Balan Nair - CEO Chris Noyes - CFO Betzalel Kenigsztein - COO.

James Radcliffe - Evercore ISI Andres Coello - Scotiabank Kevin Roe - Roe Equity Research Soomit Datta - New Street Research Jason Bazinet - Citi Matthew Harrigan - Buckingham Research.

Welcome to the Liberty Latin America's First Quarter 2018 Investor Call. This call and the associated webcast are the property of Liberty Latin America and any redistribution, retransmission or rebroadcast of this call or webcast in any form without the expressed written consent of Liberty Latin America is strictly prohibited.

At this time all participants are in a listen-only mode. Today's formal presentations materials can be found under the Investor Relations section of Liberty Global's Web site at www.lla.com. Following today's formal presentation, instructions will be given for a question-and-answer session.

As a reminder, this call is being recorded on this date, May 09, 2018. Page 2 of the slides details the Company's Safe Harbor statements regarding forward-looking statements.

Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the Company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts.

These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements.

These risks include those detailed from time-to-time in Liberty Latin America's filings with the Securities and Exchange Commission, including its most recently filed Forms 10-K and From 10-Q.

Liberty Latin America disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. Also note that nothing stated on today's call constitutes an offer of any securities for sale. I would now like to turn the call over to Mr. Balan Nair..

Thank you, Operator, and welcome everybody to Liberty Latin America's first quarter results call. Today, I'm joined by my senior leadership team from across the region, and you may hear from some of them during the Q&A session today. For our agenda, I will start by taking you to our highlights for Q1.

Before providing some examples of how we are working towards the strategic vision I laid out in February, which we believe will result in the creation of sustainable top line and free cash flow growth for our company. Chris Noyes, our CFO will then make some prepared remarks regarding our financial performance for the year so far.

And then, we will get straight to your questions. As a point of housekeeping, we will both be looking for slides, which you can find on our Web site at www.lla.com.

Starting on Slide 4 with the key highlights for the quarter, this is our first quarter as a separately listed company and although we are still in the early stages as we look to our longer term plans, we've made a solid start to the year and why do I say that? A few things, in cable and wireless we delivered good RGU growth in the quarter more than doubling on net ads in Q1 2017 and building on our product and operational improvements in the second half of last year.

VTR also continued to perform well with the consistency we've drawn the custom to. Both these businesses generated strong rebased OCF growth year-over-year of 7% and 6% at CNW and VTR respectively. True network expansion as well as bringing an exciting and innovative products to our customers, we are creating a platform for sustainable growth.

Moving to Puerto Rico, our recovery continues to move in the right direction and I'm very pleased with the substantial, sequential improvements that our team delivered in Q1.

The third highlight for the quarter is that we launched a number of new products and bundles that we believe will support our performance through 2018 and unlock their organic growth opportunity that we see. I'll cover some specific examples on what we've done later in the presentation.

Another driver of organic growth is the expansion upgrade of our networks. We added over 80,000 homes in the quarter, putting us on track with our expected build and upgrade them over 250,000 homes in 2018 and leaving a run rate of further opportunity in future years.

Finally, we remained excited about the opportunity in Costa Rica and anticipate closing the Cabletica acquisition in the early part of the second half, while we continue to work through our active M&A pipeline with a very disciplined approach.

Moving to Slide 5, we have another quarter into our recovery work in Puerto Rico and have some good progress to report. Starting with the restoration of upon network, we indicated that this would be largely completed by April 2018 and we can confirm that we are not able to serve around 900,000 of our 1.1 million homes.

As you can see in the chart on the right hand side of the slide, we are now at 723,000 RGUs compared to a base of 804,000 before last year's hurricanes.

Thanks to the great work of team in Puerto Rico, we now have about 590,000 billable subscribers, which is good progress compared to the last data we showed in early February and we are working hard to close the gap.

With a network coming back online, we are laser focused on retaining our existing customers using our ground strategy to visit neighborhoods, knock on every door and provide technical assistance where needed.

At the same time, we are leveraging a superior network in products to win new subscribers from our competitors and increased penetration in the areas that we visit. Our messaging across island is compelling.

We offer a leap bundle with 100 megabits per second broadband speeds, enhancing home connectivity to a connect box and various attractive video options ranging from English to Spanish [indiscernible] to a skinny bundle.

Our results are encouraging with gross additions in each of February, March and April recovering the levels we have seen in the same period last year and want to stop you.

We are committed to continue improving our products such as the launch of our new VOD interface just last week which will enhance the customer experience and drive organic top line growth through volume in ARPU overtime.

In terms of our B2B customers, our customers are nearly all online today compared to the 75% figure we quoted as at the end of January. This is an area where we are starting to leverage capabilities of cable and wires, which is our most advance B2B operations, so stay tune.

Finally on this slide, we wanted to translate these operational improvements into financial performance. Chris will cover this in greater detail, but I want to highlight a sequential growth we've seen since Q4 and confirm that we remain on page for the OCF run rate of around $14 million at the end of 2018 that we mentioned previously.

In the next couple of slides, I will dive into our networks and the products that we offer across the region. On Slide 6, we highlight our unique asset base and the differentiated platform to provide for our consumers and B2B operations.

Firstly looking at our fixed network, as you know, we've invested in significant upgrades and new builds over the past couple of years adding or upgrading over 800,000 homes in that time. We now have a strong fixed footprint of 6.5 million homes at LLA and over 80% of our network is comprised of 2-way HSC of fiber-to-the-home.

In addition, we utilized media cell technology, which is capable of delivering a triple plate bundle, penetration of high speed products across these networks is however still low particularly at cable and wireless risk.

For example, 33% broadband penetration versus 41% at VTR and at the same time we continue to focus on leveraging this great fixed network to drive on B2B business. Our footprint also a significant potential for further expansion and we will continue to build prioritize and capital allocation across the group.

Layered on top of this fixed back ones are leading mobile footprint. We have strong existing market position and see a significant opportunity to drive value across our residential and B2B segments by delivering robust high-speed data connectivity to our customers.

Already today, we have the networks to facilitate this growth without the 13 of our mobile markets. At the end of Q1, one quarter of our mobile subscribers were using out the nearly double the penetration of the prior year period and this growth set to continue.

We are striving to deliver the fastest and most reliable mobile services and investments in our mobile network will be a key focus of our future capital events. Finally, on the right hand side of the slide, underpinning both our fixed and wireless networks is our unique sub-sea footprint standing over 50,000 kilometers and connecting over 40 markets.

This is a highly resilient and robust network with significant capacity given with currently utilized less than 10% of its potential. With this asset, we are well positioned to address the growing demand for bandwidth in the region.

To give you an idea of this growth, demand for bandwidth was up by almost a third in the past year on our ring protected cables connecting to the U.S. In conclusion, we have a fantastic combination of telecom assets enabling us deliver differentiated value propositions compared to our competitors and be more nimble as the industry evolves.

For example, to converge fix and wireless offerings, we are able to offer cloud based services to our residential and business customers without any of the capacity constraints other operators may have. We intend to leverage this fully and to expand both organically and inorganically.

Moving to Slide 7 and building on these fantastic networks, we are bringing a number of innovative products on markets. First, the fixed line, which generates nearly half of our revenue starting with VTR as I mentioned on my opening slide our Chilean business continues to be a strong performer and we are focused at staying ahead of the competition.

During the quarter, we launched Replay TV, this features boosts our video experience as it enables our customers to access programming from the previous seven days or close to 60 channels. We also expect more exciting video products coming from Chilean customers such as the launch of our Horizon Go app and in common with our other markets.

We have the Connect Box of superior Wi-Fi, which now reaches over 45% of our customers in Chile. In Puerto Rico, where we have the leading network on the island, our broadband product is complimented with the same Connect Box with superior Wi-Fi and over one-third of our internet base in Puerto Rico enjoys the great product already today.

As previously noted, we also launch our new VOD platform last week and similar to VTR several new innovations are on the way. Lastly, the cable and wireless, we are improving our bundles in the Caribbean and started the rollout of our new propositions in April focusing on delivering greater value for our customers and simplifying the options.

The first markets to introduce the new bundles with Jamaica and Barbados. In both cases, we are seeing some good ARPU uplift from existing customers moving to the new bundles and we anticipate this should also reduce during through the year. We made good progress on the R&D front as well.

During Q1, we launched the FLOW EVO platform and upgrade that we pushed out to a digital video customers delivering an enhanced video experience including an intuitive EPG, the ability to pause live TV and cloud DDR.

On the content front, we launch FLOW SPORTS 2 in March a home for exclusive sports content in the Caribbean as a compliment to our existing FLOW SPORTS 1, one of the most popular sports channel by viewership across the Caribbean in FLOW SPORTS premier channels.

Moving to mobile generating around 20% of our revenue on the bottom left We are investing and out the and independently rated the leader in terms of speed and quality across most of our markets. We are also working to shift our base the more predictable revenue streams.

For example, our new combo deals in the Bahamas and Jamaica are driving uptick of data and voice combined plans in a prepaid base. Lastly on mobile, we are leveraging a video content in Caribbean in combination with our mobile offers. For example, in the first quarter we made FLOW SPORTS 1 available to all of our Caribbean flow mobile customers.

Moving to the top right hand side of the slide, where I wanted to provide you with an update on one of the many things that we are doing across our market to better manage our base and the customer experience. Here I would like to draw your attention to our retention center of excellence in Trinidad.

As you can see from this graph, we have continued to drive down voluntary churn in Trinidad and this is a great example for what we can achieve when we train and empower our agents with the right tools and incentive structures to help customers. In Q1, we had a safe rate in excess of 60% which is of great value to our business.

With scale dissented to Barbados in February and we intend to rollout similar incentives across our larger markets like Bahamas, Jamaica and Panama. Finally, moving to B2B, which makes up about 30% of our revenue, we are the preferred partner to our customers by providing comprehensive suite of solutions over our enterprise great networks.

With both customers and businesses benefiting from our unique combination of sub-sea, fixed and mobile networks, we have also made investments in this book services for key B2B verticals. For example, in hospitality we are offering a portfolio to include digital signage manage Wi-Fi, retail analytics, unified communications and TV for hospitality.

We are one of the first providers to offer IT based dish DTV channels in the Caribbean hospitality sector. We are already live in seven markets and will be expanding these services throughout 2018. On Slide 08, I wanted to wrap-up by looking at Q1 to the lens of the strategic vision I laid out last quarter.

We are still in the early earnings as a new management team. But I'm as excited as ever but the prospect for our company as we strive to unlock the significant growth opportunities in the Latin America and Caribbean region. We continue to look for scale opportunities.

We have changed the operating model with my Chief Operating Officer, Betzalel, driving a consolidated course in our fee, combining our products, engineering technology teams and we are also consolidated back office personnel and leverage liberty to almost procurement to drive savings.

For our product innovations, we are partnering with Liberty Global and leveraging a scale to bring the Horizon platform, DOCSIS 3.1 platforms, that's relative CPE technology. We are also committed to the fastest speeds on mobile. My commercial management team are also working hard to optimize our pace.

We have leveraged our new build sales teams, look at pricing, in ways we can move our customers to packages to better meet their needs that provide value to them, while creating a better predictable stream to us. I'm also committed to moving Liberty Latin America to a single could based digital technology for our customer experience.

This should not only improve efficiencies but this is how our customers want to interact with us. We feel we can create magical moments for our customers with this platform. Chile will be our first implementation and we would expect to scale this across the region.

To conclude, we have a fantastic combination of terrestrial and sub-sea assets in the part of the world set to grow strongly as penetration of high-speed services increases.

In this context, we are working hard to improve our propositions and operational execution with some positive results seen in the early part of the early and we've got some exciting plans for the coming quarters including continuing to leverage our robust product roadmap across B2B, mobile and fixed services with new product launches coming up over the next few years.

I'll now pass you to Chris Noyes, our Chief Financial Officer, who will go through our Q1 performance in greater detail and I look forward to your questions after that. Chris on to you..

Thank you, Balan. Moving to Slide 10, I will provide some color on our Q1 2018 subscriber results on the top left, we delivered an aggregate 33,000 RGUs during the quarter of which C&W gained 25,000 RGUs with notable year-over-year improvement from Jamaica and Trinidad and Tobago.

VTR delivered 24,000 RGUs, which is a great start to 2018 as they enter the remainder of their critical back-to-school selling season, which ends during Q2 and in Puerto Rico, we reported RGU attrition of 15,000 which is a best improvement to at last 65,000 in Q4 of 2017.

In terms of products, broadband was undoubtedly the star performer with 37,000 RGU additions. While fixed telephony declined by 6,000 RGUs. Importantly with respect to our 2000 video addition, VTR gained 9,000 RGUs which is a best Q1 result in four years and C&W added 3,000 RGUs which is a second consecutive quarter of video growth.

These gains were largely offset by a loss of 10,000 video subscribers in LCPR although LCPR was nearly 60% improve from its Q4 2017 video losses of 23,000. Turning to mobile, we lost 11,000 subscribers in Q1 2018. VTR added 9,000 postpaid subscribers as they continued to successfully sell into their cable base.

However, these additions were more than offset by C&W's loss of 20,000 mobile subscribers. As compared to the prior three quarters at C&W, the aggregate mobile expression reflects modest improvement driven impart by the Bahamas as they experience its lowest quarterly loss since Q4 2016.

Slide 11 provides a summary of our consolidated quarterly financial results, which as expected continue to reflect the impact of the Hurricane platform. We delivered $910 billion in revenue and $341 million in OCF in Q1 which represent rebased declined revenue of 4% and an OCF of 5%.

Looking at our performance relative to Q4 2017, in the right hand chart for each of revenue and OCF, you can see a $60 million step-up in revenue and a $15 increase in OCF. A majority of this increase reflects our continuing recovery in Puerto Rico, where revenue in OCF have improved by $45 million and $30 million respectively.

Moving to the bottom left, P&E additions totaled a $194 million in the quarter representing 21% of revenue as compared to a $139 million in the prior year period of 15% of revenue. The increase was driven entirely by our restoration efforts, which totaled $70 million in Q1.

In terms of adjusted free cash flow, we generated negative $46 million, which was an improvement of $28 million as compared to Q1 2017. This was a good result given the significant amount of capital expenditures that we incurred due to the restoration, net of a $30 million insurance in past.

Finally, our balance sheet remained solid, it's about 90% of our debt is due 2022 or later. And we have substantially hedged our floating rate and currency exposures. As the chart highlights our net leverage ratio continues to be impacted adversely by Puerto Rico but is declined by just over half a turn versus Q4 2017 to 4.5 times our QA OCF.

Next to Slide 12, I will summarize the Q1 performance for each of our three segments. Starting on the left, C&W generated $586 million of revenue reflecting flat rebased performance.

More specifically, we delivered rebase growth of 2% in our B2B business with our sub-sea LatAm and Jamaican operations positively contributed, while we experienced a roughly 3% rebase decline in mobile residential revenue due to competition in Bahamas and to a lesser extent Panama.

With respect to OCF, C&W delivered $229 million our best absolute results since acquisition and representing 7% rebase growth. This performance was driven largely by lower year-on-year operating expenses including lower bad debt in collection and network related expenses as well as the reduction in professional fees.

Our P&E additions totaled 11% of revenue or $67 million. This results was consistent with the prior year and included over 40,000 newly built or upgraded premises primarily in Jamaica and Panama and approximately $8 million of hurricane related spend.

Moving to the middle, VTR posted revenue of $264 million an OCF of $105 million with each equating to 6% rebase growth. Our rebase growth was supported by volume increases across residential fixed B2B and mobile as well as year-over-year expansion of our ARPU per RGU on residential fixed and a continued focus on cost control.

Our P&E additions were $57 million reflecting a modest improvement in terms of percentage of revenue from 24% in Q1 2017 to 22% in Q1 2018. Importantly, we added over 40,000 2-way homes during the quarter. Finishing on the right, LCPR reported $62 million of revenue and $18 million of OCF, which obviously represents a significant decline over Q1 2017.

But as noted on a prior slide, we delivered improved results versus Q4 2017 as customers have returned to our network. Our P&E additions of $70 million during the quarter are largely due to our network restoration efforts, which brings our aggregate recovery spend to over $110 million or 80% of our total estimated rebuild spend.

Before turning to the next slide, let me give you a quick insurance update. In Q1, we received a net $30 million of cash into the group as an advance. We are currently focused on supporting the claims with an eye towards the second advance later this summer. As previously noted, we expect full resolution of our claims will take at least until year-end.

To recap, first as Balan highlighted earlier, we have begun to build operational momentum, supported and part by a renewed focus on customer experience and product innovation. Second; we remained steadfast in driving operational and financial recovery in Puerto Rico. As our results demonstrate we have made very good progress today.

We have more work to do no doubt but remain confident in our ability to return this business back to growth.

Third as a management team, we recognize the importance of free cash flow in creating shareholder value and our focusing efforts are not only top line growth but on optimizing our operations and capitalizing on our scale to deliver free cash flow improvement.

Fourth; we are excited about bringing Cabletica into the group in the second half of the year and expanded our reach within central America. And finally on the back of our Q1 results, we are on track to deliver our 2018 guidance. With that operator, we are ready to open up for questions..

Thank you. [Operator Instructions] We'll take our first question from James Radcliffe with Evercore ISI..

Good morning. Thanks for taking the question.

Two if I could; first on Puerto Rico, I believe you said last quarter that about 30,000 homes of your footprint you thought wouldn't get rebuild, is that still where your thinking is so that there implies about 180,000 left to go in the footprint? And secondly, just any thoughts on how strategy may change in Panama, given periods of build for 79 and past? Thanks..

Sure. Thanks, James. Good morning. On Puerto Rico, I think the numbers are right, and that's what we indicated and that's kind of where we are trending too as well. On Panama, we've been following the bill, it's going through the process right now, get signed a long period after that before it becomes in effect as a law.

But we are actually very supportive of that, we think consolidation in that country makes sense and then we will see when the time comes when we go to the long - what actually happens after that..

Great. Thank you..

We will take our next question from [indiscernible] with Royal Bank of Canada..

Yes, good afternoon. Thanks for taking my question. Fixed KPIs and C&Ws have been positive, they have been proving. When should we see the better KPIs performing translate into top line growth.

I see that basically currently maybe working at time on my [indiscernible] are growing however other regions are still having some top line pressure? And my second question is regarding also CWC.

In which countries in [indiscernible] footprint is the company focused in the airports of the point and their fixed network and also we are starting to see some companies in the region they are talking about deploying FTPH networks rather than FTPX or cable, is the company expecting to deploy FTPH in some of your markets? Thanks..

Well, on the first question on the fixed networks, we as you can see, we are seeing some positive progress there and in some of our operations that's been around from some negative process. Fixed network has come around - now when do we see coming to the top line.

I think, we want to be patient on that - we have a new management team in place, we are looking at a number of things one on bundling and our packaging ways we can increase value more significantly in the ways that right now how we tie into a mobile product.

We have a very unique asset across our region where we have of course mobile and fixed and if you look at our top line really the pressure is more on mobile than fixed and you will see a lot of effort on our product to try to leverage what we have and maybe slightly improve the mobile performance both from a product standpoint, pricing standpoint and transitioning more from prepaid to postpaid.

And that's kind of what we - a lot of our management team is working on. As far as the networks are concerned, your observation on FPTH is correct. Of course, if you had a choice and you are building from Greenfield, in many cases you would go with FPTH and we've done that as well in a couple of - it's like in a number of our operations.

However, we are very prudent with our capital expenditures and in areas where like more sense to do line extensions so that our existing HSC plan we would do that, we would really focus on upgrading from 1-way to 2-way which has the biggest retail employers and in large cases where we already have existing purchase pair and looking at the competitive nature of the area, VDSL and converting to really high-speed broadband using the existing [indiscernible] technology, we would do that as well.

So the way we look at it, we are less religious about the network architecture and more about the potential returns we can get from the network..

Okay. Thank you..

We will move next to Jose Quintana with Scotiabank..

Thank you. This is really Andres Coello. I have some doubts regarding Carve-Out acquisition, the impact of the Carve-Out acquisition at the C&W level, I think it's $10 million.

But it sounded a little bit difficult to understand what was the impact during the first quarter of the year, so if you can please elaborate on that?.

Thank Jose. Okay, well let me pass it on to Chris Noyes, who can address that..

Yes, in terms of the - in the CWC numbers and the LLA is 8.2 million revenue, 1.6 million in OCF, if you added that's the Q1 2017 impact. So that's how you will calculate the rebase churn. And if you look at our press release, I think it's Page 09, there is a description of the rebase figures..

Okay, thank you and second question regarding the insurance payments.

I think do you already received $30 million, it was an advance payment, if you can just let us know you know, approximately how much you expect to receive and when?.

Yes, in terms of the insurance as we mentioned on the Q4 call, we did agree with the insurers of $60 million advance of which $30 million was related to self insurers and $30 million in effect is because third-party or external money into LLA. We did receive that at the tail end of Q1 so that is on the books in our cash numbers.

And then, our network basis, we are working through the claims as I mentioned on the call, we have indicated at least two occurrences of the claim such that to the extent if there was a limit in each case that would be $60 million of proceeds times two, so that's 120. So we are still working through the claim.

We've obviously received 30 new of capital. So somewhere, hopefully we are trying to angle to at least Q1 claims but the facts were developed overtime on the BI side and we are charging higher, so it was going to take a while to resolve.

But I would -- exactly we would some - I would expect we would have additional advance perhaps later in the summer when that's advanced, it will be smaller than what we received, just received..

Right, so from third-party insurance you are expecting in total including the advance you already received, there was a one that you will received later approximately $50 million in total or form third-party insurance?.

No, no. It's generally very complicated..

Right..

But they will go from -- if there were two limits under that assumption which we are still working through to prove that would be a $120 million of third-party capital..

All right..

Such that we'd receive 30, so that would be up to 90 if we can support to limit claims..

I see..

But I would be, we are working through it, so I wouldn't necessarily pencil in their numbers, we will get more clarity as we work through it but that's how it works..

Okay. That's clear..

Does that answer your question?.

Yes, thank you..

We will take our next question from Kevin Roe with Roe Equity Research..

Thank you.

In Puerto Rico, your revenue recovery is progressing faster than estimated, how should we think about the ramp to capture the 130,000 or 133,000 subs you classify as non-billable and switching to BTC, we've seen an improvement in your subscriber loss pressure, are we at or near stability in that market on mobility?.

Okay, let me answer the second question. I'll get to the first question in the reverse order.

On BTC, we are encouraged by the numbers that both on the fixed side and on the mobile side as well you will see as the lowest losses since our competitor showed up on the island and is it sustainable going forward? We think that we see a light at the end of the tunnel here and we have the new management team on the ground, on the island.

We started significantly, we've done a very good job, a very good job both commercially as well at the cost structure for that business. So I think we are seeing some positive signs out of that.

On Puerto Rico, the remaining numbers drives a little, I will ask Betzalel to jump in here in the second as well Betzalel Kenigsztein, the Chief Operating Officer.

But we are working really hard to get that remaining non-billable customers, knocking on doors, showing up, helping homes where we tend up and showing them how you can get back online, working through some of your devices in the home.

Naji and his management team are laser-focused and it's a race for us to get those customers back to the billable side.

Betzalel, do you want to add anything to that?.

Thank you, Balan. But as you said, I think that we are as you said at the beginning of the presentation, we are in a phase of going door-by-door, knocking on every door and making sure that we are collecting back every potential customers.

The change, there is a change on the way we were doing it in the first month where we are connecting and putting back power into the region and a lot of the customers are coming - were coming back automatically.

Now with the process of cleaning up the last team and we go node-by-node, neighborhood-by-neighborhood and knocking on every door and connecting every door. So we are still optimistic that we will collect back most of those customers that are waiting for us to be connected.

We just take a bit longer but the process is very systematic going node-by-node and reconnecting every customer across it..

Okay, thanks. Thanks, Betzalel..

And Balan --.

Sorry, I have a quick follow-up on TSTT any share, any sale update on that asset?.

Not right now, I think on the last call I indicated, I visited and met with some of the, met with a minister there and we feel there is some slight progress, but there is a high chance we will get another extension on the deadline for that disposal of that asset.

But we are working really hard and John Winter on my Legal Team, Chief Legal Council, he and his team are really focused on this and its one of the action item task that he has and it's really.

We are going to try to make something happen here, we've done everything we can with the government both in incentivizing them to make something here, so sometimes just think move a little slower than we liked..

Understood, thank you..

[Operator Instructions] We will hear next from Soomit Datta with New Street Research..

Hi, a couple of questions please.

One you disclosed the sub-sea cable business I think the first time the sport of the, which is very helpful to growth that is very high on the year-over-year basis around 33% or so and how should we think about our business going forward, was there anything sort of lumpy or unusual in the Q1 numbers, it'll be great to kind of stay on how to think about modeling that business going forward, please.

And then, secondly as a quick follow-up and just an update on digit sales activities in the region will be helpful, maybe most particularly in Jamaica where I think they have attempted some pricing initiatives in the first quarter, it's a market where they and declare a lot of pressure to home market.

Are you seeing anything in particular from them or is everything sort of relatively calm? Thank you..

On the first question, the growth for the networks and the submarine cable business and we are actually very positive about it - about that, not only the asset and the business but the opportunities there and we are looking actually at quite a number of new business plans in that vertical on extending on networks even further into some of the drop locations, that's a good business as you know, there is not much competition to bear as we pretty high in that space and it's one of the assets that we really try.

So, first, if we had to separate that asset out, we would certainly play the high multiples and our overall base and I think if one of the hidden values in this company that perhaps many of you would want to look at and then value that appropriately..

And if I could add on your question around the growth on subsidy, the one thing I would point out is the carve-out was sub-sea related and such that, that in fact is obviously positive this year but it was not in Q1 2017, it's again consolidation last year in April, so you would need to add that back to Q1 2017 to get a rebase growth..

Got it. Okay, clear. Thank you..

Yes. Now on the - your question on the - where we compete with digit sales in some of the islands, we feel actually pretty good about that as well.

In many cases, right many of us came from other businesses, really do you see you operate in a area where you are [indiscernible] and we think that opportunity for some pricing power and we've done that in a couple of areas where we've taken our prices as well and we are going to test the market, we think we have a very rationale competitor in that space in where we operated and I think it's' a win-win for both of us, if we can bring back some pricing power to the power that we have and I say that not because I think the sky is the limit on prices there, I think it's truly is under price in a lot of these markets and commercially I think we have a really good opportunity here and as you know, we announce that in the last call we have brought in Inge Smidts under Betzalel who will be running our cable and wireless business and one of the reasons I wanted Inge on our team is she has declared peace in this area of looking at pricing, looking in our commercial go-to-market, looking at above the line, below the line.

She came from P&G and this is an area where we are going to really leverage her knowledge skill set and leadership. So we feel really good about it..

Great. Thank you..

We will take our next question from Jason Bazinet with Citi..

I just had two questions, what is the definition of non-billable in RGUs in Puerto Rico?.

Okay, so the question is, so if customers argues where we've already connected the network. We have the network back up but the customer itself -- we haven't actually been able to get the customer to where do you actually send it, a payment yet on the service.

So and our feeling is that it's an area that we still need to stop pushing our customers and that's what Betzalel was referring to.

We are knocking the door to tell them, "Hey, the customer is back." I mean, you are back on, you are plug-in your modem right now and you will get service and maybe that some of the issues going on in the home where they don't have - their computers were destroyed or some other CPE in the home, so we were trying to teach these customers back out, it shows the strength of our team in Puerto Rico and help us to rebuild the network and now we need to get some of these customers back on line..

They could get the service, but they don't have the service, is that the right way to think about it? There were customers in the past who can get the service today but they are not customers yet?.

Yes, that's right..

Okay..

But they are existing customers right now. So there are customers that periodically, so we start spending billing to them because of services that was not available and so hopefully that makes sense..

Yes, okay. And then, a long-term question, I - given your history of Liberty Global, I think people sort of think of levered equity returns being sort of central to sort of a liberty narrative.

But on the other hand, I sort of look at the divergent growth rates between VTR where you have a more traditional coax robust terrestrial network on the rest of your results and there is a clear divergence, which I suspected a function of the type of terrestrial networks that you have in place or don't have in place.

Once you get to the point where you are generating free cash flow can you spend a minute and just talk about sort of your priorities for using that cash flow.

In other words would you - do you think fixing the terrestrial network or upgrading it is more important than buybacks or vice versa or do both in tandem?.

I think our capital allocation strategy will become more clearer once if you pointed now what we get, we start generating cash and which is by the way a focus of this management team. I'd like to measure a business on a from an FCF basis and the yield on FCF and this is - it's a new focus operational wise.

Let's get us back to a positive free cash flow business and start working on generating cash that I think our investors are looking for. Now what do we do from the capital allocation standpoint, we are still a levered equity model at LLA perhaps not as aggressive as other traditional Liberty companies are.

We would prefer to be in the low part of the 4.5 range or 4 to 5 range, that would be something that we would feel more comfortable with. We would certainly invest in two areas or maybe three.

One in our networks, on network to sell business and you will see us completely focused on wanting to have the best network possible with the best possible speed, which is really the key differentiator in our product whether it is mobile or fixed.

Second we would invest very specifically on our customer experience and that goes to the quality as well as to the interaction customers we will have with it and that customer experience, when we look at the digital migration for our business, we look at it from the standpoint of what does this do to make the customer experience better and that's an variable investment.

The third part of our capital allocation is, either buyback to acquisition and we know what our LRP is, we know what the LRP is and we know what the IRR for internal case and we will measure against that.

If there are any opportunities that are attractive to us from inorganic spaces, we will always measure that against buyback and that's how we would do our capital allocation..

Thank you.

Our final question comes from Matthew Harrigan with Buckingham Research..

Well, thank you. I just want Balan just around the CTO have as much as the CEO had. We used to have Puerto Rico.

I mean, you said a major job is getting everything and the fact back on line but is there anything you are doing differently on the architecture even perspective, why it was dropped, why would you have - what actually network recoveries you again you thought will be another hurricane or hurricane as a big market like Jamaica? And then, secondly, I know your growth oriented when you will feel addressing or the lower little income demographic in market like Jamaica, the possibilities of doing something more on the previous streaming side where you don't have any sack and what kind of flip very gracefully in and out depending on where the football or soccer season is? That will be great because it seems like we are picking price, nice growth enhancement if you would?.

Okay.

Maybe I'll answer the first question and you know, there is a little of my own CTO had but really no looking at it from new role and I'll tell you the ideal situation would be, we would take our time, rebuild it mostly in spite of the home underground and try to build a network is "Future proof." And to some degree, we are trying to do that especially in the backbone, where we are trying.

Where we can to put more and more of our feeder and just and a pro plant into - in underground as much as we can. Reality of what I have asked the team and what the team is working on is build it back and think of it this way, it's a race, it's a race between us and everybody else on who gets to the customer first.

So we could build a really nice future proof network but by the time we get to the customer we would have already gone with our competitor. So what Naji and Betzalel are really focused on is this race.

There is two races, the first one is getting the network back touching all of our customers, especially those non-billables, right? That doesn't, that was backup.

Second; the second race is getting the customer to sign back with us as far as possible once the network is up and that's what Naji and his team is focused on and when you do that you end up actually going back to the architecture you already have before because as soon as the bolt gets stood up, you want to attach to it as far as possible and you just swap out the nodes, you swap out the things that you need to swap out but you want to attach as far as possible and drop as far as possible to the customer.

Hopefully, that makes sense to you, if this is really a commercial race then it's a new race. On your second question on the OTT, your instincts are right there.

One of the same steps that Betzalel and now Inge will be working on is a lot of our video rights and making sure we have all the IPO rights, all the [indiscernible] rights on, we can be more innovated in our products on the video front and you will see that.

You will see us throwing that jacket from not just a residential, well fixed resident well but what happens in our mobile customer is I think in my earlier comments you see we are providing some of our sports programming, programming to our mobile customers.

And then, so we would also look at a lot of the trends here and population in our properties where cruise ships come, people get off, get on. How do we target that market with some of our products of course with broadband, but certainly with video as well.

So more to come on that, it's part of our full product revamp and but it does require us to relook at the rights that we have and Betzalel is focused on that as well. Hopefully, that helps Matthew..

Thank you..

At this time, I would like to turn the call back to Mr. Balan Nair for closing remarks..

Well, I want to say thank you to everybody. Thank you operator and for joining us on this call today. We feel really good about our business. The more time we spend on it and I have been visiting a lot of our operations and I think we see a path here that's extremely bright and positive and that's how we look at it.

The management team here feels really good about the business as well and some of the changes we've been making in the last 90 days or so and I do want to end by thanking everybody for following us and keep in touch on us and taking the time to join us on this call. So I'll talk to you all again on our second quarter earnings call. Thank you..

Ladies and gentlemen, this concludes Liberty Latin America's first quarter 2018 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's Web site at http://www.lla.com. There you can also find a copy of today's presentation materials..