Telecom Argentina S.A. (



Q4 2010 Earnings Call

February 22, 2011 10:00 AM ET


Pedro Insussarry – Head of Finance

Franco Bertone – CEO

Adrián Calaza – CFO


Michel Morin – Barclays Capital

Rodrigo Villanueva Bravo – Bank of America/Merrill Lynch

Alexandre Garcia – Citigroup



» Gilat Satellite Networks CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Frontline's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Henry Schein's CEO Discusses Q4 2010 Results - Earnings Call Transcript

Good day everyone and welcome to the Telecom Argentina Fourth Quarter 2010 Earnings Conference Call. Today’s call is being recorded. Participating on today’s call, we have Mr. Franco Bertone, Chief Executive Officer of Telecom Argentina; Mr. Adrián Calaza, Chief Financial Officer; Mr. Pedro Insussarry, Head of Finance; and Mr. Solange Barthe Dennin, Manager of Investor Relations.

At this time, I’d like to turn the conference over to Mr. Pedro Insussarry. Please go ahead, sir.

Pedro Insussarry

Good morning to everybody, and thank you for participating on this conference call. The purpose of this call, as said by our moderator is – sorry, as mentioned by moderator, is to share with you the consolidated results of Telecom Argentina that correspond to the fourth quarter and fiscal year 2010 ended on last December 31st.

We would like to remind you that for all those that have not received our press release or presentation, you can call our Investor Relations office or download them from the Investor Relations section of our website at Additionally, this conference call is being broadcasted through the webcast feature available in such section and can also be replayed through that same feature.

Before we continue with the conference call, I would like to go over some Safe Harbor information and some other details of the call. We would like to clarify that during the conference call and Q&A sessions, we may produce certain forward-looking statements about Telecom’s future performance, plans, strategies and targets.

Such statements are subject to uncertainties that could cause Telecom’s actual results and operations to differ materially. Such uncertainties include, but are not limited to, the effects of the public emergency law or complementary regulation, the effects of ongoing industry and economic regulation, possible changes in demand for Telecom products and services, and the effects of more general factors such as changes in general market or economic conditions, in legislation, or in regulation.

Our press release dated February 21, 2011, a copy of which is being included in a Form 6-K report to be furnished to the SEC, describes certain factors that may affect any forward-looking statements that we may produce during this session. Furthermore, we urge the audience of this conference call to read the disclaimer clause contained in slide one of the presentation.

As usual in our quarterly conference calls, the agenda for today, as seen in slide two of the presentation, is to go over general market overview, then we’ll go over through some business highlights, and after that we’ll go over some specifics of the evolution of our financial figures, and we will end the call with our traditional Q&A session.

I’ll go over the brief market overview as an introduction to the general operating environment. In slide three, we include some snapshots of the current Argentina macroeconomic environment. You can note that a strong economic recovery helped Argentina to regain pre-crisis levels of growth, with a better global economic context, with low interest rates, rising commodity prices and a higher interest in emerging markets coming from the investor community. The agricultural and industrial sectors were the main drivers of growth.

Strong commodity prices and a better harvest from last year helped the agricultural sector, while an outstanding performance of the auto industry lifted the overall industrial production. It’s worth mentioning that investments in key sectors are needed to maintain the current high levels of growth and release the economy from infrastructure and supply bottlenecks.

Several factors like the growing household income from a healthier labor market, government transfers to the low-income segments, and an expansive monitory policy stimulated private consumption. High inflation was a consequence of the increase in demand from the private sector, significant expansion in public spending and some supply strains, especially in the food segment.

Moreover, steady FX rates and low interest rates also stimulated consumption over savings. In this context, the government benefited from the recovery as a slight increase in fiscal surplus was registered, despite reaching a record level of fiscal spending to GDP.

In 2010 (audio gap) and the last debt swap reduced uncertainties in the sovereign debt solvency. Finally, the trade balance remained robust, despite growing imports compensated with the rising commodity prices and growing export to Brazil, which helped to sustain a strong surplus and to increase Central Bank international reserves.

In this challenging macroeconomic context for Argentina, our company has more than well performed in 2010, both in terms of its business and operations, as we will explain during the conference call.

And having gone through this introduction let me pass the call to Franco Bertone, who will go over the business highlights. Franco?

Franco Bertone

We are happy to announce our 2010 results, they’re quite good and Q4 figures are even better. Revenues grew 20% over 12 months and 25% in the fourth quarter. Data and value-added service grew twice as much and 4 times voice revenue.

EBITDA, EBIT, and net profit posted double-digit growth although we experienced some dilution in EBITDA margin due to the combined effect of frozen wireline tariffs and inflationary pressure affecting OpEx. Line in service increased by 2.1 million to 23.7 million in total.

Read the rest of this transcript for free on