Good day everyone and welcome to the Telecom Argentina TEO Fourth Quarter 2017 Earnings Conference Call. Today's call is being recorded. Participating on the call, we have Mr. Gabriel Blasi, Chief Financial Officer; and Mrs. Solange Barthe Dennin, Investor Relations Manager. I will now turn the call over to Solange. Solange, please go ahead.

Thank you, Debbie. Good morning. On behalf of Telecom Argentina, I would like to thank everybody for participating on this conference call. As stated by the moderator, the purpose of this call is to share with you the results of the fiscal year 2017 and fourth quarter of 2017 ended December 31, 2017. We would like to remind all of those that had not received our press release or presentation that they can call our Investor Relation office to request the documents or download them from the Investor Relations section of our website located at www.telecom.com.ar. Additionally, this conference call and slide presentation is being broadcasted through the webcast feature available in such section and can also be replayed through the same channel. Before we continue with the conference call, I would like to go over some safe harbor information and other details of the call, as we usually do in this type of events. We would like to clarify that during the conference call and Q&A session, 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 effect of ongoing industry and economic regulation, possible changes in the demand for Telecom's products and services, and the effect of more general factors such as changes in general market or economic conditions in legislation or in regulations. Our press release dated March 7, 2018 a copy of which has been included in a Form 6-K report furnished to the SEC, describes certain factors that may affect any forward-looking statements that we may produce during this session. Furthermore, we urge the audience of this conference call to read the disclaimer clause…

Thank you, Solange, and hello everyone. First of all, we deem important to remark our investment community and due to the fact that since [indiscernible] January 1, 2018, the merger by absorption between Telecom Argentina and Cablevision has become effective. In this presentation, we'll be discussing the results of both Telecom and Cablevision for the fiscal years 2017 and 2016. Consequently, this maybe the last quarter that the companies maybe reporting their earnings separately. [Indiscernible] and leaders in that what will be the new era [ph] of the telecommunications industry in our country. The objective of the new telecom is to deliver to our clients a high speed connectivity flow that is also permanent on mobile, independent of devices and the place where the client is. Toughing this goal and being able to deliver a value added proposal, Telecom is focused on three main pillars. Coverage and network capacity, convergent systems and services, and client experience. Through the development of the pillars, the Company will be able to complete a transformation process that it is undertaking. That is in addressing the digital revolution through an innovative offer of products and services and capitalization investment that has been done in our networks. Let's move on to our business highlights, please refer to Slide 9 where we highlight some Telecom and Cablevision key achievements in the full fiscal year 2017 and last quarter. For the full year 2017, Telecom revenues totaled ARS65.2 billion while EBITDA rose 74% year-over-year, supported by an improvement in operating cost. In addition fixed voice ARPU and broadband ARPU were up 56% and 33% year-over-year to more than ARS152 and almost ARS360 respectively. Moreover and in relation with our subscribers, mobile subs amounted to 19 million and 9.7 million where 4G clients, fixed voice subs registered 3.3 million…

Thank you, Gabriel. The positive business terms, as described by Gabriel have resulted in a very positive performance in almost all financial results. Please turn to Slide 19 where we can analyze a consolidated revenues and EBITDA from Telecom. For the fiscal year 2017, consolidated results amounted almost to ARS65.2 billion reaching the goal of 22% year-on-year. In turn, service revenue grew at a higher rate of 26%, thanks to the strong performance of fixed voice plus internet together with mobile service revenues and more specifically mobile internet. Furthermore, EBITDA show a strong evolution growing by 74% year-over-year as we have concentrated improvement our revenue quality and profitability. EBITDA margins increased substantially by 260 basis points to 31% for the fiscal year 2017, and looking at the quarterly performance, we can see that we have consolidated improvement plans in margin evidenced since the third quarter of 2016. The Company has taken actions to gain operational efficiencies and manage its cost structure and this action has positively impacted our profitability as OpEx have grown below inflation level and revenue growth. Let’s turn to Slide 20 where we can verify the Telecoms operating income total ARS12.1 billion with a 44% increase year-on-year. The EBIT growth was higher than that of EBITDA and can be explained a slowdown in the increase of the depreciation and amortization and disposal and impairment of PP&E, which stood at 10% year-on-year. This contributed to the expansion in operating margins to a 19% of consolidated revenues, 400 basis points when compared with the fiscal year 2016. Meanwhile net income attributable to Telecom Argentina reached more than ARS12.6 billion increasing by 92% in 2017. This improvement can be explained by in combination of the previously mentioned increase in operating income and in full financial results with increase of ARS1.8…

Thank you, Solange. We will take a quick view on the merger on Slide 26, where we can see a brief summary of the transaction and the new ownership structure as well. On January 1, 2018, the merger between Telecom and Cablevision became effective. In order to complete the transaction, Telecom issued 1,184.5 million new shares for Cablevision shareholders. All the resulting company share classes have equal economic and voting rights. Therefore, the ownership structure of the Company changed and CVH became the controlling shareholder. Fintech Telecom LLC owns as of to date 31.53% of the Company total capital through Class A shares while CVH owns 18.75% directly and also owns 20.06% indirectly through VLG Argentina LLC. In addition floating shares that is class B shares represent 29.65% of total capital and Class C shares account for 0.1% -- sorry, 0.1% of total company capital. In addition, Fintech Telecom owns 8.25% of the total capital through Class B shares. Turning to Slide 27 represents some key figures of the combined company. Regarding revenues, Telecom's revenues totaled 3.9 billion in 2017 while Cablevision's revenues reached almost $2.5 billion. Overall, the revenues for the combined company on a sum of the parts approach, totaled $6.4 billion. Meanwhile, EBITDA of the combined company amounted almost 2.1 billion in 2017 of which Telecoms EBITDA accounted for around 1.2 billion and EBITDA Cablevision's EBITDA accounted for 0.9 billion. Moreover EBITDA margin of the combined company reaching 32%. As of revenues from the mobile segment represented 38% of the total combined revenues, followed by pay TV with a participation of 33% and broadband services with a participation of 19%. In addition, the combined company has 19.7 million mobile subscribers, 4.1 million broadband and 3.5 million cable TV clients and 3.8 million fixed lines. Please turn to…

Thank you. [Operator Instructions] We'll go first to Rodrigo Villanueva with Merrill Lynch.

My question is related to merger related expenses. I was wondering if you give some indication of what to expect in 2018 related to this? That will be my first question, thank you.

Hi, Rodrigo. Well, we are in the process of refining a three-year plan and will be finalizing by the end of March, and there we will have a much clearer idea on the final figures. To give you a quick wrap up on the investment that we are planning, the $5 billion that we are spending in the near future are going to be deploying in a similar way on a yearly base for the next three years. Regarding the implementation of these two systems or the front end and the backend, this is still yet -- we're into to refine how to depart the amount of changes that we are going to commence. For instance in the case of the back office, we are not departing from the starting point where you have Cablevision or Telecom practicing one way or the other, but we're in the discovery process starting the Company from a single base. As I mentioned by the end of this month, we're going to have a much clearer picture about the total amount of investment to fulfill this.

Understood. Thank you very much. And I was wondering if you could share with us, where you see that you see more opportunities for cross-selling?

Well, there are several. The first we'll have is that there is not a very significant overlap between the customer base of fiber optic for instance and the mobile phone of personal. There we have a huge opportunity in terms of future growth as you probably know, Fibertel customers, i.e. is the most product the most upper scale product of its segment. And we had opportunity to go a very [Technical Difficulty] customer base there. To achieve that, we need to improve significantly our mobile services to cope with a level of service that they the cable customer is used. Other big opportunities that we have is that although our network as we have already shown is very important developed in terms of 4G capacity still we have in the northern area of the country where we have a very good and a strong customer base many of these customers still have 2G appliances or devices. So we have the opportunity to providing them the devices to improve the use there. Other important and very significant aspect that you can see is when you look at the map where you compared the network of Telecom with Cablevision and which stronger in each place. Cablevision network provides a much stronger base in the center area of the country especially in the province of Buenos Aires, the surroundings of Buenos Aires, and the northern part of the south part of Argentina where historically Telecom has a weaker position. Pooling those two networks together, we will give a huge hedge to that. Not only these, but when the final process of integration in terms of the timing in which way all the different networks are going to be interconnected which is probably be conducted by September this year, will give us an additional hedge in terms of future deployment of the way that we can provide better service to each customer in each region. Those are probably the most significant one but there I will say that there are upgrading on a daily base.

[Operator Instructions] We will go next to Fernando Suarez with AR Partners.

I’d like to get some color about the potential revenues than the -- put in place and the impact of this?

Just to clarify your question, when referring to remedies. If you can precise remedies to what, it might help. Thank you.

I'm referring that the antitrust agency have not ruled about the transaction -- different color on the potentially impact of this?

Well, of course, we are waiting for that ruling. We do not expect that situation will take too long meaning that already has been happened prior to the first half of this year. And as from the conversations that we are guiding on, we are not expecting a significant development in -- from there.

My second question is related to [Audio Gap] spectrum increase during that month, if you could give us some kind of impact of that cost?

Yes, thank you very much for the question. We are analyzing at this moment, how this -- really applies because it can be assume different ways with different implications and once that analysis is completed of course we’re going to disclose the final impact to the Company. But still I cannot provide you with single figure, there are several doubts regarding how it applies and definitely it applies over certain aspects business itself.

And how could we compensate it going forward and it's something that applied to all the industry of course.

Okay. My last question was, when should we expect to [Audio Gap] and when we are saying that and what’s the plan on there?

There is some interruption in the line.

I was wondering if you could give us some details and on any OpEx savings that can -- when those will be delivered on, if we are adjusting the five year run rate that gives us some months ago?

No, as I mentioned we are in the process of defining these three year plan in much more detail probably there would be finalize at the end of the this month. Then we will have a much, much better first idea on certain aspects of cost savings or certain synergies that the merchant may apply. Having said that I think already mentioned the analysis has been is currently is making over a whole network. Will provide a final result through September this year and so till then it was much difficult to have a very specific and clearer view. Of course we are going to provide the commercial as far we have acknowledge but the way the networks are going to work together is probably the more valuable aspect in terms of OpEx savings in the future.

[Operator Instructions] We’ll go next to Santiago Petri with Templeton.

Is it possible for you to explain us more or less the sensitivity of the Company to change this in the exchange rate? For example, how the structure of cost that you have, how much that of partition in U.S. dollars also the CapEx and the balance sheet?

Well, roughly, we have like too many policies about the foreign exchange. In terms of CapEx, you must consider that at least 65 % of the CapEx is U.S. related in dollars and that will be in main companies. In the case of the second deal source that we have that as you probably know. We are in the process of changing our capital structure and increasing substantially our debt. That will be our probably our second largest source of foreign exchange risk. And at the OpEx level, it is matched. And the one we are approaching to this important issue, although we are in the process of defining as part of a three-year plan, our coverage policy; and as Solange mentioned, we are about 40% covered as of today. In the future [Audio Gap] unless on the economic prospect which is from the stocks of foreign exchange risk or the principal balances, the Company can be consider hedged as a huge, huge amount of real estate. And as you Santiago knows very well, the real estate in Argentina is both sold and quoted to U.S. dollars. Meaning that, there is not a significant foreign exchange risk on the long run on the economic side. The problem is more on the financial side, on the instantaneous impact of the evaluation, especially on flows. That is that very likely our cash -- our hedging procedure will be directed to hedge the flow more than the stocks of foreign exchange. Regarding that, we are going to release probably in the next month or so our hedging coverage. Our intention is to have at least double net flows of fund that are going to be paid during 12 month period. Of course that can be adjusted according to the risk profile. That is very important to towards risk also on the combined entity and it's not so noticed by the market is that at present because of the operation that the Company has in Paraguay and in Uruguay on a consolidate base. The Company generates almost 90 million of EBITDA outside Argentina and that covers at least half of the cost of the projected debt that the Company is going to have. So we understand that foreign exchange risk is always an issue in Argentina, but we are very confident that both for the short run but in the long run we will be very efficient in terms of coping with that.

Can you repeat me the OpEx? What’s exposure of OpEx to U.S. dollars, I didn’t pick up the...

In terms of OpEx it's matched. The foreign exchange risk is matched. In terms of CapEx 65% this is U.S. dollars. Other important aspect that we have mentioned that is also -- it has not been fully considered up to now is that company be doing this in very strong real estate asset has a very significant amount of towers. Meaning that together the combined entity with Nextel towers plus Telecom towers plus the construction sites that we are going to develop this year more than 900, we are going to have more than 6,000 near to 7,000 towers in total. If you consider the market evaluation for these towers on a LATAM base compared to peers, similar companies in the region, you will find out that the average value in U.S. dollars for each tower is about $200,000 each one and that gives you also another potential source of U.S. dollars to go with that situation.

At this time, there are no other questions in queue. I'll turn it back to management for closing remarks.

Thank you very much for participating in our quarterly conference call. Please do not hesitate in contact our investor relation department for any further inquiries you may have. Good morning to all, have a nice day and we expect to meet again soon.

Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may now disconnect.