Vivo (VIV) Q3 2025: Postpaid Net Adds Top 1 Million, Fiber Churn Hits Record Low
Vivo’s third quarter showcased decisive commercial momentum, with postpaid mobile net additions surpassing one million and fiber churn reaching historic lows. The company’s ability to drive converged offerings and digital services growth is accelerating monetization and customer retention, even as traditional segments shift. With asset sales ramping and infrastructure cost optimization on deck, management signals further upside in cash generation and capital returns heading into 2026.
Summary
- Postpaid and Fiber Outperform: Converged mobile and fiber offers are driving higher customer stickiness and value.
- Asset Sales and Cost Control: Real estate and copper divestitures, plus lease renegotiations, are freeing up capital.
- Digital Service Expansion: New B2B and B2C digital verticals are scaling, supporting a broader ecosystem strategy.
Performance Analysis
Vivo delivered broad-based growth across its key business lines, with total revenues up 6.5% year-over-year, led by resilient mobile and fixed service segments. Mobile postpaid remains the anchor, growing 8% and now representing 68% of the mobile base, while prepaid stabilized with sequential improvement. Fiber-to-the-home (FTTH) connections climbed 12.7%, with the converged Vivo Total plan showing a 52.7% surge, signaling strong market demand for bundled offerings.
Profitability improved on disciplined cost management, as EBITDA margin expanded to 43.4% and operating cash flow before leases rose 12.4%. Free cash flow approached R$7 billion, supporting robust shareholder returns. Asset sales from the legacy fixed concession contributed R$232 million this quarter, with management reaffirming a R$4.5 billion multi-year target. New business lines, including digital B2B and verticals like health and insurance, now account for nearly 12% of total revenue, illustrating traction in diversification.
- Mobile Monetization: ARPU rose 3.9% to a record R$31.5, reflecting upselling and data demand.
- Fiber Take-Up and Retention: Take-up ratio improved to 24.9%, with churn at a five-year low, especially for converged plans.
- Cost Containment: Operating costs grew just 2.6%, below inflation, aided by digitalization and efficiency gains.
Vivo’s execution is increasingly characterized by balanced growth, with new revenue streams offsetting legacy decline and operational discipline supporting margin expansion.
Executive Commentary
"Our post-paid segment continues to lead the way. With access growing 7.3% year-over-year, Postpay now accounts for 68% of our total mobile customer base, which has reached approximately 103 million connections."
Christian Giubara, CEO
"Total cost reached R8.5 billion in the quarter, up 4.6% year-over-year, growing below inflation for the period. This performance highlights our ability to strike the right balance between commercial intensity, operational efficiency, and ongoing digitalization efforts."
Davi Malcolm, CFO & Investor Relations Officer
Strategic Positioning
1. Convergence as a Core Value Driver
Vivo’s converged offerings, especially through Vivo Total, are now central to both mobile and fiber growth. Nearly 62% of fiber access customers are on converged plans, which deliver lower churn and higher ARPU. The company’s focus on cross-selling and bundling is deepening customer engagement and increasing lifetime value.
2. Asset-Light Expansion and Infrastructure Optimization
Asset divestitures from the fixed concession migration, including copper and real estate, are unlocking capital for reinvestment and returns. Management highlighted that copper extraction will accelerate from Q4, while real estate sales will remain lumpy. On the infrastructure side, renegotiating tower leases and increasing site sharing are expected to deliver further cost savings, with current tenancy ratios below international benchmarks.
3. Digital Platform and Ecosystem Monetization
New business lines—digital B2B, health, insurance, and OTT media—are scaling rapidly, supporting Vivo’s ambition to become a comprehensive digital platform. B2B digital revenues grew 34.2%, with major IoT wins (e.g., smart water meters) reinforcing Vivo’s role as a digital transformation enabler. In B2C, financial services and wellness subscriptions are growing double digits, increasing share of wallet.
4. Disciplined Capital Allocation and Shareholder Returns
Vivo returned R$5.7 billion to shareholders through September, and declared an additional R$2.7 billion in interest on capital. The active buyback program and commitment to distribute at least 100% of net income through 2026 reflect a clear focus on capital efficiency and market relevance.
5. ESG and Corporate Reputation as Differentiators
Vivo’s environmental and governance initiatives, such as the Futuro Vivo Forest and top rankings in sustainability indices, are enhancing brand equity and stakeholder trust. These efforts are increasingly integrated into commercial strategy, aligning sustainability with business growth.
Key Considerations
This quarter’s results highlight Vivo’s ability to leverage converged services and digital expansion to offset legacy declines and competitive pressures. The strategic context is shaped by the interplay between operational execution, capital discipline, and new business scaling.
Key Considerations:
- Mobile Market Leadership: Postpaid net adds and churn improvement signal continued share gains in a competitive landscape.
- Fiber Penetration and Upsell: Converged plans are driving higher take-up and lower churn, with upside in further network penetration and ARPU expansion.
- Asset Sale Ramp: Copper extraction and real estate sales will provide a multi-year cash flow tailwind, though timing remains uneven.
- Digital B2B Momentum: IoT, cloud, and cybersecurity are emerging as high-growth verticals, diversifying revenue and deepening enterprise relationships.
- Capital Efficiency: Lease renegotiations and infrastructure sharing are set to further enhance free cash flow and support shareholder returns.
Risks
Competitive intensity in both mobile and fiber remains high, with price-based promotions and regional challengers pressuring ARPU and retention. Asset sale proceeds, especially from real estate, are inherently volatile and dependent on market conditions. Regulatory shifts or execution missteps in customer migration from copper to fiber could introduce operational and reputational risks. Macro volatility and inflation may also pressure cost containment efforts, despite current success.
Forward Outlook
For Q4 2025, Vivo guided to:
- Continued growth in postpaid mobile and fiber converged plans
- Acceleration of copper extraction and ramp-up of asset sale proceeds
For full-year 2025, management reaffirmed guidance to:
- Distribute at least 100% of net income to shareholders
- Maintain CAPEX intensity below prior year as a percentage of revenue
Management highlighted several factors that will shape results:
- Further lease cost optimization and increased infrastructure sharing
- Scaling digital B2B and B2C verticals to support top-line resilience
Takeaways
Vivo’s Q3 demonstrates the power of convergence, digital expansion, and disciplined capital management to drive growth and returns in a maturing market.
- Operational Execution: Record postpaid net adds and fiber churn improvement underscore strong customer engagement and monetization.
- Strategic Asset Monetization: Copper and real estate sales are set to deliver a multi-year cash flow boost, supporting reinvestment and returns.
- Future Watch: Investors should monitor the scaling of digital services, the pace of asset monetization, and infrastructure cost optimization as key levers for 2026 and beyond.
Conclusion
Vivo’s third quarter marks a clear inflection in converged service adoption and digital ecosystem growth, with operational discipline and capital returns reinforcing the investment case. The company is well positioned to sustain growth and margin expansion, provided it continues to execute on asset optimization and digital scaling while navigating competitive and macro headwinds.
Industry Read-Through
Vivo’s results reflect a broader industry pivot toward convergence, digital platform expansion, and asset-light models. The success in cross-selling fiber and mobile, rapid scaling of B2B digital services, and infrastructure cost discipline offer a blueprint for telcos facing legacy decline and ARPU pressure. Asset monetization from legacy networks and a focus on ESG are emerging as differentiators in capital allocation and stakeholder engagement. Peers with similar network footprints and digital ambitions should watch Vivo’s execution on asset sales, lease renegotiations, and ecosystem monetization for sector-wide implications.