First Quarter 2013 First Quarter 2013 Earnings Release Earnings - PowerPoint PPT Presentation

First Quarter 2013 First Quarter 2013 Earnings Release Earnings Release Conference Conference Call Presentation Call Presentation

Disclaimer Disclaimer This presentation is based on audited financial statements and may include 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 impact of the 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, uncertainties concerning the impact of the emergency laws enacted by the Argentine government which have resulted in the repeal of Argentina’s convertibility law, the devaluation of the peso, restrictions on the ability to exchange pesos into foreign currencies, the adoption of a restrictive currency transfer policy, 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 public services and the executive branch announcement to renegotiate the terms of the concessions granted to public service providers, including Telecom. Due to extensive and rapid 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 reduction 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 presentation, including, without limitation, changes in the Company’s business or to reflect the occurrence of unanticipated events. Information included in this presentation is unaudited and may not coincide with that included in the financial statements of the Company, due to rounding, reclassification matters, and other reasons. Readers are encouraged to consult the Company’s Annual Report and 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 and the Argentine Comisión Nacional de Valores . 1

Agenda Agenda Market Overview • Business Highlights • Financials Financials • • Q&A Session • 2

Market Overview: Soft economic conditions in 1Q13 Market Overview: Soft economic conditions in 1Q13 Real GDP* Consumption & Wages Trade & Fiscal Balance Billion USD, at current prices – Last 12 months Billion USD, at current prices – Last 12 months Trade Balance (Billion USD) Last 12 months ∆ YoY - constant prices National Wages - ∆ % YoY Fiscal Balance as % of GDP Last 12 months* 9.2% 8.9% 29.4% 26.3% 24.5% 23.3% 1.7% 2.8% 1.9% 0.3% -0.2% -0.2% 467 470 442 268 266 368 249 12.4 12.2 11.4 211 10.0 2010 2011 2012 1Q13e 2010 2011 2012 1Q13e 2010 2011 2012 1Q13e • Soft economic conditions in 1Q13. Certain • Private consumption is affected by factors • Argentine International commerce continue to sectors showed positive trends, although like the level of wage increases, deteriorate due to lower agricultural exports sectors like agriculture and construction remain government transfers to private sector and and increasing energy imports. being the main lagers. the inflation levels. • National taxes collection rose 26% YoY • The harvest period has started and might be a • Different sectors are in process of reaching helped by the VAT, income tax and import key factor for the rest of the year in terms of agreements with their unions, a necessary related taxes. This performance was achieved activity and external restrains. step to sustain consumption levels. thanks to the consumption trends, increased imports and higher nominal prices in the • Real interest rates remain in low real terms • Uncertainties in the FX market might affect economy. stimulating private spending. the normal evolution of the economy in terms of activity and inflation levels. Source: MECON, INDEC and Company Estimates •Official GDP YoY variation, constant prices. 3 •Fiscal Balance represents primarily fiscal surplus

Agenda Agenda Market Overview • Business Highlights • Financials Financials • • Q&A Session • 4

Business Highlights Business Highlights Postpaid delivered +2/3 of the quarterly net adds MOBILE Consistent VAS revenue expansion Streamlining customer acquisition and retention costs Data services to corporate clients sustains value generation Data services to corporate clients sustains value generation FIXED Enhancing value proposition with compelling offers Upselling in broadband services increases ARPU and churn control Maintaining revenue growth with limited nominal price adjustments Free Cash Flow expanded to P$ 1,429 MM in 12 months FINANCIALS Strengthening cost control to reduce impact of increase in labor related costs 1 Net income Attributable to Telecom Argentina 5

Mobile: Strong postpaid net adds drives growth Mobile: Strong postpaid net adds drives growth Mobile Clients Evolution • +2/3 of 1Q13 net adds were postpaid, Million of lines now representing 33% of our clients YoY var +3% • Consolidating revenue share leadership 19.1 19.0 18.9 18.7 18.5 • Average monthly MOU and TOU 6.3 +7% 6.2 6.2 5.9 6.0 expanded by 1% and 6% YoY Postpaid 1 • +13% ARPU increase due to better postpaid/prepaid mix and higher VAS 12.7 12.7 12.7 12.7 12.7 12.7 12.8 12.8 12.8 12.8 Prepaid Prepaid +1% +1% penetration penetration ARPU & Churn Evolution 1Q12 2Q12 3Q12 4Q12 1Q13 +13% +0.6 MM 63.3 subs . 62.1 58.2 54.3 54.9 Market Monthly Churn 33.8% 33.7% 33.3% 33.5% share 33.5% ARPU 3.2% 2.9% 2.9% 2.8% 2.8% (ARS) Note: Argentinean operation only. Figures might not sum up due to rounding 1Q12 2Q12 3Q12 4Q12 1Q13 Source: Market estimates of the top 3 providers in the industry.- Does not include trunking subscribers. 1 Includes “Cuentas Claras” subscribers 6

Mobile: Leveraging on VAS to sustain revenue growth Mobile: Leveraging on VAS to sustain revenue growth Service Revenue Breakdown SAC & SRC as % of Argentine Service Revenues - Million ARS – Argentine Market Before capitalization of SAC & SRC +21% 13,312 10,983 1,248 17.3% +61% 16.2% 16.4% SAC & 14.5% Internet 774 SRC 14.2% Services 5,765 +18% Agent 9.0% +29% 4,482 Commissions 9.0% 3,668 9.4% 3,101 Data 8.9% 8.8% (SMS) Handset 391 +42% subsidies 5.2% 276 3.8% 3.9% 2.0% 2.9% +10% +10% 6,299 6,299 1,615 1,615 Retail & Retail & 5,727 5,727 +22% +22% 1,323 1,323 Advertising Wholesale 3.6% 3.1% 3.3% 2.9% 2.8% +11% Voice 1,662 1,502 1Q12 2Q12 3Q12 4Q12 1Q13 2011 2012 1Q12 1Q13 VAS as % of 48% 53% 52% 55% Service Revenues • Efficiency gain in customer acquisition • Leadership in smartphone and mobile internet and retention costs with a strong focus supports consistent VAS revenue expansion in upselling; SAC & SRC down to 14.5% • Focusing on customer convenience to improve of service revenues value perception 7

Paraguay: Mobile Internet services key to revenue growth Paraguay: Mobile Internet services key to revenue growth Subscribers Financials Thousand of lines (includes 3G modems) IFRS Million of ARS YoY var 867 +6% 2,335 2,301 +21% 2,270 2,242 2,203 714 447 +19% Post 428 410 393 375 paid 1 REVENUES +25% 331 +32% 264 262 1,872 1,888 1,849 1,860 1,829 +3% Pre 199 paid +22% 89 89 OIBDA OIBDA 73 73 2011 2012 1Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 37% 38% 37% 34% Margin • First to launch LTE services in the country • Local currency (Guaraní) appreciation to • Postpaid segment leads customer growth and the Argentine Peso amplifies the upholds revenue share expansion performance of revenues and profits denominated in ARS. • Regulation ruling against on-net calls promotions improved the incoming/outgoing traffic ratios and • Revenues in local currency rose 5% YoY favors the competitive scenario. 1 Postpaid includes “C uentas Claras” and 3G modems but excludes WIMAX 8 Figures might not sum up due to rounding