Empresa Nacional de Telecomunicaciones S.A. (ENTEL.SN) Earnings Call Transcript & Summary

Good morning. Welcome to Entel Second Quarter 2025 Earnings Conference Call. I'm Paula Raventos, Investor Relations Officer at Entel. And joining me today is Marcelo Bermúdez, Entel's CFO. Please note that this event is being recorded [Operator Instructions]. Let's start by outlining today's agenda. We will begin with our review of the most significant and recent events, followed by the overview of Entel Group results. Then we will zoom into Chile and Peru operations and cover also ESG initiatives. Finally, with final remarks and Q&A session. I will now turn the call over to Marcelo Bermúdez, Entel's CFO. Please go ahead, Marcelo.

Thank you, Paula. Good morning, everyone. So let's start with the main events with experienced this first half of the year in Entel, which has been a very interesting year so far already in half of the of the financial period, I would say, as of June will be very challenging. But still, we have very good news in certain areas. Specifically, I want to start with just noting that we continue to lead the 5G market with almost a 48% share. That's also very interesting for the future deployment of our network in Chile as well as in Peru, as you know. So this is interesting also because we are one of the pioneers in the country in the 5G stand-alone technology. This technology, just to remember, this will allow in the future to provide a more low latency signal network to our customers also provide slicing, which allowed us to really use 1 network with different features for different customers. So this is very important for certain services like, for example, telesurgery or any other service that requires really undisrupted capabilities in order to provide control, for example, robots and other service. So this is really interest technology that we are partnering with Ericsson to provide services for our customers. So we will continue to deploy that or to advance in the first steps of the 5G [SA] and it will be very interested in how we can develop that and monetize it in the future. Also, we have been named the most valued company, telco in Chile for the third year in a row. And this is a very relevant recognition for our company. This is backed by OpenSignal. So it basically provides assurance that we are the company that provides the fastest 5G speed and good mobile experience in the country. So we're very proud of that, and we will continue to improve that connectivity for our customers in the future. Also, we've talked about this before, but the project we have been conducting with Starlink is really advancing. We already started the first -- I was testing Peru with direct to sell using the Starlink connectivity. It was a very successful initiative in Peru, it was proved that we can provide stable, basically background for the technology, specifically Starlink, we will talk about that later with messages initially. So in Peru, we'll basically do the same as we will do in Chile. And this is already on its way. Also note that S&P Global Ratings reaffirmed the BBB minus rating with a stable outlook for the future. And also we're very proud of that. And it impacts our strategy in terms of financial stability that we have been performing. Finally, Entel launched the digital B2B business in Peru. It's a very interesting market. We already started with all the commercial first steps, I would say, in the market, trying to mimic whether we are in Chile. So I'm sure that will be very successful and will support our strategy to increase the share of digital solutions in our revenues. We also expect to have 10% share of the revenues in Peru, similar to what we expect in Chile in the coming years. So that's very interesting to see how that would evolve in the future. Just to note, I already mentioned a little bit what we did in Peru with the test, but basically, we are still advancing in the Starlink contract, I would say, basically, we are already everything set up and prepared to provide as soon as possible messaging services in the country in Chile. We are just in the final step of approval, formal approval from the authorities. Today is basically requires some final review from the national controller, a state agency basically that we're still reviewing that. So hopefully, if that is approved, we will be able to provide and initiate messaging services during the year. We don't have a specific date. Hopefully, it will be soon, could be -- I don't know if it will be August, but could be August, September. So as soon as we have the approval, we will be starting to provide the service. Everything is set up for just turn that on and start providing that very awaited service for our customer base. I would say that it will be really something important to improve our services and have a positive impact also in churn rate for at least the coming years. Going to really what have changed in our shareholder structure, just noting that we have an increase in the share of foreign investors that been adding 2.5 percentage points as of June compared to the quarter-on-quarter. Mainly pension funds reducing their position a little bit in favor of foreign investors, but we don't see much change besides that. Almendral, for sure, is still the controller shareholder with 54.86% of the company. And in terms of stock price, we've seen at least some increase in terms of volume traded in the last few months. That will have supported a little bit the trend of the stock price trying to convert to something similar to the IFSA return of the year. We are lagging a little bit behind yet. So that is at least good news in the short run. And we will see what's coming in for the rest of the year. Just going to consolidated figures, we see the -- at least in terms of mobile users, what we see in general is that we have been at least posting some increase that is relevant to note in what is postpaid, growing year-on-year 8.4%, though prepaid has shown both in quarter-to-quarter figure year-on-year, a decrease is mainly due to a cleanup of the customer base that was performed in February 2025. After that, we expect to continue to grow in the postpaid business mainly, although during the first quarter and second quarter, we have been facing some challenges, mainly due to the regulation that mandates that we perform biometric clearance for our new customers. Basically, any new customer that purchases, let's say, services or SIM card needs to be authenticated by its biometric safe recognition of digital print. So that has reduced a little bit the I would say, the turnover in the industry. We'll see later that even the portal rates have decreased during the second quarter given this new regulation. And also in Peru, there is some effect also related to the anti-spam law, which basically had reduced the -- or not allowing the -- calling our customers or customers for other companies to promote telco services or between any company. So that is forbidden, and that's also had an impact on the -- what we call the turnover rate also in Peru. So when you combine those 2 effects, which are mainly drive -- or driven by regulation, you see a decline in the mobile users as a whole compared to the previous quarter and the quarters before that. But in general, the industry after this adjustment is still growing, mainly related to postpaid. In fixed business, if we see the RGUs also growing very rapidly in fiber, you can see 25% year-on-year. We have been reducing this growth speed in the last quarter in fiber. We'll touch that in a few slides later. But still compared to last year, we have improved significantly in terms of fiber and also, as you know, given that it's an older technology, decreasing our share in fiber and hybrid fiber coaxial network. So we should continue to see that declining the non-fiber and just growing fiber. In terms of consolidated revenues and EBITDA and net income, we can see that in general, the quarter-to-quarter, we have a slight reduction, but it's still growing more than 6% in overall revenues compared to last year. Growth has been driven by very markedly in the last quarter by handsets revenues, but also if you compare to last year to the same quarter-on-quarter, we still are showing some increase close to 5% in [what] our mobile services. So combined a stable and slightly growing mobile services and a very strong handset revenues and handset financing, we have been really in the mobile business pretty active. Still -- fixed business is still contributing with 8.5% year-on-year and some growth close to 3% quarter-on-quarter. So we're growing on fiber, a little bit less than we had expected. We were going to talk about that later, but still good decent growth in mobile and a very strong growth in handset revenues and financing. That -- if we translate that into EBITDA and EBITDA margin, what you see is that still the EBITDA is growing compared to last year and last quarter. kind of in the range of 3% in both figures. And EBITDA margin is decreasing. We have anticipated this since the last year. We know that the deployment of fiber will impact our margins both in 2025 and 2026. That's why we also noted in the slide, you can see in the right-hand side in the upper chart, the -- just the mobile margin for second quarter 2024 and the same margin for the second quarter 2025. That is not including fiber, just mobiles. So you see a 0.4% of decrease in the margin just in mobile. So the 1.4% decrease compared to last year as a whole in the margin is mainly coming -- 1 point of that of those 1.4% is coming from the fiber deployment and just 0.4% from the mobile business as a whole. This is consolidated both Peru and Chile. We're going to see what are the reasons driving a little bit less margin in mobile, but it's mainly the fixed that is really driving the margin down, but this will be just for -- as we have mentioned for 2 years, and we believe that is a strategic move in terms to defend our mobile business. That's why we're investing in fixed. In terms of EBIT, still year-on-year, almost no growth, just slightly 0.2% quarter-on-quarter, a little bit 1% decrease. And in terms of net income, we posted ARS 19 billion, which is still lower than the first quarter, but the important thing here is that every quarter, we are not seeing what we saw last year, which is all the impact of the exchange rate impacting our investment in Peru. So having that impact of our investment in Peru related to the exchange rate already hedged in our P&L, we have seen a more stable quarter-on-quarter net profit. So still -- that's why it's not very comparable to the last year net profit that really varied a lot quarter-on-quarter. So we still see a pretty good year for the rest of the quarters in terms of net profit. You can see a stable business growing not that much in mobile services, very levered in -- both in fixed and handset sales and financing. still margins given that, as we have mentioned several times, the industry is still facing a very stiff competition, a strong competition, both in Chile and Peru. And this year, we have expected more competition in Chile given that one was back in the industry. The cloud also got the 5G spectrum. So we were expecting this year to be more active in terms of competition in Chile. That is occurring a little bit more responsible, I would say, than previous years. And in Peru, it's still very aggressive. I mean you know that Claro and [Mitel] are very relevant in their specific market segments in Peru is still a very competitive market. Although Telefónica in both countries has been less present. It's still a challenging year because there are 4 players in each market. That is very relevant to understand. That's why 28% margin in total, 29% if we take out the fiber deployment is still good margin for this competitive environment. So we are far away from other benchmarks that you can see in other markets that are 2 or 3 players. So still, we are being able to defend our position and still keep up with this margin level. Real quick, there's not much change. We haven't seen different effects that we saw last year in terms of inflation, exchange rates. So it's mainly still good business performance if we see quarter-on-quarter in terms of EBITDA. This including the dragging of the EBITDA from the fixed business that is included in the area, really offsetting the kind of strong performance of mobile. For the 6 months accumulated figures, pretty much the same. Business still strong. Taking into account that last year, we performed several efficiencies that still are included in this year in expanding those efficiencies. Those are really supporting our business that is still very competitive in terms of pricing. So it's actually, it's very -- it's a good news that we can really perform in our organic business positively, both in the quarter figure or in the 6-month accumulated figure. We always see what's going on with CapEx. We have been posting a little bit or a figure that is a little lower than we anticipated for this year and for the first half. You know that given the competition in fiber, given the results and the churn rate in fibers, we have taken that into consideration, and we have reduced a little bit the speed of we are expanding in which market segment we are expanding fiber. So that means that we are focusing on high-value customers, trying to be cautious and responsible because every customer we connect is very significant in terms of CapEx because we need to connect the field expense in terms of connection on the last mile, what [indiscernible] is called and also expand to invest CapEx in the equipment of the fiber. So it's roughly $180 to $200 per customer. So we're very cautious to really deploy that CapEx where we see incremental value. And that's why the lower speed of deployment of the fiber business has also resulted in lower CapEx. Also, the level of competition, normally, we are able to take that into consideration in terms of mobile, how the competitive environment is in that sense. And so we have been adjusting CapEx a little bit. Normally, the first half of the year is lower in CapEx and there's some speed up at the end of the year, but still, we believe that we will be roughly in the overall figure of 19% to revenues by the end of the year. So today, you can see that as of June, we still have 15.5%, which is a low figure. We should speed up a little bit for the rest of the year, but it will be -- we're maintaining the last quarter view to reach 19% at the end of the year. As you can see, mainly it's related to fixed, which is the green line. The blue one, which is mobile is in Chile really in 14.6% for the first half of the year and Peru is speeding up the 5G and 4G deployment and increasing coverage in different areas, Lima and outside Lima. That's why that figure as of June is still high compared to its revenues in Peru. So the expectation for the rest of the year is at the most, reaching 19%. We will depend on how the competition really evolves for the second half of the year. This translated into a cash flow that is compared to last year is stronger in terms of cash flow from operations. You can see almost COP 60,000 million compared to a negative cash flow last year for the first 6 months related to a better capital -- working capital, lower CapEx also, as I was just explaining, that have resulted or coupled with a strong EBITDA have improved our position during the first half of the year. Also, the net financial expenses, this is not including the impact of the first half related to the hedge of the investment in Peru. This is just net financial interest expenses and interest income without that effect. It's a little bit higher than last year, mainly because we had a lower cash that has been invested because last year, we have in the first half, a lot of cash coming from the sales of the fiber business the previous year. So that cash has been used. We used it in the second half of last year to pay down debt, mainly we're paying $150 million in a bond that expired in the second half of the year. Besides that, the cash has been really used for the normal operations. and also to finance some part of the financial costs and dividends. So as a whole, cash for -- if you compare to the beginning cash, which is for this year, COP 233,000 million, we ended almost in the same figure, though we are including COP 56,000 million of net financing activities, which is mainly the bond issue we did in April, which provided a little bit below COP 8,000 million. And we deducted from that line the impact of the hedging of the investment in Peru, which is negative COP 41,000 million. So instead of including that hedge in the net financial cost, we are including that as a part of the net financing activities. So as a whole, looks like a balanced cash flow, very dependent, of course, in what happened for the rest of the year in CapEx, as I already mentioned. So if we keep CapEx related to the trend in EBITDA, we should be able to keep a balanced total net cash position at the end of the year. It might be a little bit negative depending on how the rest of the year evolves. But still as of June, it is pretty stable. Finally, for the consolidated, still very stable and I would say, in an adequate level, the main financial indicators, financial debt -- net financial debt growing a little bit during the last quarter. As I mentioned, we issued a new bond, coupled with the increase of the impact of the hedge of the Peruvian operation that implies a negative impact of COP 41,000 million. That impact is very important to understand. The hedging of Peru, if you see the FECU, it's included in interest expenses as a higher interest expenses, but it's netted in the tax line with more positive taxes, which are those effects are the same are netted and that accounts for the hedging we're doing. But when you see the balance sheet, it implies that we are posting a higher debt basically of COP 41,000 million just because of the hedge. On top of that hedge, we also issued COP 80,000 million bond, but we also paid 2 loans in the first half of the year for roughly COP 35,000 million, which was the bank's KFW and BCP in Peru. So those 3 effects, the new bond, debt reduction plus the impact of the hedging accounts for the COP 90,000 million that the net financial debt is increasing. So that's the main explanation. So compared to the last quarter, it's 60,000, but compared to the end of the year, it's COP 100,000 million. And net financial debt EBITDA, pretty stable ratio, and that also have allowed us to keep the credit rating as of now with still positive or neutral in terms of Fitch and S&P stable outlook for the rest of the period. And we have been also posting a dividend yield annualized of 6%, a little bit lower than the previous quarter, but still in positive area. Just quickly going to Chile, pretty much the same that we saw in the consolidated figure, mobile user base decreasing based on the -- not only the cleanup that was performed in prepaid, but also the biometric and portability regulation that started in the second quarter of 2025 or impacted mainly in second quarter 2025, that affected the levels of portability and sales in the postpaid market. In spite of that, we were able to increase compared to last quarter in 1% of our customer base. So we will expect at least if there will be a positive contribution for the coming quarter, but still, given the lower portability ratios, at least the churn rate also should be impacted positively. So we will see in the industry, I would say, some change in the turnover of the customer base among the different operators. If you see in the last quarters, we still don't have the second quarter figures. We really saw Intel leading the last quarters, every quarter, the net share of the market growth. Although in the last -- I would say, in the last quarter, first quarter 2025, Claro improved and got the pole position, but still Intel got really a significant chunk of the market growth. Telefonica also improved compared to what we saw last year, which is the green boxes there. And W is still very shy, depending on the quarter, some slightly positive or in the last quarter, slightly negative. Just to note that in the second quarter 2025, we got 33% positive net adds in that quarter. We still have the rest of the industry figures. The revenues in Chile, pretty much in the same line as the consolidated year-on-year, in general, we are growing 4%. But just seeing the quarter figures, really no growth in terms of revenues. We are really seeing some level of growth in fixed, which is the business that we're really focusing and speeding up the growth, but still helping, but not enough to really offset the adjustment we see in the mobile services. Mobile services, although the customer base is kind of stable, we are seeing some level of competition, higher discounts in the second quarter that are driving a little bit the ARPU down, we will see in a chart in a different slide. But that's mainly the impact for the second quarter. As a whole, it's pretty stable. we should continue to see in terms of handset and handset financing strong figures. We've seen compared to last year, still 4% growth with pretty strong and good bad debt is really controlled. We haven't seen yet any negative impact -- it's a little bit better than last year in terms of uncollectibles. So we've seen a stable financing business growing at a certain extent compared to last year. And in EBITDA margin, same figures, a little bit almost 1 point or 0.9 compared to last year of lower EBITDA margin. But as you see, mobile is really stable in the same 37.1% in both 2024 and 2025. So as I mentioned, the decrease is driven by the expansion of fiber. Also in terms of more detail, when you see mobile, as I already mentioned this, it is mainly both the handset business and the accessories that are growing and everything that is related to services with a slow decline compared to the last quarter, but still growing compared to last year. And as I mentioned, that's mainly a result of the competitive dynamic in the second quarter and discount to provided to customers. Still, the -- as you can see, brand power continue to lead the industry with a significant gap of more than 9 points to the second, which is second player. And still on postpaid, as you see also in the NPS, we are leading with more than 20 points gap compared to the second operator. And another measure that we like a lot, which is the ECQ, which is really a blend of different ways to perceive the quality of the network in terms of speed, latency and other features. We really keep a significant gap within the rest of the industry. We also saw in the first quarter a decline for most of the operators that is related to the -- some heavy storms we had in the country and that impacted Intel, but also the rest of the industry. We were able to recover from that and really maintain a gap against the industry. There are some players. You can see the red one that is Claro that is improving in terms of quality. That's for sure, since they have access to a better 5G network, but still compared to the other players, we still keep a very strong gap. More in detail, the mobile service revenue share, 42.3%, widening the gap compared to the rest of the industry. As I mentioned before, in the chart at the middle of the slide, we can see a steady growth in ARPU compared to first quarter of last year, although we will see in the second quarter a slight decrease mainly because of additional discounts and competition in the country. And we also know that the green operator there in the fourth quarter of last year, they performed a base cleanup that really made the ARPU of that operator jump in the last quarter of last year, and that has been maintained for sure during this first quarter. So -- and in terms of port-out rate, you can see we are as the other quarters, almost doubling the -- or half -- I mean, half the rate of port out of the rest of the industry. And we are keeping that leading position very wide against the other operators. For the second quarter of 2025, we put a note there, which is, we are keeping the 0.77 gap. Actually, the rate is 0.77, and we're keeping, I guess, the same gap against the rest of the industry. Real quick to finalize Chile fixed business accounts for 29% of the revenues, growing compared to the last year and the last quarter, mainly in fiber. And there's the detail fiber, which is the orange one or red one is growing at 36% year-on-year with a more modest growth in the last quarter and the rest of the services related to IT, digital solutions with mixed results, IT growing 3% year-on-year, but digital solutions with a slight decrease during the quarter. But still, in general, what we see is B2B business in general has performing been pretty well during this year and growing in general. Quick summary of the -- how we have been expanding in fiber. We already reached almost 13% share in terms of connections being one of the only companies that are really growing in the market, given our footprint related to the on-net connection deployment. And that has allowed us to really grow in the last year, every quarter. I would say that, that growth will continue in the coming quarters, as I mentioned, but cautiously trying to really speed up the profit goal in fiber business. This is really the net adds, how the market has been evolving in the last quarters. You see the first quarter, we have happened in the other quarters in the last year, actually, Intel is the only one growing. Mundo, which is the yellow one, speed up since the last year, fourth quarter last year and first quarter this year, speed up and is really growing a little bit similar to Intel in the first quarter. And also Claro. Claro is already using the on-net network. So they are moving customers to fiber, which is something that is expected. So we are the 3 doing some revolving and getting customers -- the new customers in the last quarters. This is also important. We are showing the trend in revenues related to fiber and the cost and expenses related to the same business. As you see, we are still growing, but this is a business that is really related to scale. So in this first stage, we have always thought about that we're not below the revenues in terms of cost. So this is really the explanation why we have 1 percentage point of margin erosion because of growth in fiber. We expect at the beginning, I would say, at the very end of 2026 or beginning of 2027, having really positive results in terms of EBITDA. That is tied to continue to grow and gain the scale to really provide and dilute fixed cost in our larger customer base. With that all, we see also in the right-hand side, the CapEx related to fiber normally, CapEx is related to installation and the equipment that is installed in every home. So basically, the cost per unit is not that unchanged. You can see in the second quarter, a drop of 22% in the CapEx. That is, I would say, is a onetime effect related to the refurbishment of some equipment of old customers that were reutilized for new customers. So I would say that normally, we will see a very stable CapEx figure per customer installed in the range of $180 to $100 at the most, including everything. That's for Chile. Paula, you can go with Peru.

Thank you, Well, moving to Peru results. The strong competition continues, but it has this quarter been mitigated since the anti law came into effect, which regulates the effect -- I'm sorry. Let me go over the -- which regulates the sending of advertising messages and requires prior user authorization. We've been able to increase the postpaid customer base in this quarter by 11% year-over-year and 2% compared to the second quarter of '25. In prepaid also, we decreased a little bit of 1.3%, but it's mainly because due to the migrations that has occurred towards to postpaid customer base. Here, we can see that despite this high competitive environment, we have been able to continue growing our postpaid share. We have maintained a positive growth trend with more than 100,000 additions in this second quarter, capturing 38% of the share of this growth. This increase we have seen that it's in the customer base attributed to the strengthening of both in-person and remote sales channel and also 2 additional lines that have shown greater growth compared to the second quarter of '24 and because of the quality admissions that we have kept churn under control contributed to the base growth with good B2C acquisition and greater B2B consistency in the different segments. Regarding the results of Entel Peru during this quarter, sales reached MXN 277 million, growing 5.5%, mainly due to the significant growth that we can see in sales of mobile equipment and services. The change in strategy allow us to maintain the tariff structure while controlling promotional discounts and reducing participation in the dynamics of in-person discounts. Regarding our EBITDA, we reached BRL 70 million during this quarter, a little bit down from compared to the second quarter '24, where growth in service and equipment margins could not offset higher advertising costs due to this anti spam law, which require additional advertising efforts an increase in sales channel cost. And also, we have some increase in channel costs in marketing campaigns to promote our best network regarding the increase that we're doing in coverage over this year. Despite this slight decrease, we have been able to maintain a stable EBITDA margin of 25%. Regarding our EBIT, it has been in line with recent quarters and has remained stable. Moving deeper to the mobile revenues. As you can see, we grew 7.7%, mainly due to the equipment sales that grew 17% and also due to the success commercial strategy that has aligned to the sales volume with the commercial plan. achieving a significant makeup in the selling price and recovering the substantial market share and also due to the market share context that we have been -- it has been favorable to us due to the reducing participation in other operators. Also regarding mobile service revenue increase explained due to lower customer acquisition discounts and due to the growth in our customer base. We've been leading in our network quality. We have been making progress improving our network in presence and also in 4G and 5G coverage with a significant growth plan out of Lima, leading in an excellent consistency quality from Tudela, which -- it's a key performer that evaluates the average download or the speed upload and latency. Also with according with [indiscernible] and OpenSignal, Entel has the best 5G network quality. Regarding brand power, Entel has maintained the second place with a significant growth in Lima and out of Lima in customer service benefits innovations and attributes that are -- has been increasing over the last quarter. Also, we have seen some important recognitions over this quarter. For example, we obtained the first place in customer experience in telco sector by ISO in Peru. Also, we obtained the first place in quality ranking on mobile Internet indicators. And also, we obtained the first place in telco sector from attracting and developing talent by Merco Talent. We've been able also to maintain good satisfaction levels for our customers in NPS in postpaid. And also this has been in line with the commercial strategy that we have been implementing to get closer to our customers with benefits and loyalty plans for our users. Also regarding our revenue share, we have been -- maintained our second position in revenue share with this significant presence and participation in mobile services, especially in Lima. Also, we have obtained important growth in the revenue share in handset revenue. Despite this high competitive and strong promotions and discounts, we have been able to grow in our ARPU reducing because mainly the reduction of the in-person channel discount. Regarding port out rate, the entire industry during the second quarter has the effects of the anti spam law. However, Entel have been able to increase the [indiscernible] gap compared to the industry average. Now I will move forward to our ESG main events and highlights during the second quarter. It's important to highlight that Entel has received the Energy Excellence Seal for [indiscernible] that it's an initiative of energy excellence seal for recycle program and thanks to the positive environment impact and the use of electric truck and collection of more than 130 tons of electronic waste. Also, we have obtained the 76% of Entel's stakeholders rate in ESG performance favorable according to the ESS Index 2024 survey, where [indiscernible] has an important performance with this 76% of evaluation with an important best rating in the corporate governance of 77%. Also, we have been highlighted the last Entel recycling initiative with more than 1,600 unused phones with this recycling initiative collected in other the 2 months that is an initiative that has been a program that we started over the last year, and our goal is to recycle the 20% of the phones sales annually by 2030. Now we will move forward to our final remarks with Marcelo. Please go ahead.

Just to finalize and before going to the open questions section, just really remarking and noting the -- that even that -- and I mentioned this at the beginning of the presentation, that we are in a very highly competitive environment. The telco landscape is not -- has not changed in the last year. In Chile and Peru, although we may have some players that have been exposed to challenging financial situation, they are still in the market, still doing commercial promotions, some of them trying to really survive for a while, some other more aggressive because they need to really speed up the deployment of additional network related to bandwidth acquisitions. So the market is still moving a lot. So that's really important to understand. And even in this scenario, we have been able to grow in the margin, in service revenues, keeping up ARPUs -- steady growth in ARPU. If you compare for the last 2 years, we have been able at least to cope for inflation in these 2 years while keeping expenses down. So that has been the key to really keep a stable EBITDA margin. That is being dragged down temporarily because of the expansion in fiber. So that's mainly the thing that I want to note. And we have been able to really swing in these waters that are really a turmoil pretty successfully, I would say. Although the cash flow has been tight, we have been also been able to finance the company and refinance some amortizations that are key for the future. So we're very happy with that. And CapEx also, as I noted at the beginning, we have been also managing very cautiously, very responsibly the aggressiveness of our CapEx, not only in mobile but also in fiber. Trying to really be careful in terms of balance our cash flow, really focus the investment where we see the value where the most value for our customers, also where the most margin for the company is located. That's why we are focusing in certain areas in Lima, really focusing in certain specific regions of higher values outside Lima and still improving our network in Chile. So that's very important as are the main keys of our focus today in this moving environment. And this has allowed us to keep and maintain our investment grade, which is really important for us and ensure our financial sustainability and funding for the coming years. And as I already mentioned, fiber, we will continue to grow. We continue to grow in Chile, and we have a plan to grow in Peru beginning end month of 2026. We are really making effort to make that happen, but always grow really carefully watching for keeping expenses being very careful with the cash deployment basically and CapEx. So I would say that summarize where we're at, the strategy, how we are dealing with this environment and before going to the open questions. So that's it.

Thank you, Marcelo. Now we will move to the questions. Please, you can send it through the chat and we will wait a couple of minutes. Well, we have a first question from Andres Coello. Can you comment on the competitive environment in Peru now that the new entrant has operated for around 6 months. Are you interested in buying Telefonica in Chile? Well, thank you, Andre, for your question. Regarding the competitive environment, as I comment, over the first 6 months of this year, what we have seen is that all the industry has faced the effects of the anti-spam law. So most of the cases, there was no much change regarding Telefonica with this new controller that they have. They still are offering promotions and discounts and what we have seen is that they've been reducing and decreasing in their service revenue share in equipment and handsets. But over the rest, we have seen that it's declining and mainly as the trend that we have seen over the last year.

And I can answer the interest in Peru. Just it's very relevant to know that the [indiscernible], which is called today is actually not necessarily a long-term operator. There could be interesting at some point and really divesting that operation in Peru. So we're always looking for opportunities. We cannot rule that out, not only in Peru, but also in Chile. Chile is tougher because of the regulation, but -- the only thing I can say that we always are looking and analyzing different alternatives, not only in Chile, but also in Peru. And we will continue to do that. Hopefully, we get some results, but it depends on actually the analysis and authorization of the different authorities.

Thank you. So we have another question from Fernando Gonzalez. What is the cost of providing direct to sell service to each client?

Yes. We cannot comment on the details of that contract. But what I can tell you is that we have already paid the part of that contract is already as an asset, and we will start to amortize that asset when we start the service provision. And the details on the cost per user, I cannot really answer that. But what I do can say in this matter is that we -- as soon as we get the authorization, we have already a different set of alternatives to monetize that directly and directly. So hopefully, we will be really tapping and getting a competitive advantage, at least for a while against the other operators. This is service a product is really -- the customers are waiting for it, and we know that it will be very successful. And we have a commercial plan of deployment and monetization.

Can you go up, please? We have 2 more questions. We have 2 questions regarding our capital market access. Could you please comment on your capital market access plans, including refinancing the upcoming maturity of 2026? And what is the refinancing upcoming maturities?

Yes. I can answer that, Paula. There is already a plan in process to refinance already we just paid at the beginning of August, some few days ago, the -- one of the amortization of that bond, which was $180 million. The second amortization, the last one, which is in August 2026, we are expected to refinance that during this month of September [indiscernible]. There's signal already? Okay. Yes. So it's similar -- so the way we have already short disruption. So I will repeat it. We are already planned and in the process of refinancing the bond amortization that is due in August 2026. This September 2025, we already have the financing. We went to the market. I will go in detail with basically we have secured roughly a little bit below $500 million of financing in average 6 years bullet, if you consider all the different alternatives. And we are using that secured finance to refinance the next year amortization plus other general uses. So what you see is that already in the next financial -- quarterly financial statements of September, we will have that already refinance to the long term. And the -- during this process, which is really interesting, during this process of going to the market, basically, I'm talking about the bank market, national and international bank facilities. We also were able to get noncommitted lines for roughly $380 million on top of the funding that I already mentioned we have secured. So we see that in general, besides going at the beginning of the year to the local bond market going to the local and international bank system with tenors that are pretty good, 6-year bullets at a very good rates also, it's really showing that still the financial community is backing the prospect growth of Entel. And we haven't tapped yet the international bond market, which is always available for different alternatives that might happen in the coming months of the year.

Thank you, Marcelo. We have another question from Vitor Tomita. On the new identification regulation in Chile, we were wondering if this was more relevant for volumes or also on the revenue side, looking at revenue from mobile service specifically that business relate this quarter, would you say that, that has more to do with regulation or with the impact of discounts and competition on postpaid ARPU?

Preparation with the impact of this kind of competition possible.

it's more the second one.