Oi S.A. (OIBR4) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Oi S.A.'s conference call to discuss the first quarter of 2020 results. This event is also being broadcasted simultaneously on the internet via webcast, which can be accessed on the company's IR website, www.oi.com.cr/ir, together with the respective presentation. [Operator Instructions] We also would like to inform that the conference call will be conducted in English by the management of the company, and the conference call in Portuguese will be conducted via simultaneous translation. This conference call may contain some forward-looking statements that are subject to known and unknown risks and uncertainties that could cause such expectations to not materialize or differ materially from those in forward-looking statements. Such statements speak only as of the day they are made, and the company is under no obligation to update them in light of new information or further developments. I will now turn the conference over to Mr. Rodrigo Abreu, CEO. Please, Mr. Abreu, you may proceed.

Thank you, and good morning. Thank you, everybody, for participating in our call. And as you know, we have postponed this call so we could combine our first quarter 2020 results also with a summary of the JR plan amendments which we just filed last night, paving the way, we believe, for a new GCM and a new future vision for the company as we have been telling since we first announced our strategic transformation plan. We really believe that after announcing our transformation plan last year, the execution has been very solid and now what we're doing is we're taking a significant step towards moving the company through long-term sustainability with a bold proposal which we are confident which will be well received. So let's start by moving to Page 3, where we look at the first quarter results. Once again, we believe we achieved solid results in line with the planned expectations, and I believe that the first highlights continue to be the fiber results. At the beginning of April, we reached 1 million FTTH customers reached, in a milestone which advanced the customer base for fiber almost 900,000 subscribers during the year. And we continue to maintain a very fast pace in homes connected and homes passed. Just in April, we achieved 97,000 new FTTH homes connected. This also led to continued recovery in the fiber revenues, looking towards the future in terms of compensating for the decline in copper revenues, and we will see that later on. Also on the postpaid, some highlights. We have maintained very good results in the postpaid, with the 12% annual growth in postpaid revenues and very good market performance. And finally, in terms of our B2B and wholesale, we also continued the path that we announced in our plan. And in particular, in B2B, one highlight is that our IT corporate revenues continue to go up, meaning a shifting in revenue profile, which have, as said, would happen. In terms of funding, we had already highlighted this in our last call, but it's always worth noting that the first quarter saw a significant improvement in cash position, given the funding initiatives that we had, not only in the asset sales, but also in closing a bridge loan at the beginning of the year. And on the third bucket of efficiency and simplification, we also continue to generate significant savings and in line with the target for the year, and this can be seen in a 7% reduction in our OpEx year-over-year. Overall, this all led us to the last pillar, which are the strategic options. Actually, this is where we advanced the most during the quarter as we prepare the new vision for the future. And as we have been saying since last year, we paved the way for a new plan amendment, which will be presented to a general creditors meeting at the beginning of the second half. And this calls for everything we have been talking about in terms of the market process for selling operations, for doing a new vision for the company, for having a full regulatory campaign in place for resolving our copper issues and our concession issues, and in reality, for advancing the company towards where we believe it should be. So let's now take a deeper look at the operating results for the quarter before we actually talk about the plan. Moving to Page 4, we can start with the fiber results, and the fiber results continues at a very strong pace. As we mentioned, we already achieved 1 million homes passed and almost 6 million homes connected. Those are significant numbers. And if we look at the results expected for the end of the year, we said we would be in the range of 1.6 million to 1.8 million homes connected. We believe it's possible to even surpass the 1.8 million, getting closer towards the 2 million homes connected at the end of the year. And all of that continues to happen with an ARPU which is in line with our plan. We said in our plan that we would have an ARPU of close to BRL 85. We have achieved BRL 84.5 in the first quarter 2020 and all of that has to be seen in the light of having new customers on board, so with all of the impacts of our pro forma revenue, as we continue to connect a very high number of customers. Confirming our plan view, this also has improved significantly our fiber revenue numbers. We are now over BRL 200 million in fiber revenues, and this is a 700% increase, obviously, following very closely the path of increasing dramatically the numbers of homes connected. And when we look at the revenue breakdown for fiber, we see that even though we had an 8x increase in fiber revenues from first quarter last year, there's still a big opportunity here to continue increasing these revenue numbers because our B2B component of these revenues are still very small. So we see that in addition to all of the residential revenues, we have a lot of opportunities on the B2B revenues as well. Those results, they actually confirm our view of resuming broadband competitiveness. And as we can see next, we see that everywhere we bring FTTH, the results improve very quickly and dramatically. So on Page 5, you can see that not only our results in terms of homes passed and homes connected keep improving, but when we look at all of the new cohorts of fiber deployment, we see that the percentage penetration continues to improve in the new cohorts in line with what we said would happen. So much so that in our plan, we said that we would get to a 25% penetration rate by the end of 3 years, and with our current plan, we are already getting to levels of 20% very soon after launch in a new given city. So we believe we are solidly in line to achieve the 25% take-up rate, which we said was a staple of our plan. After that, what we saw is that when we were first looking at our project, we started looking at benchmarks for fiber implementation. And in reality, after the first quarter this year, we believe that we have become the benchmark for homes connected per quarter. As you can see here, we are comparing our numbers both with the large U.S. players as well as the largest local players for fiber connections, and we are by far the operator with the largest number of homes connected in the first quarter, almost twice the number of the largest local player. And the pace continues to pick up, and we believe that even with all of the pandemic results, the fiber results haven't slowed down, as we will see a little bit later on. Due to those results, we can see that in every city we entered, revenue continues to go up even with the sharp decline in fixed voice. But we can see in the cities where we have FTTH, our broadband numbers in terms of revenue are already going up. And obviously, this continues to happen despite the sharp decline in fixed voice and also in copper broadband, which we believe will continue going down in line with the rate of decline of fixed voice. We recently launched, in addition to our current staple 200 meg offer, we recently launched the new 400 megabits per second offer to keep leading, and this keeps changing our revenue profile, as we can see on the next page. So on Page 6, we can reflect the results in terms of revenues for the quarter. And as expected, and as mentioned multiple times, we're still in the middle of a revenue shift. We can see that our copper revenues declined sharply, and this is a result of a structural transformation of trends, both for consumer and for technology. And so we had a minus 27%, almost 28% decline in copper revenue as well as a minus 23% decline in broadband revenue for copper, coupled with a slight decline in DTH revenues, even though it was less than market average. And all of that starts to be compensated now by the sharp increase in FTTH revenues of plus 700% as we have already mentioned. When we look at the total profile of our revenues then, we can see that, obviously, we are still impacted while we grow our FTTH base, with a minus 12% overall residential revenue decline. But all in all, we see that our fiber revenues now start to be very significant and in line towards a path of continuing to be able to replace our lost revenues in copper and eventually bring residential revenues back to growth. In the first quarter of '19, our fiber revenues represented a little bit over 1% of our total residential revenues. In the first quarter 2020, it already represents close to 12% of all of our residential revenue. So very strong performance in fiber, and we should remember that fiber is the core of our strategic plan moving forward. So those are very encouraging numbers. But let's talk next about our mobile results, in Page 7. So on Page 7 we can see that the end of the first quarter started to show the first impacts in the mobile segment due to the COVID-19 pandemic, both in sales and in revenues, especially in prepaid, and we're going to talk specifically about those impacts a little bit later on down the presentation, but despite those initial effects at the end of the quarter, we believe we had very good results overall in mobile once again. Starting with postpaid, we can see that we continue to have a significant increase of our customer base. We had a 20.6% increase in our postpaid customer base, getting very close to the 10 million subscribers, and this came with a reduction in churn and this came obviously with a much better revenue mix in terms of post versus pre. Our customer revenues in postpaid continue to increase at a very fast pace, over 12% increase in customer revenues from postpaid. And this led to us gaining 2 percentage points in market share, almost, from first quarter '19 to first quarter '20. So a dramatic increase, especially in a very competitive market, where we continue to show signs of a very strong performance given our innovative efforts and our smart offers for postpaid. On the prepaid, we know that the market continues to go down. And in particular, at the end of the quarter, and most likely, as we will see in the second quarter, obviously prepaid was hardly hit by the pandemic. But despite the prepaid market going down, we were one of the operators which had the less dramatic decline in prepaid, and this led us not only to maintain our market share but to increase it slightly, even in a scenario of a contraction in the prepaid market. All in all, this led to our customer revenues being stable in terms of mobility and with our ARPU going up due to the postpaid performance. So let's look now at the next areas of focus, B2B and wholesale on Page 8. On Page 8 we can see both the results for corporate as well as wholesale. And in one case, we already started to see the impact of voice already at the end of the quarter in the case of corporate, both in the large corporates as well as in the small and medium enterprises. We did see a very sharp impact in voice consumption, and those obviously still represent a significant amount of our B2B revenues, and thus this led to a minus 10% decline in B2B revenues overall. But when we decompose those revenues, we see that the impact was mostly restricted to voice; data remained stable. And on the other hand, we continue to see a sharp increase in IT revenues. As you'll remember, we are repositioning our corporate offers with Oi Solutions, and the Oi Solutions approach focuses very deeply on IT revenue increase and the results are coming. We had a close to 40% increase in IT revenues in B2B, and we believe this will help us not only to stabilize the B2B revenues, but eventually to bring them up as we continue to deregulate the data offers. On the wholesale space, this quarter marked the return to growth for wholesale, as expected, as we started to work on our new offers of fiber to the ISP, fiber to the tower and fiber to the city, in addition to launching our franchise project, where we just started a pilot with Mob Telecom for a franchise rollout. All in all, our wholesale revenues grew close to 7%, marking the return to growth and the good path towards our wholesale strategy that we have highlighted in our plan last year. So the planned results are in line operationally with what we expected on the business front, obviously with the small impact from COVID that we may expect to see in the second quarter as well in terms of corporate, but all in all, in line with the strategic direction we expect those businesses to be going. Now let's go to our cost efforts in the next page. So on Page 9, without getting to a lot of details, we can see that we had progress in the metrics in pretty much all of the areas where we expect to have cost reduction: sales and marketing, processes, business support, IT and network and operations. Some metrics are worth highlighting. In particular, when we look at the simplification of our business, we see that we're almost 50% of the way towards advancing our customer base to flat rate plans. We have a 23 percentage point increase target for the end of the year, and we are halfway there in Q1, meaning that most likely we'll be able to achieve those metrics at the end of the year. As well, when we look at the call volume in human customer service, we pretty much already achieved, in Q1 alone, the results for the entire year. So we are 17% down in terms of call volume in human customer service. Same thing happening in terms of the percentage of digital invoices, in line with the plans for the year which call for 14 percentage point increase, and we continue to see improvements as well in terms of bad debt as a percentage of revenues, where we expect to reduce 2 percentage points. We're slightly ahead of the curve with 30% achievement in Q1; we're 90% of our achievement in terms of percentage of agile IT projects; we're 100%, meaning that we already achieved the entire result expected for the year, in terms of repairs by FTTH customer base; halfway there in terms of the impact of the use of our digital technician app in the first quarter alone. And when we look at the second quarter, the results will probably be much better than that, given the sharp increase in usage in all of our self-service applications. And so all of our metrics, when we look at the details, continue to show good progress. Those progresses in the metrics actually show in our OpEx. And on the next page, on Page 10, we can see that all OpEx lines are down. And this allows us to -- allowed us to have a 7% decline in OpEx from Q1 '19. And with that, we went back to improving EBITDA margin again from last quarter with an EBITDA margin that is approaching 32%. Of all of our OpEx efforts, it's important to see that we obviously know that our bad debt lines are something to be looked very carefully with all of the pandemic effect. But we believe that even with the impact of bad debt, we were able to contain it pretty well given our efforts on the very good and smart postpaid offers that we continue to maintain. On the next page, let's look then at our CapEx results for the quarter. So on Page 11, in line with the strategic plan that we have highlighted and in line with the big shift that we said we would do in CapEx, Q1 was no different. And in reality, it accelerated this dramatic shift in CapEx deployments from just a year ago. When we look at our results in the first quarter of '19, we had only 33% of our CapEx applied to fiber and 30%, yes, almost 1/3 of our CapEx, applies to copper maintenance and copper CapEx deployments. At first quarter '20, we see a dramatic shift already, 60% of our CapEx went to the deployment of fiber and only 15% to copper. So a 50% reduction of the percentage of our copper CapEx. Obviously, we believe that we still need to continue evolving this percentage because even though 50% is a big reduction from last year, we know that this represents to almost BRL 300 million in copper investments, and most of them due to regulatory obligations that we expect to manage going forward with a smart approach, and obviously this represents almost BRL 1 billion per year which we need to bring down, and we are bringing down, with our plan we announced last quarter, which we call the copper de-averaging. Finally, when we look at the CapEx and what it allows us going forward, specifically in terms of fiber, we see that we have increased our presence in terms of number of cities at the end of the first quarter to 112. We expect to enter close to another 20 cities by the end of 2020. And in particular, what our CapEx in fiber has allowed us is to have a very fast reaction time, actually 20 days' time to market, to start an FTTH commercial activity in a nonplanned city where needed. And we saw that in the city of Divinópolis in Minas Gerais, where in under 20 days we were up and running with our commercial strategy to react to competitive actions. So next let's see, after all of the results in terms of our revenues, in terms of our costs, in terms of our CapEx, what the first quarter meant to cash. Moving to Page 12, we can see that in terms of cash, we had a much improved short-term position for the execution of our strategic plan. We ended the year with a cash position of BRL 2.3 billion, and after several events in Q1, we ended the quarter with BRL 6.3 billion in cash position, amounting in particular to 2 big cash inflows, one for a bridge loan of BRL 2.5 billion approximately and the other coming from the sale proceeds of Unitel, which allowed us to consider cash of $1 billion, out of which most of it was already received, $1 billion. And in all of that, we continue to focus on the noncore sale asset -- asset sales processes. And we will talk a little bit more about those in our GCM plans and the amendments we will talk about. In terms of that, 2 effects actually happened during the quarter, which led our net debt to BRL 18.1 billion. The first one was obviously the assumption of the bridge loan of BRL 2.5 billion. And the second one was the FX variation due to all of the fluctuations of the dollar exchange rate in the middle of the pandemic up and down, with an impact at the end of the quarter of about BRL 3.4 billion in terms of FX. But for the short term, even with this FX, we have maintained a short-term hedge policy with all of the Unitel proceeds that covers 99% of our short-term debt exposure. Next, let's talk about the pandemic effects. And to begin with on Page 13, we had to talk about what was our strategy to face the pandemic. And as we highlighted last quarter, the very first measure we took was -- and the first priority we had to have was to protect our employees. And we did a number of things to protect our employees, starting with a home office policy that sent close to 11,000 employees working remotely in the first 2 weeks of the pandemic effect in Brazil. And obviously, in addition to that, we took a number of measures to protect our field personnel and our call center personnel, and just as an example, we had acquired over 400,000 face masks and 25,000 liters of alcohol gel to be used as EPI on a daily basis. In addition to that, we have launched an app to monitor employee health. We do constant employee health surveys to monitor and measure everything that's happening with our team. And so far, the response has been very good. Obviously, we know that normality will take a while to return, but we have already developed a plan of return with several phases, and having in mind, in particular, the most vulnerable employees and been doing everything in our power to protect those. Next, obviously, we focused on our operation and on our customers. And first, when we looked at our operation, we took all of the measures it took to maintain our operations running smoothly. And now after almost 3 months, we can state very firmly that we are operating 100% under normality. And even with all of the traffic increases, our networks continue to perform extremely well. In reality, when looking at the results, we see that Oi was pretty much one of the only operators that didn't have any impacts in terms of operations, because we prepared for that. On our customers, we did a number of things not only to reinforce our virtual offers for technical assistance, for self-service, for getting in touch with customer service, but also in terms of offers for payment alternatives and for alleviating a little bit the impact given all of the restrictions in terms of both mobility and reduction of income for everybody. As we mentioned at the beginning of the pandemic, we released the channels in our TV offers. We increased the payment dates for postpaid. We included the different data bonus packages on our prepaid packages. And as such, we believe we have alleviated a little bit the impacts to our customer base. And finally, society and government were also on the focus of our activities, especially by providing access and 0 rating for a number of government initiatives, in particular, the 0 rating applied to the government's emergency social income distribution program, which helped bring the funds to a big number of users with our mobile phones. And in addition to that, we have also took some steps to participate in corporate social responsibility efforts, in particular, with our participation in the Zap do Bem initiative, which is a social digital wallet that has brought funds to more than 8,000 families in the most vulnerable areas of Brazil. But after all of those actions, what were the impacts to our business as well, given the pandemics? We can see that in Page 14. And first of all, we know that, obviously, the pandemics brought impacts to our business, in particular on prepaid and collections. Looking at prepaids, we know that the top-ups were impacted, but the impact was reduced after emergency relief funds were distributed by the government, and we can see that in the profile of all of the weeks when we compare January with April and then what started happening after April. When we looked at the beginning of April -- end of March, beginning of April, we can see an almost 20%, minus 18% top-up results. Those results continued negative in weeks 2 and 3 of minus 14% and minus 8%. But in week 5, at the end of April, beginning of May, we saw a slight recovery owing to the emergency relief funds of plus 2.5%. All in all, we see that the top-ups were impacted and prepaid was impacted, but during the month of April, and in particular at the end of April, beginning of May, we started to see those results going back up again. In addition to that, we saw that the digital top-ups increased dramatically compared to January, almost 50%, and the mix of top-ups in digital channels also went up 31% -- went up to 31% compared to 17% in January. So significant impact of our digital offers and as we can say, a very quick digital transformation of our business. On postpaid, obviously we did have the impact of gross adds with all of the closing of our stores and the restriction of commercial activity. But in reality, this reduction in gross adds of minus 45%, which was not very different for the entire industry as we already seen, it came with a reduction in churn as well. So our voluntary churn was reduced by pretty much the same amount, minus 45.8%. On B2B, as we have already mentioned, we faced an impact in the consumption of voice, and we also faced an impact in terms of collections with late payment by some state governments and by some corporate customers. We believe that this is a temporary situation and that it should go back as the situation starts to go back to normal in the second half. But lastly, on fiber, even though in the middle of all of this crisis, our fiber continued to show stellar results. We continued to increase our gross adds in April; while we reached 120,000 gross adds, our churn continues to go down, and we continue to have a record month in terms of sales. Obviously, this is an impact of the need for broadband during the middle of all of this crisis, but also, we believe, because our fiber product starts to be well known, starts to be appreciated and starts to become a staple as pretty much one of the best, if not the best, broadband offer in Brazil. With all of that, and I already mentioned our network resilience, it's important to mention that even with the 40% increase in all of our traffic, our networks remained okay during this whole period. And finally, in terms of collections coming from all of this, we can see that we did have some impact in collections in March-April compared to what it was before, minus 6% to minus 7%. But the beginning of May started to show some recovery of plus 3% to plus 4%. So yes, the impact was there, but we braced ourselves, we prepared our networks, we prepared our team, we digitalized and accelerated a number of digital initiatives in the business. And up to now, obviously, it's not without impact, but we managed to minimize pretty well the impacts of the pandemics in the business. So next, let's look at the summary of the quarter before we move on to talk about the plan amendments and the GCM that we see coming. In summary, we believe we continue to execute on the plan, working on all of the multiple fronts of funding, operations and efficiency and simplification. But when we look at the strategic plan pillars that we announced last year, we said that we had 3 key pillars of funding, operations and simplification. But we also said we had a fourth pillar, which were the strategic options. In our last call, we said that we were preparing to file an amendment for a new general creditors meeting expected to be held in 60 days. And actually, this is exactly what happened last night. We filed our plan amendments for GCM. And this actually prepare us for long-term sustainability, and we will talk then next about what does this mean for the company? What is the plan amendment that we just filed? What could we expect from the GCM? And more importantly, where do we believe this will take us long term? So moving on to talk about our plan amendment in our GCM, let's go to Page 17, where we start to tell a story of how did we get here and where are we going. And in order to understand the plan that we just filed, we need to understand the journey that this company has taken since filing for judicial recovery back in 2016. And obviously, it was not an easy journey, especially because prior to filing for the judicial recovery back in 2016, we knew that this company had multiple challenges. But in reality, after that, we see the transformation taking in place in 3 phases, and the first phase was exactly not only the filing of the judicial recovery, but the plan that came out of it and was approved at the beginning of 2018 and the beginning of the transformation. The second phase of the plan took place when we announced our strategic transformation plan in the middle of 2019 and continuing with the execution in 2020. And the third phase is actually looking towards the future in completing all of the reconfiguration efforts and operations that we expect that we should take for us to maintain sustainability and look at value creation in the future with the consolidation of a new strategic model. So let's look in details with all of those phases and where do we believe they will lead us. On Page 18, starting with Phase 1. Well, Phase 1 was pretty much where we overcame important challenges in the context of the judicial recovery. As you all remember, when the company filed in 2016 it was a very tough period of getting to an actual plan between 2016 and 2017, and the period was a period of enormous challenges for the company. And the first one was survival. Being very direct, it was a matter of survival for the company, of short-term financial feasibility, of operational continuity, and this all required a governance change and a change in capital structure. And this was addressed with the plan that was approved at the beginning of 2018. It was the possible plan by that time, and the plan was executed. The issues were addressed, and this is what allowed the company to start building a vision for the future. The judicial restructuring of debts and cash brought the cash protection with a debt reduction of BRL 35.5 billion in face value, from almost BRL 50 billion to close to BRL 14 billion. It provided in the beginning of 2019 with a -- to a BRL 4 billion capital increase. It brought the new governance to the company. It prepared the company to be able to sell its noncore assets. And overall, it also brought operational stability and recovery with a gradual resumption of investments. If you recall, back in 2016, there were numerous challenges also on the operational front. And those 2 years actually stabilized the company, improved the operations and allowed the company to resume CapEx investments. When we look at 2016, it was almost an all-time low in terms of CapEx of BRL 4.8 billion. It went up to BRL 5.6 billion in 2017 and back to BRL 6.1 billion in 2018, so still short of where we believe the company should be executing CapEx but gradually resuming CapEx, which is obviously key towards the future. And in terms of EBITDA, obviously the EBITDA had been falling for a long time, but between 2016 and 2018, this rate of decline of EBITDA was alleviated a little bit given all of the effects of the plan. But after this plan was announced and started to be executed -- with a lot of success, we should say -- significant changes, both in the technological and the consumer environment and a delay in updating the regulation, led to the need to evolve the plan towards a real strategic transformation of the company. So the plan needed to be adjusted. And this is what happened in Phase 2. So moving towards Page 19, we can see that when we announced our plan in the middle of 2019, we had 4 key components to execute. And the first 3 dimensions of the plan were to be executed already in 2019 and 2020, which were asset sales, funding and cash to begin with, a strategic transition of the model and a simplification and operational efficiency of the company. And this plan had its objectives. First, look at medium and long-term sustainability. We should now be looking not only towards very short-term survival, but towards medium and long-term sustainability. We also should be looking at short and medium-term execution; so what we should be doing next, immediately, to be able to allow the company to move forward. Obviously, we looked at funding and cash for investments in the transformation of our strategic model, and we have been executing pretty well on all of those fronts. So just remembering what we did here in terms of asset sales funding and cash, and we already talked about this numerous times, we had the Unitel sale with $1 billion in proceeds, out of which $920 million were already received. So we now have only 2 remaining installments of $40 million to be received, and they have been paid pretty much on time. We were able to secure a bridge loan at the very beginning of this year of BRL 2.5 billion. We continued with the real estate sale processes, which have already achieved a mark of BRL 200 million, in particular, with 2 large pieces of real estate in Rio de Janeiro and Santa Catarina. We were able to amass BRL 3.1 billion in PIS/COFINS credit with an estimated realization of BRL 100 million per month, and this is -- continues to be in progress. This has already been taken on a monthly basis, and we were able to bring in the Fistel proceeds of close to BRL 670 million of surplus distribution, which is being paid in 36 installments of close to BRL 20 million. So in terms of asset sales, obviously we still have many things to do, but we've pretty much came close to 80% of the way, and this was key to securing this short-term cash position that is allowing us to execute the plan. We said that we needed to do a strategic transition of the model. And what does this strategic transition of the model mean? It means that we had to look at each of our business components in a separated way. We first had to look at what would be the core components of the business towards the future, and it all started with fiber. Fiber is what will allow us to replace the entire copper revenue that's being lost. And so we did an enormous amount of effort and work and commercial and marketing and sales and operations initiatives to bring our fiber business up to speed. When we announced our plan at the middle of 2019, we said that we wanted to reach a 25% take-up rate in 3 years and that we wanted to reach almost 2 million homes connected by the end of 2020, that we want to get close to 4 million homes connected in the 3 years of the plan, and the numbers seemed very ambitious. After all, when we announced our plan, we had a very small amount of fiber customers and our plan was improving. But fast-forward 1 year from that, we see that the execution has been there. We have made the transition. We know that the core business of the company is working. The results have been stellar. Our numbers continue to improve quarter after quarter after quarter, even in the middle of one of the biggest crisis that we have seen in the next 100 years. And so we believe in the strategic transition of the model based on fiber, in particular based on FTTH and residential broadband. But fiber also allows us to look at B2B and transform our B2B businesses from just being based on the old regulated copper products towards new products based on fiber, based on IT, and this is what we did when we announced Oi Solutions. By announcing Oi Solutions, we started to shift the profile in B2B sales, we started to build the future towards understanding what will be required by our B2B customers, both large and small, and we started to execute. We looked at wholesale, and we realized that our wholesale has to be increased. It had to be accelerated. In the past, this company had a history of being a very important wholesale provider and still remains the largest and more important wholesale provider in the country, but we should accelerate the wholesale business because we should use our infrastructure as our key differential going forward. And as we have stressed and highlighted multiple times, we do have the largest physical infrastructure in the country, in particular with fiber, and all of this is happening. Together with those 3 components, we also said that we would sustain the value of our mobile, and we have sustained the value of our mobile. Not only we have managed to achieve significant and impressive results in postpaid, but we have done that by maintaining the numbers in terms of revenues and increasing the profitability of the business and maintaining our position in terms of being a very credible player in mobile. And with that, we believe that in the last 2 years, we have actually increased dramatically the value of our mobile business. And finally, we'll have to look at the areas where a reduction was coming, either because it was a structural trend or because it was something we have to do for our strategic plan going forward and our cash consumption and our economic value going forward. And those were on the DTH side, where we see that a trend was coming and we had to stop injecting cash in this business and convert all of the content efforts towards IPTV, which, by the way, is being done, and in particular in copper. We know that copper with fixed voice and copper broadband is going down, it will continue to go down, but we had to replace all of that with the 3 key core components of our business. And this is being done. So we believe we are well into the middle of the strategic transition of the model, and it's working. And finally, on the front of simplification and operational efficiency. We talked about this numerous times, and the results are coming. As you see, the OpEx numbers continue to be reduced on a quarterly basis, and we are focusing not only on reducing OpEx on pretty much all of the operational fronts, but also in 2 key important steps for the company, which are a new structure, a simplified structure for the company, given the core of our future, and also in a very, very targeted copper cost-reduction project called the de-averaging project, where we start to roll down and actually shut down a number of copper operations that don't make sense anymore, consolidating users into stations and using alternative technologies to reduce our copper exposure, and in reality, starting to look through winding down the copper business, which we believe will no longer be here in a number of years to come. So with all of that, with our execution actually going well, we could move to Phase 3 of the plan now, which was the long-term vision for a new company. And this has been exposed on Page 20. Phase 3, which starts today and actually goes well into 2021, is that with the execution adjusted to the challenges, our transformation can continue toward a long-term vision. We know that the environment has changed dramatically. So regulatory changes started to occur, but they're still in process. We've seen this acceleration of technological consumption trends as we mentioned. We know that the demand for high-speed broadband continues to keep pace, and we need massive investments in fiber and infrastructure, also in preparation for 5G is a very important infrastructure provider, and we know that COVID-19 has impacted the economic environment, but in reality, maybe with the potential opportunities in the recovery. And in the middle of all of that, we know as well that we need to optimize the company's financial model for the long term. We have adjusted the operational model pretty well, and we believe we have reached the execution, and we will continue to execute on our operational model. But we need to optimize the company's financial model for the long term as well. With that, we believe that the long-term strategic vision for the company brings a reconfiguration. It brings a new business model, a new company model, it continues to be based on a new governance structure, it will bring a new financial structure and a new operational structure. And when we look at how to execute that, we focus on fiber, we focus on the residential business, corporate, government and wholesale customers, and we introduce a structural separation model, which we'll talk in detail in just a couple of moments. We expect, based on our plan, to be able to consolidate our mobile operation with the potential sale of the mobile business, we expect to evaluate partnerships for the evolution of TV and content. And finally, we expect to get flexibility to execute the plan. And with all of that, what is our vision? In the next page you can see what is our vision, strategy and execution components. And it all starts with the vision, which is to enable the creation of the largest telecom infrastructure company in the country. At the same time, massifying a services operation that brings fiber optics, broadband, 5G and business services to the entire country. This vision is supported by 3 strategy pillars. The first one is that we have to have long-term sustainability, and this long-term sustainability will come with a new company model, which has investment capacity, which has revenue generation potential and a long-term sustainability. Next, we have to look at how we're going to do that, and this goes towards the structural separation of the Oi brand, with the first part focused on the customer experience, with innovation, excellence, solution development and being the face to our customers and very focused on customer experience. And the second, on an infrastructure company, where we have a neutral network, which is comprehensive, robust, granular, with better revenue predictability and better access to the financial markets. This is the area where we need to invest dramatically, and by doing the separation, we believe we will achieve that. All of that will have a lighter, agile company focused on the future, will help us seek market leadership in all of the areas where we play. It will make sense for our customers, in particular, in terms of innovation, it will provide focus and it will leverage and invest in the best network in Brazil. With all of that, we believe we'll have a company that generates value and trust for pretty much all of our stakeholders. And what is the company that will emerge out of this vision? On Page 22 we can see that we have a configuration of the company after the structural separation where we have the main Oi, with the Oi brands, with the retail and business clients, with the corporate and government clients, with the copper wholesale customers, with TV and content, with value-added services and still with a good amount of copper and fiber infrastructure. This company controls 2 operations for field operations in Serede and customer care operations in BTCC, and has a company, which is part of the group which is the infrastructure company, where we have the transport network, the FTTH network and the entire wholesale business. This structural separation of the fiber infrastructure for our neutral network, we believe, will unlock a lot of value for us, for the market and for society in general. And how does it generate value? We can see on Page 23 that the structural separation allows each company to focus the best on their core capabilities and core missions. On the infrastructure side, we would have an FTTH network, which already has more than 6 million homes passed and it's fastly approaching 10 million homes passed, and that can look towards looking at more than 30 million homes passed in the future. We have a company with almost 400,000 kilometers of fiber, 43,000 kilometers of ducts, fiber to more than 2,300 cities and a wholesale business which has a wide label FTTH, connectivity and transport for operators and ISPs, and which will be a staple in enabling 5G in the country. As we mentioned, with a robust network structure, it will have better access to funding sources due to the independence, predictability of revenues and greater exposure to other operators in the market and it will allow us to accelerate investments for network coverage and for infrastructure buildout. On the client side, the old Oi client co is focused on what it should be focused, on customers, with the Oi brands, both for residential and business, with Oi Solutions for corporate customers, and still having a role in copper wholesale, given that we will maintain all of the regulated businesses under the Oi client co. On the activities, we're focused on sales, marketing, customer care, innovation and future. And on infrastructure, we continue to have on the client company, the IPTV and DTH networks, the copper and backbone and backhaul components, which will be managed by the infrastructure company. This company will have a service culture centered on customer experience, digital-first, excellence on offer differentiation, and will have a lot less need for CapEx investment, leveraging on the investment of a very comprehensive network of the infrastructure company. But when we look at this structural separation, maybe a lot of people are asking themselves, but is this new? And could this really generate value? And our response to that is with benchmarks. On Page 24 we can see that structural separation is not something new, it's something that already happened in several countries in the world. Structural separation in summary is the reorganization of the company in 2 independent and complementary structures, one focused on a neutral network and infrastructure and the next focused on service; a company focused on customers. Each one will have a lot of focus on its own segment operating more efficiently. It will enable market expansion and growth, and will enable, in particular, much more effective use of investments on both sides. We see that structural separation is the reality in different parts of the world. And actually, across the world, across the globe, we have very successful examples of structural separation companies, in the U.K., in Ireland, in France, in Spain, in Portugal, we have Czech Republic, we have Switzerland, Germany, Italy and in Australia. So we have numerous examples, and those examples actually generated very good results, as we can see on Page 25. When we bring structural separation, the structurally separated infrastructure company has the ability to attract more investors. It has the ability to accelerate CapEx and network coverage. It has the ability to serve multiple carriers, so expanding its addressable market. And in particular, on the client company, it has the ability to establish a lighter customer structure which is customer-centric and digital-first. When we look at the shareholder value generation like example of what this can generate, one of the examples actually look at the market caps pre-separation and post-separation, and we can see that pre-separation, the entire company was worth CZK 72 billion. And when we look at several years later, the ServCo and the NetCo, each on their own has pretty much the same valuation of the entire company pre-separation, which means almost 100% increase in valuation. And the return on invested capital also went up by almost 90%. And this is because of focus and because of the better structure, both in terms of operations, but as well as in terms of all of the financial metrics of each of the companies. In our case, where do we expect it can take us? And we can look at that in Page 26. We expect that structural separation will allow for the acceleration of the fiber network deployment by InfraCo by a big amount, by a great amount. We had a plan when we announced our strategic plan last year to cover 16 million homes passed in 3 years. We actually believe that with structural separation, we can look towards covering more than 30 million homes passed by the end of 2024. This is twice the number of homes passed that we had in our previous plan. It's a dramatic increase. Looking towards 2022, it means bringing the number up from 16 million to 20 million, which is already a significant increase for our first year of operation. And when we look at the HPs, we believe that the homes passed, which will already be built, can be increased by 140%. So as if, we had already very positive results. But with the infrastructure separation, those numbers can go up significantly. And when we look at the cash flow, obviously, this will require in the infrastructure company an increase in the CapEx investments, but this period of initial investment will have a much higher EBITDA flow coming after we get into a scale of the infrastructure and the FTTH deployment. And when we look at the structural separation, the EBITDA numbers normally are much, much higher than the EBITDA numbers of an integrated company. And this will be followed by a high-return phase with reduced CapEx and increase in EBITDA as we continue to build and already achieve a very significant number of HPs, which will require us no longer a much, much accelerated investment in the future as we start to stabilize investment in homes passed. This will allow a view for a new Oi. And when we look at the numbers that we expect this can generate for us, the new Oi will grow faster in a sustainable way, as we can see on Page 27. As we have in terms of some metrics for 2025, we expect that the client co will be able to have over 7 million homes connected, and the InfraCo over 30 million homes passed and over 10 million homes connected. And this is obviously because in InfraCo, we'll be providing homes passed and services not only to the client co, but to the entire market. And as we can see, the entire fiber market continues to go up significantly with small ISPs and obviously with large telcos as well, and we believe that our infrastructure will be able to serve all of those. On the revenue front, we expect a 21% increase in the revenue metrics on the client co and over 23% on the InfraCo towards 2025. And in terms of EBITDA margins, it will be 2 very different companies, but both with very healthy EBITDA margins for the CapEx investments they require. On the client co, we expect a higher than 20% EBITDA margin, remembering that this is an asset-light company focused on services and clients. And on the InfraCo, a over 60% EBITDA margin. Those 60% numbers are confirmed by pretty much all of our benchmarks. When we look at the benchmarks for infrastructure companies around the world, we see numbers that start in the mid-60%s and go all the way up to the mid-70%s. So we believe we're being conservative here and looking towards a very doable operation in terms of our metrics. And finally, in terms of fiber-operating cash flow of EBITDA minus CapEx at 2025, we can see that the aggregated company here would be a dramatic improvement in terms of cash generation with a combined metric of BRL 4.5 billion of cash generated in terms of EBITDA minus CapEx by 2025. When we do that, the new Oi will benefit all of its stakeholders, as we can see on the next page. It would benefit customers in all segments from the best quality of infrastructure, from an increase in geographic markets served and the best experience in terms of having new services available. The telecom sector will also be benefited, and large and small operators will have access to the robust and capital infrastructure that we have in an isonomic way. And this will avoid redundancy of investments. It doesn't make sense to build 2 roads one by the side of the next, and we believe this is exactly the case in terms of fiber. And this single construction of fiber in the whole country will bring greater profitability for the infrastructure company, but will also bring best results for pretty much all of the operators. For employees and suppliers, we believe employees and suppliers will have companies which are financially stronger, more focused on their specific areas of expertise and thus generating value for them. For creditors and shareholders, we believe with this, we'll be able to have a sustainable company, a growing company, increasing the safety of pretty much everybody's investments and having more certainty for creditors and return to shareholders. And for society as a whole, we believe that massifying infrastructure in the country will have gigantic economic and social development impact through digital inclusion, higher economic efficiency of investments in infrastructure and helping to bring everybody forward. But to pursue this, we know that the plan amendment and a new general creditors meeting is needed, and that's exactly what we have done with our filing last night. On Page 29 we see that in order to implement this evolution of our business model, we need to amend our existing Judicial Reorganization Plan and a new general creditors meeting will be necessary, which we expect will happen at the beginning of the second half. This GCM and this plan amendment will allow, in particular, the continuity of our plan execution, this -- in terms of looking for sustainability and value generation. It will also bring execution flexibility and future options for the company. Our previous plan, inasmuch as it was successful in allowing the company to move forward, it still lacks some flexibility towards going to our future options, in particular, in terms of asset sales and reorganization of our operations. The plan and the amendment to the plan will also bring an anticipation of debt payments, and this will reduce the risk for creditors, but in exchange will benefit the company with better payment conditions. We are proposing with these planned alternatives for various creditors, including small ones. We believe we will optimize the capital structure of the company. We will reduce operational risks after all of the transactions are completed. And those are pretty much the objectives of the amendment to the plan of the GCM approvals. On the next page, let's take a look at the key concepts of the plan amendment, starting with the asset sales and the creation of what we call the isolated production units, or the UPIs. The plan calls for the creation of 4 UPIs, which are the isolated production units, which is an entity that exists in the Brazilian JR process. The first UPI is the towers UPI, and we're talking about close to 700 mobile towers and 225 indoor sites with the passive infrastructure. And this will generate revenue not only from us but from other operators. It's a pretty standard deal in the market. And as we have announced already, this is part of our noncore asset sales. We are setting a minimum price of BRL 1 billion for 100% of the shares of this UPI, and we will be selling this at the highest price. We have an M&A process that is being conducted by Oi. We already have proposals in, we will continue to negotiate towards those proposals. But the GCM and the creation of the UPI is what will bring certainty to the process and security to the new investors in acquiring those UPIs. On the data center front, this is also an isolated production unit part of a noncore process. We have 5 data centers. We have the revenue and contracts for the colocation and hosting businesses with B2B and with Oi, and we have established a minimum sale price of BRL 325 million for 100% of the shares. In reality, this already represents a binding proposal that we have, which will provide a right to match to the biggest binding proposal received, which was already received and closed during the M&A process conducted by Oi. So here, we have a firm binding proposal that will be the base for the UPI auction that will take place and a stalking horse model that we have highlighted before. Next, the mobile assets. Obviously, we have been talking about the possibility of a mobile sale for a long time because in strategic terms, we are the smallest player in the market, even though we are very efficient and have been having very good results. The UPI for mobile will include the complete mobile operation, including all of the active network, clients and spectrum. Elements of the active or passive transmission network are not included here, and all of those will be in the InfraCo company. For the mobile assets, we are establishing a minimum price of BRL 15 billion for 100% of the shares, and the sale will be conducted at the highest price in a judicial auction or, at our discretion, for the second-best bid if the risk of execution is lower, with a maximum price difference of 5%, if there is greater legal certainty in terms of both regulatory as well as competitive approvals to close this transaction. Obviously, we will only sell this operation if it makes sense for us, and we believe that the BRL 15 billion minimum is a fair price, given not only the amount of our assets but the very good performance that our mobile business has been having recently, and obviously, all of the metrics and multiples that it can generate to a different company. And finally, the InfraCo, the InfraCo is a different type of UPI because, obviously, it will still be an isolated company. We will execute the structural separation that we just talked about. But the InfraCo will not be a full sale. We expect to sell between 25% to 51% of the economic capital of the InfraCo, representing 51% of the voting capital of the company, and this will be towards the FTTH network plus a lot of infrastructure, with IRUs, with Oi S.A. and Telemar backbone and backhaul transport networks, which will allow the InfraCo to serve not only FTTH networks and customers across the country, but wholesale customers, with Oi obviously being its main customer for fiber broadband and Oi Solutions as well. Obviously, as already expected and announced, the InfraCo will be a neutral network providing service to all players in the market. With this partial sale of the InfraCo, Oi will still retain a very significant and relevant economic participation in the company, with no less than 49% upon the sale. And for the sale of the UPI InfraCo, we're still not establishing a minimum price, but a minimum secondary distribution for the company of BRL 6.5 billion for Oi, followed by a primary of up to BRL 5 billion and guarantee of dividends and other conditions for Oi. In addition to that, the conditions for the sale of the InfraCo will need to guarantee the execution of the investment plan with an equity support agreement or an investment agreement for the buyer. With that, we believe that we will be able to have all of the flexibility required to move the company forward towards a new model. In terms of the terms for the current plan, Page 31 shows some of the key concepts of the amendment proposal to JR plan to creditors. Starting with non-financial creditors, where we have both in labor as well as in the small business, classes I and IV, a proposal of payments within 30 or 90 days after approval of the GCM, limited to BRL 50,000 per creditor in the case of labor, BRL 35,000 per creditor in case of the small business. This is an important proposal because it allows us to settle with a large number of creditors and obviously the creditors that need the funds the most. In terms of financial creditors, we have 2 key classes of financial creditors with changes, one is the secured creditors, Class II. And in the Class II, we expect that upon the sale of the mobile UPI, we'll have a prepayment of the entire secured creditor class or the prerogative of the creditor to remain with a position in the company using its existing credits for investments, either in Oi S.A. or in its associated company such as the InfraCo. On the banks and ECAs, we're proposing for early settlement of credit with a complete liquidation of the credit with a discount and payment in 3 installments. This will be linked to asset sales and the plan will call for a mandatory repayment of the credit in the case we have a minimum volume of resources through the auctions and the execution of our plan. There will be different -- a differentiated option for creditors who provide new credit lines to the company, and all of this is explained in a lot more details in our plan amendment. For additional creditors, in the case of ANATEL, we expect to migrate ANATEL to a new legal ruling for addressing credits by adhering to Law 13,988, which allows for bilateral negotiation of public credits between the public entity and the company, and we also expect to adhere to subsequent legal provisions that may be enacted in the future, allowing us to settle the credits from ANATEL and removing them from RJ. Obviously, this is contingent upon a successful negotiation with ANATEL and the AGU. And in other case, the ANATEL credits would remain as part of the plan as is. In terms of contingencies, we also expect the payment of up to BRL 3,000 with a waiver of any additional claims within 90 days. And finally, for suppliers, bondholders and the general offering of Class III, we are introducing a possibility of prepayment with the introduction of an optional mechanism of reverse auction to repurchase all of those credits with a discount. In terms of the bridge operations, given that our plan will require probably between 18 -- 12 months, give or take, to execute 12 and 18 months to execute, we're including a mechanism to allow for bridge operations, both in terms of a bridge to partially anticipate the proceeds from the sale of the UPI -- the mobile assets UPI as well as the flexibility for adding some leverage guaranteed by the shares of the new InfraCo UPI. And finally, the last concept in the proposal is to bring the JR to closure upon closing the sale of the UPI for mobile, or if we're able to do that before, if required by Oi and confirmed by the Judicial Reorganization Courts. So all in all, we know that there is a lot to be done and the company has been working very diligently to having its grip on pretty much everything that is required to get there. And we have a timeline of when to expect all of the things we described to happen on Page 32. We start now in June with the filing of the judicial recovery plan amendment, and we expect to hold our general creditors meeting in August. We expect to conclude the towers and data center auctions in October. We expect to have the auction of the mobile assets UPI by the fourth quarter, together with the closing of the towers and data centers. Moving on to the first quarter of '21, where we would have the InfraCo UPI auction. Then on the third quarter of 2021, we would expect to close the InfraCo UPI process. And finally, in the fourth quarter of '21, given the probable long times for regulatory and competitive approval processes, we expect to close the mobile asset UPI sale. Obviously, this is just an anticipated timeline. It will depend a lot on all the processes that take place. And obviously, between now, when we filed our plan amendment proposal and the general creditors meeting, we will continue to discuss with a number of players and creditors and stakeholders towards not only explaining the plan, but being able to negotiate towards what makes sense for the company, so in August we can have a successful general creditors meeting. In conclusion, on Page 33, we know that up to here we have been firmly stabilizing our operations, we have been redefining our strategic model, and we were able to secure resources for a very strong acceleration of our fiber optics business, and this shows in the results that we have been having. But what we are proposing is an ambitious model, not only to accelerate growth, but to enable the creation of the largest infrastructure company in Brazil in a sustainable way. We believe that our customers will benefit from more quality and coverage. We believe that the neutral network carrier will efficiently accelerate fiber investment in the country for the entire sector. And in particular, we believe that this model will allow us to conciliate strong growth and the financial sustainability that the company requires. In addition to the benefits for all the customers and the industry, we believe this plan will generate value -- will be finally able to generate value and Trust for employees, creditors, shareholders, suppliers and for society in general. And the last message we would like to leave with you before we go to the Q&A session is that this management team and this Board of Directors, which looked at the company and started to charter a new path for it, always with the long-term sustainability and the long-term value generation in mind, are extremely committed to executing this new strategic model with rigor, speed and whatever it takes to be able to bring the company to a new successful, sustainable long-term position. So all in all, we know that this is a lot of information. We know that most likely there will be a lot of questions that will be answered as we move the process towards the GCM in August, and some questions which will be answered either after that as we execute our plan, but we believe we have a credible plan. We have a feasible plan. We have a plan that can generate value for us and return the company to a sustainable position and being the largest infrastructure company in Brazil. With that, we conclude the first part of the presentation, and we believe we can move to the Q&A session. Thank you.

[Operator Instructions] Marcelo Santos from JPMorgan would like to make a question.

We have 2. The first question is regarding the UPIs. So now that you have formatted the UPIs that you plan to potentially divest, could you provide some financial metrics or some -- a little bit more description, like how much EBITDA is in each UPI? Especially on the infrastructure co, how much of the EBITDA stays in the infrastructure co? How much stays in the client co? And also on the mobile company? That would be the first question, any color in that sense. The second question is regarding the governance of the infrastructure co. How will that work? How we guarantee that its interests will be kept in mind when this company going to be running independently?

Thank you, Marcelo. On your 2 questions. On the UPIs, we obviously have worked with a great level of detail towards building the financial metrics for each of the UPIs. So let's start with the first 2. Obviously, in the case of data centers and towers, those are pretty standard in UPI financial metrics. And obviously, when we look at the market multiples in the past for those types of transactions, we know what to expect. They are very standard. And as such, that's why we have set the minimum prices as we have, based on the proposals that we're already receiving. And they are pretty much standard UPI metrics, which in reality for the company only matter towards the cash that's going to be receiving and obviously the commitments that it has in the future. We should advance that when we're looking at those 2 UPIs, this company has firmly looked at doing something which probably was not done in many times in the past in sale processes, which is not to take very expensive commitments towards the future just to increase the amount of cash that is brought in as part of the sale process. This is true for the towers UPI, where we are committing to market numbers for all of the rents for the towers as well as to the data centers, where we're committing towards the usage that we know we will have and that we know we will need and no more than that. So with that, I believe that on the first 2, it's a pretty standard financial equation, Marcelo. On the mobile unit, obviously, on the mobile unit, this is part of the process that we're conducting with the interested parties and all of the details will become public when they become public. But when we look at the market multiples, we can look that, obviously, we know that Oi has internal multiples for EBITDA which are lower than the market average. And this is because, obviously, we carry the entire weight of the company and the slightly smaller scale compared to the other players in the mobile sector. But what we're doing with the UPI, and this is important for everybody to understand, is that we're not selling the Oi Movel entity. We're selling the mobile operation. And the mobile operation comes with pretty much a clean operation to whomever acquires it. And this allows us to look at the market multiples in terms of EBITDA and in terms of potential revenue generation, which will be not only in line with market but, we believe, better than markets. And that's why we have set the minimum price as we have. We believe that there is space to increase that. But obviously, we needed to set a price, a minimum price, and this was based not only on our internal analysis but also on feedback we received from the market and analysts. And so obviously, this will be taking some EBITDA out from the company. And as we have not disclosed in detail the EBITDA per segment in the past, obviously, it's part of the confidential process that is taking place. But we should expect this to resume EBITDA market levels for the UPI of mobile, which will allow us to get to the BRL 15 billion. When we look at the numbers internally, obviously if you just make a rough calculation, you can look at the volume of revenues for the mobile UPI, and the mobile UPI represents, out of the close to BRL 20 billion revenues we have, it represents close to BRL 7 million, BRL 7.5 million. And so it represents the less than half the EBITDA of the company today, give or take. Especially because, again, we're not talking about internally the same level of EBITDA margins that our peers have. Finally, let's go to the infra company, and then we can talk about both the metrics as well as the governance. On the infra company, we know that we should have an EBITDA which is obviously higher than 60%. And this is based not only on all of our internal planning, business planning, but also based on benchmarks. Obviously, when we created this plan, we tried to be conservative to allow for some space for development of the plan going forward in terms of its implementation. But pretty much all of the benchmarks that we have looked at points to between 65% and 75% EBITDA for the infrastructure company. And this, when we look at the split of how would we split the EBITDAs and the revenues and all the costs between the client co and InfraCo, this pointed out to a client co with a 20% EBITDA and cruise speed, in cruise mode, giving a 50%, give or take, EBITDA margin for the combined operation, InfraCo plus client co. Obviously, our plan details will be known with a lot more color in terms of the numbers when they become public. But in terms of the metrics and the margins, we expect that on the client co, the 20% EBITDA, without the weight of the CapEx and with a much leaner, much lighter company, this will be able to compensate everything we must do initially on winding down the copper business. And eventually, it will bring us to this level of cash generation in 4 to 5 years of close to BRL 2 billion. So it's a pretty healthy cash generation, given that it doesn't require a lot of CapEx investment. On the governance of the infrastructure company -- and again, Marcelo, sorry to not give you a lot more details than the ones that we're able to disclose -- but obviously it will become known as we look in the details of the UPIs and the process becomes more public. But in terms of the governance of the infrastructure company, we have made a number of things. And obviously, there will still be a lot of discussion in this process because we have just started the public process for calling investors, and we provided an info pack for investors as of last week, and we have a number of investors analyzing the infrastructure company process. But in terms of governance, a few things we have provided for in the process are, the first one, we will retain a significant economic position in the company of no less than 49% of the economic value when we complete the process. In addition to that, we will have some obligations to the new investors in terms of what are the minimum investment levels in terms of homes passed and homes connected that we expect. And obviously, this means that there will be already a plan in place towards where should this infrastructure be deployed, in particular to cover the original plans we already have and the expanded plans that we now have, but also to allow the security for the clients company to be able to base its FTTH, high-speed residential broadband plans on an infrastructure that it knows is going to be there. Obviously, there will be room for a lot of additional investment, a lot of flexibility towards implementing new cities based on what is not mandatory. But there is a core level of mandatory investments that pretty much represents the bulk of the governance at the very beginning. We obviously expect some natural provisions in some arrangements such as this, and having Board -- appointing a Board member to the company. And also in terms of -- at the very beginning, in particular, participating in the management of the company, because in reality the management, in particular the operations and technology management, will come from Oi. The governance details will be part of the agreement, will be part of the discussions with the new investors. But with that, we believe that we will be able to especially look towards maintaining the level of operational excellence that we have been able to achieve thus far and then be able to look towards the success in terms of operations and technology going forward. On the sales front, obviously, this company will have a lot of independence. So obviously we don't expect to control the sales of the infrastructure company, especially given that the infrastructure company will be selling to pretty much all of the operators and the telecommunications providers in the country. And so we'll have flexibility, it will not be controlled by us. It will -- the new investors will have discretion towards directing their sales efforts in the market. And this is what should happen in the case of a neutral infrastructure company. So all in all, very strong position in the economic position, very strong requirements in terms of the obligations for the investment plan, very strong say in all of the technology and operations front, and a lot of independence in terms of the sales and marketing efforts of the new company, okay?

A follow-up or a clarification on the margin. I said that the combined InfraCo and client co would have a 50% margin on -- I don't know if I'm correct or...

Yes. It's between high 40% and 50%, something like that.

Carlos Sequeira from BTG Pactual would like to make a question.

So one question that I have is on the ANATEL debt, you mentioned that you're looking forward to negotiating with ANATEL based on the new legislation that was approved recently, this 13,988. And my question -- and I know it has been accounting for the net present value of ANATEL's debt for some time now for a much lower number, which is natural given the restructuring, and my question is, do you have any expectations on how much renegotiating ANATEL's debt under the new legislation would change the net present value of what you have been accounting for as ANATEL debt? So that's my first question. And also related to ANATEL, if you don't mind also commenting if it makes sense to, instead of doing all the negotiations based on the legislation that was just approved, if it's worth waiting for the new one, the PL-6229 that is being discussed in the Congress that would give you even better conditions to negotiate with ANATEL?

Well, a comprehensive answer here. First, as you pointed out, we also -- we already have 2 parts, 2 pieces of debt with ANATEL, one of them which is part of the active debt and part of it, which is just administrative debt with ANATEL. The first one being the largest, the second one being slightly over half of it. So when we look at the 2 tranches, on the first one, which is the debt that can already go towards the year into 13,988, what we have done is that we have done a comprehensive analysis of what would imply for us getting out of the RJ conditions, and then applying the 13,988 conditions, with 84 months and now up to 50% discount on the total debt. And given that this debt, [ Cadu ], has a lot of interest and penalties applied, we will pretty much be using the entire discount possibility of the 50%. So we know that the 50% allows us to significantly reduce the debt as well on this new on this 13,988 arrangement. Obviously, when we compare that to the fair value of what's in the RJ today, there is a small difference, but we believe that there is a small difference and this difference is worth it given the legal certainty and the end of disputes with ANATEL that this will allow. And so we would be able to cut our debt in half. And remembering that even when we cut our debt in half, after that, we have to apply the 84 months. And with the 84 months, we go to close to where we were in terms of fair value. It's not exactly where we were, but it's close to where we were in fair value. And so it's not dramatically worse what we could get with maintaining the debt in the RJ. As far as dealing to the new regulations that may come out, especially PL-6229, what we're doing in terms of the negotiation -- and our plan already allows for that and now we obviously don't have anything in the law that would present this from happening -- it is possible to first adhere to 13,988, and then if a new regulation comes out which would improve our conditions and our situations, we could migrate the existing negotiation to this new regulation that can be enacted in the future. This is part of a negotiating process, but it's something that can be done, and obviously this would allow to reduce the fair value pretty much. As far as the second part of the debt, the debt that is still not -- it's not inscribed as active debt, it's just with ANATEL, per se, we have the same approach. We could either, again, migrate it to the bilateral negotiation as soon as we inscribed it. Or in the case of the second part, there are additional options, which the first tranche doesn't have, which is, the first one, to be able to work with ANATEL with the new mechanism that the agency has been discussing, in particular the obligation to do, the [ obrigacao de fazer ], and this new legal feature for ANATEL actually would allow us to significantly reduce the debt by converting it into obligations of CapEx, into obligations of coverage, into obligations of service, which would be much, much better than having to actually consider it as part of debt. This would become pretty much investment obligations. And then, compared to whatever value was considered in the RJ, this could be even much, much more positive than what we have in the RJ today. So this is what we're doing. Remembering that after the PL-6229 is approved, when and if it is approved, we would be moving from a 50% discount and an 84% -- and a 84 month installment, sorry, to a 70% discount and 120 month installment. So it's a significant improvement that would be able to come even after our first negotiation took place and goes into effect.

Okay. Perfect, Rodrigo. Can I ask one more question. On -- you mentioned in the plan that you hope to negotiate with the banks and the ECAs a discount up to 60% of the face value, which are big discounts. It goes in line with what you have been accounting for. How confident are you that you can negotiate these type of discounts when discussing during the creditors meeting with this group of creditors, please?

[ Cadu ], obviously, this is part of the whole proposal. It's not an easy discussion, as we know. But at the same time, what we have considered when doing this, and this is -- those are the conversations that will have to take place between now and the GCM, is that, first of all, we have to recognize the fair value of the debt. And the fair value of the debt is far from face value, given all of the payment terms that we have. And when negotiating, we have to first start on the fair value of the debt because, obviously, by doing what we're doing in the DCM, we will be prepaying the entire debt. We will be eliminating the risk of pretty much 100% of the ECAs and the banks. And they would be monetizing 100% of the payments right now. This will be obviously crystallizing the fair value for us. But it will be crystallizing the fair value for them as well, getting completely out of the risk, right? And so that's the key assumption and the key approach when discussing this. Obviously, it will have to be discussed. It will have to be negotiated. Remembering that the plan has to be approved by everybody, and we have several different classes. We have several different Class III shareholders. It's not adjusted to one specific type of creditor to approve the plan. And as it was the case in the previous plan as well, there will be situations where you have some creditors voting for, some credits voting against. What matters in the end is that the majority of the class ends up approving the plan, and that's what we're doing, is we're proposing something that we believe it's [ equititive ] to pretty much all of the creditors in the classes, and that can be approved, we believe, after some negotiation.

Soomit Datta from New Street Research would like to make a question.

Two or three questions, please. One, just to go back to the last question and the point of clarity on the bank and ECA debt. If a 60% discount is voted through and formally accepted at the GCM, just to be clear, does that mean everybody then has to accept this 60% discount? Or could that be voted through, but you could still opt to hold out somehow? Just to clarify that point, please?

Yes, obviously, the provisions for the plan call that there will be a general provision where the creditors that would have rights to cash sweep in the current plan would be the ones impacted by the prepayments, would be the one receiving this prepayment with the discount. And they would have to take the prepayment with the discount. Obviously, we are including also other options for creditors, as we highlighted, in the conditions. And in particular, one of the options is an option where if there is new credit brought to the company, there would be part of the credit being protected at face value. So there are some options in the plan. And obviously, the details are in the plan and in the amendment that we filed, but what we're proposing is exactly that the cash sweep that would be applied in the future will be applied now but it would be applied to prepay. It will be our obligation to prepay this with the call with the discounts to all the cash sweep creditors.

Okay. That's great. And then just a couple more, please. Just looking at the split of the InfraCo and the client co, you've not included backhaul in the InfraCo, which I guess would be typically expected. And I was just curious as to -- is it to do with the regulation of backhaul? I just wondered why backhaul was not included in the InfraCo.

Yes. Let's clarify that, Soomit, because, yes, backhaul is included in InfraCo. And the way we're including the backhaul and the backbone in the InfraCo is by having IRUs, which in Brazil were just right-of-use contracts with 100% of the infrastructure that remains in the client co, in Oi itself. And the way -- the reason why we're doing that is exactly why you have described. It's just because of a legal certainty and being extremely conservative in the way we're approaching all of the assets. We know that the new telecommunications law has already defined that none of the assets that are not used for the concession can be considered reversible. And when there are assets that are used by both the concession and additional services, just the piece of the asset that is used by the concession services should actually be considered reversible. And in this sense, we would have 100% of the rights to drop down the assets to the InfraCo entirely, just remaining the small percentage of the assets that are used by the concession. And just to give you an idea, out of our fiber backbone, less than 1% of our fiber backbone and haul is currently used for voice. So it's just a matter of having a very conservative approach, and instead of transferring and dropping down the assets per se to the InfraCo, we're transferring rights of use to the InfraCo, which will be pretty much managing the entire assets.

Okay. I didn't realize that. I’m sorry. And then, just a final clarity as well, please, if I can. Just regarding the monetizing of the InfraCo, talking about a secondary sale of BRL 6.5 billion, when you talk about the 25% to 51%, that is the [ post-money ] ownership. So that is the secondary sale, when the primary raise, I guess, sort of diluting pro rata with the other kind of shareholders, and then it's the final ownership is the 25% to 51%, is that right?

Let me give Camille the chance to jump in and talk about the structure in terms of the proceeds and what we expect out of the InfraCo. Because again, we're in the middle of a competitive process for the InfraCo that we just started. And as such, we obviously, still need to see what comes out of the market. But we have defined our basis based not only on benchmarks, but on our own internal valuations. And then we created a mechanism to address that in terms of the primaries and secondaries. Camille, can you just clarify for Soomit?

Sure. Thank you, Rodrigo. So the mechanism for InfraCo -- and as Rodrigo said, we just started a market sounding exercise, so we are waiting to get more inputs from the market to maybe add more details to the plan before the creditors meeting -- but the mechanism that we have today is that the offer has to guarantee a minimum BRL 6.5 billion to Oi in a secondary tranche. Also, if you look in details in the plan, InfraCo is going to be born sort of with debt towards Oi Mobile or Telemar due to unpaid dividends. So it's BRL 6.5 billion plus BRL 2.4 billion, roughly, of proceeds flowing to the Oi group. And also, as InfraCo is born without any additional debt, we wanted to give potential buyers the flexibility to make their own assessment on the amount of primary proceeds that InfraCo needs to pursue its business plan. We have our own estimate that it could be up to BRL 5 billion, including the debt that needs to be repaid, but that could be conservative. So we wanted to give investors the chance to -- or the potential buyers to give a -- to make their own assessments on how much primary proceeds the company needs. That's why there's flexibility there. We just want to make sure that whoever wins, let's say, this controlling stake in the UPI is bound to make the necessary investments and to guarantee the business plan. We have flexibility to -- we are maintaining flexibility to keep between 75% and 49% of the economic stake of InfraCo using ordinary and preferred shares. And our idea is to be more specific on minimum price as time goes by. But if you if you do the math there, with a minimum 25% ownership, 0 primary and the BRL 6.5 billion, you probably get close to where we expect to land on minimum terms for InfraCo.

Fred Mendes from Bradesco would like to make a question.

I have two questions here as well. Maybe, first one, regarding the mobile operations, now you disclosed the minimum BRL 15 billion for this asset. So just trying to understand here the rationale. If -- previously, I would believe that it will be easy to enter the credit holders meeting already with the former offer. But I guess if the idea here is just to give a minimum value for this asset so now you can call the meeting and you enter that. We are even -- or also the possibility of not having a formal offer in your hands. So just to understand here the rationale for providing the value, and with this meeting taking place in the next 2 months. This will be my first one. And then my second one, in terms of CapEx, now as the InfraCo and everything. How should we see the CapEx for 2022, especially once you stop investing so much in [ FTTH ]. So I guess most of the CapEx would be related to the maintenance of the fiber. So just trying to understand where this CapEx would be looking at 2022.

Thank you, Fred. Well, the rationale for establishing a minimum price for mobile at this point is that, obviously, for creditors to approve a new amendment here, they need to understand what sort of proceed -- minimum proceeds would be expected from such a process. Because, obviously, we cannot put up a proposal to sell our mobile operations up for vote in the GCM as part of an amendment without actually telling us for a minimum of how much we'll be selling. So otherwise, it will be impossible for creditors to do their own analysis to understand if it makes sense to vote for this proposal. So obviously, we had to do that. We had to include a minimum price. Obviously, it would be ideal to have already a binding proposal before that, but we're in the middle of our process yet. So we have to present a minimum price. Obviously, we based this minimum price based on our own internal analysis, our investment adviser analysis. And we believe it's something that makes sense if you compare it by multiple means. If you compare it by our own projections, if you compare it by market multiples, if you compare it by comparable transactions, if you compare it by a proxy of what kind of EBITDA generation potential this would have for additional companies. So we believe it's a fair assessment of a minimum value, and we had to provide it or else it would be impossible for creditors to analyze what would take place. And obviously, providing a minimum value allows us for the chance to have this minimum value considered by all of the multiple players that are analyzing the asset at this point. And this is particularly true given that what we expected in terms of the minimum value is obviously, after the minimum value, to sell it based on the highest bidder. But we included this feature in the amendment which calls for the possibility for the company to select a different proposal, which is slightly smaller than the highest proposal, if it's within a range of minus 5%. If this second proposal has more legal certainty in terms of regulatory approval. So it's just a feature, Fred, for the creditors to be able to understand and analyze, if we're able to consider that this is something which would be worth for approving in terms of value receipt. As far as your second question of the CapEx of InfraCo in 2022, we -- in our plan, we obviously had a plan that called for significant CapEx in FTTH deployment all the way up until the middle of 2022, getting to 60 million homes passed. When we look at the current plan for the InfraCo, we call for a plan that actually keeps up the pace and picks up the pace initially, even in 2021, and keeps up the pace in 2022, and it keeps up the pace of close to BRL 5 billion, between BRL 4 billion and BRL 5 billion again in 2022 just for fiber, no other CapEx involved, just for fiber and infrastructure. And obviously, remember that there would still be an additional CapEx for pretty much all of the other operations that we would keep at the client co. But just on the InfraCo, between BRL 4 billion and BRL 5 billion just for fiber, and obviously, all of that is not all. The good portion of that directed to the infrastructure itself, and obviously some IT CapEx included in there. But we'll be able to maintain a significant base of CapEx. And obviously, this is the entire reason of the structural separation, to be able to maintain such a high CapEx, but with a much higher margin. And obviously, it's a different structure of company altogether.

Ms. Maria Tereza Azevedo from Santander would like to make a question.

Thank you, Rodrigo and Camille, and for the detailed presentation. So I have two questions as well, just to clarify on the InfraCo, the InfraCo is going to consolidate 100% of the fiber unit revenue, EBITDA, the CapEx and the leverage. So Oi is going to recognize it as a minority stake or is it going to be like a spin-off listed company? How is it going to be that structure in terms of deconsolidating the economics of the assets? And follow-up question is on the -- on, you mentioned that upon finding the mobile sale, you could reach to a potential bridge loan to get the proceeds before the closing. What would be the capital allocation priority in that case? Would it be to further invest in the InfraCo?

Thank you, Maria Tereza. In the case of the InfraCo, yes, it would be a company that is part of the group and for all regulatory effects, it's a [Foreign Language], right? It's a company which is part of the group and that obviously still should be considered for regulatory purposes as part of the group. But in terms of control and consolidation, yes, it would be a minority stake, even though we would have, again, a lot of the governance features to be able to assure what we're doing and how we move forward with our plan until it takes place -- it takes off and is completely independent. And that would be a minority stake, receiving dividends and receiving obviously the proceeds of that. And when we look at the consolidated numbers, it would not appear in consolidated results. But it would appear in consolidated financials, right? As far as the mobile sale, with the bridge, what we would expect is actually to be able to do 2 things: to be able to accelerate part of the investment in the InfraCo as well, because we wants to keep the rhythm very fast and the CapEx at a very, very fast pace to continue passing the infrastructure increase as we have for homes passed, homes connected; and also to address all of the other obligations of the company. If you remember, the company in the next year or so will still have negative cash flow because it's still ramping up our fiber revenues. And we have to cover this in the process of cash generation with investments. And obviously, the obligations of the plan, the repayment of creditors, the obligations of the company will require some cash funding through the first part of the plan. And this -- the idea is that part of that would come from the bridge of the mobile sale, obviously, to be completely eliminated when the mobile payments took place.

Guido Rosas, Goldman Sachs would like to make a question.

Congratulations on the operational results despite the turbulent times. I hope everybody's safe there. I have two questions here. The first is, with respect to the strategic OpEx reduction, how much of that is already concluded? How much of that is really left? And is any of that impacted you think in near term from COVID or any of the results expected in the next couple of quarters, right, where we'll see some of these issues come into the numbers? The second question is, post UPI conclusion, assuming that the planning is approved in time and the timeline's followed, what does your capital structure for the company look like post payment? What's left in terms of debt? And I think addressing a little bit of the other questions as well, equity spinout versus [ health component ] you already answered, some more about the debt profile of the company [ opco ] after the conclusion of the spinouts?

Thank you, Guido. Well, on the OpEx reduction, there's an interesting effect of the COVID pandemic, and you've probably heard it before, and a lots of people are saying that the COVID has been the greatest digital disruptor that companies have faced in the last 10 years, because in reality it was an accelerator to many things that everybody wanted to do, but somehow, were not achieving. And in reality, when we look at the impact in terms of costs for us. Obviously, there are the direct costs of addressing the pandemic and now we have invested significantly to address the cost of APIs and the cost of having the remote-to-work operation. But compared to all of the positive cost impacts of just digitalizing everything, we believe that it actually helps in this regard, because we increased dramatically the number of operations that are done entirely digitally and reduced the cost of human customer care, for instance, and reduced the cost of calling technicians and talking to technicians in person. And we increased the ability to sell digital invoices, and we reduced the paper invoices, and we increased the number of digital payments. We increased the number of digital top-ups without expensive commissions. And so there's a lot that was done which we believe will be permanent. We believe they won't come back in terms of cost reductions due to the COVID. Obviously, other than that, we continue with our reduction program as is. We continue with our simplification efforts. We know that the company needs to be lighter. We have done some measures already to transform our structure and to bring a lighter structure to the company. This will continue as we analyze the processes. We are doing a lot of effort into automation; automation alone, we believe that this year, we'll be able to get us close to BRL 100 million reduction in OpEx at the end of the year. We have continued to look at reducing and simplifying our IT stack. Just to give you an idea, Guido, in terms of number of IT projects, we reduced the number of new IT projects from last year to this year by 75%, 7-5. And this was basically by, first, not doing any more complex things with the plans and including features, and including many different IT changes by simplifying our portfolio. As you saw in one of the metrics that we showed, we are moving towards a portfolio, which is pretty much flat-rate based, removing complexity from that removes complexity from IT projects as well. And on the front of the new fiber solutions and the new fiber services, we are almost starting a new IT stack from scratch to simplify and to reduce costs. So we're reducing costs across the board. And finally, there is one last aspect of cost reduction, which we emphasized in the last call and we now must emphasize it yet again. And I believe that in the second half, we will already be able to show you operational results out of that, is by reducing the copper cost, both reducing the copper maintenance costs as well as reducing all of the CapEx costs associated with copper. And this will be critically important for us. We believe that there is, as we have already mentioned before, in the range of BRL 500 million to BRL 1 billion a year in cost reduction just on the copper side. So all of that goes unabated. We continue firm on our targets. We believe we will reach our targets to the end of the year, remembering that our objective, as we announced last year, will be to get to the end of next year with a BRL 1 billion OpEx reduction in annualized terms. So by the end of next year, BRL 1 billion removed from OpEx on an annualized basis. We believe, this year, we're going to be more than halfway there already. As far of the structure of the company financial -- structure of the company after the UPI conclusion, let me pass over to Camille.

Okay. Thank you, Rodrigo. So for if you apply the provisions of the [ plan ], assuming that the plan is approved as we have presented it today, if you apply the provisions of the plan and assuming that we've raised enough secondary proceeds -- which in the case of the BRL 15 billion for mobile and a secondary of BRL 6.5 million, is already pretty much enough -- if you look at our debt table, and we have that in the full earnings release, BNDES, which is a Class II creditor, according to the plan, they would be prepaying, if they want. I mean they can opt to remain in the company in different positions. But if they want, we need to prepay them. So that will disappear. Local banks and ECAs would be subject to the prepayment discount of 60%, so we would pay them down. That would make the company remain today with the bonds, which in March amounted BRL 3.7 billion; the nonqualified facility, another BRL 0.5 billion; there is a general offer which the company has, the call option from the original plan, the call option to acquire 15%, today face value is BRL 5.6 billion, but fair value because of the call option is BRL 0.7 billion. And then there is the bridge loan that we raised in January that the company has always mentioned that its intention to -- that that was always a bridge to a longer-term debt. So we intend to refinance that as soon as we believe that the market conditions are appropriate. In the worst-case scenario that we are -- that we don't refinance, that would be also payable from the sale of mobile and that would disappear. So just to summarize, we would remain with BRL 8.7 billion of the bonds, working with March 31 numbers; another BRL 0.5 billion of the nonqualified; then there is the general offer of BRL 5.6 billion, but that -- because of the 15% call option, that's BRL 0.7 billion; and then the debentures, it depends if we prepay them or if we refinance them. If we don't refinance them, that would put us with slightly above BRL 10 billion equivalent of debt. If we refinance, then that would drive us to BRL 13 million, BRL 14 billion.

Understood. That's very clear. And I guess in terms of the next quarter, given COVID, given the shutdown of shopping centers across Brazil, potentially in form of layoff-type programs, any specific impacts on personnel line or rent expenses that you guys foresee as being relevant and diverting from what you guys originally planned on the strategic expense reduction front?

We do expect some simplification there, Guido, but it's not due to the stores. In the case of the stores, what we did was to use some of the opportunities that we had with the government programs to maintain support during the closures. And obviously we also used things such as paid time off and other alternatives. But at the same time, what we did was we got a significant portion of our store personnel and started having them work remotely. And you may ask how is this possible if the store is closed, but we started a program called [ venta en casa ], sale from home. And obviously, we're trying to use the team as best as possible. We should see some simplification, but it's not based on just the stores. It's based on pretty much the overall infrastructure of the company when bringing it simpler, and obviously having a leaner structure, in particular on the corporate front. This is pretty much where we will see most of the simplification taking place.

Mr. Daniel Federle from Crédit Suisse would like to make a question.

The first one related to the mobile business. I'd like to understand if you -- if there is any scenario that the company might accept a bid below the BRL 15 billion. And which would be the income taxes that the company would incur in the case of a sale at BRL 15 billion? And a second question related to the InfraCo, right? I'd like to understand how much of the value is coming from existing contracts, like services provided, already provided to the client co, to the Oi Mobile base with existing contracts in general, and how much of the value is coming from new contracts that you are expecting to gain -- to get in the future?

Thank you, Daniel. Well, on the mobile side, obviously, we used a minimum price because we believe that this is what the company is worth and where we should be going with the proposals that we expect to receive. And obviously, this is the scenario that has been planned. We have even included this feature for the price difference I mentioned before. But we believe that's where we're going to end up. There will always be the creditors discussion when and if any additional scenario should be considered. We don't believe this would be the case. But there are features in the plan to consider that with creditors. So it's not up the company. Yes, the company has set a minimum price and cannot go below this minimum price that it has set. In addition to that, on your income tax question, we obviously know that this would generate some taxable gains, but you have to remember that the company has a significant tax loss carryforward right now in its overall structure from both Telemar and Oi S.A. And what we would be doing is exactly to use those results to be able to compensate for part of that. We wouldn't expect any significant impact coming from tax impact due to the mobile sale. As far as the InfraCo, well, to begin with, we have to remember that the InfraCo, when it's born, it already has a significant part of the business that is already, from the -- what we call wholesale business, already up and running. It's not something that's being created from scratch. It's something that it has been there for a while. It has been operating. Oi has always been the largest wholesale operator in the market, and we believe that we would only be increasing this with the focus from the InfraCo. When we look at all of the wholesale revenues, we're talking about a close to BRL 2 billion business already today. So it's not something that gets started and just has to start using Oi as main customers. Obviously, Oi, in terms of the residential broadband, would be the main customer initially, would be the main customer for a while to come, because we want to be, as Oi, the largest broadband player in Brazil. And with that, obviously, we would be the largest customer from the infrastructure company, and we believe we have all that it takes to be able to achieve, as we mentioned in the plan, close to 7 million, even more than 7 million homes passed, generating, if you just make the very rough calculations with even an increase in ARPU, we will have, just from the residential business on the Oi side, a revenue on the client co of between BRL 7 billion and BRL 10 billion. Obviously, part of this goes back to the infrastructure company to compensate for the homes connected, homes passed. But when we look at the plan, we do have, obviously, a significant part coming from the other players in the market as well. We have included in our plan, as you saw from the presentation, close to 30% of this business coming from other players, and this would make up the entire picture for the company looking forward. But the good thing about that, Daniel, is that no matter how you split the broadband revenues in the company, if Oi grows more than everybody else, obviously the InfraCo would still be receiving Oi's revenues and everybody else's revenues. But if there is additional players that grow more than Oi, that value could be skewed slightly more towards the other players and not towards Oi. But in any case, we believe that given the significant amount of fiber that it has, given that it's a nonreplicable, given that it doesn't make sense for players to build a true fiber infrastructure one alongside the other, we believe that the infrastructure company has pretty much a set market for itself all the way into the future. When we look at the existing revenue, and we combine that with the revenue from other companies, other operators coming in even in the short term, I would say that in the short term, probably the other companies will have even a bigger weight on the infrastructure revenues than Oi, because we're still ramping up our FTTH revenue. So in 2021, we would expect close to BRL 3 billion coming from other players, because it's BRL 2 billion of wholesale which already exists. And then there is still another component coming from other players. So all in all, we do have a significant business with other players. We would increase this business by adding our very significant growth on FTTH, and at the same time, we would expect the FTTH to pick up for the other players as well.

Rodrigo, and a third question, if I may. Do you expect the client co to born as a cash flow positive or a cash flow-negative company?

The client co? No, the client co will be born pretty much as a cash flow-positive company. It will require -- we still have a year of transition. Remember that all the way up until we end all of the operations we expect, we're talking about pretty much 1.5 years of transition of the conclusion of all of the operations we expect to the end of 2021. And then after that, the client co becomes very asset-light and very CapEx-light, and so it starts to be a cash-positive company. Obviously, in order to achieve that, we need to reduce the burn out in copper, and that's exactly what we're focusing on right now because out of the things that remain on Oi -- which client co is Oi, right? It's not that there's a separate client co. Client co and Oi are one and the same. It's just one entity, which is Oi S.A. And obviously, as part of that, we can measure EBITDA minus Capex, and that is positive. And this is because we have been spinning off all of the significant CapEx investments to InfraCo, and at the same time ramping down significantly the consumption of cash coming from the copper CapEx.

We have Susana Salaru from Itaú would like to make a question.

We have 2 questions here. First on Wipro. If you could elaborate, I think, how we bring networks rollout? If the CapEx deployment occurs once you already have the contract of the demand from the customer side, or you deploy the CapEx ahead of the demand and then have to track how is going to be the demand for it? Just to size what [ effect has ] going to be the balance between CapEx expenditures and revenue generation. That's the reason for the question. That would be our first question. And the second one is regarding the approval in the -- by debtholders. You mentioned that -- I didn't understand it too much -- that all clients need to approve it, or all debtholders within all classes need to approve the proposal? If you could clarify that.

Sure. Well, Susana, on the CapEx rollout for the infrastructure company, if you recall, I mentioned that the company is born with an investment plan already defined or at least a good portion of an investment plan already defined, and that will have to be part of the investment commitments that the new investor will actually bring to the company and adopt and accept when getting into the company. And by that, we do have a rollout, which is defined, especially to cover our original plan. So when looking at covering the original plan for -- from Oi, this is a plan that will be entirely covered by the investment commitments that need to be addressed by the new investors. In addition to that, we do have a model, and we'll be discussing the details of this model with the potential investors, and there are many. But we're talking about a mix of charging between HPs and HCs. Obviously, the focus are the HCs, but we also have a mix component based on the HPs. And there will be a way of working with potential expansion plans, where there are some investments in the HPs which are covered by guaranteed the take-up rates and take-or-pay from the clients, and there is a part which is obviously investment from the InfraCo. And then on the HC, obviously, it's just a firm commitment from clients in connecting homes. So it's a mix of both. But at the same time, the company starts, is born, with a plan which is well-defined and that has a significant HP deployment plan already. As far as the approval from creditors, Susana, it's the same rules of the previous GCM, meaning that the conditions for approving the GCM is that you need to have approval in every single class. And in a given class, you need to have approval from the majority of the class, and that's it. I mean it's not that you need to have all creditors approving, but you need to have a majority in every single class.

Very clear, Rodrigo. If I may, just one last question regarding the DTH, we are assume that it will be -- it will remain in -- under the client co. Is that correct?

Yes. DTH, yes. The TV service remains under Oi, the client co. But as we mentioned in the presentation, what we're doing with DTH is we're looking towards alternatives of pretty much converting most of what we can into IPTV, and at the same time looking towards potential partnerships to avoid the costs from DTH from escalating in the future if there is a sharp reduction in customer base. So we're doing the two things at the same time. We're migrating customers away from DTH to IPTV, and we're working and -- towards partnerships that would allow us to maintain a healthy DTH business in the future.

I would like to turn the floor over to the company for the final remarks.

Thank you. Well, thank you, everybody, from listening through a very long presentation today, and we really appreciate that. We know that in addition to the first quarter results, we had to provide a lot of information on our plan and on our amendment proposal for the GCM. We know some of the concepts are new for us and are elaborated, but we know we are very confident in what we are presenting. We know that we believe in the execution of the company. We know that what we have shown in the last 12 months as far as execution of the core business of the company gives us the right to actually design such a plan for the future, and we know that all of the proposals that we have made, even though they will need to be discussed and they will need to be further understood, we believe that they are the right thing for the company to do. And it's the right thing for all creditors as well to approve, because this is what's going to bring the company forward, and it's going to sustain and generate value for pretty much everybody. So we're confident in the implementation. We believe that the company will continue to execute, will continue to maintain its focus on the operational day-by-day. But in addition to that, we will now embark into this last step of our transformation journey, which we'll see a much improved company in 18 months, we hope, with a very sustainable and value-generating future ahead of us. So thank you for staying with us. Obviously, we will be talking a lot more about the plan and about the developments of the GCM in the months to come, and we expect to talk with you very soon again about the results of that. Thank you very much.

This concludes Oi S.A. conference call. We would like to thank you for your participation. Have a good day.