Telecom Argentina Q4 Profits Drop 52% on Higher Costs

Telecom Argentina has reported that its net income for 2008 rose by 9% to reach P$961 million (US$264 million), while revenues rose by 17% to P$10,608 million (US$2.9 billion). However, the Q4 net profit fell 52 percent from a year ago to P$130 million (US$36.7 million) - which the company put down to higher costs due to inflationary pressures.

Cellular subscribers rose 17% to 14.4 million, while broadband subscribers reached 1,042,000 (+33%). Fixed lines in service also increased by 2% to 4.3 million.

As of the end of December 2008, the GSM network, Personal reached 12.6 million subscribers in Argentina, a rise of 1.9 million over the year. 4Q08 experienced the highest increase of 2008, adding 0.6 million subscribers. Approximately 66% of the overall subscriber base is prepaid and 34% is postpaid (including "cuentas claras" plans).

Total voice traffic increased by 16% over the year, while outgoing SMS traffic increased from a monthly average of 883 million messages in FY07 to 1,454 million (+65%) in FY08. Because of this raise in traffic and the increasing use of value-added services, the ARPU rate increased to P$41 (US$11.27) in FY08, compared to P$39 in FY07. Meanwhile, the ARPU in 4Q08 amounted to P$42, stable when compared to 4Q07.

Personal's controlled subsidiary that operates in Paraguay generated revenues equivalent to P$390 million during FY08 (-10% vs. FY07). The global crisis affected Paraguayan economy, where the depreciation of its currency and a lower level of activity were the last evident effects. By the end of December 2008, the subscriber base reached approximately 1.8 million customers (+12% vs. FY07). Prepaid and Postpaid customers represented 90% and 10%, respectively.

Posted to the site on 8th March 2009