Telecom Argentina Sa Class B · BCBA:TECO2

Telecom Argentina Sa Class B — Q3 2008 Earnings Presentation

19 slides from Telecom Argentina Sa Class B's earnings presentation, November 2008

  1. Slide 1: Third Quarter 2008 Earnings Results Conference Call Presentation

    Third Quarter 2008 Earnings Results Conference Call Presentation (9-month period ended September 30th) UNAUDITED DATA

  2. Slide 2: Disclaimer

    Disclaimer This presentation 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 impa

  3. Slide 3: Agenda

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

  4. Slide 4: Argentine macroeconomic evolution - The economy continued to slow down

    Argentine macroeconomic evolution - The economy continued to slow down. Real GDP Trade & Fiscal Balance Consumption Billions of ARS, 1993 based Quarterly Fiscal Balance as % of GDP Billions of ARS, 1993 based ∆ YoY Trade Balance (Billions of USD) ∆ YoY 8,8% 9,1% 8,4% 8,9% 9,4% 8,2% 7,5% 7,4% 7,4% 3,

  5. Slide 5: Agenda

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

  6. Slide 6: Fixed Line: TEO continues to grow

    Fixed Line: TEO continues to grow Millions of lines in service ƒ Despite the expansion of the cellular market, fixed lines continued to grow at a moderate pace. Evolution of Lines in Service ƒ In a scenario of regulated tariffs, ARPU was enhanced through: ƒ Offer Innovation via new handsets and equi

  7. Slide 7: Broadband: The door to growth in the fixed line business

    Broadband: The door to growth in the fixed line business Thousand of broadband connections 3.212 +44% ƒ TEO benefits from a strong demand of broadband services through: +60% 2.504 ƒ Improved network coverage. 2.233 ƒ Commercial promotions. ƒ Innovative portfolio of services. 1.561 2.236 ƒ ARPU incre

  8. Slide 8: Fixed line: Revenues comparison: 9M08 – 9M07

    Fixed line: Revenues comparison: 9M08 – 9M07 Argentine GAAP, Millions of ARS, Percentage YoY Variation 263 (+11%) ∆$ ∆% 1Q08 77 10% 2Q08 98 12% 3Q08 88 11% 2.683 2.420 14 -23 47 171 40 14 1.156 903 43% Non Regulated 37% 7% 2% 34% 5% -26% 54% 1.527 1.517 57% Regulated 63% Revenues 9M07 Monthly Fee Vo

  9. Slide 9: Mobile: Continuous growth in value

    Mobile: Continuous growth in value Millions of lines ƒ TEO continued focusing its efforts by improving the network performance TEO vs. Market Growth and increasing customer caring as well as offers to stimulate usage for existing clients. 16% 41.5 ƒ The customer base continues to expand +28% 37,8 35

  10. Slide 10: Mobile: Growth without Dilution in Customer Value

    Mobile: Growth without Dilution in Customer Value Customer base mix VAS relative participation over service revenues Millions of ARS 1.508 1.358 1.361 1.388 1.229 1041 33% 34% 34% 34% 34% Voice 967 969 990 Postpaid 897 VAS 467 332 391 392 398 Prepaid 67% 66% 66% 66% 66% 3Q07 4Q07 1Q08 2Q08 3Q08 VAS

  11. Slide 11: Mobile: Evolution of revenues: 9M07-9M08

    Mobile: Evolution of revenues: 9M07- 9M08 Argentine GAAP, Millions of ARS, Percentage YoY Variation 1.011 (+25%) ∆$ ∆% 1Q08 345 27% 2Q08 329 25% 3Q08 337 23% 5.106 122 30 30 384 157 4.095 109 179 21% 19% 19% 44% 12% 30% 10% Revenues 9M07 Monthly Fees Prepaid Traffic TLRD & CPP VAS Others Handset Sal

  12. Slide 12: Evolution of CAPEX

    Evolution of CAPEX Argentine GAAP, Millions of ARS (excluding materials) 9M08 Mobile Capex breakdown % Revenues 14% 14% 13% 15% IT 1.302 14% Coverage 1.156 Quality & 1.055 44% 11% Innovation 613 818 575 Mobile * 562 31% 377 Capacity 13% 689 581 Fixed 493 13% 23% 441 9M08 Fixed Line Capex breakdown 5

  13. Slide 13: Agenda

    Agenda • Market Overview • Business Highlights • Financials • Q&A Session 12

  14. Slide 14: TEO Group: Consolidated Results /1

    TEO Group: Consolidated Results /1 Argentine GAAP, Millions of ARS, Percentage YoY Variation Revenues * OPBDA * +23% 9.074 +20% 7.789 7.372 6.515 +34% +11% 7.033 5.345 78% 6.262 Non Regulated 4.998 73% 80% 3.052 2.502 77% 2.285 2.252 2.027 2.041 1.517 1.527 Regulated 27% 22% 23% 20% 2006 2007 9M07 9

  15. Slide 15: TEO Group: Consolidated Results /2

    TEO Group: Consolidated Results /2 Argentine GAAP, Millions of ARS, Percentage YoY Variation OPERATING PROFIT Net Income +83% +28% 1.636 +262% +35% 1.540 1.201 (*) 894 884 831 (*) 614 244 2006 2007 9M07 9M08 2006 2007 9M07 9M08 O. Profit Net Margin 12% 18% 18% 20% 3% 10% 9% 11% Margin (*) Includes $

  16. Slide 16: TEO Group: Operating FCF and Net Debt

    TEO Group: Operating FCF and Net Debt Argentine GAAP, Millions of ARS ¾ As of October 15, 2008: ƒ Telecom Personal made principal payments in an amount equivalent to ARS 59 million. OPERATING ƒ Telecom Argentina made principal FREE CASH FLOW Æ 1.624 prepayment in an amount equivalent to U$S 340 mill

  17. Slide 17: Fixed Line: Telecom Argentina Unconsolidated P&L

    Fixed Line: Telecom Argentina Unconsolidated P&L Argentine GAAP, Millions of ARS, Percentage Sep-30 9M08 ∆ 9Μ07 ∆% Labor costs 664 107 19% In MM P$ 9M 2008 9M 2007 $ Var. % Var. Materials and supplies 267 54 25% Advertising 97 46 90% Net Revenues 3.099 2.756 343 12% Network costs & interconn. 274 20

  18. Slide 18: Mobile: Personal Unconsolidated P&L

    Mobile: Personal Unconsolidated P&L Argentine GAAP, Millions of ARS, Percentage In MM P$ 9M 2008 9M 2007 $ Var. % Var. 1Q08 2Q08 3Q08 Service Revenues 1.369 1.397 1.516 Net Revenues 4.805 3.817 988 26% P re S A C & S RC OP BD A 613 597 657 Operating Costs (3.613) (2.913) (700) 24% M arg i n 45% 43%

  19. Slide 19: Agenda

    Agenda • Market Overview • Business Highlights • Financials • Q&A Session 18

Telecom Argentina — Q3 2008 Earnings Presentation on 6ix