Maria Clara Infantozzi

Maria Clara Infantozzi from Itaú BBA S.A. requested an update on the competitive landscape within the fiber industry and Vivo's perspective on potential M&A opportunities in this sector. She also asked for insights into future profitability expansion, identifying specific areas for efficiency gains, and how these efficiencies would be balanced with the expansion of the B2B segment.

Answer

Christian Gebara, CEO of Telefônica Brasil, described the fiber market as highly fragmented, noting Vivo's market share increase from 18.8% to 19.3% and strong net adds, while some competitors experienced negative growth. He sees significant room for consolidation, citing higher market shares in other countries, but emphasized the need for the right target with good quality, minimal overlap, and fair pricing. Regarding profitability, Gebara highlighted a 4.4% increase in operating costs (below revenue growth) despite a 6.4% rise in personnel expenses, driven by digitalization and AI-led efficiencies in customer care. He clarified that B2B margins are positive, especially for connectivity and managed digital services, and that many digital B2B services contribute positively to operating cash flow without requiring CapEx.

Maria Clara Infantozzi asked for an update on the competitive environment in the fiber industry and the company's view on potential M&A opportunities. She also sought insights into future profitability expansion, identifying specific areas for further efficiencies, and how these efficiencies would balance with the expansion of B2B services, considering a perceived lower margin for B2B.

Answer

Christian Gebara, CEO of Telefônica Brasil, described the fiber market as fragmented, noting Vivo's market share increase from 18.8% to 19.3% and strong net adds, while some competitors experienced negative net adds. He sees room for consolidation, comparing Brazil's fragmentation to more consolidated markets globally, and expressed openness to M&A if targets align on quality, overlap, and pricing. Regarding profitability, he highlighted efficient cost of operations (4.4% increase despite 6.4% personnel growth) driven by digitalization and AI. He clarified that B2B does not inherently have lower margins, with connectivity having good margins and digital B2B margins varying, but many services contribute positively to operating cash flow without requiring CapEx, leading to a strong positive trend in operating cash flow and free cash flow.

Maria Clara Infantozzi asked about the growth opportunities in B2B and IoT, seeking insights into TIM's long-term goals and the expected evolution of revenues in the short term.

Answer

CEO Alberto Griselli explained that TIM's B2B and IoT strategy leverages its small legacy by focusing on specific verticals like agro-business, infrastructure, utilities, and mining, driven by a 'coverage-as-a-service' model. He outlined medium-term ambitions to expand the solutions portfolio to include security and cloud, and to enter new verticals like manufacturing, through a mix of organic growth and potential ICT inorganic moves to increase customer wallet share. He noted nearly BRL 1 billion in contracted revenues over recent years.

Maria Clara Infantozzi sought further exploration of TIM's B2B and IoT growth opportunities, including long-term goals and the expected evolution of revenues in the short term.

Answer

CEO Alberto Griselli detailed TIM's B2B/IoT strategy, focusing on verticals like agro, infrastructure, utilities, and mining with a 'coverage-as-a-service' model. He outlined medium-term ambitions to expand the solutions portfolio to include security and cloud, increase verticals, and pursue both organic and inorganic growth to consolidate market positioning and customer relationships.

Maria Clara Infantozzi from Itau BBA requested more color on the drivers behind the operational deterioration in Argentina and the competitive environment there. She also asked how VTEX's guidance accounts for a potential consumption deceleration in Brazil for the second half of the year.

Answer

CFO Ricardo Camatta Sodré explained that after showing signs of recovery in Q1, GMV growth in Argentina reversed to negative double-digits in Q2, significantly impacting results. He noted no specific changes in the competitive landscape there. Regarding Brazil, Sodré confirmed that the guidance for the second half of the year already assumes a deceleration in same-store sales, reflecting trends observed in Q2 and the prolonged high-interest-rate environment.