Personal's controlled subsidiary that operates in Paraguay generated revenues equivalent to P$215 million during 1H08 (+21% vs. 1H07).
By the end of June 2008 , the subscriber base reached approximately 1.7 million, +24% vs. 1H07. Prepaid and Postpaid customers represented 90% and 10%, respectively.
Consolidated Operating Costs
The Cost of Services Provided, Administrative Expenses and Selling Expenses totaled P$4,002 million in 1H08, which represents an increase of P$527 million, or +15%, vs. 1H07.
The cost breakdown is as follows:
-- Salaries and Social Security Contributions: totaled P$563 million (+22%), affected by increases in salaries and, marginally, in personnel (+364 employees vs. 1H07).
-- Taxes: reached P$402 million (+25%), in line with the general evolution of revenues.
-- Agents and Prepaid Card Commissions: were P$350 million (+3%), mainly due to the increase in prepaid card commissions, partially compensated by reduction in total commission paid to commercial agents.
-- Advertising: amounted P$190 million (+48%) oriented to strengthen institutional brand and to support the commercial activity in the cellular telephony and internet.
-- Cost of handsets sold: totaled P$448 million (+9%) mainly due to increased handset unit cost. Despite this, handset subsidy represented P$102 million (-P$32 million vs. 1H07).
-- TLRD and Roaming: P$449 million (+29%) due to increased traffic among cellular operators.
-- Depreciation of Fixed and Intangible Assets: reached P$ 638 million (-7% vs. 1H07). Fixed-line telephony totaled P$391 million (-7%) and Cellular telephony P$247 million (-8%), due to TDMA technology depreciation charges ended in 1H08.
Consolidated Financial and Holding Results
Financial and Holding Results resulted in a loss of P$8 million, (-P$210 million vs. 1H07). Such improvement was due to positive effect of foreign currency exchange generated by liabilities and a reduction in net interests.
Consolidated Net Financial Debt
As of June 30, 2008 , Net Financial Debt (Loans before the effect of NPV valuation, minus Cash, Cash Equivalents and Other credits from derivative Investments) amounted to P$1,330 million, a reduction of P$1,455 million as compared to June 2007 .
In April 2008 , Telecom Argentina made a principal payment of Notes in the
amount equivalent to
In addition, on May 15, 2008 , Standard & Poor's International Ratings LLC upgraded the long-term debt rating of Telecom Argentina and Telecom Personal to AA- from A+ on the Local Scale.
Consolidated Capital Expenditures
During 1H08, the Company invested P$716 million (excluding materials), in fixed and intangibles assets. This amount was allocated to the Voice, Data and Internet businesses (P$337 million) and the cellular business (P$379 million).
Main capex projects are related to the expansion of broadband services and to the upgrade of the network for next generation services (NGN), the improvement of the network (capacity, coverage and 3G), and the launch of new and innovative value-added services.
Other Commercial Initiatives
Telecom, as Official Sponsor of Argentine Olympic Committee Beijing 2008, will provide communication and networking technology that will accompany the Argentina Olympic Mission. Such technology will not only assist in logistic issues related with the games (check in, medical schedule requirement, meeting schedule, among others) but will also permit athletes to be closer to their relative and friends, receiving their support which is the key to their physical preparation.
Recent Relevant Matters
Cubecorp Argentina S.A. ("Cubecorp) Acquisition: On July 15, 2008 Telecom
acquired the shares of Cubecorp for a maximum amount of