Telecom Argentina S.A. Announces Consolidated Six-Month Period ('1H08') and Second Quarter Results for Fiscal Year 2008 ('2Q08')

BUENOS AIRES, Argentina , Aug. 5 /PRNewswire-FirstCall/ -- Telecom Argentina (BASE: TECO2, NYSE: TEO), one of Argentina's leading telecommunications groups, announced today a Net Income of P$613 million for the six-month period ended June 30...

Revenues related to Internet reached P$339 million (+36% vs. 1H07), mainly due to the substantial expansion of broadband service, driven by better network coverage, commercial promotions and innovation of the service portfolio.

Telecom recently renewed the offer of broadband products with two innovative options: one is Arnet Recargable (Arnet Rechargeable), the first internet service in the market that is prepaid and without monthly charge. The other product is Arnet Go, which makes possible both in-house broadband access and mobile internet. This is the first broadband service that combines ADSL technology with the benefit coming from the domestic internet access by Wi-Fi modem and the mobile internet access through Telecom Personal's 3G network.

Moreover, as part of the CSR (Corporate Social Responsibility) program, Telecom participates in the initiative Internet en Familia (Family Internet), developed by the National Ministry of Education, oriented to making parents aware of the importance of monitoring their children when they use internet. Telecom, as a company that supports the development of internet in Argentina , promotes the responsible use of this tool, which not only changes adult communication habits, but also that of today's youth, who were born into the modern technological world.

Telecom's broadband subscribers reached 902,000 as of June 30, 2008 (+50% vs. 1H07). Therefore, lines with this type of connection represent approximately 21% of Telecom's fixed-lines in service.

Cellular Telephony

Cellular Telephony continues with its expansion, increasing its participation in the Group's total revenues (65% vs. 62% in 1H07 and 0.5 million or 5% vs. 1Q08). During 1H08, this business generated revenues of P$3,287 million (+26% vs. 1H07). As of the end of June 2008 total subscribers reached 13.1 million.

Telecom Personal in Argentina

As of the end of June 2008 , Personal's subscribers reached 11.4 million in Argentina (+1.5 million or +15% vs. 1H07). Approximately 66% of the overall subscriber base is prepaid and 34% is postpaid.

Total voice traffic increased by 21% vs. 1H07 while outgoing SMS traffic increased from a monthly average of 784 million messages in 1H07 to 1,062 million (+35%) in 1H08. Because of this enhancement in traffic and the use of value-added services, the Average Monthly Revenue per User ("ARPU") increased to P$40 in 1H08, compared to P$37 in 1H07.

Revenues totaled P$3,072 million (+P$636 million or +26% vs. 1H07). Service revenues increased by P$580 million or 27% vs. 1H07, reaching P$2,749 million; furthermore, value-added services totaled P$790 million (+P$249 million or 46%, vs. 1H07), 29% of service revenues. In addition, handset sales grew by P$56 million (+21%) compared to 1H07, reaching P$323 million.

During 2Q08, Personal continued focusing its commercial efforts in customer caring outreach as well as in offers to stimulate consumption by existing clients.

Moreover, an upgrade handset campaign was implemented, helping clients to use the wide variety of value-added services offered by the company.

For the retail segment, Personal launched a line of packages for calls, SMS messages and internet, all within an innovative and flexible offer oriented to satisfy the client's communication needs yet without changing the subscriber's current plan. The launch, also furthered by the national communication campaign under the idea "Personal te conviene" (Personal suits you), was accepted positively by the market.

Regarding the corporate segment, "Personal Soluciones Express" (Personal Express Solutions) was introduced, an application oriented to SME's and large company sales forces. This tool covers connectivity and on-line information exchange needs among the company and its in-field personnel.

Personal also implemented a campaign oriented to expanding BlackBerry use permitting the increase of smartphone sales in customer offices.

In addition, Personal continued the expansion of its commercial network by opening two new customer offices (one in Posadas and the other in Bahia Blanca ), together with extension of 3G network coverage. Also, the remaining client migration from TDMA to GSM technology ended in June 2008 .