Earnings call transcript: Entel Q2 2025 beats earnings expectations

Entel, a leading telecommunications company in Chile and Peru with a market capitalization of nearly $1 billion, reported its Q2 2025 earnings, surpassing market expectations. The company posted an earnings per share (EPS) of 109.05, significantly above the forecasted 85.14, resulting in a 28.08% earnings surprise. Revenue also exceeded expectations, coming in at 721.07 billion compared to the anticipated 713.78 billion. Despite these positive results, the stock price fell by 1.94% in after-hours trading, closing at 3,260, down from its previous close of 3,298. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics, with 12 key insights available to subscribers.

Key Takeaways

• Entel’s EPS of 109.05 exceeded forecasts by 28.08%.
• Revenue reached 721.07 billion, surpassing expectations.
• Stock price declined by 1.94% in after-hours trading.
• Mobile services revenue grew by approximately 5%.
• The company maintained a strong position in the 5G market with a 48% share.

Company Performance

Entel demonstrated robust performance in Q2 2025, with consolidated revenues growing by 6% year-over-year, building on its impressive 9.46% revenue growth over the last twelve months. The company saw a 5% increase in mobile services revenue and a 3% growth in EBITDA. Despite a slight decrease in the EBITDA margin due to fiber deployment costs, Entel maintained a 28-29% overall margin, supported by an industry-leading gross profit margin of 87.81%. The expansion of its fiber network and leadership in 5G technology have bolstered its competitive position in the telecom markets of Chile and Peru. InvestingPro subscribers can access detailed financial health scores and comprehensive analysis in the Pro Research Report.

Financial Highlights

• Revenue: 721.07 billion, up 6% year-over-year
• Earnings per share: 109.05, exceeding forecasts by 28.08%
• EBITDA: Increased by 3%

Earnings vs. Forecast

Entel’s Q2 2025 earnings significantly beat analysts’ expectations. The EPS of 109.05 was well above the forecasted 85.14, marking a substantial earnings surprise of 28.08%. Revenue also surpassed projections, with an actual figure of 721.07 billion compared to the expected 713.78 billion. This performance highlights Entel’s ability to navigate a competitive market effectively.

Market Reaction

Despite the positive earnings surprise, Entel’s stock fell by 1.94% in after-hours trading, closing at 3,260. This decline may reflect investor concerns over the competitive pressures in the telecom sector and the company’s strategic spending on fiber deployment. The stock trades near its 52-week high and has delivered a strong 38.11% return over the past year. Notable for income investors, the company maintains a significant 12.71% dividend yield and has consistently paid dividends for six consecutive years. For deeper insights into Entel’s valuation and growth potential, visit InvestingPro for exclusive analysis and Fair Value estimates.

Outlook & Guidance

Looking ahead, Entel plans to continue expanding its fiber network and digital B2B solutions, particularly in Peru. The company aims to achieve a 10% revenue share from digital solutions in the region. It anticipates stable EBITDA margins and a cautious expansion strategy, focusing on high-value customers and maintaining its leadership in network quality.

Executive Commentary

Marcelo Bermudez, CFO of Entel, emphasized the company’s strategic focus: "Our strategy is to focus on high-value customers with the best network." He also highlighted the company’s adaptability in a challenging market: "We have been able to swim in these waters that are really turmoil pretty successfully."

Risks and Challenges

• Competitive pressures in the telecom markets of Chile and Peru.
• Regulatory changes impacting customer acquisition and retention.
• Potential challenges in managing CapEx spending amid fiber network expansion.
• Macroeconomic factors affecting consumer spending and investment.

Q&A

During the earnings call, analysts inquired about Entel’s interest in acquiring Telefonica assets and the impact of regulatory changes on customer churn. The company addressed these concerns, highlighting its strategic focus on high-value customers and plans for refinancing upcoming bond maturities.

Full transcript - Empresa Nacional de Telecomunicaciones SA (ENTEL) Q2 2025:

Paula Rantos, Investor Relations Officer, Entel: Good morning. Welcome to Entel’s Second Quarter twenty twenty five Earnings Conference Call. I’m Paula Rantos, Investor Relations Officer at Entel, and joining me today is Marcelo Bermudez, Entel’s CFO. Note that this event is being recorded. Participants will be in listen mode only during the company’s presentation.

At the end of the presentation, we will open a question and answer session. Let’s start by outlining today’s agenda. We will begin with our review of the most significant and recent events, followed by the overview of Entel Group results. Then we will move we will zoom into Chile and Peru operations and cover also ESG initiatives. Finally, with final remarks and Q and A session.

I will now turn the call over to Marcelo Hermoles, Entel’s CFO. Please go ahead, Marcelo.

Marcelo Bermudez, CFO, Entel: Thank you, Paola. Good morning, everyone. So let’s start with the main events we’ve experienced this first half of the year in Intel, which has been a very interesting year. So far, already in half of the financial period, I would say, as of June will be very challenging, but still we have very good news in certain areas. Specifically, I want to start with just noting that we continue to lead the five gs market with almost 48% share.

That’s also very interesting for the future deployment of our network in Chile as well as in Peru, as you know. So this is interesting also because we are one of the pioneers in the country in the five gs stand alone technology. This technology, just to remember, will allow in the future to provide a more low latency signal network to our customers, provide slicing, which allow us to really use one network with different features for different customers. So this is very important for certain services like, for example, telesurgery or any other service that requires really undisrupted capabilities in order to provide control, for example, robots and other service. So this is really interesting technology that we are partnering with Ericsson to provide services for our customers.

So we will continue to deploy that or to advance in the first steps of the five gs SA. And it will be very interesting how we can develop that and monetize it in the future. Also, we have been named the most valued company, Telco Incida, for the third year in a row. And this is a very relevant recognition for our our company. This is backed by OpenSignal.

So it basically provides assurance that we are the company that provides the fastest five gs speed and good mobile experience in the country. So we’re very proud of that and we will continue to improve that connectivity for our customers in the future. Also, we’ve talked about this before, but the project we have been conducting with Starlink is really advancing. We already started the first I was testing Peru with direct to sell using the Starlink connectivity. It was a very successful initiative in Peru.

It was proved that we can provide stable basically background for the technology, specifically getting started, we will talk about that later with messages initially. So in Peru, we’ll basically do the same as we will do in Chile, and this is already on its way. Also note that S and P Global Ratings reaffirmed the BBB- rating with a stable outlook for the future. And also, we’re very proud of that and gives and backs our strategy in terms of financial stability that we have been performing. Finally, Antel launched the digital B2B business in Peru.

It’s a very interesting market. We already started with all the commercial first steps, I would say, in the market, trying to mimic what we have in Chile. So I’m sure that will be very successful and will support our strategy to increase the share of digital solutions in our revenues. We also expect to have a 10% share of the revenues in Peru similar to what we expect in Chile in the coming years. So that’s very interesting to see how that will evolve in the future.

Just to note, I already mentioned a little bit what we did in Peru with the test, but basically, we’re still advancing in the Starlink contract, I will say. Basically, we are already everything set up and prepared to provide as soon as possible messaging services in the country in Chile. We are just in the final step of approval formal approval from the authorities. Today, it is basically requires some final review from the national controller. It’s a state agency, basically, that they were still reviewing that.

So hopefully, if that is approved, we will be able to provide and initiate messaging services during the year. We don’t have any specific date. Hopefully, it would be soon. Could be I don’t know if it will be August, but could be August, September. So as soon as we have the approval, we’ll be starting to provide the service.

Everything is set up for just turn that on and start providing that very awaited service for our customer base. I would say that it will be really something important to improve our services and have a positive impact also in churn rate for at least the coming years. Going to really what have changed in our shareholder structure, just noting that we have an increase in the share of foreign investors that have been adding 2.5 percentage points as of June compared to August on quarter. Mainly pension funds reducing their position a little bit in favor of foreign investors, but we don’t see much change besides that. Almendral for sure is still the controller shareholder with 54.86% of the company.

And in terms of stock price, we’ve seen at least some increase in terms of volume traded in the last few months that will have supported a little bit the trend of the stock price trying to convert to something similar to the IFSAR return of the year, well, lagging a little bit behind yet. So that is at least a good news in the short run. And we would see what’s coming in the for the rest of the year. Just going to consolidated figures, when we see the at least in terms of mobile users, when we see in general is that we have been at least posting some increase that is relevant to note in what is area that is postpaid growing year on year 8.4%, though prepaid has shown both in quarter to quarter figure year on year, a decrease is mainly due to a cleanup of the customer base that it was performing in February 2025. After that, we expect to continue to grow in the postpaid business mainly.

Although during the first quarter and second quarter, we have been facing some challenges, mainly due to the regulation that that in mandates that we perform biometric clearance for our new customers. Basically, any new customer that purchases services or SIM card needs to be authenticated by its biometric face recognition or digital print. So that has reduced a little bit the I would say the turnover in the industry. We’ll see later that even the portal rates have decreased during the second quarter given this new regulation. And also in Peru, there is some effect also related to the anti spam law, which basically had reduced or not allowing the calling our customers or customer for other companies to promote telco services or between any company.

So that is forbidden and that’s also had an impact on the what we call the turnover rate also in Peru. So when you combine those two effects, which are mainly drive or driven by regulation, you see a decline in the mobile users as a whole compared to the previous quarter and the quarters before that. But in general, industry after this adjustment is still growing mainly related to postpaid. In fixed business, if we see the RGUs also growing very rapidly in fiber, you can see 25% year on year. We have been reducing this growth speed in the last quarter in fiber, we’ll touch that in a few slides later.

But still compared to last year, we have improved significantly in terms of fiber. And also, as you know, given that it’s an older technology decreasing our share in fiber and hybrid fiber coaxial network. So we will should continue to see that declining the non fiber and just growing fiber. In terms of consolidated revenues and EBITDA and net income, we can see that in general, the quarter on quarter, we have a slight reduction, but still growing more than 6% in overall revenues compared to last year. Growth have been driven by very markedly in the last quarter by handset revenues.

But also, if you compare to last year to the same quarter on quarter, we still are showing some increase close to 5% in what are mobile services. So combined at stable and a slightly growing mobile services and a very strong handset revenues and handset financing, we have been really in the mobile business pretty active. Still fixed business is still contributing with 8.5% year on year and some growth close to 3% quarter on quarter. So we’re growing on fiber, a little less than we had expected. We’re going to talk about that later, but still good decent growth in mobile and a very strong growth in handset revenues and financing.

That if you would translate that into EBITDA and EBITDA margin, you see is that still the EBITDA is growing compared to last year and last quarter, kind of in the range of 3% in both figures. And EBITDA margin is decreasing. We have anticipated this since the last year. We know that the deployment of fiber will impact our margins both in 2025 and 2026. That’s why we also noted in the slide, you can see in the right hand side, in chart, the the just the mobile margin for second quarter twenty twenty four and the same margin for the second quarter twenty twenty five.

That is not including fiber, just mobiles. So you see a 0.4% or a decrease in the margin just in mobile. So the 1.4 decrease compared to last year as a whole in the margin is mainly coming one point of those 1.4% is coming from the fiber deployment and just 0.4 from the mobile business as a whole. This is consolidated both Peru and Chile. We’re going to see what are the reasons driving a little bit less margin in mobile, but it’s mainly the fix that is really dragging the margin down.

But this will be just for, as we have mentioned, for two years. And we believe that is a strategic move in terms of to defend our mobile business. That’s why we’re investing in fixed. In terms of EBIT, still year on year, almost no growth, just slightly 0.2%. Quarter on quarter, a little bit one percent point decrease.

And in terms of net income, we posted 19,000,000,000, which is still lower than the first quarter. But the important thing here is that every quarter, we’re not seeing what we saw last year, which is all the impact of the exchange rate impacting our investment in Peru. So having that impact of our investment in Peru related to the exchange rate already hedged in our P and L, we have seen a more stable quarter on quarter net profit. So still that’s why it’s not very comparable to the last year net profit that really varied a lot quarter on quarter. So we still see a pretty good year for the rest of the quarters in terms of net profit.

You can see a stable business growing, not that much in mobile services, very levered in both in fixed and handsets sales and financing. The steel margins given that as we have mentioned several times, the industry is still facing a very stiff competition, a strong competition both in Chile, Peru. This year, we have expected more competition in Chile given that one was backed in the industry. The cloud also got their five gs spectrum. So we were expecting this year to be more active in terms of competition in Chile.

That is occurring a little bit more responsible, I would say that previous years. And in Peru, it’s still very aggressive. I mean, know that Claro and Bitel are very relevant and in their specific market segments in Peru, it’s still very competitive market. Although Telefonica in both countries have this has been less present is still a challenging year because there are four players in each market. This is very relevant to understand.

That’s why 28% margin in total, 29%, if we take out the fiber deployment, it’s still good margin for this competitive environment. So we are far away from other benchmarks that you can see in markets that are two or three players. So still, we are being able to defend our position and still keep up with this margin level. Real quick, there’s not much change. We haven’t seen different effects that we saw last year in terms of inflation exchange rates.

So it’s mainly still good business performance. We see quarter on quarter in terms of EBITDA, this including the dragging of the EBITDA from the fixed business that is included in the area, really offsetting the kind of strong performance of mobile. For the six month cumulative figures, pretty much the same. Business still is strong, Taking into account that last year, we performed several efficiencies that still are included in this year in expanding those efficiencies. Those are really supporting our business that is still very competitive in terms of pricing.

So actually, it’s a very good news that we can really perform in our organic business positively both in the quarter figures or in the six months accumulated figure. We always see what’s going on with CapEx. We have been posting a little bit or a figure that is a bit lower than we anticipated for this year and for the first half. You know that given the competition in fiber, given the results and the churn rate in fibers, have take that into consideration and we have reduced a little bit the speed of we are expanding in which market segment we are expanding in fiber. So that means that we’re focusing on high value customers, trying to be cautious and responsible because every customer we connect is very significant in terms of CapEx because we need to connect.

The field expense in terms of connection, the last mile with Skol and also expand to invest CapEx in the equipment of the fiber. So it’s roughly $180 to $100 per customer. So we’re very cautious to really deploy that CapEx where we see incremental value. That’s why the lower speed of deployment of the fiber business has also resulted in lower CapEx. Also, the level of competition normally, we are able to take that into consideration in terms of mobile, how the competitive environment is in that sense.

And so we have been adjusting CapEx a little bit. Normally, the first half of the year is lowering CapEx. There’s some speed up at the end of the year, but still we believe that we will be roughly in the overall figure of 19% to revenues by the end of the year. So today, you can see that as of June, we still have 15.5%, which is a low figure. We should speed up a little bit for the rest of the year, but we’ll be we’re maintaining the last quarter view to reach 19% at the end of the year.

As you can see, mainly is related to fixed, which is the green line. The blue one, which is mobile is in Chile, really in 14.6% for the first half of the year. And Peru is speeding up the five gs and four gs deployment and increasing coverage in different areas, Lima and outside Lima. That’s why that figure as of June is still high compared to its revenues in Peru. So the expectation for the rest of the year is at the most reaching 19%.

We will depend on how the competition really evolve for second half of the year. This translated into a cash flow that is compared to last year is stronger in terms of cash flow from operations. You can see almost ARS 60,000 million compared to a negative cash flow last year for the first six months related to a better capital working capital, lower CapEx also, as I was just explaining, that have resulted or coupled with a strong EBITDA have improved our position during the first half of the year. Also the net financial expenses, this is not including the impact of the first half related to the hedge of the investment in Peru. This is just net financial interest expenses and interest income without that effect.

It’s a little bit higher than last year, mainly because we had a lower cash that has been invested because last year, we have in the first half a lot of cash coming from the sale of the fiber business the previous year. So that cash has been used. We use it the second half of last year to pay down debt, but mainly we’re paying $150,000,000 in a bond that expired in the second half of the year. Beside that, the cash has been really used for the normal operations and also to finance some part of the financial costs and dividends. So as a whole, cash for if you compare to the beginning cash, which is for this year, 233,000 million, we ended almost in the same figure, though we are including million of net financing activities, which is mainly the bond issue we did in April, which provided a little bit below ARS 8,000 million.

And we deducted from that line the impact of the hedging of the investment in Peru, which is negative ARS 41,000 million. So instead of including that hedge in the net financial cost, we are including that as part of the net financial activities. So as a whole, looks like a balanced cash flow, very dependent, of course, in what’s happened for the rest of the year in CapEx, as I already mentioned. So we keep CapEx related to the trend in EBITDA, we should be able to keep a balanced total net cash position at the end of the year. Might be a little bit negative depending on how the rest of the year evolves, but still as of June is pretty stable.

Finally, for the consolidated, still very stable and I would say, in an adequate level, the main financial indicators, financial debt net financial debt growing a little bit during the last quarter. As I mentioned, we issued a new bond coupled with the increase of the impact of the hedge of the Peruvian operation that implies a negative impact of 41,000 million. That impact is very important to understand. The hedging of Peru, if you see the FECU, it’s included in interest expenses as a higher interest expenses, but it’s netted in the tax line with more positive taxes, which are those effects are the same are netted and that accounts for the hedging we’re doing. But when you see the balance sheet, it implies that we’re posting a higher debt basically of 41,000 million just because of the hedge.

On top of that hedge, we also issue ARS 80,000 million bond, but we also paid two loans in the first half of the year for roughly ARS 35,000 million, which was the banks KFW and BCP in Peru. So those three effects, the new bond debt reduction plus the impact of the hedging account for the 8,090 thousand million that the net financial debt is increasing. So that’s the main explanation. So it’s compared to the last quarter, it’s 60,000, but compared to the end of the year, it’s ARS 100,000 million. In net financial debt EBITDA, pretty stable ratio and that also have allowed us to keep the credit rating as of now with still positive or neutral in terms of fit rating as S and P is stable outlook for the rest of the period.

And we have been also posting a dividend yield annualized of 6%, a little bit lower than the previous quarter, but it’s still in positive area. Just quickly going to Chile, pretty much the same that we saw in the consolidated figure, mobile user base decreasing based on the not only the cleanup that was performed in prepaid, but also the biometric and portability regulation that started in the 2025 or impacted mainly in second quarter twenty twenty five that affected the levels of portability and sales in the postpaid market. In spite of that, we were able to increase compared to last quarter in 1% our customer base. So we will expect at least if the there will be a positive contribution for the coming quarter, but still given the lower portability ratios, at least the churn rate also should be impacted positively. So we will see in the industry, I would say some change in the turnover of the customer base among the different operators.

If you see in the last quarters, we still don’t have the second quarter figures. We really saw Intel leading the last quarters, every quarter, the net share of the market growth. Although in the last I would say, in the last quarter, first quarter twenty twenty five, Claro improved and got the pole position, but still until we got really a significant chunk of the market growth. Telefonica also improved compared to what we saw last year, which is the green boxes there. And warm is still very shy, depending on the quarter, some slightly positive or in the last quarter, slightly negative.

Just to know that in the second quarter twenty twenty five, we got 33% positive net adds in that quarter. We still have the rest of the industry figures. The revenues in Chile, pretty much in the same line as the consolidated. Year on year, in general, we are growing 4%, but just seeing the quarter figures really no growth in terms of revenues. We are really seeing some level of growth in fixed, which is the business that we’re really focusing and speeding up the growth, but it’s still helping, but not enough to really offset the adjustment that we see in the mobile services.

Mobile services, although the customer base is kind of stable, we have seen some level of competition, higher discounts in the second quarter that are driving a little bit the ARPU down, we’ll see in chart in a different slide. But that’s mainly the impact for the second quarter. As a whole, it’s pretty stable. We should continue to see in terms of handset and handset financing strong figures. We’ve seen compared to last year still a 4% growth with pretty strong and good but debt is really controlled.

We haven’t seen yet any negative impact. Pretty it’s a little bit better than last year in terms of uncollectibles. So we’ve seen a stable financing business growing at a certain extent compared to last year. And in EBITDA margin, same figures, a little bit almost one point or 0.9% compared to last year of lower EBITDA margin. But as you see, mobile is really stable in the same 37.1 in both 2024 and 2025.

So as I mentioned, the decrease is driven by the expansion of fiber. And also in terms of more detail, when you see mobile, as I already mentioned, this is mainly both the handset business and the accessories that are growing and what everything that is related to services is with a slow decline compared to the last quarter, but it’s still growing compared to last year. And as I mentioned, that’s mainly a result of the competitive dynamic in the second quarter and discount to provided to customers. Still the as you can see, Brand Power tells continue to leading to lead the industry with a significant gap of more than nine points to the second, which is second player. And still on postpaid, as you see often the NPS, we’re leading with more than 20 points gap compared to the second operator.

And another measure that we like a lot, which is the ECQ, which is really a blend of different ways to perceive the quality of the network in terms of speed, latency and other features. We really keep a significant gap within the rest of the industry. We also saw in the first quarter a decline for most of the operators that is related to the some heavy storms we had in the country that impacted Entel, but also the rest of the industry. We were able to recover from that and really maintain a against the industry. There are some players, you can see the red one that is Claro that is improving in terms of quality, that’s for sure, since they have access to a better five gs network, but still compared to the other players, we’ll still keep a very strong gap.

More in detail, the mobile service revenue share, 42.3%, widening the gap compared to the rest of the industry. As I mentioned before, in the chart at the middle of slide, we can see a steady growth in ARPU compared to first quarter of last year, although we will see in the second quarter a slight decrease mainly because of additional discounts and competitive competition in the country. And we also know that the green operator there in this fourth quarter last year, they performed a base cleanup that really made the ARPU of that operator jump in the last quarter of last year, and that has been maintained for sure during this first quarter. So in terms of port out rate, you can see we are, as the other quarters almost doubling the or half I mean, half the rate of port out of the rest of the industry. And we are keeping that leading position very wide against the other operators.

For the 2025, we put a note there, which is we are keeping the 0.77% gap. Actually, rate is 0.77, and we’re keeping, I guess, the same gap against the rest of the industry. Real quick to finalize Chile, fixed business accounts for 29% of the revenues, growing compared to the last year and the last quarter, mainly in fiber. And there’s the retail fiber, which is the orange one or red one is growing at 36% year on year with a more modest growth in the last quarter. And the rest of the services related to IT, Digital Solutions are with mixed results, IT growing 3% year on year, but Digital Solutions was slight decrease during the quarter.

But still, in general, what we see is B2B business in general is has performing pretty well during this year and growing in general. Quick summary of the how we have been expanding in fiber. We already reached almost 13% share in terms of connections, being one of the only companies that are really growing in the market, given our footprint related to the on net connection deployment. And that has allowed us to really grow in the last year every quarter. I would say that, that growth will continue in the coming quarters, as I mentioned, but cautiously trying to really speed up the profit goal in fiber business.

This is really the net adds, how the market has been evolving in the last quarters. You see the first quarter, we as happened in the other quarters in the last year actually, Intel is the only one growing. Mundo, which is the yellow one, speed up since the last year, first fourth quarter last year and first quarter this year, up and is really growing a little bit similar to Intel in the first quarter. And also Claro. Claro is already using the on net network, so they are moving customers to fiber, which is something that is expected.

So we are the three doing some revolving and getting customers the new customers in the last quarters. This is also important. We are showing the trend in revenues related to fiber and the costs and expenses related to the same business. As you see, we’re still growing, but this is a business that is really is related to scale. So in this first stage, we have always thought about that we’re not below the revenues in terms of cost.

So this is really the explanation why we have one percentage point of margin erosion because of growth in fiber. We expect at the beginning, I would say at the very 2026 or 2027, having really positive results in terms of EBITDA. That is tied to continue to grow and gain the scale to really provide and dilute a fixed cost in our larger customer base. With that all, we see also in the right hand side, the CapEx related to fiber. Normally, CapEx is related to installation and the equipment that is installed in every home.

So basically, the cost per unit is not that unchanged. You can see in the second quarter a drop of 22% in the CapEx. That is, I would say, is a onetime effect related to the refurbishment of some equipment of old customers that were reutilized for new customers. So I would say that normally, we will see a very stable CapEx figure per customer installed in the range of $180 to $100 at the most, including everything. That’s for Chile.

Paula, you can go with Peru.

Paula Rantos, Investor Relations Officer, Entel: Thank you, Marcelo. Well, moving to Peru results. The strong competitions continues, but, it has this quarter been mitigated since the anti spam law came into effect, which regulates the effects I’m sorry. Let me go over there. Yeah.

Which regulates the sending of advertising messages and requires prior user authorization. We’ve been able to increase the postpaid customer base in this quarter by 11% year over year and 2% compared to the ’25. In prepaid also, we decreased a little bit of 1.3%, but it’s mainly because due to the migrations that has secured towards to postpaid customer space. Here, we can see that despite this high competitive environment, we have been able to continue growing our postpaid share. We have maintained a positive growth trend with more than 100,000 additions in this second quarter, capturing 38% of the share of this growth.

This increase we have seen that it’s in the customer base attributed to the strengthening of both in person and remote sales channel and also to two additional lines that have shown greater growth compared to the ’4 and because of the quality admissions that we have kept churn under control, contributed to the base growth, with good B2C acquisition and greater B2B consistency over in the different segments. Regarding the results of Entel Perdu during this quarter, sales reached $277,000,000, growing 5.5%, mainly due to the significant growth that we can see in sales of mobile equipments and services. The change in strategy allow us to maintain the tariff structure while controlling promotional discounts and reducing participation in the dynamics of in person discounts. Regarding our EBITDA, we reached 70,000,000 during this quarter, a little bit down from compared to the second quarter twenty twenty four, where growth in service and equipment margins could not offset higher advertising cost due to this Antispa law, which require additional advertising efforts and increase in sales channel cost. And also, we have some increase in channel cost in marketing campaigns to promote our best network regarding the increase that we’re doing in coverage over this year.

Despite this slight decrease, we have been able to maintain a stable EBITDA margin of 25%. Regarding our EBIT, it has been in line with recent quarters and has remained stable. Moving deeper to the mobile revenues. As you can see, we grew 77.7%, mainly due to the equipment sales that grew 17% and also due to the success commercial strategy that has aligned to the sales volume with the commercial plan, achieving a significant makeup in the selling price and recovering the substantial market share. And also due to the market share context that we have been it has been favorable to us due to the reduced participation in other operators.

Also regarding mobile service revenue increase We have been making progress improving our network in presence and also in four gs and five gs coverage with a significant growth plan out of Lima, leading in an excellent consistency quality from Tudela, which per which it’s a key performer that evaluate the average download or the speed upload and latency. Also, with according with Obsiptel and OpenSignal, Intel has best five g network quality. Regarding our lever brand power, Intel has maintained the second place with a significant growth in Lima and out of Lima in customer service benefits, innovations and attributes that are has been increasing over the last quarter with also, we have seen some important recognitions over this quarter. For example, we obtained the first place in customer experience in telco sector by ESO in Peru. Also, we obtained the first place in quality ranking on mobile Internet indicators.

And also, we obtained the first place in telco sector from attracting and developing talent by Merco Talent. We’ve been able also to maintain a good satisfaction levels for our customers in NPS and postpaid. And also, this has been in line with the commercial strategy that we’re implementing to get closer to our customers with benefits and loyalty plans for our users. Also regarding our revenue share, we have been maintain our second position in revenue share with this significant presence and participation in mobile services, especially in Lima. Also, we have obtained important growth in the revenue share with handset revenue.

Despite these high competitive and strong promotions and discounts, we have been able to growth in our ARPU reducing because mainly the reduction of the in person channel discount. Regarding port out rate, the entire industry during the second quarter has the effects of the anti spam law. However, Intel have been able to increase the pour out gap compared to their industry average. Now I will move forward to our ESG main events and highlights during the second quarter. It’s important to highlight that Entel has received the Energy Excellence Seal for that it’s an initiatives of energy excellence seal for recycle program, thanks to the positive environment impact and the use of electric truck and collection of more than 130 tonnes of electronic waste.

Also, we have obtained the 76% of Intel’s stakeholders’ rate in ESG performance favorable according to the ESS Index 2024 survey, where Obtain has an important performance with this 76% of evaluation with an important best right rating in the corporate governance of 77%. Also, we have been highlighted the last Intel Recycle initiative with more than one sixteen hundred unused phones with this recycling initiative collective in under the two months. That is an initiative that has been a program that we started over the last year, and our goal is to recycle the 20% of the phones sales annually by 02/1930. Now we will move forward to our final remarks with Marcelo. Please go ahead.

Marcelo Bermudez, CFO, Entel: Just to finalize and before going to the open questions section, just really remarking and noting the that even that as I mentioned this at the beginning of the presentation that we are in a very highly competitive environment. The telco landscape is not have not changed in last year. In Chile and Peru, although we may have some players that have been exposed to challenging financial situation, They are still in the market, still doing commercial promotions. Some of them trying to really survive for a while, some other more aggressive because they need to really speed up the deployment of additional network related to bandwidth acquisition. So the market is still moving a lot.

So that’s really important to understand. And even in this scenario, we have been able to grow in the margin in service revenues, keeping up ARPU’s steady growth in ARPU. If you compare for the last two years, we have been able at least to cope for inflation in these two years, while keeping expenses down. So that has been the key to really keep a stable EBITDA margin that is being dragged down temporarily because of the expansion in fiber. So that’s mainly the thing that I want to note.

And we have been able to really swim in these waters that are really turmoil pretty successfully, I would say. Although the cash flow has been tied, we have been also been able to finance the company, refinance some amortization that are key for the future. So we’re very happy with that. And CapEx also, as I noted at the beginning, we have been also managing very cautiously, very responsibly the aggressiveness of our CapEx not only in mobile, but also in fiber, trying to really be careful in terms to balance our cash flow, really focus the investment where we see the value, where the most value for our customers, also where the most margin for the company is located. That’s why we are focusing in certain areas in Lima, really focusing in certain specific regions of higher values outside Lima and still improving our network in Chile.

So that’s very important as are the main keys of our focus today in this moving environment. These has allowed us to keep and maintain our investment grade, which is really important for us and ensure our financial sustainability and funding for the coming years. And as I already mentioned, fiber will continue to grow. We will continue to grow in Chile, and we have a plan to grow in Peru beginning in as any month of 2026. We’re really making effort to that to make that happen, but always grow really carefully watching for keeping expenses, being very careful with the cash deployment basically and CapEx.

So I would say that summarize where we’re at, the strategy how we are dealing with this environment and before going to the open questions. So that’s it.

Paula Rantos, Investor Relations Officer, Entel: Thank you, Marcelo. MARCELO DELLA Now we will move to the questions. Please, you can send it through the chat, and we will wait a couple of minutes. Well, we have our first question from Andre Coelho. Can you comment on the competitive environment in Peru now that the new entrant has operated for around six months?

Are you interested in buying Telefonica in Chile? Thanks. Well, thank you, Andre, for your question. Regarding the competitive environment, as I as I comment, over the first six months of this year, what we have seen is that they all the industry has faced the effects of the anti spam law. So most of the cases, there was no much change regarding Telefonica with this new controller that it has.

They still are offering promotions and discounts. And what we have seen is that they’ve been reducing and decreasing in their service revenue share in equipment and handsets. But over the rest, we have seen that it’s declining on mainly on as the trend that we have seen over the last year.

Marcelo Bermudez, CFO, Entel: And I can answer the interest in Peru. Just it’s very relevant to know that the Integratec, Integratec, which is called today is actually not necessarily a long term operator. That could be interesting at some point and really divesting that operation in Peru. So we’re always looking for opportunities. We cannot rule that out, not only in Peru, but also in Chile.

And Chile is tougher because of the regulation. But the only thing I can say that we always are looking and analyzing different alternatives, not only in Chile, but also in Peru. And we’ll continue to do that. Hopefully, we get some results, but it depends on the actually the analysis and authorization of the different authorities.

Paula Rantos, Investor Relations Officer, Entel: Thank you. So we have another question from Fernando Gonzalez. What is the cost of providing direct to self-service to each client?

Marcelo Bermudez, CFO, Entel: Yeah. We cannot comment on the details of that contract. But what I can tell you is that we have already paid the part of that contract is already asset and we will start to amortize that asset when we start the service provision. And the details on the cost per user, I cannot really answer that. But what I do can say in this matter is that we as soon as we get the authorization, we have already a different set of alternatives to monetize that directly and directly.

So hopefully, we’ll be really tapping and getting a competitive advantage at least for a while against the other operators. This is a service, a product that is really that the customers are waiting for it and we know that it will be very successful. And we have a commercial plan of deployment and monetization.

Paula Rantos, Investor Relations Officer, Entel: Can you go up, please? We have two more questions. We have two questions regarding our capital market access. Could you please comment on your capital market access plans, including refinancing the upcoming maturity of 2026? And what is the refinancing upcoming maturities?

Marcelo Bermudez, CFO, Entel: Yes. I can answer that, Paula. There is already a plan in process to refinance. We already just paid at the beginning August, some few days ago, the one of the amortization of that bond, which was $180,000,000 The second amortization, the last one, which is in August 2026, we are expected to refinance that during this month of September, since. There’s this signal already?

Okay. Yes. So it’s where. So the way we have a really short disruption, so I will repeat it. We are already planned and in the process of refinancing the bond amortization that is due in August 2026.

This September 2025, we already have the financing. We went to the market. I will go in detail. But basically, we have secured roughly a little bit below $500,000,000 of financing in average six years bullet, if you consider all the different alternatives. And we’re using that secured finance to refinance the next year amortization plus other general uses.

So what you see is that already in the next financial quarterly financial statements of September, we will have all that already refinanced to the long term. During this process, which is really interesting during this process of going to the market, basically, I’m talking about the bank market, national and international bank facilities. We also were able to get non committed lines for roughly $380,000,000 on top of the funding I already mentioned we have secured. So we see that in general, besides going at the beginning of the year to the local bond market, going to the local and international bank system with tenors that are pretty good, six year bullets at very good rates also is really showing that the still the financial community is back in the prospect growth of Intel. And we haven’t tapped yet the international bond market, which is always available for different alternatives that might happen in the coming month of year.

Paula Rantos, Investor Relations Officer, Entel: Thank you, Marcelo. We have another question for Victor Tomita. On the new identification regulation in Chile, we were wondering if this was more relevant for volumes or also on the revenue side, looking at revenue from mobile service specifically that this is related this quarter, would you say that, that has more to do with regulation or with the impact of discount and competition on postpaid ARPU?

Marcelo Bermudez, CFO, Entel: Regulation or with the impact of this kind of competition postpaid ARPU?

Paula Rantos, Investor Relations Officer, Entel: It’s more the second one.

Marcelo Bermudez, CFO, Entel: Yes. It’s a tough question. The I would say the the the regulation or the the the roof for the that regulation in Chile is just to avoid misusage of the different plans and SIM cards and the fraud that it was occurring. So going forward, since that the regulation was passed, that was implemented, what we would see, I would guess is the it will reduce churn rate or the revolving rate among the different industry operator. That may have an impact or stabilize net pricing, I would say, the aggressiveness of discount could be at a certain extent reduced.

I don’t think it would be very relevant, but I think that might occur at a certain extent. In terms of ARPU, what we have seen is the we’ve seen a positive trend, although the last measure of the last quarter is a little bit below what we had because of some level of competition. We see coming forward possibilities to really at least pass every year figures similar to inflation to our pricing. So I’m pretty confident that this regulation would also help a little bit in the margin to improve that ARPU going forward.

Paula Rantos, Investor Relations Officer, Entel: Then we have another question from Victor. Also, you give some extra color on what kind of discounts and promotions have been getting more common in the market if there’s our discount for portability or discount for the first twelve months or bundle with handsets, for example? How have you been thinking in terms of balancing customer acquisition discounts versus profitability? This is mainly on fiber.

Marcelo Bermudez, CFO, Entel: You can go with it, Pablo, if want to, Yes.

Paula Rantos, Investor Relations Officer, Entel: This is mainly on, I would say, bit on fiber business. What we have been doing also, as we mentioned during the first quarter, is that we have moved discounts from six month to twelve month with lower amount of discounts, in the range of 20% of discount for the first twelve months. And these actions has allowed us also to improve in better quality of customer acquisitions. Here also in Chile, we are not allowed to bundle offers with mobile. So so also it’s discounts and promotions in the fixed business.

Marcelo Bermudez, CFO, Entel: Yeah. I will provide some more there. And just in fixed, what is Paulo was referring to, we saw the last several quarters that the bill shock customer experience once the initial discount six months discount was over was very one of the main reasons for the higher churn rates we were getting. So the strategy there was to reduce the discount by reducing a little bit the discount in terms of percentage, but also making it go from six months to twelve months. So we had a lower bill shock after that was over.

If the question also was touching a little bit the mobile services, really we don’t do much bundling with handsets. These are different business we cannot do bundling in Chile, although in Peru it’s allowed. So mainly our discounts are targeted to certain really certain price segments and not very massive in our mobile customer base. We always try to go to a more higher income segments, more really pricing brackets where we really make a difference given our service that we provide. So we do not compete a lot with discounts in the lower part of the pricing table.

Although we are with certain strategies with additional lines and competing in area, we try to be very cautious not to work a lot in that area and focusing on what is our competitive advantage, which is service in the most the value customers we have.

Paula Rantos, Investor Relations Officer, Entel: UNIDENTIFIED Also, have another question. Could you please comment if the tough competition environment in Chilean mobile persist in the third quarter of this year. What we have seen, we only have July ended internal figures. But what we have seen is that Mt. Intel has maintained between the 33% and the 35% net share of the growth of in postpaid.

So what we have seen is that we’ve been a little bit increasing our net adds during this beginning of the third quarter. Also, there’s another question. Can you can the regulatory changes in Peru and the spam led to a structural decline in churn rates and challenge your longer term market share goal?

Marcelo Bermudez, CFO, Entel: I can answer that. I mean, yeah, you’re right. That’s a challenge given that we’re not the leading player in Peru. If we add this regulation in Chile, it would be different, my answer. So since we’re the new entrant and we are challenging our the leader in Peru, this is a regulation that makes it harder for sure.

But the way we compete in Peru similar to Chile is by really having the best network. We’re really focusing on having the best network in every area of Lima and also being a very strong competition to the leader in the main city of South Carolina. So despite normally the all this regulation and the revolving market is in a certain segment of the pricing scheme that is where we try not to compete in the lower part of the bracket. So we will continue to grow. We need to grow.

We’re trying to balance growth, capturing these three, four additional points of revenue shares in the coming years. And for sure, that is harder when we are trying not to really go into the lower price segments, to the mill to upper one. So the way to do it is really going to high value customers, having the best network and providing services like, for example, Starlink that makes a difference. So that’s the strategy. We’re not really go deep in the segment that we’re not really making a difference because it’s more price than quality.

And that’s not our main goal.

Paula Rantos, Investor Relations Officer, Entel: Yes. And we have a final question. Are these CLP loans? What kind of rates did you get?

Marcelo Bermudez, CFO, Entel: Yes. In average, we’re taking all these in nominal pesos or swap those loans to nominal pesos in as a whole, I would say, in overall, is Chilean pesos 6.48%, a little bit below 6.5 in as a blended average of the different alternatives. We are taking I will mention really short is one local bank, one large international bank and also we are doing the recouping of an existing cross currency swap related to a bond expiring in 02/1932. So the combined rate of that is in the range of 6.5% in pesos, a little below that.

Paula Rantos, Investor Relations Officer, Entel: Thank you. Well, that concludes our questions and conference call presentation. Before this, I would like to cordially invite you to participate in our next Investor Day that is going to be held on October 23 in Santiago. In the coming days, we will send you a formal invitation, some more information about this important event. So thank you so much for joining us today, and have a good day.

Marcelo Bermudez, CFO, Entel: Thank you.

Paula Rantos, Investor Relations Officer, Entel: Bye.

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