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Despite accelerated commercial investment in 3G and services, we reported a strong EBITDA margin of 47.1%, supported by a combination of VAS development, tight cost management and the benefit of asset sharing.Our focus is on attracting higher value customers which has been key to the improvement of our ARPU in South and Central America and to the growth of our overall business. Normalized EPS increased by 33% year-on-year, due to careful management of our capital structure and focus on tax planning. We have also announced an increase in our share buyback program to $800 million for the full year, which together with the proposed dividend of $1.80 a share means we could once again return close to $1 billion to shareholders this year. Slide four. Now, let’s look at the financial highlights for the quarter in more detail. We ended the quarter with almost 40 million customers, up 13% year-on-year. Revenues increased by 12.7% local currency to $1.08 billion and EBITDA for the quarter was $509 million, producing an EBITDA margin of 47.1%. This strong margin is due to our strategy and actions to develop best in innovation, our improvement in asset utilization and the careful management of our cost and returns. CapEx for the quarter was slower than a year-ago at $81 million or 7% of revenues. But this lower level is only the result of facing issues and our CapEx should be significantly higher in H2. Operating free cash flow $249 million or 23% of revenues was similar to last year. Slide five. On slide five you can see how our focus on higher value customers is being reflected in our subsidy cost which are 30% higher than in Q1 ’10 in absolute terms as we aim to support data development. This strategy of accelerated investment in 3G and services aim to address increase in demand for new services and to sustain around double-digit growth in the medium term for the Group.
Slide six. On this slide, we have set out our local currency mobile revenue growth over the nine quarters. Here you can see at 12.7% local currency revenue growth for the first quarter was 1.2% points higher than the average for 2010, demonstrating that our increased commercial investment is already being reflected in stronger growth. There were some exceptional items in both Q1 ’11 and Q1 ’10. But excluding these growth in local currency is still a solid 11.9%. We are confident of maintaining top line growth of around 10% in the local currency for the Group in 2011.Slide seven. ARPU erosion continues to improve as you can see on slide seven. As a result of our focus on higher quality customers and our non-voice revenue streams. In Central America, we have recorded a year-on-year increase in ARPU based on recurring revenue for a long time, up 1% and in South America local currency ARPU which has developed positive for a year now was up 3%. For the Group as a whole, the ARPU declined based on mobile recurring revenues worth 2%, demonstrating that we are moving closer to stabilization. Slide eight. On slide eight, you can see the distribution of customers by ARPU level. We have used Latin America for this analysis as this is where our focus on higher value customer is most applicable, given that the 3G services in Africa are still very limited. At the end of the first quarter, 37% of our customers generated an ARPU of more than $10, up 1.3 points year-on-year. We expect a greater proportion of our customers in Latin America to fall into this category over time as we accelerate investment in 3G and other value-added services. It also worth adding that around one-third of our customer base has an ARPU has less than $1 and accounts for less 1% of our revenues. Clearly, therefore, our total customer number is much less relevant as a KPR for Millicom than our revenues and ARPU. Read the rest of this transcript for free on seekingalpha.com