Nicolas Didio - IR Mauricio Ramos - CEO Tim Pennington - CFO

Nick Brown - Goldman Sachs Luigi Minerva - HSBC Stephen Bechade - Citi Michelle Morrow - Morgan Stanley Bill Miller - JM Hartwell Lena Osterberg - Carnegie Thomas Heath - Handelsbanken. Gonzalo Fernandez - Royal Bank of Canada Sergey Dluzhevskiy - Gabelli & Company Johanna Ahlqvist - SEB Equities Erik Pers - Danske Bank Anders Wennberg - Brummer & Partners

Thank you and welcome everyone to Millicom 2015 second quarter results presentation. Today’s presentation materials can be found on our Web site www.millicom.com.

Before we start, I would like to remind everyone that the Safe Harbor statements apply to this presentation and the subsequent Q&A session. With me today on this one-hour call are our CEO, Mauricio Ramos; and Tim Pennington, our CFO.

I will now hand over to Mauricio to give an overview of our Q2 ’15 results and operational performance and strategy, after which Tim will take you through the financials and we will finish with a Q&A session. With that, I hand over to Mauricio.

Good day to all and thanks for joining us today. I'm indeed here with Tim, our CFO whom you all know very well.

Let's start this call with our key messages for Q2. This is in a nutshell what we would like you to remember from this call.

One: our Q2 was a solid quarter showing strong results both operationally and financially. Two: the core of our strategy will be to build a digital lifestyle for our customers and to monetize it for our shareholders.

Three: our integration in Colombia is progressing very well, a year into the process, we have enough confidence now to raise our synergy estimate to 750 million. Four: our continued effort in corporate cost is paying off, w have now shown a fourth consecutive quarter of reductions.

And five, we are reconfirming yet again our guidance for 2015 adjusted only for FX. Let's start with a high level review of our Q2 results.

We're very happy with our strong subscriber growth across all business units. In Q2, we added 1.9 million mobile subscribers, 1.6 million in Africa and 300,000 in Latin America.

This is actually an acceleration on the 1.1 million that we have added in Q1. In home, we built a 114,000 homes.

Our footprint now is very close to 6 million homes passed. Our new pay-TV platform showed good momentum as well.

We added nearly 35,000 subscribers across our DTH and cable footprint and we also added an additional 28,000 broadband internet customers. Our Q2 results were also very strong organically.

Although that strong local currency growth was offset somewhat by currency devaluations across key markets. Indeed, organic local currency revenue growth was strong at 9%, EBITDA was also very strong at 9% organic growth and OCF grew 27% year-on-year excluding UNE and 41% including UNE.

These are all very strong operational and financial performance metrics. Tim will give you a lot more color and depth in a minute.

Let's now spend a few minutes on our strategic update. As you surely recall, we are keeping the concept of digital lifestyle as our strategic vision, but we're now giving it a lot more strategic depth.

In a nutshell, our strategic focus will revolve around two key things, building the digital lifestyle for our customers and monetizing a digital lifestyle for our shareholders. A detailed and thorough strategic roadmap has been built around these two things but I will of course keep it high level here given our time constraints.

Let's talk about mobile first as recurring mobile is still about 70% of our revenue. On mobile, building the digital lifestyle means driving smartphone penetration and data consumption on those handsets.

Today, just about one in four of our customers has our smartphone. Three years out, we ambition three out of every four customers will have a smartphone.

It may be higher than that of course. We strongly believe that we are now at a tipping point in affordability and penetration in our markets.

Entry level smartphones are now below $45 and at this price level there is large pent up demand. In Q2 alone, we added 1.6 million smartphone users to our mobile base.

And data consumption is indeed ramping up quickly. In Latin America, our mobile data subscriber is now consuming 1.1 gigabits per month, up from 0.7 a year ago.

The key on mobile however is not just creating the digital lifestyle, but monetizing that digital lifestyle. And this is the key point we want to address today.

Millicom is indeed uniquely well positioned to effectively monetize data, much more so than M&Os in developed countries may have been in the past. A 100 days into the job, I strongly believe this for two key fundamental reasons.

First, about 90% of our mobile subscribers are prepaid. This key fact is actually a tremendous opportunity in a data centric world where smartphones are rapidly being adopted.

Bear in mind that our legacy voice only subscriber with a prepaid phone can take calls without any cost and he/she only tops up when he/she wants to make a call. As a result the voice only phone experience is passive.

Prepaid usage and ARPUs are therefore low. That is largely our world today.

But mobile data shows a completely different consumer behavior. Mobile data is an always on experience.

Consumers cannot get a message or receive notifications or use apps or check their web without doing a top-up. In a data centric world, prepaid consumer behavior is no longer passive nor reactive and therefore no longer low ARPU because mobile data must always be on.

Some early signs of this shift are beginning to emerge across our footprint. In Latin America, our voice ARPU was $5, whereas our data ARPU on data subscriber was about almost $8 in Q2.

Surely, it is early days and surely early adopters are more bandwidth hungry than the average, but this change in consumer behavior underpins a change in the old prepaid voice subscriber and is very promising going forward. The second reason is that monetizing data has typically proving difficult for mobile operators which unlike us in many of our markets face strong pressure from robust fixed networks.

Those networks offer high bandwidth and unlimited fixed broadband internet offers. In this context as you can imagine, monetizing mobile data is indeed very difficult.

Said differently, the availability of a much cheaper and highly reliable price per bit from fixed offers has made mobile data monetization in many markets very difficult. In most of our markets however, we are the ones building that high bandwidth fixed network underneath our mobile network.

This is a very important point because it gives us a unique strong position to both monetize data and offer our customers a convergent offer going forward. And this is perhaps a perfect segway to talk about our strategy on cable or the home segment as we call it.

As many of you know I was a cable guy. Bringing the digital lifestyle vision into reality into the home of our customers is also about building and monetizing the digital lifestyle.

In our fixed business, we are simply and literally building cable plan first. Think of it as a cable land grab opportunity.

We build it and then we feel it. It is what we would call cable strategy 101.

Our target indeed is to reach 10 million homes passed by building the network and by doing some small infill M&A. That should make us very soon the second largest cable footprint in Latin America.

This is HFC plant DOCSIS 3.0 1 gigahertz two-way digital set-top strategy with residential Wi-Fi on it and we will be announcing our next generation TV rollout strategy sometime next quarter, so stay tuned for the update of that. Monetizing a cable investment is all about penetration, bundling and upselling.

We are indeed reaching 20% to 30% penetration on the new homes we built and we do that 12 months to 18 months after we release them for sale. We're also reaching 1.5 to 2.0 bundling ratios because we are anchoring our product proposition for home on high speed data offerings and relevant content.

For example, we have secure exclusive local soccer content in key markets like Paraguay and Bolivia to help drive that penetration. So quite simply said, we built state-of-the-art new cable plant, we offer high speed broadband against largely copper or DSR speed speeds and we do that with good or exclusive content and a next generation set top box experience.

A straight forward cable strategy for an underserved market with still low cable TV and broadband penetrations, which then leads me to our fixed mobile convergence strategy, which is of the core or what we’re doing. Simply said, it is early days for MFC in our markets, which gives us room to prepare for and more importantly drive convergence in our own terms.

Everywhere we have a strong mobile business, we are rapidly building cable underneath it, it supports our mobile business as we can expand our product proper and make the relationship with our customer stickier and it also supports offloads and enhances a capacity of our mobile network. So for us, it is not about a dis-controlled foul play bundle to protect our customer base.

For us, convergence into the future is about a new high growth and stable cash flow and a stronger customer relationship. It is about delivering multiple services at lower costs by sharing infrastructure between mobile and fixed.

The strategic mandate that we have given our CTO, it affectively to deliver at date to our customer through the most efficient of our two networks. This is our strategy in a simplified and summary way, I hope it makes sense.

The cash flow model that stands out of the strategy is equally simple. The key to delivering it is focus.

We have the runway to continue to drive organic revenue in the high-single digits as we have in the past and we will do that on the back-off data amortization and cable growth. On scale in our market and across the region is large enough that we can drive operational leverage at or above 50% on each additional dollar of revenue, you heard me say a lot about that on our last call.

And with the CapEx to revenue ratio going progressively towards the mid-teens, we can also drive cash conversion of EBITDA into OCF of around 50%. If you do the math these two things will take us towards EBITDA margins around or above 35% and OCF margins around the high-teens or the low-20s.

This is a very good cash flow model, its focus that is key and for us it is now less about a given and absolute revenue target and much more about the profitable cash flow growth. And this model work because we have high single-digit revenue growth and an increasing exposure to cable and convergence and strong synergies and focus on cost control.

With that said economic sense to go to an update on Colombia and Senegal, which I know is a focus for many of you. In Colombia indeed the mobile market is scoping with major regulatory change term contracts have been eliminated by law effectively removing subsidiaries from the marketplace.

With the subsidy is gone clients are allocating more operating income to the handset unless to the carrier plant. Those are the dynamics that you see in the marketplace today, these has driven ARPU down while handsets remain very strong and you see that in our financials.

The pendulum may eventually swim back if regulation is tempered, but for now we have seen our growth slowdown whereas our competitors have reported negative recurring revenue, we have remain in positive growth territory which is good news among a change in the marketplace. We are indeed gaining market share and growing our mobile customer base.

And most importantly although mobile growth has indeed slowdown UNE is growing EBITDA at almost 25% and our combined EBITDA margins are expanding beyond what we had originally planned. Which leads me to an update on the integration and the synergies as a next logical step.

A year into completion of the acquisition, the merger integration process is well advanced. We now have a single management team and an integrated workforce and a lot more disability certainty and some early execution on the synergies.

I have to say that the team which have visited often has done an outstanding job. So we are now comfortable in same synergies are indeed higher than initially estimated and we are raising the target to $750 million.

The chart in the presentation shows that we are actually raising the NPV vicinity targets by about 40% apples-to-apples to be clear, if we compare to the FX rate of just start of 2000 Pesos which prevailed when we first issued these guidance, but of course the Peso is now at about 2600, so this evaluation has indeed each and into some of our synergy upside and that's the increased target with the Peso at 2600 is 700 and million dollars. Hope this was clear and more importantly however we want to give you more visibility into our revised and upgraded synergy estimate by giving you a synergy run-rate that we show in this slide.

We estimated 2017 synergy runrate of about $70 million these are network cost synergies and G&A synergies largely. Indeed 80% of them favor EBITDA and 20% favor cap.

And because we are very focused as you have heard us to say consistently on profitable growth and on efficient team we also want to update you on our continued focus on corporate cost control. Corporate cost continues to increase to $55 million in Q2.

This is down from $73 million a year ago, and I want to comment Tim again and his team for the strong focus and a great results, it is a strong message internally and externally. Our run-rate is now about $220 million a year and we are certain that we can drive this number well below that in 2016.

And to close our prepared remarks we want to reconfirm yet again our 2015 guidance adjusted only for FX as shown on this slide, three months into the job with my hands now firmly on the wheel and a very strong team I feel pretty, pretty good about confirming these guidance and about saying that we are aiming to hit the mid to upper part of our EBITDA guidance range, absent of course for the pressure on our key chances. And on that very positive note, I will pass it on to Tim for a full review of our Q2 numbers.

Thank you, Mauricio. As Mauricio has said, we were very satisfied with the underlying performance in Q2.

And starting with our key financial metrics, and as already stated our organic revenue growth, grew well, for a strong trend in Q1, but we did see strong FX headwinds in Q2 they were around about 10% which is unusual running at average around 4%, so this did take the shine of some of reported numbers. That said, we still manage the EBITDA pretty well showing 9.3% organic like-for-like growth and the margin was 50 basis points up on the last year excluding in it.

Our operating cash flow was also very strong in Q2 as much as set up 41% on the year with an OCF margin of nearly16%, there will be a little bit of weakening in H2 as we catch upon on CapEx but overall the trend is positive. Before getting into the detail, I just want to see you quickly run down the group P&L and headline revenues $1.7 billion and including $133 million handsets as sales, healthy organic growth 9% organic headwind and north of 50% on handsets with the solid and service revenue growth.

We recall the D&A wasn’t positive our numbers in Q2 2014, so our year-on-year growth that was 18% overall on revenue and 17% on EBITDA, again in-line with our expectations, when we set our guidance out at the start of the year, continuing down the group P&L overall operating profit was in-line with last year, I think we discuss before the high depreciation and amortization charge D&A which is largely explain why D&A was so much higher in this quarter. In the others line which are the $44 million loss on FX and a mark-to-market revaluation of coal auctions in Honduras and Guatemala resulted in a charge of $40 million against the credit last year, incidentally with extended the expiry date on the Honduras option to the end of this year to be [indiscernible] with the Guatemala option.

Our tax laws up in the quarter but this is largely timing we took a lower charge in Q1, so if we look at the half, we ended with the tax charge slightly lower than in 2014. But we are now expecting that full VAT tax charge to be under $300 million.

Okay. Let me talk to you more detail about the drivers of the performance in Q2.

We have maintained a pretty consistent organic growth rate in the high single digit for several quarters now. I think it demonstrates that we have momentum and this quarter was no exception.

As well just handset performing this growth the services revenue which excludes handsets also showed momentum. Q2 was rock-solid at 5.7%.

I think as we have pointed out that our cable business continue to see strong growth across all properties. Q2 was another notably strong quarter with 25% plus growth.

And you can see that more clearly on this slide, obviously we had a big impact from UNE business $264 million in Q2, a 5.8% revenue growth. The point I want to make though is that our existing cable businesses also grew very strongly in Q2.

Guatemala and Bolivia both growing 80% year on year, Honduras up 25% while Paraguay’s cable business grew by 20% driven by penetration and expansion that Mauricio talked about. I think it's also worth mentioning that we saw positive net growth in mobile, it was up 3.3% and that despite communication revenues falling by over 5%.

Again, we saw a very strong days of pick up and Mauricio talked about this so I will not repeat it. But we saw an acceleration of our data revenue growth by 39% in Q2 and that benefits from the rapid rising smartphone ownership amongst our customers.

Finally, in MFS we saw some exceptional growth in some of our key markets. Tanzania which leads our way for MFS accelerated revenue growth growing nearly 50% year-on-year.

And also for a smaller base, Honduras, El Salvador and Bolivia also joined that 50% revenue growth clubbed in Q2. So turning to slide 22 and you can see that the revenue growth is broadly based regionally Africa continues to grow at very good double-digit figure while LatAm business posted a very healthy 7.7% organic revenue growth.

I want to look at this chart and not comment on FX. As said earlier, 10 percentage points of our reported revenue growth in Q2 result much more aggressive devaluations in Columbia and Paraguay as well as most of Africa.

I have got a couple of slides on EBITDA now. I think I have said before that we are looking for a balanced low cost small business, not just revenue but increases in EBITDA and in cash flow.

So overall the picture in Q2 was little mixed and yes we had EBITDA up 17% and if we split UNE as of that we saw 9.3% organic growth. FX took its toll and exUNE we ended the quarter flat on the reported basis.

But now let me look at the EBITDA performance in more detail in the next couple of slides. Let me start with Africa.

Not quite as strong as Q2 but a few mitigating factors. The major impact on us has been in charge where rapidly deteriorating security situation is exacerbating and already fragile economy.

Our business slows down 21% compared to Q1 and that explains much of the organic performance shortfall from the Africa region in Q2 and we do not expect that to change anytime soon. Hopefully we saw a very strong performance in Tanzania growing 23% year on year, based on strong customer uptake and MFS revenues.

We are awaiting regulatory approval on ZanTel acquisition. We will maintain that as a separate brand and we will see it as a very positive development to help us enhance Millicom position in this fast growing market.

In the rest of Africa we see strong organic revenue growth; DRC, Ghana, Senegal, all growing in excess of 20% year on year. All we did see series of one-off items take the shine upward otherwise would have been a decent quarter for this group.

Similar story in LatAm, perfect hits in Columbia and Paraguay leading into a to a lot of the underlying growth. That said we saw steady progress in Central America lead by Guatemala which was up 4% organically and El Salvador up 3%.

South America was again dominated by Columbia and despite slowdown in the mobile market, Mauricio commented on, we saw very strong EBITDA growth, doubling the level of a year ago. On the part of UNE, EBITDA grew 24%, whilst in the mobile business it grew by 37% year-on-year, so pretty strong progression map.

Finally, I just want to mention Paraguay which is going through the process of transformation and recovery, we made good progress in the quarter. We're not quite there yet but we did see our revenue grow by 2.2% organically.

Okay, now looking at the cash flow, familiar layout showing the cash flow from EBITDA to equity free cash flow and this is the cash flow before dividend and other one-off items like M&A. I'm looking at the half year here rather than the quarter to get a better sense of direction and so quarters often affected by timing issues.

So, headline here, cash flow was robust and OCF which is after cash CAPEX and working capital was at 22% from last year. CAPEX, as I said earlier running a little bit behind that we would expect that to catch up.

Important on taxes, 144 million, a little bit lower than Q1, primarily low payments, but we now expect our cash taxes to be under 300 million and that is lower than 320 million I forecast on the first quarter call. Dividend to minorities are pretty normal, nothing special here, left us with an equity free cash flow of 52 million.

Finally, the net debt. Net debt increased by 284 million largely accounted for by the payments of the full year dividends in Q2.

Our debt remains very well balanced between local currency and US dollars, between fixed and floating. We've got a very good maturity profile and a competitive average rate and we pulled that rate down a little bit further in the quarter by repaying an expensive El Salvador bond.

Leverage comfortable at 1.9 times, consolidated 2.3 times proportionate. And, in order to confirm our covenants we intend to issue our consent list later today to increase our net debt to EBITDA covenant to 3 times on the bonds that have already have that set to that level.

And this is simply to conform with the new bond we issued in March on the existing Swedish bond we have on that. So, in conclusion, the underlying trends remain strong.

We're facing stronger FX headwinds than we saw in 2014 especially in Columbia which will constrain some of the US dollar reported numbers. That's said, we are confirming our guidance suggested for FX and some of the FX impact is being cushioned by cost and efficiency programs that we had last year.

And, we see the Columbian integration plans moving extremely well which is why we've increased our synergy target and we feel it puts us in a very good underlined position to deliver our numbers for this year. With that, we'll take questions.

Couple of questions please. Firstly, I know you've recently increased the exposure to the Tanzania and Zanzibar acquisitions to be paid from this that you may look to continue to expand your footprint in Africa or you're considering selling assets there.

Secondly, on your targets to increase cable homes pass to 10 million, can you clarify that is only in your current markets or you're looking to expand into new countries in that time.

So, I'll give you a high level on Tanzania and maybe Tim can follow up on that. On Tanzania, this was largely an infield opportunistic transaction that enhances our position there so you should read into it nothing other than exactly that.

Infield, in-market strengthens our position and it was opportunistic. And on the $10 million target indeed is within country.

I have nothing to answer that, I think. That's the full answer.

Yes, Good afternoon. I was wondering if you can go back to one remark you made in the Q1 conference call about aligning the management priorities and incentives to total return to shareholders.

If you can give us an update on that over the last three months. And then, secondly, if you can give us your views on a M&A whether -- what are the priorities for example would it be Costa Rica for your Lucky Mobile and it will be await to feel fix mobile conversions strategy or would it be tackling countries where you don’t cover your cost of capital?

Thank you.

So, I am get first one thanks for bringing up again. In this management team is fully aligned around --.

We have rolled out a long term synergy plan regarding come to see senior management of the team which is squarely aligned around TSR. So, thanks for bringing and often giving it highlight today because it is key to the way we run around the business going forward both the holders and management team all aligned on that one.

The M&A question before I go to actual M&A, I do want to underscore and highlight that are eyes are on the ball and the area where we can drive the most value creation for the shareholders, we believe remains organic value creation around monetizing data about grabbing cable land space if you will and tapping on a mass seem to be your opportunity for us. That’s where we are focused on and I think that’s we can driving most value.

So, in that we regard M&A is although we were including and we are participating and certainly were engaged and making sure on top of all opportunities, it really is icing on the cake to the organic value creation opportunity that we have. And your instinct are right in the sense that we give priority to infield in market our positions that evidence we have higher synergy value because we can drive them off our existing cost base.

Hi, Good afternoon. I’ll put couple of questions.

You mobile ARPU, in Central America declined quite a bit this quarter, perhaps we heard let us know what the main driver that is? And on the UNE synergies at the extra synergies, is there integration benefit or are they cost cutting, extra cost cutting that you found and then just briefly on Costa Rica, could you give us an update on the regulatory situation that and what your thoughts are and Costa Rica should that not develop according to your plan?

Sure, so we’re going to tackle them jointly Tim and I, so we may be talking on top of each other. On the first one it’s Central American ARPU its largely effects.

Is that right, Tim?

Yes, I think that’s a biggest impact on that, particularly coming out of the Columbian. Now Columbians affects the value -- 40% year-on-year so that’s is the large part of that answer.

The UNE synergies I think you can put into four key buckets if you will. The first one is Cross selling synergies.

It is a conversions play and we are selling mobile into the fixed and fixed into the mobile base and Columbia is not a single given region we are stronger in certain areas and therefore ours integration gives us nationwide ability to tap fishing ponds in the area where one of the two businesses bid mobile or fixed were stronger than the other ones. So, that’s bucket number one cross selling.

Bucket number two is faster network integration that we had anticipating and that is basically driving network cost as we integrate the networks faster and more aggressively than we have anticipation. Bucket number three is a faster integration of the procurement functions and contents acquisition savings which are not small through that business.

And Bucket number four is indeed what you are eluding to which are larger D&A savings than we had initially anticipated and that is just A collection of over 80 plus work stream on the synergy. So, affectively it is a more profitable integration and we have more positive view on margin and profitability on the business and we did before.

And on Costa Rica no news rather than what we have reported there is still an appeal pending resolution before the local authorities.

Just a follow up on the synergy question. How much has been extracted to-date, if anything at all?

And can you give us a sense as how the progression will be to your 2017 run-rate? And then secondly on the corporate cost, very nice progress there.

I was wondering if there is any element of savings from FX translation and also if there's any change to how you're actually allocating cost to the regions? Is it -- I guess the question is a genuine cost cutting, 100% of this.

Thank you.

In terms of the run-rate or synergies, we expect the full run-rate of 70 million in 2017 and to get there we expect about 50% this year, which is consistent with what I said on the Q1, said it's very high impact for this year. 75% next year and 100% in 2017.

In terms of our integration cost, we are sticking with the 105 million of integration cost and we've spent about $10 million of that in the first half and I think it'll be around the 40-50 level for this full year with the balance in 2016. And in terms of corporate cost and yes there has been a little bit of FX impact on the corporate cost.

Our corporate cost run in euros, dollars and sterling, so has been a little bit there, but I think that shouldn’t sort of take away from the trend line that we've got and I think important to say this hasn’t been an exercise of just sort of pushing them somewhere out. There isn’t a -- we haven’t sort of pushed them into the operations just as to be sort of on a fundamental basis and we've brought down both our headcounts in the center and our expenditure on non-headcount related issues like consultants and that sort of T&E related things.

And if I can slip another one quick one on Colombia, you alluded to the regulatory changes. Is that basically all done now Mauricio or should we anticipate that we could see further headwinds to mobile service revenue growth in the second half?

No, I would say it's largely done now. If anything I would hope for the pendulum to swing back a little bit and hopefully for consumers to give -- given the option to acquire contracts if they choose to which is not the case today.

I think it was a sort of slight unintended consequence of a change in regulation put through in July last year that we're taking a whilst through that we're seeing today and that was the prohibition of term contract, so we're not -- we don’t have visibility fully, but we don’t expect anything like that to hit us in the near again in the future.

Could you give us little more [indiscernible]. What you got to do to your ARPU but more importantly what is to do for your mobile business in terms of reduction of churn there, so because that obviously will create tremendous impact on your margins.

So if you could just give us why this is so important in terms of other businesses as well as the potential what is the total size? I know you said 10 million homes in three years or something like that and okay, but that's just the beginning, can you go to 20 after that or what is the finite number of the possible market?

A couple of points there. Indeed if and as the region continues to and when it does continue to further create a middle class and the ability to build more footprint will grow with demographics.

Cable is indeed a business of density and a business of affordability, so the more there is a middle class into region the more we will be able to build cable plan. Conversions indeed is about delivering the bits in a more efficient way, that's the network view our conversions and that's the mandate that we given to the CTO, but from a consumer point of view, it drives down churn significantly and it allows us to provide a cross-selling opportunity to our subscriber base, which drives our acquisition costs down, it drives also turn down and consumer stickiness but we are beginning to see the early edge of that when we integrate content take for example, soccer where we have good local content, we put it on our cable TV that drives consumer adoption, but also put that on a mobile app and provide a 360 integrated due to their consumer, those consumers become stickier with best churning [ph] and drives for us, our larger percent of share wallet that is the consumer part of view of conversion that we fully believe in and those are the two reasons why we believe conversion is so important for us as we build our path we going forward.

Thanks, but what happens to say debt can you take that to a higher level because you have a more stable revenue stream, and therefore can you put on more debt to do more interesting things with it?

We’ve maintained a line of once two times net debt EBITDA I don't see that changing at this stage, obviously that is determined by the cash flow that we get from business and stability that cash flow. And clearly, if that changes and we would review the levels but lot fairly significant FX impact this year and I don't see that changing in the short term.

We are paying very close attention to the affect that cable has on the stickiness of our subscriber base, because indeed the more it reduces churn the more it indeeds gives us a stickier customer base than of course the more stable cash flows are that is of course a very positive financial impact of our conversions model.

And the ARPU and cable which you are saying three years will be six months, eight months, 10 months, what kind of prospects do you have for the year? ARPU at that point just on the cable?

Our view is that cable in the region where we operate today, and you can actually see its flow through the Columbia financials in the last quarter, we have taken ARPU increases in Columbia, while we continue to drive penetration simply because in the market we operate ARPU in cable is lower than it is in other countries in the regions, so there is one way there for penetration ARPU pickup.

Thank you. Couple of questions on Africa, Mauricio, Millicom I was refer still is largely a license American company and Africa has underperformed for some time so obviously turning around, coming into the company, how are you going to evaluate Africa’s turnaround and also could you talk a little bit about I guess longer terms strategy for Africa and whether it should remain part of Millicom portfolio is longer?

Sure. You have heard me say this before, with all our businesses there is, and I say this to the management team often, so that we maintain focus there is only plan and one plan only, which is organic execution and not applies for Africa as well.

But we are squarely focus on fixing the things that need fixing there, we are squarely focused on driving penetration which still have runway in Africa to drive penetration, we squarely focused on shipping or growing market share where we can, and we are very, very focused on improving our service levels. We’ve invested in the network quite a bit and certain countries over last few months and its beginning to payoff you see that our growth in Africa is around 20% of the EBITDA level, so it’s all about organic execution there.

And we have no guidance for sales for long term plan, other than appropriate portfolio management of the countries we operate, so where as we execute on organic value creation, there are of course players that are reconfiguring their portfolio precisions in Africa; if there is at the moment in time a better strategy that running our business and one that we think is accretive to our shareholders that is the power we would use to measure that decision. It is just exactly as you would expect us to do.

Alright. Another question on Africa and kind of you alluded to this yesterday Orange announced that it is in discussions with the party about potential acquisition of some markets in Africa including Chad Burkina Faso, surely obviously you compete this part in Chad.

And you commented on the difficult environment and securities situations there and microeconomic conditions. Could you talk a little bit about competitive environment and what could it mean if Orange potentially becomes a competitor obviously we see them in Senegal currently?

We have got a very good business in Chad at the moment in suffering because of the macro environment. But I think we continue to see that business on an underlying basis, actually performing very well from a competitive point of view.

So it does not change our view on that by -- Orange or anyone else frankly.

Right. And last question on your spectrum position.

Could you talk at a high level about your future spectrum needs given obviously the demand for mobile data and how are you thinking about that over the next three to five years?

So we monitor spectrum auctions and spectrum developments closely at our executive team and locally. We are of course dependent on spectrum.

And in many-many countries we are closely following the awards of 4G spectrum, that's true in Columbia, that's true in Bolivia, it's true in a number of our key markets like Guatemala. It is however, very difficult to give you specific guidance as to when and how because those processes tend to be very political in their timing.

So they get delayed, they get moved forward, but by far and large, we are seeing governments be very-very rational, very much focused on the industry dynamics being healthy going forward and balancing there as you expect them to again monetizing some of that spectrum as obviously fiscal pressures in many-many countries become more and more demanding. Those are the trends that we see there, preservation of industry.

We have some more focus on monetizing spectrum to help sure our fiscal offers.

Yes -- if I am cutting here. I was just going to ask you a little bit more on your long-term target.

What's the time horizon is it, for 3 to 4 year view on the EBITDA and operating free cash flow margin? And then also if you could say something about the expected progression, where do you think you will be maybe next year and in 2017?

And then also to turn on the equity free cash flow, you had a strong positive cash flow this quarter, but do you still expect the negative for the full year and also if you could give some indication on the level you expect from dividends to minorities for the full year?

So on the first part of the question, our cash flow model is midterm and by that we mean midterm that something that we will grow into. And the second part of that question is when the time is right we will be providing 2016 specific guidance in your time.

And I will pass it on to Tim for the second part of the question.

Yes. So I think in our definition I mean equity free cash flow being the cash flow before dividends and one of us like M&A is up.

I would expect this to be positive this year. It's based on the dividend and -- that and in terms of dividends to minorities; on an onlife we would expect that to be about 160 million, in fact I think we will probably be paying a special dividend out of Guatemala in the second quarter which might take that number to closer to a 100 and 130, something like that for the year.

So, not 160, 130?

We'll be paying a special dividend out of Guatemala so that will take it up a little bit outside our normal rate.

Maybe I am slow but you said 160 and 130 is low. Is 130 the extra special dividend or.

No, what it is that our normal rate on dividends to minorities is a $160 million. In this, in this, in the next quarter, we'll probably spare an extra special dividend out of Guatemala, will get part of that to minorities so in reality for this year, I'd expect the figure to be roundabout the 230 level.

Ok, then I understand it. And, you can't say a little bit more on the mid-term, how long that is.

How long is mid-term?

I refer to Mauricio to answer that how long is the midterm is.

No, this is the cash flow model that we're dragging the business towards and mid-term is exactly that, mid-term is exactly that, midterm for us. I think the important thing is that you bear in mind the focus that we have towards growing into profitable growth.

And, the fact that we will be giving you, you know, 2016 guidelines in proper time on top of having confirmed 2015 as we did earlier on. That's how you should think about our joining the business going forward.

Thank you. Firstly on Honduras.

Would you consider buying out the minority there in order to avoid de-consolidating that business if necessary? And would you remind us of the terms to do that under the current arrangement.

Secondly, just curious about the tower companies, when do you think they will start to turn profitable and how do you look at the value creation in those businesses at the moment. Is it trending in the right direction?

And, also, do you need these stakes in the long term. Thank you.

Well, I think on the Honduras issue, you know really this as an accounting technical issue. It doesn't really change our view of the business, the way the business operates, the way we manage the business or our relationship with our partner.

You know, our terms on that present call option I don't believe we disclose, I don’t think its good for me to disclose from here but the point is that we haven't and wouldn't at this stage consider exercising that option anyway.

More so, we would drive M&A decisions not on the back of largely accounting matters, or on the back of the economics of a given deal.

Yes and I think your other question was on the associates and relating to LIH, AIH and the other associates. I mean they are relatively marginal in our overall group.

I mean, the LIH AIH as you know, internet startups, we're not expecting those to be netting compulsive for several or many quarters to come. I don't think that's, well, focused on at this stage.

We're focused on the growth opportunity and for us, they are now, sort of, passive investments and you know, we'll operate them like that. Does that cover that?

Yes. Hello.

Thank you. Just one question left for me, basically related to the cable network and what's your view or your personal view of the quality of the existing cable network.

Do you believe that there are further CAPEX to be spent to, sort of, improve the network or are you satisfied with the current level.

Because embedded in the plan that we highlighted and ongoing as we speak, so its already flowing through the Columbia financials, we are indeed upgrading or rebuilding some of our acquired copper network, so that going forward, the majority of our network is either built or transformed into the state of the art network that I described. So, it is very much embedded and ongoing business plan.

Thank you. Thomas Heath here with Handelsbanken.

Firstly on the EBITDA target. How should we see this and like of rising handset revenues and 35% as I mean to be on total revenues and if so what sort of cost aspect or helping you given you should see dilution of margins from handsets?

Secondly on, sort of cash flow centric strategy wouldn’t it be fair to say that there are some troubles below EBITDA and CapEx particularly lease costs and interest and taxes paid out of Africa that arguably should make the case for non-organic value creation pretty strong particularly in Africa? And then thirdly did I see TiVo in the slide pack, curious if TiVo is core strategy for the home segment in Latam?

Thank you.

Let me deal with the first question. Our target is around 35% leverage, so the group is a whole, we recognize entirely what you saying in terms of the dilution of handsets revenues in total effect to those for the last couple of years.

And I think it’s basically what we see is growth in our existing business, the operating leverage that Mauricio talks about by improves to the bottom-line. Plus I think of the medium-term, the handsets sales will slow down a little bit in terms of level also relative to precise revenue as a whole.

So the straight answer of the question is we’re not talking we’re not sort of qualifying it, we’re talking about getting 35% on the group as a whole including everything that sort of sales in that group and that is our challenge. And I’m not underestimating the size about challenge but it’s the right challenge for us to have.

I think on the low EBITDA stuff, I think you are talking about Africa. I mean I only make a couple of points on the firstly the tax in Africa is negligible sort of put that down, because make any profit us so I’m happy we’re not paying any tax.

We do have lease payments, because of the sale of our towers and some of that just flow through the interest line. But we look at Africa on the cash flow basis so it doesn’t make to look a difference to us.

And the setup box strategy, stay tuned.

I guess most of questions have been asked. But I just wanted to hear you can clarify a little bit more, it’s been a little bit more the Honduras situation.

I mean a lot of companies have subsidiaries that are not 100% owned, why can’t you just continue to consolidated, it’s I’m not exactly sure why have to deconsolidated. Secondly in case anything on anything on what the problem is and many simplest just a technical seem to prolonged the contract?

I’ve says we absolutely no disputes. So this is purely and to be look out this purely at technically accounting issue and if you got at a long time overview, I can explain whole thing but the bottom-line is we owned $0.67 of Honduras.

We guarantee is that to the part of our core business, it carries our burn, but under the technical accounting on the IFRS 11 as a mandates for the few years ago and we maybe in a position where we have to be consolidated. Really stressing the point, this is technical accounting so as far as we continue to report on a pro forma basis.

So you can see the full impact of Honduras on our business and if we get to that particular position. So I wouldn’t sort of spend too much time pre-judging at this stage and I’ll explain the accounting issues offline to you if you are really interested.

But the message is no dispute, I’m really no difference to the way we talk or report or operate this business.

I guess this would be change from this. How much of EBITDA is under yesterday just get a sense for it?

Again I mean at the point doesn’t disappear we doesn’t go anywhere it’s it will be the same in our pro forma reported figures any way. So if not, I wouldn’t want needed to allow on that slight a bit of this stage.

I'll keep it quite quick. You've talked about the big opportunity in the B2B segment, can we get a bit more color on that towards the addressable market?

Is it something sort of Lat-Am or more country-by-country? Thanks.

It's good question and I'm glad you picked up on the fact that we haven’t alluded to it too dramatically. And the reason for that is that in the context of my three first months into the job, my 100 day if you will was picked up on a fantastic opportunity, but also -- we largely addressed the consumer market so far.

But as a result of learning more and digging into it with the Colombia team, we realized that our B2B business today is different in Colombia as a result of doing an acquisition than it is in the rest of the footprint. So in Colombia, we're focused on large conglomerates government owned entities because UNE was a government entity and in the rest of our footprint, we have focused on mobile services for B2B, so we have to put those strategies in a cohesive manner together and be able to make a single cohesive B2B strategy so that we can articulate quite definitively the size and the way to tackle that B2B opportunity.

It's large and it's different in different markets and it's something that we're going to continuously focus going forward. I hope that gives you a little bit of color on where we are and why we have not highlighted it so much today.

Well, thank you everybody for joining us today and for giving us with a lot of insight into what's in your mind. It is very helpful to us to continue our dialogue with you and thank you Tim and all the team for a fantastic quarter.