SEC Form 6-K filed by Telecom Argentina SA

Consolidated Operating Revenues

 

Mobile Services

 

As of March 31, 2025, total subscribers of Telecom (excluding TMA) in Argentina and Paraguay reached 24.0 million, while TMA’s subscriber base totaled 18.9 million. In 1Q25, consolidated mobile service revenues amounted to P$620,179 million (+P$186,182 million or +42.9% compared to 1Q24), making it the Company’s main revenue-generating segment in terms of service sales (accounting for 48.2% and 42.7% of total service revenues in 1Q25 and 1Q24, respectively). Mobile Internet revenues account for 98% and 92% of total revenues of these services in 1Q25 and 1Q24, respectively.

 

Telecom’s mobile services revenues (excluding TMA) increased by +11.0% in real terms during 1Q25 vs. 1Q24, while TMA’s standalone mobile service revenues increased by +21.6% over the same period.

 

Consolidated Mobile
Services Revenues
(in billion P$)

 

Mobile Services in Argentina

 

As of March 31, 2025, Telecom’s mobile subscribers (excluding TMA) in Argentina totaled approximately 21.3 million (+183 thousand or +0.9% vs. 1Q24). During 1Q25, there was a recovery in the postpaid base, which increased by 0.4% vs. 1Q24, while the prepaid base grew by 1.1%. As of March 31, 2025, postpaid accesses represented 39% of total mobile accesses.

 

As of March 31, 2025, TMA’s mobile subscribers totaled approximately 18.9 million (+82 thousand or +0.4% vs. 1Q24), including 2.7 million M2M accesses (+265 thousand or +11.1%). The postpaid base grew by 1.5% vs. 1Q24, while the prepaid base declined by -0.6%. As of March 31, 2025, postpaid accesses accounted for 49% of total mobile accesses. TMA’s average monthly churn stood at 2.1% in 1Q25 (vs. 2.0% in 1Q24).

 

In 1Q25, consolidated mobile service revenues in Argentina reached P$586,021 million (+P$198,515 million or +51.2% vs. 1Q24).

 

The average monthly revenue per user (ARPU) for Telecom (excluding TMA) was P$6,837.1 in 1Q25 (vs. P$6,037.6 in 1Q24). The effect of inflation adjustment to the measuring unit as of March 31, 2025, included in the ARPU amounts to P$216.3 in 1Q25 and P$2,543.4 in 1Q24. The average monthly churn was 2.0% in 1Q25 (vs. 1.5% in 1Q24).

 

TMA’s average monthly ARPU was P$6,928.4 in 1Q25 (vs. P$5,803.3 in 1Q24). The effect of the inflation adjustment to the measuring unit as of March 31, 2025, included in the ARPU was P$222.4 in 1Q25 and P$2,473.0 in 1Q24.

 

Personal in Paraguay (“Núcleo”)

 

As of March 31, 2025, Núcleo’s subscriber base totaled 2.6 million, 17% higher than in 1Q24. Of the total number of accesses, 73% corresponded to prepaid plans and 27% to postpaid plans, whereas as of March 31, 2024, prepaid accesses represented 75% and postpaid accesses represented 25%. The average monthly churn was 2.1% in 1Q25 (vs. 2.6% in 1Q24).

 

In 1Q25, mobile service revenues in Paraguay amounted to P$34,158 million, decreasing in real terms compared to the previous year (–P$12,333 million or –26.5% vs. 1Q24), primarily as a result of higher discounts granted and migration to lower-value plans.

 

 

 

Mobile Consumption of
Personal in Argentina

 

Internet Services

 

Consolidated internet service revenues amounted to P$322,420 million in 1Q25, growing in real terms (+P$59,623 million or +22.7% vs. 1Q24). Telecom’s subscriber base (excluding TMA)

 

Internet Services
Revenues (in billion P$)

 

reached 4.0 million subscribers (-44 thousand or -1.1% vs. 1Q24) during 1Q25. The average monthly churn for internet services as of March 31, 2025, was 1.2% (vs. 1.3% in 1Q24).

 

Telecom’s internet service revenues (excluding TMA) grew +10.1% in real terms during 1Q25 vs. 1Q24, while TMA’s standalone internet service revenues increased +45.4% during the same period.

 

TMA’s subscriber base reached 1.6 million subscribers (+101 thousand or +6.9% vs. 1Q24) during 1Q25. The average monthly churn for internet services as of March 31, 2025, was 2.1% (vs. 1.8% in 1Q24).

 

In 1Q25, Telecom’s broadband ARPU (excluding TMA) (restated in constant currency as of March 31, 2025) reached P$22,538.5 (vs. P$19,854.9 in 1Q24). The effect of the inflation adjustment to the measuring unit as of March 31, 2025, included in the ARPU amounts to P$722 in 1Q25 and P$8,296 in 1Q24.

 

Additionally, in 1Q25, TMA’s broadband ARPU (restated in constant currency as of March 31, 2025) reached P$20,940.9 (vs. P$15,795.0 in 1Q24). The effect of restatement in terms of the current unit of measure as of March 31, 2025, included in ARPU, amounts to P$672.2 and P$6,730.8 for 1Q25 and 1Q24, respectively.

 

As of March 31, 2025, Telecom accesses (excluding TMA) with a service of 100 Mb or more accounted for 90% of the total subscriber base (vs. 85% as of March 31, 2024).

Cable TV Services

 

Consolidated cable TV service revenues amounted to P$172,674 million in 1Q25 (+P$14,524 million or +9.2% vs. 1Q24). The number of TV subscribers for Telecom, (excluding TMA) and including Uruguay and Paraguay, reached 3.4 million (+21 thousand or +0.6% vs. 1Q24). TMA’s TV subscribers totaled 0.4 million (-10 thousand or -2.3% vs. 1Q24).

 

Telecom’s cable TV service revenues (excluding TMA) increased by +3.9% in real terms during 1Q25 vs. 1Q24, while TMA’s standalone cable TV service revenues increased +48.5% during the same period.

 

Telecom’s subscriber base in Argentina (excluding TMA) reached 3.1 million accesses as of March 31, 2025, reflecting an increase of +0.7% compared to 1Q24, driven by the Flow Full and Flow Flex products, with the latter being fully digital (no set-top box or installation required). Of this customer base, 1.6 million are subscribed to Flow, and the number of Premium subscriptions as of 1Q25 reached 1.2 million, decreasing -1.1% compared to 1Q24.

 

Telecom’s monthly TV ARPU (excluding TMA) (restated in constant currency as of March 31, 2025) reached P$15,094.1 in 1Q25 (vs. P$14,097.6 in 1Q24). The effect of the inflation adjustment to the measuring unit as of March 31, 2025, included in the ARPU amounts to P$472.6 in 1Q25 and P$5,945.1 in 1Q24.

 

On the other hand, TMA’s monthly TV ARPU (restated in constant currency as of March 31, 2025) reached P$19,371.7 in 1Q25 (vs. P$13,292.5 in 1Q24). The effect of the inflation adjustment to the measuring unit as of March 31, 2025, included in the ARPU was P$621.9 in 1Q25 and P$5,664.4 in 1Q24.

 

 

Pay TV Service
Revenues (in billion P$)

 

 

The average monthly churn for Telecom’s cable TV service (excluding TMA) stood at 1.5% as of March 31, 2025 (vs. 1.6% as of March 31, 2024), while for TMA it was 4.0% and 2.9% as of March 31, 2025 and 2024, respectively.

 

Fixed Telephony and Data Services

 

Consolidated fixed telephony and data service revenues amounted to P$154,859 million in 1Q25 (+P$5,558 million or +3.7% vs. 1Q24).

 

Telecom’s fixed-line customer base (excluding TMA) reached 2.7 million in 1Q25, of which 1.9 million correspond to customers with IP lines. TMA’s telephony customer base totaled 2.1 million, with 1.5 million being IP line customers.

 

Other Service Revenues

 

Consolidated revenues from other service revenues—primarily including revenues related to fintech services, billing and collection services on behalf of third parties, administrative fees, and advertising sales, among others—amounted to P$15,130 million in 1Q25 (+P$3,131 million or +25.6% vs. 1Q24).

 

The main variation was driven by the increase in fintech services in Argentina, primarily due to the growth in usage of the Personal Pay digital wallet and an increase in the client base, which reached 3.9 million in 1Q25 vs. 2.5 million in 1Q24. Additionally, other service revenues include P$3,077 million corresponding to TMA.

 

Revenues from equipment sales

 

Consolidated equipment sales revenues totaled P$77,871 million in 1Q25 (+P$27,905 million or +55.8% vs. 1Q24). This variation was mainly driven by a +64% increase in the number of mobile devices sold compared to 1Q24. Equipment sales revenues in 1Q25 include P$15,686 million corresponding to TMA.

 

Consolidated Operating Costs

 

Consolidated Operating Costs, including Depreciation, Amortization, and Impairment of Fixed Assets, amounted to P$1,251,454 million in 1Q25 (+P$144,253 million or +13.0% vs. 1Q24). Excluding Depreciation, Amortization, and Impairment of Fixed Assets, consolidated operating costs increased by P$167,959 million or 22.6% in real terms during the same period. The operating costs of 1Q25 include P$159,850 million corresponding to TMA.

 

The cost breakdown was as follows:

 

·

Employee benefits and severance payments: P$286,847 million in 1Q25 (+P$40,752 million or +16.6% vs. 1Q24). The increase is primarily due to the consolidation of TMA as of March 31, 2025, which contributed P$43,492 million. The total headcount was 19,800 employees as of March 31, 2025.

 

·

Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits): P$44,275 million (+P$5,155 million or +13.2% vs. 1Q24). The increase is primarily due to the consolidation of TMA as of March 31, 2025, which contributed P$20,095 million.

 

·

Fees for services, maintenance and materials: P$172,012 million in 1Q25 (+P$16,024 million or +10.3% vs. 1Q24). The increase is primarily due to the consolidation of TMA as of March 31, 2025, which contributed P$27,308 million.

 

 

Fixed Telephony and
Data Services Revenues
(in billion P$)

 

·

Taxes and fees paid to regulatory authorities: P$113,911 million (+P$31,736 million or +38.6% vs. 1Q24). Taxes, fees, and regulatory authority charges for 1Q25 include P$21,759 million corresponding to TMA.

 

·

Commissions and advertising (commissions paid to agents, collection fees and other commissions): Total charges amounted to P$71,288 million in 1Q25 (+P$15,922 million or +28.8% vs. 1Q24). Commissions and advertising costs in 1Q25 include P$12,580 million corresponding to TMA.

 

·

Cost of handsets sold: P$57,005 million (+P$19,805 million or +53.2% vs. 1Q24). This variation is primarily due to the consolidation of TMA’s results, which contributed P$10,419 million. Excluding the impact of TMA’s consolidation, the variation corresponds to a 64% increase in the number of units sold.

 

·

Programming and content costs: P$71,825 million (+P$13,420 million or +23.0% vs. 1Q24). Programming and content costs in 1Q25 include P$4,548 million corresponding to TMA.

 

·

Other Costs totaled P$94,242 million (+P$25,145 million or +36.4% vs. 1Q24), among which bad debt expenses totaled P$25,650 million (-P$889 million or -3.3% vs. 1Q24).

 

·

Bad debt expenses for 1Q25 include P$4,532 million corresponding to TMA. Our bad debt ratio continued its favorable trend: it represented 1.9% of total revenues as of March 31, 2025 (vs. 2.5% in 1Q24).

 

·

Other operating costs, including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity, among others, totaled P$68,592 million (+P$26,034 million or +61.2% vs. 1Q24).

 

·

Depreciation, Amortization, and Impairment of Fixed Assets: Totaled P$340,049 million (-P$23,706 million or -6.5% vs. 1Q24). The charge for the period includes the impact of amortizations for additions made after December 31, 2024, partially offset by the effect of those assets that ended their useful life after the same date.

 

Financial Results, Net

 

Net Financial Results (including Financial Expenses on Debt and Other Financial Results) showed an income of P$100,956 million in 1Q25 (vs. a gain of P$1,424,208 million in 1Q24). This variation was mainly due to:

 

*Related to Notes issued in UVA

 

The lower gain in net financial results is primarily due to a lower negative real depreciation compared to 1Q24 (-4.1% vs. -30.0%).

 

Income Tax

 

Telecom’s income tax includes the following effects:

 

i)

the current income tax, determined based on the current tax legislation applicable to Telecom,

 

ii)

the effect of applying the deferred tax method with respect to the temporary differences determined by comparing our asset and liability valuation according to tax and financial accounting criteria which includes the effect of the income tax inflation adjustment.

 

The consolidated income tax loss amounted to P$119,745 million in 1Q25 (vs. a loss of P$328,741 million in 1Q24). The loss related to current income taxes amounted to P$238,918 million in 1Q25 (vs. a loss of P$2,710 million in 1Q24) and the income tax effect related to the application of the deferred tax method of P$119,173 million in 1Q25 (vs. a loss of P$326,031 million in 1Q24).

 

Net Financial Debt

 

As of March 31, 2025, our consolidated net financial debt (cash and cash equivalents – net of Client Funds - plus financial investments and financial NDF* minus loans) is liability and amounted to P$3,587,066 million, which represents an increase of P$835,014 when compared to the net financial debt as of December 31, 2024, restated by inflation. This increase is primarily explained by the loans taken for the acquisition of TMA.

 

* Contemplates rate swaps and NDF (non-delivery forwards) agreements.

 

Investments in PP&E, intangible assets and rights of use assets

 

As of March 31, 2025, consolidated CAPEX (additions to Property, Plant and Equipment and intangible assets) totaled P$176,721 million, (+ 8.3% compared to 1Q24). Including right-of-use assets, total CAPEX amounted to P$220,409 million, of which P$21,759 million corresponding to TMA.

 

The investments were focused on:

 

·

Expansion of cable TV and internet services to improve transmission and access speed offered to customers.

 

·

Deployment and modernization of our 4G mobile access sites to improve coverage and increase mobile network capacity. The deployment of 4G/LTE reached a coverage of 98% of the population. Our mobile subscribers with access to our 4G network, according to Ookla's latest March 2025 benchmark, perceived a better service experience, reaching average speeds of 76Mbps, compared to 40Mbps during the same period in 2024.

 

·

During the first months of 2025, we continued the expansion of our 5G network with the addition of 31 sites.

 

·

Additionally, we continued to deploy mobile site connectivity to achieve better quality and capacity, replacing radio links with high-capacity fiber optic connections.

 

Relevant financial events of the period

 

Merger between Telecom Argentina, AVC and NYSSA

 

With respect to the information disclosed in Note 28.d) to the individual financial statements as of December 31, 2024, it should be noted that:

 

On February 27, 2025, the Board of Directors of Telecom Argentina (the absorbing company) and the Boards of Directors of the absorbed companies (NYSSA and AVC) resolved to approve the corporate reorganization whereby Telecom Argentina, as the absorbing and continuing company, incorporated its subsidiaries NYSSA and AVC through a merger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments (in billion
P$) (includes rights of
use assets)

 

 

The effective date of the merger was January 1, 2025, from which date the entire assets and liabilities of the absorbed companies were deemed to have been transferred to the absorbing company. As a result, all rights and obligations, assets and liabilities into the assets and liabilities of the absorbing company.

 

On April 25, 2025, the Shareholders' Meetings of these companies approved the corporate reorganization.

 

Acquisition of TMA – Regulatory Aspects

 

As of the date of this report, the Company has made the pertinent filings in relation to the acquisition of TMA in due time and form and the necessary procedures have been initiated before the Argentine National Commission for the Defense of Competition (Comisión Nacional de Defensa de la Competencia, “CNDC”) and the Argentine National Communications Agency (Ente Nacional de Comunicaciones, “ENACOM”) in order to obtain, respectively, the conformity of the Secretary of Industry and Commerce (or such other authority that succeeds it as enforcement authority of Law No. 27,442) to the economic concentration produced as a result of the acquisition of TMA and the conformity of ENACOM to the change of control occurred in TMA as a consequence of the acquisition of TMA by the Company. The filing with the CNDC was made on March 3, 2025 and the filing with ENACOM was made on March 7, 2025, in both cases in accordance with the applicable regulatory framework.

 

Both administrative proceedings are currently pending. As of the date of this report, the only communication received is a Resolution issued by the Secretary of Industry and Commerce dated March 21, 2025, which imposes, as a provisional measure under Article 44 of Law No. 27,442, that for a period of six (6) months, or until the Secretary of Industry and Commerce rules on whether to grant, conditionally approve, or deny authorization of the transaction pursuant to Article 14 of the aforementioned law—whichever occurs first—the Company must refrain from carrying out any legal, corporate, and/or commercial acts that directly or indirectly involve the integration or consolidation of TMA’s business with that of the Company. This includes any initiative aimed at unifying or integrating the teams of TMA with those of the Company, as well as any exchange of competitively sensitive information with TMA, such as pricing and pricing strategies, costs and margins, business plans and commercial strategies, customer and supplier information, and investment plans, among others. The Company must continue to observe the existing agreements for reciprocal infrastructure use previously entered into with TMA.

 

This Resolution does not alter the current way the Company and TMA operate as of the date of this report, as both continue to conduct their business independently, each with its own Board of Directors and management team.

 

Relevant events after March 31, 2025

 

Ordinary and Extraordinary General Shareholders’ Meeting

 

The Ordinary and Extraordinary General Shareholders’ Meeting of Telecom held on April 25, 2025, resolved, among other matters, the following:

 

(i)

To approve the proposal of the Board of Directors, expressed in constant purchasing power currency as of March 31, 2025, using the National Consumer Price Index (IPC Nacional) in accordance with CNV Resolution No. 777/18, regarding the Unallocated Retained Earnings as of December 31, 2024, amounting to P$ 1,099,156 million in constant currency as of March 31, 2025, as follows: a) P$ 54,958 million (in constant currency as of March 31, 2025) allocated to the “Legal Reserve”; b) P$ 1,044,199 million (in constant currency as of March 31, 2025) allocated to a “Discretionary Reserve to maintain the level of investments in capital goods and the current solvency level of the Company”; and c) to reclassify P$ 101,053 million (in constant currency as of March 31, 2025) from the “Discretionary Reserve to maintain the level of investments in capital goods and the current solvency level of the Company” and apply such amount against the “Merger Premium” account.