Telefônica Brasil S.A. (NYSE:VIV) Q4 2023 Earnings Call Transcript

So once we sell connectivity, we are the first one to be the technological partner of this customer to sell more things and in that level of digitalization of Brazilian companies is still very low. So on average, we say that 10% that these customers buy is digital service coming from Vivo. So there is a room for us to sell much more or try to concentrate they are purchased with Vivo instead of having it distributed among different players. So we are very positive. We’ve been showing numbers, double-digit growth quarter-over-quarter. We don’t see any different sign to continue to grow, although now we come from a base volume very high compared to what we had in the past. So here, B2B will grow in digital services. And also, we see good perspective in fiber and also other advanced connectivity that we see what we call data corporate data as one of the key core revenues for fixed and the growth that we presented this quarter and this year.

So here is also based in partnerships. We have our Telefonica Tech, that is a global company that we have replicated in Brazil that we have 3, 1 in cyber, 1 in cloud and 1 in IoT, big data, also other partners. There are companies like Cisco, Microsoft, among others, that also are partners and they see the advantage of combining forces with us once we have the knowledge of the customer and again, the commercial attractiveness and proximity that is needed to do this type of business. Regarding Auren, I think is a good point. In December 23 last year, we announced the creation of the joint venture with Auren Energy. And here the focus is in the commercialization of customized solutions, and renewable energy. In the whole country, Auren is a key player in renewable energy, and also in commercialization.

And again, they want to leverage on our scale and our relationship with customers and our digital penetration, to distribute capacity in the free energy market that we see in some segment of B2B. The market opened last year, is going to open more this year and hopefully, it’s going to open even more in the following years reaching the B2C, and we want to be positioned to that. So, I think when you connect your home or connect your office, again, the second thing that you may be worried about the energy that, we have, because there is saving here and also there is this approach, to have sustainable energy at home, or in the office. So we started with a pilot. It was very successful. Now we’re going to continue as the marketing is going to be opening up year-over-year and there is going to be more details in the future where the JV is going to be independent company, have its own brand and we are very positive, there is a lot of companies that we can reach more than 7,000 large companies, including factories, offices and commercial establishments that could be approached, by us and in the future even more if the market open up and again, considering that we believe the B2C will be a target in the future.

Carlos de Legarreta: Thank you for your comments.

Christian Gebara: Thank you.

Operator: Our next question comes from Felipe Cheng from Santander. Please, Mr. Cheng, your microphone is open.

Felipe Cheng: Good morning, Christian, Davi and João. Thank you so much for taking my questions. And congrats on the good fourth quarter results. Two on my side, if you could first comment on the churn levels, right, for the postpaid segment. We have been seeing a consistent improvement. So just wondering, what are the main drivers here for this improvement in churn which is at a historically low level? And what should we expect right for 2024, if there is more room for improvement in this sense? And my second question is related to price increases in mobile, if you could also make a comment on expectations for 2024, if you continue to see room for price increases above inflation? And what should the schedule look like, if price increases should mostly be concentrated in the first half or second half of the year? Thank you.

Christian Gebara: So Felipe, thank you for your question. Yes, you’re right, churn has been going down. If you look at end of 2019, we had 1.65%. If you look at the end of 2021, we had 1.3%. And now if you look at the end of ’23, we have 0.97%. Here, I think, is a reflection of the right strategy that we have to focus on customer rather than that just in product, although we have like the best network in 3G, 4G or 5G, we also are trying to combine more service to the same customers and also improving the experience that they have when they deal with Vivo. So that’s a reflection of the Vivo Total. As I said, more 5G together more postpaid together with fiber. Also the inclusion of value-added services that make it more attractive.