Telecom Argentina S.A. announces consolidated annual period ('FY13') and fourth quarter ('4Q13') results for fiscal year 2013*

   Telecom Argentina S.A. announces consolidated annual period ('FY13') and
            fourth quarter ('4Q13') results for fiscal year 2013*

PR Newswire

BUENOS AIRES, Argentina, Feb. 28, 2014

-- Consolidated Revenues amounted to P$27,287 million (+23.4% vs. FY12); Fixed
Data +31.0% vs. FY12; Fixed Internet +26.5% vs. FY12; and Mobile business in
Argentina +25.6% vs. FY12.

-- Mobile subscribers in Argentina: 20.1 million; +1.1 million (+5.9% vs.
FY12).

-- Mobile Value Added Services in Argentina (Internet and Data): +32.6% vs.
FY12; 58.1% of mobile Service Revenues.

-- Mobile ARPU reached P$66.8 per month in FY13 (+15.8% vs. FY12).

-- ADSL ARPU increased to P$124.7 per month in FY13 (+21.9% vs. FY12); monthly
churn reached 1.4% in FY13.

-- Consolidated Operating costs -including D&A and Results on disposal of
PP&E and write-down of PP&E- totaled P$22,832 million (+25.2% vs. FY12);
Employee benefits expenses +27.0%, Taxes +33.3% vs. FY12.

-- Operating Income Before Depreciation and Amortization reached P$7,564
million (+15.1% vs. FY12), 27.7% of Net Revenues.

-- Net Income amounted to P$3,254 million (+19.1% vs. FY12). Net Income
attributable to Telecom Argentina amounted to P$3,202 million (+19.3% vs.
FY12).

-- Capex increased to P$4,851 million in FY13 (+48.9% vs. FY12), 17.8% of
Consolidated Revenues. Capex in 4Q13 increased by +82.7% vs. 4Q12.

-- Net Cash Position: P$5,354 million, an increase of P$1,706 million vs.
FY12, due to the cash generation of the Group, after Telecom Argentina's cash
dividend payment of P$1,000 million and share buybacks for P$461 million.

BUENOS AIRES, Argentina, Feb. 28, 2014 /PRNewswire/ -- Telecom Argentina
("Telecom") - (NYSE: TEO; BASE: TECO2), one of Argentina's leading
telecommunications companies, announced today a Net Income of P$3,254 million
for the annual period ended December 31, 2013, or +19.1% when compared to the
same period last year. Net income attributable to Telecom Argentina amounted
to P$3,202 million (+19.3% vs. FY12).

(in million P$, except where    As of December, 31
noted)                           2013       2012      $   %
                                                     Change       Change
Revenues                         27,287     22,117   5,170        23.4%
 Mobile Services      20,281     16,094   4,187        26.0%
 Fixed Services       7,006      6,023    983          16.3%
Operating Income before D&A    7,564      6,570    994          15.1%
Operating Income                 4,518      3,966    552          13.9%
Net Income attributable to       3,202      2,685    517          19.3%
Telecom Argentina
Shareholders' equity
attributable to Telecom          11,783     9,959    1,824        18.3%
Argentina
Net Financial Position - Cash   5,354      3,648    1,706        46.8%
CAPEX                           4,851      3,257    1,594        48.9%
Fixed lines in service (in       4,124      4,128    (4)          -0.1%
thousand lines)
Mobile customers (in thousand)   22,508     21,276   1,232        5.8%
 Personal             20,088     18,975   1,113        5.9%
(Argentina)
 Nucleo (Paraguay)    2,420      2,301    119          5.2%
-including Wimax customers-
Broadband access (in thousand)   1,707      1,629    78           4.8%
Average Billing per user (ARBU)
Fixed Telephony / voice (in     52.5       48.2     4.3          8.9%
P$)
Average Revenue per user (ARPU)  66.8       57.7     9.1          15.8%
Mobile Services in Arg. (in P$)
Average Revenue per user (ARPU)  124.7      102.3    22.4         21.9%
ADSL (in P$)

*Unaudited non financial data

During FY13, Consolidated Revenues increased by 23.4% to P$27,287 million
(+P$5,170 million vs. FY12), mainly fueled by the Mobile Services, Fixed Data
and Broadband business. Moreover, Operating Income amounted to P$4,518 million
(+P$552 million vs. FY12).

Consolidated Operating Revenues

Mobile Services

During FY13 clients continued to increase, reaching 22.5 million as of the end
of December 2013, representing an increase of 1.2 million (+5.8%) since
December 31, 2012.

Revenues to third parties amounted to P$20,281 million (+26.0% vs. FY12)
thanks to usage stimulation of value added services ('VAS'), to convenient
offers that are adopted to the needs of clients, and to the growth coming from
equipments sales.

Telecom Personal in Argentina

As of December 31, 2013, Personal reached 20.1 million subscribers in
Argentina (+5.9% or +1.1 million vs. FY12) where postpaid clients represented
32% of the subscriber base. 

In FY13, Revenues from third parties reached P$19,129 million (+P$3,902
million or +25.6% vs. FY12) while Service Revenues (excluding equipment sales)
amounted to P$16,003 million (+20.2% vs. FY12), with 58.1% corresponding to
VAS revenues (vs. 52.7% in FY12). VAS revenues amounted to P$9,300 million
(+32.6% vs. FY12). Moreover, equipment sales increased by 63.2% vs. FY12,
reaching P$3,126 million.

During FY13 the Average Monthly Revenue per User ('ARPU') reached P$66.8
(+15.8% vs. FY12). Moreover, the overall traffic of voice minutes remained
stable in 22.2 billion of minutes in FY13. SMS traffic decreased by -6% vs.
FY12, due to the migration to instant messages, showing a preference for other
alternatives of VAS offered by Personal.

Initiatives

During 4Q13, in the holiday season, Personal presented an aggressive
commercial offer with a 50% discount in smartphones, in order to continue
promoting the upgrade of the customer base equipments thus stimulating value
added services usage. In addition, Personal continued with its strategy based
on usage convenience, through campaigns of credit recharges and with special
benefits to clients under the fidelity program 'Club Personal'.

Moreover, Personal continued strengthening their customer care channels by the
implementation of a new system, NPS (Net Promoter System), where clients are
the key point, with the objective of bringing an innovative and quality
experience and, as a result of it, increasing customer loyalty and
recommendations.

Additionally, together with the technological reconversion plan and the
expansion of the mobile network, Personal launched free access Wi-Fi at
airports, malls and stadiums. The objective of this initiative was to enhance
access to mobile internet improving the browsing experience and clients'
communications in high data traffic areas. "Personal Wi-fi", is a
technological solution that allows the improvement of calls and SMS quality,
diverting data traffic to an own Wi-Fi network, and thereby making available
network resources for these basic services.

Finally, consolidating its brand position associated to music, Personal
organized the 9^th edition of the 'Personal Fest', the most important
international music festival in Argentina with more than 50,000 fans in two
days and more than 400,000 visits over Personals' web page becoming a
milestone in the calendar of International Music events.

Telecom Personal in Paraguay ('Nucleo') 

As of December 31, 2013, Nucleo's subscriber base reached 2.4 million clients
(+5.2% vs. FY12). Prepaid and postpaid customers represented 80% and 20% (vs.
19% on postpaid in FY12), respectively.

Nucleo generated revenues from third parties equivalent to P$1,152 million
during FY13 (+32.9% vs. FY12), influenced by the evolution of the peso against
the Guarani (+33% yoy). VAS revenues amounted to P$583 million (+38.5% vs.
FY12) representing 53.8% of FY13 service revenues (vs. 50.4% in FY12).

Moreover, the level of mobile ARPU reached Gs.27.5 thousand in FY13
(equivalent to P$34.6).

The focus is to maintain the revenue share position in a context with a lower
growth of private consumption.

Fixed Services (Voice, Data & Internet)

During FY13 revenues generated by fixed services amounted to P$7,006 million,
+16.3% vs. FY12; with Data revenues (+31.0% vs. FY12) and Internet (+26.5% vs.
FY12) growing the most in this segment in relative terms.

Voice

Total revenues for this service reached P$3,442 million in FY13 (+7.1% vs.
FY12). A portion of this line of business continued to be affected by frozen
tariffs of regulated services enforced by the Argentine Government in 2002.

Revenues generated by measured services totaled P$1,395 million, an increase
of P$89 million or +6.8% vs. FY12 mainly due to the higher penetration of flat
rate packs of local and national long distance calls.

Monthly charges and supplementary services reached P$1,121 million, an
increase of P$89 million or +8.6% vs. FY12 due to higher revenues in
non-regulated supplementary services. The customer base surpassed 4.1 million
lines in service.

As a result of these increases, the average monthly bill per user (ARBU)
reached P$52.5 in FY13, +8.9% vs. FY12.

Fixed and mobile interconnection revenues reached P$547 million (+6.0% vs.
FY12). Meanwhile, other revenues totaled P$379 million (+5.3% vs. FY12)

During 4Q13 Telecom continued promoting the sale of Aladino handset bundled
new lines and ADSL.

Data and Internet

Data revenues amounted to P$963 million (+P$228 million or +31.0% vs. FY12),
where the focus was to strengthen the position of Telecom as an integrated ICT
provider, offering a wide variety of services.

During 4Q13, Telecom Argentina offered new products and services for the
corporate and government segments. Among them were:

Redes de Circuitos Financieros, a financial network solution that enables
financial institutions to establish a different and exclusive network with all
transactional banks and retails that require to process operations;
Aplicaciones Moviles Empresariales (AME), a Mobile Corporate App that allows
customers to take their businesses applications to mobile devices in a safety
and reliable manner, assuring the integrity of data and transactions. The main
function of this platform is becoming a bridge between mobile information from
each member of a Company and the data of it. Lastly, Firewall de Applications
Web, which is an application firewall service used as a new generation
solution for preventive safety.

Revenues related to Internet totaled P$2,521 million (+P$528 million or +26.5%
vs. FY12), due to the increase in the customer base in the quarter together
with a commercial offer with higher speeds that can be rendered to the
investments executed.

As of December 31, 2013, Telecom surpassed 1.7 million ADSL accesses (+4.8%
vs. FY12) with an increase in net adds in 4Q13 (around +38 thousand). These
connections represented 41.4% of Telecom's fixed lines in service. In
addition, ADSL ARPU reached P$124.7 in FY13, +21.9% when compared to FY12 and
the monthly churn rate was 1.4% in FY13.

During November 2013, Arnet continued with its 360º campaign, through the
launch of 'Llamadas Libres a Celulares' (Free calls to mobiles) as a
complement of Arnet services + local calls with the objective of enriching the
offer with value added proposals. This product allows local calls from a fixed
number to any mobile, at convenient prices.

Consolidated Operating Costs

Consolidated Operating Costs, (including 'Results on disposal of PP&E and
write-down of PP&E' that amounted P$173 million in FY13), totaled P$22,832
million in FY13, an increase of P$4,602 million, or +25.2% vs. FY12. The
increase is a consequence of higher labor costs, costs of handsets with new
features and taxes associated to revenues.

The cost breakdown is as follows:

- Employee benefit expenses and severance payments totaled P$4,152 million
(+27.0% vs. FY12), mainly affected by increases in salaries to the unionized
employees due to the Collective Bargaining agreement reached on July, 2013, as
well as increases in salaries to the non-unionized workforce, together with
the social security contributions associated to such concepts, and to an
increase in the number of unionized employees. Total employees (including
temporary employees) at the end of the period totaled 16,581.

- Interconnection costs and other telecommunication charges (including TLRD,
Roaming, Interconnection, international settlement charges and lease of
circuits) amounted to P$1,829 million, +7.1% vs. FY12. This increase resulted
from higher Data and SMS roaming costs as well as charges of lease of
circuits.

- Fees for services, maintenance and materials and supplies amounted to
P$2,641 million (+25.2% vs. FY12), principally due to increases in the
maintenance of radiobases, systems and real estate in the mobile business; a
higher charge of maintenance of systems licenses and higher maintenance and
restyling costs in some buildings. In addition, price increases were granted
to suppliers associated to higher costs in both fixed and mobile segments.

- Taxes and fees with regulatory authorities reached P$2,689 million (+33.3%
vs. FY12), impacted mainly by a higher volume of revenues, a higher incidence
in turnover taxes derived from increases in municipal jurisdictions, higher
municipal taxes and higher levies of the regulatory authority.

- Commissions (Commissions paid to agents, prepaid card commissions and
others) totaled P$2,203 million (+13.0% vs. FY12), mainly due to the increase
in commissions paid to commercial agents associated with the increase in
sales. Agent commissions capitalized as SAC amounted to P$551 million (+75.5%
vs. FY12).

- Cost of handsets sold totaled P$3,111 million (+52.3% vs. FY12), due to an
increase in the participation of high-end handsets that maximizes VAS usage,
that resulted in higher unit prices. This was partially compensated by a lower
quantity of handsets sold. Deferred costs from SAC amounted to P$255 million
(-44.9% vs. FY12).

- Advertising amounted to P$656 million (-0.6% vs. FY12), mainly derived from
lower commercial expenses and campaigns in comparison to FY12.

- Depreciations and Amortizations reached P$2,873 million (+10.0% vs. FY12).
PP&E depreciation amounted to P$1,983 million (+10.7% vs. FY12); SAC and
services connection costs amortization totaled P$867 million (+8.8% vs. FY12);
and other intangible assets amortization reached P$23 million, same level that
the one achieved in FY12.

- Other Costs totaled P$2,505 million (+33,9% vs. FY12). This increase was
mainly due to costs of VAS that totaled P$708 million (+117.2% vs. FY12),
related to the increase of those sales, especially in the mobile business. Bad
debt expenses reached P$283 million (+2.9% vs. FY12) representing 1.2% of
consolidated costs and 1.0% of consolidated revenues, while charges related to
lawsuits and other contingencies amounted to P$270 million in FY13 (+76.5% vs.
FY12). The recovery of restructuring costs amounted to P$8 million in FY13 and
is related to the finalization of the Restructuring Plan initiated by the
Telecom Group in the last quarter of 2012.

Consolidated Financial Results

Financial results resulted in a gain of P$528 million, an increase of P$299
million or +130.6% vs. FY12. This was mainly due to a gain in net financial
interest of P$632 million in FY13 (+P$363 million vs. FY12) based on a higher
net financial position (Cash) partially compensated by losses for FX results
of P$279 million in FY13 (vs. losses of P$46 million in FY12).

Consolidated Net Financial Position

As of December 31, 2013, Net Financial Position (Cash, Cash Equivalents and
financial Investments minus Loans) totaled P$5,354 million in cash, an
improvement of P$1,706 million vs. Net Financial Position as of December 31,
2012, thanks to the cash generation of the Group and after a cash dividend
payment of P$1,000 million in 4Q13 and share buybacks for P$461 million.

Capital Expenditures

During FY13, the Company invested P$4,851 million (+48.9% vs. FY12). This
amount was allocated to Fixed Services (P$2,155 million) and Mobile services
(P$2,696 million). In relative terms, capex reached 17.8% of consolidated
revenues.

The main capital expenditures in the fixed business were associated to the
reconversion plan of the network that implies the replacement of copper
connections with fiber optic in different points (FTTC or Fiber to the
Cabinet, FTTB or Fiber to the Building and FTTH or Fiber to the Home) to
enhance the broadband portfolio and improve user experience. This evolution to
new technologies contributes to optimize service quality in terms of stability
and availability.

In the mobile business, the technological reconversion plan of the network
continues, mainly by the installation of the second 3G carrier, on national
scale, that allows the optimization of mobile services throughout the country,
increasing capacity to cope with the incremental demand of data traffic.

Relevant Matters

The Board of Directors on its meeting held on December 13^th, 2013 decided to
determine the total withdrawal and distribution to Shareholders of the Reserve
for Future Cash Dividend in the amount of P$1 billion. The constitution of the
referred Reserve was approved in the second part of the Annual General
Ordinary Shareholders' Meeting on April 23^rd, 2013, adjourned to May 21^st,
2013. The dividend was made available on December 27^th, 2013. The amount
distributed was equivalent to approximately P$1.0318 per share outstanding and
approximately P$5.1591 per ADR, before the deductions, if applicable, of
Personal Asset Tax and Income Tax.

As of December 31^st, 2013, Telecom Argentina has acquired 15,221,373 of its
own shares for P$461 million, with an average price per share of P$30.24
(1.55% of the Capital stock).

On December 17^th, 2013, SC Resolution No. 26/13 was issued. This Resolution
establishes mandatory per second billing for mobile services stating,
specifying that billing must be entirely per second after the first
indivisible fraction of 30 seconds.

On November 14^th, 2013, Telecom Italia SpA and Telecom Italia International
N.V. (the "Sellers"), as well as Tierra Argentea S.A. ("Tierra Argentea"), a
company controlled by the sellers, have accepted the offer of Fintech Group
for the acquisition of the entire controlling interest of Telecom Italia Group
in Telecom Argentina, held by the Sellers, through its subsidiaries Sofora
Telecomunicaciones S.A., Nortel Inversora S.A. and Tierra Argentea. On
December, 10^th, 2013, Tierra Argentea formalized the transfer to the Fintech
Group of the Class B Shares of Telecom Argentina, representative of 1.58% of
the capital stock of Telecom Argentina and Nortel's ADRs representative of 8%
of total Prefer B Shares. The sale of the Shares of Sofora is conditional upon
obtaining certain required regulatory approvals. As of December, 31^st, 2013,
economic interest of Telecom Italia in Telecom Argentina totaled 19.3%.

Telecom is the parent company of a leading telecommunications group in
Argentina, where it offers, either itself 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 whose common stock (approximately 78% 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 December 31, 2013, Telecom continued to have 984,380,978 shares issued
and 969,159,605 shares outstanding.

For more information, please contact Investor Relations:

                 Solange Barthe       Gustavo Tewel Ruth Fuhrmann Antonella
Pedro Insussarry Dennin                                           Papaleo
                                      (5411) 4968   (5411) 4968
(5411) 4968 3743 (5411) 4968 3752     3718          4448          (5411) 4968
                                                                  6236

Voice Mail: (5411) 4968 3628
Fax: (5411) 4968 3616
E-mail: relinver@ta.telecom.com.ar

For information about Telecom Group services, visit:

www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
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.

SOURCE Telecom Argentina S.A.

Website: http://www.telecom.com.ar
 
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