Telecom Personal S.A. announces Consolidated six-month period ( 1H09 ) and second quarter results for fiscal year 2009 ( 2Q09 )*

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1 FOR IMMEDIATE RELEASE Contacts: Pedro Insussarry Solange Barthe Dennin (54-11) /3752 August 6, 2009 Telecom Personal S.A. announces Consolidated six-month period ( 1H09 ) and second quarter results for fiscal year 2009 ( 2Q09 )* Consolidated Net Revenues Telecom Personal ( Personal ) reached P$3,781 million (+15% vs. 1H08). Personal in Argentina +16 vs. 1H08. Subscriber base reached 15.4 million (+17% vs. 1H08). Argentina: 13.6 million. Paraguay: 1.8 million. Average Revenue per User ( ARPU ) in Argentina remained stable in P$40 in 1H09. Value Added Services in Argentina revenues reached 32% of the service revenues. Operating Profit Before Depreciation and Amortization ( OPBDA ) reached P$979 million (+14% vs. 1H08), equivalent to 26% of Net Revenues. Operating Profit reached P$773 million (+24% vs.1h08), equivalent to 20% of Net Revenues. Net Income amounted P$444 million (+17% vs. 1H08). Investments (excluding materials) totaled P$231 million. Net Financial Position as of June 30, 2009 totaled P$810 million (+P$298 million vs. 1H08), as a consequence of the dividend payment by P$730 million occurred during this period. As of June 30 (in million P$, except where noted) $ % Consolidated Net Revenues 3,781 3, % Telecom Personal in Argentina Net Revenues 3,592 3, % Operating Profit Before D&A % Operating Profit % Net Income % Shareholder's equity 1,400 1, % Net Financial Debt % CAPEX (excluding materials) (148) -39% Mobile customers (in thousands) 15,354 13,125 2,229 17% Personal (Argentina) 13,586 11,379 2,207 19% Núcleo (Paraguay) 1,768 1, % Incoming/Outgoing cellular traffic in Argentina (in MM minutes) 7,662 6,535 1,127 17% Average Revenue per user (ARPU ) Cellular Telephony Arg. (in P$) % Average Revenue per user (ARPU ) Cellular Telephony Paraguay. (in U$S) 4 6 (2) -30% * Non audited financial data 1

2 Buenos Aires, August 6, Telecom Personal S.A., one of the leading mobile operators in Argentina and Paraguay (through its subsidiary Nucleo), announced today a Net Income of P$444 million for the 1H09, ended June 30, The businesses of Personal continued evolving very positively during the period, in terms of revenues and profitability. Consolidated Net Revenues increased by 15% when compared to 1H08, reaching P$3,781 million. 1H09 1H08 $ % Net Revenues (MMP$) 3,781 3, % Net Income (MMP$) % Earnings per Share (P$) OPBDA * 26% 26% Operating Profit * 20% 19% Net Income* 12% 12% *As a percentage of Net Revenues As of June 30, 2009, the customer base reached 15.4 million, an increase of +17% vs. June 30, In Argentina, Personal s subscribers totaled 13.6 million or +19% vs. 1H08. Operating Profit increased significantly (+24% vs. 1H08) to P$773 million, equivalent to 20% of Net Revenues (vs. 19% in 1H08). Meanwhile, Net Income was P$444 million, representing 12% of Net Revenues. On an unconsolidated basis, Personal reported Net Revenues of P$3,592 million (+16% vs. 1H08), OPBDA of P$916 million (+16% vs. 1H08) and Net Income of P$444 million (+17% vs. 1H08). Telecom Personal in Argentina Mobile Customers & Revenues in Argentina (in million P$) $ 3,089 1,725 6,874 2,448 9,881 11,379 3,592 13,586 1H06 1H07 1H08 1H09 Mobile customers '000 Revenues Total Mobile Traffic (in million minutes) As of the end of June 2009, customers base in Argentina totaled 13.6 million, an increase of 2.2 million customers, or +19% when compared to June This enhanced its market position and strengthens its potential for future revenue growth. The strong increase in net additions continued during this half of the year (+1 million subscribers in 1H09 vs million subscribers in 1H08), Approximately 68% of the subscriber base is composed of prepaid clients and 32% of postpaid (including Cuentas Claras plans). Personal continued with the consistent growth in total revenues (including handset sales) reaching P$3,592 million (+16% vs. 1H08), fueled by the increase in overall voice traffic in minutes by 17% vs. 1H08, and in value-added services (VAS). The VAS increased 33% vs. 1H08. Service revenues reached P$3,253 million (+18% vs. 1H08), where VAS revenues represented 32% of them. Noteworthy is SMS traffic performance which climbed to a monthly average of 2,624 million messages (+147%) in 1H09 from 1,062 million in 1H08, with similar service quality levels. 3,412 4,589 6,535 7,662 1H06 1H07 1H08 1H09 Mobile consumption of Telecom Personal in Argentina As a consequence of the traffic increase and higher usage of value-added services, ARPU remained stable at approximately P$40 in 1H09, despite a significant level of penetration. 1H06 1H07 1H08 1H09 ARPU (in P$/month) MOU (month) 2

3 Personal maintained its level of profitability despite of its more intensive commercial activity focused in the expansion of its customer base and in the retention of high-value segment customers. In relation with Net Revenues, OPBDA margin reached 26% in 2Q09 (vs. 23% in 2Q08). Initiatives During this quarter, in connection with Father's Day and in the framework of the campaign Personal te conviene ( Personal is convenient ), a new value offer integrating important benefits was launched to the market. New plans were designed incorporating, among other benefits, like numbers to make communications free of charge between our clients and extra credit. Mobile Broadband has been enhanced by data plans and the 2.0 version of the Pack offering, that targets social networks. International roaming service was extended also for prepaid clients to more than 200 different destinations all over the world. Furthermore, continuing with the strategic links between Personal and the entertainment industry, Pack Music was introduced, the first market offer that integrates the acquisition of digital music in the package of services for current client plans. Personal continued with the expansion of third generation infrastructure in both, capacity and coverage; under the HSDPA/UPA standard that allows content under optimal conditions peaks of up to 7.2 MB of theoretical download velocity in certain cities. All of these actions are consistent with the strategy of enabling content and services to enhance the expansion of value-added services. Telecom Personal in Paraguay As of June 30, 2009, subscribers in Paraguay reached approximately 1.8 million (including broadband customers), +1% vs. same period last year. The subscriber base is composed of approximately 89% of prepaid clients and 11% of postpaid. ARPU represented US$4 in 1H09. The company controlled by Personal in Paraguay, generated revenues equivalent to P$192 million (-11% when compared to 1H08) reflecting the impact of both the global crisis that affected the Paraguayan economy with effect in the lower level of activity and local currency depreciation as well as intensive operator competition levels. Consolidated Operating Costs Mobile Subscribers in Paraguay (includes boradband customers, in thousands) 791 1,405 1,746 1,768 1H06 1H07 1H08 1H09 During the first half of 2009, consolidated Cost of Services Provided, Administrative and Selling Expenses totaled P$3,008 million, an increase of P$331 million (+12% vs. 1H08), due to the expansion of the business, greater expenses related to competition and inflation that impacted the overall cost structure. 3

4 The cost breakdown is as follows: - Salaries and social security contributions totalized P$159 million (+22% vs. 1H08), as a result of salary increases and the increase of personnel +161 employees when compared to June Taxes reached P$348 million (+21% when compared to 1H08) mainly due to higher rates in turnover tax, municipal taxes and a higher volume of revenues. - Network access costs (includes Roaming, Interconnection and others) amounted to P$716 million (+5% vs. 1H08), as a consequence of higher traffic generated by Personal clients. - Agents and prepaid card commissions totaled P$394 million (+18% vs. 1H08); mainly due to the increase in total commission paid to commercial agents and prepaid card distributors as consequence of higher subscriber volume and sales of cards was registered. - Advertising amounted to P$109 million (-17% vs. 1H08) and was oriented to promote the commercial activity. - Handsets cost amounted to P$501 million (+17% vs.1h08) mainly due to an increase in subscriber additions and in the number of upgraded terminals. - Depreciation of fixed and intangible assets reached P$206 million a reduction of 12% vs. 1H08, mainly due mainly due to reestimation of the useful lifes of certain technical assets and also since TDMA technology depreciation charges ended in March Other costs registered P$575 million (+29% vs. 1H08). The increase was due to the inflationary effects on related services. Consolidated Financial and Holding Results Financial and Holding Results for 1H09 resulted in a loss of P$64 million, as compared to a gain of P$3 million in 1H08. Such deterioration was mainly due to the negative effect of foreign exchange losses (P$102 million), partially compensated by the positive holding results of P$26 million and lower net interests of P$12 million. Consolidated Net Financial Position Consolidated Net Financial Position (Loans minus Cash, Banks and Investments) as of June 30, 2009 totaled P$810 million, an increase of P$298 million compared to same date in 2008, as a consequence of the cash dividend payment made by Personal for an amount of P$730 million and also because of the effect of depreciation of the local currency. 4

5 Capital Expenditures During 1H09, Capital Expenditures (excluding materials) reached P$231 million, (-P$148 million vs. 1H08). The operation in Argentina invested P$217 million and P$14 million correspond to the operation in Paraguay. Capital expenditures are focused in network enhancement (coverage and capacity) and in expansion of 3G products. Recent Relevant Matters During 1H09 Telecom Personal made a dividend payment in cash of P$730 million. The distribution was approved by the Ordinary Shareholder s Meeting of Telecom Personal March 31, Such dividend was paid to Telecom Personal shareholders: Telecom Argentina and Nortel Inversora. *********** 5

6 For more information, please contact Investor Relations Department: Pedro Insussarry Solange Barthe Dennin Evangelina Sánchez Ruth Fuhrmann Horacio Nicolás del Campo Voice Mail: Fax: For information about Telecom Group services, visit: Disclaimer This document may contain 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 impact of emergency laws enacted by the Argentine Government; and the impact of competition on the Company s future financial performance. Forward looking statements may be identified by words such as believes, expects, anticipates, projects, intends, should, seeks, estimates, future or other similar expressions. Forward-looking statements involve risks and uncertainties that could significantly affect the Company s expected results. The risks and uncertainties include, but are not limited to, uncertainties concerning the impact of emergency laws enacted by the Argentine Government which have resulted in the repeal of Argentina s Convertibility law, the devaluation of the peso, various changes in restrictions on the ability to exchange pesos into foreign currencies, and currency transfer policy generally. Other factors may include, but are not limited to, the evolution of the economy in Argentina, growing inflationary pressure and evolution in consumer spending and the outcome of certain legal proceedings. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. The Company undertakes no obligation to release publicly the results of any revisions to forward-looking statements which may be made to reflect events and circumstances after the date of this press release, including, without limitation, changes in the Company s business or to reflect the occurrence of unanticipated events. Readers are encouraged to consult Telecom Argentina s Annual Report in Form 20-F as well as periodic filings made on Form 6-K, which are filed with or furnished to the United States Securities and Exchange Commission for further information concerning risks and uncertainties faced by the Company, as a member of the Telecom Argentina Group. (Financial tables follow) ******* Jorge Luis Pérez Alati Chairman 6

7 1- Balance Sheet TELECOM PERSONAL S.A. Consolidated Information First Half and Second Quarter - Fiscal Year 2009 (In million of Argentine pesos) 6/30/ /31/2008 $ % Cash, equivalents and investments (310) -56% Trade receivables (16) -3% Other current assets % Total Current Assets 1,203 1,498 (295) -20% Fixed & Intangible assets 2,801 2, % Other non-current assets % Total Non current Assets 2,859 2, % Total Assets 4,062 4,287 (225) -5% Accounts payable 944 1,000 (56) -6% Loans % Reserves % Other current liabilities (168) -28% Total Current Liabilities 1,714 1, % Loans % Reserves % Other non-current liabilities (5) -14% Total Non Current Liabilities % Total Liabilities 2,590 2, % Minority Interest (9) -11% Shareholders' equity 1,400 1,696 (296) -17% Total Liabilities and Equity 4,062 4,287 (225) -5% 2- Consolidated Loans 6/30/ /31/2008 $ % Banks and others (3) -3% Other short term credit facilities Accrued interest bonds 1 1-0% Accrued interest loans % Derivatives Total Current Loans % Corporate Bonds % Banks and others Total Non Current Loans % Total Loans 1, % 7

8 3- Income Statement Six-Months Comparison 6/30/2009 6/30/2008 $ % Net revenues 3,781 3, % Cost of services provided (1,980) (1,801) (179) 10% Gross Profit 1,801 1, % Administrative expenses (95) (86) (9) 10% Selling expenses (933) (790) (143) 18% Operating Profit % Equity income from related companies Financial & holding results (64) 3 (67) - Other expenses, net (38) (23) (15) 65% Results from ordinary operations % Taxes on income (236) (211) (25) 12% Minority interest (4) (9) 5-56% Net Income % Operating Profit before D&A % As a % of Net Revenues 26% 26% Financial and Holding results Financial results generated by assets 6/30/2009 6/30/2008 $ % Interest on short term investments % Foreign currency exchange results 32 (17) 49 - Holding results on Inventories 11 (15) % Other financial results - (2) 2-100% Total Financial results generated by assets 70 (18) 88 - Financial results generated by liabilities Interest (44) (45) 1-2% Foreign currency exchange results (90) 61 (151) - Others - 5 (5) - Total Financial results generated by liabilities (134) 21 (155) - Total Financial and holding results (64) 3 (67) - 4- Income Statement Three Months Comparison (In million of Argentine pesos ) 6/30/2009 6/30/2008 $ % Net revenues 1,923 1, % Cost of services provided (994) (922) (72) 8% Gross Profit % Administrative expenses (52) (42) (10) 24% Selling expenses (484) (406) (78) 19% Operating Profit % Equity income from related companies Financial & holding results (20) 17 (37) - Other expenses, net (18) (11) (7) 64% Results from ordinary operations % Taxes on income (125) (109) (16) 15% Minority interest (3) (3) - 0% Net Income % Operating Profit before D&A % As a % of Net Revenues 26% 24% 8

9 5- Breakdown of costs First Half - Fiscal Year 2009 Variation vs 1H08 (In million of Argentine pesos ) Cost of services Administrative Selling Total provided expenses expenses $ % Salaries and social security contributions % Depreciation of fixed and intangible assets (29) -12% Allowance for doubtful accounts % Service fees % Interconnection cost % Taxes % Roaming and TLRD (6) -1% Cost of cellular handsets % Advertising (22) -17% Agent commissions and prepaid card sales comissions % Others % Total 1, , % 6- Breakdown of costs First Half - Fiscal Year 2008 (In million of Argentine pesos ) Cost of services Administrative Selling provided expenses expenses Total Salaries and social security contributions Depreciation of fixed and intangible assets Allowance for doubtful accounts Service fees Interconnection cost Taxes Roaming and TLRD Cost of cellular handsets Advertising Agent commissions and prepaid card sales comissions Others Total 1, , Breakdown of costs Second Quarter - FY 2009 Variation vs 2Q08 (In million of Argentine pesos ) Cost of services Administrative Selling $ % Total provided expenses expenses Salaries and social security contributions % Depreciation of fixed and intangible assets % Allowance for doubtful accounts % Service fees % Interconnection cost % Taxes % Roaming and TLRD (18) -8% Cost of cellular handsets % Advertising (12) -17% Agent commissions and prepaid card sales comissions % Others % Total , % 8- Breakdown of costs Second Quarter - FY 2008 Cost of services Administrative Selling (In million of Argentine pesos ) provided expenses expenses Total Salaries and social security contributions Depreciation of fixed and intangible assets Allowance for doubtful accounts Service fees Interconnection cost Taxes Roaming and TLRD Cost of cellular handsets Advertising Agent commissions and prepaid card sales comissions Others Total ,370 9

10 TELECOM PERSONAL S.A. Un co nso lidated Information First Half and Second Quarter - Fiscal Year 2009 (In million of Argentine Pesos) 9- Balance Sheet 6/30/ /31/2008 $ % Cash, equivalents and investments (309) -57% Trade receivables (15) -3% Other current assets % Total Current Asse ts 1,173 1,465 (292) -20% Fixed & Intangible assets 2,432 2, % Other non-current assets % Total Non current Assets 2,637 2, % Total Assets 3,810 4,051 (241) -6% Accounts payable (34) -4% Loans Reserves % Other current liabilities (178) -29% Total Current Liabilities 1,573 1, % Loans % Reserves % Other non-current liabilities (6) -17% Total Non Current Liabilities % Total Liabilities 2,410 2, % Shareholders' equity 1,400 1,696 (296) -17% Total Liabilities and Equity 3,810 4,051 (241) -6% 10- Income Statement Six-Months Comparison 6/30/2009 6/30/2008 $ % Net revenues 3,592 3, % Cost of services provided (1,883) (1,694) (189) 11% Gross Profit 1,709 1, % Administrative expenses (74) (64) (10) 16% Selling expenses (886) (730) (156) 21% Operating Profit % Equity income from related companies % Financial & holding results (55) (10) (45) - Other expenses, net (38) (23) (15) 65% Results from ordinary operations % Taxes on income (231) (199) (32) 16% Net Income % Operating Profit before D&A % As a % of Net Revenues 26% 26% Financial and Holding results Financial results generated by assets 6/30/2009 6/30/2008 $ % Interest on short term investments % Foreign currency exchange results 32 (15) 47 - Holding results on Inventories 12 (15) 27 - Other financial results - 2 (2) -100% Total Financial results generated by assets 71 (14) 85 - Financial results generated by liabilities Interest (38) (43) 5-12% Foreign currency exchange results (88) 47 (135) - Total Financial results generated by liabilities (126) 4 (130) - Total Financial and holding results (55) (10) (45) - 10

11 TELECOM PERSONAL S.A. Unconsolidated Information 11- Income Statement Three Months Comparison (In million of Argentine pesos ) 6/30/2009 6/30/2008 $ % Net revenues 1,826 1, % Cost of services provided (953) (871) (82) 9% Gross Profit % Administrative expenses (39) (31) (8) 26% Selling expenses (453) (369) (84) 23% Operating Profit % Equity income from related companies Financial & holding results (19) 13 (32) - Other expenses, net (18) (11) (7) 64% Results from ordinary operations % Taxes on income (122) (106) (16) 15% Net Income % Operating Profit before D&A % As a % of Net Revenues 26% 23% 11