Telecom Argentina Q4 profit falls 52%

9 Mar 2009

Fixed line incumbent Telecom Argentina has announced its fourth quarter net profit fell 52% to ARS130 million (USD35.72 million), compared to ARS270 million a year earlier. The telco attributed the drop, which was lower than market expectations, to rising costs resulting from inflation. The company reported 2008 profit of ARS961 million, up from ARS884 million a year earlier, but said rising costs of rent, energy, insurance and printing had cut into its profit margin: ‘The increase (of service costs) was largely the result of inflation.’ The government reported a rise in consumer prices of 7.2% in 2008, but most independent economists have stated prices rose nearly three times the official figure.

Telecom Argentina reported 2008 revenues of ARS10.6 billion, up 17% year-on-year. Mobile revenues rose 20% to ARS6.95 billion, and internet business revenues increased 39% to ARS735 million, while operating income before depreciation and amortisation (OIBDA) increased 9% to ARS3.33 billion. The operator’s mobile arm, Telecom Personal, gained 1.9 million new subscribers during 2008, bringing its total to 12.6 million at the end of December; of the total 66% were pre-paid customers. Fixed lines in service increased by 2% to 4.3 million, while the number of Telecom Argentina’s ADSL subscribers grew 33% to 1.04 million. Average revenue per user (ARPU) was unchanged year-on-year for fixed customers at ARS39, while mobile ARPU rose to ARS41 from ARS39 in 2007.