Millicom International Cellular S.A. (NASDAQ:TIGO) Q4 2025 Earnings Call Transcript

Millicom International Cellular S.A. (NASDAQ:TIGO) Q4 2025 Earnings Call Transcript February 26, 2026

Millicom International Cellular S.A. beats earnings expectations. Reported EPS is $1.5, expectations were $1.05.

Luca Pfeifer: Hello, everyone, and welcome to our fourth quarter 2025 results call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez; and Bart Vanhaeren, CFO of the company. The slides for today’s presentation are available on our website, along with the earnings release and our financial statements. Now please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties, which could have a material impact on our results. On Slide 3, we define the non-IFRS metrics that we will reference throughout this presentation, and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO, Marcelo Benitez. Marcelo?

Marcelo Benitez: Thank you, Luca, and good day to everyone. We closed 2025 with strong operational and financial performance and a clear top line acceleration. During the year, we successfully integrated Ecuador and Uruguay, expanding to 11 countries. This footprint diversifies our revenue base and supported robust sustainable free cash flow generation going forward. Two weeks ago, alongside NJJ, we expanded further to Chile, our 12 markets, which we will address further in the sections that follow. In addition to the expansion to Chile, we have moved quickly to stabilize and integrate the newly acquired business in Uruguay and Ecuador. On the first day of the acquisition, we appointed a new General Manager, a new CFO and a new CTO.

Within the first week, we redesigned the executive team and their direct reports. And within the first month, we applied our playbook with discipline, including 30% reduction in headcount. I’m pleased to share that today, we already consider these operations business as usual, reflecting the speed and effectiveness of our integration approach. Turning to our operations. Our pre-to-post strategy continues to deliver. We added more than 200,000 postpaid customers in the quarter and 1.8 million customers if we include Ecuador and Uruguay. This is not just growth. It’s a structural upgrade of our postpaid base. We also made meaningful progress in Home, adding 40,000 net new homes, reinforcing our ambition to be a full mobile and fixed operator across the region.

Financially, execution translated into results. Adjusted EBITDA reached $778 million for the year. EBITDA margin stood at a strong 47%. We delivered $278 million of equity free cash flow in Q4, taking full year eFCF to $916 million or $864 million, excluding tower sales proceeds. This performance exceeded our guidance even after absorbing onetime impact such as DOJ and other legal settlements. As we close 2025, I want to recognize our Tigo team. Thank you for an exceptional year. This was not easy. We integrated new markets, accelerated growth, strengthened cash flow, all while maintaining financial discipline. This combination only happens with focus, teamwork and ownership across the organization. Because of your work, we entered 2026 stronger, more diversified and with a real momentum.

Thank you. Now let’s move to our Mobile business. The engine is strengthening, and Mobile delivered another strong quarter. Service revenue totaled $954 million, including $112 million from Ecuador and Uruguay. Excluding perimeter effects, mobile service revenue grew 5.7% or $43 million year-over-year, a clear acceleration. This performance reflects disciplined execution across 3 core strategies: network investment. We continue to deliver the best connectivity experience through a disciplined deleveraging strategy and highly granular return-focused CapEx allocation. Our investments are targeted where they create measurable impact to customers and drive long-term value. Second, pre- to post migration. Postpaid customers reached 9.1 million, up 12.6% year-over-year when excluding the perimeter expansion.

Q&A Session

Only 22% of our 49 million customers are postpaid. The runway remains long. Third, prepaid base management. Revenue grew 3%. We are preserving scale through strong commercial execution and increasing ARPU with a simple, easy-to-understand more-for-more value proposition. Now let’s move to our Home business. During the quarter, we added 40,000 home customers, and our Home customer base increased 5.1% year-over-year. We are focused on expanding high-speed broadband to low penetrated areas while accelerated fixed mobile convergence, which delivers materially lower churn versus non-FMC customers. As a result, Home service revenues declined a marginal 0.3% year-over-year, marking a second consecutive quarter of essentially flat performance. Given our ongoing commercial efforts and simplified pricing strategy, we are confident in a return to home revenue growth in 2026.

Next, I will review our B2B business. Digital service revenues increased 40.7% year-over-year to $79 million in the quarter, excluding the perimeter expansion. This growth reflects a combination of onetime government projects in Colombia and Panama, alongside strong underlying momentum in our digital portfolio. Beyond digital, we continue to see solid performance across the broader B2B segment. Mobile service revenues growth in B2B was 7%, while the SME segment is accelerating, reaching 5% growth after starting the year with low single-digit growth. Overall, this demonstrates improving execution, stronger commercial traction and increasing relevance of our digital solutions across enterprise customers. Let’s turn to Guatemala, our best-in-class operation.

Postpaid grew 20% year-over-year. Mobile service revenue increased 5.9%. Operating cash flow grew over 17% in the quarter. Full year operating cash flow reached a record of $791 million. Even from a leadership position, the team continues to excel in performance, outstanding execution. Congratulations to the Guatemala team. Colombia is another clear success story. We delivered strong results across all business lines with postpaid mobile and home customer bases, both expanding 10% year-on-year. Our value proposition of best-in-class mobile coverage and broadband speeds continue to drive share gains and monetization. In line with this momentum, service revenue growth increased 6.9% year-on-year and adjusted EBITDA reached a record quarterly margin of 44%.

This is a remarkable outcome given the fragmented nature of the Colombian telecom market. My thanks go to the Colombia team for delivering such strong results. As recently announced, we have acquired EPM 50% stake in Tigo UNE and now own 100% of our Colombia operation. With full ownership, we are well positioned to consolidate our market presence and further optimize our operations. This also places us in an excellent position to begin the integration of Coltel, a strategic initiative on which I will share more in a moment. Turning to Panama. We see encouraging signs of top line acceleration. Our postpaid customer base expanded 14.6% year-on-year and mobile service revenue grew 4.5% year-on-year, reaching $84 million in the quarter. On the right side of the slide, you will note that adjusted EBITDA reached $94 million or 49.8%, primarily due to several onetime items that impacted Q4 profitability.

Panama remains in our Club 50 in full year performance, and we are confident that they will remain so in 2026. Before handling the call over to Bart, let me update you on our key strategic projects. As noted earlier, our Colombia operation is performing at its best, setting a strong foundation for market consolidation. As announced in February 5, we acquired 2/3 stake of Coltel from Telefonica, gaining operational control. Our management teams are already on the ground, taking initial steps to strengthen the business. Regarding the 33% stake from La Nacion, as you know, there is a formal privatization process with a time line that sets the potential closing of the transaction for La Nacion stake in April 2026. On February 10, we announced a transaction with NJJ to acquire Telefonica operations in Chile, a strategically important balance sheet protected move for Millicom.

Together with NJJ, we are acquiring 100% of Telefonica stake in its Chilean business through a joint venture vehicle with NJJ acquiring 51% and Millicom, the remaining 49%. The upfront payment is $50 million. Telefonica may receive up to $150 million in earn-out considerations, fully funded by the acquired company’s own cash. None of the transactions obligations, including existing debt, are recourse to Millicom. At closing, Telefonica also contributed approximately $92 million to ensure balance sheet stability. This structure allows us to strengthen the business from day 1 and provides a clear path to full ownership. In years 5 and 6, we have the option to acquire NJJ’s stake at a valuation based on Millicom trading multiples less a 10% discount.

If we do not exercise, NJJ can acquire our stake on the same terms. This creates a meaningful long-term upside with limited upfront risk. Chile is a sophisticated market with clear operational upside. Applying our proven playbook, we see a path to stabilization and performance improvement. This transaction expands our South America presence while preserving flexibility and leverage discipline. With that, let me turn the call over to Bart.

Bart Vanhaeren: Thank you, Marcelo. Let’s now take a deeper look at our financial performance for the quarter and the full year. Service revenues for the quarter reached $1.55 billion, up 15.9% year-on-year. Excluding $131 million contributions from our newly acquired operations in Ecuador and Uruguay, service revenues increased 5.2% year-on-year organically. We are very pleased with this performance. It’s a direct result of our strategy, delivering the best network experience, maintaining a commercial focus on the pre to post migration and fixed mobile convergence. These efforts continue to reduce churn and support healthy ARPU expansion. At the same time, a little word of caution. We have $16 million in B2B government projects in Panama and Colombia, boosting revenues this quarter but are not necessarily recurring in nature.

Adjusted EBITDA for the quarter increased 25.9% year-on-year, reaching $778 million, representing an EBITDA margin of 47.1%. Here again, Ecuador and Uruguay contributed meaningfully, adding approximately $45 million to adjusted EBITDA. Excluding this effect, adjusted EBITDA still grew 18% year-on-year to $732 million. Three key factors drove this robust year-on-year improvement. One, outstanding operational performance, particularly in Colombia, Guatemala and Paraguay; two, relentless focus on margin enhancement, both in our local operations and across HQ expenditures. three, positive FX impacts, which for the first time in 2025 supported EBITDA growth. Finally, equity free cash flow grew $139 million or 17.9% over the last 12 months, reaching $916 million.

Excluding infrastructure sales, we reached $864 million equity free cash flow this year, which is a number we measure ourselves against. As Marcelo highlighted earlier, we are proud to have exceeded both our own guidance and market expectations despite currency headwinds for much of the year, particularly in Bolivia alongside $118 million DOJ settlement and other cleanups as disclosed in our Q3 results. With favorable currency evolution, including in Bolivia, this positions us very well for the entry point of 2026. Let me now turn to service revenue performance by country. I will briefly reference Guatemala, Colombia and Panama, as Marcelo already addressed the main dynamics. Guatemala delivered solid growth with stable market share in our strongest market.

Colombia, exceptional commercial execution and favorable FX tailwinds produced an outstanding year with Home business now contributing to growth. We are excited and ready to execute on the upcoming in-market consolidation opportunity. Panama returned to solid growth, up 4.9% year-on-year, supported by an expanding postpaid base as well as some one-off governmental projects mentioned earlier. Paraguay, revenue growth was flat year-on-year in constant currency but reached $154 million for the quarter in real USD. Underlying, though, we have real growth driven by postpaid subscriber growth and ARPU increases, which were offset by one-offs that benefited Q4 2024, without which we would have seen a 2% organic growth. Bolivia service revenue returned to triple-digit territory for the first time in 2025, up 5.5% year-on-year to $105 million.

The Boliviano has strengthened significantly since the elections and shows signs of stabilization in Q4 of this year. We are now converting Bolivianos to USD around 9 Boliviano per USD. In the other countries, which includes Ecuador and Uruguay for this quarter, in addition to Costa Rica, Nicaragua and El Salvador grew 6% organically or 69%, including inorganic growth. Let’s now turn to the next slide, reviewing EBITDA. As highlighted in my opening remarks, we are very pleased with the strong profitability delivered this quarter with group adjusted EBITDA reaching a robust margin of 47.1%, including below average margins coming from Ecuador and Uruguay that include restructuring costs. As shown on Slide 16, all of our major operations contributed to this performance, each delivering meaningful year-over-year margin expansion.

Let’s now review the performance of each country in more detail. Our strongest operation, Guatemala, reached $241 million in adjusted EBITDA for the quarter, up 11.3% year-on-year in local currency, driven by improved revenue performance, particularly in postpaid and continued disciplined cost control. Colombia delivered another exceptional quarter with adjusted EBITDA reaching a record $174 million, up 24.6% year-on-year. Strong postpaid ARPU and disciplined cost management leave this operation in an excellent shape as we assume control of Coltel. Two points of attention here. One, we expect the margin to come down in Q1 due to material increase in minimum wages by the government; and two, although having control over Coltel, we expect to run the company a couple of months independently until we buy out the government.

This is expected for April, assuming the time lines of the privatization process doesn’t change. In Panama, adjusted EBITDA grew 4.5% year-on-year, reaching $94 million, benefiting from the revenue momentum mentioned earlier. Paraguay reported another strong quarter with adjusted EBITDA up 11.8% in local currency to $83 million and a margin of 52.1% we are encouraged by this margin expansion as we keep costs in check while our customer base continues to grow. In Bolivia, FX rates stabilized during the fourth quarter, combined with disciplined ARPU growth and strong cost control, leading to a margin of 53%. This places Bolivia as our newest and sixth member of our Club 50, which is our countries with an EBITDA margin above 50%. Congratulations to the team for this outstanding result.

And as Marcelo says, a very exclusive club where you can get in but never get out. Turning to other countries. Excluding the new operations in Uruguay and Ecuador, adjusted EBITDA in Nicaragua, El Salvador and Costa Rica increased 13.1% to $106 million. The new operations contributed $45 million to our EBITDA even as we began initial headcount-related efficiency programs. In Q3, we told you that we focused on solving a lot of the corporate matters with settlements with DOJ, Telefonica, getting our 2026 budget so that in Q4, we could concentrate on the business, the entry point of 2026 and the integration of Uruguay and Ecuador. As Marcelo mentioned in his opening remarks, we hit the ground running and captured efficiencies from day 1. Are there more low-hanging fruit compared to other countries?

Sure. But I was just looking at preliminary unaudited adjusted EBITDA numbers for January and was very pleased to see both countries already achieving mid-40s adjusted EBITDA margin levels. Let’s now turn to Slide 17 for a review of our fourth quarter equity free cash flow. We began the quarter with strong operational momentum, resulting in a $163 million year-over-year uplift in adjusted EBITDA. This was the single largest contributor to our equity free cash flow expansion for the period. Working capital and other payments decreased by $94 million year-on-year, largely driven by $180 million DOJ settlement we disclosed during our Q3 results in November. This extraordinary impact was partially offset by favorable timing in payables. Taxes paid increased $33 million consistent with higher profitability across the group and the settlement of certain tax litigations during the quarter.

As expected, lease payments increased $48 million year-on-year, reflecting the full quarter impact of our tower sale and leaseback transaction as well as the incremental leases from our newly acquired operations in Ecuador and Uruguay. Finally, we recorded a $30 million increase in repatriation from our joint venture in Honduras following the infrastructure transaction. Putting all these items together, equity free cash flow increased by $42 million year-on-year, reaching $278 million. Now please turn to the next slide for a look at our equity free cash flow and leverage for the full year 2025. I won’t go over each of these points individually, and I will simply highlight that most of the improvement came from a mix of higher EBITDA for $284 million, lower spectrum charges for $63 million and about $74 million in finance charges.

These effects were partly offset by an increase in taxes paid of $96 million that included settlements, cash CapEx increase of $82 million and working capital and other charges of $75 million. In summary, for the year, equity free cash flow increased $139 million to $916 million or $864 million, excluding Lati, our strongest performance to date. Let me now walk you through the net debt bridge and resulting leverage at year-end. We began the quarter with $4.6 billion in net debt, corresponding to 2.09 leverage as disclosed in Q3. We generated $278 million equity free cash flow in the quarter, and we received the cash proceeds of $236 million from tower sales executed at the end of Q3. During the quarter, we distributed $0.75 per share in ordinary dividends and $1.25 per share in extraordinary dividends tied to the tower sale proceeds.

In total, we distributed $334 million to our shareholders, increasing leverage by 0.14. Adding the operations of Ecuador and Uruguay increased our leverage by approximately 0.35. Bringing these factors together, quarter end leverage was 2.31, comfortably below our target of below 2.5. even after absorbing the additional perimeter. This is a remarkable achievement. Lastly, on a pro forma basis, including last 12 months adjusted EBITDA from Uruguay and Ecuador, leverage would have been 2.17. This reinforces our confidence that we will reduce leverage further as we enhance profitability in the acquired operations. Let’s now have a look at our financial targets. We are extremely proud of our 2025 results, which reflect both operational excellence and disciplined financial management.

Our regional footprint continues to provide important diversification benefits, enabling us to offset volatility in individual markets, such as the FX devaluation in Bolivia this year through the performance of the broader portfolio. That said, we operate in Latin America, a region known for macro volatility, and we must factor in stabilization needs of Ecuador, Uruguay and the Coltel acquisition in Colombia. For 2026, we project an equity free cash flow of at least $900 million. Regarding leverage, we expect our leverage to increase a bit on the back of the different acquisitions in Colombia. We had about $570 million for the 50% stake in Tigo Colombia acquired from EPM. This is about $170 million more than anticipated due to FX, with about $220 million from the acquisitions of Telefonica shares in Coltel, and we expect another $220 million from the acquisition of La Nacion shares in Coltel.

With all that, we see our leverage increase a little more than anticipated in the first half of 2026. But then in the second half of the year, we expect to bring leverage down again to around 2.5 by year-end to then land within our guided range of 2.0 to 2.5 in 2027. With that, let me turn the call back to Luca.

Luca Pfeifer: We’ll now begin our question-and-answer session. As a reminder, if you would like to ask a question, please let us know by e-mailing us at investors@millicom.com and we will add you to the queue. Our first question of the day comes from Leonardo Olmos from UBS. I think Leonardo has some technological issues. Since Leonardo has been able to ask his question, please continue with Livea Mizobata from JPMorgan. Leonardo?

Leonardo Olmos: So 2 on our end. So the first one, regarding the acquisition of the operations in Chile, I just wanted to know your view on the current competitive environment and how you assess the operational and balance sheet conditions of the asset that you bought from Telefonica. That’s the first one. And the second one, just a quick — maybe more color on what is embedded in this equity free cash flow guidance for this year, especially regarding the impacts from the ongoing integrations.

Marcelo Benitez: I will take the first one, Leonardo, and I will let Bart answer the second one. First of all, it’s a luxury for us to be in Chile. Chile has a very strong macroeconomics, dollar stability — currency stability and also it’s an investment-grade country. So we do believe in the long-term prospect of Chile. If we go to the competitive environment, yes, it is a very fragmented market. We are nevertheless #1 in Home subscribers and our position in Mobile is #2. So we do believe that there is we can forecast long-term or midterm market consolidation but that is not the main reason why we got in Chile. Our playbook fits very well to the Chilean operation, and we are getting very good at executing it. In just 2 weeks, we appointed a new CEO, a new CTO and a new CFO.

Then we — in the first week, we appointed the [indiscernible]. And as we speak today, we are executing the downsize of the Chilean operation. So despite the fact that we are losing money every day in Chile today, we do think we can bring the operation this year to equity free cash flow neutral and from then, start looking and receiving the benefits of a new run rate with a new operating model. So that will be Chile. Bart?

Bart Vanhaeren: For the equity free cash flow, Leonardo [indiscernible]. So we have, on an organic basis, $864 million equity free cash flow, right? So many people will add the $180 million for the DOJ that is embedded in those costs, $980 million, right, the 2 combined. And then going into 2026, we have Uruguay and Ecuador contributing a little bit to the equity free cash flow starting in the year. You can estimate low to mid-double-digit equity free cash flow from the 2 countries combined. So with that, you get to $1 billion starting the year but then you have to put a number of risks next year. The big one is Coltel. And also we did acquire Coltel now just a couple of weeks ago, which is on a negative run rate equity free cash flow, right?

So we know how to turn around that business. We have done it in Colombia with our own Tigo business. But then you also have the restructuring costs and the acquisition that — so all that together should be close to zero but there are risk on the execution if you go into the negatives. Besides Coltel, you get currency risk and macro risk in Lat Am, it’s inherent to our region. Look where we started the year, where we are now, it’s — the good thing is we have now a platform that is diversified and can weather some storms. But it’s risk that we need to take into account political risk, tax risk, legal risk but also upsides. We’re starting the year with a very favorable currency. Will it sustain during the year? We don’t know, but it’s a good start, and then we could have extra growth.

So all that together is how we get to this $900 million balanced view on equity free cash flow for 2026. Maybe in the same trend, we’re not giving guidance beyond 2026, if you look in the medium term, we do hope that Uruguay, Ecuador and Colombia will align to the average equity free cash flow to revenue and profitability, which is this year around 15%. And so in run rate, that’s why they all should converge to. That’s our ambition, right? So on the $2.2 billion acquired revenue, 15% equity free cash flow would be a good ambition to have.

Leonardo Olmos: Just a quick follow-up, if I may. You mentioned the equity cash flow impact expected for Colombia — from Coltel, I’m sorry. What about the operations in Uruguay and Ecuador, if you could comment on that.

Bart Vanhaeren: I mentioned at the beginning. So for 2026, low to mid-double-digit equity free cash flow.

Operator: Thank you. Our next question comes from Livea Mizobata from JPMorgan. Livea?

Livea Mizobata: So I have 2 topics that I would like to explore. The first one is, of course, margins. You have had consistently raising margins, have been consistently raising margins. And I feel like fourth quarter was like remarkable on that front. So congrats on that. The first thing that comes into our mind is how sustainable is that? And particularly, I would like to touch upon some operations. So the first one is Colombian operation. This has been particularly strong. So it was way above our expectations. And what we would like to know is like what have been done in this operation, particularly this quarter and what we can expect in 2026, given the deal process? And I would also like to know a little bit about your expectations for Ecuador and Uruguay, if the fourth quarter level is a good proxy for 2026.

And then the second topic that I would like to ask you about is M&A, of course. So 2025 was an intense year. Something that we often receive as a question from investors is if Tigo would be willing to go to new countries and the ones that they always ask us about is particularly Brazil, Mexico, Venezuela and even Argentina now. So can you comment a little bit about your appetite for acquisitions? How are you thinking about capital allocation for this year given the recent moves?

Marcelo Benitez: Thank you, Livea, for your questions, and thanks for your kind comments about our results. I will start with the margins question. So basically, the margins increase or expansion that we see that is consistent during the quarters has to do with 2 things. Number one is because our efficiencies programs are not onetime. These are part of our operating business. Still, we review every purchase order from $1. Still, we challenge each and — every and each new contract. So our battle is against the inertia, and that’s how we operate on a day-to-day basis. We can add that now — we can add to that now the top line growth. As you can — as you — maybe you recall, we started the year with 0 top line growth, and we ended the year around 5%, a bit more than 5% growth.

So that is bringing us more scale and also that scale is translated in a better operating leverage. If I — when going to Colombia, when we talk about margins in Colombia, it’s more or less the same story but in a larger volume. We are growing our mobile base and our home base by 10% year-over-year. So this expansion of our top line — our customer base and top line growth is bringing us new scale, combined with the efficiency program that I already mentioned is what is translating into better margins. Where do we see Colombia is this sustainable and increasing in the future? The answer is yes. Of course, during the merger, you have some — you need to transition through the integration and that brings some extra cost. But there is no reason why in Colombia, we cannot — that Colombia cannot be part of our Club 50.

And finally, Ecuador and Uruguay, we already are operating Ecuador and Uruguay as business as usual, and we already did a lot of the efficiencies that we call the efficiencies Phase 1, the one that we need to do the first 60, 90 days. We already did that last year. We start — we took these operations with around 30% margin. We are above 40% already in these 2 countries. So we do believe this is absolutely sustainable. There is still a lot to do in the Phase 2 of these efficiency programs, and we should start looking at top line growth at the end of this year. So in 2027, we will have the full benefit of our playbook. But the Phase 1 that has to do with efficiency, we are looking at it right now.

Bart Vanhaeren: And I think on the back of what Marcelo said, you see that quarter-on-quarter, the growth has been accelerating. So hence as well the operational leverage that comes from that through the margins down to the equity free cash flow. If we look at the M&A, so bigger picture, right, what’s our M&A strategy? What are we looking at? Now first of all, we’re focused on turning around the businesses that we acquired, right? So it went really quick. In Q4, we already did Uruguay and Ecuador, as Marcelo said, they’re now on run rate in business as usual. We have now Coltel and Chile to deal with. So that’s our main priority. If we look at the M&A strategy, first has always been in-market consolidation, right? And over the last few years, we did Panama, Nicaragua and now Colombia.

And many of our markets are not 2-player markets with not a lot of immediate consolidation targets in the remaining. There are still 3 or 4 players in Costa Rica, but has been difficult to do something as our last transaction got canceled. Salvador, Paraguay and Uruguay, which are still 3 or 4 player markets. Adjacent markets, right? So we did Uruguay, Ecuador and now Chile. And what are the main sizable markets that remain would be Venezuela and Peru, basically, right, on the continent. I’m deliberately excluding Mexico and Brazil. It’s not market for us. It’s too big, too complicated. It’s not something that we have immediately on the radar to enter. And as well Argentina, where the dice are already thrown, right? So the M&A already happened last year.

There’s nothing to go and do there. So the focus on adjacencies would then be mainly Peru and Venezuela should they when they come to the market. And then obviously, minorities. We did already Guatemala. We did already Panama. We did now Colombia. So what is remaining is Honduras. In Honduras, I kind of like to have a partner. It hedges us a little bit against the currency. Honduras, the lempira is one of our most volatile currencies this year next to the Boliviano. And then in Chile, we just did a JV. So we’re thinking there more longer term. As you know, we have this option in year 5 and 6. So that’s more a longer-term discussion to have.

Livea Mizobata: That’s very clear. And just back on the point of margins, I think soon we will stop discussing the 50 clubs and it will be the 60 clubs, right? Like from the level that you are delivering, this is totally achievable, I guess. Let’s see.

Luca Pfeifer: Thank you, Livea. The next question comes from Andreas Joelsson. I see he just dropped. Maybe let’s give him another second if he reconnects. There he is. So next question from Andreas Joelsson from DNB. We cannot hear you, Andreas. Let’s see. No, we — unfortunately, we don’t have any audio on your side, Andreas. Maybe let’s give it another try later on. If we can then continue with Phani Kanumuri from HSBC, please.

Phani Kumar Kanumuri: So my questions are on your shareholder remuneration. How are you looking at it in the light of the acquisition charges that you have? The second one is on Guatemala. We are seeing a strong increase in subscribers as well as accelerating revenue growth. What is driving that? Are you able to increase the prices in Guatemala in specific? And probably the third question is on the appetite for postpaid in your region. I mean the countries that you operate in are still very highly prepaid. So what is driving the increase and upgrade to postpaid in these regions? So those are the 3 questions.

Bart Vanhaeren: You take the second one. Sorry, first question revenue growth, appetite for postpaid.

Marcelo Benitez: I can take that and you take the dividend. So Revenue growth in Guatemala was the first question, Phani. Guatemala is our most, I would say, it’s the example we have of excellent execution, brilliant execution. Guatemala started the process of pushing customers from prepaid to postpaid. They are growing that at a 20% month-over-month. They have only 12% of postpaid customers over the total customers. So the run rate — the opportunity to expand is big. The other dimension is we invested in the network. So we have a very, very strong mobile network in Guatemala. And also, we expanded coverage. We have more than 200 sites with a vision of having at least 500 aggregated new sites in Guatemala. And finally, there is a very, very sharp base management in prepaid.

So prepaid for the first time, we are being able to increase ARPU by increasing allowances and the size of the ticket. So in that combination, yes, the foundation is a solid network with a very granular dimensioning and way to allocate CapEx, migration from prepaid to postpaid at a rate of 20% quarter-over-quarter. And finally, prepaid base management. And this is brilliant execution from the Guatemala team. And congrats again, Guatemala. You are our north in terms of how to operate and become and open the Club 60 in the very near future. What is behind the migration from prepaid to postpaid? And this is very simple to understand, Phani, when you think — when you see that the prepaid customer is only connected 15 days per month. Who wants to be connected only 15 days per month?

So what are the drivers that makes this migration to accelerate in the group, I would say, in all the operations and has to do, number one, with the network investment and with this granular view on where to put the money is where the demand is. Number two, has to do with a very simple migration process, and that has 2 key elements. One is a very simple value proposition. We have no more than 3 to 4 plans to migrate prepaid customers to postpaid customers. And the second part is it has to be easy. Now you can migrate from your phone from prepaid to postpaid with 2 clicks. That’s it. We are already profiled you. We already know that you are — you have — I mean, you are using — your demand for data is higher than the allowance that the prepaid gives you.

So they just need to put their names, names, some data and then you are activated. So these are the things that are making this migration a machinery to increase customer satisfaction, more days connected and more ARPU. So Bart on dividends?

Bart Vanhaeren: Yes. So we are not giving guidance on dividends. So that’s maybe an unfortunate question. But let me give some color on how we’re thinking about this. I think I mentioned before that I’d like to distribute 2/3 of the equity free cash flow to shareholders. In 2025, this has been in the form of dividends and extraordinary dividends. And so yes, we go from $750 million guidance to $900 million guidance equity free cash flow. There is 20% uplift. But at the same time, I’m also triangulating with our net debt, right? And so on the back of these acquisitions, we’re going to appear through temporarily through this 2.5x leverage. So ideally, I want to see the leverage come down again before really touching too much on the dividend.

So sustain yes, grow is the question. So sustain yes, grow maybe. So give us a few more weeks until we get better views on the risk regarding to Coltel, how do we land, how do we executing against the current guidance? And then within our Q1 results, we’ll give more color. There will also be around the time we have to call for the AGM. And so it will be more clearer in a few more weeks. So a little bit of patience on that.

Luca Pfeifer: Thank you very much, Phani. Let’s see if we can give Andreas another shot on his questions. If the audio doesn’t work, I believe I have a good idea…

Andreas Joelsson: Yes, we test. Can you hear me?

Luca Pfeifer: Yes, loud and clear.

Andreas Joelsson: Perfect. Two quite easy questions from my side. First of all, how much restructuring are you planning to do in 2026 in terms of costs? And secondly, if you can explain a little bit the quite good growth — sequential growth in mobile ARPU during the quarter. I guess there is some FX element, but also there must be something else underlying. So it would be interesting to hear that and your thoughts on that going forward as well.

Marcelo Benitez: Thank you, Andreas, for your question. I will take the second one, and Bart will take the first one. So on the second one, what’s behind the ARPU increase? 50% of the ARPU increase comes from the positive or the currency appreciation of our countries. 50% of that comes from 2 things. One is pre to post migrations. So that is an uplift of ARPU more or less of 50% and ARPU price increases in prepaid through a very simple value proposition of more for more and give you more days connected or more allowances for a higher ticket. So those are the 2 things that organically are making the ARPU growth.

Bart Vanhaeren: Yes. Regarding the restructuring costs, so far in Uruguay and Ecuador combined, we did about $20 million in 2025, and that then mostly relates to ERC restructuring. In 2026, I’m then looking more towards Coltel rather than Uruguay and Ecuador. And there, we probably are looking towards — with all the restructuring that needs to be done there, more towards a triple-digit number to really to get the business back to a run rate that we are used to.

Andreas Joelsson: Perfect. And just a follow-up on the ARPU. That growth that you related to, was that sequential or year-on-year?

Marcelo Benitez: No, no. The growth is year-on-year. But also, you can see a sequential growth quarter-over-quarter but it’s not 5%, 4.7%, I think it’s ARPU growth.

Luca Pfeifer: Thank you very much, Andreas. And our final question of the day will come from Eduardo Nieto from JPMorgan.

Eduardo Nieto Leal: Just a quick one from my side. Thinking about the pending payments for M&A, it seems like most of it will be 1Q but I’m just curious where you see leverage peaking this year? And at what level kind of related to the question that Phani asked, at what level would you be comfortable stopping dividend payments if leverage gets a little bit higher than you would expect?

Bart Vanhaeren: So payments on M&A. So Q4, we did Ecuador and Uruguay done, right? In Q1, we have the $570 million from the purchase of the EPM held shares in our Tigo operation. And we also have $220 million out of which about $60 million is deferred for the acquisition of the Telefonica shares in Coltel. So that’s all done in Q1. And then as you saw, the minimum price in the privatization process done by La Nacion for their stake in Coltel is also about $220 million and that we expect in Q4, okay? Remember that we also have extraordinary dividends coming into Q4 of another $1.25 per share, which was part of the $2.50 that was announced last year payable in October and [indiscernible] 50%. So with that, yes, our leverage is going to increase in the first half of the year.

So we’re going to pierce through that 2.5x leverage. But then in line with the guidance, we hope by end of the year to be back around 2.5. And then in 2027, again, comfortably within the 2.0 to 2.5 range, in line with our policy. cutting dividend is not on the radar at all. We’ve been quite accurate with our forecasting. So at this moment, it’s not even on the table. We’re looking at sustaining it and potentially growing over time as our leverage comes back below the 2.5.

Eduardo Nieto Leal: Got it. And just maybe a quick follow-up. You asked, is there a level at which leverage would make you uncomfortable as CFO here?

Bart Vanhaeren: Well, any leverage makes me uncomfortable if you ask me but not uncomfortable but you want to have a strong balance sheet to be able to do things. And we have now been able to do things, thanks to our strong balance sheet. We add 4 operations in 1 year and also Uruguay, Ecuador, Colombia. And as you saw, we did some structuring around Chile exactly to protect the balance sheet. Do I believe we’re going to do really good in Chile? Yes, absolutely. But I also don’t want to bet the house on that. And so we said, okay, let’s put a nonrecourse structure, 49%, we don’t consolidate, let us do our work. And hopefully, we’re talking about upsides in the future and not about risks on the balance sheet. So I think we’re at the leverage where we feel comfortable, including the Coltel acquisition. And from there, I want to see deleveraging before doing other stuff on balance sheet.

Luca Pfeifer: Thank you very much, Eduardo. That was our final question for today and concludes the question-and-answer session. Thank you so much for your time and for connecting, and we see you all for our first quarter results in May.

Marcelo Benitez: Thank you.