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Edited Transcript of TRL.TO earnings conference call or presentation 7-Nov-19 6:30pm GMT

Q3 2019 Trilogy International Partners Inc Earnings Call

Nov 25, 2019 (Thomson StreetEvents) -- Edited Transcript of Trilogy International Partners Inc earnings conference call or presentation Thursday, November 7, 2019 at 6:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ann Saxton

Trilogy International Partners Inc. - VP of IR & Corporate Development

* Bradley Jay Horwitz

Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director

* Erik Mickels

Trilogy International Partners Inc. - Senior VP & CFO

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Conference Call Participants

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* Benjamin Tureck Brogadir

Odeon Capital Group LLC, Research Division - Research Analyst

* Bentley Cross

TD Securities Equity Research - Associate

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Presentation

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Operator [1]

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Good morning -- I'm sorry, good afternoon, and welcome to the Trilogy International Partners Third Quarter Earnings Conference Call. (Operator Instructions) Please note, today's event is being recorded.

I would now like to turn the conference over to Ann Saxton, Vice President of Investor Relations and Corporate Development. Please go ahead, ma'am.

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Ann Saxton, Trilogy International Partners Inc. - VP of IR & Corporate Development [2]

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Thank you, Arco. Hello, everyone, and welcome to our conference call to discuss our third quarter 2019 results. This call is also being broadcast live over the web and can be accessed in the Investor Relations section of the Trilogy International Partners website. Joining me today are Trilogy's President and CEO, Brad Horwitz; and Trilogy's Senior Vice President and CFO, Erik Mickels.

This call includes forward-looking information from which our actual results may differ materially. For further information regarding the various factors, assumptions and risks that could cause our actual results to differ, please review the cautionary language in the About Forward-Looking Information section of our yesterday's press release as well as the cautionary note regarding forward-looking statements and the risk factors in our 2018 annual information form available on SEDAR, which is also included in our annual report on Form 40-F available on EDGAR.

This forward-looking information represents the expectations as of today and accordingly is subject to change. We disclaim any obligation to update forward-looking information except as required by law. Please also refer to yesterday's press release for definitions and reconciliations for any non-GAAP measures that we use during today's call. The press release is posted on our website at trilogy-international.com under the Investor Relations tab.

I will now turn the call over to Brad Horwitz, President and CEO of Trilogy International Partners.

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Bradley Jay Horwitz, Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director [3]

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Thanks, Ann. And hello, everyone. Thank you for joining us for our third quarter 2019 earnings call. We're pleased with the performance in the third quarter, during which we maintained the momentum established during the first half of the year. In New Zealand, we continue to post solid growth across all of our customer segments, including our highest postpaid gross additions since the third quarter of 2016 and another strong quarter for broadband activations.

This has improved our top line results on a sequential and year-over-year basis and has positioned 2degrees well to meet or exceed full year 2019 guidance. In Bolivia, competitive dynamics remain elevated, but we've seen sequential stability in our postpaid subscriber base and corresponding revenues.

Currently, however, the level of protest and disruptions, following the presidential election is impacting the entire business community in the country. Since the election and voting on October 20, our offices have been operating with minimum staffing, and retail distribution outlets largely remained closed. Sales and recharge activity are being affected during this period of instability.

Our consolidated business ended the quarter with 3.4 million wireless customers. Postpaid users make up 23% of our consolidated wireless base versus 22% a year ago. We produced another strong quarter of postpaid and broadband net additions and increased stability in our prepaid base in New Zealand. Our consolidated adjusted EBITDA was $33.4 million, down 11% versus last year, which includes a 3% foreign exchange headwind in New Zealand. Our adjusted EBITDA margin in Q3 was 25%.

Moving to results by market, starting with New Zealand. The operational momentum continued throughout the third quarter with strong growth across all of segments: Postpaid, prepaid and broadband, driven by both strong activation levels and improved churn rate. As I mentioned on our last call, we've been leveraging our 10th anniversary in New Zealand and reinforcing our commitment to fighting for fair, this brand reinforcement and our synchronized offerings are resonating well in the market.

In postpaid, our growth or additions were at their highest level in 8 quarters, and our net additions increased 29% year-over-year. At the end of September, our postpaid base was 11% larger than a year ago.

Postpaid customers now make up about 1/3 of our 2degrees wireless base. Our broadband growth continues to accelerate and our cross-selling efforts continue to bear fruit. We set high watermarks again in the third quarter for growth and net activations. We surpassed 100,000 broadband customers during the third quarter and ended the quarter with the 31% larger broadband base than a year ago.

Still, only 14% of our postpaid customers have our broadband service, thus significant cross-sell runways in front of us.

In mid-July, we refreshed our prepaid offerings, including new monthly plans that range from $10 to $85 as well as new 14-day plans to correspond with Kiwi's paycheck schedules, which we call, pay when you get paid. As a result, our prepaid net additions were 7,700 versus a net loss of 45,000 a year ago. Another shattering but an indication of positive traction, especially as we saw a solid take-up of plans on the higher value end of the spectrum.

Our New Zealand customer growth is translating to improved service revenues on both the sequential and year-over-year basis. Our subscriber revenues increased 3% sequentially and 9% versus last year on an organic basis, which excludes the impact of foreign exchange and the implementation of the new revenue accounting standard.

Our postpaid revenues grew 4% sequentially on our larger customer base and a 1% improvement in ARPU. This is our second quarter in a row of New Zealand postpaid ARPU growth. Our prepaid ARPU also improved versus last quarter driving a prepaid revenue increase of 4% compared to last year.

Rounding out our core revenue performance in the third quarter, our broadband revenues increased 20% year-over-year on a 31% larger base.

Our adjusted EBITDA in New Zealand for the third quarter was $27 million, an increase of 12% compared to last year. On an organic basis, it grew 6%, driven by our service revenue growth and the positive impact of our continuous focus on churn and bad debt. This is partially offset by the anticipated increase in our advertising and marketing efforts related to our 10-year anniversary milestone.

Capital expenditures in the third quarter were $18 million compared to $10 million a year ago, as we made investments in both network capacity and digital initiatives.

Since our last call, the New Zealand Commerce Commission finalized the mobile market study. The results were positive for the industry, as the regulator noted healthy market competition and also recognized the importance 2degrees plays in delivering competition. It determined that there was no need to regulate the wholesale mobile market.

On the 5G front, the brief update on the 3.5 gigahertz spectrum process in New Zealand. Until recently, allocation of this spectrum was scheduled to take place in 2020 with rights not available for use until late 2022.

The MBIE, which is the office and manager spectrum on behalf of the government, has publicly sought expressions of interest from operators with respect to short-term commercial access to the 3.5 spectrum. The government has freed up 210 megahertz of 3.5 for commercial use, which is expected -- will be available from mid-2020 through October 31, 2022.

We are committed to and excited about the 5G opportunity in New Zealand and have expressed our interest in this early release of spectrum.

Moving across the southern hemisphere to Bolivia, competitive intensity in the market continues, which is largely impacting the prepaid business. Our postpaid business, however, has been fairly resilient year-to-date, underpinned by the success of our BYOD unlimited plans, which remains unique in the market.

Our postpaid activations and net additions have improved sequentially for 3 quarters in a row, culminating in a modest 201 net adds in the third quarter. Corresponding revenue and ARPU has almost improved each of the last 2 quarters. Postpaid customers make up about 17% of our subscriber base and contributed 42% of our service revenue in Bolivia during the third quarter compared to 39% a year ago.

The relative stability in postpaid was more than offset by ongoing pricing pressure in the prepaid space, which comprises the majority of the wireless market. While we did see indications of stability in our prepaid customer base in the third quarter, yields on data in the market were down 67% year-over-year.

This is a step down from last quarter when data yields were down about 33% versus the prior year. Data consumption across our mobile base has increased 86%, as 43% of our base now uses LTE compared to 28% in the third quarter of 2018.

Third quarter adjusted EBITDA in Bolivia was $9.5 million versus $16.9 million a year ago. We are particularly focused on operating efficiency and reduced our operating expenses by $5 million year-over-year, which partially offset pricing compressions that has impacted our top line.

Third quarter capital expenditures in Bolivia were $5 million compared to $10 million a year ago. This 48% variance is largely due to timing. The current election-related disruption in the country is negatively impacting the entire business sector, as much of the population is unable to get to their jobs due to wide-ranging public protest or strikes, and stores are largely closed.

Once we are through this period, we believe the wireless sector can return to growth, as the macroeconomic fundamentals remain solid and the 3 player operator structure is sound. The demand for services continues to increase and customers continually have the means to pay for it. In the meantime, our local team is focusing on operational and capital efficiencies. We look forward to updating you with further developments as they occur.

With that, I'll turn the call over to Erik to take you through the numbers. Erik?

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Erik Mickels, Trilogy International Partners Inc. - Senior VP & CFO [4]

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Thanks, Brad, and hello, everyone. Our consolidated business ended the third quarter of 2019 with 3.4 million wireless subscribers. 795,000 of these customers are on postpaid plans, increase of 4% versus Q3 2018 and an increase of 2% sequentially.

Our total wireless subscriber count increased by 14,800 in the third quarter as our solid net additions in New Zealand more than offset prepaid disconnections in Bolivia. Our consolidated postpaid net adds for Q3 were 12,300 versus 9,700 a year ago, due predominantly to strong growth in New Zealand.

We continue to gain momentum in increasing our broadband customer base in New Zealand, and we ended the third quarter with 101,900 broadband subscribers, up 31% versus Q3 of 2018. As a reminder with respect to comparability, we implemented the new revenue accounting standard or NRS in the first quarter of 2019 and 2018 was not recast for the new standard.

Foreign exchange also impacted our results in the third quarter though to a lesser degree than the last several quarters with a 3% headwind. Where noted, we refer to results on an organic like-for-like basis, which is, excluding the impact of the new revenue standard as well as foreign currency. We believe an organic perspective enhances comparability during this NRS implementation period.

Our total revenues in the third quarter were $160.5 million, a 14% decrease on an organic basis versus the same quarter last year, primarily due to reductions in New Zealand. Our total service revenues in Q3 of $134.1 million decreased 3% year-over-year, again on an organic basis, due to reduced service revenues in Bolivia, which were partially offset by growth in our subscriber revenue in New Zealand.

Consolidated postpaid revenues of $64.4 million, increased 3% on an organic basis as growth in New Zealand more than offset declines in Bolivia. Our consolidated operating expenses in Q3, including cost of equipment sales were $154.2 million, a reduction of 13% versus the same period last year on an organic basis, primarily due to lower cost of equipment sales in both of our markets, particularly New Zealand.

Excluding cost of equipment sales, our Q3 consolidated operating expenses increased by 1% versus the same period last year, again this is on an organic basis.

Our consolidated adjusted EBITDA was $33.4 million in the third quarter, a 16% decrease on an organic basis versus last year. Our consolidated adjusted EBITDA margin was 24.9% this quarter versus 26.5% a year ago. On an organic basis, our adjusted EBITDA margin for Q3 2019 was 22.7%.

Our consolidated capital expenditures for Q3 were $23.4 million versus $20 million a year ago. At the end of September, we had 2,392 sites on air, of which 95% provide LTE service. This is a 7% increase in LTE sites versus a year ago.

Moving on to results by market. In New Zealand, we ended the third quarter with 463,200 postpaid subscribers, an 11% increase from Q3 2018 and a 3% increase sequentially. We had 12,100 postpaid net adds in the third quarter, up 29% compared to Q3 2018, driven by both increased gross adds as well as improved churn, which was 1.25% this quarter versus 1.4% a year ago.

Our prepaid subscriber count increased by 7,700 during the third quarter versus a net loss of 44,800 a year ago, due in part to our refreshed prepaid offerings that we introduced in July.

Our fixed broadband net additions in the quarter were 8,500 once again more than double the net adds from last year, as we set another record high in activations coupled with churn improvements versus Q3 of 2018.

Our broadband base is now 101,900, a 31% increase versus a year ago.

Our Q3 service revenue in New Zealand was $85.2 million, up 5% versus a year ago on a reported basis. On an organic basis, which again excludes the impact of foreign exchange and NRS, service revenues in New Zealand increased 8% versus prior year due to revenue growth in each of our core service offerings, postpaid, prepaid and broadband. Together, these 3 comprised subscriber revenues, which in the quarter increased 9% on an organic basis versus Q3 of 2018.

At the revenue product level, our postpaid revenues in the quarter were $43.8 million, an increase of 4% versus Q3 2018 on a reported basis.

On an organic basis, our postpaid revenues increased 8% year-over-year, as the 11% growth in our postpaid base was partially offset by an ARPU decline of 3% in the quarter compared to Q3 of 2018.

This ARPU decline is primarily due to business subscribers transitioning from legacy postpaid plans into lower ARPU equipment installment plans. However, on a sequential basis ARPUs have held steady for the past couple of quarters.

Our Q3 prepaid revenues of $21.8 million increased by 404,000 or 2% versus Q3 of 2018. Excluding the 3% FX headwind, prepaid revenue increased 5% and is our fourth consecutive quarter of sequential prepaid revenue growth, and this is after several periods of flat to declining prepaid revenues.

Prepaid ARPU for the quarter increased 4% over prior year on an organic basis due primarily to increase adoption of higher value prepaid rate plans.

Our broadband revenues in the third quarter of $17.5 million increased 7% versus the same period last year or 20% on an organic basis. Our organic broadband revenue growth was due to a 31% larger base, partially offset by some year-on-year ARPU compression.

Our noncore revenue, including roaming, which is reported within wireless service revenue and nonsubscriber international long distance and other revenue, which together represent only 2% of our service revenues, declined by about $800,000 or 28% as a result of the decline in the volume of other operator subscriber traffic on our network and lower rates in the bilateral agreement with another operator for international long-distance.

Both of these declines began in the third quarter of 2018. The impact of the decline in noncore revenues is to offset service revenue growth by about 1%. Our operating expenses for Q3 in New Zealand were $99.5 million, down 20% versus the same period in 2018.

On an organic basis, our operating expenses decreased 16% due primarily to lower cost of equipment sales, which declined by $23.2 million or 47% during the quarter. This decline in cost of equipment sales was due to the discontinuation of an exclusivity arrangement with a retail distributor and reseller of 2degrees wireless handsets during the third quarter of 2019, coupled with lower handset prices over the same period last year.

This decrease was partially offset by an increased in certain operating expenses, including cost of service increasing $1.3 million or 5%, primarily due to a $1.8 million increase in transmission expense associated with the growth in broadband subscribers; sales and marketing was flat over the same period in 2018. As anticipated, New Zealand incurred $1.5 million higher advertising expenses in the third quarter of 2019 compared to the same period in 2018, following lower levels of advertising spend in the first half of 2019.

This increase in spending was attributable to the 2degrees 10th anniversary brand campaign and was offset by a $1.8 million decrease in commission cost related to the implementation of the new revenue standard.

General and administrative costs increased by $0.3 million or 2%, primarily as a result of an increase in individually insignificant administration cost, partially offset by a reduction in bad debt expense due primarily to improved credit management process. Excluding cost of equipment sales, our Q3 operating expenses in New Zealand increased by 6% versus the same period last year on an organic basis.

Our adjusted EBITDA for Q3 in New Zealand was $26.7 million, an increase of 12% versus Q3 2018 or 6% on an organic basis. Our adjusted EBITDA margin in the third quarter was 31.3% or 28.6% on an organic like-for-like basis versus 29.3% a year ago.

Again, the third quarter was burdened by higher advertising expenses as we transition to a new advertising agency in the first half of the year as well as leveraging the 10th anniversary campaign, which we mentioned previously.

Our Q3 capital expenditures in New Zealand were $18.2 million versus $9.9 million a year ago. On an organic basis, our capital expenditures increased 89%, primarily due to investments in network capacity. LTE now covers about a 100% of our network versus 96% in Q3 of 2018.

Our capital intensity in New Zealand in the period was 21.4% versus 12.2% a year ago, largely due to timing. Moving on to Bolivia, we ended the third quarter with 2 million wireless subscribers. Our subscriber count was reduced by 4,900 subs in Q3 due to ongoing competitive pressure. Our service revenues in Bolivia were $48.7 million in the quarter, an 18% decline versus Q3 of 2018 due to our smaller subscriber base and continued yield compression in the market, particularly in prepaid.

The implementation of the new revenue standard and reallocation of service to equipment revenue resulted in a service revenue decrease of $1.1 million in the quarter relative to Q3 of 2018. On a sequential basis, service revenues declined 6% as modest increases in the postpaid revenue for the second quarter in a row were offset by the prepaid declines.

Our postpaid ARPU decreased 8% versus Q3 2018 or 3% on an organic basis, and our prepaid ARPU decreased 15% due to pricing reductions in the market versus last year.

Our Bolivia operating expenses for Q3 were $50.4 million, down 9% versus Q3 2018 as our cost of service decreased $300,000 or 1%, primarily due to a decrease in interconnection costs as result of lower voice and SMS traffic terminating outside of our network, as well as the combination of individually insignificant items.

These decreases were mostly offset by couple of items, a net increase in site operating cost of $900,000 as a result of the tower sale/leaseback transaction; sales and marketing declined $1.2 million or 13% due to a $0.9 million reduction in commission expense associated with the implementation of the new revenue standard; and our cost of equipment sales decreased by $1 million or 28%, mainly due to a 37% decline in the number of handsets sold.

These decreases in operating expenses were partially offset as general and administrative costs increased $500,000 or 6%, primarily due to higher transaction taxes associated with the second closing of the tower sale/leaseback transaction, as well as increased consulting cost.

Excluding cost of equipment sales, our Q3 operating expenses in Bolivia decreased by 5% versus the same period last year on an organic basis. Our adjusted EBITDA in Bolivia was $9.5 million in the third quarter and our adjusted EBITDA margin was 19.5%. Excluding the impact of NRS, our adjusted EBITDA for Q3 was $9.1 million and adjusted EBITDA margin was 18.4% compared to $16.9 million and 28.3% in Q3 of 2018.

Our capital expenditures in Bolivia were $5.2 million in the third quarter, a decrease of 48% versus Q3 of 2018 due to the timing of our LTE expansion in 2018. We ended the third quarter with 91% of our sites overlaid with LTE in Bolivia.

Shifting now to our consolidated cash and liquidity position. At the end of Q3, our consolidated cash balance was $109.4 million, $7.2 million of which was held by 2degrees, $83.4 million was held by NuevaTel and $18.8 million in cash was held at corporate.

With respect to our capital structure, consolidated debt at the end of Q3, including $350 million of Trilogy's holdco notes, plus local debt and other was, $543.3 million. Our debt outstanding on the senior facilities agreement in New Zealand was $138.7 million or 221.5 million in local currency.

At September 30, we had available capacity on the New Zealand 250 million facility of about NZD 28.5 million. In Bolivia, at the end of September, our debt outstanding totaled $41.1 million, which includes $16.2 million related to the first and second tranches of the tower sale and leaseback closings in 2019.

From a consolidated gearing standpoint, net debt to consolidated LTM adjusted EBITDA was 3.0x at the end of Q3, down from 3.5x at the end of Q3 last year. Before moving on to Q&A, I'll comment on our 2019 guidance.

As Brad mentioned, we are sustaining solid top line growth in New Zealand, and we are well positioned to meet, if not exceed, our full year service revenue and adjusted EBITDA targets there.

Regarding Bolivia, on our last call we noted that we were trending towards the lower end of our guidance range for 2019. With the continued competitive pricing pressures and current political instability following the presidential election, we anticipate Q4 will reflect sequential revenue declines and thus likely landing below our 2019 targets for both service revenue and EBITDA.

Finally, regarding our spectrum renewal process in Bolivia, we have recently received notification that the renewal price will be approximately $30 million, and we expect to make this payment in Q4. We are pleased with the outcome and great to have this clarity.

With that, let's go to questions, Rocco?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Ben Brogadir of Odeon Capital.

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Benjamin Tureck Brogadir, Odeon Capital Group LLC, Research Division - Research Analyst [2]

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My question is regarding, kind of, high-level strategy, given the particular weakness in Bolivia. I noticed you guys have done some monetization exercises with respect to tower sale/leaseback transactions in the region. And it seems like most of those proceeds they are earmarked for reinvestment as it pertains to Bolivia. I'm just wondering that, kind of, given the trends there, what point does it make sense to use those proceeds to deleverage the balance sheet, buyback bond or pay off the bonds at the holdco level to both deleverage the balance sheet and create shareholder value? And then kind of more broadly, if Bolivia trends continue to the downside, at what point does it makes sense for the company just to kind of walk away from that asset or run it off for cash?

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Erik Mickels, Trilogy International Partners Inc. - Senior VP & CFO [3]

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This is Erik. Thanks for the question. I'll take the first part. In terms of the monetization of the tower portfolio, the bulk of that reinvestment will go towards the spectrum renewal that we just talked about in past calls, we've also referenced some investments in fixed LTE, which we believe does make sense on its own merits and does diversify the revenue streams in that market, notwithstanding some of those challenges you referenced. In terms of reinvestments down to a certain floor, there's about $25 million that the company can use for general corporate purposes and those will be used as such. In terms of broader monetization and how we think about the assets strategically, I'll let Brad comment.

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Bradley Jay Horwitz, Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director [4]

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Yes, Ben. I guess what I would add to that is in previous discussions, the license renewal fee folks had some uncertainty about that. Now that we have clarity that the fee is both in line with what we had expected, I think that provides another 20-year sort of free reign on a going-forward basis. So that uncertainty has been removed. I think the other element is, once we get through -- the other element that I think was weighing on the minds of lot of folks were -- what was going to happen with the elections that were there. And they were held last October 20, and I don't think that the outcome was particularly any surprise to us.

The closeness, I guess, of the rates and then assuming protests and disturbances are impacting things now, but I think that's going to -- that is going to settle down and resolve itself over the next couple of weeks. I think you'll have a period of stability. Again, the broader macroeconomic picture in Bolivia is still good and strong. And I think with increased stability and the uncertainty of the license fee putting behind us, we'll continue to look at alternatives for that business. But I would also add that it is still a business that generates -- a few million customers, generate couple of hundred million in revenues and some pretty significant cash flow with the bulk of the heavy listing on the capital side behind us. So it's a -- well it's certainly not growing at anywhere near the level of our other assets, it's still a pretty valuable chunk of business.

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Benjamin Tureck Brogadir, Odeon Capital Group LLC, Research Division - Research Analyst [5]

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Okay. I guess just -- and framing just, kind of, clarification on my part. Is any of the proceeds from the sale/leaseback transaction in Bolivia earmarked currently for reducing debt at the holdco level or buying back the $350 million of notes currently?

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Erik Mickels, Trilogy International Partners Inc. - Senior VP & CFO [6]

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Yes, at this point, Ben, we're evaluating use of proceeds and we'll be opportunistic in balancing the overall cash needs of the business.

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Benjamin Tureck Brogadir, Odeon Capital Group LLC, Research Division - Research Analyst [7]

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Understood. And then just lastly from me, again on the sale/leaseback. Is there anything more to do in Bolivia with respect to towers leaseback transaction? Or at this point kind of subsequent to quarter end, do you guys feel like that avenue's been fully exhausted?

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Erik Mickels, Trilogy International Partners Inc. - Senior VP & CFO [8]

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Sure. This is Erik, again. Of the $100 million headline price on the tower transaction, we closed about $84 million through the third quarter, currently working on a third closing now that we expect will close in the fourth quarter. I don't know that we'll get all the way at the 100, some sites we may choose to retain those, but we do expect another tranche in the fourth quarter.

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Operator [9]

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(Operator Instructions) Today's next question comes from Bentley Cross of TD Securities.

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Bentley Cross, TD Securities Equity Research - Associate [10]

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First, I just wanted to ask about guidance? I mean if you guys are suggesting that you should have no problem hitting guidance in New Zealand or even topping it. But I mean, unless I'm missing anything you really have to fall a cliff -- off a cliff not to make guidance. So I just want to make sure there's no expectation there of big spend or something that -- that's just might be missing?

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Erik Mickels, Trilogy International Partners Inc. - Senior VP & CFO [11]

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Bentley. It's Erik. Thanks for the question. No nothing unforeseen, we feel good about the business. Things are trending well and as Brad mentioned, we're positioned well to meet, if not exceed things. So no, we're feeling good about the full year and well positioned for 2020, although not putting out any guidance at this point regarding 2020.

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Bentley Cross, TD Securities Equity Research - Associate [12]

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Okay. And then Brad in your opening script, you talked about Bolivia potentially returning to growth over time. I know with all the uncertainty now it's hard to put any sort of a time frame on that. But just wondering, kind of, your longer-term thoughts about the asset and how it does get back to growth, and when kind of the noise of the elections goes down, do we immediately, kind of, get some stability there? Or is it going to be a slow grind to get back to, kind of, a normal operating environment?

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Bradley Jay Horwitz, Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director [13]

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Yes. I think it's going to be -- if those are my choices, it's going to be, I think, a slow steady thing. Over the last 12 months, you've had basically 2 things, which have driven some of the behavior in the market. The first -- last year was the implementation and the overreaction of the incumbents to number portability, which put a pretty big wack on the revenue side by just more than doubling the amount of data the customers had. And then coming up to the political and up to the elections, I think you saw a lot of activity in the market that has, sort of, been more of a populous -- sort of moved to increase popularity. Both of those -- those are now behind us. I don't see anything going forward, that's going to create any additional irrationality in the marketplace. But the fundamentals of the economy are still good. I mean the economic activity is still strong. We were down there last month, the restaurants are full, construction is happening, the quality of life looks good down there, commodity pricing has stabilized, actually oil's is about up. Since then I think that's all reflected in increased economic activity. The usage, even though it's a great deal, for the consumers the usage continues to be dramatic and increasing quarter-after-quarter on the basis. And that's was only about 40% of our base having LTE devices now, which is a strong increase from what it was before, and we certainly see that continuing. I don't think you're going to overnight see anything dramatic, but I think that the some of the irrational pricing moves, I think, are in the rearview mirror and will have a, what I would call, sort of a normal 3 player competitive environment going forward.

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Bentley Cross, TD Securities Equity Research - Associate [14]

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And just following on with that, Brad, I mean you already had some consultants down there and you've also been talking about fixed wireless business. Can you just give us an update, kind of, where we stand on those fronts?

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Bradley Jay Horwitz, Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director [15]

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Sure. We had a group come in and kind of do a top to bottom review of everything from revenue initiatives versus cost-saving initiatives and there are number of ideas and some plans that we're putting in place but there isn't a -- there's no magic bullet that was going to be dramatic. I think it's just a series of smaller incremental steps, which will improve things overall. On the fixed LTE, we soft-launched that service, that product. We're seeing some positive results and uptick with it. We've got a little bit of clearing still to do of some legacy WiMAX folks, which will allow to use the full spectrum band, and we want to make sure we have all that cleared away before we go spend any money aggressively promoting that. But it's going to be a slow steady growth in that business. And given that it is, what it's now the fourth quarter, and all of that, we're going to see -- we will see some positive impacts of that on the -- well, we'll see it on the revenue side, incrementally as we go forward. But it'll really be next year when we've got the full system up before we start seeing a positive impact on that.

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Operator [16]

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And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

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Bradley Jay Horwitz, Trilogy International Partners Inc. - Co-Founder, President, CEO & Non-Independent Director [17]

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Well, great thanks, Rocco, and thanks, everybody. As I mentioned earlier, we're pleased with things that are going on, particularly in New Zealand with the momentum that's been established that continues to be consistent with us. As I look ahead, I see continued runway for continued growth. And we look forward to updating everybody on the next call as to our continued progress. Thank you all for joining.

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Operator [18]

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Thank you, sir. Today's conference has now concluded. We thank you all for attending today's presentation. You may now disconnect.