Usually, either you never get to where you — you’re missing it by a year, 1.5 years or you abandoned the project altogether. In this case, we’re really going to come like within months. And I tell the team, this is actually quite, quite magical.
Operator: Thank you, Vitor. Our next question go to Cesar Medina of Morgan Stanley. Cesar, please go ahead. Your line is open.
Cesar Medina: Thank you. The first question is regarding your guidance. You mentioned that there is now a little bit more variability on that on that target. Can you please maybe quantify what is the magnitude of potential viability and the direction of it over lever? And then second, regarding Panama, several moving parts in the sense that you have a very positive uplift for B2B. Is that sustainable? And then there is process in the country, plus the freight of the terror digital on that country.
Balan Nair: Sure. I’ll answer these questions, and then I’m going to ask Chris to jump in as well when I’m done. On the guidance, as Chris pointed out, there’s two things. One, this whole migration thing. We may end up spending more on handsets. We’re going to be very flexible on it. Right now, the reason we’re not changing guidance, we think we’re going to hit it. But there is a few things and we thought we are at like just keep everybody a heads up. One, the equipment and two, as Chris highlighted, in Panama, we have a very large B2B customer that at the end, a lot of the bills gets paid in the month of November and December. And we see light at the end of the tunnel, but we thought maybe we should highlight that. If that doesn’t come in, it will come in, in January.
It’s just a timing issue. And Chris will give you more color on that. In Panama, the business itself, the B2B business, that’s where a lot of the growth, a B2B business, there’s about two-third monthly recurring and one-third non-recurring revenue. And a lot of the non-recurring revenue comes in, in the third and fourth quarter. A lot of government contracts, large enterprise contracts, and we closed those deals usually in the second-half of the year and then we write it the following year. And every year, it’s kind of like the same cadence that way. And — but we feel fairly confident. It’s about a $300 million business to B2B. I don’t know if we break that segment, I’ll tell you, it’s about a $300 million B2B business. It’s about $100 million of NRR and our sales team there led by actually one of our best salesperson.
And we — that team delivers every year. So I’m not that worried about the variability of that business on the B2B segment. On the protest, it is what it is in Panama. It has impacted us a bit. Our shops have been — one of our key shops are because a number of other shops to foot traffic have dropped quite a bit. And as you know, in these regions, a lot of our sales happens at the retail level, and it happens at the door-to-door level as well. So a lot of these protests have kind of ramp in a little bit. But I did check on our sales. We go through our sales numbers every week. And sales — while it slowed down our backlog installs have been increasing. So as soon as this process is done, the installs gets out there and we should recover. So it’s a temporary blip with the protest.
I don’t expect much of much of a hit to us financially. With that, I’ll pass to Chris.
Christopher Noyes: Yes. Maybe just a little bit of color as the potential headwind we would see, in particular around the delay in the migration, there’s kind of two key points. One is the inventory since we have both our new stack, which is getting up and running and then we have the AT&T platform. We basically have double handset inventory than one would normally carry going into the holiday season. And then second, we have obviously monthly TSA costs and additional costs related to the migration. I mean, I would say just conceptually, the headwind around that would be greater than sort of $30 million on the free cash flow side. But we are working hard driving our businesses across the group to continue to produce and strive to meet our target that we had given at the start of the year.
Cesar Medina: Thanks, Chris.
Balan Nair: Thank you. Very careful, [Indiscernible]. Sorry we’ve missed that.
Operator: Thank you. Our next question goes to Soomit Datta of New Street Research. Soomit, please go ahead. Your line is open.
Soomit Datta: Hi, Balan and Chris. Thanks for the call. Yes, a couple, please. And then also, I don’t think we got an answer on the Puerto Rico mobile competition. I’d be interested if you could set back on that. So I mean, that was a previous question. But just first of all, on — just thinking about free cash flow, looking into next year, I think, Balan, you mentioned the 70 million of synergies in Puerto Rico is still intact. But as we look forward, should we think about those synergies layering in from here as well as some of the kind of extra costs we’ve seen at the moment falling away? So is the uplift kind of 70 million plus a little bit more? And then secondly, as well kind of looping into the same theme, how much of the synergies are now coming through in Panama?
So how much more can we think about coming in from that market as well. Just trying to get a feel for what sort of cash flow uplift we can think about on a run rate basis once this integration process is completed, please? That’s the first question. I’ll maybe come back in a second.
Balan Nair: Sure. I’ll come back to the PR mobile. But on the free cash flow, I don’t anticipate us changing our synergy guidance on Costa Rico. It would be about $70 million annualized. Clearly, next year because of the bleed in cost will probably not to the full $70 million next year. In Panama, the incremental synergies is not that significant anymore going forward. So you’ll see the synergies that we’ve captured a lot this year. And next year, there’s an incremental — I’m going to try the number like $5 million or so, probably that won’t exceed $10 million next year, over and above what we’ve captured this year. That’s the number in the top my head from my last reviews. On Puerto Rico Mobile?
