BUENOS AIRES, Brazil, May 8 /PRNewswire-FirstCall/ -- Telecom
Argentina (NYSE: TEO; BASE: TECO2), one of Argentina's leading
telecommunications groups, announced today a Net Income of P$329
million for the first quarter ended March 31, 2009 or +21% when
compared to same period of the previous year. -- Consolidated Net
Revenues amounted to P$2,829 million (+14% vs. 1Q08): Mobile
business in Argentina 16% vs. 1Q08; Internet +49% vs. 1Q08. --
Mobile subscribers: 15,0 million (+19% vs. 1Q08); Broadband
subscribers: 1.1 million (+27% vs. 1Q08); Fixed lines in service:
4.3 million (+2% vs. 1Q08). -- Operating Profit Before Depreciation
and Amortization ("OPBDA") reached $917 million (+4% vs. 1Q08),
32.4% of Net Revenues. Growth was fueled by mobile services in
Argentina. -- Operating Profit amounted to P$625 million (+17% vs.
1Q08), 22% of Net Revenues. -- Net Income reached P$329 million
(+21% vs. 1Q08). -- Investments (excluding materials) totaled P$234
million. -- Net Financial Debt (before NPV effect) reached P$562
million (-P$1,104 million vs. 1Q08). Net Financial Debt to OPBDA
ratio declined from 0.5x as of the end of March 2008 to 0.2x as of
the end of March 2009. As of March 31 2009 2008 $ % Consolidated
Net Revenues (in MM P$) 2,829 2,480 349 14% Voice, Data &
Internet 979 863 116 13% Mobile 1,850 1,617 233 14% Operating
Profit before D&A (in MM P$) 917 879 38 4% Operating Profit (in
MM P$) 625 534 91 17% Net Income (in MM P$) 329 272 57 21%
Shareholder's equity (in MM P$) 4,353 3,328 1,025 31% Net Financial
Debt - Before NPV effect (in MM P$) 562 1,666 (1,104) -66% CAPEX
(in MM P$) 234 248 (14) -6% Lines in service (Fixed lines -in
thousands) 4,306 4,224 81 2% Mobile customers (in thousands) 15,002
12,575 2,427 19% Personal (Argentina) 13,171 10,882 2,289 21%
Nucleo (Paraguay) 1,831 1,693 138 8% Broadband customers (in
thousands) 1,068 841 228 27% During 1Q09, Consolidated Net Revenues
increased by 14% (+P$349 million vs. 1Q08) to P$2,829 million,
mainly fueled by the Mobile and Broadband businesses. Moreover,
operating profit increased by 17% (+P$91 million vs. 1Q08) to P$625
million. Consolidated Operating Revenues Fixed Telephony (Voice,
Data Transmission & Internet) During the first quarter of 2009,
revenues generated by these services amounted to P$979 million,
+13% vs. 1Q08, where Internet revenues have grown the most in
relative terms (+49% vs. 1Q08). Voice Total Revenues for this
service reached P$684 million in 1Q09 (+5% vs. 1Q08). The results
of this line of business are still affected by frozen tariffs of
regulated services. Monthly Charges and Supplementary Services
increased by P$11 million, or 6% vs. 1Q08, to P$207 million, as a
consequence of a higher number of lines in service (+2%), which
reached more than 4.3 million lines, and 14% increase in
supplementary services. Revenues generated by traffic (Local
Measured Service, Domestic Long Distance and International
Telephony) totaled P$307 million, an increase of 5% vs. 1Q08, as a
consequence of a slight decrease in volume in local traffic (-6%
vs. 1Q08) and in national long distance traffic (-5% vs. 1Q08)
affected by the mobile substitution. Otherwise, international
traffic continued growing (+3% vs. 1Q08). Interconnection revenues
amounted to P$109 million (+16% vs. 1Q08), mainly as a consequence
of traffic originated in cellular lines but transported by and
terminated in the Company's fixed-line network. Other revenues
reached P$61 million (-10% vs. 1Q08). This evolution is principally
the consequence of a decrease in Public Telephony revenues (-P$8
million or -31% vs. 1Q08). Data Transmission and Internet Data
transmission revenues amounted to P$60 million (+11% vs. 1Q08),
generated by the offering of new solutions to the corporate market
geared towards addressing internal necessities related to
infrastructure. This has enhanced its position as an integrated
provider of innovative ICT solutions (connectivity, housing and
hosting). Revenues related to Internet reached P$235 million (+77
million or 49% vs. 1Q08), mainly due to the substantial expansion
of broadband service, driven by better network coverage, commercial
promotions and innovation of the service portfolio. As of March 31,
2009, Telecom reached 1.1 million ADSL customers (+27% vs. 1Q08).
Lines with these types of connections represent approximately 25%
of Telecom's fixed-lines in service. Data Transmission and Internet
both increased their contribution to net consolidated revenues
reaching 10% participation and representing 30% of the fixed
telephony segment revenues. Mobile Services During the quarter,
clients have significantly increased reaching 15 million
subscribers as of the end of March 2009 representing an increase of
0.6 million since December 2008 and 2.4 million since March 2008.
During 1Q09, net revenues reached P$1,850 million (+14% vs. 1Q08).
Telecom Personal in Argentina As of the end of March 2009, Personal
reached 13.2 million subscribers in Argentina (+2.3 million, or
+21% vs. 1Q08) that allowed the Company to enhance its market
position and strengthens its potential for future revenues growth.
The strong increase in net additions (+0.6 million subscribers
since December 2008) was sustained (vs. +0.2 million net additions
in 1Q08). Approximately 67% of the overall subscriber base is
prepaid and 33% is postpaid (including "cuentas claras" plans).
Revenues totaled P$1,757 million (+P$247 million or +16% vs. 1Q08),
sustained by the increase in overall voice traffic minutes by 22%
vs. 1Q08 and in value-added services (VAS). The VAS increased 28%
vs. 1Q08 and represented 31% of service revenues that reached
P$1,596 million (17% vs. 1Q08). In particular, SMS traffic rose to
a monthly average of 990 million messages in 1Q08 to 2,470 million
(+149% vs. 1Q08) preserving service quality levels. As a
consequence of traffic and the higher usage of value-added
services, the Average Monthly Revenue per User ("ARPU") was stable
around P$40 in 1Q09, the same level as 1Q08. Personal´s
contribution to consolidated margins has improved since 1Q08
despite its commercial activity centered in the expansion of its
subscriber base and the retention efforts to the high-value
segment. Furthermore, the first Mobile WI-FI service with 3G
technology was launched, as well as together with Microsoft and
Gemalto, the SIM Messenger, allowing clients the access to Windows
Live Messenger from their handsets, independently of which mobile
device or plan they have. All these actions were focused on the
strategy of enabling services to leverage the increase in VAS.
Telecom Personal in Paraguay By the end of March 2009, Nucleo´s
subscriber base reached approximately 1.8 million customers (+8%
vs. 1Q08). Prepaid and Postpaid customers represented 90% and 10%,
respectively. Personal's controlled subsidiary generated revenues
equivalent to P$93 million during 1Q09 (-13% vs. 1Q08). The global
crisis affected the Paraguayan economy, where the lower level of
activity and depreciation of its currency affected Nucleo´s
operations. Consolidated Operating Costs The Cost of Services
Provided, Administrative Expenses and Selling Expenses totaled
P$2,204 million in 1Q09, which represents an increase of P$258
million, or +13%, vs. 1Q08. This increase in costs is a consequence
of the increase in revenues, inflationary effects on the costs
structure, and higher expenses related to the competition in the
Mobile and internet businesses. The cost breakdown is as follows: -
Salaries and Social Security Contributions totaled P$317 million
(+17% vs. 1Q08), affected by increases in salaries agreed in 2008
and social security imposed by law. Regarding personnel, the
decrease in fixed segment (-379 employees vs. 1Q08) was compensated
by the incorporation of 269 employees in the same period in the
mobile segment. The total headcount at the end of 1Q09 reached
15.309 employees. - Taxes reached P$228 million (+15% vs. 1Q08),
influenced mainly by higher rates in turnover taxes and higher
volume of revenues. - Network access costs (includes TLRD, Roaming,
Interconnection, international settlement charges and lease of
circuits) amounted to P$365 million (+14% vs. 1Q08) generated by
higher traffic between mobile operators that accompany the increase
in revenues. - Agents, prepaid card commissions and other
commissions were P$240 million (+14% vs. 1Q08), mainly due to the
increase in commissions paid to commercial agents and card
distribution costs, as a higher volume of revenues was registered.
- Advertising amounted to P$78 million (+7% vs. 1Q08) oriented
towards supporting the commercial activity in mobile services and
Internet, and to strengthen the brand position of the Telecom
Group. - Cost of handsets sold totaled P$263 million (+31% vs.
1Q08) mainly due to an increase in net additions and in the number
of upgraded terminals. - Depreciation of Fixed and Intangible
Assets reached P$292 million (-15% vs. 1Q08). Fixed-line telephony
totaled P$189 million (-2% vs. 1Q08) and mobile services P$103
million (-33% vs. 1Q08), as TDMA technology depreciation charges
ended in March 2008. - Others Costs (includes maintenance,
materials and supplies, fees for services, bad debt expense, cost
of directories publishing, transportation and freight, insurance,
energy, water and others, rental expense and international and
satellite connectivity) totaled P$421 million (+28% vs. 1Q08). This
increase was due to the inflationary effects on related services
and higher contingencies for bad debt expenses. Consolidated
Financial and Holding Results Financial and Holding Results
resulted in a loss of P$94 million, an increase of P$34 million vs.
1Q08. This was due to the loss registered in foreign currency
exchange (+P$82 million vs. 1Q08), compensated to lower net
interest (-P$30 million vs. 1Q08) and the positive effect of
holding results generated by inventories (+P$19 million vs. 1Q08).
Consolidated Net Financial Debt As of March 31, 2009, Net Financial
Debt (Loans before the effect of NPV valuation, minus Cash, Cash
Equivalents and Other credits from derivative Investments for
Notes) amounted to P$562 million, a reduction of P$1,104 million as
compared to March 2008 and P$350 million when compared to December
2008. During 1Q09, Personal purchased a nominal amount of US$8.77
million Series 3 Notes due 2010. Furthermore, during April 2009
Telecom Argentina purchased Notes in an aggregate principal nominal
amount of Euros 18.5 million of Telecom's Series A Euro Notes Due
2014 (equivalent to an outstanding amount of Euros 6.97 million).
The Notes acquired were cancelled according to the terms and
conditions of the Indenture. On April 15, 2009, Telecom Argentina
made, together with the corresponded interest payment, a principal
mandatory payment of Notes in the amount of US$40 million (US$29
million in principal and US$11 million in interests), with the
excess cash as of December 31, 2008. Nucleo has refinanced its
debt, in local currency, with a maturity between 9 months and 2
years. Consolidated Capital Expenditures During 1Q09, the Company
invested P$234 million (excluding materials), in fixed and
intangible assets. This amount was allocated to Voice, Data and
Internet businesses (P$126 million) and mobile services (P$108
million). In relative terms, capex reached 8% of the revenues. Main
capex projects are related to the expansion of broadband services
and to the upgrade of the network for next generation services
(NGN), the improvement of the network (capacity, coverage and 3G),
and the launch of new and innovative value-added services. Other
Initiatives During the period, Telecom Argentina was selected by
"Banco Patagonia" to update is communication services in voice and
data. The solution includes a data net transmission in MPLS to
interconnect four central buildings of the bank, offices and call
center positions. Otherwise, Telecom Argentina continued enhancing
its leader position in the country with world class data center
solutions through the incorporation of an intelligent platform to
improve network security. Recent relevant Matters The Ordinary
Shareholder´s Meeting of Telecom Personal approved last March 31,
2009, a dividend payment of P$730 million. Moreover, the Court of
Appeals in Commercial Matters N°2 resolved to provisionally suspend
the Ordinary and Extraordinary Telecom Argentina Shareholders
meeting scheduled to be held on April 28, 2009. Telecom is the
parent company of a leading telecommunications group in Argentina,
where it offers directly or through its controlled subsidiaries
local and long distance fixed-line telephony, cellular, data
transmission and Internet services, among other services.
Additionally, through a controlled subsidiary, the Telecom Group
offers cellular services in Paraguay. The Company commenced
operations on November 8, 1990, upon the Argentine government's
transfer of the telecommunications system in the northern region of
Argentina. Nortel Inversora S.A. ("Nortel"), which acquired the
majority of the Company from the Argentine government, holds 54.74%
of Telecom's common stock. Nortel is a holding company where the
common stock (approximately 68% of capital stock) is owned by
Sofora Telecomunicaciones S.A. Additionally, Nortel capital stock
is comprised of preferred shares that are held by minority
shareholders. As of March 31, 2009, Telecom had 984,380,978 shares
outstanding. For more information, please contact the Investor
Relations Department: Pedro Insussarry 54-11-4968-3743 Solange
Barthe Dennin 54-11-4968-3752 Evangelina Sanchez 54-11-4968-3718
Ruth Fuhrmann 54-11-4968-4448 Horacio Nicolas del Campo
54-11-4968-6236 Voice Mail: 54-11-4968-3628 Fax: 54-11-4313-5842
E-mail: For information about Telecom Group services, visit:
http://www.telecom.com.ar/http://www.personal.com.ar/http://www.personal.com.py/http://www.arnet.com.ar/
Disclaimer This document may contain statements that could
constitute forward-looking statements, including, but not limited
to, the Company's expectations for its future performance,
revenues, income, earnings per share, capital expenditures,
dividends, liquidity and capital structure; the effects of its debt
restructuring process; the impact of emergency laws enacted by the
Argentine Government; and the impact of rate changes and
competition on the Company's future financial performance.
Forward-looking statements may be identified by words such as
"believes," "expects," "anticipates," "projects," "intends,"
"should," "seeks," "estimates," "future" or other similar
expressions. Forward-looking statements involve risks and
uncertainties that could significantly affect the Company's
expected results. The risks and uncertainties include, but are not
limited to, the impact of emergency laws enacted by the Argentine
government that have resulted in the repeal of Argentina's
Convertibility law, devaluation of the peso, various changes in
restrictions on the ability to exchange pesos into foreign
currencies, and currency transfer policy generally, the
"pesification" of tariffs charged for public services, the
elimination of indexes to adjust rates charged for public services
and the Executive branch announcement to renegotiate the terms of
the concessions granted to public service providers, including
Telecom. Due to extensive changes in laws and economic and business
conditions in Argentina, it is difficult to predict the impact of
these changes on the Company's financial condition. Other factors
may include, but are not limited to, the evolution of the economy
in Argentina, growing inflationary pressure and evolution in
consumer spending and the outcome of certain legal proceedings.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as the date of this
document. The Company undertakes no obligation to release publicly
the results of any revisions to forward-looking statements which
may be made to reflect events and circumstances after the date of
this press release, including, without limitation, changes in the
Company's business or to reflect the occurrence of unanticipated
events. Readers are encouraged to consult the Company's Annual
Report on Form 20-F, as well as periodic filings made on Form 6-K,
which are filed with or furnished to the United States Securities
and Exchange Commission for further information concerning risks
and uncertainties faced by Telecom. DATASOURCE: Telecom Argentina
CONTACT: Pedro Insussarry, +54-11-4968-3743, or Solange Barthe
Dennin, +54-11-4968-3752, or Evangelina Sanchez, +54-11-4968-3718,
or Ruth Fuhrmann, +54-11-4968-4448, or Horacio Nicolas del Campo,
+54-11-4968-6236, Voice Mail: +54-11-4968-3628, Fax:
+54-11-4313-5842, Web Site: http://www.telecom.com.ar/
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