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Good day, and welcome to the Millicom Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Michel Morin, VP of Investor Relations. Please go ahead.
Thanks, Alyssa. Good morning, everyone, and welcome to our fourth quarter 2020 results conference call. As usual, we will be referring to some slides, which are available on our website. So please turn to Slide 2 for our Safe Harbor disclosure.
We will be making forward-looking statements on today's call, and these involve risks and uncertainties which could have a material impact on our results. We will also be referring to many non-IFRS metrics throughout the presentation, and we define these on Slide 3. And you can find reconciliation tables at the back of our earnings release as well as on our website.
So with those legal disclaimers out of the way, let me turn the call over to our CEO, Mauricio Ramos. Mauricio?
Thanks, Michel. Good morning and good afternoon, everyone. I hope that you and your loved ones are all staying safe and in good health. And I wish everyone a very good 2021. 2020 was indeed a most challenging year. And yet, we all saw so very many of our own give their very best in the worst of times, and that inspired us to work harder and do much better here today. 2020 also marked our 30th anniversary as a company. We celebrated with continued investment and hard work to position the company for recovery in 2020 and 2021 and full growth into the future.
Now please turn to Slide 5 for a summary of the main messages today. First, we had very, very strong net adds in Q4, and our customer base is substantially up year-on-year on both mobile and cable. Second, the gradual recovery we have seen since June continued and actually gained momentum during Q4. Third, we continued to invest for the long term. We did so heavily in the second half of the year, and we're already seeing some of the payback for that in Q4 and into this year. Fourth, our cash flow was solid and much better than we were expecting. And fifth, we made additional material progress in reducing our net debt, which we continue to believe is the best use of our excess cash flow at the moment.
Now let's look at each of these 5 points, beginning on Slide 6. At the beginning of the crisis, one of the main goals we set was to protect our market leadership. And there is no doubt that we accomplished that goal with flying colors in every country and also in the context of a harsh pandemic and strong lockdowns in our countries. In mobile, we added a record 2.3 million users in Q4 and a full 1.9 million users for the full year. The vast majority of these were high-quality 4G smartphone data users. We have solid performance in all markets, and Colombia had a very strong quarter with record net adds of more than 875,000 in Q4. We now have 42 million mobile users in Latin America, and that is up roughly 5% year-on-year. We also had very, very strong customer growth in cable. We added 277,000 cable home customers for the year, including 103,000 customers in a very strong fourth quarter. So you can see that we are back to an annual rate of just around 400,000 cable net adds, which is nothing sort of very resilient and fantastic in the middle of this pandemic. We're seeing very strong demand for residential broadband. Our pay TV customer base also continued to grow at mid-single-digit rates. So we ended the year with 4.5 million customers, including a bit less than 4 million on our HFC networks.
Now please turn to Slide 7 to look how our financials recovered in the fourth quarter. Tim will give you a ton of detail in a few minutes. The second point I'm making is simply that the financial recovery continued in the fourth quarter. Both our service revenue and EBITDA were essentially flat on a year-on-year basis in Q4. That is almost a full recovery on our financials and a major improvement from the low point of the year in Q2. And every month has been a little bit better than the previous one since. That good momentum has continued strongly into January, which is very promising for the year. This is partly the result of lessened mobility restrictions in most of our markets, but also the result of our decision to stay in the marketplace during the pandemic, not reducing our workforce or leaving the streets, but rather motivating our teams to keep selling and providing high-quality service, and also the result of our investment in the networks, as you can see on Slide 8.
As you know, when the pandemic hit, we held back CapEx in Q2 to protect our cash flow for 2020. But even then, we ploughed ahead with our key strategic network investments. And when the outlook improved in Q3 and Q4, we released more and more CapEx. In total, we ended up spending about $1 billion on CapEx for the full year, for a very healthy 16% of sales. As usual, the biggest slice went to our cable business, including both CPE and the expansion of the network. We also built over 400,000 new homes. And our focus was, and rightly so, on filling more and more of our existing network. As I said earlier, we added 277,000 net adds in the midst of the pandemic, and we took our penetration up to 31%, up from 30% a year ago. And on the mobile side, we continued to invest very smartly as well. We added 2,500 new sites and upgraded 5,400 sites in total. About half of these upgrades were in Colombia, where we moved quicker than anyone else to deploy our 700 megahertz. And we moved equally fast in El Salvador to deploy our AWS network, and you already see the results of both of those moves. And in Panama, Nicaragua and Guatemala, we moved equally fast to modernize our networks. Our network superiority is now widely and externally recognized in most of our markets as a result of this decision to continue investing.
Now let's take a look at cash flow on Slide 9. As you surely recall, to face the pandemic, we set a very high target to generate operating cash flow of $1.4 billion, thus protecting cash flow. We shared the target with you on our Q1 call, as our COVID response plan started to show it would work with the Producto Minimo, or lifeline service, protecting our customer base, our reputation and our cash flow; with the teams on the job still selling and providing service; with the mobility restrictions easing off; and the outlook improving, we kept the brakes on the OpEx, but we accelerated the CapEx. Tim will give you details on the effect on operating cash flow of this smart and flexible CapEx management approach. But the key messages here is that we reached $1.5 billion of operating cash flow, well above the $1.5 billion [ph] target as a result of our ability to keep a flexible and prudent management approach throughout the year.
Earlier this year, we also communicated our decision to focus all excess cash flow to reduce net debt as the most value-creating use of our excess capital. We managed to reduce our net debt by $0.5 billion in the year. So we had to adjust early on in the year to the pandemic. When we take stock now of the past year, we achieved all of the key goals that we set out in the onset of COVID and have communicated to you. We protected our market share. And in some countries, we increased it. We actually grew, and very substantially so, our customer base in both mobile and cable in the context of a year of the pandemic. We continued to invest and modernize our networks, deploying new 700 megahertz and AWS networks in Colombia and El Salvador. We sustained and actually grew our operating cash flow in dollar terms, and we materially reduced net debt. And yet, as I've said to the team often and repeatedly during the crisis, the true lasting measure of our performance and success would be not just our financial and commercial success but rather, and much more importantly, whether our customers and communities would deem Tigo to have been there for them during these troubled times.
So we focused harder than ever before on all of our stakeholders in 2020. For our investors, we delivered with strong and almost record net adds, continued investment, receiving operating cash flow and reduced net debt. For our customers and our communities, we kept our operations up and running 24/7, adding capacity and with no glitches. And we made it easier for them to interact with us digitally at a time of social distancing. Because of this, we saw our NPS scores increase significantly in the second half, ending up 13% year-on-year. And we kept our promise not to disconnect any customers in financial hardship by rolling out lifeline services or Producto Minimo.
Please note, that in the peak of the pandemic, we had over 750,000 households on the lifeline service; that was the peak. And the number of unique benefited families at some point or another over the length of the pandemic far exceeds that number. We also zero-rated government educational and informational services, and we launched a new program called Maestr@s Conectad@s to train teachers on how to use technology tools in the digital classroom. We trained 137,000 teachers, let me repeat that number, 137,000 teachers, that's a stunning number that we're very proud of. And it's making a difference in our communities. And to our 21,000 employees, to them, we made a commitment not to do any layoffs or furloughs and to protect the income of our commission-based sales staff, and we did this without taking any government money.
We paid additional hazard pay to our frontline workers who kept the networks running, and they responded by being there when our customers needed them. And the results are clear in terms of customer net adds and NPS scores and simply respect and love for our brand. We launched an award-winning campaign called Tigo heroes to recognize amazing work of our frontline workers. I want to thank them all publicly again here today for an amazing job, well done. And our customers are very pleased. Our workforce engagement went actually very significantly up during the pandemic, and our efforts to create a great place to work were recognized. We ranked number 13 among the top 25 multinationals to work for in Latin America this past year, our highest ranking ever, and Tigo was the only telco in that group. Indeed, this year, it was about a lot more than hitting our OCF project for the year, which we did and exceedingly so. It was about significant progress in building a stronger and more sustainable business for the future. And this translated into some solid ESG scores this year, as you can see on Slide 12.
Across a host of these rankings, we consistently scored above average, and often well above average, which is not a small task as we compare ourselves with telcos and other companies in far more developed companies -- economies, I'm sorry. I just mentioned our work with teachers, and I am proud that we worked closely with the government of Paraguay to use our Tigo Money product to disburse COVID-related subsidies to over 0.5 million families last year. And we will work with the government of Honduras this year in a very similar program. This is a great example of how our services drive financial inclusion in the region. We also refinanced our revolving credit facility, and we incorporated ESG targets into our facility. The foundation for all of these remains our strong governance framework. Plus we do know that we still have more to do to improve our outperformance and our reporting.
And we are totally committed to continue to so because we do all of these things with a clear sense of purpose, as you can see on Slide 13. This purpose guides each and every one of our 21,000 employees now more than ever during these challenging times. And I'm hard to say that each and every one of those 21,000 employees knows his purpose at heart.
Now, let me turn it over to Tim to go over the financials.
Thank you, Mauricio. So I'm going take a quick look at how 2020 developed for us and then how we performed in Q4 and the resulting full year performance. I'll also take a quick look at the balance sheet position. And turning to Slide 15. And this is just our usual bridge from the reported IFRS numbers to the underlying numbers for the LatAm service revenue and EBITDA, which better reflects the way we manage the group. And so these are the metrics that we're talking about.
So, let me go to Slide 16. And in -- the next 2 slides shows the story of 2020 on our LatAm business. And you can see the very significant impact of COVID-19 in Q2. This was largely driven by a big reduction in prepaid revenues caused by severe mobility restrictions and compounded by collection issues in the subscription business. As we and our customers adapted to this reality, we saw an improvement in Q3 and that has continued into Q4. And in fact, Q4 service revenues are about back to where they were in Q1, which is a great achievement. Now remember, Q4 is typically our best quarter of the year. So we're not quite back to pre-COVID levels just yet. But kind of -- and whilst the macro environment has not worsened, there are pockets like Panama, which continued to see a weak economy. And these are things we'll keep a very close eye on.
Having said that, the actions we've taken mean that we saw a very meaningful pickup in EBITDA to the point where we were up on last year organically. Now I should point out, there were some bad debt provisions. They did vary a lot from quarter-to-quarter this year and accentuated the decline in Q2 and helped us in the second half as our collections improved. But still, the solid improvement in collections have flowed through to EBITDA and flowed through to cash flow and consequently, our investment decisions, which are on Slide 17. So what we're showing on this slide is how our decision-making evolved on CapEx and how that flowed through to cash flow.
On the left-hand side is our CapEx, and we reacted quickly to the onset of COVID-19. And in Q1, we told you we were planning to reduce our CapEx by $200 million to $300 million. However, we do not take static decisions, and we're constantly looking at the market and the opportunities and adjusting to the environment as we see it. And as we saw the resilience of our business, we unleashed a further $100 million of additional CapEx in Q3 and then an extra $100 million in Q4. So in fact, we ended 2020 with a CapEx spend of just under $1 billion for the full year, which is only around $100 million lower than our original plan. And you can see why on the right-hand side of this slide, the buildup of cash flow through the year.
To remind you, we'd focused on maintaining that operating cash flow of $1.4 billion. And as we saw the operating resilience translate into cash flow, we were able to allocate more to investment while still maintaining delivery of that operating cash flow. In fact, we ended at $1.5 billion. And that allowed us to reduce our debt materially, which I think is a very significant achievement given the difficult operating environment in 2020.
So with that, let me look at Q4 and the full year operating performance for LatAm, starting on Slide 18. And here, you can see our service revenue drivers for both Q4 and the full year. Now for the quarter, we were almost flat year-on-year against what was a good fourth quarter in 2019. Not only is this a very solid result, but this allows us -- it allowed us to close the year down only 2.5%, which is significantly better than we had imagined back in April. Clearly, the story has been recovery of the mobile business. You can see that in Q4, we were basically flat year-on-year compared to being down 4.3% for the year as a whole. And in particular, the prepaid business has come back very strongly, and growth has been positive in each of the last 3 months of the year. The home business has continued to deliver positive revenue growth as it has every quarter of 2020. We closed the year up 3.8%, slightly better than the 3.3% for the full year, so momentum there.
Now, recall that we took a number of steps this year to support our customers. That did impact our revenue growth in home, but we expect these actions to drive further growth in the future. And we're starting to see a reacceleration now. I think final point on this slide is B2B continues to be more challenged. But even here, performance has been better than the numbers might suggest. You'll recall 2019, we had a very strong Q4 because of a large election contract in Colombia, which did not repeat in 2020.
So, if I drill down further on Slide 19 to service revenue by country. The first thing to say is that every country performed better in Q4 than they did in Q3. And the standout performances are El Salvador, which delivered a 9% year-on-year growth. It was a little flattened by a one-off, but take nothing away from a very, very good performance. Guatemala once again delivered superb performance, up 6.6% and again, driven by the mobile business, particularly prepaid, which goes from strength to strength. But also, this was one of the best-performing home businesses we had in 2020. Elsewhere, Bolivia, Paraguay and Honduras continued to recover, improving sequentially, again, on mobile. And in Colombia, but for the one-off I've just mentioned, the performance would have been positive.
Now finally, Panama is probably the one market where the macro has been worse than expected. But that's having a negative impact on B2B. That said, the consumer business held up very, very well, as Mauricio has said. And we remain very pleased with the progress we're making in integrating the businesses there.
Let me turn to EBITDA on Slide 20. Clearly, the improved performance in mobile has filtered through to EBITDA, as I mentioned earlier. We did, however, book considerably lower bad debt charges in the quarter, reflecting the continued improvement in our collections. And if we translate that into a full year impact, in the lower part of the slide, we were down 3.7% organically. And whilst the bad debt in Q4 was lower, for the year as a whole, we did add an extra $22 million of bad debt charge. So despite that, our margins have remained remarkably strong, ending the year just 10 basis points down at 40.4%.
And then, looking more closely at the EBITDA by country on Slide 21. The improved performance filtered down to EBITDA in most countries. Guatemala was almost 15% up organically, once again, a superb performance. El Salvador produced almost double-digit growth, again, a little bit of one-off but really a strong underlying performance. And again, generally, we saw solid improved performance across the board. Bolivia rebounded, flattened a little bit by lower bad debt charges. Colombia, whilst down considerably in dollar terms, most of this was FX-related. Organically, they were down 2.8%. And if it hadn't been for that one-off, we would have been in positive territory.
So moving to Slide 22. As you've heard, we achieved just under $1.5 billion of OCF, ahead of our target. And this slide gives you a sense of how we got there. And despite the reduction in service revenue of over USD 150 million, we were able to compensate that through cost-saving reductions, which exceeded $100 million and, to a lesser extent, lower CapEx. And this flowed through to debt reduction, which you can see on Slide 23. Strong underlying equity free cash flow added to equity investment disposals. This drove $541 million reduction in net debt, and that's despite higher levels of spectrum purchases than we've seen in recent years.
I also want to bring to your attention that our partner's shareholder funding in Guatemala is treated as a payable for accounting purposes, and this is flagged as the $157 million payable on this slide. So with that, our proportionate leverage, and that's excluding leases, ended the year at 3.07x. That's a reduction on last quarter. If we add leases to that, we're at 3.2x, again, also a reduction on last quarter. And as you can see, we have been very focused on achieving our leverage targets and on reducing our debt, and we plan to maintain that approach in 2021. And to that end, today, we've announced that we intend to deploy $180 million of our cash balances to reduce more of our U.S. dollar debt.
So with that, let me pass back to Mauricio.
Thank you, Tim. Before we take your questions, let me recap the key messages. First, our customer base is growing very rapidly. Net adds were very strong and at almost record levels in Q4 and for the full year, and we achieved this in the midst of the pandemic. Second, our business continued to recover in Q4. Third, we never stopped investing, and we're already seeing some tangible benefits from this continued investment focus well into January of this year. Fourth, we followed a prudent and flexible approach to managing the business in 2020, and we were able to protect and even grow our cash flow. And fifth, we made a lot of progress towards reducing our net debt, all of which were our key targets for the year as the pandemic hit.
Going forward, we will continue to execute on our organic growth strategy because it's working very, very well. Many of you will recognize the six boxes in the middle of this page. But it is worth repeating perhaps in a different way that our strategy is, first and foremost, network-centric because we believe fundamentally in the power of these digital highways that are building our future throughout Latin America. Second, it is convergence-driven. We aim to provide both fixed and mobile services in all our markets and in an increasingly seamless way to our customers. And we believe this will give us differentiation going forward. Third, we're growing increasingly customer-focused. NPS is now our main internal KPI used for management incentive compensation because we know that we create shareholder value by increasing the number of satisfied customers who become attached to our high-speed data networks. And it's begun to work very, very well on the second part of the year. Fourth, we now have a digital-first customer touch point strategy to enhance the experience of the customer of the future and also to lower our costs. The pandemic has indeed given us a big push forward on this digital journey. Digital collections were up 78% in 2020. Digital reloads are up 106%, and the Tigo Money digital transactions are up 153%.
So with this, finally, let's take a look at our outlook for 2021. As you've heard so far on this call, we're very pleased with our results for 2020. The pace of recovery in the business is very positive, and we think we're very well prepared going into 2021 with subscriber growth, resilient cash flow and reduced net debt. But we're cognizant that the reality still remains that we're still in the midst of a global pandemic, and the health crisis is still at emergency levels in our countries. The second wave is hitting most of our markets. And some countries like Colombia, Panama and Bolivia have been implementing new, albeit more limited, restrictions. And it will take a while, we know that, for a majority of our citizens in our markets to be vaccinated and also for economies to recover. And we still do not really fully know how badly they have been hurt. So we don't think we're out of the woods yet, not yet. 2021 is still highly uncertain. So in 2021, we will use the same flexible and prudent and successful management approach that worked so very well for us in 2020. We will indeed be prudent and flexible as we were in 2020. And we will continue to invest for the long term but now with a renewed and more confident investment focus, as we see a strong and renewed long-term outlook for our business.
Broadband is very, very resilient, and its demand is growing in our markets. That means that we will invest more in the business with more confidence, and yet we will commit, again, to a minimum operating cash flow level of $1.4 billion for 2021. And our priorities will continue to be investing in the business and further reducing net debt rather than immediately resuming dividends or buybacks. As I said earlier, we believe that these are the best uses for our cash flow at this time.
With that, we're ready for your questions.
[Operator Instructions] The first question is from Stefan Gauffin of DNB. Please go ahead.
I would like to start where you finished. It seems like you are quite cautious on your outlook comments and the target to deliver above $1.4 billion in operating cash flow. You end 2020 with improved momentum and a very solid subscriber intake on the mobile side. And in especially Q2 and Q3, you will face easy comps on both service revenue and EBITDA. And I understand there's great uncertainty, but it seems like you have accounted for sort of a worst-case scenario with new lockdowns across your footprint. Can you just please elaborate a little bit more on your thinking around 2021 and this target that you put out? And also, do you foresee further expansion of your CapEx plan in that?
So listen, I think, Stefan, you've obviously picked up, as I think everyone has picked up, in this sort of dual mode that we are -- if you will, we're a little of a dual mind here. On the one hand, we're actually very optimistic and we think we are definitely on the right track. We've finished very strong. And as I said earlier, January has continued to be very strong. So for the short term, meaning 2021, we're actually optimistic. But you need to bear in mind 2 things. One, we also want to be very cautious, and we don't want to get ahead of ourselves. And deliver is better than promise. And there's so much uncertainty out there, for the reasons that I mentioned earlier, that we would rather just be very, very cautious and focus on deliver rather than promising with such an uncertain outlook. And you know that there's still a health crisis in our economies. There's still the potential for renewed pandemic waves.
And also, the vaccines are going to take longer than they will in the developed countries. So we want to be very cautious. At the same time, the reason why we are putting out this sustained $1.4 billion operating cash flow target is because we want to invest in the business. And that's consistent with our very bullish, very positive and optimistic outlook for the long term that we're very happy to strongly reiterate because we've seen nothing more than broadband become more and more relevant in our marketplaces. And because of that, we want to have the ability to prudently invest in the business. That means we want to continue to invest adding mobile sites. We're adding, successfully so, capacity and coverage in our markets. And we want to continue to do that to expand our 4G coverage in the year to almost 80% of the total population in our markets with LTE expansions in Guatemala, Panama, Paraguay, Bolivia. And we also want to continue to modernize our networks because it's working. The subscribers are quite frankly loving it, particularly in Colombia. And we also want to invest in cable because we see continued growing demand.
As I said on the call, we're now at the same run rate in Q4 that we were before the pandemic, at 400,000 per year. So we want to have all the flexibility to continue to invest. So when you combine the 2 things, our very bullish outlook for the long term with our desire to invest for that and then the possibility that the recovery may be dampened or take longer, then we need to strike a very cautious tone for 2021 and, at the same time, give ourselves the ability to invest for the long term. So when you put all that, what we're basically saying to you is, guys, we're going to guarantee $1.4 billion. Think of it as a floor. We're going to guarantee, in dollar terms, $1.4 billion. And let us just take it from there and give us the flexibility to manage on the upside like we did in 2020. I hope that gives you a full vision of why we're doing this and why we think this is a smart approach, Stefan.
The next question is from Peter Nielsen of ABG. Please go ahead.
I'd like to address two of your good markets. One, Guatemala has, of course, been strong throughout this year, which I think is remarkable and even stronger in Q4. Do you see any changes to that coming into this year? And also, just on Colombia, where Tim highlighted the underlying positive trends adjusted for the one-offs in Q4 last year, we obviously have spoken at length before about the new entrant, etcetera. Do you think Colombia can continue to show underlying positive growth this year? So just focusing on these two markets, please.
Thank you, Peter. Yes, these are part of the reason why our performance is so good over the last few months is because these markets are performing very well for us. On Guatemala, in particular, indeed, we had record mobile net adds this year, just north of 0.5 million, 5% year-on-year. And now we have more than 1 million mobile subs. And we've also been growing our home customer base, some 90,000 net adds for the year. And indeed, we're having consecutive quarter of growth in both service revenue and EBITDA. We've invested in this business, Peter, significantly. So we bought additional spectrum. We've put the carriers on that spectrum. We've improved that network significantly. And as a result of that, we're seeing strong performance. Now going forward, this remains a healthy two player market in which behavior has been very rational. And at the point in time in which we've seen competition kick up, we reacted very, very well and very smartly. So I remain very positive, very, very positive on Guatemala, without a doubt.
And the same is true on Colombia, and you've seen the numbers in Colombia really start to show the effects of the investment that we've put into that marketplace. We added a record 878,000 mobile net adds in the quarter. We now have more than 10 million mobile users there. So we crossed a point mark there. And we added 33,000 HFC customers in the quarter. And our results, good as they are, are a little distorted because we didn't have some of the government contracts in Q4 that we used to have before. But despite that, they're very, very strong. And the reason I'm continuing to be bullish, Peter, on Colombia is more fundamental than just a quarter. We've been now for years building fiber cable. We now have the second largest fiber cable network in the country. We got those low frequency spectrum that we never had before, and we've built it pretty fast and with total conviction. So we're very ready with those two things and the hard work that our team has put in place to position ourselves for growth in a market in which, in mobile, despite the new entrant and maybe even because of the new entrant, we stand ourselves to also be a challenger.
I keep reminding everyone internally and externally that we only have 15% market share in Colombia, and we now have A&P network. We're the largest holder of 700 megahertz spectrum with an empty network. So we're not playing the legacy game or we don't have a congested network that basically makes us an incumbent player. We have the ability to play here as a challenger. And we are doing exactly that, ahead of the entry of WOM partially into the market later this year, which, of course, is another reason for us to be a little bit cautious. And we have a fixed network that allows us to be ready for defending our position with FMC solutions. So the answer to you is, yes, we expect and are very bullish that Colombia will continue to deliver for us because we've turned ourselves now into a challenger in mobile with all the goods in the toolbox to play in that market.
Mauricio, if I could just -- and maybe to expand that a little bit because it wasn't just Colombia and Guatemala, Peter. I mean, every one of our businesses performed better in Q4 than it did in Q3. And even Panama, which I flagged that, which is sort of lagging a little bit than some of the others, they are almost back to where they were in Q1. So we're hard taskmasters. I think the businesses generally have all made a lot of strides in the year, particularly in Q4. But as Mauricio has said, we remain cautious about the outlook.
And Tim brings a really good point, Peter, which is worth noting, a really, really good point. I mean, Panama looks difficult because GDP is down 20% in 2020. It's just the harshest of the economies that has been hit. But within that, we have continued to grow both our mobile and our cable subscriber base. And those will stay on with us into the future. We actually added for the year almost 10,000 net adds on cable when we have a very strong and now very well-defended cable position. And in mobile, our subscriber base grew by 11%, 120,000 mobile net adds, which only tells you the brand name is very strong. Our ability to cross-sell is very strong, and we have upside on our mobile position there. So just look through the economic downturn in Panama and look into the future, and you see how strong the business we built there.
The next question is from Lena Osterberg of Carnegie. Please go ahead.
I have a question relating to Colombia phenomenal intake and, as you say, much related to the network and spectrum position being significantly improved. But can you maybe just say a little bit about what drove the intake, if it's heavy discounts in the market or just demand so we know if we should expect similar ARPU levels or if the ARPU should come down with this massive intake?
It's neither actually, Lena. It's effectively increased coverage as we've expanded our network. The minute you put out new towers in new areas, you pick up traffic and you pick up users. And it's also increased indoor penetration because now our new network further penetrates indoors. And as a result of that, you pick up traffic and users in areas that you were before that not even available. So it's largely the result of, a, increased coverage, increased indoor penetration; and b, the fact that to go with that better, stronger network, we also, if you recall, increased significantly our distribution network, our commercial distribution network. So it's the result of basically increased reach.
Okay. So with the exception of the new entrants, you should have continued very strong growth in Colombia based on intake?
Correct.
The next question is from Johanna Ahlqvist of SEB. Please go ahead.
Two questions, if I may. So looking into next year, we talked about Guatemala, Colombia and so forth. I'm just wondering, I mean, if we won't have a second wave, and we have seen that vaccine is getting to countries and so forth, things are not getting worse, do you expect to see a macroeconomic impacts from -- obviously, the GDP development in many of your countries will be tough, even if the pandemic stops here, and it will take time to recover. So do you expect to -- that the consumers will have a tough time in those countries even after the pandemic? And that's the first question. And then the second question is a detailed one for you, Tim. You're paying off some U.S. dollar debt. I'm just wondering, do you have the expectations for the financial interest payments in 2021? And also, if you can comment on the tax expectations for '21.
So I'll take the first little bit and then hand it over to Tim. As you point out, Johanna, and I think Stefan was also mentioning, yes, there's a -- we get it. There's a bit of a dichotomy here. We almost sound like we have split personality. The business is doing extremely well. And if you were to read, as I'm sure you have, the GDP projections from most sources for our markets into 2021, they're all forecasting a very strong comeback sometime in 2021. We just said -- as I said to the question from Stefan, we just said we don't think it would do you any good and we don't do anyone any good by putting that all into the bank. We'd rather take the prudent and flexible approach, be optimistic, as I am, but be very cautious.
And as I said earlier, it worked really well for us in 2020, and we were able to over deliver. We expect to use that very same approach into 2021. And in order to do that, we need to take a little bit of an exception to the rosy projections you see from macroeconomists for our economies, be a little bit more conscious that it may take longer for the pandemic to really get out of our countries and play this dual personality issue just to be optimistic but cautious at the same time. Over to you, Tim, by the way.
Yes. Okay. I think on the tax side, we expect taxes to be broadly where they were in 2020, maybe a little bit higher because we'd expect to improve our profitability there. And we'll probably see a little bit more funds flow. Hence, there will be some higher withholding taxes. And our interest bill, probably the best thing to do is look at Q4 and annualize it. I think that is probably the closest you're going to get. Obviously, we're trying to manage the interest bill now. We've been bringing down our average cost of debt. It was sort of 5.6% in the year to the end of December, which compared to about 6.2% a year ago. So interest rate's coming down. And the reason why we're paying down some more debt today is that we expected to end the year with less cash than we actually have ended the year with.
So, we were actually just using some of that surplus cash to bring down our gross to net. Obviously, it doesn't change the net position, but it just brings away that negative carry. So I hope that gives you a good sort of indicator, Johanna.
The next question is from Marcelo Santos of JPMorgan. Please go ahead.
Hi, good morning. Thanks for taking my question. I have actually 2 questions. The first is, if you could comment a bit on El Salvador stellar performance, even if you remove the one-off on the revenue side. I mean, you mentioned that you had AWS spectrum there. So just a little bit more color on what made this big turnaround on the revenues. And the second question is on the bad debt. I think Tim commented on his prepared remarks that you had this bad debt release in the fourth quarter. So you provisioned a lot in the second quarter, and then the second half of the year benefited. How are we -- how is Tigo on the bad debt coverage? Do you think you're already normalized? Or there is more bad debt to release in the coming quarters?
So, I'll -- Tim, I'll ask you to answer both the bad debt and then the so-called one-off, which is not really a one-off on El Salvador. But I want to give you just a big picture answer on El Salvador to make things very clear. There's 2 things going on in El Salvador. And both of them are preceded by a promise, I think, I made very, very publicly 2 to 2.5 years ago, which is that we would fix El Salvador, and we will fix it very, very well. If you recall 2.5 years ago, it was our problem child, and we made a promise at that point in time that we will focus and fix it. And we have done 2 things. We completely changed the management team. And if they're on the call, I want to give them here kudos because we have a great leader in El Salvador and someone who's been able now to turn the business around the right way, motivating his team, focusing on creating a great brand name, focusing on the customer and just doing the things that build long-term value.
And with that credibility, then we did the second thing that mattered in the long term, and you're seeing the results now, which is we invested. We put new spectrum, gave ourselves then immediately more and more investment to build out that network quickly. And the team locally did a fantastic job. And now we have network superiority in El Salvador. Customers are happy, and we are back and able to defend our number one position in that country.
Over to you, Tim.
Great. Okay. And yes, so the bad debt, a little bit complicated in Q4. And bear in mind, under IFRS 9, it's very formula-driven these days. But you'll remember, I said in Q2, we took a very big charge on bad debt because we were not getting collections at the time. So we had to take a very large charge. Now kind of we put an awful lot of effort into collections. I can't tell you how much effort the guys put into that. And actually, they came back very, very well in the second half of the year. So our Q3 and our Q4 bad debt rates, bad debt charges were much lower than normal. So in Q4, I think we were something like about $20 million lower than we would normally expect to book. But to put that in context, the overall charge for the full year, it was actually $20 million higher than we had a year ago. All that is very interesting, and it explains a little bit of the volatility in the year. But if you're asking me about going forward, I think we are back to normal going forward.
So, I wouldn't expect the level of volatility going forward. I think our collection rates are pretty much back to where they were in almost every business and every segment. And that will mean that the algorithm, the metrics that we'll work, the bad debt charge will sort of return to sort of steady state, and I expect that for Q1. The position in El Salvador, good performance in Q4. I mean, the reason I called out this deferred revenue adjustment we made was because Q4 numbers were flat as a consequence of that. And I don't want you to kind of expect 10% sort of EBITDA growth every quarter. Having said that, I don't want to take anything away. This is a normal kind of adjustment. We always -- in all businesses, we look at the deferred revenue accounts at the end of the year and we make adjustments. And so if you look at it on an annual basis, it's really no different and that is just a normalized rate. So, the full year performance is a better indicator in El Salvador than the actual Q4 performance.
Having said that, and after many difficult years in El Salvador, I echo Mauricio's sentiment. The team has done a great job, and we really are doing very, very well. Basically investment-driven mobile delivery is taking place there.
I mean, just if you look at the subscriber counts, we added just in the fourth quarter, when the benefits of the AWS deployment really came forth, we added 150,000 net adds of mobile, which for a business such as El Salvador is really, really strong. And that's just execution and investment on that network. It's the same trend that you see in Colombia, and kudos to the team there in Colombia as well. As I said earlier to Lena's question, it's increased coverage on the back of delivering a very strong network that now gives us network superiority and great execution.
The next question is from Bill Miller of MAI. Please go ahead.
I'm curious if you look out 3 years and would just give us a slight view of where you think your revenues and earnings will come from on a 3-year basis, cable versus B2B versus financial transactions, whatever it's going to be. But that would be a nice outlook for us.
Thank you, Bill. That allows me to perhaps reiterate something that I think is the most important thing of our call today, which is both how resilient our business really is and how strong and forcibly we want to reiterate our long-term outlook. I realize that we don't have a crystal ball for 2021, and we're trying not to put ourselves out on a limb there. But we're extremely, extremely happy to have had the opportunity to finally demonstrate to the investment community at large that contrary to perhaps opinions that may be out there, our business, regardless of where we operate, is extremely resilient. And we've demonstrated that this year with subscribers that grow significantly at almost record levels in a year of pandemic, both in cable and in mobile, and with a cash flow that grew in dollar terms in a year of the pandemic and that we know how to manage. So that's a very important point for us in 2020, just how resilient our business is despite where we operate and despite a year of a pandemic.
And number two, our outlook going forward, we could not be more bullish. We are more bullish than we have ever been. So if we are of split personality for 2021, we are of a single mind for the long-term outlook, which we're happy to reiterate and bullishly so for a number of reasons. And your question allows me to point those out, Bill. Number one, broadband is more relevant than it has ever been in our markets, and we see that in spades. And to your question, we're going to be in the business of delivering broadband, fixed and mobile, with a combination of those that will increasingly be seamless to the consumer. But everything, everything will rely on that fiber network that we're building, both mobile and cable. And we are more bullish now than ever we have been that we're becoming a cable-centric, network-centric, broadband-centric company.
Two, we're very bullish because we have not only defended our market positions this year, we've actually improved them. And we come out of this year with a significantly strengthened market positions in just about every country, Bolivia, Guatemala, El Salvador, Colombia and Nicaragua. We have stronger market positions than we did going in and industry structures that are improving. Now you don't see that quarter-over-quarter. But over the last 2 years, you've seen those industry structures improve. And I believe they will continue to improve, of course, with the exception of Colombia, in which there's going to have to be, at some point, a shake-up of everything. And fourth, because we have continued to invest and are continuing to invest. We now have network advantage and superiority, and our subscriber counts are demonstrating all of these together.
We added record subscribers in the fourth quarter in mobile. And on fixed, we're back to our run rate of almost 400,000 net adds on a yearly basis because we added 100,000 in Q4. When you annualize that, that's 400,000 for the year. So to your question, Bill, this is going to be a business that is cable-centric, adding broadband subscribers with tons of mobile on top of it and a growing MFS business that I don't want to make any promises on because it's being built as we speak.
That's great. Terrific. Thank you.
The next question is a follow-up from Lena Osterberg of Carnegie. Please go ahead.
Yes. I just wanted to ask, out of the provisions you took for bad debt in the first half of the year, how much of that did you release in Q3 and Q4?
Tim, you do know that you're going to have to bail me out here.
Yes. Look, Lena, the bad debt charge for the whole year was $20 million higher than we had in 2019. So in a sense, the whole year, we had a much bigger bad debt charge than we would normally see. Now that said, it was heavily skewed to the first half of the year, particularly Q2. So when we get to the Q4 numbers, our Q4 numbers were -- I think it's around about $20 million lower in bad debt charge for the quarter than we would typically have seen or we saw, for instance, in Q4 2019. And so I haven't got the exact numbers from the top of my head. Those are the key metrics. For the full year, we took a $20 million extra charge. And in Q4, coincidentally, it was $20 million lower than we took in Q4 '19. And that's because it was...
The provision that you had in Bolivia -- sorry, the release, how much was that?
I can't remember exactly what the Bolivia number. It was -- I mean, we took big charges in El Salvador and Bolivia in Q2. I'm sure Michel can sort of follow up with you later on for the -- more specifics. But it was -- yes, it sort of flattened it, but I don't want to take anything away. I think it was -- Bolivia actually has rebounded very, very well.
It was an exceptional rebound. Does that just -- doing the modeling into next year, just trying to understand what sort of the underlying trend so that we don't end up wrong going into '21.
Well, Lena, perhaps the thing to comment on Bolivia is that we've seen, and we're confident now, that we have come out of effectively 2 years or 2.5 years of combined crisis. First, of course, all the political crisis and then that combined with the COVID crisis. The political front now seems quite stable with quite a bit of support for the current president, who's turned out to be rational and very friendly towards investment as he tries to stabilize the business going forward. So we're now a lot more comfortable with the political and the macro outlook for Bolivia. And as a result of that, we're happy, as you have seen us, to continue to invest and then grow in that country.
Okay, perfect. I think I understand roughly where I should be. I might look into next year.
I think Michel and Sarah will be able to help you with more detail. But essentially, our expectation for '21 is that bad debt will be back to a normalized level.
The next question is from [indiscernible] of Federated Hermes.
I just wanted to get a bit more color on the Africa business, Tanzania and Zanzibar, in terms of kind of what your outlook and commitment is to that business. And also, just an update on kind of -- understand there's meant to be an IPO regulatory requirement. Just understanding where we are with that in terms of the process and the timing. And also, the money raised from the IPO, what would that be used for? Would that be used for repaying debt?
Sure. Tim, do you want to give it a go?
Yes. Kind of unlike the LatAm business, the Tanzania business hasn't really been COVID-affected. There's been a lot of other things happening in the market relating to registration and reregistration, etcetera. But net-net, the business sort of recovered. It was broadly flat on Q4 '19. It is a business. As all of Africa is, it's nonstrategic to us, but kind of we have to find the right moment on that. And in terms of the IPO, it is mandated by the government. And therefore, we are moving towards that IPO. There are some kind of -- obviously, there are plenty of regulatory discussions on something like that. I can't particularly go into the details of them, but we're continuing with that regulatory process. And the use of proceeds from the IPO will be essentially for investment funds for the business, the Tanzania business.
Okay, that's excellent color. So in terms of kind of in the short and medium term, Millicom are kind of committed to the African business, i.e., the Tanzanian business. And as of when the time's right, you'll look to kind of exit. Is that correct? Is my understanding correct on that?
Yes. Look, I mean, for the time being, it's owned by Millicom. It did $125 million of EBITDA last year. It's got a huge customer base, a great MFS business. But kind of 96% of our revenues and business are in Latin America; so that's really where we see our strategic future.
Okay. Thank you.
Thank you.
Yeah. Thank you.
[Indiscernible].
Yes. well, thank you -- no, I was going to finish up, operator. Thank you. I wanted to thank everybody for joining us today. As you can see quite clearly, we've weathered the storm, and we've weathered it quite well. We think we got our sea legs really, really strong now. So we're up on deck. We're manning the ship. The storm has not fully subsided yet. And as a result of that, we want to be cautious till we're out completely from the storm. But on a long-term view, and hopefully, even this year, if things turn out the way we want them, not the way we're preparing for, then we're going to have a very, very bright future going forward. We just want to be able to invest in the business to make sure that that bright future that we see ahead happens later this year and certainly, after the pandemic is behind us.
Thank you for joining us today, and thank you for your support.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.