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OPERATING EXPENSES

12 Months Ended

Dec. 31, 2021

NOTE 24 – OPERATING EXPENSES

Operating expenses disclosed by nature of expense amounted to $428,280, $424,602 and $454,610 for the years ended December 31, 2021, 2020 and 2019, respectively. The main components of the operating expenses are the following:


	Years ended December 31,
	2021	2020	2019
Employee benefit expenses and severance payments	Profit (loss)
Salaries, Social security expenses and benefits	(83,429)	(82,094)	(82,763)
Severance indemnities	(6,518)	(3,751)	(10,589)
Other employee expenses	(1,876)	(2,420)	(2,266)
	(91,823)	(88,265)	(95,618)
Fees for services, maintenance, materials and supplies
Maintenance and materials	(28,512)	(28,413)	(31,973)
Fees for services	(20,360)	(21,215)	(22,437)
Directors and Supervisory Committee’s fees	(559)	(201)	(266)
	(49,431)	(49,829)	(54,676)
Taxes and fees with the Regulatory Authority
Turnover tax	(15,813)	(16,496)	(17,547)
Regulatory Entity Fees	(7,863)	(8,503)	(9,549)
Municipal taxes	(4,524)	(4,727)	(5,047)
Other taxes and fees	(4,543)	(5,021)	(5,636)
	(32,743)	(34,747)	(37,779)


	Years ended December 31,
	2021	2020	2019
Cost of equipment and handsets	Profit (loss)
Inventory balance at the beginning of the year	(6,001)	(7,079)	(9,073)
Plus:
Purchases	(19,754)	(17,711)	(21,529)
Others	1,356	1,986	1,434
Less:
Inventory balance at the end of the year	3,438	6,001	7,079
	(20,961)	(16,803)	(22,089)
Other operating expenses
Provisions	(7,896)	(4,533)	(2,643)
Rentals and internet capacity	(2,751)	(3,022)	(4,094)
Energy, water and other services	(6,991)	(8,181)	(10,087)
Other	(3,544)	(4,774)	(6,137)
	(21,182)	(20,510)	(22,961)
Depreciation, amortization and impairment of fixed assets
Depreciation of PP&E	(108,382)	(99,185)	(96,535)
Amortization of intangible assets	(15,558)	(16,056)	(16,991)
Amortization of Rights of use assets	(10,330)	(8,860)	(7,149)
Impairment of fixed assets	(1,284)	(568)	(5,269)
	(135,554)	(124,669)	(125,944)

Operating expenses, disclosed per function are as follows:

Operating

Administration

Commercializa-tion

Total

Concept

costs

12.31.2021

12.31.2020

12.31.2019

Employee benefit expenses and severance payments

(52,999)

(17,036)

(21,788)

(91,823)

(88,265)

(95,618)

Interconnection costs and other telecommunication charges

(15,262)

—

(15,262)

(16,987)

(15,453)

Fees for services, maintenance, materials and supplies

(26,465)

(8,000)

(14,966)

(49,431)

(49,829)

(54,676)

Taxes and fees with the Regulatory Authority

(32,271)

(231)

(241)

(32,743)

(34,747)

(37,779)

Commissions and advertising

(299)

(121)

(23,972)

(24,392)

(26,040)

(30,027)

Cost of equipment and handsets

(20,961)

—

(20,961)

(16,803)

(22,089)

Programming and content costs

(28,949)

—

(28,949)

(30,443)

(37,053)

Bad debt expenses

—

(7,983)

(7,983)

(16,309)

(13,010)

Other operating expenses

(9,818)

(2,080)

(9,284)

(21,182)

(20,510)

(22,961)

Depreciation, amortization and impairment of fixed assets

(107,717)

(13,933)

(13,904)

(135,554)

(124,669)

(125,944)

Total as of 12.31.2021

(294,741)

(41,401)

(92,138)

(428,280)

—

Total as of 12.31.2020

(287,980)

(37,020)

(99,602)

—

(424,602)

—

Total as of 12.31.2019

(310,528)

(39,843)

(104,239)

—

(454,610)

Operating leases

Future minimum lease payments of non-cancellable operating lease agreements of Telecom and its subsidiaries as of December 31, 2021, 2020 and 2019 in current currency on the transaction date are as follows:


	Less than 1		More than 5
	year	1‑5 years	years	Total
2019	436	142	—	578
2020	341	148	—	489
2021	894	272	65	1,231

Further information is provided in Note 3.j) to these consolidated financial statements.