Good morning, and good afternoon, ladies and gentlemen. And welcome to the Millicom Financial Results Conference Call. Today's presentation will be hosted by Chief Executive Officer, Mauricio Ramos and Tim Pennington, Chief Financial Officer. Following the formal presentation by Millicom's management, an interactive Q&A session will be available. I would now like to hand the call over to Michel Morin, Millicom's Head of Investor Relations. Please go ahead.

Thanks, Morin and hello, everyone, and welcome to Millicom's third quarter 2017 results conference call. Before we begin, let me draw your attention to the Safe Harbor disclosure on slide two of the presentation, which is available on our website. And with that, let me hand it over to Mauricio for his remarks.

Good morning, or good afternoon to everyone and thank you for joining us today. As always, I am here today with Tim, our CFO, whom you all know. Let's get right on it on slide four. Overall, we are extremely pleased with our results this quarter. We continue to build high speed data networks in Latin America, both fixed and mobile, at increasingly faster speeds. We also continued to add record number of customers on both our 4G and our HFC networks. And as a result, service revenue growth is now back. As we had anticipated, in Q3 we saw growth come back in all of our Latin American markets and that was so squarely as a result of the operation on the strategy that we put in place a couple of years ago. So, we're extremely pleased to see that happening. And we are now entering the last few months of the year with strong momentum and this is very important across all our business in all our markets in Latin America, that's the key point our strong momentum. Now let's look specifically at the strong process that we made during the third quarter beginning on slide five. In mobile, the chart on the left shows that we continued to expand our 4G networks to tap into the unmet demand for high-speed data in our markets. Over the past year, we have increased the number of 4G point of presence by almost 70%. That is almost doubling the size of our 4G network in that pantry. Our 4G network is now on average over 52% of the population in our Latin American markets. In some of those countries, these 4G networks now cover almost as much of the population as our 3G network, which is typically 60% to 70%…

Thank you, Mauricio. And let's start on slide 14. So, you just heard from Mauricio the operational building blocks are rapidly falling into place, customer uptake is accelerating, some businesses are delivering, what are your improvement are and we have been able to maintain on sustained margins. Whilst investing in higher levels of sales activity plus cash flow continues to show strength. LatAm is trending in line with where we wanted to be. Let me turn to the key financial metrics in slide 15, service revenue growth swung by more than 300 basis points from Q2, turning us to positive service revenue growth after full quarters with negative growth. This is slowing Q3 EBITDA which was up 3.4% year-on-year, and with cost discipline margin is improved 80 basis points to 36.8%. And for the record FX was not a major factor this quarter. In line with CapEx has picked up to $632 million, reflecting the rapid build on underway. But we expect to be in line with our guidance which adjusted for Ghana and Senegal would be revised for around $1 dollars for the year. Mauricio has already gone into detail in service revenue growth. But I just want to take a second to disaggregate what a sequential growth came from. The biggest contributor was LatAm, Colombia which contributed more than half the improvement, but what really made the difference in this quarter is both Colombia and Africa show sequentially improvements. Turning to LatAm slide 17. Overall, LatAm service revenue growth in Q3 was 2.3%, big improvement in B2C Mobile, now less than 1% down year-on-year, unless we are - and we are also seeing data continuing to grow over 20% per annum rates. Moreover, Paraguay, Bolivia and Guatemala all reported positive mobile service revenue growth, which helped drive the…

Thank you. [Operator Instructions] Our first question comes from Johanna Ahlqvist with SEB.

Yes. Only one question, so how do you sort of look upon the margin potential going forward? You mentioned that you've seen Colombian being new that for the next couple of quarters, but how much is that really sort of left in terms of cost and margin expansion you foresee in 2018 versus where we are now? Thank you.

Hi, Johanna Ahlqvist. How are you? Thanks for the call. So, on a general level and once we have recuperated revenue growth as we have and the operational momentum that. I was describing margins will continue to service revenue growth. My favorite language and one that has been adopted quite clearly that Millicom is operational leverage and it's much easier to attain that once you have service revenue growth, as we now do. So, we see some upside potential and naturally as a result of focusing more operations in Latin America, where we have a margin, but also because we continue to be adamantly focused on headquarter costs, but also because we see in some of the operations those upside for margin expansion. Now regarding specifically with Colombia, I think your question have both angles to it. The group in Colombia, and on one side, remember that in the long-term our margins in Colombia are structurally lower simply due to differences in the mix. We have a call center in there. And our lower market share in mobile simply means that it's harder for us to attain the benefits or very strong market position. But during that in mind and as we have recuperated revenue growth in Colombia and we are doing that. We will also start to expand our margins there. When and exactly how much would really depend, particularly in Colombia. As with the rest of the group but to a lesser extent on growth and the point here is that if we continue to see the opportunity that we're seeing particularly in Colombia where we've increased our sales and marketing group, we increased our acquisition cost and we've increased its size and the strength of our distribution teams, we will continue to invest. So, in the trade-off between short-term EBITDA margins and capturing in the short-term. That long-term growth that we have an opportunity to do. More of this business is a subscription business, the mortgage important to build momentum in the short-term, to secure long-term sustainable growth.

I would just add to that, I mean if I look at the margins over the businesses ex our fixed mobile markets in LatAm ex-Colombia over the improved margins in the quarter and margin is 36%. So, our challenges are in Colombia, which Mauricio addressed, and I mean Africa, which is subset margins still. And the point I would make on that is it now represents sort of less than 8 percent of our group EBITDA, so it's becoming increasingly marginal in the impact. So, the focus of margin improvement is ultimately in Colombia, and we continue to express confidence that we will improve the margin overtime, but at this point in time, it's better to capture the growth that exist. It's just a lot easier to do it when you've got revenue growth, so you can tackle operational leverage and help support not just cost reductions.

Perfect. Thank you very much. And just if I may just one follow up question, a detailed one for you Tim on financial net outlook sort of I see that you ended up at 106 underlying in the quarter and if you can say anything of how we should view that figure going forward given the sort of tower deals you made and so forth. Thank you.

Sorry, I didn't quite catch that financial what you're talking about.

The financial net, if you exclude the redemption fees sort of the underlying financial - quarter.

The financial charges in the quarter, and I think sort of, no I think it's probably better Michel follows up with you more detail. But we can wind up around the 440 million, its $450 million of finance charges for the full year, it obviously was distorted in the quarter by the $28 million redemption fee on that the 20s and the 21s that we took.

Thank you.

Thanks.

Our next question comes from Julio Arciniegas with RBC.

Hello, hi Mauricio, Tim. Thanks for taking my question. My question is also about Colombia, we have seen that basically EBITDA has been some penalized by subscriber growth or at least sales and marketing. Can you give us some color of what sort of actions are you doing? Has the subscribers increased because, for example, when I see subscribers actually well broadband product has growth in this quarter but for example, mobile net adds in Q3 they are actually lower than the previous quarter. So, I would like to have a better sort of feeling of what are the dynamics that actually are driving these subscribers and marketing growth? Thanks.

So, as we said last quarter Julio, we have significantly ramped up our sales and marketing and distribution commercial distribution networks in Colombia and we are adding a number of on home business and subscribers that is effectively twice we are adding a year ago, if you look at the HFC, that's a significant pickup focus on the market and we have also launched this quarter and in preparation to our launch last month, we have also look to launch a new product which is you can imagine has a fair amount of momentum. And in 4G in Colombia in particularly, this quarter we added a strong 250,000 4G net adds which is an acceleration - to that 900 which is a good number 250 from Colombia. Now at a good level and this 900 is similar to Q2 up on our run rate or year-to-date we are almost now about 3 million marks, that we have spoken about as our target. So that's what we think into 4G we are going to be comfortably ahead of that we had put out for - and you have seen us, and I realize that we don't give you lot of detail on this, we have got a - into the business, we are adding, I am not sure I am looking in the chart to see if I can say a number, but we are adding over the north for 100,000 postpaid subs so far. And that obviously has an additional cost into that line that you're referring to, that as I was saying before, when you have that kind of opportunity you've got a light, dive right into it and take it because in postpaid subscription of business that you bring into the house and this business stays with you for the long term. That's the color. I think that we can give you and clearly just to remind you, in terms of looking at the purpose subscriber base in Colombia, we took at cleanup in the fourth quarter of last year. So that would-be kind of in the first half, just over 0.5 million subs that distorts the year-on-year comparison total sub base.

Okay. If I might follow-up are we seeing share improving due to the mix because at the end if Cable subscribers are growing, that requires less commercial activity, because at the end. That translates into more net adds?

Yeah. So, I think the, the key to your question is indeed looking at churn as you're growing as you're beginning to grow in Colombia. The area where we've seen churn decreased the most in Colombia is copper and as you recall, at the beginning of this year, towards the end of last year we had a double whammy, which is one, we have taken a price increase that cost some churn early in the year. February and January of this year, which was also coupled with the copper losses are on the context of early low consumer confidence in Colombia. We're now out of that phase, there is still because of the price increases now so far behind, churn has gone down, and also, we're being a lot more able to retain those corporate customers because of that we've been doing to the network over the past and as a result of that net share is much lower and we're now in growth territory in Colombia, which is as I said earlier, pretty much a good turning point.

Okay, thank you.

We'll go next to Stefan Gauffin with DnB.

Yes. To continue on Colombia, you say that you increase investments due to the growth prospects that you see in this market. Can you give a little bit more understanding of where you see that you can take this business both in terms of growth and in terms of margins? Secondly, therefore a question on the RGUs this quarter Cable RGUs which increases quite significantly compared to homes connected. Just wondering what is driving that development? Thank you.

Yeah, so the second part of the questions have been and thank you for noticing that one, very keen - it's called cross-selling and it's called better bundling. So, we have a base in Colombia that we can cross-sell too and that's really quick wins that we're beginning to take, and I may have said this earlier that we are now evenly distributor in our subscriber base in Colombia. There are some areas in which we can cross-sell into our existing fixed base and some areas in which we can cross-sell into our mobile base. We're doing a lot of that. And also as a result of these upgrades from copper to HFC. We have the ability to cross-sell broadband into our subscriber base. There is the effect of bundling and cross-selling. And again, I won't start making this point, we don't hesitate to invest in that at all, because this is HFC customers that have significantly lower churn and then all the customers, which means we have to keep this customer long-term. So that's where you've got there in terms of the dynamics, we didn't want to highlight because we issue reporting number of homes connected. But we had a significant number of RGU pickups in Colombia indeed much more than the actual number of connected homes. Now, on Colombia in general, and you've heard me say this before, we are extremely, extremely positive. This is a large market and which we see a significant opportunity for us to drive our network growth and add customers that we are beginning to have and also pick up on our 4G net adds and see a recovery of the mobile, the mobile market. The one thing that I think it's according to highlight about Colombia going forward. Is that it is a country with tremendous growth population, it is now about 15 million inhabitants and I know it still covers, it is small part of the available homes. So, there is growth there for us in broadband for sure.

Thank you.

And we'll go next to Bill Miller with JM Heart Well.

Good morning. The cable economics of interest...

Good morning. We can barely hear you.

Okay. I'm talking about the economics. Can you hear me now? Can you hear me? The economics of cable could you run through that again. The investments and the monthly subscriber fees does that would appear after a certain amount of time, there is almost a 100% pay back return. Could you give us more color on just exactly how that works and how long it takes for somebody to become a full subscriber and as you passed their home?

Yeah surely. Yes, that's a great question. So first the opportunity which is alluded to on the last quarter. We have set a target of 50 million homes in our markets, is that by the time we complete that target, it would only be a 50% build out ratio about effectively 50 million homes out of our market that has 30 million homes. That we think are the available market. So that's 50% build out ratio compared very favorably to what is an 80% build out ratio in Puerto Rico and an 75% built out ratio in Chile which are sort of the aspirational comparisons, it still be 50 against 75. So, it is a target that could be much bigger, but there is no point in putting it out there, if we are only building about a million - in homes, half homes per year. Now the economics themselves are pretty simple. The cost to build the home for us is about a $100, a little less in Colombia, a little more in other countries. But on average you can use about a $100 per home passed. The cost to connect the home is about a 150, that's the installation, the tab, the CPE and that's fair installation and as we have said before we are aiming in the in states so that's about 3 years out to connect a about a third of the homes that we passed, so I'll call it a 30% to 35% penetration rates on the homes that we build. So, the last piece of the equation here is of course the ARPU that we get per household and we are now getting around $20 per household on average in the region per home per month, on what is two times than the ratio.…

Mauricio, that's a terrific answer. Thank you. But I have a follow-on since you gave a such a great answer, which is okay. Can you throw more CapEx sales marketing whenever at this and accelerate the pace of cable penetration conversion from comp or whatever? And can you give us any idea since you've had well above your estimates for this year? What the estimates might be for next year?

We shouldn't have given you a comeback. I'm hoping that we're going to end the year flow through a run rate of 1.5 than 1. It's going to fall somewhere between 1 and 1.5 but that's going to be a run rate. And the number of homes that we are connecting is increasing especially now that we are out of partially out of the couple of ways and - the net adds. So, we're pretty excited about the penetrations that we're getting. And by the way, when getting this penetration as when there is pick up in countries like Paraguay and Bolivia as much as we are in Colombia. So, it is quite broad based. And we're going to be as adamant as we've been in this last two quarters on tapping the opportunity when it is right there right away.

Okay, but you didn't answer the question about the outlook for next year. That would be really helpful for us.

It's very difficult in terms of providing that. And because we're getting better and better every quarter and that's also probably the reason. And we are looking to strength the quarter and that will give us the better idea on how to put out the guidance for next year, every day so that we can settle it. We're not looking at less than 1 million, how about that.

Thanks.

Our next question comes from Georgios Ierodiaconou with Citi.

I have two questions please. The first one I was wondering if you could give us an update on spectrum events you are anticipating on other one in Colombia probably, will come a bit later now, but if you could talk more broadly about other ones that you may be expecting for 2018? And my second question is on cable speeds in Colombia. There was any port out in the summer by the regulator which kind of - around 45,000 of your subscribers take speed to more than 10 megs and the majority of the - in the region of 2 to 5 megs on competitor, how does much better mix on you. Q1 explaining trials, the drivers there any actually and actually you are taking perhaps reduce the gap between the speeds. Thanks.

Yes, you bet. So, on spectrum, there's been a lot of activity in the last 18 months or so. Some of it kind of goes without releases with renewed all of our licenses in Bolivia. we also got license maybe some [indiscernible]. We're looking pretty good there. We also just renewed a little bit in Ghana in the context of closing the transaction. So, we increased the number of years on that license, and El Salvador earlier this year. All within our budgeted numbers. Those four other ones that have occurred over the last call it 12 or 18 months. Now, looking ahead, there is a very, [indiscernible] 700 megahertz options in Colombia, which is now been postponed into 2018, and it had handicapped, whether it will or will not happen in 2018, because the electrical process are already started in Colombia and this things until go hand-in-hand. So, who knows it will be a 2018 - or not. In Paraguay and also coming a possible AWS license, again that could happen before year end or could moving to 2018, obviously we look towards it very positively. And we're having the natural dialogue with the government - right price for it. And we see the government that has been very rational and very focused on making sure the private sector has the resources needed to make an economy continue to grow. So, we would hope it happen this year, that maybe does moving to next year, and we think it's going to happen a very reasonable price. We also have an [indiscernible] the second part of our licenses, that's coming up. It possible needs spectrum and the people close out well within the number that we think a very reasonable and giving our budget. And then largely there is the Guatemala in our 4G/AWS option that has been postponed, and postponed, and postponed from the last two to three years, and it still remain uncertain, where it would be the 2018 at all or not, certainly, not of 2017 event.

I think on the spectrum and speeds. I think our point number one will be that, there's a bit of inconsistency in the way the regulators capture this date. We seem to be in the path of that - it's sort of had a different spectrum, at the end of the day we of, and I saw - we offer a range of speeds, our customers buy the speeds that, once you. And I think we've said in the past, most of our customers are in that sort of 5 to 10 megabits, second band, and that just gives us plenty of upselling opportunities. So, we're not comfortable with where our customer base is in the main.

So, let me give you, sorry I missed out. Let me give the little bit more color on my long-term beyond this, because speed is our friend. And I'll tell you why in a minute. So, when you look at the picture today in Colombia, you've got to remember, that we still have quite of bit of copper there, it's respect to that in mind. And got to remember, that we still have a little bit of M&DA that we just give up, and that has fixed broadband on it. It's speed on copper and M&DA that are not comparable to the one that - the building can offer. So, that data likely captured a lot of that. That's the picture today. The picture going forward is as golden, and the neck breaking speeds, that I've just referred, state-of-the-art 1 gigahertz, two ways, DOCSIS 1.0 ready network. So, once you have that kind of network in play, like we're building, at the rate we're building, and have DOC 60 modems and housing, routers on the house, speed becomes our friend. And it is up to us, how we monetize it and how we drive that margin. Because they're the only be couple of HFC network in that market that we would be able to drive speeds into the market place. When and how we monetize it, is a commercial decision, but speed is our friend. With the kind of times that we're building. And you already know the last point I would make is the network that we're building is identical to the network that the large MSOs have in the U.S. no difference. 1 gigahertz, -DOC 60.1 existing networks.

If you just remind me following up, is there a difference in the subscriber base, they are addressing. Because in the last 12 months, they have around an 8% growth in the RGUs around 0.5 million customers being added and or services being added to be more precise. Is it because their subscriber base is more this year top grade to kind of speeds versus yours. Or what would then expand addition in the performance?

There are two things. One is the bigger network, so if you're comparing apples to oranges. And two, we have the copper effect and that we just described that we just begun coming out. Prior it doesn't have any copper, that when you compare our HFC gross adds with [indiscernible].

Yeah, thank you.

And we'll go next to Nielsen [ph] with Nordic.

Hi, good morning guys. Three questions if I may. On the impact of the rule effect wireless decommissioning, will that roll through the numbers until annualized or is that a project that takes longer time to complete, so what's the character to expect there? And then on moving away from Colombia and maybe focusing on a smaller market on Bolivia, we see a solid acceleration of net adds on the highest level since 2014 I believe. Is there anything specific driving that and how sustainable do you think that is? Thank you.

On the third one...

I'll come back to that sorry.

It's holding it back it's a back. I'll let Tim answer number one.

Very quickly the fixed one as we've come out of our numbers after Q2, it's an annualized thing.

So, the Bolivia question, our Bolivia's empire. And is the cable playing out faster than the other countries and right by the book? We added 30,000 this is the fixed or the home or the cable. We added 30,000 net adds this quarter and we had added another 30,000-last quarter. And we've been building in Bolivia and adding subscribers like always telling upticks. And we're pretty bullish into next year. And as you can imagine we're going through a budget and we're just putting capital right there that's what we do. Our semi-speed on 4G, Bolivia added about 160,000 4G net adds and that's on the back on putting money into the 4G network. And then just being ahead of the pack in terms of 4G deployment. So, it is just a playbook thing out like as we would expect it would once you get operational momentum. The other element that is specific about Bolivia is that if the market where we first started putting all the sales team selling all products. First market in which we started selling fixed and mobile single unified commercial team. And the benefits of that are beginning to show.

I think it's interesting because in the couple of quarters back and it sort of slowed down. Yet we saw the opportunity there. We're seeing the opportunity we're actually significantly up our CapEx investments into Bolivia diversely from other markets. And I think that's give investments since as I seen sort of service that is paying off quickly than we feel it's actually with the speed in which the particularly the cable business is taking place. So, we're very happy with that.

Thank you for that. And onto my third and last question, this might be stupid one. But is there is a seasonality effect on your subscriber intake in LatAm specifically. I mean looking back a number of years, it looks like Q3 is always rather flat or negative or is that just by coincidence.

Well, there is seasonality in mobile, it tends to be fourth quarter for sure, that's definitely the case. And that's why we are like confident that we're going to constantly ahead of 3 million 4G net adds which was our target for the year. But because we had a pretty good hope now it tends to be [indiscernible] last quarter or fourth quarter we did about 1 million or so plus. Now on key, the element of seasonality of the numbers made difficult to see because we're building so much [indiscernible] but the element of seasonality it's going to get to do since it is pickup and subscribers on the back of the pick up on our outlook.

Okay. Thank you.

Lauren, I think that we're already at 9 o'clock, so I think that had to be our last question. So, Mauricio I don't know if you want to go for final remarks.

Well I think that the key point that we're making today is that our Latin American business is performing driving lines of our expectations and adding tons and tons of operational momentum. We just have a market opportunity right now is driving faster than we had anticipated and that's a great problem to have. I think we're going to be building more than that 1 million homes that we targeted we would build and we're penetrating them better than we had expected. We were adding 4G subscribers or users that are passed and we're going to end up ahead of our target that's our mobile opportunity that we have to tap. We're now adding 70,000 HFC subscribers in a quarterly basis and that is an opportunity that we had to tap. So, we're investing more and more in acquisitions and it's taken the view like we told you before that we want to grab that opportunity for the subscription base business that we want to build momentum for the future and it would be absurd for us not to build more, not to spend more, not to spend more in certain marketing and acquisitions. Short-term guidance, it will be the guidance that we would use the market opportunity and we don't want to do that, we shouldn't be doing that and relative to that we're pretty pleased with the kind of momentum that we're building for our business into fourth quarter Latin America and the practical building is strong 2018 going forward. Thank you for joining us today.

This concludes Millicom's financial results conference call. Thank you for your participation. You may now disconnect.