Daniel Federle

Daniel Federle asked about the importance of a convergence operation for a telco in Brazil, specifically highlighting Vivo Total's success and its role in the overall strategy. He also requested more information on the company's expectations for AI as a source of cost savings in the upcoming years.

Answer

Christian Gebara, CEO of Telefônica Brasil, emphasized that convergence has always been Vivo's focus, citing that 62.7% of FTTH customers are convergent, with 43.2% on Vivo Total. He explained that Vivo Total increases customer switching costs, fosters closer relationships, and enables better monetization through cross-selling digital services, leading to lower churn rates for convergent customers. He noted that 84% of in-store fiber sales are Vivo Total, with a gross ARPU of BRL 230 and an average of 1 fiber and 1.7 postpaid connections per customer. Regarding AI, he stated that Vivo has long used AI (e.g., WhatsApp interactions) and expects Gen AI to bring even higher possibilities for internal process optimization (e.g., B2B solicitations), as a copilot for agents, and through piloting AI agents for direct customer interaction, with initial results expected in May, alongside network optimization, all contributing to significant efficiency gains.

Daniel Federle from Banco Bradesco BBI S.A. asked about the strategic importance of convergence operations for a telco in Brazil, specifically highlighting Vivo's focus on Vivo Total. He also inquired about Vivo's expectations for Artificial Intelligence (AI) as a source of cost savings in the coming years.

Answer

Christian Gebara, CEO of Telefônica Brasil, emphasized the critical role of convergence for Vivo, citing 62.7% of FTTH customers being convergent and 43.2% on Vivo Total. He explained that Vivo Total increases customer switching costs, fosters closer relationships, and enables better monetization through cross-selling digital services, leading to a 1 percentage point lower churn rate for Vivo Total fiber customers. Gebara detailed AI's role in optimizing internal processes (e.g., B2B public solicitations), serving as a copilot for call center/store agents, and piloting direct AI agents for customer service, with initial results expected in May, alongside network optimization, all contributing to significant cost efficiencies.

Daniel Federle inquired about the primary barriers to further mobile plan price increases and sought to understand Vivo's confidence and competitive advantages in building a profitable digital services business.

Answer

Executive Christian Gebara explained that Vivo's strategy focuses on value creation through service convergence, like the Vivo Total plan, rather than simple price hikes. This approach reduces churn and increases lifetime value. On digital services, Gebara stated they already represent nearly 10% of revenue and are a success, driven by Vivo's vast customer base, extensive sales channels, and strong brand. He highlighted 35% growth in B2C new businesses and 19% in B2B digital services, bolstered by the IPNET acquisition.

Daniel Federle asked for more color on TIM S.A.'s Q1 price increases, specifically regarding frontbook and backbook adjustments and their magnitude. He also requested an update on CapEx demands, requirements, and any pressure from external factors, given that CapEx ended closer to the top of the guidance range.

Answer

Alberto Griselli, CEO of TIM S.A., confirmed that postpaid backbook price adjustments are underway in Q1, with a similar magnitude and mechanic to the previous year. He also indicated plans for frontbook price adjustments in Q2, following a similar pattern to last year, expressing confidence in postpaid adjustments for the current year. Andrea Viegas, CFO, stated that CapEx is on track and within guidance, with the company anticipating CapEx when efficiency gains create opportunities, emphasizing that 2025 investments were as expected and focused on free cash flow.

Daniel Federle requested more color on TIM S.A.'s Q1 price increases, specifically if they apply to frontbook or backbook customers and their magnitude. He also asked for updates on CapEx demands, requirements, and any pressure from external factors, given that CapEx ended closer to the top of the guidance range.

Answer

CEO Alberto Griselli confirmed that backbook price adjustments for postpaid are underway in Q1, similar in magnitude and mechanic to last year's, with frontbook price adjustments planned for Q2. CFO Andrea Viegas stated that CapEx is on track and within guidance, with the company anticipating CapEx when efficiency opportunities arise, maintaining focus on free cash flow.

Daniel Federle from Bradesco BBI asked if TIM was seeing any competitive impact from a new market entrant. He also inquired about structural reasons for TIM's mobile revenue growth relative to peers and how inflation translates into price increases.

Answer

CEO Alberto Griselli stated they have not seen an impact from the new entrant. He explained that TIM's higher proportion of prepaid revenue can be a drag on overall growth since the recharge market is shrinking, which is why the company is focused on new revenue streams like B2B. Regarding inflation, he confirmed they pass on increases to postpaid customers annually and are executing this year's adjustment with the same intensity as last year.

Daniel Federle from Bradesco BBI asked for the rationale behind the expected deceleration in mobile industry growth in 2025 as implied by the 3-year guidance. He also questioned why selling expenses were not showing more efficiency gains despite historically low churn.

Answer

CEO Alberto Griselli explained the long-term guidance reflects a normalization of growth to a rate slightly above inflation, following a period of rapid 'catch-up' growth, contingent on a continued rational market. CFO Andrea Viegas clarified that selling expenses are indeed growing below revenue and showing productivity when excluding the impact of a one-time FISTEL tax credit recognized in the prior year's comparison period.

Daniel Federle from Bradesco BBI asked about any perceived impact from new competitors, the structural reasons for TIM's mobile revenue growth relative to peers, and the relationship between inflation and the company's ability to raise prices.

Answer

CEO Alberto Griselli stated that no impact from new entrants has been observed so far. He explained that TIM's overall mobile growth can be affected by its larger prepaid base in a shrinking market, which is why the company is focused on new revenue streams. Regarding inflation, he confirmed they pass on increases to postpaid customers annually but monitor customer response to gauge demand elasticity.

Daniel Federle of Bradesco BBI questioned the rationale for the implied deceleration in mobile industry growth in the 3-year guidance for 2025 and beyond. He also asked why selling expenses were not showing more efficiency gains despite lower churn.

Answer

CEO Alberto Griselli explained the long-term guidance reflects growth of 1.5-2.0 percentage points above inflation; as inflation is expected to fall, so will nominal growth. CFO Andrea Viegas clarified that selling expenses are growing below revenue when excluding a prior-year tax credit, and the current figure includes investments in advertising for new product launches.