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                                                                    Exhibit 4.7

                            TELEFONICA DE ARGENTINA
                          MEMORANDUM OF UNDERSTANDING

In the City of Buenos Aires, on February 15, 2006, in the context of the
renegotiation process of utilities contracts established by Laws No. 25,561,
25,790, 25,820, and 25,972, and their supplementary Decree No. 311/03, the
RENEGOTIATION AND ANALYSIS OF PUBLIC AGREEMENTS UNIT, as mandated by the
National Executive Power, herein represented by its Executive Secretary Dr. D.
Jorge Gustavo SIMEONOFF, and TELEFONICA DE ARGENTINA S.A. (hereinafter the
LICENSEE), herein represented by Mr. Mario Eduardo Vazquez, in his capacity as
Chairman of the Board of Directors, as evidenced in the Corporate Bylaws, the
Minutes of the Shareholders' Meeting dated April 28, 2005 wherein corporate
authorities were elected and the Minutes of the Board of Directors' Meeting
dated April 28, 2005 wherein corporate positions were assigned, herein express
that they have agreed on the terms and conditions stated in this MEMORANDUM OF
UNDERSTANDING.

Upon completing the procedures established under current regulations, this
letter shall be a necessary background document to enter into a PROTOCOL OF
RENEGOTIATION of the share TRANSFER CONTRACT, approved under Decree 2,332/90,
as provided by Section 9 of Law No. 25,561 and any supplementary and related
regulations thereof.

PART ONE
BACKGROUND AND CONSIDERATIONS

Pursuant to Decree No. 2344 of November 8, 1990, the NATIONAL EXECUTIVE POWER
has granted SOCIEDAD LICENCIATARIA SUR S.A. a LICENSE to provide BASIC
TELEPHONE SERVICES, as provided under the TRANSFER CONTRACT that was executed
pursuant to Law No. 23,696, Decree No. 731 of September 12, 1989 and Decree
No. 62 of January 5, 1990, approved by Decree No. 2,332 of November 8, 1990.

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By means of Decree No. 1,229/90, the shares owned by SOCIEDAD LICENCIATARIA SUR
S.A. were timely awarded to a consortium whose members were TELEFONICA
INTERNACIONAL HOLDING BV, CITICORP AND INVERSORA CATALINAS S.A., currently
TELEFONICA DE ARGENTINA S.A.

As a result of the serious crisis that the country went through at the end of
2001, the HONORABLE NATIONAL CONGRESS passed Law No. 25,561, whereby a public
social, economic, administrative, financial and exchange market emergency was
declared until December 10, 2003, empowering the NATIONAL EXECUTIVE POWER with
the authority required to take any steps to help avert the critical emergency
situation and setting forth that utilities contracts be renegotiated.

The provisions included in Law No. 25,561 were later ratified and expanded by
means of Laws No. 25,790, 25,820, and 25,972, as well as several regulatory and
supplementary rules.

Under Section 9 of said Law, the NATIONAL EXECUTIVE POWER was authorized to
renegotiate any utilities and public works contracts included in Section 8.

The contract renegotiation process was regulated and implemented at a first
institutional stage by Decrees No. 293/02 and No. 370/02, and at a second stage
by Decree No. 311/03 and Joint Resolution No. 188/03 and 44/03 issued by the
Ministry of Economy and Production and the Ministry of Planning, Public
Investment and Services, respectively.

Decree No. 311/03 established that the renegotiation process shall be carried
out through the RENEGOTIATION AND ANALYSIS OF PUBLIC AGREEMENTS UNIT
("UNIREN"), presided by the Ministry of Economy and Production and the Ministry
of Planning, Public Investment and Services.

UNIREN was entrusted with several missions, including to carry out the
renegotiation process of utilities and public works contracts, execute
agreements with concessionaire and licensee utility companies ad referendum of
the National Executive Power, submit regulatory projects related to potential
temporary price adjustments and utilities

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contractual clauses, as well as make recommendations related to utilities and
public works contracts and to the operation of the respective services.

Joint Resolution No. 188/03 and 44/03 issued by the Ministry of Economy and
Production and the Ministry of Planning, Public Investment and Services has
established that UNIREN shall consist of a President's Office and also a
Sector-Specific Committee for Utilities Contracts Renegotiation and Analysis
and an Executive Secretary of the Unit.

The members of the above mentioned COMMITTEE shall be the Secretaries of State
having specific jurisdiction over the sectors related to utilities and/or
public works contracts to be renegotiated, and the UNIREN Executive Secretary.

During the renegotiation process involving the TRANSFER CONTRACT, progress was
made in connection with the analysis of the LICENSEE's contractual situation
and the agenda under discussion, and the parties held several meetings to help
them attain a basic understanding as to the contractual renegotiation.

The NATIONAL GOVERNMENT and the Basic Telephony Service LICENSEE companies
executed a Memorandum of Understanding on May 20, 2004, wherein some
commitments and essential guidelines were set to build the consensus required
to further the final renegotiation process.

The NATIONAL COMMUNICATIONS COMMISSION ("CNC"), reporting to the SECRETARIAT OF
COMMUNICATIONS of the MINISTRY OF PLANNING, PUBLIC INVESTMENT AND SERVICES, as
provided under Section 7 of Decree No. 311/03 and Section 13 of Joint
Resolution No. 188/03 and 44/03 of the MINISTRY OF ECONOMY AND PRODUCTION and
the MINISTRY OF PLANNING, PUBLIC INVESTMENT AND SERVICES, analyzed the
situation and the extent of performance of the TRANSFER CONTRACT.

The UNIREN Executive Secretary has generated the Contract Performance Report
required under Section 13 of Joint Resolution No. 188/03 issued by the Ministry
of Economy and Production and No. 44/03 issued by the Ministry Planning, Public

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Investment and Services, regulating Section 7 of Decree No. 311/03, in order to
submit the status of performance of the TRANSFER CONTRACT, which is the
background and basis of the renegotiation process thereof, as provided under
Law No. 25,561 and subsequent and supplementary rules.

Both evaluations above mentioned are a comprehensive and thorough analysis of
the current status and the degree of performance of obligations by the LICENSEE.

Such renegotiation process shall take into consideration: a) the provisions
included in Sections 8, 9, and 10 of Law No. 25,561, Law No. 25,790 and Decree
No. 311/03, as well as any regulatory and supplementary rules thereof; b) the
provisions included in the TRANSFER CONTRACT; c) the reports issued by the CNC
and the UNIREN Executive Secretary above mentioned; and d) the conditions
related to the current economic and social situation of the country.

Now that the relevant evaluations are completed, it is necessary and advisable
to preserve service accessibility, continuity and quality for any users
thereof, and to set forth temporary conditions and recognize those that are
permanent and tend to normalize the contractual situation between the NATIONAL
GOVERNMENT and the LICENSEE.

Such measures should by no means be considered changes to the monetary
incentive system or responsibility for SERVICE management by the LICENSEE,
whose core objective is to focus on service provision efficiency and reasonable
costs that enable maintenance as well as network growth and development. All of
this should be done under conditions that are appropriate for providing the
BASIC TELEPHONE SERVICE.

Within the context described hereinabove and without implying any waiver or
change to the rights they are entitled to, the PARTIES deemed it necessary to
execute this MEMORANDUM OF UNDERSTANDING, within the scope and effects provided
under Section 5 hereof.

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For the NATIONAL GOVERNMENT and the LICENSEE to enter into the PROTOCOL OF
RENEGOTIATION, the procedures set forth under Laws No. 25,561 and 25,790 shall
be fulfilled and said PROTOCOL FOR RENEGOTIATION shall be "ad referendum" of
the NATIONAL EXECUTIVE POWER.

PART TWO
DEFINITIONS

For interpretation purposes, the terms used in this MEMORANDUM OF UNDERSTANDING
shall bear the meanings specified below:

PROTOCOL OF RENEGOTIATION: The agreement to be entered into between the
NATIONAL GOVERNMENT and the LICENSEE pursuant to the terms and conditions set
forth in this MEMORANDUM OF UNDERSTANDING in order to renegotiate the TRANSFER
CONTRACT in compliance with the provisions of Laws No. 25,561, No. 25,790,
No. 25,792, and No. 25,820, and Decree No. 311/03 and other applicable rules.

ENFORCEMENT AUTHORITY: The SECRETARY OF COMMUNICATIONS ("SECOM"), reporting to
the MINISTRY OF PLANNING, PUBLIC INVESTMENT AND SERVICES.

REGULATORY AUTHORITY: The NATIONAL COMMUNICATIONS COMMISSION ("CNC") is a body
reporting to the SECRETARY OF COMMUNICATIONS (SECOM, Spanish acronym), which in
turn reports to the MINISTRY PLANNING, PUBLIC INVESTMENT AND SERVICES.

MEMORANDUM OF UNDERSTANDING: This document.

TRANSFER CONTRACT: The contract that was approved under Decree No. 2,332/90 and
originated in the Bid Specifications approved by Decree No. 62/90.

LICENSE: The license granted to SOCIEDAD LICENCIATARIA SUR S.A. to provide the
BASIC TELEPHONE SERVICE in Decree No. 2,344 of November 8, 1990.

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LICENSEE: TELEFONICA DE ARGENTINA S.A.

SERVICE GOALS: BASIC TELEPHONE SERVICE goals established under Decree No. 62/90
and the General BASIC TELEPHONE SERVICE Quality Regulations, approved by SECOM
Resolution No. 25,839/96.

LONG-TERM GOALS: Those established for the long term under Decree No. 62/90 and
the General Basic Telephony Service Quality Regulations, approved in SECOM
Resolution No. 25,839/96.

PARTIES: The NATIONAL GOVERNMENT and the LICENSEE.

SERVICE or BASIC TELEPHONE SERVICE: The Basic Telephone Service provided by
TELEFONICA DE ARGENTINA S.A. under its LICENSE terms.

UNIREN: RENEGOTIATION AND ANALYSIS OF PUBLIC AGREEMENTS UNIT created by Decree
No. 311/03, representing the NATIONAL GOVERNMENT for the purposes of this
MEMORANDUM OF UNDERSTANDING.

PART THREE

1. CONTRACTUAL SITUATION

1.1. The CNC and the UNIREN Executive Secretary have conducted, as provided
     under current laws, an analysis of the current status and the degree of
     performance by the LICENSEE of its obligations under the Transfer Contract
     and the regulations in force. Said analysis concluded that, until the date
     of this MEMORANDUM OF UNDERSTANDING, the performance of obligations by the
     LICENSEE was acceptable and only the following was observed: a) specific
     operational irregularities, which were subject to the appropriate penalty
     processes, and b) issues related to the specific development of operations
     referred to under bullet 1.2.

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1.2. For the purposes of regularizing any claims or requests submitted by the
     LICENSEE related to specific development issues of any operations included
     in the usual and ordinary license development and all administrative
     procedures which are in process and have been initiated by the REGULATORY
     AUTHORITY and/or ENFORCEMENT AUTHORITY, the resolution of which is pending
     when this MEMORANDUM OF UNDERSTANDING is executed and whose nature or
     decision is not directly related to economic emergency topics or issues,
     the parties hereby agree to set the latest date for discussion and
     resolution thereof within the scope of the ENFORCEMENT AUTHORITY at June
     30, 2006.

2. INVESTMENTS. TECHNOLOGICAL RESEARCH AND DEVELOPMENT.

2.1. The LICENSEE shall continue investing in the development and technological
update of its network.

2.2. The LICENSEE undertakes to promote: i) research and development related to
new services; ii) steps intended to reduce the digital divide and foster
information society development; iii) upgrade and technology transfer programs,
as well as the development of national companies.

2.3. To develop its planned investments mentioned in 2.1. above, the LICENSEE
shall abide by the provisions of the Argentine Purchasing Regime established by
Law No. 25,551, as appropriate.

3. SERVICE AND LONG-TERM GOALS.

3.1. The LICENSEE undertakes to continue to provide SERVICE, performing any and
all quality obligations arising from current laws.

3.2. By December 31, 2010, the LICENSEE shall meet the LONG-TERM GOALS set
forth under Decree No. 62/90 and the General BASIC TELEPHONE SERVICE Quality
Regulations, approved by SECOM Resolution No. 25,839/96.

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3.3. From 2006 to the date mentioned in paragraph 3.2. above, the LICENSEE
shall meet its SERVICE GOALS, pursuant to the detailed list included in Exhibit
1 hereof.

3.4. The LICENSEE shall report to the CNC, on a yearly basis, the extent of
performance of SERVICE GOALS, as required under the General Service Quality
Regulations mentioned hereinabove, and, within the necessary advance notice,
any eventual adjustment requirements for well-founded reasons.

3.5. The CNC shall assess, on a yearly basis, the overall performance of the
new SERVICE GOALS established herein, pursuant to current laws.

4. REGULATORY FRAMEWORK

4.1. The PARTIES undertake to abide by and maintain the legal terms and
conditions established under the TRANSFER CONTRACT and current laws to this
date.

4.2. The NATIONAL EXECUTIVE POWER states that, in order to ensure the
predictability required in the telecommunications sector and taking into
account the background and telecommunications expertise of companies in this
sector, it undertakes to make an effort to consolidate an appropriate and
homogeneous REGULATORY FRAMEWORK that supplements and reinforces the
regulations applicable to the sector, based on the legal and technical aspects
that are the pillars of this industry.

4.3. In this sense, the NATIONAL EXECUTIVE POWER undertakes to make an effort
to create a stable legal framework in the future to help regulate the sector
activities. For such purpose, it shall submit a bill to the LEGISLATIVE BRANCH,
which shall include at least the following contents:

1. Ensuring stability and enforceability of the sector regulatory framework.

2. Preserving and ensure legal stability to foster service development.

3. Consolidating public welfare in the country.

4. Ensuring proper service provision.

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5. Ensuring effective protection of user and consumer rights.

6. Encouraging private sector involvement in telecommunications.

7. Promoting a sustainable evolution of technological development in the
sector, providing for both wired and wireless connectivity.

8. Developing the national telecommunications industry.

9. Promoting job creation.

10. Encouraging investment undertakings to ensure sustainable development of
telecommunications infrastructure abiding by the principle of technological
freedom.

11. Setting forth equal treatment for all providers.

5. SUSPENSION AND DISMISSAL OF ACTIONS BY THE LICENSEE AND ITS SHAREHOLDERS.
CONTRACTUAL BREACH EVENTS. EFFECTS.

5.1. SUSPENSION OF ACTIONS

5.1.1. Within THIRTY (30) days after the Public Hearing called by the UNIREN to
       discuss this MEMORANDUM OF UNDERSTANDING, the LICENSEE and its
       shareholders shall suspend for TWO HUNDRED AND TEN (210) business days
       any and all claims, administrative proceedings or complaints filed or in
       process, before administrative or arbitral bodies or courts of law in
       our country or abroad, which are grounded on or related to events
       occurring or measures taken as a result of the emergency situation
       declared under Law No. 25,561, regarding the TRANSFER CONTRACT and the
       LICENSE.

       The suspension shall include any issues related to claim procedures, as
       well as any issues raised in connection with substantial aspects.

5.1.2. To this effect and within the term set in paragraph 5.1.1, the LICENSEE
       shall submit any documents, duly certified and notarized as true and
       valid, providing evidence of the express suspension of actions under the
       terms established in the preceding item.

5.1.3. The LICENSEE undertakes to obtain and submit similar suspension
       documents from the shareholders representing at least NINETY EIGHT
       PERCENT (98%) of the capital stock.

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5.1.4. Failure to submit the documents evidencing the suspension of actions by
       the LICENSEE or its shareholders will prevent the NATIONAL EXECUTIVE
       POWER from executing the MEMORANDUM OF AGREEMENT until correction
       thereof.

5.1.5. Together with the suspension of actions, the LICENSEE and the
       shareholders representing at least NINETY EIGHT PERCENT (98%) of the
       capital stock shall submit a document undertaking to refrain from filing
       claims, administrative proceedings or complaints, before administrative
       or arbitral bodies or courts of law in our country or abroad, which are
       grounded on or related to events occurring or measures taken as a result
       of the emergency situation declared under Law No. 25,561, regarding the
       TRANSFER CONTRACT and the LICENSE while the suspension agreed upon is
       effective.

5.2. WAIVER OF RIGHTS AND DISMISSAL OF ACTIONS

5.2.1. Within THIRTY (30) days after the NATIONAL EXECUTIVE POWER ratifies the
       MEMORANDUM OF AGREEMENT, the LICENSEE and the shareholders representing
       at least NINETY EIGHT PERCENT (98%) of the capital stock, should fully
       and expressly waive every right they may eventually invoke, and abandon
       all actions filed or in process, grounded on or related to events
       occurring or measures taken as a result of the emergency situation
       declared under Law No. 25,561, regarding the TRANSFER CONTRACT and the
       LICENSE.

       Such waiver or abandonment shall include any rights and actions which
       may be invoked or filed before administrative or arbitral bodies or
       courts of law, in our country or abroad. Any expenses, court costs and
       attorney's fees resulting from the provisions of items 5.1. and 5.2.
       shall be borne by each PARTY, to the extent applicable to each of them.

       Under no circumstance may the waivers provided herein be construed as
       waivers by the LICENSEE to any rights it may be entitled to for
       circumstances that differ from those provided for under this clause and
       that may occur in the future.

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5.2.2. To this effect, the LICENSEE shall furnish any documents, duly certified
       and notarized as true and valid, providing full and express evidence of
       its waiver of the right and the abandonment of any actions as
       established under the preceding paragraph.

5.2.3. The LICENSEE undertakes to obtain and submit similar instruments for the
       waiver of rights and abandonment of actions by the shareholders
       representing at least NINETY EIGHT PERCENT (98%) of the capital stock.

5.2.4. In the event that the term set in item 5.2.1. ends and the waiver and
       abandonment documents from the LICENSEE and the shareholders
       representing at least NINETY EIGHT PERCENT (98%) of the capital stock
       fail to be furnished, the NATIONAL GOVERNMENT may suspend the
       enforcement of the MEMORANDUM OF AGREEMENT. In such event, the NATIONAL
       GOVERNMENT shall provide notice to the LICENSEE demanding to furnish the
       waiver or abandonment documents agreed upon within FIFTEEN
       (15) additional days.

5.2.5. Upon expiration of the warning notice term and if the LICENSEE or its
       shareholders fail to furnish the waiver or abandonment documents agreed
       upon, the NATIONAL GOVERNMENT may give notice of termination of the
       MEMORANDUM OF AGREEMENT for cause attributable to the LICENSEE and
       proceed to revoke or declare the LICENSE expired for breach by the
       LICENSEE and/or its shareholders. In such event, the Current Regulatory
       Framework shall apply.

5.2.6. In the event that, even if the suspension and waiver or abandonment
       documents provided for in the preceding paragraphs were submitted, any
       proceeding, claim, petition or complaint were filed by the LICENSEE or
       its shareholders before administrative or arbitral bodies or courts of
       law in our country or abroad, grounded on or related to events occurring
       or measures taken as a result of the emergency situation declared under
       Law No. 25,561 regarding the TRANSFER CONTRACT, the NATIONAL GOVERNMENT
       shall require that the claim

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       filed be immediately withdrawn or that such action be abandoned within
       FIFTEEN (15) days.

5.2.7. In the event that said term elapses and the claim fails to be withdrawn
       or the action filed fails to be abandoned, the NATIONAL GOVERNMENT may
       give notice of termination of the MEMORANDUM OF AGREEMENT for cause
       attributable to the LICENSEE and proceed to revoke or declare the
       LICENSE expired pursuant to the Current Regulatory Framework.

6. EQUAL TREATMENT

In the context of the contract renegotiation process, currently framed by the
Laws No. 25,561, No. 25,790, No. 25,820 and No. 25,972, and Decree No. 311/03,
the NATIONAL GOVERNMENT undertakes to treat the LICENSEE in a way that is
reasonably similar and equal to the treatment given to other telecommunications
companies involved in said process.

7. INCOMING INTERNATIONAL CALLS AT THE LOCAL AREA

For the purposes of matching up the termination value of incoming international
calls with international standards and improving the balance of foreign
currency flowing into the country as a result of the use of international
telecommunications services, the application of a correction factor is hereby
approved in the way and to the extent specified in Exhibit II included herein.

8. TIME BAND INTEGRATION

After the MEMORANDUM OF UNDERSTANDING FOR RENEGOTIATION becomes effective, the
time band for reduced rate time for local and domestic and international long
distance calls shall become integrated. As a result of such integration, the
reduced rate time band for the abovementioned call categories shall be Mondays
through Fridays from 10:00 PM to 8:00 AM, Saturdays from 12:00 AM to 8:00 AM
and from 1:00 PM until midnight, and Sundays and national holidays 24 hours a
day (Exhibit III).

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9. MEMORANDUM OF UNDERSTANDING FOR RENEGOTIATION

9.1. The condition precedent for the execution of the PROTOCOL OF RENEGOTIATION
is to comply with the procedures and stages provided for by Law No. 25,790,
Decree No. 311/03, and Joint Resolution No. 188/2003 and 44/2003 issued by the
Ministry of Economy and Production and the Ministry Planning, Public Investment
and Services.

9.2. For such purpose, this MEMORANDUM OF UNDERSTANDING shall be subject to a
PUBLIC HEARING procedure in order to encourage involvement by users and the
Community at large, taking into account that the terms and conditions hereof
are the consensus basis to further the execution of the PROTOCOL OF
RENEGOTIATION.

9.3. The conditions required for the PROTOCOL OF RENEGOTIATION to become
effective are as follows:

9.3.1. Compliance with the procedures provided under Law No. 25,790, Decree
No. 311/03 and Joint Resolution No. 188/2003 and 44/2003 issued by the Ministry
of Economy and Production and the Ministry Planning, Public Investment and
Services.

9.3.2. Submission of the instruments, duly certified and notarized, as provided
under paragraph 5.1. hereof regarding suspensions and commitments of any
actions filed by the LICENSEE and its shareholders.

9.3.3. Submission of the Minutes of the LICENSEE's Shareholders' Meeting
whereby the execution of the PROTOCOL OF RENEGOTIATION is approved and
authorized.

9.4. Upon full compliance with such requirements, the conditions to promote the
issue of a Decree by the National Executive Power NATIONAL EXECUTIVE
POWERratifying the PROTOCOL OF RENEGOTIATION shall be met and the provisions
therein shall become effective.

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In witness whereof, three (3) copies are signed, each of which shall be deemed
an original but all of which together shall constitute one and the same
document, in the place and on the date stated in the heading.


    /s/ Mario Eduardo Vazquez               /s/ Jorge G. Simeonoff
------------------------------------  -----------------------------------
      Mario Eduardo Vazquez                   Jorge G. Simeonoff
             Chairman                        Executive Secretary
                                             Utilities Contracts
                                       Renegotiation and Analysis Unit

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