Good morning, ladies and gentlemen. Welcome to TIM SA 2021 Q1 results conference call. We would like to inform you that this event is being recorded, and all participants will be in listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TIM SA remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given. We highlight that statements that may be made regarding the prospects, projections, and goals of TIM SA constitute the beliefs and assumptions of the company's board of executive officers. Future considerations are not performance warranties. They involve risks, uncertainties, and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors to TIM SA may affect their performance and lead to different results than those planned. Now I'll turn the conference over to the CEO, Mr. Pietro Labriola, so he can present the main messages for the Q1 of 2021. Please, Mr. Pietro, you may proceed. Good morning, everyone. Thanks for attending our results conference call. We started the year with high hopes that the worst of the pandemic was behind us. Unfortunately, already in February, the second wave started to hit some Brazilian cities and spread more broadly during March. This time, we were more prepared to sustain the impact from more strict measures to control the spread of the virus. The fact that cities implemented those measures in different moments of the quarter made a difference in how we were affected. The consequences of the second wave in our business were smaller than the first wave a year ago. Considering this, we are not altering materially any part of our strategic plan disclosed to you in our TIM Brazil Day. Neither the project nor the targets are going to be changed. We are confirming our entire guidance. The Q1 was marked by excellent execution. We accelerated our recovery started in the second half of the last year, and both revenues and EBITDA are growing more in our recent results. We closed the quarter with service revenue growing more than three percent year-over-year. EBITDA came in very solid, up 4.5% versus last year. It summed more than BRL 2 billion, representing a margin of almost 47%. As you probably saw last night, we reached an agreement with IHS, completing the deal for our FiberCo. A great deal for both companies. As I said, our customer platform plan is moving forward, and we are much closer to announce new partnership for distance learning education and digital wallet. On the technology front, we reached more than 4,000 cities covered with 4G and more than 120 sites in the Sky Coverage project. We also signed the agreement with the vendors for our Journey to Cloud project. These achievements show our commitment to improve the quality of our service, implement more cost-efficient solution, and last, generate social and environmental positive impacts, as we detail in our ESG plan. Last but not least, this quarter, TIM Live was appointed as the best broadband service in Brazil. Detailing our revenue acceleration, we saw positive contribution coming from mobile and fixed services, with all lines posting better growth rates than the Q4. Mobile service revenue accelerated to grow 2.8% year-over-year, with postpaid segment growth also spending up to reach almost four percent. Mobile service revenue is also receiving a contribution of customer platform projects, and this is the Q2 that we book revenue from this new revenue stream. In this quarter, it summed BRL 17 million. In parallel, fixed services are also growing faster, up by 12%, with a solid contribution from TIM Live of more than 20% year over year. ARPU improvements in all segments are a significant driver for both mobile and fixed accelerations. The key element of our mobile recovery amid the second wave of pandemic is the ability to play our game of from volume to value. Despite having stores closed across the country impacting our commercial activity, our mobile ARPU grew almost seven percent year over year, with postpaid and prepaid contributing positively to the performance. We expect to improve even further our prepaid dynamics. In the first quarter, we increased the participation of eRecharges to 55% of the total and accelerated the adoption of TIM Mais Vantagens. In March, prepaid recharges were slightly positive versus last year, but in April they are up by nine percent. For postpaid, churn reduction was a highlight once again. At the same time, we continue to differentiate our offers with the OTT marketplace and try to monetize data consumption with a more for more approach. Still in the mobile arena, but now talking about new initiatives under customer platform name, our projects are starting to bear fruits. Out of the BRL 17 million in revenues, BRL 11 million were generated by financial services and BRL 6 million were generated by mobile advertising. The latter was driven by the evolution in TIM Ads and informative platforms. Besides data rewards for video ads, we are working on leads generation, service, and app installations. In the Q2, we expect even more after the launch of TIM Fun under our partnership with Play2Pay and TIM News with Aiqo. Talking about the future, the customer platform roadmap is full. In the Q2, we expect to sign an MOU with any learning platform and our digital wallet negotiation are speeding up. We expect news by the end of the quarter. This time, we either manage to bring other telcos on board or we do it alone. On health, we are starting the first negotiation, it will be something for the Q3. Changing gears and moving to the fixed services, it's not a surprise that TIM Live's consistent performance, combining ARPU and customer base growth, produced solid results in the past years. It's no different this quarter. Additionally, we are developing the connected house concept to bring more innovation to our clients and sell intelligent devices. Regardless of the difficulties imposed by one year of pandemic, we managed to keep growing our coverage, reaching 3.5 million homes passed with fiber, up 40% against last year. This is a remarkable achievement, but we believe we can do more. That is why TIM is partnering with IHS in the FiberCo project. We have been saying from the start, this deal has an industrial orientation, different from other deals you can find in the market. Summarizing the deal, the FiberCo will receive TIM Live's last-mile network in FTTH and FTTC, and TIM will hold 49% of the capital of the new company. TIM will drive the network rollout, but the fiber will be open to other players to run. The FiberCo was valued at 21 x in terms of enterprise value on EBITDA multiple, and TIM received BRL 1 billion in proceeds from the transaction. As a consequence of the deal, we will deconsolidate a large portion of TIM Live's CapEx, and even if new costs emerge from the last mile run, the net effect will generate a positive contribution to free cash flow. Maintaining our discussion on infrastructure developments, I'd like to remark that it was not only the broadband coverage that grew solidly despite the challenges of the moment. Mobile coverage also expanded soundly. 17.5% more cities covered with 4G, 27% more in 4.5G, more than 40% growth in cities covered by 700 MHz, and more than 120 sites with the scattered coverage project to cover remote areas. Network developments didn't stop there. We are preparing our network for Oi's asset integration and planning the 5G rollout. In this context, Massive MIMO rollout, site modernization, and the network sharing agreement with Vivo play a crucial role in the next step of our infrastructure plan. Before moving to IT evolution, I wanted to remark that despite 5G DSS being the 5G of marketing, it has its importance, and we know how to play this game. That is why we are ahead of the competition on this front as well. Today, we have the broadest coverage in this technology with 19 cluster of cities and approximately 150 DSS stations. Our customer access the 5G DSS technology more frequently than our competitor clients. To complete the 5G topic, TIM was the first Brazilian telco to test 5G standalone with commercial equipment, reaching speeds above 1.8 gigabit per second. Now, on the IT front, I'd like to remark TIM's pioneer move with the support of Microsoft and Oracle to be the first operator and one of the first company in Brazil to migrate 100% of its data center to the cloud. We already detailed the project during our investor day, but I want to use this as an example of the importance of having an integrated approach to ESG. In this project, we combine innovation, cash flow-focused efficiency, and positive environmental impact to take TIM to the forefront of IT solutions. It is essential to highlight this is not the only example. When we analyzed the outputs of our digital transformation in caring services and how they positively impact NPS in different segments, it is becoming clear that technology will help us deal with one of the most pressing ESG challenges for a telco in Brazil, its customer satisfaction. One of the beauties of digital transformation is its dual effect. At the same time, it supports customer experience, but it also helps to control and reduce costs. We are still in the middle of the process, so we have a long way to go. This past year, digitalization speeded up, for sure one of the consequences of the pandemic. eRecharges, e-bills, e-payment, e-sales, and app optimization all presented double-digit increases versus 2020. On top of that, Pix, which was launched six months ago, already has more than 2 million TIM invoices paid. In this context, our OpEx continued to be under control, rising well below inflation. It went up just 1.7% versus 2020. Bad debt continued to show solid performance. As we mentioned in the fourth quarter, the main structural changes were done. Improvements will be more incremental than transformational. We need to account that we have more than 60% of our revenues in post-paid. Clearly, the combination of revenues going up and costs under control is well-known. It produced EBITDA growth, in our case, a solid 4.5% year-over-year. This is the Q19 with positive EBITDA growth. Additionally, it also generated margin expansion to reach 46.6%, and net income rise of almost 60%. As I mentioned earlier, we are preparing our network for Oi's asset integration and resuming project initially scheduled for 2020. Our investment totalized BRL 1.3 billion, growing more than 40%. Before I conclude my presentation, I'd like to highlight that the mobile sector is being reshaped by the Oi acquisition on one side and the spectrum auction on the other side. Both are expected to occur at a certain point in the Q3. On the Oi mobile deal, it is worth pointing that the transactional approval process is going according to expectation. We have completed all the necessary steps with CADE and Anatel for both to conduct their analysis. Now we must wait. As for the auction, we continue to view it as having a well-designed structure, which will privilege investments to serve customers in the best manner. As we stated before, TIM's focus will be the 5G frequencies. We are waiting on TCU's contribution to complete the details of our strategy for the auction. Ending my comments, I want to remark on the sound result we are delivering amid a very complex environment, which confirms the company's positive momentum and solid fundamentals. We will continue to work on mobile growth acceleration with the expectation that vaccination can represent an upside. Implementation of the deal with IHS to grow further our FTTH business. Continue developing our customer platform strategy to increase its contribution. Transforming our infrastructure and preparing the company for the future. Last, maintaining the focus on profitability and financial discipline. Thank you. We will now open the floor for questions. Please, operator. Thank you, Mr. Pietro. Now we will begin the Q&A session. First, we will take questions from analyst, followed by general public, both in English. If you are listening through webcast, your questions can be sent by chat. We ask each participant to restrict himself to two questions at a time. To ask a question, please press star one. To remove the question from the list, please press star two. Please hold while we poll for questions. The first question comes from Mathieu Robilliard with Barclays. Please, you may proceed. Mr. Matt, you may proceed. Please hold while we poll for questions. The next question comes from Leonardo Olmos with UBS. Hi. Good morning, everyone. Can you hear me well? Yep. Yes, we can hear you well. Okay. Thank you. Sorry about that. Well, I have two quick questions. The first one about the fiber cross sale to IHS. Great deal, first of all. Congratulations. I wanted to know if you could share with us the EBITDA that this operation was generating so we can understand a bit about the multiple. If there are any long-term clauses in this deal such as earn-out. Thank you. Okay. Hi, Leonardo. It's Adrian here. You know that it's not easy to disclose those kind of information in terms of EBITDA, but I think that since Pietro mentioned the multiple that we arrive with the enterprise value that we are considering, you can do the math and it's almost pretty easy. This is. I mean the multiple, sorry. Yeah. Well, Pietro mentioned the 21 x. Yeah. Thank you enterprise value over the 2020 pro forma EBITDA. The thing here is that's the 2020 EBITDA, in terms of pro forma. Clearly, what we had, it's a very, if you want, challenging business plan, is the internal business plan that we had even before the transaction. What I'm trying to say is, probably in the future, we can do more of what we put in the business plan, because at the end, that's the goal of closing this deal and especially with IHS being an industrial partner in this case. Remember, Leonardo, we always said that this, for us, was not a financial deal. It's more an industrial deal due to the fact that we wanted to be in the business of fixed ultra broadband. It's the opportunities that the market will have in terms of new connection of FTTH in the next three years, up to 11 million of new connections. You can understand that there is a lot of space for many players, and we want to catch a portion of that opportunity. Internally, with the actual situation, could have been a little bit difficult because this will mean additional CapEx, being the fixed ultra broadband much more capital-intensive than the mobile. That's the first goal of the FiberCo project. Yes, of course, we can also mention the more financial side of the transaction, and then you arrive there to that multiple of 21 x EBITDA. It's not something that for us is the key. The key for us of this project is industrial. Of course, this secondary that we mentioned will help us in order to finance the deal with Oi? Yes, of course. Be sure that the first goal for us for this project was industrial. I think that you had a second question, Leonardo, was? Yes. Thanks for that, Adrian. Yeah. Thanks for the answer. The second question is related to the agreement you made with Telecom Italia. I understand that you tested seven other companies to provide the submarine cable, the foreign connection. I just want to understand, before this deal, which company were you using? What were you doing before that to get access to foreign internet from Brazil? I don't know if I got your question, Leonardo. Is it regarding our contract that we signed with Sparkle? Yes. That's it. My question is, you signed the contract with Sparkle, right? For 2021 until 2023. My question is, before that, which company were you using? Where was the capacity? How much were you paying? Hi, Leonardo. This is Vicente Ferreira speaking. This information was disclosed yesterday in a communication. All the information available about this contract with Sparkle, as it's our related party, is public. I will pass the floor to Mr. Alberto so he can explain the usage since this is under our wholesale department. Please, Mr. Alberto. Yes. Hi, Leonardo. It's quite a standard piece of business, meaning that on a yearly basis, we review the terms of conditions of our peering internet traffic. We sound the market and we check out the best deal in terms of volume versus prices. This specific contract was discussed yesterday, and yes, it has been awarded to Sparkle because it provided to us the best technical scoring and the lowest price, and it extends for the 12 months renewable. Yeah. Okay. Just I'm not sure I got my question. In 2020, who was the Sparkle? Who was providing you capacity? Sparkle, too. All right. Thank you very much. The next question comes from Edinardo Figueiredo with J.P. Morgan. Hello, everyone. Do you hear me well? Yes, sure. Okay. Thank you for the call. I have two questions on mobile, if I may, please. The first one, Pietro mentioned during the speech this move from volume to value, and indeed, we can see that the postpaid net adds from TIM have been softer in the past months. On the other hand, you've been able to increase ARPUs and increase postpaid revenues. I was trying to understand the drivers behind that. Are you benefiting from price increases, or are customers migrating for higher value packages, such as controlling to Yeah, and the- To pure postpaid? Yeah. The second question? The second question is still on mobile. If you could give us a call around competition. We saw Oi launching unlimited products. How are you seeing these trends right now? Thank you. Okay. Edinardo Figueiredo, first of all, thank you. You catch the right point that is related to our strategy that we declare since a couple of years to move from volume to value. As you have seen, we posted a growth year-over-year in this Q1, mainly on the postpaid. The growth is related also to the fact that we had softer net adds increase, but in the meantime, we were able to continue to increase the level of consumption in our package by our customer. What I mean that our package, differently from what's happened, for example, in some country like Italy or the U.S., do not have a huge amount of giga. During the pandemic, customer further increased their level of data consumption, it will allow us to per giga to package to higher amount of giga. What is important to highlight is that in this number is not yet included the price up that we did in the month of March. The impact of the ARPU increase coming from the price up will be appreciated in the Q2. What is important is that our price up is not a real price increase, but it's with our more for more strategy. What we do, we add more giga for the customer, exchanging. Our strategy that we define from volume to value is composed by package of giga that progressively, time by time, are increased in terms of amount of giga in front of a price increase. This will follow the data consumption increase from our customer that in 2020 was driven by the increase of consumption due to the pandemic, but it is a natural trend in a country like Brazil. To sustain this strategy, we have to further improve our quality of service. The fact that we were able also to reduce the level of churn, as I mentioned during my speech, is a further element that confirms that we are on the right path. When we will discuss the result of the Q2, we will show a further increase in the revenues of postpaid year-over-year. This time, they will be much more driven by an ARPU increase and less driven by a customer base increase. Coming back to the second question that is related to the competition. It's time by time, if you remember, it happened also with Nextel in 2019. There are some operators that are perceived in the market with a lower level of network quality. They try to gain space, releasing in the market offer with a higher volume of giga. To the good part of the market and of the customers have of this offer and of these operators, what's happened is that they do not have impact in terms of strong increase of customer base, of change of operator. We do not foresee this offer as an issue that can change. Again, I don't know if you were able to catch all my answer because I understood that there were some technical issue, Edinardo. I was able to explain? Yeah. You cut sometimes, but I got the answer. Thank you very much, Pietro. Very clear. Okay. I apologize for the issue, but if you want, I can repeat. No worries. No, it's good. Thank you. The next question comes from Frederico Faria with Bradesco BBI. Hi, good morning, everyone. I have two questions regarding the FiberCo deal. The first one, I would like to understand the estimated growth in terms of homes passed. If the estimated growth now, we didn't see much difference regarding the expected CapEx deployment, but we'd like to understand how much the company can achieve in terms of homes passed in the future now with the new investment partner versus previously. Second, my other point is that if the primary offer that the company will receive is enough to fully finance the growth expected in terms of capital deployed. Thanks. Okay, Frederico. I think that, first of all, it's important to remember that when we presented the new plan during the TIM Day, we clearly stated to the market that the FiberCo project. Once we closed the deal with IHS, the first step of our deal was to use IHS to fulfill what was included in our plan in terms of on pass. In this first phase, we are not adding further on pass, but through the vehicle of IHS, we are going to deliver what was already included in the plan. I'll take the question from here because we're having some issues with the connection. Frederico, I think that you heard what Pietro was mentioning. We reached this agreement with IHS for the FiberCo based on our actual plan for deployment of FTTH and obviously operation and maintenance of the actual networks. Clearly, in order to reach this agreement, we need to base it on what we already have and what we are already projecting. As I was mentioning in the first question here, the goal obviously is to accelerate. As you know, the opportunities that we will have in the next few years are big. We want to catch a big portion of those opportunities. Yes, obviously, the intention is to make more of what we were projecting. What we have now and the base of this agreement is the actual plan that we have. That's why you see the figures of reaching almost nine millions of home passed in four years or what we are doing in terms of for the next two years. The other part of your questions is regarding the component of the primary that IHS will be paying if it is enough in order to finance. Yes, it's enough to finance the first years of the operation, remembering always that the good thing of this FiberCo is that it's born with an anchor customer that is TIM. The FiberCo will have an EBITDA since the beginning. Probably something different in other cases. Again, we would try to focus on our project. Of course, with the EBITDA and the capital injection coming from IHS, there will be enough cash flow in order to finance the additional deployment. Obviously, every company can be much more efficient through leverage. We obviously could consider this alternative. Again, we're very comfortable with this level of primary at least to finance the first three or four years of the FiberCo. Adrian, I'm already in. Do you hear me well? Yes. Adrian? Yeah. Adrian, do you hear me well now? Yes, Pietro. Okay. Sorry, I apologize. Just to complement what Adrian was telling. I was telling before that it is important to remember that when we presented during our TIM Day presentation, our three years plan, we didn't include in our numbers the FiberCo operation, the FiberCo deal. In this first phase, what is happening is that we are replicating with FiberCo the target of home passed that there were in our plan, in our existing plan. It's clear that we have the flexibility to further accelerate because our goal is to use this vehicle to have an acceleration in terms of coverage. The way in which this deal was built give us the flexibility to do that. As Adrian was explaining, also from the financial point of view, there are all the elements that can allow to have a further acceleration. What we'll do is that once we put everything in place from the operational point of view, the next step will be to evaluate the right speed up that we can have with this vehicle. Again, answering also to the first question that we received on FiberCo, it's really important not to discuss about which is the level of EBITDA of this FiberCo, because from our point of view, this is an industrial operation, and this is not a financial operation. If we would like to have a financial operation on that. It was quite easy to increase the level of EBITDA of this company, increasing the transfer price of the cost of the local loop. We kept this level at a low rate because this is a vehicle that will allow us to further accelerate our growth in the ultra-broadband business. Again, I like to stress this point because this is not a financial deal. It has also important financial components, but at the end of the day, it is an important industrial deal that will allow us to further accelerate our ultra-broadband development. Perfect. Thanks, Pietro Labriola. If you just allowed me to make it, how it's going to be with it in terms of TIM branding? You are able to continue to grow in terms of homes, or they will be available to offer the infrastructure to other players? Frederico, we lost you for part of your question. Part one. Can you rephrase? Perfect. I just wanted to understand if the growth in terms of homes connected will be exclusive to use the TIM brand, or the FiberCo will be able to offer the other homes passed to other players as well? Thanks. Okay. Yeah, understood. As we mentioned in the material fact that we issued yesterday, there will be for every new deployment, a period of exclusivity for TIM of six months. After that, yes, obviously, FiberCo could start to offer the infrastructure to other players. That's the main difference when we talk about neutral or open vehicles. In this case, it's not neutral because the vehicle will have the anchor customer that is TIM and will have an exclusivity period on every new deployment. Yes, these networks will be open to third parties. That's probably what's interesting in this deal, and we think that it's reflected in the value of the company. Again, remembering always that we will keep all the management of the customers, we will keep even the management of the home devices, so the modems, because we think that this is an extremely important touchpoint with our customers. Again, what we are putting here in this fiber, what we are dropping down is from the OLT, from the cabinet to the customer. The answer to your question is yes, the networks will be open after a period of exclusivity. Adrian, if may, because perhaps also do a comparison can help Frederico Faria to catch difference between other model of Infraco. As Adrian was explaining, in the Brazilian market, you will see that you will have some cases in which the Infraco model will be completely neutral. What it means that from P0, the day where they built the infrastructure, the last mile, this infrastructure can be bought by any operator. There will be no exclusivity of time for one operator to buy from this neutral Infraco. This is more or less the model of the Oi Infraco. Okay? It is a model that is pure wholesale that have some pros and some cons related to the fact that you don't have an anchor operator customer. Our model, as Adrian was explaining, is open. What it means? Once we will be built the fiber infrastructure, for a certain period of time, six months, the only operator that could buy that infrastructure will be TIM. After that period of time, it will be open also to other operators. Okay? These are two model, completely different because in the second one, the one that was chosen by TIM, it's clear that you can give a strategic indication in the area that must be developed and continue to be synergic with the TIM strategic plan. This is the reason for which I'll stress another time, it's more an industrial deal than a financial deal. Okay. Thanks, Pietro. Thanks, Adrian. The next question comes from Carlos Sequeira with BTG Pactual. Hi, Pietro, Adrian. Good morning. How are you? Thanks for taking my questions. I will still stick to the transaction with FiberCo. I think by now I got it, but just to confirm, TIM's backbone are not included in the assets that are being transferred right to the FiberCo. They will remain controlled by TIM. Is that right? You told Carlos backbone. Is it right? Yeah. Backhaul and backbone. Yeah. They will stay with TIM. Okay. Any decision by the fiber company. Sorry, Cadu. Yeah. Sorry, it's Adrian here. Sorry. Yeah. As Pietro was mentioning, we always said since the beginning that what we were interested in to find a partner was on the last mile. Why this was designed, because remember that our backbone and obviously our backhauling are mainly for the mobile business yet considering what we have. Of course, as we said in the beginning, the ultra broadband, it's always leveraging on this mobile infrastructure that we have. For us, it was extremely key to maintain what we have in terms of backbone and backhauling in-house. That's why the only thing that we're dropping down is the secondary network. At the end, as we mentioned, this is an industrial deal, and it's probably more strategic, and the strategy is to maintain the backbone and the backhauling in-house. There could be additional subsidies in the deal, in this FiberCo deal because FiberCo could be in the future, yes, deploying infrastructure not only on the FTTH, but also on what we call FTT sites because it could be also efficient. What we are dropping down to the company is limited to the secondary network. No, it's clear. I think this is important to be clear to everybody because we ourselves, when we were doing the analysis, we mentioned an EV per homes passed and compared it to the other deals that happened, but it's completely different, right? The other deals included backhaul and backbone, and you are not included in here. It's impossible to really compare the different transactions from the valuation standpoint, right? Yeah, you are right also because some of the transaction that happened have also customer included. In such a case, we are only including the last mile. That is the fiber that go from, let me say, the OLT- up to the customer house. No, perfect. A different question. The expansion plan is pretty aggressive, right? My question is, which type of geographies or type of cities are you looking, the FiberCo will be expanding to? Is there any specific target you're looking for, a type of market that you are going to target with the new company? Carlos, it's clear that if we were just in two in front of a coffee or a glass of wine, I can give you a lot of details that now could be the disclosure of our strategy. What I mean, it's clear that your question try to understand if there's the risk of some overlap with other activity that are quite similar. We took a lot of attention at our geo-marketing model to evaluate exactly where to go. In our plan, there will be, for sure, and it's something that we can disclose, part of the change of the FTTC in FTTH, what we call brownfield. The choice of the remaining area will be done based on our idea about the move and the strategy of the other player in terms of geo-marketing and analysis about what is the potentiality of each area. It's clear you have to consider that there are different factors that you have to keep in mind, also the strategy of the other players. There is someone that evaluate the evolution of the cable technology, if and how, at which cost cable technology is able to scale up to one gigabit per second, take the migration of copper to fiber from some other player. There are some small ISPs that have fiber optics network, but with a level of overbooking that do not allow in an easy way to upsell and upgrade the network at highest level of speed. These are all the different elements that we are evaluating to define exactly our geo-marketing approach in the different area. What is clear that we will try to avoid overlap, and we will never try to be the third or the fourth player to go to build a fiber optics network because it makes no sense from the industrial point of view. In some way, thanks to the size of Brazil, the untapped market is still huge. I don't foresee in the next three, five years, huge issue in terms of overlap. Oh, that's clear. Thanks, Pietro. Thanks, Adrien. Carlos, it's clear that you have to keep in mind that this is something that is a chess game because you have to consider also what will be, as I mentioned, the strategy of the other player. They have to keep in mind that differently from TIM, they have some legacy. The strategy is defend the legacy, migrate the legacy, go for untapped market, but it will be difficult for them to do all of that. We must be clever, having no legacy, to try to fill this, let me say, gap in their strategy that will be left on the market due to the fact that the increase of speed is a fact. We are already moving to offer of 400 or 500 megabits per second. You can imagine that there are some technologies that can have much more difficulties to follow this kind of strategy. Yes, no doubt. Thank you, Pietro. Very welcome. The next question comes from Alejandro Gallostra with BBVA. Hi. Good morning, Pietro, Adrian. Thank you very much for taking my questions. First one, I'm trying to better understand the strategy of the new FiberCo. Purpose of the FiberCo is to have all the homes passed with FTTH in four years and having nothing with FTTC. That would mean that you plan to upgrade your current FTTC network to FTTH and then increase the FTTH footprint in order to reach the 9 million FTTH homes passed target within four years. Is that correct? We are talking about 9 million FTTH plus 3.5 FTTC? What will be the infrastructure deployment plans at the TIM level? That's my first question. Second question is regarding the personnel expenses. You have been reducing the number of employees at a faster pace in recent quarters. Will this trend continue as part of the digitalization process, or it is accelerating because you are permanently closing stores? How much reduction in the workforce should we expect going forward? In addition, related to this question, you mentioned in the press release that employees will be transferred to the new FiberCo. Would it be possible to mention the number of employees that you will be transferring to the new entity when the transaction materializes? Thank you. Okay. Related to the first question, before to leave Adrian Calaza to give more details, perhaps my previous speech wasn't clear. We are not starting to phase off the FTTC, changing everything for FTTH. In our three-year plan, what we'll do that we'll partially substitute in some area FTTC with FTTH. We don't have to do that at once. At the end of the three years, we will continue to have FTTC customer, but we will migrate part of them, not all the customer, to FTTH. Okay. Now I don't remember, but today we are more than 300,000 FTTC customer. If I'm not wrong, our number at the end of 2023 will be to reduce FTTC customer from 300,000 - 200,000 customer. Adrian Calaza can correct me if I'm wrong. Related to the personal expenses, keep in mind that first of all, employee reduction. We don't foresee employees reduction, also because we are already a lean company. We have more or less 9,500 employees. If I remember well, in 2015, we were 13,500. Okay. We already did a huge job in terms of use of external forces, outsourcing part of the activity. We don't foresee this activity. What will happen is that the digitalization process that we put in place is allowing us to reduce costs that we have externally for some kind of activity that are more human-based than automatized. In relation to the comparison year-over-year, if you look at the real labor cost, if you look at the overall cost, it's an increase, if I'm not wrong, eight percent year-over-year. The real increase on what is exactly labor cost, it was only three percent. It is more or less aligned with the inflation. The remaining part is related to some contingencies. Again, Adrian, please, if you want to integrate or correct something that I told. No, you said it correctly, Pietro. On the first part of the question, in terms of what we will have four years from now in terms of home passed, clearly, we want to reach nine million of home passed on FTTH, but there will remain still some others on FTTC. Why? Because We will be overlaying from C to H where we need to. As always, we need to be extremely efficient to maximize the return. It's not that we will be overlaying all the FTTC in four years. On the second part of your question regarding the employees that will be going to the FiberCo, remember that this is a very limited number of employees. We're not talking about something significant. We didn't have any movement in our numbers of employees in the past. We think that we are very comfortable with the actual situation. We don't have plans in order to reduce this number. Okay. Thank you very much, Pietro and Adrian. Alejandro, your question allow me to further give another detail about why FiberCo. Next year, reality, the truth is that already this year, we will have a big challenge that will be the integration, touch wood, of Oi's asset. One of the reasons to create a FiberCo was also to create, let me say, a center of excellence in terms of fixed operation for the last mile. What I mean? Until you discuss about backbone, backhauling, transport network, there are a lot of synergies managing a unique network, fixed and mobile. When you talk about last mile, it's something that is completely different from, let me say, the last mile of mobile. Mobile is a delivery of a SIM and everything works. Build the last mile, it's a complete different job. The creation of a FiberCo will allow us to have a team that will be completely focused in this tough job, and we are sure that we will benefit the most also from the operational point of view to have a separate company completely focused on this activity. They've been working on the fixed for a lot of years in Italy, and I can assure you that I don't want to say that there's one simplest than the other. For sure are two activity completely different, and it is difficult to let them come back. The creation of this company will allow to our internal team to be 100% focused on the integration of Oi. I'm discussing about the operation activity. We will have another team that will be in the Infraco that will be completely focused to build this last mile network. Alberto and his team will be focused to sell fixed and mobile because at the sell level, nothing change, and we continue to manage the customer. Understood. Very clear. Thank you very much. Thank you, Alejandro. Ladies and gentlemen, without any more questions, I'm returning to Mr. Pietro Labriola for his final remarks. Please, Mr. Pietro, you may proceed. I've been saying this for the past few quarters. In TIM, we don't use shortcuts. We will maintain our focus on the sustainability of the business with a rational approach and solid execution. The anti-fragile stance of the company is turning challenges into opportunities to evolve further. We will continue to use our innovative approach and agility to make the right decision and be ready to take full advantage of the recovery of the economy. I want to thank the dedication and commitment of our team, who continue to overcome many challenges to deliver outstanding results. Once again, together we can do more, or as we say in Italian, Thank you once again for participating in our conference call. Stay safe and healthy. I hope we can virtually meet soon in the upcoming events that we'll be doing with the financial community, but I hope to meet you in person as soon as possible. Thus we conclude the first.