Marcelo Santos: No. Just on this, I mean, what about last year? Did you also increase in January and June? Was the same pattern of increase or just want to understand the seasonality here?
Christian Gebara: Yes. More or less, exactly the same months, more customer base now that we have that’s going to be impacted by the increase because our customer base increased.
Marcelo Santos: Thank you.
David Melcon: Hi, Marcelo. So, regarding the second question, as we say on our Vivo Day, the plan for 2024 is to reduce the intensity of CapEx. So last year, we closed the year with a CapEx intensity of 17.2%. The plan for this year is to reduce it versus last year. So, in the first quarter, you see that we are showing intensity of 13.8%, and the comparison with the previous year is that we are anticipating accelerating investment to maximize the return of this CapEx, between the year, for the next nine months. So, bear in mind that, that the revenue is coming from new businesses. They are not consuming CapEx. So at the end of the day, this is one of the key levers that we will use to make sure that this intensity continues reducing.
Marcelo Santos: Perfect. Thank you very much for both answers.
David Melcon: Thank you.
Christian Gebara: Thank you, Marcelo.
Operator: Next question from Marco Nardini with XP Investimentos.
Marco Nardini: Hello. Good morning, Christian, David and Vivo team. Thank you for taking my questions. So, the first one is a quick follow-up regarding fixed broadband from the last question. FTTH ARPU is growing consistently over the last few quarters. Can you comment here on churn, please? And regarding EBITDA margin, can you comment on the flattish performance year-over-year? And what can you expect from EBITDA margin performance for the next quarters, please? Thank you.
Christian Gebara: Marco, regarding the churn, we don’t give the number of churn. What we are giving you now is, like — and then I think it’s a good data, that it’s — we have 6.3 million FTTH customers. 1.5 million are in Vivo Total and is increasing quarter-over-quarter. If you look at what we had in the first quarter of last year, it was 0.7 million. So, we have doubled Vivo Total. And Vivo Total, the fiber churn is 1 percentage point lower of the standalone fiber. So, we have 25% more or less of our customer base already in Vivo Total, and more than 80% of the sales of Vivo fiber in our stores come with Vivo Total. So, we have a very strong positive trend of churn going down. So, that’s basically what I can share. And additionally to everything that I told Marcelo before, if you have any specific question about the what I told him, of course, I can contribute.
I think it’s important to see about the ARPU again. ARPU is driven by the speed. ARPU is driven by the servers that we are packaging together, and we started with OTTs, but we are adding now the smart home services. It’s not only selling devices. We’re going to start also offering other type of service like smart devices installation, and that’s going to also contribute to a high ARPU. I don’t know if I answered your question, Marco, regarding…
Marco Nardini: Yeah, that’s perfect.
Christian Gebara: And EBITDA, David will talk about it, but it’s important also, that we are — now we have more than 9% of our revenues coming from new businesses, as David said before. New business are driving many things up. It’s driving revenue up. It’s driving loyalty up. And that’s our strategy that we just defended, like, long time ago that we would do that in B2B and now we are doing that in B2C. And also our ability to have a more complete and broader offering to our customer base. When we have 113 million access in your customer base, your key objective is try to monetize as much as we can offer more services and advantage and benefits to these customers going beyond our core of just offering connectivity. So that’s our strategy.
These services that represent more than 9%, they don’t have CapEx. Most of them are CapEx light or CapEx zero. Our acquisition cost to sell these services, in some cases, is almost zero when I use my app, but they have a different EBITDA margin. So let’s discuss absolute evolution that is beyond inflation as we’ve been presenting the last quarters. And, of course, when you look to the margin, operating cash flow margin, the free cash flow margin, that’s going to be the key indicators driving our strategy going forward.
David Melcon: Yes. Hi, Marco. Just to complement, as Christian mentioned, we are keeping focus on activities to reduce our OpEx on digitalization and simplification. But regarding margin, we look at operating cash flow margin, as you can see now Slide 11 in our presentation, we have the highest operating cash flow margin, which is 23.6%. You can see the trend, which is the highest over the last couple of years. And here we are including [EBITDA] (ph), but also CapEx. So, we look at operating cash flow margin, and you can see the positive evolution that we expect this to continue.
Christian Gebara: Yes. Then, I’m going to look at the operating cash flow margin also. That’s why also I’m like, I think I find it interesting because our operating cash flow margin was in the first quarter ’23, 21%. Now we presented one that is 23.6%. And operating cash flow that is positive in R$3.4 billion. When you look to the free cash flow, our free cash flow yields 8.8%. Free cash flow over sales, 14%, and it’s positive in R$2.4 billion also. So, just — we discussed, like, revenue and EBITDA, but it’s also very good to pay attention in the cash flow generated by Vivo and the evolution over sales in the last quarters.
Marco Nardini: Perfect. Thank you very much, Christian and David. Super clear.
Christian Gebara: Thank you, Marco.
Operator: [Operator Instructions] Our next question comes from Vitor Tomita with Goldman Sachs.
Vitor Tomita: Hello. Good morning, all, and thanks for taking our questions. Two questions from my side. The first one is if you could give us an update on how you are seeing the competition price competition in the fiber business? And the second question from our side, as a follow-up to the discussion on upselling and prepaid to hybrid migration, do you — now that you seem to be focusing increasingly more on migrating within prepaid — within postpaid, do you believe that you are already close to reaching a ceiling in terms of how many prepaid customers can be migrated to hybrid or postpaid, considering customers’ profile and suitability to hybrid plans since they imply some credit risk, and I have to believe that a large portion of the remaining prepaid customers just will never be suitable for postpaid? Thank you.
