Business Context and Reporting Period
Company: Telecom Argentina S.A. (NYSE: TEO)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Half (1H26) and Second Quarter (2Q26) ended June 30, 2026.
Context: Results are restated for inflation in accordance with IAS 29. The period includes the full six-month contribution of the acquired subsidiary TMA (Telefónica Móviles Argentina), whereas the prior year comparative period included only four months. Argentina's cumulative inflation for the six months ended June 30, 2026, was 16.8% (33.5% annualized).
Key Financial Metrics
| Metric | 1H26 (Millions P$) | Change vs. 1H25 |
|---|---|---|
| Consolidated Revenues | 5,075,511 | +16.0% |
| Service Revenues | 4,888,908 | +16.0% |
| Operating Income before D, A & I (EBITDA) | 1,816,819 | +35.1% |
| EBITDA Margin | 35.8% | +5.8 p.p. |
| Net Income | 869,038 | Turnaround from Loss of 100,900 |
| CAPEX (excl. right-of-use) | 946,470 | +47.3% |
| Net Financial Debt | 4,646,726 | -14.7% (Real terms) |
Segment Performance (Service Revenues):
- Mobile: P$2,668,829 million (+24.5% vs. 1H25). Telecom (excl. TMA) ARPU rose 18.4% in real terms.
- Internet: P$1,101,497 million (+10.8% vs. 1H25). Telecom broadband base grew 2.7% to 4.2 million.
- Cable TV: P$541,595 million (+4.9% vs. 1H25). Growth driven by FIFA World Cup 2026 demand and new Netflix partnership.
- Fixed Telephony: P$550,145 million (+5.5% vs. 1H25). Telecom (excl. TMA) revenues declined 10.9% due to pricing lagging inflation.
Material Changes vs. Prior Period
- Profitability Turnaround: The company moved from a net loss of P$100.9 billion in 1H25 to a net income of P$869.0 billion in 1H26. This was primarily driven by a foreign exchange gain of P$830.4 billion due to the real appreciation of the Argentine peso (USD rose only 1.9% vs. 16.8% inflation).
- Customer Base Dynamics:
- Telecom (excl. TMA) Mobile: Total accesses declined 7.1% to 19.4 million due to disconnection of inactive prepaid lines. However, the postpaid segment grew 1.3%.
- TMA Mobile: Grew 1.2% to 19.5 million accesses.
- Fixed Broadband: Telecom grew 2.7%; TMA grew 4.6%.
- Cost Structure: Operating costs increased 3.7% (excluding D&A), largely due to the full consolidation of TMA. Labor costs rose 1.9%, while commissions and advertising fell 3.4% following the loss of control over Micro Sistemas (Fintech).
- Debt Reduction: Net financial debt decreased 14.7% in constant currency terms compared to December 31, 2025.
Outlook, Risks, and Unusual Items
- Regulatory Contingency (Antitrust): On June 18, 2026, the Argentine Antitrust Tribunal conditioned the acquisition of TMA on a "Remedy." This requires the transfer of a minimum of 6 million mobile customers (4 million in Buenos Aires, 2 million elsewhere) and 211,400 residential internet subscribers to a third-party purchaser, along with necessary radio spectrum rights.
- Strategic Partnerships: Announced an exclusive partnership with Netflix in Argentina, integrating the platform into the "Flow+" flexible entertainment offering.
- Investment Focus: CAPEX increased 47.3% to support 5G expansion (375 new sites added), 4G coverage (98% population), and FTTH deployment (36% of broadband base).
- Post-Period Events:
- Paraguay Spectrum: Nucleo (Paraguay) won 5G spectrum licenses (3,700-3,800 MHz) for US$1 million.
- Management Change: Manuel Garcia Diez appointed CFO, effective August 3, 2026.
- Risks: Significant exposure to Argentine inflation, currency devaluation, and regulatory changes. The company notes that forward-looking statements are subject to risks including political instability and the ability to access international capital markets.
Investor Verification Checklist
- Antitrust Divestiture: Verify the timeline and financial impact of the mandated transfer of 6 million mobile customers and 211k internet subscribers required by the Antitrust Tribunal.
- FX Sensitivity: Assess the sustainability of the net income, which was heavily driven by a one-time foreign exchange gain due to peso appreciation; monitor future USD/PAR volatility.
- Prepaid Churn: Investigate the long-term impact of the 7.1% decline in Telecom's mobile base (excl. TMA) driven by prepaid disconnections versus the growth in postpaid.
- Debt Servicing: Confirm the company's ability to service its P$4.6 trillion net financial debt given the high inflation environment and potential restrictions on foreign currency transfers.
- Micro Sistemas: Review the financial impact of the loss of control over Micro Sistemas, which contributed to a 33.4% drop in "Other Service Revenues."