Form 6-K TELECOM ARGENTINA SA For: Aug 16

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of August 2019

Commission File Number: 001-13464

Telecom Argentina S.A.

(Translation of registrant’s name into English)

Alicia Moreau de Justo, No. 50, 1107

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

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Telecom Argentina S.A.

TABLE OF CONTENTS

Item

1.            Financial information consisting of a free translation of (i) Telecom Argentina’s Operating Financial Review and Prospects, and (ii) the Unaudited Condensed Consolidated Financial Statements of Telecom Argentina as of June 30, 2019

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TELECOM ARGENTINA S.A.

TELECOM ARGENTINA S.A.

Unaudited Condensed Consolidated Financial Statements as of June 30, 2019

Alicia Moreau de Justo 50

(1107) Ciudad Autónoma de Buenos Aires

Argentina

$: Argentine peso

US$: US dollar

$42.46 = US$1 as of June 30, 2019

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TELECOM ARGENTINA S.A.

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018

INDEX

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TELECOM ARGENTINA S.A.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS AS OF JUNE 30, 2019

(In millions of Argentine pesos or as expressly indicated)

As required by CNV regulations, the Company has prepared its unaudited consolidated financial statements as of June 30, 2019 under IFRS.

As provided under Resolution No. 777 issued by the CNV on December 28, 2018, this Report discloses the comparative balances for the six-month period ended June 30, 2018, restated to current currency as of June 30, 2019.

The table below shows the evolution of the National Consumer Price Index (National CPI with the characteristics identified in Note 1.e) to the consolidated financial statements) of the last three years and as of June 30, 2019 and 2018 according to official statistics (INDEC) used for the preparation of this operating and financial review and prospects and the accompanying financial statements:

As established by the rules of the CNV, it will be included comparative information restated to current currency as of the closing date until reaching five comparative fiscal years.

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TELECOM ARGENTINA S.A.

·                Revenues

During 1H19 consolidated revenues showed a decrease of 11.5% (-$12,322 vs. 1H18) amounting to $94,756. This is due to the Mobile, Internet and Cable Television service revenues and equipment sales, partially offset by higher Fixed and Data Services revenues.

Services revenues amounted to $88,581 (-10.2% vs. 1H18) and represent 93.5% of revenues. Mobile services revenues amounted to $32,023 in 1H19 (-$5,491 vs. 2018), Internet Services revenues amounted to $21,451 in 1H19 (-$2,502 vs. 1H18) and the Cable Television Services revenues amounted to $20,016 in 1H19 (-$3,050 vs. 1H18) and fixed telephony and data service revenues amounted to $14,756 (+$1,004 vs. 1H18). Equipment revenues decreased 26.6%, amounting to $6,175 and represent 6.5% of revenues.

Total Revenues include $7,307 and $42,899 as of 1H19 and 1H18, respectively, related to the effect of restatement in terms of current currency as of June 30, 2019.

Mobile Services

Mobile services revenues amounted to $32,023 (-$5,491 or -14.6% vs. 1H18), being the main service in term of service revenues (36.2% and 38.0% of services revenues in 1H19 and 1H18, respectively). The variation was mainly due to mobile services revenues in Argentina, which amounted to $27,910 (-$6,111 or -18.0% vs. 1H18), due to the decrease in the customers’ base of 1.2% and a decrease of approximately 10.6% in ARPU.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in mobile services revenues amounts to $2,444 and $15,116, as of 1H19 and 1H18, respectively.

Personal’s mobile customers amount to 18.4 million and 18.6 million as of June 30, 2019 and 2018, respectively, of which 7.4 million and 6.9 million correspond to postpaid customers, respectively. The main ratios related to the services provided to these customers were:

·                  Approximately 60% of the total of customers consist of prepaid customers, and 40% consist of postpaid customers as of June 30, 2019, while it amounts to 63% and 37% respectively, as of June 30, 2018.

·                  Mobile Internet services revenues are equivalent to 78% of Personal’s customers total services revenues.

·                  The monthly average revenue per user (“ARPU”) is $246.5 pesos per month in 1H19 (vs. $275.8 pesos per month in 1H18), representing a -10.6% variation. The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in ARPU amounts to $19.5 and 110.8, as of 1H19 and 1H18, respectively.

·                  The average churn rate per month amounted to 2.3% in 1H19 (vs. 2.7% average in 1H18).

During the fourth quarter of 2018, the integration mobile service brands began with the launch of a campaign to transport Nextel’s customers to Personal. This communication was accompanied by the presentation of Personal’s new Smart Radio service, which includes the benefits of the most modern 3G/4G network in the market. Smart Radio enables customers to communicate with all users who share the radio network, including other providers besides Personal, through the use of robust equipment or smartphones which are compatible with the application of the service.

Regarding infrastructure, the Company continued to enhance the mobile internet experience of its customers through the deployment of its 4G and 4G+ network throughout the country, which currently covers more than 1,639 locations from La Quiaca to Ushuaia, and reaching more than 13.1 million customers with 4G devices throughout the country. Accompanying these improvements, through a massive communication campaign, the 4G Personal Network was promoted as the fastest in the country -based on the results of international benchmarks that measure network standards through the worldwide experience of customers-.

On the other hand, in the first months of this year, Personal and Fibertel brands came together to offer the best Wi-Fi connectivity and 4G service experience, with benefits for their Club Personal customers.

Mobile services revenues generated in Paraguay amounted to $4,113 (+$620 or +17.7% vs. 1H18) due to the appreciation of the Guaraní against the Argentine Peso by 26.6% and to the increase in ARPU, while the customer base remained stable.

The main ratios related to the mobile services in Paraguay were:

·                  Núcleo’s mobile customers amount to 2.4 million as of June 30, 2019 and 2018.

·                  Approximately 84% of total customers consist of prepaid customers, and 16% consist of postpaid customers as of June 30, 2019 and 2018.

·                  The monthly ARPU amounted to $254.4 pesos in 1H19 (vs. $213.6 pesos in 1H18), representing a 19.1% increase. This increase is mainly due to a 6.0% increase in the ARPU in Guaraníes in addition to the variation of the average exchange rate.

·                  The average churn rate per month amounted to 2.9% in 1H19 (vs. 3.1% in 1H18).

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TELECOM ARGENTINA S.A.

Internet Services

Internet services revenues amounted to $21,451 in 1H19 (-$2,502 or -10.4% vs. 1H18) driven mainly by the variation in the broadband ARPU of -11.4%, which reached $867.4 pesos in 1H19 vs. $978.5 in 1H18. The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in ARPU amounts to $68.7 and $393.1, as of 1H19 and 1H18, respectively.

It should be noted that customers with service of 20Mb or higher represent 49.6% and 29.9% of the total customer base as of June 30, 2019 and 2018, respectively. These revenues represent a 52% and 32% of total Internet services revenues as of June 30, 2019 and 2018, respectively. Within this range there are customers who have plans of 100 Mb and 300 Mb (recently released to the market), that as of June 30, 2019 amount to 247,548 and 8,237, respectively.

Internet services churn rate per month amounted to 2.0% and 1.5% as of June 30, 2019 and 2018, respectively, maintaining stable the subscriber base in 1H19, which amounts to 4.1 million.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in internet services revenues amounts to $1,673 and $9,518, as of 1H19 and 1H18, respectively.

Cable Television Services

Cable Television service revenues amounted to $20,016 in 1H19 (-$3,050 or -13.2%vs. 1H18). The variation is mainly due to the effects of the ARPU and a lower customer base of approximately 1.9%. The ARPU has decreased by 16.2%, reaching $914.8 in the 1H19 vs. $1,091.8 in 1H18. The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in ARPU amounts to $72.4 and $438.6, as of 1H19 and 1H18, respectively.

The average monthly churn of 1H19 amounted to approximately 1.4% (vs. 1.3% in 1H18).

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Cable television services revenues amounts to $1,571 and $9,194, as of 1H19 and 1H18, respectively.

Fixed Telephony and Data Services

Fixed Telephony and data services revenues amounted to $14,756 (+$1,004 or +7.3% vs. 1H18), mainly due the increase in data services in the context of the Company’s position as an integrated ICT service provider (Datacenter, VPN, among others) in wholesale and government customers.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Fixed and Data services revenues amounts to $1,126 and $5,505, as of 1H19 and 1H18, respectively.

In relation to Fixed telephony services, there have been increases in monthly fees charged to both corporate and residential fixed telephony customers, and in greater sales of combined product packs that include voice and Internet services, that aim to achieve higher levels of customer loyalty, partially offset by a 8.4% decrease in fixed telephony customers´ base as compared to 1H18. The average monthly revenue billed per user (“ARBU”) of fixed telephony services remained constant and amounted to $341.2 in 1H19.

On the other hand, the increase in Data services revenues, is mainly due to the variation of the $/US$ exchange rate related to agreements settled in such foreign currency.

Equipment

Equipment revenues amounted to $6,175 (-$2,236 or -26.6% vs. 1H18). This variation is mainly due to lower handsets sold as compared to 1H18 (-30%), partially offset by an approximately 73% increase in handset sale prices to the mobile services customers as compared to 1H18.

It is important to highlight that the Company, in terms of devices, continued to promote the updating of the handsets with financed offers and special discounts focused on the convergence of services.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Equipment revenues amounts to $469 and $3,365, as of 1H19 and 1H18, respectively.

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TELECOM ARGENTINA S.A.

·                 Operating costs

Consolidated operating costs totaled $62,917 in 1H19, which represents a decrease of $5,800 or -8.4% vs. 1H18. These lower costs are mainly associated with the decrease in Taxes and fees with the Regulatory Authority, Commissions and advertising and Cost of equipment and handsets, Interconnection and transmission costs, Programming and content costs and Employee benefit expenses and severance payments partially offset by an increase in the charge for bad debt expenses.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Operating costs amounts to $5,504 and $27,834, as of 1H19 and 1H18, respectively.

The costs breakdown is mainly as follows:

Employee benefit expenses and severance payments

Employee benefit expenses and severance payments amounted to $18,083 in 1H19 (-$371 or -2.0% vs. 1H18). The decrease is mainly due to a decrease in headcount of 6.7%, which amounted to 24,583 employees in 1H19 (vs. 26,335 in 1H18), partially offset by increases in salaries agreed by the Company with several trade unions with respect to unionized employees as well as to non-unionized employees, together with related social security charges, as well as higher charges for dismissals.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Employee benefit expenses and severance payments amounts to $1,425 and $7,400, as of 1H19 and 1H18, respectively.

Interconnection and transmission costs

Interconnection and transmission costs, which also includes charges for roaming, cost of international outbound calls and lease of lines and circuits, decreased, amounting to $2,987 in 1H19 (-$354 or -10.6% vs. 1H18), mainly due to operating efficiencies as of June 30, 2019 as compared to June 30, 2018, partially offset by greater traffic and increases in the exchange rate in relation to services set in US$.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Interconnection and transmission costs amounts to $244 and $1,367, as of 1H19 and 1H18, respectively.

Fees for services, maintenance, materials and supplies

Fees for services, maintenance, materials and supplies amounted to $9,781 in 1H19 (-$33 or -0.3% vs. 1H18). This effect was partially due to the processes synergies resulting from the merger of Telecom and Cablevisión in January 2018, partially offset by the increase in professional fees driven by a higher level of activity and new Company projects and services related to operational management in general and higher technical, hardware and software maintenance costs due to the increase in prices and fluctuation of the exchange rate $/US$.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Fees for services, maintenance, materials and supplies amounts to $892 and $3,575, as of 1H19 and 1H18, respectively.

Taxes and fees with the Regulatory Authority

Taxes and fees with the Regulatory Authority, including turnover tax, municipal taxes and other taxes and fees, decreased, amounting to $7,515 in 1H19 (-$1,209 or -13.9% vs. 1H18). This decrease corresponds mainly to the effect of the decrease in sales in 1H19 vs. 1H18 partially offset by the impact of the application of ENACOM Resolution No. 840/2018 that introduced changes in the determination of the radioelectric rights fee.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Taxes and fees with the Regulatory Authority amounts to $575 and $3,489, as of 1H19 and 1H18, respectively.

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TELECOM ARGENTINA S.A.

Commissions and advertising

Commissions (including commissions paid to agents, collections commissions and other commissions) and advertising totaled $5,579 in 1H19 (-$1,146 or -17.0% vs. 1H18). The decrease is due to lower charges for agent commissions as a result of the reordering of the sales channel and a slight decrease in advertising due to the synergies after the merger of 2018 that allowed reducing costs even with greater presence in various media, partially offset by higher collections fees.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Commissions and advertising amounts to $425 and $2,907, as of 1H19 and 1H18, respectively.

Cost of equipment and handsets

Cost of equipment and handsets sold totaled $4,638 in 1H19 (-$1,671 or -26.5% vs. 1H18). $4,425 of this amount correspond to cost of handsets sold in Argentina, which decreased 26.8% vs. 1H18, mainly due to lower handsets sold as compared to 1H18 (-30%), partially offset by the increase in the purchase prices of handsets as compared to 1H18.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Cost of equipment and handsets amounts to $798 and $2,713, as of 1H19 and 1H18, respectively.

Programming and content costs

Programming and content costs decreased, totalizing $7,143 in 1H19 (-$414 or -5.5% vs. 1H18) mainly due to operative efficiencies as of 1H19 in relation to 1H18, partially offset by the increase in the cost of signals, includying the cost of signals to broadcast live soccer matches of the first division of the Argentine Football Association.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Programming and content costs amounts to $568 and $3,028, as of 1H19 and 1H18, respectively.

Bad debt expenses

Bad debt expenses amounted to $2,662 (+$539 or +25.4% vs. 1H18). The increase is related to the reduction in the level of collections. Bad debt expenses represent 2.8% and 2.0% of the consolidated revenues in 1H19 and in 1H18, respectively. It is worth mention that the percentage of Bad debt expenses over Revenues decreased in 2Q19 in relation to 1Q19.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Bad debt expenses amounts to $227 and $850, as of 1H19 and 1H18, respectively.

Other operating income and expenses

Other operating income and expenses include provisions, energy and other public services, insurance, leases and internet capacity, among others. The decrease is mainly due to a decrease in operating leases due to the application of IFRS 16, as explained in Note 1.f) to the Consolidated Financial Statements partially offset by increases in energy costs.

The effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Other operating income and expenses amounts, to $350 and $2,505, as of 1H19 and 1H18, respectively.

Depreciation, amortization and impairment of PP&E, Intangible assets and Rights of use

Depreciation, amortization and impairment of PP&E, Intangible assets and Rights of use amounted to $22,480 (+$3,261 or +17.0% vs. 1H18). The increase is due to the impact of the amortization of the CAPEX subsequent to June 30, 2018 as a consequence of the adjusted investment plan that the Company is developing and the effect of the application of IFRS 16 as of January 1, 2019, as disclosed in Note 1.f) to these Consolidated Financial Statements of $1,268, partially offset by assets that have stopped amortizing in 2019.

On the other hand, the effect generated by the restatement in terms of the current currency as of June 30, 2019 included in Depreciation, amortization and impairment of PP&E, Intangible assets and Rights of use amounts to $9,601 and $9,577, as of 1H19 and 1H18, respectively.

·                Operating income

Operating income amounted to $9,359 in 1H19 (-$9,783 or -51.1%vs. 1H18), representing 9.9% over consolidated revenues represented in 1H19 (vs. 17.9% in 1H18).

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TELECOM ARGENTINA S.A.

·                Financial results, net

Financial results, net resulted in a gain of $4,826 and a loss of $19,618 in 1H19 and 1H18, respectively. The variation in Financial Results, net is mainly due to higher foreign currency exchange net gains, in terms of current currrency, of $6,551 in 1H19 (due to the depreciation of the peso against the US$ during 1H19 of 13% vs. an inflation of 22%) while in 1H18 higher foreign currency exchange net losses, in terms of current currency, of $22,071 (due to the depreciation of the peso against the US$ of 55% vs. an inflation of 16%). That effect is partially offset by higher interest on debts of $1,400 and the restatement in terms of current currency of $2,524 ($2,076 in 1H19 and $4,600 in 1H18).

·                Income tax

Income tax amounted to a loss of $7,621 and a gain of $3,672 in 1H19 and 1H18, respectively.

The Company’s income tax charge includes two effects: (i) the current tax payable for the year pursuant to tax legislation applicable to Telecom; and (ii) the effect of applying the deferred tax method on temporary differences arising out of the asset and liability valuation according to tax versus financial accounting criteria.

Telecom’s current tax expenses amounts to $72 and $106 in 1H19 and 1H18, respectively. Telecom’s deferred tax losses amounts to $7,549 in 1H19 and deferred tax gains amounts to $3,778 in 1H18, respectively.

Net income

Telecom Argentina recorded a net income of $6,729 in 1H19, which means an increase of $3,357 in relation to a gain of $3,372 in 1H18, representing 7.1% of revenues (vs. 3.1% in 1H18). Net income attributable to controlling shareholders amounted to $6,600 in 1H19 vs. $3,305 in 1H18.

·                Financial position, net

The consolidated financial position, net (that is: Cash and cash equivalents plus Financial investments and financial IFD less Financial debts) is debt and totaled $75,268 and $80,335 as of June 30, 2019 and as of December 31, 2018, respectively.

·                Capital expenditures (CAPEX) and Rights of use additions

CAPEX and Rights of use additions composition 1H19 and 1H18 is as follows:

The Company and its subsidiaries’ main PP&E CAPEX projects are related to the expansion of cable TV and internet services in order to improve the transmission and speed offered to customers; the deployment of 3G and 4G services to support the growth of mobile Internet services and improvement of the quality service together with the launch of innovative VAS services.

It also continued with the expansion of transmission and transport networks to join the different access technologies, converting the fixed copper networks to fiber or hybrid fiber-coaxial networks to meet, in this way, the growing demand of services of both fixed telephony and mobile services customers. Likewise, significant investments have also been made in the pricing, billing and customer relationship systems.

In relation to the additions of the Rights of Use, IFRS 16 provides that, from the years beginning on January 1, 2019, the Company as lessee recognizes a right of use asset and a liability at present value for those contracts that meet the definition of lease contracts in accordance with such standard.

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TELECOM ARGENTINA S.A.

Revenues in 2Q19 amounted to $46,235, operating costs -including depreciation, amortization and impairment of PP&E- amounted to $41,798, operating income amounted to $4,437 –equivalent to 9.6% of consolidated revenue vs. 15.4% in 2Q18- and net gain amounted to $5,328 –equivalent to 11.5% of consolidated revenues. Net loss attributable to the Controlling Company amounted to $5,250.

Services revenues amounted to $43,133 -equivalent to 93.3% of consolidated revenues-, and equipment revenues amounted to $3,102 -equivalent to 6.7% of consolidated revenues-.

Mobile services revenues in 2Q19 amounted to $15,809 -equivalent to 36.7% of consolidated services  revenues- which were mainly generated by Personal’s customers in Argentina and Paraguay.

Internet services in 2Q19 amounted to $10,339 -equivalent to 24.0% of consolidated services revenues.

Additionally, Cable Television revenues in 2Q19 amounted to $9,535 –equivalent to 22.1% of consolidated service revenues and they are mainly composed of services revenues provided in Argentina and Uruguay. Fixed and data services in 2Q19 amounted to $7,242 –equivalent to 16.8% of consolidated service revenues.

Operating costs without depreciation, amortization and impairment of PP&E amounted to $30,258 during 2Q19, the main components are employee benefit expenses and severance payments (which totaled $8,469); fees for services, maintenance, materials and supplies (which totaled $4,851); taxes and fees with the Regulatory Authority (which totaled $3,703); programming and content costs (which totaled $3,408); and commissions and advertising (which totaled $2,823).

Depreciation, amortization and impairment of PP&E, intangible assets and rights of use totaled $11,540 during 2Q19 -equivalent to 24.9% of consolidated revenues-, including the effect of the application of IFRS 16 as of January 1, 2019, as disclosed in Note 1.f) to these Consolidated Financial Statements.

Operating income for 2Q19 amounted to $4,437, resulting in a margin over consolidated revenues of 9.6% (vs. 15.4% in 2Q18).

Financial results, net amounted to a gain of $4,711 in 2Q19, mainly due to net foreign currency exchange rate gain totaling $8,587 in terms of current currency, partially offset by interests on debts totaling $1,860, and net gain on restatement in terms of current currency of $1,889.

Telecom Argentina obtained a net gain of $5,328 in 2Q19, which represents 11.5% of consolidated revenues. Net gain attributable to the controlling shareholders amounted to $5,250 in 2Q19.

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(i)                Base December 2013= 100

(ii)              Base December 2015= 100

(iii)            Base December 2017= 100

1)                Current assets/Current liabilities.

2)                Total equity/Total liabilities.

3)                Non-current assets/Total assets.

In macroeconomic terms, during the second quarter of the year, the trend of the inflation rate has changed, improving in monthly terms compared to the first quarter. In this context, there has been a deceleration in the monthly devaluation rate by the end of the first half of 2019.

The economic-financial performance of Telecom - and other companies that operate in Argentina- is not oblivious to the impact of exchange rate fluctuations, especially for a company that makes intensive investments in infrastructure, with dollarized inputs, but operates in Argentine pesos in the local market.

In this sense, the economic scenario forces us to strongly focus our management on achieving operational efficiencies to maintain growth levels in line with the investments undertaken. Nevertheless, we remain our commitment to the development of the country through a strategic investment plan aimed at the deployment and upgrading of infrastructure throughout the national territory, as well as the integration of the Company’s systems within the framework of its digital transformation.

With the aim of leveraging its investment plan, Telecom obtained the support of the international market through several loan agreements, being the most relevant those executed with the International Finance Corporation for a total amount of up to US$ 450 million, with the Inter-American Development Bank for a total amount of up to US$ 300 million and the facility guaranteed by Finnvera plc, the official export credit agency of Finland, for up to US$ 96 million. The disbursements received are allocated to the continued deployment of infrastructure for our fixed-mobile convergent network with differentiating characteristics.

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In addition, in July, the Company accessed once again the international financial market and issued new Notes for a nominal value of US$ 400 million due in July 2026. The funds obtained will be allocated to the refinancing of liabilities. As of the date of this report, the Company has settled financial liabilities for approximately US$ 130 million.

We continue to invest in strong networks with a focus on our residential customers, in areas with low and high concentration of population, and in order to meet the connectivity needs required by the economic development of the country. In that sense, we continue working to expand connectivity throughout the national territory to be able to offer high quality products and services to the entire population in Argentina.

To such end, with a customer focused approach, we seek to provide the best service offerings in terms of speed, quality and technological reliability, constantly expanding the contents offered that support and add value to our product portfolio.

We continue with fiber optic cable laying increasingly closer to households, unifying different access technologies to improve Internet browsing speeds through the fixed broadband service provided by Fibertel. At the same time, we are converting copper fixed networks into fiber networks or hybrid fiber-coaxial networks to offer higher connection speed and capacity.

Regarding the mobile network, Personal has become the fastest 4G service provider in Argentina, and we continue to expand its coverage and capacity, upgrading the installed sites throughout the country with 4.5G technology, which will allow us to be prepared for 5G deployment and the possibilities it provides through IoT solutions. In this regard, Telecom has made the first two 5G technology demos open to the public in Argentina.

Through our fixed and mobile networks, we seek to provide our customers with a comprehensive connectivity service, and an experience that ensures constant and fluid connection, with a broad range of contents at their disposal which can be consumed from any device in any place and at any time. For this purpose, we rely on the high capacity and capillarity of the IP transport interurban network, with a new architecture that allows the Company to transport digital contents based on the growing demand.

In addition, through Flow we offer users high quality audiovisual contents, with a catalogue designed to cater to the needs of the most diverse audiences. This multi device platform also offers new entertainment experiences through Flow Music.

During 2019, Telecom will continue upgrading its management systems focused on convergence, improving customer satisfaction and relationships and boosting the performance of our networks. The full integration of our fixed mobile network, Argentina’s most powerful and sustainable one, will allow us to expand the plan for the transformation of connectivity services and contents.

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Argentine pesos in current currency - Note 1.e)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CONSOLIDATED INCOME STATEMENTS

(In millions of Argentine pesos in current currency, except per share data in Argentine pesos in current currency - Note 1.e)

See Note 22 for additional information on operating expenses per function.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of Argentine pesos in current currency - Note 1.e)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Argentine pesos in current currency - Note 1.e)