By Brazil Stock Guide – Telefônica Brasil (B3: VIVT3), which operates under the Vivo brand, is betting on a significant source of cash generation: the sale of legacy assets. CEO Christian Gebara said the company expects to generate around R$3 billion in net proceeds from selling 120,000 tons of copper—net of extraction costs—by 2028, in addition to R$1.5 billion from real estate tied to its former fixed-line concessions. “Together, these two streams represent roughly R$4.5 billion in asset monetization, and the effects are already visible in 3Q25, with R$232 million realized,” Gebara told analysts.
The topic dominated the earnings call, as investors pushed management for more visibility on timing and cash conversion. CFO David Melcon explained that Vivo is gradually decommissioning its copper network, replacing about 1.2 million remaining connections with fiber. “Each customer migrated improves efficiency and frees up a physical asset that can be recycled and turned into cash,” he said.
Gebara emphasized that the copper-to-fiber transition is not merely a technical upgrade but also a commercial opportunity. “When we replace copper with fiber, we don’t just cut maintenance costs — we deepen customer relationships,” he said. “Many migrate to Vivo Total, our convergent bundle for mobile and broadband, which drives ARPU (Average Revenue Per User) to R$230 and reduces churn well below market levels.”
The numbers underscore that shift. Vivo’s FTTH (Fiber to the Home) base grew 12.7% year-on-year, reaching 7.6 million connected homes and coverage of 30.5 million households. The take-up rate rose to 24.9%, marking five consecutive quarters of churn decline. “Convergence is at the heart of Vivo’s strategy and the main lever for sustainable value creation,” Gebara said.
Analysts also pressed on three additional fronts during the call. The first was inorganic growth. Marcelo Santos of JP Morgan questioned whether Vivo plans to step up M&A activity amid consolidation in Brazil’s broadband market. Gebara replied that the company remains cautious and selective, favoring organic expansion. “We only consider assets that meet three criteria — technical quality, limited overlap, and fair valuation — and so far, none has,” he said. The pending FibraZil acquisition, still awaiting CADE approval, is expected to raise fiber returns from 16% to around 25%.
Lucca Brendim of Bank of America turned to synergies from the end of the fixed-line concession regime, asking when these would show in the numbers. David Melcon said productivity gains are already emerging, particularly in staffing and infrastructure, and that the full benefits should be captured by 2028 as legacy assets are dismantled and maintenance costs fall.
Vitor Tomita of Goldman Sachs focused on the competitive mobile landscape, following selective price hikes across the hybrid and postpaid base. Gebara acknowledged the pressure but said Vivo’s scale and network strength continue to give it an edge. “We had the best postpaid quarter in our history, with more than 1 million net additions and churn below 1%. Even in prepaid, recharges and data usage are trending upward,” he noted.
The discussion also revisited tower efficiencies, a recurring theme among analysts. David Melcon said Vivo aims to raise average tower tenancy from 1.4 to about 2 operators per site, in line with global benchmarks, which should deliver leasing-cost savings and structural synergies over the next two to three years.
Concluding the session, Gebara reaffirmed Vivo’s commitment to distribute 100% of net income in both 2025 and 2026 — with R$5.7 billion already paid through September and R$2.7 billion in JCP to be disbursed by April 2026 — while maintaining net leverage at just 0.5x EBITDA. For analysts, the next test will be whether Vivo can turn its technological transition, tower renegotiations, and asset sales into tangible cash generation in the coming quarters.