Second Quarter 2012Second Quarter 2012Earnings ResultsEarnings Results

Conference Call PresentationConference Call Presentation

Financial data prepared under IFRS

This presentation is based on audited financial statements and may include statements that could constitute forward-lookingstatements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings pershare, capital expenditures, dividends, liquidity and capital structure; the impact of the emergency laws enacted by the Argentinegovernment; and the impact of rate changes and competition on the Company’s future financial performance. Forward-lookingstatements may be identified by words such as “believes”, “expects”, “anticipates”, “projects”, “intends”, “should”, “seeks”,“estimates”, “future” or other similar expressions. Forward-looking statements involve risks and uncertainties that could significantlyaffect the Company’s expected results. The risks and uncertainties include, but are not limited to, uncertainties concerning theimpact of the emergency laws enacted by the Argentine government which have resulted in the repeal of Argentina’s convertibilitylaw, the devaluation of the peso, restrictions on the ability to exchange pesos into foreign currencies, the adoption of a restrictivecurrency transfer policy, the “pesification” of tariffs charged for public services, the elimination of indexes to adjust rates charged forpublic services and the executive branch announcement to renegotiate the terms of the concessions granted to public service

DisclaimerDisclaimer

1

public services and the executive branch announcement to renegotiate the terms of the concessions granted to public serviceproviders, including Telecom. Due to extensive and rapid changes in laws and economic and business conditions in Argentina, it isdifficult to predict the impact of these changes on the Company’s financial condition. Other factors may include, but are not limitedto, the evolution of the economy in Argentina, growing inflationary pressure and reduction in consumer spending and the outcome ofcertain legal proceedings. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only asthe date of this document. The Company undertakes no obligation to release publicly the results of any revisions to forward-lookingstatements which may be made to reflect events and circumstances after the date of this presentation, including, without limitation,changes in the Company’s business or to reflect the occurrence of unanticipated events. Information included in this presentation isunaudited and may not coincide with that included in the financial statements of the Company, due to rounding, reclassificationmatters, and other reasons. Readers are encouraged to consult the Company’s Annual Report and Form 20-F as well as periodicfilings made on Form 6-K, which are filed with or furnished to the United States Securities and Exchange Commission and theArgentine Comisión Nacional de Valores.

• Market Overview

• Business Highlights

AgendaAgenda

2

• Financials

• Q&A Session

9,2% 8,9%

5,2%

1,4%

Market Overview: Facing a more challenging scenarioMarket Overview: Facing a more challenging scenario

Billions USD, at current prices – Last 12 months∆ YoY - constant prices

Trade Balance (Billions USD) Last 12 monthsFiscal Balance as % of GDP Last 12 months*

Real GDP* Trade & Fiscal BalanceConsumption

368442 452 453

211249 255 257

11,6 10,0 11,4 11,5

1,7%

0,3% 0,1% 0,1%

∆ YoY - constant prices

9,0%10,7%

7,0%

2,5%

Billions USD, at current prices – Last 12 months

3

Source: MECON, INDEC and Company Estimates•Official GDP YoY variation, constant prices. •Fiscal Balance represents primarily fiscal surplus

• Efforts to achieve a higher commercial surplusseems to be taking effect, although with somedeterioration in fiscal revenues.

• The increasing gap between fiscal revenuesand spending has been covered by incrementalfinancial assistance from the Central Bank andthe National Pension Fund, allowing to maintainthe fiscal balance neutral.

• Higher commodities prices will help to sustainexternal balance and the economy growth.

• European crisis increased investors riskaversion and the lower global growth were themain international factors in this quarter.

• The domestic economy is showingdeceleration since sectors like constructionand industrial production suffered significantdeclines in their levels of activity.

• Investment levels seems to suffer from importrestrictions and a lower level of growth.

• A more cautious consumer is slowingprivate consumption trends. Concernsabout the economy and access to the FXmarket have deteriorated consumerconfidence.

• Inflation remains stable at high levels and ingeneral, wages negotiation seems toconclude at lower levels from last year.

• Telecommunications is a defensive sector,although it is not excluded from theeconomy cycles.

2010 2011 1Q12 2Q12e 2010 2011 1Q12 2Q12e

10,0 11,4 11,5

2010 2011 1Q12

• Market Overview

• Business Highlights

AgendaAgenda

4

• Financials

• Q&A Session

Business Business HighlightsHighlights

Successful start in MNP being #1 in customer choice

Leaders in Postpaid net adds & revenue share

Mobile Internet revenues +82% YoY in 2Q12, driven mainly bysmartphones

Focus in bundling services and flat pricing

Launch of cloud services for corporate ICTFIXED

MOBILE

5

Launch of cloud services for corporate ICT

Data services +29% YoY in 2Q12

FINANCIALS

FIXED

Strong balance sheet, net cash position, key for a challengingenvironment

TA dividend payment of ARS 807 MM

34,6 36,3 34,9 36,9

Mobile: Headstart in MNPMobile: Headstart in MNP

Service Revenue Share evolution*Subscriber Share EvolutionMillion of lines

Others

54,550,9

+5%

+7%52,3

55,6

+6%

+6%

29,8%

34,5%TEO

#3

# 2 Player

16,3 18,2 17,4 18,7

2010 2011 1H11 1H12e

6

Note: Argentinean operation only – does not include trunking subscribersSource: Market estimates of the main providers in the industry for total subscribers and services revenues, based on publicly available information.

• Leader in net ports

• 3 out of 4 port-ins are high value customers

• #1 Postpaid net adds – 14% YoY growth

• ARPU up +10% YoY to ARS 54,3 in 2Q12

NationalMarket share

TEO

+1,3 Msubs.

+50 pts

+11%

33,2% 33,7%32,1% 33,4%

+8%

2009 2010 2011 1H12

#3 Player

2.9974.482

2.0112.653

5.095

5.727

2.7253.000

Mobile: Strong Resilience in Mobile Internet usageMobile: Strong Resilience in Mobile Internet usage

Million ARS – Argentine Market

Internet

Data (SMS)

Service Revenue Breakdown

5.050

+98%

+50%

+12%

+32%

6.222

+10%

Retail & Wholesale Voice

8.483

10.983+29%

+23%

97 96 98 99

313 292 316 296

48,3

54,6

49,2

54,3

TOU (SMS/Month)

MOU (Mins/Month)

ARPU (ARS/Month)

+13%

-7%

-1%

Mobile KPI

+10%

-6%

+1%

391 774 314 5692.011

2010 2011 1H11 1H12

7

VAS as % of Service Revenues

Internet Services

as % of Service Revenues – Before capitalization of SAC & SRC

• Revenue performance driven by usage and customer increase, since last prices adjustment was effective in 4Q11

• Sustained growth in Mobile Internet revenues; +82% YoY in 2Q12

• In MNP context, change in agent commissions with focus in quality for acquisitions and customer retention

• Handset upgrades increases to yield base, stimulate usage and facilitate upselling

SAC & SRC

+98%

Handset subsidies

Advertising

Agent Commission

52%

+81%

46%48%40%

7,7% 9,0%

4,7%4,5%

3,2%3,4%

15,6% 16,9%

1H11 1H12

97 96 98 99

1H11 1H12 2Q11 2Q12

1.8782.149

1.9832.242

Paraguay Mobile Market: 3G services driving expansionParaguay Mobile Market: 3G services driving expansionMobile lines

Thousand of lines (includes 3G modems)

+14%

+13%

466

714

322403

158

264

114 149OPBDA

REVENUES

+53%

+67%

Financials

+25%

+31%

IFRS Million of ARS

2010 2011 1H11 1H12

8

• Increasing EBITDA margins thanks to VASexpansion

• Revenues in local currency rose +22% vs 1H12

114

2010 2011 1H11 1H12

Margin 34% 37% 35% 37%

• 3G subscribers increased 57% YoY

• Internet service revenues more than doubled YoY

• Elimination of unlimited SMS & Voice promotionsreduced MOU and TOU

6.029241 34

642 255 221 81 7.503

+1.474(+24%)

IFRS, Million of ARS, Percentage

Mobile Revenues: 3G services keep adding value & revenuesMobile Revenues: 3G services keep adding value & revenuesEvolution of revenues 1H11 – 1H12

1H11 Revenues

Retail Voice

Wholesale* Voice

Data Internet Equipment Nucleo* (Paraguay)

1H12 Revenues

9

+13% +4% +32% +25%+34%

Note: Wholesale voice shows Interconnection revenues (CPP, TRLD, Roaming and others )Núcleo revenues expressed in Argentine pesos, includes equipment.

35%11% 8%29% 12%% of total MobileRevenues

5%

+81%YoY Variation

2.5312.891 2.686

3.022

4.6164.441

Others1

BroadbandBroadband: Launch of integrated cloud computing services: Launch of integrated cloud computing services

• Bundling and new services contributes to control churn

• Launch of cloud data services

• Data services +29% YoY in 2Q12

• ARPU up +12% YoY & reduced churn

Thousand of broadband accesses

Evolution of Accesses

4.143

+12%

+11%

3.911

+14%

+14%

1.380 1.550 1.457 1.594

2010 2011 1H11 1H12e

NationalMarket share1

1,2% 1,2% 1,1% 1,3% 1,1%

86,088,2 91,1

95,6 96,5

2Q11 2Q11 4Q11 1Q12 2Q12

Monthly Churn

ARPU (ARS)

10

1 Source: Market estimates of the main providers in the industry.2 It must be noted that the calculation method of ARPUs of 2011 was adjusted in order to exclude from thesubscriber base the dongles of customers that already had fixed broadband access.

35%

TEO

+12%

35%

ARPU (2) & Churn Evolution

+9%

35%35%

+12%

4.622 4.611 4.621 4.583

8.752 8.740 8.731

Fixed voice: 2Q12 resumes positive net adds in LISFixed voice: 2Q12 resumes positive net adds in LIS

• More than 10 thousand net adds in 2Q12

• Retail voice revenues increased 6% YoY due to packs of services

• Increasing ARPU thanks to supplementary services and flat pricing offers

Thousand of lines in service

Evolution of Lines in Service

-0,8%-0,2%

8.729 +0,1%+0,3%

Others1

45,7 46,6 46,9 46,9 47,4

2Q11 3Q11 4Q11 1Q12 2Q12

4.107 4.141 4.119 4.148

2010 2011 1H11 1H12

11

1Source: Company reports of the main providers in the industry.ARBU: Includes only concepts billed to clients

ARS +4%

+0,7%

(excluding broadband and data)

+0,8%

ARBU evolution

Market share1 47% 47% 48%47%

TEO

2.555 71 -367 198 -11 2.877

+322(+13%)

IFRS, Million of ARS, Percentage

FixedFixed Services: Data Revenues accelerated in 2Q12Services: Data Revenues accelerated in 2Q12

38%

Regulated

Evolution of revenues 1H11 – 1H12

Regulated

Revenues 1H11

Retail Voice Wholesale Voice

Data Internet Equipment Revenues 1H12

12

YoY Variation

-22%+6%

Note: Does not include intercompany revenues.Graph not in scale

-1%

12% 32%42% 13%% of total FixedLine Revenues

62%

42%

58%

Regulated

Non Regulated

1%

+25%

Non Regulated

+27%

21%

19%

37%

17%

6%

Others

ITMobile access

1.852

2.318

751916

Evolution of Evolution of CAPEXCAPEX

Million of ARS

PP&E Capex BreakdownCapex Evolution

+25%

+32%

2.424

3.192

+25%PP&E

+22%

1.0761.345

37%

Fixed access

Core & Infraestructure1

572 874325 429

751

2010 2011 1H11 1H12

13

Note: 1Core & infrastructure refers to network related capex, including quality and innovation capex.

% Revenues 17% 13% 13%

• Initiated FTTC program improves fixed BB bandwidth and allows new services

• Fiber backhauling aimed to improve quality and capacity; +20% YoY increase in fiber-connected sites

• Increase in “Commercial Assets” due SAC & SRC related to MNP implementation

• NGN & FTTC deployments in new residential developments

• Certain restrictions in customs clearance process may affect Capex rollout in 2H12

17%

+53%Intangible AssetsSAC/SRC

+32%

• Market Overview

• Business Highlights

AgendaAgenda

14

• Financials

• Q&A Session

TEO Group: Consolidated Results TEO Group: Consolidated Results

+23%

IFRS, Million of ARS, Percentage

Revenues OPBDA*IFRS, Million of ARS,

8.584

10.380

+26%18.498

14.627

4.874

6.015+21%

1.431 1.647

1.474 1.492

2010 2011 1H11 1H12

2Q

1Q

15

OPBDA Margin

33% 33% 34% 30%

8.584

Regulated Revenues 14% 12%

+18%

+8%

2.905 3.139

4.874

13% 10%

+24%

+1%

+15%4.134 5.126

4.4505.254

2010 2011 1H11 1H12

2Q

1Q

*Operating Profit Before Depreciation & Amortization.Note: Figures restated due to reclassification of gains on disposals of PP&E

TEO Group: Consolidated TEO Group: Consolidated CostsCosts

Consolidated Costs 1 as % of Revenues Operating Costs 1 1H12

Labor Costs

Taxes

Others2

21%

13%

25%

19,9%20,9%

8,4%7,8%

Marketing & Sales

ITX Costs

69,9%66,4%

16

1. Excluding Depreciation & Amortizations.2. Others includes: Fees for services, fees for Call Center outsourcing,

maintenance, materials and supplies, bad debt expenses..

• MNP implementation required stronger commercial efforts that resulted in higher SAC/SRC

• The energy subsidies elimination represents 60 bps in OPBDA margin reduction

• Labor and labor related costs continue to affect margins.• Inflationary effect impacted costs in general affecting

margins in a competitive environment.

ITX costsMarketing & Sales

11%30%

16,0% 17,7%

13,3% 14,4%

8,8%9,1%

1H11 1H12

Others2

Sales

Taxes

Labor costs

1.275

TEO Group: Consolidated ResultsTEO Group: Consolidated Results

IFRS, Million of ARS, Percentage

Operating Profit Net Income attributable to Telecom

1.929 1.882

3.857

3.162

+22%

+30%

-2%

2.513

1.935

634 698

627 577

2010 2011 1H11 1H12

1.2751.261

958 1.033

971 849

2010 2011 1H11 1H12

17

O. Profit Margin 22% 21% 13% 14%22% 18% 15% 12%

-8%

-13%

1.929 1.882

+10%+8%

+1%

2Q

1Q

2Q

1Q

2.973

1.505

258 80 819

IFRS, Million of ARS - Last 12 months

TEO Group: FCF and Net Financial PositionTEO Group: FCF and Net Financial Position

6.249 3.461

185

OPBDA Capex ∆ WK & others

Operating Free Cash Flow

1.236

2.223

18

Note:(1) Includes Telecom USA(2) Includes Springville(3) OFCF: Operating Free Cash Flow before Taxes.

Net Financial Position

2Q11(Cash)

Net Financial Position

2Q12(Cash)

Net Interest

FX Variations

Operating Free Cash

Flow3

Taxes Dividend Payment

Free Cash Flow = 1.468

Telecom Argentina 1.286 (1)

Telecom Personal 1.058 (2)

Nucleo (Paraguay) (121)

Net Financial Position

• Market Overview

• Business Highlights

AgendaAgenda

19

• Financials

• Q&A Session