Millicom International Cellular (NASDAQ:TIGO) reported record adjusted EBITDA and higher cash flow for the third quarter of 2026, as growth in mobile services and cost controls helped offset a decline in home customers.
Service revenue rose 6.1% from a year earlier to approximately $2.1 billion, while organic growth was 5.4%, excluding foreign exchange movements and the Coltel acquisition, Chief Financial Officer Bart Vanhaeren said. Adjusted EBITDA reached $1.1 billion, up 7.7% organically, and the adjusted EBITDA margin was 48%.
Equity free cash flow increased 27% to $316 million, bringing the nine-month total to approximately $870 million. The company maintained its full-year target of around $1.1 billion and said it remained on a path to reduce leverage below 2.5 times. The leverage ratio stood at 2.53 at quarter-end.
Mobile Growth Offsets Home Customer Losses
Chief Executive Officer Marcelo Benitez said the company added almost 390,000 postpaid customers during the quarter, with 73% of postpaid sales coming from existing prepaid users. The postpaid base reached 17.2 million, up almost 31% year over year, while the prepaid base grew 7.8%.
Mobile service revenue rose 7.2% organically to $1.3 billion. Benitez attributed growth to customer migration, disciplined pricing and the company’s “more-for-more” strategy, which offers larger allowances and improved connectivity alongside gradual increases in average revenue per user.
Millicom lost 86,000 home customers sequentially, but home service revenue increased 3.4% organically to $374 million. Benitez attributed roughly one-third of the customer decline to an earthquake in Colombia, with the remainder driven largely by the company’s pricing approach. He said subscriber additions could remain under pressure in the fourth quarter.
Benitez said the earthquake cost the company approximately 27,000 customers in Colombia and had a financial impact of around $10 million. He also reported that an employee and a contractor died in Colombia. A separate earthquake affected Panama, where operations were not materially affected, he said.
Colombia Integration and Network Investment
In Colombia, service revenue increased 7.5% organically to $908 million. Adjusted EBITDA rose 6.3% organically to $417 million, including approximately $20 million in severance expenses. Vanhaeren said Millicom expects about $40 million in additional restructuring expenses during the remainder of the year.
Management said the most intensive phase of integrating Coltel was largely complete. Benitez said the combined operation began using the Tigo brand on October 14, accompanied by a four-year network investment plan.
The plan includes doubling 5G coverage, adding capacity at more than 5,000 sites and building more than 1,000 new sites. Millicom also launched the Tigo brand in Ecuador on October 1 and plans to build at least 500 additional sites there, primarily to expand coastal coverage.
Asked about capital spending, Benitez said the company expects to make the Colombia and Ecuador investments without increasing its capital expenditure ratio. He also said efficiencies and revenue growth could bring Colombia close to a 50% adjusted EBITDA margin in 2027, while describing that level as an ambition rather than a certainty.
Guatemala Settlement and Other Markets
Guatemala service revenue rose 6.5% organically to $392 million, and adjusted EBITDA increased 7.6% to $255 million. The market’s 57.2% adjusted EBITDA margin included a $4 million one-time benefit from reversing certain legal liabilities, Vanhaeren said.
Vanhaeren said Millicom reached a settlement resolving all pending material litigation and claims in Guatemala. The company recorded a high-double-digit-million-dollar expense in the quarter as other non-operating income and expenses.
In Chile, where Millicom owns 49% and does not consolidate revenue or adjusted EBITDA, the quarterly adjusted EBITDA margin improved by nearly 10 percentage points to approximately 33%. Service revenue was broadly stable, with a marginal decline. Benitez said returning the business to revenue growth is the first priority in a competitive market.
Vanhaeren said the Chilean business is generating annual equity free cash flow in the mid-to-high double-digit millions and is expected to reach triple-digit millions next year. He said Millicom and its partners are evaluating uses for that cash, including distributions, debt reduction and commercial investment.
Cash Flow Ambition and Dividends
During the question-and-answer session, executives discussed an internal ambition to reach $2 billion in equity free cash flow. Both Benitez and Vanhaeren emphasized that it was not new financial guidance. Vanhaeren declined to specify a timeline, saying that doing so would make it guidance.
Vanhaeren said Millicom had announced extraordinary dividends of $0.75 per quarter on top of the existing $0.75 quarterly dividend for the first and second quarters of 2027, resulting in $1.50 per quarter. The dividend policy for July 2027 through June 2028 will be determined at the annual general meeting in May, he said.
On acquisitions, Vanhaeren said Millicom continues to consider in-market consolidation and adjacent markets. He described Venezuela as a difficult investment because of capital controls and said Brazil was not a primary focus because of its size, cultural differences and limited synergies.
About Millicom International Cellular (NASDAQ:TIGO)
Millicom International Cellular SA is a telecommunications and digital services company operating under the Tigo brand in Latin America. The company provides mobile voice and data services, fixed broadband, pay television, cable connectivity and other communications services to consumers, businesses and government organizations.
Its consumer offerings include wireless plans, home internet, television and digital entertainment services. Through Tigo Money and related financial technology products, Millicom also provides mobile money, digital payments and other financial services in selected markets.
