Telecom Argentina more than doubles net income; predicts further profit margin decline

12 May 2005

Telecom Argentina has reported a first quarter profit of ARS279 million (USD96.5 million), a huge increase on ARS124 million in the corresponding period of 2004. Mobile turnover at subsidiary Telecom Personal increased to ARS550 million from ARS360 million, driven by a 48% growth in subscribers to over 4.2 million and an increase in the proportion of post-paid users. Telecom’s CEO Carlos Felices told reporters yesterday he expects a similar customer growth rate for the remainder of 2005, predicting 5.5 million wireless customers by the end of the year, although this is expected to result in a steady decline in operating profit margins; Q1 2005 group operating profit represented 41% of net sales compared to 49% in 2004. However, Felices added that he believed mobile ARPU levels for 2005 would remain flat.