Oi S.A.

Thank you, Marcello. And good morning, everybody.

Welcome to our call or good afternoon, depending on where you are. And this call comes as one of the first calls after we have shifted our focus primarily from doing extraordinary operations to a focus on the execution of the several pillars of the plan we announced by the middle of the year, in particular, with a focus in addition to completing the M&A operations, which will soon be behind us in maintaining our fiber performance and then streamlining the way to a new cost structure.

We believe that quarter after quarter from now on, it will be possible to see the operating results of our strategy in the metrics that we'll share as well as we'll start to recognize the mid- to long-term potential results on our financial plan as we make it happen. And we know that we need to bring the consistency so all of you can understand what's going on and what is the future potential of the company.

So, let's start by taking a look at the key figures for Q3 starting with Page 2. So, if we can move on to Page 2, we see that again we believe our operational execution is on track.

Fiber continues to keep a strong pace. Residential has confirmed a very solid turnarounds, and we also had declining costs and margin expansion.

So, on the first figure there, you can see that it has been approximately two years since we started the fiber project and the fiber results continue to deliver quarter-after-quarter. We have large HP additions, homes passed additions in eight of the last ten quarters in Brazil.

And actually, today we have reached the 14 million homes passed, literally today we have reached 14 million homes passed, but we closed Q3 with 13.5 million homes passed and 1.4 million new homes passed. And we also have been a leading the net additions for homes connected in seven out of the last eight quarters.

And we closed last quarter with a 3.2 million homes connected at the clip of over 320 homes connected in third quarter. This is an average take-up of 24%.

So pretty significant performance that continues unabated since the beginning of the project. And due to this, we can see that the residential revenues continue going to growth friends.

And it confirms that fiber has now left copper behinds. And we could present a 2.4% year-over-year increase on residential revenues, including both Copper Broadband and Copper Voice compared to fiber.

So, two of them going down, one going up, and this has helped us to post positive results on a year-over-year basis. And if we look at the segments that we expected to catch up, which was the small medium enterprise segment, revenues have been going up as well on this segment for 6.5% up on a year-over-year basis.

So, a very good result from where we were. It had been presenting positive results, but now we confirm that the positive really have to stay.

On the financial side, the positive highlight here is that EBITDA has again turned positive both on a quarter-over-quarter, as well as on a year-over-year metric. And if we look at the cash levels, obviously we continue to manage cash very carefully.

We know that there are several components to the cash equation here, including a significant consumption to maintain our expansion, but also some cash ins are for all of the funding activity that we have in anticipation of the transition that we're going to have with the closing of our two most important transactions. And if we look at the EBITDA, the other positive highlight is that in addition to having some EBITDA growth, both a quarter-over-quarter and year-over-year, we also had some margin expansion.

For the planned milestones, finally, we had some very important milestones regarding the regulatory and competitive approvals of the company's two largest M&A operations. And those were the approval of the partial sale of InfraCo sale by CADE.

So, CADE has completely approved this operation now and we're waiting for the Anatel approval. We also had the Anatel technical report recommending the approval of the mobile UPI, as well as CADE’s general superintendency, which is a keen to the technical group at CADE recommending approval of the mobile UPI as well.

And both approvals are now going to the respective boards. So now turning to Page 3, let's start as usual by looking at the fiber performance in a little bit more detail.

On fiber, in spite of coming from a very strong performance, we maintain the trend. And we continued solid on the plant metrics and probably the largest highlight here is that the annualized revenue is already above R$ 3 billion, R$ 3.2 billion to be more precise.

We see that the homes passed continues to accelerate. We are now, as I mentioned, above 14 million homes passed as of today.

And the homes passed per month has maintained pretty much the same level, almost 500,000 homes passed per month, as we had in the last quarter. If you look at the homes connected, we continue to be the leaders in homes connected firmly on track to be at the 3.5 medium homes connected mark by year end.

And keeping our long-term targets actually unabated, we're looking at 2024 targets as we have mentioned already a few times above eight million homeless connected. So, maintaining a pretty significant CAGR.

Since the beginning of the project the CAGR has been very, very consistent. Obviously, now we're still showing very large CAGR numbers from last year above a 100%, but we expect to maintain above 30% CAGR until 2024.

And this is happening with ARPU growing again. Upselling continues to play a role in boosting ARPU.

In the third quarter, over 10% of our fiber customer base had speeds above 400 megabits per second. And we said in the past that this will be a key factor in moving ARPU up.

It would be selling more for more. And obviously this is happening.

And now 19% of our net additions are already above the 400 megabits per second. This is three percentage points over the last quarter.

So pretty significant performance over there. And when we look at the revenues again, we can see that it was a hundred percent increase from last year.

But the good news here is also that it grew both on Residential as well as on the B2B side. So, as we speak about Residential, let's move to the next page where we can see that fiber has now less copper behind for good.

The solid Residential turnaround in Page 4, as you can see, is confirmed. And when we look at both the number of RGUs, the revenue generating units, as well as the revenue numbers, the revenue growth numbers, we see that fiber is now the dominant force for us in residential.

On the RGUs fiber already to represent almost 60% of the mix compared to a 30% of the mix last year. So, it's a phenomenal growth here.

And on the Residential revenue, the same happened here. And we moved the fiber to be already significantly above the copper revenues.

As we have mentioned in the last quarter, last quarter was the quarter where the transition happened where the crossover between the two curves happened and not only it happened, but it continued to accelerate. And we see that this is a long-term trend now.

With that, we see that the fiber now represents almost 60% in one year, even with a 36% decline in copper revenues. Again, we knew that this was expected.

We knew that we had to plan around the erosion of the legacy customer base and legacy revenues. This is, as I mentioned, many times the structural segment issue, it's not a performance issue, it's just structurally people are moving away from fixed voice and legacy broadband.

And obviously we had to do something to replace that and fiber is the answer. With that we are maintaining then a very positive growth trend, as you can see here in the left-hand side at the bottom of the left-hand side on the residential revenue evolution, which has come consistently from a negative, double-digit territory, then stabilizing, and then now presenting positive growth which we expect will be maintained.

And when we talk about the decline of legacy revenues, we know that this impacts not only the residential segment, but also B2B as we can see in the next page. But in B2B, we know that that we have been compensating this partially by fiber, but also partially by the growth in the ICT components.

And on the ICT components, we know that this is part of our long-term strategy. We need the ICT components to make up for the declining legacy, both voice, and data revenue and point-to-point solutions.

Those, we will be migrating to fiber and GPON solutions as well. But while this happens, we have to maintain sustained revenue and ICT is helping us do just that.

Obviously, this represents a small, sequential drop, but in reality, this is happening on the verge of ICT revenues growing, and data and legacy revenues going down. We still maintain our long-term guidance of having Oi Soluções' revenues stable with around R$2.6 billion.

And we know that in order to do that, Oi Soluções has been weaning and deploying very significant complete ICT projects, including both IT solutions as well as communications solutions, which can illustrate the strategy of becoming a full solutions provider. And here we present some examples of significant, recent projects.

We have mentioned one about the Video Police contract with the Government of Bahia. We have implemented Digital Palace for the São Paulo government including IOT, security, video monitoring, energy efficiency and automation solutions.

We have done to one of the largest switching resale projects with Banco do Brasil to compliment all our communication services. And this has been expended as we speak to multiple of our large B2B clients.

On the SME segment, fiber had another strong growth quarter. And this led the segment to grow both on a quarter-over-quarter, as well as on a year-over-year basis.

And we see here that this is pretty significant, and it comes on the verge of expending, the home's best coverage in synergy with the growth of residential home space. And this has less than fiber to represent already 25% of the segment revenues.

Next, let's see again, the results on mobile. And we know that mobile performance is important for us until we close the operation at the beginning of next year.

And our mobile performance continues to maintain a good transition back. And this is in reality back to sequential revenue growth supported by a strong post-paid performance and also some sequential improvement on prepaid.

When we will look at mobile customer revenues, we see that sequentially revenues were up quarter-over-quarter, in particular, due to another very strong postpaid quarter. We can see that postpaid revenues started growing almost 5%, both in a quarter-over-quarter, as well as on a year-over-year basis.

And this has led us to actually be on the forefronts of revenue growth, overall revenue growth, for mobile service revenues on a sequential basis. And this is important not only because it maintains the value of our mobile operation and it help us do a good transition path in terms of bringing cash into the company until we finally close the mobile sale operation on the first quarter of next year.

When you look at the other revenue components on next page, and I'm talking here about new revenues, they also presented positive results and growth. And we know that although the new revenues are still small on a grand scale, they not only are growing fast, but have the capacity to grow even faster.

The new revenues are coming from more the connectivity as we have highlighted that as part of our plan. And if we look at the portfolio, our portfolio keeps expanding rapidly, both with offers that Oi developed itself or in white labels, as well as in partnerships offers.

And this is both for offers that are active now, and soon to be launched. This number of offers have been multiplying.

We have not only the traditional offers that we have been putting a lot of effort and emphasis on such as Oi Expert, which is the technical solutions service software for home. Also, the Oi Play, which is our marketplace.

Oi Play, which is our content aggregation play. And then you can see that we have a host of other solutions, including the SME space, the education and health space, the financial services space and we are trying to bring some innovation here in particular, in some of the areas where we're just launching our solutions.

In the financial services space, we have launched an initial solution with Oi SAP. We will continue bringing some innovative solutions here with partners soon to be announced.

On the education and health space the same thing is happening here. We are just launching a solution for instance, with the help of some partners, including Accenture, in which we will guarantee to whomever is taking those educational solutions courses, access to the labor marketplace, as soon as those courses are completed.

So, we're doing some innovative things here. We know that there is still a lot to be done here, but when we look at the results, the results are coming.

When we look at the new revenues from last year to this year, it was almost 54% growth. And in annualized storms, it means that we are already almost reaching R$180 million revenues every year, with those new revenue streams.

And the growth for some of them has been phenomenal. In the case of Oi Play, we have a 4x growth.

In the case of Oi Expert, we almost doubled the business and we maintain then the guidance of having new services reach the revenue target between R$1 billion and R$1.5 billion in 2024 thus contributing to the company becoming more than just a connectivity company. So now let's look at the current revenue mix considering all segments on Page 8.

And we see here that the new revenue mix is improving not only fast, but also consistently sustained by obviously the solid fiber performance, as we mentioned which combined with ICT and new revenues already represents more than 40% of the new Oi total revenues. We know that we have still to do the turnaround on total revenues, considering that the legacy revenues are still a significant impact on the total.

But when we look at the sequential revenue growth, it is coming. And when we look at the percentage of the core revenues that is represented by fiber plus ICT, this percentage has been increasing consistently as well.

And we are now already above 40%. This means a 73% year-over-year increase in core revenues, while we know that the legacy revenues continue to go down.

On the discontinued revenues, which includes mobile and DTH, the good news here, obviously we need to maximize those as much as possible until the close of the operations. We see that we went back to sequential growth, almost a 6% sequential growth on discontinued revenues.

And on the verge of that, if we move on to next page on Page 9, we also have good indicators on OpEx and EBITDA. As you know, we have been doubling down our efforts on addressing costs in the company and results are coming in multiple areas, which led us to EBITDA growth on the verge of OpEx reduction.

On the OpEx front, we can see here that our OpEx had a 6% reduction, which is very significant, even in place of very significant inflationary pressure. And this is due to our DCO efforts or the drastic cost out efforts, which is producing results in pretty much all of the areas, inverting the cost curve from the previous quarter even amidst a very difficult macro environment in Brazil.

This led us to a significant growth in routine EBITDA and margin expansion from 29% last quarter to 32% this quarter, which is growth even considering the last year quarter, the third quarter 2020, which was at 31%. Our DCO cost reduction program is now covering pretty much all areas in the company as we can see in Page 10 and we have mapped over R$1 billion in cost reductions.

We are executing this program on a daily basis and talking roughly about the three core fronts of focus. The first one is the streamlining, the New OI, its moving in parallel with all of the structural changes and this includes changes to organizational structure.

We are redesigning the New OI. We are increasing the relevance of a shared services structure to become leaner and lighter.

And we have been reducing the size of the organizations. In the third quarter we have a reduction in 1,300 positions already performed.

We know that we'll still do some reductions are coming forward as we move on with the closing of the structural operations and the cost outs will occur also at the Mobile and InfraCo levels to be executed with the carve outs during the very beginning of 2022. And this includes the normal things you would expect from such operations, such as commercial footprint reduction, active resizing of our telesales and commercial performance, working capital reduction in terms of stocks and other cross outs that come with the exit of both the mobile and the control of infrequent V.tal.

On the second front, we are talking about really digitizing and increasing our efficiency in the New OI operations. It's focusing on the New OI, including all the way from marketing and digital in terms of portfolio simplification, increasing our digital communications, spending optimization on our marketing, having optimization of our channel mix and also having a reduced content acquisition costs.

And this goes all the way to operations and IT and network efficiency. We are obviously focusing a lot on doing an optimization and automation of every possible function inside the company, including simplifying our IT Stack.

We have announced that we are building a new IT Stack, which drastically simplifies our core IT going forward. And we have been focusing there as well as on every other front including for instance, energy costs reductions through our distributed generation plants or GD plants in Brazil, as they are referred to and looking at the long-term energy contrasts.

On the G&A we have been also doing some very, very in-depth initiatives in terms of procurement, in terms of efficiency, in general expenses and the results are also coming. The third front addresses the legacy.

We have mentioned the legacy turnaround many times here, and this addresses all of the concession issues and the concession sustainability, not only from an operational perspective where we continue to reduce our legacy network and continue to migrate our technology to technologies that will allow us to have a lower operating cost, but we have also been concentrating consolidating central office switches in the expectation of the migration from concessions authorization and the results of our arbitration, which with ANATEL, which will allow us again to turn the page around in terms of all of the heavy burden of the legacy that don't make sense anymore. And we are implementing this by actually bringing a very strong cross-culture for the New OI with all of these actions.

It's a strong financial discipline, which involves not only the operations on a daily basis, but also our planning, our budgeting performance, our zero-base initiatives were pretty much everything we've been doing in order to create a completely new company in terms of a financial discipline and cost process. The focus has been on increasing our efficiency, but also while allowing space for growth as can be seen in the next slide.

And we can see this as our operating costs, which are directly linked to the efficiency programs, was reduced by almost 10% year-over-year and our costs associated to revenue and to growth increased only 3%. On the operating side as you can see here, everything was reduced personnel, network maintenance, telecom infrastructure, printing, post and billing, consulting, and all of the G&A costs and this was a minus 10% year-over-year.

On the revenues side, some growth was there and it was all associated with the building up and bringing our fiber operation from the ground and increasing our revenues associated with the long-term prospects of the company. Those included some revenue linked costs, commercial expenses, and even some bad debt.

We knew that we did have an increase in bad debt in the last quarter compared to last year. But this is because we are accelerating our sales, and we know that we are fine tuning our credit scoring models, but this is just a regular effect than relatively small compared to obviously all of the benefit of bringing new revenue.

And to illustrate that we have some indicators, some metrics here to help us understand what we're doing. So, for instance we have been increasing our e-collection metrics from 18% in January 20 to almost 40% in September 2021.

We have been increasing the percentage of our e-commerce sales from 8% to 13% as of September. In e-billing we have gone up 20 points and we are now above the 50% mark in September 2021.

JOYCE, which is our virtual assistant, has gone up 6 percentage points, almost tripling its participation as well in the total of customer communications. And we have been focusing on what it's possible to do as well on the concession.

And I mentioned that we are trying to streamline the concession and the legacy infrastructure by doing some discussions with ANATEL and consolidation of requirements. We have enabled from January 20 to the last quarter to reduce for instance the number of payphones out there by 15% and this is obviously a good indication for us, and this is just the pure cost are now on payphones are not generating any significant revenue.

In addition to all of that on the IT front, we have been investing significantly in simplifying our systems and IT stack. We have already more than 450 IT systems switched off.

I mean, you probably think this is a big number, and it is a big number but the complexity was much larger than this. So, we still have some work to do, but we continue on a relentless space to simplify the IT structure of the company.

This is going to be possible as well after the cutoff of both the Infra operation as well as the mobile operation at the beginning of next year. And as communicated in the middle of this year, this will help us achieve a new cost base; this can be seen in Slide 12.

And if we look at most of the mapped costs, we have already mapped what's going to happen both in terms of the cost that is going out with the key structural M&A's as well as what we can do moving forward. And as soon as we close the structural M&A's we're going to have a cost space for the company, which is roughly 50% of what we have today, and then moving forward we will have a new cost logic and we will disclose numbers next year in a very different way to reflect and provide all of the visibility to what we're doing going forward.

But we can already say that out of this 50% cost base, we expect to reduce at least 20% of that with the continuation of our cost reduction programs. So next on Page 13, let's look at CapEx and cash.

We know that our cash needs to be managed very carefully. We know that this is the spot where obviously there is a lot of attention both because of the cash requirements to do the transition, while we continue to focus on closing the operations and then having the cash-in of other divestment program in particular those attached to the sale of the UPI mobile and the UPI InfraCo expect it for the first quarter 2022.

And also, while we work during the period to streamline our depths, we know that we have to recur to some additional funding and financing operations during this period, then this was expected because we needed to fund our growth and our operation all the way to the close of the two largest structural M&A transactions and cash needs. But we've been doing that in order to maintain an adequate level of cash and you can see here that starting with CapEx we had a small decline, but remained focused on fiber and with all of the additional cash flow and backed operations, we ended up the last quarter with a over $4.1 billion in cash.

We did have some consumption here, which was due to obviously the regular operations while we expect the closing of the two operations, as I mentioned. But then we had some cash-ins from some of the refinancing programs we had and now we have this $4.1 billion cash position.

Obviously, this has increased a little bit, our growth debt and net debt. We expect again to reduce those after we closed the operations, as you can see obviously, we expect the very significant cash-in from the two operations at the beginning of next year, and then we will be able to reduce significantly the depth again to the level that we have announced before, which would be close to the R$10 billion in net depth.

It's also important while we talk about the whole plan to provide some brief updates on V.tal on next page. And V.tal as we mentioned, less order is now being operated as a completely independent entity.

We have been doing 100% independent commercial activity, and we can have a sense of the potential of the company for what is already happening out there. In Q3 we added already almost a 40 new CDs with the FTTHs structure of V.tal, and also, we already have in V.tal a large number of contracts under management.

Not only in neutral and wholesale contracts that are already existed, and it allows the company to have an EBITDA expected for this year, which is in excess of 1.1 billion, but also an active base of new multi-tenant customers for FTPPs with over 13 million homes passed potential and a potential as well for over 3 million homes connected into the long-term. With this plan we know that V.tal has an aggressive growth plan.

We had already over 30 billion announced and we're working to accelerate the HP deployment starting in 2022. We are discussing with V.tal, the anticipation acceleration of the original plan.

Obviously, we want to occupy the opportunities as soon as possible and so we are right now in discussion to do an accelerated version of this plan for the future already starting in 2022. And finally, we have to remember that V.tal is not only about e traditional wholesale and FTTH, but it's also about providing a backbone for 5G in Brazil.

We just had last week, the 5G auction and as we heard it today, the world is going to 5G. Brazil is going to 5G, but we have to remember that 5G is going to fiber.

5G is going to need a lot of fiber. V.tal is preparing to do just that.

We believe V.tal can be a significance winner in this whole process by having a driver for more fiber consumption in the entire country. So V.tal with that will continue to be a critical part of our equity story going forward.

And as we have highlighted many times before we expect that our equity value increasing V.tal, we will be an important component going forward to really help us completely redo the debt structure and the capital structure of the company a few years from now. So, before we actually go to a wrap-up let's just have a look on our ESG initiatives on Page 15.

And as we can see we have been continuing to advance on all ESG pillars. So, we had some structuring actions in all of them starting with the environmental pillar.

In the energy sector we had 89 additional units migrates to the free markets. Totally now an average of 73 megawatts making OI the number one telecom company in consumption from renewable sources in Brazil.

We have a long-term plan of 100% of our energy coming from renewable sources. And this is not only good for the greater predictability of costs, but it also helped us offsets all of the environmental impact that the company had with is a very large consumption of energy.

On the reverse logistics side, we continue to advance as well. We have been maintaining a reverse logistics program that has already reconditioned over 200,000 units of FTTH equipment by the third quarter of 2021.

In the ESG pillar, we have been focusing on a number of actions, including workplace safety, and we're glad that OI Brazil was awarded the Brazil 2021 protection award for a safe work environment and a better quality of life. We have been focusing as well on advancing our diversity and inclusion initiatives, including several meetings for diversity, over 2,000 trained employees and third-parties in this process already.

We have a very significant project on women leadership which was concluded and is now a great success, and is going to be replicated for future classes. And finally, we have been maintaining the activities of OI FUTURO of our social institute in particular with a focus on social, educational and cultural impact.

And we by doing that are adapting our NAVE; NAVE is our advanced education center initiative to 100% digital format, which will serve to include even more students enrolled in the schools, both in Rio de Janeiro and Recife, which are the original NAVE schools. And finally, in the ESG pillar and the governance pillar, we had some very interesting awards for the Latin America Executive Team Award Institutional Investor.

We have launched our privacy program, which brings the company to be fully compliant with all of the LGPD requirements in Brazil, with an emphasis on the motto people come before data to all of our employees and also to our customers. And we have events as well on our risk management and compliance policies with an update of our corporate policies and our review of our guide of expected conduct, not only internally but from all of our third parties.

So, as I have been mentioning many times before we have been doing a number of initiatives in ESG for a long time now. What we're doing now is just giving more visibility to all of those initiatives as we believe they are a fundamental part of what we do and why we do it.

So, in closing on the next slide, we again highlight that this is a transition year. We know that 2021 milestones are still on track.

We have been tracking execution on pretty much everything we said that we would do. And as off last quarter we had a few new achievements and also at the beginning of this quarter given that we were already in November.

So, we had the approval, the arbitration commitment on our arbitration with ANATEL on the concession. We have the CADE approval of InfraCo.

We had the ANATEL preliminary technical report recommending the approval of InfraCo and MobiCo and we also had the preliminary approvals for both CADE and ANATEL on our mobile deal. We now expect that those activities will continue?

So, we can have both the closing of V.tal and the closing of the UPI mobile sale on the first quarter of next year. And with this, that cash-in that will help us again, redo the financial structure of the company for the future, this allowing in 2022 to start a completely new execution model.

And this comes again by focusing on the five core areas of execution that we have highlighted at the beginning of the year – at the middle of the year. The first, the completion of our structuring M&A operations; the second, the focus on our core business acceleration and the generation of new revenue sources; the third, the organizational transformation and cost structure, readjustment of the company; the fourth, our concession resolution; and finally, the full development of a V.tal as an independent company that will bring significant equity value increase for us, and will help us address the long-term issues in terms of capital structure and depth.

So, in summary, this is what we had as our presentation for the quarter. We know that once again we are in the middle of a transition, we know that we still need to provide them many different indicators to you going forward, so you can track what we're doing and how we're doing.

But we believe we're on the right path, even with all of the challenges that we don't control such as the macro environment or the exchange rates, but we've been firmly working on being very careful with our management and we continue focused on not the long-term goals and the whole executive team and the Board are fully committed to making it happen. So, thank you.

And Marcelo, I believe we can now go straight to our Q&A Session.

Sure Rodrigo. Thank you.

So, we will now begin the Q&A session. Please remember that the question should be asked in English and to get inline in order to ask questions, please click in the Q&A icon at the bottom of the screen and write your name and company.

After your name is begin announced, I requested to activate your microphone, you appear on the screen and you must activate it to ask your question. So, our first question comes from Victor Ricciuti from UBS.

We will now open you out, so that you can ask your question, Victor.

Hi, Marcelo. How do you go?

Great. You can proceed.

Yes, you can. Thank you, Victor.

Okay, perfect. So first of all, thank you very much for taking my question.

I have just one question around margins. We saw legacy revenue reducing its relevance on consolidate revenue in the past quarters.

At the same time EBITDA margins have increased. How should we think about the 15% EBITDA margin in 2022, 2024 guidance you have provided?

Well, this is a long-term guidance that is actually composed of two different margin components, right, Victor? If we look at what's going on the consolidated margin, we have the 15%, if we separate and dis-aggregate this component in two we see that what we expect as final margin for our core business fiber and all of the other components we are closer to the 20% actually were 19% at the overall core business at 2024, and then going into 2025 with 20% rates.

And when we look at the whole legacy business, obviously we expect significant margins decline there because not only the revenue continues to drop, but there is a gap in terms of timeline from the drop in revenue on the legacy sites and the dropping costs on the legacy side, because it's – unfortunately it's not an immediate reduction in costs. You cannot simply disconnect the entire network the moment customers are going out of the legacy network.

And so, we do have one or two years, so to address that as we reduce the costs as well. Obviously, the reduction of costs from the legacy side are also associated with all of the discussions we have been having in regulatory terms, both on the migration from our concessions to an authorization, which we expect to produce results only starting in 2023.

Unfortunately, there's two another year of discussion there as well as the arbitration discussion, which will help us address this migration without any additional costs. And even with some access a positive surplus for us to address other costs associated with the legacy including all of the finds that we still have with them.

So that's how we're thinking about it. Obviously, there is a gliding path for that as we know initially when we look at the EBITDA for core operations, including fiber.

We have to remember that we are at the very accelerated pace of growth on the fiber space and so we do have some growth costs in the fiber operation. And as we continue to go forward, this EBITDA level is going to be significantly increased.

And the same thing we know that obviously the other difference here is we have always to remember is that what's going to make a huge difference for the company is the amount of CapEx that gets reduced with the exit of InfraCo. Because in order to generate this 19% EBITDA give or take on the CORE by 2024, we're going to be at the approximately 7% to 8% CapEx level, all included for the company including the CapEx that we're going to have to make for the legacy as well.

That's very helpful, Rodrigo. Thank you.

Thank you.

Thank you, Rodrigo. Thank you.

So, our next question comes from Carlos Eduardo from BTG Pactual. Carlos, we will now open your, you can proceed please.

Thanks, Marcelo. Can you hear me?

Yes. Carlos.

Thank you.

Yes Carlos. Thank you.

Thanks. Hi Rodrigo, how are you.

So, I have a few questions, so we will start with one on the arbitration process. So, when do you expect the final decision?

Usually this process, they don't – they're not supposed to take that long. So, I was wondering if you have any, any expectations on when you might have a final sale decision on that process.

And I don't know if you releasing that information, but can you give us an idea of how much you are – how big a reimbursement you're asking for in the process? And if you on this line of thinking, I would guess that once you conclude the sale of the assets, you will also going to move to lift the bankruptcy protection.

I was wondering when you expect you have the bankruptcy protection lifted, please? Thank you.

Sure. Carlos, thank you.

On the two questions, the arbitration procedure as it is a large – very large arbitration and already maybe asking a lot of here in stating numbers here, because it is a large discussion that is still subject to a number of technical diligences and confirmation from the technical teams that will be associated with the arbitration panel. But suffice to say that in reality what we're seeing is a number that will – would be enough not only to help us migrate without any costs from the concessions on authorization, but then to have still have some surplus for us to address other pending items that we have as far as financial liabilities with the federal government.

Obviously, it is, we believe several billion but how big it is? We prefer to wait until the arbitration has moved a little bit further and we have all of the panels in order for us to do more – to provide more precise numbers too.

But it's again in the range of several billion. And obviously in terms of the expectation of the timing we know that any large arbitration such as this, which is a complex arbitration involving a public concession, it's not necessarily short it's actually quite the opposite.

It takes a while. It takes in the range of 18 to 24 months, depending on the process.

We know that so far pretty much all of the steps that we have to conclude were concluded with no delay. And that's the good news.

We already had the approval from ANATEL well, in terms of the object of the whole discussion. We had the approval of the indications of judges of the arbitration on both sides.

We already had a good indication of the President of the arbitration panel, which is also going through a good bath with no delay. And with that, what we would expect is that by the end of next year, we will be already at the condition of having some preliminary decisions and recommendations.

So, we can maybe in a matter of another six months or so come to a final, not only decision but the final conclusion and the producing effects of this result. The good thing here is that as some of the components of the arbitration Cadu, they actually are very directly linked to what we're doing in the concession, including some material and information and evidence that we're bringing to the table in terms of what happened with the concession and all of its components.

Without a question by judging and analyzing that and ruling on that, but then providing preliminary reports on that the arbitration then will be able to directly impact the cost of the proposed migration. That's where we're going to have to have by next year, and probably by the end of next year.

And as such, even though we probably should not expect the arbitration to be completely finalized by the end of next year, it will be close to that, and we believe I will be able to help it produce results as well on the migration to an authorization. As far as the lifting RJ question, obviously, this is something that it is up to the judge to decide.

But as you remember in our RJ plan the approval from creditors was to maintain the RJ until May of next year. And what happened after that when the plan was approved by the judge, initially the plan indicated that we should have the end of the RJ this year, but as we expect the closing of the two operations only by the first quarter of next year, the judge then extended this deal then to formally until March next year.

And this is to give us a sufficient time to close the two large operations still with the company under the RJ supervision. But the ruling also said that it could be extended to guarantee that the two closings of the operations could be done still under judicial supervision.

Judging by where we are today, we see March as a feasible date, and this would coincide with at the end of Q1 and where we expect to have the two operations closed. But in case there is any small delay this could be considered as a factor by the judge in also providing an additional extension so we can have the close sill under RJ.

Perfect Rodrigo, thank you. Just to confirm, then the arbitration should not be completed before the end of the year, but you think that even though we might not be completed, you will be able to migrate – you might be able to migrate to authorization before the end of the year.

That's exactly right Cadu. But also, this depends on the ribbon of the whole migration process as well, which is not going super-fast at this point, right?

Yes.

We we're waiting for initial results of the Anatel work with the external consulting companies. But this is still being reviewed.

We know that it's a very important step for all of the companies that we will be potential migrators to one, allies, and two, prepare plans and to discuss this with Anatel. This will still be subject Cadu, to reviews in in TCU.

So, it can be a long process. It can be something that takes a while.

And thus, we expect that the end of the next year is something reasonable for this migration, even though, obviously at the beginning of the process, everybody expected it to move faster. But that at this point for us, this is something that is being matched in terms of speed and timing with our arbitration process.

And let's not forget that all of the concessionaries including us, including people, including the smaller concessions also have arbitration with Anatel and they are all occurring pretty much in parallel and all of them should impact the migration numbers as well.

Perfect, Rodrigo. Thank you.

Thank you.

Thank you, Cadu. So, Rodrigo, I guess we don't have anyone else in the line to ask questions.

Myself.

Okay, go ahead, Carlos.

Yes, Carlos here. Can I then ask another one?

Sure, sure. Go ahead please.

Sure, Cadu.

Sure. So, one question that I was wondering here working capital consumed like R$460 millimeters in cash this quarter, and it had consumed like R$300 plus million the last quarter.

So, it's around R$770 million in cash consumption and working capital needs in the past two quarters. I was just looking for some more color on what is really causing that?

Maybe there is something to do with the issue of the bankruptcy, but I can see they are different. If you can give me some color on what is happening with working capital and how we should think about it going forward?

Well, absolutely. And Cadu, we're looking at that as an absolutely routine and regular management of the cash flows of the company.

And so, when we look at all of the operations, we have some of them which are just ordinary operations on the regular cash management and some of them which also help us manage the cash flows that considering the funding and the cash ins expected for the company. And as such, it's something that if you look at the quarter before, it was a little bit less, and then the quarter after it's a little bit more, than the quarter before it's going to be a little bit less.

And it's just part of the regular nature of our cash management that the company has the ability to do, given that it has a large amount of CapEx to deal with. So, it's nothing out of the ordinary, it's just part of what we're doing on a quarterly basis.

And obviously we should expect this to continue until the closing of the operations, which will then happen at the beginning of the next year, sorry.

Of course. Okay.

Thanks Rodrigo. So, you think that working capital will continue to grow in the next quarter?

I mean, it will obviously continue to be managed with the Tier so we can maintain our cash levels. But obviously we can have specific discussions with the DIR team Cadu to give a little more color.

Obviously, the numbers are public and we're disclosing it in the RPR, but we can have a lot more details in, private discussions here just to provide an explanation of the details that we have been giving in all of the PRs. In addition to that, let me just highlight as well that this is the first call in which we have our new CFO with us, Christiani.

Christiani is here on the line. Obviously, it's been the first quarter where Christiani has already started to work with us in looking at all of the costs discipline, and all of debt operations of the company.

And she is doing a fantastic job, not only helping us already address the continuation of our cost efforts, but to only help us streamline the way we're reporting, especially for the new Oi, starting in the next quarters. In terms of reorganize how we presenting our cost numbers, including all of the numbers even the working capital differences, okay.

Perfect, Rodrigo. Thank you very much.

Thank you.

Okay. Thank you, Cadu.

So, Rodrigo, as always saying we don't have anyone else now in the line to ask questions. So, I think you can move on with your final considerations.

Thank you, Marcello. Thank you everybody.

We know it's again highlighting a chain transition year, but our focus will remain committed on delivering what we promised. And we're still going to have many moving parts until the closing of all of the operations at the beginning of the year.

But until then we will continue to highlight and disclose as much information as possible. So, you can track the progress on our operational execution, as well as in our financial progress until the new Oi starts to fully operate.

We expect that's the second quarter of next year. Thank you so much.

And obviously looking forward to talk to you again in our next earnings call next quarter.