Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to the Telefônica Brasil Third Quarter of 2017 Earnings Conference Call. Today with us representing the management of Telefônica Brasil, we have Mr. Eduardo Navarro, CEO; Mr. Christian Gebara, COO; Mr. David Melcon, CFO and Investor Relations Officer; 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 and MZiQ platform. 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 session. 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. Please note, this event is being recorded. Now, I would like to turn the conference over to Mr. Luis Plaster, Investor Relations Director of Telefônica Brasil. Mr. Plaster, you may begin your conference.

Good morning, everybody, and thank you for joining us in this conference call for Telefônica Brasil's 2017 third quarter results. The call will be divided as follows: to start, Eduardo Navarro, our CEO, will give you an overall view of our operating and financial results for the third quarter of the year. Secondly, Christian Gebara, our CRO, will go over our commercial and CapEx evolution. Finally, CFO, David Melcon, will discuss our efficiency commitment, digitalization initiatives and financial results. We will then move to Q&A. I now pass the word to Eduardo.

Thank you, Plaster and good morning to everybody on the call. Regarding our third quarter 2017 results, we maintained our trend of revenue acceleration, which once again confirms and reinforces our leadership. We continued solid mobile revenue growth above inflation, 3.7% year-over-year even with one-time effect for wholesale revenues in the third quarter for last year that makes the comparison more difficult. Driven by another set of strong performance in ultra-broadband and mobile data revenues, our total services revenue continued to accelerate, growing 2.4 year over year. The exposure to voice continues to decrease every quarter and non-voice revenues now represent a significant 68% of our overall services revenues. In recurring costs, moving to the middle of the slide, the third quarter of the year was the 7th quarter in a row where we saw a drop, minus 1% year-over-year, taking our EBITDA margin to a solid level of 33.8%, 1.9 percentage points higher when compared to third quarter of the previous year. We continue to be as committed as ever to controlling costs and the optimization of our cost structure through the digital transformation of the company. When you look at net income, we see 28.3% increase year-over-year reaching R$1.2 billion in the quarter. As you can see, our results are in line with the perspectives shared with you in the past and we continue to outperform in terms of profitability. Moving to the right hand side of the slide let me update you on the ongoing efforts to improve differentiation and guarantee that Vivo consolidates its leadership through innovation and a superior customer experience. Our accelerated commercial activity in the quarter resulted on a remarkable number of postpaid net additions, reaching almost 1 million, adding FTTH another 115,000 net additions, meaning that we now have approximately 1.2 million…

Thank you, Eduardo. Good morning, everyone. This was another very positive quarter for Vivo, reinforcing our leadership in key segments. As Eduardo said, this quarter we grew 2.4% in total service revenues year-over-year. Before going to the slide, I'd like to highlight our key operational initiatives and results for the third quarter. We maintain our focus on expansion of 4G coverage including acceleration of the 700 MHz and 4G plus deployment. We launch the new features enable prepaid and hybrid users to data services reinforcing our data centric approach. We continue to expand our high-speed data network deploy FTTH in seven new series in this quarter. We also increased our IPTV footprint in Sao Paulo state. And finally, we increased significantly B2B digital service revenues mainly driven by security and IoT services. Getting on details of our main businesses, on Slide 5 we present the evolution of our mobile service revenues, which increased 3.7% year-over-year mostly driven by data and digital service that went up by 28.2%. Moving to the right hand side of the slide, the on the top shows that mobile data revenues already represent 72% of total mobile service revenues. This is a result of our efforts to reduce our dependence on voice by launching new services, offering more effective bundles, and increasing data allowance in mobile appliances. Our postpaid revenues maintain a solid growth of 8.5%, already representing 75% of our total mobile service revenues. The left hand side of the Slide 6, shows that our mobile market share increased 1.5 percentage points in the last year, reaching 30.8% with 42.3% in postpaid. This quarter we had highest postpaid growth that since fourth quarter of 2015 reflecting a good execution of our strategy focus on best network quality, superior customer experience, innovative offers and brand preferences.…

Thank you, Christian, and good morning, everyone. Moving to Slide 11, we are pleased to announce that recurring cost reduced for the seventh quarter in a row decreasing 1% in comparison to the same period of 2016. Once more, we'd like to highlight management commitment to controlling cost, so the cost and pursuit so the cost and pursuit of efficiencies and end-to-end digitalization of our company balancing cost savings, and business and sustainability. Personnel cost increased 1% mainly due to the collective agreement with base days in September 2016, partially offset by savings from rightsizing initiatives that took place last year. Cost of service rendered fell 4.7% explained by the additional interconnection tariff reduction in February 2017, synergies in TV content and lower mobile content costs. Commercial expenses, excluding bad debt increased 3.7% in the period in line with our successful acceleration of commercial activity in key segments as we have been addressing during the last quarters. Bad debt remains under control reaching 3.5% of the net revenues for the second quarter in a row due to the combination of credit and collection actions aimed at guaranteeing its stability. As a result, we reported an acceleration of our OIBDA growth reaching 7.8% on a year-over-year basis and an EBITDA margin of 33.8%, an increase of almost 2 percentage points when compared to the previous year. Moving to Slide 12, we present an update on our synergy evolution to the usual breakdown that you have seen over the last quarters. The company has already secured by the end of this quarter an NPV of R$18 billion, already securing 81% of total NPV included in our best cases scenario of R$22 billion. An important point to highlight this quarter is that we have an improvement in the capture of revenue synergies which…

Thank you. The floor is now open for questions. [Operator Instructions] The first question comes from Richard Dineen of UBS. Please go ahead.

Hi, good morning, everyone. Thanks for taking the questions. Just two questions, kind of high level I guess. First, just on the telecom bill, which is I guess sort of still making its way through congress, just if you can give us an update on where you see that? It seems like perhaps there's a sense that the authorities are a bit more - perhaps a bit more cautious about the idea of, quote unquote, giving away, these assets that they may be more aggressive in their demands for a price or compensation to move those concessions to authorizations? And secondly, I guess I may have seen some headlines, Eduardo, just some comments on China telecom as potential investor, perhaps even a controlling investor in Oi. How would you view that scenario? Any color on the above would be fantastic gentlemen? Thank you very much.

Richard, thank you very much for your question. I'm starting by the second question about China telecom. I've seen that what they comment, not so much on it, it's more is that we are very favor of competition. Oi, I think for us it's very good to have a healthy player in the Brazilian market. I see my all concern is that I see that we all welcome players that are very aligned with shareholder remunerations. And my comment was not regarding any specific company or a Chinese company, none, in specific terms, was that I potentially know, we potentially could be concern about the interest of state other companies here, it's not - not only state companies, any kind of companies that could be committed to return to their shareholders. Now this has been my own point, my own concern, it's not specific to the Chinese companies, and again I see more than welcome every competitors that could be committed to shareholder remuneration. Your first question about the telecom view, we continue to be I think optimistic about the evolution. As you know it's now in this night [ph] the president of senate, they can have - they can do pretty things to send to be filed by the president, to be voted on the senate plenary or senate commissions. You must take one of those three issues. We are very confident that the - basically, the fundamentals of the builder is still there. We do not see any value at all in using resources, dedicate the resources to services that has no value to society at all like public phones, like fixed line. In the meantime that we have schools that has no access to Internet, of rural areas with no mobile. I think that it now makes…

Eduardo, that's fantastic, thanks for those comments. I mean, just - I guess, just to sort of see if I can have quick follow-on, I guess, it was just - the question was in the context, I suppose, of the headline recently that that Oi had been refused it's TAC application had been refused and I was just wondering whether that was represented a sort of change in tone from the authorities, I don't know, TCU or whatever, which may be taking a harder line on these sort of - regulatory benefits for the sector.

For me, Richard, the main reason of at least according to my knowledge, there's Oi TAC - the TAC Oi have been refused, is that in order to sign a TAC the authority must be 100% certain that the order part can - the packing mainly important and applicable. And I think, that now at least what I - we listen that people in Anatel or empresas [ph], now, we are not 100% sure that under the current scenario that Oi will be able to deliver the commitments they could assume for the future. For me this is the only reason. So I do not see any reason that they could approve, they should approve our TAC and not approved Oi TAC, I think the fundamental is the same. I think that the only reason to approve or not to approve the order is the certainty that Telefonica can deliver the commitments that was from investment, and at this point now on their order due to the situation could be more difficult to Oi to assume this commitment for the future.

That's terrific. Thanks so much for the clarification, Eduardo. Thank you.

Thanks.

The next question is from Fred Mendes of Bradesco. Please go ahead.

Good morning, everyone, and thanks for the call. I have two questions. The first one, we saw an increase in the VAT right to represent 60% of services revenue versus 10% in the last quarter, but the differencing in the taxes over gross revenue decreased only 60 basis points quarter-over-quarter to 25.2%. So I was just wondering, if you can see an even lower level of tax on the gross revenue given the benefit of the VAT? This would be my first question. And also the second one, I guess, on a related topic, which segments already consider to follow on the portfolio services you're already offering, I mean, it looks like not all of the postpaid clients already have this benefit, so can you - if you'd be seeing this in the next quarters, do you have more benefits to pick it up on this time? So just kind of wanted to understand the dynamics.

Hi Fred, this is Christian. I'm answering the second question. We included the VAT in prepaid and in control hybrids by May, so in this quarter, the benefit is for these two segment. And we just launched a new service for postpaid this week, so postpaid - pure postpaid, you don't have VAT in the portfolio. And in B2B, we basically have in a very limited segment. So as to your second question, VAT is in prepaid and control, and postpaid is being implemented in our new portfolio that was launched at this weekend.

Okay. Thank you, Chris.

Hi Fred, this is David Melcon. Regarding your first question, I mean, looking to the evolution of the gross operating revenues and the net operating revenues, which I understand is what you're asking, the difference between the gross and the net and the taxes, we see that they're both - one is growing - the gross is growing 2% and the net is growing 1.8%, so we believe is very linear. So there is no any significant variation on those trends.

Okay. Thank you, Chris, and thanks, David. You justify if you allow me a follow-up question, I mean, how long do you - I mean, how high can this VAT as a percentage of gross revenue do you think you can reach in the next quarters assuming that there are also some segments that you do not completely implement this future, I mean how high can it go you think?

Fred, we don't give like guidance about that, but what we see is that we've been able to develop very exclusive and relevant partnerships in regulated services like I think one of them I - some of them I mentioned during my speech that we have exclusive deal there, NBA, we have a very good deal with GoRead that is a real content in magazines. We are developing new things also for B2B with cloud, securing, et cetera. And we see also value-added services growing standalone or being very much approached, or many different partners of many famous entities to have very good deals for Vivo. So we believe that's going to keep growing, but we don't give guidance in the number.

Perfect. Thank you, Chris. Very clear.

The next question is from Susana Salaru of Itau. Please go ahead.

Hi, good morning. First question on the digitalization initiative, how far are we in those initiatives? When do you expect those initiatives to be at the peak? I would expect that - I mean, just correct me if I'm mistaking, by the end of 2018, we should reach the peak of the initiatives. And if you could elaborate which one are the most advised one, and which one we believe it is - is going to be the latest one to be implemented? That would be our first question. And second, on the prepaid top-ups, we know that's a very sensitive way to monitor the economy, I guess, I was wondering if you already seeing a pickup - a marginal pickup in the prepaid top-up in the latest weeks? Thank you.

Hi, Susana, this is Christian, answering the questions. Okay, I think this digitalization is ongoing process. What I said is that we saw a peak in the number of users in our Meu Vivo app, that's our e-care app that was like 13 million unique users on average of last quarter. That for us is an impressive number. And that we are bringing new functionalities to this app to bring more customers to use this as a channel instead of either receiving a physical deal or calling our call center. And also these are like the first two things that we are trying to reduce digitalization. So the first movement is going to be in the B2C mobile, is where we are more advanced, and that depends on I think two elements, one that we have the capability, not only IT, but also process, and I think we are investing a lot in IT to be able to offer that, and B2C mobile is the most advanced one, we are implementing full stock. We're starting to already having one city with our full stack being implemented at centers here in the state of Sao Paulo. So we are little bit ahead of other sectors - other segments. The second thing that is important is the adoption. So we are also investing a lot in convincing and educating customers to use the digital channel instead of the most traditional ones, that also takes time. So if you - after looking when you're going to see this, I think it's going to be a process of few years, no, so maybe going to see more in the mobile - in the B2C mobile in the first years, then we're going to see together in the B2C fig. And then B2B, because we have a more important transformation process in our IT, if you take more. So again we are convinced that we are in the right direction. The results are being very positive, but it's a long journey. And regarding the second question that you talk about the prepaid, I think, it's soon to say that we see a pick-up in the economy. What we see is that we'll be very good migrating prepaid to control. To migrate prepaid to control, you need to have a very robust and healthy prepaid customer-base and we see that we are continuing this trend. Also we see the adoption our prepaid Vivo Turbo offer being increasing - an increasing and able to up-sell also more data to our current customer-base. So good result, but nothing that I can tell there is reflecting that people consuming much more.

Susana, this is Eduardo. I can just add some synergies, it's related to a question about macro. Synergies, way to think about macro all those related with consumption like Christian has answered here. But I think there is another impact from the macros that's the drop of inflations. What you see is that it's even tougher to pass through inflation to prices than to revenue than to cost. On the cost we already have - and usually to be regulated it's labor cost, it's energy, it's postpaid, and then it's always stated by greater to better own those low-cost instrument, inflation is back to directory. It's not the same on revenues or it's not easy. For me there is some sign that on this new environment that are now with a low inflation maybe, we are going to see maybe in the short-term, as we are going to see lower nominal increase both in revenues and in cost. But I think that is going to lead us to a margin expansion, I see - what I've seen in this quarter. I think that the EBITDA growth that we presented this quarter, 7.8% is helping inflation obviously, it could be approximately 5% renew increase in EBITDA, I think is much healthy and I think slight or bit we can relate it to initiatives in cost-cutting internal initiatives, but also to a decrease in inflation. I think that is the positive impact of lower inflation in the future could be very positive to the business.

Okay. Thank you. Very clear.

Thank you.

The next question comes from Andre Baggio of JP Morgan. Please go ahead.

Good morning, everyone. So I have two questions. The first one with regards to FTTH, I see that you're doing a big push. Can you describe a little bit how the economics of the FTTH is base, it's - and do you expect FTTH to eventually become meaningful, let's say, majority of your broadband access in Sao Paulo or in Brazil?

What is the second question, Andre? The first one I understand, what did you ask about Sao Paulo?

Yeah. Let's say if the FTTH should become like say the majority of the connections in your region?

Okay. So for FTTH, okay, I'll try to answer your question, so we are investing as you said, and it's true, we are growing our revenues in FTTH in very robust way, 31.5% that's we reported in the last quarter. And the number of parts is also growing like 45%. We are convinced that what we have is the long-lasting solution for broadband is the one that can offer very high speeds and it's our strong, but not only for Sao Paulo, for outside Sao Paulo as well where we have 83 cities, with this year at 12 new cities, we're going to end the year with 16 cities so it's our best is for this technology. The economics, I think is varied a lot depending on the city where we deploy it. Of course, we don't deploy in cities with most - more in B segments and in very concentrated, you have a much better return, when you go to smaller cities with more CD - and maybe with a more dispersed customer-base, future customer-base, the economics are very different, okay. So it's difficult to tell a number, it really depends on the geography. In Sao Paulo, everything they'll be reviewing is to build on FTTH. There are some areas that we're going to keep the DSL, so it's difficult to say when it's going to be that we'll have more from - off the other, we're only building FTTH. Of course, when we reach areas where we have DSL and we go to FTTH and the customer has the acquisition power to switch, we see - switch technologies here also in areas outside Sao Paulo, when our only competitor there has copper, and we bring the FTTH that our take-up is very high. So it will depend on the evolution of the market, but if we have a very broad homes passed in Sao Paulo, with still a lot of room for growth. So we're talking about on average of 20%, so we can grow much more in the homes passed that we already have in the state.

Okay. And the second question, that's on mobile, you're giving away much more data for a lot of applications like Waze, Spotify, and so on. How do you monetize that - let's say, have you increased your price or have you been getting some money out of these apps for the traffic that you take from them, or are you - you'll be doing more for the clients, and so how do you monetize those?

Okay, so this new portfolio is very focused on high-end customers, as you can see that we are offering this for customers like paying a bill of over R$270 per month, it goes to R$389 et cetera. It replaces previous portfolio and we are giving more data, but we are also increasing price on average R$20. We are segregating what we call streaming and music from the normal apps, so all the other Internet. So some of them we gain also revenue share, because some of them are our services, so they are included like people music that's ours, and we also want to exclude some of others that we have partnerships. So there are two ways. Also we're going to sell more value-added service because of that. And again, I think, we are bringing innovation to our customers. Now, we are very focused on the family plan, so apart from the prices that I gave you, if you add more members, you're also paying more. So I think, we are very well focused in this top of the pyramid, and bringing more functionalities, more benefits, but also charging more.

Okay. Thanks so much, Christian.

The next question comes from Mathieu Robilliard of Barclays. Please go ahead.

Yes, good morning. Thank you for taking the questions. I have two questions, please. The first one with regards to mobile, so you've built your dominance or your very strong position in Brazil, because you've invested early and more in 3G. And obviously you've also invested in 4G, but some of your competitors are trying to catch up. So maybe if you could share with us some data points and elements showing how you think your network fares compared to other players in the market that would be helpful to understand, if you can continue to - or if you're maintaining that network advantage. And then second question, please, with regards to your capital structure. So obviously, Brazil doing better from macro point of view, EBITDA grows very strong and you are de-levering the balance sheet more and more. How should we think about the right capital structure going forward? I mean, do you think this is the right level of debt for you, or do you think at some point makes sense to de-lever? Thank you.

Hi Mathieu, this is Christian. I'm going to answer the first, and David is going to answer the second. So I think, you point out some of the elements of our winning strategy. In 3G, we have almost 4,000 cities, and the second player has 3,300 more or less, so I think we are ahead in 3G. In 4G we are speeding up. It's true that the other players are also doing the same, but today we - I think this year we built more cities than any other one in the country. So we've reached more than 75% of population coverage. And we believe that we are going to keep a very strong coverage that will differentiate us from others, because you can also have to add a 3G, because you build the full experience when you don't have 4G for any operators. Apart from that I think it's good to highlight that, because our frequency portfolio that I think is - it's not the best one of the two best in the country. We have 20 MHz of 2.6, we bought 10 MHz later on of some very specific and very relevant capitals. We have the 700 MHz, we have 1800 MHz in many cities. That allow us to do what we're doing before everyone, that we are doing 4G+, that we are putting together two or three frequencies. We already have almost 100 cities that we offer the 4G+ that is double the speed of the 4G. And also I think also customer that needs to see some measures that not only the corporate, it is also the experience and Vivo is leading, number one or two depending on the cities that you see in the past experience. Combine that with the best experience that we can offer in the stakes, I think we have a winning infrastructure proposition that will keep their way in the future. I think, I - hopefully I answered your question and I will pass it to David.

Hi Mathieu, this is David. Regarding your second question, we have the practice to distribute to 100% of the net income from the previous year. And this is what we are going to continue. In addition to these, we are always monitoring what are the key macro indicators particularly around interest rate and exploring where we can generate value - additional value to our shareholders, while elaborating the company. So far we are having additional - we believe that the flexibility that the balance sheet is giving us and the shareholder is the right thing considering the current interest rate. However, it's something that we are always as a team monitoring, so if in the future we believe that this new better macro environment allowing us to de-lever the company, we will analyze it and look for opportunities.

And would you consider paying more than 100% of the net income or just one of the potential ways to do that?

This could be one of the options. As you know, we are very focused on the cash flow generation and this is also very important for us in terms to maximize the return for our shareholders. And then we're always looking to ultimately how to distribute the cash flow that we are generating. So I think it's very - everything is easily ignored to also total interest rate. Up to now the interest rate we have in Brazil will have a more two-digit interest rate, so we believe that this was not an asset - the right scenario is de-lever the company. Now the scenario changing, so we will look for alternatives to maximize this distribution to our shareholders. But always looking to the whole scenario more than just the cash flow generated.

Thank you very much.

Thank you.

The next question comes from Cesar Medina of Morgan Stanley. Please go ahead.

No, thank you. My question has already been done. Thank you.

The next question comes from Valder Nogueira of Santander. Please go ahead.

Good morning, gentlemen. First question, if by any means spectrum license solution is flexibilized, either by coming legislation or by whatever other option Anatel and the ministry may have, would you be interested in acquiring more spectrum? That's question number one.

It's Eduardo, I'd say, yes, of course, I have - spectrum is a very valuable asset. I think that what's the strength that, it could be changed, will be considered alternatives, that could be even not filed directly for the government, even in the market. I think this is something that we always be looking at if there is an opportunity. The regulatory is changing. There is opportunity that creates value to us, so that also will be considered. Although we expect to have now again, it's the best in the market.

And also, the - and the 700 I think we start using it. So we already have like 200 cities. We're expecting to have double of this number in the next month and we are doing also some reforming of 2G to 4G. So in the moment as Eduardo said, we are pretty well covered, because of decisions taken in the past of being very keen on buying it, but again, spectrum is also something that for our business is critical.

We were not meeting, the short and in the medium-term, but of course something was alternative for the long term.

Yeah, because there may be some forced opportunities for the governments to be more flexible in the spectrum, don't you agree?

Yes, there are discussions. I think that's - those discussions have to be taken carefully, no, because the same - we are taking the same time and as we are discussing the other situation, yeah. I think this is necessary discussions that should be taken very carefully.

Okay. And the second question is we saw a positive number in working capital in the quarter. It came better than I believe most of the Street expected. However, I believe a part of it may be non-recurring. Is that a fair reading?

Hi Valder, this is David. I mean the working capital effect is always driven by seasonality, because we're comparing OIBDA minus CapEx with the free cash flow generation. But looking to what we are doing every quarter we are always trying to maximize the generation of the free cash flow. Here we are working on opportunities on payment terms, collection turns, we're accelerating collection turns. And also, we are also optimizing all the assets that we have in our balance sheet that will allow us to reduce the cash flow payment. So I believe that this is a seasonality effect, but doesn't really change the positive number that we have in our year-to-date, in the first 9 months. Now, looking for the rest of the year normally the payment, the cash flow - I'm sorry, the CapEx will grow in the fourth quarter and normally the payment terms of the CapEx are longer than the OpEx cost, so we believe that this is a trend that is sustainable.

Thank you, guys.

Thank you, Valder.

The next question is from Mauricio Fernandes of Merrill Lynch. Please go ahead.

Thank you. Good morning everybody. I have a question on Pay TV. There was a decline year-on-year in subscribers by 8% and revenues are basically flat. We also saw América Móvil in Brazil reporting a decline in fixed line plus pay television revenues. I think you've been vocal before about defocusing the strategy away from pay television. The question is whether we should expect going forward a decline in your revenues, Pay TV revenue specifically, please?

Hi Mauricio, this is Christian. I think in our situation it's something different, it's not that we are stepping out TV. I think we are focusing in one technology, that's IPTV rather than DTH. So I think our total revenues, they are impacted by this change in strategy. If you look exclusively what we did in IPTV, we can see that the number of subscriber, it's growing. So the same quarter last year in IPTV, we had something more than 200,000 customers. This quarter we ended the period with 351,000 customers, so it's a clear change from DTH to IPTV. And what we are doing IPTV, it will also bring you more revenues and specifically in this technology of more than 75%. And what we decided to do is to deploy IPTV in more cities. Now, so today we are concentrating in 43 cities out of the 80-something that we have as DTH. Our decision is to bring IPTV to all of them. So we're doing this last quarter of the year in main capitals, where we have FTTH. And we'll do the rest by the end of next semester of 2018. So again, I think in the long run it may be reflected in the change of our revenue mix. And we don't give the guidance of what's going to be in real growth, but it's going to be a change in mix, more IPTV and much fewer physical numbers in the customers with DTH.

Thank you, Christian. And while we're on the subject and in fact because of the change in - expected change in mix away from DTH, I think this will be reflected in your potential interest in SKY Brasil, should AT&T decide to resell it. I mean, it seems that that's been the speech for some time. I just want to confirm that that's still really the case.

Yeah, we are focused in IPTV, Mauricio. That's the right approach.

Thank you.

Thank you.

The next question is from Daniel Federle of Credit Suisse. Please go ahead.

Hello, good morning, everyone. My first question is if you - could you share with us some color on the strong performance in the corporate segment in the fixed line market? Is it related to one-off contributions from a specific contract or this is a recurring effect in the numbers? And my second question is related to the new prices, the new postpaid plans, what is the average - weighted average increase in prices overall in the base with this automatic migration? Thank you.

Daniel, it's Christian. On your first question, I think we shared in the previous meetings that we're doing a very strong transformation program in B2B. So we are seeing some results of that. If you see only like the mobile data for instance in this segment is growing much over 30%. If I look only fiber broadband in the segment, it's growing over 15%, and also I mentioned some digital service then in IoT and security also we are growing a lot. And machine-to-machine we are above 40% market share. And this specific quarter, yes, this we are also dealing with large corporations as our customers. And in this quarter, we had a very good contract in one of the customers that are also helping our results. So I think it's a combination of this high-volume specific large corporation deals that we can see happening once in a while, that happened in this quarter; but also, the fundamentals of the business considering specifically what I told you, mobile, fixed broadband and digital service are also showing good results. About the second question, I do not - you wanted to ask about the price of the new portfolio, postpaid? What is the specific thing that you wanted to - that I share with you?

Yes, because you mentioned that the increase was in average R$20, right?

Yes.

But are you able to share with us the weighted average increase in the price, because we don't know exactly the mix of the amount for the lowest plan, highest plan?

Our portfolio is very simple. And I think I can give you some of the numbers. So I think we are very focused in family plans as I said before. This family plan has extended value and value add more dependent, okay? So depending on the number of dependants that you add, you have and also to pay more, that some one or two or three included in the original price depending on the plan that you are. So what I was telling I think in the previous question I was like, let's consider the first four. So we had R$249.99 for a 6 giga plan. This one increased 20%. We went to R$269 and we're giving now 10 giga, okay, so with more data and increasing R$20. The other one - and then we have also the other benefits that I said before, the special apps and also the ones that you can use for streaming and video. There was another one that was 8 giga, that we were selling at R$369, we increased to R$389, another R$20. And now we are offering 15 gigas. There was another one, R$469, that we offered 12 gigas, we went to R$489, another 20 gigas - not, R$20, and we're offering 30 gigas this time. And the other one R$569, that we went to R$589 and offering instead of 30, 50 gigas. What we want to show here is that we are very focused in family, we are giving more data, but also depending on the number of dependants we are charging more. We're increasing R$20. And again, we are focusing the top of the pyramid, customers that are willing to spend this amount of money.

Okay, perfect. Thank you.

The next question comes from Julio Arciniegas of RBC. Please go ahead.

Yes, good morning, thanks for taking my question. I see that mobile ARPU is benefiting from tax benefit of the value-added services such as content. However, mobile service revenue growth is slightly lower than in previous quarter and by looking mobile ARPU, it's almost flat. So is the company seeing some pressure in the pricing dynamic in the market? Thank you.

I think also when you compare - thank you, Julio. This is Christian. Well, I think when you compare the quarter, the evolution of the mobile is also - in the last year, we had important wholesale agreement. So that is impacting the growth rate. Excluding that, the growth rate would be higher. So it was a long-term agreement that in the beginning of the contract had more revenues, because we needed to implement some adjustment in our network to be able to afford to this new traffic from the wholesale agreement. Apart from that, I think you also need to consider inflation. Inflation this quarter is much lower than previous quarters. So increasing price depend on the inflation rate, so we are not able to give the same increase when inflation is around 3% compared to other numbers much higher than this one that we had in quarters before. And again, I think our strategy continue to be of selling. We are increasing prices in all segments: prepaid, control, and now, as I showed in postpaid. And we are bringing innovation to differentiate our offer from other competitors. So I think we follow the same trend. I think the result in net adds prove that we are in the right direction. I think ARPU is increasing. Considering that, we have the inflation much lower and the comparison year-over-year is impacted by the wholesale agreement that we had in 2016.

Okay. Thank you very much.

This concludes the question-and-answer session. At this time, I would like to turn the floor back to Mr. Eduardo Navarro for any closing remarks.

I just like now to thank you very much for taking or participating in this call. And I hope we have the chance now to see one-to-one meetings in the next week, that you have different events that probably we are going to meet. And again, thank you very much for your participation.

Thank you. This concludes today's Telefonica Brasil 3Q 2017 results conference call. You may disconnect your lines at this time.