Good morning, ladies and gentlemen, and welcome to Vivo's Third Quarter 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. David Melcon, CFO and Investor Relations Officer; and Mr. João Pedro Soares Carneiro, IR Director. Now I'll turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Please, Mr. Carneiro, you may begin your conference.

Good morning, everyone, and welcome to Vivo's Third Quarter 2025 Earnings Call. Christian Gebara, our CEO, will start us off by commenting on Vivo's connectivity and digital services performance as well as present our main ESG highlights for the period. Then David Melcon, our CFO, will give more details on cost and CapEx management, free cash flow generation, profitability for the period as well as an update on shareholder remuneration for 2025. With that, let me turn the call over to Christian.

Thank you, João. Good morning, everyone, and thank you for joining us today. I'm pleased to announce that Vivo delivered another set of strong results, presenting real growth across all key lines fueled by a powerful commercial performance and our relentless focus on customer experience. In mobile, our postpaid segment continues to lead the way with access growing 7.3% year-over-year. Postpaid now accounts for 68% of our total mobile customer base, which has reached approximately 103 million connections. On the fiber front, we have 7.6 million homes connected, an impressive 12.7% increase year-over-year, and our footprint covers 30.5 million homes nationwide. Total revenues rose by 6.5%, driven by consistent results in both mobile and fixed services. Mobile service revenues grew 5.5%, while fixed services saw a 9.6% increase. This balanced growth highlights the strength of our diversified portfolio and our ability to meet demand across multiple segments. EBITDA grew 9% year-over-year with our margin expanding to 43.4%. This reflects our continued focus on operational efficiency and disciplined cost management. As a result, operating cash flow reached BRL 11.2 billion in the first 9 months of the year, up 12.4% compared to the same period last year. Net income rose 13.4%, totaling BRL 4.3 billion, while free cash flow approached BRL 7 billion with a margin of 15.6%. These strong financial results enable us to return BRL 5.7 billion to shareholders by the end of September, reaffirming our commitment to sustainable value creation. Moving to Slide 4, we show how our top line continues to grow at a strong pace, driven by an increasingly robust and diversified revenue mix. In the quarter, total revenues reached BRL 14.9 billion, once again led by the solid performance of our postpaid and FTTH segments that grew 8% and 10.6%, respectively. These two pillars clearly demonstrate how high-quality convergent services can boost monetization. Our new businesses also continue to gain traction, now accounting for 11.7% of our total revenues over the last 12 months, an increase of 2 percentage points year-over-year. This evolution underscores the success of our strategy to diversify and modernize our revenue base, ensuring sustainable growth in a highly dynamic and competitive market. Now on Slide 5, we highlight the key drivers behind our continuous ramp in mobile. In the third quarter, we recorded our highest-ever postpaid net additions, surpassing 1 million net access machine-to-machine and dongles. These outstanding results reflect the success of our value-driven strategy and reinforce our leadership in the mobile market. Postpaid access grew 7% year-over-year, reaching nearly 50 million customers, while 5G adoption continues to accelerate with more than 21 million customers now benefiting from our award-winning technology. In fact, in September, Vivo's 5G network was recognized by Opensignal as the fastest in the world for the second consecutive year. Customer retention remains a top priority. Postpaid churn ex machine-to-machine and dongles reached just 0.98%, a testament to the loyalty of our high-value customer base, though we still see room for further improvement. ARPU rose 3.9% year-over-year, reaching a record high of BRL 31.5, supported by upselling and growing demand for data. These results demonstrate the effectiveness of our customer-centric approach, our ability to innovate, and the strength of our mobile platform as a key growth engine. On Slide 6, we explored the continued capabilities of our fiber business and its convergence with mobile. FTTH access once again posted double-digit year-over-year growth, continuing the strong momentum we've seen in recent quarters. This performance is largely driven by our flagship convergent offer, Vivo Total, which saw an impressive 52.7% increase year-over-year. Notably, Vivo's convergent base already nears 62% of all fiber access. This reinforces the market's clear shift toward bundled solutions. Our fiber footprint also continued to expand. In the last 12 months, we passed over 2.2 million new homes, reaching a total of 30.5 million. The take-up ratio improved to 24.9%, reflecting stronger demand and better conversion. Churn continues to trend downwards, marking the fifth consecutive quarter of year-over-year improvement. For Vivo Total specifically, churn is 50% lower than our already below-market fiber churn, highlighting the stickiness and value of the offer. Today, nearly 85% of FTTH sales in our stores are done through Vivo Total. This not only boosts lifetime value but also drives higher user expenditure with gross ARPU reaching BRL 230 per month for Vivo Total subscribers. On this plan, we have reached 1.7 mobile postpaid lines per fiber connection, a clear demonstration of how convergence supports both lower churn and sustained ARPU growth for mobile and fiber. Turning to Slide 7, we dive into how our B2C segment is evolving, with a focus on how new businesses are driving incremental value and enhancing customer monetization. Over the last 12 months, total B2C revenues reached BRL 44.1 billion, up 5% year-over-year. This growth is supported by both our core connectivity services and the expanding contribution of new businesses that grew 15.3% and now represent 3.1% of total revenues. Revenue per RGU continues its upward trajectory, reaching BRL 64.6 per month. This reflects our success in deepening customer engagement and expanding share of wallet. Looking at the breakdown of new businesses, we see strong performance across key verticals. Our video and music OTTs remain a major growth driver, with revenues up 19.9% year-over-year. Meanwhile, one of our health and wellness initiatives, Vale Saúde Sempre, now has around 450,000 subscriptions, up 27% versus last year, with plans starting at just BRL 17.90 per month. In financial services, Vivo Seguros continues to scale rapidly, already counting with 600,000 insured devices, a growth of 42% year-over-year. Today, over 40% of our smartphones sold in Vivo stores are bundled with insurance, underscoring the relevance of this offer. These performances emphasize our strategy of positioning Vivo as a comprehensive digital platform, where connectivity is just the starting point for a broader ecosystem of services tailored to our customers' evolving demand. Heading to Slide 8, we highlight how our B2B segment is increasingly being driven by the expansion of digital services. Over the past 12 months, B2B revenues reached BRL 13.2 billion, up 15% year-over-year. This performance was led by digital B2B that grew an impressive 34.2% and now accounts for 8.6% of our total revenues. Connectivity also continued to grow steadily, rising 5.6% in the same period. A major milestone this quarter was the signing of the largest IoT deal in the world with Sabesp. This partnership includes the installation of approximately 4.4 million smart water meters in the cities of São Paulo and São José dos Campos by 2029. Vivo will also provide the platform to monitor and process the data generated by these devices, reinforcing our leadership in large-scale digital infrastructure. This combination of robust revenue growth and strategic partnerships positions Vivo as a key enabler of digital transformation across multiple industries. With regards to ESG, we reinforce Vivo's leadership now with both new commitment to biodiversity and long-term environmental stewardship. This quarter, we launched the Futuro Vivo Forest, a 30-year initiative dedicated to regenerating the Amazon. This project will preserve 800 hectares of native forest by planting nearly 900,000 trees in the states of Maranhão and Pará, bringing back the local fauna in the region. Beyond its environmental impact, the initiative also brings benefits to the local communities, aligning sustainability with social inclusion. The announcement was made during the Encontro Futuro Vivo, an event that brought together acknowledged leaders to reflect on the future life of our planet. It marks a new chapter in our ESG journey focused on long-term regeneration and climate resilience. In governance, Vivo continues to stand out. We ranked first place across all sectors in B3's Corporate Sustainability Index, ISE B3, and received recognition for excellence in Corporate Social Responsibility under the ISO 26000 standard. We were also honored with several awards this quarter. Vivo's Compliance Program was named Program of the Year at the Leaders League Compliance Summit, and we were recognized as the top company in the TMT category in Exame Magazine’s Melhores e Maiores ranking. Finally, we are proud to be ranked sixth among the best companies to work for in Brazil by Great Place to Work and to be the only Brazilian company and the only one in our industry featured on Fortune's Change the World list. These achievements reflect our ongoing commitment to creating shared values for society, the environment, and our stakeholders. With that, I will hand the floor to David, who will walk you through our financial performance for the period. Thank you.

Thank you, Christian, and good morning, everyone. Starting with Slide 10, we take a closer look at the evolution of our cost structure and provide an update on the sale of concession-related assets. On the left-hand side, you will see that total cost reached BRL 8.5 billion in the quarter, up 4.6% year-over-year, growing below inflation for the period. This performance highlights our ability to strike the right balance between commercial intensity, operational efficiency and ongoing digitalization efforts. Cost of services and goods sold rose 9%, driven by the increase in service costs. This was due to the accelerated growth of digital solutions, particularly in the B2B segment. On the other hand, the cost of goods sold declined by 5%, benefiting from an improved margin profile in the sale of handsets and accessories. Operating costs grew just 2.6% year-over-year. Personnel expenses increased 3.2%, mainly due to the salary adjustments, which we partially offset with a more efficient management of our benefit programs. Our largest cost line, commercial and infrastructure, rose slightly above 4% with higher commercial activity being mitigated by gains from digitalization. This quarter was marked by the acceleration of the sale of assets related to the fixed voice concession, resulting in a net gain of BRL 232 million, up from BRL 95 million in the same period last year. These gains include BRL 199 million from real estate and BRL 34 million from copper. We reaffirm our confidence in delivering BRL 4.5 billion in asset sales over the coming years. As a result, EBITDA grew 9% year-over-year, reaching BRL 6.5 billion with a 100 basis point expansion in margin to 43.4%. Moving to Slide 11, we highlight our operating cash flow performance. CapEx totaled BRL 6.9 billion in the first 9 months this year, up 3% year-over-year. Importantly, our CapEx to revenues ratio declined 60 basis points to 15.7%, reflecting our ongoing focus on efficiency and prioritization of high-return investments. As a result, operating cash flow before leases reached BRL 11.2 billion, a 12.4% increase compared to the same period last year. After leases, operating cash flow rose 15.2%, totaling BRL 7.2 billion with a 16.4% margin. This performance underscores the strength of our result profile and the effectiveness of our investment strategy. Looking ahead, we see significant potential to further optimize leasing costs. On average, there are 1.4 operators using the same towers as us. But in similar mature markets, this number exceeds 2 operators per tower. This opens up opportunities for contract renegotiation and increased infrastructure sharing that will further enhance our ability to generate cash. On Slide 12, we present how our resilient operating performance continues to support profitability and cash generation. Net income for the first 9 months this year reached BRL 4.3 billion, up 13.4% year-over-year. This growth was consistent across all quarters this year, where we have been growing double digits, reflecting our solid execution and financial management. Our net cash position strengthened further, reaching BRL 3 billion at the end of September, a significant increase of BRL 1.7 billion a year earlier. Including IFRS 16 effects, our net debt stands at BRL 11.1 billion with a leverage ratio of just 0.5x EBITDA over the last 12 months, underscoring how robust our financial structure is. Free cash flow generation remains healthy, totaling BRL 6.9 billion in the period. While this represents a slight year-over-year decline due to some phasing effects, the third quarter already shows a 5.5% increase, signaling a positive trend. These results reinforce our ability to consistently generate value even in a recovering macroeconomic scenario. Moving to the last slide of the presentation, we reaffirm our commitment to shareholders' return. From January to October this year, we have already distributed BRL 5.7 billion to shareholders through a combination of interest on capital, capital reduction and share buybacks. In addition, we declared another BRL 2.7 billion in interest on capital to be paid before April 2026, further supporting our guidance to distribute at least 100% of net income for both 2025 and 2026. Since the beginning of the year, we repurchased 48.4 million shares, equivalent to 1.5% of our current capital stock. Our buyback program of up to BRL 1.75 billion to be repurchased until February next year remains active and aligned with our capital allocation strategy. It's also worth noting that our share continues to gain market relevance, now ranking as the 34th most liquid share in the Brazilian Stock Exchange, an improvement of 11 positions year-over-year. These actions reflect our strong commitment to value creation and consistent shareholders' remuneration. Thank you. And now we can move to the Q&A.

Our first question comes from Luis Chagas from XP.

Congrats on the robust results again. So my question regards mobile services revenues. So we saw a slight deceleration in MSR in this quarter. So how do you see the competitive environment in mobile affecting your performance in this quarter?

Thank you, Luis. I will answer your question. We grew 5.5% year-over-year in mobile service revenues. It's good to also split the mobile postpaid service revenue: we grew 8% and the prepaid decreased 7.6%. Starting with the prepaid. The prepaid performance is better than we had last quarter, indicating a positive trend. When you compare the quarter-over-quarter growth, there is a positive growth. So we are bringing up revenues in prepaid while we continue migrating prepaid to postpaid. In postpaid, our growth was 8%. It's also a very strong growth considering the amount of revenues coming from postpaid. Out of our total mobile, we are talking about BRL 8.3 billion coming from the postpaid segment. We experienced the best net add performance of the last several quarters. If you look back to the third quarter of 2024 and review each quarter, it's the first time that we surpassed 1 million postpaid net additions. That's a strong performance and churn, if we keep it around 1%. If we exclude machine-to-machine and dongles, it's below 1%. At the same time, we've been able to increase ARPU by about 4% when you compare year-over-year. That's a positive result. Of course, there is always some minor seasonality impact from price increases. If you look back in August 2024, we increased prices for 40% of our hybrid customer base, and this August 2025, we increased prices for the same segment, but for only 25% of the customer base. Looking forward, despite the competitive market, we have positive trends concerning mobile service evolution in the upcoming quarters. I don't know, Luis, if there's anything else that you want me to address.

Our next question comes from Gustavo Farias from UBS.

I have two questions on my end. The first one is on leasing; could you comment further on the leasing efficiencies you guys are pursuing on specific measures and possibly the timing we should expect them to start to have further impact on the leasing payments? That was my first question. And the second question, if you could provide us an updated outlook for the sale of assets related to the concession migration? We saw most of it come from real estate. So how should we expect them to behave going forward in the next several quarters?

Gustavo, thank you for the question. Regarding the first one on leases. The evolution of lease depreciation and interest accruals remains consistent compared to the previous period. In fact, if you look at EBITDA after leases, it grew even more than EBITDA before leases, not only in the quarter but also in the full year. For the first 9 months, around 2 percentage points more than 0.2%. When we look at the payments, there is always some volatility across the quarters. But I think it's important to look at the number we have this quarter, which is around BRL 1.3 billion; this is consistent and almost flattish compared to the fourth last quarters. This is important because that shows a positive trend resulting from the negotiations that we are having with the tower companies. For the coming years, it is challenging to talk about any precise quarters. However, the information we also show in this presentation relates to the current tenancy ratio in Brazil, which we believe is quite low. We are talking about a 1.4 tenancy ratio in Brazil. In other countries with the same number of carriers, we’re talking about above 2 tenants per tower. This creates opportunities to negotiate not only in terms of unit costs but also to be more strategic about deployment. We expect positive trends in this line for next year.

Can I address the second question, Gustavo, if you have any other doubts about leases, David can follow up, or otherwise, I will move to the copper and real estate?

Yes, David was clear.

So regarding the second question, Gustavo. As we stated before and now reiterated, we will capture approximately BRL 3 billion in positive cash effect from the sale of copper, net of extraction costs from the sale of around 120,000 tons of copper and cable coating. Additionally, we anticipate BRL 1.5 billion in proceeds from the sale of real estate assets, net of mobilization costs. These are the two figures that we mentioned before. For the third quarter, we started delivering that. We recorded approximately BRL 232.4 million, which is divided into BRL 33.7 million from copper and BRL 198.7 million from real estate. That compares to BRL 232.4 million from BRL 95 million one year prior in the third quarter of '24. Now we are beginning to see the benefits of the migration, which will ramp up and accelerate in '26 and '27, with the project expected to be completed in 2028. If you compare what we had in the last year, copper was around BRL 63 million, and real estate was BRL 32 million, adding to BRL 95 million. This quarter, we achieved BRL 34 million in copper and BRL 199 million in real estate. copper seems to show positive trends and will continue improving because we are selling more and more, and the real estate sales will vary based on the assets sold each quarter. So, additional to the BRL 1.5 billion mentioned before.

Christian, just a follow-up. So is it fair to think that the sale of real estate could be a little volatile based on what you commented?

You are correct. It depends on what we sell. In some quarters, we'll see more; in others, we’ll see less. This quarter was a good one totaling BRL 1.5 billion where we reached around BRL 200 million, but we still have another BRL 1.3 billion.

Okay. And regarding the copper, should we expect a more volatile or more stable pace of sales?

I believe it will follow a more positive evolution. Starting next quarter in January, we will proceed with full extraction because we currently have 1.2 million customers connected to copper. We are now replacing these with new technology, specifically fiber, and commencing full-speed extraction next quarter. Thus, we’re expecting positive trends in copper sales and more volatility in real estate, although out of the BRL 1.5 billion, we talked about BRL 200 million for now.

Our next question comes from Marcelo Santos from JPMorgan.

The first question, I wanted to go back to something that was asked first about mobile, specifically on prepaid trends. I mean, you mentioned that you had sequential growth, but actually, that's the second quarter of sequential growth in prepaid. So it looks like a different trend than we have been seeing despite you continue to migrate clients to postpaid. So can you talk a bit about what's going on with the prepaid? Is it something more like Vivo led some initiatives you're putting forward or the market is a bit better? Just want to know if you could provide some more color on the positive trends we are seeing in prepaid. And the second question is regarding M&A in the ISP space. So I would like to better get a feeling of what's your appetite for inorganic moves, specifically in the ISP space.

Right, Marcelo. We see a positive trend in the prepaid segment. Each company operates differently. What we see is that our customer base that is recharging every month is increasing. Our ability to offer more data to our customer base is impacting and also the digital services are slightly increasing ARPU. So, although there is a very challenging landscape for prepaid—a more competitive environment—and also our strong migration to hybrid is having a negative effect on prepaid revenue results, we still see a positive trend for prepaid alongside a very strong growth in postpaid. As I've mentioned before, we are experiencing record net adds, and churn rates are at their lowest levels. The combination of both provides us with an optimistic trend for mobile service revenue in the future. Regarding ISPs, can you please repeat your specific question?

I just wanted to get a sense of your appetite for inorganic moves in the ISP space, whatever you can share on this.

Great question, Marcelo. As we reach almost 31 million homes passed with fiber, the number of customers is also increasing. As you can see, net adds of Vivo have reached their highest levels, creating a significant positive gap compared to other players, with churn levels decreasing. We highlighted our churn at 1.46%, but for the Vivo Total fiber, it's as low as 0.7%. As you know, in the market, that’s a record churn level for any player. Going forward, we believe that in light of the size of the Brazilian market, increasing the number of homes passed is one of our objectives. Brazil has around 90 million homes, and approximately 60 million are more addressable for fiber deployment. Currently, we have less than half of that. Thus, we want to be in a stronger position in this market. We can achieve this organically, as we've been doing with a low CapEx for home passing. We’re improving this process and looking to remain under BRL 200 per home passed. We also want to connect more via our own network. Our first approach will be to enhance organic deployment. Although we might acquire a network that meets some of our criteria—technical quality and limited overlap with our existing network—so far, we haven't found any fitting assets. There is some movement in the market; we have assessed some assets and analyzed them. However, we couldn't finalize an agreement due to not meeting one of the three criteria I just described. Additionally, we have the opportunity to increase our penetration in our network. We have just acquired FiBrasil and are waiting for final antitrust approval. Their take rate was around 16%, whereas our take rate over their network is approximately 25%. By taking full control of the network, we will likely improve this take rate. Hence, we aim to deploy more of the network organically and potentially consider acquisitions that fit the criteria, alongside increasing penetration in our existing network, which has shown a very positive trend.

Our next question comes from Lucca Brendim from Bank of America.

I also have two questions. The first one is regarding concessions, a follow-up on the previous question on the migration. Not only talking about the assets that were being sold, but also on the synergies and efficiencies that you mentioned we would be seeing in terms of cost savings. Have you already started to see any, and what is the timeline for those to be captured and appear in results? And then the second one on B2B digital, it continues to perform really well. Do you think you should continue to see this pace of expansion? What are the verticals within this segment that you think will be the drivers for the coming quarters?

In response to your first question, Lucca, we are not providing specific numbers regarding cost savings. As expected, this will primarily impact our commercial and infrastructure lines, but it will be captured gradually until 2028. We're focusing on quickly capturing the benefits of the copper extraction and real estate sales, which are crucial for the customer migration. While we aim to protect revenue and customers, we will keep you informed about numbers related to the BRL 4.5 billion in asset sales previously stated. Moving to your second question about B2B, we have a very positive outlook regarding the growth of B2B digital services. As you noted, it shows a very strong positive trend. Our revenues over the past 12 months indicate year-over-year growth of 34.2%. The key growth areas include cloud services—here we've been diversifying by adding not only Microsoft but also Google, Oracle, among others—along with the growth in managed services. These acquisitions, such as Vita and IPNET, were vital because they brought in specialized talent and certified professionals that can support managed service growth, and we're looking at other assets as well. Additionally, IoT messaging is also a significant focus area, as demonstrated in our deal with Sabesp. We're witnessing early opportunities in IoT, notably in the agribusiness sector, where we have seen a 25% year-over-year growth. Cybersecurity is another area with strong growth potential, albeit at a lower volume, which will be a focus of growth moving forward. We believe we can significantly increase the penetration of digital services in B2B. Currently, we have 15%, and while it's much higher in our top client segments, there's a substantial opportunity to grow in the SME segment. We have 5,000 sales representatives who can leverage our brand and the combination of connectivity with our digital services.

Our next question comes from Vitor Tomita from Goldman Sachs.

Two questions from my side. The first one is that you cited the competitive environment when discussing mobile in some earlier answers. Could you elaborate a bit more on how you view the competitive situation in mobile as we head into Q4? And my second question would be if you could provide more insights on the topic of sales related to copper and real estate assets from an operational standpoint in terms of communicating with copper users, as mentioned, moving them to fiber, mobilizing field teams to extract copper, and negotiating real estate, etc. How has the execution been on that side, and have there been any surprises?

I'll start with the second question. It's crucial to emphasize that this migration process has been in place for some time—we are not just beginning now. If you look at real estate, we have been authorized by ANATEL over the last few years and have successfully sold significant assets while demobilizing unneeded concession-related assets. We continue to do this with more flexibility now that we don’t require additional approvals. Regarding copper, we were already focused on replacing copper with fiber prior to this process. In the past, we needed the customer's full authorization, but now we can replace the technology if a customer declines migration. We communicate and explain the benefits of fiber, and in most cases, customers are willing to migrate. We have a dedicated PMO team working on this, and we not only migrate customers but also find upsell opportunities. An example would be converting corporate clients from copper to fiber while also adding broadband services, leading to better ARPU. In many cases, where we have transitioned from copper to fiber, we also engage in upsell, like Vivo Total. Therefore, our process is working quite well. As for your first question regarding mobile market dynamics, the competitive environment continues to be intense but remains similar to previous quarters. We constantly adjust our pricing according to inflation and focus closely on customer experience to retain customers. We are innovating our offerings and recently launched Vivo Easy Lite, which has been quite successful. Our performance in net additions showcases the positive trajectory. For the first time, we surpassed 1 million postpaid net additions, and postpaid churn is at a very low level. We are also observing price increases in ARPU. Hence, while competition is present, our strategies in prepaid, hybrid, and postpaid are effectively being managed, alongside our strong emphasis on convergent services and digital initiatives. We aim to maintain this positive trend and navigate the competitive landscape successfully.

Our next question comes from Maria Clara Infantozzi from Itaú BBA.

I have two questions. The first one, can you provide us an update on how you perceive the competitive landscape in the fiber business? It caught our attention that ARPU continues to fall for the second consecutive quarter. The second question would be related to CapEx. It also caught our attention the sequential increase this quarter. With the integration of FiBrasil approaching, how should we think about the evolution of CapEx in the following quarters?

Regarding fiber, it’s important to reiterate it was a very strong quarter for us. We achieved revenue of BRL 2 billion with a growth of 10.6%. Our net additions were at record levels. Looking back at the last five quarters, this was our strongest performance. Additionally, churn rates are at their lowest historical levels. When addressing specific ARPU, you must consider that we are deploying in new areas with promotional entry offers. Importantly, 85% of our fiber sales are bundled with mobile through the Vivo Total service. This bundling does affect how ARPU is allocated, but overall revenue from fiber is still growing double digits and reaching BRL 2 billion in a quarter. While we are pleased to see robust performance, we aim to enhance our market penetration, offer more convergent services, and continue launching new plans and speeds, including 10 gigabits. Competitive dynamics do play a role, but we believe our asset attributes are uniquely difficult to replicate. This is reflected in our net additions, which position us favorably against the second player in the market. Regarding CapEx, our focus remains on efficiency, and this trend is likely to continue. Even with the acquisition of FiBrasil, which should be approved shortly, we expect only a slight impact on operating cash flow, possibly being neutral overall, very slightly positive. The CapEx is more than offset by the positive impact on EBITDA, so the ongoing evolution of CapEx over revenues should decline further.

Our next question comes from Mathieu Robilliard from Barclays.

I have two follow-up questions. One on the lease costs, which you mentioned could be contained or decline. I was wondering if this is still linked to the acquisition of some of the Oi towers, and whether it's basically the prospects of continuing to rationalize your tower portfolio linked to that acquisition, or is it something more structural? The second question is about B2B, specifically regarding data centers and cloud. That may be very euro-centric, but what we're seeing here is that, with the geopolitical changes, sovereignty has become a big topic. Many countries and companies are considering having locally owned data centers. I was wondering what the discussion is there in Brazil and whether you guys have any data centers directly, or any plans to have in that context? Lastly, just to clarify about the fixed ARPU; are you basically saying that one of the reasons for the decline in ARPU is due to a discount to the sum of the parts in your product, and perhaps accounting-wise, you're allocating revenues more toward the fixed business than the mobile business?

Yes, regarding your last question, it's true that there is an allocation decision here, as I mentioned with Vivo Total. We have around 7.6 million fiber customers, and 3.2 million are already on Vivo Total. If you're looking at specific service ARPU, given that we aim to sell more to the same customer through convergence, analyzing individual ARPU can be misleading. What's essential is that in absolute numbers, we're seeing revenue increase in double digits, and we've had substantial growth in net additions and the lowest levels of churn. Regarding leases, this quarter we didn't observe any impacts from Oi's exit from the market. What benefits the trend is that we went from five carriers to three in Brazil, which necessitated a reassessment of our infrastructure sharing strategy. We’re now positioned to negotiate more advantageous terms for contracts approaching expiration, allowing us to maximize value in return on capital. We see opportunities for synergies that will enhance cash flows over the next couple of years, so we expect positive numbers in free cash flow.

Mathieu, this is David. Regarding leases, while we have yet to see impact from other carriers exiting, the current structure with only three players offers us a much more advantageous negotiating position for our tower portfolio. We believe there will be significant optimization in leasing contracts affecting cash flows positively, especially as we see a 1.4 tenant ratio per tower compared to over 2 in similar markets.

Lastly, regarding B2B, we don’t foresee the same issues you mentioned in the U.S. We are working towards establishing a diversified vendor portfolio, and many players have recently entered the cloud space, positively impacting our competitive position. While some companies wish to adopt hybrid strategies with a combination of on-premise servers and cloud solutions, we are not currently experiencing stronger movements in that direction here in Brazil.

Okay. That's very clear. Just to follow up, do you guys have data center capacity? Do you own infrastructure in Brazil that's significant in size, or do you primarily work with hyperscalers?

We have engaged in a sales-leaseback transaction for a data center we previously owned, and we now have an agreement to occupy part of that data center. Besides that, we do not own any other data centers in Brazil. Instead, we procure data center capacity from other prominent players and resell it. We have a commitment to utilize part of their capacity, but it is not our own infrastructure.

The Q&A session is over. I would now like to hand the floor back to Mr. Christian Gebara for the company's final remarks. Please, Mr. Gebara, the floor is yours.

Thank you. Thank you all again for participating in our call. Just want to highlight the strong results that we just presented and, more importantly, the positive outlook that we foresee, especially based on our strong and consistent commercial performance and our ability to monetize and retain customers across all services and in all segments. If you have any other additional doubts, please reach out to our team. Thank you again, and see you soon.

Vivo's conference call is now closed. We thank you for your participation and wish you a very good day.