Company Overview - Tele2 (TLTZY) shares increased by 7.8% to close at $6.95, with notable trading volume exceeding typical levels [1] - The stock has gained 9.9% over the past four weeks [1] Strategic Moves - Industry rumors suggest that Tele2 is considering selling its wireless towers in the Baltics, specifically in Estonia, Latvia, and Lithuania [2] - The proposed sale is expected to generate approximately $542 million, which could strengthen Tele2's core business operations [2] Financial Performance Expectations - Tele2 is projected to report quarterly earnings of $0.07 per share, reflecting a year-over-year increase of 16.7% [3] - Expected revenues for the upcoming quarter are $721.73 million, representing a 4.9% increase from the same quarter last year [3] - The consensus EPS estimate for Tele2 has remained unchanged over the last 30 days, indicating a lack of earnings estimate revisions [4] Market Position - Tele2 holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [4] - In comparison, Telecom Argentina (TEO), another company in the same industry, experienced a 1.6% decline in its stock price, closing at $10.42, and has returned -9.3% over the past month [4]

Economic Environment - The Argentine Peso depreciated at a monthly rate of approximately 2% in 2024, with an exchange rate of P$1,032 per US$1.00 as of December 31, 2024, reflecting a 27.7% appreciation of the U.S. dollar from P$808.45 on December 31, 2023 [118]. - The Argentine economy remains volatile, with risks including inflation, currency devaluation, and regulatory changes that could adversely affect the company's financial condition and operations [116]. - Inflation in Argentina reached 211.4% in 2023 and 117.8% in 2024, with a monthly inflation rate of over 25% in December 2023 [147]. - Argentina's economy contracted in 2023 and 2024, with significant volatility characterized by high inflation and depreciation of the Argentine Peso [152]. - The ongoing economic crisis may lead to lower consumer confidence and disposable income, adversely impacting the demand for the company's services [179]. - The potential impact of global economic conditions, including U.S. interest rate changes, remains uncertain for the Argentine economy and the company's operations [158]. Government Policies and Regulations - The Milei administration introduced policies to stabilize the economy, including the issuance of U.S. dollar-denominated securities (BOPREAL) to help importers with overdue debts, with maximum amounts issued reaching US$5,000 million, US$2,000 million, and US$3,000 million in different series [125]. - The Milei administration's economic reforms include a public emergency declaration until December 31, 2025, affecting various sectors and allowing legislative powers to be delegated to the executive [135]. - The Ley de Bases, approved on June 28, 2024, establishes a framework for state reform, privatization of public companies, and incentives for large investments [139]. - The PAIS tax was reduced from 17.5% to 7.5% for foreign currency acquisition for imports, effective September 2, 2024 [141]. - The Argentine government has historically influenced the telecommunications sector through regulations and ownership stakes, which may continue to affect Telecom Argentina's operations [150]. - The company faces risks from potential government interventions, including nationalization and changes in regulatory frameworks, which could adversely impact its financial condition [151]. - The BCRA has implemented new regulations limiting the flow of foreign currency into and from Argentina, affecting the transfer of securities and foreign currency transactions [269][270]. Financial Performance and Risks - As of December 31, 2024, Telecom Argentina had P$2,627,952 million in liabilities denominated in foreign currencies, indicating significant exposure to foreign exchange risks [128]. - Telecom Argentina's revenues are primarily in Argentine Pesos, making the company vulnerable to inflation that is not matched by price increases [149]. - The devaluation of the Argentine Peso and foreign exchange restrictions may hinder Telecom Argentina's ability to pay dividends and meet obligations in U.S. dollars [128]. - The total indebtedness of Telecom as of December 31, 2024, was P$2,878,004 million, representing a 37.9% decrease compared to the previous year [249]. - 71.3% of Telecom's debt is scheduled to mature within the next three years, with 37.3% maturing in 2025 [249]. - The company anticipates increased revenues from cable television and internet services, but growth may be hindered by competition from non-traditional technologies like OTT services [209]. - The market price of Telecom Argentina's ADSs increased by approximately 79% in 2024, 39% in 2023, and 7% in 2022 [263]. Competition and Market Dynamics - The company is subject to substantial competition in the Argentine telecommunications market, which may impact its market share and profitability [114]. - The company anticipates increased competition in Fintech Services from both local and global players, which may impact market share and revenue [198]. - An increase in churn rates for mobile telephony, cable television, and internet services could materially impact the company's revenues and operations [211]. Technological and Operational Challenges - The company is exposed to risks related to technological advancements, requiring significant expenditures to maintain competitiveness in its service offerings [114]. - The telecommunications industry is subject to rapid technological changes, requiring substantial capital expenditures to maintain competitiveness [206]. - The company must continuously invest in network upgrades and new technologies to enhance user experience and remain competitive in the internet and mobile markets [207]. - Telecom Argentina must comply with regulatory obligations related to the acquisition of 4G and 5G spectrum, requiring significant resources for network maintenance and refurbishment [197]. - Cybersecurity risks have increased due to the proliferation of new technologies, potentially leading to significant operational and financial impacts [226]. - The adoption of new technologies, such as AI, may introduce additional cybersecurity vulnerabilities that could adversely affect the company's business [229]. Legal and Compliance Issues - The company may face legal and regulatory proceedings that could result in unfavorable decisions and financial penalties [114]. - The company is subject to BCRA regulation for Fintech Services, and any non-compliance could result in regulatory sanctions and reputational damage [195]. - The Federal Court nullified Decree No. 690/20, impacting regulatory frameworks affecting the company [313]. - Related-party transactions exceeding 1% of shareholders' equity are subject to a prior approval process to ensure compliance with market practices [292]. Strategic Acquisitions and Investments - Telecom Argentina acquired 99.999625% of Telefónica Móviles for US$1.245 billion, financed through two loans totaling US$1.170 billion [187]. - The acquisition is subject to post-closing review by regulators, including ENACOM and CNDC, to ensure compliance with regulatory and antitrust requirements [188]. - Telecom Argentina acquired 100% of TSMA, previously holding 50.1%, and received US$5.5 million for the share transfer [306]. - Telecom Argentina exercised call options to acquire 100% of Naperville and Saturn for a total of US$42 million, consolidating its ownership of Manda and RISSAU [309]. - A new subsidiary, CrediPay, was established in Paraguay with a 67.5% ownership to engage in financial activities [310]. Stakeholder Expectations and ESG - Stakeholders' evolving expectations regarding ESG practices may impose additional costs or expose the company to new risks [114]. - The evolving expectations regarding ESG practices may impose additional costs and expose Telecom to new risks, affecting its reputation if not adequately addressed [235].

Corporate Reorganization - Telecom Argentina's Board of Directors approved a corporate reorganization to merge its controlled companies Negocios y Servicios S.A.U. and AVC Continente Audiovisual S.A.[5] - The effective date of the corporate reorganization is set for January 1, 2025[6] - The reorganization will be presented for approval at the Ordinary and Extraordinary General Shareholders' Meeting scheduled for April 25, 2025[6]

Financial Performance - Revenues for the three-month period ended September 2024 were ARS 983,141 million, a decrease of 4.6% compared to ARS 1,030,218 million in the same period of 2023[41]. - Net income for the nine-month period ended September 2024 was ARS 951,912 million, significantly higher than ARS 263,157 million for the same period in 2023, representing an increase of 261.5%[41]. - The operating loss for the three-month period ended September 2024 was ARS 36,736 million, an improvement from a loss of ARS 57,149 million in the same period of 2023[41]. - Total comprehensive loss for the three-month period ended September 2024 was ARS 37,100 million, compared to a comprehensive income of ARS 101,239 million in the same period of 2023[44]. - The total net income attributable to the controlling company for the nine-month period ended September 2024 was ARS 938,639 million, compared to ARS 251,230 million for the same period in 2023, indicating a substantial increase[41]. - The net income for the period ending September 30, 2023, was 938,639 million pesos, compared to a net income of 251,230 million pesos for the same period in the previous year, indicating a significant increase of approximately 273%[47]. - Total comprehensive income for the nine-month period ending September 30, 2023, was 793,253 million pesos, a substantial rise from 249,176 million pesos in the prior year, representing an increase of about 218%[47]. - The company reported a total comprehensive loss of 145,386 million pesos for the period, which is a decrease from the previous year's loss of 2,054 million pesos, indicating improved financial performance[47]. - The company reported a basic and diluted loss per share attributable to the controlling company of ARS 7.60 for the three-month period ended September 2024, down from earnings of ARS 43.47 in the same period of 2023[41]. - The net loss for the three-month period ended September 30, 2024, was ARS 11,543 million, compared to a net income of ARS 98,988 million in the same period of 2023, indicating a significant shift in performance[81]. Assets and Liabilities - Total assets decreased from ARS 11,041,799 million as of December 31, 2023, to ARS 10,193,592 million as of September 30, 2024, representing a decline of approximately 7.7%[38]. - Current assets fell from ARS 971,981 million to ARS 717,760 million, a decrease of about 26.1%[38]. - Total liabilities decreased from ARS 6,515,443 million to ARS 4,956,216 million, a reduction of approximately 23.9%[38]. - Non-current liabilities decreased from ARS 4,284,510 million to ARS 3,164,706 million, a reduction of approximately 26.1%[38]. - Total equity increased from ARS 4,526,356 million to ARS 5,237,376 million, reflecting a growth of about 15.7%[38]. - Equity attributable to the controlling company increased from ARS 4,370,029 million to ARS 5,138,576 million, reflecting a growth of about 17.6%[38]. - Total cash and cash equivalents decreased to ARS 182,810 million as of September 30, 2024, down from ARS 322,074 million as of December 31, 2023[93]. - Total trade receivables decreased from $268,344 million on December 31, 2023, to $256,180 million on September 30, 2024, representing a decline of approximately 4.0%[104]. - Total inventories decreased from $63,557 million to $53,100 million, reflecting a decline of about 16.5%[109]. - Total trade payables decreased from $721,192 million to $403,042 million, a significant drop of approximately 44.2%[121]. Cash Flows - Total cash flows from operating activities decreased to ARS 479,006 million in 2024 from ARS 943,912 million in 2023, reflecting a decline of about 49%[52]. - Cash flows used in investing activities improved to ARS (249,793) million in 2024 compared to ARS (661,203) million in 2023, indicating a reduction in cash outflow by approximately 62%[52]. - The company reported a net decrease in cash and cash equivalents of ARS (83,368) million for the period, contrasting with an increase of ARS 53,562 million in the previous year[52]. - Payments for property, plant, and equipment (PP&E) were ARS (205,909) million in 2024, down from ARS (368,261) million in 2023, a decrease of approximately 44%[52]. - The company received dividends from associates amounting to ARS 933 million in 2024, compared to ARS 1,891 million in 2023, reflecting a decline of about 51%[52]. Borrowings and Debt - Borrowings decreased significantly from ARS 4,289,779 million to ARS 2,663,441 million, a reduction of about 37.8%[38]. - Current borrowings decreased from $1,135,863 million to $1,029,938 million, a reduction of about 9.3%[122]. - Proceeds from borrowings increased to ARS 842,682 million in 2024, up from ARS 527,996 million in 2023, marking a rise of about 60%[52]. - The company made principal payments on borrowings totaling $816,816 million in the nine-month period ended September 30, 2024, up from $325,329 million in the same period of 2023, indicating a significant increase of approximately 150%[125]. - The company issued Series 20 Notes with a principal value of $59.7 million and Series 21 Notes with a principal value of $115.3 million, both with an annual fixed interest rate of 9.50%[126]. Operational Highlights - The company has established a new subsidiary, CrediPay, which is expected to contribute to future revenue streams and market expansion efforts[48]. - The merger between Núcleo and Tuves Paraguay S.A. was completed in June 2024, indicating strategic consolidation in the telecommunications sector[62]. - Telecom Argentina continues to monitor its operations in the fintech industry and abroad, although these segments are not currently considered reportable due to their size[72]. - The company operates under a single business unit strategy, consolidating various services including mobile, internet, and cable television under the ICT Services segment[70]. - The company is currently navigating regulatory changes, including the repeal of Decree No. 690/20, which may impact pricing for its services[197]. Shareholder Information - The controlling company, CVH, holds 28.16% of the capital stock of Telecom Argentina, influencing major decisions through a Voting Trust Agreement[182]. - The company has allocated 210,544 million pesos in dividends to non-controlling shareholders, reflecting a commitment to shareholder returns despite recent losses[47]. - The shareholders approved a proposal to absorb an accumulated deficit of $257,730 million, equivalent to $519,534 million in current currency as of September 30, 2024[172].

Financial Data and Key Metrics Changes - The EBITDA margin for the first half of 2024 was 29.7%, showing improvement year-over-year despite a challenging macroeconomic environment [6] - Revenues totaled almost $1.83 billion, with a year-over-year decrease of 13% in constant pesos, but a quarter-over-quarter growth of 5.6% in real terms [9] - The net income profit was ARS 859 billion, primarily due to real exchange differences gains [6][20] Business Line Data and Key Metrics Changes - Mobile subscribers increased by over 3% year-over-year, with mobile data usage growing by 18% [7] - Broadband ARPU grew above inflation year-over-year, with FTTH accesses rapidly increasing [7][12] - Pay TV unique customers reached almost 1.5 million, an increase of 11% year-over-year [7][12] Market Data and Key Metrics Changes - The company holds a 35% market share in the broadband business in Paraguay, contributing to margin improvements [37] - In Paraguay, mobile customers grew by 5% year-over-year, with broadband and pay TV subscribers increasing by 17% and 10% respectively [14][15] Company Strategy and Development Direction - The current CapEx focus is on expanding fixed and mobile access networks, particularly FTTH and 5G [6][21] - The company aims to improve operational profitability through effective pricing and cost management strategies [18][30] - The Fintech business, Personal Pay, has grown significantly, with almost 3 million onboarded clients, positioning it as a key player in the market [16][29] Management's Comments on Operating Environment and Future Outlook - Management expects a reduction in inflation rates, which may stabilize around 2-3% [39][41] - Delinquency rates are among the lowest in the company's history, indicating improved collection practices [41] - The company is cautiously optimistic about the second half of the year, with positive trends in customer behavior and revenue expectations [39][42] Other Important Information - The company successfully returned to international debt capital markets with a $500 million issuance due in 2031, indicating strong investor support [8][27] - The net debt-to-EBITDA ratio as of June 2024 was 2.2x, reflecting a recovery in operational profitability [25] Q&A Session Summary Question: Consolidated margins and quarter-over-quarter decline - Management explained that seasonal factors and inflation fluctuations impacted margins, with a typical pattern of higher margins at the beginning of the year [32][33] Question: Margin improvement in Paraguay - The improvement is driven by the broadband business growth and cost management in the mobile segment [37] Question: Outlook for the second half and customer resistance to price increases - Management noted that July and August showed strong performance, with expectations for stable customer behavior regarding pricing [38][39] Question: Expectations for pricing increases and profitability - Management clarified that previous legal restrictions on price increases did not significantly impact their pricing strategy, which remains focused on portfolio evolution [44][45] Question: Clarification on cash flow and liability management - Management discussed the resolution of previous foreign exchange restrictions and ongoing liability management efforts to improve debt structure [47][52]

[FORM 6-K Filing Information](index=1&type=section&id=FORM%206-K) This section details Telecom Argentina S.A.'s Form 6-K filing for July 2024, noting its annual reports are filed under Form 20-F [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Form 6-K report filed by Telecom Argentina S.A. with the SEC for the month of July 2024 - Telecom Argentina S.A. filed a Form 6-K report for July 2024[1](index=1&type=chunk) - The company files annual reports under Form 20-F[1](index=1&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements%20as%20of%20March%2031%2C%202024) This section presents Telecom Argentina's unaudited condensed consolidated financial statements as of March 31, 2024, prepared under IAS 34 and restated for hyperinflation [Glossary of Terms](index=5&type=section&id=Glossary%20of%20terms) This section defines key financial, regulatory, and company-specific terms used in the unaudited condensed consolidated financial statements for clarity - The glossary defines terms such as ADS, ADR, BYMA, CAPEX, CNV, DFI, DNU, Fintech, IFRS Accounting Standards, INDEC, LAD, LGS, NYSE, OPH, PEN, PP&E, RECPAM, RT, Telecom, USA, UVA, and VLG[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Consolidated Statements of Financial Position](index=7&type=section&id=Consolidated%20statements%20of%20financial%20position) As of March 31, 2024, total assets and liabilities slightly decreased, while total equity increased, driven by investments despite lower cash Consolidated Statements of Financial Position (March 31, 2024 vs. December 31, 2023) | Indicator | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------------- | :----------------------------- | :----------------------------- | | **Total Assets** | 8,143,553 | 8,305,246 | | Current Assets | 770,327 | 731,089 | | Cash and cash equivalents | 150,604 | 242,252 | | Investments | 315,094 | 187,964 | | Non-Current Assets | 7,373,226 | 7,574,157 | | **Total Liabilities** | 4,167,697 | 4,900,683 | | Current Liabilities | 1,533,735 | 1,678,027 | | Non-Current Liabilities | 2,633,962 | 3,222,656 | | **Total Equity** | 3,975,856 | 3,404,563 | [Consolidated Income Statements](index=8&type=section&id=Consolidated%20income%20statements) Net income significantly increased in 3M24 due to a substantial rise in financial costs, despite decreased revenues and an operating loss Consolidated Income Statement (Three-month period ended March 31, 2024 vs. 2023) | Indicator | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Revenues | 683,916 | 833,213 | | Operating loss | (26,147) | (11,985) | | Financial costs | 797,844 | 34,582 | | Other financial results, net | 115,520 | 40,567 | | Income before income tax | 885,858 | 64,812 | | Income tax benefit (expense) | (210,826) | 45,665 | | Net income for the period | 675,032 | 110,477 | | Earnings per share (Basic and diluted) | 312.14 | 49.99 | - Net income for the period increased significantly from **ARS 110,477 million** in 3M23 to **ARS 675,032 million** in 3M24[20](index=20&type=chunk) - Financial costs surged from **ARS 34,582 million** in 3M23 to **ARS 797,844 million** in 3M24, contributing heavily to the income before tax[20](index=20&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20statements%20of%20comprehensive%20income) Total comprehensive income for 3M24 significantly increased, despite a substantial other comprehensive loss from currency translation adjustments Consolidated Statements of Comprehensive Income (Three-month period ended March 31, 2024 vs. 2023) | Indicator | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net income for the period | 675,032 | 110,477 | | Other comprehensive loss, net of tax | (103,739) | (3,483) | | Total comprehensive income for the period | 571,293 | 106,994 | | Attributable to Controlling Company | 598,958 | 104,663 | | Attributable to Non-controlling interest | (27,665) | 2,331 | - Currency translation adjustments resulted in a significant loss of **ARS 104,170 million** in 3M24, compared to **ARS 2,987 million** in 3M23[22](index=22&type=chunk) [Consolidated Statements of Changes in Equity](index=10&type=section&id=Consolidated%20statements%20of%20changes%20in%20equity) Total equity increased in 3M24, primarily driven by net income, partially offset by other comprehensive losses Consolidated Statements of Changes in Equity (March 31, 2024 vs. January 1, 2024) | Indicator | March 31, 2024 (millions ARS) | January 1, 2024 (millions ARS) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Total Equity | 3,975,856 | 3,404,563 | | Equity attributable to Controlling Company | 3,885,937 | 3,286,979 | | Equity attributable to non-controlling interest | 89,919 | 117,584 | | Net income for the period (Controlling Company) | 672,260 | - | | Other comprehensive loss (Controlling Company) | (73,302) | - | - Retained earnings for the controlling company shifted from a deficit of **ARS (390,775) million** at January 1, 2024, to a positive balance of **ARS 281,485 million** by March 31, 2024[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20statements%20of%20cash%20flows) Operating cash flows decreased, investing cash outflows decreased, and financing cash inflows increased, leading to a net decrease in cash Consolidated Statements of Cash Flows (Three-month period ended March 31, 2024 vs. 2023) | Indicator | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Cash flows from operating activities | 171,229 | 206,118 | | Cash flows used in investing activities | (224,218) | (237,682) | | Cash flows from financing activities | 27,656 | 9,735 | | Net decrease in cash and cash equivalents | (25,333) | (21,829) | | Cash and cash equivalents at end of period | 150,604 | 161,330 | - Net income for the period was **ARS 675,032 million** in 3M24, a substantial increase from **ARS 110,477 million** in 3M23[27](index=27&type=chunk) - Financial results and others had a significant negative adjustment of **ARS (950,299) million** in 3M24, compared to **ARS (108,452) million** in 3M23, impacting operating cash flows[27](index=27&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20unaudited%20condensed%20consolidated%20financial%20statements) These notes provide detailed explanations for the unaudited financial statements, covering accounting policies, asset/liability categories, and recent developments - The financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and must be read jointly with the annual financial statements as of December 31, 2023[31](index=31&type=chunk)[32](index=32&type=chunk) - The financial information is expressed in millions of Argentine pesos, on an accrual basis, based on historical cost, and prepared in current currency as of March 31, 2024, due to Argentina being a hyperinflationary economy[37](index=37&type=chunk) [Note 1 – Basis of Preparation and Accounting Policies](index=13&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20preparation%20of%20the%20unaudited%20condensed%20consolidated%20financial%20statements%20and%20significant%20accounting%20policies) This note outlines the preparation of interim financial statements under IAS 34, consolidation of subsidiaries, segment reporting, and IAS 29 application for hyperinflation - The financial statements consolidate entities like Núcleo (Paraguay), Personal Smarthome (Argentina), Opalker (Uruguay), and Telecom USA, among others[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - Telecom operates as a single business unit for ICT Services in Argentina, with other international and fintech activities grouped under 'Other segments' due to non-significance[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) Key Inflation and Exchange Rate Data | Indicator | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :------------------------------------ | :------------- | :---------------- | :------------- | | National CPI (Dec 2016=100) | 5,357.09 | 3,533.19 | 1,381.16 | | Annual Variation in prices | 287.9% | 211.4% | 104.3% | | Accumulated 3 months Variation in prices | 51.6% | n/a | 21.7% | | Banco Nación US$/$ exchange rate | 858 | 808.45 | 209.01 | | Annual Variation in the exchange rate | 310.5% | 356.3% | 88.3% | | Accumulated 3 months Variation in the exchange rate | 6.1% | n/a | 18.0% | [Note 2 – Cash and Cash Equivalents and Investments](index=18&type=section&id=Note%202%20%E2%80%93%20Cash%20and%20cash%20equivalents%20and%20Investments.%20Additional%20information%20on%20the%20consolidated%20statements%20of%20cash%20flows.) Cash and cash equivalents decreased, while current investments significantly increased, with details on financing activities and non-cash transactions Cash and Cash Equivalents & Investments (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | 150,604 | 242,252 | | Current Investments | 315,094 | 187,964 | | Non-Current Investments | 32,937 | 36,097 | | Total Investments | 348,031 | 224,061 | - Main financing activities in 3M24 included **ARS 191,171 million** from borrowings proceeds and **ARS (73,487) million** in payments of borrowings[63](index=63&type=chunk) - Non-cash operating transactions included **ARS 48,710 million** for PP&E and intangible asset acquisitions financed with accounts payable, and **ARS 40,804 million** for right-of-use asset acquisitions through leases in 3M24[64](index=64&type=chunk) [Note 3 – Trade Receivables](index=22&type=section&id=Note%203%20%E2%80%93%20Trade%20receivables) Net trade receivables increased, while the allowance for doubtful accounts decreased due to uses and RECPAM adjustments Trade Receivables (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total trade receivables, net | 209,002 | 201,839 | | Allowance for doubtful accounts | (49,099) | (53,254) | - Movements in the allowance for doubtful accounts included increases of **ARS (17,020) million** and uses of **ARS 1,907 million** in 3M24[70](index=70&type=chunk) [Note 4 – Other Receivables](index=22&type=section&id=Note%204%20%E2%80%93%20Other%20receivables) Net other receivables decreased, primarily in non-current receivables, due to reductions in income tax credits and guarantee deposits Other Receivables (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total other receivables, net | 73,125 | 81,374 | | Current Other Receivables | 51,774 | 51,611 | | Non-Current Other Receivables | 21,351 | 29,763 | - Non-current other receivables decreased by **ARS 8,412 million**, mainly due to decreases in income tax credits and guarantee deposits[71](index=71&type=chunk) [Note 5 – Inventories](index=23&type=section&id=Note%205%20%E2%80%93%20Inventories) Total inventories decreased, accompanied by an increase in the allowance for obsolescence Inventories (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total inventories | 44,208 | 47,805 | | Mobile handsets and others | 47,147 | 49,878 | | Allowance for obsolescence | (2,939) | (2,073) | - The allowance for obsolescence of inventories increased by **ARS 866 million** in 3M24[74](index=74&type=chunk) [Note 6 – Goodwill](index=24&type=section&id=Note%206%20%E2%80%93%20Goodwill) Total goodwill slightly decreased, primarily due to currency translation adjustments Goodwill (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total goodwill | 2,337,135 | 2,340,988 | | Argentina | 2,328,158 | 2,328,158 | | Abroad | 8,977 | 12,830 | - Currency translation adjustments resulted in a decrease of **ARS (3,853) million** in goodwill during 3M24[75](index=75&type=chunk) [Note 7 – PP&E (Properties, Plant & Equipment)](index=24&type=section&id=Note%207%20%E2%80%93%20PP%26E) Total PP&E decreased, influenced by depreciation and currency translation adjustments, despite new CAPEX PP&E (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | PP&E | 3,283,930 | 3,444,604 | | PP&E (gross) | 3,321,601 | 3,481,709 | | Allowance for obsolescence and impairment | (37,671) | (37,105) | - CAPEX for 3M24 amounted to **ARS 98,191 million**, while depreciation for the period was **ARS (177,941) million**[76](index=76&type=chunk) - Currency translation adjustments led to a decrease of **ARS (80,204) million** in PP&E during 3M24[76](index=76&type=chunk) [Note 8 – Intangible Assets](index=24&type=section&id=Note%208%20%E2%80%93%20Intangible%20assets) Total intangible assets decreased, primarily due to amortization and currency translation adjustments Intangible Assets (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Intangible assets | 1,355,603 | 1,374,340 | | Intangible assets (gross) | 1,407,030 | 1,425,767 | | Impairment allowance | (51,427) | (51,427) | - Amortization of intangible assets for 3M24 was **ARS (20,873) million**, and CAPEX for intangible assets was **ARS 6,477 million**[80](index=80&type=chunk) [Note 9 – Right of Use Assets](index=26&type=section&id=Note%209%20%E2%80%93%20Right%20of%20use%20assets) Total right-of-use assets slightly decreased, with new additions partially offset by amortization and currency adjustments Right of Use Assets (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Leases rights of use | 325,633 | 327,036 | | Sites | 205,424 | 208,734 | | Asset retirement obligations | 54,664 | 57,145 | - Additions to right-of-use assets amounted to **ARS 40,804 million** in 3M24, while amortization was **ARS (34,386) million**[81](index=81&type=chunk) [Note 10 – Trade Payables](index=26&type=section&id=Note%2010%20%E2%80%93%20Trade%20payables) Total trade payables decreased, mainly driven by a reduction in current suppliers' payables Trade Payables (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total trade payables | 426,632 | 542,455 | | Current Suppliers | 407,528 | 532,484 | | Non-current Suppliers | 11,192 | 1,386 | - Current trade payables decreased by **ARS 125,629 million**, while non-current trade payables increased by **ARS 9,806 million**[82](index=82&type=chunk) [Note 11 – Borrowings](index=26&type=section&id=Note%2011%20%E2%80%93%20Borrowings) Total borrowings decreased, primarily due to significant exchange differences and currency translation adjustments Borrowings (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total borrowings | 2,446,036 | 3,226,619 | | Current Borrowings | 854,148 | 854,356 | | Non-Current Borrowings | 1,591,888 | 2,372,263 | - Net cash flows from borrowings were **ARS 41,275 million**, but exchange differences and currency translation adjustments resulted in a decrease of **ARS (878,396) million**[86](index=86&type=chunk) - The Company complied with the EBITDA/Net Interest ratio and Net Debt/EBITDA ratio established in the waivers obtained in March 2024[87](index=87&type=chunk) [Note 12 – Salaries and Social Security Payables](index=28&type=section&id=Note%2012%20%E2%80%93%20Salaries%20and%20social%20security%20payables) Total salaries and social security payables decreased Salaries and Social Security Payables (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total payables | 133,612 | 143,842 | | Current | 127,776 | 138,188 | | Non-current | 5,836 | 5,654 | [Note 13 – Income Tax and Deferred Tax](index=28&type=section&id=Note%2013%20%E2%80%93%20Income%20tax%20payable%20and%20Deferred%20income%20tax%20assets%2Fliabilities) Net deferred tax liability increased, and the company holds significant tax loss carryforwards Deferred Income Tax Assets and Liabilities (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total deferred tax liability, net | 890,171 | 678,245 | | Net deferred tax assets | (16,282) | (20,947) | | Net deferred tax liabilities | 906,453 | 699,192 | - Telecom and subsidiaries have cumulative tax loss carryforwards of **ARS 479,244 million** as of March 31, 2024, with most expiring in 2028[93](index=93&type=chunk) - Income tax expense for 3M24 was **ARS (210,826) million**, a significant shift from a benefit of **ARS 45,665 million** in 3M23[93](index=93&type=chunk) [Note 14 – Other Taxes Payables](index=30&type=section&id=Note%2014%20%E2%80%93%20Other%20taxes%20payables) Total other taxes payables slightly increased, primarily due to current national taxes Other Taxes Payables (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total other taxes payables | 61,307 | 59,374 | | Current | 61,300 | 59,357 | | Non-current | 7 | 17 | [Note 15 – Leases Liabilities](index=31&type=section&id=Note%2015%20%E2%80%93%20Leases%20liabilities) Total leases liabilities decreased, influenced by payments and RECPAM/currency adjustments Leases Liabilities (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total leases liabilities | 113,529 | 134,405 | | Current | 40,178 | 43,570 | | Non-current | 73,351 | 90,835 | - Payments of leases liabilities amounted to **ARS (13,619) million** in 3M24[96](index=96&type=chunk) [Note 16 – Other Liabilities](index=31&type=section&id=Note%2016%20%E2%80%93%20Other%20liabilities) Total other liabilities decreased, with reductions in both current and non-current categories Other Liabilities (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total other liabilities | 36,949 | 44,732 | | Current | 26,736 | 31,022 | | Non-current | 10,213 | 13,710 | - Deferred revenues on prepaid credit decreased from **ARS 12,063 million** to **ARS 9,912 million**[98](index=98&type=chunk) [Note 17 – Provisions](index=31&type=section&id=Note%2017%20%E2%80%93%20Provisions) Total provisions decreased, mainly due to RECPAM and currency translation adjustments Provisions (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total provisions | 40,250 | 47,696 | | Current | 5,228 | 8,097 | | Non-Current | 35,022 | 39,599 | - RECPAM and currency translation adjustments reduced total provisions by **ARS (13,083) million** in 3M24[99](index=99&type=chunk) [Note 18 – Financial Assets and Liabilities](index=33&type=section&id=Note%2018%20%E2%80%93%20Additional%20information%20of%20financial%20assets%20and%20liabilities) The company reported net financial liabilities in foreign currencies, with instruments classified across fair value hierarchy levels Financial Assets and Liabilities in Foreign Currencies (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Assets | 189,971 | 271,373 | | Liabilities | (2,341,538) | (3,414,888) | | Net Liabilities | (2,151,567) | (3,143,515) | - As of March 31, 2024, total financial assets recognized at fair value were **ARS 324,110 million**, with **ARS 321,998 million** in Level 1 (Mutual Funds, Government bonds) and **ARS 2,112 million** in Level 2 (DFI, Indemnification assets)[108](index=108&type=chunk) - The fair value of borrowings was **ARS 2,375,472 million**, compared to a carrying value of **ARS 2,446,036 million**, with Notes classified as Level 1 or 2 and other borrowings as Level 3[110](index=110&type=chunk)[111](index=111&type=chunk) [Note 19 – Purchase Commitments](index=36&type=section&id=Note%2019%20%E2%80%93%20Purchase%20Commitments) The company has outstanding purchase commitments, including for fixed assets, some with 'take or pay' clauses - Total purchase commitments amounted to approximately **ARS 555,780 million** as of March 31, 2024[113](index=113&type=chunk) - Fixed Assets commitments represent **ARS 166,041 million** of the total[113](index=113&type=chunk) - Some commitments include 'take or pay' clauses[113](index=113&type=chunk) [Note 20 – Equity](index=36&type=section&id=Note%2020%20%E2%80%93%20Equity) Telecom Argentina's capital stock remained stable, represented by common shares across four classes, subject to legal reserve requirements Capital Stock (March 31, 2024) | Class of Shares | Total (shares) | | :---------------- | :------------- | | Class "A" | 683,856,600 | | Class "B" | 628,058,019 | | Class "C" | 106,734 | | Class "D" | 841,666,658 | | Total | 2,153,688,011 | - All shares are authorized by the CNV for public offering, and Class B Shares are traded on BYMA and NYSE (as ADSs)[115](index=115&type=chunk) - A minimum of **5%** of net income must be appropriated to a legal reserve until it reaches **20%** of outstanding capital plus inflation adjustment[116](index=116&type=chunk) [Note 21 – Revenues](index=36&type=section&id=Note%2021%20%E2%80%93%20Revenues) Total revenues decreased in 3M24, with Mobile Services remaining the largest contributor, impacted by the inability to raise prices with inflation Revenues by Service (Three-month period ended March 31, 2024 vs. 2023) | Service Category | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :----------------------- | :----------------------------- | :----------------------------- | | Mobile Services | 278,328 | 339,812 | | Internet Services | 168,535 | 182,364 | | Cable Television Services | 101,424 | 154,795 | | Fixed and Data Services | 95,749 | 95,032 | | Other services revenues | 7,836 | 6,769 | | Subtotal Services revenues | 651,872 | 778,772 | | Equipment revenues | 32,044 | 54,441 | | Total Revenues | 683,916 | 833,213 | - Services revenues decreased by **16.3%**, while equipment revenues decreased by **41.1%** year-over-year[117](index=117&type=chunk) [Note 22 – Operating Expenses](index=36&type=section&id=Note%2022%20%E2%80%93%20Operating%20expenses) Total operating expenses decreased in 3M24, with reductions across most categories including employee benefits, taxes, commissions, and depreciation Operating Expenses by Nature (Three-month period ended March 31, 2024 vs. 2023) | Expense Category | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Employee benefit expenses and severance payments | (157,824) | (200,408) | | Fees for services, maintenance, materials and supplies | (100,037) | (97,685) | | Taxes and fees with the Regulatory Authority | (52,700) | (64,161) | | Commissions and advertising | (35,507) | (48,550) | | Cost of equipment | (23,857) | (38,663) | | Programming and content costs | (37,456) | (47,770) | | Bad debt expenses | (17,020) | (25,208) | | Other operating expenses | (27,293) | (33,620) | | Depreciation, amortization and impairment of Fixed Assets | (233,281) | (264,278) | | Total Operating Expenses | (710,063) | (845,198) | - Employee benefit expenses decreased by **21.2%** due to headcount reduction, partially offset by salary increases[118](index=118&type=chunk)[174](index=174&type=chunk) - Depreciation, amortization, and impairment of Fixed Assets decreased by **11.7%**, mainly due to assets reaching the end of their useful life[121](index=121&type=chunk)[192](index=192&type=chunk) [Note 23 – Financial Results](index=38&type=section&id=Note%2023%20%E2%80%93%20Financial%20results) Net financial results significantly increased in 3M24, primarily driven by foreign currency exchange gains on borrowings Financial Results (Three-month period ended March 31, 2024 vs. 2023) | Financial Result Category | March 31, 2024 (millions ARS) | March 31, 2023 (millions ARS) | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Interests on borrowings | (26,368) | (26,833) | | Remeasurement in borrowings | (29,511) | 10,981 | | Foreign currency exchange gains on borrowings | 853,723 | 51,644 | | Total financial cost | 797,844 | 34,582 | | Fair value gains/(losses) on financial assets | (23,767) | (11,047) | | Other foreign currency exchange gains (losses) | 97,655 | (3,157) | | RECPAM | 52,700 | 62,129 | | Total other financial results, net | 115,520 | 40,567 | | Total financial results, net | 913,364 | 75,149 | - Foreign currency exchange gains on borrowings increased dramatically from **ARS 51,644 million** in 3M23 to **ARS 853,723 million** in 3M24[122](index=122&type=chunk) - Remeasurement in borrowings shifted from a gain of **ARS 10,981 million** in 3M23 to a loss of **ARS (29,511) million** in 3M24[122](index=122&type=chunk) [Note 24 – Related Party Transactions](index=40&type=section&id=Note%2024%20%E2%80%93%20Balances%20and%20transactions%20with%20Companies%20under%20Section%2033%20-%20Law%20No.%2019%2C550%20and%20Related%20Parties) This note details financial balances and transactions with associates, joint ventures, and other related parties, with CVH as the controlling company - CVH is the controlling company of Telecom Argentina, holding **28.16%** of the capital stock, with additional shares in a Voting Trust[124](index=124&type=chunk) Current Assets with Associates and Joint Ventures (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Trade receivables | 38 | 56 | | Other receivables | 319 | 321 | Current Liabilities with Associates and Joint Ventures (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (millions ARS) | December 31, 2023 (millions ARS) | | :-------------------------- | :----------------------------- | :----------------------------- | | Trade payables | 1,002 | 1,631 | | Other liabilities | 2,559 | 3,575 | [Note 25 – Recent Developments (3M24)](index=42&type=section&id=Note%2025%20%E2%80%93%20Recent%20developments%20corresponding%20to%20the%20three-month%20period%20ended%20March%2031%2C%202024) The precautionary measure suspending Decree No. 690/20 was extended, then the decree was derogated, impacting ICT Services regulation - Precautionary measure suspending Decree No. 690/20 was extended until August 20, 2024[132](index=132&type=chunk) - Decree No. 690/20, which declared ICT Services as essential public services and limited price setting, was derogated by Decree No. 302/24 on April 9, 2024[133](index=133&type=chunk) [Note 26 – Subsequent Events](index=42&type=section&id=Note%2026%20%E2%80%93%20Subsequent%20events%20to%20March%2031%2C%202024) Shareholders approved absorbing accumulated deficit from a voluntary reserve, reclassifying a portion, and delegating power for potential dividend distribution - Shareholders approved absorbing **ARS 257,730 million** (**ARS 390,775 million** in current currency as of March 31, 2024) of accumulated deficit from the 'Voluntary reserve to maintain the Company's level of capital expenditures and its current solvency level'[134](index=134&type=chunk) - **ARS 84,257 million** (**ARS 127,752 million** in current currency as of March 31, 2024) was reclassified from the voluntary reserve to 'Contributed Surplus'[134](index=134&type=chunk) - The Board of Directors was delegated power to reverse the voluntary reserve between October 1, 2024, and December 31, 2024, for dividend distribution up to **US$100 million**[134](index=134&type=chunk) [Corporate Information](index=44&type=section&id=CORPORATE%20INFORMATION) This section provides market quotation data for Telecom Argentina's shares and ADSs, along with contact information for auditors and investor relations [Market Quotations and Investor Relations](index=44&type=section&id=Market%20Quotations%20and%20Investor%20Relations) This section provides market quotation data for Telecom Argentina's shares on BYMA and its ADSs on NYSE, along with contact information BYMA Market Quotation ($/share) | Quarter | High ($) | Low ($) | Volume of shares traded (in millions) | | :------ | :------- | :------ | :------------------------------------ | | 1Q23 | 499.50 | 332.25 | 8.4 | | 2Q23 | 687.45 | 390.73 | 7.0 | | 3Q23 | 959.80 | 621.60 | 11.9 | | 4Q23 | 1,752.45 | 773.30 | 10.6 | | 1Q24 | 2,073.15 | 1,333.80| 8.5 | NYSE Market Quotation (US$/ADR) | Quarter | High (US$/ADR) | Low (US$/ADR) | Volume of ADRs traded (in millions) | | :------ | :------------- | :------------ | :---------------------------------- | | 1Q23 | 6.70 | 4.24 | 8.2 | | 2Q23 | 6.72 | 4.71 | 6.5 | | 3Q23 | 6.43 | 4.79 | 8.0 | | 4Q23 | 8.64 | 4.60 | 11.0 | | 1Q24 | 7.97 | 6.53 | 8.7 | - Independent Auditors are Price Waterhouse & Co S.R.L. (PricewaterhouseCoopers)[136](index=136&type=chunk) [Operating and Financial Review and Prospects](index=45&type=section&id=OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS%20AS%20OF%20MARCH%2031%2C%202024) This section provides an overview of Telecom Argentina's operating and financial performance, liquidity, capital resources, and future outlook as of March 31, 2024 [1. General Considerations](index=45&type=section&id=1.%20General%20considerations) This section highlights that the operating and financial review is presented with comparative balances restated to current currency due to Argentina's hyperinflation - Financial information is restated to current currency as of March 31, 2024, due to Argentina's hyperinflationary economy (IAS 29)[139](index=139&type=chunk) - The National Consumer Price Index (CPI) increased by **287.9%** for the twelve-month period ended March 31, 2024[140](index=140&type=chunk) [2. Telecom's Activities (3M24 vs. 3M23)](index=45&type=section&id=2.%20Telecom's%20activities%20for%20the%20three-month%20period%20ended%20March%2031%2C%202024%20%28%223M24%22%29%20and%202023%20%28%223M23%22%29) Net income significantly increased in 3M24 due to financial results, despite decreased revenues and operating loss, while Adjusted EBITDA declined Key Financial Highlights (3M24 vs. 3M23) | Indicator | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | Variation (%) | | :------------------------------------------ | :--------------- | :--------------- | :-------------------- | :------------ | | Revenues | 683,916 | 833,213 | (149,297) | (17.9) | | Operating loss | (26,147) | (11,985) | (14,162) | 118.2 | | Financial costs | 797,844 | 34,582 | 763,262 | n/a | | Other financial results, net | 115,520 | 40,567 | 74,953 | 184.8 | | Net income for the period | 675,032 | 110,477 | 564,555 | n/a | | Adjusted EBITDA | 207,134 | 252,293 | (45,159) | (17.9) | - Net income increased to **ARS 675,032 million** in 3M24 (**98.7%** of revenues) from **ARS 110,477 million** in 3M23 (**13.3%** of revenues), mainly due to financial results[142](index=142&type=chunk) - Adjusted EBITDA decreased by **17.9%** to **ARS 207,134 million**, maintaining **30.3%** of revenues, as revenue decline outpaced operating cost reductions[143](index=143&type=chunk) [Revenues](index=47&type=section&id=Revenues) Total revenues decreased by 17.9% in 3M24, primarily because the company could not increase prices at the same rate as Argentina's high annual inflation Revenues by Service (3M24 vs. 3M23) | Service Category | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | Variation (%) | | :----------------------- | :--------------- | :--------------- | :-------------------- | :------------ | | Mobile Services | 278,328 | 339,812 | (61,484) | (18.1) | | Internet Services | 168,535 | 182,364 | (13,829) | (7.6) | | Cable Television Services | 101,424 | 154,795 | (53,371) | (34.5) | | Fixed and Data Services | 95,749 | 95,032 | 717 | 0.8 | | Other services revenues | 7,836 | 6,769 | 1,067 | 15.8 | | Equipment revenues | 32,044 | 54,441 | (22,397) | (41.1) | - The inability to raise prices in line with **287.9%** annual inflation was the main driver for the revenue decrease[145](index=145&type=chunk) [Mobile Services](index=47&type=section&id=Mobile%20Services) Mobile services revenues decreased by 18.1% in 3M24, primarily due to a decrease in ARPU despite an increase in the customer base - Mobile services revenues in Argentina decreased by **21%** to **ARS 248,513 million**[148](index=148&type=chunk) - ARPU in Argentina decreased by **23.6%** to **ARS 3,872.0**, mainly due to inflation and increased discounts[149](index=149&type=chunk) - Mobile customers in Argentina increased to **21.2 million**, with prepaid customers growing by **8.7%** and postpaid decreasing by **4.2%**[150](index=150&type=chunk) [Internet Services](index=48&type=section&id=Internet%20Services) Internet services revenues decreased by 7.6% in 3M24, mainly due to a decrease in Broadband Internet access ARPU, while the customer base remained stable - Internet services revenues amounted to **ARS 168,535 million** in 3M24[154](index=154&type=chunk) - Broadband Internet access ARPU decreased by **9.8%** to **ARS 12,733.2**, impacted by inflation[155](index=155&type=chunk)[156](index=156&type=chunk) - The customer base remained stable at **4.1 million**, with a churn rate of **1.5%** per month[157](index=157&type=chunk) [Cable Television Services](index=49&type=section&id=Cable%20Television%20Services) Cable television service revenues decreased by 34.5% in 3M24, driven by a significant decrease in ARPU and a reduction in the customer base - Cable television service revenues amounted to **ARS 101,424 million** in 3M24[159](index=159&type=chunk) - ARPU decreased by **37.5%** to **ARS 9,041.0**, primarily due to the inability to increase prices in line with inflation[160](index=160&type=chunk)[161](index=161&type=chunk) - The customer base decreased by **1.5%** to **3.1 million** customers in Argentina[162](index=162&type=chunk) [Fixed and Data Services](index=50&type=section&id=Fixed%20and%20Data%20Services) Fixed and data services revenues slightly increased by 0.8% in 3M24, mainly due to dollar-denominated data service appreciation, despite ARPU and customer base reductions - Fixed and data services revenues amounted to **ARS 95,749 million** in 3M24[164](index=164&type=chunk) - ARPU of fixed telephony services decreased by **6.4%** to **ARS 5,875.6**[165](index=165&type=chunk)[166](index=166&type=chunk) - The customer base of fixed telephony services decreased by **4.5%** to **2.8 million**[167](index=167&type=chunk) [Other Services Revenues](index=50&type=section&id=Other%20services%20revenues) Other services revenues increased by 15.8% in 3M24, primarily driven by significant growth in fintech services, particularly the 'Personal Pay' digital wallet - Other services revenues increased by **ARS 1,067 million** to **ARS 7,836 million** in 3M24[168](index=168&type=chunk) - Fintech services in Argentina increased by **ARS 1,839 million**, driven by the growth of 'Personal Pay' digital wallet users[170](index=170&type=chunk) - 'Personal Pay' digital wallet users grew from **1.0 million** in 3M23 to **2.5 million** in 3M24[170](index=170&type=chunk) [Equipment Revenues](index=50&type=section&id=Equipment) Equipment revenues decreased by 41.1% in 3M24, mainly due to a substantial reduction in handsets sold - Equipment revenues amounted to **ARS 32,044 million** in 3M24, a decrease of **ARS 22,397 million**[171](index=171&type=chunk) - The decrease is primarily attributed to a **37%** reduction in handsets sold[171](index=171&type=chunk) [Operating Costs (Excluding D&A)](index=50&type=section&id=Operating%20costs%20%28without%20depreciation%2C%20amortization%20and%20impairment%20of%20Fixed%20Assets%29) Total operating costs (excluding D&A) decreased by 17.9% in 3M24, indicating some cost control efforts, though not fully offsetting inflation Operating Costs (Excluding D&A) (3M24 vs. 3M23) | Cost Category | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | Variation (%) | | :------------------------------------------ | :--------------- | :--------------- | :-------------------- | :------------ | | Employee benefit expenses and severance payments | (157,824) | (200,408) | 42,584 | (21.2) | | Interconnection and transmission costs | (25,088) | (24,855) | (233) | 0.9 | | Fees for services, maintenance, materials and supplies | (100,037) | (97,685) | (2,352) | 2.4 | | Taxes and fees with the Regulatory Authority | (52,700) | (64,161) | 11,461 | (17.9) | | Commissions and advertising | (35,507) | (48,550) | 13,043 | (26.9) | | Cost of equipment and handsets | (23,857) | (38,663) | 14,806 | (38.3) | | Programming and content costs | (37,456) | (47,770) | 10,314 | (21.6) | | Bad debt expenses | (17,020) | (25,208) | 8,188 | (32.5) | | Other operating expenses | (27,293) | (33,620) | 6,327 | (18.8) | | Total operating costs | (476,782) | (580,920) | 104,138 | (17.9) | - Operating costs did not increase at the same level as the **287.9%** annual inflation, indicating some cost management[173](index=173&type=chunk)[174](index=174&type=chunk) [Employee Benefit Expenses and Severance Payments](index=51&type=section&id=Employee%20benefit%20expenses%20and%20severance%20payments) Employee benefit expenses and severance payments decreased by 21.2% in 3M24, primarily due to headcount reduction, partially offset by salary increases - Expenses decreased by **ARS 42,584 million** to **ARS 157,824 million**[174](index=174&type=chunk) - Headcount reduced from **21,681** to **21,079** employees[174](index=174&type=chunk) [Interconnection and Transmission Costs](index=51&type=section&id=Interconnection%20and%20transmission%20costs) Interconnection and transmission costs slightly increased by 0.9% in 3M24, mainly due to exchange rate increases for dollar-denominated services, partially offset by network optimization - Costs increased by **ARS 233 million** to **ARS 25,088 million**[176](index=176&type=chunk) - Increase driven by exchange rate for dollar-denominated services, offset by optimization of links and sites[176](index=176&type=chunk) [Fees for Services, Maintenance, Materials and Supplies](index=51&type=section&id=Fees%20for%20services%2C%20maintenance%2C%20materials%20and%20supplies) Fees for services, maintenance, materials and supplies increased by 2.4% in 3M24, primarily due to higher maintenance and dollar-denominated service costs - Expenses increased by **ARS 2,352 million** to **ARS 100,037 million**[178](index=178&type=chunk) - Maintenance and materials costs increased, while fees for services decreased[178](index=178&type=chunk) [Taxes and Fees with the Regulatory Authority](index=51&type=section&id=Taxes%20and%20fees%20with%20the%20Regulatory%20Authority) Taxes and fees with the Regulatory Authority decreased by 17.9% in 3M24, mainly due to the effect of decreased sales - Expenses decreased by **ARS 11,461 million** to **ARS 52,700 million**[180](index=180&type=chunk) - The decrease was mainly due to the effect of the decrease in sales[180](index=180&type=chunk) [Commissions and Advertising](index=51&type=section&id=Commissions%20and%20advertising) Commissions and advertising expenses decreased by 26.9% in 3M24, primarily due to lower charges for agent and collection commissions - Expenses decreased by **ARS 13,043 million** to **ARS 35,507 million**[182](index=182&type=chunk) - Mainly due to lower charges for agent commissions and collection commissions[182](index=182&type=chunk) [Cost of Equipment](index=51&type=section&id=Cost%20of%20equipment) Cost of equipment decreased by 38.3% in 3M24, mainly due to a significant reduction in handsets sold - Cost of equipment decreased by **ARS 14,806 million** to **ARS 23,857 million**[183](index=183&type=chunk) - This decrease is mainly due to a **37%** decrease in handsets sold[183](index=183&type=chunk) [Programming and Content Costs](index=51&type=section&id=Programming%20and%20content%20costs) Programming and content costs decreased by 21.6% in 3M24, mainly due to commercial efficiency, despite price increases in cable television signals - Costs decreased by **ARS 10,314 million** to **ARS 37,456 million**[184](index=184&type=chunk) - Decrease attributed to commercial efficiency, despite price increases in cable TV signals[184](index=184&type=chunk) [Bad Debt Expenses](index=53&type=section&id=Bad%20debt%20expenses) Bad debt expenses decreased by 32.5% in 3M24, representing 2.5% of revenues, mainly due to ongoing credit recovery actions - Expenses decreased by **ARS 8,188 million** to **ARS 17,020 million**[187](index=187&type=chunk) - Represented **2.5%** of revenues in 3M24, down from **3.0%** in 3M23[187](index=187&type=chunk) - Decrease mainly due to continuing credit recovery actions[187](index=187&type=chunk) [Other Operating Expenses](index=53&type=section&id=Other%20operating%20expenses) Other operating expenses decreased by 18.8% in 3M24, mainly due to lower charges in legal claims and contingent liabilities, and energy and other public services - Expenses decreased by **ARS 6,327 million** to **ARS 27,293 million**[188](index=188&type=chunk) - Mainly due to lower legal claims and energy/public services costs[188](index=188&type=chunk) [Adjusted EBITDA](index=53&type=section&id=Adjusted%20EBITDA) Consolidated Adjusted EBITDA decreased by 17.9% in 3M24, maintaining 30.3% of total consolidated revenues, reflecting operating performance excluding capital structure and taxation Adjusted EBITDA Reconciliation (3M24 vs. 3M23) | Indicator | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | Variation (%) | | :------------------------------------------ | :--------------- | :--------------- | :-------------------- | :------------ | | Net income | 675,032 | 110,477 | 564,555 | n/a | | Income tax (benefit) expense | 210,826 | (45,665) | 256,491 | n/a | | Other financial results, net | (115,520) | (40,567) | (74,953) | 184.8 | | Financial cost | (797,844) | (34,582) | (763,262) | n/a | | (Earnings) Losses from associates and joint ventures | 1,359 | (1,648) | 3,007 | n/a | | Operating loss | (26,147) | (11,985) | (14,162) | 118.2 | | Depreciation, amortization and impairment of Fixed Assets | 233,281 | 264,278 | (30,997) | (11.7) | | Adjusted EBITDA | 207,134 | 252,293 | (45,159) | (17.9) | - Adjusted EBITDA decreased by **ARS 45,159 million**, or **17.9%**, in 3M24[191](index=191&type=chunk) - Adjusted EBITDA represented **30.3%** of total consolidated revenues in both 3M24 and 3M23[191](index=191&type=chunk) [Depreciation, Amortization and Impairment of Fixed Assets](index=53&type=section&id=Depreciation%2C%20amortization%20and%20impairment%20of%20Fixed%20Assets) Depreciation, amortization, and impairment of Fixed Assets decreased by 11.7% in 3M24, primarily due to assets reaching the end of their useful life - Expenses decreased by **ARS 30,997 million** to **ARS 233,281 million**[192](index=192&type=chunk) - Variation is due to assets ending their useful life, partially offset by amortization of subsequent CAPEX[193](index=193&type=chunk) [Operating Loss](index=54&type=section&id=Operating%20loss) Operating loss increased to ARS (26,147) million in 3M24, representing (3.8)% of revenues, compared to ARS (11,985) million in 3M23 - Operating loss increased by **ARS 14,162 million**[194](index=194&type=chunk) - Operating loss represented **(3.8)%** of revenues in 3M24, compared to **(1.4)%** in 3M23[194](index=194&type=chunk) [Financial Results, Net](index=54&type=section&id=Financial%20results%2C%20net) Telecom recorded a significant net financial gain in 3M24, primarily driven by foreign exchange gains due to the U.S. dollar appreciating against the Argentine Peso - Net financial gain of **ARS 913,364 million** in 3M24, up from **ARS 75,149 million** in 3M23[195](index=195&type=chunk) - Foreign exchange gains measured in real terms amounted to **ARS 951,378 million**, driven by the U.S. dollar appreciating **6.1%** against the Argentine Peso[195](index=195&type=chunk) - Partially offset by losses from remeasurement in borrowings of **ARS 29,511 million** and fair value losses on financial assets of **ARS 23,767 million**[195](index=195&type=chunk) [Income Tax Benefit (Expense)](index=54&type=section&id=Income%20tax%20benefit%20%28expense%29) Income tax shifted from a benefit in 3M23 to an expense in 3M24, including current tax expenses and a deferred tax expense - Income tax expense of **ARS 210,826 million** in 3M24, compared to a benefit of **ARS 45,665 million** in 3M23[197](index=197&type=chunk) - Includes current tax expenses of **ARS 1,738 million** and a deferred tax expense of **ARS 209,088 million** in 3M24[197](index=197&type=chunk) [Net Income](index=54&type=section&id=Net%20income) Net income significantly increased in 3M24, primarily due to the increase in income before income tax, partially offset by the income tax expense - Net income increased by **ARS 564,555 million**[198](index=198&type=chunk) - Net income attributable to controlling shareholders was **ARS 672,260 million** in 3M24[199](index=199&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) Telecom's liquidity relies on operating cash flows and third-party financing, maintaining negative working capital typical for capital-intensive firms, while complying with debt covenants - Main liquidity sources are cash flows from operations and third-party financing; uses include CAPEX, operating expenses, and debt payments[200](index=200&type=chunk) - Telecom has a negative working capital of **ARS (763,408) million** as of March 31, 2024, typical for a capital-intensive company[210](index=210&type=chunk) - The company has complied with the Net Debt/EBITDA ratio and other commitments under its debt waivers[212](index=212&type=chunk) [Sources and Uses of Funds](index=55&type=section&id=Sources%20and%20Uses%20of%20Funds) Telecom Argentina expects to fund operations and investments primarily through cash flows from operations and external financing, with key expenditures including CAPEX and debt servicing - Expected short-term liquidity sources are operating cash flows and third-party financing (capital markets, financial institutions)[200](index=200&type=chunk) - Principal uses of cash flows are capital expenditures, operating expenses, dividend payments, and debt payments[200](index=200&type=chunk) [Borrowings Developments during 3M24](index=55&type=section&id=Borrowings%20Developments%20during%203M24) No significant developments related to borrowings occurred during the first three months of 2024 - No significant developments related to borrowings occurred during 3M24[201](index=201&type=chunk) [Cash Flow](index=55&type=section&id=Cash%20Flow) Cash and cash equivalents decreased in 3M24, with operating cash flows decreasing, investing cash outflows decreasing, and financing cash inflows significantly increasing Consolidated Cash Flows (3M24 vs. 3M23) | Cash Flow Category | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | | :------------------------------------------ | :--------------- | :--------------- | :-------------------- | | Cash flows provided by operating activities | 171,229 | 206,118 | (34,889) | | Cash flows used in investing activities | (224,218) | (237,682) | 13,464 | | Cash flows provided by financing activities | 27,656 | 9,735 | 17,921 | | Net foreign exchange differences and RECPAM | (66,315) | (5,950) | (60,365) | | Cash and cash equivalents at end of period | 150,604 | 161,330 | (10,726) | - Operating cash flows decreased by **ARS 34,889 million** (**16.9%**) in 3M24, primarily due to an increase in net loss adjusted for non-cash items[205](index=205&type=chunk) - Financing activities provided **ARS 27,656 million** in 3M24, including **ARS 191,171 million** from borrowings proceeds[209](index=209&type=chunk) [Liquidity](index=56&type=section&id=Liquidity) Telecom maintains a negative working capital, typical for a capital-intensive company, relying on spontaneous financing from suppliers Working Capital Breakdown (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 ($ million) | December 31, 2023 ($ million) | Variation ($ million) | | :------------------------------------------ | :------------------------- | :-------------------------- | :-------------------- | | Operating working capital - negative | (376,789) | (525,147) | 148,358 | | Negative working capital (current assets — current liabilities) | (763,408) | (946,938) | 183,530 | | Liquidity rate (current assets / current liabilities) | 0.5 | 0.5 | - | - Cash and cash equivalents were **ARS 150,604 million** as of March 31, 2024[211](index=211&type=chunk) [Compliance with Covenants](index=56&type=section&id=Compliance%20with%20covenants) Telecom Argentina has complied with the Net Debt/EBITDA ratio and other commitments stipulated in the waivers obtained in March 2024 - The company obtained waivers to increase the Net Debt/EBITDA ratio to **3.75** for the period between December 31, 2023, and December 31, 2024[212](index=212&type=chunk) - Telecom has complied with the established Net Debt/EBITDA ratio and other commitments[212](index=212&type=chunk) [Capital Expenditures (CAPEX)](index=56&type=section&id=Capital%20Expenditures) Total CAPEX and Right of Use asset additions increased in 3M24, focusing on expanding services, deploying 4G/5G networks, and improving mobile site connectivity CAPEX and Right of Use Asset Additions (3M24 vs. 3M23) | Category | 3M24 ($ million) | 3M23 ($ million) | Variation ($ million) | Variation (%) | | :-------------------------------- | :--------------- | :--------------- | :-------------------- | :------------ | | PP&E | 98,191 | 94,403 | 3,788 | 4.0 | | Intangibles assets | 6,477 | 4,014 | 2,463 | 61.4 | | Total CAPEX | 104,668 | 98,417 | 6,251 | 6.4 | | Rights of use assets | 40,804 | 35,506 | 5,298 | 14.9 | | Total CAPEX and Right of use asset additions | 145,472 | 133,923 | 11,549 | 8.6 | - Main CAPEX projects focus on expanding cable TV and Internet, deploying 4G/5G services, and improving mobile site connectivity[215](index=215&type=chunk)[216](index=216&type=chunk) - 4G/LTE network coverage reached **97%** of the urban population, and 5G network expansion aims for **200 sites** in 2024[216](index=216&type=chunk) [3. Trend Information](index=58&type=section&id=3.%20Trend%20information) Telecom Argentina anticipates inflation deceleration and exchange rate stability, focusing on balancing price adjustments, investing in digital services, and expanding 5G technology - Expects inflation deceleration and exchange rate stability, along with regularization in technological equipment purchases[220](index=220&type=chunk) - Focuses on balancing price adjustments, commercial promotions, and sustained investment in systems and infrastructure for digital services[221](index=221&type=chunk)[222](index=222&type=chunk) - The repeal of Decree No. 690/20 on April 10, 2024, is expected to reduce regulatory uncertainty and promote free competition in the ICT Services industry[227](index=227&type=chunk) - Continued deployment of 5G networks, with plans to reach **200 sites** in 2024, is a key strategic initiative[216](index=216&type=chunk)[225](index=225&type=chunk) [Unaudited Selected Financial Data](index=60&type=section&id=UNAUDITED%20SELECTED%20FINANCIAL%20DATA) This section presents supplemental unaudited selected financial data, including statements of financial position, income, and cash flows, recast to current currency as of March 31, 2024 [Financial Statements – Application of Accounting Standards](index=60&type=section&id=Financial%20Statements%20%E2%80%93%20Application%20of%20Accounting%20Standards) Telecom Argentina's annual financial statements are prepared under IFRS, while interim statements are prepared under IAS 34, both in current currency - Annual Financial Statements (2023, 2022, 2021) are prepared in Pesos in current currency as of December 31, 2023, under IFRS[232](index=232&type=chunk) - Q1 2024 Unaudited Financial Statements are prepared in Pesos in current currency as of March 31, 2024, under IAS 34[233](index=233&type=chunk) [Financial Statements – Application of IAS 29](index=60&type=section&id=Financial%20Statements%20%E2%80%93%20Application%20of%20IAS%2029%20%22Financial%20Repor

Financial Performance - Revenues for the three-month period ended March 31, 2024, were ARS 683,916 million, a decrease of 18% compared to ARS 833,213 million in the same period of 2023[23] - Net income for the period was ARS 675,032 million, significantly up from ARS 110,477 million in the prior year, representing a 510% increase[26] - Earnings per share attributable to the controlling company increased to ARS 312.14 from ARS 49.99, reflecting a substantial growth in profitability[23] - Total comprehensive income for the three-month period ended March 31, 2024, was ARS 598,958 million, compared to ARS 104,663 million in the same period of 2023, showing an increase of about 471%[32] - The company reported a significant foreign currency exchange gain on borrowings of $853,723 million for the three-month period ended March 31, 2024, compared to $51,644 million in the same period of 2023[116] - The company reported a net financial gain of $913,364 million in 3M24, a significant increase from $75,149 million in 3M23, driven primarily by foreign exchange gains[165] Assets and Liabilities - Total assets decreased to ARS 8,143,553 million as of March 31, 2024, down from ARS 8,305,246 million at the end of 2023[21] - Total liabilities reduced to ARS 4,167,697 million from ARS 4,900,683 million, indicating improved financial stability[21] - The total equity attributable to the controlling company as of March 31, 2024, was ARS 3,885,937 million, an increase from ARS 3,864,686 million as of March 31, 2023[29] - The company reported a net increase in liabilities of $102.484 million in Q1 2024, compared to $69.832 million in Q1 2023[64] - Total liabilities amounted to $3,226,619 million, an increase of 45.6% from $2,215,334 million as of March 31, 2023[83] Cash Flow and Investments - Total cash flows from operating activities for the three-month period ended March 31, 2024, amounted to ARS 171,229 million, compared to ARS 206,118 million in 2023, indicating a decrease of about 17%[32] - The company reported a net decrease in cash and cash equivalents of ARS 25,333 million for the three-month period ended March 31, 2024, compared to a decrease of ARS 21,829 million in the same period of 2023[32] - The company’s total cash flows used in investing activities for the three-month period ended March 31, 2024, were ARS 224,218 million, a decrease from ARS 237,682 million in 2023[32] Operational Efficiency - The company continues to focus on improving operational efficiency and reducing costs in response to market challenges[23] - The company is focusing on digital transformation through automation, artificial intelligence, cloudification, and big data management to enhance operational efficiency[189] Market Conditions - The National Consumer Price Index (CPI) in Argentina increased by 287.9% year-over-year as of March 31, 2024, indicating a high inflationary environment[58] - The annual inflation rate in Argentina reached 287.9%, impacting the company's ability to increase prices in line with inflation during Q1 2024[134] Future Outlook - The company plans to expand its 5G network to reach 200 sites in 2024, enhancing service offerings and connectivity[183] - The company anticipates a trend towards inflation deceleration and stability in the exchange rate, which may positively impact future revenues[180] - The company is seeking financing opportunities in international markets and local capital markets to support its investment plan[186] Revenue Breakdown - Mobile services revenues fell by 18.1% to $278,328 million, while cable television services revenues dropped by 34.5% to $101,424 million[133] - Internet services revenues decreased by $13,829 million or 7.6% to $168,535 million in 3M24, driven by a 9.8% decrease in Broadband Internet access ARPU[141] - Revenues from other services increased by $1,067 million or 15.8% to $7,836 million in 3M24, mainly due to fintech services growth[152] Cost Management - Operating expenses for the three-month period ended March 31, 2024, amounted to $710,063 million, down 16% from $845,198 million in the same period of 2023[112] - Employee benefit expenses and severance payments decreased from $200,408 million in Q1 2023 to $157,824 million in Q1 2024, reflecting a reduction of 21%[112] Shareholder Information - The weighted average number of shares outstanding during the period was 2,153,688,011, with basic and diluted earnings per share remaining the same due to no dilutive potential common stock outstanding[52][53] - Telecom Argentina's capital stock remained stable at $2,153,688,011 as of both March 31, 2024, and December 31, 2023[107]

Financial Data and Key Metrics Changes - The EBITDA margin for the first quarter of 2024 was 30.3%, remaining steady year-over-year despite a challenging macroeconomic environment [7][22][41] - Revenues totaled almost $800 million, with a decrease of 18% in real terms year-over-year, while nominal revenues increased by 207% [22][34] - The company generated approximately $116 million in free cash flow before dividends and interest payments during the first quarter of 2024 [8][51] - Net income for the first quarter of 2024 was ARS675 million, primarily due to positive exchange differences from the appreciation of the peso [18][22] Business Line Data and Key Metrics Changes - The mobile subscriber base grew by over 3% year-over-year, with mobile data usage increasing by 21% [10][23] - FTTH accesses in the broadband segment continued to grow, while HFC accesses remained stable [14][28] - Pay TV business in Paraguay saw growth, with Flow unique customers reaching almost 1.5 million, a 12% increase year-over-year [11][24] Market Data and Key Metrics Changes - The accumulated inflation in Argentina for the third quarter of 2024 was 51.6%, with year-over-year inflation reaching 287.9% [13] - The company maintained a strong market position in Paraguay, being the second most important player in the mobile market with 2.4 million customers [26][28] Company Strategy and Development Direction - The company is focusing on expanding its FTTH technology and mobile network, including the development of 5G [8][50] - A pricing strategy has been implemented to minimize the impact of inflation on subscribers, with adjustments made on a monthly basis [13][49] - The B2B segment is expected to grow significantly, with a focus on providing integrated ICT solutions [31][32] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the company in the face of FX depreciation and high inflation, maintaining EBITDA margins and growing the customer base [41][55] - The company anticipates continued access to local capital markets for financing needs and is exploring liability management transactions abroad [54][55] Other Important Information - The total outstanding debt as of March 2024 amounted to more than $2.7 billion, with a significant portion in cross-border instruments [20][38] - The company has been successful in managing labor costs, with salary increases below inflation contributing positively to the EBITDA margin [17][48] Q&A Session Summary Question: What is the company's strategy regarding inflation and pricing? - The company has been adjusting prices monthly to manage the impact of inflation while retaining customers through discounts and promotions [13][49] Question: How is the company performing in its regional operations? - The company is performing well in Paraguay, being the second largest mobile player and expanding its FinTech business [26][28] Question: What are the expectations for the B2B segment? - The B2B segment is expected to grow significantly, with a focus on providing integrated solutions to meet market demands [31][32]

Financial Performance - Telecom Argentina reported a negative retained earnings balance of AR$ 257,729,766,816 as of December 31, 2023[8]. - The Board of Directors proposed to absorb the negative retained earnings from the "Voluntary Reserve" to maintain capital expenditures and solvency[19]. Compensation and Budget Proposals - Total compensation for the Board of Directors for the fiscal year ended December 31, 2023, is proposed at AR$ 889,453,418[22]. - The proposed compensation for the Supervisory Committee for the fiscal year ended December 31, 2023, is AR$ 106,243,621[23]. - The budget for the Audit Committee for Fiscal Year 2024 is set at AR$ 127,958,619[15]. - The compensation for audit services provided by Independent Auditors for Fiscal Year 2023 is proposed at AR$ 490,046,900[28]. - The proposed compensation for the Board of Directors of Telecom Argentina for fiscal year 2023 is AR$ 889,453,418.00, which is considered reasonable and adequate in terms of market conditions for similar companies[53]. - The budget for the Audit Committee's functioning for fiscal year 2024 is proposed to be AR$ 127,958,619.00, adjusted for inflation based on the currency as of August 31, 2023[30][47]. Shareholders' Meeting - The Shareholders' Meeting is scheduled for April 25, 2024, to discuss the proposals and financial documentation for Fiscal Year 2023[6]. - The Board of Directors will seek delegation of powers to decide on the release of the "Voluntary Reserve" for potential dividend distribution[19]. - The meeting will also address the performance of the Board of Directors and Supervisory Committee members during Fiscal Year 2023[21]. - The proposal to authorize advance payments of fees to Directors for fiscal year 2024 is contingent upon the decision of the Shareholders' Meeting[36][56]. Audit Committee Activities - The financial documentation for Fiscal Year 2023 includes the Integrated Annual Report and Financial Statements, which have been approved by the Board and Audit Committee[18]. - Telecom Argentina plans to appoint Price Waterhouse & Co. S.R.L. as Independent Auditors for fiscal year 2024, with Alejandro Javier Rosa as the certifying accountant[39][41]. - The total amount proposed for the Independent Auditors' services for fiscal year 2023 is AR$ 490,046,900.00, which includes AR$ 334,810,700.00 for financial statements audit and AR$ 155,236,200.00 for Sarbanes-Oxley Act certification[38][42]. - The Audit Committee unanimously approved the proposed fees for the Independent Auditors, considering the complexity and specialization required for the audit activities[41]. - The Audit Committee's total expenses for fiscal year 2023 amounted to AR$ 9,714,715.00[45]. - The Audit Committee conducted a review of Price Waterhouse & Co. S.R.L.'s performance and concluded that the firm meets stringent levels of quality and independence[44][45]. - The Audit Committee's budget request for fiscal year 2024 is consistent with the estimated needs for training and advisory services[47]. Meeting Format - The meeting was held in a hybrid format, allowing both in-person and remote participation, ensuring accessibility for all members[33].

Economic Environment - As of December 29, 2023, the Argentine Peso depreciated to P$808.45 per US$1.00, representing an appreciation of the U.S. Dollar of approximately 356.3% from P$177.16 per dollar at December 30, 2022[139]. - The average exchange rate for 2023 was P$295.29 per dollar, with a significant appreciation of 118% against the Argentine Peso following the new administration's assumption in December 2023[139]. - The inflation rate for January and February 2024 was reported at 20.6% and 13.2%, respectively, with an accumulated figure of 36.6% for the first two months of the year[139]. - Argentina's inflation rate reached 211.4% in 2023, with a monthly inflation peak of over 25% in December, significantly impacting the economy and Telecom's margins[164]. - The BCRA's "Relevamiento de Expectativas de Mercado" estimated an inflation rate of 227% for the year 2024, while the OECD projected inflation at 250.6%[139]. - The Argentine government has implemented measures to stabilize the Peso, including stronger exchange regulations and increased short-term interest rates[140]. - The Argentine government has limited access to international financing, which could hinder its ability to implement necessary reforms and sustain economic growth[178]. - Argentina's economy contracted during 2023, following growth in 2021 and 2022, indicating ongoing economic instability[171]. Company Financials - Telecom Argentina reported revenues of P$2,059,101 million and a net loss of P$249,687 million, with Adjusted EBITDA of P$579,396 million and total assets of P$5,477,603 million[317]. - As of December 31, 2023, Telecom Argentina's total indebtedness, including accrued interest, was P$2,128,069 million, representing a 45.6% increase compared to the previous year[269]. - 85.6% of Telecom's debt is scheduled to mature within the next three years, with 26.5% maturing in 2024[269]. - The company holds investments in Argentine sovereign bonds amounting to P$111,339 million as of December 31, 2023, which could be adversely affected by any new default events[183]. - Telecom's outstanding borrowings contain restrictive covenants that may limit its ability to pursue business strategies and could result in defaults if breached[266]. Regulatory Environment - The telecommunications sector is subject to significant regulation, which may impose limitations on operations and affect financial performance[186]. - Regulatory changes, specifically Decree No. 690/20, have established price controls on essential ICT services, which may adversely affect the company's revenues and operating margins[213][215]. - The Argentine government has declared a public emergency in various sectors until December 31, 2025, which may lead to significant economic reforms and deregulation initiatives[158]. - The enforcement of the Law for the Promotion of Registered Labor and Prevention of Labor Fraud may have a material adverse effect on Telecom's operations and financial position[242]. Market Competition - Competition in the fixed and mobile telephony, cable television, and Internet sectors is increasing, potentially impacting market share and financial results[201]. - The company faces intense competition from established cable television and Internet service providers, which may lead to increased pressure on pricing and market share[206][208]. - The entry of new competitors into the market could further pressure pricing and market share for the company[209]. Operational Challenges - Telecom Argentina's ability to service its liabilities and pay dividends may be adversely affected by the continued devaluation of the Argentine Peso and foreign exchange restrictions[149]. - The company is highly exposed to risks associated with fluctuations in the Argentine Peso, which may impact its capital expenditure program and trade payables[150]. - The Argentine System of Imports (SIRA) has created significant delays and barriers for companies accessing foreign exchange, affecting their ability to meet obligations[144]. - Churn rates in mobile telephony, cable television, and Internet services significantly affect revenues, with any substantial increase potentially leading to material adverse effects[224]. - The company must invest in new technologies and network upgrades to remain competitive, which may require substantial capital expenditures[216][218]. Strategic Initiatives - Telecom Argentina aims to enhance its fixed and mobile networks while expanding broadband coverage and capacity, focusing on new business opportunities in the digital economy[332]. - The company is committed to becoming a significant player in the Latin American financial industry by developing monetizable products in the digital ecosystem, leveraging 5G technology[333]. - On April 24, 2023, Telecom Argentina entered a joint venture by acquiring 50% of OPH, which holds a 100% equity interest in Open Pass S.A.U., focusing on software development and digital wallet platform[322][323]. - Telecom Argentina was awarded Lot 2 in the 5G spectrum auction on October 24, 2023, with a winning bid of US$350 million[326]. - The company submitted two new tranches under the IDB loan totaling US$120 million (approximately P$42,012 million) on October 17, 2023, to finance the 5G spectrum acquisition[324]. Cybersecurity and Compliance - Telecom's insurance policy does not currently cover damages caused by cyberattacks, posing a risk to its business operations[248]. - The company has implemented new security measures to protect its operations and customer information amid the rise in cyber threats[247]. - Telecom's suppliers are contractually obliged to comply with laws and regulations, but non-compliance could adversely affect the company despite its monitoring efforts[261]. Investment and Ownership Structure - The company has a significant concentration of ownership, with CVH owning 28.16% of total capital stock and GC Dominio controlling 64.24% of CVH's voting stock[306]. - Telecom Argentina's status as a foreign private issuer allows it to follow alternate corporate governance standards, potentially limiting investor protections compared to U.S. companies[301]. - Holders of American Depositary Shares (ADSs) may face currency conversion costs and potential adverse effects from currency fluctuations[290]. Future Outlook - The potential for increased government intervention in private sector companies poses risks to Telecom's operations and financial condition[166]. - The ongoing geopolitical tensions, including conflicts in Ukraine and the Middle East, may further exacerbate economic challenges for Argentina[173]. - The company emphasizes innovation and diversification, exploring new business models such as IoT, cybersecurity, and smart home solutions[333].