Millicom International Cellular S.A. (TIGO) Q4 2020 Earnings Report, Transcript and Summary

Good day, and welcome to the Millicom Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Michel Morin, VP of Investor Relations. Please go ahead.

Thanks, Alyssa. Good morning, everyone, and welcome to our fourth quarter 2020 results conference call. As usual, we will be referring to some slides, which are available on our website. So please turn to Slide 2 for our Safe Harbor disclosure.

Thanks, Michel. Good morning and good afternoon, everyone. I hope that you and your loved ones are all staying safe and in good health. And I wish everyone a very good 2021. 2020 was indeed a most challenging year. And yet, we all saw so very many of our own give their very best in the worst of times, and that inspired us to work harder and do much better here today. 2020 also marked our 30th anniversary as a company. We celebrated with continued investment and hard work to position the company for recovery in 2020 and 2021 and full growth into the future. Now please turn to Slide 5 for a summary of the main messages today. First, we had very, very strong net adds in Q4, and our customer base is substantially up year-on-year on both mobile and cable. Second, the gradual recovery we have seen since June continued and actually gained momentum during Q4. Third, we continued to invest for the long term. We did so heavily in the second half of the year, and we're already seeing some of the payback for that in Q4 and into this year. Fourth, our cash flow was solid and much better than we were expecting. And fifth, we made additional material progress in reducing our net debt, which we continue to believe is the best use of our excess cash flow at the moment. Now let's look at each of these 5 points, beginning on Slide 6. At the beginning of the crisis, one of the main goals we set was to protect our market leadership. And there is no doubt that we accomplished that goal with flying colors in every country and also in the context of a harsh pandemic and strong lockdowns in our countries. In mobile, we added a record 2.3 million users in Q4 and a full 1.9 million users for the full year. The vast majority of these were high-quality 4G smartphone data users. We have solid performance in all markets, and Colombia had a very strong quarter with record net adds of more than 875,000 in Q4. We now have 42 million mobile users in Latin America, and that is up roughly 5% year-on-year. We also had very, very strong customer growth in cable. We added 277,000 cable home customers for the year, including 103,000 customers in a very strong fourth quarter. So you can see that we are back to an annual rate of just around 400,000 cable net adds, which is nothing sort of very resilient and fantastic in the middle of this pandemic. We're seeing very strong demand for residential broadband. Our pay TV customer base also continued to grow at mid-single-digit rates. So we ended the year with 4.5 million customers, including a bit less than 4 million on our HFC networks.

Thank you, Mauricio. So I'm going take a quick look at how 2020 developed for us and then how we performed in Q4 and the resulting full year performance. I'll also take a quick look at the balance sheet position. And turning to Slide 15. And this is just our usual bridge from the reported IFRS numbers to the underlying numbers for the LatAm service revenue and EBITDA, which better reflects the way we manage the group. And so these are the metrics that we're talking about.

Thank you, Tim. Before we take your questions, let me recap the key messages. First, our customer base is growing very rapidly. Net adds were very strong and at almost record levels in Q4 and for the full year, and we achieved this in the midst of the pandemic. Second, our business continued to recover in Q4. Third, we never stopped investing, and we're already seeing some tangible benefits from this continued investment focus well into January of this year. Fourth, we followed a prudent and flexible approach to managing the business in 2020, and we were able to protect and even grow our cash flow. And fifth, we made a lot of progress towards reducing our net debt, all of which were our key targets for the year as the pandemic hit. Going forward, we will continue to execute on our organic growth strategy because it's working very, very well. Many of you will recognize the six boxes in the middle of this page. But it is worth repeating perhaps in a different way that our strategy is, first and foremost, network-centric because we believe fundamentally in the power of these digital highways that are building our future throughout Latin America. Second, it is convergence-driven. We aim to provide both fixed and mobile services in all our markets and in an increasingly seamless way to our customers. And we believe this will give us differentiation going forward. Third, we're growing increasingly customer-focused. NPS is now our main internal KPI used for management incentive compensation because we know that we create shareholder value by increasing the number of satisfied customers who become attached to our high-speed data networks. And it's begun to work very, very well on the second part of the year. Fourth, we now have a digital-first customer touch point strategy to enhance the experience of the customer of the future and also to lower our costs. The pandemic has indeed given us a big push forward on this digital journey. Digital collections were up 78% in 2020. Digital reloads are up 106%, and the Tigo Money digital transactions are up 153%. So with this, finally, let's take a look at our outlook for 2021. As you've heard so far on this call, we're very pleased with our results for 2020. The pace of recovery in the business is very positive, and we think we're very well prepared going into 2021 with subscriber growth, resilient cash flow and reduced net debt. But we're cognizant that the reality still remains that we're still in the midst of a global pandemic, and the health crisis is still at emergency levels in our countries. The second wave is hitting most of our markets. And some countries like Colombia, Panama and Bolivia have been implementing new, albeit more limited, restrictions. And it will take a while, we know that, for a majority of our citizens in our markets to be vaccinated and also for economies to recover. And we still do not really fully know how badly they have been hurt. So we don't think we're out of the woods yet, not yet. 2021 is still highly uncertain. So in 2021, we will use the same flexible and prudent and successful management approach that worked so very well for us in 2020. We will indeed be prudent and flexible as we were in 2020. And we will continue to invest for the long term but now with a renewed and more confident investment focus, as we see a strong and renewed long-term outlook for our business. Broadband is very, very resilient, and its demand is growing in our markets. That means that we will invest more in the business with more confidence, and yet we will commit, again, to a minimum operating cash flow level of $1.4 billion for 2021. And our priorities will continue to be investing in the business and further reducing net debt rather than immediately resuming dividends or buybacks. As I said earlier, we believe that these are the best uses for our cash flow at this time. With that, we're ready for your questions.

The first question is from Stefan Gauffin of DNB. Please go ahead.

I would like to start where you finished. It seems like you are quite cautious on your outlook comments and the target to deliver above $1.4 billion in operating cash flow. You end 2020 with improved momentum and a very solid subscriber intake on the mobile side. And in especially Q2 and Q3, you will face easy comps on both service revenue and EBITDA. And I understand there's great uncertainty, but it seems like you have accounted for sort of a worst-case scenario with new lockdowns across your footprint. Can you just please elaborate a little bit more on your thinking around 2021 and this target that you put out? And also, do you foresee further expansion of your CapEx plan in that?

So listen, I think, Stefan, you've obviously picked up, as I think everyone has picked up, in this sort of dual mode that we are -- if you will, we're a little of a dual mind here. On the one hand, we're actually very optimistic and we think we are definitely on the right track. We've finished very strong. And as I said earlier, January has continued to be very strong. So for the short term, meaning 2021, we're actually optimistic. But you need to bear in mind 2 things. One, we also want to be very cautious, and we don't want to get ahead of ourselves. And deliver is better than promise. And there's so much uncertainty out there, for the reasons that I mentioned earlier, that we would rather just be very, very cautious and focus on deliver rather than promising with such an uncertain outlook. And you know that there's still a health crisis in our economies. There's still the potential for renewed pandemic waves. And also, the vaccines are going to take longer than they will in the developed countries. So we want to be very cautious. At the same time, the reason why we are putting out this sustained $1.4 billion operating cash flow target is because we want to invest in the business. And that's consistent with our very bullish, very positive and optimistic outlook for the long term that we're very happy to strongly reiterate because we've seen nothing more than broadband become more and more relevant in our marketplaces. And because of that, we want to have the ability to prudently invest in the business. That means we want to continue to invest adding mobile sites. We're adding, successfully so, capacity and coverage in our markets. And we want to continue to do that to expand our 4G coverage in the year to almost 80% of the total population in our markets with LTE expansions in Guatemala, Panama, Paraguay, Bolivia. And we also want to continue to modernize our networks because it's working. The subscribers are quite frankly loving it, particularly in Colombia. And we also want to invest in cable because we see continued growing demand. As I said on the call, we're now at the same run rate in Q4 that we were before the pandemic, at 400,000 per year. So we want to have all the flexibility to continue to invest. So when you combine the 2 things, our very bullish outlook for the long term with our desire to invest for that and then the possibility that the recovery may be dampened or take longer, then we need to strike a very cautious tone for 2021 and, at the same time, give ourselves the ability to invest for the long term. So when you put all that, what we're basically saying to you is, guys, we're going to guarantee $1.4 billion. Think of it as a floor. We're going to guarantee, in dollar terms, $1.4 billion. And let us just take it from there and give us the flexibility to manage on the upside like we did in 2020. I hope that gives you a full vision of why we're doing this and why we think this is a smart approach, Stefan.

The next question is from Peter Nielsen of ABG. Please go ahead.

I'd like to address two of your good markets. One, Guatemala has, of course, been strong throughout this year, which I think is remarkable and even stronger in Q4. Do you see any changes to that coming into this year? And also, just on Colombia, where Tim highlighted the underlying positive trends adjusted for the one-offs in Q4 last year, we obviously have spoken at length before about the new entrant, etcetera. Do you think Colombia can continue to show underlying positive growth this year? So just focusing on these two markets, please.

Thank you, Peter. Yes, these are part of the reason why our performance is so good over the last few months is because these markets are performing very well for us. On Guatemala, in particular, indeed, we had record mobile net adds this year, just north of 0.5 million, 5% year-on-year. And now we have more than 1 million mobile subs. And we've also been growing our home customer base, some 90,000 net adds for the year. And indeed, we're having consecutive quarter of growth in both service revenue and EBITDA. We've invested in this business, Peter, significantly. So we bought additional spectrum. We've put the carriers on that spectrum. We've improved that network significantly. And as a result of that, we're seeing strong performance. Now going forward, this remains a healthy two player market in which behavior has been very rational. And at the point in time in which we've seen competition kick up, we reacted very, very well and very smartly. So I remain very positive, very, very positive on Guatemala, without a doubt. And the same is true on Colombia, and you've seen the numbers in Colombia really start to show the effects of the investment that we've put into that marketplace. We added a record 878,000 mobile net adds in the quarter. We now have more than 10 million mobile users there. So we crossed a point mark there. And we added 33,000 HFC customers in the quarter. And our results, good as they are, are a little distorted because we didn't have some of the government contracts in Q4 that we used to have before. But despite that, they're very, very strong. And the reason I'm continuing to be bullish, Peter, on Colombia is more fundamental than just a quarter. We've been now for years building fiber cable. We now have the second largest fiber cable network in the country. We got those low frequency spectrum that we never had before, and we've built it pretty fast and with total conviction. So we're very ready with those two things and the hard work that our team has put in place to position ourselves for growth in a market in which, in mobile, despite the new entrant and maybe even because of the new entrant, we stand ourselves to also be a challenger. I keep reminding everyone internally and externally that we only have 15% market share in Colombia, and we now have A&P network. We're the largest holder of 700 megahertz spectrum with an empty network. So we're not playing the legacy game or we don't have a congested network that basically makes us an incumbent player. We have the ability to play here as a challenger. And we are doing exactly that, ahead of the entry of WOM partially into the market later this year, which, of course, is another reason for us to be a little bit cautious. And we have a fixed network that allows us to be ready for defending our position with FMC solutions. So the answer to you is, yes, we expect and are very bullish that Colombia will continue to deliver for us because we've turned ourselves now into a challenger in mobile with all the goods in the toolbox to play in that market.

Mauricio, if I could just -- and maybe to expand that a little bit because it wasn't just Colombia and Guatemala, Peter. I mean, every one of our businesses performed better in Q4 than it did in Q3. And even Panama, which I flagged that, which is sort of lagging a little bit than some of the others, they are almost back to where they were in Q1. So we're hard taskmasters. I think the businesses generally have all made a lot of strides in the year, particularly in Q4. But as Mauricio has said, we remain cautious about the outlook.

And Tim brings a really good point, Peter, which is worth noting, a really, really good point. I mean, Panama looks difficult because GDP is down 20% in 2020. It's just the harshest of the economies that has been hit. But within that, we have continued to grow both our mobile and our cable subscriber base. And those will stay on with us into the future. We actually added for the year almost 10,000 net adds on cable when we have a very strong and now very well-defended cable position. And in mobile, our subscriber base grew by 11%, 120,000 mobile net adds, which only tells you the brand name is very strong. Our ability to cross-sell is very strong, and we have upside on our mobile position there. So just look through the economic downturn in Panama and look into the future, and you see how strong the business we built there.

The next question is from Lena Osterberg of Carnegie. Please go ahead.

I have a question relating to Colombia phenomenal intake and, as you say, much related to the network and spectrum position being significantly improved. But can you maybe just say a little bit about what drove the intake, if it's heavy discounts in the market or just demand so we know if we should expect similar ARPU levels or if the ARPU should come down with this massive intake?

It's neither actually, Lena. It's effectively increased coverage as we've expanded our network. The minute you put out new towers in new areas, you pick up traffic and you pick up users. And it's also increased indoor penetration because now our new network further penetrates indoors. And as a result of that, you pick up traffic and users in areas that you were before that not even available. So it's largely the result of, a, increased coverage, increased indoor penetration; and b, the fact that to go with that better, stronger network, we also, if you recall, increased significantly our distribution network, our commercial distribution network. So it's the result of basically increased reach.

Okay. So with the exception of the new entrants, you should have continued very strong growth in Colombia based on intake?

Correct.

The next question is from Johanna Ahlqvist of SEB. Please go ahead.

Two questions, if I may. So looking into next year, we talked about Guatemala, Colombia and so forth. I'm just wondering, I mean, if we won't have a second wave, and we have seen that vaccine is getting to countries and so forth, things are not getting worse, do you expect to see a macroeconomic impacts from -- obviously, the GDP development in many of your countries will be tough, even if the pandemic stops here, and it will take time to recover. So do you expect to -- that the consumers will have a tough time in those countries even after the pandemic? And that's the first question. And then the second question is a detailed one for you, Tim. You're paying off some U.S. dollar debt. I'm just wondering, do you have the expectations for the financial interest payments in 2021? And also, if you can comment on the tax expectations for '21.

So I'll take the first little bit and then hand it over to Tim. As you point out, Johanna, and I think Stefan was also mentioning, yes, there's a -- we get it. There's a bit of a dichotomy here. We almost sound like we have split personality. The business is doing extremely well. And if you were to read, as I'm sure you have, the GDP projections from most sources for our markets into 2021, they're all forecasting a very strong comeback sometime in 2021. We just said -- as I said to the question from Stefan, we just said we don't think it would do you any good and we don't do anyone any good by putting that all into the bank. We'd rather take the prudent and flexible approach, be optimistic, as I am, but be very cautious. And as I said earlier, it worked really well for us in 2020, and we were able to over deliver. We expect to use that very same approach into 2021. And in order to do that, we need to take a little bit of an exception to the rosy projections you see from macroeconomists for our economies, be a little bit more conscious that it may take longer for the pandemic to really get out of our countries and play this dual personality issue just to be optimistic but cautious at the same time. Over to you, Tim, by the way.

Yes. Okay. I think on the tax side, we expect taxes to be broadly where they were in 2020, maybe a little bit higher because we'd expect to improve our profitability there. And we'll probably see a little bit more funds flow. Hence, there will be some higher withholding taxes. And our interest bill, probably the best thing to do is look at Q4 and annualize it. I think that is probably the closest you're going to get. Obviously, we're trying to manage the interest bill now. We've been bringing down our average cost of debt. It was sort of 5.6% in the year to the end of December, which compared to about 6.2% a year ago. So interest rate's coming down. And the reason why we're paying down some more debt today is that we expected to end the year with less cash than we actually have ended the year with. So, we were actually just using some of that surplus cash to bring down our gross to net. Obviously, it doesn't change the net position, but it just brings away that negative carry. So I hope that gives you a good sort of indicator, Johanna.

The next question is from Marcelo Santos of JPMorgan. Please go ahead.

Hi, good morning. Thanks for taking my question. I have actually 2 questions. The first is, if you could comment a bit on El Salvador stellar performance, even if you remove the one-off on the revenue side. I mean, you mentioned that you had AWS spectrum there. So just a little bit more color on what made this big turnaround on the revenues. And the second question is on the bad debt. I think Tim commented on his prepared remarks that you had this bad debt release in the fourth quarter. So you provisioned a lot in the second quarter, and then the second half of the year benefited. How are we -- how is Tigo on the bad debt coverage? Do you think you're already normalized? Or there is more bad debt to release in the coming quarters?

So, I'll -- Tim, I'll ask you to answer both the bad debt and then the so-called one-off, which is not really a one-off on El Salvador. But I want to give you just a big picture answer on El Salvador to make things very clear. There's 2 things going on in El Salvador. And both of them are preceded by a promise, I think, I made very, very publicly 2 to 2.5 years ago, which is that we would fix El Salvador, and we will fix it very, very well. If you recall 2.5 years ago, it was our problem child, and we made a promise at that point in time that we will focus and fix it. And we have done 2 things. We completely changed the management team. And if they're on the call, I want to give them here kudos because we have a great leader in El Salvador and someone who's been able now to turn the business around the right way, motivating his team, focusing on creating a great brand name, focusing on the customer and just doing the things that build long-term value. And with that credibility, then we did the second thing that mattered in the long term, and you're seeing the results now, which is we invested. We put new spectrum, gave ourselves then immediately more and more investment to build out that network quickly. And the team locally did a fantastic job. And now we have network superiority in El Salvador. Customers are happy, and we are back and able to defend our number one position in that country. Over to you, Tim.

Great. Okay. And yes, so the bad debt, a little bit complicated in Q4. And bear in mind, under IFRS 9, it's very formula-driven these days. But you'll remember, I said in Q2, we took a very big charge on bad debt because we were not getting collections at the time. So we had to take a very large charge. Now kind of we put an awful lot of effort into collections. I can't tell you how much effort the guys put into that. And actually, they came back very, very well in the second half of the year. So our Q3 and our Q4 bad debt rates, bad debt charges were much lower than normal. So in Q4, I think we were something like about $20 million lower than we would normally expect to book. But to put that in context, the overall charge for the full year, it was actually $20 million higher than we had a year ago. All that is very interesting, and it explains a little bit of the volatility in the year. But if you're asking me about going forward, I think we are back to normal going forward. So, I wouldn't expect the level of volatility going forward. I think our collection rates are pretty much back to where they were in almost every business and every segment. And that will mean that the algorithm, the metrics that we'll work, the bad debt charge will sort of return to sort of steady state, and I expect that for Q1. The position in El Salvador, good performance in Q4. I mean, the reason I called out this deferred revenue adjustment we made was because Q4 numbers were flat as a consequence of that. And I don't want you to kind of expect 10% sort of EBITDA growth every quarter. Having said that, I don't want to take anything away. This is a normal kind of adjustment. We always -- in all businesses, we look at the deferred revenue accounts at the end of the year and we make adjustments. And so if you look at it on an annual basis, it's really no different and that is just a normalized rate. So, the full year performance is a better indicator in El Salvador than the actual Q4 performance. Having said that, and after many difficult years in El Salvador, I echo Mauricio's sentiment. The team has done a great job, and we really are doing very, very well. Basically investment-driven mobile delivery is taking place there.

I mean, just if you look at the subscriber counts, we added just in the fourth quarter, when the benefits of the AWS deployment really came forth, we added 150,000 net adds of mobile, which for a business such as El Salvador is really, really strong. And that's just execution and investment on that network. It's the same trend that you see in Colombia, and kudos to the team there in Colombia as well. As I said earlier to Lena's question, it's increased coverage on the back of delivering a very strong network that now gives us network superiority and great execution.

The next question is from Bill Miller of MAI. Please go ahead.

I'm curious if you look out 3 years and would just give us a slight view of where you think your revenues and earnings will come from on a 3-year basis, cable versus B2B versus financial transactions, whatever it's going to be. But that would be a nice outlook for us.

Thank you, Bill. That allows me to perhaps reiterate something that I think is the most important thing of our call today, which is both how resilient our business really is and how strong and forcibly we want to reiterate our long-term outlook. I realize that we don't have a crystal ball for 2021, and we're trying not to put ourselves out on a limb there. But we're extremely, extremely happy to have had the opportunity to finally demonstrate to the investment community at large that contrary to perhaps opinions that may be out there, our business, regardless of where we operate, is extremely resilient. And we've demonstrated that this year with subscribers that grow significantly at almost record levels in a year of pandemic, both in cable and in mobile, and with a cash flow that grew in dollar terms in a year of the pandemic and that we know how to manage. So that's a very important point for us in 2020, just how resilient our business is despite where we operate and despite a year of a pandemic. And number two, our outlook going forward, we could not be more bullish. We are more bullish than we have ever been. So if we are of split personality for 2021, we are of a single mind for the long-term outlook, which we're happy to reiterate and bullishly so for a number of reasons. And your question allows me to point those out, Bill. Number one, broadband is more relevant than it has ever been in our markets, and we see that in spades. And to your question, we're going to be in the business of delivering broadband, fixed and mobile, with a combination of those that will increasingly be seamless to the consumer. But everything, everything will rely on that fiber network that we're building, both mobile and cable. And we are more bullish now than ever we have been that we're becoming a cable-centric, network-centric, broadband-centric company. Two, we're very bullish because we have not only defended our market positions this year, we've actually improved them. And we come out of this year with a significantly strengthened market positions in just about every country, Bolivia, Guatemala, El Salvador, Colombia and Nicaragua. We have stronger market positions than we did going in and industry structures that are improving. Now you don't see that quarter-over-quarter. But over the last 2 years, you've seen those industry structures improve. And I believe they will continue to improve, of course, with the exception of Colombia, in which there's going to have to be, at some point, a shake-up of everything. And fourth, because we have continued to invest and are continuing to invest. We now have network advantage and superiority, and our subscriber counts are demonstrating all of these together. We added record subscribers in the fourth quarter in mobile. And on fixed, we're back to our run rate of almost 400,000 net adds on a yearly basis because we added 100,000 in Q4. When you annualize that, that's 400,000 for the year. So to your question, Bill, this is going to be a business that is cable-centric, adding broadband subscribers with tons of mobile on top of it and a growing MFS business that I don't want to make any promises on because it's being built as we speak.

That's great. Terrific. Thank you.

The next question is a follow-up from Lena Osterberg of Carnegie. Please go ahead.

Yes. I just wanted to ask, out of the provisions you took for bad debt in the first half of the year, how much of that did you release in Q3 and Q4?

Tim, you do know that you're going to have to bail me out here.

Yes. Look, Lena, the bad debt charge for the whole year was $20 million higher than we had in 2019. So in a sense, the whole year, we had a much bigger bad debt charge than we would normally see. Now that said, it was heavily skewed to the first half of the year, particularly Q2. So when we get to the Q4 numbers, our Q4 numbers were -- I think it's around about $20 million lower in bad debt charge for the quarter than we would typically have seen or we saw, for instance, in Q4 2019. And so I haven't got the exact numbers from the top of my head. Those are the key metrics. For the full year, we took a $20 million extra charge. And in Q4, coincidentally, it was $20 million lower than we took in Q4 '19. And that's because it was...

The provision that you had in Bolivia -- sorry, the release, how much was that?

I can't remember exactly what the Bolivia number. It was -- I mean, we took big charges in El Salvador and Bolivia in Q2. I'm sure Michel can sort of follow up with you later on for the -- more specifics. But it was -- yes, it sort of flattened it, but I don't want to take anything away. I think it was -- Bolivia actually has rebounded very, very well.

It was an exceptional rebound. Does that just -- doing the modeling into next year, just trying to understand what sort of the underlying trend so that we don't end up wrong going into '21.

Well, Lena, perhaps the thing to comment on Bolivia is that we've seen, and we're confident now, that we have come out of effectively 2 years or 2.5 years of combined crisis. First, of course, all the political crisis and then that combined with the COVID crisis. The political front now seems quite stable with quite a bit of support for the current president, who's turned out to be rational and very friendly towards investment as he tries to stabilize the business going forward. So we're now a lot more comfortable with the political and the macro outlook for Bolivia. And as a result of that, we're happy, as you have seen us, to continue to invest and then grow in that country.

Okay, perfect. I think I understand roughly where I should be. I might look into next year.

I think Michel and Sarah will be able to help you with more detail. But essentially, our expectation for '21 is that bad debt will be back to a normalized level.

The next question is from of Federated Hermes.

I just wanted to get a bit more color on the Africa business, Tanzania and Zanzibar, in terms of kind of what your outlook and commitment is to that business. And also, just an update on kind of -- understand there's meant to be an IPO regulatory requirement. Just understanding where we are with that in terms of the process and the timing. And also, the money raised from the IPO, what would that be used for? Would that be used for repaying debt?

Sure. Tim, do you want to give it a go?

Yes. Kind of unlike the LatAm business, the Tanzania business hasn't really been COVID-affected. There's been a lot of other things happening in the market relating to registration and reregistration, etcetera. But net-net, the business sort of recovered. It was broadly flat on Q4 '19. It is a business. As all of Africa is, it's nonstrategic to us, but kind of we have to find the right moment on that. And in terms of the IPO, it is mandated by the government. And therefore, we are moving towards that IPO. There are some kind of -- obviously, there are plenty of regulatory discussions on something like that. I can't particularly go into the details of them, but we're continuing with that regulatory process. And the use of proceeds from the IPO will be essentially for investment funds for the business, the Tanzania business.

Okay, that's excellent color. So in terms of kind of in the short and medium term, Millicom are kind of committed to the African business, i.e., the Tanzanian business. And as of when the time's right, you'll look to kind of exit. Is that correct? Is my understanding correct on that?

Yes. Look, I mean, for the time being, it's owned by Millicom. It did $125 million of EBITDA last year. It's got a huge customer base, a great MFS business. But kind of 96% of our revenues and business are in Latin America; so that's really where we see our strategic future.

Okay. Thank you.

Thank you.

Yeah. Thank you.

.

Yes. well, thank you -- no, I was going to finish up, operator. Thank you. I wanted to thank everybody for joining us today. As you can see quite clearly, we've weathered the storm, and we've weathered it quite well. We think we got our sea legs really, really strong now. So we're up on deck. We're manning the ship. The storm has not fully subsided yet. And as a result of that, we want to be cautious till we're out completely from the storm. But on a long-term view, and hopefully, even this year, if things turn out the way we want them, not the way we're preparing for, then we're going to have a very, very bright future going forward. We just want to be able to invest in the business to make sure that that bright future that we see ahead happens later this year and certainly, after the pandemic is behind us. Thank you for joining us today, and thank you for your support.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.