Megacable Holdings, S. A. B. de C. V. (MEGACPO) Earnings Call Transcript & Summary

Good morning, and welcome to Megacable's Third Quarter 2023 Earnings Conference Call. With us this morning from Megacable, we have Mr. Enrique Yamuni, CEO; Mr. Raymundo Fernandez, Deputy CEO; and Mr. Luis Zetter, CFO. Let me remind you that the information discussed in today's earnings call may include forward-looking statements on the company's future financial performance and prospects which are subject to risks and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statement. I'll now turn the call over to Mr. Enrique Yamuni. Sir, you may begin.

Thank you. Good morning, everyone, and thank you for joining us today. I would like to provide you with an overview of our company's performance and highlights of the significant advances we made this quarter. Similar to the previous periods, the company's results this quarter were characterized by the ongoing execution of the expansion plan. This is now being reflected in the revenue growth in the Mass segment, the highest recorded since 2019. Overall, our growth trajectory remains positive with expectations for product improvement towards the coming years. In terms of homes passed, this is the strongest quarter ever. We are moving ahead of our initial objectives for the year, taking advantage of the current market conditions, both in terms of economics and competition. By year-end, we will have surpassed more than 6 million homes passed of this initiative, including 2022 and 2023 and over 15 new cities. We have a clear plan with respect to our infrastructure based on 2 main edges. One, fiber deployment is in new areas. As of today, we have more than 5 million homes passed of state-of-the-art full fiber technology from our CTCs all the way to the subscriber premises, including OTT, Android TV, set-top boxes and ONT's Wi-Fi broadband modems to all give the best experience for the subscribers. Second, as of quarter end, more than 33,000 kilometers have been converted from our HFC legacy technology to 100% fiber network, including what we did in previous years. Once again, a full fiber level with all the technological advances we can offer. As of today, 62% of our network is 100% fiber to the home. These initiatives are not related to replace only the last mile and keeping the same technology that the subscribers already have. This is a complete state-of-the-art new network that improves the capacity from the backbone to the subscriber end and allow us to present great products, very superior than our competitors. The rest of our network that remains with HFC technology has been upgraded to 500 and 200 homes per [ loan ], depending on the market. [indiscernible] the best performance and speed until the project converting Mega to 100% fiber takes place in the future years. Our full fiber vision is right on track. All the previous mentioned have been possible at the lower cost in the industry, proof of the efficiency culture embedded in the company. Turning to operational performance. It is encouraging to see a contribution of the net adds in both our legacy and new territories. Regarding our churn rate performance, we believe the slight increase recorded was within the expected range. Considering the price adjustments made earlier this year and the aggressive growth strategies of the last periods aimed at capturing the market in the new territories. We continue to look for a more efficient model of sales, including promotional rates and subscribers quality to support the growth of the company. Something we're proud of is that after so many years of strong competition by not just one but several companies, we keep the highest market share in our organic territories. We clearly must be being doing something right. On the financial side, the quarter's revenue growth was mainly driven by the significant increase in Mass Market revenues in line with the continued subscribers increase recorded in last periods. It's worth to mention that we registered revenues as received by our subscribers. So we have a real subscriber increase. Regarding EBITDA margin, we saw a slight contraction as a result of our expansion. On that line, it's very relevant to note that this quarter, the margin of the expansion territories is already positive. Our balance sheet remains robust due to our prudent and strategic management as reflected by, our ratings for information of our investment grade were in line with the Finch ratings graded action of June. Regarding leverage, it remains a very similar level which when compared to the last quarter, well under the industry average. As we have stated before, we are planning to issue additional debt in the first half of next year. Given our CapEx management, we are confident that after the issuance, our cash generation will be enough to cover our investment plan, emphasizing both network expansion and technological upgrades in the legacy territories. In summary, our expansion project was conceived and approved by the Board at the end of 2021 and began its operation in the third quarter of 2022. So after 15 months of this initiative, we can agree that it remains as the right decision. We have created a company with double-digit growth in revenue with a manageable leverage and doubling the size of its infrastructure by 2024 with a complete transition to fiber technology. Thank you for your attention. And now I hand to the call to Raymundo for a deep dive into our operational performance. Raymundo, please go ahead.

Thanks, Enrique, and good morning, everyone. Building on last quarter's momentum, our operational performance continues to be driven by a combination of our expansion into new territories, technological evolution and the continued growth in the legacy footprint, all of it with a focus on customer satisfaction. Starting with our infrastructure efforts. We added another 4,300 kilometers of fiber this quarter and expanded our reach to an additional 1.1 million homes. This achievement brings our yearly total home pass to over 3 million with a total figure of 14.5 million home pass, meaning that we are ahead of our CapEx spending and we have almost completed our goal of new homes passed for the year. Moving into technological evolution. During this quarter, we converted an additional 360,000 home pass from HFC to FTTH in the legacy territories reaching more than 760,000 for the full year for a total of close to 9 million full fiber home pass in the company. As you can see, we have a very clear vision of the future of the company and we have been executing in that regard. The more than 55,000 kilometers of fiber to the home network that we have are a reality and this has been reflected in the quality of the services we can provide, improving our customer satisfaction KPIs. It is relevant to note that this quarterly CapEx figure includes an advancing the expansion and conversion kilometers as well as in the CPEs that we will need in the future. Regarding our subscriber metrics, we continue with a solid growth trend. As Enrique mentioned, we are reinforcing our sales and marketing staff to keep a stronger pace of activations to better capitalize on our modern infrastructure. We recorded a 12% year-over-year increase in unique subscribers reaching 4.8 million. This growth consists of over 523,000 net additions, including 106,000 from this quarter. In the internet segment, there was a 14% year-over-year growth, totaling 4.6 million subscribers or 551,000 net additions. Sequentially, this segment added 116,000 subscribers with our ongoing speed-up rates, further strengthening our reputation as a market leader. Both our state-of-the-art fiber network and robust HFC technology are unique in facilitating these upgrades. Significantly, 83% of our subscriber base now has highest speed connections of 60 megabits or high, up from approximately 54% during the same period last year. Our video subscriber reached 3.9 million, a growth of 8% or 297,000 compared to the third quarter of 2022. And with 43,000 added this quarter alone, maintaining its solid growth trend. The Xview platform user base grew by 27% year-over-year, reaching 2.7 million subscribers. Concurrently, Xview set-top boxes are now in over 4.1 million homes. The unique features and functionalities of the Xview coupled with the [indiscernible] interaction of more than 108 million, underlying its importance within our value proposition. Telephony saw a growth of 20% year-over-year, reaching 3.9 million subscribers. This was translated into 643,000 net additions with 144,000 from this quarter. This performance is attributed to the penetration into new markets with bundles that include telephony services. By the end of this quarter, REUs reached more than 12 million, marking a 14% growth from last year. REUs per unique subscriber this quarter averaged 2.58, up from 2.54 during the same period last year. Now the MVNO segment showed a 1% and 6% year-over-year and quarter-over-quarter growth respectively, standing at 414,000 subscribers. This highlights our focus on quality postpaid customers. Our churn rate for internet, video and telephony are 2.1%, 2.3% and 2.2% respectively, reflecting a slight increase when compared to the previous quarter. This is explained by the rate increases and the aggressive growth and commercial campaigns of the previous quarters. The gross adds of the quarter remained at the same levels on a sequential comparison, both higher than those of the third quarter of last year. The approach of the company remains to prioritize the gross adds that will remain in the long term, looking for the right balance with the churn rate. The ARPU per unique subscriber remained resilient at MXN 418.7, an increase of 1% versus the same period last year. On a sequential basis, it practically remained at the same levels when compared to the second quarter of 2023. This is mainly due to the rate increases we have performed, which offset the promotional rates offering new territories. Regarding ARPU per service, while internet and video ARPU increased by 3% and 1% year-over-year respectively, telephony saw a 4% decrease. However, the MVNO service ARPU grew by 29% year-over-year, emphasizing our strategy of prioritizing quality revenues over quantity. On the corporate telecom front, revenue remained flat when compared to the same quarter of last year, with Metrocarrier and MCM registering growth of 2% and 5% respectively. In the case of Metrocarrier, the decrease is based on a soft comparison effect due to the extraordinary revenues recorded in third quarter '22. Excluding this effect, the quarterly increase should have been 12%. Ho1a's revenue decreased 18% as a result of a slowdown in the projects pipeline and more restricted credit conditions after a strong first half of the year. Going forward, we expect a strong end of the year for Ho1a, in line with the seasonality of this business. Wrapping up, we remain optimistic about our business strategy as we get closer to the end of the building phase of our expansion project. We are now focused on speeding up the pace of the sales to fully reflect growth. Our efforts in infrastructure expansion alongside our commitment to technological transformation mark a promising future featuring sustainable growth and unmatched service delivery. Thank you for your time. Now I'll turn over the call to Luis for a deeper dive into the financial insights.

Thank you, Raymundo. Good morning, everyone, and welcome. The solid performance of the Mass Market, which revenues for the quarter increased 14% when compared to the third quarter of 2022, drove an 11% increase in the total consolidated revenues compared to the same period last year to reach MXN 7.5 billion. In the same line, revenue from the Mass segment rose to MXN 6.2 billion as revenues from the internet, video and telephony services increased by 18%, 10% and 11% respectively. Compared to last year, while the MVNO business maintained a strong growth, marking a 25% year-over-year high, reflecting our focus on subscribers with a higher ARPU contribution. Within the corporate segment, revenues remain at the same level year-over-year, reaching around MXN 1.3 billion. MetroCarrier had a tough comparison as mentioned by Raymundo due to the non-recurrent revenues recorded in the fifth quarter of 2022, but still grew 2%. On the other hand, Ho1a faced an 18% decline due to seasonality, recording a slowdown after 2 strong quarters. Nevertheless, on a cumulative basis, this segment continues with a 12% year-over-year revenue increase. In terms of revenue distribution, the Mass segment accounted for 83% of the company's total revenue, with the corporate segment contributing the remaining 17%. Turning to expenses. The cost of services increased to MXN 2.1 billion, a 20% annual growth. Meanwhile, the SG&A expenses increased 14%, totaling approximately MXN 2 billion. This rise mainly reflect the overall expansion of our operations, highlighting labor due to both employee growth and regulatory factors such as minimum wage increase, vacations and retirement bonus, among others. Consolidated EBITDA for the quarter stood at MXN 3.3 billion, an increase of 4% from previous year with a 44.1% margin. On a sequential basis, consolidated EBITDA was virtually unchanged from the second quarter of 2023. However, it recorded a margin contraction of 40 -- sorry, 50 basis points. As mentioned in the past conference calls, our recent investments will continue to put some pressure on those results as we head into the fourth quarter of 2023. As Enrique mentioned, EBITDA for the expansion territories turned positive, while the EBITDA margin in organic territories remained at 48%. This quarter, net income amounted to MXN 531 million, a decrease when compared to the same period in 2022. The primary factors include an increase in G&A resulting from our significant infrastructure investments and the increase in financial expenses triggered by rising interest rates and the debt assumed to support our expansion projects. It is crucial to recognize that these expenses correspond to strategic investments for future growth and emphasize -- sorry, and enhanced profitability. Moving into the balance sheet. As of September 2023, net debt totaled broadly MXN 18.9 billion, an increase from MXN 10.3 billion as of the same period in 2022. However, it's slightly above of the figure reported in the second quarter of this year. The surge follows our focus to accelerate expansion and commercial debt contracted in recent periods, including a loan of MXN 1.7 billion obtained in this quarter. Nevertheless, it is important to mention that our net debt-to-EBITDA ratio remains at 1.46x, well below the industry levels, granting us the wide financial flexibility for coming expansion efforts. For the year-end, we expect this metric to remain under control below our target levels. And as we have stated in previous calls, we should see an increase in the first half of 2024, following the issuance of additional debt to refinance our short-term maturities. We count on sufficient financial sources to finish the main phase of our expansion plan in addition to our comfortable debt and cash flow position. Meanwhile, the interest coverage ratio remains solid, staying at nearly 6x over the last 12 months, demonstrating our strong capacity to meet interest obligations. For this quarter, CapEx was over MXN 3.8 billion, summing up MXN 8.9 billion year-to-date, representing 40% of the accommodated revenues. It's important to highlight that excluding the advanced subscriber equipment received in this quarter would have been at the 36% to 38% level year-to-date as mentioned in previous calls. These investments have been aimed towards our expansion into new territories, and specifically this quarter, we have anticipated spending in subscriber equipment that will support our growth for the rest of the year. To conclude, while our aggressive growth endeavors as associated investments have shortly impacted certain lines of the P&L, we remain confident in their success at the long term. The potential of our new territories, combined with a strong commitment to operational efficiency and financial products encourage us to anticipate a stable closing of the year and a promising outlook for 2024. Thank you for your time and attention. I will hand it back to the operator for the Q&A session. Operator?

[Operator Instructions] Our first question comes from the line of Vitor Tomita with Goldman Sachs.

The first question from our side is if you could give a bit more color on your strategy for promotions in new territories and accelerating penetration and on how that might interact with churn rates given that, as I understand, the slight increase in churn that we saw in this quarter was partly driven by price readjustments and by past promotions. Second question from our side would be if we should expect a relevant deceleration in new homes passed and in CapEx in Q4, considering the strong pace so far in 2023 and considering that you already acquired extra CPEs to support growth through the end of the year, as mentioned in the earnings release.

Sure, Vitor. Thank you for your question. As we say regarding the strategy and the [indiscernible], it was related to the price increase that we have at the end of the second quarter, pretty much that when we have -- that affects us in the third quarter. That's normal for both for existing organic and expansion territory. In expansion territories, we have the end of the promotional campaigns and we have [ liabilities ] related to the price increase. Related to the promotions, as we say, we did not increase the number of gross adds. We remain at around 400,000 gross adds for the period. And we did not increase because we tied the -- we put a lot more effort into quality of subscribers. We wanted to increase that number and that is key for our expansion in the future, but it has to be on a very good balance between the quality of subscribers and the [indiscernible]. So what we're doing in those territories is also less promotional in terms of months that they pay and we could not increase the number and that affects. The main affections that we have are seasonality of the churn and the rate increases. So we should focus on that. Now looking into the fourth quarter that you asked, as we explained in our opening remarks, we were very successful in accelerating the CapEx and the number of kilometers. We already have 3 million home passed for the year. We expect to open to cover another around 750,000 more home passed for the end of the year. That will reach 3,750,000 home passed for the year, which is very remarkable for a company this size and for the amount of CapEx that we're investing on that. CapEx for the fourth quarter, therefore, it will be lower than what we are experiencing in the third quarter mostly because, as I said, we increased the speed of the kilometers that we're building for this third quarter. We were very successful on that. And also because we have the CPE equipment for those subscribers in the -- for the future months to come, for the future. So those are the 2 answers probably to your question, and thank you, again, for the question, Vitor.

Our next question is coming from the line of Marcelo Santos with JPMorgan.

I have 2. The first is if you could comment a bit on competitive environment and if that had any impact on the churn, if it had? And the second, if you could reiterate your CapEx outlook. In the previous calls, you were saying something that around next year should have a similar level of CapEx to revenues in this year going down in 2025 and then getting closer to low- to mid-20s in 2026. Just wanted to know if that's still the plan or is there any updates to that.

Thank you, Marcelo. Yes, regarding the competitive environment, as you know, all our markets received a strong competition through competition. We believe the state-of-the-art network that we have and the great quality of the Xview market difference also with the efficiency in the ARPU that we provide on this part, we are bringing and expanding our subscribers both. And I want to be very clear on that, we have growth in subscribers, both in organic and expansion territories for the year and for the quarter. So that means we're taking subscribers away from competition and we are increasing in market penetration in the systems where we are on that part. Total Play, as you know, is not increasing and now it's not increasing anymore, the number of home pass. They already have between 17 million and 18 million, we believe 17.5 million home pass. Televisa has a higher [indiscernible] footprint with 19.5 million home pass and of course, America Movil more than we have. We are very, very proud that after having 9 million home pass when we started this project at 8.9 million, now we're down to 14.5 million. That is bringing 62% of our network fully fiber. So we can provide the best speeds in the market, not below the competition, but more than the competition even when you consider that we have full fiber in those markets. And then the agency systems as we present on a retail remark, we've already split all the nodes to 500 and 250 home pass. So we have these bits to provide them. We are very well positioned with a lower ARPU and good product. That's why we are growing. We are right on track in infrastructure. We said we were going to double the size of the infrastructure of the company in the first 2 to 3 years. We're going to do that in 2 years. You have to consider that we started July 2022, deployed it and we are now September 2023. We will double the amount in 2 years of that. And we are still looking into having double the size by the end of 2026 or 2027 beginning. We don't see why we shouldn't have that right on track. Looking at CapEx that I know everybody is concerned on that part, we, as I said, accelerated CapEx for third quarter, taking advantage of the speed and capacity that we have to do to deliver and also why not the exchange rate that we have on that part. So we decided to speed up the process. That brings CapEx down in the years to come. That's something you guys want to hear and that's something that is going to happen. If we are building this year around 26,000 kilometers of fiber construction, we're going to go down next year because of that speed to 40% less kilometer what we have. That's going to take pressure away from the CapEx over revenues. And what we foresee is getting to the levels of 15% to 20%. That's going to take time. That's going to take 2 or 3 -- getting to 2027 pretty much, that where we're going to reach that, but we will decrease from the 40% that we have, we sure will be decreasing to that amount year-over-year. So you will expect lower CapEx over revenue for 2024 for sure. I cannot give you more 4-5 years, but I can give you that next year, we're going to have a lower CapEx over revenue ratio. That will be our math. I don't know, Luis, if we missed something.

2024 will be on low- to mid-30s. And then we will reach mid-20s. And yes, as Raymundo said, we will be by '26, '27 around 20% or even below.

You said -- the range you gave was 15% to 20%. Is that right? 15% to 20%, or should we consider just 20% and below?

Yes, it will be around 20%. Even below is a possibility. But for now let's stay with 20%.

But in the years to come after we finish all the expansion and we stabilize what we have, that's why I say by 2028, you should be looking at close to 20% or between 15% to 20%. Luis doesn't want me to say that. Let's leave it 20%.

Next question comes from the line of Carlos Legarreta with Itau.

The first one, if you can disclose how is the penetration, the home pass penetration evolving in the new territories? That will be helpful. And secondly, I guess, you mentioned you have 5 million fiber-only homes passed. I know all of the new homes are being rolled out with fiber. But what about the, let's say, the legacy 8 million to 9 million homes passed that you have? Would you plan to increase that at some point in time to fiber or to operate that fully to fiber? Or will that be on a seasonal basis? I mean, just to get your thoughts on that, that will be helpful.

Sure, Carlos. I didn't quite get the first part but let me answer the second part and get back to the first one. As we say, we will have 6 million homes passed on fiber for the expansion project. But we're not taking away anything. Enrique was very clear. In the 2 initiatives we have, we are expanding and we are turning our network into a full fiber as needed as in a project very clear to have that full fiber by 2028. But right now we have 62%. Now that means that if you have 9 million homes passed on that part, we already have 4 million homes passed in the existing territories that have fiber. We're very, very proud of that. We convert 25,000 kilometers of homes passed between '21 and '22 and we convert another 7,000 kilometers of homes passed over this year. So we are not a company looking only to growth, we are a company that is taking care of the existing markets and we do that because we believe sooner or later, everybody should go to fiber on that board. We truly believe that in the long term, with the cost that we have to conversion and the cost that we have for building, it is the right area. I would like to tell you that if you take -- everybody, if you look at the amount of CapEx that we have invested from 2020 to 2023 so far, which is around MXN 2 billion in CapEx, it's way less than any other company in our territory in that period and we converted around 50,000 kilometers for 9 million homes passed. So if you consider how efficient we are building, I'm pretty sure you will do the same that we're going to do.

And this MXN 2 billion is the lowest in the industry in Mexico, not in our territories. Sorry.

Well, in Mexico -- thank you, Luis. Thank you. The MXN 2 billion that we spent in the last 4 years is the lowest by far, by far.

No, no. Sorry, I think you misunderstood. I think what -- okay, I understand the plan for the fiber rollout. But the first part of the question was what is your homes passed penetration or unique subscriber by homes passed penetration in the new territories? I know you've mentioned levels before, but I want to understand how that's moving along. And also, if I may a follow-up, if you could quantify perhaps the second payroll that you would have if the approval of the reduction of the working week in Mexico go through for 2024, that would also be really helpful.

Sure, Carlos. That's why I say the first part of the question, I didn't get it. What I can tell you that in the areas of the expansion projects that we have, let's say, more than 12 months, we already passed 15% penetration, which is in line with what we have, okay? Overall penetration is lower because we are building 1 million homes passed every 3 quarters. So let me tell you about the one that has been there for a longer time. We already have approximately 15% and in some areas, above 20%, but you can say 15% average on that part. Now regarding the impact that that is going to have, I don't know if reducing in the working hours per week is going to pass. It's going to impact all the companies, not only us. That's for sure. We believe we are going to have an impact in the labor cost because of the increase in wages, regular wages regarding from minimum wage to the days of occasion that we have and even the end of the year bonus. And for what we believe, the reduction is not going to be taking place. If it's going to take place, we see the -- we're looking into an increase on fair labor of about 7% to 10% for next year if everything passes by.

Yes, the Christmas bonus also.

That will be the full effect, 7% to 10%, you said?

You can count to 7% to 10% in labor, closer to 10% because of inflation, the raise of the personnel, the minimum wage, the vacation, the return the bonus and increment bonus.

Right. So that's, let's say, the most conservative scenario where everything goes throughput, what might be...

Most conservative will be around 8%. I will go between 8% to 10%.

Our next question is from the line of Andres Coello with Scotiabank.

First one, I just want to confirm that your decision now is to migrate all of the HFC subscribers to fiber-to-the-home. Because I understood that in the past, you will kind of lead with both technologies. So just confirming that the 41% of your rate that's still on HFC will be migrated in the next couple of quarters? That's the first question.

Andres, this is a long-term project. Let me tell you, our view is to have a full fiber company by 2028. That means we will slowly year-over-year we're in 2023, we're going to convert kilometers and homes passed in 2024, 2025, 2026, 2027 and 2028. Okay? Right now we have 62%. What I can tell you is that great amount of our existing set-top boxes -- and I want to have that because some of our competitors say that we don't change the equipment. But we don't change it because our set-top boxes is ready to be GPON-ready in terms of [ VIP ]. In terms of broadband, all of our broadband subscribers migrate to an ONT with the best Wi-Fi integrated, it is integrated as well as VIP.

Yes. Just to make it clear, Andres, as we convert our infrastructure, our network from HFC to FTTH, we migrate the subscribers. We don't leave both networks to coexist. As soon as we finish the migration, we dismantle, we take out the HFC network. It might take us some months because I mean it's thousands of subscribers would have to migrate from HFC to the FTTH. So we have to change the draft. We have to change the modem, which is a ONT instead of a cable modem. And in some cases, the box, the media box is already preferred to have -- to be GPON box. It doesn't really make a difference. The box, the cable box, the media box, set-top box, it works indistinctively either for GPON or HFC. We have to make sure to reach an advanced box that has other functionalities for the Xview+ product, which means that you can download all the apps that we manage with the service, which is Netflix, Amazon Prime, HBO, Star Plus, all the apps that are very popular out there in the market. But we do migrate the subscribers as soon as we build the FTTH network. We plan to get rid of all HFC network by 2028. That means even smaller towns that we -- I mean we will keep them within HFC network until maybe '26, '27, '28 because that network is perfectly suitable to provide advanced services. We can provide speeds of 500 megabits to the home with that current network we have in HFC. Even we could go up to 1 gig or 750 meg because we're delivering over 1 gig to node in those cities. So our network is perfectly suitable for any services that you want to provide right now there is -- that exceed the expectations of the customers or the needs of the customers. So we're perfectly okay in -- but I mean, at the end, we think that fiber technology is cheapest to maintain and can be very, very effective. In it's ready, the way we did -- build this network, it's ready for the next 10, 15 years to come.

It's increase dependent on...

Just changing some equipment in the back office, nothing in the ODM or nothing in the network industry. Yes, in the back office. I don't know if that answers your question.

It does. And actually, on this same line, in the conference call, in the Q3 conference call, Total Play basically said that not all FTTH is born equal, that's what they said, that not all FTTH is born equal. And they said that, even though Telmex has migrated 76% of their base from copper to FTTH, their fiber service is not the same quality as that provided by native FTTH networks like yours or like Total Play. So I'm wondering, Enrique, if you can talk a little bit about the quality experience or your opinion on the quality experience of the Telmex subscribers that have been migrated to fiber. Would you agree that that service is not the same as yours?

Telmex is a great company. Telmex is a much better company than Total Play and the best company is ours. Our network is much better -- the FTTH network we've been building, it's much better than any other FTTH network that is being built in Mexico.

Right. But specifically regarding the Telmex subscribers, do you think that they are getting the same service as yours? I mean the question is basically if you believe that you can take Telmex subscribers that haven't migrated to fiber, or do you think that those 76% of Telmex users already on fiber...