DESCRIPTION OF BUSINESS AND BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2021

DESCRIPTION OF BUSINESS AND BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

Schedule of subsidiaries included in the consolidation process and the respective equity interest owned by the company


			Telecom Argentina's
			direct/indirect interest
			in capital stock and
Company	Main Activity	Country	votes
Núcleo	Mobile telecommunications Services	Paraguay	67.50	%
Personal Envíos	Mobile financial services	Paraguay	67.50	%
Tuves Paraguay	Distribution of television and audio signals direct to home services	Paraguay	67.50	%
Micro Sistemas	Services related to the use of electronic payment media	Argentina	100.00	%
Pem	Investment	Argentina	100.00	%
Cable Imagen	Closed-circuit television	Argentina	100.00	%
Televisión Dirigida	Cable television services	Paraguay	100.00	%
Adesol (a)	Holding	Uruguay	100.00	%
AVC Continente Audiovisual (b)	Broadcasting services	Argentina	100.00	%
Inter Radios	Broadcasting services	Argentina	100.00	%
Telecom USA	Telecommunication services	USA	100.00	%
Personal Smarthome S.A. (c)	Security solutions and services	Argentina	100.00	%
Opalker S.A. (d)	Cybersecurity and related services	Uruguay	100.00	%

(a)	Includes the 100% interest in Telemas S.A., which holds interests in the following special-purpose entities: Audomar S.A., Bersabel S.A., Dolfycor S.A., Reiford S.A., Space Energy S.A., Tracel S.A. and Visión Satelital S.A. (See Note 3 d.4) to these consolidated financial statements).

(b)	On October 27, 2021, Telecom acquired the remaining 40% of AVC Continente Audiovisual's capital stock. For further information, see Note 3.d.1.b) to these consolidated financial statements.

(c)	Company started on December 30, 2020 and registered in the IGJ on June 9, 2021 As of December 31, 2021 is a dormant entity.

(d)	Company acquired on July 27, 2021. For further information, see Note 3.d.1.f) to these consolidated financial statements.

Schedule of income statement information

Presented below is the Segment financial information as it is analyzed by the Executive Committee and the CEO for the years ended December 31, 2021, 2020 and 2019.

◻

Consolidated Income Statement as of December 31, 2021

Services

Other

rendered in

abroad

Other abroad

Services

Argentina –

Argentina

Other

segments –

segments

rendered in

Inflation

restated for

abroad

Inflation

restated for

Argentina

restatement

inflation

segments

restatement

inflation

Eliminations

Total

Revenues

332,816

63,403

396,219

26,215

5,067

31,282

(2,008)

425,493

Operating costs without depreciation, amortization and impairment of fixed assets

(229,554)

(46,552)

(276,106)

(15,514)

(3,114)

(18,628)

2,008

(292,726)

Adjusted EBITDA

103,262

16,851

120,113

10,701

1,953

12,654

—

132,767

Depreciation, amortization and impairment of fixed assets

(135,554)

Operating loss

(2,787)

Earnings from associates

395

Debt financial expenses

28,700

Other financial results, net

16,949

Income before income tax expense

43,257

Income tax expense

(33,317)

Net Income

9,940

Attributable to:

Controlling Company

8,665

Non-controlling interest

1,275

9,940

◻

Consolidated Income Statement as of December 31, 2020

Services

Other

rendered in

abroad

Other abroad

Services

Argentina –

Argentina

Other

segments –

segments

rendered in

Inflation

restated for

abroad

Inflation

restated for

Argentina

restatement

inflation

segments

restatement

inflation

Eliminations

Total

Revenues

240,325

185,042

425,367

18,183

13,811

31,994

(2,127)

455,234

Operating costs without depreciation, amortization and impairment of fixed assets

(158,901)

(123,028)

(281,929)

(11,419)

(8,712)

(20,131)

2,127

(299,933)

Adjusted EBITDA

81,424

62,014

143,438

6,764

5,099

11,863

—

155,301

Depreciation, amortization and impairment of fixed assets

(124,669)

Operating Income

30,632

Earnings from associates

749

Debt financial expenses

(37,280)

Other financial results, net

10,649

Income before income tax expense

4,750

Income tax expense

(12,454)

Net loss

(7,704)

Attributable to:

Controlling Company

(8,626)

Non-controlling interest

922

(7,704)

◻

Consolidated Income Statement as of December 31, 2019

Services

Other

rendered in

abroad

Other abroad

Services

Argentina –

Argentina

Other

segments –

segments

rendered in

Inflation

restated for

abroad

Inflation

restated for

Argentina

restatement

inflation

segments

restatement

inflation

Eliminations

Total

Revenues

182,233

274,494

456,727

12,931

19,924

32,855

(2,515)

487,067

Operating costs without depreciation, amortization and impairment of fixed assets

(121,682)

(186,711)

(308,393)

(8,946)

(13,842)

(22,788)

2,515

(328,666)

Adjusted EBITDA

60,551

87,783

148,334

3,985

6,082

10,067

—

158,401

Depreciation, amortization and impairment of fixed assets

(125,944)

Operating Income

32,457

Losses from associates

(385)

Debt financial expenses

(34,229)

Other financial results, net

23,284

Income before income tax expense

21,127

Income tax benefit

(29,116)

Net loss

(7,989)

Attributable to:

Controlling Company

(9,034)

Non-controlling interest

1,045

(7,989)

Schedule of Financial Statement Information Based on Geographical Area


	As of December 31
	2021	2020	2019
Sales revenues from customers located in Argentina	394,781	423,580	454,269
Sales revenues from foreign customers	30,712	31,654	32,798

CAPEX corresponding to the segment “Services rendered in Argentina	78,593	75,599	124,088
CAPEX corresponding to the segment “Other abroad segments”	6,957	8,525	10,486

Fixed assets corresponding to the segment “Services rendered in Argentina”	974,315	1,008,512	1,034,134
Fixed assets corresponding to the segment “Other abroad segments”	33,608	39,882	40,985

Financial Debt corresponding to the segment “Services rendered in Argentina”	259,403	293,562	303,919
Financial Debt corresponding to the segment “Other abroad segments”	7,518	8,623	8,421

Schedule of national consumer price index according to official statistics (INDEC)

The table below show the evolution of the National CPI in the last three years according to official statistics (INDEC) and following the guidelines provided by Resolution No. 539/18, as well as the devaluation of the argentine peso against the US dollar for the same years:


	As of December 31,		As of December 31,		As of December 31,
	2019		2020		2021

National Consumer Price Index (December 2016=100)	284.44		385.88		582.46

Variation in Prices
Annual	53.8	%	36.1	%	50.9	%
Accumulated 3 years	183.2	%	209.2	%	216.1	%

Banco Nación US$/$ exchange rate	59.89		84.15		102.72

Variation in the exchange rate
Annual	58.9	%	40.5	%	22.1	%
Accumulated 3 years	276.9	%	351.2	%	172.5	%