Form 20-F  x

Form 40-F o

Yes  o

No  x

1.

Press Release dated May 3, 2012 entitled “Telecom Argentina S.A. announces consolidated first quarter results for fiscal year 2012 (1Q12)”

FOR IMMEDIATE RELEASE

Market Cap P$ 14.9 billion

May 3th, 2012

As of March, 31

(in million P$, except where noted)

2012

2011

Δ $

Δ %

Revenues

5,126

4,134

992

24

%

Fixed Services

1,421

1,251

170

14

%

Mobile Services

3,705

2,883

822

29

%

Operating Profit before D&A 

1,648

1,436

212

15

%

Operating Profit 

1,033

958

75

8

%

Net Income attributable to Telecom Argentina

698

634

64

10

%

Shareholders’ equity attributable to Telecom Argentina 

8,736

7,070

1,666

24

%

Net Financial Position - Cash

2,982

1,712

1,270

74

%

CAPEX

690

462

228

49

%

Fixed lines in service (in thousand lines)

4,138

4,110

28

1

%

Mobile customers (in thousand)

20,750

18,783

1,967

10

%

Personal (Argentina)

18,547

16,882

1,665

10

%

Núcleo (Paraguay) -including Wimax customers-

2,203

1,901

302

16

%

Broadband acceses (in thousand)

1,566

1,407

159

11

%

Fixed line traffic (in MM minutes, Internet & Public Telephony not incl.)

3,411

3,509

(98

)

-3

%

Incoming / Outgoing mobile voice traffic in Arg.(in MM minutes)

5,118

4,792

326

7

%

Average Billing per user (ARBU) Fixed Telephony / voice  (in P$)

46.9

43.7

3.2

7

%

Average Revenue per user (ARPU) Mobile Services in Arg. (in P$)

54.9

47.4

7.5

16

%

Average Revenue per user (ARPU) ADSL (in P$)

95.6

82.2

13.4

16

%

1Q12

1Q11

Δ $

Δ %

Consolidated Revenues (MMP$)

5,126

4,134

992

24

%

Net Income (MMP$)

708

640

68

11

%

Earnings per Share (P$)

0.72

0.65

0.07

Earnings per ADR (P$)

3.60

3.25

0.35

OPBDA *

32

%

35

%

Operating Profit *

20

%

23

%

Net Income*

14

%

15

%

The actions developed to increase the usage of value added services (“VAS”), innovative offers to clients and equipments sales allowed Personal to increase consolidated revenues to third parties to P$3,705 million (+29% vs. 1Q11).

Telecom Personal in Argentina

As of March 31, 2012, Personal reached 18.5 million subscribers in Argentina (+10% or 1.7 million vs. 1Q11), thus improving its market position. It is worth noting that the overall subscriber base mix continued to improve with 32% in the postpaid modality (including “Cuentas claras” plans and 3G modems) and 68% in prepaid.

In 1Q12, Revenues to third parties reached P$3,506 million (+P$771 million or 28% vs. 1Q11) while Service Revenues (excluding equipments) amounted to P$3,101 million (+28% vs. 1Q11), with 52% corresponding to value-added services (‘VAS’) revenues (vs. 46% in 1Q11). VAS revenues strongly increased by 44% vs.1Q11.

During 1Q12, the overall voice traffic minutes increased by 7% vs. 1Q11. SMS traffic (incoming and outgoing charged messages) continued increasing, although at a slower pace of growth, due to other Internet alternatives provided by

During the 1Q12, as a result of the launch of Mobile Number Portability (MNP), Personal presented an integrated offer maximizing benefits for clients through flexible commercial offerings. The launch of MNP was supported by Personal with a national communication campaign focused on providing information about this new modality.

Personal was the first Latam mobile operator to present freemium fames (a new value added service), that allows access to free high definition games, and offers a wide variety of paid options for enhancing the customer experience. In addition, Personal launched new messaging solutions such as ¨SMS por Cobrar¨ (the SMS is paid by the person who receives it), and ¨SMS respuesta paga¨ (the message sent and the answer are paid by the sender). By these means Personal provides alternatives for those clients who have run out of credit.

Personal continued with its brand positioning associated to music by organizing several events and concerts that were strengthened with dedicated offers and customer retention actions.

Total Revenues for this service reached P$782 million in 1Q12 (+6% vs. 1Q11). The results of this line of business continued to be affected by frozen tariffs of regulated services enforced by the Argentine Government in 2002.

Revenues generated by Measured Services totaled P$299 million, an increase of P$20 million or +7% vs. 1Q11. In relative terms, revenues from local calls increased the most, with 7% vs. 1Q11, mainly due to the incorporation of flat rate packs.  Moreover, domestic long distance traffic increased by 7% vs. 1Q11 and revenues from international services increased by 4% vs. 1Q11.

Monthly Charges and Supplementary Services reached P$269 million, an increase of P$24 or +10% vs. 1Q11, as a consequence of a higher number of lines in service (+1%), which surpassed 4.1 million, and to the increasing penetration of Value Added Services.

The average bill per user (ARBU) reached $47 in 1Q12 vs. $44 in 1Q11.

Interconnection revenues reached P$124 million (+2% vs. 1Q11). Meanwhile, other revenues totaled 90 million (-4% vs. 1Q11).

Data Transmission and Internet

Revenues related to Internet totaled P$458 million (+ P$109 million or +31% vs. 1Q11), mainly due to the continued expansion of broadband services.

Data transmission revenues amounted to P$163 million (+21% vs. 1Q11), where the focus was to strengthen Telecom’s position as an integrated ICT provider.

As of March 31, 2012, Telecom surpassed 1.5 million ADSL accesses (+11% vs. 1Q11). These connections represented 38% of Telecom’s fixed lines in service. In addition, ADSL ARPU reached approximately P$96 in 1Q12, +16% when compared to 1Q11 and the churn rate slightly increased to 1.3% in 1Q12 (vs. 1.2% in 1Q11), although it remain at low levels.

During 1Q12, Telecom Argentina launched the campaign ¨Bares¨ offering Arnet Wi-Fi with Arnet Turbo 7Mb with residential access and six month of free Mobile Internet. In this way, a broad communication campaign was rolled out (including TV, graphic, radio, web).

In 1Q12 Telecom Argentina promoted a Web server product under “Try & Buy” offer based on a Hosting Virtual Platform service, where the aim of this promotion is to identify potential clients, providing them the services free of charge for a period of time to test the quality of the service.

Consolidated Operating Costs

The Cost of Services Provided, General & Administrative Expenses and Selling Expenses totaled P$4,098 million in 1Q12, an increase of P$907 million, or +28%, vs. 1Q11. The increase is a consequence of higher commercial costs due

The cost breakdown is as follows:

· Employee benefit expenses and severance payments totaled P$677 million (+29% vs. 1Q11), mainly affected by increases in salaries due to the labor agreement reached in July 2011 and the increase in the number of employees. Regarding personnel, 576 employees were incorporated in the mobile business and 288 employees in the fixed services vs. 1Q11 resulted in a total headcount at the end of the period of 16,587 employees.

· Taxes and fees with the regulatory authority reached P$462 million (+28% vs. 1Q11), impacted mainly by a higher volume of revenues, an increase in the average rates of turnover taxes, by higher bank debit and credit taxes, and by higher taxes from municipal jurisdictions.

· Interconnection costs and other telecommunication charges (includes TLRD, Roaming, Interconnection, international settlement charges and lease of circuits) amounted to P$408 million, +P$44 million vs. 1Q11. This small increase (+14% vs.1Q11) was achieved thanks to savings from stimulating on-net traffic among mobile clients and by renegotiating the lease of wireless backhaul equipment.

· Commissions (Commissions paid to Agents, prepaid card commissions and others) totaled P$449 million (+32% vs. 1Q11), net of capitalization of SAC of P$76 million and P$41 million for 1Q12 and 1Q11, respectively, mainly due to the increase in commissions paid to commercial agents associated with higher revenues from the sale of more sophisticated handsets, higher costs associated with a higher volume of acquisitions and retention of customers with the aim of gaining fidelity from clients, looking towards the number portability implementation, which started in late March.

· Advertising amounted to P$164 million (+27% vs. 1Q11), oriented towards supporting the commercial activity in mobile and Internet services and to strengthen the brands of the Telecom Group through the sponsorship of important artistic events and to continue the rebranding communication efforts of the Personal brand.

· Cost of handsets sold totaled P$437 million (+20% vs. 1Q11), net of capitalization of SAC of P$106 million and P$76 million for 1Q12 and 1Q11, respectively, due to an increase in high-end handsets sales and a higher number of handset upgrades, performed to stimulate VAS usage. These effects resulted in the increase of the average cost of handsets.

Consolidated Financial Results

Financial Results resulted in a gain of P$61 million, an increase of P$42 million vs. 1Q11. This was mainly due to a gain in net financial interest of P$64 million in 1Q12 (+P$39 million vs. 1Q11) derived from a healthy financial position and to losses for FX results of P$6 million in 1Q12 (vs. losses of P$4 million in 1Q11) as a result of a lower exposure to foreign currency debts.

Financial Results

(In million P$)

1Q11

1Q12

Net Interests

$

25

$

64

FX results

$

-4

$

-6

Others

$

-2

$

3

Total

$

19

$

61

Consolidated Net Financial Position

As of March 31, 2011, Net Financial Position (Cash, Cash Equivalents and current Investments minus Loans) totaled P$2,982 million in cash, an improvement of P$1,270 million vs. Net Financial Position as of March 2011.

Capital Expenditures

During 1Q12, the Company invested P$690 million. This amount was allocated to Fixed Services (P$298 million) and Mobile services (P$392 million). In relative terms, capex reached 13% of consolidated revenues.

Main capex projects are aimed to improve the network capacity to offer top quality services, to sustain the growth of Mobile Internet, as well as to support ADSL services, enhancing customer’s speed. Moreover, projects were associated to transmission and transport networks expanding coverage and capacity, in order to face the growing demand coming from fixed and mobile customers.

Other Relevant Matters

The General Ordinary Shareholders’ Meeting of Telecom Argentina approved on April, 27th, 2012 a cash dividend payment of P$807 million. This payment will be made starting on May 10th, 2012. The amount to be distributed is equivalent to P$0.82 per share or P$4.10 per ADR, prior to deductions of the Personal Asset Tax obligations. Moreover, P$121 million where allocated to the Legal Reserve and P$ 2.553 million to Voluntary Reserves for Future Investments.

The General Ordinary Shareholders’ Meeting of Telecom Personal approved on April, 19th, 2012 a cash dividend payment of P$800 million payable in two installments: P$250 million in April 26th, 2012 and P$550 million in June 18th, 2012. Moreover, P$910 million where allocated to Reserves for future dividends, and P$1.237 million to a Voluntary Reserve to finance the working capital and Investments in the country.

Nortel Inversora S.A. (“Nortel”), which acquired the majority of the Company from the Argentine government, holds 54.74% of Telecom’s common stock. Nortel is a holding company whose common stock (approximately 74% of capital stock) is owned by Sofora Telecomunicaciones S.A. Additionally, Nortel capital stock is comprised of preferred shares that are held by minority shareholders.

As of March 31, 2012, Telecom continued to have 984,380,978 shares outstanding.

Pedro Insussarry
(5411) 4968 3743

Solange Barthe Dennin
(5411) 4968 3752

Ruth Fuhrmann
(5411) 4968 4448

Nicolás del Campo
(5411) 4968 6236

Gustavo Tewel
(5411) 4968-3718

03/31/12

12/31/11

∆ $

∆ %

Cash and cash equivalents

3,122

2,818

304

11

%

Trade receivables

1,779

1,790

-11

-1

%

Other Receivables

925

842

83

10

%

Total current assets

5,826

5,450

376

7

%

Trade receivables

29

30

-1

-3

%

Property, plant and equipment

8,352

8,247

105

1

%

Intangible assets

1,496

1,488

8

1

%

Other Receivables

112

104

8

8

%

Total non-current assets

9,989

9,869

120

1

%

Total Assets

15,815

15,319

496

3

%

Trade payables

2,997

3,407

-410

-12

%

Deferred revenues

324

292

32

11

%

Financial debt

24

19

5

26

%

Salaries and social security payables

593

536

57

11

%

Income tax payables

755

605

150

25

%

Other taxes payables

440

457

-17

-4

%

Dividend Payable

23

—

—

—

Other liabilities

52

30

22

73

%

Provisions

51

173

-122

-71

%

Total current liabilities

5,259

5,519

-260

-5

%

Deferred revenues

302

307

-5

-2

%

Financial debt

116

115

1

1

%

Salaries and social security payables

137

136

1

1

%

Deferred income tax liabilities

203

210

-7

-3

%

Income tax payables

13

13

0

0

%

Other liabilities

71

72

-1

-1

%

Provisions

839

782

57

7

%

Total non-current liabilities

1,681

1,635

46

3

%

TOTAL LIABILITIES

6,940

7,154

-214

-3

%

Equity attributable to owners of the Parent

8,736

8,021

715

9

%

Noncontrolling interest

139

144

-5

-3

%

TOTAL EQUITY

8,875

8,165

710

9

%

TOTAL LIABILITIES AND EQUITY

15,815

15,319

496

3

%

03/31/12

12/31/11

∆ $

∆ %

Banks and other financial Institutions

24

17

7

41

%

Accrued interest

—

2

(2

)

—

Total Current Loans

24

19

5

26

%

Banks and other financial institutions

116

115

1

1

%

Total Non Current Loans

116

115

1

1

%

Total Loans

140

134

6

4

%

Cash and cash equivalents

3,122

2,818

304

11

%

Net Financial Position- Cash

2,982

2,684

298

11

%

03/31/12

03/31/11

∆ $

∆ %

Revenues

5,126

4,134

992

24

%

Other income

5

15

(10

)

-67

%

Total Income

5,131

4,149

982

-43

%

Consolidated Operating Costs

(4,098

)

(3,191

)

(907

)

28

%

Operating income

1,033

958

75

8

%

Finance results, net

61

19

42

—

Net income before income tax expense

1,094

977

117

12

%

Income tax expense

(386

)

(337

)

(49

)

15

%

Net income

708

640

68

11

%

Attributable to:

Owners of the Parent

698

634

64

10

%

Noncontrolling interest

10

6

4

67

%

Operating income before D&A

1,648

1,436

212

15

%

As % of Revenues

32

%

35

%

—

0

%

03/31/12

03/31/11

∆ $

∆ %

Finance Income and Expenses

Finance Income

Interest on cash equivalents

80

29

51

176

%

Interest on receivables

19

15

4

27

%

Foreign currency exchange gains

24

13

11

85

%

Others

7

2

5

—

Total finance income

130

59

71

120

%

Finance expenses

Interest on financial debt

(3

)

(4

)

1

-25

%

Interest on taxes and accounts payable

(6

)

(3

)

(3

)

100

%

Interest on provisions

(26

)

(12

)

(14

)

117

%

Loss on discounting of other liabilities

(3

)

(2

)

(1

)

50

%

Foreign currency exchange losses

(30

)

(17

)

(13

)

76

%

Others

(1

)

(2

)

1

-50

%

Total finance expenses

(69

)

(40

)

(29

)

73

%

03/31/12

03/31/11

∆ $

∆ %

Revenues from Sevices

4,697

3,795

902

24

%

Fixed Services

1,403

1,223

180

15

%

Voice

782

739

43

6

%

Retail Voice

Monthly Charges

269

245

24

10

%

Supplementary Services

299

279

20

7

%

Others

39

39

—

0

%

Wholesale

Interconnection

124

121

3

2

%

Others

51

55

(4

)

-7

%

Data

163

135

28

21

%

Internet

458

349

109

31

%

Mobiles Sevices

3,294

2,572

722

28

%

Telecom Personal

3,101

2,432

669

28

%

Voice

1,502

1,323

179

14

%

Retail Voice

Monthly Charges

497

384

113

29

%

Supplementary Services

473

462

11

2

%

Roaming

67

36

31

86

%

Others

40

30

10

33

%

Wholesale

Interconnection (CPP and TLRD)

373

348

25

7

%

Roaming

46

57

(11

)

-19

%

Others

6

6

—

—

Data

1,323

956

367

38

%

Internet

276

153

123

80

%

Núcleo

193

140

53

38

%

Voice

104

76

28

37

%

Retail Voice

Monthly Charges

24

18

6

33

%

Supplementary Services

57

40

17

43

%

Roaming

2

2

—

0

%

Others

3

2

1

50

%

Wholesale

Interconexión (CPP y TLRD)

16

12

4

33

%

Roaming

2

2

—

0

%

Data

63

52

11

21

%

Internet

26

12

14

117

%

Revenues from equipment sales

429

339

90

27

%

Fixed Services

18

28

(10

)

-36

%

Voice

12

9

3

33

%

Data

5

18

(13

)

-72

%

Internet

1

1

—

0

%

Mobiles Sevices

411

311

100

32

%

Equipments (Personal)

405

303

102

34

%

Equipments (Núcleo)

6

8

(2

)

-25

%

REVENUES

5,126

4,134

992

24

%

OTHER INCOME

5

15

(10

)

-67

%

Fixed

4

9

(5

)

-56

%

Mobile

1

6

(5

)

-83

%

TOTAL INCOME

5,131

4,149

982

24

%

03/31/12

03/31/11

∆ $

∆ %

Revenues

5,126

4,134

992

24

%

Other income

5

15

(10

)

-67

%

Total income

5,131

4,149

982

24

%

Employee benefit expenses and severance payments

(677

)

(526

)

(151

)

29

%

Interconnection costs and other telecommunication charges

(408

)

(364

)

(44

)

12

%

Fees for services, maintenance and materials

(477

)

(361

)

(116

)

32

%

Taxes and fees with the Regulatory Authority

(462

)

(361

)

(101

)

28

%

Commissions

(449

)

(341

)

(108

)

32

%

Cost of equipments and handsets

(437

)

(363

)

(74

)

20

%

Advertising

(164

)

(129

)

(35

)

27

%

Provisions

(40

)

(23

)

(17

)

74

%

Bad debt expenses

(69

)

(39

)

(30

)

77

%

Other operating expenses

(300

)

(206

)

(94

)

46

%

Operating income before D&A

1,648

1,436

212

15

%

D&A

(615

)

(478

)

(137

)

29

%

Operating income

1,033

958

75

8

%

Finance results, net

130

59

71

120

%

Costos financieros

(69

)

(40

)

(29

)

73

%

Net income before income tax expense

1,094

977

117

12

%

Income tax expense

(386

)

(337

)

(49

)

15

%

Net Income

708

640

68

11

%

Attributable to:

Owners of the Parent

698

634

64

10

%

Noncontrolling interest

10

6

—

0

%

Telecom Argentina S.A.

Date: May 7, 2012

By:

/s/ Enrique Garrido

Name: Enrique Garrido

Title: Chairman of the Board of Directors