EX-12.1 9 dex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

Exhibit 12.1

Telecom Argentina S.A.

Computation of Ratio of Earnings to Fixed Charges/Deficiency

In the Coverage of Fixed Charges by Earnings Before Fixed Charges (in Argentine GAAP)

(In millon of Argentine constant pesos, except for the ratio)

|  | As of and for fiscal year ended |
|  | September 1999 |  |  | December 2000 |  |  | December 2001 |  |  | December 2002 |  |  | December 2003 |
A – Earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pretax income (loss) |  | 1,152 |  |  | 603 |  |  | 218 |  |  | (5,692 | ) |  | 363 |
Fixed charges |  | 569 |  |  | 687 |  |  | 708 |  |  | 946 |  |  | 629 |
Amortization of capitalized interest |  | 53 |  |  | 65 |  |  | 56 |  |  | 92 |  |  | 94 |
Distributed income from equity investments |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capitalized interest |  | (105 | ) |  | (130 | ) |  | (104 | ) |  | (67 | ) |  | (6 | )
|  | 1,669 |  |  | 1,225 |  |  | 878 |  |  | (4,721 | ) |  | 1.080 |
B – Fixed charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expenses |  | 441 |  |  | 519 |  |  | 564 |  |  | 852 |  |  | 608 |
Capitalized interest |  | 105 |  |  | 130 |  |  | 104 |  |  | 67 |  |  | 6 |
Estimate of the interest within rental expense |  | 23 |  |  | 38 |  |  | 40 |  |  | 27 |  |  | 15 |
Preference security dividend |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
|  | 569 |  |  | 687 |  |  | 708 |  |  | 946 |  |  | 629 |
Ratio (A/B) |  | 2.9 |  |  | 1.8 |  |  | 1.2 |  |  | — | (1) |  | 1.7 |

| (1) |  | Under Argentine GAAP, the ratio related to the year ended December 31, 2002 indicates less than one-to-one coverage. Consequently, earnings for this period are inadequate to cover fixed charges. A total amount of earnings of P$5,667 million is required to attain a ratio of one-to-one determined under Argentine GAAP for the year ended December 31, 2002.

Telecom Argentina S.A.

Computation of Ratio of Earnings to Fixed Charges/Deficiency

In the Coverage of Fixed Charges by Earnings Before Fixed Charges (in U.S. GAAP)

(In millon of Argentine constant pesos, except for the ratio)

|  | As of and for fiscal year ended |
|  | September 1999 |  |  | December 2000 |  |  | December 2001 |  |  | December 2002 |  |  | December 2003 |
A – Earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pretax income (loss) |  | 1,250 |  |  | 554 |  |  | (3,331 | ) |  | (2,886 | ) |  | 535 |
Fixed charges |  | 569 |  |  | 687 |  |  | 708 |  |  | 946 |  |  | 629 |
Amortization of capitalized interest |  | 53 |  |  | 65 |  |  | 56 |  |  | 92 |  |  | 94 |
Distributed income from equity investments |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capitalized interest |  | (105 | ) |  | (130 | ) |  | (104 | ) |  | (67 | ) |  | (6 | )
|  | 1,767 |  |  | 1,176 |  |  | (2,671 | ) |  | (1,915 | ) |  | 1,252 |
B – Fixed charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expenses |  | 441 |  |  | 519 |  |  | 564 |  |  | 852 |  |  | 608 |
Capitalized interest |  | 105 |  |  | 130 |  |  | 104 |  |  | 67 |  |  | 6 |
Estimate of the interest within rental expense |  | 23 |  |  | 38 |  |  | 40 |  |  | 27 |  |  | 15 |
Preference security dividend |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
|  | 569 |  |  | 687 |  |  | 708 |  |  | 946 |  |  | 629 |
Ratio (A/B) |  | 3.1 |  |  | 1.7 |  |  | — | (1) |  | — | (1) |  | 2.0 |

| (1) |  | Under U.S. GAAP, the ratios related to the years ended December 31, 2002 and 2001 indicate less than one-to-one coverage. Consequently, earnings for these periods are inadequate to cover fixed charges. A total amount of earnings of P$2,861 million and P$3,379 million is required to attain a ratio of one-to-one determined under US GAAP for the years ended December 31, 2002 and 2001, respectively.