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Executives

Pedro Insussarry – Finance Director

Franco Bertone – CEO

Adrián Calaza – CFO

Analysts

Rizwan Ali – Deutsche Bank

Stanley Martinez – Legal & General Investment Management

Rodrigo Villanueva – Bank of America Merrill Lynch

Telecom Argentina (TEO) Q4 2011 Earnings Conference Call February 17, 2012 10:00 AM ET

Operator

Good day, everyone, and welcome to the Telecom Argentina, TEO, fourth quarter 2011 earnings conference call.

Today's call is being recorded.

Participating on today's call we have Mr. Franco Bertone, Chief Executive Officer of Telecom Argentina, Mr. Adrián Calaza, Chief Financial Officer; Mr. Pedro Insussarry, Finance Director; and Ms. Solange Barthe Dennin, Manager of Investor Relations.

At this time, I'd like to turn the call over to Mr. Pedro Insussarry. Please go ahead, sir.

Pedro Insussarry

Good morning to everybody. And on behalf of Telecom Argentina, I would like to thank you for participating on this conference call. As mentioned by Tracy, our moderator, the purpose of this call is to share with you the consolidated results of Telecom Argentina Group that correspond to the fourth quarter of full fiscal year 2011 that ended on December 31st, 2011.

We would like to remind you that for all those that have not received our press release or presentation, you can call our Investor Relations office or download them from the Investor Relations section at our website located at www.telecom.com.ar/investors. Additionally, this conference call is being broadcasted through the webcast feature available in subsection and it can also be replayed through this same channel.

Before we can continue with the conference call, I would like to go over some Safe Harbor information and other details of the call, as we typically do in every earnings call.

We would like to clarify that during the conference call and Q&A sessions we may produce certain forward-looking statements about Telecom’s future performance, plans, strategies and targets. Such statements are subject to uncertainties that could cause Telecom's actual results and operations to differ materially. Such uncertainties include, but are not limited to, the effects of public emergency law and complementary regulation, the effects of ongoing industry and economic regulations, possible changes in demand for telecom products and services and the effects of more general factors such as changes in general market or economic conditions, in legislation and regulation.

Our press release dated February 16th, 2012, a copy of which has been included in the Form 6-K report to be furnished to the SEC, describes certain factors that may affect any forward-looking statements we may produce during this session. Furthermore, we urge the audience of this conference call to read the disclaimer clause contained in slide one of the presentation.

As usual, in our quarterly conference calls, the agenda for today as seen in slide two is first to go over the general market overview. Then, we'll go over to some business highlights, and after that we'll go over to some specifics of the evolution of our financial figures, where we have added a short reconciliation between IFRS and local GAAP figures for fiscal year 2011, and finally we will end the call with our traditional Q&A session.

Having gone through these procedural matters, I will go over a brief macro overview as an introduction to the general operating environment.

In slide three, we included some snapshots on the current Argentine macroeconomic scenario. Year 2011 showed an Argentine economy with a substantial level of growth, although at the end of the year certain deceleration was perceived. Moreover, tightening fiscal and monetary policies announcing and gradually implemented by the government could slowdown economy during 2012, but could contribute to a more sustainable growth perhaps for the future.

Furthermore, strong drought affected the foreign margin (ph) in the country in the recent months and they imply lower commodity outputs and somehow lower (inaudible) exports for 2012, hence affecting the country’s trade balance. Subscriber consumption remains strong, although higher real interest rates and the reduction in public subsidies that could limit the performance of that consumption. (Inaudible) are starting from lower levels than last year as inflation ended lower than it was expected for the year at the beginning of 2011. Nonetheless, the reduction in energy and transit subsidies that may result in higher tariff and fees could add pressure on pricing in the economy.

National fiscal surplus suffered an important deterioration due to a strong increase in public spending, although as mentioned before, the government tends to tackle the problem by turning subsidies. Imports increased by 31% year-on-year in 2011. But in the last quarter strong deceleration was evidenced partly due to the increasing restrictions on imports. Furthermore, capital outflows decelerated in the last month of the year. Thanks to higher interest rates and the effects of regulations in the FX market that includes a preapproval of the tax office in certain treasury transaction.

In this challenging macroeconomic context for Argentina, our company continues to report strong growth in results, both in terms of businesses and financials as we will enlighten during this conference call.

Having gone through this introduction let me pass the call to Franco Bertone, who will go over the business highlights. Franco?

Franco Bertone

Well, thank you, Pedro. Good morning to everyone. In 2011, we posted a solid successful performance in mobile net adds and delivering a healthy growth in the fixed business.

In slide five, we highlight our Personal brand restyling that was executed in the fourth quarter of this year that strengthened our market positioning and contributed to deliver an outstanding performance in the postpaid segment in the quarter. We also want to bring to your attention the improvement in our Paraguayan operation, both in markets and financial performance. Throughout 2011, we continued (inaudible) into voice with ADSL and mobile incoming bundle, as well as introducing new products that helped delivering a 28% revenue growth in our fixed broadband services and sustain a marginal growth in the fixed line segment. In the fourth quarter, strong commercial and advertising diluted margins. Nonetheless throughout the year, our operational and financial performance exceeded the 2011 guidance we disclosed the market a year-ago.

Let’s now address on the pace of the mobile operation and turn to slide six please. In the Argentine mobile market we continued leading growth posting an 11% year-on-year, well above half year. Particularly in the quarter, we were absolute leaders in postpaid client acquisition that represented over two-thirds of the quarterly net adds. On an annual basis, the postpaid subscriber grew by 18% year-on-year and currently represents 32% of our base. Intensive advertising activities and the mobile brand restyling campaign, accumulated postpaid adds and helped us retaining the leadership in the smartphone market, while ARPU rose to 56 phases, a 14% growth over the last – in the last quarter.

Please turn to slide seven to review value-added revenues, 55% year-on-year growth, reaching a record level of 48% of service revenues in 2011, while fourth quarter of the year, over half of our revenues of our service revenues were generated by value-added services.

With the launch of mobile number portability scheduled for mid March this year, we have been implementing plans aimed to strengthen our markets position, shaping a closer relation with our customer base. We timed mobile brand restyling in anticipation of an implementation with a strong purchasing customer relationship and a concept of personal ownership of the telephone number. In addition, handset upgrade were increased to yield our customer base with similar usage and facilitate up selling of services. This activity contributed the incremental cost, (inaudible) margin along with the typical seasonality of the last quarter of the year. In the fourth quarter our subscriber acquisition and retention cost rose to 20% of service revenues up from 16% reported in the third quarter of last year.

Please turn to slide eight where we have a snapshot – we’ve provided a snapshot on our Paraguayan operation which is back on track on the growth side. Nucleo has been operating in a healthy macroeconomic environment and in a consolidated four legged market where we have the number two position. 2011 was a successful year for our Paraguayan operation where revenues, local currency rose to 29% year-on-year. We are again above our peers. We also grew margin and reduced levels of CapEx. We posted a 15% increase in ARPU, driven by our premium network quality and leadership in the mobile – in mobile Internet. Moreover revive regulation foster competition in SMSs and voice traffic with lower interconnection rates. Financially, Nucleo holds a sound position, thanks to an improved debt tracker where indebtedness was refinanced in local currencies with longer tenders and competitive interest rates.

Slide nine shows how our mobile revenues evolved reaching almost 13.2 billion pesos. In 2011, we are 31% increased or 3.1 billion pesos when compared to last year. Value-added service played a strongest part in the growth, posting a 1.9 billion pesos increase, a 55% progress year-on-year. Prepaid traffic voice and monthly fees revenues were up 15%, mobile interconnection revenues 8% and handset sale 45%. Our Paraguayan operation posted a 32% year-on-year increase when valued at the Argentine pesos.

The wireline business is shown on slide 10. Fixed broadband business performed very well. During the year, our subscriber base expanded 12% and ARPU rose 15% year-on-year in the fourth quarter. Bundling and new products delivered churn reductions to new record low levels. Innovative services like OTT video streaming play and (inaudible) that increases the current bandwidth speed as well as our new 10-megabit residential offer contributed to client retention and customer experience improvement.

In slide 11, we show voice landline service increased close to 1% during the year with an average monthly bill growing 7% over last year. Customer find attractive flat pricing proposition that has grown through selling our limited local media packages. All packages are a 100 calls to 300 calls with no time mix (ph).

The evolution of wireline revenues is shown in slide 12. Third-party revenues totaled 5.3 billion pesos, equivalent to a 15% increase compared to 2010. Broadband and data services are the main drivers of revenue growth, increasing 28% and 23% year-on-year respectively. Meanwhile fixed telephony business posted a 9% growth for voice measure services and a 7% growth in monthly fees, including supplementary services. Revenues coming from direct interconnection rose 11% year-on-year.

Slide 13 gives the evolution of CapEx that in 2011 totaled 2.4 billion pesos, represents 13% of consolidated revenues, increasing 23% year-on-year. Executed CapEx trends in our core network in order to accommodate fixed and mobile growing capacity. We’ve initiated a deployment of fiber-to-the-curb to increase fixed asset bandwidth and we are also in the process of installing low visual impact to our site to expand our mobile access network, extend the coverage also to reduce domestic roaming cost.

Well, these were the highlights – the business highlights, and I’ll pass the call to Adrián to go over the financial performance of the period.

Adrián Calaza

Okay, thank you. Good morning to everyone. The strong business evolution that Franco just mentioned in order to increase the levels of growth in terms of revenues and profitability and to achieve revenues cash flow generation in 2009.

Please refer to slide 15. We can see the evolution of revenues and operating profit before depreciation and amortization. Consolidated revenues reached in 2011 18.5 billion pesos, showing a 26% growth when compared to 2010, one of the highest grades of last year’s despite the flows and ties of unregulated services now accounting for just 12% of total revenue.

Operating profits before depreciation and amortization for 2011 grew strongly by 23% when compared to the same period of last year, totaling 5.6 billion pesos. It is worth mentioning that fourth quarter revenue margins were impacted by several one-off effects. Specifically our bandwidth (ph) dialing already mentioned, the launch of our display and intense commercial activity that includes mobile number portability increased SAC and SRC expenses. Nonetheless, full-year operating profit before depreciations and amortizations ended ahead of our 2011 guidance.

Now, please refer to slide 16, where we can see the break down of our consolidated cost structure. As mentioned before, you can see the SAC and SRC increase that allowed our strong customer base grow, impacted our marketing and selling expenses relative way, but were partially compensated with the reduction on interconnection cost achieved through domestic roaming cost reduction and our relentless focus in increasing efficiencies to mitigate cost inflation effects.

As seen in slide 17, operating profit rose at a 26% year-on-year growth rate, reaching 4.0 billion pesos with the same margin of 22% reported last year. With this significant growth and positive financial results coming from our funds financial position, Telecom Argentina Group reported a total net income of 2.4 billion pesos, equivalent to a growth of 33% when compared to 2010.

Regarding to our financial position in slide 18, we illustrate cash generation for 2011 where again we have well performed reaching a free cash flow of 2.2 billion pesos. This resulted in a net cash position of nearly 2.7 billion pesos at the end of the year.

Finally, please turn to slide 19, where we have included our comparison between our maintenance figures reported under Argentine local GAAP and IFRS.

Let me remind you that from the first quarter of the current fiscal year, we will be reporting under IFRS accounting standards. As you will see there is no substantial difference in revenues. Moreover, for full-year 2011 operating profit before depreciation and amortizations would have been higher under IFRS mainly due to the effect, part of this is subscriber acquisition and retention costs are capitalized and deferred thus increasing reported margins. Meanwhile the reclassification of other expanded in IFRS standards to evolve the operating profit level would have impacted negatively our operating profit margins. Finally, net income under IFRS standards would have been 5% higher than our current local GAAP, while CapEx would have been substantially higher due to effects of SAC and SRC capitalization already mentioned.

For more information, we encourage the analysts and the investor community to read the additional disclosure related to IFRS reconciliation included in the notes in our financial statements.

So having concluded with the presentation, we are now more than pleased to answer any questions you may have. Thank you very much.

Question-and-Answer Session

Operator

(Operator Instructions). And we’ll go first to Richard Dineen. Your line is open. Richard your line is open you may want to pickup the handset or unmute the phone. Okay Richard, we cannot hear you. I’m going to go ahead and move on to Rizwan Ali, your line is open.

Rizwan Ali – Deutsche Bank

Yes, thank you. So I wanted to inquire about potential regulations related to dividend repatriation, if you could update us on what the central bank requirements are now. And second is, I understand you’re bundling quite a bit, and are you – is Telefónica bundling their services well, and if you have noticed any changes in the way Telefónica is competing in Argentina because of what’s happening in with the parent company, which is under the quite a bit of pressure?

Adrián Calaza

Rizwan, can you repeat your last question please? If I’m not mistaken, first question is repatriation of dividend. Second?

Rizwan Ali – Deutsche Bank

Second is, I mean have you noticed any changes in the way Telefónica Argentina is competing in the market? In other markets, they are losing a bit of a market share and apparently they are not getting much support from Spain. So I’m just wondering if you’ve seen any changes in the way Telefónica is competing with you in this market.

Adrián Calaza

And the last one is regarding Telefónica’s bundling services to us.

Rizwan Ali – Deutsche Bank

That’s right.

Adrián Calaza

Yes.

Operator

And we’ll go next to Mark Magarian (ph). Your line is open.

Adrián Calaza

Tracy, we still haven’t answered Rizwan’s question. Hold on, please.

Mark Magarian

I’ll wait.

Adrián Calaza

Okay. I’ll answer – I’ll take the first one Rizwan. For the time being, we haven’t heard nor read nor learnt about any changes in the repatriation of dividends, basically regulation is the same as the last time we saw. So with respect to that there is no change, okay? And the following questions, Franco.

Franco Bertone

Yes. One thing – two questions you raised about operation in relation with Telefónica specifically, in terms of bundling if that was the first question, we have so far quite a unique bundle proposal in the ADSL market and together with our mobile operations. So we are the only provider in the market that is offering bundles, fixed and mobile broadband access. It’s a product we launched a while ago, as a matter of fact two years ago, that it’s being constantly reshaped with changing our customer experience and has been very successful during 2011, and hasn’t been much of a competition so far.

As far as your observation about how is Telefónica doing in the market, well it’s really not for us to comment on that. What I’m prepared to comment is our market share has substantially increased this year. And in terms of net, it has been very strong manner particularly in the postpaid markets. So we believe we came out as single lead during 2011 as far as mobile is concerned.

Pedro Insussarry

Tracy, can we move to the following question please?

Operator

Yes, I’m sorry. Mark Magarian, your line is still open.

Mark Magarian

Okay, thank you. Firstly, great job everyone. Results all look fantastic. My question are just briefly on the upcoming potential dividend which for the 2012. When can we expect any information on that? And then the next question is given your stock’s current evaluation, have you ever considered given – especially given your current cash position stock buyback?

Franco Bertone

Thank you for your remarks on our results. As far as the dividend decision of the company, it’s premature, we are two months away from Shareholder Meeting that usually takes place at the very backend of the month of April. So we’ll let the market obviously know what our proposal will be. But we aren’t ready yet and the thing has not been dealt by our Board yet. And in terms of the cash position, as we’ve strongly increased in this year, I understand your observation that we have no plans in (inaudible).

Mark Magarian

Thank you.

Operator

And we’ll go next to Stanley Martinez, your line is open.

Stanley Martinez – Legal & General Investment Management

Thank you very much for taking my question. First question on the mobile side, I noticed that the increase in VAS was largely additives to overall mobile revenues rather than substitutive and in fact voice revenues look to have grown 11% year-on-year. Just wondering if you expect that to continue under mobile number portability or do you perceive that there maybe some more competition on data plans specifically from Mobistar?

And then just a couple of things on the OpEx side. You were right to note the increase in subscriber acquisition cost, but should we expect the increases in advertising and commission expense spending to remain constant at least in the first half of the year as you go through mobile number portability. And then last, any feasibility in terms of salary expense would be helpful, thanks.

Franco Bertone

Yes, revenue substitution from voice into data, both are growing. I mean a 10% growth in voice, basically matches the 11% growth of our customer base. And there is a substitution factor is very marginal. And we do not anticipate that the trend and this pattern could change with portability. What it definitely affects is that growth rate of our value-added services, in particularly mobile internet pace of rate is 10 folds the one of voice.

In terms of data plans, we don’t believe that profitability will shift the policy and the offerings of the main players in the market. I think that telecom – I’m sorry the Argentina market is well ahead of regional peers in terms of intensity of data into the ARPU of their customers. Though again we don’t have factors to shift a substantially nor very noticeably because of the coming number portability. As a company ourselves obviously we bet a loss on the data usage of our customer, we believe we have the highest data service revenue on the region and we have the need taking this up a long while ago and so we’ll be consistent we’ve already in the past and in the future.

In terms of – your mentioning advertising cost over 2012 in the year to come, certainly will be an increase over time in cost but not in percentage term. I mean we have a pretty virtual percentage of advertising cost over consolidated and business unit revenues and will not exceed what we change in the past year.

Stanley Martinez – Legal & General Investment Management

Thanks for clarifying that Franco. And if I can just ask one follow-up question. I mean Telefónica and NIHT are yet to report of course, but is it your perception that you took share of growth decisions, i.e. share of gross adds in the Argentine marketplace in the fourth quarter? In addition, I know your focus is typically on revenue market share and share of net additions, but in terms of growth additions, do you think that if you were a gainer there?

Franco Bertone

We believe so.

Stanley Martinez – Legal & General Investment Management

Okay, great. Thanks.

Operator

And we’ll go next to Walter Giardino (ph). Your line is open.

Walter Giardino

Yes, hello, congratulations for the results. I have a kind of tough questions. In case that if some regulations blocks the possibility of the dividend payment this year, could you please say or give some guidance about – you’re having a strong cash position, I mean doesn’t mean whether you have investment opportunities that you think which you can use that cash in which in order to increase the value for the stock. I mean maybe accelerating investment project that have some attractive return on this cash. If you were to happen that you don’t have the possibilities of paying dividends or to reduce the dividend payments. Hello.

Adrián Calaza

Yes, give us a minute, please.

Walter Giardino

Okay.

Franco Bertone

Yes. We understand your concern about an important issue, but it’s – clearly for us at this point in time to make any comment. The thing is not being dealt yet and as I say we are two months away from the Shareholder Meeting.

Walter Giardino

All right, thank you.

Operator

(Operator Instructions). We’ll go next to Jennifer Leonard (ph). Your line is open.

Jennifer Leonard

Hi, good morning, thank you. I was hoping you could tell us a little bit about your CapEx plans for 2012 and then also if you could give us an update on the spectrum auction timing that would be great. Thanks.

Franco Bertone

In terms of CapEx for 2012, we will be providing some guidance about our plans in the Group Conference next week. I’m prepared to comment on the fact that where the CapEx will be the main focus. And the main focus of it will be on the fixed network access into the FTPC natural deployment that has been already initiated this year and will be ahead a strong heart of our capital investment in 2012 and 2013.

As far as the spectrum auction is concerned, the process data starts about two weeks ago with Phase I that is being completed that is a prequalification of the bidders. Phase II was scheduled to happen in the third week of March, although it’s currently suspended a few days ago, and we are at the moment in anticipation when that would be resumed, but the process has finally started.

Jennifer Leonard

Okay, thank you very much.

Operator

And we’ll go to our next question from (inaudible). Your line is open.

Unidentified Participant

Yes. I see the Paraguay numbers for 2011 were very strong, but it looks like if I’m not mistaken there was quite a slowdown in Q4. Is there anything sort of in particular which has driven that? Thank you.

Franco Bertone

In the fourth quarter, we are – what we have it’s a small FX change effect, but we are pretty sure that our Paraguayan operation is still performing widely on the fourth quarter.

Unidentified Participant

The regulatory changes which Millicom have talked about in that market, I believe there has been a move to equalize on-net and off-net prices. And I just wondered whether you would could comment on the state of that regulation, whether that has happened yet in Paraguay and what impact it has had on your business?

Franco Bertone

Yes, effectively the change in regulation happened. Basically as you say, the change in regulation is to equalize pricing in terms of on-net and off-net type of offering or in other words operators must non-inclusive type of pricing and not to discriminate the interconnection charges. And that change in regulation happened by midyear, midyear 2011.

Unidentified Participant

Okay. And have you noticed a sort of particular change in kind of traffic patterns on-net, off-net flows that has presumably supported your business since then or has there been no sort of significant change?

Franco Bertone

Well, basically what we fear is that the market is much more even in terms of offering and pricing. Basically the previous regulation or in other words favored the largest player and basically to do this discrimination of termination rates both in SMS and in voice traffic.

Unidentified Participant

Okay, thank you.

Franco Bertone

You’re welcome.

Operator

(Operator Instructions). We’ll go next to Rodrigo Villanueva. Your line is open.

Rodrigo Villanueva – Bank of America Merrill Lynch

Yes, hi, good morning. I’m sorry I joined the call late, so I was wondering if there is some guidance being provided for 2012. And also if you could talk a little bit about any type of dividend to proposed at the General Shareholder Meeting corresponding to 2011 earnings? Thank you.

Franco Bertone

I’m sorry, you joined late. I mentioned that we will provide some guidance for our next year, for 2012 operation in a week from now in the Group Conference Call that will be held by Telecom Italia. And as far as your dividends question as we commented before, we are in an early stage of that, I mean we are two months away from our Shareholder Meeting, and the process in that respect hasn’t started yet.

Rodrigo Villanueva – Bank of America Merrill Lynch

Understood, thank you very much.

Franco Bertone

We expect the Shareholder Meeting to happen by the end of April, and therefore our proposal will be disclosed to market about five weeks earlier than that.

Rodrigo Villanueva – Bank of America Merrill Lynch

Understood, thank you very much. And another question would be is there any regulatory change that you expect for 2012 in the telecom sector and is there any potential extraordinary expense related to CapEx that you could have this year? Thank you.

Franco Bertone

No, we don’t. We expect a stable landscape from the regulatory point of view. Of course the main point is number portability that is three weeks away and that was scheduled since a long time, we don’t expect any other changes in the regulatory landscape. If we have any changes – yes, we don’t expect any dramatic change at all any exceptional item of investment during 2012. You will see that given the new project that we’ll be facing and it will be very (inaudible) the FTTC upgrade of our access network within the framework of our typical CapEx to revenue percent of share that will be reported in the week, but we don’t have any significant change from what we’ve been delivering over the last three years.

Rodrigo Villanueva – Bank of America Merrill Lynch

Understood. Thank you very much.

Franco Bertone

You’re welcome.

Operator

And we’ll go next to Richard Dineen again. Your line is open.

Sean Glickenhaus – HSBC

Hi guys, this is Sean Glickenhaus actually. I know that the salaries expense that’s negotiated once a year. Can you talk a little bit about how you can offset inflationary pressures on some of your other costs that seems to have been a concern with some folks?

And the second question is just on number portability, it seems that there is a lot of action you’re taking to prevent any weight from portability, but we’ve seen that portability – it hasn’t really had a negative effect in other countries in a big way, so I’m just wondering if you’re being a little overly cautious on that issue. Thanks.

Franco Bertone

You’re right about how to offset salary cost increase, it’s a good question. And we work on that a lot. I mean basically the salary cost increase that we’ve being experience in this year and the year before and approximately in line with the growth rate we have on our top line has changed, so it hasn’t altered so far substantially cost equation. Our recipe to address that is basically to maintain stable the workforce numbers, despite the growth not only in revenues but on the number of lines we operate sales very strong. I mean this year we hit 26 million lines, 10% increase over last year, and our workforce did not increase because of that. So basically offsetting exercise as the name that is increase efficiency in the usage of our human resources.

The effects on portability that you were recalling, well it’s – Argentine will be a good cascade for the industry in general, because to the best of my knowledge there isn’t another at least regional market that adds balance as the Argentine one among the three players. So that in our opinion will deliver a very limited net effect on the shares of market of whichever player. But certainly have strong competitive pressure in all of them to retain the acquisition. So that’s the way we see it. We don’t expect as they say market share to shift dramatically, but certainly we are aware and we are prepared to face stronger competition here in – in this space.

The fact that have been improving our market position quite substantially as a matter of fact over the last quarters, over the last two years makes us quite comfortable that we are in a reasonable safe position to face all this.

Sean Glickenhaus – HSBC

Thanks, thank you. Just one clarification on the IFRS EBITDA. Assuming there were no restatements. The Q4 year-on-year growth I get about 20%, again IFRS EBITDA growth, is that accurate to the quarter?

Franco Bertone

Richard, can we get back to you on that?

Adrián Calaza

We believe it’s not 20%. Our feeling is that it’s not 20%, it’s lower than that, but we’ll get back to you with the percentage figure, okay?

Sean Glickenhaus – HSBC

No problem. Thank you.

Adrián Calaza

You’re welcome.

Operator

And we’ll go to our next question from Rizwan Ali. Your line is open.

Rizwan Ali – Deutsche Bank

Yes sorry, I may be repeating this question. But with regards to share buyback, are there any restrictions or tax implications as to – which makes you not to have a share buyback in Argentina?

Franco Bertone

No, there are no restrictions or additional taxes for payback.

Rizwan Ali – Deutsche Bank

So why wouldn’t you not consider share buybacks.

Franco Bertone

We think we discuss this issue very often, but we are in an industrial pact and we live in the actual conditions of the country, this is a – the accurate financial structure that we should have in this moment. And having the spectrum auctions coming in a few months, we don’t know what can happen with AWS auctions also. So we think that this is the accurate financial structure that we need in the actual context.

Rizwan Ali – Deutsche Bank

Thank you very much.

Franco Bertone

You’re welcome.

Operator

(Operator Instructions). We have no further questions in the queue. I’d like to turn it back to you for any closing remarks.

Adrián Calaza

The answer for Richard – basically you’re right, it’s 20% year-on-year and 10% compared to the September 2011 under IFRS standards the growth in EBITDA or operating profit depreciation and amortization.

Franco Bertone

Having provided this clarification, want to thank you very much for being in this quarterly conference call. Please contact our Investor Relations for any further inquiries you may have. And good afternoon to you all and have a nice day. And look forward to meet you again soon. Thank you.

Operator

That concludes our call for today. Thank you for your participation.

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