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<SEC-DOCUMENT>0000950103-06-001766.txt : 20061226
<SEC-HEADER>0000950103-06-001766.hdr.sgml : 20061225
<ACCEPTANCE-DATETIME>20060714171605
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950103-06-001766
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060714

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TELECOM ARGENTINA SA
		CENTRAL INDEX KEY:			0000932470
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		MAIPU 1210
		STREET 2:		PISO 9
		CITY:			BUENOS AIRES
		STATE:			C1
		ZIP:			1006
		BUSINESS PHONE:		5419684000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TELECOM ARGENTINA STET FRANCE TELECOM SA
		DATE OF NAME CHANGE:	19950809
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<P align="center">
<FONT size=2 BASEFACE="serif" face="serif">[LETTERHEAD OF TELECOM ARGENTINA S.A.]</FONT></P>
<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <blockquote>
          <p align="right">
            <FONT size=2 BASEFACE="serif" face="serif">July 14, 2006</FONT></p>
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    </blockquote>
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<P align="left">
<B><FONT size=2 BASEFACE="serif" face="serif">VIA EDGAR SUBMISSION</FONT></B></P>
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<FONT size=2 BASEFACE="serif" face="serif">Re:</FONT>
        </TD>
        <TD width=95% align=left>
<B><FONT size=2 BASEFACE="serif" face="serif">Telecom Argentina S.A.</FONT></B>
        </TD>
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<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

        </TD>
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<B><FONT size=2 BASEFACE="serif" face="serif">Form</FONT></B>
<b><font size=2 baseface="serif" face="serif">20-F for the Fiscal Year Ended
December 31, 2004</font></b>    </TD>
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<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

        </TD>
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<B><FONT size=2 BASEFACE="serif" face="serif">Filed June 29, 2005, Amended June 30, 2005</FONT></B>
        </TD>
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        <TD width=5% align=left>&nbsp;

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<B><FONT size=2 BASEFACE="serif" face="serif">Form</FONT></B>
<b><font size=2 baseface="serif" face="serif">6-K, Filed March 14, 2006</font></b>      </TD>
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<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

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<B><FONT size=2 BASEFACE="serif" face="serif">(File No. 1-13464)</FONT></B>
        </TD>
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<P align="left">
<FONT size=2 BASEFACE="serif" face="serif">Ms. Cecilia D. Blye<br>
</FONT><FONT size=2 BASEFACE="serif" face="serif">Chief, Office of Global Security
Risk<br>
Securities and Exchange Commission<br>
Division of Corporation Finance<br>
100 F
Street, N.E.<br>
</FONT><FONT size=2 BASEFACE="serif" face="serif">Washington, D.C. 20549</FONT></P>
<P align="left">
<FONT size=2 BASEFACE="serif" face="serif">Dear Ms. Blye:</FONT></P>
<P align="left">
  <font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT BASEFACE="serif">This
  letter responds to the comments of the Office of Global Security Risk of the
  Securities and Exchange Commission (the &#147;<B>Commission</B>&#148;) contained
  in the letter from the Office of Global Security Risk dated June 29, 2006 (the &#147;<B>Comment Letter</B>&#148;)
  regarding the above-referenced filings on Form 20-F (the &#147;<B>2004 20-F</B>&#148;)
  and Form 6-K filed March 14, 2006 (the &#147;<B>6-K</B>&#148;) of Telecom Argentina
S.A. (the &#147;<B>Company</B>&#148;).</FONT></font></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">Set forth below are responses to the comments of the Office of Global Security Risk, as set forth in the Comment Letter.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><FONT size=2 BASEFACE="serif" face="serif">1. We note the reference on page 28 of the Form 6-K regarding services received from Etec S.A., a Cuban state-owned telecommunications company. Your Form 20-F for the year ended
December 31, 2004, does not include any information regarding such services, or any other contacts with Cuba. </FONT></I></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><FONT size=2 BASEFACE="serif" face="serif">Cuba is identified as a state sponsor of terrorism by the U.S. State Department, and is subject to asset controls and export control administered by the U.S. Treasury
Department&#146;s Office of Foreign Assets Control and the U.S. Commerce Department&#146;s Bureau of Industry and Security. Please describe the nature and extent of your past, current, and anticipated contacts with Cuba, whether through direct or
indirect </FONT></I></P>
<br>
<br>
<hr size=3 color=GRAY noshade>
<p style="page-break-before:always"></p>
<PAGE>
<br>
<br>

<TABLE border=0 width=95% cellspacing=0 cellpadding=0>
<TR valign="bottom">
        <TD width=33% align=left>
<FONT size=2 BASEFACE="serif" face="serif">Ms. Cecilia D. Blye</FONT>
        </TD>
        <TD width=34% align=center>
<FONT size=2 BASEFACE="serif" face="serif">2</FONT>
        </TD>
        <TD width=33% align=right>
<FONT size=2 BASEFACE="serif" face="serif">July 14, 2006</FONT>
        </TD>
</TR>
</TABLE>
<BR>
<I><FONT size=2 BASEFACE="serif" face="serif">arrangements. Your response should describe the material terms of any agreements or commercial arrangements you have with Etec S.A.</FONT></I>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><FONT size=2 BASEFACE="serif" face="serif">2. Please discuss the materiality of your contacts with Cuba, in light of </FONT></I><I><FONT size=2 BASEFACE="serif" face="serif">Cuba&#146;s status as a state sponsor of terrorism. Discuss also whether those contacts constitute a material investment risk for your security holders. You should address materiality in quantitative terms,
including the dollar amounts of any associated revenues, assets, and liabilities. Please also address materiality in terms of qualitative factors that a reasonable investor would deem important in making an investment decision, including the
potential impact of corporate activities upon a company&#146;s reputation and
share value.</FONT></I></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><FONT size=2 BASEFACE="serif" face="serif">We note, for example, that Arizona and Louisiana have adopted legislation requiring their state retirement systems to prepare reports regarding state pension fund assets invested
in, and/or permitting divestment of state pension fund assets from, companies that conduct business with countries identified as state sponsors of terrorism. The Pennsylvania legislature has adopted a resolution directing its Legislative Budget and
Finance Committee to report annually to the General Assembly regarding state funds invested in companies that have ties to terrorist-sponsoring countries. The Missouri Investment Trust has established an equity fund for the investment of certain
state-held monies that screens out stocks of companies that do business with U.S.-designated state sponsors of terrorism. Florida requires issuers to disclose in their prospectuses any business contacts with Cuba or persons located in Cuba. Your
materiality analysis should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have business contacts with Cuba.</FONT></I></P>
<P align="left">
  <font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT BASEFACE="serif">The
  Company does not believe that the operations of Empresa Nacional de Telecomunicaciones
  de Cuba S.A. (&#147;<B>Etec</B>&#148;) pose a material investment risk to our
  security holders. Etec is the exclusive operator for national and international
  fixed line and wireless telecommunications services in Cuba. The Company owns
  no assets in Cuba. The Company has no direct or indirect ownership interest
  in Etec, and has no business relationship with Etec other than as described
below.</FONT></font></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">Etec is deemed a related party of the Company under Argentine GAAP and certain capital markets regulations solely due to an investment in Etec by one of the Company&#146;s indirect
shareholders. Accordingly, transactions with Etec are included in the Company&#146;s financial statements set forth in the 2004 20-F and the 6-K in the related party transactions footnote. The Company does not believe that its indirect relationship
with Etec is likely to have an adverse impact on the Company&#146;s reputation or share value, or that a reasonable investor would deem the Company&#146;s relationship with Etec important in making an investment decision.</FONT></P>
<br>
<br>
<hr size=3 color=GRAY noshade>
<p style="page-break-before:always"></p>
<PAGE>
<p>&nbsp;</p>
<TABLE border=0 width=95% cellspacing=0 cellpadding=0>
  <TR valign="bottom">
    <TD width=33% align=left> <FONT size=2 BASEFACE="serif" face="serif">Ms.
        Cecilia D. Blye</FONT> </TD>
    <TD width=34% align=center> <font size="2" face="serif">3</font> </TD>
    <TD width=33% align=right> <FONT size=2 BASEFACE="serif" face="serif">July
        14, 2006</FONT> </TD>
  </TR>
</TABLE>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">Under
    Argentine GAAP and certain capital markets regulations, Etec may be deemed
    a related party of the Company because the Company&#146;s indirect shareholder,
    Telecom Italia International N.V., also owns 27% of the common stock of Etec.
    As disclosed in the 2004 20-F, Nortel Inversora S.A. (&#147;</FONT><B><FONT size=2 BASEFACE="serif" face="serif">Nortel</FONT></B><FONT size=2 BASEFACE="serif" face="serif">&#148;) owns approximately
54.74% of the Company&#146;s total capital stock. 100% of the common stock of
Nortel is owned by Sofora Telecomunicaciones S.A. (&#147;</FONT><B><FONT size=2 BASEFACE="serif" face="serif">Sofora</FONT></B><FONT size=2 BASEFACE="serif" face="serif">&#148;), an
Argentine holding company of which Telecom Italia International N.V. owns 17.5% . Telecom Italia S.p.A., which owns 100% of the common stock of Telecom Italia International N.V., owns an additional 32.5% of Sofora&#146;s
stock.</FONT></p>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">The Company receives revenue from Etec for the termination of calls on its network when Etec customers in Cuba call customers of the Company in Argentina. For the year ended December
31, 2005, the Company received revenue in the amount of P&#36;0.2 million, or 0.003% of the Company&#146;s total consolidated revenue. For the year ended December 31, 2004, the Company received revenue in the amount of P&#36;0.2 million, or 0.004%
of the Company&#146;s total consolidated revenue. Similarly, Etec charges the Company for the termination of calls on Etec&#146;s network made by customers of the Company to customers of Etec in Cuba.
As disclosed in the Form 20-F for the Fiscal Year Ended December 31, 2005 filed June 30, 2006 (the &#147;</FONT><B><FONT size=2 BASEFACE="serif" face="serif">2005 20-F</FONT></B><FONT size=2 BASEFACE="serif" face="serif">&#148;), for the year ended
December 31, 2005, these termination charges accounted for P&#36;4 million, or 0.08% of the Company&#146;s consolidated cost of services, general and administrative and selling expenses. As disclosed in the 2004 20-F, for the year ended December 31,
2004, these termination charges accounted for P&#36;3 million, or 0.07% of the Company&#146;s consolidated cost of services, general and administrative and selling expenses.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">Based on the percentage of the Company&#146;s cost services, general and administrative and selling expenses, the Company does not consider the costs generated by its transactions
with Etec to be material. As discussed above, the Company incurs such costs because certain of its customers place calls to Cuba. The Company expects to continue incurring such costs, as they represent normal course of business calls for certain of
its customers making calls to Cuba. Notwithstanding Etec&#146;s status as the exclusive operator for national and international fixed line and wireless telecommunications services in Cuba, the Company believes that its business dealings with Etec
are currently, and will continue to be, financially immaterial.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">In light of the indirect relationship between the Company and Etec and the limited nature of the business that the Company conducts with Etec, the Company does not believe that its
relationship with Etec is material on either a quantitative or a qualitative basis.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">Please note that the Company has supplemented its disclosure relating to Etec by including the following text in its 2005 20-F under &#147;Item 7: Major Shareholders and Related Party
Transactions&#148;.</FONT></P>
<br>
<br>
<hr size=3 color=GRAY noshade>
<p style="page-break-before:always"></p>
<PAGE>
<p>&nbsp;</p>
<TABLE border=0 width=95% cellspacing=0 cellpadding=0>
  <TR valign="bottom">
    <TD width=33% align=left> <FONT size=2 BASEFACE="serif" face="serif">Ms.
        Cecilia D. Blye</FONT> </TD>
    <TD width=34% align=center> <font size="2" face="serif">4</font> </TD>
    <TD width=33% align=right> <FONT size=2 BASEFACE="serif" face="serif">July
        14, 2006</FONT> </TD>
  </TR>
</TABLE>
<blockquote>
  <p><FONT size=2 BASEFACE="serif" face="serif">&#147;Among the above mentioned
      expenses incurred through transactions with related parties of Sofora were
      payments of P&#36;4
        million in fiscal year 2005 made to Etec S.A. for international outbound
        calls. Etec S.A., the monopoly provider of fixed line and wireless telecommunications
        services in Cuba, is an affiliate of Telecom Italia Group. Telecom Italia
    holds, through Telecom Italia </FONT><FONT size=2 BASEFACE="serif" face="serif">International,
    N.V., a 27% interest in Etec S.A. The other shareholders in the company include
    the Cuban government which controls 51% of the company and four other Cuban
    shareholders. In addition to its shareholding in Etec S.A., Telecom Italia
    International is a party to a shareholders&#146; agreement pursuant to which
    it has the right to designate certain senior executive officers and a majority
    of the board of  directors of Etec S.A. on alternate years, and has also
    agreed to provide certain technical assistance to Etec S.A. We do not believe
    that our affiliation with Etec S.A. is material to our results of operations
  or financial condition.&#148;</FONT></p>
</blockquote>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">The
    Company understands and acknowledges that: (i) it is responsible for the adequacy
    and accuracy of the disclosure in its filings; (ii) staff comments or changes
    to disclosure in response to staff comments do not foreclose the Commission
        from taking any action with respect to the filings; and (iii) it may not
        assert staff comments as a defense in any proceeding initiated by the Commission
        or any person under the federal securities laws of the United States.</FONT></p>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 BASEFACE="serif" face="serif">We are grateful for your assistance in this matter. A representative of the Company will call you after this filing has been made to discuss any concerns you may have. Please do not
hesitate to call me (at +54-11-4968-3007) or Pedro Insussary, Manager, Analysis Financial Controls and Investor Relations (+54-11-4968-3743), with comments or questions. Alternatively, please feel free to contact Julia Cowles (650-752-2007) of Davis
Polk &amp; Wardwell, the Company&#146;s counsel.</FONT></P>
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      <TD width=100% align=left>
    <FONT size=2 BASEFACE="serif" face="serif">Very truly yours,</FONT>
      </TD>
    </TR>
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      <TD align=left>&nbsp;</TD>
    </TR>
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      <TD align=left>&nbsp;</TD>
    </TR>
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      <TD width=100% align=left>
    <FONT size=2 BASEFACE="serif" face="serif">/s/ Valerio Cavallo</FONT>
      </TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD width=100% align=left>
    <FONT size=2 BASEFACE="serif" face="serif">Valerio Cavallo</FONT>
      </TD>
    </TR>
    <TR valign="bottom">
      <TD width=100% align=left>
    <FONT size=2 BASEFACE="serif" face="serif">Chief Financial Officer</FONT>
      </TD>
    </TR>
  </TABLE>
  <BR>
</div>
<TABLE border=0 width=95% cellspacing=0 cellpadding=0>
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        <TD width=5% align=left>
<FONT size=2 BASEFACE="serif" face="serif">cc:</FONT>
        </TD>
        <TD width=95% align=left>
<FONT size=2 BASEFACE="serif" face="serif">Julia K. Cowles</FONT>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

        </TD>
        <TD width=95% align=left>
<FONT size=2 BASEFACE="serif" face="serif">Davis Polk &amp; Wardwell</FONT>
        </TD>
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