additions, it's a matter of fact it's performing well. So there are a number of initiatives always in place because it's always a fine-tuning, Marcelo, when you go to the migration or acquisition in terms of you explore different segments, you explore different payment mechanisms, different offer construct. So basically, this is something that is going on, and we're going to keep optimizing. Now, of course, the macro, it's unknown, it's uncertain. So we need to adjust our approach to the evolution of the macro environment. For example, this Enrollah plan at the end of the day can have a positive impact because it can release a bit of pressure on the level of depth of families. And in general terms, what is happening is acquisition is improving bit by bit as we move month over month. So this is something that has been, and we highlight in the presentation. So when you look at the big broader impact, our acquisition has been improving, and this has been driving the net additions up in the first quarter, and the churn has been dragging down a bit. And over time, the churn increased due to price up is going to slow down, involuntary, involuntary, and the acquisition are likely to level off. But the acquisition side is improving bit by bit.

Okay, thank you. Thank you very much.

Our next question comes from Silvio Doria with Safra. You can open your microphone.

Thanks for taking my question. I have a question about Fistel. Fistel is going to be discussed at the STF this week. So what's the company's expectation regarding the outcome?

Well, Silvio, we believe that we have, as we always say, a strong legal case. It's good news that Fistel is now to be started to be treated. starting next week, the 8th is going to start. We think that the discussion will take some months to articulate and move forward. What we think as a sector, we have a solid legal case in terms of the modulation of these tariffs related to their objective. so let's see what it comes out uh uh the eighth where the uh the alexander morais will put for order his point of view and then there will be a discussion that will involve all the ministers there so we we believe that it's gonna take some months yet to be uh to be addressed hopefully by the end of the year got it thank you our next question comes from daniel fedeli with bradesco

BBI. You can open your microphone.

Hi, good morning everyone. Thank you very much for taking my questions. The first one is a follow-up on the competitive landscape, but more focused on the hybrid, the controlling segments that I understand is more relevant for revenue dynamics than the pure post-paid. By the same time last year, two of the three operators had already increased prices one in february the other one in the beginning of april so far this year no one has increased price so i'd like to hear your thoughts on why that's happening that's a very important development for the sector there seems to be some rationality but so far no price increase so uh here are your your thoughts here and the second one related to clients generated revenue uh that decelerated from 6.3% growth to 5%. I would like to understand if we should understand this as a deceleration trend or that's more volatility and should rebounds going forward. Thank you.

So, Daniel, let me go on the first one. So I would say that for the – so let's see the – so price up, you're right, they're quite important, especially for control. Not a lot in terms of the revenue they generate for that year, but basically the alignment between front book and back book is something important for the sustainability of the more for more. strategy. So this is, therefore, an important point. And as for us, and then I will give you my reading for the others, as for us, we executed our adjustment last year roughly in, I think it was June, after Mother's Day. So now we are in a promotional period, Mother's they did this sort of more for more strategy is going is likely to happen afterwards so my view is that uh in our in our uh in our scenario current scenario we are seeing this happening in the in the third quarter across the board as for the reason uh in terms of why the other our competitors didn't do it in February, that was something that I mentioned at the You know, this market repair, the more for more strategy, and this constructive approach, and it's already happened, by the way, in the past, they got ups and downs, right? And so we already saw ups and downs in the past, Danielle, you follow the sector very closely. So you might remember that one of our competitors at a certain point implemented a more formal strategy in control and then it went back again. It depends on each company targets, strategy, so it's not like a linear thing. I still think that as a whole my outlook in terms of this happening in the third quarter is positive. I think if you ask the same question to you, our guy is going to have a more complete answer. But this is my view in terms of the overall process. It's never been linear in the past, and it's always ups and downs, and my outlook is that this will unfold positively in the following months. At least this is the intention on our side. When it comes to the client-generated revenues, I would say that when you look at our revenue portfolio, you see that we have mobile now we we said in february that we wanted to complement with growth from broadband and the b2b this is happening and we always say that mobile is hinged upon post-paid growth in terms of arpu and and and customer base and to a less extent and a lower deceleration of prepaid, let's put it this way. And nothing of this is changed. What is changed in this quarter, and you see that everything is accretive, mobile product, B2B and broadband. And when it comes to the mobile in specific, we always say that the almost double-digit would have come down to a higher middle digit and this is basically what is happening so the the the the mechanics in the engine remain the same with a slightly different intensity very clear thank you very much yeah i got it too right okay ladies and gentlemen without any more questions i am returning to mr alberto grizzelli for his final remarks please mr alberto you may proceed so guys thank you all for joining today's video call i want to thank the tireless efforts of our team for the consistent results and solid start of 2026 the environment is a bit more volatile so we focus on execution as a critical element to our strategy i look forward to meeting all of you in the coming days on the one-to-one and group meetings thank you everybody thus we conclude the first quarter of 2026 conference call of Team SA.

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