Unidentified Analyst: Yes, I want to know in broader terms here about Argentina. Do you see some factors that we need to monitor, such as impacting customer of everything that’s happening in the country, higher delinquency rates, lower frequency of the charges in prepaid. Do you see any of that? Or it’s too early or detail.
Daniel Hajj Aboumrad: Well, what we’re — in Argentina, I think the operations are to improve. We are growing. We’re allowing to increase some prices because of the inflation. And in the — we have a very good growth in the fixed broadband. In the fixed broadband, we have been growing the last 2 years if you Pay TV were growing. In the mobile, the operations in Argentina are good, and we’re growing our RGUs in Argentina, like 26%. We have 3.2 the year with 3.2 million RGUs in Argentina, 4.4 more in wireless. So we are doing good. I hope and that Argentina with all these changes that goes to a better economy. And we are still investing and doing what we need to do in Argentina. So we think that Argentina is very important for us and that in the next years, maybe we can see a much better economy, and we’re going to be much stronger than what is today, Argentina…
Operator: Thank you. Our next question comes from the line of Phani Kanumuri of HSBC.
Phani Kanumuri: The first question is that in line with your CapEx guidance, we can expect an increase in cash flow. What would be the use of the cash flow? Are you looking at deleveraging or giving it back to the shareholders? So that’s the first question. The second question is regarding Chile. How long do you think it will be come before Chile can become a self-sustaining operations by itself? And how much equity infusion would likely be needed in Chile going forward. Thank you…
Carlos Garcia Moreno: Okay. So on the first question, the cash flow as we have said, until now, we don’t expect to reduce our leverage further. I think that we want to remain in a band between 1.3x and 1.5x net debt to EBITDA. So that’s one of the objectives. We don’t have anything on M&A currently in our — in the plan. So essentially, this means of whatever the sales cash flow there is, will be distributed back to shareholders…
Daniel Hajj Aboumrad: And on Chile, I think what — all the synergies we have been working in the company, all the synergies have been doing very well. The operations improving. And well, the management, we’re reducing costs, we’re putting a much better network. We’re doing capacity. We’re doing a lot of things in Chile, and we’re working for the long term, and I think we can position the company together. It’s a company over $1 billion. So it’s big enough to compete and to be a competitive company in Chile.
Carlos Garcia Moreno: It is a company that has many advantages, as have been pointed out. It has some challenges as well. It’s — it’s a difficult operating environment, and there’s plenty to do over the next 2 to 3 years. But as Daniel says, we are focused on is the long term, and we expect that long-term this will be a good investment.
Operator: Our next question comes from the line of Fred Mendes of Bank of America.
Fred Mendes: I have two questions as well. The first one is on Telcel and is mainly on ARPU. Do you think that the ARPU there where they should be pretty much? Or you think there is room for a more aggressive pricing strategy, especially on postpaid. I think Daniel mentioned that the ARPU increase mainly on prepaid. So I was just wondering if you see room for a more aggressive pricing strategy in 2024 for postpaid. And then the second one is on Brazil and mainly the mobile market as well. We are seeing other players, for example, they give a guidance for the next 3 years of real growth, top line growth, especially to price increase — so my point is, do you think that that’s the trend that at least we expect internally for Brazil for the next 2 years, like real growth on the mobile to price increase?
Or do you think that eventually someone would try to gain market share to be more aggressive on price and make it a more, let’s say, more challenging market as the expectations for Brazil for next year.
Daniel Hajj Aboumrad: Well, let’s talk about the ARPUs in Mexico. What I can tell you, Fred, is that we have the best 5G network, — and what we’re seeing is that 5G subscribers are using more and are upgrading their plans. And it’s the trend that we’re seeing all around Latin America. And as people is moving more to 5G, they are getting better plans — in the other side, we have a lot of competition and a lot of promotions and well, that’s the other. But I think the ARPUs in prepaid, we have been doing good. Our prepaid is growing around 4% and postpaid is growing about 2%. So all overall, it’s okay. I think we can sustain that. And with the network, the quality people is choosing to move to Telcel. — number portability is doing also good.
So all overall we are doing good. But in the other side, we have big promotions from Altan and the other competitors. So that’s what you see in Mexico and well, let’s see how it’s going to be helped for this year. And in Brazil, what I don’t understand what your question is that if we are going to have real growth in postpaid is what you’re saying?
Fred Mendes: Yes, Daniel. Basically, I mean, one of the other players in Brazil, they already published our guidance, right, for the next 3 years of real growth, the expectation and that’s coming mainly through price increase. So my question to you guys is if you expect that you’re seeing the same angle as to these other players in Brazil are seeing or you believe that eventually the market could get more aggressive with someone trying to gain, let’s say, more market share?
Daniel Hajj Aboumrad: I think we want more market share, but we are not going to do crazy things. I think Brazil is a market where you need to do intelligent things. And if there is a possibility to increase prices, we have been increasing prices in the last year. So I think if there’s an opportunity and still the inflation allow us to increase prices, we are going to increase prices. But we’re going to compete, and we want to have market share. So both where we want to increase prices because the inflation and the costs requires, but with the network, with the 5G, with the coverage, all the investments that we have been doing in the commercial side, I think we can still grow a little bit of market share. And also, we are leaders in ultra broadband, leaders in IPTV. So that to do the convergence and to leaders in broadband to do all the combos that we’re doing there also help us to grow the spread.
Operator: The next question comes from the line of Carlos Legarreta from Itau — please go ahead.
Carlos Legarreta: The first question is based on Mexico on the wireless side. If you could talk about the possibility of working prices if the environment allows you to do that, both on prepaid and postpaid. And the second question is €¦
Daniel Hajj Aboumrad: We don’t hear you. Can you repeat that question because also the line is not clear.
Carlos Legarreta: Sorry about that. I hope this is better.
Daniel Hajj Aboumrad: Yes.
Carlos Legarreta: Just on wireless in Mexico, if you could talk about if the environment allows you to perhaps increase prices during this year, both on prepaid and postpaid. And secondly, for Telmex, it looks like there is a number of developments going on, the 2-year review of the regulatory symmetric measures, perhaps changes in regulation schemes in Mexico. And obviously, the recent statements for your [indiscernible]. So if you can talk a little bit about what went on there because the actual results have come in broadband that you recovered were pretty good. So just what are your thoughts on the comment in general, that will also be helpful.
Daniel Hajj Aboumrad: Well, in terms of the regulation, we hope that things will be deregulated in Telmex, we have been — we don’t have — I think we don’t have Pay TV. And if you check the market share that we have between Pay TV, broadband and fixed, I think we have around 30.6%. So I don’t think they should regulate more a company like that. We expect to — that they deregulate some of the measures. So it’s what we expect. We only have 30 point or 31 or 31% of the market and in the peak side. So we don’t think that will become. In Mexico, in the wireless sector to increase prices, we don’t know. We have a lot of customers with — in postpaid with a contract. So if — when they finish the contract, we can do something, but we cannot do anything until they finish their contract.
We are putting in contract a lot of subscribers, but we still don’t think — at this time, we don’t think that we are going to increase prices. What we think is that we can give more to our customers to upgrade their plan right now. So it’s what we are working on and give more for more. So it’s the strategy that we are doing and what we are thinking for this year in Mexico.
Carlos Legarreta: And a follow-up, if I may, perhaps for Carlos. Let me, first of all, congratulations on the debt issue. And I was just wondering if you could do further ESG-related issues down the road so you can help lower your cost of financing…
Carlos Garcia Moreno: I think that we launched this program a few months ago, which is a Global Peso Notes. This is basically to be sold to both global investors and international investors. I think it’s got a lot of traction. We intend need to become a very, very lipid program, probably the best alternative to notes in Mexico. And yes, I think that we will continue the idea to bring the market 2 to 3 times a year, including the openings of the bonds. And I think that we will definitely be coming back to Mexico the international market with Peso Notes at least once more this year, if not to…
Operator: As a reminder, on the telephone. Our final question comes from Alexandros from GBM. Please go ahead.
Unidentified Analyst: A quick one. And I just want to understand on your free cash flow, the working capital during the last 3 years, you guys have taken close to $100 billion in working capital uses. I’m just wondering what’s happening on those accounts? What — which account is the reason? And how should we see working capital for MX in 2024 or perhaps going forward?
Carlos Garcia Moreno: No. I mean if you like we can review this separately, but I think generally, our working capital basically breaks even every year. It is very significant. So depending on what numbers you are looking at you might be looking at increases in working capital because it does increase significantly during the first 6 or 7 months of the year, and then it comes down later. So I think we have not had major increases or changes in working capital in the last few years.
Daniel Hajj Aboumrad: To add something on what Carlos is saying, what we have been doing and maybe increase a little bit the working capital is that we are financing a lot of the handset. So we are going and finance is a very good business. And what the customers, what they like is that they can buy a better handset or a 5G handset. So we are financing that and that increased a little. Our is a very good business. We finance them and that will be good.
Carlos Garcia Moreno: The other thing to note is if you start out with 2021, then a bad year because we reduced significantly CapEx in 2020 because of the pandemic. And that means that we didn’t really have accounts payable that we needed new accounts a — so we had an issue because we did have to increase working capital in ’21 as opposed to 2020 on account of….
Unidentified Analyst: Thank you, Carlos and Daniel…
Operator: As there are no additional questions waiting at this time, I’d like to turn the conference call back over to Mr. Daniel Hajj for closing remarks.
Daniel Hajj Aboumrad: I just want to thank everyone for being in the call, and thank you, Oscar, Daniela and Carlos. Thank you very much.
Operator: This concludes today’s conference call. You may now disconnect your lines.
