Telefônica Brasil S.A. (NYSE:VIV) Q1 2016 Earnings Conference Call - Final Transcript

Apr 29, 2016 • 08:00 am ET

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Telefônica Brasil S.A. (NYSE:VIV) Q1 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen. At this time, I would like to welcome everyone to the Telefonica Brasil First Quarter 2016 Earnings Conference Call. Today with us representing the management of Telefonica Brasil, we have Mr. Amos Genish, CEO, Mr. David Melcon, CFO and Investor Relations Officer, Mr. Christian Gebara, Chief Revenue Officer, Mr. Rodrigo Dienstmann, Chief Resources Officer, and Mr. Luis Plaster, IR Director.

We also have a simultaneous webcast with slide presentation on the Internet that can be accessed at the site www.telefonica.com.br/ir. There will be a replay facility for this call on the website. After the company's remarks are over, there will be a question-and-answer section. At that time, further instructions will be given. [Operator Instructions]

Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the company's management beliefs and assumptions and on information currently available. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the company's future results and could cause results to differ materially from those expressed in such forward-looking statements.

Now, I will turn the conference over to Mr. Luis Plaster, Investor Relations Director of Telefonica Brasil. Mr. Plaster, you may begin your conference.

Executive
Luis Carlos Da Costa Plaster

Thank you. Hello, everybody. Thank you for joining us in this conference call for the first quarter of 2016 results release of Telefonica Brasil.

Our call will be divided in three parts. In the first part, our CEO, Amos Genish, will give you an overall view of our operating and financial results for the quarter. In the second part, Amos will pass it on to Christian Gebara, our Chief Revenue Officer to go over our commercial strategy, to our CFO, David Melcon, who will discuss in detail our financial results, and to Rodrigo Dienstmann, our Chief Resources Officer who will explain our CapEx evolution. And finally, we will move to Q&A.

Now, I'll pass over to Amos.

Executive
Amos Genish

Thank you, Plaster, and good morning to everyone.

I am very pleased to present our results for the first quarter of 2016. The results continues to demonstrate our focus on profitability and our capacity to continue delivering revenue goals, improving EBITDA margins and free cash flow even in the face of slower economic activity and termination rate reduction.

Service revenue grew 1% year-over-year, driven not only by solid evolution of the fixed business, which grew 2%, but also by continued growth of the mobile service revenue, which grew 0.4%. Excluding reduction in termination rate, our service revenue had a robust growth of 3.8% versus 5.1% and 2.9% in our fixed and mobile business, respectively.

Our fixed business; with respect to our fixed business, I would like to emphasize that we were able to grow our