Earnings Call Transcript - VIV Q4 2021

Operator, Operator

Good morning, everyone. We would like to welcome you to the Telefônica Brasil Fourth Quarter of 2021 Earnings Conference Call. Today, we have Mr. Christian Gebara, the CEO of the company, Mr. David Melcon, CFO and Investor Relations Officer, and Mr. Joao Pedro Carneiro, the IR Director, with us. There is also a simultaneous webcast with a slide presentation available on the internet at www.telefonica.com.br/ir. A replay of this call will be accessible on the website. After the company’s remarks, we will have a question and answer session, during which further instructions will be provided. Before we begin, I want to highlight that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. These statements are based on the beliefs and assumptions of the company's management, and on information currently available. They do not guarantee performance and involve risks, uncertainties, and assumptions, as they pertain to future events that depend on circumstances that may or may not happen. Investors should be aware that general economic conditions, industry conditions, and other operational factors could affect the company's future results, which may lead to variations from those anticipated in these forward-looking statements. Now, I will turn the conference over to Mr. João Pedro Carneiro, Investor Relations Director of Telefônica Brasil. Please go ahead.

João Pedro Carneiro, Investor Relations Director

Good morning, everyone and welcome to Telefonica Brasil's earnings call for the fourth quarter and full-year of 2021. Today's call will be divided into two parts. First, our CEO, Christian Gebara will present Vivo's main financial and operating highlights, as well as an update on the digital ecosystem and ESG initiatives. Then our CFO, David Melcon, will provide more information regarding our cost and capex structure, net income, shareholder remuneration, and free cash flow. Now I pass it over to Christian.

Christian Gebara, CEO

Thank you, Joao. Good morning everyone and thank you for joining our earnings call. Before we start with the main highlights for 2021, let's begin on a very positive note. In the fourth quarter, we achieved our largest ever customer base with 99 million accesses, as our connected homes reached the historic mark of 50 million customers, growing 36% year-over-year, totaling 4.6 million. Vivo registered over 1.2 million net additions in 2021, 37% more than in 2020. Our strong operating performance allowed us to unlock positive year-over-year solutions across all lines in the fourth quarter of '21, as we were able to grow total mobile services, handset, and fixed revenues, as well as EBITDA, net income, and free cash flow. On the revenue side, fixed services grew 0.8% year-over-year, confirming that we are able to reverse the negative trend that pressured the top line of this business for several years. We followed up with core fixed revenues increasing 13.7% year-over-year driven by a 31.2% growth in FTTH revenues. In Mobile, our revenues expanded 3.7% year-over-year in the quarter, with handsets up 8.8%, and services growing a solid 3.1% led by the acceleration of upsells we see in our customer base, and improved postpaid portability figures. Our EBITDA grew 1.2% year-over-year in the fourth quarter '21 as our revenue acceleration was able to offset impacts stemming from double-digit inflation recorded in 2021. As a result, EBITDA margins stood at 42.9% in the quarter. Finally, our bottom line for the quarter doubled in comparison to fourth-quarter '20, allowing us to register a net income of 6.2 billion reais in 2021, up 30.6% year-over-year, which will be fully distributed to our shareholders. Additionally, we bought back R$500 million of our shares during the year, leading to a treasury position of 14 million shares by year-end, which were canceled in February 2022. Now moving to Slide 4. In the fourth quarter '21, our total revenues expanded 2.8% year-over-year, driven by the 6% increase seen in our core business revenues, which represented over 90% of our total operations. Our complete and up-to-date portfolio of connectivity and digital services solutions has been generating top-notch results and will continue to drive our business forward over the next quarters and years. Let's move to Slide 5, where we detail the evolution of our mobile revenue for the quarter. In terms of mobile services revenues, we had our best fourth quarter performance since 2017, with an expansion of 3.12% year-over-year. While we were able to maintain prepaid revenues flat compared to fourth quarter '20, our postpaid business expanded 3.9% year-over-year, led by our data-driven approach towards our offer portfolio and increasing customer base. As a result, postpaid accounted for 81% of our mobile service revenue in the quarter. A very valuable asset in periods of high inflation since we have historically been able to achieve through our postpaid customers. In handsets, we were able to grow revenues by 8.8% throughout the year in fourth quarter '21 positively impacted by successful Black Friday and Christmas campaigns. As a result, our total mobile revenues expanded 3.7% year-over-year in the quarter. On Slide 6, you can see that we are closing another year as the mobile market leader with the highest share in total postpaid and prepaid lines. Our reinforced leadership resulted from a 6.9% year-over-year increase in our mobile access base, leading us to register our largest ever number of mobile customers, at 83.9 million. The growth came mainly from our postpaid base that expanded 10.6% year-over-year, while our prepaid lines grew for the second consecutive year, up 1.9% versus 2020. On the right-hand side of this slide, we highlight some interesting aspects that underscore our solid operating mobile performance in 2021. Even though we increased hybrid plan prices in the third quarter '21, our fourth quarter postpaid churn remained quite stable at a low 1.3% per month figure, up only 0.1% versus the previous quarter. The price increase not only helped in enlarging our positive revenue performance but also prompted part of our users to upgrade their plans to our pure postpaid offers, as seen by an 87% year-over-year increase in hybrid to pure postpaid upsells in the quarter. Moreover, our premium value proposition of services aligned with customer demand for connectivity and digital solutions, as perceived by a 1.3 times increase in data consumption in 2021, allowed us to register in the fourth quarter a number of postpaid net adds coming from other operators that was three times higher than in the fourth quarter of the previous year. Moving to Slide 7. In the first few months of 2022, both ANATEL and CADE approved the transaction involving the acquisition of assets for Oi's mobile business by Vivo, TIM, and Claro. This will be a transformational operation for the Brazilian telecommunications sector, allowing for an overall improvement in quality for mobile users, especially those coming from Oi's network, while enabling the creation of a fiber infrastructure player. The closing of the transaction is expected to happen over the next month, with Vivo committing to pay approximately R$5.5 billion fully funded with our own cash to acquire a portion of access comprised of 43 megahertz of spectrum, around 10.5 million mobile customers, and 2,700 sites. Over the coming weeks, we will keep you posted on the next steps and synergies we plan to capture from this deal. On Slide 8, you can see that our core fixed revenues expansion, which stood at 13.7% year-over-year in the fourth quarter '21, allowed our total wireline revenues to grow for the second consecutive quarter at a 0.8% pace. Consolidating the turnaround of our business that represents a third of our top-line. All three components of our core fixed revenues grew at a double-digit rate in the fourth-quarter '21. FTTX expanded 10.4% year-over-year, IPTV was up 13.3%, while data ICT and digital services increased 19.5%. As a result, the revenue stemming from our core fixed products already represents over 70% of our total fixed revenues, eight percentage points above the fourth quarter '20's figure. We're certain this ongoing shift in mix towards higher quality and value-added products will be the driving force behind achieving higher growth rates over the next periods. Going to Line 9, you will see that revenues coming from our fiber to the home network closed fourth-quarter '21 at over R$1.5 billion, representing 13.3% of the total revenues we registered in the period, after expanding at an average base of 35.8% for the year, from 2019 to 2021. Our FTTH broadband continues to excel as demand for high-speed connectivity remains as strong as ever. In fact, in the fourth-quarter '21, the average speed of our FTTH customers was 188 megabits per second, an increase of 77% year-over-year, as how our growth is currently coming from customers buying plans with speeds at least 300 megabits per second. Moreover, fiber adoption should be further expanded by the recent launch of our fully bundled FTTH plus mobile cost-based plan, Vivo Total, that offers attractive benefits to clients that want to enjoy the best and most reliable data experience both in and out of their homes. As a result, we are poised to continue posting strong revenue performance in fiber, which will be further enhanced by the price increase that we plan to implement during the year for our FTTH customer base. On Slide 10, we show the evolution of our fiber home-pass and home-connected numbers, keeping Vivo on track to hit the 2024 target set for the FTTH business. We closed 2021 with 19.6 million homes passed with fiber by growing our network to 3.9 million new premises, increasing our footprint by 35% year-over-year. This robust expansion allowed us to register our highest ever number of FTTH net adds over the course of the year, with 1.2 million new users added to our base, which now composes of 4.6 million accesses growing 36.4% year-over-year. As the year-over-year expansion of our user base exceeded the footprint growth in 2021, we were able to accelerate our FTTH take-up rates by two percentage points to 23.5%. We aim to reach by the end of 2024, a take-up rate of around 30% over the 29 million homes passed that we plan to have by then. Thus leading us to set targets almost doubling our FTTH user base in three years. This growth will come not only through our organic efforts, which we continue to commend with our fiber deployment, but also through FiBrasil, which should see an expansion of homes passed over the 2022 to 2024 period. Moving to Slide 11, for the first time we disclosed information about our B2B digital services that have been one of the main drivers behind our improved top-line performance. Now with updated numbers and additional information on Cloud and digital solutions. We ended 2021 with BRL2.1 billion in revenues coming from the sale of services, including in our digital B2B portfolio that is composed of Cybersecurity, Cloud, IoT, and digital solutions and equipment. This amount grew 46% year-over-year, representing almost 5% of our annual revenue base. A significant part of the growth came from the sale of Cloud services. We registered around R$600 million in Cloud revenues during 2021, which nearly doubled in size on a yearly basis. We provide our B2B customers with solutions from the main players in the cloud service landscapes such as Microsoft, Amazon, Google, and Oracle. In addition, in 2021, we had our revenue coming from Digital Solutions and equipment growing 29% throughout the year, reaching R$780 million, benefiting from our large range of suppliers that fully meet the demands of companies of all sizes, enabling us to be a one-stop shop for those investing in the modernization and digitalization of their businesses. Now moving to Slide 12. Here we update you on some of the initiatives we have been developing to address the digital service opportunity on the B2C side. I start with our entertainment vertical in which we partner with main OTTs available in the market such as Netflix, Disney Plus, Amazon Prime Video, Spotify, and Tidal to complement Vivo's customer experience and access to content. We ended 2021 with 1.2 million subscriptions through Vivo of OTT content platforms, growing the number of accesses by 79% year-over-year. This includes both bundled subscriptions through our Vivo Selfie and FTTH plans and standalone purchases. In health and wellness, we just completed the rebranding of our Vivo Meditação app, which is now called ATMA. With low investment in marketing, we were able to achieve 150,000 installations of the app exclusively by leveraging Vivo's customer base. We plan to go further, and rebranding was the first step to accelerate the adoption of this app. In financial services, our 100% digital personal loan service, VIVO MONEY, broke the mark of R$30 million in credit given to our mobile customers, with originations and the number of contracts seeing strong upticks year-over-year as we include part of our prepaid users within our targeting base. In education, we took another significant step in our partnership with the market to enhance our service by signing a contract for the constitution of our joint venture that will provide a lifelong learning platform with digital education courses focused on employability, contributing to the development and improvement of the living conditions of our students. On Slide 19, we present some highlights regarding our proactive approach to ESG-related topics. On the environmental front, we closed 2021 with over 9 tons of electronic waste collected at our points of sale, contributing to the safe disposal of those products. Moreover, we ended up the year with 21 active renewable energy power plants on track to achieve the goal of 83 plants by the end of 2032, helping us reduce 19% the number of CO2 direct emissions annually. Regarding diversity, we continue to move forward in increasing the representation of multiple groups within our workforce. By the end of 2021, 29% of leadership was composed of women. Looking more broadly, 30% of our total workforce is black, while 4% also identify as LGBTI+. We play an important role within Brazilian society, not only by providing connectivity and stimulating the digitalization of the country but also by sponsoring education through our Telefonica Vivo initiative, which benefited 2.7 million people in 2021 with investments of more than R$64 million. The efforts we have taken towards growing sustainably, with great emphasis on enhancing social quality through representation and education, have led us to a series of acknowledgments both on a local and global basis. Locally, we ranked as the third company with the highest score among all ISE applicants while also being the only telco company chosen to be part of the newly created Great Place To Work index for our segment. In addition, we became part of the Bloomberg Global Gender-Equality Index while being recognized as the Best Telco in LatAm and participating for the second year in a row in the S&P Global Sustainability Yearbook. Now, I hand it over to David to take us through the financial highlights of the quarter.

David Melcon, CFO

Thank you, Christian. Good morning, everyone. On Line 14, you can see that we were able to maintain our costs under control in the fourth quarter with a 4% year-over-year growth during a period of double-digit inflation. Costs with services and goods sold have grown 15.9% year-over-year. The increase of this portion of our OpEx, which already represents 36% of our total expenditure, is impacted by the fact that we have been able to accelerate our revenues coming from digital services and equipment, thus enhancing the monetization of our connectivity platforms. On the other hand, operations, which represent 64% of our OpEx in the fourth quarter of 2021, saw a year-over-year decrease of 1.6%. Here, we have optimized customer-related expenses, such as call centers, collection, and bad debt, relying on the benefits of the ongoing digitalization of processes and points of contact. These efficiencies helped us to more than offset higher costs associated with personnel infrastructure and commercialization that are being impacted by high inflation and increased network usage. Moving to Slide 15, here you can see that in the fourth quarter we posted a 1.2% year-over-year increase in EBITDA to BRL4.9 billion, achieving our 42.9% margin supported by our core revenue expansion and our efficient cost control. On an annual basis, our recorded EBITDA grew 1.7% year-over-year to R$18 billion with a margin of 40.9%. Now going to Slide 16. In the fourth quarter, we invested R$2.3 billion, excluding licenses. This represents 20.3% of the revenues registered in the period, taking our total investment for the year to R$8.7 billion, or 19.7% of sales. Our capex was mainly directed towards growth transformation projects supporting our FTTH footprint and customer base expansions, our superior mobile quality and capacity, and the modernization and optimization of our IT systems and platforms. In addition, in November 2021 we participated in the auction for the acquisition of frequency licenses, purchasing blocks on the 2.3, 3.5, and 26 gigahertz frequencies, supporting the development of our 5G network. On an annualized basis, apart from the coverage of obligations, this will be accounted as business as usual in our capex over the next few years. In the fourth quarter, we booked an extraordinary capex of around R$4.5 billion, consisting of R$900 million related to the amounts to be paid for the licenses that will be spread over the next 20 years and R$3.6 billion attached to the contributions to be made to the entities responsible for implementing specific goals defined by the regulator and to be fulfilled between 2022 and '24. We certainly see relevant opportunities going forward, and as mobile leaders, Vivo will be at the forefront when it comes to the provision of services and solutions enabled by this technology. Moving now to Slide 17. In 2021, our net income grew 30.6% year-over-year to R$6.2 billion. Apart from the improved operational results, the bottom line was positively impacted by the recognition of our tax assets in the amount of R$1.4 billion, arising from a Supreme Court decision regarding updates on income taxes from past tax results. Our robust net income allowed us to propose a shareholder remuneration of R$6.3 billion through dividends and interest on capital distribution based on 2021 results. This led to dividends per share of R$3.7, translating to a 7.7% dividend yield. Additionally, going into 2021, we invested almost R$500 million to buy back our own shares. By the end of the year, we held R$14 million in treasury shares, which were canceled in February 2022 as approved by our Board of Directors. Considering the value we did for acquiring our shares, our dividend plus share buybacks reached 8.4%, reinforcing our strong shareholder remuneration compared to the telecommunications landscape. To help maintain the high level of returns to our shareholders, we announced the launch of our new share buyback program for the next 12 months. Now turning to Slide 18. In 2021, we generated R$7.4 billion in free cash flow after leases, or 16.9% of our net revenue, surpassing our net income results by R$1.2 billion. As a result, we closed the year with a free cash flow yield of 9.2%, putting us in a very strong position to fund the acquisition of Oi's mobile assets, invest in 5G, and step-up shareholder remuneration. Even after booking R$4.5 billion in debt related to the acquisition of frequencies, we closed the year with a net cash position of R$500 million, excluding leases. Thank you. And now we can move to Q&A.

Operator, Operator

Thank you. The floor is now open for questions. If you have a question, please signal by raising your hand. Questions will be taken in the order they are received. We ask that when you pose your question, you take your headset to provide optimal sound quality. Please hold our first question comes from Bernardo Goodman.

Unidentified Analyst, Analyst

Thanks for taking my question. I have two questions here. The first one about the deal with Oi. What can we expect in terms of synergies now with the new approval? I was wondering if you could give us some color in terms of numbers and speed of capturing these synergies. And my second question is related to network sharing with China. How is the project evolving, and what can we expect in terms of OpEx and capex avoidance this year? Thanks.

Christian Gebara, CEO

Bernardo, that's Christian. I will try to answer both of them. For the deal with Oi, we need to wait for the closing of the transaction to provide more color on the synergies. What I can try to anticipate is that the majority of the cost and capex optimization will rely on leveraging our existing advantages, not only in channels but also in the network. We believe we could serve these customers in a more cost-efficient way, especially because we have deployed and developed digital channels in a much more advanced way than they currently have with their current provider. The network, especially considering that most of the clients we are capturing from this transaction will be in the Northeast region, will benefit from the largest and best quality mobile network in the region. We could easily offer these customers much better service in a cost and capex efficient manner. If you add to that the optimization of frequency usage, we will be able to provide excellent quality and services efficiently, not just in the regions where we capture the customers but throughout our national presence. Some customers will naturally move to Vivo, based on the network quality alone. Tower management is another area where we could capture some synergies and capex avoidance, particularly with increased frequency utilization. We believe that integration should happen rapidly and we are getting prepared for that. We expect to unlock some significant synergies already in 2022. Now regarding your second question, about the network sharing with TIM, there are different aspects to this. The 4G coverage is the first, which is very important as it expands how we serve markets where we are present and vice versa. We have already implemented this in 716 cities, enabling access in new areas for both operators. We also completed a pilot for the single grid model in cities with less than 30,000 inhabitants, where we test offering full frequency for both operators on the same tower. The pilot was successful, and we identified the next steps necessary for scaling this initiative further. The potential we see here is to implement this in 1,600 cities. We aim to cover around 25% of this market this year. The third front involves shutting down the 2G network, which has a lot of cost efficiencies and opens up opportunities for reforming frequencies for newer technologies. We expect to start this in 2022; though there have been some delays due to IT system developments required in both companies. The overall potential remains high across these initiatives.

Unidentified Analyst, Analyst

Very clear, Christian. Thanks a lot.

Operator, Operator

Our next question comes from Marcelo Santos, JPMorgan.

Marcelo Santos, Analyst

Hi. Good morning, Christian. Good morning, Vivo team. I have two questions. The first, could you comment a bit on the outlook for the B2B digital services in 2022, and how is the competitive environment shaping up? The second question is regarding the deceleration in the fixed core revenues, including Fiber-to-the-home and IPTV when you compare the growth from the third quarter to the fourth quarter. Could you elaborate on that and if that's something sustainable? Thank you.

Christian Gebara, CEO

Marcelo, thank you for the question. Regarding the competitive environment, I think it remains very strong. The market dynamics have not changed, as the three major players continue to innovate in technology, especially in 4G services. Therefore, competitive pressure continues, with our strategies targeting not just market share, but pricing as well. We aim to move prices up as we did in the third quarter of last year with hybrid and pure postpaid offers. While most competitors are trying to follow suit, there is still more risk in the prepaid segment. We are attempting to upgrade customers to higher data offers. Regarding the fixed question, our fixed business is doing fairly well. The growth of 0.8% indicates a second consecutive quarter of increasing fixed revenues. Non-core segments, which include ADSL and DTH, represent less than 10% of the company's total revenue, continuing to decrease by 20% but without significant impact on our overall performance. In fixed FTTH, we were previously more aggressive with promotions in the last quarter. Now, we maintain pricing and are working on driving customers to higher speed units, 300 and 600 megabits. Our strategy is focused on absolute revenue growth while minimizing churn to ensure we acquire high-quality customers.

Marcelo Santos, Analyst

Perfect. Thank you very much, Chris.

Christian Gebara, CEO

Thank you, Marcelo.

Operator, Operator

Our next question comes from Freddie Mendes, Bank of America.

Freddie Mendes, Analyst

Hello. Good morning, everyone. I have two questions as well. The first is a follow-up regarding the Oi acquisition. It would be helpful if you could provide a ranking of the lines where you expect to see the most relevant impacts. The second question pertains to FTTH; you reached 20 million as of Q4 and expect to reach 29 million by 2024. However, given the slowdown observed, I want to know if it's fair to assume that the highest growth stage for FTTH has already occurred in 2021 or if there is still room to boost growth in the coming years? Thank you.

Christian Gebara, CEO

Freddie, this is Christian. Regarding costs and capex avoidance, I want to emphasize that competition remains quite steady. Overall, we are focused on the efficiency we can gain through cost and capex. Many of the customers involved, especially in the Northeast, have low market shares, which we can harness to our advantage. In terms of FTTH, I see Vivo gaining momentum. We're not measuring performance by access counts but rather the ability to retain customers and drive revenues. The goal is to maintain growth in key areas while focusing on ARPU increases through quality offers.

Freddie Mendes, Analyst

Perfect, Christian. Super clear. If I may just have a follow-up. Typically, when entering a new city, ARPU levels tend to be lower. How long does it usually take to bridge new customer segments to your current offerings? Thank you.

Christian Gebara, CEO

As I mentioned, every city is different and ARPU changes. We're working on driving faster adoption of the 300-speed plans. Our strategy to offer technical support and devices for connected homes is also in play. My focus remains on improving overall customer acquisition and revenue generation.

Freddie Mendes, Analyst

Thank you very much.

Operator, Operator

Our next question comes from Victor Tomita, Goldman Sachs.

Victor Tomita, Analyst

Hello, good morning, Christian. Good morning to all and thanks for taking our questions. Apologies if any of this has been covered, as I experienced connection issues earlier in the call. My first question relates to how you've been able to increase shareholder distributions despite IT investments and the Oi acquisition on the horizon. Could you elaborate on your thoughts regarding capital allocation in balancing between increasing payouts versus pursuing opportunities for further capex and M&A? The second question is about the B2C Digital Ecosystem rollout. How quickly do you plan to leverage Vivo Money with user migrations from Oi and the potential for acquisitions to aid in the digital strategy? Thank you.

Christian Gebara, CEO

Victor, I will start with the second question. Yes, of course, the Oi customers will be targets for our digital services. We will be waiting for closing; there is a 12-month period to migrate customers. We are not rushing to offer digital services now but they will certainly contribute to our base. In terms of investing, we may consider smaller acquisitions to reinforce our digital portfolio. We've previously invested in startups and are open to pursuing relevant initiatives to add value to both B2C and B2B.

David Melcon, CFO

Hi, this is David. At the end of 2021, we had R$6.5 billion in cash. This allows us to acquire Oi’s mobile assets without impacting our future shareholder remuneration. Our focus remains on maintaining payouts and pursuing share buybacks actively as demonstrated by our continued initiatives.

Victor Tomita, Analyst

Very clear, thanks.

Operator, Operator

Our next question comes from Arturo Langa from Itau.

Arturo Langa, Analyst

Hi, good morning, everyone, and thank you for taking my question. Just one housekeeping item. Regarding 5G, I believe you have around R$2.7 billion of obligations for 2022. My question is how does that factor into capex?

David Melcon, CFO

Hi, Arturo. This is David. The R$4.5 billion recorded in 2021 includes obligations related to 5G. These will not affect our future budgeting as they are already accounted for in our financials. Our capex level will remain stable as we focus on ongoing 5G and fiber deployment.

Christian Gebara, CEO

The obligations from the R$2.7 billion are already accounted for, and our focus on solid coverage and deployment will guide future capex planning.

Arturo Langa, Analyst

Thanks for the clarification, that was very clear.

Operator, Operator

Our next question comes from Victor Ricciuti, Credit Suisse.

Victor Ricciuti, Analyst

Good morning, everyone. Thank you for taking my questions. I have two from my side. First is a follow-up on the B2C initiative. We see that you are investing in the consolidation of digital services in providing clients more integrated services. How should we see the monetization of these initiatives going forward? Secondly, I have seen good adherence from Internet providers on this initiative. What type of clients do you see participating?

Christian Gebara, CEO

Victor, regarding digital services, we are starting to develop and sell these services, especially in the video entertainment vertical. By selling bundled services like Netflix with our FTTH offerings, we see a tangible increase in ARPU. This is also the case in mobile where we see some uptick in overall customer upgrades. In the B2B segment, the growth remains strong too, and we are systematically looking to drive that forward with relevant partnerships. Revenue increases in digital services will strengthen our ability to maintain growth.

Victor Ricciuti, Analyst

Thank you very much.

Operator, Operator

Thank you. We have now concluded the question-and-answer session. I would like to invite Mr. Christian Gebara for any closing remarks.

Christian Gebara, CEO

Thank you all for participating in our call. Thank you for following Vivo throughout this past year. We experienced a very positive year as reflected in the results presented today. Moreover, as we prepare for our future through our neutral and fiber networks in Brazil, we look forward to successful outcomes from 5G and the Oi acquisition. We are also eager to provide more insights on our digital strategy going forward in both B2B and B2C. If you have further questions, please reach out to our team. Thank you again for your participation.

Operator, Operator

Thank you. This concludes today's Telefonica Brasil Q4 '21 results conference call. You may disconnect your lines. Have a nice day.