Given that the “zero rate” that prevented Telcel from charging termination rates in its mobile network was held unconstitutional by the Supreme Court (

Suprema Corte de Justicia de la Nación

or “SCJN”), the IFT has determined asymmetric interconnection rates for the termination of traffic in Telcel’s and other operators’ networks for 2018, 2019, 2020, 2021, 2022 and 2023. The resolutions setting such rates have been challenged by Telcel, and final resolutions are pending.

The Company expects that mobile termination rates, as well as other rates applicable to mobile interconnection (such as transit), will continue to be the subject of litigation and administrative proceedings. The Company cannot predict when or how these disputes will be resolved or the financial effects of any such resolutions.

(2) Telcel Class Action Lawsuit

A class action lawsuit was filed against Telcel by customers allegedly affected by Telcel’s quality of service and wireless and broadband rates continues in process. At this stage, the Company cannot assess whether this class action lawsuit could have an adverse effect on the Company’s business and results of operations in the event that it is resolved against Telcel, due to uncertainty about the factual and legal claims underlying this proceeding. Consequently, the Company has not established a provision in the accompanying consolidated financial statements for an eventual loss arising from this proceeding.

(3) IFT Proceedings Against Telmex

In 2018, the IFT imposed a fine of Ps. 2,543,937 on Telmex relating to a sanction procedure triggered by the alleged breach in 2013 and 2014 of certain minimum quality goals for dedicated link services. Telmex challenged this fine, and a final resolution is pending.

(4) Brazilian Tax Matters

As of December 31, 2022, certain Company’s Brazilian subsidiaries had aggregate tax contingencies of Ps. 132,440,125 (R$35,594,051) for which the Company has established provisions of Ps. 19,135,992 (R$ 5,142,909) in the accompanying consolidated financial statements for eventual losses arising from contingencies that the Company considers probable. The most significant

matters

for which provisions have been established are:

•

Ps. 35,621,523 (R$ 9,573,491) aggregate contingencies and Ps. 3,515,261 (R$ 944,747) provisions related to value-added tax (

Imposto sobre a Circulação de Mercadorias e Prestação de Serviços

or “ICMS”) assessments;

•

Ps. 16,126,122 (R$ 4,333,989) aggregate contingencies and Ps. 4,067,063 (R$ 1,093,047) provisions related to social contribution on net income (

Contribuição Social sobre o Lucro Líquido

or “CSLL”) and corporate income tax (

Imposto de Renda sobre Pessoa Jurídica

or “IRPJ”) assessments;

•

Ps. 18,667,727 (R$ 5,017,060) aggregate contingencies and Ps. 5,572,638 (R$ 1,497,679) provisions related to the social integration program (

Programa de Integração Social

or “PIS”) and the contribution for social security financing (

Contribuição para o Financiamento da Seguridade Social

or “COFINS”) assessments;

•

Ps. 7,870,074 (R$ 2,115,128) aggregate contingencies and Ps.83,960 (R$ 22,565) provisions related to offset’s rejections of tax credits related to Income Tax (Imposto de Renda Pessoa Jurídica o “IRPJ”) and Social Contributions over Profits (Contribuição Social sobre o Lucro Líquido o “CSLL”), arising from non-appelable judicial resolutions, mainly;

•

Ps. 13,243,052 (R$ 3,559,147) aggregate contingencies and Ps.1,468,894 (R$ 394,774) provisions mainly related to an allegedly improper exclusion of interconnection revenues and costs from the basis used to calculate Fund for Universal Telecommunication Services (

Fundo de Universalização dos Serviços de Telecomunicações

or “FUST”) obligations, which are being contested;

•

Ps. 5,689,462 (R$1, 529,076) aggregate contingencies and Ps. 431 (R$ 116) provisions related to an alleged underpayment of obligations to the Telecommunications Technology Development Fund (

Fundo para o Desenvolvimento Tecnológico das Telecomunicações

or “FUNTTEL”), which are being challenged and for which a final resolution is pending;

•

Ps. 2,097,833 (R$ 563,805) aggregate contingencies and Ps. 45,926 (R$ 12,343) provisions related to the alleged nonpayment of Services Tax (

Imposto Sobre Serviços

or “ISS”) over several communication services, including Pay TV services, considered taxable for ISS by the Municipal Revenue Services, which are being challenged and for which a final resolution is pending;

•

Ps. 4,481,801 (R$ 1,204,510) aggregate contingencies and Ps. 127,509 (R$ 34,269) provisions arising from, among other, things the alleged underpayment of IRRF and CIDE taxes and on remittances made to foreign operators as remuneration for completing international calls abroad (outgoing traffic); and

•

Ps. 4,577,981 (R$ 1, 230,359) aggregate contingencies and Ps. 4,073,679 (R$ 1,094,825) provisions related to the requirement to contribute to the Promotion of Public Radio Broadcasting (“EBC”).

In addition, the Company’s Brazilian subsidiaries are subject to a number of contingencies for which it has not established provisions in the accompanying consolidated financial statements because the Company does not consider the potential losses related to these contingencies to be probable. These include Ps. 21,961,918 (R$ 5,902,393) related to an unpaid installation inspection rate (

Taxa de Fiscalização de Instalação

or “TFI”) allegedly due to the renovation of radio base stations, which is being challenged on the basis that there was no new equipment installation that could have led to this charge, along with any unpaid functioning inspection rate (

Taxa de Fiscalização de Funcionamento

or “TFF”).

(5) Anatel Challenge to Inflation Adjustments

Anatel has challenged the calculation of inflation-related adjustments due under the concession agreements with Tess S.A. (“Tess”), and Algar Telecom Leste S.A. (“ATL”), two of the Company’s subsidiaries that were previously merged into Claro S.A. Anatel rejected Tess and ATL’s calculation of the inflation-related adjustments applicable to 60% of the concessions price (which was due in three equal annual installments, subject to inflation-related adjustments and interest), claiming that the companies’ calculation of the inflation related adjustments resulted in a shortfall of the installment payments. The companies filed declaratory and consignment actions seeking the resolution of the disputes and have obtained injunctions from the Federal Court of Appeal suspending any payment until the pending appeals are resolved. After certain unfavorable resolutions issued by the Federal Court of Appeals to the appeals filed by such companies, new appeals have been filed before the Superior Court of Appeals for which definitive resolutions are pending.

The amount of the alleged shortfall as well as the method used to calculate monetary corrections are in dispute. If other methods or assumptions are applied, the amount may increase. In 2022, Anatel calculated the monetary correction in a total amount of Ps. 16,215,464 (R$ 4,358,000). As of December 31, 2022, the Company has established a provision of Ps. 5,584,995 (R$ 1,501,000) in the accompanying consolidated financial statements for the losses arising from these contingencies, which the Company considers probable.