Telecom reports improved results

12 May 2004

Telecom Argentina has reported a 20% jump in sales for the first quarter of 2004 to ARS1.02 billion. The increase was largely a result of a recovery of demand – particularly in the cellular arena – where the company’s wireless arm, Telecom Personal (TP), reported a 52% increase in sales to ARS360 million. At the end of March TP claimed 2.85 million customers, an increase of 617,000 in twelve months, of which 81% were connected to pre-paid packages. ARPU increased in the year to 31 March 2004 by 22% to ARS34 per customer. Nucleo, TP’s subsidiary in Paraguay, generated revenues of ARS42 million during the period and claimed 535,000 customers, an increase of 3%. Highlights of the company’s fixed line operations included a 71% hike in ADSL lines to 80,000. During the quarter internet minutes accounted for 33% of total traffic, measured in minutes transported over the fixed line network. Total number of lines in service at the end of March stood at 3.67 million, while the number of customer lines was 3.38 million.

Telecom Argentina also announced plans to seek approval of an offer to extend maturities and pay interest on its USD3.2 billion of defaulted debt. A solicitation period will be open for 20 days, after which the company will offer three bond options to its creditors: new notes to mature in 2014; new notes to mature in 2011; or a cash payment of 740-850 for every 1,058 units held. The company has allocated USD663 million in cash for the third option, and expects uptake of the first two options to translate to interest payments of no more than USD150 million in the first year, decreasing in future years as the debt is amortised.