The most relevant differences between Nortel Inversora s corporate governance practices and NYSE standards for listed companies are as follows:

Significant Differences between Nortel Inversora s corporate governance practices and US Companies practices under NYSE Sections Last modification April 2017 Nortel Inversora s corporate governance practices are governed by the applicable Argentine law (particularly, the General Companies Law, the Capital Markets Law and the Standards of the Comisión Nacional de Valores (the CNV ), as well as by its By-laws. Nortel Inversora has securities that are registered with the Securities and Exchange Commission (the SEC ) and are listed on the New York Stock Exchange (the NYSE ), and is therefore subject to corporate governance requirements applicable to NYSE-listed non-us companies. NYSE-listed non-us companies may, in general, follow their home country corporate governance practices in lieu of most of most of the new NYSE corporate governance requirements (the NYSE Sections ) codified in Section 303A of the NYSE s Listed Company Manual. However, NYSE-listed non- US companies must comply with NYSE Sections 303A.06, 303A.11 and 303A.12(b) and (c). NYSE-listed non-us companies comply with Section 303A.06 since July 31, 2005 and with Sections 303A.11 and 303A.12(b) since the first annual meeting of shareholders held after January 15, 2004, or since October 31, 2004. NYSE Section 303A.11 requires that non-us companies disclose any significant ways in which their corporate governance practices differ from those of US companies under NYSE listing standards. A NYSE-listed non-us company is simply required to provide a brief, general summary of the significant differences to its US investors either 1) in the company s annual report filed with the SEC or 2) on its website (in English), if it is not required to file an annual report with the SEC. Nortel Inversora complies with NYSE Section 303A.11 by including such information in the annual report filed with the SEC and posting on its website the comparative table set forth below. The most relevant differences between Nortel Inversora s corporate governance practices and NYSE standards for listed companies are as follows: 1

NYSE Standards for US companies Listed Companies Manual Section 303.A NYSE Section 303A.01 A NYSE-listed company must have a majority of independent directors on its board of directors. Nortel Inversora Corporate practices Under Argentine law, the board is not required to consist of a majority of independent directors. Notwithstanding, when directors are appointed, each shareholder that nominates a director is required to report at the meeting whether or not such director is independent. NYSE Section 303A.02 establishes general standards to evaluate directors independence (no director qualifies as independent unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company)), and emphasizes that the concern is independence from management. When evaluating directors serving on a compensation committee, the board must consider any consulting, advisory or compensation fees the company pays the director. The board is also required, on a case by case basis, to express an opinion with regard to the independence or lack of independence, of each individual director. Argentine companies are required to have at least two independent directors who may be members of the Audit Committee. As of the date of this report Nortel Inversora has three independent directors according to the criteria set forth in Rule 10-A-3 under the Securities Exchange Act of 1934 (the Securities Exchange Act ) out of the seven members of its Board of Directors To qualify as an independent or non-independent director, CNV standards (General Resolution Nº 622) and NYSE standards are substantially similar. CNV standards require independence with respect to the Company and to its shareholders with significant direct or indirect holdings (15% or more). To be eligible as independent director, a person must not be hired by the Company, nor have been hired by the Company during the prior three years, nor have any professional relationship with the Company or its shareholders with significant holdings whatsoever, nor receive any other compensation than that which corresponds to his/her performance as a member of the Board. Moreover, such person shall not be a supplier of goods or services to the Company or to its shareholders with significant direct or indirect holdings, for amounts substantially higher than his/her compensation as a member of the Board. Close relatives of any person who in the event of being a director would not be considered an independent director, shall not be considered independent directors. 2

NYSE Section 303A.03 Non-management directors must meet at Neither Argentine law nor Nortel Inversora s By-laws require that any regularly scheduled executive meetings not attended by management. such meetings be held. NYSE Section 303A.04 Listed companies shall have a nominating/ Neither Argentine law nor Nortel Inversora s By-laws require the corporate governance committee comprised entirely of independent formation of a nominating/corporate governance committee. In directors. Argentina, it is unusual (though possible) for the Board to propose the appointment of certain individuals as new directors. The Board of Directors of Nortel Inversora refrains from making such proposals. The right to nominate and appoint directors is vested in the shareholders of Nortel Inversora who nominate and appoint regular and alternate directors at their Shareholders Meetings. Pursuant to CNV standards, the person who nominates a director shall report at the shareholders meeting whether or not the nominee is an independent person, based on criteria established by CNV (which are substantially similar to NYSE standards). Compliance with the independence requirements of Rule 10 A-3 under the Securities Exchange Act by regular or alternate director nominees is also reported at Nortel Inversora s Shareholders Meetings. NYSE Section 303A.05(a) Listed companies shall have a Compensation Neither Argentine law nor Nortel Inversora s By-laws require the Committee comprised entirely of independent directors. formation of a compensation committee. NYSE Section 303A.05(b). The Compensation Committee shall have a Neither Argentine law nor Nortel Inversora s By-laws require the written charter establishing the committee s purpose and certain minimum formation of a compensation committee. responsibilities as set forth in NYSE Section 303A.05(b)(i) and (ii). NYSE Section 303A.05(c). The Compensation Committee has sole discretion whether to hire compensation advisors, consultants or counsel, which the Compensation Committee will oversee, and which the company must fund. Neither Argentine law nor Nortel Inversora s By-laws require the formation of a compensation committee. 3

NYSE Section 303A.06 Listed companies in the NYSE must have an Audit Committee that complies with the standards set forth in Rule 10-A- 3 under the Securities Exchange Act. NYSE Section 303A.07(a) The Audit Committee shall consist of at least three members. All members of the Audit Committee shall be independent. All of its members shall be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members shall have experience in accounting or financial administration. NYSE Section 303A.07(a) If a member of the Audit Committee is simultaneously a member of the Audit Committee of more than three public companies, and the listed company does not limit the number of Audit Committees on which its members may serve, then, in each case the board shall determine whether the simultaneous service would prevent such member from effectively serving on the listed company s Audit Committee, and shall report its decision in the annual proxy statement of the Company or in the Company s annual report on Form 20-F filed with the SEC. NYSE Section 303A.07(b) The Audit Committee shall have a charter establishing the purpose and the duties and responsibilities of its members, including the duties and responsibilities required, at a minimum, by Rule 10 A-3 (b) (2), (3), (4) and (5) of the Securities Pursuant to the Capital Markets Law and CNV standards, Nortel Inversora has an Audit Committee composed by three of the Board members as from May 10, 2004. All of the members are independent according to the criteria set forth in Rule 10-A-3 under the Securities Exchange Act. The Audit Committee consists of three members. As of the date of this report, every and all the members of Nortel Inversora s Audit Committee (appointed by the Board on April 29, 2016) are independent as set forth in Rule 10-A-3 of the Securities Exchange Act. The three members of Nortel Inversora s Audit Committee are conversant with financial and accounting issues. Nortel Inversora contemplates their continued training and updating. Nortel Inversora Board has determined that one member meets the SEC s standards to be Financial Expert of the Audit Committee. There is no provision under the Argentine Law or under Nortel Inversora s by-laws towards the number of simultaneous memberships to audit committees an Audit Committee member shall be member. However, when appointing its current members, the Board verified that none of them is simultaneously a member of the audit committee of more than three public companies. Moreover, in the event they shall be members of the audit committee of more than three companies, the members of Nortel Inversora s Audit Committee have agreed to inform the Board. In such case, the Board shall analyze if such simultaneous membership prevents said directors of the fulfillment of their duties as members of the Audit Committee of Nortel Inversora. The purpose, duties and responsibilities of the members of the Audit Committee in Argentina, established by the Capital Markets Law and CNV standards, are substantially similar as those set forth in Rule 10 A-3 (b) (2), (3), (4) and (5) of the Securities Exchange Act, and Section 4

Exchange Act and as set forth in NYSE Section 303A.07(b) of the NYSE Manual. 303A.07(b)(i) and (ii). Accordingly, Nortel Inversora s Board approved a Regulation for the Implementation of the Audit Committee (the Regulation ), in order to regulate such duties and responsibilities. The Board amended the Regulation to reflect the requirements set forth in Rule 10-A-3 of the Securities Exchange Act, particularly paragraphs (b) (1) and (b) (3) (i) and (ii) of said Rule. In addition, the Audit Committee has issued its Internal Regulations. At the beginning of each fiscal year, the Audit Committee submits to the Board of Directors an Action Plan of activities which it intends to perform throughout the year. At year end, the Audit Committee submits its Annual Report which deals with all the activities it has carried out to comply with its duties. Such Audit Committee s Annual Report is attached to the Board of Directors Annual Report and may be accessed through the Company s website. The Audit Committee of Nortel Inversora has a budget determined by the Shareholders Meeting and has the authority to engage independent counsel and other advisors. Pursuant to Argentine laws, external auditor fees are approved at the Shareholders Meeting, and the Audit Committee must issue a prior opinion about the reasonableness of such fees. NYSE Section 303A.07(b)(iii) This paragraph sets forth, among the objectives of the audit committee, the following: Paragraph (A): at least annually, obtain and review a report by the independent auditor describing: the firm s internal quality-control procedures; any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (to assess the auditor s independence) all relationships between the independent auditor and the listed company. Nortel Inversora s Audit Committee complies with all tasks and responsibilities described in this Section 303 A.07(b)(iii)A regarding independent auditors, their duties, independence and internal qualitycontrol procedures and reports the information to the Board of Directors in its Annual Report. Furthermore, the CNV has implemented a Registry of independent auditors to control the professional performance of the firms and people performing such duties and has issued rules so that independent auditing firms establish quality-control systems to allow them to know if their members observe the professional and legal standards applicable to such activity and to ensure the quality of the independent audit services rendered. 5

NYSE Section 303A.07(b)(iii) Paragraph (B): to discuss the annual audited financial statements and the quarterly financial statements of the company with management and the independent auditor, including the information disclosed under the heading Management s Discussion and Analysis of Financial Conditions and Results of Operations. Paragraph (C): to discuss the company s press releases relating to its earnings, as well as the financial information and guidelines relating to its earnings that are supplied to equity researchers and rating agencies. Paragraph (D): discuss policies with respect to risk assessment and risk management. Paragraph (E): meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors. Paragraph (F): review with the independent auditor any audit problems or difficulties and management's response. NYSE Section 303A.07(b)(iii) Paragraph (G): Set clear policies for hiring external auditors employees. Provisions in the Argentine Law and the Regulation for the Implementation of the Audit Committee approved by Nortel Inversora s Board establish similar duties for the Audit Committee, namely, to verify the reliability of the administrative-accounting system, and of all financial data, or of any significant data submitted to CNV and to self-regulated exchanges, in compliance with the applicable reporting regulations. Thus, the Audit Committee of Nortel Inversora complies with all objectives, duties and responsibilities described in this Section 303 A.07 (b) (iii) (B), (C), (D) and (F) regarding the Company s financial statements, the financial and profit information distributed to the markets and appraisal and risk management policies. The Audit Committee reviews with independent auditors audit problems or difficulties and the administration s response to those. For all these purposes, the Audit Committee regularly holds meetings with the administration and independent auditors and reports on these matters in its Annual Report, which is submitted to the Board of Directors and published with its Annual Report. No such provision regarding hiring external auditors employees is contained in Argentine law or Nortel Inversora s By-laws. NYSE Section 303 A.07 (b) (iii) Paragraph (H) Report regularly to the board of directors The Audit Committee regularly reports to the Board of Directors on relevant significant matters and prepares a general summary of its activities in its Annual Report submitted to the Board of Directors. NYSE Section 303A.07(c) Provides that each company must have an internal audit function in order to provide to the management and to the Audit Committee permanent assessments on the company s risk management processes and internal control system. NYSE Section 303 A.08 Shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions. No such provision regarding an internal audit function is required by Argentine law or Nortel Inversora s By-laws. Nortel Inversora has not implemented any equity compensation plan. 6

NYSE Section 303A.09 Companies must adopt guidelines and disclose corporate governance guidelines, including several issues for which such reporting is mandatory, and include such information on the company s website, which should also include the charters of the Audit Committee, the Nominating Committee and the Compensation Committee. NYSE Section 303A.09 The Board of Directors must make a selfassessment of its performance at least once a year to determine if it or its Committees function effectively and report thereon. NYSE Section 303A.10 Provides for the adoption of a Code of Business Conduct and Ethics and sets out the topics that such code must contain. The Capital Markets Law requires companies to disclose information in their Annual Reports, including information relating to the decisionmaking organization (corporate governance), the company s internal controls system, norms for director and manager compensation, stockoptions, and any other compensation system applicable to Board members and managers. The CNV standards require Companies to include in their Annual Reports, a report on the Corporate Governance Code prepared by the CNV. In such report, the Company s Board of Directors must inform if and how it follows the recommendations included in the CNV s Corporate Governance Code, or explain the reasons why it does not follow them-totally or partially, and/or explain whether it contemplates to follow them in the future. All relevant information sent by the Company to the CNV is forwarded to the CNV through the CNV s Financial Reporting Highway and may be viewed on the website of CNV (www.cnv.gov.ar). The Annual Report (including the Report on Corporate Governance Code) and financial statements can be accessed at the Company s website located at www.nortelsa.com.ar. Under Argentine law, the board s performance is evaluated at the annual Shareholders Meeting. Nortel Inversora s Board approved a Code of Business Conduct and Ethics, ( the Code ), which applies with no exception to all its directors, management, and employees. Nortel Inversora believes that its Code complies with every and all of the NYSE requirements. The Code includes the procedures established by the Audit Committee for the receipt and treatment of complaints regarding accounting, internal accounting controls and auditing matters, as required by Rule 10 A-3 (b) (3) (i) and (ii) of the Securities Exchange Act. The Code provides that any waiver of the fulfillment thereof granted to a director, member of the supervisory committee or member of the management may only be granted by the Audit Committee or by the 7

NYSE Section 303A.12 (a) The CEO shall on a yearly basis certify to NYSE that he/she knows of no violation by the company of NYSE rules relating to corporate governance NYSE Section 303A.12 (b) The CEO shall notify the NYSE in writing whenever any executive officer of the company becomes aware of any non-compliance with any applicable provision under NYSE Section 303A. NYSE Section 303 A.12 (c) Listed companies must submit a Written Affirmation annually to the NYSE and an interim Written Affirmation as and when required by the NYSE rules. Board of Directors and such waivers shall be reported to control bodies. No waiver has been applied for or granted as of the date of this report. The Code of Nortel Inversora is available to the public on Nortel s website (www.nortelsa.com.ar). No such certification is required by Argentine law or by Nortel Inversora s By-laws. No such provision regarding non-fulfillment of NYSE Section 303A is contained in Argentine law or Nortel Inversora s By-laws. Nortel Inversora has complied and shall comply with the provisions relating to this Section 303A.12(c). 8