Millicom International Cellular SA (TIGO) 2002 Q3 法說會逐字稿

Thank you very much.

Ladies and gentlemen, we will now poll for questions. If you do have a question, please press the number one on your telephone touch pad. If you wish to cancel your question, please press the hash (ph) or the pound sign. Once again, that's number one to register a question and the hash or pound sign to cancel.

Thank you. Our first question comes from Andreas Eckstrom (ph). Please go ahead, sir, announcing your company name.

Andreas Eckstrom (ph): Yes, hi Mark (ph), this is Andreas Eckstrom (ph), from Andrews Banking (ph).

Three questions, first question is during the quarter you sold limited broadband and also your operation in Congo and you're also now indicated that you sell some other assets or it was possible, could you give any indication what kind of assets that could be? That is the first question.

The second question relates to Mick Systems (ph), last quarter you said it would be closed - that it would be closed before the third quarter and now it's delayed to some extent, do you expect the deal to be closed before the year-end, as the second question and the third question, is the ownership structure all the Mick Systems (ph) the same as the previous quarter, when we saw that Shiniwig (ph) bought 17 percent of Mick? Is that still valid or have they bought any further in Mick Systems (ph)? Thank you.

Mark (ph): Thank you.

The after sales I'm referring to, as I said in my script, are after sales that have a negative impact on our cash flow. Lucky for us there aren't that many left and we want to focus on both businesses that are generating the strong operating results. I think we have mentioned the names in the past, like you know, our business in the Philippines. We also, as you know, have been in talks on our Colombian business. So those are assets we have earmarked that over time, though, we might want to divest from because we think it's better to use our cash in businesses that give us the highest returns.

In terms of Mick Systems (ph) you'll understand that, as I said, on the call that we are on in the final phase that it's very difficult for me to comment on any, you know, timings and valuations of that business. What I can say is that, you know, we're talking to more than one buyer and we hope to finalize this process shortly.

The company as you can see from the results had a fantastic quarter; a record quarter and that will definitely (INAUDIBLE) the valuation that we're looking at.

In terms of the ownership of Mick Systems (ph) that has not changed since the last quarter.

Andreas Eckstrom (ph): OK, thank you.

Mark (ph): Thank you.

Thank you.

Our next question comes from Andrew Woolet (ph). Please go ahead, sir, announcing your company name.

Andrew Woolet (ph): Good afternoon Mark (ph).

Mark (ph): Afternoon.

Andrew Woolet (ph): Describe what you think your free cash flow deficit for the full-year will be at this point and that's not including the sale of Mick Systems and then also talk about how much cash you think you can upstream for the full-year.

Mark (ph): What you're referring Andrew, is you know, for the year 2003. At this point in time, we're in the middle of the budget process so I don't have any detailed information as to what the needs and surpluses are going to be for the following year.

What I said in the past is that we expect that we're looking at the cash flow break-even situation towards the end of next year on a monthly basis. The statements were made that in point time still including Mick Systems (ph), which as you know, is a major, you know, contributor given their excellent performance. So, that (INAUDIBLE) might be crucial and say a little bit into time into 2004. So, as far as I know at this point in time, nothing has changed with respect to that, you know, to that, you know, point of break even but again, I don't have the detailed cash flows for next year as we are in the middle of our budget process.

Andrew Woolet (ph): Then, Mark (ph), for this year, what would you think the, you know, the funding deficit for this year would be before the Mick Systems (ph) sale?

Mark (ph): That doesn't - I mean our funding, in defense on two elements, the first one is the operating cash flow and as you've seen, you know, that continues to be strong and the upswing of that continues to go well. So, we expect to have further amounts, you know, will be upstream, you know, in the fourth quarter and as a matter fact and because of this month, you know, we have no additional contributions, you know, from two Asian businesses.

Secondly, no, there is the Apu (ph) sale and we are continuing, as I said, you know, with the Mick Systems (ph) sale. So, you almost make the allusion that, you know, that we have stopped that process, which is not true. We are continuing and we hope that, you know, we will be able to make an announcement shortly.

We have, as you look at our balance sheet, I think the total cash on our balance sheet times deposits and cash, I think was just under 60 million at the end of September.

Andrew Woolet (ph): Just two other things, one would be, what anything new on El Salvador and the other is, is there anything you can do to reduce corporate overhead at this point, which is still pretty high?

Mark (ph): El Salvador in these locations are continuing so meetings have taken place recently. Secondly, in terms of corporate costs, you know, the costs are coming down and they will continue to come down. So we will be looking at a substantially lower number next year, probably about 20 percent lower than the current level 2002 is going to come out because we have reduced a number of costs. We have closed down our office in Buenos Aires. We've closed down other offices. Unfortunately, with, you know, the costs, you know, (INAUDIBLE) for laying off people, you know, some of those costs are still in the P&L. Still going to be in the P&L for the full-year but will no longer be there next year.

Andrew Woolet (ph): OK, thank you.

Mark (ph): Thank you Andrew.

Thank you.

Our next question comes from Jordan Turamo (ph). Please go ahead announcing your company name.

Jordan Turamo (ph): A few questions, first, so if you didn't get the Mick Systems (ph) sale done by - closed by Q4, could you pay the interest? December coupon?

Mark (ph): Like I said, you know, we are not relying entirely on one or the other asset sales, to make our, you know, liquidity position work. It's a combination of several factors, you know and again, you know, repeating myself here, we are continuing with the Mac (ph) sale and I would anticipate, maybe, that we will be finalizing that Mac (ph) sale.

Jordan Turamo (ph): Right.

Well, I think you'll find that your repeating answers because you don't give any direct answers to direct questions. So, you know, it's not any one question's fault it's because you're not really giving answers.

Now, also, in the Q3, can you detail, specifically, the cash flows because I know you up streamed 21 million, I don't know what cap ex was in the quarter and the cash interest, as well as the actual in from the stock sales to understand the movements here and how met debt decreased by the amount of debt?

Mark (ph): Acceptable to cap ex, you know, is before up streaming so that's not a relevant factor any longer.

Jordan Turamo (ph): Yes, I know just what was the number?

Mark (ph): I don't have the number here.

The number was approximately 30 million.

Jordan Turamo (ph): OK. All right and what else? What in terms of any other - the asset sale, the stock sales, how much did that bring in, in the quarter?

Mark (ph): I don't have the detailed number of that but I guess that is included in the $30 million because I think we must have gotten, in terms of (INAUDIBLE) sale I think of around 25 million approximately.

Jordan Turamo (ph): In the quarter, you think around 25 million?

Mark (ph): I think it was for the quarter, yes and as you know, we did subsequent after sales as we announced in October.

Jordan Turamo (ph): Right and that would be another 25 million coming in, in Q4 about because the total of 3.7 million ...

Mark (ph): I think that's probably about the number, you know, we did in Q4 already up.

Jordan Turamo (ph): OK and now, if you'd just tell me exactly what the balance sheet looks like now in terms of the face amount of the bank debt outstanding and then the bank debt of subsidiaries and the equipment financing facilities.

Mark (ph): Well, we've never given the detail of our debt. We all know what the high yield debt is you know. We know what the debt of the subsidiary level it's more left, you know, but we've never really broken down the debt of the subsidiary level and the corporate debt. That means, you know, the single episode that we have (INAUDIBLE) but what we said is that the debt has come down over $50 million from the previous quarter and the debt will try to come down in the fourth quarter but that something - you could probably look at a balance sheet yourself in any case, see that both long-term and short-term debt excluding the high yield is approximately 440 million as at the end of September.

Jordan Turamo (ph): Right.

I'm just - I assume that the stock sales went to - had to go down - had to go to pay down the bank debt but it doesn't look like that happened given the amount of debt outstanding, in which case I'm wondering where all the cash went.

Mark (ph): Note from debt (INAUDIBLE) some of the proceeds were probably used or were used to pay down the debt (INAUDIBLE) there might have been you know some increases in the debt, supply, financing, you know, that we have we have gone at the operating (INAUDIBLE) level.

You know, we continue to spend close $100 million on cap ex every year. Some of that, you know, is being financed although the portion that is being financed is much longer than it used to be.

Jordan Turamo (ph): OK.

If I can just ask or plead with you guys to produce a quarterly cash flow statement every time you put numbers out because it's very difficult to understand how all this cash moves given the information you give and you just give cash balances and you give a debt number but given all your in-flows and outflows and the up streaming, it's very difficult to understand what you guys are doing with cash and what real EBITDA is and real cash flow et cetera. So, if you could please do that I think maybe you'd find that you end up getting less questions on these conference calls regarding these issues.

Mark (ph): OK, we'll look into that.

Jordan Turamo (ph): Thank you.

Mark (ph): Thank you John.

Thank you.

Our next question comes from David Couric (ph). Please go ahead sir, announcing your coming name.

David Couric (ph): Indes Capital (ph). Hi Mark (ph).

Mark (ph): Hi David.

David Couric (ph): Couple questions for you, number one, just to confirm - sorry to repeat slight question maybe but the proceeds from the sale of Teletu (ph), did those - can we assume those went both in this quarter and I guess on the October sales, went directly to pay off Trona Dominion's (ph) facility?

Mark (ph): Some of the proceeds were used to pay down debt, not all of them. Not all of the proceeds.

David Couric (ph): OK.

The second question is, in terms of your negotiation to sell Mick Systems (ph), have any of the buyers proposed any consideration other than cash to pay for that acquisition and I guess I'm thinking in particular of using bonds, your bonds that is?

Mark (ph): No, we only talk on a cash basis.

David Couric (ph): OK.

Next question is, what do you think - assuming the sale goes through and assuming that the proceeds are somewhere around the numbers that you've sort of float around in the past and whatever range that is, what do you suppose would be the best use of those proceeds?

Mark (ph): I think the use of proceeds is going to be very similar to what we've done with proceeds in the past. I mean proceeds of asset sales is that in line with what I've been saying for the last eight months is, that you know, we want to continue bringing down the debt and that is also what we're going to do with, you know, the proceeds from the Mac (ph) sale or any other, you know, asset sale we might be doing over the next couple of quarters. So, there's not going to be any change from what we've been doing over the last 18 months.

David Couric (ph): And I guess, would you agree with - some other people's opinions including my own that the best way to bring down the debt would be to re-purchase bonds at the fantastic discount they're trading in or?

Mark (ph): We've all respected a principle, which I've, you know, mentioned in previous calls, is that we have three kinds of debt. The operating company debt we have seen at the corporate level and we have subordinated debt at the corporate level and the first priority for us is to, you know, pay down the operating company debt as it is scheduled to be paid down. So, that's why the proceeds got to come first.

Secondly, you know, we will be further paying down as we have been doing over the last quarters now the senior debt at the next level and then, you know, when there are surpluses coming from asset sales/operating, you know, cash flow, you know, we will look at the high yield debt but at this point in time, you know, we want to make sure that you know, we deal with priorities first. I think that is, you know, what one should do to make sure that, you know, deal with debt, you know, that is maturing, going to, you know, pre-agreed schedules.

David Couric (ph): Right.

The Trona Dominion (ph) would be the second priority, why, because of the pre-agreed schedule? Obviously, that's collateralized by the (INAUDIBLE) shares, so they should be willing to keep rolling that over as long as you like I would guess.

Mark (ph): Well, the maturity of that loan is 2004. It's November 2004 so we can have that loan or if we want we can continue to have that loan outstanding. I just don't think that, you know, it is, you know, good to have, you know, a loan that is going to one single asset, you know, outstanding as the way markets are behaving these days. So, that's why we have over the last three quarters, you know, bringing down this loan and its substantially lower than what it was when we signed the deal at the end of last year.

David Couric (ph): Yes, I guess to make the obvious point every dollar of the bonds you buy back retires between $3 and $4 of actual debt.

Mark (ph): Yes.

David Couric (ph): So, that's helpful.

Mark (ph): No, no, I take your point.

David Couric (ph): Last thing is, just on Vietnam. There's some talk about a PAF system being installed there. I think UK STARcom (ph) is selling the equipment to a Chinese company, would you view that as a major threat to the business or maybe (INAUDIBLE) talk to about the competitive environment in Vietnam, I think it's - there's (INAUDIBLE) of new competitors there.

Mark (ph): So, what system were you referring to?

David Couric (ph): PHS or PAF.

Mark (ph): Oh, the (INAUDIBLE) phone system. No, it's a TDMA system that is going to be installed toward the end of this year early next year. We have mentioned this on previous calls that there's a third operating entering the market in Vietnam and it's a company that is going to be partly controlled by Korean, you know, manufacturers as well as operator having SK telecom.

I think Vietnam being, you know, very much unexplored or a market (INAUDIBLE) penetration level below two percent, I think some additional competition, I think will do good for everybody including ourselves now being the largest operator of that new loss (ph).

David Couric (ph): Thank you.

So, you're not aware then of an actual PHS system, apart from TDMA?

Mark (ph): No but there's been talk for the last couple of years that, you know, other operators might come into the markets. I think we all know what the market looks like so I think that they're finding who are ready to spend big bucks, you know, on entering in the market as number four or number five, you know, I think there are fewer and fewer of those. So, I think we're probably looking at the markets, you know, in Vietnam with three operators in the long-term. That's just my personal view.

David Couric (ph): Good thank you so much. Are you coming to New York by the way?

Mark (ph): I will be coming out, still have not decided on which week, you know but we are looking at, you know, setting a week aside to spend in the U.S. and even invest in some bonds there, so.

David Couric (ph): Thank you. Look forward to meeting you.

Mark (ph): Thank you.

Thank you.

Our next question comes from Maurice Paretes (ph). Please go ahead, sir, announcing your company name.

Maurice Paretes (ph): Yes, hi. Maurice Paretes (ph) from ING.

I guess this is a follow up question to what stated earlier. You mentioned that you were looking to get rid of some of your assets; can you give us a flavor of when to expect this, especially on your Philippines and Colombia businesses?

Mark (ph): I think (INAUDIBLE) negotiating because you know, you should never give your time schedule, you know, away to your, you know, the other party so we're not planning on doing that but clearly, you know, better, you know, than others testing (INAUDIBLE) been something that we've been looking at for a number of times, you know, and the Philippines, as you know, is a different asset (ph), trying so much as this point in time so that it's hardly (INAUDIBLE) to us. So, we'll look at that and you know when we think the time is right, you know, we will do the deal. There is no specific time set for that.

Maurice Paretes (ph): Thanks.

Mark (ph): Thank you.

thank you.

Our next question comes from David Sonin (ph). Please go ahead, sir, announcing your company name.

David Sonin (ph): Hi, it's David Sonin (ph), Morgan Stanley.

Can you tell me if you've re-purchased any of the South Korea bonds and if so, how much and how much remains outstanding?

Mark (ph): We've not bought any bonds since we bought the bonds in, you know, March, beginning of March this year.

David Sonin (ph): OK.

Mark (ph): ... outstanding there must be still around 68 to 69 million bonds.

David Sonin (ph): OK, thank you.

Thank you very much.

Just to remind you, it's the number one if you do have a question and the hash or the pound sign to cancel.

Our next question comes from Ethan Devine (ph). Please go ahead, sir, announcing your company name.

Ethan Devine (ph): From Indes Capital (ph).

My first question is how you raised Arpu (ph) so dramatically in Africa this quarter?

Mark (ph): The increase in Arpu (ph) in Africa came essentially out of Senegal where we run a program of - call it upgrading our subscriber base and getting subscribers in with higher Arpu's (ph) than the one we were having and that, I think, increased our Arpu (ph) from below 10 percent to I think around $14 to $15, I think it's there for the prepaid subscribers.

Ethan Devine (ph): Have you tried that program in other regions or considered extending it?

Mark (ph): But there's not always a need, you know, to do that but we felt that in Senegal, you know, we have, you know, taken customers on board in the beginning, you know, which, you know, we felt were not the right ones to have so that's why we actively stopped changing the amounts that are being offered customers with higher Arpus (ph).

In other countries, you know, we didn't have the need for that because, you know, when we went into the market we did it in a slightly different way. Mind you, that Senegal was one of our more recent start ups, you know and that's why, you know, we only have to correct that situation in that country.

Ethan Devine (ph): And on cash flow, can you tell me what the difference is between your EBITDA, just talking nine months I guess since this (INAUDIBLE) closed and the net cash provided by operating activities?

Mark (ph): First of all, EBITDA is something that is reported as revenues of being made, OK? Cash flow up streaming is something that is not necessarily happening at the same moment. So that there's kind of a, you know, deferment there because, you know, it takes for post paid subscribers typically 30 days to collect the revenues. Takes, you know, a while to declare dividends, you know. It takes, you know, some time to upswing interest or, you know, principal payments on loans. So, there's a small deferment there, small delay, you know, of, you know, I would say between two to three months and that's why I said in my script is that in terms of the cash up streaming, I expect that to continue growing strong for the simple reason that, you know, the operating performance, you know, over the last quarter have been very strong. So, that means that, you know, more free cash flow will be available in the next month or so.

Ethan Devine (ph): Have you targeted - previously I thought on the last call, you had targeted around $30 million in up streaming a quarter, is that true?

Mark (ph): I've never given any number in the past.

Ethan Devine (ph): OK.

It does appear that it's slightly down quarter-on-quarter; do you expect that to rebound to previous quarters up streaming?

Mark (ph): There's some seat analyses, you know, in those numbers, you know, because dividends are typically more, you know, or declared are taken the first two quarters, you know but we're moving, as I've said in previous calls, you know, to a system whereby, you know, every month or every quarter, you know, there's a certain amount coming out of our business systems. So, we should see less of the seasonality going forward.

Ethan Devine (ph): Will you have up stream primarily through dividends now or do you still have sufficient shareholder loans to up stream?

Mark (ph): I mean we're getting more dividends than we have in the past so a number of the loans have been paid back interest on those loans have been paid. So, going forward we'll be looking more at dividends. As you know, we've structured our company in a very specific way so that, you know, the tax impact of dividends, as well as asset sales in our base is minimal, if any, you know, going forward.

Ethan Devine (ph): And, finally, just to clear, the 30 million from an earlier question you said was for cash proceeds, what was that from?

Mark (ph): I mean you brought the $30 million up, I never mentioned it the 30 million.

Ethan Devine (ph): Oh, no, no. I'm sorry. In a previous question, not one of mine, you discussed two different up streaming one was 30 million, perhaps from asset sales. I know there was a 25 that was to be recognized in the fourth quarter.

Mark (ph): No, we didn't - the 30 million was the operating cash flow.

Ethan Devine (ph): Was it just operating cash?

Mark (ph): It was mentioned at 30 million on cap ex so that was just adding to some confusion.

Ethan Devine (ph): OK but just to be clear, you have 25 million in asset sale proceeds that you'll recognize in the fourth quarter?

Mark (ph): In the third quarter.

Ethan Devine (ph): OK, I see.

Mark (ph): And already its 25 in the fourth quarter too, yes.

Thank you very much.

Our next question comes from Adrian Doors (ph). Please go ahead, sir, announcing your company name.

Adrian Doors (ph): I had a couple questions Mark (ph), one can you give us an update firstly, on El Salvador, where negotiations are there and also some clue as to ongoing development of the fundamentals in that ongoing as best you can tell?

Mark (ph): It's that the negotiations are continuing and the amounts have been, you know, put on the table but we have not agreed on the amount and as you know, it's an issue of local shareholders bonds to be bought up.

In terms of the business, we fought and run this up to August where that shows that the business was going very strong but revenue-wise and EBITDA-wise, EBITDA margin's up somewhat below on the average, which is not surprising because I think if we could get our hands on the business I'm sure, you know, we could get those margins up very quickly.

What we know is that there was a substantial amount of cash in the business and that the debt, you know, was coming down as scheduled. So, the business is operating as normal. Benefits that, you know, we probably could do better if we were to get control of the business.

Adrian Doors (ph): What's the approximate revenue run rate through August?

Mark (ph): I think we were looking at slightly over 60 million even less at that point in time.

Adrian Doors (ph): Switching to Vietnam, obviously, your equity ownership of Vietnam declined by 10 percent and when one looks at the P&L statement, there were losses on disposal of investments, which obviously some related to Teletu (ph) but I think also some may have related to Vietnam. Can you give us a breakdown of that and whether or not in Vietnam there's further reduction in your proportional ownership likely to occur?

Mark (ph): No. Let me - half of the second part, now maybe the option of Vietnam is something that was there from the very beginning and on a more (INAUDIBLE) in Vietnam. So that's the last one and then basically ...

Yes and there are three main factors in that loss, which we referred to in fact the environment is the smallest of those three, there's four negative on the Vietnam sale. Then the other two key components were on the Liberty drawback, which was mentioned earlier by Mark (ph), which was sold during the quarter where we took a loss and equally on the prime contributor fact to that was on the firm Teletushev (ph).

The Vietnamese (INAUDIBLE) was loss that was there was very small.

Adrian Doors (ph): I question on the most recent sale of Teletu (ph), curious a little about the timing. Why do it so early in the quarter and what was the rationale behind it relative to everything else in terms of expected Mick (ph) sale occurring? Can you sort of walk us through the thought process?

Mark (ph): The reason why we did the sale of Teletu (ph) and I guess all of you know that, you know, we sold them to Genipeg (ph) after they were not sold in the market but that at point in time we're sure all of you remember that there was (INAUDIBLE) volatility in the stock market and to make sure that, you know, we have some of kind - works more (INAUDIBLE), you know, decided to sell some Teletu (ph) stock to make sure that, you know, whatever happened in the markets, you know, that, you know, we would have that cash on hand. So, the timing might, looking back now, not looked perfect, you know, but at the end of the day, you know, three weeks ago I think this favored the equity markets (INAUDIBLE) than what it is today.

Adrian Doors (ph): That's certainly true. Thanks Mark (ph).

Mark (ph): Thanks Adrian (ph).

Thank you.

Our next question comes from Lars Lemonias (ph). Please go ahead, sir, announcing your company name.

Lars Lemonias (ph): Hi Mark (ph). It's Lars Lemonias (ph) from Morgan Stanley.

Mark (ph): Hi there.

Lars Lemonias (ph): I apologize if some of these questions have been asked already. I joined a little late.

Could you just let me know what the cash balance at the holding company is at present?

Mark (ph): We've not disclosed that number. So, the cash on our balance sheet at the end of September on the report we'll make was just under $60 million.

Lars Lemonias (ph): And you won't disclose how much of that is at the holding company?

Mark (ph): No, we've never disclosed (INAUDIBLE) because as I said before, you know, it doesn't really matter where the cash is because, you know, we are list continuously, you know, most (INAUDIBLE) in cash and also cash might be operating level today and, you know, tomorrow will be at the corporate level.

Lars Lemonias (ph): Thank you then.

The second question was, any of the Teletu (ph) shares, sales of the Teletu (ph) shares you used to pay down the bank debt and in such case, what's the current draw down on the banked 30?

Mark (ph): Yes, we did use some proceeds of our asset sales including the Teletu (ph) sale to bring down the debt and as before, you know, we're no longer disclosing the amount of the senior debt outstanding to avoid any kind speculation in the market.

Lars Lemonias (ph): OK.

Third question, could you disclose what the total current subsidiary debt is?

Mark (ph): No, I don't have that number.

Yes, eight cents.

Mark (ph): So, it's a number that has come down with the previous quarter, you know, let's say some of it is long-term, some is short-term, so we don't have the breakdown.

Lars Lemonias (ph): OK.

Fourth question, you say, I think 9.3 percent Teletu (ph) shares left, how many shares is that in kind of millions exactly?

Just under 13 million Teletu (ph) shares.

Lars Lemonias (ph): 13.1 million say?

Yes, just over 13 million.

Lars Lemonias (ph): OK and lastly, are you looking to do any sort of debt restructuring or how do you view your balance sheet going forward?

Mark (ph): ... we're not looking at doing any debt restructuring. What we're doing is, we're offsetting cash. We're doing some asset sales. We're sure that we can do - that we can make our debt payments and with (INAUDIBLE) dependents on asset sales, you know, its coming down and we foresee it go down going forward up to the point, you know, where we'll be cash flow break-even.

Lars Lemonias (ph): All right, thank you very much Mark (ph).

Mark (ph): Thanks Lars.

Thank you.

Our next question comes from Ross Haverman (ph). Please go ahead, sir, announcing your company name.

Ross Haverman (ph): Morning Mark (ph). Russ Haverman (ph), Haverman Brothers (ph).

Mark (ph): Hi.

Ross Haverman (ph): You were fairly devoted to the Teletu (ph) shares a year or so ago, I was wondering where your devotion stands today and will you be more inclined, if given the opportunity, to sell (INAUDIBLE) a little more aggressive with your sales?

Mark (ph): I mean I feel like going to a lot and for those who have not heard the results earlier today, you know, they're doing extremely well in going against the trends in the market. So it's a great company and a lot of - on the other hand, you know, we have reduced our stake in the company but that is nothing new, you know. We have been selling Teletu (ph) shares over the last, you know, four to 4.5 years. So, what we're doing now is nothing exceptional.

We hope that, you know, the stock price is going to continue going up as it has done over the last week or so because we're still, you know, over a nine percent shareholder of the company so that let's you know I still have a devotion for that company but, you know, my primary devotion really is for Millicom (ph) and that's what we're focusing on and that's why, you know, we set up with this good operating results and we will make sure that, you know, the asset sale including (INAUDIBLE) the cash, you know, happens so that no one can look, you know, into the future and then we go about our obligation, debt obligations.

Ross Haverman (ph): I just want to throw a suggestion, I know it's brought every conference call you have that analysts urge you to buy back your bonds but given where they are today and given your devotion to Teletu (ph) it comes - there comes a point where the trade-off becomes more compelling on the bond side than on the Teletu (ph) side and I just urge you to re-examine the issue at least once or twice a quarter because in my mind it's a no-brainer favoring the bonds today as opposed to the Teletu (ph) but that's my personal opinion. So, I just urge you and the Board to examine the issue at least one or twice quarter to see what's the better trade off.

Mark (ph): I'll give that message to the Board.

Ross Haverman (ph): Thank you.

Mark (ph): Thank you Ross.

Thank you,

Our next question comes from Adam Tuckman (ph). Please go ahead, sir, announcing your company name.

Adam Tuckman (ph): Hi guys. Adam Tuckman (ph) calling from Golden Tree Asset Management.

I would actually take the last gentleman's question a step further and ask if you could please explain the return you expect to generate on the Teletu (ph) shares and keeping that in mind, the financial rationale behind holding the stock versus swapping those shares for whole co-bonds (ph), for example and please take into account the rapid de-leveraging and the interest savings on such a transaction.

Mark (ph): As I've said, you know, before you guys should look at the stock for our debt and the senior debt and the subordinated debt and at this point in time, as I think everybody's running a business, you know, should do as, you know, focusing on, you know, the senior debt that is coming due as scheduled. You know at your present come due level and also reduce, you know, our exposure on, you know, the long stock, you know, that are backing our senior corporate actuaries (ph). I think that's the top priority for the company and I've been saying this for the last couple of quarters so nothing has changed there.

In terms of the high yield debt, you know, that's a debt that expires in 2006. You know, as I said before, you know, once we have the cash surpluses, you know, we will start looking at that debt but you know, you have to do first things first.

Adam Tuckman (ph): OK.

Can you explain what return you expect to generate on those Teletu (ph) shares?

Mark (ph): I don't that this is an issue of return, it is an issue of proper cash management and meeting, you know, the debt obligations as they have been scheduled in that past, has nothing to do with return.

Should I default on the loans to look at the operating (INAUDIBLE) level, you know and by buying bank loans in the market, is that what you guys are telling me? I don't that is proper management.

Adam Tuckman (ph): I would encourage you to look at the numbers because I think enough investors have pointed you in the direction. As well I would like to comment, as earlier said in the call, you know, I sense the frustration you have with trying to answer the same repetitive questions from the investor base but I would say that the investor base is equally if not more frustrated with the lack of disclosure. So, like earlier said, you know, we're all trying to encourage you to give a little bit more information and you know, in return, there might be additional interest in some of these securities.

Mark (ph): But I think in terms of disclosure of information, I think we're disclosing more information, you know, than we did a year ago. For instance, you know, a year ago, we never disclosed, you know, the up streaming of cash flow. So, we're doing that. I think we have been focusing on the debt reduction. So, I think we ought to be - we disclose what number of - what the amount of debt is we are reducing. So I think we're providing a pretty good picture of what we're doing. I think it's just some people are trying to get information out as, you know, not in the interest of the company but in their personal interest and I don't that we are interested in that.

Adam Tuckman (ph): I would disagree and I would ask you, as an investor, how you would try and monitor an investment like this when you're so unclear as to cash at hold co, bank at hold co, et cetera.

Mark (ph): But what is important is that you get to well balance sheet, consolidated balance sheet, every quarter you get our P&L. You can see the progress in our accounts of cash up streaming, debt reduction and all of those things. You can see what cash we have but no, as a company, at the end of the quarter. So, I think we are disclosing, you know, again, more information today than we were disclosing a year ago.

Adam Tuckman (ph): OK.

It doesn't sound that way being on the other side of this call.

Mark (ph): OK, then maybe you should have a closer look at the numbers, you know, because, you know, there is a lot of information of what we disclose. You know, we never disclose, you know, the cash up streaming a year ago. Now, we say, 81 million, you know, in the first nine months. I think that's a pretty good indicator, isn't it?

Adam Tuckman (ph): Yes.

Mark (ph): To say, you know, we're doing asset sales. You know the asset sales are in the, you know, the balance sheet and the FINO (ph), you know. We, you know, give the debt number, you know, the debt reduction, so, you know, we give indication as to what we're going to do and that it's, you know, further debt reduction as we go forward. So, I think it's pretty straightforward there in terms of (INAUDIBLE) content.

Adam Tuckman (ph): OK.

Thank you.

Once again, if you have a question, it's the number one and it's the hash sign to cancel.

Our next question comes from Romeo Reyes (ph). Please go ahead, sir, announcing your company name.

Romeo Reyes (ph): Yes, Jeffries and Company (ph).

Couple of quick questions for you, you know, I guess everybody's talked on the buying back the debt, can you tell us if the TD facility allows you to buy back the debt, number one and then, same question, how many Teletu (ph) shares are now part of the collateral for the TD debt, that's the second question, as of, I don't know, as of the last pay down, are they a clear facility and then the third question is a little bit more involved. Can you give us a sense of like the cash usage for the fourth quarter? Obviously we know what the interest expense is but, you know, can you tell us if there are any other mandatory debt repayment that you have to make in the fourth quarter and what's the, I guess, the corporate overhead will be because obviously you know, a lot of people are interested to hear that you, you know, intend to service the debt but we'd like to hear, you know, how that gets done. Thanks.

Mark (ph): Far as I know nothing restricts from buying back loans (INAUDIBLE) the result of the terms of the (INAUDIBLE) facility. We have, I don't know exactly what the exact amount is, you know, but we have "Teletu (ph) shares" that are not all of our Teletu (ph) stock is (INAUDIBLE) pledged, you know, for the (INAUDIBLE) and as a result of us a reducing the (INAUDIBLE) since it was time last year, you know, being we have, you know, what I call free Teletu (ph) shares.

So, in terms of commitment in the fourth quarter, other than some, what I would say small and I didn't know how much that is until (INAUDIBLE), you know, just, you know, what (INAUDIBLE), you know, debt repayments at the operating company level, we don't have any, you know, big (INAUDIBLE) at the company level ...

Romeo Reyes (ph): Well ...

Mark (ph): So, I mean it was very nice (ph).

Romeo Reyes (ph): Pro forma cash, it seems like you should be - but 60 million you're reporting at the end of September plus, I don't know, 20 to 25 million from the post-third quarter Teletu (ph) share sales. So if you have, you know, close to 88, you know, between $80 million and $90 million of cash, you know, you have obviously $65 million of interest coming due on the bonds, you think you'll be able to make that interest payment?

Mark (ph): I said some of the proceeds of the asset sales have been and will be, you know, used to further reduce debt at the corporate level. So and as a matter, you know, we have $60 million of, you know, cash on a consolidated balance sheet at the end of the quarter and we have done further asset sales, I mean, we sold Teletu (ph) shares in the beginning of October, in the first days of October. Some of that money, again, you know, we used to, you know, do debt reduction.

Romeo Reyes (ph): Just to finish up, if there were an unforeseen delay in the sale of the assets, would be you be able to make the interest payment?

Mark (ph): We're not looking at delaying any asset sales so.

Romeo Reyes (ph): If there were a delay on the other side, not necessarily on your side?

Mark (ph): That's why we're talking to more than one site buyer.

Romeo Reyes (ph): So, absent an asset sale, you wouldn't be able to make the interest payment, is that what you're talking about?

Mark (ph): That's not what I'm saying. What I'm saying is that, you know, we're not planning, you know, delaying any asset sale, you know, so we are diligently working on that process and the other hand, you know, we have operating cash that's coming in. So, there's all this, you know, interest payment, there's always in the past now having made out a combination of (INAUDIBLE) asset sales.

Romeo Reyes (ph): Great, thanks a lot.

Mark (ph): Bye.

Thank you.

Our next question comes from Andrew Sandler. Please go ahead, sir, announcing your company name.

Hi, Sandler Capital. How you doing Mark (ph)?

Mark (ph): Hi Andrew.

Lot of questions already been answered but I didn't hear the answer's to Romeo's question, which was were you allowed to buy back the bonds with Teletu (ph) stock sales?

Mark (ph): I mean his question was whether there was any restriction on, you know, me buying back bonds, no restriction under the Teletu (ph). That's only the transfer Dominion facility. To my knowledge there's no restriction of that kind.

No restrictions?

Mark (ph): No.

So you could sell Teletu (ph) stock and not repay the debt?

Mark (ph): I mean there's certain ratios that, you know, that we need to live up to. Our published rate is we need to live up to. As long as we live up to those ratios, you know, we are free people.

OK and is it correct, also, that you're not disclosing of the $400 million of non-bonds related debt, how much it is that bank debt and how much is subsidiary bank debt? You're not disclosing that?

Mark (ph): That's right. We have (INAUDIBLE) in the previous quarter.

OK.

What about this debt that's coming due within one year, the $200 million on the balance sheet? What's the plan for that and what exactly are the dates that it comes due?

Mark (ph): I mean, debt coming, you know, in our numbers, debt coming due, you know, is spread over 18 different companies.

Right.

Mark (ph): So, that doesn't, you know, schedule payments on, you know, three-year, five-year financing and then, as I said on previous calls, you know, there's a lot of short-term debts, you know, that get, you know, (INAUDIBLE) long-term because, you know, every, you know, 12 months, you know, every 12 months that (INAUDIBLE) roll over and the reason for that is that, you know, those markets there is no long-term debt market available. So the longest we can go is 365 days and you know, at the end of that year, we roll over the debt. So that is not necessarily debt, you know, that the incomes use and that needs to be paid back but there is long-term debt, you know, that comes due, you know, will have to be paid back.

Do you have a sense what the dates are or how much can't be rolled over?

Mark (ph): No, I don't have that breakdown. I mean, frankly and perfectly, the long-term that, you know, becomes short-term debt, we do pay off, we don't roll over because those typically are, you know, equipment finances, supply finances, so we just pay them off as they come due but there's a certain amount of short-term debt, which we will, you know, working capital in other facilities, we will just roll over at the end of every year but the most important is that the overall amount of debt, you know, is coming down now for more than, I think, four to five quarters in a row.

Well but everyone keeps, you know, sort of focusing on the coupon and the interest payments and I don't know whether that's the right analysis. Why is not the correct worry that this short-term debt due analysis?

Mark (ph): But the short-term debt is not an issue because we have generated just under $200 million worth of EBITDA in the first nine months, you know and if you take back $80 million cap ex of that, you know, that's $120 million, you know, at the operating company level that, you know, it can be used for other purposes including interest payments, (INAUDIBLE) payments, and very importantly, payments of dividends and the repayments of loans and other (INAUDIBLE). So, there's no issue of financing at the operating company level.

How much of that 200 million of debt due within a year, is non-TD money? Most of all of it, right?

Mark (ph): I mean, I'm not going to disclose that all right on this call (ph).

OK, fine.

Mark (ph): I mean we have our reasons for that.

OK.

One more question, this is sort of a low general question but you guys have cut the cap ex now, this year, pretty aggressively and held it pretty good last year, at the same time minutes keep growing and subscribers keep growing and you have more competition, is this something that we're going to need to eventually have catch up and we're going to need to re-invest? Otherwise, we're going to have churn and lose customers?

Mark (ph): No, I think cap ex over time will continue to go down for two reasons but first of all, we're focusing on capacity only so very little coverage. The investment in capacity only always had the much lower cost and secondly, you know, now that we've turned most of our networks into digital networks, you know, digital technology comes, you know, at a much lower cost than the old analog technology's cost per subscriber but also, you know, in our maintenance and our running costs, all of those things, you know, are much lower, for instance, the power consumption on our bridge-to-network that would be substantially lower than an analog network. So, all of these things, you know, bring us higher operating margins and lower cap ex per subscriber going forward.

Lower cap ex per subscriber in per minute but your minutes in subscribers are going 30 to 40 cents a year.

Mark (ph): Yes on minutes, prepaid 61 percent meters that's going very strong and bow what we're doing is, you know, we built increasing, you know, the capacity on our networks so we spent $80 million. You know for $80 million you can build an awful lot of capacity these days and secondly, also close by to fill up our networks as good as possible by, you know, trying to get, you know, minutes at the, you know, the off peak part of the day. So that you know, we can increase, you know, the return of our investment. I think that really shows in our, you know, excellent EBITDA margin of 46 - it's 47 percent now.

Right. OK and you don't have a budget for '03 in terms of cap ex?

Mark (ph): We're working at it but if I were to pick a number, I don't think cap ex is going to be higher than it's going to be this year.

OK. Thank you.

Mark (ph): OK. Bye.

Bye.

Thank you.

Our next question comes from Adrian Doors (ph). Please go ahead, sir, announcing your company name.

Adrian Doors (ph): Mark (ph), is there anything to preclude Chinovik (ph) from buying in the open market Millicom (ph) bonds and perhaps exchanging them for Teletu (ph) stock or some other creative way of reducing cumulative debt and maximizing most value for you?

Mark (ph): I don't know Adrian (ph) because, you know, I more of an executive or a director or (INAUDIBLE), so I don't know what they are bound or not bound by. So, I can't answer that question.

Adrian Doors (ph): In terms of looking out a little to next year, EBITDA growth cumulatively good on the line subscriber growth in all of the markets, what kind of growth rate are we shall we think about for next year?

Mark (ph): You know, if you split the three regions up, you know, I could still see double-digit growth in Asia and in Africa. Latin America is a question mark when it comes to the currency impact, you know, excluding the currency impact, you know, we would have this year double-digit, you know, in some countries, you know, we would have double-digit growth. You know, I mean I'm a little bit into the dark as to what is going to happen in South America situation, Argentina and Brazil, so it's very difficult to give an answer for South America but Asia, you know and Africa, I expect to continue growing strong in double digits, both revenue and EBITDA.

Adrian Doors (ph): And margins should continue to rise given the cost cuts you alluded to?

Mark (ph): Yes, the margins should continue to rise. I think the fourth quarter of this year probably going to be the first quarter that, you know, may impact of, you know, cost these have as a result of the cost cutting and you know, that will continue next year given, you know, that the economy's a scale I want to continue to grow. We expect, you know, some follow up, you know, increases both in revenue and EBITDA, for instances, in places like Pakistan or New Pango (ph) and Giasam (ph). So those should all be, you know, solid continued in 2003, which we have not have had in 2002.

Adrian Doors (ph): Did I hear correctly your comment that G&A at the corporate level should decline by about 10 percent year-over-year?

Mark (ph): I said 20 percent.

Adrian Doors (ph): Twenty percent year-over-year, so we had a $24 million run rate in Q3, so if we look at 20 percent less than that as a reasonable point to work from?

Mark (ph): Yes.

Adrian Doors (ph): Great. Thanks very much Mark (ph). Later (ph).

Mark (ph): OK. Thank you.

So operator, I'll take one more question.

Ladies and gentlemen, if you do have a question, please press the number on your telephone touch pad, it'll be the hash (ph) sign to cancel.

Sir, there appears to be no questions at this time. I'll hand the conference back to you for any closing remarks.

Mark (ph): Thank you very much operator.

So, once again, I would like to thank you all for participating in today's conference call. If there are any further issues you wish to discuss, David and myself, you know, we're available to deal with those on one-to-one basis. If you wish to contact us direct alternative you can call Shared Value (ph) in London on 442-07-321-5010.

Thank you very much and good-bye.

Thank you ladies and gentlemen. That concludes today's conference call. You may now disconnect your lines.