Megacable Holdings, S. A. B. de C. V. (MEGACPO) Earnings Call Transcript
October 30, 2026
Earnings Call Speaker Segments
Good morning. Welcome to Megacable's Third Quarter 2026 Earnings Conference Call. With us this morning, we have Mr. Enrique Yamuni, CEO; Mr. Raymundo Fernandez, Deputy CEO; and Mr. Luis Zetter, CFO. Let me remind you that the information discussed in today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statements. I will now turn the call over to Mr. Enrique Yamuni. Sir, you may begin.
Good morning, everyone, and thank you for joining us today. It is a pleasure to present another quarter of strong performance for Megacable. As we have discussed over the past several quarters, the company has largely completed its network expansion and investment cycle, building one of the most advanced telecommunications infrastructures in Mexico. That investment has translated into a network with capacity, quality and convergence to sustain steady growth in the coming years. We are now entering a new phase in Megacable's evolution. After several years of significant investment, our priority is no longer pursuing scale as the primary objective. Instead, we are focused on extracting greater value from the infrastructure we have built by improving operational efficiency, attracting and retaining higher-quality customers and driving profitable sustainable growth. This means placing greater emphasis on customer lifetime value, margin expansion and cash generation, while maintaining a disciplined approach to subscriber growth. We believe that a more balanced approach between growth, profitability and customer value ultimately leads to a healthier and more resilient business. The pace of subscriber growth has slowed, reflecting a more selective approach to both customer acquisition and retention. We are increasingly focused on attracting and retaining customers who generate sustainable growth, long-term value while becoming more disciplined in promotional activity and commercial spending. We believe this approach supports healthy growth, stronger margins and improved long-term returns. This progress is most clearly reflected in our profitability. EBITDA grew faster than revenue, reaching the highest level in the company's history, while the margin expanded both sequentially and year-over-year. Importantly, this outcome is consistent with the trajectory we outlined last quarter. Additionally, net income continued to rise strongly compared with the third quarter of this last year. Cash generation also continued to strengthen in line with the priorities we set for 2026. The efficiency gains we are seeing are not limited to our commercial operations. They are also becoming increasingly visible across the organization. We are simplifying processes, raising productivity standards, investing in automation and gradually incorporating artificial intelligence and digital tools into our operations. At the same time, we continue to focus on attracting, developing and retaining high-performance talent. These initiatives are helping us create a leaner and more agile organization, supporting sustained margin expansion while improving the quality of service we deliver to our customers. From a financial perspective, we believe Megacable is entering one of the strongest positions in its history with a moderated investment profile, growing EBITDA generation and a disciplined approach to leverage, we expect our financial flexibility to continue improving over time. During the quarter, a small portion of our debt matured. However, we maintain leverage at a level much better than the range we consider appropriate for the company, combined with a granular investment profile and continued EBITDA growth. This provides us with significant flexibility in how we allocate capital going forward. Our priority remains balancing investments that support future growth with actions that enhance shareholder value, while continuing to improve our cash flow generation, leverage profile and overall financial strength. This focus extends beyond the residential market. Our enterprise business -- enterprise business also continued to move in the right direction, delivering sustained growth during the quarter and more stable performance throughout the year. These results reinforce our view that the repositioning of the business towards integrated solutions for enterprise customers is gaining traction. In summary, the third quarter reflects the early results of an important transition for Megacable. We're evolving from a period defined by investment and expansion into one increasingly characterized by efficiency, profitability, thus cash generation and disciplined growth. The infrastructure is in place, our competitive position is strong, and our financial profile is becoming increasingly resilient. We believe the foundations for the next stage of value creation are firmly established and our focus is now on disciplined execution. We remain confident in the opportunities ahead in our ability to capitalize on them. I will now hand the call over to Raymundo, who will walk you through our operating performance. Raymundo, go ahead, please.
Thank you, Enrique. Good morning to all of you. As Enrique mentioned, this quarter marks a transition in our strategy toward a phase centered on efficiency, productivity and profitability. With most of our investment cycle now behind us, we are well-positioned to capture the benefits of our infrastructure transformation and convert them into sustainable value creation for shareholders. Starting with Internet, we added 60,000 subscribers during the quarter, ending September [Technical Difficulty]
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Are we back?
Yes, we're back.
Okay. Sorry about that. As I was telling everybody, starting with Internet, we added 60,000 subscribers during the quarter, ending September with roughly 6.1 million, up 7% year-over-year, equivalent to 405,000 net additions over the last [Technical Difficulty]
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We are really sorry. We don't know whether it's a problem with the video conference platform, we will try to continue. Hopefully, we don't have a problem. Sorry for everybody. It is important to analyze this strategy based on the maturity level of each market. In our organic territories, [Technical Difficulty].
We are having some technical issues. Please stand by.
Let's try once again, and sorry, never happened before. There's always one time to do this. Okay. In video, traditional subscriber declined by 84,000 in the quarter to over 3.7 million, reflecting the continued migration of viewing habits to our digital platforms. Meanwhile, our streaming applications grew to 2.7 million users from 2.4 million in the second quarter, keeping unique video subscribers at nearly 4 million, broadly in line compared with the third quarter 2025. For this reason, we remain committed to a flexible content proposition that pairs linear programming with app-based alternatives. Fixed voice, which continues to benefit from its integration into our bundled packages, added 84,000 lines in the quarter to reach 5.4 million, up 6% year-over-year. Mobile also kept up its momentum, adding 64,000 lines in the quarter, taking our MVNO base to 845,000 lines, up 32% year-over-year. Looking at customer behavior, retention remained healthy across our core services. Broadband churn improved to 1.9% compared with 2.3% a year ago. Telephony churn improved to 2.1% from 2.7%, while video churn declined to 2.5% from 2.7% over the same period. These trends reflect the progress we are making in strengthening our subscriber base and support a more sustainable profitability profile over the long-term. Our infrastructure continues to support this strategy with 19.9 million homes passed across approximately 112,000 kilometers of network at quarter end. The share of subscribers on full fiber reached 89%, up from 82% at the end of the third quarter of 2025. And with the buildout largely complete, our network agenda now centers on penetration, reliability and operating productivity. Our infrastructure already allow us to differentiate from the competition. During this period, we launched new broadband symmetrical bundles with speeds up to 5 gigabits, leveraging Wi-Fi 7 technology and further reinforcing our leadership in connectivity and network performance. Turning to monetization. ARPU stood at MXN 429.5. This was practically unchanged from the MXN 430 recorded in the second quarter, while the 2% year-over-year decline mainly reflects the package mix and a higher [Technical Difficulty]
We are having some technical issues. Please stand by.
Sorry, we're back. Okay. Across the organization, we have continued to execute on the efficiency initiatives introduced last quarter, leveraging automation, digitalization and artificial intelligence to improve productivity and simplify processes. These actions contribute to a leaner and more efficient operating structure, better aligned with our [Technical Difficulty]
We are having some technical issues. Please stand by.
Hello, everyone. Will you hear me? Operator?
Yes, we can hear you.
Yes, we can hear you.
I am really sorry. I believe we are having problem with the Zoom platform. All our backup system went off too, but let's try to improvise on that part, and I appreciate your patience on this technical problem. Okay. Let's try to finish my speech, and I will turn to Luis on the financials. These actions contribute to a leaner and more efficient operating structure, better aligned with our long-term strategic priorities. As part of this transition, we ended the quarter with approximately 31,700 employees, reflecting a more focused organization while maintaining the operational capabilities required to support future growth. All in all, our operating base is in good shape. Growth is more selective, churn is stable, mobile keeps expanding and corporate is growing again. Over the coming months, we will build on this base by lifting penetration, getting more out of our existing footprint and further raising the productivity of our operations. Thank you for your attention. I will now turn the call over to Luis. I hope Luis, you will have better luck than I did, who will take you through the financial results. Thank you. Go ahead, Luis.
Thank you, Raymundo. Good morning, everyone. Starting with the top line performance. Consolidated revenue for the third quarter reached MXN 9.5 billion, up 7% year-over-year. This represents a moderation from the growth record in the second quarter, reflecting the slower pace of subscriber addition, as Raymundo described. By segment, Mass Market grew 6% year-over-year to reach MXN 8.1 billion, supported by the continued expansion of our subscriber base, particularly broadband and the stabilization of churn both enabled by broader reach of our network. Corporate revenue, in turn, increased 7% year-over-year and 5% sequentially to MXN 1.4 billion. Mobile revenue on its side reached MXN 285 million, a new high for the business. Up from MXN 274 million in the second quarter. On the cost side, cost of services amounted to MXN 2.5 billion, up 2% year-over-year, while SG&A came at MXN 2.7 billion, up 6%. That represents a significant moderation from the second quarter when this line grew 5% and 11%, respectively. Taken together, cost and expenses grew 4%, well below the pace of revenue and early reflection of the workforce optimization and cost control measures put in place in recent months. A key contributor was a reduction of more than 2,600 employees compared with year-end, lowering labor costs while improving productivity across the organization. In addition, growth continued to be concentrated in broadband, which carries a lower cost per subscriber than video, reducing our average cost per subscriber and contributing to the favorable cost trend. As a result, EBITDA rose 10% year-over-year to MXN 4.3 billion, the highest level in the company history, outperforming revenue growth by 3 percentage points. This led to an EBITDA margin of 45.5%, representing an expansion of 130 basis points compared to 44.2% in the third quarter of 2025 and 60 basis points sequentially from 44.9% in the second quarter of this year. Moving below the operating line, operating income increased 15% to MXN 1.7 billion. Comprehensive financing cost was MXN 531 million, a 3% lower year-over-year, mainly due to lower interest expense. This decrease was partially offset by a foreign exchange loss of MXN 61 million. It is worth noting that 71% of the debt is at a floating rate and is denominated entirely in Mexican pesos. Net income totaled MXN 813 million, 30% above the third quarter of 2025. On a year-to-date basis, net income reached MXN 2.5 billion, an increase of 18%. Turning to investment. CapEx for the quarter was MXN 2.4 billion or 25% of revenue compared with MXN 2.4 billion or 26.6% of revenue in the third quarter of 2025. This brings 9 months total to MXN 6.5 billion, equivalent to 23% of revenue. For the full year, we continue to anticipate CapEx between 23% and 24% of revenue. The combination of stronger profitability and a more disciplined level of investment translated directly into higher cash generation, EBITDA minus CapEx, CapEx reached MXN 2 billion in the quarter versus MXN 1.6 billion in the third quarter of 2025, an increase of 25% and totaled MXN 6.3 billion year-to-date, up 19% year-over-year, consistent with the cash generation objectives we set for 2026. On the balance sheet, MXN 1 billion loan matured during the quarter, which drove most of the MXN 1.2 billion sequential reduction in total debt. We closed September with cash and investments of MXN 4.7 billion, up 26% year-over-year, total debt of MXN 25 billion and net debt of MXN 20.3 billion, down 9% and 6% compared with the third quarter of 2025 and the previous quarter, respectively. Net leverage stood at 1.21x EBITDA compared with 1.45x in the same period of last year and 1.31x at the end of the second quarter, while interest coverage was 6.8x. The leverage kept us within the 1.0 to 1.3x range we consider appropriate for the company. During the quarter, HR ratings reaffirmed Megacable's AAA credit rating consistent with the reaffirmation received from Fitch in the second quarter. We believe these ratings are a clear reflection of the company's financial strength, operational resilience and disciplined financial management. Together with our improvement cash generation profile, they provide us with significant financial flexibility and place us in a strong position to pursue value-creating investment opportunities as they emerge while maintaining a prudent approach to leverage and liquidity. To conclude, this quarter brought a clear improvement in the quality of our earnings, EBITDA outpaced revenue. Margins improved in both a quarterly and annual basis. Net income rose meaningfully against last year and cash generation strengthened. Revenue growth moderated, consistent with a more selective approach to growth, while the balance sheet remains solid and continues to support both investment and shareholders' return. Thank you. We're now ready to take your questions.
[Operator Instructions] Our first question comes from the line of Marcelo Santos from JPMorgan.
I have 2. The first is regarding this strategic transition, this new focus you mentioned like in cash generation. So I mean, given that you generate much more cash, given that the mobile asset that was on sale has been sold, what is going to be that use of cash? I mean could you provide some more clarity on what you plan to do with that? That's the first question. And the second question is regarding net ads. So what can we expect going forward? In the past, you used to discuss something between 100,000 and 150,000. I understand that's not the case anymore. So how to think about this? And what kind of network penetration do you think you can achieve in the more longer term?
The first question regarding the use of cash. As you are aware, we like to have a strong balance sheet. We have several options looking forward into that. Right now, we are focusing to increasing the penetration and our EBITDA margin. We will look for the best for shareholders. So far, we can tell you that we're still looking to be a strong player on the fixed telecom market or bring any possibility of bringing more value to the shareholders through that cash, whether it can be dividend, it can be different parts on that area. So we'd like to keep it that way and be strong for any possibility that might arise. We cannot tell you right now anything concrete, but we like to keep that level. On the net adds, we see it less as a question of difficulty and more as a question of choices. For us, each additional customer has to meet the standard of value in terms of retention, mix and profitability. And that standard is what changed the pace at which we grow the base of our subscribers. In our point of view, penetration of the broadband service in the country is near its peak, especially in urbanized areas, which limits the market growth as a whole. But competitive environment will drive net additions of the operations to a more conservative pace. That's something that is going to happen for all the subscribers on that part. But at the end, we still believe there is still a lot of growth into our expansion territories. There is a big amount of kilometers and home passed that are only served by 1 or 2 players and not by 3. That's where we're focusing in very strategic areas so we can bring better subscribers and not that much in retention. What you can look into that, we believe we can still grow at a pace of 70,000 to 125,000, pretty much 70,000 to 100,000 instead of 100,000 that everybody was asking you -- asking us. That one with less gross adds, okay, and continue to decrease the churn in a much more quality subscriber. That's what we believe it can happen in the future. We are in this third quarter and it's going to be looking into the future very disciplined in terms of where we sell and less sales but more quality subscriber. That's our strategy so far to bring value from what we have. We finished our growth in expansion, even though we're building 750,000 home passed every year, that is normal growth for a company of this big and that is the amount that will still decrease our CapEx over revenue ratio. We are just focusing, as I said, in expansion where we have the highest growth and where we believe there is still a big amount of kilometers with only 2 players and only with fiber optic.
The next question comes from the line of Lucca Brendim from Bank of America.
I have 2, also on this line of the new strategy. So your ARPU for this quarter remained mostly stable on a quarter-over-quarter basis and declined a little bit on the year-over-year basis. With the new strategy, do you think this ARPU can start to pick up as you'll be slowing down on expansion, you have less expansion territory, and you're also focusing on higher-value clients? And then, does this new strategy change your outlook for CapEx for the coming years in 2027, '28. You mentioned a little bit already for this year. But when we look to the future years, would this also mean a reduction in the CapEx?
Thank you, Lucca. Well, ARPU was stable sequentially, and we view it is the result of 2 forces. One is the package mix that means video and broadband, video decreasing for all the telco companies. And also, we have a higher share of expansion territory customers that currently dilute the average and a growing base that increases overtime. We believe ARPU is going to stay and remains at the levels that we have. We compensate the package mix that I told you and the expansion territories with increasing rates. And also, we've been very successful in the strategies of bringing apps into the revenue from our subscribers on that part. In this quarter, we increment the value proposition of our video package. We brought Netflix into the equation also. And with Amazon Prime, it is a strong proposition that we believe it can increase the number of subscribers going into the triple play package compared to the second. That will take a little bit of the slowdown of traditional video into a better and more robust platform. So ARPU, I believe is going to stay within the levels that you are seeing right now going into the future. The second one, Luis?
Related to CapEx, we -- the heaviest part of the investment cycle is behind us. The network that we built is coverage, capacity and quality for the next stage. So the investment question is no longer how much to build, but where traditional peso generates the best return as, Raymundo explained. For 2027, we will keep that discipline, prioritizing investment tied to penetration, service reliability, operating productivity and continuing to improve cash generation. A level of 21% to 22%, we expect for 2027. 21% to 22%, revenues, yes. We would rather commit capital selectively and not the higher return. Now the CapEx return uses that maintain an investment base for its own sake.
I want to be clear for everybody, our third quarter results brings 25% of CapEx over revenue. It reflects seasonality of what we're doing. It reflects also exchange rate that affects us. If it was going to be below that. It does reflect online with the 23% that we will have for year-end 2026. So with all the discipline that we're telling you in terms of all the employees, network, not network, the maintenance and everything we're doing with third party, very disciplined management. We're focused on that. We believe that 21% to 22% that Luis is telling you is going to be reflected in 2027 with no doubt, unless something happens with the exchange rate that we cannot control, but we see that 21% to 22% is going to be really achievable by our company. And from there on into the future, the same, we are really, really focusing to bringing CapEx over revenue in the future to below 20% as we have declared before in our conference.
And the next question comes from the line of Phani Kanumuri from HSBC.
The first question is what is the competitive scenario you're observing in the broadband market? It does seem like it has increased in the quarter, but I would be interested in the color that you can provide on that. And the second is on your enterprise revenue. It had seen good growth this quarter. What is driving the growth? And can it be sustained going forward?
Thank you, Phani. Yes, we are very aware of the competitive scenario. We are 4 players into that, and we're reaching a mature market in that area. But we have proven in the past that we can continue to provide growth, and we have penetration to increase in the expansion territories and subscribers to maintain in the existing territories. We are by far the leader on the organic territories based on a good package mix, based on service, brand awareness, based on revenues per subscriber that we have. So all around, we have proven in the past that we can focus into that. We are keeping our strategy organic to retain subscribers in those competitors. We increased speeds, as we said. Now 90% of our network is fiber pretty much in the upper territory when we have competition in fiber. So, we increased to 200 megabits. We have a good speed. We challenge our Net Promoter Score customer satisfaction. So we have a low churn below 2%. We want to keep that churn decreasing slightly, we're trying to decrease because we are aggressive company. So that will cover our organic part. And the expansion territories, as I said, we're very focused into markets where we are only 2 players, one with fiber and the other one transforming into coaxial to fiber where they have higher ARPU. So even though we -- we will be more selective in the promotions. We still have better price than the price that the actual subscriber is paying. So even though market is reaching maturity, I believe we can still provide growth in subscribers on the low -- in the upper single digits for the year to come in that part. So we expect to continue to grow. If we grow this year-over-year at 7%, we still continue to believe that we can aim to those targets of growth within the Megacable regardless of the increase of competition that we have. Now talking about the enterprise, we're very happy that we're increasing our revenue in that part. It's not an easy market. If you look at our competitors, our colleagues in the fixed market, we are all selling around MXN 5 billion to MXN 5.5 billion per year in that area and very steady the growth that we have, not talking about American Movil Telmex, which is the preponderant in the sector and the big guy to beat. The other ones, we are going through a transition from fiber and increasing fiber or lower and increasing speeds and a lower of the ARPU and bringing more solutions, IT solutions to the subscribers. That transition is not easy. I believe we have done a good job, to keeping track of the transition of the market. And we believe we can be on those levels and increase slightly going into the future and contribute to revenue growth of Megacable.
Maybe if I can have a quick follow-up on that. In the enterprise revenue, what percentage of your revenue is coming from these solutions versus, let's say, connectivity?
Your question was, what percentage will come into the future?
No. And what percentage of the enterprise revenues is coming from the solutions versus, let's say, connectivity.
Yes, we have around 80% of our subscriber revenue from -- is coming still from connectivity. The other one is coming from cloud services, from solutions, from collaboration on that part that we have. And also, that percentage doesn't change because the base is completely different. And we still sell a lot of connectivity to carriers, long distance we have a very robust network on that part. So the base, even though as a percentage or less as a percentage of the overall revenue, the majority continues to be connectivity.
The next question comes from Matheus Tostes from Citi.
Congratulations on the result. I want to ask on the video disconnections. There was -- this was the second quarter of some disconnections at the video side. I just want to hear your thoughts on the future of this business. And what would be the relevance today for this revenue line in terms of EBITDA? And how do you see this evolving in the future? My -- if I can add a second one, if you could also share what specific actions Mega is taking to be more selective of the customers that's bringing into network, perhaps charging an installation fee or something like this? If you could share any specific actions and some early results that would be interesting.
Thank you, Matheus. Very specific, and I like the questions. As you know, we're very detailed in everything we explain and we do here. Video disconnection is a trend of the market, mostly linear TV. We see a decrease on that way of consuming content. We are balancing that with apps, as I explained before. People are getting more apps and less video linear channels. We believe that bundling video with ads is a good way because there is still a huge amount of people that want to see some of that linear video. That's why, as I explained, we grow to our proposition, Netflix and Amazon Prime, what you can do is you get a double play package, and that's mostly because all our subscribers are also not that much into the triple play. On that area, we are the ones that have the higher percentage of video. What we are doing is all our new sales, we are trying to focus into quality subscribers that get a promotional of MXN 350 for broadband or for only MXN 150 more, you can get a triple play package that includes Xview, with all the capability of nonlinear and linear TV and also Netflix and Amazon. That's a very powerful offer that we believe and we know that is increasing the number of new subscribers that comes on board with triple compared to double. So that's our strategy to compensate what we're losing on that part, and we believe it can be robust, and we'll see how that resolves into the future coming there. We're very confident because that's the trend all over to going to apps and combine them with TV. On the strategy, we're more selective in terms of the subscriber, where we have technology, we have artificial intelligence already applied with our sales force. We are moving a lot into digital sales, and we are also moving into specific areas and markets where we know that the penetration is low. Now all our sales force goes straight to where we have that low penetration and where we believe that is less competition in terms of number of players in the expansion territories, and focusing to making their compensation based on more stable subscriber. I've been very specific. I would like to go more because there's that's very, very inside Megacable that I want to give you assurance that that's part of our strategy that is already been in place and that affects the gross ads. But that's why we are doing that. And that strategy is bringing also EBITDA being much more productive in our sales force and with less OpEx and CapEx coming from subscribers. So I would like to go more I'm very specific, and I believe I gave you the whole idea that we are really serious about what we are doing with this strategy.
The next question comes from Emilio from GBM.
It's on capital allocation. Given the ongoing consolidation we've seen in the space, could expanding into mobile services even further than your current MVNO be a strategic priority, either organically through your MVNO or any partnerships or M&A? And additionally, are you actively evaluating any further opportunities within the segment? And how do you weigh these potential investments against return on capital to shareholders, particularly share buybacks given your current share price and valuation.
Thank you, Emilio. Going to the second one, yes, we are always looking into opportunities. All of the above that you are saying, we will see how this scenario or industry end. As you know, right now, one of our competitors, Televisa, acquired AT&T on the convergence sector. We continue to look for opportunities that might arise. Talking about the mobile or the MVNO that we have. MVNO for us is a compensate. It compensates -- it is an add-on to our existing subscriber. It is good because it doesn't take any CapEx. As we say our CapEx, it goes straight to our network and contributes to EBITDA of the company. The majority of our subscribers are based in Altan, and another portion of those in AT&T. So we have 2 of them. We don't have a problem going to the third player also, and we're looking into having 3 of them in commercial agreements with Megacable. We don't have a problem also if we move all our subscribers into the Altan platform. That will depend on how we see the strategy of Televisa with AT&T, but we don't have a problem that we're covering into that area. And we will continue to put some effort on the MVNO as an add-on to our existing but we're not wasting any strategic effort of our company going into CapEx or going into convergence so far. We're focusing into what we told you guys before, which is bringing results as we see of this quarter, where we have 7% revenue, 10% EBITDA growth and 30% net profit compared to last year. I believe our financial results, we brought down net debt to 1.21. We are a good free cash flow generating company and increasing that going into the future and not future but actually. We're in a very well position to look for the second part that you asked me, which is the opportunities. We are actively looking for opportunities on that part. You can count on that to me.
The next question comes from Jesus Romo from Global.
Congratulations on the results. My question goes in the sense of if you could add more color on how the AT&T Televisa impact your mobile strategy going forward? I think that you covered the wholesale right now. But I'd like to see -- or I'd like to ask more specifically, how does impact your mobile strategy in terms of other type of wholesale relations for mobile, the bundling strategy, opportunities for acquisition in the mobile segment and opportunities beyond residential, for example, mobility for B2B services or IoT even?
Thank you, Jesus. As I told Emilio now, let me expand into the explanation. So far, the impact, as I said, the majority of our subscribers are with Altan, not with AT&T. We like to keep relation with AT&T if they like to keep it. But at the end, if we need to move our subscribers to Altan or to other players, we don't have a problem doing that. It's an additional revenue for us. It's not our core business on that part. We will continue to grow mobile subscriber at the pace that we have based on the agreements so far that are. And if you are talking about acquisitions for the mobile part, of course, acquiring America Movil is out of any question that's not the one you are looking for. But as I said, whether we grow into fixed mobile, whether we do purchase of our shares backs, whether we increase dividends, we're looking at all the opportunities that make more sense. So far, we've proven that we continue to grow and strength our position. And I cannot tell you any more right now, but we're looking into everything to be done. So result impact on the mobile, we will continue to grow and contribute to the EBITDA the way we have right now. And we'll see 2027 focusing into more Altan and less AT&T, we'll see. We don't know yet. It's too early to call.
We have one additional question through the Q&A section that is from Marco Battaglia from Temujin. He says: why did ARPU did not recover in the 3Q?
Sure, Marco. ARPU did not recover for 2 reasons, as we said. One is the mix of package, or the package mix. That means less video over total subscriber with a lower ARPU. And the other one is we have more subscribers on the expansion territories with lower ARPU. I call it the growing pains on that part, and the mix. As I said, the way that we are compensating that is with less promotion, more selective subscriber and bringing a much more robust video and app offer to our existing Internet and new Internet subscriber, so we can keep and manage that trends that affect our ARPU.
And it seems we have a follow-up from Emilio Fuentes from GBM.
Just a quick follow-up. I recall you previously had long-term or medium-term guidance from your expansion plan on reaching ballpark numbers, 45% to 47% EBITDA margins and the network penetration of somewhere around 30%, if I'm correct. My question is, is this still something you see achievable? And how does this mix come -- how does a reduced penetration target affect this mix with a more selective approach to customer acquisitions?
Thank you, Emilio. Interesting question. Well, the EBITDA that we forecast for that was around 44% to 46%. We are certain we're going to meet those percentage. Where I don't recall what the penetration that you call there, because that 30% penetration over the expansion territories will bring our market share in 33%, and that's not what we aim when we did the expansion on that part. Remember that in those territories also, there are 4 players. Four strong players, all of them split in the market between the 3 of them. What we aimed at that part was something between 22% to 25% penetration. I can tell you that we have all kinds of penetration so far. Some of the areas has more than 20% penetration, another one between 15% and 20% and new territories and more build-ups between 2024 and '25 has less than 15% and 10%. We have some at 5% new cities that we opened in the northern border and some in the Southeast part of Mexico. So that means I'm pretty sure that we can continue -- our focus is to continue to increase penetration in those territories. And that put pressure on ARPU, again, as I said, because those brings good promotion. What we are doing is being more selective on the terms where we acquired the subscriber. One of our -- one of the questions of Matheus -- one of his question was, how do we plan to change that. And now I recall in my answer that yes, we are collecting more money when you get -- it's not an installation fee, but it's an advanced payment, and that's a way that you clear out. But also with technology. Technology tell us where we have all the database of subscriber that is possible, not who belong to the competition, but how many home passed, how many houses our sales force can go and not on that part, whether they can do an update in that area because it's an existing subscriber or whether they can sell to the competition. So it's technology, efficiency, charging a little bit more to the customer on that part, reducing the amount of promotions that we have. So all into that part, Emilio. So expansion should meet that 44% to 46% and should get us to 22% to 25% penetration.
It seems like we have no further questions. This concludes the question-and-answer session. I will now turn the call over to Mr. Enrique Yamuni for his final remarks.
Enrique, you're on mute. I hope he doesn't have a problem.
I'm sorry, I was in mute. Yes. Thank you very much, Esau, and thank you all for taking the call and for your interest in the company. If you have any further questions, you can contact our Investor Relations department directly. Please have a nice weekend and see you in our next conference or before.
Thank you, everyone. Really good questions, and we enjoy having this conversation with you. Thank you.
Sorry for the glitches we had.
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Programmatic access to Megacable Holdings, S. A. B. de C. V. earnings transcripts and 258,000+ others is available through the
EarningsAPI REST API and the hosted MCP server.
Quarterly plans from $145 - full transcripts, speaker segments, full-text search,
and the /api/v1/transcripts/recent polling endpoint for ETL pipelines.