##### Table of Contents

As filed with the Securities and Exchange Commission on April 14, 2014.







UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F





(Mark One)

| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013
|- | --------------------------------------------------------------------------------------------------------------------------------

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from                  to

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------------

Date of event requiring this shell company report

For the
transition period from                  to

Commission file number: 1-13464





TELECOM
ARGENTINA S.A.

(Exact name of Registrant as Specified in its charter)





Republic of Argentina

(Jurisdiction of incorporation or organization)

Alicia Moreau de Justo 50

(C1107AAB) - Buenos Aires

Argentina

(Address of
Principal Executive Offices)

Pedro Insussarry

(Tel: 54-11-4968-3743, Fax: 54-11-4968-3616, E-mail: pinsussa@ta.telecom.com.ar,

Alicia Moreau de Justo 50, 10th Floor, (C1107AAB), Buenos Aires, Argentina)

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:



|                                                                 |  |                                          
|---------------------------------------------------------------- |  | -----------------------------------------
|Title of Each Class                                              |  | Name of Each Exchange On Which Registered
|American Depositary Shares,
representing Class B Ordinary Shares |  | New York Stock Exchange                  
|Class B Ordinary Shares,
nominal value P$1.00 per share          |  | New York Stock Exchange*                 



|* | Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None





Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered
by the annual report.



|                                                   |  |  |             | 
|-------------------------------------------------- |  |  | ----------- | 
|Class A Ordinary Shares, nominal value P$1.00 each |  |  | 502,034,299 | 
|Class B Ordinary Shares, nominal value P$1.00 each |  |  | 466,857,868 | 
|Class C Ordinary Shares, nominal value P$1.00 each |  |  | 267,438     | 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.    Yes  x    No   ̈

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes   ̈    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                             |  |                        |  |                           
|---------------------------- |  | ---------------------- |  | --------------------------
|Large Accelerated Filer    x |  | Accelerated Filer     ̈ |  | Non-Accelerated Filer     ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:    US GAAP   ̈    International Financial Reporting Standards as issued by the International Accounting Standards
Board  x    Other   ̈

If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant
has elected to follow.    Item 17   ̈    Item 18   ̈

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x









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##### Table of Contents

TABLE OF CONTENTS







|                                      |  |                                                                              |   |  |     | 
|------------------------------------- |  | ---------------------------------------------------------------------------- | - |  | --- | 
|                                      |  | Page                                                                         |  
|PRESENTATION OF FINANCIAL INFORMATION |  |                                                                              | 1 | 
|FORWARD-LOOKING STATEMENTS            |  |                                                                              | 3 | 
|GLOSSARY OF TERMS                     |  |                                                                              | 5 | 
|                                      | 
|PART I                                |  |                                                                              |   | 
|                                      |  |                                                                             
|ITEM 1.                               |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |   |  | 13  | 
|ITEM 2.                               |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |   |  | 13  | 
|ITEM 3.                               |  | KEY INFORMATION                                                              |   |  | 13  | 
|ITEM 4.                               |  | INFORMATION ON THE COMPANY                                                   |   |  | 31  | 
|ITEM 4A.                              |  | UNRESOLVED STAFF COMMENTS                                                    |   |  | 66  | 
|ITEM 5.                               |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |   |  | 67  | 
|ITEM 6.                               |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |   |  | 115 | 
|ITEM 7.                               |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |   |  | 130 | 
|ITEM 8.                               |  | FINANCIAL INFORMATION                                                        |   |  | 139 | 
|ITEM 9.                               |  | THE OFFER AND LISTING                                                        |   |  | 146 | 
|ITEM 10.                              |  | ADDITIONAL INFORMATION                                                       |   |  | 150 | 
|ITEM 11.                              |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |   |  | 164 | 
|ITEM 12.                              |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |   |  | 165 | 
|                                      | 
|PART II                               |  |                                                                              |   | 
|                                      |  |                                                                             
|ITEM 13.                              |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |   |  | 166 | 
|ITEM 14.                              |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |   |  | 166 | 
|ITEM 15.                              |  | CONTROLS AND PROCEDURES                                                      |   |  | 166 | 
|ITEM 16A.                             |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |   |  | 167 | 
|ITEM 16B.                             |  | CODE OF ETHICS                                                               |   |  | 167 | 
|ITEM 16C.                             |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |   |  | 168 | 
|ITEM 16D.                             |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |   |  | 169 | 
|ITEM 16E.                             |  | PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED PURCHASERS      |   |  | 169 | 
|ITEM 16F.                             |  | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                 |   |  | 170 | 
|ITEM 16G.                             |  | CORPORATE GOVERNANCE                                                         |   |  | 171 | 
|ITEM 16H.                             |  | MINE SAFETY DISCLOSURE                                                       |   |  | 171 | 
|                                      | 
|PART III                              |  |                                                                              |   | 
|                                      |  |                                                                             
|ITEM 17.                              |  | FINANCIAL STATEMENTS                                                         |   |  | 172 | 
|ITEM 18.                              |  | FINANCIAL STATEMENTS                                                         |   |  | 172 | 
|ITEM 19.                              |  | EXHIBITS                                                                     |   |  | 172 | 



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##### Table of Contents

PRESENTATION OF FINANCIAL INFORMATION

Telecom Argentina S.A. is a company incorporated under the laws of Argentina. As used in this Annual Report on Form 20-F (the Form
20-F or Annual Report), the terms the Company, Telecom, Telecom Group, we, us, and our refer to Telecom Argentina S.A. and its consolidated subsidiaries as of
December 31, 2013. Unless otherwise stated, references to the financial results of Telecom are to the consolidated financial results of Telecom Argentina and its consolidated subsidiaries. The Telecom Group is engaged in the
provision of fixed and mobile telecommunications services.

The term Telecom Argentina refers to Telecom Argentina S.A.
excluding its subsidiaries, as of December 31, 2013, Telecom Personal S.A., Núcleo S.A., Springville S.A. (Springville), Telecom Argentina USA Inc. (Telecom Argentina USA), and Micro Sistemas S.A. Telecom
Argentina is engaged in the provision of fixed telecommunication services in Argentina. The terms Telecom Personal or Personal refer to Telecom Personal S.A., our subsidiary engaged in the provision of mobile
telecommunication services in Argentina. The term Núcleo refers to Núcleo S.A., Personals consolidated subsidiary engaged in the provision of mobile telecommunication services in Paraguay.

Our Consolidated Financial Statements as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011, and
the notes thereto (the Consolidated Financial Statements) are set forth on pages F-1 through F-77 of this Annual Report.

Our
Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and have been approved by resolution of the
Board of Directors meeting held on February 27, 2014.

Our Consolidated Financial Statements as of December 31, 2013 and
2012 and for the years ended December 31, 2013, 2012 and 2011, as included in this report, have been audited by our independent registered public accounting firm.

Telecom Argentina and our Argentine subsidiaries maintain their accounting records and prepare their financial statements in Argentine Pesos,
which is their functional currency. Our subsidiaries Núcleo, Telecom Argentina USA and Springville, however, maintain their accounting records and prepare their financial statements in Guaraníes, U.S. dollars and Uruguayan pesos,
respectively. Our Consolidated Financial Statements include the results of these subsidiaries translated into Argentine Pesos. Assets and liabilities are translated at year-end exchange rates and revenue and expense accounts at average exchange
rates for the year.

Certain financial information contained in this Annual Report has been presented in U.S. dollars. This Annual Report
contains translations of various Argentine Peso amounts into U.S. dollars at specified rates solely for convenience of the reader. You should not construe these translations as representations by us that the Argentine Peso amounts actually represent
these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Except as otherwise specified, all references to US$, U.S. dollars or dollars are to United States dollars and references
to P$, Argentine Pesos or pesos are to Argentine Pesos. Unless otherwise indicated, we have translated the Argentine Peso amounts using a rate of P$6.52 = US$1.00, the U.S. dollar ask rate published by the Banco
de la Nación Argentina (Argentine National Bank) on December 31, 2013. During the first three months of 2014, the exchange rate of the Argentine peso suffered a devaluation of approximately 23% against the U.S. dollar. On April 11,
2014, the exchange rate was P$8.00 = US$1.00. As a result of fluctuations in the Argentine peso/U.S. dollar exchange rate, the exchange rate at such date may not be indicative of current or future exchange rates. Consequently, these translations
should not be construed as a representation that the peso amounts represent, or have been or could be converted into, U.S. dollars at that or any other rate. See Item 3Key InformationExchange Rates, and Item 3Key
Information Risk FactorsRisks Relating to ArgentinaDevaluation of the peso may adversely affect our results of operations, our capital expenditure program and the ability to service our liabilities and transfer funds abroad.

For the purposes of this Annual Report, billion means a thousand million.



|                                      |  |                       
|------------------------------------- |  | ----------------------
|PRESENTATION OF FINANCIAL
INFORMATION |  | TELECOM ARGENTINA
S.A.



1



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##### Table of Contents

Certain amounts and ratios contained in this Annual Report (including percentage amounts) have
been rounded up or down to facilitate the summation of the tables in which they are presented. The effect of this rounding is not material. These rounded amounts are also included within the text of this Annual Report.

The contents of our website and other websites referred to herein are not part of this Annual Report.

This Annual Report contains certain terms that may be unfamiliar to some readers. You can find a glossary of these terms on page 3 of this
Annual Report.



|                                      |  |                       
|------------------------------------- |  | ----------------------
|PRESENTATION OF FINANCIAL
INFORMATION |  | TELECOM ARGENTINA
S.A.



2



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##### Table of Contents

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Certain information
included in this Annual Report contains information that is forward-looking, including, but not limited to:



| |  |  | our expectations for our future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the implementation of our business strategy;
| | - |  | --------------------------------------------



| |  |  | the discussion of the changing dynamics and growth in the telecommunications market;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | our outlook for new and enhanced technologies;
| | - |  | ----------------------------------------------



| |  |  | the effects of operating in a competitive environment;
| | - |  | ------------------------------------------------------



| |  |  | industry conditions;
| | - |  | --------------------



| |  |  | the outcome of certain legal proceedings;
| | - |  | -----------------------------------------



| |  |  | the impact of the emergency laws and subsequent related laws enacted by the Argentine government;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | regulatory and legal developments; and
| | - |  | --------------------------------------



| |  |  | other factors identified or discussed under Item 3Key InformationRisk Factors.
| | - |  | ----------------------------------------------------------------------------------

This Annual Report contains certain forward-looking statements and information relating to the Telecom Group that are based on current
expectations, estimates and projections of our Management and information currently available to the Telecom Group. These statements include, but are not limited to, statements made in Item 3Key InformationRisk Factors,
Item 5Operating and Financial Review and Prospects under the captions Critical Accounting Policies and Trend Information, Item 8Financial InformationLegal Proceedings and other
statements about the Telecom Groups strategies, plans, objectives, expectations, intentions, capital expenditures, and assumptions and other statements contained in this Annual Report that are not historical facts. When used in this document,
the words anticipate, believe, estimate, expect, intend, plan, project, will and should and other similar expressions are generally intended
to identify forward-looking statements.

These statements reflect the current views of the Management of Telecom Argentina S.A. (the
Company) with respect to future events. They are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions
as to future events that may not prove to be accurate.

Many factors could cause actual results, performance or achievements of the
Telecom Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include, among others:



| |  |  | our ability to successfully implement our business strategy;
| | - |  | ------------------------------------------------------------



| |  |  | our ability to introduce new products and services that enable business growth;
| | - |  | -------------------------------------------------------------------------------



| |  |  | uncertainties relating to political and economic conditions in Argentina;
| | - |  | -------------------------------------------------------------------------



| |  |  | inflation, the devaluation of the peso and exchange rate risks;
| | - |  | ---------------------------------------------------------------



| |  |  | restrictions on the ability to exchange pesos into foreign currencies and transfer funds abroad;
| | - |  | ------------------------------------------------------------------------------------------------



|                           |  |                       
|-------------------------- |  | ----------------------
|FORWARD-LOOKING STATEMENTS |  | TELECOM ARGENTINA
S.A.



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| |  |  | the final results of the contract renegotiation process with the Argentine government regarding the adjustment to our regulated rates in the fixed services;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the creditworthiness of our actual or potential customers;
| | - |  | ----------------------------------------------------------



| |  |  | nationalization, expropriation and/or increased government intervention in companies;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | technological changes;
| | - |  | ----------------------



| |  |  | the lack of additional mobile frequency bands;
| | - |  | ----------------------------------------------



| |  |  | the impact of legal or regulatory matters, changes in the interpretation of current or future regulations or reform and changes in the legal or regulatory environment in which we operate; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the effects of increased competition.
| | - |  | -------------------------------------

Many of these factors are macroeconomic in nature and
therefore beyond the control of the Companys Management. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated,
believed, estimated, expected, intended, planned or projected. The Company does not intend and does not assume any obligation to update the forward-looking statements contained in this Annual Report.

These forward-looking statements are based upon a number of assumptions and other important factors that could cause our actual results,
performance or achievements to differ materially from our future results, performance or achievements expressed or implied by such forward-looking statements. Readers are encouraged to consult the Companys filings made on Form 6-K, which are
periodically filed with or furnished to the United States Securities and Exchange Commission.



|                           |  |                       
|-------------------------- |  | ----------------------
|FORWARD-LOOKING STATEMENTS |  | TELECOM ARGENTINA
S.A.



4



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##### Table of Contents

GLOSSARY OF TERMS

The following explanations are not provided as or intended to be technical definitions, but only to assist the general reader to understand
certain terms used in this Annual Report.

2G (second-generation mobile system): Second-generation protocols using digital encoding
and including GSM, D-AMPS (TDMA) and CDMA. These protocols support high bit rate voice and limited data communications. 2G networks technology offers auxiliary services such as data, fax and SMS. Most 2G protocols offer different levels of
encryption.

3G (third-generation mobile system): Third-generation mobile service, designed to provide high speed data, always-on
data access, and greater voice capacity. 3G networks allow the transfer of both voice data services (telephony, messaging) and non-voice data (such as downloading Internet information, exchanging email, and instant messaging). The high data speeds,
measured in Mbps, are significantly higher than 2G, and 3G networks technology enable full motion video, high-speed Internet access and video-conferencing. 3G technology standards include UMTS, based on WCDMA technology (quite often the two terms
are used interchangeably), and CDMA2000.

Access charge: Amount charged per minute by national operators for the use of their
network by operators of other networks.

ADS: Telecom Argentinas American Depositary Share, listed on the New York Stock
Exchange, each representing 5 Class B Shares.

ADSL (Asymmetric Digital Subscriber Line): A type of digital subscriber line
technology (DSL); a data communications technology that enables faster data transmission over copper lines than a conventional voiceband modem can provide.

AFIP (Administración Federal de Ingresos Públicos): The Argentine federal tax authority.

AFJP (Administradoras de Fondos de Jubilaciones y Pensiones): Private entities that were in charge of managing the funds of the Private
Pension and Retirement System established by Law No. 24,241, until its nationalization in November 2008 pursuant to Law No. 26,425.

AMBA (Area Múltiple Buenos Aires): An area comprising the city of Buenos Aires and the greater Buenos Aires area. Telephone
calls within the area are considered local.

Analog: A mode of transmission or switching that is not digital, e.g., the
representation of voice, video or other not in digital form.

ANSES: The Argentine administrator of social security pension and
retirement benefits.

Argentina: Republic of Argentina.

Argentine Bankruptcy Law: Law No. 24,522, as amended.

Argentine GAAP: Generally Accepted Accounting Principles in Argentina, which we used before the adoption of IFRS.

ARBU (Average Revenue Billed per User): Calculated by dividing total monthly basic charges and traffic revenue excluding public
telephony revenue by weighted-average number of fixed lines in service during the period.

ARPU (Average Revenue per User):Calculated by dividing total revenue excluding mainly handset, out collect (wholesale) roaming, cell site rental and activation fee revenue by weighted-average number of subscribers during the period.

ATM (Asynchronous Transfer Mode): A Broadband switching technology that permits the use of one network for different kinds of
information (e.g., voice, data and video).



|                  |  |                       
|----------------- |  | ----------------------
|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
S.A.



5



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Backbone: Portion of telecommunication network with the highest traffic intensity and from
which the connections for services in the local areas depart.

Basic telephone services:The supply of fixed telecommunications
links that form part of the public telephone network, or are connected to such network, and the provision of local and long-distance telephone service (domestic and international).

BCBA (Bolsa de Comercio de Buenos Aires): The Buenos Aires Stock Exchange.

BCRA (Banco Central de la República Argentina): The Central Bank of Argentina.

Broadband services or Broadband:Services characterized by a transmission speed of 2 Mbps or more. These services include interactive
services such as videotelephone/videoconferencing (both point-to-point and multipoint); videomonitoring; interconnection of local networks; file transfer; high-speed fax; e-mail for moving images or mixed documents; Broadband videotex; video on
demand and retrieval of sound programs or fixed and moving images.

Broadcast: Simultaneous transmission of information to all
nodes and terminal equipment of a network.

Carrier:Company that makes available the physical telecommunication network.

CAT:Compañía Argentina de Teléfonos S.A.

CDMA (Code Division Multiple Accesses): A digital wireless technology used in radio communication for transmission between a mobile
handset and a radio base station. It enables the simultaneous transmission and reception of several messages, each of which has a coded identity to distinguish it from the other messages.

Cell: Geographical portion of the territory covered by a base transceiver station: 850 MHz/1900 MHz.

Cellular: A technique used in mobile radio technology to use the same spectrum of frequencies in one network multiple times. Low power
radio transmitters are used to cover a cell (i.e., a limited area) so that the frequencies in use can be reused without interference for other parts of the network.

Channel: The portion of a communications system that connects a source to one or more destinations. Also called circuit, line, link or
path.

CNC (Comisión Nacional de Comunicaciones):The Argentine National Communications Commission.

CNDC (Comisión Nacional de Defensa de la Competencia): Argentine Antitrust Commission.

CNV (Comisión Nacional de Valores): The Argentine National Securities Commission.

Convertibility Law: Law No. 23,928 and its Regulatory Decree No. 529/91. The Convertibility Law fixed the exchange rate at
one peso per U.S. dollar during the period from April 1, 1991 through January 6, 2002. The Convertibility Law was partially repealed on January 6, 2002 by the enactment of the Public Emergency Law.

CPP (Calling Party Pays): The system whereby the party placing a call to a mobile handset rather than the mobile subscriber pays for
the air time charges for the call.

D-AMPS (Digital-Advanced Mobile Phone Service): It is a digital version of AMPS (Advanced
Mobile Phone Service), the original analog standard for mobile telephone service in the United States.

Digital: A mode of
representing a physical variable such as speech using digits 0 and 1 only. The digits are transmitted in binary form as a series of pulses. Digital networks are rapidly replacing the older analog ones. Digital networks allow for higher capacity and
higher flexibility through the use of computer-related technology for the transmission and manipulation of telephone calls. Digital systems offer lower noise interference and can incorporate encryption as a protection from external interference.



|                  |  |                       
|----------------- |  | ----------------------
|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
S.A.



6



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##### Table of Contents

DWDM (Dense Wavelength Division Multiplexing): Technology for multiplying and transmitting
different wavelengths along a single optical fiber contemporaneously.

EDGE (Enhanced Data for GSM Evolution):Technology that
increases the data transmission rate of the GPRS standard.

ENTel (Empresa Nacional de Telecomunicaciones):National
Telecommunications Company which operated the telecommunications system in Argentina prior to the Transfer Date.

FCR: France
Cables et Radio S.A.

February Agreement: An agreement entered into on February 28, 1992 and subsequently ratified by Decree
No. 506/92 between the Argentine government and Telecom Argentina. This agreement provides for the reduction of domestic long-distance rates from their then-current level. The reduction became effective on May 1, 1992.

Fiber Optic: A transmission medium that permits extremely high capacities. It consists of a thin strand of glass that provides a
pathway along which waves of light can travel for telecommunications purposes.

Flat rate:The rate applied by providers to users
accessing the internet. It is usually a fixed monthly rate for a subscription to a specific Internet Service Provider, aside from the number of connection hours to the internet.

Frame Relay: A data transmission service using fast protocols based on direct use of transmission lines.

Free Pulses:The number of Free Pulses included in the monthly basic charge before the issuance of Decree No. 92/97.

FTT Home, FTT Curb, FTT (Fiber to the ):It is the term used to indicate any network architecture that uses fiber optic
cables in partial or total substitution of traditional copper cables used in telecommunications networks. The various technological solutions differ in the point of the distribution network where the fiber connection is made, with respect to the
end-users location. In the case of FTT Curb (Fiber to the Curb or Fiber to the Cabinet), the fiber connection reaches the equipment (distribution cabinet) located on the pavement, from where copper connections are run to the customer; in the
case of FTT Home (Fiber to the Home), the fiber connection terminates inside the customer premises.

GDP:Gross Domestic Product.

GPRS (General Packet Radio Service): An enhanced second-generation mobile technology used to transmit data over mobile networks.
GPRS transmits and receives packets of data in bursts instead of using continuous open radio channels, and it is used to add faster data transmission speed to GSM networks. GPRS is packet-based rather than circuit-based technology.

GSM (Global System for Mobile Communications): A standard for digital mobile technology used worldwide, which works on 900 MHz and
1,800 MHz band.

HSPA (High-Speed Packet Access): Enhanced third-generation mobile telephony communications protocol which allows
networks based on UMTS to have higher data transfer speeds and capacity.

HSPA+: Evolved HSPA that uses the spectrum more
efficiently, allowing for higher peak data rates in data transmission.

IASB:International Accounting Standards Board.



|                  |  |                       
|----------------- |  | ----------------------
|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
S.A.



7



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##### Table of Contents

ICT (Information and communication(s) technology): Broad area concerned with
information technology, telecommunications networking and services and other aspects of managing and processing information, especially in large organizations.

IFRS: International Financial Reporting Standards as issued by the International Accounting Standards Board.

INDEC (Instituto Nacional de Estadísticas y Censos):The Argentine National Statistics and Census Institute.

Interactive:Allowing the user to change some aspect of the program.

Internet: The worlds best-known data network. Initially used by the U.S. Department of Defense, the Internet now provides an
interface for networks based on different technologies (LANs, WANs, data networks, etc.), but with the use of the TCP/IP protocol platform.

IP (Internet Protocol):A set of communications protocols for exchanging data over the Internet.

IPTV (Internet Protocol Television): The service provides the distribution of television channels over Internet connections using the
IP protocol. More than just duplicating a distribution means, IPTV enables interactive services so that the viewer can interact with the show as it is broadcast.

ISP (Internet Service Provider):A vendor who provides access to the Internet and World Wide Web.

Law No. 25,561: Ley de Emergencia Económica y Reforma del Régimen Cambiario: See Public Emergency Law.

List of Conditions: The Privatization Regulations, including the Pliego de Bases y Condiciones, was approved by Decree
No. 62/90, as amended. Pursuant to the List of Conditions, Telecom Argentina was required to comply with rate regulations and meet certain minimum annual standards regarding the expansion of its telephone system and improvements in the quality
of its service to maintain and extend the exclusivity of its non-expiring license to provide fixed-line public telecommunications services and Basic telephone services in the northern region of Argentina. After the market was opened to competition,
the outstanding obligations that continue in force are the rate regulations and those related to the quality of service; the obligations related to the expansion of the network are no longer required.

Local Loop: Copper wire-couple, through which the telephone connection reaches users; it is the foundation of traditional telephone
lines and it is often called last mile.

Micro Sistemas:Micro Sistemas S.A.

MMS (Mobile Multimedia Services): Represent an evolution of the SMS and the Enhanced Messaging Service (EMS) using various
mono-medial elements (text, design, photos, video-clips and audio), which are synchronized and combined allowing them to be packed together and sent to GSM-GPRS platforms.

Mobile service: A mobile telephone service provided by means of a network of interconnected low-powered base stations, each of which
covers one small geographic cell within the total cellular system service area.

Modem:Modulator/Demodulator. A device that
modulates digital data to allow their transmission on analog channels, generally consisting of telephone lines.

MPLS-TP:Functionality and Management coincident with the operation of circuit-oriented transmission networks.

MPM: Best maintenance
practices methodology.



|                  |  |                       
|----------------- |  | ----------------------
|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
S.A.



8



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##### Table of Contents

Multimedia:A service involving two or more communications media (e.g., voice, video,
text, etc.) and hybrid products created through their interaction.

NDF (Non Deliverable Forward): A generic term for a set of
derivatives that covers national currency transactions including foreign exchange forward swaps, cross currency swaps and coupon swaps in nonconvertible or highly restricted currencies. The common characteristics of these contracts are that they
involve no exchange of principal, are fixed at a predetermined price and are typically settled in U.S. dollars (or sometimes in Euros) at the prevailing spot exchange rate taken from an agreed source, time, and future date.

Network: An interconnected collection of elements. In a telephone network, these consist of switches connected to each other and to
customer equipment. The transmission equipment may be based on fiber optic or metallic cable or point-to-point radio connectors.

NGN
(Next Generation Networks): A packet-based network able to provide services including telecommunication services and able to make use of multiple Broadband, QoS (Quality of Service)-enabled transport technologies and in which service-related
functions are independent from underlying transport-related technologies.

Node: Topological network junction, commonly a switching
center or station.

Nortel: Nortel Inversora S.A., the parent company of Telecom Argentina S.A.

November Agreement: An agreement between Telecom Argentina and the Argentine government providing for rates to be dollar-based and, at
the election of each of Telecom Argentina and Telefónica, adjusted semiannually according to the U.S. consumer price index. The November Agreement was ratified by Decree No. 2,585/91 and became effective on December 18, 1991.
Subsequently, in accordance with the Public Emergency Law, these rates were pesified at the exchange rate of US$1.00 = P$1.00. See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentRates.

Optical fiber: Thin glass, silica or plastic wires, building the infrastructure base for data transmission. An optical fiber cable
contains several individual fibers, and each of them is capable of driving a signal (light impulse) at unlimited bandwidth. Optical fibers are usually employed for long-distance communication: they can transfer heavy data loads, and the
signal reaches the recipient, protected from possible disturbances along the way. The driving capacity of optical fibers is higher than the traditional cable ones.

Outsourcing: Hiring outsiders to perform various telecommunications services, which may include planning, construction, or hosting of a
network or specific equipment belonging to a company.

PCS (Personal Communications Service): A mobile communications service with
systems that operate in a manner similar to cellular systems.

PEN (Poder Ejecutivo Nacional): The executive branch of the
Argentine government.

Penetration: The measurement of the take-up of services. As of any date, the penetration is calculated by
dividing the number of subscribers by the population to which the service is available and expressed as a percentage.

Personal:
Telecom Personal S.A.

Pesification: Modification of the exchange rate by the Argentine government pursuant to the Public Emergency
Law.

Platform:The total input, including hardware, software, operating equipment and procedures, for producing (production
platform) or managing (Management platform) a particular service (service platform).



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|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
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##### Table of Contents

Presubscription of Long-Distance Service: The selection by the customer of international
and domestic long-distance telecommunications services from a long-distance telephone service operator.

Price Cap: Rate regulation
mechanism applied to determine rate discounts based on a formula made up by the U.S. Consumer Price Index and an efficiency factor. The mentioned factor was established initially in the List of Conditions and afterwards in different regulations by
the SC.

Privatization Regulations: The Argentine governments privatization program as set forth in the State Reform Law
approved in August 1989 and subsequent decrees.

Public Emergency Law: The Public Emergency and Foreign Exchange System Reform Law
No. 25,561 adopted by the Argentine government on January 6, 2002, as amended by Law No. 25,790, Law No. 25,820, Law No. 25,972, Law No. 26,077, Law No. 26,204, Law No. 26,339, Law No. 26,456, Law
No. 26,563, Law No. 26,729 and Law No. 26,896. Among others, the Public Emergency Law grants the executive branch of the Argentine government the power to set the exchange rate between the peso and foreign currencies and to issue
regulations related to the foreign exchange market and to renegotiate public service agreements.

Pulse: Unit on which the rate
structure of the regulated fixed line services is based.

Rate Agreement: The November Agreement, as supplemented by the February
Agreement. The Rate Agreement, among other things, permits Telecom Argentina to effect aggregate rate reductions required pursuant to the List of Conditions by lowering rates for some or all categories of service, provided that the net
reductions meet applicable targets.

Rate Rebalancing: The Rate Rebalancing established by Decree No. 92/97, of
January 31, 1997, which provides for a significant reduction in domestic and international long-distance rates, an increase in basic telephone charges, the elimination of Free Pulses and an increase in urban rates.

Regulatory Bodies: Collectively, the SC and the CNC.

Roaming: A function that enables mobile subscribers to use the service on networks of operators other than the one with which they
signed their initial contract. The roaming service is active when a mobile device is used in a foreign country (included in the GSM network).

Satellite: Satellites are used, among other things, for links with countries that cannot be reached by cable to provide an alternative
to cable and to form closed user networks.

SC (Secretaría de Comunicaciones): The Argentine Secretary of Communications.

SCI (Secretaría de Comercio Interior): Secretary of Internal Commerce.

SDH (Synchronous Digital Hierarchy): A hierarchical set of digital transport structures, standardized for the transport of suitably
adapted payloads over physical transmission networks.

SEC: The Securities and Exchange Commission of the United States of America.

Service Provider:The party that provides end users and content providers with a range of services, including a proprietary,
exclusive or third-party service center.

SMS (Short Message Service):Short text messages that can be received and sent through
GSM-network connected mobile phones. The maximum text length is 160 alpha-numerical characters.

Sofora: Sofora Telecomunicaciones
S.A.

Springville: Springville S.A.

SRMC (Servicios de Radiocomunicaciones Móviles Celular): Mobile Cellular Radiocommunications Service.



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|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
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##### Table of Contents

STM (Servicio Telefónico Móvil): Mobile Telephone Service.

Switch: These are used to set up and route telephone calls either to the number called or to the next switch along the path. They may
also record information for billing and control purposes.

Synchronous:Type of data transmission in which there is permanent
synchronization between the transmitter and the receiver.

TDM (Time-Division Multiplexing):A type of digital (or rarely analog)
multiplexing in which two or more bit streams or signals are transferred apparently simultaneously as sub-channels in one communication channel, but are physically taking turns on the channel.

TDMA (Time Division Multiple Accesses):A technology for digital transmission of radio signals between, for example, a mobile handset
and a radio base station. TDMA breaks signals into sequential pieces of defined length, places each piece into an information conduit at specific intervals and then reconstructs the pieces at the end of the conduit.

Telco S.p.A.: A joint company made up of Assicurazioni Generali S.p.A., Intesa San Paolo S.p.A., Mediobanca S.p.A., Sintonia S.A. and
Telefónica, S.A. (of Spain).

Telecom Argentina USA: Telecom Argentina USA, Inc.

Telecom Italia: Telecom Italia S.p.A.

Telecom Italia Group: Telecom Italia and its consolidated subsidiaries.

Telefónica: Telefónica de Argentina S.A.

Telefónica de España: Telefónica, S.A. (of Spain).

Telintar: Telecomunicaciones Internacionales de Argentina Telintar S.A.

TLRD (Terminación Llamada Red Destino): Termination charges from third parties mobile networks.

Transfer Date: November 8, 1990, the date on which Telecom Argentina commenced operations upon the transfer from the Argentine
government of the telecommunications system in the northern region of Argentina that was previously owned and operated by ENTel.

UMTS
(Universal Mobile Telecommunications System):Third-generation mobile communication standard.

Unbundling:A process that
allows telephone carriers (other than Telecom Argentina) to lease the last part of the telephone loop that is to say, the copper wire-cable, connecting Telecom Argentina central station to the users home, by disconnecting the user from Telecom
Argentina terminals and connecting him/her to the telephone carriers terminals.

UNIREN (Unidad de Renegociación y
Análisis de Contratos de Servicios Públicos): Renegotiation and Analysis of Public Services Contracts Division.

Universal Service: The availability of Basic telephone service, or access to the public telephone network via different alternatives,
at an affordable price to all persons within a country or specified area.

Value Added Services (VAS): Services that
provide a higher level of functionality than the basic transmission services offered by a telecommunications network such as video streaming, Personal Video, Nube Personal (Cloud services), M2M (Machine to Machine
communication), social networks, Personal Messenger, content and entertainment (SMS subscriptions and content, games, music, etc), MMS and voice mail.

W de ArgentinaInversiones: W de ArgentinaInversiones S.L.

WAN (Wide Area Network): A private network that covers a wide geographic area using public telecommunications services.



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|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
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##### Table of Contents

Wi-Fi:A service for mobile Internet connection and high-speed access.

Wi-Max (Worldwide Interoperability for Microwave Access):A technology that allows mobile access to Broadband telecommunications
networks. It is defined by the Wi-Max Forum, a global consortium formed by major companies in the field of fixed and mobile telecommunications, which has the purpose to develop, test and promote the interoperability of systems.



|                  |  |                       
|----------------- |  | ----------------------
|GLOSSARY OF TERMS |  | TELECOM ARGENTINA
S.A.



12



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##### Table of Contents

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Selected Financial Data

The following
table presents our summary financial data for each of the years in the five-year period ended December 31, 2013.

The selected
consolidated income statement data for the years ended December 31, 2013, 2012 and 2011 and the selected consolidated financial position data as of December 31, 2013 and 2012 have been prepared in accordance with IFRS as issued by the IASB
(IFRS) and have been derived from our Consolidated Financial Statements included elsewhere in this Annual Report. The selected consolidated income statement data for the years ended December 31, 2010 and 2009 and the selected
consolidated financial position data as of December 31, 2011 and 2010 have been prepared in accordance with IFRS and have been derived from our consolidated financial statements as of December 31, 2011 and 2010 and for the years ended
December 31, 2011, 2010 and 2009 included in our Annual Report on Form 20-F for the year ended December 31, 2011, filed on April 30, 2012. The selected consolidated financial position data as of December 31, 2009 prepared in
accordance with IFRS have been derived from our consolidated financial statements as of December 31, 2010 and 2009 and for the years then ended included in our Annual Report on Form 20-F for the year ended December 31, 2010, filed on
June 29, 2011.

Our audited consolidated financial statements as of December 31, 2010 and for the year then ended were the first
annual audited financial statements that are fully compliant with IFRS. Before December 31, 2010, our consolidated financial statements were prepared in accordance with Argentine GAAP. Our financial statements as of December 31, 2009 and
for the year then ended, originally prepared in accordance with Argentine GAAP were adjusted to fully comply with IFRS, and all of our subsequent audited consolidated financial statements fully comply with IFRS.

The mandatory adoption of IFRS for public companies in Argentina was effective for fiscal years beginning January 1, 2012. Therefore, the
consolidated financial statements as of December 31, 2011 and 2010 for filing with the CNV were prepared in accordance with Argentine GAAP, which differs in certain respects from IFRS. According to the CNV regulations, financial statements
under IFRS for the years 2011 and 2010 were presented as additional information to the consolidated financial statements prepared under Argentine GAAP.

You should read the information below in conjunction with our Consolidated Financial Statements and the notes thereto, as well as
Presentation of Financial Information and Item 5Operating and Financial Review and Prospects.



|                                                          |  |                       
|--------------------------------------------------------- |  | ----------------------
|PART I  ITEM 3 KEY INFORMATION
 SELECTED FINANCIAL DATA |  | TELECOM ARGENTINA
S.A.



13



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##### Table of Contents

CONSOLIDATED SELECTED INCOME STATEMENT AND FINANCIAL POSITION DATA



|                                                                    |  |                                                       |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|------------------------------------------------------------------- |  | ----------------------------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------ | - |  |  | ------ | -
|                                                                    |  | 2013                                                  |         |   | 2012 |  |         | 2011 |  |  | 2010    |   |  | 2009 |       
|                                                                    |  | (P$ million, except per share and per ADS data in P$) |        
|INCOME STATEMENT DATA                                               |  |                                                       |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Total revenues and other income                                     |  |                                                       | 27,350  |   |      |  | 22,196  |      |  |  | 18,528  |   |  |      | 14,652 |   |  |  | 12,191 |  
|Operating expenses (without depreciation and amortization)          |  |                                                       | (19,786 | ) |      |  | (15,626 | )    |  |  | (12,535 | ) |  |      | (9,785 | ) |  |  | (8,043 | )
|Operating expensesdepreciation and amortization                    |  |                                                       | (2,873  | ) |      |  | (2,612  | )    |  |  | (2,158  | ) |  |      | (1,712 | ) |  |  | (1,545 | )
|Gain on disposal of PP&E and impairment of PP&E                     |  |                                                       | (173    | ) |      |  | 8       |      |  |  | 22      |   |  |      | 7      |   |  |  | 13     |  
|Operating income                                                    |  |                                                       | 4,518   |   |      |  | 3,966   |      |  |  | 3,857   |   |  |      | 3,162  |   |  |  | 2,616  |  
|Other, net (1)                                                      |  |                                                       | 528     |   |      |  | 229     |      |  |  | 80      |   |  |      | (137   | ) |  |  | (401   | )
|Income tax expense                                                  |  |                                                       | (1,792  | ) |      |  | (1,463  | )    |  |  | (1,395  | ) |  |      | (1,076 | ) |  |  | (798   | )
|Net income                                                          |  |                                                       | 3,254   |   |      |  | 2,732   |      |  |  | 2,542   |   |  |      | 1,949  |   |  |  | 1,417  |  
|Net income attributable to Telecom Argentina                        |  |                                                       | 3,202   |   |      |  | 2,685   |      |  |  | 2,513   |   |  |      | 1,935  |   |  |  | 1,405  |  
|Net income attributable to Noncontrolling Interest                  |  |                                                       | 52      |   |      |  | 47      |      |  |  | 29      |   |  |      | 14     |   |  |  | 12     |  
|                                                                    |  |                                                       |         |   |     
|Number of shares outstanding at year-end (in millions of shares)(2) |  |                                                       | 969     |   |      |  | 984     |      |  |  | 984     |   |  |      | 984    |   |  |  | 984    |  
|                                                                    |  |                                                       |         |   |     
|Net income per share (basic and diluted)(3)                         |  |                                                       | 3.27    |   |      |  | 2.73    |      |  |  | 2.55    |   |  |      | 1.97   |   |  |  | 1.43   |  
|Net income per ADS(4)                                               |  |                                                       | 16.35   |   |      |  | 13.64   |      |  |  | 12.76   |   |  |      | 9.83   |   |  |  | 7.14   |  
|Dividends per share(5)                                              |  |                                                       | 1.03    |   |      |  | 0.82    |      |  |  | 0.93    |   |  |      | 1.07   |   |  |  |       |  
|Dividends per ADS(6)                                                |  |                                                       | 5.11    |   |      |  | 4.10    |      |  |  | 4.65    |   |  |      | 5.35   |   |  |  |       |  
|                                                                    |  |                                                       |         |   |     
|FINANCIAL POSITION DATA                                             |  |                                                       |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Current assets                                                      |  |                                                       | 9,751   |   |      |  | 6,986   |      |  |  | 5,450   |   |  |      | 3,624  |   |  |  | 2,943  |  
|PP&E and intangible assets                                          |  |                                                       | 12,745  |   |      |  | 10,549  |      |  |  | 9,735   |   |  |      | 8,598  |   |  |  | 7,839  |  
|Other non-current assets                                            |  |                                                       | 634     |   |      |  | 274     |      |  |  | 134     |   |  |      | 101    |   |  |  | 77     |  
|Total assets                                                        |  |                                                       | 23,130  |   |      |  | 17,809  |      |  |  | 15,319  |   |  |      | 12,323 |   |  |  | 10,859 |  
|Current liabilities                                                 |  |                                                       | 9,050   |   |      |  | 5,883   |      |  |  | 5,519   |   |  |      | 4,510  |   |  |  | 4,201  |  
|Non-current liabilities                                             |  |                                                       | 2,029   |   |      |  | 1,768   |      |  |  | 1,635   |   |  |      | 1,302  |   |  |  | 1,061  |  
|Total liabilities                                                   |  |                                                       | 11,079  |   |      |  | 7,651   |      |  |  | 7,154   |   |  |      | 5,812  |   |  |  | 5,262  |  
|Total equity                                                        |  |                                                       | 12,051  |   |      |  | 10,158  |      |  |  | 8,165   |   |  |      | 6,511  |   |  |  | 5,597  |  
|Equity attributable to Telecom Argentina                            |  |                                                       | 11,783  |   |      |  | 9,959   |      |  |  | 8,021   |   |  |      | 6,404  |   |  |  | 5,509  |  
|Noncontrolling Interest                                             |  |                                                       | 268     |   |      |  | 199     |      |  |  | 144     |   |  |      | 107    |   |  |  | 88     |  
|                                                                    |  |                                                       |         |   |     
|Capital Stock                                                       |  |                                                       | 984     |   |      |  | 984     |      |  |  | 984     |   |  |      | 984    |   |  |  | 984    |  



|(1) | Other, net includes Other income from investments and Finance income and expenses.
|--- | ----------------------------------------------------------------------------------

|(2) | Number of ordinary shares outstanding as of December 31, 2013 (without including treasury shares).
|--- | --------------------------------------------------------------------------------------------------

|(3) | Calculated based on the weighted average number of ordinary shares outstanding during the period (978,939,079 shares).
|--- | ----------------------------------------------------------------------------------------------------------------------

|(4) | Calculated based on 195,787,816 ADSs, which is equivalent to the weighted average number of ordinary shares outstanding during the period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The 2013 dividend per share Argentina peso amount translated into U.S. dollars using the ask rate published by the Banco de la Nación Argentina (National Bank of Argentina) as of the date when dividends were
available, is US$0.16.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The 2013 dividend per ADS Argentina peso amount translated into U.S. dollars using the ask rate published by the Banco de la Nación Argentina (National Bank of Argentina) as of the date when dividends were
available, is US$0.79.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                          |  |                       
|--------------------------------------------------------- |  | ----------------------
|PART I  ITEM 3 KEY INFORMATION
 SELECTED FINANCIAL DATA |  | TELECOM ARGENTINA
S.A.



14



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##### Table of Contents

OTHER SELECTED DATA



|                                                |  |      |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|----------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                                                |  | 2013 |        |  | 2012 |  |        | 2011 |  |  | 2010   |  |  | 2009 |       
|Number of installed fixed lines (thousands)(1)  |  |      | 4,700  |  |      |  | 4,851  |      |  |  | 4,793  |  |  |      | 4,689  |  |  |  | 4,595  | 
|Number of fixed lines in service (thousands)(2) |  |      | 4,124  |  |      |  | 4,128  |      |  |  | 4,141  |  |  |      | 4,107  |  |  |  | 4,060  | 
|Fixed lines in service per 100 inhabitants(3)   |  |      | 20     |  |      |  | 21     |      |  |  | 21     |  |  |      | 21     |  |  |  | 21     | 
|Lines in service per employee                   |  |      | 375    |  |      |  | 371    |      |  |  | 373    |  |  |      | 379    |  |  |  | 366    | 
|ARBU (in P$/month) (national + international)   |  |      | 52.5   |  |      |  | 48.2   |      |  |  | 45.7   |  |  |      | 42.8   |  |  |  | 40.9   | 
|Fixed Internet access lines (thousands)         |  |      | 1,707  |  |      |  | 1,629  |      |  |  | 1,550  |  |  |      | 1,380  |  |  |  | 1,214  | 
|Arnet subscribers (thousands)                   |  |      | 1,687  |  |      |  | 1,622  |      |  |  | 1,540  |  |  |      | 1,377  |  |  |  | 1,184  | 
|ARPU/ADSL (access + ISP) (in P$/month)          |  |      | 124.7  |  |      |  | 102.3  |      |  |  | 87.0   |  |  |      | 76.1   |  |  |  | 66.7   | 
|Mobile subscribers in Argentina (thousands)     |  |      | 20,088 |  |      |  | 18,975 |      |  |  | 18,193 |  |  |      | 16,333 |  |  |  | 14,475 | 
|Subscribers at year-end per employee            |  |      | 3,897  |  |      |  | 3,612  |      |  |  | 3,774  |  |  |      | 3,738  |  |  |  | 3,810  | 
|ARPU (in P$/month)                              |  |      | 66.8   |  |      |  | 57.7   |      |  |  | 51.4   |  |  |      | 44.4   |  |  |  | 40.7   | 
|Mobile subscribers in Paraguay (thousands)(4)   |  |      | 2,420  |  |      |  | 2,301  |      |  |  | 2,149  |  |  |      | 1,878  |  |  |  | 1,806  | 
|Subscribers at year-end per employee            |  |      | 5,696  |  |      |  | 5,226  |      |  |  | 4,944  |  |  |      | 4,512  |  |  |  | 4,251  | 
|ARPU (in P$/month)                              |  |      | 34.6   |  |      |  | 27.5   |      |  |  | 26.4   |  |  |      | 22.2   |  |  |  | 18.8   | 
|Telecom Group Headcount(5)                      |  |      | 16,581 |  |      |  | 16,808 |      |  |  | 16,346 |  |  |      | 15,647 |  |  |  | 15,330 | 



|(1) | Reflects total number of lines available in Switches.
|--- | -----------------------------------------------------

|(2) | Includes lines customers, own usage, public telephony and ISDN channels.
|--- | ------------------------------------------------------------------------

|(3) | Corresponds to the Northern Region of Argentina.
|--- | ------------------------------------------------

|(4) | Includes Wi-Max Internet customers.
|--- | -----------------------------------

|(5) | Includes temporary employees.
|--- | -----------------------------

Exchange Rates

The following tables show, for the periods indicated, certain information regarding the exchange rates for U.S. dollars, expressed in nominal
pesos per dollar (ask price). See Item 10Additional InformationForeign Investment and Exchange Controls in Argentina.



|                                    |  |      |      |  |     |  |      |            |  |  |              |  |  |  |      | 
|----------------------------------- |  | ---- | ---- |  | --- |  | ---- | ---------- |  |  | ------------ |  |  |  | ---- | 
|                                    |  | High |      |  | Low |  |      | Average(1) |  |  | End ofPeriod | 
|Year Ended December 31, 2009        |  |      | 3.85 |  |     |  | 3.49 |            |  |  | 3.75         |  |  |  | 3.80 | 
|Year Ended December 31, 2010        |  |      | 3.99 |  |     |  | 3.84 |            |  |  | 3.92         |  |  |  | 3.98 | 
|Year Ended December 31, 2011        |  |      | 4.30 |  |     |  | 3.97 |            |  |  | 4.15         |  |  |  | 4.30 | 
|Year Ended December 31, 2012        |  |      | 4.92 |  |     |  | 4.30 |            |  |  | 4.55         |  |  |  | 4.92 | 
|Year Ended December 31, 2013        |  |      | 6.52 |  |     |  | 4.98 |            |  |  | 5.55         |  |  |  | 6.52 | 
|Month Ended October 31, 2013        |  |      | 5.91 |  |     |  | 5.80 |            |  |  | 5.85         |  |  |  | 5.91 | 
|Month Ended November 30, 2013       |  |      | 6.14 |  |     |  | 5.93 |            |  |  | 6.02         |  |  |  | 6.14 | 
|Month Ended December 31, 2013       |  |      | 6.52 |  |     |  | 6.16 |            |  |  | 6.32         |  |  |  | 6.52 | 
|Month Ended January 31, 2014        |  |      | 8.02 |  |     |  | 6.55 |            |  |  | 7.12         |  |  |  | 8.01 | 
|Month Ended February 28, 2014       |  |      | 8.01 |  |     |  | 7.76 |            |  |  | 7.85         |  |  |  | 7.87 | 
|Month Ended March 31, 2014          |  |      | 8.01 |  |     |  | 7.86 |            |  |  | 7.93         |  |  |  | 8.00 | 
|April 2014 (through April 11, 2014) |  |      | 8.00 |  |     |  | 8.00 |            |  |  | 8.00         |  |  |  | 8.00 | 



|(1) | Yearly data reflect average of month-end rates.
|--- | -----------------------------------------------

Sources: Banco de la Nación Argentina

During the first three months of 2014, the exchange rate of the Argentine peso suffered a devaluation of approximately 23% against
the U.S. dollar. On April 11, 2014, the exchange rate was P$8.00 = US$1.00. As a result of fluctuations in the Argentine peso/U.S. dollar exchange rate, the exchange rate at such date may not be indicative of current or future exchange rates.
Consequently, translations based on these exchange rates should not be construed as a representation that the peso amounts represent, or have been or could be converted into, U.S. dollars at that or any other rate.



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Capitalization and Indebtedness

Not applicable.

Reasons for the Offer and
Use of Proceeds

Not applicable.



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Risk Factors

This section is intended to be a summary of more detailed discussions contained elsewhere in this Annual Report. The risks described below
are not the only ones that we face. Additional risks that we do not presently consider material, or of which we are not currently aware, may also affect us. Our business, results of operations, financial condition and cash flows could be materially
and adversely affected if any of these risks materializes and, as a result, the market price of our shares and our ADSs could decline. You should carefully consider these risks with respect to an investment in Telecom Argentina.

Risks Relating to Argentina

Overview

Substantially all of our
property, operations and customers are located in Argentina, and a portion of our assets and liabilities are denominated in foreign currencies. Accordingly, our financial condition, results of operations and cash flows depend to a significant extent
on economic and political conditions prevailing in Argentina and on the exchange rates between the peso and foreign currencies. In 2001 and 2002, the Argentine economy experienced a severe recession as well as a political crisis. The abandonment of
dollar-peso parity in 2002 led to the significant devaluation of the peso against major international currencies. Although Argentina has experienced economic growth and political conditions have shown improvement in the last decade, uncertainty
remains as to whether the growth is sustainable, as well as how several factors would impact the Argentine economy, including among others, inflation rates, exchange rates, commodity prices and healthy trade and fiscal balances.

Devaluation of the peso may adversely affect our results of operations, our capital expenditure program and the ability to service our liabilities and
transfer funds abroad.

Since we realize a substantial portion of our revenues in pesos (our functional currency), any devaluation may
negatively affect the U.S. dollar value of our earnings while increasing, in peso terms, our expenses and capital costs denominated in foreign currency. A depreciation in the Argentine Peso against major foreign currencies may also have an adverse
impact on our capital expenditure program and increase the peso amount of our trade liabilities denominated in foreign currencies. Telecom seeks to manage the risk of devaluation of the peso by entering from time to time into certain NDF contracts
to partially hedge its exposure to foreign currency fluctuations caused by its liabilities denominated in foreign currencies (mainly U.S. dollars). The Company also has cash and cash equivalents denominated in U.S. dollars that contribute to reduce
the exposure to trade payables in foreign currencies. See Item 11Quantitative and Qualitative Disclosures About Market Risk.

The Argentine Peso has been subject to significant devaluation against the U.S. dollar in the past and may be subject to fluctuations in the
future. According to the exchange rate published by the Banco de la Nación Argentina, in the year ended December 31, 2013 the devaluation of the peso against the U.S. dollar was 32.5% and in the three months ended March 31, 2014 it
was approximately 23%.

In late 2011 the Argentine government implemented a series of measures aimed at maintaining the level of reserves
of the BCRA which are often used to fulfill payment obligations of public debt. To that effect, during the last quarter of 2011 and throughout 2012 and 2013, new measures to limit the purchase of foreign currency by private companies and
individuals, such as requiring the authorization of tax authorities to access the foreign exchange market, were implemented. As a result, the implied exchange rate in the quoted price of Argentine securities that trade in foreign markets and in the
local market increased significantly. Given the economic and political conditions in Argentina, we cannot predict whether, and to what extent, the value of the peso may depreciate or appreciate against the U.S. dollar, the euro or other foreign
currencies, which could partially or totally reduce the current gap between the exchange rate published by the Banco de la Nación Argentina and the implied exchange rate. We cannot predict how these conditions will affect the consumption of
services provided by the Telecom Group or our ability to meet our liabilities denominated in currencies other than the peso. Moreover, we cannot predict whether the Argentine government will further modify its monetary, fiscal, and exchange rate
policy and, if so, what impact any of these changes could have on the value of the peso and, accordingly, on our financial condition, results of operations and cash flows, and on our ability to transfer funds abroad in order to comply with
commercial or financial obligations or dividend payments to shareholders located abroad.



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Inflation could accelerate, causing adverse effects on the economy and negatively impacting Telecoms
margins.

In the past, Argentina has experienced periods of high inflation. Inflation has increased since 2005 and has remained
relatively high since then.

The INDEC estimates that the Argentine consumer price increased by 10.9% in 2010, 9.5% in 2011, 10.8% in 2012
and 10.9% in 2013; and the wholesale price index increased 14.6% in 2010, 12.7% in 2011, 13.1% in 2012 and 14.8% in 2013. There has been a substantial disparity between the inflation indexes published by the INDEC and those higher estimated by
private consulting firms.

Since January 2014, a new consumer price index is published in order to improve the accuracy of the
macroeconomic statistics. The new index integrates a set of price indexes which allows the monitoring of the change in several prices in the economy (wholesale, commodities and construction costs, among others). In the two-month period ended
February 28, 2014, the new consumer price index showed an increase of 7.2%.

The Argentine government continued implementing several
actions to monitor and control prices for the most relevant goods and services. Despite such actions, the Argentine economy continues to experience consumer inflation. If the BCRA issues significant amounts of currency to finance public sector
spending, to service public debt, to intervene in the foreign exchange market or to assist any financial institutions in distress, or if the value of the peso cannot be stabilized through fiscal and monetary policies, a significant increase in
inflation rates could be expected.

Moreover, high inflation may undermine Argentinas foreign competitiveness in international
markets, negatively affecting the level of economic growth, exports, balance of payments and employment. In addition, public sector spending has increased over the past years, which will probably cause continuing deterioration of the fiscal balance
and lead to higher inflation.

Since the majority of our revenues are denominated in pesos, any further increase in the rate of inflation
not accompanied by a parallel increase in our prices would decrease our revenues in real terms and adversely affect our results of operations. As discussed below under Risks Associated with Telecom and its Operations, Telecom
Argentinas ability to increase its regulated rates is subject to approval of regulatory authorities and Personals ability to increase its rates could also be negatively impacted by the governmental policy of freezing of prices that was
extended to non-regulated sectors and by other regulation. See Changes in the laws and regulations of the Argentine mobile industry or restrictions on rate increases could adversely affect Personal. We cannot guarantee that any
possible rate increase will be sufficient to counter the effect of inflation, and we cannot assure you that the results of any future regulated rate negotiations of Telecom Argentina will be favorable to us and to our financial condition.

Also, higher inflation leads to a reduction in the purchasing power of the population, mainly those unemployed and with low salary levels,
thus increasing the risk of a lower level of service consumption from our fixed and mobile customers in Argentina.

Future policies of the Argentine
government may affect the economy as well as the operations of the telecommunications industry.

The Argentine government has
historically exercised significant influence over the economy, and telecommunications companies in particular have operated in a highly regulated environment. Due to the economic crisis of 2001 and 2002, the Argentine government promulgated
numerous, far-reaching regulations affecting the economy and telecommunications companies in particular. In this context, the CNC adopted new interpretations of applicable regulations and imposed fines on telecommunications companies, particularly
incumbent operators such as our company. See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentDecree No. 764/00Universal Service Regulation and Item 8Financial
InformationLegal ProceedingsRegulatory Proceedings for more information. In addition, local municipalities in the regions where we operate have also introduced regulations and proposed various taxes and fees for the installation of
infrastructure, equipment and expansion of fixed line and mobile networks. For example, municipalities usually restrict areas where antennas may be deployed, causing negative impact for the



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mobile service coverage. Provinces have increased, and are continuing to increase, their tax rates, particularly the turnover tax rates, resulting in the highest rates in history. Municipal and
provincial tax authorities have also brought an increasing number of claims against us. We disagree with these proceedings and we are contesting them. See Item 8Financial InformationLegal ProceedingsTax Matters for more
information. However, we cannot assure you that the laws and regulations currently governing the economy or the telecommunications industry will not change, that the claims will be resolved in our favor, or that any changes to the existing laws and
regulations will not adversely affect our business, financial condition, results of operations and cash flows.

Resolution SC
No. 5/13, issued in July 2013, has set new benchmarks for the quality of services provided by telecommunications operators, including Telecom Argentina and Personal, setting metrics to be achieved that are considered high when compared to
international standards and considering the current allocation of the spectrum and the lack of authorization to install antennas given by municipalities. This resolution has a gradual implementation schedule. Telecom Argentina, Personal and other
telecommunications operators have submitted technical comments for a review of the metrics. However, if the technical comments are not taken into account, compliance with the metrics could be difficult which may result in potential penalties for
telecommunications operators, including Telecom Argentina and Personal. See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentResolution SC No. 5/13.

In particular, in recent years the Argentine government has taken several actions to re-nationalize concessions and public services companies
that were privatized in the 1990s, such as Aguas Argentinas S.A. and Aerolíneas Argentinas S.A. Additionally, in May 2012, Law No. 26,741, established the expropriation of the 51% of the capital stock of YPF S.A. and the 51% of the
capital stock of YPF GAS S.A., which were directly or indirectly owned by Repsol YPF S.A. (Repsol). After almost two years of negotiations, in February 2014 a final agreement was reached through which the Argentine government set the compensation
for the expropriated capital stock in the amount of US$5 billion to be paid with government securities. The agreement was approved by Repsol and its shareholders and is subject to the approval of the Argentine Congress.

These actions had a negative effect on the markets. We cannot provide any assurance that similar actions of the Argentine government will not
be extended to other private companies or other sectors in the near future.

The Argentine government may exercise greater intervention in private
sector companies, including Telecom Argentina.

The global economic and financial crisis in the recent years has resulted in a
significant reduction in global GDP growth and a loss in consumer confidence in the financial sectors of many countries. To improve the countries financial condition and assist certain troubled industries, certain governments have responded
with extraordinary intervention in the private sector. Certain governments of the leading industrialized nations have implemented various financial rescue plans outlining new regulatory frameworks that would be expected to remain in effect at least
until market conditions and investor and consumer confidence have stabilized.

In November 2008, Argentina nationalized, through Law
No. 26,425, its private pension and retirement system, which had been previously administered by the AFJP, and appointed ANSES as its administrator. Argentinas nationalization of its pension and retirement system constituted a significant
change in the governments approach towards Argentinas main publicly traded companies. A significant portion of the public float of these companies was owned by the AFJP and is currently held by ANSES.

The government could exercise influence over corporate governance decisions of companies in which it owns shares by combining its ability to
exercise its shareholder voting rights to designate board and supervisory committee members with its ability to dictate tax and regulatory matters. Additionally, since the AFJP were significant institutional investors in Argentina, the
nationalization of the private retirement system affected the way to access financing in capital markets for publicly traded companies.

In addition during 2012, Decree No. 1,278/12 stated that the Secretary of Economic Policy and Development Planning of the Ministry of
Economy and Public Finance is responsible for the implementation of policies and actions regarding the exercise of shareholder rights of the equity shares of companies where the Argentine government is a minority shareholder and approved for that
purpose a Regulation of officers and directors appointed by the shares or equity interests of the Argentine government, establishing the rules that they must follow in performing their duties.



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Subsequently, the Secretary of Economic Policy and Development Planning approved Resolution
No. 110/12 which assigns the responsibilities, powers and duties set forth in Decree No. 1,278/12 to the Dirección Nacional de Empresas con participación del Estado (National Direction of Corporations with
government participation).

In January 2013, a new Capital Market Act (No. 26,831) came into effect, granting new intervention powers to
the CNV. In September 2013, the CNV issued regulations pursuant to Law No. 26,831 through Resolution No 622/13 that approved the new text of the CNV rules. See Item 9The Offer and ListingThe Argentine Securities
MarketNew Capital Market ActLaw No. 26,831.

These matters could create uncertainties for some investors of public
companies in Argentina, including Telecom Argentina.

Argentinas economy may contract in the future due to international and domestic conditions.

The effects of the global economic and financial crisis in recent years and the general weakness in the global economy may negatively
affect emerging economies like Argentinas. Although Argentina has experienced economic growth in recent years, and developed countries had a better performance in 2013, global financial instability may impact the Argentine economy and cause
Argentina a slowdown of the growth rate or could lead to a recession generating a fiscal deficit and increased unemployment.

Several
international economic, social and political factors could affect the global financial markets, such as, among other factors, a growing concern regarding government deficits, governments abilities to honor their respective sovereign debts,
social unrest and general uncertainty about the global economic recovery.

Moreover, the growth trend that the Argentine economy has
experienced in the most recent years might be negatively affected by several domestic factors such as an appreciation of the real exchange rate, which could affect its competitiveness, diminishing or even reversing the countrys positive trade
balance and, if coupled with an increase in capital outflows, might reduce consumption and investment levels as a result of increased pressure on the foreign exchange rates. Additionally, abrupt changes in monetary and fiscal policies or foreign
exchange regime could rapidly affect local economic output, while lack of appropriate levels of investment in certain economy sectors could reduce long term growth. Because access to the international financial market could be limited, an increase
in public spending not correlated with an increase in public revenues could affect the countrys fiscal results and generate uncertainties that might affect the economys level of growth.

If international and domestic economic conditions for Argentina were to worsen, Argentina could be negatively affected as a result of lower
international demand and lower prices for its products and services, higher international interest rates, lower capital inflows and higher risk aversion, which may also adversely affect our business, results of operations, financial condition and
cash flows.

Economic and legal conditions in Argentina remain uncertain.

Although general economic conditions have shown improvement in the last decade, and political protests and social disturbances have diminished
considerably since the economic crisis of 2001 and 2002, the nature of the changes in the Argentine political, economic and legal environment over the past several years has given rise to uncertainties about the countrys business environment.

In the event of any economic, social or political crises, companies in Argentina may face the risk of strikes, expropriation,
nationalization, forced modification of existing contracts, and changes in taxation policies including tax increases and retroactive tax claims. In addition, Argentine courts have issued rulings changing the existing jurisprudence on labor matters
and requiring companies to assume increasing responsibility for, and assumption of costs and risks associated with, utilizing sub-contracted labor and the calculation of salaries, severance payments and social security contributions. Also, there was
an increase in claims regarding compensations for work accidents over the cap established by the current relevant legislation. Since we operate in a context in which the governing law and applicable regulations change frequently, it is difficult to
predict whether our commercial activities will be affected positively, negatively or at all by such changes.



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Substantially all of our operations, properties and customers are located in Argentina, and, as a
result, our business is, to a large extent, dependent upon economic and legal conditions prevailing in Argentina. If economic and legal conditions in Argentina were to deteriorate, they would be expected to have an adverse effect on our financial
condition, results of operations and cash flows.

Argentinas past fiscal problems and the incomplete restructuring of Argentinas sovereign
debt may negatively affect the macroeconomic environment.

Although Argentina has shown improved fiscal results in recent years, it has
a history of fiscal deficits. Since almost all of the financial obligations of the Argentine government were denominated in foreign currencies at the time the dollar-peso parity was eliminated in early 2002, there was an increase in the cost of
financial services (in terms of Argentine Pesos) of the debt of the Argentine government. Also, since the Argentine governments fiscal revenues were denominated in large part in Argentine Pesos, the Argentine government was severely affected
in its ability to carry out its payment obligations using foreign currency and defaulted on a significant part of its public debt in 2002. The Argentine governments sovereign debt default and its consequences may continue to negatively affect
the ability of private companies, including Telecom, to access the capital markets or other forms of financing.

The Argentine government
implemented a debt restructuring effort mainly through two debt exchange offers. The first and largest was closed on February 25, 2005 and the second took place in 2010. Nonetheless, a number of bondholders who held out from the exchange offers
have initiated legal actions against the Argentine government. In late 2012, further rulings favoring the holdout positions and putting into risk the ability to serve its debt under foreign legislation exacerbated uncertainties and increased
sovereign risk. In 2013, the New York State Court of Appeals ratified its ruling against Argentina. Argentina has appealed to the Supreme Court of the United States, and the case is still pending resolution. A judgment against the Argentine
government in these pending cases could lead to a default of its public debt and reduce the sources of funding and investment capital and could potentially impact the governments ability to adopt measures that promote economic growth.

After the economic crisis in 2002, the Argentine government has maintained a policy of fiscal surplus. To be able to repay its debt, the
Argentine government may be required to continue adopting austere fiscal measures that could adversely affect economic growth.

As of
June 30, 2013, the outstanding principal amount of Argentinas public debt was equivalent to US$196.1 billion (of which approximately 59% was denominated in foreign currency) of which US$11.5 billion were not tendered in the exchange
offers and are still pending to be restructured.

There can be no assurance that the Argentine government will not default on its
obligations under its bonds if it experiences another economic crisis. A new default by the Argentine government could lead to a new recession, higher inflation, restrictions on Argentine companies to access financing and funds, limit the operations
of Argentine companies in the international markets, higher unemployment and social unrest, which would negatively affect our financial condition, results of operations and cash flows. In addition, we have investments in sovereign Argentine bonds
which could be restructured in a way that negatively affects their valuation and repayment terms. See Note 20 to our Consolidated Financial Statements.

The Argentine banking system may be subject to instability.

The Argentine banking system collapsed in 2001 and 2002, when the Argentine government restricted bank withdrawals and required mandatory
conversion of dollar deposits to pesos. From 2005 to 2007, a period of economic growth coupled with relative stability of the countrys exchange rate and inflation resulted in the restoration of public confidence, a gradual accumulation of
deposits in Argentine financial institutions, and improved liquidity of the financial system. However, since 2008 certain events like internal conflicts with certain sectors of the economy, the international financial crisis and finally, the
increased regulation on the foreign exchange market, decreased depositors confidence. These events led to a slowdown in the growth of deposits, initially increased the dollarization of private deposits and were followed by substantial
withdrawals of the dollarized deposits. Despite improvements in stability since 2002 we cannot be certain that another collapse will not occur in the future.



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Financial institutions are particularly subject to significant regulation from multiple
regulatory authorities, all of whom may, amongst other things, establish limits on commissions and impose sanctions on the institutions. The lack of a stable regulatory framework could impose significant limitations on the activities of the
financial institutions and could create uncertainty with respect to the financial system stability.

A new crisis of the Argentine banking
system or the consequent instability of one or more of the larger banks, public or private, could have a material adverse effect on the prospects for economic growth and political stability in Argentina, resulting in a loss of consumer confidence,
lower disposable income and fewer financing alternatives for consumers. These conditions would have a material adverse effect on us by resulting in lower usage of our services and the possibility of a higher level of uncollectible accounts or
increase the credit risk of the counterparties regarding the Company investments in local financial institutions.

Shareholders may be liable under
Argentine law for actions that are determined to be illegal or ultra vires.

Under Argentine law, a shareholders liability for
losses of a company is limited to the value of his or her shareholdings in the company. Under Argentine law, however, shareholders who vote in favor of a resolution that is subsequently declared void by a court as contrary to Argentine law or a
companys bylaws (or regulations, if any) may be held jointly and severally liable for damages to such company, to other shareholders or to third parties resulting from such resolution. In connection with recommending any action for approval by
shareholders, Telecom Argentinas Board of Directors occasionally obtains and plans to obtain opinions of counsel concerning the compliance of its actions with Argentine law and Telecom Argentinas bylaws (or regulations if any). Although,
based on advice of counsel, Telecom Argentina believes that a court in Argentina in which a case has been properly presented would hold that a noncontrolling shareholder voting in good faith and without a conflict of interest in favor of such a
resolution and based on the advice of counsel that such resolution is not contrary to Argentine law or the Companys bylaws or regulations, would not be liable under this provision, we cannot assure you that such a court would in fact rule in
this manner.

Delays in the attribution and allocation of radio spectrum can adversely affect Argentinas mobile industry.

The SC is the authority responsible for administering the use of radio electric spectrum and, consequently, for the attribution of new segments
of frequencies and the reallocation of the existing segments of frequencies for mobile service. Additionally, the regulation of administration, management and control of radio spectrum provides for the prior intervention of the CNDC, and for a joint
performance with the SC, in certain circumstances, for example, in determining the safeguards designed to prevent the concentration of spectrum and the occurrence of a dominant position. It is important to point out that, current spectrum used by
mobile operators in AMBA is 132.5 Mhz while in 1999 it was 170.0 Mhz, representing a 37.5 Mhz reduction in the spectrum used in that area. Such reduction is equivalent to the frequency bands needed for the operation of a unique operator. Delays in
the allocation of new frequencies, the reallocation of existing frequencies and their subsequent auction could affect the quality of services, the future development of the sector and the implementation and commercialization of new advanced
services, among others, such as mobile Broadband and its applications.

The recently proposed reform of the Argentine Civil Code and Commercial Code
may materially impact our contractual relationships.

The Argentine Senate approved a reform of Argentinas Civil Code and
Commercial Code in November 2013, hereinafter, the bill. Approval by the Chamber of Deputies is pending.

Among the reforms
introduced by the bill are the addition of new categories of contracts, such as adhesion contracts with standard form clauses and consumer contracts. The reform also includes a series of general principles with respect to consumer contracts which
complement the Consumer Protection Law (Law No. 24,240). Practices that limit consumers freedom of contract, particularly practices that tie the provision of goods and services to the simultaneous acquisition of other goods and services,
are specifically regulated.



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The proposed reform provides that contracts with payment denominated in foreign currency are to
be regarded as contracts for goods which may be paid for in Argentine pesos.

The proposed reform also creates modern contract forms such
as commercial agency, commercial concession, distribution and franchise contracts which were not previously covered by existing law. The reform expands limitations on the assumption of freely bargained contracts which previously had only been
applicable to consumer contracts. The reform would also allow judges to modify unfair clauses in contracts.

With respect to agency
contracts, the proposed law would assume an indefinite duration period unless otherwise specified by the parties. The continuation of an agency relationship beyond the term of a contract would create a new contract for an indefinite period on the
same terms. For either party to end the relationship, that party must provide advance notice of one month per year of the duration of the agreement. A party who fails to give such notice would be liable for consequential damages, lost profits and
other damages.

The bill will require judicial interpretation, and the ultimate consequences of the reform may be unpredictable. If
approved, we will have to review, among other things, contractual guidelines with our suppliers and customers (for example, bundling offers), as well as payments under our contracts denominated in foreign currency.

Risks Associated with Telecom and its Operations

The Pesification and freezing of rates may continue to adversely affect Telecom Argentinas revenues.

In accordance with the Public Emergency Law, in January 2002, rates for Basic telephone services and long distance services were converted to
pesos and fixed at an exchange rate of P$1.00=US$1.00. The rates that Telecom Argentina may charge in the future will be determined by negotiations between Telecom Argentina and the Argentine government. According to the Public Emergency Law, while
undertaking these negotiations, the Argentine government must consider the effect of these rates on the competitiveness of the general economy, the quality of service and investment plans of service providers, as contractually agreed. The Argentine
government must also consider consumer protection, accessibility of the services and the profitability of public service providers such as Telecom Argentina. The Public Emergency Law has been subsequently extended through December 31, 2015. See
Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentRates.

On March 6,
2006, Telecom Argentina executed a Letter of Understanding (the Letter of Understanding 2006) with the Argentine government pursuant to which Telecom Argentina will be permitted to raise certain rates and incorporate certain
modifications to the current regulatory framework. Under the Letter of Understanding 2006, the only agreed-upon adjustments to the rate structure were the rate increases to the termination charge for international incoming calls and the extension of
the time bands for peak-hour rates applied to local and domestic long distance calls. See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentRates.

The Letter of Understanding 2006 contemplated the signing and effectiveness of the Minutes of Agreement of the Renegotiation upon the
fulfillment of certain necessary steps. As of the date of this Annual Report, such fulfillment has yet to occur. Although we expect such fulfillment to occur, we cannot guarantee if or when this will happen. We are unable to predict the outcome of
the negotiations that are continuing with regard to further rate increases and the rate scheme which will be applied in the future. Moreover, we are unable to predict whether the Argentine government, as a result of the current rate renegotiations,
will impose additional conditions or requirements, and if these conditions or requirements are imposed, whether we will be able to satisfy them.

Rate restrictions for regulated services may continue for a number of years and may affect revenues from fixed line and other services. While
we intend to continue to strive to control operating costs and capital expenditures and improve productivity, these efforts has not offset the significant decline in profit margins and operating results that resulted from mandatory rate freezing and
the increase in costs due to high levels of investment in capital expenditures and higher operating costs.



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We must comply with conditions in our license, and regulations and laws related thereto, and such compliance
may at times be outside of our control.

We are subject to a complex series of laws and regulations with respect to most of the
telecommunications services that we provide. Such laws and regulations are often governed by considerations of public policy. We provide telecommunications services pursuant to licenses that are subject to regulation by various regulatory bodies.
Any partial or total revocation of the licenses would likely have a material adverse impact on our financial condition, results of operations and cash flows. Our dissolution and the declaration of bankruptcy, among others, are events that may lead
to a revocation of our licenses.

Certain license conditions are not within our control. For example, any transfer of shares resulting in
a direct or indirect loss of control in Telecom Argentina without prior approval of the regulatory authorities may result in the revocation of Telecom Argentinas license. See Item 7  Major Shareholder and Related Party Transactions
 Shareholders of Nortel. Pursuant to the provisions of Telecom Argentinas List of Conditions as amended by Resolutions SC No. 111/03 and No. 29/04: (i) any reduction of ownership of Nortel in our capital stock to
less than 51% without prior approval of the Regulatory Bodies; or (ii) any reduction of ownership of currently common shareholders in the capital stock with voting power of Nortel to less than 51% without prior approval of the Regulatory
Bodies, may result in the revocation of Telecom Argentinas telecommunications license.

Nortel owns all of Telecom Argentina
Class A Ordinary Shares (51% of our total capital stock) and approximately 7.64% of our Class B Ordinary Shares (3.74% of our total capital stock) which, in the aggregate, represents approximately 54.74% of our total capital stock as of the
date of this Annual Report. Because Telecom Argentina owns 15,221,373 of its own Class B Shares as of the date of this Annual Report, Nortels ownership of the outstanding shares amounts to 55.60% (51.80% consists of Class A Ordinary
Shares and 3.80% of Class B Ordinary Shares). We are directly controlled by Nortel by virtue of Nortels ownership of a majority of our capital stock; however, Nortels controlling interest is subject to certain agreements among
Soforas shareholders. In addition, the Telecom Italia Group and W de ArgentinaInversiones (a company that is part of the Argentine Werthein Group) are each required to maintain direct ownership of at least 15% of the common stock of
Sofora.

Compliance with conditions in our license and related regulations and laws may be affected by events or circumstances outside of
our control, and therefore we cannot predict whether such events or circumstances will occur and if any do occur, this could result in an adverse effect on our financial condition, our operations and cash flows.

We operate in a competitive environment that may result in a reduction in our market share in the future.

We compete with licensed provider groups, composed of, among others, independent fixed line service providers, mobile and cable operators, as
well as individual licensees, some of which are affiliated with major service providers outside Argentina. As of December 31, 2013, more than 1,000 licenses for local and/or long distance services, payphones and Value Added Services had been
granted since the end of the exclusivity period.

Internet and mobile services, which we expect will continue to account for an increasing
percentage of our revenues in the future, are characterized by rapidly changing technology, evolving industry standards, changes in customer preferences and the frequent introduction of new services and products. To remain competitive in the fixed
telecommunications market, we must invest in our fixed-line network and information technology. Specifically, in the Internet services market, we must constantly upgrade our access technology and software in order to increase the speed, embrace
emerging transmission technologies and improve the commercial offers and the user experience. Also, to remain competitive in the mobile telecommunications market, we must enhance our mobile networks by expanding our network infrastructure and
extending 3G and HSPA+ technology and bandwidth in mobile data transmission. In addition, a key factor for Personals competitiveness is to be awarded with new mobile frequency bands. Future technological developments may result in decreased
customer demand for certain of our services or even render them obsolete. In addition, as new technologies develop, equipment may need to be replaced or upgraded or network facilities (in particular, mobile and Internet network facilities) may need
to be rebuilt in whole or in part, at substantial cost, to remain competitive. These enhancements and the implementation of new technologies will continue requiring increased capital expenditures.



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We also anticipate that we will have to devote significant resources to the refurbishment and
maintenance of our existing network infrastructure to comply with regulatory obligations particularly regarding fixed line services and to remain competitive with the quality of our services in both Internet and mobile business. We also expect to
continue to devote resources to customer retention and loyalty in such segments.

The macroeconomic situation in Argentina may adversely
affect our ability to successfully invest in, and implement, new technologies, coverage and services in a timely fashion. Accordingly, we cannot assure you that we will have the ability to make needed capital expenditures and operating expenses. If
we are unable to make these capital expenditures, or if our competitors are able to invest in their businesses to a greater degree and/or faster than we are, our competitive position will be adversely impacted.

Moreover, the products and services that we offer may fail to generate revenues or attract and retain customers. If our competitors present
similar or better responsiveness, functionality, services, speed, plans or features, our customer base and our revenues may be materially affected.

We also expect that the level of competition in our markets may continue to increase in the future, particularly as a result of the emergence
of the operator Argentine Satellite Solution Corporation S.A. (ARSAT  a company wholly owned by the Argentine government) which could initially result, among other things, in increased wholesale competition and in a decline in
governmental agency customers for fixed and mobile services due to a potential preference of public entities to hire ARSAT.

Competition
is and will continue to be affected by our competitors business strategies and alliances. Accordingly, we may face additional pressure on the rates that we charge for our services or experience a loss of market share of fixed and mobile
services. In addition, the general business and economic climate in Argentina may affect us and our competitors differently; thus our ability to compete in the market could be adversely affected.

Even though the Company grew and developed in recent years in a highly competitive market, because of the range of regulatory, business and
economic uncertainties we face, as discussed in this Risk Factors section, it is difficult for us to predict with meaningful precision and accuracy our future market share in relevant geographic areas and customer segments, the drop in
our customers consumption which could result in a reduction of our revenue market share, the speed with which change in our market share or prevailing prices for services may occur or the effects of competition. Those effects could be material
and adverse to our overall financial condition, results of operations and cash flows.

Changes in the laws and regulations of the Argentine mobile
industry or restrictions on rate increases could adversely affect Personal.

The Argentine mobile industry is currently subject to an
important set of regulations that has enabled the development of a highly competitive and intense capital expenditure environment. Notwithstanding, in the last few years several bills were introduced in the Argentine Congress proposing a substantial
change through the classification of the mobile industry as a public service which could result in deeper and specific regulations regarding rates, quality of service, coverage areas or other core aspects of our business. Other bills
were also introduced in the Congress proposing changes to specific rules that regulate Personals services, such as changes in billing processes and customer service.

In addition, in September 2013 the SC issued a resolution establishing a procedure for public comment on the Draft Regulation for Users of
Mobile Communication Services. See Item 4Information on the CompanyRegulatory FrameworkRegulatory Environment for a description of these regulations.

Although mobile telephony is a non rate regulated industry, we cannot predict whether current or new factors, including governmental
initiatives in order to reduce inflation rates, would negatively impact Personals ability to apply rate increases, thus negatively affecting the profit margins and the level of cash flows.



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Future allocations of mobile frequency bands may affect the competitiveness of the Argentine mobile industry
and could impact Personals competitive position within it.

Telefónica Móviles Argentina S.A. returned to the
Argentine government the frequency bands exceeding an aggregate 50 MHz, as a result of the combination of operations of Unifón and Movicom in 2004, in accordance with the current laws and pursuant to a plan to be subsequently issued. In 2005,
the SC issued its plan relating to the return of those frequency bands although it did not stipulate how the returned bands would be reallocated or assigned to other operators.

The launch of the auction to reassign the 850 MHz and 1,900 MHz frequency bands returned by Telefónica Móviles Argentina S.A.
was postponed several times. Finally, in May 2011 the auction was launched by SC Resolution No. 57/11. Personal took part in the spectrum auction process and expected to acquire additional spectrum to complete its Spectrum cap
throughout Argentina, but, on September 5, 2012, Personal was notified of SC Resolution No. 71/12, by which the auction was canceled for reasons of opportunity, merit and convenience of the Argentine government. As part of that process,
the CNDC issued an opinion, as requested by the SC, by which it recommended against assigning additional frequency bands through auction to Personal regardless of the cap established by the regulatory authority in order to avoid the risk that such
additional spectrum could cause. However, this recommendation was not considered in evaluating Personal in the auction nor in the reasons for cancelling the auction. Personal believes that the grounds of this opinion are clearly contrary to the
current regulatory framework and to the previous actions of the government.

By Presidential Decree No. 2426/12 issued in December
2012, the current spectrum and telecommunication license general regulation was modified to allow the SC to allocate spectrum directly to government organizations (or organizations where the state is the main owner) without proceeding with a public
auction as was required before this modification. It also mandates the SC to allocate the spectrum from the recently cancelled auction (which represents approximately 20% of current mobile spectrum available) to Argentine Satellite Solution
Corporation S.A. (ARSAT  a company wholly owned by the Argentine government). See Item 4Information on the CompanyRegulatory FrameworkRegulatory Bodies and General Legal Framework for a description of
the dispositions of Decree No. 2,426/12.

In December 2012 the President announced the launching of a new state owned mobile service
branded libre.ar. The business plan has not been presented and details of these operations were not disclosed yet.

The
governments dual-role, as both regulator and competitor, represents a significant change in the mobile industry. We cannot assure you that it could not open several risks to Personals business including possible adverse changes in the
regulatory framework and the current market rules.

The lack of allocation of additional frequency bands is negatively affecting the
quality of service of all the Argentine mobile operators and the evolution of the sector, exposing Personal to the loss of revenues, difficulties in developing new business, claims of customers and fines imposed by authorities. It could also
adversely affect Personals competitive position and may require higher capital expenditures for Personal to continue providing high quality mobile services to its customers. See Item 4Information on the CompanyRegulatory
FrameworkOther RegulationsRegulations Applicable to PCS Services for a detailed description of Personals license.

Actual or
perceived health risks or other problems relating to mobile handsets or transmission masts could lead to litigation or decreased mobile communications usage.

The effects of, and any damage caused by, exposure to an electromagnetic field were and are the subject of careful evaluations by the
international scientific community, but until now there is no scientific evidence of harmful effects on health. We cannot rule out that exposure to electromagnetic fields or other emissions originating from mobile handsets will finally not be
identified as a health risk.

Although Argentine mobile operators comply with the international security standards established by the
World Health Organization and Argentine regulations, which are similar, our mobile business may be harmed as a result of these alleged health risks. For example, the perception of these health risks could result in a lower number of customers,
reduced usage per customer or potential consumer liability. In addition, these concerns may cause regulators and municipalities to impose restrictions on the construction of base station towers or other infrastructure, which may hinder the
completion of network build-outs and the commercial availability of new services and/or may require additional investments.



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Operational risks could adversely affect our reputation and our profitability.

Telecom Argentina faces operational risks inherent in its business, including those resulting from inadequate internal and external processes,
fraud, inability to perform certain operations required by the judiciary due to inadequate technology, employee errors or misconduct, failure to comply with applicable laws, failure to document transactions properly or systems failures. In addition,
unauthorized access to the Companys information systems or institutional sites could cause the loss or improper use of confidential information, unauthorized changes in the Companys information and network systems or alterations to the
Companys information published on these sites. These events could result in direct or indirect losses, technical failures in the Companys ability to provide its services, inaccurate information for decision making, adverse legal and
regulatory proceedings, and harm to its reputation and operational effectiveness, among others.

Telecom Argentina has risk management
practices at the highest levels designed to detect, manage and monitor the evolution of these kinds of operational risks, and for this purpose it established a Risk Management Committee in September 2012.

However, there is no guarantee that these measures will be successful in effectively mitigating the operational risks that Telecom Argentina
faces and such failures could have a material adverse effect on its results of operations and could harm its reputation.

Nortel, as our controlling
shareholder, and Sofora, as Nortels controlling shareholder, exercise control over significant matters affecting us.

Nortel is
our direct controlling shareholder. Sofora owns 100% of the common stock of Nortel, which represents 78.38% of the total capital stock of Nortel as of the date of this Annual Report. Sofora is 68% owned by Telecom Italia Group and 32% owned by W de
ArgentinaInversiones.

Through their ownership of Sofora and the Shareholders Agreement between them, the Telecom Italia Group
and W de ArgentinaInversiones have, as a general matter, the ability to determine the outcome of any action requiring our shareholders approval, including the ability to elect a majority of directors and members of the Supervisory
Committee. In addition, we have been informed that, pursuant to the Shareholders Agreement entered into between the Telecom Italia Group and the Werthein Group, the Telecom Italia Group and W de ArgentinaInversiones have agreed among
themselves to certain matters relating to the election of our directors and those of Nortel and Sofora and have given W de ArgentinaInversiones veto power with respect to certain matters relating to us. See Item 7Major Shareholders
and Related Party TransactionsShareholders Agreement.

We have engaged in and will continue to engage in transactions
with these shareholders of Nortel and, at the present time, of Sofora, and their affiliates. Certain decisions concerning our operations or financial structure may present conflicts of interest between these shareholders as indirect owners of
Telecom Argentinas capital stock and as parties with interests in these related party contracts.

Nevertheless, all related party
transactions are made on an arms length basis and those which exceed 1% of Telecom Argentinas shareholders equity are subject to a prior approval process established by Law No. 26,831 and require involvement of the Audit
Committee and/or an opinion of two independent valuation firms as well as subsequent approval by the Board of Directors to verify that the agreement could reasonably be considered to be in accordance with normal and habitual market practice. See
Item 7Major Shareholders and Related Party TransactionsRelated Party Transactions.

On November 14, 2013
Telecom Italia S.p.A and Telecom Italia International N.V. (collectively, the Sellers) and Tierra Argentea S.A. (Tierra Argentea, a company controlled by the Sellers) announced their acceptance of the offer made by Fintech
Group (Fintech) to acquire Telecom Italias controlling stake in Telecom Argentina owned by the Sellers through their subsidiaries Sofora, Nortel, and Tierra Argentea. See Item 7Major Shareholder and Related Party
TransactionsShareholders of Nortel.

Our operations and financial condition could be affected by union negotiations.

In Argentina, labor organizations have substantial support and have considerable political influence. In recent years, the demands of our labor
organizations have increased mainly as a result of the increase in the cost of living (which was affected by increased inflation) and a decline in the populations purchasing power.



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In addition, telecommunication labor organizations continue to request that we delegate currently
outsourced tasks to Telecom Argentinas employees.

If labor organization claims continue or are sustained, this could result in
increased costs and greater conflict in the negotiation process. See Item 6Directors, Senior Management and EmployeesEmployees and Labor Relations.

The Argentine government may order salary increases to be paid to employees in the private sector or changes in labor regulations, which would increase our
cost of doing business.

The Argentine government has in the past and may in the future promulgate laws, regulations and decrees
requiring companies in the private sector to maintain minimum wage levels and provide specified benefits to employees (including higher levels of severance payments to former employees dismissed without proper cause). We cannot guarantee that the
government will not adopt measures, as it did in the past, which will increase salaries or require us to provide additional benefits, which would increase our costs and, among other things, in the absence of an adjustment of regulated rates in our
fixed services segments, continue reducing our profit margins.

Moreover, there are certain bills pending in the Argentine Congress
regarding modifications to labor regulations such as increasing severance payments or considering amounts paid to employees that are currently not subject to social security contributions as part of the normal and usual employees salaries,
increasing liability of the companies for the contractors and sub-contractors employees in outsourced tasks and the implementation of a regime that would entitle employees to participate in the profits of companies that employ them.

If such bills are approved, the modifications in current labor regulations and conditions could materially impact our relationship with our
employees by increasing the labor cost and in some cases decreasing the flexibility to provide services to our clients.

The Regulatory Bodies may
impose increased penalties on Telecom Argentina and Personal.

The Regulatory Bodies have increased the number of cases and the amount
of fines applied to Telecom Argentina mainly in connection with alleged delays in repairing defective fixed lines installation and/or installing new fixed lines. Additionally, the Regulatory Bodies have initiated various administrative procedures
against Telecom Argentina and Personal related to temporary interruptions of services caused by various incidents. Lately the Authorities have threatened Personal with the applications of fines and the obligation to pay compensation to the clients
involved. In many of these cases, we believe that the Authorities are misinterpreting the legal framework of our telecommunication license or exceeding the legal terms of the service provision. Neither final administrative nor judicial decisions on
these cases have not been made yet. We cannot foresee whether the Regulatory Bodies based on the increased number of administrative complaints will seek to apply significant sanctions to Telecom Argentina or Telecom Personal, any of which could have
an adverse effect on Telecom Argentina or Personal ́s operations, financial situation, results of operations and cash flows. See Item 4Information on the CompanyRegulatory FrameworkRegulatory Environment.

We are involved in various legal proceedings which could result in unfavorable decisions and financial penalties for us.

We are party to a number of legal proceedings, some of which have been pending for several years. We cannot be certain that these claims will
be resolved in our favor. Responding to the demands of litigation may divert Managements time and attention and financial resources.

In addition, in recent years, certain changes in the treatment of employment matters under Argentine law have created new incentives for
individuals to pursue employment-related litigation in Argentine courts. These changes include holdings that an employee of a contractor or subcontractor may file a direct action against the company contracting the work, that any cap on severance
pay in cases of dismissal without cause is unconstitutional, that an employee may bring a civil action in the event of an occupational accident, and that an employee can bring a lawsuit against the employer because of changes in working conditions.
Additionally, the Company is exposed to claims of employees of contractors and subcontractors and commercial agents claiming direct or indirect responsibility of Telecom based on a broad interpretation of the rules of labor law.



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Also, the Company is subject to various lawsuits initiated by some employees and former employees
who claim wage differences arguing different reasons. The Argentine Supreme Court in a case against Cervecería y Malteria Quilmes ruled that non-remunerative items resulting from collective bargaining agreements should
be considered as salaries for all purposes. Such ruling creates a negative precedent in this matter and could imply increased labor costs for us. See Item 8Financial InformationLegal ProceedingsLabor ClaimsWage
differences by food vouchers and non-remunerative sums.

Additionally, we cannot assure you that after the recategorization process
executed by Telecom Argentina in 2012 as a result of the agreements reached with the labor organizations, individual employee claims will not be filed regarding such recategorization process.

In the past, Personal was subject, and currently is subject, to claims by former representatives (commercial agents) who end their business
relationship by making claims for reasons that are not always justified by contract terms.

Personal maintains agreements with VAS
suppliers. Amounts billed to its customers resulting from these agreements are recorded as Personals revenues while commissions paid to VAS suppliers as a percentage of services billed to customers are recorded as expenses (Costs of VAS).
Personals customers can subscribe to VAS services directly from the VAS supplier. During 2013 there was a significant increase of VAS revenues resulting in an increase of the customers claims regarding these services. Although Personal
has taken actions in connection with the VAS suppliers in order to reduce risks regarding the provision of the services to its customers, we can not assure you that significant claims regarding VAS services will not be presented in the future.

As a result, Telecom Argentina and Personal may face increased risk of employment, commercial, regulatory and customers proceedings. If
this occurs, we cannot guarantee that it will not have an adverse effect on our results of operations, financial condition and cash flows, despite the provisions that the Company has recorded to cover from these matters, as it is described in
Item 8Financial Information.

The CNC regulates telecommunications services in Argentina and in its capacity is
empowered to apply economic sanctions against licensees for breaches of the current regulatory framework. Recently, there has been a growing trend of imposing sanctions on Telecom Argentina for technical reasons, mainly related to the delay in
repairing defective lines and/or installing new lines. In addition, there were an increased number of sanctions on Telecom Argentina and Personal regarding service failures. Although penalties are appealed in the administrative stage, if the appeals
are not solved in our favor in administrative or judicial stage, or the penalties imposed by the CNC increased, it could have an adverse effect on our financial situation, results of our operations and cash flows. See Item
8Financial InformationLegal ProceedingsRegulatory Proceedings.

In 2009, the environmental agency required Telecom
Argentina to be registered in the National Registry of Generators and Operators of Hazardous Waste as a result of alleged problems with our liquid drainage at an underground chamber (as it had been previously required to do in 1999). This
registration would require Telecom Argentina to pay an annual fee calculated in accordance with a formula that takes into consideration the extent of the hazard and the quantity of the waste. Telecom Argentina filed a request for administrative
review seeking to obtain rejection of the environmental agencys ordinance. We cannot guarantee that the rejection will be obtained. In addition, changes in environmental legislation or the evolution of products and services we offer could
require Telecom Argentina to be registered in the National Registry of Generators and Operators of Hazardous Waste. In that case or if the rejection of the environmental agencys ordinance is not obtained, Telecom Argentina would face increased
costs which may include retroactive fees.

See Item 8Financial InformationLegal ProceedingsCivil, commercial,
labor, regulatory, tax and other matters proceedings.

The enforcement of regulations aimed at protecting consumers may have an adverse effect on
us.

The Consumer Protection Act No. 24,240 (the Consumer Protection Act) establishes a series of principles and rules
for the protection of consumers and users. The Consumer Protection Act applies to the telecommunications industry and to any other industry in which consumers and users are involved.



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Telecom Argentina and Personal have received several customer complaints in connection with the
provisions of the Consumer Protection Act that were filed with different law enforcement bodies (national, provincial or municipal). In the last few years there was also an increase in legal actions brought by consumer associations. See Item
8Financial InformationLegal ProceedingsCivil, commercial, labor, regulatory, tax and other matters proceedingsGeneral ProceedingsConsumer Trade Union Proceedings.

This situation may entail risks for Telecom Argentina and Personal concerning, among others, the prices charged for its services, or the
obligation to return amounts charged for its services. If such were the case, any of such consequences could have an adverse effect on our financial situation, results of our operations and cash flows.

The BCRA has imposed restrictions on the transfer of funds outside of Argentina in the past; some restrictions currently exist and may increase in the
future, which could prevent us from making payments on dividends and liabilities.

In the past, the Argentine government has imposed a
number of monetary and currency exchange control measures, including temporary restrictions on the free availability of funds deposited with banks and restrictions or limitations on the access to foreign exchange markets and transfers of funds
abroad, including for purposes of paying principal and interest on debt, trade liabilities to foreign suppliers and dividend payments to foreign shareholders. Between the end of 2001 and 2002, the Argentine government implemented a unified exchange
market (Mercado Único y Libre de Cambios  MULC) with significant regulations and restrictions for the purchase and transfer of foreign currency.

Since late 2011 the Argentine government implemented a series of measures aimed to increase controls on the foreign trade and capital flows.
To that effect, certain measures were implemented to control and limit the purchase of foreign currency, such as the prior approval of the AFIP for any purchase of foreign currency made by private companies and individuals for saving purposes. In
addition, the BCRA expanded the controls and measures to make payments abroad accessing the local foreign exchange market, regarding trade payables and financial debt, and also established demanding procedures that must be met to pay certain trade
payables with related parties. Although there are no regulations that prohibit making dividend payment to foreign shareholders, in practice authorities have substantially limited any purchase of foreign currency to pay dividends since these exchange
controls were implemented. There can be no assurance that the BCRA or other government agencies will not increase controls and restrictions for making payments to foreign creditors or dividend payments to foreign shareholders, which would limit our
ability to comply in a timely manner with payments related to our liabilities to foreign creditors or non-resident shareholders. See Item 10Additional InformationForeign Investment and Exchange Controls in Argentina.

Pursuing the same objective, in October 2011 Decree No. 1,722 eliminated an exception for oil, gas and mining companies, and thus
requires these companies to liquidate all their export receipts in the local foreign exchange market. Moreover, in October 2011 the National Insurance Bureau issued Resolution No. 36,162 imposing the obligation for insurance companies to
repatriate all investments and liquid assets allocated outside Argentina. We cannot ensure that similar measures will not be implemented for other private companies or other sectors in the future.

In addition, starting in February 2012 all import operations of goods and services must be filed and approved in advance by AFIP. Such
procedure could also negatively affect our supply chain, as some raw materials, equipment and handsets are imported by our suppliers.

Fluctuations in
Telecom Argentinas share price depend on various factors, some of which are outside of our control.

The market price of our
shares is subject to change due to various factors which are outside of our control such as changes in market expectations, changes in the economic, financial and political situation in Argentina, the way the Ministry of Economy and Public Finance
(in exercise of shareholders rights that belong to ANSES, according to Decree No. 1,278/12) will exercise its political rights and manage its share ownership in Telecom Argentina, and changes in measures used by investors or analysts to
value our stock or market trends unrelated to our performance and operations. We cannot predict when such external factors will affect our stock price or whether their effects will be positive or negative.

In addition, currency fluctuations could impact the value of an investment in Telecom Argentina. Although Telecom Argentinas ADSs listed
on the New York Stock Exchange are U.S. dollar-denominated securities, they do not eliminate the currency risk associated with an investment in an Argentine company.



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ITEM 4. INFORMATION ON THE COMPANY

INTRODUCTION

The Company

Telecom is one of the largest private-sector companies in Argentina in terms of revenues, net income and number of employees. Telecom Argentina
has a non-expiring license (the License) to provide fixed-line telecommunications services in Argentina, and it also provides other telephone-related services such as international long-distance service, data transmission, IT solutions
outsourcing and Internet services. Through our subsidiaries, we also provide mobile telecommunications services and international wholesale services.

As of December 31, 2013, we had approximately 4.1 million fixed lines in service. This is equivalent to approximately 20 lines in
service per 100 inhabitants in the Northern Region of Argentina and 375 lines in service per employee.

As of December 31, 2013, our
Internet business reached approximately 1.7 million accesses and our mobile business had approximately 20.1 million subscribers in Argentina and approximately 2.4 million subscribers in Paraguay.

Business Strategy

The Telecom Group pursues a business strategy focused on increasing its profitability and maximizing value generation for its customers,
shareholders, employees and the broader community it serves. In order to promote the achievement of its goals in a sustainable and consistent manner, the Telecom Group develops business plans according to the telecommunications market and
macroeconomic environment and invests in products and services innovation aimed at improving its customers user experience by adding content, interactivity and convenience to communication.

Our priority focuses on operational efficiency and the effectiveness of planning and control processes. We view these as key competitive
factors for our Company and its long-term corporate sustainability.

We invest in our human resources through communication, training and
development programs, promoting work-life balance, enabling telecommuting and providing open and transparent relationships with individual employees and trade unions. We conduct our activities in accordance with the principles and values in our Code
of Business Conduct and Ethics, which applies to all managers and employees in the Telecom Group, and which our suppliers are required to comply with. We have an experienced Management team that has demonstrated flexibility and aimed at achieving
operational and economic goals.

We also consider the integrated vision of processes and technology to be a key factor of efficiency in
our corporate Management and market competitiveness, thereby enabling us to provide high-value service options to the individual and business consumer.

Our investments in technology are designed to continuously adapt our coverage and capacity of our infrastructure and implement new service
platforms. We aim to provide higher quality service to our increasing traffic volumes and demand for bandwidth, caused by the expansion of our customer base, the access to the network applications and to Value Added Services, access to social
networks and content distribution. We intend to align these investments with cutting edge technologies and those that have been previously implemented in other parts of the world, capturing the benefits of international experience.

Through our Broadband and mobile Internet services, we offer our customers continuous Internet access, regardless of the users physical
location. We also provide our consumers with mobile equipment and applications that enhance personal communication, social relations, entertainment and professional performance.

For the corporate segment, we integrate communication solutions with information technology services by providing virtual access to
applications and platforms at our datacenters.



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We maintain affordable prices commensurate with the markets purchasing power, focusing on
achieving our revenue growth by expanding and developing our customer base and by offering new services and products. We simplified our price structure by developing service packages targeted to different consumer profiles, which provide customers
with a clear view and control over their communication expenses.

The penetration of communication services in the Argentine market has
continued to show sustained growth positioning above the regional average. Our growth rate is currently positioned above the market rate. New market development opportunities could result from a more favorable environment for investment and
competition in the sector.

We believe that the strategy implemented by our Management sets the foundations for the Telecom Group to reach
its goals of continuous service quality improvement, strengthening its market position and increasing its operating efficiency in light of new regulations for telecommunications and other rules of general application affecting the private sector in
Argentina.

Organizational Structure

The following chart shows our subsidiaries as of December 31, 2013, and jurisdiction of organization.



LOGO





|(*) | Dormant entity as of December 31, 2013.
|--- | ---------------------------------------

|(**) | On February 10, 2014 Personals Board of Directors approved the sale of its equity interest in Springville, which was completed on February 19, 2014.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------



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Consolidated Subsidiary Information

The following table presents information relating to our consolidated subsidiaries for the year ended as of December 31, 2013:



|                            |  |                                  |  |                          |  |                        |        |  |                                                         |  |      | 
|--------------------------- |  | -------------------------------- |  | ------------------------ |  | ---------------------- | ------ |  | ------------------------------------------------------- |  | ---- | 
|Subsidiary(1)               |  | Activity                         |  | Segment                  |  | Percentage ofOwnership |        |  | Percentage ofTelecoms TotalRevenues andother income(5) | 
|Telecom Personal S.A.       |  | Mobile Services                  |  | Personal Mobile Services |  |                        | 99.99  |  |                                                         |  | 70.1 | 
|Núcleo S.A.(2)              |  | Mobile Services                  |  | Núcleo Mobile Services   |  |                        | 67.50  |  |                                                         |  | 4.2  | 
|Springville S.A.(2)(3)(4)   |  | Mobile Services                  |  | Personal Mobile Services |  |                        | 100.00 |  |                                                         |  |     | 
|Telecom Argentina USA, Inc. |  | International Wholesale Services |  | Fixed Services           |  |                        | 100.00 |  |                                                         |  | 0.3  | 
|Micro Sistemas S.A.(3)      |  | Electronic Equipment Sales       |  | Fixed Services           |  |                        | 99.99  |  |                                                         |  |     | 
|                            |  |                                  |  |                          |  |                        |        |  |                                                         |  |      | 
|Total                       |  |                                  |  |                          |  |                        |        |  |                                                         |  | 74.6 | 
|                            |  |                                  |  |                          |  |                        |        |  |                                                         |  |      | 



|(1) | Personal and Micro Sistemas are incorporated in Argentina while Núcleo, Springville and Telecom Argentina USA are incorporated in Paraguay, Uruguay and the United States, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Interest held indirectly through Personal.
|--- | ------------------------------------------

|(3) | Dormant subsidiary as of December 31, 2013.
|--- | -------------------------------------------

|(4) | On February 10, 2014 Personals Board of Directors approved the sale of its equity interest in Springville, which was completed on February 19, 2014.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes service revenues, equipment sales and other income with third parties.
|--- | -------------------------------------------------------------------------------

Our principal
executive offices are located at Alicia Moreau de Justo 50, C1107AAB, Buenos Aires, Argentina, telephone number: 54-11-4968-4000.

Our
authorized agent in the United States for SEC reporting purposes is Puglisi & Associates, 850 Library Avenue, Suite 204, P.O. Box 885, Newark, Delaware 19715.

Recent Developments

Telecom Argentinas Board of
Directors called for the Annual Shareholders Meeting

Telecom Argentinas Board of Directors, at their meeting held on
March 14, 2014, called a shareholders meeting to be held on April 29, 2014, to consider among other issues: (i) the allocation of Telecom Argentinas retained earnings as of December 31, 2013 suggested by the Board of
Directors as follows: P$9 million to the legal reserve; P$1,202 million (P$1.24 per outstanding share) for distribution of cash dividends in two equal installments of P$601 million each, the first one to be paid on May 8, 2014 and the second
one during September 2014, and P$1,991 million to a Voluntary Reserve for Capital Investments; and (ii) the delegation of authority in Telecom Argentinas Board of Directors to determine the allocation of the Voluntary Reserve for Capital
Investments.

Personals Board of Directors called for the Annual Shareholders Meeting and approved disaffecting the Reserve for Future Cash
Dividends

Personals Board of Directors, at their meeting held on March 14, 2014, decided to call an ordinary and
extraordinary shareholders meeting to be held on April 23, 2014, which, among other issues, will consider the allocation of P$2,664 million of retained earnings as of December 31, 2013 to a Reserve for Future Cash Dividends and the
delegation of authority in the Board for disaffecting and distributing such reserve, based on the proposal made by the Board of Directors.

The Board of Directors also approved disaffecting the remaining amount of the Reserve for Future Cash Dividends for an aggregate amount of
P$250 million to distribute as cash dividends on March 21, 2014.

Sale of the Equity Interest in Springville

On February 10, 2014 Personals Board of Directors decided to approve the sale of its entire equity interest in Springville
(representing 100% of Springvilles capital stock), a company incorporated in Montevideo, República Oriental del Uruguay. The price of the transaction was US$ 27,223, which was collected by Personal on February 19, 2014 (equivalent
to P$0.2 million).



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History

Telecom Argentina was created by Decree No. 60 of the executive branch dated January 5, 1990, and incorporated as Sociedad
Licenciataria Norte S.A. on April 23, 1990. In November 1990, its legal name was changed to Telecom Argentina STET-France Telecom S.A. and on February 18, 2004, it was changed to Telecom Argentina S.A.

Telecom Argentina is organized as a corporation (sociedad anónima) under Argentine law. The duration of Telecom Argentina is 99
years from the date of registration with the Buenos Aires Public Registry of Commerce (July 13, 1990). Telecom Argentina conducts business under the commercial name Telecom.

Telecom Argentina commenced operations on November 8, 1990 (the Transfer Date), upon the transfer from the Argentine
government of the telecommunications system in the Northern Region previously owned and operated by ENTel. This transfer was made pursuant to the Argentine governments privatization program as set forth in the State Reform Law approved in
August 1989 and subsequent decrees (the Privatization Regulations), which specified the privatization procedure for ENTel.

The Privatization Regulations provided for:



| |  |  | the division of the Argentine telecommunications network operated by ENTel into two regions, the Northern Region and the Southern Region of Argentina;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the granting to Telecom Argentina and Telefónica of non-expiring licenses to provide basic telecommunication services in the Northern Region and Southern Region, respectively;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the granting to Telintar and Startel, each joint subsidiaries of Telecom Argentina and Telefónica, of non-expiring licenses to provide international long distance and data transmission, respectively; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the transfer by ENTel of substantially all of its assets and certain contracts into Telecom Argentina, Telefónica, Telintar and Startel.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

On the Transfer Date, pursuant to the terms and conditions of a transfer contract (the Transfer Agreement), the Argentine
government sold 60% of the common stock of Sociedad Licenciataria Norte S.A. to Nortel, a holding company formed by a consortium of investors including Telecom Italia, among others. In 2003, Nortels common stock was transferred to an Argentine
company named Sofora. As of the date of this Annual Report, Sofora is held 68% by the Telecom Italia Group and 32% by W de ArgentinaInversiones, a holding company incorporated in the Kingdom of Spain, and a company of the Werthein Group. See
Item 7Major Shareholders and Related Party TransactionsShareholders of Nortel.

On November 14, 2013 Telecom
Italia S.p.A and Telecom Italia International N.V. (collectively, the Sellers) and Tierra Argentea S.A. (Tierra Argentea, a company controlled by the Sellers) announced their acceptance of the offer made by Fintech to acquire
Telecom Italias controlling stake in Telecom Argentina owned by the Sellers through their subsidiaries Sofora, Nortel, and Tierra Argentea.

On December 10, 2013 Tierra Argentea completed the transfer to Fintech of (i) Class B Shares of Telecom Argentina, representing
1.58% of the capital stock of such company, and (ii) Nortels ADRs representing 8% of the aggregate Series B Preferred Shares of Nortel.

The transfer of the shares held by the Telecom Italia Group in Sofora is conditional upon prior approval by regulatory authorities. See
Item 7Major Shareholder and Related Party TransactionsShareholders of Nortel.



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Pursuant to the Privatization Regulations, 10% of Telecom Argentinas common stock was
transferred as Class C Shares to a Share Ownership Plan for certain former employees of ENTel and CAT by the Argentine government, and the remaining 30% of Telecom Argentinas common stock was sold to investors, principally in Argentina, the
United States and Europe, in an offering completed in March 1992. A portion of the shares in the Share Ownership Plan has been sold in the public market, and the remaining shares resulting from the Share Ownership Plan are being gradually converted
into Class B Shares. See Item 6Directors, Senior Management and EmployeesShare OwnershipShare Ownership Plan.

Through September 30, 1999, Telecom Argentina provided domestic and international communication services in the Northern Region on an
exclusive basis. Commencing in October 1999, the Argentine government implemented a deregulation plan introducing competition into the Basic telephone services market. See Regulatory FrameworkLiberalization of the Argentine
Telecommunications Industry below. The Argentine telecommunications market was opened to full competition beginning in November 2000. As a result, Telecom Argentina now offers services throughout Argentina and competes with Telefónica
and with a number of additional local operators.



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THE BUSINESS

General

As of the date of this Annual
Report, we conduct our business through five legal entities, each representing a distinct operating segment. We aggregate these operating segments into three segments  Fixed Telecommunications Services (Fixed Services), Personal
Mobile Telecommunications Services (Personal Mobile Services) and Núcleo Mobile Telecommunications Services (Núcleo Mobile Services)  according to the type of products and services provided and taking into
account the regulatory and economic framework under which each entity operates.

The companies we aggregated to create the segments are as
follows:



|                         |  |                                         
|------------------------ |  | ----------------------------------------
|Segment                  |  | Consolidated Company / Operating Segment
|Fixed Services           |  | Telecom Argentina                       
|                         |  | Telecom Argentina USA                   
|                         |  | Micro Sistemas(1)                       
|                         |  |                                         
|Personal Mobile Services |  | Personal                                
|                         |  | Springville(1)(2)                       
|                         |  |                                         
|Núcleo Mobile Services   |  | Núcleo                                  
|                         |  |                                         



|(1) | Dormant entity as of December 31, 2013.
|--- | ---------------------------------------

|(2) | On February 10, 2014 Personals Board of Directors approved the sale of its equity interest in Springville, which was completed on February 19, 2014.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

Fixed Services. Telecom Argentina owns a local telephone line network, public long-distance telephone transmission facilities
and a data transmission network in the Northern Region since the market was open to competition. Telecom Argentina expanded its network in the Southern Region of Argentina providing nationwide services. Fixed services are comprised of the following:



| |  |  | Basic telephone services. Telecom Argentina provides Basic telephone services, including local, domestic and international long-distance telephone services and public telephone services. As of December 31,
2013, Telecom Argentina had approximately 4.1 million lines in service;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Interconnection services. Telecom Argentina provides interconnection services, which primarily include access, termination and long-distance transport of calls;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Data transmission and Internet services. Telecom Argentina provides data transmission and Internet services, including traditional Broadband and mobile Internet, Internet dedicated lines, private networks,
national and international video streaming, transportation of radio and TV signals and videoconferencing services. As of December 31, 2013, Telecom Argentina had approximately 1.7 million Internet accesses;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Information and Communication Technology Services. Telecom Argentina provides ICT services, datacenter services, telecommunications consulting and value-added solutions;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other telephone services.Other services provided by Telecom Argentina include supplementary services such as call waiting, call forwarding, conference calls, caller ID, voice mail, itemized billing and
maintenance services; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sale of equipment.
| | - |  | ------------------

Personal Mobile Services and Núcleo Mobile
Services. We provide mobile services through our subsidiaries in Argentina and Paraguay. Our subsidiary, Personal, provides mobile telephone service throughout Argentina via cellular and PCS networks. Personals service offerings
include:



| |  |  | Voice, data and Internet services. Voice communications, GSM and 3G mobile communications over UMTS / HSPA / HSPA+ networks (including high-speed mobile Internet, content and applications download, multimedia
messaging, online streaming, corporate e-mail, social network access and cloud backup services); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sale of mobile communication devices (handsets, 3G modems, and tablets).
| | - |  | ------------------------------------------------------------------------

We also
provide mobile services in Paraguay through Núcleo, a subsidiary of Personal.

As of December 31, 2013, Personal had
approximately 20.1 million mobile subscribers in Argentina and Núcleo had approximately 2.4 million in Paraguay.

See
Note 28 to our Consolidated Financial Statements and Item 5Operating and Financial Review and ProspectsYears ended December 31, 2013, 2012 and 2011Results of Operations by Segment for additional information as to
our results of operations by segment.

Fixed Services

Telecom Argentina is the principal provider of Basic telephone services in the Northern Region, and since late 1999 has also provided Basic
telephone services in the Southern Region.

Since November 2000, the telecommunications sector in Argentina is completely open to
competition. Our operations are subject to a complex series of laws and regulations of the Argentine government. In addition, we are subject to the supervision of the Regulatory Bodies. See Regulatory Framework below.

The Argentine government has taken certain measures that have affected revenues from the services we provide. Since the enactment of the
Public Emergency Law in January 6, 2002, the rates charged by Telecom Argentina for fixed line services such as measured service, monthly basic charges, public telephone service, domestic, national and international long-distance, installation
charges and most of supplementary services (except for lines and equipment maintenance) have been pesified (Regulated Services since the Transfer Date). We cannot predict when the Public Emergency Law will cease to be effective or how these or other
government regulations may affect our future revenues. See Regulatory FrameworkRatesRate Regulations below and Item 5Operating and Financial Review and ProspectsEconomic and Political Developments in
Argentina.

On the other hand, interconnection services, data transmission, Internet services, ICT services and sale of equipment
are not regulated services subject to a price cap regulation.



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Telecom Argentinas Telephone Network

Telecom Argentinas fixed-line telephone network includes installed telephones and switchboards, a network of access lines connecting
customers to exchanges and trunk lines connecting exchanges and long-distance transmission equipment. The following table illustrates the deployment of Telecom Argentinas telephone network:



|                                        |  |                  |           |   |                  |  |           |                  |  |  |                  |  |  |                  |           |  |  |  |           | 
|--------------------------------------- |  | ---------------- | --------- | - | ---------------- |  | --------- | ---------------- |  |  | ---------------- |  |  | ---------------- | --------- |  |  |  | --------- | 
|                                        |  | December 31,2013 |           |   | December 31,2012 |  |           | December 31,2011 |  |  | December 31,2010 |  |  | December 31,2009 |          
|Number of installed lines(1)            |  |                  | 4,699,254 |   |                  |  | 4,850,554 |                  |  |  | 4,792,530        |  |  |                  | 4,688,977 |  |  |  | 4,595,043 | 
|Net lines installed (during each year)  |  |                  | (151,300  | ) |                  |  | 58,024    |                  |  |  | 103,553          |  |  |                  | 93,934    |  |  |  | 152,414   | 
|Net lines installed cumulative(2)       |  |                  | 3,128,290 |   |                  |  | 3,279,590 |                  |  |  | 3,221,566        |  |  |                  | 3,118,013 |  |  |  | 3,024,079 | 
|Number of lines in service(3)           |  |                  | 4,123,795 |   |                  |  | 4,127,858 |                  |  |  | 4,141,135        |  |  |                  | 4,107,082 |  |  |  | 4,060,260 | 
|Net lines in service added for the year |  |                  | (4,063    | ) |                  |  | (13,277   | )                |  |  | 34,053           |  |  |                  | 46,822    |  |  |  | 50,204    | 
|Net lines in service added cumulative   |  |                  | 2,721,826 |   |                  |  | 2,725,889 |                  |  |  | 2,739,166        |  |  |                  | 2,705,113 |  |  |  | 2,658,291 | 
|Lines in service per 100 inhabitants(4) |  |                  | 20        |   |                  |  | 21        |                  |  |  | 21               |  |  |                  | 21        |  |  |  | 21        | 
|Pending applications(5)                 |  |                  | 91,950    |   |                  |  | 152,210   |                  |  |  | 133,977          |  |  |                  | 83,984    |  |  |  | 77,172    | 
|Public phones installed                 |  |                  | 33,650    |   |                  |  | 36,813    |                  |  |  | 40,079           |  |  |                  | 44,846    |  |  |  | 50,275    | 



|(1) | Reflects total number of lines available in Switches.
|--- | -----------------------------------------------------

|(2) | Cumulative net lines installed since the Transfer Date.
|--- | -------------------------------------------------------

|(3) | Includes lines customers, own usage, public telephony and ISDN channels.
|--- | ------------------------------------------------------------------------

|(4) | Corresponds to the Northern Region of Argentina.
|--- | ------------------------------------------------

|(5) | Corresponds to lines requested by clients, but not yet installed.
|--- | -----------------------------------------------------------------

Revenues

Fixed services include, among other charges, monthly basic charges, measured service charges, installation charges, public telephone services
and interconnection services related to essential facilities. The rates for these charges are regulated by rules governing our license, which establish maximum prices that can be charged to clients. Telecom Argentina is able
to charge prices below the maximum regulated prices as long as the discount is applied equally to clients who share the same characteristics (under the so-called principle of non-discrimination). In accordance with this ability, Telecom
Argentina charges lower prices than the maximum regulated prices for certain of the services offered.

The remaining services included in
the Fixed Services segment are not subject to regulation and, as a result, Telecom Argentina is able to set the corresponding rates. Market conditions limit rate increases.

a) Retail  Residential and Business Customers

Monthly Basic Charges. Telecom Argentina bills a monthly basic charge to its customers. The charge is based on pulses, valued at the
price per pulse prevailing during the periods included in the invoice. The number of pulses varies depending on the type of customer. As of December 31, 2013 and 2012 approximately 82% of lines in service were for residential customers and
public telephony and approximately 18% were for professional, commercial and government customers. Additionally, due to the regulatory regime, Telecom Argentina is obliged to offer discounts to certain retired individuals and low-consumption
residential customers.

Measured Service Charges. In addition to a monthly basic charge, Telecom Argentina bills a monthly measured
service charge from almost all of its customers, which is based on telephone usage. Measured service is billed at the price per unit of time. Charges for local and domestic long-distance measured service vary with the price per unit of usage. The
number of units of usage depends on the time of day, the day of the week, the distance traveled and the duration of calls. During the summer months (December through March), there is decreased consumption due to the fact that many customers are on
vacation. Additionally, due to competition, Telecom Argentina offers discounts to customers mainly for domestic long-distance service as semi-flat rate plans that include a set quantity of minutes for a fixed charge.

Local minutes were approximately 9.7 billion in 2013, 10.6 billion in 2012 and 11.5 billion in 2011. During the past three years, despite
increased economic activity in Argentina the volume of local minutes has decreased due to the strong growth in mobile telephony and the resulting migration of traffic to mobile service. During 2013, revenues from local traffic continued to increase
leveraged by the growth of lines with minutes included in the plan and subscription plans, despite the drop in traffic volume. Also, and to adjust the portfolio to customers needs, new local calling plans were launched to lower-consumption
customers.



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Domestic long-distance minutes were approximately 2.5 billion in 2013, 2.6 billion in 2012 and
2.8 billion in 2011. Ever since the Northern Region was opened to competition in 1999, Telecom Argentina has maintained its position as the regional market leader for domestic long-distance traffic. During 2013, deploying a similar strategy to that
which was adopted for local traffic, we maintained sales of targeted and selective flat-rate plans positioned to maintain average revenues generated by customers.

In the year ended December 31, 2013 approximately 79% of measured service revenue was generated by residential customers, and
approximately 21% was generated by business, professional and government customers and, in 2012, approximately 79% of measured service revenue was generated by residential and professional customers, and approximately 21% was generated by business
and government customers.

International Long-Distance Service. International long-distance traffic minutes increased to
241 million in 2013 from 237 million in 2012 and from 226 million in 2011, mainly due to an increase in the MOU (Minutes of Use) of residential customers.

Since 1992, international rates have been reduced annually as a consequence of the application of the Price Cap described in Regulatory
FrameworkRegulatory EnviromentRate RegulationsPrice Cap. Telecom Argentina also has reduced international long-distance rates in order to compete with the new providers of long-distance calling services.

Installation Charges. Revenues from installation charges consist primarily of fees levied for installation of new fixed lines. Telecom
Argentina offers discounts in multiple localities to reduce the rate authorized by the government, with the aim of stimulating demand in those areas. The penetration of fixed-line telephony has been affected by the maturity of the Argentine market.

Public Telephone Services. As of December 31, 2013, there were 33,650 public lines installed of which 2,514 are in the
Southern Region. Local and domestic long-distance traffic experienced a systematic reduction as a result of a strong development in the mobile industry in Argentina. As a result, public telephony traffic for 2013 fell to 112 million minutes,
from 166 million minutes in 2012 and 202 million minutes in 2011. The traffic in domestic long-distance public telephony was 79 million minutes in 2013, 97 million minutes for 2012 and 120 million minutes for 2011. The
traffic in international long-distance public telephony has experienced a reduction to 45 million minutes in 2013 from 60 million minutes in 2012 and 70 million minutes in 2011.

Other Domestic Telephone Services. Telecom Argentina provides dedicated lines to businesses. Dedicated lines are dedicated
point-to-point leased lines. In addition to installation fees, Telecom Argentina receives revenues from dedicated analog urban/inter-urban lines. These revenues are calculated according to the price for long-distance codes of urban/interurban calls.
Additionally, other domestic telephone services include charges for supplementary services (such as call waiting, call forwarding, conference calls, caller ID, voicemail and itemized billing).

Data Transmission Services. The data services business includes nationwide data transmission services, virtual private networks,
symmetric Internet access, national and international signal transport and videoconferencing services. These services are provided mainly to corporations and governmental agencies. Telecom Argentina also provides certain Value Added Services,
including electronic standard documents telecommunication software exchange and fax storage and delivery service. The data services business also includes the lease of networks to other providers, telecommunications consulting services, operation
and maintenance of telecommunications systems, supply of telecommunications equipment and provision of related services. Corporate data transmission services are mainly Ethernet and IP services.

During 2013, we maintained our focus on ICT solutions and the sale of data services and dedicated Internet accesses. This strategy is
supported by the World Class multi-site network of Datacenters focused on communications, with over 7,000 square meters used to keep computer technology services throughout Argentina. Through this infrastructure, we offer a broad services portfolio
including dedicated hosting and housing, connectivity, cloud services which enable our customers to optimize their costs by increasing the security of their information and avoiding hardware and software obsolescence issues. All the services are
provided with support, security, connectivity and the ability to engage further management, professional, monitoring, storage and backup services.

In addition, we continued making additional investments at the major data center in Pacheco, consolidating its position as leader in the
market and enhancing the level of services supplied. Such investments will enable Telecom Argentina to support business growth in the next few years with the highest market standards.

Internet. Telecom Argentina has been providing residential Internet services under the brand name Arnet since 1998. Telecom Argentina
mainly offers this service in the major cities of Argentina. In recent years, Telecom Argentinas Internet service has experienced higher demand and usage in less populated areas of the country. The Internet services include access, Arnet
service and Dial-Up. However, during the past several years we have seen a constant decrease in Dial-Up access that has been more than offset by increased Broadband accesses. As a result, Dial-up access
represents a marginal percentage of Telecom Argentinas revenues.



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The following table illustrates the evolution of Internet services:



|                      |  |              |           |  |      |  |           |      |  |  |           | 
|--------------------- |  | ------------ | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                      |  | December 31, |          
|                      |  | 2013         |           |  | 2012 |  |           | 2011 | 
|Fixed access lines(1) |  |              | 1,706,787 |  |      |  | 1,629,294 |      |  |  | 1,550,098 | 
|Arnet subscribers     |  |              | 1,686,982 |  |      |  | 1,621,643 |      |  |  | 1,539,719 | 



|(1) | Includes accesses in the Northern Region and the Southern Region. Accesses refer to connections to Internet services offered by Telecom Argentina.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

The market for Broadband has experienced growth in 2011, 2012 and 2013 throughout the country, increasing 15%, 9% and 7%, respectively.
Broadband can be delivered through three technologies: cable modem, ADSL and mobile; cable modem and ADSL being the most widely used. In the local market, ADSL connections exceeded the number of cable modem and mobile connections. Telecom Argentina
markets its ADSL service through its Arnet brand and in partnership with other ISPs.

During the last five years, Telecom Argentina
continued to increase its customer base. As of December 31, 2013, we reached approximately 1.7 million accesses. During 2013, our efforts to communicate effectively with our customers and special offers with competitive prices according to
segment helped us to maintain the leadership of our products under the brand Arnet.

Continuing the evolution of Internet access services,
during the year 2013 services focused on offering higher speed access to customers.

In 2013 Telecom Argentina expanded the bundling of
Broadband and voice services, by launching a fixed monthly payment plan for residential customers which includes packs of calls from a fixed-line to a mobile phone.

Also, in 2013, Arnet Play (the video streaming service for Telecom Argentinas residential customers) was significantly
improved, increasing the video offers.

Internet revenues include both Internet access services and the provision of Internet service.

A small portion of Internet access services is provided by Telecom Argentinas 0610, 0611 and 0612 services. The 0610 service is
provided at rates reflecting up to a 30% discount compared to regular urban rates for connections lasting 30 minutes, depending on the time and day of the connection. After the implementation of an agreement reached with the Argentine government, by
the end of fiscal year 2009, Telecom Argentina offered Internet dial-up access to 100% of the users of fixed lines located in its coverage region. Although Internet dial-up service represents a marginal percentage of Telecom Argentinas
revenues, we continue to provide this service to a small market where Broadband service is not available.

b) Corporate Customers

The large customer segment includes leading companies in the Argentine market as well as the National government, Provincial
governments and Municipalities. These customers demand cutting-edge technology and solutions tailored to their needs, including voice, data, Internet and Value-Added services.

In response to the constant changes demanded by the market, Telecom Argentina maintained its strategy to position itself as the integrated
provider for large customers through the offer of convergence ICT solutions, including fixed and mobile voice, data, Internet, multimedia, ICT, datacenter and application services through sales, consulting, management and specialized and targeted
post-sale customer services.

The main solutions and businesses developed during 2013 included:



| |  |  | Renewal of a contract for the management of 911 emergency calls in a northern province of Argentina.
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | Telecom Argentina was chosen to provide data center services of the major national sugar cane refinery for the production of food and paper.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Telecom Argentina was chosen to provide data center services of a major multinational fast food company.
| | - |  | --------------------------------------------------------------------------------------------------------

Additionally, the following projects are underway and are expected to be completed in 2014:



| |  |  | implementation of a software to manage and control services allowed in corporate mobile lines of an important national bank
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | installation of a trunked communication network for security service calls for a subway network in the metropolitan area of Buenos Aires City.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------

c) Wholesale

Interconnection Revenues. Telecom Argentina collects fees from other operators for interconnection services. These fees primarily
include local access, termination and long-distance transport of calls, rentals of network capacity and commissions on calling party pays fees. These fees are payable by mobile operators as well as fixed-line operators.

Additionally, Telecom Argentina remained one of the leading providers of wholesale telecommunications solutions for various fixed and mobile
operators, independent operators, local operators, public telephony licensees, cable operators, ISP, TV and radio channels, production companies and other service providers. The services marketed by Telecom Argentina include, among others, traffic
and interconnection resources, third-party billing, dedicated Internet access services, transport of video signals in standard definition and high definition, streaming audio and video, dedicated links, backhaul links for mobile operators, Internet
Protocol Virtual Private Network and data center hosting services.

Telecom Argentina continued to strengthen its position as a provider
of solutions for the broadcasting segment by offering transportation solutions for audio and video signals both as dedicated private links and on the Internet. We provided solutions to cable operators and TV channels for the distribution of video
signals. In 2013, we continued to increase the number of clients connected to Telecom Argentinas video matrix located in the city of Buenos Aires.

In 2013 Telecom Argentina continued executing a contract to transport and distribute signals in Open Digital TV (Television Digital Abierta)
for ARSAT. Also Telecom Argentina has transmitted, among others, the video signal of The Four Nations Rugby Championship from the places where the events took place to central distribution in the British Telecom Tower in London.

International Long-Distance Service. Telecom Argentina holds a non-expiring license to provide international telecommunications
services in Argentina, including voice and data services and international point-to-point leased circuits.

Revenues from wholesale
international long-distance service reflect payments under bilateral agreements between Telecom Argentina and foreign telecommunications carriers, covering virtually all international long-distance calls into or out of Argentina using our network.
Revenues from international long-distance service therefore consist mainly of:



| |  |  | amounts earned from foreign telecommunications carriers for connection to the Argentine telephone network;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | bandwidth capacity under an Indefeasible Right of Use (IRU) basis;
| | - |  | --------------------------------------------------------------------



| |  |  | international point-to-point leased circuits; and
| | - |  | -------------------------------------------------



| |  |  | international data services.
| | - |  | ----------------------------

Operating revenues from international long-distance service
depend on the volume of traffic, the rates charged to local customers and the rates charged by each party under agreements between the Argentine provider and foreign telecommunications carriers. Settlements among carriers are usually made on a net
basis. Incoming traffic with carriers measured in minutes accounted for 632 million minutes in 2013, 676 million minutes in 2012 and 727 million minutes in 2011.

Telecom Argentina is connected to international telecommunications networks mainly through the following submarine Fiber Optic cables:
Americas 2 (USA), Columbus 3 (Europe), Atlantis 2 (Brazil  Europe), Sea-Me-We (Europe  Asia), Bicentenario (Uruguay), Latin American Nautilus (LAN), a company in the Telecom Italia Group, and other minor cables.



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In order to meet the growth in our Internet access base, Telecom Argentina has acquired several
IRUs on a submarine facility of Latin America Nautilus (LAN) (a subsidiary of Telecom Italia), which connects Argentina with the U.S. (Miami) in a submarine fiber optic ring. These rights, which last for 15 years, allow the interconnection of the IP
backbone of Telecom Argentina with IP Transit providers in Miami. Telecom Argentina has also contracted Transit IP in Buenos Aires to ensure better performance regarding regional traffic.

Through our wholly owned subsidiary in the United States, Telecom Argentina USA, Inc., a corporation organized under the laws of the State of
Delaware, we were granted a Section 214 authorization by the Federal Communications Commission, or the FCC, to provide global international facilities-based and resale services. Telecom Argentina USAs business, at the moment, is focused
mainly on wholesale long-distance international traffic consequently on February 3, 2014 its Board of Directors decided to discontinue the retail services it had been providing (pre-paid calling cards and call forwarding service) and to
surrender the authorization under Section 214 needed therefore, which was accomplished, after FCC approval, on April 1, 2014.

Telecom Argentina USA, routes the majority of its wholesale traffic through its own switching capabilities. In 2013, Telecom Argentina USA,
Inc., continued operating a node of high-definition video in Miami, thus extending the Telecom video matrix to the international market.

Network and Equipment

In line with previous years, coverage, capacity, quality and availability have been the focus of the development of Telecom Argentina network
strategy in 2013.

Telecom Argentina continued the deployment of fiber optic connections to ensure that Broadband availability in each
city satisfies the customers increasing demands.

In order to improve the availability of the Internet and data access services,
Telecom Argentina has started to deploy the new Multiservice Broadband Network Gateway (MSBNG) architecture with the Aggregation Node (AGN) equipment in the AMBA area.

We also improved the availability of the IP Backbone core (BBIP) by introducing three disjointed paths of fiber optic networks /
DWDM.

Moreover, in 2013, Telecom Argentina launched a three-year plan aiming to change the transport network from a multiprotocol network
to a higher homogeneous network in a unique protocol with high availability (Multiprotocol Label Switching  MPLS).

Broadband services are the most demanded services, requiring the creation of concentration points in the north area of the country in order to
distribute the traffic and to significantly improve the user experience. To this end, the BBIP has to be extended to each provincial capital. In 2013 the BBPI was extended to Chaco, Corrientes, Misiones and Formosa, which involved the creation of
new Point of Presence (POP  connecting nodes) and increased bandwidth transport.

Moreover, the deployment of a MPLS
network for packet transport (PTN or Packet Transport Network) at 10 Gbps was initiated, which will cover all regional nodes throughout all the interurban fiber optic. This deployment will improve bandwidth availability in
additional cities and will allow a more efficient use of the bandwidth. In 2013, approximately 80% of the planned nodes were in the process of implementation.

The deployment of NGN continued in order to satisfy the demand for new lines and reach the customers homes with an increasingly higher
capacity. Also, in order to ensure proper TDM equipment operation, Telecom Argentina continued with a Service Level Agreement (SLA) with the TDM technology providers, which expire in 2015.

In response to Telecom Argentina customers need for more bandwidth, the plan to shorten the loop continued which enhances current
Broadband capacity and also allows Telecom Argentina to provide customers with fiber optic technology at even greater speeds. Additionally, it allows us to offer value-added services that require greater bandwidth.

Also, the FTTC strategy has continued in areas with saturated copper cabinets and the FTTB strategy has been expanded into new buildings.

At the end of 2013, the implementation of the multiservice network was almost finalized in AMBA and other cities of Buenos Aires province,
which uses MPLS- TP technology and enables the same connection site to provide various services with high-capacity levels.

Regarding
operations, MPM continued to be implemented on the fixed access network. When a cabinet area needs to be restored, MPM helps maintain the improvements achieved over time. In 2013, about 270 areas of cabinets were restored reaching more than 2,400
restored areas using the MPM restoration methodology and more than 6,500 restored areas using all restoration methodologies.



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Work also continued to replace telephone poles. In 2013 Telecom Argentina has replaced more than
53,000 poles (including replacement of wooden poles by others of wood or cement).

Personal Mobile Services and Núcleo Mobile Services

We provide mobile services via cellular and PCS networks through our subsidiaries in Argentina and Paraguay.

Mobile Telecommunication Services in ArgentinaPersonal

The market for mobile telecommunications services in Argentina is characterized by constant growth and intense competition. Operators are
generally free from regulation to determine the pricing of services, with the limited exception of CPP charges for termination of calls originating on a fixed line network. See Regulatory FrameworkRegulatory environmentOther
RegulationsCalling Party PaysCPP. There are currently three mobile operators offering nationwide service. The penetration of mobile service in Argentina has increased from approximately 134.2% of the population as of
December 31, 2011, to approximately 139.4% in 2012 and to approximately 148.5% in 2013. This information regarding penetration of mobile service is an estimate, as there are no official statistics published in Argentina, and only considers
lines serviced by the three operators providing nationwide mobile telecommunications services (i.e., it does not include Nextel).

Service
providers in Argentina are making significant capital expenditures in new network infrastructure for the deployment of 3G (and HSPA+) technology, which allows for the higher transmission speeds required for Value Added Services such as data
transfer, video calling and Internet browsing.

Our mobile telecommunications services in Argentina are provided through our subsidiary,
Personal. We provide mobile services throughout Argentina via STM, SRMC and PCS networks. Personal utilizes GSM and 3G technologies in its networks and primarily offers its services of STM and SRMC services on the 850 MHz frequency band and PCS
service on the 1,900 MHz frequency band.

Personals business continues growing. From December 31, 2012, to December 31,
2013, its subscriber base in Argentina grew approximately 6%. As of December 31, 2013, Personal had approximately 20.1 million subscribers compared with approximately 19.0 million subscribers as of December 31, 2012, and
approximately 18.2 million subscribers as of December 31, 2011.

a) Residential and Business Customers

Personal subscribers are offered a variety of flexible pricing options for mobile services. These options include prepaid, post-paid and mixed
plans.

On December 17, 2013, the SC issued Resolution 26/13, which changed the billing unit of measurement for calls originating on
mobile communications. Such resolution established that calls will be charged per second and the pricing of each call will consist of a fixed value corresponding to the initial communication block (including up to 30 seconds), plus additional
charges per second, after the 30th second of communication has elapsed (See Regulatory frameworkRegulatory environmentChange in the valuation method of mobile services and information on the conditions of commercial mobile
plans).

Prepaid Plans. Under prepaid plans, the subscriber pays in advance for telephone calls and Value Added Services
using prepaid credit. When the subscriber runs out of credit, he or she can purchase prepaid cards using a prepaid system or can purchase virtual credit on Personals website, by phone, at ATMs and drugstores, or through authorized agents.
Since there are no monthly bills, prepaid plans allow subscribers to communicate with maximum flexibility while maintaining control over their consumption. A subscriber can add credit to the card and make and receive local, national and
international calls.

Post-Paid Plans. Personal offers a National Flat Rate post-paid plan and a Local Flat Rate post-paid plan.
Post-paid plans include caller ID, voicemail and a personalized greeting, call forwarding, data services, a multimedia personalized greeting, telephone technical support and call waiting. The plans deploy Personal Digital Invoicing, enabling
subscribers to view, download and print their invoices from the web. Depending on the plan, and the monthly fee, they might include Value Added Services such as social network access, e-mail or data allowance for browsing the Internet, as well as
specific contacts (on-net numbers) that can be contacted by voice or SMS for free.



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Under both plans, a subscriber pays a monthly bill consisting of a monthly user fee plus Value
Added Services and a charge for airtime used in excess of the amount included in the plan. These plans generally offer a specified number of free seconds per month. Once the free seconds have been used, the subscriber can continue using the mobile
service at a set price per second. The charges for additional airtime will be added to the next months bill. Under the National Flat Rate Plan, a subscriber can make calls to and from any location within Argentina at a constant rate because
the airtime rate includes the local public network, national long-distance and national roaming. Under the Local Flat Rate Plan, where the airtime rate includes the Local Public Network and Roaming, a subscriber can make local calls within any
locality in the country but calls from one locality to another are charged at an extra rate.

Cuentas Claras. Under the
Cuentas Claras plans, a subscriber pays a set monthly bill and, once the contract credit per month have been used, the subscriber can obtain additional credit by recharging the phone card through the prepaid system. Under this plan, a
subscriber can use its monthly credit or its pre-paid credits for calls, such as social network access, e-mail or data allowance for browsing the Internet, as well as specific contacts (on-net numbers) that can be contacted by voice or SMS on a free
basis.

The following table presents information regarding Personals post-paid, prepaid, Cuentas Claras and total mobile
subscriber bases for the periods indicated:



|                       |  |                    |            |  |            |  |       |      |  |  |            |  |  |      |       |  |            |  |            |  |  |  |       | 
|---------------------- |  | ------------------ | ---------- |  | ---------- |  | ----- | ---- |  |  | ---------- |  |  | ---- | ----- |  | ---------- |  | ---------- |  |  |  | ----- | 
|                       |  | As of December 31, |           
|                       |  | 2013               |            |  | % of Total |  |       | 2012 |  |  | % of Total |  |  | 2011 |       |  | % of Total | 
|Mobile subscribers:(1) |  |                    |            |  |            |  |       |      |  |  |            |  |  |      |       |  |            |  |            |  |  |  |       | 
|Prepaid                |  |                    | 13,539,423 |  |            |  | 67.4  |      |  |  | 12,720,001 |  |  |      | 67.0  |  |            |  | 12,414,127 |  |  |  | 68.2  | 
|Post-paid              |  |                    | 2,417,344  |  |            |  | 12.0  |      |  |  | 2,386,656  |  |  |      | 12.6  |  |            |  | 2,178,645  |  |  |  | 12.0  | 
|Cuentas Claras       |  |                    | 3,878,962  |  |            |  | 19.3  |      |  |  | 3,476,512  |  |  |      | 18.3  |  |            |  | 3,138,755  |  |  |  | 17.3  | 
|Mobile Internet        |  |                    | 252,188    |  |            |  | 1.3   |      |  |  | 392,081    |  |  |      | 2.1   |  |            |  | 461,950    |  |  |  | 2.5   | 
|                       |  |                    |            |  |            |  |       |      |  |  |            |  |  |      |       |  |            |  |            |  |  |  |       | 
|Total                  |  |                    | 20,087,917 |  |            |  | 100.0 |      |  |  | 18,975,250 |  |  |      | 100.0 |  |            |  | 18,193,477 |  |  |  | 100.0 | 
|                       |  |                    |            |  |            |  |       |      |  |  |            |  |  |      |       |  |            |  |            |  |  |  |       | 



|(1) | Mobile subscribers mean total registered and active mobile subscribers at the end of the relevant period. An active mobile subscriber is a mobile subscriber who made or received three phone calls within the
last 90 days of such relevant period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New products and services. Personal continued to deepen its strategy based in
the concept Cada Persona es un Mundo  Each Person is a World with the launch of various products, promotions and benefits to meet the diverse communication needs of different types of customers. The quality in customer
experience continued as the strategic axis that crossed all the initiatives developed by Personal during 2013.

Personal also increased
the granting of benefits in recharges and service packages for its customers, optimizing their plans convenience. It also introduced a new benefit for customers with monthly bills, allowing unused airtime in a month to be used in the next
month.

The unlimited Internet service per day, an innovative offer launched by Personal in early 2011, increased by approximately 42%
penetration on active Cuentas Claras and Prepaid customer base during 2013.

Furthermore, Club Personal, the loyalty
program with more than 5.6 million members and over 500 participating businesses, continued to evolve from its base resegmenting, expanding the differential benefits for its members.

In relation to the strategy of contacts with customers, Personal presented a new model of personal assistance in commercial offices around the
country, which is based on the experience and education of each customer, to respond to their needs and increase its satisfaction. During 2013, three sales offices were opened with the new model across the country. Thus, the sales network of
Personal reached 69 offices with a presence in several major cities.

Finally, Personal continued its strategy of repositioning its brand,
with the realization of the 9th edition of Personal Fest, the most important international music festival in Argentina, which attracted more than 50,000 people over two days. This event was broadcast online, reaching more than 500,000 people
who enjoyed the festival virtually.

Personals ARPU was approximately P$66.8 per month for 2013 and P$57.7 per month for 2012.



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b) Wholesale

International Business. During 2013, Personal continued to position itself as a benchmark in international roaming services, expanding
3G data coverage in order to provide a better user experience to its subscribers.

Personal entered into over 280 data agreements
(GPRS/EDGE) reaching over 135 3G launchings of a total of 325 international roaming agreements, which provide service in 165 countries.

In order to increase the number of roaming destinations Personal implemented a second Roaming Hub which expanded international coverage.

Also, Personal enhanced the coverage of destinations reached by the International SMS service through two contracted SMS Hubs, which enable
greater flexibility and reliability of the service.

We implemented the IPX technology with the aim to improve customers experience
regarding data roaming services. Through this technology, the interconnection is made by signaling and GRX solution which allows Personal to faster and efficiently satisfy the increased bandwidth customers demands.

In order to reveal data consumption by customers abroad, and to be in line with the global policies of the GSM Association, during 2013
Personal added the following features to its international services:



| |  |  | Warning notifications via SMS to customers regarding their consumption.
| | - |  | -----------------------------------------------------------------------



| |  |  | Implementation of daily data consumption cap which is automatically reset.
| | - |  | --------------------------------------------------------------------------



| |  |  | Communication updates via text messages received abroad by our customers (SMS Welcome).
| | - |  | ---------------------------------------------------------------------------------------

Also,
Personal implemented and widely communicated daily offer packages of voice, SMS and data services for the most popular destinations visited by customers during vacation and based on their historical consumption.

Personal continues increasing its penetration of international services. Currently over 415,000 monthly packs (+50% compared to the previous
year) are sold.

Personal participated in events organized by foreign groups in Argentina, increasing its position in international
services with tailored offerings for different demographic segments.

Domestic Business. During 2013, Personal continued to
strengthen its relationship with operators and suppliers of telecommunication services, Cooperatives Federations and clearing house services suppliers. Personal renewed contracts with existing operators of such services or entered into new ones.
Also, Personal signed new agreements with cooperatives to install new sites in their towns in order to achieve or improve mobile coverage in those areas. On the other hand, Personal continues contracting non-conventional sites for the same purpose.
In addition, Personal expanded agreements with other operators of resources and facilities (data links and transmission, interconnection resources, origination, termination, minutes transport, conventional and non-conventional site leases and
domestic roaming) that contributed to the development of Personal mobile network, improving the quality of the services offered to its customers.

Personals Network and Equipment

Personal is the operator of mobile networks at a national level, and uses world-class technology providing GSM and third-generation services.

The mobile network infrastructure and the fixed network infrastructure are complementary. Therefore, the development strategy for
Personals network aims to maximize the synergies of investments of the Telecom Group as an integrated operator group.

To this end,
Personals radio access network is supported by a regional transport network that is shared with the fixed telephony business. To the extent possible, the switching core shares the facilities with other switches in the Telecom Group, and all
data services are supported by the public backbone of the Group.

In order to improve coverage and capacity of the mobile access network,
Personal performs continuous measurements of relevant parameters and benchmarks with the networks competitors.



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In 2013, the 2G network continued growing primarily in terms of capacity to accompany the
increase in data traffic and to compensate the reduction of spectrum reassigned to 3G. By the end of 2013, Personal had over 3,500 2G sites distributed throughout the country.

Personal continued to deploy a 3G access network with over 3,150 sites as of December 31, 2013. Consequently, 3G access network increased
its capacity in existing sites after the activation of the spectrum assigned from the 2G network and the construction of six-sectors technology (which allows a more effective use of the spectrum), allowing to satisfy the increasing
demand for mobile Internet services.

Also, Personal continued the strategy of maximizing the deployment of radio bases linked by fiber
optic in order to ensure bandwidth availability to address current and future needs. Also, a 3G second carrier was launched.

Moreover,
Personal worked on the MPM methodology expansion, reaching more than 75 sites with restored radio base, which allows Personal to reduce radio bases unavailability and to maintain the improvements achieved over time.

Mobile Telecommunications Services in ParaguayNúcleo

We provide nationwide mobile telecommunications services in Paraguay through our subsidiary, Núcleo, under the commercial name of
Personal. Núcleo is 67.5% owned by Personal and 32.5% owned by ABC Telecomunicaciones S.A., a Paraguayan corporation. Núcleo has been granted licenses to provide commercial mobile services, Internet access and
videoconference and data transmission services in Paraguay.

During 2013, the telecommunications sector in Paraguay showed good
performance, with growth levels above 9% compared to 2012. As of December 31, 2013, Núcleo had approximately a 33% share of the market for mobile telecommunications services in Paraguay. The subscriber base increased 5% as compared to
the previous year. As of December 31, 2013, Núcleo had 1,935,558 pre-paid subscribers, 297,474 subscribers with the service plan Plan Control, 29,035 post-paid subscribers and 152,684 mobile Internet subscribers.

Núcleo communicative actions in early 2013 were focused on Number Portability, working on transparency and awareness about the impact
of the customers ability to choose the operator maintaining the same number.

Since midyear 2013, Núcleo has focused on a new
concept titled Recharge your Personal and get direct benefits in calls, messages and Internet. The objective aims to highlight the convenience of recharging credit, offering a variety of benefits associated with recharging as well as
emphasizing the synergy between offers, communication and point of sales, giving a customer experience focused in recharging of credit.

Also, consumption of value-added services, mobile financial services and the Internet, were encouraged in order to increase the
customers demand. This effort is focused on the younger segment which primarily consumes such products (i.e. music, games, and sports). With respect to Internet, Núcleo was the first company in the market that launched LTE, and focused
its communication campaign in its speed and its Mega Experience.

Núcleos Network and Equipment

Núcleo deployed the first LTE network in Paraguay and was then followed by other operators. For the deployment of the
network, 80 sites were installed in 1,900 MHz covering all of the city of Asuncion.

Other major developments in 2013 include the
following:

Paraguay Dream Project: In order to update the access network, Núcleo completed Phases 1 and 2 of the project,
making the swap of 186 mobile sites in Asunción and the entire Central Department.

Coverage expansion: 190 new cell sites
were installed in Paraguay, representing an increase of 32% of the total network.

Quality and Capacity Improvement: Núcleo
has expanded its mobile network to satisfy the increasing voice and data traffic. For this purpose, 1,138 new cells have been installed, representing a 69% increase in network capacity. In addition, 2 new controller nodes (RNC) have been installed
and the existing RNCs have been expanded.



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Core: Núcleo continued to expand its circuit core and package core by upgrading the
hardware and software at all network nodes. In addition, Núcleo completed the replacement of the MSC (Mobile Switching Center) in Asunción and Ciudad del Este through the installation of two new nodes with Blade Cluster architecture,
which is the latest version of hardware and software available in the mobile telecommunication market.

Transmission: While
expanding the transmission network, Núcleo expanded coverage of the network by providing Internet access services to the Corporate sector. Additionally, Núcleo is completing the extension of the DWDM Network in the north of Paraguay
adding 513 Km of fiber optic, which will result in a security ring of this area.

Finally, in Ciudad del Este, the installation of a new
transport network called IPRAN was completed by Núcleo. This new transport network will meet new capacity requirements and provide the scalability, and flexibility that the evolution of the traffic of mobile network requires.

Competition

Fixed Services

Basic Telephony and International Long-Distance Services. Before November 1999, Telecom Argentina held an exclusive license to provide
Basic telephone services to the Northern Region. The Argentine telecommunications market has been open to full competition since November 2000. As of the date of this Annual Report, the main licensees providing local and/or fixed long-distance
telephone service are Techtel (commercially known as Telmex), Impsat (commercially known as Level 3 Communication formerly Global Crossing), IPlan, Comsat, Telecentro, Telefónica (principally in the Southern Region)
and Telecom Argentina (principally in the Northern Region). Telefónica has the dominant market share for provision of telecommunications service in the Southern Region. Some of these competitors may be better capitalized than us and have
substantial telecommunications experience. Accordingly, if economic conditions in Argentina improve and competitors increase their presence in the Northern Region, Telecom Argentina expects that it will face additional pressure on the rates it
charges for its services and experience limited loss in market share in the Northern Region.

Internet and Data Services. We face
nationwide competition in the Internet service market in Argentina from Telefónica, Gigared, Cablevisión (Fibertel) and Telecentro (providing a triple-play offer), among others. Our data services business faces competition from
Telefónica, Comsat, Grupo Telmex Argentina and from several providers of niche data services such as Impsat, IPlan and others.

Mobile Telecommunications Services

Mobile Telecommunications Services in Argentina. The mobile telecommunications market in Argentina has been open to competition since
1993 and was expanded to include PCS services in 1999. During recent years, GSM technology has created intense competition for subscribers among the various service providers, including giving rise to severe pricing pressure, significant handset
subsidies and increased sales incentives provided to dealers. The introduction of 3G technology since May 2008 has allowed operators to focus competition on Value Added Services.

Currently, there are three operators providing nationwide mobile telecommunications services. These three operators are Personal,
Telefónica Móviles Argentina and América Móvil. Nextel competes on a limited level, offering trunking telephony services in Buenos Aires and selected cities in the interior, in addition to offering mobile
telecommunication services in those cities.

América Móvil, operating in Argentina under the trade name Claro
(formerly CTI), is one of the countrys largest mobile operators in terms of number of subscribers and has provided STM cellular services in the Northern and Southern Regions outside of the AMBA since 1994 through the 850 MHz band (25 MHz in
each region). Claro also holds a 40 MHz license for its PCS services in the AMBA and a 20 MHz license for PCS in each of the Northern and Southern Regions.

Telefónica Móviles, operating in Argentina under the trade name Movistar, is another of the largest mobile operators
in Argentina in terms of number of subscribers. Movistar is the result of Telefónicas merger of Unifón and Movicom in 2005. Movistar operates in the AMBA through the 850 MHz band with a total of 37.5 MHz (25 MHz + 12.5 MHz), and
a total of 50 MHz (20 MHz + 30 MHz) for PCS. It also holds a total of 80 MHz (40 MHz + 40 MHz) for its PCS licenses for the Northern



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Region, and a total of 60 MHz (20 MHz + 40 MHz) for its PCS license in the Southern Region. This Southern Region is Unifons original service area, where it also holds a 25 MHz license for
STM. The economic concentration that resulted from Unifon and Movicoms merger exceeded the maximum limit of the 50 MHz of spectrum assignation (for the services of STM-SRMC-PCS and SRCE) permitted by Article 4 of the Annex to Article 1 of
Decree 266/1998. In Regulation No. 343/05, regulatory authorities approved the merger on the condition that the resulting entity decreases its spectrum holdings to the permitted levels in accordance with a schedule ending at year-end 2008.
Movistar has completed the required decrease in its spectrum.

Nextel Argentina provides trunking telephony and other telecommunications
services in Buenos Aires and cities in the interior. Nextel Argentinas service currently focuses on business subscribers in the main cities of Argentina.

The acquisition and retention of high-value customers continues to be a key factor to Personals strategy, which is focused on
maintaining customers consumption through the launch of new products and services that enable retention of existing customers.

See
Regulatory FrameworkRegulatory EnvironmentDecree No. 764/00 for a description of Number Portability and also Regulatory FrameworkOther RegulationsRegulations Applicable to PCS Services for
additional details on Personals license.

Mobile Telecommunications Services in Paraguay. Currently, there are four
participants in the mobile telecommunications services market in Paraguay. As of December 31, 2013, Núcleos major competitor was Tigo (a Millicom International Cellular subsidiary).

REGULATORY FRAMEWORK

Regulatory
Bodies and General Legal Framework

Telecom Argentina and Personal operate in a regulated industry. Regulation not only covers rates
and service terms, but also the terms on which various licensing and technical requirements are imposed.

The activities of Telecom
Argentina and Personal are supervised and controlled by the CNC, a governmental agency under the supervision of the SC (which is presently supervised by the Ministry of Federal Planning, Public Investments and Services). The CNC is in charge of
general oversight and supervision of telecommunications services. The SC has the power to develop, suggest and implement policies, which are applicable to telecommunications services, to ensure that these policies are applied, to review the
applicable legal regulatory framework, to approve the frequency band scheme, to act as the enforcing authority with respect to the laws governing the relevant activities, to approve tariffs for basic fixed services and to resolve administrative
appeals filed against CNC resolutions, among others.

The principal features of the regulatory framework in Argentina have been created
by:



| |  |  | the Privatization Regulations, including the List of Conditions;
| | - |  | ----------------------------------------------------------------



| |  |  | the Transfer Agreement;
| | - |  | -----------------------



| |  |  | the Licenses granted to Telecom Argentina and its subsidiaries;
| | - |  | ---------------------------------------------------------------



| |  |  | the Rate Agreements; and
| | - |  | ------------------------



| |  |  | various governmental decrees, including Decree No. 764/00, establishing the regulatory framework for licenses, interconnection, universal service and radio spectrum management.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Núcleo, Personals Paraguayan controlled company, is supervised by the Comisión Nacional de Telecomunicaciones de Paraguay,
the National Communications Commission of Paraguay (CONATEL). Telecom Argentina USA, Telecom Argentinas subsidiary in the United States, is supervised by the Federal Communications Commission (FCC).



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Licenses granted as of December 31, 2013

To Telecom Argentina

As of December 31, 2013, Telecom Argentina has been granted the following non-expiring licenses to provide the following services in
Argentina:



| |  |  | local fixed telephony;
| | - |  | ----------------------



| |  |  | public telephony;
| | - |  | -----------------



| |  |  | domestic and international long-distance telephony;
| | - |  | ---------------------------------------------------



| |  |  | domestic and international point-to-point link services;
| | - |  | --------------------------------------------------------



| |  |  | domestic and international telex services;
| | - |  | ------------------------------------------



| |  |  | Value Added Services, data transmission, videoconferencing and transportation of audio and video signals; and
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | Internet access.
| | - |  | ----------------

To the Companys subsidiaries

As of December 31, 2013, the Companys subsidiaries have been granted the following licenses:



| |  |  | Personal has been granted a non-exclusive, non-expiring license to provide mobile telecommunication services (STM) in the Northern Region of Argentina and data transmission and Value Added Services throughout the
country. In addition, Personal owns licenses to provide mobile radio communication services (SRMC) in the Federal District and Greater Buenos Aires areas, as well as a non-expiring license to provide PCS services throughout the country, and it is
registered to provide national and international long-distance telephone services; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Núcleo has been granted a renewable five-year period license to provide mobile telecommunication services (STM) in Paraguay as well as PCS services in certain areas of that country. In addition, Núcleo has
been granted a five-year renewable license to provide Internet services, data transmission and videoconferencing throughout the country.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Radio electric spectrum auction

In May 2011, the SC through Resolution No. 57/11 launched an auction to reassign the 850 MHz and 1,900 MHz frequency bands returned by
Telefónica Móviles de Argentina S.A. because this company had exceeded its 50 MHz spectrum cap. This auction was canceled by SC Resolution No. 71/12 for reasons of opportunity, merit and convenience of the Argentine government.

On December 13, 2012, the PEN, through Decree No. 2,426/12, amended the Regulation on Management and Control Spectrum (See
Decree No. 764/00 below), incorporating paragraph 8.5 to Article 8 of that Regulation, establishing: Notwithstanding the provisions of Article 8.1., the regulatory authority may assign frequencies directly to National
Organizations, State Agencies and Entities majority-owned by the Argentine government.

Also, the mentioned Decree instructed the SC
to confer to Argentine Satellite Solution Corporation S.A. (ARSAT  a company wholly owned by the Argentine government) the authorization for the use of the frequencies involved in the auction approved by Resolution SC
No. 57/11.

The mentioned decree also amended Article 8 of the Regulation for Telecommunications Services Licenses in force,
incorporating the following provision: Article 8 bis  Mobile Virtual Network Operator. Those interested in offering mobile services that do not have radio spectrum frequencies assigned for the provision of these services must have the
license for telecommunications services and the registration as Mobile Virtual Network Operator. Mobile services operators will be responsible for the services rendered to its customers and are liable for the application of the respective sanction
system. The regulatory authority may issue the application and interpretation acts that it deems appropriate.

The same decree
instructs the SC to implement the appropriate measures in order to attribute the bands between 1,710-1,755 MHz; 2,110-2,155 MHz and 698-806 MHz exclusively for terrestrial mobile telecommunications services.

On December 13, 2012, the PEN, through Decree No. 2,427/12, declared of public interest the development, implementation and
operation of the Federal Wireless Network, in charge of the Ministry of Federal Planning, Public Investment and Services, to be executed through ARSAT, under the National Telecommunications Plan Argentina Conectada, which
provides the infrastructure necessary for this purpose, according to the general guidelines established in the Decrees Annex.



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In addition, by Article 2 of Decree 2,427/12, the PEN instructed the Ministry of Federal
Planning, Public Investment and Services, as major shareholder of ARSAT, to take the necessary corporate actions and decisions, that allow the execution of works and services required as a result of the implementation of the Federal Wireless
Network.

Also, on December 21, 2012, the SC Resolution No. 222/09 was published in the Official Bulletin, which assigned
ARSAT the telecommunication services license that authorizes the state company to provide any kind of telecommunication services with or without owned infrastructure. It also provided the authorization for the provision of value-added services, data
transmission and transportation of audio and video signals.

By Resolution No. 9/13, published on February 7, 2013, the SC
granted ARSAT the registration of Mobile Services and National and International Long Distance Services and the Provision of Telecommunication Facilities.

Revocation of the License

Telecom
Argentinas license is revocable in the case of non-compliance with certain obligations, including but not limited to:



| |  |  | an interruption of all or a substantial portion of service;
| | - |  | -----------------------------------------------------------



| |  |  | a modification of corporate purpose or change of domicile to a jurisdiction outside Argentina;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | a sale or transfer of the license to third parties without prior approval of the Regulatory Bodies;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | any sale, encumbrance or transfer of assets which has the effect of reducing services supplied without the prior approval of the Regulatory Bodies;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a reduction of ownership of Nortel in the capital stock of Telecom Argentina to less than 51%, or the reduction of ownership of Sofora in the capital stock with voting power of Nortel to less than 51%, in either case
without prior approval of the Regulatory Bodies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any transfer of shares resulting in a direct or indirect loss of control in Telecom Argentina without prior approval of the Regulatory Bodies; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a bankruptcy of Telecom Argentina.
| | - |  | ----------------------------------

If Telecom Argentinas license is revoked, Nortel
must transfer its interest in Telecom Argentinas capital stock to the Regulatory Bodies, in trust for subsequent sale through public auction. Once the sale of the shares to a new management group is performed, the Regulatory Bodies may renew
the license of the Company under the terms to be determined.

Personals licenses are revocable in case of non-compliance with
certain obligations, including but not limited to:



| |  |  | repeated interruptions of Personals services as set forth in the List of Conditions;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | any transfer of the license and/or the related rights and obligations, without the prior approval of the regulatory authority;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | any encumbrance of the license;
| | - |  | -------------------------------



| |  |  | any voluntary insolvency proceedings or bankruptcy of Personal; and
| | - |  | -------------------------------------------------------------------



| |  |  | a liquidation or dissolution of Personal, without the prior approval of the regulatory authority.
| | - |  | -------------------------------------------------------------------------------------------------

Núcleos licenses are revocable mainly in the case of:



| |  |  | repeated interruptions of the services;
| | - |  | ---------------------------------------



| |  |  | any voluntary insolvency proceedings or bankruptcy of Núcleo; and
| | - |  | -----------------------------------------------------------------



| |  |  | non-compliance with certain obligations.
| | - |  | ----------------------------------------

Liberalization of the Argentine Telecommunications Industry

In March 1998, the Argentine government issued Decree No. 264/98, introducing a plan for the liberalization of the Argentine
telecommunications industry, or the Plan. Decree No. 264/98 provided for the extension of the period of exclusivity with respect to the provision of Basic telephone services until sometime between October 8, 1999, and
November 8, 1999, depending on the particular region.



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The Plan also provided for: (i) the immediate liberalization of paid telephone services and (ii) during July 1998, the liberalization of telephone service in rural areas. In addition,
the Plan contemplated that in January 1999, data transmission services within the countries included in Mercosur would be open to competition, subject to the following conditions: (i) each of the Mercosur countries enters into agreements
providing for the liberalization of these services and establishing similar regulatory bodies and (ii) reciprocity exists between countries with respect to the granting of licenses. Beginning in late 1999, two new operators, formed by
independent operators, mobile operators and cable television operators were permitted to offer services. These new operators, together with the existing licensees of Basic telephone services, allowed customers to choose from four operators until the
full liberalization of services occurred. The Plan also granted data transmission operators existing before the privatization of ENTel the right to operate domestic and international long-distance services by the end of 2000. Finally, the full
liberalization of local, domestic and international long-distance services took place in November 2000. See Decree No. 764/00 below

During the Transition Period (1998-1999), new regulatory obligations were also introduced with respect to quality and service
targets applicable to both Telecom Argentina and Telefónica.

As long-distance services were liberalized, competition was
introduced by Pre-subscription of Long-Distance Service for locations with more than 5,000 clients. Following the introduction of Presubscription of Long-Distance Service, a call-by-call selection service will be installed. These requirements
obligated the telephone companies to make significant investments and modifications to their networks.

During 1999, competition in local,
national and international long-distance services was established among Telecom Argentina and Telefónica and Compañía Telefónica del Plata (CTP, Movicom Bell South) and Compañía de Telecomunicaciones
Integrales S.A. (CTI, now Claro), the two new national operators permitted to offer services by Decree No. 264/98. Some provisions of Decree No. 264/98 and related resolutions were modified by Decree No. 764/00, mainly provisions
related to licensing conditions, interconnection and Universal Service. Decree No. 764/00 established the general regulation of licenses and provided that each licensed company was allowed to launch its services in November 2000 when the full
liberalization of the telecommunications market began. As of the date of this Annual Report, the main licensees providing local and/or fixed long-distance telephone service are Techtel (Telmex), Impsat (Level 3 Communication  formerly Global
Crossing), Comsat, IPlan, Telecentro, Telefónica and Telecom Argentina.

Pursuant to the Plan, the liberalization of public
telephone services began. On December 9, 1998, Telecom Argentina was granted (upon the subsequent issuance of SC General Resolution No. 2,627/98) a license to provide public telephone services in the Southern Region.

Regulatory Environment

Decree
No. 764/00

On September 5, 2000, the Argentine executive branch issued Decree No. 764/00 which enacted four new
regulations:



| |  |  | the regulation of licenses for telecommunications services;
| | - |  | -----------------------------------------------------------



| |  |  | the interconnection regulation;
| | - |  | -------------------------------



| |  |  | the regulation governing the administration, management and control of the radioelectric spectrum; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the Universal Service regulation.
| | - |  | ---------------------------------

The basic guidelines for these regulations are as follows:

General Regulation of Licenses. This regulation establishes a single nationwide license for the provision of all telecommunication
services to the public, including fixed-line, mobile, national and international, irrespective of whether these services are provided through telecommunications infrastructure owned by the service provider. Under the regulation, a licensees
corporate purpose does not need to be exclusively the provision of telecommunications services and there are no restrictions on participation by foreign companies. In addition, the regulation does not establish any minimum investment or coverage
requirements. Broadcasting service companies may also apply for a license to provide telecommunications services. The regulation further authorizes the resale of telecommunications services subject to obtaining a license. This regulation governs the
license through which Telecom Argentina offers services in the Southern Region and supplements Telecom Argentinas obligations pursuant to its preexisting licenses.



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Interconnection Regulation. Compared to the prior interconnection regulation (Decree
266/98), this regulation provides for a reduction in the reference interconnection prices in effect at the time. The regulation also increases the number of infrastructure elements and services that the dominant operator is required to provide,
including interconnection at the local exchange level, billing services and unbundling of Local Loops. This regulation also introduces interconnection for number translation services (NTS) such as Internet, audiotext, collect calling and the
implementation of number portability, all of which were subject to future regulations.

Related to the Regulation for the call by call
selection of the providers of long-distance services, the former Ministry of Infrastructure and Housing issued General Resolution No. 613/01 which approved this Regulation, subsequently modified by Resolution No. 75/03 of the Ministry of
Economy and Public Finance, which introduced several changes related to the obligation of service provision and habilitation and blockage modality and the availability of the service on December 6, 2003. The Company has fulfilled with all its
obligations, nevertheless, as of the date of this Annual Report, this long-distance service modality is not implemented.

Regarding the
number portability, on January 22, 2009, the SC issued Resolution No. 8/09 pursuant to which an ad hoc Working Commission was created with representatives of the SC and the CNC, for the purpose of preparing a draft of the Number
Portability Regime.

On August 19, 2010, through SC Resolution No. 98/10, the SC approved the Number Portability Regime
(NP), covering the STM, SRMC, PCS and SRCE (trunking) mobile services, defined in the resolution as portable services.

On
June 14, 2011, the SC issued Resolution No. 67/11 replacing several sections of the NP regime. It also approved the Processes and Technical and Operational Specifications relating to the implementation and correct application of the NP,
the Bidding Specifications for the selection of the Database Administrator and the model contract, and the Network Technical Specification for the implementation of the NP in the Networks Mobile Communications.

On October 12, 2011, and under the provisions of SC Resolution No. 98/10 and No. 67/11, the contract for the integration and
management of the Database, between the four service providers and the Administrator of the Portability was formalized with the selection of the joint offer by Telcordia Technologies Inc. and its Argentine affiliate Telmark S.A.

Personal and the other mobile service providers finalized the adjustments of their respective networks as well as developments and testing of
the necessary information technology applications, implementing the NP during March 2012.

On November 4, 2013, the SC, through its
Resolution No. 21/13, modified the Number Portability Regime (NP) approved by SC Resolution No. 98/10, providing among other things, that the period for complying with a request cannot be more than five business days starting
from the receipt of the application by the Database Administrator.

Regulation Governing the Administration, Management and Control of
the Radioelectric Spectrum. This regulation establishes the principles and requirements governing the administration, management and control of the radioelectric spectrum. According to the regulation, authorizations or permissions will be
granted subject to SCs right to substitute, modify or cancel them without any grantee right to indemnification. New grants of authorizations will have a minimum duration of five years. The authorizations or permissions for use of frequencies
may not be transferred, leased or assigned, in whole or in part, without prior authorization by the SC.

Universal Service
(SU) Regulation. The Universal Service regulation requires entities that receive revenues from telecommunications services to contribute 1% of these revenues (net of taxes) to the Universal Service Fiduciary Fund (the SU
Fund). The regulation adopted a pay or play mechanism for compliance with the mandatory contribution to the SU fund. The regulation established a formula for calculating the subsidy for the SU liability which takes into account the
cost of providing this service and any foregone revenues. Additionally, the regulation created a committee responsible for the administration of the SU fund and the development of specific SU programs.

On June 8, 2007, the SC issued Resolution No. 80/07 which stipulated that until the SU Fund was effectively implemented,
telecommunication service providers, such as Telecom Argentina and Personal, were required to deposit any contributions accrued since the issuance of such Resolution into a special individual account held in their name at Banco de la Nación
Argentina. CNC Resolution No. 2,713/07, issued in August 2007, established how these contributions are to be calculated.



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New Universal Service Regulation

Decree No. 558/08, published on April 4, 2008, introduced certain changes to the SU Fund regime created by Decree No. 764/00.
Decree No. 558/08 established that the SC would assess the value of service providers direct program contributions in compliance with obligations promulgated by Decree No. 764/00. It would also determine the level of funding required
in the SU Fund for programs pending implementation. In the same manner, in order to guarantee the continuity of certain projects, the SC was given the choice to consider as SU contributions certain other undertakings made by telecommunication
services providers and compensate providers for these undertakings.

In defining Universal Service, the new regulation
established two categories: (a) areas with uncovered or unsatisfied needs and (b) customer groups with unsatisfied needs. It also determined that the SC would have exclusive responsibility for the issuance of general and specific
resolutions regarding the new regulation, as well as for its interpretation and application.

It also established that the SC will review
SU programs which were established under the previous regulation, guaranteeing the continuity of SU programs already being administered and implementing programs that had been under review. The financing of SU ongoing programs which were recognized
as such will be determined by the SC, whereas telecommunications providers appointed to participate in future SU Programs will be selected by competitive bidding.

The Decree requires Telecom Argentina and Telefónica to extend the coverage of their fixed line networks, within their respective
original region of activity, within 60 months from the effective date of the Decrees publication. The SC will determine on a case-by-case basis if the providers will be compensated with funds from the SU Fund.

The Decree requires telecommunications service providers to contribute 1% of their revenues (from telecommunication services, net of taxes) to
the SU Fund and keeps the pay or play mechanism for compliance with the mandatory monthly contribution to the SU Fund or, to claim the correspondent receivable, as the case may be.

Providers of telecommunications services shall rely on the assistance of a Technical Committee made up of seven members (two members appointed
by the SC, one member appointed by the CNC, three members appointed by the telecommunication services providers  two of which shall be appointed by Telecom Argentina and Telefónica and one by the rest of the providers  and another
member appointed by independent local operators). This Technical Committee is informed by the SC of the programs to be financed and is responsible for managing and controlling the SU Fund, carrying out technical-economic evaluations of existing
projects and supervising the process of competitive bidding and adjudication of new SU programs, with prior approval by the SC.

The
Technical Committee has been created and it is fully operative. Additionally, telecommunications service providers had already sent the proposed Fiduciary agreement to the SC. The SC approved it in January 2009 through Resolution No. 7/09.

On April 4, 2009, by means of SC Resolution No. 88/09, the SC created a program denominated Telephony and Internet for towns
without provision of Basic Telephone services that will be subsidized with funds from the SU Fund. The program seeks to provide local telephony, domestic long-distance, international long-distance and Internet services in towns that did not
provide Basic telephone services. The proposed projects approved by the SC would be sent to the Technical Committee of the SU Fund so that availability of funds can be evaluated and they can be included in a bidding process provided for in Decree
No. 558/08.

On December 1, 2010, the SC issued Resolutions No. 147/10 and No. 148/10, approving Internet for
educational institutions and Internet for public libraries programs, respectively. These programs aim to provide the Broadband Internet service to state-run educational institutions and public libraries, respectively, and would be
implemented using SU Fund resources, through public biddings. The first bid for the Internet for educational institutions program for 4,900 schools, was awarded to Telecom Argentina, among others. Telecom Argentina is finishing the
installation of the last project facilities, which will reach 1,540 schools and generate revenue to us from the FFSU of approximately P$5 million per year for a period of 5 years. On the other hand, the auction Internet for public
libraries program was cancelled by the Regulatory Authority to be redefined. Also, during 2012, the auction Telephony and Internet for towns without provision of Basic Telephone Service took place according to Resolution
No. 88/09, which involved the service provision in 430 locations. Personal presented its offer to the auction. As of the date of this Annual Report, the auction is in pre-award stage.



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On November 11, 2010, the SC issued Resolution No. 154/10 adopting the methodology for
the deposit of the SU contributions to the trustees escrow account. The Resolution includes several provisions related to the determination of the contributions that correspond to the periods before and after Decree No. 558/08 was issued.
It also states that telecommunication providers may discount the amounts incurred in the implementation of the SU Initial Programs from the contributions to the SU Fund until the SC determines if those Initial Programs qualify as such. However, if
as a result of the SCs verification some amounts are not recognized as Initial Programs, those amounts would have to be contributed into the SU Fund or would have to be allocated to develop SU projects previously approved by the
SC.

On December 30, 2010, the trustee notified Telecom Argentina and Personal of the trustees escrow account number in which
they shall deposit the SU contributions under the provisions of SC Resolution No. 154/10.

On January 26, 2011, the SC issued
Resolution No. 9/11 establishing the Infrastructure and Equipment Program. The Resolution provides that telecommunication service providers can contribute to the projects in this program only the amounts corresponding to their
pending SU contributions under Annex III of Decree No. 764/00, before the effective date of Decree No. 558/08.

In Telecom
Argentina

By the end of 2002, the SC formed a working group responsible for analyzing the method to be applied for measuring the net
costs of SU performance  particularly, the application of the Hybrid Cost Proxy Model (the HCPM Model), based on the incremental cost of a theoretical network. The working group was also tasked with defining non-monetary
benefits and determining the methodology for its calculation, in order to assess the costs that would be offset due to performance of SU obligations. The working group decided that, given the complexity of this methodology, efforts should be
made to continue the initial programs independently from application of the HCPM Model, and that there was a need to carry out a comprehensive review of the present general regulations relating to SU to ensure that these regulations were operative
in the near term considering the existing social needs.

Several years after the deregulation of the market and effectiveness of the first
SU regulations, incumbent operators have not received any set-offs for the services rendered under the SU regime.

Pursuant to Resolutions
SC No. 80/07, SC No. 154/10 and CNC No. 2,713/07, Telecom Argentina has estimated for that SU Initial Programs a receivable of P$1,457 million (unaudited) for the period initiated in July 2007 through December 31, 2013, and has
filed its calculations for approval by the SC. This receivable has not yet been recorded since it is subject to approval of the SU programs and review of the SC.

On April 8, 2011, the SC issued Resolution No. 43/11 notifying Telecom Argentina that investments associated with High-Cost
Areas  amounting to approximately P$1,220 million since July 2007 and included in the above-mentioned receivables  are not considered an Initial Indicative Program. Such resolution was appealed by Telecom Argentina. As of the date
of this Annual Report, the outcome of this appeal is still pending.

On July 12, 2012, Telecom Argentina was notified of the SC
Resolutions No. 53 and 54/12 and on July 25, 2012, it was notified of SC Resolutions No. 59, 60, 61 and 62/12, pursuant to which the Special Service of Information 110, the Discounts for Retired People, Pensioners
and Low Consumption Households, the services of Social Public Telephony and Loss-Making Public Telephony, the Services and Discounts relating to the Information Society Program argentina@internet.todos, the
Services for Deaf-Mute People and the Free Access to Special Emergency Services and Special Community Services, provided by Telecom Argentina did not qualify as an Initial Indicative Program, pursuant to the terms of Article
26 of Annex III of Decree No. 764/00, and that, taking into account the conditions and legal framework within which such services were developed by Telecom Argentina, they did not constitute different services involving a SU provision, and
therefore cannot be financed with SU funds, pursuant to the terms of Section 2 of Decree No. 558/08.

On August 21, 2012,
the Company was notified of SC Resolutions No. 69 and 70/12, pursuant to which the Value Added Service 0611 and 0612 and the Long Distance Semipublic Service provided by Telecom Argentina did not qualify as an Initial
Indicative Program, pursuant to the terms of Article



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26 of Annex III of Decree No. 764/00, and that, taking into account the conditions and legal framework within which such services were developed by Telecom Argentina, they did not constitute
different services involving a SU provision, and therefore cannot be financed with SU funds, pursuant to the terms of Article 2 of Decree No. 558/08.

Telecom Argentinas Management, with the advice of its legal counsel, has filed appeals against SC Resolutions Nos. 53, 54, 59, 60, 61,
62, 69 and 70 presenting the legal arguments based on which such resolutions should be revoked. The deductions that were objected by the SC Resolutions amount to approximately P$534 million and are included in the credit balance mentioned in the
third paragraph of this section.

On September 13, 2012, the CNC required Telecom Argentina to deposit approximately P$208 million.
Telecom Argentina has filed a recourse refusing the CNCs request on the grounds that appeals against the SC Resolutions are still pending of resolution. However, it cannot be assured that these issues will be favorably resolved in the
administrative stage. Otherwise, we cannot assure what actions the Company would take to defend its rights at court.

In Personal

Since January 2001, Personal has been recording a liability related to its obligation to make contributions to the SU Fund. In
addition, since July 2007 and in compliance with SC Resolution No. 80/07 and No. 154/10 and CNC Resolution No. 2,713/07, Personal deposited the correspondent contributions of approximately P$112 million into an account held under
their name at the Banco de la Nación Argentina.

During the first quarter of 2011, the abovementioned funds were transferred to the
trustees escrow account, in compliance with the provisions of SC Resolution No. 154/10 previously described. Since January 2011, the SU Fund monthly contributions are now being made into such escrow account.

In March 2011, Personal submitted to the SC a P$70 million investment project, pursuant to SC Resolution No. 9/11, for the development of
network infrastructure in locations in the Northern Region of Argentina with no mobile coverage. As of the date of this Annual Report, SC approval of this project is still pending.

On July 5, 2012, the SC issued Resolution No. 50/12 pursuant to which it notified that the services referred to by the Mobile
Communications Services Providers, which were filed as High Cost Areas or services provided in non-profitable areas, services provided to clients with physical limitations (deaf-mute and blind people), rural schools, and the request relating to the
installation of radio-bases and/or investment in the infrastructure development in various localities, do not constitute items that may be discounted from the amount of contributions to the SU pursuant to Article 3, last part, of Resolution
No. 80/07, or Article 2 of Decree No. 558/08. It also provides that certain amounts already deducted may be used for investment projects within the framework of the Program of SC Resolution No. 9/11, or deposited in the SU Fund, as
applicable.

Personal has filed an administrative action against SC Resolution No. 50/12 requesting its nullity. As of the date of
this Annual Report, the resolution of this matter is still pending.

On October 1, 2012, responding to an SCs requirement,
Personal deposited under protest approximately P$23 million in the SU Fund, corresponding to the assessment of the SU services provided by Personal since the issuance of Decree No. 558/08, reserving its right to take all actions it may deem
appropriate to claim its reimbursement, as informed to the SC and the CNC on October 15, 2012. Since August 2012, Personal has paid its monthly calculations under protest of those concepts.

It cannot be assured that this issue would be favorably resolved in the administrative stage. Otherwise, we cannot assure what actions the
Company would take to defend its rights at court.

Administrative complaint in connection with the service cuts affecting Telecom
Argentina and Personals customers

In the normal course of business, telecommunication service providers face the possibility
of incidents in their networks or other assets which could have varying impacts on the services provided to customers. The regulatory framework applicable to Telecom Argentina and Personal provides for the possibility of interruptions in the
provision of services and also allows for the suspension of service in case of unforeseen circumstances or force majeure. In particular, the list of conditions of the Mobile



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Telephony Service (approved by Decree No. 1,461/93) and the General Regulation of Individual Communications Service (approved by Resolution SC No. 60/96) provide for a penalty regime
taking into account the period of the service interruption, exempting from any sanction the total service provision interruption of no more than 24 hours and partial service interruptions for periods of less than seven days. The Telecom Group seeks
to prevent such incidents, and, in case of any occurrence, ensure their resolution as soon as possible.

However, the CNC has recently
initiated various administrative procedures against Telecom Argentina and Personal related to various network incidents, including some originated by cases of unforeseen circumstances or force majeure, imposing penalties of various amounts for the
companies of the Telecom Group.

The more relevant administrative sanctions are as follow:



|                     |  |                   |  |                                                              |  |                                                                                                                                                                              
|-------------------- |  | ----------------- |  | ------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date of the incident |  | Company           |  | Approximate duration of the incident and impact              |  | Sanctions                                                                                                                                                                    
|06/12/2012           |  | Telecom Argentina |  | 21⁄2 hours (affecting certain services in some cities)       |  | Fine of approximately P$0.6 million.                                                                                                                                         
|                     |  |                   | 
|06/12/2012           |  | Personal          |  | 21⁄2 hours (affecting certain services in some cities)       |  | Fine of approximately P$0.6 million and P$10 of reimbursement to each customer affected, with a penalty of P$4,690 for each day of delay in complying with the reimbursement.
|                     |  |                   | 
|03/08/2013           |  | Personal          |  | 2 hours (affecting certain services in some cities)          |  | Fine of P$6 million and P$30 of reimbursement to each customer affected, with a penalty of P$140,700 for each day of delay in complying with the reimbursement.              
|                     |  |                   | 
|04/02/2013           |  | Personal          |  | Service provision affected by the flooding of La Plata city. |  | Fine of approximately P$2 million and P$60 of reimbursement to each customer affected, with a penalty of P$140,700 for each day of delay in complying with the reimbursement.
|                     |  |                   | 
|05/10/2013           |  | Personal          |  | 10 hours (affecting certain services in some cities)         |  | Fine of approximately P$0.6 million and a daily fine of P$1,407 per day of delay in complying with reporting required by the CNC with respect to the incident.               

Telecom Argentina and Personal have filed their defenses against such penalty procedures in the administrative
stage, arguing that these penalties should not be imposed. As of the date of this Annual Report, these penalty procedures are not final. However, it cannot be assured that a favorable result will be obtained at the administrative stage.

Resolution SC No. 1/13

On April 8, 2013, Resolution SC No. 1/13 was published in the Official Bulletin, requiring that all mobile operators guarantee the
availability of network service, even in emergency situations, in which case the normal provision of mobile services must be restored in a maximum period of one hour. Mobile operators must, in all cases, prioritize the access to emergency services
in the affected areas.

In addition, Resolution SC No. 1/13 established that mobile operators provide, within 45 days, a contingency
Plan for emergency situations, for purposes of guaranteeing the continuity of services in such circumstances.

As of the date of this
Annual Report, Personal has appealed Resolution SC No. 1/13, based on the argument that the Resolution introduces new obligations to mobile operators which substantially change the current licenses conditions. Notwithstanding the appeal,
Personal has met its commitment to present a contingency plan for emergency situations.



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Resolution SC No. 5/13

On July 2, 2013, SC Resolution No. 5/13 was published in the Official Bulletin. This resolution approved a telecommunication
service quality regulation, establishing, among others, new quality parameters required for telecommunication services provided through mobile and fixed public networks, for all the operators in Argentina, as well as the obligation that
providers give periodic information to CNC.

CNC Resolution No. 3,797/13 was published in the Official Bulletin on November 13,
2013, supplementing SC Resolution No. 5/13 and approving the Audit Procedures and Technical Verification of Service Quality Regulation of Telecommunications Services Manual. Resolution No. 3,797/13 establishes guidelines and requirements
regarding customer care and technical indicators of the network performance, for the operators who must comply with the telecommunication service quality regulation. This Resolution will be gradually implemented during 2014.

Telecommunication operators have requested, to the SC, the progressive application of the new quality standards, the redefinition of some of
them due to technical reasons and the review of the technical indicators contemplating current allocation of the spectrum between mobile operators.

As of the date of this Annual Report, Telecom Argentina and Personal are analyzing the operational aspects required by the new regulations as
well as its economic impact and applicable actions to be taken.

Regulation of Users of Mobile Communication Services

On September 9, 2013, the SC issued Resolution No.12/13, which established a public comment procedure whereby the public may express
opinions and offer proposals on the Project of Regulation of Users of Mobile Communication Services. As of the date of this Annual Report, the period for such public comment has expired. The draft regulation contemplates, among other matters, the
filing of all service contracts electronically and on paper and also modifies the way changes in business and marketing service plans are disclosed. As part of that process, Personal has submitted comments to the project stating the effects that the
proposed provisions, if approved, would have on the Argentine mobile communications industry. Among others, such effects could include more bureaucratic hurdles in the relationship with the client and increased costs for Telecom Personal.

Change in the valuation method of mobile services and information on the conditions of commercial mobile plans

Resolution No. 26/13 issued on December 17, 2013 changed the billing unit of measurement for calls originating on mobile services and
the mechanism for informing the CNC of the conditions of existing commercial plans. The new resolution establishes that calls originated by users of mobile communications will be charged per second and the pricing of each call will consist of a
fixed value corresponding to the initial communication block (including up to 30 seconds), plus additional charges per second after the 30th second of communication has elapsed.

The resolution requires providers of mobile communications services to adopt appropriate measures for the implementation of the new method
within 60 calendar days of the publication of the resolution for current customers, and within 15 calendar days of publication for new customers.

The resolution also establishes that the prices for each type of service plan, as well as the commercial conditions for all service plans,
must be reasonable and non-discriminatory, and must be submitted to the Enforcement Authority no less than 60 calendar days prior to their becoming effective.

Rates

The Price
Cap was a rate regulation mechanism applied to calculate changes in Telecom Argentinas basic services rates using the U.S. Consumer Price Index (the U.S. C.P.I.) and an efficiency factor. However, in October 2001, a preliminary
injunction prohibited Telecom Argentina from applying rate increases by applying the U.S. C.P.I.

Public Emergency Law No. 25,561
explicitly prohibited rate adjustments. As of the date of this Annual Report, the Pesification and the freeze of regulated rates remain in force. Therefore, the Price Cap regime is suspended and it is unknown if and when it will come back into
effect or be replaced by other rate regulation procedures.



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In accordance with the Public Emergency Law, in January 2002, rates for Basic telephone services
and long-distance services were converted to pesos and fixed at an exchange rate of P$1.00=US$1.00. The rates Telecom Argentina may charge in the future will be determined by negotiations between Telecom Argentina and the Argentine government. The
Public Emergency Law has been subsequently extended through December 31, 2015.

On March 6, 2006, Telecom Argentina executed a
Letter of Understanding (the Letter of Understanding 2006) with the Argentine government pursuant to which Telecom Argentina will be permitted to raise the termination charge for international incoming calls, increase the time bands for
peak-hour rates applied to local and domestic long-distance calls and incorporate certain modifications to the current regulatory framework.

The Letter of Understanding 2006 contemplated the signing and effectiveness of the Minutes of Agreement of the Renegotiation upon the
fulfillment of certain necessary administrative steps. As of the date of this Annual Report, such fulfillment has yet to occur. Although we expect such fulfillment to occur, we cannot guarantee whether or when this will happen. We are unable to
predict the outcome of the negotiations that are continuing with regard to further rate increases and the future rate scheme. Also, we are unable to predict whether the Argentine government, as a result of the current rate renegotiations, will
impose additional conditions or requirements and if these conditions or requirements are imposed, whether we will be able to satisfy them.

Rate Regulations

Rate Rebalancing. At the time of ENTels privatization, the need for a future amendment of rates to rebalance the pricing of
domestic and international charges was foreseen. Subsequent agreements established the right of licensees to a Rate Rebalancing and set forth some methods to implement a new rate structure.

Decree No. 92/97 provided for a significant reduction in domestic and international long-distance rates, an increase in basic telephony
charges, the elimination of Free Pulses and an increase in urban rates. The Rate Rebalancing was undertaken as part of the Argentine governments plan to create a competitive environment in the Argentine telecommunications industry. One of the
main principles of the Rate Rebalancing was to have a neutral effect on the licensees revenues.

The new rate schedule was intended
to reduce cross-subsidies (particularly those existing between urban and long-distance services) to create a competitive environment beginning in the year 2000. Decree No. 2,585/91 established that the Rate Rebalancing should have a neutral
effect on the licensees revenues. In developing the rate structure implemented by Decree No. 92/97, the Argentine government relied on studies which demonstrated that because of the elasticity of demand for telephone service, an increase
in demand for lower-priced services would compensate for the rate reductions. Decree No. 92/97 established corrective methods to facilitate neutral results on revenues.

The variation in revenues resulting from the Rate Rebalancing for the two-year period beginning February 1997 was determined to amount to an
increase of P$9.5 million in accordance with SC Resolution No. 4,269/99. As a result, during fiscal year 2007, Telecom Argentina recorded a liability on the CNC final results, which was shown as a deduction from the Resolution No. 41/07
receivables. In April 2009, the CNC notified the offsetting of the P$9.5 million Rate Rebalancing amount with the Resolution No. 41/07 receivables (See Tax Stability: Social Security Contribution Variations), thus ratifying
the registration made by Telecom Argentina.

Historical Rates. The following table sets forth certain of our maximum monthly rates
for various components of local service and domestic long-distance service which have been in effect since 1999:



|                              |  |                  |  |  |        | 
|----------------------------- |  | ---------------- |  |  | ------ | 
|                              |  | Maximum rate (1) | 
|Residential:                  |  |                  |  |  |        | 
|Installation charge per line  |  | P$               |  |  | 150    | 
|Monthly Basic Charge per line |  | U.S. Dollars (2) |  |  | 13.23  | 
|Commercial:                   |  |                  |  |  |        | 
|Installation charge per line  |  | U.S. Dollars (2) |  |  | 150    | 
|Monthly Basic Charge per line |  | U.S. Dollars (2) |  |  | 27.30  | 
|Prices:                       |  |                  |  |  |        | 
|Price per pulse (nominal)     |  | U.S. Dollars (2) |  |  | 0.0469 | 



|(1) | Figures shown do not include value added tax charged to customers.
|--- | ------------------------------------------------------------------

|(2) | In accordance with Public Emergency Law, these rates were pesified at the exchange rate US$1.00 to P$1.00.
|--- | ----------------------------------------------------------------------------------------------------------



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Price Cap. The List of Conditions required that rates undergo an annual reduction until
the Regulatory Bodies determine that there is effective competition in the markets we serve. The Price Cap was a regulation method applied in order to calculate changes in Telecom Argentinas rates, based on changes in the U.S.
C.P.I. and an efficiency factor. A 2% (measured in real dollar terms) reduction in the prior years rates was required for each of the third through the seventh year following the Transfer Date (through November 7, 1997). In addition,
following the extension of the exclusivity period, rates were required to be 4% lower (measured in real dollar terms) than the prior years rates. This requirement was maintained pursuant to the Rate Agreement, whereby Telecom Argentina was
permitted to effect aggregate rate reductions by lowering rates for some or all categories of service, provided that net reductions meet the applicable targets. The application of annual reductions to the general level of rates established in the
List of Conditions (price cap) has been implemented mainly by reducing the long-distance rates and (in Price Cap 1998) discounts to certain public entities, including the fire departments and public libraries. The CNC notified Telecom Argentina of
the completion of the Price Cap 1998 audit which did not show any balance that needed to be applied. As a result of the 1999 Price Cap audit process and Telecom Argentinas reviews, the Regulatory Authority notified us, in August 2009, of the
existence of an outstanding balance of P$3.1 million plus interest. Telecom Argentina has offset this amount with the credit resulting from SC Resolution No. 41/07. See Tax Stability: Social Security Contribution Variations.

On April 6, 2000, the Argentine government, Telefónica and Telecom Argentina signed an agreement (Price Cap 2000)
that set the price cap efficiency factor at 6.75% (6% set by the SC and 0.75% set by Telecom Argentina and Telefónica) for the period of November 2000 to October 2001.

The 2000 Price cap audit results are still pending. Should the outcome of these audit results yield a payable by Telecom Argentina, this
payable can be offset with the receivables generated by Resolution No. 41/07. See Tax Stability: Social Security Contributions Variation.

In April 2001, the Argentine government, Telefónica and Telecom Argentina signed an agreement (2001 Price Cap) that set an
efficiency factor for reduction of rates at 5.6% for the period from November 2001 to October 2002.

However, in October 2001, a
preliminary injunction against Telecom Argentina disallowed Telecom Argentina to apply rate increases by reference to the U.S. C.P.I. Telecom Argentina appealed this injunction arguing that if one part of the formula could not be applied, the Price
Cap system should be nullified. Finally, Public Emergency Law No. 25,561 explicitly prohibited rate adjustments. As of the date of this Annual Report, the Pesification and the freeze of the regulated rates are still in force, therefore the
price cap regime is suspended and it is unknown if and when it will come back into effect or be replaced by other rate regulation procedures.

Installation Charges. Under the Rate Agreement, Telecom Argentina was required to gradually reduce installation charges so as to
achieve pricing levels equal to those for internationally mature networks (estimated in the Rate Agreement to be US$250) and to eliminate distinctions between residential and commercial users. Decree No. 92/97 established that, beginning in
November 1997, installation charges could not exceed the amount charged in mature international markets. According to this decree, the current maximum permitted charge is US$150 (pursuant to the Public Emergency Law, this charge was pesified at the
exchange rate of US$1.00=P$1.00). Telecom Argentina has been applying several promotions to installation charges.

Monthly Basic
Charges. Until the effective date of Decree No. 92/97, customers were entitled to a certain number of Free Pulses per line depending on the category of each customer and the number of lines in the area. As a result of the application of
Decree No. 92/97 and in order to offset rate reductions for domestic and international long-distance services, Free Pulses were eliminated for all categories of customers and monthly basic charges were equalized throughout the country. Decree
No. 92/97, however, provided for a special reduced rate that is available to certain retired people and low-consumption residential customers.



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Long-Distance Rates. Decree No. 92/97 reduced the average weighted domestic
long-distance rate by approximately 33%. Under this revised rate schedule, interurban rates were significantly reduced, with maximum long-distance rates reduced by 56%. Calls within Provincial Code 1 (up to 30 km) made within provincial cities are
billed at an urban rate.

Letter of Understanding Relating to Basic Services. Pursuant to the Letter of Understanding 2006,
described under Rates, the government has agreed that Telecom Argentina can increase the termination charges applied to incoming international calls and reduce the time bands for off-peak local rates. As of the date of this Annual
Report, Telecom Argentina is expecting the completion of certain administrative steps required for the National Executive to submit to the National Congress a proposed Memorandum of Agreement for Renegotiation. See Rates for a
description of the status of the letter of understanding 2006.

Tax on Deposits to and Withdrawals from Bank Accounts
(IDC). On February 6, 2003, the Ministry of Economy and Public Finance, through Resolution No. 72/03, defined the method to allow, going forward, rate increases on Basic telephone services reflecting the impact of the IDC.
The amount of tax charged must be shown separately in customers bills. Telecom Argentina has determined the existence of a remaining unrecovered amount of approximately P$23 million that arose before the issuance of Resolution No. 72/03.
Telecom Argentina planned to claim such amount within the rate renegotiation process (See Rates). In April 2007, Telecom Argentina provided the CNC with supporting documentation about this amount for its audit. Telecom Argentina
had access to the CNCs audit documentation which corroborates the amounts claimed by Telecom Argentina and its application of a similar offsetting method pursuant to Resolution No. 41/07 described below. As a result, the Company recorded
as Non-current Other receivable a total of P$23 million.

Tax Stability: Social Security Contribution Variations.On
March 23, 2007, the SC issued Resolution No. 41/07 relating to the impact of variations in social security contributions occurring over the past several years and the proposed use for the resulting savings and increases in contribution
rates that have occurred. Pursuant to Resolution No. 41/07, Telecom Argentina may offset the impact of costs caused by increases in social security contribution rates that have been implemented in accordance with the applicable regulations
against the savings caused by reductions in the levels of social security contributions initially earmarked for the argentina@internet.todos Program.

Telecom Argentinas implementation of Resolution No. 41/07 was subject to CNC audits, which were carried out during the third
quarter of 2007. Telecom Argentina gained access to the documentation related to the CNCs audits and it showed no significant differences as compared to the net amounts that Telecom Argentina had determined.

Consequently, Telecom Argentina recorded a receivable from increases in social security contributions and canceled payables stemming from
reductions in social security contribution rates and other fines due by Telecom Argentina. As of December 31, 2013, Telecom Argentina has a net receivable of P$62 million which, in addition to the receivable of P$23 million corresponding to the
IDC, is included in the line item Other receivables as non-current receivables.

Since Resolution No. 41/07 gives Telecom
Argentina the right to offset receivables with existing and/or future regulatory duties and, given its intention to exercise this right, the receivable was recorded net of reserves. As of December 31, 2013, the reserves corresponding to these
regulatory duties amounted to P$85 million.

In 2013, Telecom Argentina continued its practice of billing customers for the increases in
its social security contribution rate accrued from October 2008, applying the same method used to bill the IDC.

Other Regulations

Regulation for the Call-by-Call Selection of the Providers of Long-Distance Services. On December 28, 2001, the former
Ministry of Infrastructure and Housing issued General Resolution No. 613/01, approving a system that allows callers to select their preferred long-distance provider for each call. This call-by-call selection system is referred to as
SPM.

Subsequently, as a result of claims submitted by several carriers objecting to General Resolution No. 613/01, the
Ministry of Economy and Public Finance issued General Resolution No. 75/03, which introduced several changes to the regulations setting forth the SPM. The main changes relate to the following: long-distance carriers freedom to provide
SPM, changes in blockage modality due to delinquency, changes in the service connection modality and greater flexibility of obligations related to



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service promotion and advertising. General Resolution No. 75/03 also provides that origin providers, both fixed and mobile, must have their equipment and networks available to provide the
SPM service within 120 days of February 6, 2003. Our equipment and networks have been able to provide this service since 2002. As of the date of this Annual Report, this long-distance service modality has not been implemented.

Buy Argentine Act. In December 2001, the Argentine government passed Public Law No. 25,551 (the Compre Trabajo
Argentino or Buy Argentine Act), and in August 2002, Decree No. 1,600/02 approved and brought such Act into effect.

The
Act requires Telecom Argentina to give priority to national goods and services, as defined in Public Laws No. 25,551 and No. 18,875, in any procurement related to the rendering of Basic telephone services. Priority must be given to
national goods and services as long as the price of such goods is equal to or lesser than the price of a foreign good (including customs duties, taxes and other expenses that are linked to the nationality of goods) increased by 7% (when the
Argentine offeror is a small-or medium-size company) or 5% (when the Argentine offeror is any other company).

The Buy Argentine Act also
mandates that Telecom Argentina publish any bid for services in the Official Bulletin in order to provide any and all prospective offerors with information necessary for them to participate. This mandatory publication requires considerable lead time
before the issuance of the purchase order and has had the result of extending the period needed to complete certain purchases. Non-compliance with the Act is subject to criminal sanctions.

Public Law No. 18,875 establishes the obligation to exclusively contract services, as defined by such law, with local companies and
professionals. Any exception must receive the prior approval of the relevant Ministry.

In August 2004, CNC Resolution No. 2,350/04
enacted the Procedure for the fulfillment of the Buy Argentine Act, which requires Telecom Argentina to present biannual returns addressing its compliance with these rules. Non-compliance with this obligation is subject to administrative
sanctions. Since this regulation requires Telecom Argentina to make bids for goods and services and/or to obtain any necessary approvals by a relevant authority, and given the higher administrative expenses derived from the obligation to present
biannual returns, this regulation reduces Telecom Argentinas operating flexibility.

Rendering of Fixed Telephony Through Mobile
Telephony Access Infrastructure. In August 2007, through SC Resolution No. 151/07, fixed telephony was granted access to particular frequency bands, with the purpose of providing Basic telephone services in rural and suburban areas through
the mobile access infrastructure used for the provision of mobile telephony service. Telecom Argentina and Telefónica provide this service within their respective fixed telephony service original regions. Telecom Argentina has installed fixed
lines based on this technology in order to satisfy service demand in rural and suburban areas.

Calling Party Pays  CPP. As
from April 15, 1997, pursuant to Decree No. 92/97 and SC General Resolutions No. 263/97 and No. 344/97, mobile telephone services apply the CPP system, whereby the party placing a call from a fixed-line to a mobile phone pays for
the air-time charges for the call. As an exception to this rule, traffic originating from public telephones does not pay CPP, and is instead charged according to the Mobile Party Pays or MPP system, whereby the mobile party pays for the
call received.

In March 2002, Personal started entering into agreements with the telephone operators to charge CPP for calls made by
calling cards. Mobile operators have also agreed to pay for traffic terminated in each others networks at agreed prices.

In
accordance with SC General Resolution No. 124/02, since January 2003, mobile operators can charge the CPP for international calls whereby overseas calls that terminate in mobile telephones in Argentina pay for CPP charges. In order to identify
these calls, customers dialing from outside must add a prefix 54 + 9 + area code to the mobile number.

The price per minute
for the CPP (for fixed-line to mobile calls) is regulated by the SC based on average traffic volume and costs, as reported by the mobile operators under Resolution SC No. 623/02 which approved the calculation mechanism for the reference value
of the TLRD costs for CPP modality. Resolution SC No. 48/03 fixed the values for the TLRD at P$0.335 per minute for peak-hours and P$0.22 per minute for off-peak hours, but these values had to be revised by the SC a month after their approval,
with a second revision during the subsequent six months that was to be in turn followed by quarterly revisions. However, the SC has yet to complete these revisions.



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The CPP price per minute for international calls has been agreed upon by the mobile operators and
currently stands at US$0.18.

Law No. 25,891. Law No. 25,891 was adopted on April 2, 2004, but material regulations
under this law are still pending. This regulation intends to regulate the commercial distribution of mobile services and includes mandated registration of personal data for all customers, creating a Public Registry in the SC named Registro
Público Nacional de Clientes y Usuarios de Comunicaciones Móviles.

Regulations Applicable to PCS Services

PCS. Personal has licenses for PCS in all areas in Argentina.

AMBA. In June 1999, Personal and Unifón were jointly awarded a license of 40 MHz in the PCS Band for the region including the
AMBA. Miniphone and Movicom each exercised the right to acquire a license of 20 MHz in the PCS Band. Personal and Unifón have divided the 40 MHz license awarded to the two companies and the additional 20 MHz license granted to Miniphone (10
per company).

Interior Regions. Personal holds licenses of 40 MHz in the PCS Band in the Southern Region. Personal also holds a
license of 20 MHz in the PCS Band in the Northern Region.

In August 2006, the CNC issued Resolution No. 2,528/06 declaring that
Personal had fulfilled its obligations under the Pliego de Bases y Condiciones for the acquisition of the licenses for the provision of PCS. In addition, the SC issued Note No. 1,040/06 which enabled Personal to recover the promissory
notes used to guarantee the granted PCS licenses and, therefore, all such notes have been recovered.

Personal also has licenses for Data
Transmission and Value Added Services (granted by Resolution SC No. 18/96 and confirmed by Resolution SC No. 55/96), and for National and International Long Distance Telephony Service (Registered by Resolution SC No. 502/01).

In connection with Telefónica Móviles acquisition and combination of operations of Unifón and Movicom, in 2004, the
SC authorized a change in shareholder control of stakes held in Compañía de Radiocomunicaciones Móviles S.A. and in Compañía de Teléfonos del Plata in Telefónica Móviles favor. This
authorization was conditioned upon the return, without charge, of frequency bands exceeding an aggregate 50 MHz in accordance with the effective laws and pursuant to a plan to be subsequently issued. See Regulatory
FrameworkRegulatory Bodies and General Legal Framework  Licences granted as of December 31, 2013 Radio electric spectrum auction for a description of the reassignment of the 850 Mhz and 1,900 Mhz frequency bands returned
by Telefónica Móviles Argentina S.A.

DISCLOSURE PURSUANT TO SECTION 219 OF THE IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT OF 2012
(ITRSHRA)

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange
Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports filed with the SEC whether the issuer or any of its affiliates has knowingly engaged in certain activities, transactions or dealings with the government of
Iran, relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the annual or quarterly report. Disclosure is required even when the
activities were conducted outside the United States by non-U.S. entities and even when such activities were conducted in compliance with applicable law.

In accordance with our Code of Ethics and Conduct, we seek to comply with all applicable laws.

Activities relating to Iran

Telecom Group

The
only activity we have that, to our knowledge, relates in any way to Iran is our roaming agreement with Mobile Company of Iran (MCI) (formerly TCI).



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Our roaming agreements allow our mobile customers to use his or her mobile device on a network
outside the subscribers home network. (See Glossary of Terms  Roaming).

Like all major mobile networks, in
response to the competition and customers demands Personal has entered into roaming agreements with many foreign mobile networks, including MCI, to allow their customers to make and receive calls abroad.

Roaming agreements are, including the one relating to Iran, on standard terms and conditions. Entering into roaming agreements is an activity
carried out in the ordinary course of business by a mobile network operator.

Roaming agreements are, generally, reciprocal. Pursuant to a
roaming agreement when our mobile customers are in a foreign country covered by the network of an operator with which we have a roaming agreement (the Foreign Operator), our mobile customers may make and receive calls on their mobile
phone using the Foreign Operators network. Likewise, the Foreign Operators customers may make and receive calls using our networks when these customers are in Argentina.

The Foreign Operator bills us for the calls made and received by our roaming customers at the rate agreed upon in the applicable roaming
agreement. We then bill these customers according to the specific roaming fees in their subscription agreement. Likewise, we bill the Foreign Operator at the roaming rate agreed upon in the applicable roaming agreement. The Foreign Operator bills
its clients for the calls made and received using our networks according to customer agreements. Roaming agreements do not, generally, contemplate other fees or disbursements.

In 2013, the consolidated impact on net profit (loss) arising from our roaming agreements with MCI was as follows:



| |  |  | our total revenues under roaming agreements with MCI were approximately US$367 (three hundred and sixty seven U.S. dollars).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | our total charges paid under roaming agreements with MCI were approximately US$220 (two hundred and twenty U.S. dollars).
| | - |  | -------------------------------------------------------------------------------------------------------------------------

These revenues and charges are immaterial to our consolidated revenues and operating expenses, respectively. Because we do not separately
allocate costs directly attributable to the service provision or other overhead costs to these transactions, the amount of our consolidated net profits earned under these agreements is not determinable, but it does not exceed our gross revenues from
the agreements.

The purpose of our roaming agreements is to provide our customers with coverage in areas where we do not own networks.
For that purpose, we intend to continue maintaining our roaming agreements.

Telecom Italia

We are also required to disclose our affiliates activities relating to Iran. We have been informed that other members of the Telecom
Italia Group also have entered into roaming agreements with Iranian telecommunications operators. The information in this section is based solely on information provided to us by our Parent Telecom Italia S.p.A. for purposes of complying with our
obligations under Section 13(r) of the Exchange Act. Information set forth below is for the consolidated Telecom Italia Group and includes the impact of our revenues and charges described above.

The Telecom Italia Group operates one of the largest mobile networks in Italy. Through its foreign subsidiaries, Telecom Italia also has large
mobile operations in Brazil (Tim Participações S.A. by means of its subsidiary TIM Celular S.A.) and Argentina (Telecom Argentina S.A. by means of Telecom Personal S.A.).

Telecom Italia informs us that the only activities that Telecom Italia has that, to its knowledge, relate in any way to Iran are:



| |  |  | roaming agreements with the following Iran mobile phone operators: Taliya, KFZO  TKC, Irancell (MTN) and Mobile Company of Iran (MCI); and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | commercial relationship for the delivery of traffic from Iran to its networks and from its networks to Iran (International Carrier Agreements). To this end, its subsidiary Telecom Italia Sparkle S.p.A.
(TI Sparkle) entered into agreements with Telecommunication Company of Iran. In addition, Telecom Italia S.p.A. has also entered into certain agreements (of a small amount) for the provision of TLC services (marine radio traffic) with
Telecommunication Company of Iran and Islamic Republic of Iran Shipping Lines.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Roaming. Telecom Italia informs us that in 2013, the impact on Telecom Italia Group net
profit (loss) arising from such roaming contracts is analyzed as follows:



| |  |  | its total revenues from roaming agreements with Iranian networks were approximately 182 thousand euros (of which 159 thousand euros were recorded by Telecom Italia S.p.A.); and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | its total charges from roaming agreements with Iranian networks were approximately 212 thousand euros (of which 210 thousand euros were recorded by Telecom Italia S.p.A.).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The purpose of all of these roaming agreements is to provide Telecom Italia ́s customers with coverage in areas where Telecom Italia does
not own networks. For that purpose, it intends to continue maintaining these roaming agreements.

International Carrier Agreements.
As a rule in the modern telecommunication business, when traffic from a specific network is placed to or transported through another carriers network (the Host Network), the Host Network receives a fee from the incoming network.

Telecom Italia informs us that in 2013, the impact on its net profit (loss) arising from the above International Carrier Agreements is
analyzed as follows:



| |  |  | its total revenues from traffic from networks located in Iran to its networks were approximately 1.4 million euros; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | its total charges from traffic to networks in Iran from its networks were approximately 0.5 million euros.
| | - |  | ----------------------------------------------------------------------------------------------------------

The purpose of this agreement is to allow exchange of international traffic. Consequently, Telecom Italia intends to continue maintaining this
agreement.

All such amounts of revenues and charges are de minimis with respect to Telecom Italia consolidated revenues and operating
expenses, respectively.

CAPITAL EXPENDITURES

Capital expenditures (investment in Property, Plant and Equipment PP&E and Intangible Assets) amounted to P$4,851 million in
the year ended December 31, 2013, P$3,257 million in the year ended December 31, 2012, and P$3,192 million in the year ended December 31, 2011.

The following table sets forth our Total Additions (Capital Expenditures plus Materials) for the years ended December 31, 2013, 2012 and
2011, amounting to P$5,214, P$3,416 and P$3,359, respectively.



|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|-------------------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                   |  | Year ended December 31, |      
|                                                   |  | 2013                    |       |  | 2012 |  |       | 2011 | 
|                                                   |  | (P$ million)(1)         |      
|Land and buildings                                 |  |                         | 172   |  |      |  | 88    |      |  |  | 184   | 
|Switching and transmission                         |  |                         | 990   |  |      |  | 558   |      |  |  | 640   | 
|Equipment and infrastructure for special projects  |  |                         | 67    |  |      |  | 94    |      |  |  | 23    | 
|Access and outside plant                           |  |                         | 1,387 |  |      |  | 732   |      |  |  | 710   | 
|Computer equipment and software                    |  |                         | 952   |  |      |  | 636   |      |  |  | 589   | 
|Other                                              |  |                         | 396   |  |      |  | 307   |      |  |  | 172   | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal tangible capital expenditures (2)         |  |                         | 3,964 |  |      |  | 2,415 |      |  |  | 2,318 | 
|Rights of use, exclusivity agreements and licenses |  |                         | 5     |  |      |  |      |      |  |  | 106   | 
|Service connection or habilitation costs           |  |                         | 88    |  |      |  | 21    |      |  |  | 22    | 
|Subscribers acquisition costs                      |  |                         | 794   |  |      |  | 821   |      |  |  | 746   | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal intangible capital expenditures           |  |                         | 887   |  |      |  | 842   |      |  |  | 874   | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total capital expenditures                         |  |                         | 4,851 |  |      |  | 3,257 |      |  |  | 3,192 | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Materials (3)                                      |  |                         | 363   |  |      |  | 159   |      |  |  | 167   | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total additions in PP&E and intangible assets      |  |                         | 5,214 |  |      |  | 3,416 |      |  |  | 3,359 | 
|                                                   |  |                         |       |  |      |  |       |      |  |  |       | 



|(1) | The allocation of work in progress among items is estimated.
|--- | ------------------------------------------------------------

|(2) | Includes materials transferred amounting to P$450 million, P$209 million and P$231 million as of December 31, 2013, 2012 and 2011, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Each year increase is calculated as the net amount between additions and transfers to work in progress during the year.
|--- | -----------------------------------------------------------------------------------------------------------------------



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In addition, the following table shows capital expenditures for the years ended December 31,
2013, 2012 and 2011 broken down by Fixed Services and Mobile Services:



|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|---------------------------------------------------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                                   |  | Year ended December 31, |      
|                                                                                   |  | 2013                    |       |  | 2012 |  |       | 2011 | 
|                                                                                   |  | (P$ million)            |      
|Fixed Services                                                                     |  |                         |       |  |      |  |       |      |  |  |       | 
|Land and buildings                                                                 |  |                         | 124   |  |      |  | 56    |      |  |  | 74    | 
|Switching and transmission                                                         |  |                         | 431   |  |      |  | 265   |      |  |  | 310   | 
|Equipment and infrastructure for special projects                                  |  |                         | 67    |  |      |  | 94    |      |  |  | 23    | 
|Outside plant                                                                      |  |                         | 819   |  |      |  | 491   |      |  |  | 455   | 
|Computer equipment and software                                                    |  |                         | 367   |  |      |  | 270   |      |  |  | 194   | 
|Other                                                                              |  |                         | 229   |  |      |  | 171   |      |  |  | 131   | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal tangible capital expenditures                                             |  |                         | 2,037 |  |      |  | 1,347 |      |  |  | 1,187 | 
|Rights of use, exclusivity agreements and licenses                                 |  |                         |      |  |      |  |      |      |  |  | 105   | 
|Service connection or habilitation costs                                           |  |                         | 88    |  |      |  | 21    |      |  |  | 22    | 
|Subscribers acquisition costs                                                      |  |                         | 30    |  |      |  | 61    |      |  |  | 49    | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal intangible capital expenditures                                           |  |                         | 118   |  |      |  | 82    |      |  |  | 176   | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total Fixed Services capital expenditures                                          |  |                         | 2,155 |  |      |  | 1,429 |      |  |  | 1,363 | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|                                                                                   |  |                         |      
|Personal Mobile Services and Núcleo Mobile Services                                |  |                         |       |  |      |  |       |      |  |  |       | 
|Land and buildings                                                                 |  |                         | 48    |  |      |  | 32    |      |  |  | 110   | 
|Switching and transmission                                                         |  |                         | 559   |  |      |  | 293   |      |  |  | 330   | 
|Mobile network access                                                              |  |                         | 568   |  |      |  | 241   |      |  |  | 255   | 
|Computer equipment and software                                                    |  |                         | 585   |  |      |  | 366   |      |  |  | 395   | 
|Other                                                                              |  |                         | 167   |  |      |  | 136   |      |  |  | 41    | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal tangible capital expenditures                                             |  |                         | 1,927 |  |      |  | 1,068 |      |  |  | 1,131 | 
|Rights of use, exclusivity agreements and licenses                                 |  |                         | 5     |  |      |  |      |      |  |  | 1     | 
|Subscribers acquisition costs                                                      |  |                         | 764   |  |      |  | 760   |      |  |  | 697   | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Subtotal intangible capital expenditures                                           |  |                         | 769   |  |      |  | 760   |      |  |  | 698   | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total Personal Mobile Services and Núcleo Mobile Services capital expenditures (1) |  |                         | 2,696 |  |      |  | 1,828 |      |  |  | 1,829 | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total capital expenditures                                                         |  |                         | 4,851 |  |      |  | 3,257 |      |  |  | 3,192 | 
|                                                                                   |  |                         |       |  |      |  |       |      |  |  |       | 



|(1) | Includes P$327 million, P$193 million and P$171 million of capital expenditures in Paraguay as of December 31, 2013, 2012 and 2011, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

During 2013, capital expenditures in the Fixed Services segment were focused on continuing the deployment of a loop shortening plan, and on
improving our ability to supply the increased demand by companies, neighborhoods and buildings. Additionally, capital expenditures in the Fixed Services segment were focused on the deployment of DWDM and PTN technology in order to enable Telecom
Argentina to improve the bandwidth available to mobile operators.

With respect to the Personal Mobile Services segment, capital
expenditures have been made to extend 3G network capacity and coverage to many cities in Argentina. This objective was met mainly through the implementation of replacement plans and a network upgrade, the launch of a 3G second carrier, the
deployment of six sectors technology (both actions can practically double the capacity of sites in which this technology is installed) and the installation of new sites that provide coverage and capacity simultaneously.

We estimate that our capital expenditures will be approximately P$5.6 billion in 2014 (P$4.3 billion in tangible assets and P$1.3 billion in
intangible assets, particularly Subscriber Acquisition Cost (SAC). See Item 5Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCapital Expenditures.

The main investment projects of the Telecom Group in the Fixed Service Segment are related to the reconversion of the network architecture,
which involves the replacement of copper by fiber optics in different points (FTTC or fiber connection to the cabinet, FTTB or fiber to the building and FTTH or fiber to the home), with the aim of improving the commercial offer and the Internet user
experience. The evolution towards new technology helps to optimize the quality of service in terms of stability and availability. In the Mobile Service Segment, we continue with the reconversion technological network plan, mainly through the
installation of a 3G second carrier nationwide, which optimizes mobile services in order to have greater speed and capacity accompanying the growth in demand for data traffic. We expect to continue increasing the 3G network capacity to optimize the
use of the available spectrum.

We expect to finance these expenditures through operating cash flows and financing provided by our
vendors.



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PROPERTY, PLANT AND EQUIPMENT

As detailed below, our principal physical properties consist of transmission equipment, access facilities, outside plant (external wiring) and
switching equipment. These properties are, at present, mainly located throughout the Northern Region. We believe that these assets are, and for the foreseeable future will be, adequate and suitable for their respective uses.



|                                                |  |                         |       |  |                                                  |  |           |       |  |  |             | 
|----------------------------------------------- |  | ----------------------- | ----- |  | ------------------------------------------------ |  | --------- | ----- |  |  | ----------- | 
|                                                |  | As of December 31, 2013 |      
|                                                |  | FixedServices           |       |  | PersonalMobile Servicesand NúcleoMobile Services |  |           | Total | 
|                                                |  | (P$ million)(*)         |      
|Land and buildings                              |  |                         | 933   |  |                                                  |  | 125       |       |  |  | 1,058       | 
|Switching and transmission                      |  |                         | 1,666 |  |                                                  |  | 1,720     |       |  |  | 3,386       | 
|Access and outside plant                        |  |                         | 2,714 |  |                                                  |  | 1,339     |       |  |  | 4,053       | 
|Equipment & infrastructure for Special Projects |  |                         | 176   |  |                                                  |  |          |       |  |  | 176         | 
|Computer equipment and software                 |  |                         | 690   |  |                                                  |  | 1,138     |       |  |  | 1,828       | 
|Materials                                       |  |                         | 228   |  |                                                  |  | 97        |       |  |  | 325         | 
|Others                                          |  |                         | 150   |  |                                                  |  | 250       |       |  |  | 400         | 
|                                                |  |                         |       |  |                                                  |  |           |       |  |  |             | 
|Total PP&E, net carrying value                  |  |                         | 6,557 |  |                                                  |  | (**)4,669 |       |  |  | (***)11,226 | 
|                                                |  |                         |       |  |                                                  |  |           |       |  |  |             | 



|(*) | The allocation of work in progress among items is estimated.
|--- | ------------------------------------------------------------

|(**) | Includes P$1,065 million located in Paraguay.
|---- | ---------------------------------------------

|(***) | Net of valuation allowance for materials for P$21 million and impairment of PP&E for P$156 million.
|----- | ---------------------------------------------------------------------------------------------------

All of the above-mentioned assets were used to provide service to our customers as described below.



|                            |  |             |        |  |      |  |        |      |  |  |        | 
|--------------------------- |  | ----------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                            |  | 2013        |        |  | 2012 |  |        | 2011 | 
|                            |  | (thousands) |       
|Fixed lines in service      |  |             | 4,124  |  |      |  | 4,128  |      |  |  | 4,141  | 
|Fixed Internet access lines |  |             | 1,707  |  |      |  | 1,629  |      |  |  | 1,550  | 
|Mobile subscribers(*)       |  |             | 22,508 |  |      |  | 21,276 |      |  |  | 20,342 | 



|(*) | In 2013, 2012 and 2011, includes 2,420, 2,301 and 2,149 thousand Núcleo mobile subscribers, respectively, of which 5, 6 and 8 thousand were Internet (Wi-Max) customers.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2013, we have entered into purchase commitments relating to PP&E totaling P$2,105 million primarily for switching
equipment, external wiring, network infrastructure, inventory and other goods and services. In general, the contracts are financed, directly or indirectly, by domestic and foreign vendors.

Our current major suppliers of fixed assets are Cía. Ericson S.A.C.I, , Huawei Tech Investment Co. Ltd. Argentina, Italtel Argentina
S.A., Alcatel-Lucent de Argentina S.A., Oracle Argentina S.A., Nokia Siemens Network Argentina S.A. and Hewlett Packard Argentina S.R.L.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.



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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion in conjunction with our Consolidated Financial Statements, including the notes to those financial
statements, which appear elsewhere in this Annual Report. Our Consolidated Financial Statements have been prepared in accordance with IFRS. See Item 3Key InformationSelected Financial Data. The following discussion and
analysis is presented by the Management of our company and provides a view of our financial condition, operating performance and prospects from Managements perspective. The strategies and expectations referred to in this discussion are
considered forward-looking statements and may be strongly influenced or changed by shifts in market conditions, new initiatives that we implement and other factors. Since much of this discussion is forward-looking, you are urged to review carefully
the factors referenced elsewhere in this Annual Report that may have a significant influence on the outcome of such forward-looking statements. We cannot provide assurance that the strategies and expectations referred to in this discussion will come
to fruition. Forward-looking statements are based on current plans, estimates and projections, and therefore, you should not place too much reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no
obligation to update any forward-looking statements in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. We
caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements. Please refer to Forward-Looking Statements and Item
3Key InformationRisk Factors for descriptions of some of the factors relevant to this discussion and other forward-looking statements in this Annual Report.

Management Overview

The Telecom Group
ended the 2013 fiscal year in a solid financial situation as well as with a strong market position. The Telecom Group has continued to expand its Internet accesses base, reaching 1.7 million fixed Internet accesses, and its mobile subscribers
base, reaching 22.5 million mobile subscribers (including Personal and Núcleo). To promote the expansion of business, total additions in PP&E and intangible assets amounted to P$5,214 million in 2013, representing 19% of consolidated
total revenues in 2013 (Our capital expenditures, total additions in PP&E and intangible assets less materials, amounted to P$4,851 million in 2013, equivalent to 18% of consolidated revenues).

Telecom is considered one of the leading companies in the Argentine telecommunications sector. The Company has attained this position without
neglecting its commitment to generate economic value for its shareholders, demonstrating good performance in terms of revenues and profitability. Telecom had consolidated net financial assets of P$5,354 million as of December 31, 2013, compared
to consolidated net financial assets of P$3,648 million and P$2,684 million as of December 31, 2012 and 2011, respectively. The strong cash flow generation has allowed Personal, Telecom Argentina and Núcleo to maintain the high level of
capital expenditures and has allowed Telecom Argentina to distribute P$1,000 million in cash dividends by disaffecting the Reserve for Future Cash Dividends constituted by the shareholders meeting held on May 21, 2013 (second tranche),
without incurring any financial indebtedness.

The following discussion and analysis summarizes relevant measures of results of operations
presenting items by nature. The Company believes that the presentation of the measure operating income before depreciation and amortization provides investors and financial analysts with appropriate information that is relevant to
understanding the Companys past, present and future performance. Moreover, operating income before depreciation and amortization is one of the key performance measures used by Telecoms Management for monitoring the Companys
profitability and financial position, at each segment and at the consolidated levels.

Continuing the trend of prior years, revenues in
2013 grew by 23% compared to 2012, reaching P$27,287 million, and grew by 20% in 2012 compared to 2011, reaching P$22,117 million. Operating income before depreciation and amortization in 2013 increased P$994 million as compared to 2012, reaching
P$7,564 million (equivalent to 28% of total revenues), while in 2012 it increased P$577 million as compared to 2011, reaching P$6,570 million (equivalent to 30% of total revenues). Operating income increased P$552 million in 2013 as compared to
2012, reaching P$4,518 million (equivalent to 17% of total revenues) while in 2012 it increased P$109 million as compared to 2011, reaching P$3,966 million (equivalent to 18% of total revenues). Net income increased P$522 million in 2013 as compared
to 2012, reaching P$3,254 million (equivalent to 12% of total revenues), while it



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increased P$190 million in 2012 as compared to 2011, reaching P$2,732 million (equivalent to 12% of total revenues). Net income attributable to Telecom Argentina increased P$517 million in 2013
as compared to 2012, reaching P$3,202 million, while it increased P$172 million in 2012 as compared to 2011, reaching P$2,685 million.

Our results of operations continue to be affected by the Pesification and freeze of regulated rates in the Fixed Services segment and
macroeconomic factors. For a discussion of these and other factors that may affect our results of operations. See Years ended December 31, 2013, 2012 and 2011Factors Affecting Results of Operations and Trend
Information below.

For a detailed analysis of our results of operations for fiscal year 2013, see Years ended
December 31, 2013, 2012 and 2011 below.

Economic and Political Developments in Argentina

In the second half of 2001 and through the first half of 2002, Argentina experienced a deep economic recession together with an overwhelming
financial and political crisis. The rapid and radical nature of changes in the Argentine social, political, economic and legal environment created a very unstable macroeconomic environment. In January 2002, the Argentine government abandoned the
convertibility regime which had fixed the peso / U.S. dollar exchange rate at 1:1 and adopted emergency economic measures which converted and froze our rates for the voice-regulated services in the Fixed Services segment into pesos at a 1:1 peso /
U.S. dollar ratio (referred to herein as Pesification), among other measures. Capital outflows increased sharply, leading to a massive devaluation of the peso and an upsurge in inflation. By the end of 2002, the peso had devalued by 237%
(having devalued 280% as of June 30, 2002) while the wholesale price index increased 118% and the consumer price index increased 41%.

After the abovementioned crisis, the Argentine economy began a new period of rapid growth. Argentinas GDP increased for six consecutive
years, from 2003 to 2008, at an average rate of 8.5%. However, the international financial crisis affected the country decreasing its growth rate significantly to 0.9% in 2009. Throughout 2010 and 2011, the economy showed a rapid and strong recovery
growing at a 9.2% and 8.9% annual rate respectively, but in 2012 a slowdown affected the economy and growth was reduced to 1.9%. In 2013, better economic conditions helped to increase the economic activity. Inflation continued to be the main concern
for the economy. According to official statistics reported by the INDEC, the consumer price index rose 10.9% in 2010, 9.5% in 2011, 10.8% in 2012 and 10.9% in 2013, while the wholesale price index increased 14.6% in 2010, 12.7% in 2011, 13.1% in
2012 and 14.8% in 2013. Nonetheless, since 2007, the public credibility of the INDEC as a reference for reporting Argentine economic statistics has been challenged. In January 2014, the government published a new CPI Index (IPCNu) that
reached 7.2% for the first two months of the year. For further detail regarding Argentine economic conditions see Item 3Key InformationRisk FactorsRisks Relating to ArgentinaInflation could accelerate, causing adverse
effects on the economy and negatively impacting Telecoms margins.

During the period between 2005 and 2007, the peso remained
relatively stable against the U.S. dollar, with US$1.00 trading within a range of P$2.86 to P$3.16. However, the international financial crisis created uncertainty that affected the Argentine exchange rate, as reflected by a peso/dollar exchange
rate increase of 9.5% and 10.1% per year in 2008 and 2009, respectively. The peso/dollar exchange rate was relatively stable in 2010 and 2011, ending 2010 at P$3.98 per US$1.00 and 2011 at P$4.30 per US$1.00, increasing 4.7% and 8.0%
respectively. In 2012 and 2013, the pace of peso devaluation accelerated to 14.4% and 32.5% respectively; and the official exchange rate ended the year at a P$6.52 per US$1.00. During the first three months of 2014, the exchange rate of the
Argentine peso suffered a devaluation of approximately 23% against the U.S. dollar. On April 11, 2014, the exchange rate was P$8.00 = US$1.00. Increasing restrictions on the foreign exchange (FX) market have been established, and an
authorization from the AFIP (National Tax Authority) is required to access the FX market to acquire foreign currencies.

After
a slowdown in the Argentine economy in 2012, a positive first half of 2013 with an improved agricultural production, nominal wage increases that helped sustain consumption trends and a more dynamic industry helped to increase the economic activity
in 2013. The global economy showed some signs of recovery which fostered a better economic environment. Private consumption remained positive, although growing at a much slower pace. In the second half of the year, due to certain reduction on the
industrial exports, the economic activity started showing some signs of deterioration, ending 2013 with an economic growth of 3.0% over 2012.



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The most important factors for the economy in 2013 can be summarized as follows:



| |  |  | The Brazilian economy returned to growth and drove industrial exports from Argentina. Similarly, stable agricultural commodity prices together with a better crop harvest were a key factor.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Private consumption and investment continued moving demand forward. Consumption was encouraged mainly by expansive fiscal policies and lax monetary policy that maintained real interest rates at low levels and promoted
consumption. An upturn in the construction sector and increases in the import of capital assets helped to raise the level of investment. Inflation remained high and according to INDEC, the annual inflation as of December 2013 was 10.9%, which is
substantially lower than private estimates.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Argentine international commerce expanded in 2013, due to higher levels of exports of 3%, amounting to US$83.0 billion and increased imports of 8%, totaling US$74.0 billion. As a result, the trade balance totaled US$9.0
billion decreasing 27% over 2012. The improved agricultural production fostered exports, while industrial exports grew 3% year over year, mainly due to the demand from the Brazilian economy. The imports expansion is due to higher energy imports and
the accelerated economic growth.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expansive fiscal spending continued through 2013. Higher transfers to the provinces, public subsidies, and public social expenditures contributed to record high spending as a percent of GDP. Fiscal revenues expanded 26%
over 2012, due to higher social security and value added tax collection. A significant portion of government revenues were obtained from transfers from the Central Bank and the National Pension Funds.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The official exchange rate accelerated through 2013 with a strong depreciation of the peso of 32.5%, ending 2013 at P$6.52 per US$1.00 dollar. In the second part of the year the BCRA intervened in the exchange market
accelerating a nominal depreciation of the exchange rate. The government continued implementing measures to increase control over the exchange market, such as applying a 35% tax on the official FX rate to acquire foreign currency for tourism as a
payment in advance of Income and Personal Asset taxes.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Monetary indicators continued to show signs of expansion; the monetary base rose 24% in 2013. This expansion was mainly driven by increasing assistance from the Central Bank to the National Treasury and partially offset
by the Central Bank ́s sale of foreign currency. Private deposits in pesos rose 29% annually, helped by the growth in time deposits. As a result, interest rates on placements (Private Badlar rate) performed at an average rate of 17%. Meanwhile,
loans granted in pesos continued expanding due to a low real interest rate that fostered lending, thus encouraging private consumption. Finally, international reserves totaled 30,599 million dollars as of December 31, 2013, a 35% year over
year decrease.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The labor market was relatively stable despite a slowing economy, reaching an unemployment rate of 6.4% in the last quarter of 2013, a small decrease from the same quarter one year prior. Furthermore, salaries in
nominal terms expanded 25.9% annually, as of December 2013.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | According to public figures, the Gross National Public Debt amounted to US$196 billion as of June 2013, which represented approximately 43.6% of Argentinas GDP. The holdouts situation has not been resolved and is
subject to continued litigation, which is disturbing the normal access to the international financial markets and impacting sovereign risk. Nonetheless, Argentina holds a solid position in terms of public indebtedness; its level of debt to GDP is
relatively low, and a significant amount is held by National Public Sector Agencies like ANSES. As a result, the portion of public debt exposed to market risk represents a minor portion of the total debt.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Argentine economy faced many changes in 2013 and showed an increase in economic activity. Nevertheless certain economic variables
deteriorated with an impact on the telecommunication sector.

As the substantial majority of our property and operations are located in
Argentina, macroeconomic and political conditions will continue to affect us. The Argentine government has exercised and continues to exercise significant influence over many aspects of the Argentine economy. Accordingly, Argentine governmental
actions concerning the economy could significantly



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affect private sector entities in general and our operations in particular, as well as affect market conditions, prices and returns on Argentine securities, including ours. While our business
continued growing in 2013, our operating results, financial condition and cash flows remain vulnerable to fluctuations in the Argentine economy. See Item 3 Key InformationRisk FactorsRisks Relating to Argentina.

Critical Accounting Policies

Our
Consolidated Financial Statements, prepared in accordance with IFRS, are dependent upon and sensitive to accounting methods, assumptions and estimates that we use as a basis for its preparation. We have identified critical accounting estimates and
related assumptions and uncertainties inherent in our accounting policies (that are fully described in Note 3 to our Consolidated Financial Statements), which we believe are essential to an understanding of the underlying financial reporting risks.
Additionally we have identified the effect that these accounting estimates, assumptions and uncertainties have on our Consolidated Financial Statements.

Use of estimates

IFRS involves the use of assumptions and estimates that may significantly affect the reported amounts of assets, liabilities and results of
operations and any accompanying financial information.

Management considers financial projections in the preparation of the financial
statements as further described below. These financial projections anticipate scenarios deemed both likely and conservative based upon macroeconomic, financial and industry-specific assumptions. However, actual results may differ significantly from
such estimates.

Variations in the assumptions regarding exchange rates, rates of inflation, level of economic activity and consumption,
creditworthiness of our current and potential customers, aggressiveness of our current or potential competitors and technological, legal or regulatory changes could also result in significant differences from financial projections used by us for
valuation and disclosure of items under IFRS.

The most important accounting estimates, those which require a high degree of subjective
assumptions and judgments, are the following:

Revenue recognition

Revenues are recognized to the extent that it is probable that economic benefits will flow to the Telecom Group and their amount can be
measured reliably. Revenues are stated net of estimated discounts and returns.

Revenues from upfront connection fees for fixed, data and
Internet services that are non-separable from the service are accounted for as a single transaction and deferred over the term of the contract or, in the case of indefinite period contracts, over the average period of the customer relationship
(approximately nine years for the fixed telephony customers). Therefore, these revenues are influenced by the estimated expected duration of customer relationships for indefinite period contracts.

Revenues are also subject to estimations of the traffic measures. Unbilled revenues from the billing cycle dating to the end of each month are
calculated based on the traffic and are accrued at the end of the month. In addition, revenues from unexpired prepaid calling cards are recognized on the basis of the minutes used, at the contract price per minute.

Changes in these estimations, if any, may require adjustments to recorded revenues.

PP&E and intangible assets

Useful lives and residual value

We record PP&E and intangible assets at acquisition or construction cost. PP&E and intangible assets, except for indefinite useful life
intangibles, are depreciated or amortized on a straight-line basis over their estimated useful lives. The determination of the depreciable amount of the assets and their useful lives involves significant judgment. We periodically review, at least at
each financial year-end, the estimated useful lives of its PP&E and amortizable intangible assets.



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Recoverability assessment of PP&E and intangible assets with finite useful life

At least at every annual closing date, we assess whenever events or changes in circumstances indicate that PP&E and amortizable intangible
assets may be impaired.

Under IFRS, the carrying value of a long-lived asset is considered impaired by the Company when the recoverable
amount of such asset is lower than its carrying value. In such event, a loss would be recognized based on the amount by which the carrying value exceeds the recoverable amount of the long-lived asset. The recoverable amount is the higher of the fair
value (less costs to sell) and its value in use (present value of the future cash flows expected to be derived from the asset, group of assets or cash generating unit). Once an impairment loss is identified and recognized, future reversal of
impairment loss is permitted only if the indicators of the impairment no longer exist or have decreased.

The identification of impairment
indicators and the estimation of the value in use for assets (or groups of assets or cash generating units) require Management to make significant judgments concerning the validation of impairment indicators, expected cash flows and applicable
discount rates. Estimated cash flows are based on significant Managements assumptions about the key factors that could affect future business performance such as the future market share, competition level, capital expenditures, salary
increases, foreign exchange rates evolution, capital structure, capital cost, etc.

For the years presented, we estimated that there are
no indicators of impairment of assets that are subject to amortization, except for those mentioned in Note 3.k to the Financial Statements for a total of P$187 million.

However, changes in our current expectations and operating assumptions, including changes in our business strategy, technology, competition,
changes in market conditions or regulations, and the outcome of the rates negotiations for regulated fixed services with the Argentine government, could significantly impact these judgments and could require future adjustments to the carrying amount
of recorded assets.

Although there are no impairment indicators, Telecom Argentinas Management has analyzed the recoverability of
its PP&E and intangible assets assuming different probable scenarios that contemplate the update of the regulated services rates. Considering these assumptions, the management of Telecom Argentina considers that the carrying amount of its fixed
assets is recoverable.

Intangible assets with indefinite useful lifePCS license

We determined that Personals PCS license met the definition of an indefinite-lived intangible asset for the years presented. Therefore,
Personal does not amortize the cost of its license. However, Personal tests it annually for impairment. An impairment loss is recognized when the carrying amount exceeds the recoverable amount. The recoverability assessment of an indefinite-lived
intangible asset such as the PCS license requires our Management to make assumptions about the future cash flows expected to be derived from such asset.

Such estimated cash flows are based on significant Managements assumptions about the key factors that could affect future business
performance such as the future market share, competition level, capital expenditures, salary increases, foreign exchange rates evolution, capital structure, discount rate, etc.

Personals net cash flows projection is denominated in Argentine Pesos, its functional currency. However, due to the fact that there is
no prevailing long-term discount rate in pesos available in the market, Personal: (a) has converted such peso-denominated cash flows into U.S. dollars using future estimated exchange rates applicable to each period; and (b) has discounted
these U.S. dollar-denominated cash flows at an annual U.S. dollar rate of approximately 13% in order to obtain the recoverable value of intangible assets with indefinite useful life.

Through this evaluation, it was determined that the carrying amount of the PCS license did not exceed the recoverable amount of the asset. As
a result, no impairment has been recognized.

Our judgments regarding future cash flows may change due to future market conditions,
competition, business strategy, the evolution of technology, changes in regulations and other factors. These changes, if any, may require material adjustments to the carrying amount of the PCS license.



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Income Taxes and Recoverability assessment of deferred income tax assets

We are required to estimate our income taxes (current and deferred) in each of the companies of the Telecom Group according to a reasonable
interpretation of the tax law in effect in each jurisdiction where the companies operate. This process may involve complex estimates to determine taxable income and deductible and taxable temporary differences between the carrying amounts and the
taxable amounts. In particular, deferred tax assets are recognized for all deductible temporary differences to the extent that future taxable income will be available against which they can be utilized. The measurement of the recoverability of
deferred tax assets requires estimating future taxable income based on the Companys projections and takes into account conservative tax planning. If actual results differ from these estimates due to changes in tax authoritys
interpretations and the new fiscal jurisprudence, or we adjust those estimates in future periods, our financial position, results of operation and cash flows may be materially affected.

The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law as of the end of the
reporting period and the effects of future changes in tax laws or rates are not anticipated.

Receivables and payables valued at
amortized cost

Receivables and payables valued at amortized cost are initially recorded at their fair value, which is generally
determined by using a discounted cash flow valuation method. The fair value under this method is estimated as the present value of all future cash flows discounted using an estimated discount rate, especially for long-term receivables and payables.
The estimated discount rate used to determine the discounted cash flow of long-term receivables and payables is an annual rate in pesos ranging between 20% and 32% for year 2013. Additionally, the estimated discount rate used to determine the
discounted cash flow of long-term receivables and payables is an annual rate in pesos ranging between 19% and 28% for years 2012 and 2011. The estimated discount rate used to determine the discounted cash flow of long-term receivables in U.S.
dollars is an annual rate of 8% for years 2013, 2012 and 2011. The difference between the initial fair value and the nominal amount of receivables and payables is recognized as finance income or expense using the effective interest method over the
relevant period.

Changes in these estimated discount rates could materially affect our financial position and results of operations.

Provisions

We are
subject to proceedings, lawsuits and other claims related to labor, civil, tax, regulatory and other matters. In order to determine the proper level of provisions relating to these contingencies, we assess the likelihood of any adverse judgments or
outcomes related to these matters as well as the range of probable losses that may result from the potential outcomes. We consult with internal and external legal counsel on these matters. A determination of the amount of provisions required, if
any, is made after careful analysis of each individual issue. Our determination of the required provisions may change in the future due to new developments in each matter, changes in jurisprudential precedents and tribunal decisions or changes in
our method of resolving such matters, such as changes in settlement strategy, and, therefore, these changes may materially affect our financial position and results of operations.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make the required
payments. We base our estimates on the aging of our accounts receivable balances, our historical write-offs, customer creditworthiness and changes in our customer payment terms when evaluating the adequacy of our allowance for doubtful accounts. If
the financial condition of our customers were to deteriorate, our actual write-offs could be higher than expected.

Years ended December 31, 2013,
2012 and 2011

For purposes of these sections, the fiscal years ended December 31, 2013, 2012 and 2011 are referred to as
2013, 2012 and 2011, respectively.



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Our results of operations are determined in accordance with IFRS. The Telecom Group provides
customers with a broad range of telecommunication services. To fulfill its purpose, it conducts different activities that are distributed among the companies in the Group. Each company represents an operating segment. These operating segments have
been aggregated into the following segments according to the nature of the products and services provided and economic characteristics:



|                         |  |                                                                           
|------------------------ |  | --------------------------------------------------------------------------
|Segment                  |  | Company of the Telecom Group / Operating Segment                          
|Fixed Services           |  | Telecom Argentina S.A. Telecom Argentina USA,
Inc. Micro Sistemas S.A. (i)
|                        
|Personal Mobile Services |  | Telecom Personal S.A. Springville S.A. (i)
(ii)                           
|                        
|Núcleo Mobile Services   |  | Núcleo S.A.                                                               
|                        



|(i) | Dormant entity as of and for the fiscal years ended December 31, 2013, 2012 and 2011.
|--- | -------------------------------------------------------------------------------------

|(ii) | The sale of all the shares of Springville, representing 100% of the capital and voting rights of that company, was approved by the Personals meeting of the Board of Directors on February 10, 2014. The sale
was completed on February 19, 2014.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The main products and services in each segment are:



| |  |  | Fixed Services: local area, national long-distance and international communications, supplementary services (including call waiting, itemized invoicing, voicemail, etc.), interconnection with other operators, data
transmission (including private networks, point-to-point traffic, radio and TV signal transmission), Internet services (Broadband and Arnet Mobile), IT solution outsourcing and sales of equipment.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Personal Mobile Services and Núcleo Mobile Services: voice communications, GSM and 3G mobile communications over UMTS / HSPA / HSPA+ networks (including high-speed mobile Internet content and applications
download, multimedia messaging, online streaming, corporate e-mail, social network access and contacts save services) and sale of mobile communication devices (handsets, 3G modems and tablets).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table shows a breakdown of our revenues by business segment for the years ended December 31, 2013, 2012 and 2011:



|                         |  |                         |        |  |                          |  |       |                         |  |  |                          |  |  |                         |       |  |                          |  |        |  |  |  |       | 
|------------------------ |  | ----------------------- | ------ |  | ------------------------ |  | ----- | ----------------------- |  |  | ------------------------ |  |  | ----------------------- | ----- |  | ------------------------ |  | ------ |  |  |  | ----- | 
|                         |  | 2013                    |        |  | 2012                     |  |       | 2011                    | 
|Segment                  |  | Revenues(1)(P$ million) |        |  | % ofConsolidatedRevenues |  |       | Revenues(1)(P$ million) |  |  | % ofConsolidatedRevenues |  |  | Revenues(1)(P$ million) |       |  | % ofConsolidatedRevenues | 
|Fixed Services           |  |                         | 7,006  |  |                          |  | 25.7  |                         |  |  | 6,023                    |  |  |                         | 27.2  |  |                          |  | 5,329  |  |  |  | 28.8  | 
|Personal Mobile Services |  |                         | 19,129 |  |                          |  | 70.1  |                         |  |  | 15,227                   |  |  |                         | 68.9  |  |                          |  | 12,455 |  |  |  | 67.3  | 
|Núcleo Mobile Services   |  |                         | 1,152  |  |                          |  | 4.2   |                         |  |  | 867                      |  |  |                         | 3.9   |  |                          |  | 714    |  |  |  | 3.9   | 
|                         |  |                         |        |  |                          |  |       |                         |  |  |                          |  |  |                         |       |  |                          |  |        |  |  |  |       | 
|TOTAL                    |  |                         | 27,287 |  |                          |  | 100.0 |                         |  |  | 22,117                   |  |  |                         | 100.0 |  |                          |  | 18,498 |  |  |  | 100.0 | 
|                         |  |                         |        |  |                          |  |       |                         |  |  |                          |  |  |                         |       |  |                          |  |        |  |  |  |       | 



|(1) | Includes service revenues and equipment sales and the effect of elimination of intersegment transactions.
|--- | ---------------------------------------------------------------------------------------------------------

Managements explanations under (B) Results of Operations by Segment below regarding changes in financial condition and
results of operations for years 2013, 2012 and 2011 related to segments of the Company have been provided based on financial information under IFRS as disclosed in Note 28 to our Consolidated Financial Statements.

Factors Affecting Results of Operations

Described below are certain factors that may be helpful in understanding our operating results. These factors are based on the information
currently available to our Management and may not represent all of the factors that are relevant to an understanding of our current or future results of operations. Additional information regarding trends expected to influence our results of
operations are analyzed below under Trend Information.

Impact of Political and Economic Environment in
Argentina. Levels of economic activity affect our customers consumption of local and long-distance traffic, the demand for new fixed lines, Broadband and mobile services and the levels of uncollectible accounts and disconnections. Demand
for our services and the amount of revenues we collect is also affected by inflation, exchange rate variations and the rate of unemployment, among others. The same factors, but to a lesser degree, affect the activity of Núcleo, that operates
in Paraguay.



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Rate Regulation. Revenue from our Fixed Services segment will depend principally on the
number of lines in service, the minutes of use or traffic for local and long-distance services and the rates charged for services. The rates that Telecom Argentina charges in its fixed telephony service (including both monthly basic
charges and measured service charges), installation charges, public telephone charges and charges for Internet Dial-Up traffic (Regulated Services) are subject to regulation. These rates were pesified and rate increases were frozen by
the Argentine government in 2002. Telecom Argentina has been in discussions with regulators with respect to rate adjustments and, on March 6, 2006, Telecom Argentina signed the Letter of Understanding 2006 with the Argentine government which
permits Telecom Argentina to raise certain of its regulated rates. However, the agreement is still subject to the implementation of certain administrative steps and the pending approval by the legislative branch. Although the Companys
Management expects that the contract renegotiation process will be satisfactorily completed, to date there is no certainty regarding either the outcome of the negotiations or the timing of such outcome. The impact of the rates Pesification on
Telecom Argentinas results of operations has been particularly relevant in recent years as a result of inflationary pressures on Telecom Argentinas costs structure. See Item 3Key InformationRisk Factors and
Economic and Political Developments in Argentina.

The mobile business is not a rate-regulated industry. However,
certain social or political factors could negatively affect rate adjustments, thus delaying their application to set-off the cost increases and higher capital expenditures that are required to maintain the quality of services. See Item
3Key Information Risk FactorsRisks associated with Telecom and its operations.

Competition. The Argentine
telecommunications market has become increasingly competitive. Competition is mainly focused on Internet and mobile services. To remain competitive, we must devote significant resources to capital expenditures, and trade expenses (including selling
commissions).

Personal and Núcleo subscribers bases are expected to continue expanding in 2014 although at lower rates than those
of recent years. Value Added Services, especially mobile Internet, will continue to be one of the main drivers of revenue growth in the mobile services business.

Technology Developments and Capital Expenditures. Improvements in technology influence demand for services and equipment by our
customers. For example, demand for fixed-line telecommunications services has been affected by continued significant growth in mobile business. Growth in the fixed-services business at present is being driven by the expansion of Broadband for
individuals and corporations and Telecom Argentina continuous updating of commercial and support systems. The increase in Broadband adoption has also proven to be a critical factor in facilitating the offering of Value Added Services to customers
and the bundling of services. In the fixed-services business, we must invest in our fixed-line network and information technology. Specifically, in Internet services, we must constantly upgrade our access technology and software, embrace emerging
transmission technologies and improve the responsiveness, functionality, coverage and features of our services.

In the mobile business,
to provide its subscribers with new and better services, Personal has to enhance its mobile networks extending 3G and HSPA+ technology and bandwidth for mobile data transmission.

In addition, as new technologies develop, equipment may need to be replaced or upgraded and network facilities (in particular, mobile and
Internet network facilities) may need to be rebuilt in whole or in part, at substantial cost, to remain competitive. These enhancements and the implementation of new technologies will continue requiring increased capital expenditures.

Devaluation of the peso. The peso has been subject to significant devaluations in the past and may be subject to fluctuation in the
future. In the three months ended March 31, 2014, there was a significant devaluation which amounted to approximately 23%. The majority of our revenues are received in pesos whereas a portion of the materials and supplies related to the
construction and maintenance of our networks and services are incurred in foreign currencies. Consequently, the Pesification of our regulated rates in the fixed services and the high level of competition limit our ability to transfer to our
customers the fluctuations in the exchange rates between the peso and the U.S. dollar and other currencies. In addition, any devaluation of the peso against foreign currencies may increase operating costs and capital expenditures, which will
adversely affect our results of operations, considering the net effect on revenues and costs.

Increase in inflation. In the past,
Argentina has experienced periods of high inflation. In recent years, inflation levels have been increasing and have remained relatively high. The economic recovery, a higher increase in public spending or a fast devaluation of the Argentine peso
could lead to higher inflation. Any increase in inflation levels not accompanied by an increase in the rates we charge our customers could adversely affect our results of operations in nominal and real terms.



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Tax pressures and litigation. Local municipalities in the regions where we operate have
introduced regulations and proposed various taxes and fees for the installation of infrastructure, equipment and expansion of fixed-line and mobile networks. Local and federal tax authorities have brought an increasing number of claims against us.
We disagree with these proceedings and we are contesting them. Also, jurisprudential changes in labor and pension matters have generated higher claims from employees and former employees and also increased claims from employees of a contractor or
subcontractor alleging joint liability. We cannot assure you that the laws and regulations currently governing the economy or the telecommunications industry will not change, that the claims will be resolved in our favor, or that any changes to the
existing laws and regulations will not adversely affect our business, financial condition, results of operations and cash flows as well.

(A) Consolidated Results of Operations

In the year ended December 31, 2013, we reported net income of P$3,254 million, compared to net income of P$2,732 million for the year
ended December 31, 2012, and net income of P$2,542 million for the year ended December 31, 2011. Net income attributable to Telecom Argentina increased P$517 million in 2013 as compared to 2012, reaching P$3,202 million, while it increased
P$172 million in 2012 as compared to 2011, reaching P$2,685 million, from P$2,513 in 2011.

Consolidated revenues in 2013 were P$27,287
million compared to P$22,117 million in 2012 and P$18,498 million in 2011. The increase of P$5,170 million in 2013 (a 23% increase) can be largely attributed to the growth in the Personal Mobile Services segment including handset revenues and in
Internet and Data services included in the Fixed Services segment.

In 2013, operating expenses (including depreciation and amortization
and gain on disposal of PP&E and impairment of PP&E) totaled P$22,832 million, representing an increase of P$4,602 million, or 25%. The most significant changes in operating expenses included increases in employee benefit expenses and
severance payments, taxes and fees with the Regulatory Authority (mainly caused by the increase in revenues and higher average rates of the turnover tax in the City of Buenos Aires, Córdoba, Chaco, Jujuy and Mendoza), cost of equipment and
handsets (due to customer upgrade of mobile handsets), in fees for services, maintenance, materials and supplies , the increase in cost of VAS, provisions (due to higher regulatory and municipal claims and higher civil and commercial claims) and an
impairment loss of P$187 million recognized in 2013.

In 2012, operating expenses (including depreciation and amortization and gain on
disposal of PP&E and impairment of PP&E) totaled P$18,230 million, representing an increase of P$3,559 million, or 24% compared to 2011. The most significant changes in operating expenses included increases in employee benefit expenses and
severance payments, taxes and fees with the Regulatory Authority (mainly caused by the increase in revenues), cost of equipment and handsets (due to an expansion of the subscriber base and customer upgrade of mobile handsets), commissions (as a
result of the increase in prepaid subscriber base), cost of VAS and fees for services, maintenance, materials and supplies (attributable to increased service costs related to call centers, higher supplies consumption and the effect of inflation on
prices).

Our regulated fixed telephony service (8% of the consolidated revenue in 2013 vs. 10% in 2012) is still affected by the
Pesification and freezing of regulated rates in early 2002; as a result, the increase in the 2013 structure of operating expenses for the Fixed Services segment (20%) is higher than the increase in revenues including intersegment revenues
(17%).

Since fiscal year 2012, the Companys Management has changed the calculation method of the Operating income before
Depreciation and Amortization by not considering within it the Gain on disposal of PP&E previously disclosed within the line Revenues and other income and from fiscal year 2012 are shown below Operating income before
Depreciation and Amortization, as part of Operating income. Accordingly, comparative figures for the year ended December 31, 2011 have been adapted in the consolidated income statements.



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(A.1) 2013 Compared to 2012



|                                                           |      |                         |         |      |              |  |         |                       |  |  |                        |   |  |                      |        |   |  |  |        |   |  |  |        |   |  |  |      |  
|---------------------------------------------------------- | ---- | ----------------------- | ------- | ---- | ------------ |  | ------- | --------------------- |  |  | ---------------------- | - |  | -------------------- | ------ | - |  |  | ------ | - |  |  | ------ | - |  |  | ---- | -
|                                                           |      | Years EndedDecember 31, |         |      | Total Change |  |         | Change by segment (1) | 
|                                                           | 2013 |                         |         | 2012 |              |  |         | FixedServices         |  |  | PersonalMobileServices |   |  | NúcleoMobileServices |       
|                                                           |      | (P$ million)            |         |      | %            |  |         | (P$ million)          | 
|Revenues                                                   |      |                         | 27,287  |      |              |  | 22,117  |                       |  |  | 23                     |   |  |                      | 5,170  |   |  |  | 983    |   |  |  | 3,902  |   |  |  | 285  |  
|Other Income                                               |      |                         | 63      |      |              |  | 79      |                       |  |  | (20                    | ) |  |                      | (16    | ) |  |  | (42    | ) |  |  | 20     |   |  |  | 6    |  
|Operating expenses (without depreciation and amortization) |      |                         | (19,786 | )    |              |  | (15,626 | )                     |  |  | 27                     |   |  |                      | (4,160 | ) |  |  | (1,058 | ) |  |  | (2,911 | ) |  |  | (191 | )
|Operating income before depreciation and amortization (2)  |      |                         | 7,564   |      |              |  | 6,570   |                       |  |  | 15                     |   |  |                      | 994    |   |  |  | (117   | ) |  |  | 1,011  |   |  |  | 100  |  
|Depreciation and amortization                              |      |                         | (2,873  | )    |              |  | (2,612  | )                     |  |  | 10                     |   |  |                      | (261   | ) |  |  | (90    | ) |  |  | (102   | ) |  |  | (69  | )
|Gain on disposal of PP&E and impairment of PP&E            |      |                         | (173    | )    |              |  | 8       |                       |  |  | n/a                    |   |  |                      | (181   | ) |  |  | (113   | ) |  |  | (69    | ) |  |  | 1    |  
|Operating income                                           |      |                         | 4,518   |      |              |  | 3,966   |                       |  |  | 14                     |   |  |                      | 552    |   |  |  | (320   | ) |  |  | 840    |   |  |  | 32   |  
|Financial results, net                                     |      |                         | 528     |      |              |  | 229     |                       |  |  | 131                    |   |  |                      | 299    |   |  |  | 142    |   |  |  | 167    |   |  |  | (10  | )
|Income tax expense                                         |      |                         | (1,792  | )    |              |  | (1,463  | )                     |  |  | 22                     |   |  |                      | (329   | ) |  |  | (24    | ) |  |  | (302   | ) |  |  | (3   | )
|Net income                                                 |      |                         | 3,254   |      |              |  | 2,732   |                       |  |  | 19                     |   |  |                      | 522    |   |  |  | (202   | ) |  |  | 705    |   |  |  | 19   |  
|                                                           |      |                         |         |      |              |  |        
|Net income attributable to:                                |      |                         |         |      |              |  |         |                       |  |  |                        |   |  |                      |        |   |  |  |        |   |  |  |        |   |  |  |      |  
|Telecom Argentina (Controlling Company)                    |      |                         | 3,202   |      |              |  | 2,685   |                       |  |  | 19                     |   |  |                      | 517    |   |  |  |        |   |  |  |        |   |  |  |      |  
|Noncontrolling interest                                    |      |                         | 52      |      |              |  | 47      |                       |  |  | 11                     |   |  |                      | 5      |   |  |  |        |   |  |  |        |   |  |  |      |  



|(1) | Includes the effect of eliminations of Intersegment transactions.
|--- | -----------------------------------------------------------------

|(2) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues

During 2013, total
consolidated revenues increased by 23% to P$27,287 million from P$22,117 million in 2012, mainly driven by our mobile, Broadband and data transmission businesses.



|                 |      |                         |        |      |              |  |        |                      |  |  |                        |  |  |                      |       |  |  |  |     |   |  |  |       |  |  |  |     | 
|---------------- | ---- | ----------------------- | ------ | ---- | ------------ |  | ------ | -------------------- |  |  | ---------------------- |  |  | -------------------- | ----- |  |  |  | --- | - |  |  | ----- |  |  |  | --- | 
|                 |      | Years EndedDecember 31, |        |      | Total Change |  |        | Change by segment(1) | 
|                 | 2013 |                         |        | 2012 |              |  |        | FixedServices        |  |  | PersonalMobileServices |  |  | NúcleoMobileServices |      
|                 |      | (P$ million)            |        |      | %            |  |        | (P$ million)         | 
|Voice            |      |                         | 10,645 |      |              |  | 9,927  |                      |  |  | 7                      |  |  |                      | 718   |  |  |  | 228 |   |  |  | 404   |  |  |  | 86  | 
|Data             |      |                         | 8,488  |      |              |  | 6,767  |                      |  |  | 25                     |  |  |                      | 1,721 |  |  |  | 228 |   |  |  | 1,447 |  |  |  | 46  | 
|Internet         |      |                         | 4,879  |      |              |  | 3,395  |                      |  |  | 44                     |  |  |                      | 1,484 |  |  |  | 528 |   |  |  | 840   |  |  |  | 116 | 
|Service Revenues |      |                         | 24,012 |      |              |  | 20,089 |                      |  |  | 20                     |  |  |                      | 3,923 |  |  |  | 984 |   |  |  | 2,691 |  |  |  | 248 | 
|Equipment (2)    |      |                         | 3,275  |      |              |  | 2,028  |                      |  |  | 61                     |  |  |                      | 1,247 |  |  |  | (1  | ) |  |  | 1,211 |  |  |  | 37  | 
|Revenues         |      |                         | 27,287 |      |              |  | 22,117 |                      |  |  | 23                     |  |  |                      | 5,170 |  |  |  | 983 |   |  |  | 3,902 |  |  |  | 285 | 



|(1) | Net of the Intersegment revenues effect.
|--- | ----------------------------------------

|(2) | This item is composed of voice, data and Internet equipment in each year.
|--- | -------------------------------------------------------------------------

Consolidated
revenues for 2013 and 2012 are comprised as follows:

Voice

Revenues from voice services increased 7% to P$10,645 million in 2013 from P$9,927 million in 2012. Such increase is largely due to a growth in
the mobile subscriber base, as well as an increase in monthly charges for our services in the Personal Mobile Services segment. Revenues from voice services represented 39% of our total consolidated revenues for 2013 compared to 45% of our total
consolidated revenues for 2012.



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Fixed services

Revenues from voice services represented 49% of our total Fixed Services segment revenues attributable to third parties for 2013 compared to
53% for 2012.

Voice services mainly include revenues from monthly basic charges, charges for supplementary services, measured service
(national and international calls) and public telephone service. Charges for supplementary services include call waiting, call forwarding, three-way calling, caller ID, direct inwards dialing, toll-free service and voicemail, among others. Measured
service charges are based on the number and duration of calls. Measured service revenues depend on the number of lines in service, the volume of usage, the number of new lines installed and applicable rates. They also include interconnection
services (which primarily include access, termination and long-distance transport of calls), international long-distance service (which reflect payments made under bilateral agreements between Telecom Argentina and foreign telecommunications
carriers covering inbound international long-distance calls) and revenues related to billing and collection services charged to other operators.

Revenues from voice-retail increased 7% to P$2,656 million and are still affected by the Pesification and freezing of regulated rates in early
2002. Revenues from regulated rate services represented 33% of our total segment revenues in 2013 compared with a 36% in 2012.See (B) Results of Operations by Segment (B.1) Fixed Services
SegmentRevenuesVoice-Retail for a description of the services included as voice-retail.

Monthly basic charges and
supplementary services increased P$89 million or 9% to P$1,121 million in 2013 from P$1,032 million in 2012. Such growth was due to the increase of prices of non-regulated services and the increase in the subscriber base during the year.

Measured service charges increased 7% to P$1,395 million in 2013 from P$1,306 million in 2012. Such increase was due to the effect of the flat
rate packs. This increase is mainly explained by the increase in revenues from local and domestic long distance plans.

Voice-wholesale revenues (including fixed and mobile interconnection revenues, together with the revenues generated by the subsidiary Telecom
Argentina USA amounting to P$70 million) amounted to P$786 million (+6% vs. 2012).

Interconnection services increased 6% to P$547 million
in 2013 from P$516 million in 2012. Other wholesale revenues reached P$239 million in 2013 and P$223 million in 2012.

Personal Mobile
services

Revenues from voice services represented 35% of our total Personal Mobile Services segment revenues attributable to third
parties for 2013 compared to 41% for 2012.

Voice services mainly include revenues from monthly basic charges, airtime usage charges and
roaming charges to our customers for their use of our and other carriers networks, CPP, TLRD and roaming charges to other mobile service providers whose customers use our network.

Voice-retail revenues reached P$4,773 million in 2013 (+7% vs. 2012). The increase was mainly due to increase in monthly charges prices and an
increase in the subscriber base especially in prepaid and Cuentas Claras subscribers.

Voice-wholesale revenues reached
P$1,930 million in 2013 (+5% vs. 2012). The increase was mainly due to higher traffic with mobile operators (TLRD) and an increase in roaming revenues and to the increase of mobile leases, mainly due to new agreements and to the renegotiation of the
existing ones.

In Núcleo Mobile Services segment, voice revenues increased 21% to P$500 million in 2013 compared to P$414 million
in 2012 mainly due to an increase in the subscriber base (+5.2%) and to the appreciation of the Guaraní with respect to the Argentine peso (+33% inter-annual).

Data and Internet

Revenues from data and Internet services increased 32% to P$13,367 million in 2013 from P$10,162 million in 2012. Revenues from data and
Internet represented 49% of our total consolidated revenues for 2013 compared to 46% of our total consolidated revenues for 2012.



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In the Mobile Services segments, data and Internet services mainly include SMS, contents via SMS,
MMS, Browsing and Internet. Revenues from data and Internet in the Personal Mobile segment increased 33% to P$9,300 million in 2013 from P$7,013 million in 2012.

As a consequence of the increase in the usage of VAS (Internet and data), the ARPU increased to P$66.8 per month in 2013 (vs. P$57.7 per month
in 2012).

Data

Revenues from data services in the Fixed segment increased 31% to P$963 million in 2013 from P$735 million in 2012, where the focus was to
strengthen Telecom Argentinas position as an integrated TICs provider (Datacenter, VPN, among others) for wholesale and government segments. The increase was mainly due to an increase in Integra and VPN IP services, to the increase in the IP
traffic in the wholesale segment; and to the increase in the monthly charges and transmission Datacenter services (especially in hosting and housingmonthly charges, and Value Added Services transmission). The majority of our revenues
from data transmission services is denominated in U.S. dollars and, consequently, in 2013 and 2012, was affected by the fluctuations in the exchange rate between the peso and the U.S. dollar resulting in an increase in data transmission revenues.

Mobile data revenues reached P$7,212 (+25% vs. 2012). This increase is mainly due to constant SMS sales increase as a result of several
campaigns launched by Personal and especially due to the increase in revenues from the sale of contents via SMS, both in prepaid or postpaid customers.

Internet

Internet
revenues in the Fixed segment increased 26% to P$2,521 million in 2013 from P$1,993 million in 2012. The increase was mainly due to the substantial expansion of the Broadband service (+5% of customers vs. 2012), an increase in average prices
resulting in an improvement in the ARPU amounted to P$124.7 per month in 2013 vs. P$102.3 per month in 2012. As of December 31, 2013 the number of Internet accesses reached approximately 1.7 million equivalent to 41% of fixed lines in
service of Telecom Argentina (vs. 39% in 2012), compared to 1.6 million as of December 31, 2012, an increase of 5%.

Mobile
Internet revenues in the Personal Mobile segment increased 67% to P$2,088 million in 2013 from P$1,248 million in 2012. Such increases were mainly due to new subscribers, and the migration of existing ones to higher-value plans, partially offset by
the revenues decrease generated by the decrease of Mobile Internet subscribers.

Equipment

Revenues from equipment increased by 61% to P$3,275 million in 2013 from P$2,028 million in 2012. This increase was due to a mix between the
increase in the average price of the handsets of 72% and the decrease of 5% in the handsets sold by Personal. This situation was mainly generated by a subsidy reduction policy, the increase in average prices related to higher-value handsets demand,
the business strategy to attract high-value subscribers, a decrease in discounts as a result of the finalization of commercial promotions and lower retail revenues.

Other Income

Other income mainly
includes penalties and indemnities collected from suppliers, as a result of delays in deliveries of goods or matters related to the quality of the services provided. During 2013, other income decreased 20% to P$63 million from P$79 million in 2012,
mainly due to a decrease in indemnities collected from suppliers.

Operating expenses (without depreciation and amortization)

Total operating expenses (without depreciation and amortization and gain on disposal and impairment of PP&E) increased by P$4,160 million
totaling P$19,786 million in 2013, representing a 27% increase as compared to 2012. The increase was mainly due to increases in employee benefit expenses and severance payments, cost of VAS, fees for services, maintenance, materials and supplies,
taxes and fees with the Regulatory Authority, commissions, and cost of equipment and handsets.



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|                                                                 |  |                         |        |   |              |  |        |                      |               |  |     |                        |  |  |                      |   |  |  |       |   |  |  |       |   |  |  |     | 
|---------------------------------------------------------------- |  | ----------------------- | ------ | - | ------------ |  | ------ | -------------------- | ------------- |  | --- | ---------------------- |  |  | -------------------- | - |  |  | ----- | - |  |  | ----- | - |  |  | --- | 
|                                                                 |  | Years EndedDecember 31, |        |   | Total Change |  |        | Change by segment(1) |              
|                                                                 |  | 2013                    |        |   | 2012         |  |        |                      | FixedServices |  |     | PersonalMobileServices |  |  | NúcleoMobileServices |  
|                                                                 |  | (P$ million)            |        |   | %            |  |        | (P$ million)         |              
|Employee benefit expenses and severance payments                 |  |                         | 4,152  |   |              |  | 3,269  |                      |               |  | 27  |                        |  |  | 883                  |   |  |  | 611   |   |  |  | 252   |   |  |  | 20  | 
|Interconnection costs and other telecommunications charges       |  |                         | 1,829  |   |              |  | 1,707  |                      |               |  | 7   |                        |  |  | 122                  |   |  |  | 21    |   |  |  | 60    |   |  |  | 41  | 
|Fees for services, maintenance, materials and supplies           |  |                         | 2,641  |   |              |  | 2,109  |                      |               |  | 25  |                        |  |  | 532                  |   |  |  | 176   |   |  |  | 334   |   |  |  | 22  | 
|Taxes and fees with the Regulatory Authority                     |  |                         | 2,689  |   |              |  | 2,018  |                      |               |  | 33  |                        |  |  | 671                  |   |  |  | 129   |   |  |  | 534   |   |  |  | 8   | 
|Commissions                                                      |  |                         | 2,203  |   |              |  | 1,949  |                      |               |  | 13  |                        |  |  | 254                  |   |  |  | 8     |   |  |  | 226   |   |  |  | 20  | 
|Cost of equipment and handsets                                   |  |                         | 3,111  |   |              |  | 2,043  |                      |               |  | 52  |                        |  |  | 1,068                |   |  |  | 30    |   |  |  | 992   |   |  |  | 46  | 
|Cost of VAS                                                      |  |                         | 708    |   |              |  | 326    |                      |               |  | 117 |                        |  |  | 382                  |   |  |  | 2     |   |  |  | 371   |   |  |  | 9   | 
|Advertising                                                      |  |                         | 656    |   |              |  | 660    |                      |               |  | (1  | )                      |  |  | (4                   | ) |  |  | (12   | ) |  |  | 6     |   |  |  | 2   | 
|Provisions                                                       |  |                         | 270    |   |              |  | 153    |                      |               |  | 76  |                        |  |  | 117                  |   |  |  | 80    |   |  |  | 36    |   |  |  | 1   | 
|Bad-debt expense                                                 |  |                         | 283    |   |              |  | 275    |                      |               |  | 3   |                        |  |  | 8                    |   |  |  | 2     |   |  |  | 3     |   |  |  | 3   | 
|Restructuring Costs (recovery)                                   |  |                         | (8     | ) |              |  | 90     |                      |               |  | n/a |                        |  |  | (98                  | ) |  |  | (91   | ) |  |  | (7    | ) |  |  |    | 
|Other operating expenses                                         |  |                         | 1,252  |   |              |  | 1,027  |                      |               |  | 22  |                        |  |  | 225                  |   |  |  | 102   |   |  |  | 104   |   |  |  | 19  | 
|Total operating expenses (without depreciation and amortization) |  |                         | 19,786 |   |              |  | 15,626 |                      |               |  | 27  |                        |  |  | 4,160                |   |  |  | 1,058 |   |  |  | 2,911 |   |  |  | 191 | 



|(1) | Net of the Intersegment transactions effect.
|--- | --------------------------------------------

Employee benefit expenses and severance
payments

During 2013, employee benefit expenses and severance payments were P$4,152 million, representing a 27% increase from 2012.
This was primarily due to salary increases that Telecom implemented across all segments.

With a total headcount of 16,581 at the end of
2013 (-1% vs. 2012), lines in service per employee reached 375 in the Fixed Services segment (slightly higher than 2012), 3,897 in the Personal mobile services segment (+8% vs. 2012) and 5,696 in the Núcleo mobile services segment (+9% vs.
2012).

Interconnection costs and other telecommunications charges

Interconnection costs and other telecommunications charges includes interconnection costs, lease of circuits and costs of international
outbound calls, which reflect payments made under bilateral agreements between Telecom Argentina and international carriers in connection with outgoing calls made by our customers. Additionally, the cost of roaming and TLRD is included in the Mobile
Services segments. In 2013, interconnection costs and other telecommunications charges amounted to P$1,829 million compared with P$1,707 million in 2012. The increase was mainly due to higher traffic volume in the domestic market.

Fees for services, maintenance, materials and supplies

Expenses related to fees for services, maintenance, materials and supplies increased 25% to P$2,641 million in 2013 from P$2,109 million in
2012. This increase was mainly due to higher maintenance costs of radio bases, systems and buildings in the mobile services segments, as a result of an increase in technical assistance cost of radio bases, higher maintenance costs of licenses and
higher costs of building maintenance, and to higher fees for services related to call centers (a P$98 million increase from 2012 to 2013).



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Taxes and fees with the Regulatory Authority

Taxes and fees with the Regulatory Authority (including turnover tax, IDC, municipal and other taxes) increased 33% to P$2,689 million in 2013
from P$2,018 million in 2012, mainly due to charges of turnover tax (P$413 million increase from 2012 to 2013 due to an increase in revenues during 2013 and higher average rates of the turnover tax in Autonoma City of Buenos Aires, Córdoba,
Chaco, Jujuy and Mendoza) and from taxes with the Regulatory Authority (an increase of P$120 million from 2012) as a result of the increase in revenues during 2013 .

Commissions

Commissions
increased by P$254 million, or 13%, to P$2,203 million in 2013 from P$1,949 million in 2012. The increase was mainly due to higher commissions related to commercial agents associated with increased revenues because of major acquisition and retention
costs, higher card sales, and prepaid recharges and collections.

Commissions are net of agent commissions capitalized as SAC, which
totaled P$551 million (+P$237 million or 75% vs. 2012), and are directly related to the increase in the postpaid subscribers base in the Personal Mobile Services segment and the increase in the commissions prices.

Cost of equipment and handsets

During 2013, the cost of equipment and handsets increased to P$3,111 million from P$2,043 million in 2012, representing a 52% increase. This
increase was mainly due to the increase in costs of mobile handsets in both Mobile Services segments of P$1,038 million, as a consequence of higher average unit cost of sales (+72% vs. 2012) offset by a decrease in the number of handsets sold (-5%
vs. 2012).

Cost of equipment and handsets are net of costs capitalized as SAC (P$255 million in 2013, P$208 million or 45% lower than
2012).

Cost of VAS

Cost of VAS amounted to P$708 million (+P$382 million vs. 2012), mainly due to the increase of VAS sales in the Personal Mobile Services
segment (mainly the SMS service) as a consequence of several campaigns launched by Personal and especially due to the increase in revenues from the sale of contents via SMS.

Advertising

Costs
related to advertising decreased by P$4 million, or 1%, to P$656 million in 2013, due to a reduction in advertising Personal and Arnets campaigns.

Provisions

During 2013,
we recorded P$270 million in provisions compared to P$153 million recorded in 2012, representing a 76% increase. The increase in 2013 was mainly due to an increase in regulatory tax proceedings amounting to P$84 million and an increase in civil and
commercial proceedings amounting to P$62 million, partially offset by a decrease in labor claims amounting to P$29 million.

Bad Debt
Expense

In 2013, bad debt expense amounted to P$283 million, an increase of 3% as compared to 2012, representing 1% and 1.2% of
consolidated revenues in 2013 and 2012, respectively. The increase was mainly due to higher aging of the accounts receivables, mainly in voice-retail customers in the Núcleo Mobile Services segment.

Restructuring Costs/ Recovery

In the last quarter of 2012 the Companys Management decided to implement a restructuring plan aimed at improving the efficiency of the
Telecom Groups organizational structure. This plan contemplates the removal and / or merger of management structures in various areas of Telecom Argentina and Personal. The plan involves the dismissal of about 90 employees with a total
estimated cost of P$90 million. The recovery of these costs in 2013 amounts to P$8 million as a consequence of the end of the restructuring Plan in June, 2013.



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Other Operating Expenses

Other operating expenses, which include transportation costs, energy and rentals, among others, increased 22% to P$1,252 million in 2013 from
P$1,027 million in 2012 primarily as a result of an increase in prices on related services and an increase in rent prices because of new and renegotiated rental contracts.

For a further breakdown of our consolidated operating expenses, see Results of Operations by Segment below.

Operating income before depreciation and amortization

Our consolidated operating income before depreciation and amortization was P$7,564 million in 2013, representing an increase of P$994 million
or 15% from P$6,570 million in 2012. It represented 28% and 30% of total consolidated revenues, respectively. This growth was mainly fueled by the Personal Mobile Services segment.

Depreciation and Amortization

Depreciation of PP&E and amortization of intangible assets increased by P$261 million, or 10%, to P$2,873 million during 2013. The increase
in PP&E depreciation reached P$191 million, in amortization of SAC and Service connection or habilitation costs totaled P$70 million and in amortization of other intangible assets remains the same as in 2012.

Gain on disposal of PP&E and impairment of PP&E

The gain on disposal of PP&E amounted to P$14 million, an increase of P$6 million vs. 2012 and mainly corresponds to the Fixed Services
segment. Impairment of PP&E amounted to P$187 million in 2013 and is mainly related to the discontinuation of commercial systems of Personal, amounting to P$65 million and to the impairment of certain PP&E items related to some projects
undertaken by Telecom Argentina with the public sector and the private sector that present uncertainty regarding their development and future associated cash flows, amounting to P$122 million.

Operating income

During 2013,
consolidated operating income was P$4,518 million, representing an increase of P$552 million or 14% from 2012. Operating income represented 17% of consolidated revenues in 2013 versus 18% in 2012. The decrease in the margin was mainly due to the
increase of operating expenses (including depreciation and amortization and gain on disposal of PP&E and impairment of PP&E) of 25% partially offset by the increase in revenues of 23%.



|                                                          |  |                          |        |   |                     |  |        |           |  |  |     | 
|--------------------------------------------------------- |  | ------------------------ | ------ | - | ------------------- |  | ------ | --------- |  |  | --- | 
|                                                          |  | Years Ended December 31, |        |   | % of Change         | 
|                                                          |  | 2013                     |        |   | 2012                |  |        | 2013-2012 | 
|                                                          |  | (P$ million / %)         |        |   | Increase/(Decrease) | 
|Operating income before depreciation and amortization (1) |  |                          | 7,564  |   |                     |  | 6,570  |           |  |  | 15  | 
|As % of revenues                                          |  |                          | 28     |   |                     |  | 30     |           |  |  |     | 
|Depreciation and amortization                             |  |                          | (2,873 | ) |                     |  | (2,612 | )         |  |  | 10  | 
|As % of revenues                                          |  |                          | (11    | ) |                     |  | (12    | )         |  |  |     | 
|Gain on disposal of PP&E and impairment of PP&E           |  |                          | (173   | ) |                     |  | 8      |           |  |  | n/a | 
|Operating income                                          |  |                          | 4,518  |   |                     |  | 3,966  |           |  |  | 14  | 
|As % of revenues                                          |  |                          | 17     |   |                     |  | 18     |           |  |  |     | 



|(1) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------



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Financial results, net

During 2013, Telecom recorded a net financial gain of P$528 million compared to a net financial gain of P$229 million in 2012. This was mainly
due to higher gains from financial interest on time deposits (including interest on loans given to related parties) and other investments (+P$364 million vs. 2012), higher gains on mutual funds (+P$69 million vs. 2012), higher gains on Financial
derivatives (+P$55 million vs. 2012), and higher interests on receivables (+P$35 million vs. 2012), partially offset by a higher foreign currency exchange loss of P$233 million.

Income tax expense

The Companys
income tax charge includes three effects: (i) the current tax payable for the year pursuant to tax legislation applicable to each company in the Telecom Group; (ii) the effect of applying the deferred tax method on temporary differences
arising out of the asset and liability valuation according to tax versus financial accounting criteria; and (iii) the analysis of recoverability of deferred tax assets.

(i) Regarding current tax expenses, Telecom Argentina, Telecom Argentina USA, Personal and Núcleo generated tax profit in fiscal year
2013, resulting in an income tax payable of P$1,956 million (including fiscal year 2012 return adjustment of P$3 million) versus P$1,522 million in 2012. Fixed Segment income tax expense assessed in 2013 amounted to P$344 million as compared to
P$312 million in 2012; Personals, in 2013, amounted to P$1,588 million compared to P$1,187 million in 2012; and Núcleos, in 2013, amounted to P$24 million compared to P$23 million in 2012.

(ii) Regarding the deferred tax, in 2013 and 2012, the Fixed Segment recorded a deferred tax benefit of P$47 million and P$39 million,
respectively; Personal recorded a deferred tax benefit of P$120 million and P$20 million in 2013 and 2012, respectively; and Núcleo generated a P$1 million and P$3 million gain in 2013 and 2012, totaling P$168 million and P$62 million of
deferred tax benefit in 2013 and 2012, respectively. The gain in 2013 was mainly generated by the tax effects of temporary differences related to PP&E and intangible assets, inventories and provisions.

(iii) Regarding the analysis of recoverability of deferred tax assets, Personal recorded a valuation allowance for deferred tax assets of P$4
million and P$3 million in 2013 and 2012, respectively, while no charges were recorded for Telecom Argentina, Telecom Argentina USA and Núcleo in those years.

Net income

For 2013, we recorded net
income of P$3,254 million (12% of total consolidated revenues), of which P$3,202 million is attributable to Telecom Argentina. The Fixed Services segment accounted for a gain of P$538 million, the Personal Mobile Services segment accounted for a
P$2,556 million gain and the Núcleo Mobile Services segment accounted for a gain of P$160 million, representing 7%, 13% and 14% of the total segment revenues, respectively.

For 2012, we recorded net income of P$2,732 million (12% of total consolidated revenues), of which P$2,685 million is attributable to Telecom
Argentina. The Fixed Services segment accounted for a gain of P$502 million, the Personal Mobile Services segment accounted for a P$2,085 million gain and the Núcleo Mobile Services segment accounted for a gain of P$145 million, representing
7%, 14% and 17% of the total segment revenues, respectively.



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A.2) 2012 Compared to 2011



|                                                           |      |                         |         |      |              |  |         |                      |  |  |                        |   |  |                      |        |   |  |  |      |   |  |  |        |   |  |  |     |  
|---------------------------------------------------------- | ---- | ----------------------- | ------- | ---- | ------------ |  | ------- | -------------------- |  |  | ---------------------- | - |  | -------------------- | ------ | - |  |  | ---- | - |  |  | ------ | - |  |  | --- | -
|                                                           |      | Years EndedDecember 31, |         |      | Total Change |  |         | Change by segment(1) | 
|                                                           | 2012 |                         |         | 2011 |              |  |         | FixedServices        |  |  | PersonalMobileServices |   |  | NúcleoMobileServices |       
|                                                           |      | (P$ million)            |         |      | %            |  |         | (P$ million)         | 
|Revenues                                                   |      |                         | 22,117  |      |              |  | 18,498  |                      |  |  | 20                     |   |  |                      | 3,619  |   |  |  | 694  |   |  |  | 2,772  |   |  |  | 153 |  
|Other Income                                               |      |                         | 79      |      |              |  | 30      |                      |  |  | 163                    |   |  |                      | 49     |   |  |  | 55   |   |  |  | (6     | ) |  |  |    |  
|Operating expenses (without depreciation and amortization) |      |                         | (15,626 | )    |              |  | (12,535 | )                    |  |  | 25                     |   |  |                      | (3,091 | ) |  |  | (860 | ) |  |  | (2,146 | ) |  |  | (85 | )
|Operating income before depreciation and amortization(2)   |      |                         | 6,570   |      |              |  | 5,993   |                      |  |  | 10                     |   |  |                      | 577    |   |  |  | (111 | ) |  |  | 620    |   |  |  | 68  |  
|Depreciation and amortization                              |      |                         | (2,612  | )    |              |  | (2,158  | )                    |  |  | 21                     |   |  |                      | (454   | ) |  |  | (111 | ) |  |  | (336   | ) |  |  | (7  | )
|Gain on disposal of PP&E                                   |      |                         | 8       |      |              |  | 22      |                      |  |  | (64                    | ) |  |                      | (14    | ) |  |  | (13  | ) |  |  | (1     | ) |  |  |    |  
|Operating income                                           |      |                         | 3,966   |      |              |  | 3,857   |                      |  |  | 3                      |   |  |                      | 109    |   |  |  | (235 | ) |  |  | 283    |   |  |  | 61  |  
|Financial results, net                                     |      |                         | 229     |      |              |  | 80      |                      |  |  | 186                    |   |  |                      | 149    |   |  |  | 83   |   |  |  | 64     |   |  |  | 2   |  
|Income tax expense                                         |      |                         | (1,463  | )    |              |  | (1,395  | )                    |  |  | 5                      |   |  |                      | (68    | ) |  |  | 5    |   |  |  | (67    | ) |  |  | (6  | )
|Net income                                                 |      |                         | 2,732   |      |              |  | 2,542   |                      |  |  | 7                      |   |  |                      | 190    |   |  |  | (147 | ) |  |  | 280    |   |  |  | 57  |  
|                                                           |      |                         |         |      |              |  |        
|Net income attributable to:                                |      |                         |         |      |              |  |         |                      |  |  |                        |   |  |                      |        |   |  |  |      |   |  |  |        |   |  |  |     |  
|Telecom Argentina (Controlling Company)                    |      |                         | 2,685   |      |              |  | 2,513   |                      |  |  | 7                      |   |  |                      | 172    |   |  |  |      |   |  |  |        |   |  |  |     |  
|Noncontrolling interest                                    |      |                         | 47      |      |              |  | 29      |                      |  |  | 62                     |   |  |                      | 18     |   |  |  |      |   |  |  |        |   |  |  |     |  



|(1) | Includes the effect of eliminations of Intersegment transactions.
|--- | -----------------------------------------------------------------

|(2) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues

During 2012, total consolidated
revenues increased by 20% to P$22,117 million from P$18,498 million in 2011, mainly driven by our mobile, Broadband and data transmission businesses.

Consolidated revenues for 2012 and 2011 are comprised as follows:



|                 |      |                         |        |      |              |  |        |                      |  |  |                        |  |  |                      |       |  |  |  |     |   |  |  |       |  |  |  |     | 
|---------------- | ---- | ----------------------- | ------ | ---- | ------------ |  | ------ | -------------------- |  |  | ---------------------- |  |  | -------------------- | ----- |  |  |  | --- | - |  |  | ----- |  |  |  | --- | 
|                 |      | Years EndedDecember 31, |        |      | Total Change |  |        | Change by segment(1) | 
|                 | 2012 |                         |        | 2011 |              |  |        | FixedServices        |  |  | PersonalMobileServices |  |  | NúcleoMobileServices |      
|                 |      | (P$ million)            |        |      | %            |  |        | (P$ million)         | 
|Voice            |      |                         | 9,927  |      |              |  | 9,184  |                      |  |  | 8                      |  |  |                      | 743   |  |  |  | 110 |   |  |  | 572   |  |  |  | 61  | 
|Data             |      |                         | 6,767  |      |              |  | 5,316  |                      |  |  | 27                     |  |  |                      | 1,451 |  |  |  | 152 |   |  |  | 1,283 |  |  |  | 16  | 
|Internet         |      |                         | 3,395  |      |              |  | 2,411  |                      |  |  | 41                     |  |  |                      | 984   |  |  |  | 440 |   |  |  | 474   |  |  |  | 70  | 
|Service Revenues |      |                         | 20,089 |      |              |  | 16,911 |                      |  |  | 19                     |  |  |                      | 3,178 |  |  |  | 702 |   |  |  | 2,329 |  |  |  | 147 | 
|Equipment(2)     |      |                         | 2,028  |      |              |  | 1,587  |                      |  |  | 28                     |  |  |                      | 441   |  |  |  | (8  | ) |  |  | 443   |  |  |  | 6   | 
|Revenues         |      |                         | 22,117 |      |              |  | 18,498 |                      |  |  | 20                     |  |  |                      | 3,619 |  |  |  | 694 |   |  |  | 2,772 |  |  |  | 153 | 



|(1) | Net of the Intersegment revenues effect.
|--- | ----------------------------------------

|(2) | This item is composed of voice, data and Internet equipment in each year.
|--- | -------------------------------------------------------------------------



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Voice

Revenues from voice services increased 8% to P$9,927 million in 2012 from P$9,184 million in 2011. Such increase is largely due to a growth in
the mobile subscriber base, as well as an increase in the prices of our services in the Personal Mobile Services segment. Revenues from voice services represented 45% of our total consolidated revenues for 2012 compared to 50% of our total
consolidated revenues for 2011.

Fixed services

Revenues from voice services represented 53% of our total Fixed Services segment revenues attributable to third parties for 2012 compared to
58% for 2011.

Voice services mainly include revenues from monthly basic charges, charges for supplementary services, measured service
(national and international calls) and public telephone service. Charges for supplementary services include call waiting, call forwarding, three-way calling, caller ID, direct inwards dialing, toll-free service and voicemail, among others. Measured
service charges are based on the number and duration of calls. Measured service revenues depend on the number of lines in service, the volume of usage, the number of new lines installed and applicable rates. They also include interconnection
services (which primarily include access, termination and long-distance transport of calls), international long-distance service (which reflect payments made under bilateral agreements between Telecom Argentina and foreign telecommunications
carriers covering inbound international long-distance calls) and revenues related to billing and collection services charged to other operators.

Revenues from voice-retail increased 5% to P$2,475 million and were still affected by the Pesification and freezing of regulated rates in
early 2002. Revenues from regulated rate services represented 36% of our total segment revenues in 2012 compared with a 41% in 2011.See (B) Results of Operations by Segment(B.1) Fixed Services
SegmentRevenuesVoice-Retail for a description of the services included as voice-retail.

Monthly basic charges and
supplementary services increased P$75 million or 8% to P$1,032 million in 2012 from P$957 million in 2011. Such growth was due to the increase of non-regulated services during the period.

Measured service charges increased 5% to P$1,306 million in 2012 from P$1,242 million in 2011. Such increase was due to the effect of the flat
rate packs. In relative terms, revenues from local measured service increased 6% vs. 2011 and domestic long distance increased 5% vs. 2011.

Voice-wholesale revenues (including fixed and mobile interconnection revenues, together with the revenues generated by the subsidiary Telecom
Argentina USA amounting to P$43 million) amounted to P$739 million (-1% vs. 2011).

Interconnection services decreased 2% to P$516 million
in 2012 from P$525 million in 2011. Other wholesale revenues reached P$223 million in 2012 and P$222 million in 2011.

Personal Mobile
services

Revenues from voice services represented 41% of our total Personal Mobile Services segment revenues attributable to third
parties for 2012 compared to 46% for 2011.

Voice services mainly include revenues from monthly basic charges, airtime usage charges and
roaming charges to our customers for their use of our and other carriers networks, CPP, TLRD and roaming charges to other mobile service providers whose customers use our network.

Voice-retail revenues reached P$4,461 million in 2012 (+11% vs. 2011). The increase was mainly due to increase in prices and an increase in
the subscriber base.

Voice-wholesale revenues reached P$1,838 million in 2012 (+6% vs. 2011). The increase was mainly due to higher
traffic with mobile operators (TLRD) and an increase in roaming revenues, also due to higher traffic.

In Núcleo Mobile Services
segment, voice revenues increased 17% to P$414 million in 2012 compared to P$353 million in 2011 mainly due to an increase in the subscriber base.



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Data and Internet

Revenues from data and Internet services increased 32% to P$10,162 million in 2012 from P$7,727 million in 2011. Revenues from data and
Internet represented 46% of our total consolidated revenues for 2012 compared to 42% of our total consolidated revenues for 2011.

In the
Mobile Services segments, data and Internet services mainly include SMS, contents via SMS, MMS, Browsing and Internet. Revenues from data and Internet in the Personal Mobile segment increased 33% to P$7,013 million in 2012 from P$5,256 million in
2011.

As a consequence of the voice traffic increase, the usage of VAS (Internet and data) and the prices increase implemented in 2012,
the ARPU increased to P$57.7 per month in 2012 (vs. P$51.4 per month in 2011).

Data

Revenues from data services in the Fixed segment increased 26% to P$735 million in 2012 from P$583 million in 2011, where the focus was to
strengthen Telecom Argentinas position as an integrated TICs provider (Datacenter, VPN, among others) for wholesale and government segments. The increase was mainly due to an increase in virtual private network services (private data network
services replacing the point-to-point service), leases of circuits, dedicated lines and the growth in data center services. The majority of our revenues from data transmission services is denominated in U.S. dollars and, consequently, in 2012 and
2011, was affected by the fluctuations in the exchange rate between the peso and the U.S. dollar resulting in an increase in data transmission revenues.

Mobile data revenues reached P$5,765 million (+29% vs. 2011). This increase is mainly due to the SMS traffic performance, related to the
increase in the subscriber base and higher prices of this service, both in prepaid or postpaid customers.

Internet

Internet revenues in the Fixed segment increased 28% to P$1,993 million in 2012 from P$1,553 million in 2011. The increase was mainly due to
the substantial expansion of the Broadband service (+5% of customers vs. 2011), an increase in average prices resulting in an improvement in the ARPU amounted to P$102.3 per month in 2012 vs. P$87 per month in 2011. As of December 31, 2012, the
number of Internet accesses reached approximately 1.6 million equivalent to 39% of fixed lines in service of Telecom Argentina (vs. 37% in 2011), compared to 1.5 million as of December 31, 2011, an increase of 5%.

Mobile Internet revenues in the Personal Mobile segment increased 61% to P$1,248 million in 2012 from P$774 million in 2011. Such increases
were mainly due to an increase in the subscriber base.

Equipment

Revenues from equipment increased by 28% to P$2,028 million in 2012 from P$1,587 million in 2011. This increase is mainly related to the
Personal Mobile services segment in the retail business with an increase of P$443 million vs. 2011 and was due to a mix between the increase in the average price of the handsets of 34% and the decrease of 5% in the handsets sold.

Other Income

Other income mainly
includes penalties collected from suppliers, as a result of delays in deliveries of goods or matters related to the quality of the services provided. During 2012, other income increased 163% to P$79 million from P$30 million, mainly due to an
increase in penalties and indemnities collected from suppliers.

Operating expenses (without depreciation and amortization)

Total operating expenses (without depreciation and amortization) increased by P$3,091 million totaling P$15,626 million in 2012, representing a
25% increase as compared to 2011. The increase was mainly due to increases in employee benefit expenses and severance payments, fees for services, maintenance, materials and supplies, taxes and fees with the Regulatory Authority, commissions, energy
fees, restructuring costs and cost of equipment and handsets.



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|                                                                 |  |                         |        |  |             |  |        |                      |               |  |     |                        |  |  |                      |   |  |  |     |   |  |  |       |  |  |  |    |  
|---------------------------------------------------------------- |  | ----------------------- | ------ |  | ----------- |  | ------ | -------------------- | ------------- |  | --- | ---------------------- |  |  | -------------------- | - |  |  | --- | - |  |  | ----- |  |  |  | -- | -
|                                                                 |  | Years EndedDecember 31, |        |  | TotalChange |  |        | Change by segment(1) |              
|                                                                 |  | 2012                    |        |  | 2011        |  |        |                      | FixedServices |  |     | PersonalMobileServices |  |  | NúcleoMobileServices |  
|                                                                 |  | (P$ million)            |        |  | %           |  |        | (P$ million)         |              
|Employee benefit expenses and severance payments                 |  |                         | 3,269  |  |             |  | 2,609  |                      |               |  | 25  |                        |  |  | 660                  |   |  |  | 431 |   |  |  | 220   |  |  |  | 9  |  
|Interconnection costs and other telecommunications charges       |  |                         | 1,707  |  |             |  | 1,497  |                      |               |  | 14  |                        |  |  | 210                  |   |  |  | (5  | ) |  |  | 199   |  |  |  | 16 |  
|Fees for services, maintenance, materials and supplies           |  |                         | 2,109  |  |             |  | 1,719  |                      |               |  | 23  |                        |  |  | 390                  |   |  |  | 135 |   |  |  | 245   |  |  |  | 10 |  
|Taxes and fees with the Regulatory Authority                     |  |                         | 2,018  |  |             |  | 1,595  |                      |               |  | 27  |                        |  |  | 423                  |   |  |  | 82  |   |  |  | 337   |  |  |  | 4  |  
|Commissions                                                      |  |                         | 1,949  |  |             |  | 1,515  |                      |               |  | 29  |                        |  |  | 434                  |   |  |  | 30  |   |  |  | 396   |  |  |  | 8  |  
|Cost of equipment and handsets                                   |  |                         | 2,043  |  |             |  | 1,640  |                      |               |  | 25  |                        |  |  | 403                  |   |  |  | (15 | ) |  |  | 396   |  |  |  | 22 |  
|Cost of VAS                                                      |  |                         | 326    |  |             |  | 182    |                      |               |  | 79  |                        |  |  | 144                  |   |  |  | 4   |   |  |  | 135   |  |  |  | 5  |  
|Advertising                                                      |  |                         | 660    |  |             |  | 599    |                      |               |  | 10  |                        |  |  | 61                   |   |  |  | 17  |   |  |  | 36    |  |  |  | 8  |  
|Provisions                                                       |  |                         | 153    |  |             |  | 225    |                      |               |  | (32 | )                      |  |  | (72                  | ) |  |  | (75 | ) |  |  | 4     |  |  |  | (1 | )
|Bad-debt expense                                                 |  |                         | 275    |  |             |  | 169    |                      |               |  | 63  |                        |  |  | 106                  |   |  |  | 28  |   |  |  | 77    |  |  |  | 1  |  
|Restructuring costs                                              |  |                         | 90     |  |             |  |       |                      |               |  | n/a |                        |  |  | 90                   |   |  |  | 83  |   |  |  | 7     |  |  |  |   |  
|Other operating expenses                                         |  |                         | 1,027  |  |             |  | 785    |                      |               |  | 31  |                        |  |  | 242                  |   |  |  | 145 |   |  |  | 94    |  |  |  | 3  |  
|Total operating expenses (without depreciation and amortization) |  |                         | 15,626 |  |             |  | 12,535 |                      |               |  | 25  |                        |  |  | 3,091                |   |  |  | 860 |   |  |  | 2,146 |  |  |  | 85 |  



|(1) | Net of the Intersegment transactions effect.
|--- | --------------------------------------------

Employee benefit expenses and severance
payments

During 2012, employee benefit expenses and severance payments were P$3,269 million, representing a 25% increase from 2011.
This was primarily due to salary increases that Telecom implemented across all segments and the increase in Telecoms headcount. In the Fixed Services segment, the increases were mainly due to salary increases and severance payments and
termination benefits, as a result of an increase in the number of employees who retired or were dismissed. In the Personal Mobile Services segment there was a 9% increase in the number of employees (from 4,820 employees in 2011 to 5,254 employees in
2012).

With a total headcount of 16,808 at the end of 2012 (+3% vs. 2011), lines in service per employee reached 371 in the Fixed
Services segment (slightly lower to 2011), 3,612 in the Personal mobile services segment (-4% vs. 2011) and 5,226 in the Núcleo mobile services segment (+6% vs. 2011).

Interconnection costs and other telecommunications charges

Interconnection costs and other telecommunications charges includes interconnection costs, lease of circuits and costs of international
outbound calls, which reflect payments made under bilateral agreements between Telecom Argentina and international carriers in connection with outgoing calls made by our customers. Additionally, the cost of roaming and TLRD is included in the Mobile
Services segments. In 2012, interconnection costs and other telecommunications charges amounted to P$1,707 million compared with P$1,497 million in 2011. The increase was mainly due to higher traffic volume.

Fees for services, maintenance, materials and supplies

Expenses related to fees for services, maintenance, materials and supplies increased 23% to P$2,109 million in 2012 from P$1,719 million in
2011. This increase was mainly due to higher maintenance costs across all segments, and to higher fees for services related to call centers (a P$173 million increase from 2011 to 2012).

Taxes and fees with the Regulatory Authority

Taxes and fees with the Regulatory Authority (including turnover tax, IDC, municipal and other taxes) increased 27% to P$2,018 million in 2012
from P$1,595 million in 2011, mainly due to charges of turnover tax (P$222 million increase from 2011 to 2012) as a result of the increase in revenues during 2012 and from taxes with the Regulatory Authority (an increase of P$92 million from 2011).



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Commissions

Commissions increased by P$434 million, or 29%, to P$1,949 million in 2012 from P$1,515 million in 2011. The increase was mainly due to higher
commissions related to commercial agents associated with increased revenues because of major acquisition and retention costs, higher card sales, and prepaid recharges and collections.

Commissions are net of agent commissions capitalized as SAC, which totaled P$314 million (+P$66 million or 27% vs. 2011), and are directly
related to the increase in the postpaid subscribers base in the Personal Mobile Services segment.

Cost of equipment and handsets

During 2012, the cost of equipment and handsets increased to P$2,043 million from P$1,640 million in 2011, representing a 25%
increase. The increase in costs of mobile handsets in both Mobile Services segments was P$418 million and was mainly due to higher average unit cost of sales (+26% vs. 2011) offset by a decrease in the number of handsets sold (-5% vs. 2011).

Cost of equipment and handsets are net of costs capitalized as SAC (P$463 million in 2012, P$7 million or 1% lower than 2011).

Cost of VAS

Cost of VAS
amounted to P$326 million (+P$144 million vs. 2012), mainly due to the increase of VAS sales in the Personal Mobile Services segment (mainly the SMS service).

Advertising

Costs
related to advertising increased by P$61 million, or 10%, to P$660 million in 2012. During 2012, Telecom Argentina continued its focus on advertising campaigns as a result of competition in the Internet services market while Personal recorded higher
media advertising expenses to strengthen the brand position of the Telecom Group.

Provisions

During 2012, we recorded P$153 million in provisions compared to P$225 million recorded in 2011, representing a 32% decrease. The decrease in
2012 was mainly due to a decrease in labor claims amounting to P$68 million and in regulatory tax proceedings amounting to P$24 million, partially offset by an increase in civil and commercial proceedings amounting to P$20 million.

Bad Debt Expense

In
2012, bad debt expense amounted to P$275 million, an increase of 63% as compared to 2011, representing 1% of consolidated revenues in 2012 and less than 1% in 2011. The increase was mainly due to higher revenues in 2012 (+ 20%) as compared to 2011
and higher aging of the accounts receivables, mainly in voice-retail customers in the Personal Mobile Services segment.

Restructuring
Costs

In the last quarter of 2012 the Companys Management decided to implement a restructuring plan aimed at improving the
efficiency of the Telecom Groups organizational structure. This plan contemplates the removal and / or merger of management structures in various areas of Telecom Argentina and Personal. The plan involves the dismissal of about 90 employees
with a total estimated cost of P$90 million. As of December 31, 2012, 45 dismissals have been made effective, 40 employees of Telecom Argentina and 5 employees of Personal, for a total amount of P$36 million. The remaining P$54 million has been
accrued.

Other Operating Expenses

Other operating expenses, which include transportation costs, energy and rentals, among others, increased 31% to P$1,027 million in 2012 from
P$785 million in 2011 primarily as a result of the subsidies elimination on certain public services. Other operating expenses also were higher due to higher costs of site leases and international and satellite connectivity.



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Operating income before depreciation and amortization

Our consolidated operating income before depreciation and amortization was P$6,570 million in 2012, representing an increase of P$577 million
or 10% from P$5,993 million in 2011. It represented 30% and 32% of total consolidated revenues, respectively.

Depreciation and Amortization

Depreciation of PP&E and amortization of intangible assets increased by P$454 million, or 21%, to P$2,612 million during 2012. The increase
in PP&E depreciation reached P$254 million, in amortization of SAC and Service connection or habilitation costs totaled P$195 million and in amortization of other intangible assets totaled P$5 million.

For a further breakdown of our consolidated operating expenses, see Results of Operations by Segment below.

Gain on disposal of PP&E

The gain
amounted to P$8 million, a reduction of P$14 million vs. 2011 and mainly corresponds to the Fixed Services segment.

Operating income

During 2012, consolidated operating income was P$3,966 million, representing an increase of P$109 million or 3% from 2011. Operating income
represented 18% of consolidated revenues in 2012 versus 21% in 2011. The decrease in the margin was mainly due to the increase of operating expenses (including depreciation and amortization) of 24% partially offset by the increase in revenues of
20%.



|                                                          |  |                          |        |   |                     |  |        |           |  |  |     |  
|--------------------------------------------------------- |  | ------------------------ | ------ | - | ------------------- |  | ------ | --------- |  |  | --- | -
|                                                          |  | Years Ended December 31, |        |   | % of Change         | 
|                                                          |  | 2012                     |        |   | 2011                |  |        | 2012-2011 | 
|                                                          |  | (P$ million / %)         |        |   | Increase/(Decrease) | 
|Operating income before depreciation and amortization (1) |  |                          | 6,570  |   |                     |  | 5,993  |           |  |  | 10  |  
|As % of revenues                                          |  |                          | 30     |   |                     |  | 32     |           |  |  |     |  
|Depreciation and amortization                             |  |                          | (2,612 | ) |                     |  | (2,158 | )         |  |  | 21  |  
|As % of revenues                                          |  |                          | (12    | ) |                     |  | (12    | )         |  |  |     |  
|Gain on disposal of PP&E                                  |  |                          | 8      |   |                     |  | 22     |           |  |  | (64 | )
|Operating income                                          |  |                          | 3,966  |   |                     |  | 3,857  |           |  |  | 3   |  
|As % of revenues                                          |  |                          | 18     |   |                     |  | 21     |           |  |  |     |  



|(1) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Financial results, net

During 2012,
Telecom recorded a net financial gain of P$229 million compared to a net financial gain of P$80 million in 2011. The positive change in the net financial results was mainly due to higher gains from net financial position of P$135 million and lower
interest loss on provisions of P$34 million, partially offset by higher net foreign currency exchange losses by P$31 million as compared to 2011 (including the effect of loss on derivatives).

Income tax expense

The Companys
income tax charge includes three effects: (i) the current tax payable for the year pursuant to tax legislation applicable to each company in the Telecom Group; (ii) the effect of applying the deferred tax method on temporary differences
arising out of the asset and liability valuation according to tax versus financial accounting criteria; and (iii) the analysis of recoverability of deferred tax assets.



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(i) Regarding current tax expenses, Telecom Argentina, Telecom Argentina USA, Personal and
Núcleo generated tax profit in fiscal year 2012, resulting in an income tax payable of P$1,522 million versus P$1,434 million in 2011. Fixed Segment income tax expense assessed in 2012 amounted to P$312 million as compared to P$379 million in
2011; Personals, in 2012, amounted to P$1,187 million compared to P$1,039 million in 2011; and Núcleos, in 2012, amounted to P$23 million compared to P$16 million in 2011.

(ii) Regarding the deferred tax, in 2012 and 2011, the Fixed Segment recorded a deferred tax benefit of P$39 million and P$101 million,
respectively; Personal recorded a deferred tax benefit of P$20 million and a deferred tax loss of P$59 million in 2012 and 2011, respectively; and Núcleo generated a P$3 million gain in 2012 and a P$2 million gain in 2011, totaling P$62
million of deferred tax benefit in 2012 and P$44 million of deferred tax benefit in 2011. The gain in 2012 was mainly generated by the tax effects of temporary differences related to the allowance for doubtful accounts and provisions. The gain in
2011 was mainly generated by the tax effects of temporary differences related to provisions, partially offset by the tax effects of temporary differences related to PP&E and intangible assets.

(iii) Regarding the analysis of recoverability of deferred tax assets, Personal recorded a valuation allowance for deferred tax assets of P$3
million and P$5 million in 2012 and 2011, respectively, while no charges were recorded for Telecom Argentina, Telecom Argentina USA and Núcleo in those years.

Net income

For 2012, we recorded net
income of P$2,732 million (12% of total consolidated revenues), of which P$2,685 million is attributable to Telecom Argentina. The Fixed Services segment accounted for a gain of P$502 million, the Personal Mobile Services segment accounted for a
P$2,085 million gain and the Núcleo Mobile Services segment accounted for a gain of P$145 million, representing 7%, 14% and 17% of the total segment revenues, respectively.

For 2011, we recorded net income of P$2,542 million (14% of total consolidated revenues), of which P$2,513 million are attributable to Telecom
Argentina. The Fixed Services segment accounted for a gain of P$517 million, the Personal Mobile Services segment accounted for a P$1,936 million gain and the Núcleo Mobile Services segment accounted for a gain of P$89 million, representing
8%, 15% and 12% of the total segment revenues, respectively.



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(B) Results of Operations by Segment

(B.1) Fixed Services Segment

Results of operations for our Fixed Services segment for 2013, 2012 and 2011 are comprised as follows:



|                                                           |  |                          |        |   |                     |  |        |      |  |  |           |   |  |           |     |   |  |  |     |  
|---------------------------------------------------------- |  | ------------------------ | ------ | - | ------------------- |  | ------ | ---- |  |  | --------- | - |  | --------- | --- | - |  |  | --- | -
|                                                           |  | Years Ended December 31, |        |   | % of Change         | 
|                                                           |  | 2013                     |        |   | 2012                |  |        | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                           |  | (P$ million)             |        |   | Increase/(Decrease) | 
|Revenues (1)                                               |  |                          | 8,254  |   |                     |  | 7,061  |      |  |  | 6,208     |   |  |           | 17  |   |  |  | 14  |  
|Other Income (2)                                           |  |                          | 43     |   |                     |  | 84     |      |  |  | 26        |   |  |           | (49 | ) |  |  | 223 |  
|Operating expenses (without depreciation and amortization) |  |                          | (6,550 | ) |                     |  | (5,500 | )    |  |  | (4,614    | ) |  |           | 19  |   |  |  | 19  |  
|Operating income before depreciation and amortization (3)  |  |                          | 1,747  |   |                     |  | 1,645  |      |  |  | 1,620     |   |  |           | 6   |   |  |  | 2   |  
|Depreciation and amortization                              |  |                          | (1,019 | ) |                     |  | (929   | )    |  |  | (818      | ) |  |           | 10  |   |  |  | 14  |  
|Gain on disposal of PP&E and impairment of PP&E            |  |                          | (106   | ) |                     |  | 7      |      |  |  | 20        |   |  |           | n/a |   |  |  | (65 | )
|Operating income                                           |  |                          | 622    |   |                     |  | 723    |      |  |  | 822       |   |  |           | (14 | ) |  |  | (12 | )
|Financial results, net                                     |  |                          | 213    |   |                     |  | 52     |      |  |  | (27       | ) |  |           | 310 |   |  |  | n/a |  
|Income tax expense                                         |  |                          | (297   | ) |                     |  | (273   | )    |  |  | (278      | ) |  |           | 9   |   |  |  | (2  | )
|Net income                                                 |  |                          | 538    |   |                     |  | 502    |      |  |  | 517       |   |  |           | 7   |   |  |  | (3  | )



|(1) | Includes intersegment revenues of P$1,248 million, P$1,038 million and P$879 million in 2013, 2012 and 2011, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------

|(2) | Includes intersegment other income of P$10 million, P$9 million and P$6 million in 2013, 2012 and 2011, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(3) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues

During 2013, revenues from our
Fixed Services segment increased by 17% to P$8,254 million from P$7,061 million in 2012. During 2012, revenues from our Fixed Services segment increased by 14% to P$7,061 million from P$6,208 million in 2011. The increase in each year was mainly due
to data transmission and Broadband with a 5% growth in Internet accesses in both 2013 and 2012.

Revenues from our Fixed Services segment
for 2013, 2012 and 2011 are comprised as follows:



|                              |  |                          |       |  |                     |  |       |      |  |  |           |  |  |           |    |   |  |  |    |  
|----------------------------- |  | ------------------------ | ----- |  | ------------------- |  | ----- | ---- |  |  | --------- |  |  | --------- | -- | - |  |  | -- | -
|                              |  | Years Ended December 31, |       |  | % of Change         | 
|                              |  | 2013                     |       |  | 2012                |  |       | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |   
|                              |  | (P$ million)             |       |  | Increase/(Decrease) | 
|Voice-retail                  |  |                          | 2,656 |  |                     |  | 2,475 |      |  |  | 2,357     |  |  |           | 7  |   |  |  | 5  |  
|Voice-wholesale               |  |                          | 786   |  |                     |  | 739   |      |  |  | 747       |  |  |           | 6  |   |  |  | (1 | )
|Data                          |  |                          | 963   |  |                     |  | 735   |      |  |  | 583       |  |  |           | 31 |   |  |  | 26 |  
|Internet                      |  |                          | 2,521 |  |                     |  | 1,993 |      |  |  | 1,553     |  |  |           | 26 |   |  |  | 28 |  
|Service Revenues              |  |                          | 6,926 |  |                     |  | 5,942 |      |  |  | 5,240     |  |  |           | 17 |   |  |  | 13 |  
|Equipment (1)                 |  |                          | 80    |  |                     |  | 81    |      |  |  | 89        |  |  |           | (1 | ) |  |  | (9 | )
|Subtotal third party revenues |  |                          | 7,006 |  |                     |  | 6,023 |      |  |  | 5,329     |  |  |           | 16 |   |  |  | 13 |  
|Intersegment                  |  |                          | 1,248 |  |                     |  | 1,038 |      |  |  | 879       |  |  |           | 20 |   |  |  | 18 |  
|Total Fixed Services revenues |  |                          | 8,254 |  |                     |  | 7,061 |      |  |  | 6,208     |  |  |           | 17 |   |  |  | 14 |  



|(1) | This item is composed of voice, data and Internet equipment in each year.
|--- | -------------------------------------------------------------------------



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Voice-retail

Revenues from voice-retail represented 32% of our total segment revenues for 2013 compared to 35% of our total segment revenues for 2012 and
38% of our total segment revenues for 2011. Revenues from voice-retail increased 7% to P$2,656 million in 2013 from P$2,475 million in 2012 and increased 5% in 2012 from P$2,357 million in 2011.

Voice-retail mainly includes revenues from monthly basic charges (which differ for residential, professional and commercial customers),
charges for supplementary services, measured service (national and international calls) and public telephone service. Charges for supplementary services include call-waiting, call-forwarding, three-way calling, caller ID, direct inwards dialing,
toll-free service and voicemail, among others. Measured service charges are based on the number and duration of calls. Measured service revenues depend on the number of lines in service, the volume of usage, the number of new lines installed and
applicable rates. Most of our customers are billed monthly.

Monthly basic charges increased 9% to P$1,121 million in 2012 from P$1,032
million in 2012 and increased 8% from P$957 million in 2011. Such growth was due to the level of service packages sold as well as increased prices for non-regulated services during the period.

Measured service charges increased 7% to P$1,395 million in 2013 from P$1,306 million in 2012 and increased 5% from P$1,242 million in 2011.
Such increases were due to the increase in the commercialization of domestic plans and domestic long distance services.

Voice-wholesale

Revenues
from voice-wholesale represented 10% of our total segment revenues for 2013 and 2012 compared to 12% in 2011. Revenues from voice-wholesale increased 6% to P$786 million in 2013 from P$739 million in 2012 and decreased 1% from P$747 million in 2011.

Voice-wholesale mainly includes interconnection services (which primarily include access, termination and long-distance transport of
calls), international long-distance services (which reflect payments made under bilateral agreements between the Company and foreign telecommunications carriers covering inbound international long-distance calls) and revenues related to billing and
collection services charged to other operators.

Interconnection services increased 6% to P$547 million in 2013 from P$516 million in 2012
and decreased 2% from P$525 million in 2011.

Data and Internet

Revenues from data and Internet represented 42% of our total segment revenues in 2013 compared to 39% and 34% in 2012 and 2011, respectively.
Revenues from data and Internet services increased 28% to P$3,484 million in 2013 from P$2,728 million in 2012 and increased 28% from P$2,136 million in 2011.

Internet

Revenues from
Internet increased 26% to P$2,521 million in 2013 from P$1,993 million in 2012 and increased 28% from P$1,553 million in 2011. The increases were mainly due to the growth in the number of Internet accesses and to the increase in the average price of
fixed charge services as a result of the completion of promotions granted to customers in the first months of subscription. As of December 31, 2013, the number of Internet accesses increased approximately 5% to 1.71 million from
1.63 million as of December 31, 2012 and increased 5% from 1.55 million as of December 31, 2011.

Data

Revenues from data services increased 31% to P$963 million in 2013 from P$735 million in 2012 and increased 26% from P$583 million in 2011. The
increases were mainly due to the growth of Integra and VPN IP services (private data networks services that replace the point to point services); and due to the increase in monthly charges and Datacenter services (especially in hosting and housing
monthly charges and Value Added Services).

Equipment

Revenues from equipment amount to P$80 million in 2013 compared to P$81 million in 2012 and decreased 9% from P$89 million in 2011. The
decrease in 2012 was principally due to the decrease of sales of equipment related to construction contracts.



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Intersegment

Intersegment revenues mainly includes interconnection services, which primarily include access, termination and transport of calls, leases of
circuits, revenues related to billing and collection services charged.

During 2013, our intersegment revenues increased 20% to P$1,248
million from P$1,038 million in 2012 and increased 18% from P$879 million in 2011. These increases were mainly due to higher revenues on leases of circuits to Personal as part of the growth of its network traffic. The intersegment revenues are
eliminated at the consolidated level.

Other Income

Other income mainly includes penalties and indemnities collected from suppliers, as a result of delays in deliveries of goods or matters
related to the quality of the services provided. During 2013, other income decreased 49% to P$43 million from P$84 million in 2012. The decrease in 2013 was mainly due to a decrease in indemnities and penalties collected from suppliers. In 2012,
other income increased 223% from P$26 million in 2011 mainly due to an increase in indemnities collected from suppliers.

Operating
Expenses (without depreciation and amortization)

During 2013, total operating expenses (without depreciation and amortization) for the
Fixed Services segment increased 19% to P$6,550 from P$5,500 million in 2012 and increased 19% from P$4,614 million in 2011. The increases were mainly due to increases in employee benefit expenses and severance payments, fees for services,
maintenance, materials and supplies, provisions and taxes and fees with the Regulatory Authority.

Detailed below are the major components
of our operating expenses for the years ended December 31, 2013, 2012 and 2011 related to our Fixed Services segment:



|                                                           |  |                          |       |   |                     |  |       |      |  |  |           |  |  |           |     |   |  |  |     |  
|---------------------------------------------------------- |  | ------------------------ | ----- | - | ------------------- |  | ----- | ---- |  |  | --------- |  |  | --------- | --- | - |  |  | --- | -
|                                                           |  | Years Ended December 31, |       |   | % of Change         | 
|                                                           |  | 2013                     |       |   | 2012                |  |       | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |    
|                                                           |  | (P$ million)             |       |   | Increase/(Decrease) | 
|Employee benefit expenses and severance payments           |  |                          | 2,991 |   |                     |  | 2,380 |      |  |  | 1,949     |  |  |           | 26  |   |  |  | 22  |  
|Interconnection costs and other telecommunications charges |  |                          | 525   |   |                     |  | 507   |      |  |  | 491       |  |  |           | 4   |   |  |  | 3   |  
|Fees for services, maintenance, materials and supplies     |  |                          | 1,126 |   |                     |  | 950   |      |  |  | 815       |  |  |           | 19  |   |  |  | 17  |  
|Taxes and fees with the Regulatory Authority               |  |                          | 578   |   |                     |  | 449   |      |  |  | 367       |  |  |           | 29  |   |  |  | 22  |  
|Commissions                                                |  |                          | 177   |   |                     |  | 169   |      |  |  | 139       |  |  |           | 5   |   |  |  | 22  |  
|Cost of equipment                                          |  |                          | 74    |   |                     |  | 44    |      |  |  | 59        |  |  |           | 68  |   |  |  | (25 | )
|Cost of VAS                                                |  |                          | 11    |   |                     |  | 9     |      |  |  | 5         |  |  |           | 22  |   |  |  | 80  |  
|Advertising                                                |  |                          | 159   |   |                     |  | 171   |      |  |  | 154       |  |  |           | (7  | ) |  |  | 11  |  
|Provisions                                                 |  |                          | 169   |   |                     |  | 89    |      |  |  | 164       |  |  |           | 90  |   |  |  | (46 | )
|Bad debt expenses                                          |  |                          | 58    |   |                     |  | 56    |      |  |  | 28        |  |  |           | 4   |   |  |  | 100 |  
|Restructuring Costs (recovery)                             |  |                          | (8    | ) |                     |  | 83    |      |  |  |          |  |  |           | n/a |   |  |  | n/a |  
|Other operating expenses                                   |  |                          | 690   |   |                     |  | 593   |      |  |  | 443       |  |  |           | 16  |   |  |  | 34  |  
|Total Fixed Services(1)                                    |  |                          | 6,550 |   |                     |  | 5,500 |      |  |  | 4,614     |  |  |           | 19  |   |  |  | 19  |  

Includes intersegment cost of P$104 million, P$112 million and P$86 million in 2013, 2012 and 2011, respectively.



| | (1) | These costs are eliminated at the consolidated level.
| | --- | -----------------------------------------------------



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Employee benefit expenses and severance payments

During 2013, employee benefit expenses and charges for severance payments were approximately P$2,991 million, representing a 26% increase from
P$2,380 million in 2012. In 2012, these charges increased 22% from P$1,949 million in 2011. The increases were mainly due to salary increases in 2013 and 2012. The Fixed Services segment had 11,002, 11,115 and 11,093 employees as of
December 31, 2013, 2012 and 2011, respectively.

Interconnection costs and other telecommunications charges

Interconnection costs and other telecommunications charges includes interconnection costs, lease of circuits and costs of international
outbound calls, which reflect payments made under bilateral agreements between Telecom Argentina and international carriers in connection with outgoing calls made by our customers.

In 2013 interconnection costs and other telecommunications charges amounted to P$525 million, representing an increase of 4% from P$507
million in 2012. In 2012 these charges increased 3% from P$491 million in 2011. The increases were mainly due to higher traffic volume resulting from Telecom Argentinas network.

Fees for Services, Maintenance, Materials and Supplies

During 2013, fees for services, maintenance, materials and supplies increased 19% to P$1,126 million from P$950 million in 2012 and increased
17% from P$815 million in 2011. The increases were mainly due to higher maintenance costs, the increase in the prices of certain supplies due to the effects of inflation and higher costs of services, especially those related to call centers (a P$7
million increase from 2012 to 2013 and a P$32 million increase from 2011 to 2012), as a result of an increase in the commercial activity, as well as technical maintenance fees (a P$51 million increase from 2012 to 2013 and a P$38 million increase
from 2011 to 2012).

Fees for services, maintenance, materials and supplies are net of service connection fees capitalized (P$36 million
in 2013, P$4 million or 12% higher than 2012).

Taxes and fees with the Regulatory Authority

Expenses related to taxes and fees with the Regulatory Authority increased 29% to P$578 million in 2013 from P$449 million in 2012 and
increased 22% from P$367 million in 2011, mainly due to charges of turnover tax (a P$75 million increase from 2012 to 2013 and a P$37 million increase from 2011 to 2012) as a result of the increase in revenues during both years and an increase in
rates. Also, in 2013 the increase was a result of higher average rates of the turnover tax in the City of Buenos Aires, Córdoba, Chaco, Jujuy and Mendoza.

Commissions

During 2013,
costs relating to commissions amounted to approximately P$177 million, representing an increase of 5% as compared to P$169 million in 2012. In 2012, these charges increased 22% from P$139 million in 2011. The increase in both years was mainly due to
higher commissions for collections as a result of increased sales and higher transaction cost for collection services.

Cost of
Equipment

During 2013, 2012 and 2011 we recorded P$74 million, P$44 million and P$59 million in cost of equipment, respectively. The
variation in these years is related mainly to the variation in the costs of construction contracts.

Cost of equipment includes P$16
million and P$14 million related to equipment construction contract costs in 2013 and 2011, respectively. No costs were recorded for this concept in 2012.

Cost of VAS

Cost of VAS
increased P$2 million to P$11 million in 2013 from P$9 million in 2012.

Advertising

During 2013, we recorded P$159 million in costs of advertising representing a decrease of 7% as compared to P$171 million recorded in 2012. The
decrease was mainly due to a reduction in the commercial campaigns of Arnet as compared to 2012. In 2012, these charges increased 11% from P$154 million in 2011. Telecom Argentina continued its advertising campaigns as a result of competition in the
Internet services market.



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Provisions

During 2013, we recorded P$169 million in provisions compared to P$89 million recorded in 2012 and P$164 million recorded in 2011. The increase
in 2013 was mainly due to the increase in regulatory and municipal claims for approximately P$85 million. The decrease in 2012 was mainly due to the decrease in labor claims of approximately P$54 million and lower regulatory and tax claims for
approximately P$21 million.

Bad Debt Expenses

In 2013, bad debt expenses amounted to P$58 million, and P$56 million in 2012. In 2012 theses charges increased 100% from P$28 million in 2011.
The increase in 2012 was mainly due to higher aging in accounts receivable, mainly in the Residential, professional and commercial customers segment.

Restructuring Costs

In
the last quarter of 2012 the Companys Management decided to implement a restructuring plan aimed at improving the efficiency of the Telecom Groups organizational structure. This plan contemplates the removal and / or merger of management
structures in various areas of Telecom Argentina. The total estimated cost amounted to P$83 million in 2012. The recovery of these costs in 2013 amounts to P$8 million as a consequence of the end of the restructuring Plan in June, 2013.

Other Operating Expenses

Other operating expenses include accrued expenses such as transportation costs, insurance, international and satellite connectivity, energy and
rentals.

During 2013, our other operating expenses amounted to P$690 million compared to P$593 million in 2012 and P$443 million in 2011.
The increases were primarily due to the increase in prices of transportation, freight, energy, water and others to provide Telecom Argentinas services and rental expenses.

Operating Income before depreciation and amortization

Our operating income before depreciation and amortization from the Fixed Services segment was P$1,747 million in 2013, P$1,645 million in 2012
and P$1,620 million in 2011, representing 21%, 23% and 26% of total segment revenues, respectively.

Depreciation and Amortization

Depreciation and amortization expenses were P$1,019 million in 2013, P$929 million in 2012 and P$818 million in 2011. The increase was mainly
due to assets acquired during 2013 and 2012, partially offset by a reduction in the level of depreciation due to the end of the amortization period for certain assets.

Gain on disposal of PP&E and impairment of PP&E

The gain on disposal of PP&E amounted to P$16 million, P$7 million and P$20 million in 2013, 2012 and 2011, respectively. Impairment loss
of PP&E amounted to P$122 million in 2013 and is mainly related to the impairment of certain PP&E items related to some projects undertaken by Telecom Argentina with the public sector and the private sector that present uncertainty regarding
their development and future associated cash flows.

Operating Income

Operating income represented 8%, 10% and 13% of total segment revenues in 2013, 2012 and 2011, respectively. In 2013, the operating income from
our Fixed Services segment decreased 14% to P$622 million from P$723 million in 2012. In 2012, the operating income from our Fixed Services segment decreased 12% to P$723 million from P$822 million in 2011.



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Our operating income in the Fixed Services Segment continues to be affected by the Pesification
and freeze of regulated rates. See Factors affecting results of operations  Rate Regulation.

The following table
shows our operating income from the Fixed Services segment in 2013, 2012 and 2011 and its percentage of revenues in each year.



|                                                          |  |                          |        |   |                       |  |       |      |  |  |           |   |  |           |     |   |  |  |     |  
|--------------------------------------------------------- |  | ------------------------ | ------ | - | --------------------- |  | ----- | ---- |  |  | --------- | - |  | --------- | --- | - |  |  | --- | -
|                                                          |  | Years Ended December 31, |        |   | % of Change           | 
|                                                          |  | 2013                     |        |   | 2012                  |  |       | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                          |  | (P$ million / %)         |        |   | Increase / (Decrease) | 
|Operating income before depreciation and amortization (1) |  |                          | 1,747  |   |                       |  | 1,645 |      |  |  | 1,620     |   |  |           | 6   |   |  |  | 2   |  
|As % of revenues                                          |  |                          | 21     |   |                       |  | 23    |      |  |  | 26        |   |  |           |     |   |  |  |     |  
|Depreciation and amortization                             |  |                          | (1,019 | ) |                       |  | (929  | )    |  |  | (818      | ) |  |           | 10  |   |  |  | 14  |  
|As % of revenues                                          |  |                          | (12    | ) |                       |  | (13   | )    |  |  | (13       | ) |  |           |     |   |  |  |     |  
|Gain on disposal of PP&E and impairment of PP&E           |  |                          | (106   | ) |                       |  | 7     |      |  |  | 20        |   |  |           | n/a |   |  |  | (65 | )
|Operating income                                          |  |                          | 622    |   |                       |  | 723   |      |  |  | 822       |   |  |           | (14 | ) |  |  | (12 | )
|As % of revenues                                          |  |                          | 8      |   |                       |  | 10    |      |  |  | 13        |   |  |           |     |   |  |  |     |  



|(1) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Financial results, net

During 2013, we
recorded a net financial gain of P$213 million compared to a net financial gain of P$52 million in 2012. The increase in our financial results was mainly attributed to higher interest from cash equivalents and investments of approximately P$15
million and a net foreign currency exchange gain of P$103 million.

During 2012, we recorded a net financial gain of P$52 million compared
to a net financial loss of P$27 million in 2011. The increase in our financial results was mainly attributed to higher interest from cash equivalents and investments of approximately P$38 million and lower interest of approximately P$47 million
related to provisions for legal claims and severance payments and termination benefits. In addition, during 2012, a net foreign currency exchange gain of P$6 million was recorded.

Income tax expense

As previously
mentioned, the income tax charge includes three effects (See Years ended December 31, 2013, 2012 and 2011Income Tax).

During 2013, our Fixed Services segment recorded an income tax expense of P$297 million compared to P$273 million in 2012 and P$278 million in
2011. The increase in 2013 was mainly due to the increase in our pre-tax income compared to 2012. The decrease in 2012 was mainly due to the decrease in our pre-tax income compared to 2011.

The income tax expense in 2013 was mainly attributable to the recognition of current income tax expense (amounting to P$344 million),
partially offset by income generated by deferred tax on temporary differences arising out of the asset and liability valuations due to tax versus financial accounting criteria (amounting to P$47 million). The income tax expense in 2012 was mainly
attributable to the recognition of current income tax expense (amounting to P$312 million), partially offset by income generated by a deferred tax on temporary differences arising out of the asset and liability valuations according to tax versus
financial accounting criteria (amounting to P$39 million). The income tax expense in 2011 was mainly attributable to the recognition of current income tax expense (amounting to P$379 million), partially offset by income generated by a deferred tax
on temporary differences arising out of the asset and liability valuations according to tax versus financial accounting criteria (amounting to P$101 million).



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Net Income

For 2013, 2012 and 2011, the Fixed Services segment recorded net income of P$538 million, P$502 million and P$517 million, respectively. The
increase in 2013 was mainly due to an increase in financial results, partially offset by a reduction in our operating income compared to the gain recorded in 2012, and an increase in the income tax expense as detailed above. The decrease in 2012 was
mainly due to a reduction in our operating income compared to the gain recorded in 2011, partially offset by an increase in financial results and a reduction in the income tax expense as detailed above.

(B.2) Personal Mobile Services Segment

Results of operations from our Personal Mobile Services segment for 2013, 2012 and 2011 are comprised as follows:



|                                                           |  |                          |         |   |                     |  |         |      |  |  |           |   |  |           |     |  |  |  |     |  
|---------------------------------------------------------- |  | ------------------------ | ------- | - | ------------------- |  | ------- | ---- |  |  | --------- | - |  | --------- | --- |  |  |  | --- | -
|                                                           |  | Years Ended December 31, |         |   | % of Change         | 
|                                                           |  | 2013                     |         |   | 2012                |  |         | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                           |  | (P$ million)             |         |   | Increase/(Decrease) | 
|Revenues(1)                                                |  |                          | 19,245  |   |                     |  | 15,350  |      |  |  | 12,548    |   |  |           | 25  |  |  |  | 22  |  
|Other Income                                               |  |                          | 24      |   |                     |  | 4       |      |  |  | 10        |   |  |           | 500 |  |  |  | (60 | )
|Operating expenses (without depreciation and amortization) |  |                          | (13,879 | ) |                     |  | (10,760 | )    |  |  | (8,449    | ) |  |           | 29  |  |  |  | 27  |  
|Operating income before depreciation and amortization(2)   |  |                          | 5,390   |   |                     |  | 4,594   |      |  |  | 4,109     |   |  |           | 17  |  |  |  | 12  |  
|Depreciation and amortization                              |  |                          | (1,628  | ) |                     |  | (1,526  | )    |  |  | (1,190    | ) |  |           | 7   |  |  |  | 28  |  
|Gain on disposal of PP&E and impairment of PP&E            |  |                          | (68     | ) |                     |  | 1       |      |  |  | 2         |   |  |           | n/a |  |  |  | (50 | )
|Operating income                                           |  |                          | 3,694   |   |                     |  | 3,069   |      |  |  | 2,921     |   |  |           | 20  |  |  |  | 5   |  
|Financial results, net                                     |  |                          | 334     |   |                     |  | 186     |      |  |  | 118       |   |  |           | 80  |  |  |  | 58  |  
|Income tax expense                                         |  |                          | (1,472  | ) |                     |  | (1,170  | )    |  |  | (1,103    | ) |  |           | 26  |  |  |  | 6   |  
|Net income                                                 |  |                          | 2,556   |   |                     |  | 2,085   |      |  |  | 1,936     |   |  |           | 23  |  |  |  | 8   |  



|(1) | Includes intersegment revenues of P$116 million, P$123 million and P$93 million in 2013, 2012 and 2011, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(2) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues

During 2013, revenues from our
Personal Mobile Services segment increased by 25% to P$19,245 million from P$15,350 million in 2012 and increased 22% from P$12,548 million in 2011. The increase in each year was mainly due to the growth in the subscriber base, the increase in
prices of our services and the increase in the monthly consumption of the offered services, primarily data and Internet services.

An
important monthly operational measure used in the Personal Mobile Services segment is ARPU, which we calculate by dividing adjusted total service revenuesexcluding outcollect wholesale roaming, cell site rental and reconnection fee revenues
and others(divided by 12 months) by the average number of subscribers during the period. ARPU is not a measure calculated in accordance with IFRS and our measure of ARPU may not be calculated in the same manner as similarly titled measures
used by other companies. In particular, certain components of service revenues are excluded from Personals ARPU calculations presented in this Annual Report. Our Management believes that this measure is helpful in assessing the development of
the subscriber base in the Personal Mobile Services segment. The following table shows the reconciliation of total service revenues to such revenues included in the ARPU calculations:



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|                                                                     |  |                          |        |   |      |  |        |      |  |  |        |  
|-------------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                     |  | Years Ended December 31, |       
|                                                                     |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|                                                                     |  | (P$ million)             |       
|Total service revenues                                               |  |                          | 16,119 |   |      |  | 13,435 |      |  |  | 11,076 |  
|Components of service revenues not included in the ARPU calculation: |  |                          |        |   |      |  |        |      |  |  |        |  
|Outcollect wholesale roaming                                         |  |                          | (270   | ) |      |  | (250   | )    |  |  | (210   | )
|Cell sites rental                                                    |  |                          | (32    | ) |      |  | (25    | )    |  |  | (18    | )
|Reconnection fees and others                                         |  |                          | (239   | ) |      |  | (220   | )    |  |  | (145   | )
|                                                                     |  |                          |        |   |      |  |        |      |  |  |        |  
|Adjusted total service revenues included in the ARPU calculation(1)  |  |                          | 15,578 |   |      |  | 12,940 |      |  |  | 10,703 |  
|                                                                     |  |                          |        |   |      |  |        |      |  |  |        |  
|Average number of subscribers during the year (thousands)            |  |                          | 19,448 |   |      |  | 18,687 |      |  |  | 17,336 |  



|(1) | Certain components of service revenues are not included in the ARPU calculation. Includes Intersegment revenues for P$116 million in 2013, P$123 million in 2012 and P$93 million in 2011.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During 2013, ARPU increased 16% to approximately P$66.8 per customer per month compared to approximately P$57.7 per customer per month in
2012. ARPU reached P$51.4 per customer per month in 2011.

The total number of Personals subscribers increased approximately 6% to
20.1 million as of December 31, 2013 from 19.0 million as of December 31, 2012 and increased 4% from 18.2 million as of December 31, 2011. The increase in both years was fueled by increased penetration in the mobile
services market in Argentina. As of December 31, 2013, the subscriber base in Argentina amounted to approximately 13.6 million prepaid subscribers, or 68% of the total subscriber base, approximately 2.5 million post-paid subscribers,
or 12% of the total subscriber base and approximately 4.0 million Cuentas Claras plan subscribers, or 20% of the total subscriber base.

Revenues from our Personal Mobile Services segment for 2013, 2012 and 2011 are comprised as follows:



|                                        |  |                          |        |  |                     |  |        |      |  |  |           |  |  |           |    |   |  |  |    | 
|--------------------------------------- |  | ------------------------ | ------ |  | ------------------- |  | ------ | ---- |  |  | --------- |  |  | --------- | -- | - |  |  | -- | 
|                                        |  | Years Ended December 31, |        |  | % of Change         | 
|                                        |  | 2013                     |        |  | 2012                |  |        | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |   
|                                        |  | (P$ million)             |        |  | Increase/(Decrease) | 
|Voice-retail                            |  |                          | 4,773  |  |                     |  | 4,461  |      |  |  | 4,001     |  |  |           | 7  |   |  |  | 11 | 
|Voice-wholesale                         |  |                          | 1,930  |  |                     |  | 1,838  |      |  |  | 1,726     |  |  |           | 5  |   |  |  | 6  | 
|Data                                    |  |                          | 7,212  |  |                     |  | 5,765  |      |  |  | 4,482     |  |  |           | 25 |   |  |  | 29 | 
|Internet                                |  |                          | 2,088  |  |                     |  | 1,248  |      |  |  | 774       |  |  |           | 67 |   |  |  | 61 | 
|Services Revenues                       |  |                          | 16,003 |  |                     |  | 13,312 |      |  |  | 10,983    |  |  |           | 20 |   |  |  | 21 | 
|Equipment                               |  |                          | 3,126  |  |                     |  | 1,915  |      |  |  | 1,472     |  |  |           | 63 |   |  |  | 30 | 
|Subtotal third party revenues           |  |                          | 19,129 |  |                     |  | 15,227 |      |  |  | 12,455    |  |  |           | 26 |   |  |  | 22 | 
|Intersegment                            |  |                          | 116    |  |                     |  | 123    |      |  |  | 93        |  |  |           | (6 | ) |  |  | 32 | 
|Total Personal Mobile Services Revenues |  |                          | 19,245 |  |                     |  | 15,350 |      |  |  | 12,548    |  |  |           | 25 |   |  |  | 22 | 

Voice-retail

Revenues from voice-retail represented 25% of our total segment revenues in 2013 compared to 29% and 32% of our total segment revenues in 2012
and 2011, respectively. Revenues from voice-retail increased 7% to P$4,773 million in 2013 from P$4,461 million in 2012 and increased 11% from P$4,001 million in 2011.

Voice-retail mainly includes revenues from monthly basic charges, airtime usage charges and roaming charges billed to our customers for their
use of our and other carriers networks.

Monthly basic charges increased 11% to P$2,369 million in 2013 from P$2,137 million in 2012
and increased 26% in 2012 from P$1,698 million in 2011. Airtime usage charges increased 2% to P$2,005 million in 2013 from P$1,961 million in 2012 and decreased 3% to P$1,961 million in 2012 from P$2,022 million in 2011. Roaming charges billed and
other services increased 10% to P$399 million in 2013 from P$363 million in 2012 and increased 29% in 2012 from P$281 million in 2011. Such growth was mainly due to an increase in the subscriber base (especially in prepaid and Cuentas
Claras), an increase in the volume of total traffic and an increase in the prices of our services.



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Voice-wholesale

Revenues from voice-wholesale represented 10% of our total segment revenues in 2013 compared to 12% and 14% of our total segment revenues in
2012 and 2011, respectively. Revenues from voice-wholesale increased 5% to P$1,930 million in 2013 from P$1,838 million in 2012 and increased 6% from P$1,726 million in 2011.

Voice-wholesale mainly includes revenues from CPP, TLRD and roaming charges billed to other mobile service providers whose customers use our
network.

CPP and TLRD increased 4% to P$1,634 million in 2013 from P$1,568 million in 2012 and increased 4% from P$1,503 million in 2011.
Such increases were mainly due to increased traffic volume in Argentina.

Roaming charges billed and other services increased 10% to P$296
million in 2013 from P$270 million in 2012 and increased 21% from P$223 million in 2011. The increase was due to an increase in the traffic volume in Argentina.

Data and Internet

Data
and Internet services mainly include SMS, MMS, Browsing and Internet. Data and Internet represented 48%, 46% and 42% of our total segment revenues for 2013, 2012, and 2011, respectively.

Data

Revenues from data
mainly include contents via SMS, SMS, MMS and other Value Added Services. Revenues from data increased 25% to P$7,212 million in 2013 from P$5,765 million in 2012. Revenues from data increased 29% in 2012 from P$4,482 million in 2011. This increase
was mainly due to the constant SMS sales increase as a result of several campaigns launched by Personal and especially due to the increase in revenues from the sale of contents via SMS, which represented an inter-annual increase of P$1,280 million,
a 141% of growth in 2013.

In particular, revenues of SMS increased 3% to P$4,792 million in 2013 from P$4,668 million in 2012 (the
monthly average number of SMS decreased 6% to 5,435 million in 2013 from 5,769 million in 2012). Revenues of SMS increased 21% to P$4,668 million in 2012 from P$3,847 million in 2011 (the monthly average number of SMS grew 3% to
5,769 million in 2012 from 5,587 million in 2011).

Internet

Revenues from Internet increased 67% to P$2,088 million in 2013 from P$1,248 million in 2012. Revenues from Internet increased 61% in 2012 from
P$774 million in 2011. Such increases were mainly due to an increase in the subscriber base and the increase in consumption by Personals subscribers.

Equipment

Equipment
revenues consist primarily of revenues from the mobile handsets sold to new and existing subscribers and to agents and other third-party distributors. The revenues associated with the sale of mobile handsets and related expenses are recognized when
the products are delivered and accepted by the subscribers, agents and other third-party distributors.

During 2013, handset revenues
increased 63% to P$3,126 million from P$1,915 million in 2012 and increased 30% from P$1,472 million in 2011. This increase was due to a mix between the increase in the average price of the handsets of 72% and the decrease of 5% in the handsets sold
by Personal. This situation was mainly generated by a subsidy reduction policy, the increase in average prices related to higher-value handsets demand, the business strategy to attract high-value subscribers, a decrease in discounts as a result of
the finalization of commercial promotions and lower retail revenues.

Intersegment

Intersegment revenues mainly include services rendered to Telecom Argentina and primarily consist in monthly basic charges, airtime usage
charges and Value Added Services. During 2013, our intersegment revenues decreased 6% to P$116 million in 2013 from P$123 million in 2012 and increased 32% from P$93 million in 2011. The intersegment revenues are eliminated at the consolidated
level.



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Other Income

Other income mainly includes penalties collected from suppliers, as a result of delays in deliveries of goods or matters related to the quality
of the services provided. During 2013, other income was P$24 million, representing an increase of 500% from P$4 million in 2012 and P$10 million in 2011.

Operating Expenses (without depreciation and amortization)

Total operating expenses (without depreciation and amortization) in our Personal Mobile Services segment increased 29% to P$13,879 million in
2013 from P$10,760 million in 2012 and increased 27% from P$8,449 million in 2011. In line with our increases in revenues, during 2013 and 2012, all items in the cost structure of the Personal Mobile Services segment experienced material increases.
This trend reflects increases in certain costs related to acquiring and retaining customers, taxes, commissions associated with sales and expansion of the customer service staff.

Detailed below are the major components of the operating expenses for the years ended December 31, 2013, 2012 and 2011 in the Personal
Mobile Services segment:



|                                                           |  |                          |        |  |                     |  |        |      |  |  |           |  |  |           |     |  |  |  |     | 
|---------------------------------------------------------- |  | ------------------------ | ------ |  | ------------------- |  | ------ | ---- |  |  | --------- |  |  | --------- | --- |  |  |  | --- | 
|                                                           |  | Years Ended December 31, |        |  | % of Change         | 
|                                                           |  | 2013                     |        |  | 2012                |  |        | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |    
|                                                           |  | (P$ million)             |        |  | Increase/(Decrease) | 
|Employee benefit expenses and severance payments           |  |                          | 1,077  |  |                     |  | 825    |      |  |  | 605       |  |  |           | 31  |  |  |  | 36  | 
|Interconnection costs and other telecommunications charges |  |                          | 2,148  |  |                     |  | 1,947  |      |  |  | 1,621     |  |  |           | 10  |  |  |  | 20  | 
|Fees for services, maintenance, materials and supplies     |  |                          | 1,634  |  |                     |  | 1,242  |      |  |  | 966       |  |  |           | 32  |  |  |  | 29  | 
|Taxes and fees with the Regulatory Authority               |  |                          | 2,076  |  |                     |  | 1,542  |      |  |  | 1,205     |  |  |           | 35  |  |  |  | 28  | 
|Commissions                                                |  |                          | 1,970  |  |                     |  | 1,745  |      |  |  | 1,353     |  |  |           | 13  |  |  |  | 29  | 
|Cost of equipment                                          |  |                          | 2,956  |  |                     |  | 1,964  |      |  |  | 1,568     |  |  |           | 51  |  |  |  | 25  | 
|Cost of VAS                                                |  |                          | 663    |  |                     |  | 292    |      |  |  | 157       |  |  |           | 127 |  |  |  | 86  | 
|Advertising                                                |  |                          | 442    |  |                     |  | 436    |      |  |  | 400       |  |  |           | 1   |  |  |  | 9   | 
|Provisions                                                 |  |                          | 101    |  |                     |  | 65     |      |  |  | 61        |  |  |           | 55  |  |  |  | 7   | 
|Bad debt expenses                                          |  |                          | 214    |  |                     |  | 211    |      |  |  | 134       |  |  |           | 1   |  |  |  | 57  | 
|Restructuring Costs                                        |  |                          |       |  |                     |  | 7      |      |  |  |          |  |  |           | n/a |  |  |  | n/a | 
|Other operating expenses                                   |  |                          | 598    |  |                     |  | 484    |      |  |  | 379       |  |  |           | 24  |  |  |  | 28  | 
|Total Personal Mobile Services(1)                          |  |                          | 13,879 |  |                     |  | 10,760 |      |  |  | 8,449     |  |  |           | 29  |  |  |  | 27  | 



|(1) | Includes intersegment cost of P$1,257 million, P$1,049 million and P$884 million in 2013, 2012 and 2011, respectively. These costs are eliminated at the consolidated level.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employee benefit expenses and severance payments

During 2013, employee benefit expenses and severance payments charges increased 31% to P$1,077 million from P$825 million in 2012 and increased
36% from P$605 million in 2011. The increase was mainly due to the salary increases that Personal implemented and the increase in the number of full-time employees. The Personal Mobile Services segment had 5,155, 5,254 and 4,820 employees as of
December 31, 2013, 2012 and 2011, respectively.

Interconnection Costs and other telecommunications charges

During 2013, interconnection costs and other telecommunications charges increased 10% to P$2,148 million from P$1,947 million in 2012 and
increased 20% from P$1,621 million in 2011. The increases were mainly due to higher traffic volume resulting from Personals network and higher costs



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of roaming and TLRD due to an increase in mobile traffic among mobile operators as a consequence of a growth in the total subscriber base. Interconnection costs and other telecommunications
charges includes intersegment costs of P$921 million, P$780 million and P$652 million in 2013, 2012 and 2011, respectively, that are eliminated at the consolidated level.

Fees for services, Maintenance, Materials and Supplies

In 2013, fees for services, maintenance, materials and supplies expenses increased 32% to P$1,634 million from P$1,242 million in 2012 and
increased 29% from P$966 million in 2011. The increase was mainly due to an increase in the prices for the principal services received caused by the effects of inflation, higher service costs related to call centers (a P$86 million increase from
2012 to 2013 and a P$143 million increase from 2011 to 2012), as a result of an increase in the commercial activity and higher maintenance costs of hardware and software. Fees for services, maintenance, materials and supplies expenses includes
intersegment costs of P$211 million, P$153 million and P$122 million in 2013, 2012 and 2011, respectively, that are eliminated at the consolidated level.

Taxes and fees with the Regulatory Authority

During 2013, taxes and fees with the Regulatory Authority increased 35% to P$2,076 million from P$1,542 million in 2012 and increased 28% from
P$1,205 million in 2011. The increase in each year was mainly attributable to the increase in total segment revenues and higher average rates of the turnover tax.

Commissions

In 2013,
commissions increased 13% to P$1,970 million from P$1,745 million in 2012 and increased 29% from P$1,353 million in 2011. These increases were mainly due to a growth in commercial activity (mainly due to the increase in commercial agents
commissions) and a growth in the subscriber base. Commissions include intersegment cost of P$56 million, P$57 million and P$61 million in 2013, 2012, and 2011, respectively, that are eliminated at the consolidated level.

Cost of Equipment

During
2013, the cost of equipment and handsets sold increased 51% to P$2,956 million from P$1,964 million in 2012 and increased 25% from P$1,568 million in 2011. The increase in costs of mobile handsets in 2013 was mainly due to higher average unit cost
of sales (+72% vs. 2012) offset by a decrease in the number of handsets sold (-5% vs. 2012). The increase in costs of mobile handsets in 2012 was mainly due to higher average unit cost of sales (+26% vs. 2011) offset by a decrease in the number of
handsets sold (-5% vs. 2011).

Cost of equipment and handsets are net of costs capitalized as SAC (P$225 million in 2013, P$217 million or
49% lower than 2012).

Cost of VAS

Cost of VAS amounted to P$663 million (+P$371 million vs. 2012), mainly due to the increase of VAS (mainly the SMS service) as a consequence of
several campaigns launched by Personal and especially due to the increase in revenues from the sale of contents via SMS.

Advertising

During 2013, advertising expenses including media, promotional and institutional campaigns, amounted to P$442 million, representing an
increase of 1% from P$436 million in 2012. During 2012, these costs increased 9% from P$400 million in 2011. This increase was due to the increase in promotional campaigns.

Provisions

During 2013,
we recorded P$101 million in provisions compared with P$65 million and P$61 million recorded in 2012 and 2011, respectively. The increase in 2013 was mainly due to higher claims recorded, in particular an increase in civil and commercial claims for
P$62 million, partially offset by lower labor claims for P$24 million. The increase in 2012 was mainly due to higher claims recorded, in particular an increase in trade claims for P$20 million, partially offset by lower labor claims for P$14
million.



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Bad Debt Expenses

In 2013 bad debt expenses amounted to P$214 million, representing a lower increase of 1% from P$211 million in 2012. In 2012, bad debt expenses
increased 57% from P$134 million in 2011. The increase was mainly due to higher revenues in 2012 (+22%) as compared to 2011 and higher aging in accounts receivables in voice-retail customers.

Restructuring Costs

In
the last quarter of 2012 the Management decided to implement a restructuring plan aimed at improving the efficiency of the Telecom Groups organizational structure. This plan contemplates the removal and / or merger of management structures in
various areas of Personal. The plan involves the dismissal of about 9 members of middle and upper management with a total estimated cost of P$7 million.

Other Operating Expenses

Other operating expenses include accrued expenses such as costs associated with the provision of transportation costs, insurance, energy and
costs of site leases.

Other operating expenses increased 24% to P$598 million in 2013 from P$484 million in 2012 and increased 28% from
P$379 million in 2011. The increase was mainly due to higher costs associated with an increase in freight and transportation costs. Other operating expenses include intersegment costs of P$69 million, P$59 million and P$49 million in 2013, 2012, and
2011, respectively, that are eliminated at the consolidated level.

Operating Income before depreciation and amortization

Our operating income before depreciation and amortization from the Personal Mobile Services segment reached P$5,390 million in 2013, P$4,594
million in 2012 and P$4,109 million in 2011, representing 28%, 30% and 33% of total segment revenues in 2013, 2012 and 2011, respectively. The increase in each year was mainly due to higher growth in revenues, partially offset by increases in
operating costs (before depreciation and amortization).

Depreciation of PP&E and Amortization of Intangible Assets

During 2013 depreciation of PP&E and amortization of intangible assets increased 7% to P$1,628 million from P$1,526 million in 2012 and
increased 28% from P$1,190 million in 2011. The increase was the result of higher investment in PP&E and intangible assets, partially offset by a reduction in the level of depreciation due to the end of the amortization period for certain
assets. In particular, during 2013, amortization of SAC increased P$44 million and depreciation of PP&E and other intangible assets increased P$58 million compared to 2012. During 2012 amortization of SAC increased P$193 million and depreciation
of PP&E and other intangible assets increased P$143 million compared to 2011.

Gain on disposal of PP&E and impairment of PP&E

The loss on disposal of PP&E amounted to P$3 million in 2013 and the gain on disposal of PP&E amounted to P$1 million in 2012.
Impairment of PP&E amounted to P$65 million in 2013 and is mainly related to the discontinuation of a commercial system.

Operating Income

In 2013, our operating income from the Personal Mobile Services segment was P$3,694 million, representing an increase of 20% from P$3,069
million in 2012, and increased 5% from P$2,921 million in 2011. Operating income represented 19% of revenues in 2013 for this segment, 20% of revenues in 2012 and 23% in 2011. The increase in operating income was mainly due to the growth in service
and equipment revenues, partially offset by increases in operating expenses and depreciation and amortization as explained above.



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The following table shows our operating income from the Personal Mobile Services segment in 2013,
2012 and 2011 and its percentage of revenues in each year:



|                                                         |  |                          |        |   |                       |  |        |      |  |  |           |   |  |           |     |  |  |  |     |  
|-------------------------------------------------------- |  | ------------------------ | ------ | - | --------------------- |  | ------ | ---- |  |  | --------- | - |  | --------- | --- |  |  |  | --- | -
|                                                         |  | Years Ended December 31, |        |   | % of Change           | 
|                                                         |  | 2013                     |        |   | 2012                  |  |        | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                         |  | (P$ million / %)         |        |   | Increase / (Decrease) | 
|Operating income before depreciation and amortization(1) |  |                          | 5,390  |   |                       |  | 4,594  |      |  |  | 4,109     |   |  |           | 17  |  |  |  | 12  |  
|As % of revenues                                         |  |                          | 28     |   |                       |  | 30     |      |  |  | 33        |   |  |           |     |  |  |  |     |  
|Depreciation and amortization                            |  |                          | (1,628 | ) |                       |  | (1,526 | )    |  |  | (1,190    | ) |  |           | 7   |  |  |  | 28  |  
|As % of revenues                                         |  |                          | (8     | ) |                       |  | (10    | )    |  |  | (9        | ) |  |           |     |  |  |  |     |  
|Gain on disposal of PP&E and impairment of PP&E          |  |                          | (68    | ) |                       |  | 1      |      |  |  | 2         |   |  |           | n/a |  |  |  | (50 | )
|Operating income                                         |  |                          | 3,694  |   |                       |  | 3,069  |      |  |  | 2,921     |   |  |           | 20  |  |  |  | 5   |  
|As % of revenues                                         |  |                          | 19     |   |                       |  | 20     |      |  |  | 23        |   |  |           |     |  |  |  |     |  



|(1) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Financial results, net

During 2013, the
Personal Mobile Services segment recorded a net financial gain of P$334 million compared to a net financial gain of P$186 million in 2012 and a net financial gain of P$118 million in 2011. The gain recorded in 2013 was mainly attributed to interest
from cash equivalents and investments of approximately P$650 million. In addition, the devaluation of the peso against the U.S. dollar generated a net foreign currency exchange loss of P$328 million in 2013. The gain recorded in 2012 was mainly
attributed to interest from cash equivalents and investments of approximately P$232 million. In addition, the devaluation of the peso against the U.S. dollar generated a net foreign currency exchange loss of P$55 million in 2012.

Income Tax Expense

During 2013, our
Personal Mobile Services segment recorded an income tax expense of P$1,472 million compared to P$1,170 million in 2012 and P$1,103 million in 2011. The increase was mainly due to higher pre-tax income in each year. The income tax expense in 2013 was
mainly attributable to the recognition of current income tax expense amounting to P$1,588 million, partially offset by the gain generated by the deferred tax on the temporary differences arising out of the asset and liability valuations according to
tax versus financial accounting criteria amounting to P$120 million and P$4 million loss in the allowance for net deferred tax assets.

The income tax expense in 2012 was mainly attributable to the recognition of current income tax expense amounting to P$1,187 million,
partially offset by the gain generated by the deferred tax on the temporary differences arising out of the asset and liability valuations according to tax versus financial accounting criteria amounting to P$20 million and P$3 million loss in the
allowance for net deferred tax assets.

The income tax expense in 2011 was mainly attributable to the recognition of current income tax
expense amounting to P$1,039 million, the loss generated by the deferred tax on the temporary differences arising out of the asset and liability valuations according to tax versus financial accounting criteria amounting to P$59 million and a loss of
P$5 million in the allowance for net deferred tax assets.

Net Income

During 2013, our Personal Mobile Services segment reported net income of P$2,556 million as compared to P$2,085 million during 2012 and P$1,936
million in 2011. The increase in net income in 2013 and 2012 was mainly due to higher operating income and financial results, partially offset by higher income tax expense, as explained above.



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(B.3) Núcleo Mobile Services Segment

Results of operations from our Núcleo Mobile Services segment for 2013, 2012 and 2011 are comprised as follows:



|                                                           |  |                          |       |   |                       |  |      |      |  |  |           |   |  |           |     |  |  |  |     |  
|---------------------------------------------------------- |  | ------------------------ | ----- | - | --------------------- |  | ---- | ---- |  |  | --------- | - |  | --------- | --- |  |  |  | --- | -
|                                                           |  | Years Ended December 31, |       |   | % of Change           | 
|                                                           |  | 2013                     |       |   | 2012                  |  |      | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                           |  | (P$ million)             |       |   | Increase / (Decrease) | 
|Revenues (1)                                               |  |                          | 1,160 |   |                       |  | 873  |      |  |  | 718       |   |  |           | 33  |  |  |  | 22  |  
|Other Income                                               |  |                          | 6     |   |                       |  |     |      |  |  |          |   |  |           | n/a |  |  |  |    |  
|Operating expenses (without depreciation and amortization) |  |                          | (739  | ) |                       |  | (542 | )    |  |  | (454      | ) |  |           | 36  |  |  |  | 19  |  
|Operating income before depreciation and amortization (2)  |  |                          | 427   |   |                       |  | 331  |      |  |  | 264       |   |  |           | 29  |  |  |  | 25  |  
|Depreciation and amortization                              |  |                          | (226  | ) |                       |  | (157 | )    |  |  | (150      | ) |  |           | 44  |  |  |  | 5   |  
|Gain on disposal of PP&E                                   |  |                          | 1     |   |                       |  |     |      |  |  |          |   |  |           | n/a |  |  |  |    |  
|Operating income                                           |  |                          | 202   |   |                       |  | 174  |      |  |  | 114       |   |  |           | 16  |  |  |  | 53  |  
|Financial results, net                                     |  |                          | (19   | ) |                       |  | (9   | )    |  |  | (11       | ) |  |           | 111 |  |  |  | (18 | )
|Income tax expense                                         |  |                          | (23   | ) |                       |  | (20  | )    |  |  | (14       | ) |  |           | 15  |  |  |  | 43  |  
|Net income                                                 |  |                          | 160   |   |                       |  | 145  |      |  |  | 89        |   |  |           | 10  |  |  |  | 63  |  



|(1) | Includes intersegment revenues of P$8 million, P$6 million and P$4 million in 2013, 2012 and 2011, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------

|(2) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues

During 2013, total revenues
from Núcleo increased by 33% to P$1,160 million from P$873 million in 2012. This increase was mainly due to an increase of 5% in Núcleos subscriber base that reached approximately 2.4 million mobile subscribers as of
December 31, 2013 and the appreciation of the Guaraní of 33%. As of December 31, 2013, Núcleo had approximately 1.9 million prepaid subscribers, representing 80% of Núcleos total mobile subscriber base.

Value Added Services sales (included in Data and Internet services) grew by 38% in 2013 as compared to 2012.

During 2012, total revenues from Núcleo increased by 22% to P$873 million from P$718 million in 2011. This increase was mainly due to
an increase of 7% in Núcleos subscriber base that reached approximately 2.3 million mobile subscribers as of December 31, 2012, the appreciation of the Guaraní of 9% and the increase in internet revenues (+83%). As of
December 31, 2012, Núcleo had approximately 1.9 million prepaid subscribers, representing 82% of Núcleos total mobile subscriber base.

Value Added Services sales (included in Data and Internet services) grew by 26% in 2012 as compared to 2011.

Revenues from our Núcleo Mobile Services segment for 2013, 2012 and 2011 are comprised as follows:



|                              |  |                          |       |  |             |  |     |      |  |  |           |  |  |           |     |  |  |  |    | 
|----------------------------- |  | ------------------------ | ----- |  | ----------- |  | --- | ---- |  |  | --------- |  |  | --------- | --- |  |  |  | -- | 
|                              |  | Years Ended December 31, |       |  | % of Change | 
|                              |  | 2013                     |       |  | 2012        |  |     | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |    
|                              |  | (P$ million)             |       |  | Increase    | 
|Voice                         |  |                          | 500   |  |             |  | 414 |      |  |  | 353       |  |  |           | 21  |  |  |  | 17 | 
|Data                          |  |                          | 313   |  |             |  | 267 |      |  |  | 251       |  |  |           | 17  |  |  |  | 6  | 
|Internet                      |  |                          | 270   |  |             |  | 154 |      |  |  | 84        |  |  |           | 75  |  |  |  | 83 | 
|Service revenues              |  |                          | 1,083 |  |             |  | 835 |      |  |  | 688       |  |  |           | 30  |  |  |  | 21 | 
|Equipment                     |  |                          | 69    |  |             |  | 32  |      |  |  | 26        |  |  |           | 116 |  |  |  | 23 | 
|Subtotal third party revenues |  |                          | 1,152 |  |             |  | 867 |      |  |  | 714       |  |  |           | 33  |  |  |  | 21 | 
|Intersegment                  |  |                          | 8     |  |             |  | 6   |      |  |  | 4         |  |  |           | 33  |  |  |  | 50 | 
|Total revenues                |  |                          | 1,160 |  |             |  | 873 |      |  |  | 718       |  |  |           | 33  |  |  |  | 22 | 



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Other Income

Other income mainly includes indemnities collected from suppliers. During 2013, other income was P$6 million.

Operating Expenses (without depreciation and amortization)

Total operating expenses in our Núcleo Mobile Services segment increased 36% to P$739 million in 2013 from P$542 million in 2012. In
2012 operating expenses increased 19% from P$454 million in 2011. In line with our increases in revenues, during 2013 and 2012, all items in the cost structure of the Núcleo Mobile Services segment experienced increases. This trend reflected
increases in certain costs of acquiring and retaining subscribers, and commissions directly associated with sales and expansions of the customer service staff, also, the increase is mainly due to the appreciation of the Guaraní with respect
to the Argentine peso (+33% inter-annual).

Detailed below are the major components of the operating expenses for the years ended
December 31, 2013, 2012 and 2011 related to Núcleo Mobile Services segment:



|                                                           |  |                          |     |  |                     |  |     |      |  |  |           |  |  |           |     |  |  |  |     | 
|---------------------------------------------------------- |  | ------------------------ | --- |  | ------------------- |  | --- | ---- |  |  | --------- |  |  | --------- | --- |  |  |  | --- | 
|                                                           |  | Years Ended December 31, |     |  | % of Change         | 
|                                                           |  | 2013                     |     |  | 2012                |  |     | 2011 |  |  | 2013-2012 |  |  | 2012-2011 |    
|                                                           |  | (P$ million)             |     |  | Increase/(Decrease) | 
|Employee benefit expenses and severance payments           |  |                          | 84  |  |                     |  | 64  |      |  |  | 55        |  |  |           | 31  |  |  |  | 16  | 
|Interconnection costs and other telecommunications charges |  |                          | 171 |  |                     |  | 128 |      |  |  | 110       |  |  |           | 34  |  |  |  | 16  | 
|Fees for services, maintenance, materials and supplies     |  |                          | 101 |  |                     |  | 76  |      |  |  | 64        |  |  |           | 33  |  |  |  | 19  | 
|Taxes and fees with the Regulatory Authority               |  |                          | 35  |  |                     |  | 27  |      |  |  | 23        |  |  |           | 30  |  |  |  | 17  | 
|Commissions                                                |  |                          | 112 |  |                     |  | 92  |      |  |  | 84        |  |  |           | 22  |  |  |  | 10  | 
|Cost of equipment                                          |  |                          | 81  |  |                     |  | 35  |      |  |  | 13        |  |  |           | 131 |  |  |  | 169 | 
|Cost of VAS                                                |  |                          | 34  |  |                     |  | 25  |      |  |  | 20        |  |  |           | 36  |  |  |  | 25  | 
|Advertising                                                |  |                          | 55  |  |                     |  | 53  |      |  |  | 45        |  |  |           | 4   |  |  |  | 18  | 
|Provisions.                                                |  |                          |    |  |                     |  | (1  | )    |  |  |          |  |  |           | n/a |  |  |  | n/a | 
|Bad debt expense                                           |  |                          | 11  |  |                     |  | 8   |      |  |  | 7         |  |  |           | 38  |  |  |  | 14  | 
|Other operating expenses                                   |  |                          | 55  |  |                     |  | 35  |      |  |  | 33        |  |  |           | 57  |  |  |  | 6   | 
|Total Núcleo Mobile Services(1)                            |  |                          | 739 |  |                     |  | 542 |      |  |  | 454       |  |  |           | 36  |  |  |  | 19  | 



|(1) | Includes intersegment cost of P$21 million, P$15 million and P$12 million in 2013, 2012 and 2011, respectively. These costs are eliminated at the consolidated level.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employee benefit expenses and severance payments

During 2013, employee benefit expenses and severance payments increased 31% to P$84 million from P$64 million in 2012. During that year, these
costs increased 16% from P$55 million in 2011. The increase was mainly due to salary increases that Núcleo implemented in 2013, partially offset by a decrease in the number of employees as of December 2013. The increase was mainly due to
salary increases that Núcleo implemented and an increase in the number of employees in 2012. Núcleo had 424 employees as of December 31, 2013. As of December 31, 2012 and 2011 it had 439 and 433, respectively.



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Interconnection Costs and Other Telecommunication Charges

During 2013, interconnection costs and other telecommunication charges increased 34% to P$171 million from P$128 million in 2012. During 2012,
those charges increased 16% from P$110 million in 2011. The increase was mainly due to higher traffic volume resulting from Núcleos network.

Fees for Services, Maintenance, Materials and Supplies

During 2013, fees for services and maintenance, materials and supplies totaled P$101 million, representing an increase of 33% from P$76 million
in 2012. During 2012, they increased 19% from P$64 million in 2011. The increases in 2013 correspond to higher maintenances costs, while the increases in 2012 correspond to higher miscellaneous fees for services.

Taxes and fees with the Regulatory Authority

During 2013, taxes and fees with the Regulatory Authority increased 30% to P$35 million from P$27 million in 2012 and increased 17% from P$23
million in 2011. The increase in the year was attributable to the increase in total segment revenues.

Commissions

During 2013, commissions increased to P$112 million from P$92 million in 2012, representing an increase of 22%. During 2012, commissions
increased 10% from P$84 million in 2011. The increases were mainly due to the growth in the subscriber base.

Cost of Equipment

During 2013, the cost of handsets sold increased to P$81 million from P$35 million, representing an increase of 131%. During 2011, the
cost of handsets was P$13 million. The increase in 2013 and 2012 was mainly due to an expansion of the subscriber base and increased customer upgrade of mobile handsets as a result of technological advances and new service offerings.

Cost of VAS

Cost of VAS
increased P$9 million to P$34 million in 2013 from P$25 million in 2012.

Advertising

During 2013, advertising expenses including media, promotional and institutional campaigns, amounted to P$55 million, representing an increase
of 4% from 2012. During 2012, these expenses amounted to P$53 million, representing an increase of 18% from P$45 million in 2011. This variation was mainly due to campaigns related to Internet 3G, the Interconnection Network and to strengthening the
Personal brand position in Paraguay and Number Portability.

Other Operating Expenses

Other operating expenses include accrued expenses such as costs associated with the provision of transportation costs, insurance, energy and
costs of site leases.

Other operating expenses increased 57% to P$55 million in 2013 and increased 6% to P$35 million in 2012 from P$33
million in 2011. The increase was mainly due to the higher costs of site leases.

Operating Income before depreciation and amortization

Operating income before depreciation and amortization was P$427 million in 2013 and P$331 million in 2012, representing 37% and 38% of total
revenues, respectively. Operating income before depreciation and amortization was P$264 million in 2011, representing 37% of total revenues in that year. The increase was mainly due to growth in service revenues, partially offset by increases in
costs, such as fees for services and maintenance, materials and supplies, cost of handsets and commissions.



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Depreciation of PP&E and Amortization of Intangible Assets

During 2013, depreciation of PP&E and amortization of intangible assets increased 44% to P$226 million from P$157 million in 2012. During
2012 depreciation and amortization increased 5% from P$150 million in 2011. The increase was the result of higher investment in PP&E and intangible assets, partially offset by a reduction in the level of depreciation due to the end of the
amortization period for certain assets.

Operating Income

In 2013, our operating income from the Núcleo Mobile Services segment was P$202 million, representing an increase of 16% from P$174
million in 2012, which represent 17% and 20% of total revenues for this segment in 2013 and 2012, respectively. In 2011, our operating income was P$114 million, representing 16% of total revenues for this segment.

The following table shows our operating income from the Núcleo Mobile Services segment in 2013, 2012 and 2011 and its percentage of
total revenues in each year:



|                                                          |  |                          |      |   |                       |  |      |      |  |  |           |   |  |           |     |  |  |  |    | 
|--------------------------------------------------------- |  | ------------------------ | ---- | - | --------------------- |  | ---- | ---- |  |  | --------- | - |  | --------- | --- |  |  |  | -- | 
|                                                          |  | Years Ended December 31, |      |   | % of Change           | 
|                                                          |  | 2013                     |      |   | 2012                  |  |      | 2011 |  |  | 2013-2012 |   |  | 2012-2011 |    
|                                                          |  | (P$ million / %)         |      |   | Increase / (Decrease) | 
|Operating income before depreciation and amortization (1) |  |                          | 427  |   |                       |  | 331  |      |  |  | 264       |   |  |           | 29  |  |  |  | 25 | 
|As % of total revenues                                    |  |                          | 37   |   |                       |  | 38   |      |  |  | 37        |   |  |           |     |  |  |  |    | 
|Depreciation and amortization                             |  |                          | (226 | ) |                       |  | (157 | )    |  |  | (150      | ) |  |           | 44  |  |  |  | 5  | 
|As % of total revenues                                    |  |                          | (19  | ) |                       |  | (18  | )    |  |  | (21       | ) |  |           |     |  |  |  |    | 
|Gain on disposal of PP&E                                  |  |                          | 1    |   |                       |  |     |      |  |  |          |   |  |           | n/a |  |  |  |   | 
|Operating income                                          |  |                          | 202  |   |                       |  | 174  |      |  |  | 114       |   |  |           | 16  |  |  |  | 53 | 
|As % of total revenues                                    |  |                          | 17   |   |                       |  | 20   |      |  |  | 16        |   |  |           |     |  |  |  |    | 



|(1) | Although it is not specifically defined, this is a permitted measure under IFRS. See Management Overview for a discussion of the use of this measure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

Financial results, net

During 2013, the Núcleo Mobile Services segment recorded a net financial loss of P$19 million, compared to a net financial loss of P$9
million in 2012 and P$11 million in 2011. The increase in the loss in 2013 was mainly due to higher interest on financial debt and higher exchange differences. The decrease in the loss in 2012 was mainly due to lower interest on financial debt.

Income Tax Expense

During 2013, our
Núcleo Mobile Services segment recorded an income tax expense of P$23 million compared to P$20 million in 2012. The income tax expense in 2013 was mainly attributable to the recognition of current income tax expense amounting to P$24 million
partially offset by the gain generated by the deferred tax on the temporary differences arising out of the asset and liability valuations according to tax versus financial accounting criteria amounting to P$1 million.

During 2012, our Núcleo Mobile Services segment recorded an income tax expense of P$20 million compared to P$14 million in 2011. The
income tax expense in 2012 was mainly attributable to the recognition of current income tax expense amounting to P$23 million partially offset by the gain generated by the deferred tax on the temporary differences arising out of the asset and
liability valuations according to tax versus financial accounting criteria amounting to P$3 million.

During 2011, our Núcleo
Mobile Services segment recorded an income tax expense of P$14 million compared to P$10 million in 2010. The income tax expense in 2011 was mainly attributable to the recognition of current income tax expense amounting to P$16 million partially
offset by the gain generated by the deferred tax on the temporary differences arising out of the asset and liability valuations according to tax versus financial accounting criteria amounting to P$2 million.



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Net Income

During 2013, our Núcleo Mobile Services segment reported net income of P$160 million as compared to P$145 million during 2012,
representing 14% and 17% of total revenues in 2013 and 2012, respectively. In 2011, our net income was P$89 million, representing 12% of total revenues. The increase in net income was mainly due to higher operating income partially offset by the
higher income tax expenses.

Liquidity and Capital Resources

Sources and Uses of Funds

We expect that the principal source of Telecom Argentinas liquidity in the near term will be cash flows from Telecom Argentinas
operations and the dividends that Personal may pay to it. Telecom Argentinas principal uses of cash flows are expected to be for capital expenditures and operating expenses and retributions to its shareholders. Telecom Argentina expects
working capital and funds generated from operations to be sufficient for its present requirements.

We expect that the principal source of
Personals liquidity in the near term will be cash flows from operations. Personals principal uses of cash flows are expected to be for capital expenditures, operating expenses and dividend payments to Telecom Argentina.

The Ordinary and Extraordinary Shareholders Meeting of Telecom Argentina held on December 15, 2011, approved the creation of a
Medium-Term Notes Global Program for a maximum outstanding amount of US$500 million or its equivalent in other currencies for a term of five years.

The Ordinary and Extraordinary Shareholders Meeting of Personal held on December 2, 2010, approved the creation of a Medium-Term
Notes Global Program for a maximum outstanding amount of US$500 million or its equivalent in other currencies for a term of five years. On October 13, 2011, the CNV approved this program.

The table below summarizes, for the years ended December 31, 2013, 2012 and 2011, Telecoms cash flows:



|                                                              |  |                          |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                              |  | Years Ended December 31, |       
|                                                              |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|                                                              |  | (P$ million)             |       
|Cash flows from operating activities                          |  |                          | 7,139  |   |      |  | 5,029  |      |  |  | 5,317  |  
|Cash flows used in investing activities                       |  |                          | (3,894 | ) |      |  | (3,945 | )    |  |  | (2,941 | )
|Cash flows used in financing activities                       |  |                          | (1,407 | ) |      |  | (859   | )    |  |  | (965   | )
|Net foreign exchange differences on cash and cash equivalents |  |                          | 226    |   |      |  | 117    |      |  |  | 31     |  
|                                                              |  |                          |        |   |      |  |        |      |  |  |        |  
|Increase in cash and cash equivalents                         |  |                          | 2,064  |   |      |  | 342    |      |  |  | 1,442  |  
|Cash and cash equivalents at the beginning of the year        |  |                          | 3,160  |   |      |  | 2,818  |      |  |  | 1,376  |  
|                                                              |  |                          |        |   |      |  |        |      |  |  |        |  
|Cash and cash equivalents at the end of the year              |  |                          | 5,224  |   |      |  | 3,160  |      |  |  | 2,818  |  
|                                                              |  |                          |        |   |      |  |        |      |  |  |        |  

As of December 31, 2013, 2012 and 2011, we had P$5,224 million, P$3,160 million and P$2,818 million in
cash and cash equivalents, respectively.

Cash flows from operating activities were P$7,139 million, P$5,029 million and P$5,317
million in 2013, 2012 and 2011, respectively. The increase of P$2,110 million in 2013 was mainly due to an increase in the collection of trade receivables, resulting from an increase in revenues. The decrease of P$288 million in 2012 was mainly due
to higher employee benefit expenses and severance payments and higher income tax paid.

Cash flows used in investing activities
were P$3,894 million, P$3,945 million and P$2,941 million in 2013, 2012 and 2011, respectively. The decrease of P$51 million in 2013 was mainly due to a decrease in investments not considered as cash and cash equivalents (amounting to P$915
million), partially offset by higher payments for the acquisition of PP&E (amounting to P$887 million). The increase of P$1,004 million in 2012 was mainly due to higher payments for the acquisition of PP&E (amounting to P$272 million) and
intangible assets (especially SAC and service connection costs) amounting to P$54 million and an increase of P$652 million in investments not considered as cash and cash equivalents.



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Cash flows used in financing activities were P$1,407 million, P$859 million and P$965
million in 2013, 2012 and 2011, respectively. The increase in 2013 of P$548 million was mainly due to the acquisition of treasury shares by P$461 million and a higher payment of dividends of P$151 million. The decrease in 2012 of P$106 million was
mainly due to lower payments of dividends.

Debt Obligations and Debt Service Requirements

Non-Deliverable Forward (NDF) Contracts to Purchase U.S. Dollars at Fixed Rates

During 2013 Personal entered into several NDF agreements to hedge/cover a total amount of US$182 million maturing December 2013. The purpose of
these NDF agreements is to eliminate the risks associated with the fluctuation of the exchange rate and to align the payment currency of Personals commercial commitments to its functional currency. These NDF agreements were regarded as cash
flow hedges, but these did not comply with effectiveness requirements. As of December 31, 2013, changes in fair value of these instruments represented a gain of approximately P$55 million, which was recognized in Financial results.
As of December 31, 2013, about P$13 million were collected and P$42 million were included in other receivables.

During 2012, Telecom
Argentina and Personal entered into several NDF contracts to hedge/cover approximately US$20.0 million and US$26.3 million, respectively, maturing September and December 2012, in order to hedge its exposure to U.S. dollar fluctuations related to
accounts payable. These NDF agreements were regarded as cash flow hedges, but these did not comply with effectiveness requirements. As of December 31, 2012, the changes in the fair value of these NDF agreements resulted in a loss of
approximately P$1.0 million and P$0.5 million for Telecom Argentina and Personal, respectively. The loss was recognized in Financial results, net against Trade payables.

Also during 2012, Personal entered into several NDF contracts to purchase a total amount of US$6.4 million maturing in September 2012 in order
to hedge its exposure to US dollar fluctuations related to accounts payable. These NDF agreements were regarded as cash flow hedges, but these did not comply with effectiveness requirements.

Indebtedness of Subsidiaries

Núcleo. As of December 31, 2013, Núcleos outstanding debt is denominated in Guaraníes and amounted
to approximately P$235 million. Additional information is set forth in Note 12 to our Consolidated Financial Statements.

Liquidity

The
liquidity position for each of Telecom Argentina, Personal and Núcleo is and will be significantly dependent on each individual companys operating performance, its indebtedness, capital expenditure programs and receipt of dividends,
from its subsidiaries, if any.

We expect that our cash flow from operations will be sufficient to permit Telecom Argentina and its
subsidiaries to satisfy their respective indebtedness and other cash requirements in the near to medium term.

Our ability to generate
sufficient cash from our operations in order to satisfy our indebtedness and capital expenditure needs may be affected by macroeconomic factors influencing our business, including, without limitation: the exchange rate of Argentine Pesos to U.S.
dollars; rates of inflation; and the achievement of ultimate rates adjustments for regulated services in the Fixed Services segment, among others. These factors are not within our control. The statements expressed in the preceding paragraphs
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties, including those described in this Annual Report in Item 3Key InformationRisk
Factors. Actual results may differ materially from our expectations described above as a result of various factors.

Telecom
Argentina is able to distribute dividends up to the limit of retained earnings determined under Argentine Corporations Law. As provided by CNV Resolution No. 609/12, positive retained earnings generated by the mandatory adoption of IFRS as from
January 1, 2012, should be reassigned to a Special Reserve that can only be utilized for its capitalization or to absorb negative retained earnings. Positive retained earnings generated by the application of IFRS in Telecom Argentinas
2012 statutory financial statements amounted to P$370 million, of which P$19 million were allocated to Legal Reserve and P$351 million were assigned to the Special Reserve established by CNV Resolution No. 609/12, as approved by the Ordinary
Shareholders Meeting held on May 21, 2013 (second tranche).



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Telecom Argentinas Board of Directors, at their meeting held on March 14, 2014, called
a shareholders meeting to be held on April 29, 2014, to consider among other issues the allocation of Telecom Argentinas retained earnings as of December 31, 2013. The Board proposed to allocate P$1,202 million (P$1.24 per
outstanding share) for distribution of cash dividends in two equal installments of P$601 million each, the first one to be paid on May 8, 2014 and the second one during September 2014.

The General Ordinary Shareholders Meeting of Telecom Argentina of April, 23, 2013 adjourned to May 21, 2013, approved the
allocation of P$1,000 million to a Reserve for Future Cash Dividends. The Shareholders ́ Meeting resolved to delegate to the Board of Directors the powers to determine the allocation of the Reserve for Future Cash Dividends.

On December 13, 2013, the Board of Directors decided to determine the total withdrawal and distribution to Shareholders of the Reserve
for Future Cash Dividend in the amount of P$1,000 million. The amount distributed was equivalent to P$1.03182179 per outstanding share or P$5.15910896 per ADR, prior to deductions of the Personal Asset Tax and Income Tax obligations. The dividends
were made available from December 27, 2013. Dividends were not paid nor reserved to Treasury shares.

As of December 31, 2013,
Telecom Argentina and its consolidated subsidiaries had approximately P$5,224 million in cash and cash equivalents. Of this amount, approximately P$1,662 million of cash and cash equivalents was held by Telecom Argentina on a stand-alone basis.
Telecom Group has approximately P$63 million of restricted cash in connection with legal proceedings. Such restricted cash has been classified as Other Receivables, net on our balance sheet.

Capital Expenditures

We estimate that our capital expenditures for 2014 will be approximately P$5.6 billion (P$4.3 billion in tangible assets and P$1.3 billion in
intangible assets, particularly SAC). The main investment projects of the Telecom Group in the Fixed Service Segment are related to the reconversion of the network architecture, which involves the replacement of copper by fiber optics in different
points (FTTC or fiber connection in the connection lockers, FTTB or fiber in buildings and FTTH or fiber in homes), with the aim of improving the commercial offer and the Internet user experience. The evolution towards new technology helps to
optimize the quality of service in terms of stability and availability. In the Mobile Service Segment, we continue with the reconversion technological network plan, mainly through the installation of a second 3G carrier nationwide, which
optimizes mobile services in order to have greater speed and capacity accompanying the growth in demand for data traffic. We expect to continue increasing the 3G network capacity to optimize the use of the available spectrum.

See Item 3Key InformationRisk FactorsWe operate in a competitive environment, that may result in a reduction in our
market share in the future. We expect to finance our capital expenditures through cash generated through our operations and cash on hand; therefore, our ability to fund these expenditures is dependent on, among other factors, our ability to
generate sufficient funds internally. Telecom Argentinas ability to generate sufficient funds for capital expenditures is also dependent on its ability to increase its regulated rates, since the cost of imported materials may increase in peso
terms (as a result of the decline in the peso/U.S. dollar exchange rate and higher inflation).

Related Party Transactions

During 2013, we entered into certain transactions with our indirect shareholders Telecom Italia and W de
ArgentinaInversiones or their affiliates in the ordinary course of business. For a description of these transactions see Item 7Major Shareholders and Related Party TransactionsRelated Party Transactions.

Taxes

Turnover
Tax

Under Argentine tax law, Telecom is subject to a tax levied on gross revenues. Rates differ depending on the jurisdiction where
revenues are earned for tax purposes. Rates in effect ranged from 2.5% to 8.0% for the years ended December 31, 2013, 2012 and 2011, depending on the jurisdiction or goods and services subject to the tax.



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Income Tax

Our income tax rate is currently 35% of net taxable income for the companies located in Argentina, 10% for Núcleo, 25% for Springville
and 34% for Telecom Argentina USA. The amount of income subject to tax is calculated according to tax regulations which contain a different methodology for calculating net taxable income than the methodology used for the preparation of our
Consolidated Financial Statements under IFRS. The differences between the methodology of computing income under the tax regulations and under IFRS make it difficult to determine the taxable net income from our income statements. For instance, some
deductions from income normally accepted for accounting purposes are not deductible and, accordingly, must be added back to income for tax purposes.

Prior to September 23, 2013, cash dividends, property or capital stock of Telecom Argentina were, in general, exempt from Argentine
withholding tax and other taxes. As of September 23, 2013 dividend distributions and gains derived from transfers of stocks of Argentine companies are subject to income tax. See Item 10Additional
InformationTaxationArgentine Taxes.

Additionally, under Argentine Income Tax Law, a corporation that makes a
distribution of dividends to its shareholders in excess of the amount of its accumulated net taxable income at the close of the previous taxable year, as determined by application of the Argentine Income Tax Law, shall have to withhold a 35% tax
from such excess. This withholding income tax is known as the equalization tax. See Item 10Additional InformationTaxationArgentine TaxesTaxation of Dividends.

Tax on cash dividends received from a foreign subsidiary is calculated according to the statutory income tax rate. As per Paraguayan tax law,
an additional income tax rate of 5% is imposed on dividends that are paid. Additionally, under such law, when dividends are being paid to foreign shareholders, there is an additional income tax rate of 15%, which is deducted from the amounts which
are paid to such shareholders. As per Argentine tax law, income tax paid abroad is recognized as tax credit.

Net losses can generally be
carried forward and applied against future taxable income for five years.

Thin Capitalization Rules

Argentine Law No. 25,784, modified the limitation on the deduction of interest expense by stating that the limit will only be applied to
interest expense on debt owed to non-resident entities that control the borrowing entity (except for interest expense subject to the 35% withholding tax) in proportion to the amount of debt that exceeds by two times the companys equity, and
the excess of interest over this ratio will be treated as dividend payments. During fiscal years 2013, 2012 and 2011, Telecoms deduction of interest expenses was not limited because Telecom was able to meet the conditions required for such
deduction.

Tax on Minimum Presumed Income

Our companies located in Argentina are required to pay an amount equal to the greater of the income tax or the tax on minimum presumed income.
The tax on minimum presumed income is computed based on 1% of the value of our assets. The value of our assets is determined in accordance with the criteria established under the tax laws. The amount of any income tax paid during the year may be
applied against the tax on minimum presumed income that would be payable in such year. The amount of any tax on minimum presumed income paid in excess of the income tax for such year may be carried forward for a period of up to ten years. This
excess may be treated as a credit to be applied against the income tax payable in a future year to the extent the tax on minimum presumed income for the year does not exceed income tax payable for such future year. During fiscal years 2013, 2012 and
2011, income tax was higher than tax on minimum presumed income. Shares and other equity participations in companies subject to the tax on minimum presumed income are exempt from the tax on minimum presumed income.

Value Added Tax (VAT)

VAT does not have a direct impact on our results of operations. VAT paid by us to our suppliers is applied as a credit toward the amount of VAT
charged by Telecom to its customers and the net amount is passed through to the Argentine government. VAT rates are 21%, 27% and 10.5%, depending on the type of the transaction and tax status of the customer.



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The import of services (including financial services) by Argentine VAT taxpayers registered for
VAT purposes, or responsables inscriptos, such as the Company, is subject to VAT. In the case of loans, if the lender is a bank or a financial entity located in a country whose central bank has adopted the Banking Supervision Standards of the
Basel Committee, the rate is 10.5%. If the foreign lender is one other than those mentioned above, the rate is 21%.

The burden of paying
VAT is borne by the Argentine taxpayer.

Tax on Deposits to and Withdrawals from Bank Accounts

The tax on deposits to and withdrawals from bank accounts under Law No. 21,526 applies to certain deposits to and withdrawals from bank
accounts with Argentine financial institutions and to other transactions that, due to their special nature and characteristics, are similar or could be used in lieu of a deposit to or withdrawal from a bank account. Therefore, any deposit to or
withdrawal from a bank account opened in an institution regulated by Law No. 21,526, or any transaction deemed to be used in lieu of a deposit to or withdrawal from a bank account, is subject to the tax on deposits and withdrawals unless a
particular exemption is applicable. The tax rate in effect since August 1, 2001 has been 0.6% of the transaction volume.

During
2013, 2012 and 2011, we charged to our income statement P$258 million, P$216 million and P$166 million, respectively, of this tax.

On February 6, 2003, the Ministry of Economy and Public Finance, through General Resolution No. 72/03, authorized us to increase the
Basic telephone services rates by the amount of the tax on deposits to and withdrawals from bank accounts as provided for in General Resolution No. 72/03. The amount of the tax charged must be shown in detail on the customers bills. The
amounts charged before General Resolution No. 72/03 were approximately P$23 million. This amount was subsequently corroborated by CNC audits, resulting in a receivable for the Company for P$23 million which was recorded under Other
receivables during 2007. That receivable can be offset with existing and/or future regulatory duties. See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentRate RegulationsTax on
deposit to and withdrawals from bank accounts (IDC).

Decree No. 534/2004 provides that owners of bank accounts
subject to the general tax rate of 0.6% may take into account as a tax credit 34% of the tax originated in credits on such bank accounts. This amount may be computed as a credit for the Income Tax and Tax on Minimum Presumed Income. The amount
computed as a credit is not deductible for income tax purposes.

Tax on Personal Property

Argentine Law No. 25,585, as amended by Law No. 26,317, imposes a tax on shares of stock corporations, such as Telecom
Argentinas ADSs and the Class A, B and C Shares. See Item 10Additional InformationTaxationArgentine TaxesTax on Personal Property.

The tax rate applied is 0.50%. This tax is computed based on the value of the shareholders equity as stated on the most recent annual
balance sheet of Telecom Argentina. Although Telecom Argentina is required to pay this tax on behalf of the holders of its ADSs, Class A, B and C Shares, it has the right to obtain reimbursement of the amounts paid from its shareholders, even
if this requires holding and/or foreclosing the property on which the tax is due. As a result, until shareholders reimburse Telecom Argentina for the amounts paid on their behalf, the payment of this tax constitutes a receivable for Telecom
Argentina.

Telecom Argentina has, from time to time, requested that its shareholders reimburse the amounts of tax on personal property
paid on their behalf and has received partial reimbursement of such taxes. The amount paid by Telecom Argentina and pending collection from its shareholders as of December 31, 2013, was approximately P$29 million, of which P$18 million are
included in the allowance for doubtful accounts, based on the recoverability assessment made by Telecom Argentina. Whenever applicable, tax on personal property paid on behalf of Telecom Argentinas shareholders is deducted from the cash
dividend payment.

Other Taxes and Levies

We are subject to a levy of 0.5% of our monthly revenues from telecommunications services. The proceeds of this levy are used to finance the
activities of the Regulatory Bodies. The amount of this levy is included in our consolidated income statement within Taxes and fees with the Regulatory Authority.



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Law No. 25,239 imposes a tax on Personal of 4% (tax on mobile and satellite services) of
amounts invoiced excluding VAT but including the excise tax, which results in an effective tax rate of up to 4.167%.

Law No. 26,539
amends the excise tax and establishes that the importation and sale of technological and computer goods, including mobile phones, is subject to the excise tax at a rate of 17%, resulting in an effective tax rate of up to 20.48%, effective from
December 1, 2009.

Since the beginning of 2001, telecommunication services companies have been required to pay a Universal Service
tax to fund Universal Service requirements. The Universal Service tax is calculated as a percentage of the total revenues received from the rendering of telecommunication services, net of taxes and levies applied on such revenues, excluding the
Universal Service tax. The rate is 1% of total billed revenues. See Item 4Information on the CompanyRegulatory FrameworkDecree No. 764/00.

Law No. 26,573, which was regulated in 2010, imposes a levy of 1% of the monthly revenues from telecommunication services, excluding
prepaid services, which must be collected from the customers. The proceeds of this levy are used to finance the activities of the Ente Nacional de Alto Rendimiento Deportivo  ENARD (National Board of High Performance Sport).

Research and Development, Patents and Licenses, etc.

None.

Trend Information

In 2013 we consolidated our position in each of our business segments. In particular, we highlight the following:



| |  |  | An expansion in the number of mobile subscribers reaching 22.5 million, and Internet accesses, reaching 1.7 million (equivalent to 41% of fixed lines in service). Otherwise, the number of fixed lines in
service remained at similar levels to the previous year, reaching 4.1 million. As a result, our consolidated revenues increased by 23% reaching P$27,287 million. Our service revenues represented 88% of consolidated revenues and grew by 20% as
compared to 2012.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our capital expenditures amounted to P$4,851 million in 2013, equivalent to 18% of consolidated revenues. These investments consisted of 44% for Fixed services segment, 49% for Personal mobile services and 7% for
Núcleo mobile services.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An improvement in economic results as compared to 2012: +14% in operating income and +19% in net income. The return on Shareholders Equity at the beginning of the year was 32% annually.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash from operating activities allowed Telecom Argentina to increase the level of capital expenditures without incurring financial
indebtedness, even after distributing dividends in the amount of P$1,000 million.

In 2014 we expect the prospects for fixed line services
to continue in line with the trend experienced in recent years as a result of the market maturity. Our Arnet Broadband business is well-positioned to continue to capture market opportunities.

With regard to prices, in the Fixed Services segment, the implementation of the Letter of Understanding of March 6, 2006 executed with
the National government is still pending and the rate adjustments of regulated services is also not yet implemented. Both would restore Telecom Argentinas financial and economic equation. Constant pressures on the Companys cost structure
accentuate this need.

Review of the mechanism of contribution to SU Fund and the compensation for incumbent operators of economic and
financial losses incurred in services rendered since 2001, to give access to basic services to low-income individuals and those in areas not currently covered by fixed and mobile telecommunication services, is still pending. We also expect the
definition of new criteria for mobile operators, who have not reached the maximum radio spectrum prescribed by regulation, to increase



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their range, so as to make feasible the provision of mobile services with the quality that investments in infrastructure allow. We expect that the regulatory authority will continue working with
operators as well as municipalities to enable operators to install the necessary sites to improve their network coverage.

The mobile
business is expected to continue gaining market share in value and in subscriber base although at lower rates than those of recent years. Value Added Services, especially mobile Internet, continue to be one of the key sources of revenue growth (in
2013 Value Added Services accounted for about 58% of service revenues). We expect to expand our share of the youth segment through the social media strategy and through brand association with music, by developing music festivals that integrate our
brands throughout the country.

During 2014, Personal will continue to work on expanding the mobile Internet experience, through the
technological reconversion of the national network and the satisfactory resolution regarding the need of additional spectrum.

Coverage
expansion and speed access improvement to 3G and HSPA+ networks with the more complete portfolio of advanced mobile devices will be the driver of revenues. The opportunity to grow in data capacity will come from the network evolution to 4G, once the
spectrum availability enables its development.

The growth will be based on three factors: the innovative and active role of operators in
the evolution of the industry value chain; the ability to develop mobile Internet and promote a satisfactory customer experience by providing access to the digital world through any device; and the ability to empathize with customers providing them
a high quality of customer care. To provide customers with new and better services, the Telecom Group will continue with its investment plans that are expected to require expenditures in 2014 of approximately 17% of the estimated revenues for 2014.
Telecom Argentinas investments will focus on growth of Broadband, new Value Added Services initiatives in the fixed business, provision of infrastructure to mobile operators and modernization of commercial and support systems. Personal will
enhance its network infrastructure by expanding coverage of its 3G and HSPA+ technology and bandwidth for mobile data transmissions and commercial systems improvements.

The strategy implemented by the Companys Management and described in this Annual Report sets forth the basic standards that Management
believes will enable the Telecom Group to reach its objectives of improving quality of service, strengthening its market position and increasing operating efficiency to meet the growing demands of the dynamic telecommunication market in which it
operates. Our investment plans are based on this future vision and on the commitment of the Telecom Group to our country and its people.

The statements expressed in the preceding paragraphs constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve risks and uncertainties, including those described in this Annual Report in Item 3Key InformationRisk Factors. Actual results may differ materially from our expectations described
above as a result of various factors.



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Contractual Obligations

Our consolidated contractual obligations and purchase commitments as of December 31, 2013 were as follows:



|                               |  |                                 |       |  |           |  |     |           |  |  |                  |  |  |       |     |  |  |  |       | 
|------------------------------ |  | ------------------------------- | ----- |  | --------- |  | --- | --------- |  |  | ---------------- |  |  | ----- | --- |  |  |  | ----- | 
|                               |  | Less than1 year                 |       |  | 1-3 years |  |     | 3-5 years |  |  | More than5 years |  |  | Total |    
|                               |  | (in million of Argentine Pesos) |      
|Debt obligations(1)            |  |                                 | 31    |  |           |  | 113 |           |  |  | 159              |  |  |       |    |  |  |  | 303   | 
|Operating lease obligations    |  |                                 | 372   |  |           |  | 375 |           |  |  | 149              |  |  |       | 71  |  |  |  | 967   | 
|Purchase obligations(2)        |  |                                 | 4,112 |  |           |  | 89  |           |  |  | 67               |  |  |       | 122 |  |  |  | 4,390 | 
|Other long-term liabilities(3) |  |                                 | 94    |  |           |  | 93  |           |  |  | 53               |  |  |       | 70  |  |  |  | 310   | 
|                               |  |                                 |       |  |           |  |     |           |  |  |                  |  |  |       |     |  |  |  |       | 
|Total                          |  |                                 | 4,609 |  |           |  | 670 |           |  |  | 428              |  |  |       | 263 |  |  |  | 5,970 | 
|                               |  |                                 |       |  |           |  |     |           |  |  |                  |  |  |       |     |  |  |  |       | 



|(1) | Includes P$68 million of future interest.
|--- | -----------------------------------------

|(2) | Other than operating lease obligations.
|--- | ---------------------------------------

|(3) | Includes voluntary retirement program, pension benefits and other long-term payables.
|--- | -------------------------------------------------------------------------------------

Off-Balance Sheet
Arrangements

None.

Safe Harbor

See the discussion at the beginning of this Item 5 and Forward-Looking Statements in the introduction of this Annual
Report, for forward-looking statement safe harbor provisions.



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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The Board of Directors

Management of the
business of the Telecom Group is vested in the Board of Directors. Telecom Argentinas bylaws provide for a Board of Directors consisting of no fewer than three and no more than eleven directors and up to the same or a lower number of alternate
directors. As of the date of this Annual Report, Telecom Argentina has eleven directors and ten alternate directors. Six of the directors and six of the alternate directors qualify as independent directors under SEC regulations. Five of the
directors and five of the alternate directors also qualify as independent directors under CNV rules. According to Telecom Argentinas bylaws, the Board of Directors has all of the required authority to administer the corporation, including
those for which the law requires special powers. The Board operates with a quorum of the absolute majority of its members and resolves issues by simple majority of votes present. According to Telecom Argentinas bylaws, the Chairman has a
double vote in the case of a tie. Under CNV regulation, in order to be independent, a director must neither be employed by, nor affiliated with, Telecom Argentina, Nortel, Sofora, the Telecom Italia Group or W de ArgentinaInversiones.
Directors and alternate directors are normally elected at annual ordinary general meetings of the shareholders and serve a renewable three year term.

Because a majority of shares are owned by Nortel, Nortel as a practical matter may have the ability to elect the majority of directors and
alternate directors. In the absence of a director, the corresponding alternate director may attend and vote at meetings of the Board of Directors.

See Item 7Major Shareholders and Related Party TransactionsShareholders Agreement for a description of certain
agreements relating to the appointment of members of the Board of Directors.

The following table lists the directors and alternate
directors of Telecom Argentina as of December 31, 2013 and, otherwise mentioned, as of the date of this Annual Report:



|                              |  |                                         |  |                                          
|----------------------------- |  | --------------------------------------- |  | -----------------------------------------
|Name                          |  | Position                                |  | Date Director became aMember of the
Board
|Enrique Garrido               |  | Chairman of the Board of Directors      |  | April 27, 2007                           
|Gerardo Werthein              |  | Vice Chairman of the Board of Directors |  | December 19, 2003                        
|Andrea Mangoni                |  | Director                                |  | November 30, 2010                        
|Gianfranco Ciccarella         |  | Director                                |  | December 9, 2013(1)                      
|Francesca Petralia            |  | Director                                |  | April 23, 2013                           
|Piergiorgio Peluso            |  | Director                                |  | April 23, 2013                           
|Enrique Llerena               |  | Director                                |  | April 23, 2013                           
|Esteban Gabriel Macek         |  | Director                                |  | April 27, 2007                           
|Federico Horacio Gosman       |  | Director                                |  | April 23, 2013                           
|Esteban Santa Cruz            |  | Director                                |  | November 30, 2010                        
|Mariana Laura Gonzalez        |  | Director                                |  | April 23, 2013                           
|Aldo Raúl Bruzoni             |  | Alternate Director                      |  | April 23, 2013                           
|Jorge Alberto Firpo           |  | Alternate Director                      |  | April 23, 2013                           
|Lorenzo Canu                  |  | Alternate Director                      |  | April 23, 2013                           
|Jorge Luis Pérez Alati        |  | Alternate Director                      |  | November 30, 2010                        
|María Virginia Genovés        |  | Alternate Director                      |  | April 23, 2013                           
|Eduardo Federico Bauer        |  | Alternate Director                      |  | April 27, 2007                           
|Pablo Alberto Gutierrez       |  | Alternate Director                      |  | November 30, 2010                        
|Eduardo Pablo Guillermo Setti |  | Alternate Director                      |  | April 23, 2013                           
|Juan Massolo                  |  | Alternate Director                      |  | April 23, 2013                           
|Verónica Daniela Alvarez      |  | Alternate Director                      |  | April 23, 2013                           



|(1) | On December 9, 2013 Gianfranco Ciccarella was appointed director by the Board of Directors, replacing Patricio Graziani who had resigned.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

Enrique Garrido is a lawyer. He served as a director of Telecom Argentina during fiscal year 2007 and was appointed as Chairman of the
Board of Directors on April 29, 2008. He was reelected Chairman of the Board of Directors of Telecom Argentina on November 30, 2010. He is Director of Sofora. He is also a member of the Supervisory Committee of La Estrella S.A.
Compañía de Seguros de Retiro. He was born on June 7, 1937.

Gerardo Werthein is a veterinarian. He was director
of Personal since December 2003 until April 10, 2013. Since that date he is alternate director of Personal. He is Chairman of Caja de Seguros S.A., La Caja de Seguros de Retiro S.A. and Haras El Capricho S.A. He is also Chairman of
Comité Olímpico Argentino. He is a member of the International Olympic Committee. He is Vice Chairman of Ente Nacional de Alto Rendimiento Deportivo and La Estrella S.A. Compañía de Seguros de Retiro. He is a director of
Gregorio, Numo y Noel Werthein S.A., Los W S.A., and Caja de Ahorro y Seguro S.A. He was born on December 3, 1955.



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Andrea Mangoni has been graduated from the University of Rome in 1988 with a thesis on
valuation and private financing of investments in public infrastructures. Since July 2013, he is Chairman and Chief Executive Officer of Sorgenia S.p.A.; he is also member of the Board of Directors of Prelios SpA and Fincantieri SpA. Previously, he
has been Managing Director for South America of Telecom Italia from August 2012 to March 2013. Until August, 2012 he was responsible for Administration, Finance and Control and International Development in Telecom Italia. Mr. Mangoni joined the
Telecom Italia Group on July 1, 2009, as Chairman of Telecom Italia Sparkle (from July 2009 to July 2010) and as Director of International Business at Telecom Italia S.p.A. From 1996 to March 2009 he worked in Acea, where he was appointed Chief
Executive Officer in November 2003; from March 2003 to November 2003 he was General Manager of Acea; from June 2001 to February 2003, he was Chief Financial Officer, responsible for strategies, finance, budget, economic planning and control,
investor relations of Acea; in 2002 he was appointed common representative of the Joint Venture among Acea, Electrabel and Energia Italiana which brought to the acquisition of Interpower, the third generation company sold by Enel; from January 2000
to May 2001 he was Strategic Planning Director of Acea; from January 1998 to December 1999 he worked as manager of the Finance Department of Acea, where he was responsible of strategic planning; from 1996 to 1997 he was President Assistant,
responsible for the transformation process of Acea from municipal company into share capital company. Mr. Mangoni worked for InterAmerican Development Bank (IDB). Mr. Mangoni was born in Terni, Italy on June 5, 1963.

Gianfranco Ciccarella holds a University Degree in Electrical Engineering and, at present, is responsible for Global Advisory Services
within Technology Department in Telecom Italia S.p.A. Previously he held various positions in Telecom Italia S.p.A. as Vice President of several departments: Technical Support for the South America Region, Next Generation Access Networks and
Partnerships in the Strategy Department (from April 2011 to February 2013), Technical Support in the Technology and Operations Department (from December 2009 to March 2011); Network and IT, Telecom Italia Sparkle. From 1998 to 2009 he was
appointed to drive the design, deployment and operations of the Telecom Italia international network. Mr. Ciccarella is a member of the board of directors of a number of companies within the Telecom Italia Group. He is Director of the Post
Graduate Training & Technical Department at the Scuola Superiore Guglielmo Reiss Romoli in LAquila. He also carried out research and teaching activities in the Electrical Engineering Department at the University of LAquila, as
well as at New York Polytechnic University where he was Adjunct Associate Professor. Mr. Ciccarella was born in LAquila, on January 30, 1952.

Francesca Petralia serves as at Telecom Italia S.p.A. as head of International Legal Affairs. Previously she was head of Corporate and
Legal Affairs in South America (February 2013 to February 2014). After graduating in Law, she began her career in 1978 as in-house counsel in Fiat Auto S.p.A., Grandi Lavori S.p.A. and Selenia Industrie Elettroniche Associate S.p.A. She joined
Telecom Italia S.p.A. in 1990, focusing on international legal affairs. From 2002 to 2011, she was head of Corporate Finance Legal Affairs within the Legal Department. Subsequently, she acted as Group Compliance Officer until February 2013.
Ms. Petralia is a member of the Board of Directors of the South American companies TIM Participaçoes S.A., TIM Brasil Serviços e Participaçoes S.A. and Sofora Telecomunicaciones S.A., as well as of the holding Telecom
Italia International N.V. in The Netherlands. Mrs. Petralia was born in Bologna, Italy, on August 30, 1953.

Piergiorgio
Peluso. Since September 26, 2012. Mr. Peluso has been Head of Administration, Finance and Control at Telecom Italia. After graduating with a degree in Economic and Social Sciences from the Università Commerciale
Luigi Bocconi in 1992, with a specialization in Finance, from 1992 to 1994 he held the position of experienced accountant at Arthur Andersen & Co. Following a period at Mediobanca as Senior Financial Analyst (1994-1998) and with Credit
Suisse First Boston as Vice President of Financial Institutions Group (1998-2000) and Mergers & Acquisitions Group (2000-2001), in 2002 he joined Medio Credito Centrale S.p.A. (Capitalia Group) as Central Director Advisory Area. He retained
this position until 2005, when he was appointed Central Director at Capitalia S.p.A. From 2007 to 2009, following the merger of Capitalia S.p.A. and UniCredit Group S.p.A., he was Head of Investment Banking Italy at UniCredit Group S.p.A. In 2009 he
was appointed CEO of UniCredit Corporate Banking S.p.A. Following the merger of UniCredit Corporate Banking S.p.A. with UniCredit S.p.A., in 2010 he was appointed Head of Corporate & Investment Banking Italy, UniCredit Group. From 2011 to
September 2012 he was Managing Director of Fondiaria SAI S.p.A. He is a non-executive member of the Board of Directors of TIM Participacoes S.A. since April 11, 2013. Mr. Peluso is also member of the Board of Directors of Telecom Italia
Media S.p.A., Telecom Argentina S.A. and Fondazione Telecom Italia. Mr. Peluso was born in Rome on March 25, 1968



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Enrique Llerena is a lawyer with a degree from Pontificia Universidad Católica
Argentina Santa María de los Buenos Aires. He is a Director of Tradelog SA and an Alternate Director of SZ Consultores en Arte S.A. He was born on April 9, 1955.

Esteban Gabriel Macek is a public accountant. He is Chairman of Fiduciaria Internacional Argentina S.A. He is a director of
Inmobiliaria Madero S.A. He is also an alternate member of the Supervisory Committees of Visa Argentina S.A. and Prisma S.A. He was born on November 8, 1960.

Federico Horacio Gosmanis a director of Metrovías S.A. and Consultatio S.A. Presently, he is Coordinator of the
Dirección Nacional de Empresas con participación del Estado (National Direction of Corporations with government participation), in the Ministry of Economy and Public Finance. He served as assistant professor of
Historia del Pensamiento Económico at the Universidad de Buenos Aires and he held research activities in the CEPLAD (Economic research institute of the Universidad de Buenos Aires). He worked as consultant in Rational
Technologies and IBM. He was a member of the EDENOR Board of Directors. He graduated from the Universidad de Buenos Aires as an economist. He was born on May 19, 1983.

Esteban Santa Cruz holds a degree in Economics from the Universidad de Buenos Aires and a Masters Degree in Finance from the
Universidad Di Tella. He is currently the Financial Director of the ANSES. He was Manager of Financial Asset Strategy at Fondo de Garantía de Sustentabilidad (FGS-ANSES). He previously worked at Banco Hipotecario and Asociart ART. He was born
on August 20, 1979.

Mariana Laura González, holds a degree in Economics and a Magister in Economics, both from the
Universidad de Buenos Aires. Also, she has a Masters Degree in Social Sciences from the Facultad Latinoamericana de Ciencias Sociales (FLACSO). She is currently the Undersecretariat of Economic Coordination and Improvement of Competitiveness of the
Ministry of Economy and Public Finance. She was born on February 13, 1976.

Aldo Raúl Bruzoni holds a degree in
Business Administration. He has served as a director of Sofora Telecomunicaciones S.A. since 2010 and an alternate director of Telecom Argentina. He served as a director of Personal from 2008 up to 2010. He is also an alternate director of TGLT S.A.
He was born on March 30, 1950.

Jorge Alberto Firpo is an electrical engineer and a graduate of the Universidad
Tecnológica Nacional. Since 2005, he has served as a director in Telecom Group companies. Presently, he is an alternate director in Telecom Argentina and Personal and a director in Telecom Argentina USA. Also, he serves as an alternate
director in Tierra Argentea S.A. Since 2001, he has worked as Southamerica Supplier Director in Telecom Italia Latam, Brasil. From 1977 until 2001, he had assumed different positions in Pirelli Cables in Brasil and Italia. He was professor in high
school and in universities. He was born on April 17, 1954.

Lorenzo Canu holds a University Degree in Law. Since 1997 he has
been in charge of management of corporate affairs of the international subsidiaries of the Telecom Italia Group, within the Legal Affairs Department of Telecom Italia S.p.A. Mr. Canu is a member of the Board of Directors of Sofora
Telecomunicaciones S.A., Nortel Inversora S.A. and Telecom Personal S.A. Mr. Canu was born in Rome on January 30, 1963.

Jorge Luis Pérez Alatiis a lawyer. He is Chairman of the Board of Directors of In Store Media Argentina S.A.,
Inversiones Alumine S.A., Inversiones Aluquina S.A., Inversiones Los Alpes S.A., Inversiones Meliquina S.A., ISDIN Argentina S.A., La Papelera del Plata S.A., Nogal Central S.A., Pilar del Este S.A.,
Alpe S.A.C.I.F.I.A. and Solcan S.A. He is Vice Chairman of TMLUC Argentina S.A., Puig Argentina S.A., Lan Argentina S.A. and Inversora Cordillera S.A. He is a director of Aluflex S.A., Herbalife International Argentina
S.A., Young & Rubicam S.A., Chipirón S.A., CMPC Inversiones de Argentina S.A., Cork Supply Argentina S.A., Fabi Bolsas Industriales S.A., Honda Motor de Argentina S.A., Inesa Argentina S.A., Inversiones Los
Andes S.A., Ivax Argentina S.A., Media Planning S.A., Havas Sports Argentina S.A, and LDC Argentina S.A. and an alternate director of Avex S. A., Arbumasa S.A., Burson Marsteller S.A., Wunderman Cato Johnson S.A., Arena Argentina
S.A., Co. Fru. Va S.A., Harvest S.A., Bodegas Caro S.A., Cerámica San Lorenzo I.C.S.A., Media Contacts Argentina S.A., Proximia Havas Argentina S.A., Sociedad Alpe S.A., Salfa



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Construcciones Trasandinas S.A, Marina Holding S.A., Navieras Americanas, S.A. and Telecom Argentina. He is a member of the Supervisory Committees of Banco Santander
Río S.A., BRS Investment S.A., Distrilec Inversora S.A., Edesur S.A., ISBAN Argentina S.A., Calyx Siembre S.A., Calyx Tierra S.A., Quickfood S.A., Santander Río Servicios S.A., Portal Universia
Argentina S.A., Perevent Empresa de Servicios Eventuales S.A., Santander Río Seguros S.A., Santander Río Trust S.A., Santander Merchant S.A. and Santander Rio Sociedad de Bolsa S.A. He was born on
September 14, 1954

María Virginia Corina Genoves is an accountant with a degree from the Universidad de Buenos Aires.
She works as an external tax and accounting consultant for companies or individuals. Previously, she worked as an external auditor and as a consultant specializing in costs, taxes and process redesigning for optimization of resources. She developed
budgets for a variety of market companies. She was born on June 11, 1964.

Eduardo Federico Baueris a lawyer. He is
Vice Chairman of the Board of Directors of Nortel and Micro Sistemas. He is a director of Sofora and an alternate director of Personal, Caja de Seguros S.A., La Caja Aseguradora de Riesgos del Trabajo ART S.A., La Caja de Seguros de Retiro S.A., La
Estrella S.A. Cía. de Seguros de Retiro, Ritenere S.A. and Pluria Productores de Seguros S.A. He was born on January 14, 1950.

Pablo Alberto Gutiérrez is a public accountant. He is an advisor for many companies. He is director of Fiduciaria Internacional
Argentina S.A. He is Vice Chairman of CAFIDAP  Cámara Argentina de Fideicomisos y Fondos de Inversión Directa en Actividades Productivas. He was born on January 4, 1968.

Eduardo Pablo Guillermo Setti holds a degree in Economics from the Universidad de la Empresa (UADE). Since February 2012, he is General
Investment Director in ANSES  Fondo de Garantía de Sustentabilidad-and had previously served as Strategy Financial Assets Director and Financial Consultant. He worked as Planning Director in the Ministry of Infrastructure of the
Province of Buenos Aires and as Secretary of Production in the Secretaría de Desarrollo Económico y Producción of the Municipality of Zárate, Province of Buenos Aires. He is a director of Pampa Energía S.A.,
Empresa Distribuidora y Comercializadora Norte S.A., Metrovías S.A. and Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A. He is an alternate director in Telecom Argentina and in Gas
Natural Ban S.A. He was born on February 16, 1971.

Juan Massoloholds a degree in Economics from the Universidad de Buenos
Aires and a Masters degree in Microfinance and Social Development from the Centro Internacional de Formación Financiera (CIFF)-Universidad de Alcalá. He currently works at Dirección Nacional de Empresas con
participación del Estado (National Direction of Corporations with government participation) of the Ministerio de Economía y Finanzas Públicas de la Nación. He is also an alternate director of Metrovías S.A.
and Grupo Concesionario del Oeste S.A. Previously, he worked at Accenture, United Nations Development Programme (UNDP) and Instituto Nacional de Servicios Sociales para Jubilados y Pensionados (PAMI). He was also an assistant professor of economics
at the FCE-UBA. He was born on December 3, 1982.

Verónica Daniela Alvarezholds a degree in Economics from the
Universidad de Buenos Aires, she conducted activities of specialization in legislative budgets forming part of the working group responsible for managing the budget of the Convención Constituyente Nacional and the Convención
Constituyente of the City of Buenos Aires. She was Chief of Budget Department before being Chief of Purchasing Department in the Cámara de Diputados. In the Secretaría de Política Económica y
Planificación del Desarrolloof the Ministry of Economy and Public Finance, she worked as a consultant in management issues. Presently, she is the General Legal and Administrative Coordinator of the Secretaría Legal y
Administrativaof the Ministry of Economy and Public Finance. She is also a director in Ferrosur Roca and an alternate director in Telecom Argentina and in the Banco Hipotecario. She was born in September 21, 1964.



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Senior Management

As of December 31, 2013, the Telecom Groups senior Management team includes the individuals listed below. Unless otherwise noted,
these individuals are members of the Telecom Groups senior Management as of the date of this Annual Report.



|                           |  |                                      |  |                    
|-------------------------- |  | ------------------------------------ |  | -------------------
|Name                       |  | Position(1)                          |  | Date of Designation
|Stéfano de Angelis         |  | Chief Executive Officer              |  | February 2013      
|Gonzalo A. Martínez        |  | Director of Regulatory Affairs       |  | April 2012         
|Guillermo O. Rivaben(2)    |  | Director of Mobile Telephony         |  | May 2010           
|Marcelo E.Villegas         |  | Director of Human Capital            |  | August 2008        
|Adrián Calaza              |  | Chief Financial Officer              |  | August 2009        
|Patrizio Graziani          |  | Director of Procurement              |  | November 2013      
|Alejandro D. Quiroga López |  | Director of Legal Affairs            |  | June 2011          
|Ricardo Luttini            |  | Director of Audit                    |  | April 2007         
|Máximo D. Lema             |  | Director of Wholesale                |  | June 2010          
|Paolo Perfetti             |  | Director of Network                  |  | November 2012      
|Anibal Gómez               |  | Director of Fixed Telephony          |  | March 2013         
|Mariano Cornejo            |  | Director of Communications and Media |  | June 2007          
|Eduardo M. Etcheverry      |  | Director of Information Services     |  | December 2012      
|Paolo Chiriotti(3)         |  | Director of Corporate Security       |  | August 2012        



|(1) | The designation of Director does not imply that the officers mentioned above are members of the Board of Directors of Telecom Argentina, which is composed of the persons stated in the Directors, Senior
Management and EmployeesThe Board of Directors above. The terms of office of Telecoms Senior Management are contractual in nature. Such contracts do not include a specified expiration date.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Guillermo O. Rivaben served as Director of Mobile Telephony until February 6, 2014. Since that date until February 27, 2014, the position was held by Stéfano de Angelis on an interim basis.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Paolo Chiriotti served as Director of Corporate Security until January 15, 2014. Since that date, the position has been held by Stéfano de Angelis on an interim basis.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Stefano de Angelisholds a degree in Economics and Business Administration from Università degli Studi La Sapienza, Rome, Italy
and also an MBA from Scuola di Amministrazione Aziendale dell Università di Torino, Italy. He was appointed as Chief Executive Officer of the Telecom Group in February 2013. From September 2007 until February 2013 Mr. De Angelis
was Director of Administration, Planning and Control in Telecom Italia S.p.A. Before that, he was the Chief Financial and Investor Relations Officer of TIM Participações S.A. between 2006 and 2007. He also served as Chief
Administration, Finance and Control Officer of the TIM Companies in Brazil since July 2004. Between 2002 and 2004, he was responsible for the planning and controlling operations of Telecom Italia Mobile S.p.A. in Italy. Mr. De Angelis also
worked in the Consodata Group Ltd, H.M.C. S.p.A., Stet S.p.A. and at Fiat Geva. S.p.A. He is member of the Board of Directors of TIM Participações S.A. He was born on August 22, 1967.

Gonzalo A. Martínez is a telecommunications engineer, graduated from La Plata University. He joined Telecom Argentina in 1991.
Mr. Martínez has served in different roles at Telecom, such as Products and Services Development Manager, Corporative and Large Customers Manager and Support Manager on Regulation for Operative and Commercial Direction. In 2001, he was
appointed Manager of Regulatory Affairs for fixed telecommunication operation and in 2007 as Regulatory Assurance Director of mobile and fixed operations. In 2012 he was appointed Regulatory Affairs Director of Telecom Argentina. Before joining
Telecom Argentina, Mr. Martínez worked at the SADE-Perez Compac Group, in areas of engineering and construction telecommunications projects until 1987, when he was appointed as Business Manager of Micro Sistemas S.A. In 1988, he became
Plant Manager of this informatics technology company. He was born on February 12, 1954.

Guillermo O. Rivabenholds a degree
in electronic engineering from the Universidad de Buenos Aires and has over 19 years experience as senior manager and consultant in the Latin America telecommunications market with strong expertise in mobile services, integrated broadband corporate
services, international business relationships and strategic planning. He joined Personal in 1995 as Marketing Manager and left in 2000 to launch AT&T Latinamerica in Argentina and then became Executive Vice Chairman of Regional Marketing
(Brazil-Argentina). He rejoined Personal in 2004 as Executive Director of Marketing and Strategic Planning. He became Director of Mobile Telephony in May 2010. He is also Director of Núcleo and Vice Chairman of Springville. He was born on
April 5, 1966.

Marcelo E. Villegas is a lawyer. He joined Telecom Argentina in May 2008 as the Human Capital Director. He
graduated from Universidad de Buenos Aires. Previously, he worked in the human resources department of the following companies: Wal-Mart Stores (International Division) for Wal-Mart Argentina, the Cencosud Group (Jumbo Retail Division) for the
brands Jumbo, Disco and Vea, Hewitt & Aso (as head of talent Management and organizational change), the Perez Companc Group, Sade S.A., the Division of Exploration and Production of Gas and Oil in Latin America, the Suez Group, Aguas
Provinciales de Santa Fe, Aguas Argentinas, Latin America Region and Ondeo de Puerto Rico Inc. He was born on March 13, 1963.



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Adrián Calaza holds a degree in Business Administration from the Universidad de
Belgrano and an MBA from the Universidad del CEMA. He was appointed Telecom Argentinas Chief Financial Officer in August 2009. Mr. Calaza joined the Telecom Italia Group in January 1999, where he held various positions such as Chief
Financial Officer of Entel Bolivia, a subsidiary of the TI Group and as Corporate Chief Financial Officer of Telecom Italia Latam in Brazil. Mr. Calaza returned to Argentina in 2007 as Manager of the Corporate Administrative Services Department
of the Telecom Group. He was born on March 8, 1967.

Patrizio Graziani holds a degree in Economics and Business Administration
from Universitá degli Studi La Sapienza, Roma and a doctorate in Economics, Accounting and Legal Auditing. He is at present the chairman of Sofora Telecomunicaciones S.A., Nortel Inversora S.A. and Tierra Argentea S.A. Since November
2013 he has served as Director of Purchasing and Real Estate Department of Telecom Argentina S.A. Mr. Graziani is also a director and member of Internal Control and Risk Committee, and Remuneration Committee of TIM Participasoes (Brazil) and
since April 2010 he has served as chairman of HR Services, a company in the Telecom Italia Group. He was a director and member of Operations Committee of Telecom Argentina (until December 2013) and Personal (until November 2013). From April 2011 to
October 2013 he served as Assistant and Head of Staff Manager to the Chairman & CEO of Telecom Italia Group. He was born on April 3, 1965.

Alejandro D. Quiroga Lopezis a lawyer graduated from the Universidad de Buenos Aires. From 2010 to 2011, he was an associate at
Curutchet-Odriozola Law Firm. From 2001 and until February 2010 he was general counsel and Secretary of the Board of Directors of YPF S.A. He was a partner at the law firm Nicholson & Cano from 1986 to 1997, a foreign associate at Davis
Polk & Wardwell in 2000, and Undersecretary of Banking and Insurance at the Ministry of Economy and Public Finance of Argentina from 1997 to 1999. He was professor of banking and commercial law at the University of CEMA. He was a member of
the Executive Board of the Universidad de Buenos Aires School of Law. He is also a graduate of the Wharton Advanced Management Program. He was born on June 9, 1962.

Ricardo Luttini is an accountant. He joined Telecom in June 2005. He had previously served as Manager of Business Controls and Auditing
for La Caja de Ahorro y Seguro S.A., General Manager of Banco Caja de Ahorro S.A., and General Accountant and Audit Manager at Banco Mercantil Argentino. He was born on September 27, 1961.

Máximo D. Lemais an engineer.Currently, he is the Director of the Wholesale Unit and Chairman of Telecom Argentina USA
Inc.He graduated from the Universidad de Mar del Plata (Argentina) and from Purdue University (Indiana USA) with a Master of Science and Ph.D., both in electrical engineering. He also holds an MBA from UCEMA (Universidad Centro Estudios
Macroecónomicos Argentina). He joined Telecom Argentina in 1998 as Wholesale Marketing Director. He previously worked at Telintar S.A. (International Business Director), Entel S.A. (International Director) and Purdue University (Image
Processing Research). He was born on October 6, 1956.

Paolo Perfetti holds a degree in Electronic Engineering at the
University of Roma, La Sapienza. He was appointed Telecom Argentina Network Director in November 2012. Mr. Perfetti joined the Telecom Italia group in August 2000 after an experience in BT Italia Group. Since then he held various position as
director of Engineering and Operation Director contributing to the development of fixed and mobile broadband services. He was born on April 14, 1966.

Anibal R. Gomez holds a degree in Systems at CAECE University. In March 2013 he was appointed as Fixed Telephony Director at Telecom
Argentina. Mr. Gomez joined Telecom Argentina in March 1994. During these years he held different positions, such as Commercial Manager, General Manager of Núcleo in Paraguay, Marketing Director and Sales Director, and President of
Núcleo. He was born on December 26, 1964.

Mariano Cornejo holds a degree in advertising. He joined Telecom in June
2007. Previously, he served for twelve years as General Manager in Marketing at La Caja de Ahorro y Seguro S.A. He was also Director of Brands for the Werthein Group for the same period. He was born on December 20, 1963.

Eduardo M. Etcheverry holds a degree in Informatics from UADE, Argentina. In December 2012 he was appointed as Information Services
Director at Telecom Argentina. Mr. Etcheverry joined Telecom Argentina in July 2006. During these years he held different positions, such as Datacenter Manager, Operations and Technology Manager, and Datacenter Director. He was born on
December 18, 1956.



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Paolo Chiriotti holds a degree in Political Science from Génova University. He also
holds a Human Resources Strategic Management Master from the Bocconi University, Milano. He was appointed Corporate Security Director in August 2012. Mr. Chiarotti started working at the Telecom Italia Group in March 1991, where he has held
several positions, including Human Resources Organization Manager. Since 2010 he has been the responsible for the Crisis Management area in the Security Direction Department. He was born on July 28, 1970.

Telecom Argentinas Board of Directors, at their meeting held on February 27, 2014, approved a new organizational structure. As a
result the new Telecom Groups senior Management team as of the date of this Annual Report is as follows:



|                           |  |                                                     |  |                   
|-------------------------- |  | --------------------------------------------------- |  | ------------------
|Name                       |  | Position(1)                                         |  | Date ofDesignation
|Stéfano de Angelis         |  | Chief Executive Officer                             |  | February 2013     
|Anibal Gómez               |  | Chief Operating Officer                             |  | February 2014     
|Adrián Calaza              |  | Chief Financial Officer and Director of Procurement |  | February 2014     
|Marcelo E.Villegas         |  | Director of Human Capital                           |  | August 2008       
|Alejandro D. Quiroga López |  | Director of Legal and Regulatory Affairs            |  | June 2011         
|Ricardo Luttini            |  | Director of Audit                                   |  | April 2007        
|Máximo D. Lema             |  | Director of Wholesale                               |  | June 2010         
|Paolo Perfetti             |  | Director of Network and IT Infraestructure          |  | November 2012     
|Mariano Cornejo            |  | Director of Communications and Media                |  | June 2007         
|Stéfano de Angelis(2)      |  | Director of Corporate Security                      |  | August 2012       



|(1) | The designation of Director does not imply that the officers mentioned above are members of the Board of Directors of Telecom Argentina, which is composed of the persons stated in the Directors, Senior
Management and EmployeesThe Board of Directors above. The terms of office of Telecoms Senior Management are contractual in nature. Such contracts do not include a specified expiration date.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Paolo Chiriotti served as Director of Corporate Security until January 15, 2014. Since that date, the position has been held by Stéfano de Angelis on an interim basis.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Telecom Groups senior Management team as of December 31, 2013 described above for further information about the
individuals experience and qualifications.

Supervisory Committee

Argentine law requires that any corporation with share capital in excess of P$10,000,000 or which provides a public service or which is listed
on any stock exchange or is controlled by a corporation that fulfills any of the aforementioned requirements, to have a Supervisory Committee. The Supervisory Committee is responsible for overseeing Telecom Argentinas compliance with its
bylaws and Argentine law and, without prejudice to the role of external auditors, is required to present a report on the accuracy of the financial information presented to the shareholders by the Board of Directors at the Annual Ordinary
Shareholders Meeting. The members of the Supervisory Committee are also authorized:



| |  |  | to call ordinary or extraordinary Shareholders Meetings;
| | - |  | ---------------------------------------------------------



| |  |  | to place items on the agenda for meetings of shareholders;
| | - |  | ----------------------------------------------------------



| |  |  | to attend meetings of shareholders; and
| | - |  | ---------------------------------------



| |  |  | generally to monitor the affairs of Telecom Argentina.
| | - |  | ------------------------------------------------------

Telecom Argentinas bylaws
provide that the Supervisory Committee is to be formed by three or five members and three or five alternate members, elected by the majority vote of all shareholders. Members of the Supervisory Committee are elected to serve one year terms and may
be reelected.

The following table lists the members and alternate members of the Supervisory Committee as of December 31, 2013:



|                            |  |                                               |  |                      
|--------------------------- |  | --------------------------------------------- |  | ---------------------
|Name                        |  | Position                                      |  | Profession           
|Evelina Leoní Sarrailh      |  | Member of the Supervisory Committee           |  | Lawyer               
|Gustavo Adrián E. Gené      |  | Member of the Supervisory Committee           |  | Accountant           
|Gerardo Prieto              |  | Member of the Supervisory Committee           |  | Accountant           
|Susana Margarita Chiaramoni |  | Member of the Supervisory Committee           |  | Lawyer               
|Raúl Alberto Garré          |  | Member of the Supervisory Committee           |  | Accountant and Lawyer
|Gonzalo F. Oliva Beltrán    |  | Alternate Member of the Supervisory Committee |  | Lawyer               
|Alberto Gustavo Gonzalez    |  | Alternate Member of the Supervisory Committee |  | Accountant           
|Jacqueline Berzón           |  | Alternate Member of the Supervisory Committee |  | Lawyer               
|Guillermo Feldberg          |  | Alternate Member of the Supervisory Committee |  | Accountant           
|Silvia A. Rodríguez         |  | Alternate Member of the Supervisory Committee |  | Lawyer               



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Evelina Leoní Sarrailh is a lawyer with an extensive experience in the financial
industry. She served as the Legal Director of the Group BBVA Banco Francés S.A. (1999-2010) and she had been the former Legal Director of the Group Deutsche Bank in Argentina. She has served as chairman of the Supervisory Committee of Telecom
Argentina S.A during the fiscal year 2013 and she is a member of the Board of the Latin American Section of the AIDV, Asociación del Derecho de la Vid y el Vino. She was born on September 1, 1952.

Gustavo Adrián Enrique Gene is a licensed public accountant and holds a degree in Administration and a Masters in Administration
and Strategic Planning from the University of Buenos Aires. He served as the Principal Accounting Officer of Edenor from 2006 to 2008. He previously served as Vice President of Strategic Planning from 1998 to 2002, and again from 2005
through May 2006. From 2002 to 2005, Mr. Gené was the Vice President of Planning and Control in the Regional Americas division of Electricité de France. He is a member of the Supervisory Committee of Telecom Argentina and
Telecom Personal since April 2013. He was born on December 23, 1955.

Gerardo Prieto is an accountant. He has been a member of
the Supervisory Committee since 2004. He is also a member of the Supervisory Committees of Sofora, Nortel, Personal and Micro Sistemas. He is Chairman of Campofin S.A., Polifin S.A., Pluria Productores de Seguros S.A., La Caja Aseguradora de Riesgos
del Trabajo ART S.A. and Cabaña Doble G del Litoral S.A. He is a director of Industrial and Commercial Bank of China (Argentina) S.A., Caja de Seguros S.A., Gregorio, Numo y Noel Werthein SAAGCeI and Ritenere S.A. He is also an
alternate director of La Caja de Seguros de Retiro S.A., Caja de Ahorro y Seguro S.A. and La Estrella S.A. Compañía de Seguros de Retiro. He was born on March 3, 1951.

Susana Margarita Chiaramoniis a lawyer with extensive experience in corporate and financial law and degree in Management and History
of Arts. She was appointed to the Supervisory Committee of Telecom Argentina and Nortel Inversora S.A. during the fiscal year 2013. She was born on June 24, 1953.

Raúl Alberto Garré is a Certified Public Accountant and a lawyer with a degree from the Universidad de Buenos Aires and
holds a degree in Marketing, Organizational Management and Finances from the University of California, Berkeley Business School. He also holds a degree as a Certified Mediator from the Universidad Maimónides. He is currently the trustee of
Telecom S.A., Gas Natural Ban S.A. and the Dirección General de Fabricaciones Militares. He was the Director General of the Dirección General de Rentas de la Municipalidad de la Ciudad de Buenos Aires, the President of the
Confederación Organismos Tributarios de Estados Americanos (COTEA) and the Vicepresident of C.E.A.M.S.E. (Coordinación Ecológica Área Metropolitana Sociedad del Estado). He was also Internal Auditor of the Department of
Internal Affairs, Delegate to the Constitutional Convention of Buenos Aires City and member of the Consejo Directivo del Colegio Público de Abogados de la Ciudad de Buenos Aires. He was Cabinet Chief of the Department of Defense and the
Department of Security and the Executive Secretary of the Consejo de Seguridad Interior. He was born on May 9, 1951.

Gonzalo F.
Oliva Beltrán is a partner at Llerena Amadeo, Dondo & Oliva Beltran Abogados. He has concentrated his practice in the areas of corporate and finance law, foreign trade and exchange regulations, mergers and acquisitions, real
estate and non-profit organizations. He graduated as a lawyer from the Universidad Católica Argentina in 2001. In 2006 he obtained an LLM from the University of Westminster, England (graduated with honors). He was born on May 12,
1978.

Alberto Gustavo González is currently President of Integral Management of Medical Center, Partner at G & P
Management Consultants, Director of Sudamerican ServicesUruguay and Director Sudamerican ServicesArgentina. He has also served as Controller of Electricité de France, Deputy Manager of Strategic Planning in Edenor and Planning
Manager at Laboratorios Bago SA. He was born on May 12, 1962.

Jacqueline Berzónis a lawyer. From 2005 to 2010, she
served as an alternate member and as a member of the Supervisory Committee of Telecom Argentina. She is a member of the Supervisory Committee again since 2013. She is currently a member of the Supervisory Committee of Personal, Monsanto Argentina
SAIC and Chairwoman of Hungry Man Argentina S.R.L. She was born on October 9, 1975.



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Guillermo Feldberg is a public accountant. He has been an alternate member of the
Supervisory Committee since 2004. He is also an alternate member of the Supervisory Committees of Personal, Micro Sistemas, Nortel and Sofora. He is Chairman of Agropecuaria La Victoria S.A., Caroline Establecimientos Agropecuarios S.A., Ineba S.A.,
Izzalini Trade S.A., GWF. S.A., Majuida S.A. Viosan S.A., Associacion ORT Argentina and Pintarko S.A. He is Vice Chairman of Doble G del Litoral S.A., Fundación Ineba (Instituto de Neurociencias Buenos Aires). He was born on February 20,
1951.

Silvia Alejandra Rodríguez is a lawyer. She is member of the Supervisory Committee of Agua y Saneamientos Argentinos
S.A. (AySA), Nucleoeléctrica Argentina S.A. and Parque Eólico Arauco S.A. She is alternate member of the Supervisory Committee of Ferrosur Roca S.A., Ferroexpreso Pampeano S.A., Empresa Argentina de Soluciones Satelitales S.A.
(AR-SAT), Pampa Energía S.A. and Centros de Estudios de Alta Tecnología S.A. (CEATSA). She was born on December 15, 1972.

There is no family relationship between any director, alternate director, member of the Supervisory Committee or executive officer and any
other director, alternate director, member of the Supervisory Committee or executive officer.

Compensation

The compensation of the members for the Board of Directors and the Supervisory Committee is established for each fiscal year at the annual
meeting of shareholders.

The aggregate compensation paid by Telecom Argentina and its subsidiaries to the members of Telecom
Argentinas Board of Directors and the members of Telecom Argentinas Supervisory Committee, acting since April 23, 2013, and the executive officers described under Senior Management above, was approximately P$50.3 million
for the year ended December 31, 2013.

Accrued compensation as of December 31, 2013 for the members of the Board of Directors
and the members of the Supervisory Committee acting since April 23, 2013 was approximately P$15.5 million and approximately P$4.8 million, respectively. Those amounts are derived from the proposal made by Telecom Argentinas Board of
Directors, with the prior opinion of the Audit Committee, regarding the aggregate compensation for the members of the Board of Directors and the Supervisory Committee in connection with their duties performed since April 23, 2013. Such
compensation is subject to approval by the Annual Ordinary Shareholders meeting which will be held on April 29, 2014.

As of
December 31, 2013 compensation paid as advance payments to the members of the Board of Directors and members of the Supervisory Committee acting as from April 23, 2013 was P$4.4 million and P$2 million, respectively.

Compensation for the executive officers described under Senior Management above, amounted to approximately P$68.9 million during
the year ended December 31, 2013 (including fixed and variable compensation, retention plan benefits and, in some cases, severance payments and non-compete agreements), of which P$25.0 million remained unpaid as of December 31, 2013.

The Companys managers (including Senior Management) receive fixed and variable compensation. A managers fixed compensation
reflects the level of responsibility required for his or her position and the market rate for similar positions. Variable compensation is tied to annual performance goals. Certain managers are beneficiaries of retention plan benefits.

Also, Telecom Argentina implemented a Long-Term Incentive Program(LTI), with the purpose of providing Senior Management
members with incentives to create value in the medium/long term, involve such members in the Groups success and as an element for retaining key personnel at the organization. For the fiscal year 2012 results, bonuses were paid to the LTI
program participants in May 2013. LTI program bonuses for fiscal year 2013 results are expected to be paid in May 2014.

During the year
ended December 31, 2013, Telecom Argentina was not required to set aside or accrue any amounts to provide pension, retirement or similar benefits.

Telecom Argentina has no stock option plans for its personnel, or for its members of the Board of Directors or the Supervisory Committee.



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Board Practices

Under Argentine law, directors have the obligation to perform their duties with loyalty and the diligence of a prudent business person.
Directors are jointly and severally liable to Telecom Argentina, our shareholders and third parties for the improper performance of their duties, for violations of law, our bylaws or regulations and for any damage caused by fraud, abuse of authority
or gross negligence. Under Argentine law, specific duties may be assigned to a director by the bylaws or regulations or by resolution of the Shareholders Meeting. In these cases, a directors liability will be determined with reference to
the performance of these duties, provided that certain recording requirements are met. Under Argentine law, directors are prohibited from engaging in activities in competition with Telecom Argentina without express authorization of a
Shareholders Meeting. Certain transactions between directors and Telecom Argentina are subject to ratification procedures established by Argentine law.

The Supervisory Committee is responsible for overseeing our compliance with our bylaws and Argentine law and, without prejudice to the role of
external auditors, is required to present to the shareholders at the annual ordinary general meeting a report on the accuracy of the financial information presented to the shareholders by the Board of Directors. See Supervisory
Committee for further information regarding the Supervisory Committee.

On May 22, 2001 the Argentine government issued Decree
No. 677/01, entitled Regulation of Transparency of the Public Offering, or the Transparency Decree (replaced since January 28, 2013 by equivalent articles included in Law No. 26,831. See Item 9The
Offer and ListingThe Argentine Securities MarketNew Capital Market ActLaw No. 26,831 below). The intention of this decree was to move towards the creation of an adequate legal framework that may strengthen the level of
protection of investors in the market. The main objectives of the Transparency Decree were to promote the development, liquidity, stability, solvency and transparency of the market, generating procedures to guarantee the efficient reallocation from
savings to investments and good practices in the administration of corporations.

The Transparency Decree (and now Law No. 26,831)
vests in members of the Board of Directors:



| |  |  | the duty to disclose certain events, such as any fact or situation capable of affecting the value of the securities or the course of negotiation;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the duty of loyalty and diligence;
| | - |  | ----------------------------------



| |  |  | the duty of confidentiality; and
| | - |  | --------------------------------



| |  |  | the duty to consider the general interests of all shareholders over the interest of the controlling shareholder.
| | - |  | ----------------------------------------------------------------------------------------------------------------

A director will not be liable if, notwithstanding his presence at a meeting at which a resolution was adopted or his knowledge of the
resolution, a written record exists of his opposition thereto and he reports his opposition to the Supervisory Committee before any complaint against him is brought before the Board of Directors, the Supervisory Committee, the Shareholders
Meeting, the competent governmental agency or the courts. Any liability of a director vis-à-vis Telecom Argentina terminates upon approval of the directors performance by the Shareholders Meeting, provided that shareholders
representing at least 5% of our capital stock do not object and provided further that this liability does not result from a violation of the Companys bylaws, the law or the regulations.

Additionally, Law No. 26,831 provides that those who infringe the provisions set forth therein shall be subject, in addition to civil and
criminal liability (as applicable), to certain sanctions including warnings, fines, disqualification, suspension or prohibition from acting under the public offering regime.

In July 2012, Decree No. 1,278/12 approved a Regulation of officers and directors appointed by the shares or equity interests of the
Argentine government through the Secretary of Economic Policy and Development Planning of the Ministry of Economy and Public Finance.

Telecom Argentina maintains an officers and directors insurance policy covering claims brought against the officers and/or
directors relating to the performance of their duties. At present, the total amount covered by this insurance is US$50,000,000.

In May
2004, the Board of Telecom Argentina resolved to create the Consejo de Dirección, or Steering Committee, which served as an internal body of the Board of Directors and was comprised of four members of the Board of Directors.



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In March 2009, the Board of Directors of Telecom Argentina resolved to dissolve the Steering
Committee. However, on April 7, 2010, the Board of Directors of Telecom Argentina resolved to reestablish this Committee, maintaining the same pre-dissolution structure. The Steering Committee, consisting of four members or alternate members of
the Board of Directors of Telecom Argentina and Personal, resumed its duties on October 26, 2010. On such date, the Board of Directors issued a new Regulation of Authority and Operation of the Steering Committee. The Steering
Committees duties, among others, are: (i) to approve the Business Plan of Telecom Argentina and its subsidiaries, (ii) to approve the general compensation policy of Telecom Argentina and Personals employees, (iii) to
review the bids to be submitted under public bidding processes for any amount over P$5 million and the marketing plans to determine that they do not violate the Argentine Antitrust Law and (iv) to prepare the Advertising Budget to be submitted
to the Board of Directors.

Pursuant to the Regulation of Authority and Operation of the Steering Committee, a quorum shall consist
of the majority of members of the Steering Committee including those who attend by teleconference or videoteleconference. All members shall adopt decisions unanimously. In the event no resolution is adopted on any of the issues submitted for
consideration of the Steering Committee, the matter shall be referred to the Board of Directors.

As of the date of this Annual Report,
the members of the Steering Committee are: Gerardo Werthein, Adrián Werthein, Francesca Petralia and Andrea Mangoni.

The
Companys bylaws grant the Board of Directors the power to appoint an Executive Committee formed by some of its members, to be in charge of the Companys day to day affairs, under the supervision of the Board of Directors. The Board of
Directors decided not to appoint an Executive Committee.

Regulatory Compliance Committee

According to the New Shareholders Agreement and to the TI-W Commitment (See Item 7Major Shareholders and Related Party
TransactionsTelco and TI-W Commitments and Shareholders Agreement), in October 2010, a Regulatory Compliance Committee was created consisting of three members or alternate members of the Board of
Directors of Telecom Argentina and Personal not taking into account those members appointed at the request of Telecom Italia and those members appointed jointly by Telecom Italia and W de Argentina, if any. It should be noted that the directors of
Telecom Argentina appointed at the request of Telecom Italia or those appointed jointly by W de Argentina and Telecom Italia are not allowed to vote in the appointment of the Regulatory Compliance Committee members.

The main duty of the Regulatory Compliance Committee is to verify that Telecom Argentina and Personal are in compliance with the requirements
(hereinafter, the Requirements) assumed or derived for both companies from the Telco and the TI-W Commitment.

The Regulatory Compliance Committee has the following rights and duties:



| |  |  | To prepare quarterly reports to be submitted to the Board of Directors of Telecom Argentina and Personal regarding Requirements compliance.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To audit Telecom Argentina and Personals Requirements compliance.
| | - |  | ------------------------------------------------------------------



| |  |  | To verify all the information required by Telecom Italia according to the Telecom Italia S.p.A. audit rights under the New Shareholders Agreement of Sofora.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To approve any agreement to be executed or amended between Telefónica, S.A. and/or any of its affiliates, and Telecom Argentina and/or any of its subsidiaries.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To prepare annual reports on Requirements compliance, for submittal to the Board of Directors of Telecom Argentina and Personal ten days before their filing with the CNDC.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of the date of this Annual Report, the members of the Regulatory Compliance Committee are Adrián Werthein (Chairman); Eduardo
Federico Bauer and Esteban Gabriel Macek.

Audit Committee

Law No. 26,831 provides that companies with publicly-listed shares shall appoint an audit committee, or the Audit Committee,
to be formed by three or more members of the Board of Directors. Under CNV rules, the majority of the members of the Audit Committee must be independent. In order to qualify as independent, the director must be independent with respect to the



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company, any controlling shareholders or any shareholders that are significant participants in the company and cannot carry out executive duties for the company. A member of the Board of
Directors cannot qualify as an independent director if he or she is a relative of a person who would not qualify as an independent director if such relative were appointed as a member of the Board of Directors.

Pursuant to General Resolution No. 400/02 of the CNV, published in the Official Bulletin on April 5, 2002, the provisions of the
Transparency Decree relating to the Audit Committee were applicable for the financial years beginning on or after January 1, 2004.

At the Board of Directors meeting held on April 29, 2004, the Board of Directors resolved the final composition of the Audit Committee,
and the Audit Committee came into effect.

According to the Normativa de Implementación del Comité de
Auditoría, (a set of guidelines for the Audit Committee filed with the CNV) in case of resignation, dismissal, death or lack of capacity of any of the members of the Audit Committee, the Board of Directors shall immediately appoint a
replacement, who shall remain in such position until the following annual shareholders meeting.

According to Law No. 26,831 the duties of
the Audit Committee shall be:



| |  |  | providing the market with complete information on transactions with which there might be a conflict of interest with the members of the corporate bodies or controlling shareholders;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | giving an opinion on the fulfillment of legal requirements and reasonableness of the conditions for the issuance of shares or securities convertible into shares, in the case of capital increases where preemptive rights
have been excluded or limited;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | giving an opinion regarding transactions with related parties in certain cases;
| | - |  | -------------------------------------------------------------------------------



| |  |  | supervising internal control systems and verifying the fulfillment of norms of conduct; and
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | giving an opinion regarding the Board of Directors proposal to designate external auditors and evaluating their independence, among others.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

Additionally, within the Normativa de Implementación del Comité de Auditoría the Audit Committee also reviews
the plans of internal auditors, supervising and evaluating their performance.

At its meeting on April 23, 2013, the Board of
Directors reelected Mr. Garrido, Mr. Macek and elected Mr. Federico H. Gosman as members of the Audit Committee. The Board furthermore determined that Mr. Macek qualifies as an audit committee financial expert under SEC
guidelines. Under SEC and New York Stock Exchange regulations the three members of the Committee qualify as independent directors. Under CNV regulations, two members of the Audit Committee (Mr. Macek and Mr. Gosman) qualify as independent
directors.

Pursuant to the Argentine governments Decree No. 677/01, and now pursuant to Law No. 26,831, the Audit
Committee may seek the advice of lawyers and other outside professionals at Telecom Argentinas expense, so long as the shareholders have approved expenditures for the services of such professionals. For fiscal year 2013, a budget of
P$1,500,000 was approved for Audit Committee expenditures. As of the date of this Annual Report, the Annual Shareholders meeting approving Audit Committee expenditures for year 2014 has not yet been held.

Disclosure Committee

Telecom Argentina has also established a Disclosure Committee, which is responsible for monitoring the gathering, processing and submission to
the CEO and CFO of consolidated financial and non-financial information that is required to be included in disclosure reports in order to ensure timely and accurate disclosure of material information. The duties of the Disclosure Committee include
the following:



| |  |  | assisting the CEO and the CFO in evaluating the effectiveness of Telecom Argentinas disclosure controls and procedures prior to the filing of Annual Reports both in Argentina and the US;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | suggesting any improvements in disclosure procedures as a result of this evaluation;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | verifying that Telecom Argentinas processes for information collection, processing and control are in compliance with its disclosure procedures such that the accuracy of its disclosures can be verified; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | providing assistance in determining what information may be considered material to Telecom Argentina.
| | - |  | -----------------------------------------------------------------------------------------------------



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Employees and Labor Relations

As of December 31, 2013, our total number of employees was 16,581 (including temporary employees), of which approximately 77 %
belonged to unions. All Management and senior positions are held by non-union employees.

Telecom Argentina and Personal have 9,930 and
2,881 unionized employees, respectively, representing an increase of approximately 1.1% and 1.5%, respectively, compared to 2012. The union which has the largest number of employees is the Federation of Telephone Workers and Employees of Argentina
(FOETRA) in Buenos Aires, which is currently included in the Argentine Telecommunications Federation (FATEL), representing 5,604 Telecom Argentina employees. The Argentine Federation of Telephone Workers and Employees
(FOEESITRA) represents 2,240 employees and the Professionals Workers Center of Telecommunication Companies (CEPETEL) represents 306 employees. Two remaining unions, the Technical and Supervisory Telephone Personnel Federation
(FOPSTTA) and the Telecommunications Union (UPJET), represent 1,780 middle management employees of Telecom Argentina. Personal has 2,877 employees represented by the Argentine Federation of Commercial and Service Employees
(FAECyS) and 4 employees represented by the Single Argentine Federation of Travelers (FUVA).

Salary
agreements with labor organizations are reviewed annually or from time to time, in a context of increased social claims and an increased cost of living.

In 2013, Telecom Argentina continued negotiating with telecommunication labor organizations through the Mesa de Unidad Sindical de las
Telecomunicaciones (the MUS  Board of Trade Union Unity), which brings together FOEESITRA, FATEL, FOPSTTA and UPJET. The negotiations resulted in an agreement to implement a gradual and non-cumulative increase in salaries,
which amounted to 15.5% in July 2013 and 9.5% as from January 2014. Additionally, 2% of the aggregate salaries were assigned to increase certain variable employee compensation items. Moreover, salary agreements for call centers activity were reached
with FOETRA, SITRATEL (Telephone Union Employees included in FATEL) and FOEESITRA, resulting in the same salary increases as those agreed with the MUS.

Additionally, negotiations continued with CEPETEL (which is not part of the MUS) which resulted in a salary agreement reached in September
2013 with same terms and conditions as the other telecommunication labor organizations.

With respect to Personal, during 2013, union
employees were covered by the FAECyS collective bargaining agreement, and, as a result, the related salary agreements applied. These agreements contemplated a 24% salary increase in 2013. This salary increase was granted gradually and was
non-cumulative: 14% in May 2013 and 10% in November 2013.

On November 6, 2013, the first mobile telephony collective bargaining
agreement was reached between the mobile operators (with the exception of Claro) and FOETRA (Buenos Aires), which was approved on December 5, 2013 by the Ministry of Labor, Employment and Social Security (MTEySS). The effective date
of the agreement is February 1, 2014. However, current salary conditions remain in force until April 30, 2014.

Considering the
evolution of negotiations and the agreement reached by FOETRA in Buenos Aires as described above, it is probable that in 2014 mobile unionized employees will be represented by FATEL and FOEESITRA in order to replicate the national level the
agreement reached in Buenos Aires. Additionally, FOPSTTA, UPJET and CEPETEL claimed the mobile employees representation as well as the negotiation of a mobile telephony collective bargaining agreement, having initiated the administrative
procedures with the MTEySS as of the date of this Annual Report.

See Item 8Financial InformationLegal
ProceedingsCivil, commercial, labor, regulatory, tax and other matters proceedingsLabor Claims for more detail on labor claims filed against Telecom Argentina and Personal



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Employees by Segment

The table below shows the number of employees as of December 31, 2013, 2012 and 2011 by segment (1):



|                         |  |                  |        |  |                  |  |        |                  |  |  |        | 
|------------------------ |  | ---------------- | ------ |  | ---------------- |  | ------ | ---------------- |  |  | ------ | 
|                         |  | December 31,2013 |        |  | December 31,2012 |  |        | December 31,2011 | 
|Fixed Services           |  |                  | 11,002 |  |                  |  | 11,115 |                  |  |  | 11,093 | 
|Personal Mobile Services |  |                  | 5,155  |  |                  |  | 5,254  |                  |  |  | 4,820  | 
|Núcleo Mobile Services   |  |                  | 424    |  |                  |  | 439    |                  |  |  | 433    | 
|                         |  |                  |        |  |                  |  |        |                  |  |  |        | 
|Total                    |  |                  | 16,581 |  |                  |  | 16,808 |                  |  |  | 16,346 | 
|                         |  |                  |        |  |                  |  |        |                  |  |  |        | 



|(1) | Includes temporary employees
|--- | ----------------------------

Share Ownership

Share Ownership by directors, executive officers, and Supervisory Committee members

Enrique Garrido holds 231 Class B Shares of Telecom Argentina. No other member of the Board of Directors or any member of the Supervisory
Committee holds obligations or capital stock of Telecom Argentina.

Adrian Calaza holds 11,860 Class B Shares of Telecom Argentina. No
other member of Telecom Argentinas senior management holds obligations or capital stock of Telecom Argentina.

Share Ownership
Plan

At the time of the privatization of ENTel in 1990, the Argentine government created a Share Ownership Plan, or SOP, for the
employees of ENTel and CAT acquired by Telecom Argentina, Telintar, and Startel. Pursuant to the Privatization Regulations, 10% of Telecom Argentinas then-outstanding shares, consisting of 98,438,098 Class C Shares, were transferred by the
Argentine government to Telecom Argentina, Telintar, and Startel employees previously employed by ENTel and CAT. This transfer was made through a general transfer agreement signed on December 29, 1992 (the General Transfer
Agreement). Our Class C Shares consist exclusively of shares originally sold in connection with the SOP. According to applicable law, to be eligible to continue to participate in the SOP, the employees had to remain employed by Telecom
Argentina, Telintar, and Startel. Employees who terminated their employment with Telecom Argentina, Telintar, and Startel before the deferred purchase price was fully paid were required to sell their Class C Shares to another employee under the SOP
or, if no other employee was available to purchase these shares, to a guaranty and repurchase fund (the Guaranty and Repurchase Fund), at a price calculated according to a formula provided in the General Transfer Agreement.

On December 9, 1999, Decree No. 1,623/99 was issued, authorizing the accelerated repayment of the outstanding balance of the
deferred purchase price for all Class C Shares, and lifting the transfer restrictions on the Class C Shares upon the satisfaction of certain conditions precedent. However, the shares held in the Guaranty and Repurchase Fund were still subject to
transfer restrictions until an injunction prohibiting trading or selling of these shares was lifted. The Decree provides that once the injunction is lifted, the sale of an amount of shares in the Guaranty and Repurchase Fund, will take place in
order to cancel the debt owed to the former employees for the acquisition of shares transferred to the Guaranty and Repurchase Fund. The remaining shares held in the Guaranty and Repurchase Fund will then be distributed in accordance with the
decision of the majority of the employees taken in a special meeting of the SOP.

In accordance with Decree No. 1,623/99, at the
extraordinary and special Class C Shareholders Meeting held on March 14, 2000, Telecom Argentinas shareholders approved the conversion of up to 52,505,360 Class C Shares into Class B Shares in one or more tranches from time to time,
as determined by the trustee of the SOP, Banco de la Ciudad de Buenos Aires, based on the availability of Class C Shares that were not affected by judicial restrictions on conversion.

A first tranche of 50,978,833 Class C Shares was converted into Class B Shares for public resale. This transaction was authorized in Argentina
by the CNV and was registered in the United States with the SEC on May 3, 2000. The rest of the Class C Shares authorized for conversion were converted into Class B Shares in four more tranches ending in 2005.

As requested by the Executive Committee of the SOP, the ordinary, extraordinary and special Class C shareholders meetings held on
April 27, 2006 approved the delegation of authority to Telecom Argentinas Board of Directors for the conversion of up to 41,339,464 ordinary Class C Shares into an equal quantity of Class B Shares, in one or more conversions. As of
December 31, 2011, all the 41,339,464 shares were converted into Class B Ordinary Shares in eleven tranches.



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The remaining 4,593,274 Class C shares were affected by an injunction measure
recorded in file Garcías de Vicchi, Amerinda y otros c/ Sindicación de Accionistas Clase C del Programa de Propiedad Participada s/nulidad de acto jurídico, which has been lifted. Therefore, the General
Ordinary and Extraordinary and Special Class C Shares Meetings held on December 15, 2011, approved the delegation of authority to Telecom Argentinas Board of Directors for the conversion of up to 4,593,274 Class C ordinary shares into an
equal quantity of Class B ordinary shares in one or more tranches. As a result, 4,325,836 Class C Shares have been converted to Class B Shares in seven tranches. As of the date of this Annual Report, the outstanding number of Class C Shares is
267,438.



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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

Our
principal shareholder is Nortel. As of December 31, 2013, Nortel owned all of Telecom Argentinas Class A Ordinary Shares (51% of Telecom Argentinas total capital stock) and approximately 7.64% of the Class B Ordinary Shares
(3.74% of Telecom Argentinas total capital stock) which, in the aggregate, represented approximately 54.74% of the total capital stock or 55.6% of the total outstanding shares considering the 15,221,373 Class B Ordinary Shares which were
repurchased and are held in treasury. Telecom Argentina is directly controlled by Nortel by virtue of Nortels ownership of a majority of Telecom Argentinas capital stock; however, Nortels controlling interest is subject to certain
agreements among Soforas shareholders. See Shareholders of Nortel below.

Nortel was incorporated in Buenos Aires,
Argentina on October 19, 1990 and registered with the Buenos Aires Public Registry of Commerce on October 31, 1990 under No. 8,025, book 108, Volume A of Corporations. Nortel is a holding company that was formed in 1990 by
a consortium including the Telecom Italia Group and FCR in connection with the privatization of ENTel and formation of Telecom Argentina.

In the event of certain payment defaults or breaches of covenants, holders of Nortels preferred stock collectively have the right to
elect one director of Nortel and obtain voting rights.

Nortels offices are located at Alicia Moreau de Justo 50, 11th floor, Buenos
Aires, Argentina.

Shareholders of Nortel

All of Nortels ordinary shares are owned by Sofora. Soforas shares are owned by the Telecom Italia Group (68%) and W de
Argentina  Inversiones S.L. (32%).

As of December 31, 2013, Nortels capital stock was represented by ordinary shares
(78.38% of the capital stock) and Preferred Series B shares (21.62% of the capital stock).

During 2011, Telecom Italia International N.V.
(a company of the Telecom Italia Group) acquired 8% of Nortels total Series B Preferred Shares (without voting rights) and also made a public announcement together with Telecom Italia S.p.A. regarding the acquisition of Series B Shares
representing 1.58% of Telecom Argentinas capital stock through the local company Inversiones Milano S.A. (which has changed its name to Tierra Argentea S.A.).

As of the date of this Annual Report, the Telecom Italia Group indirect stake in Telecom Argentina amounts to 19.3% of its economic rights.

W de ArgentinaInversiones S.L., Telecom Italia S.p.A. and Telecom Italia International N.V. have signed a shareholders
agreement for the joint management of Sofora, Nortel, Telecom Argentina and its subsidiaries, including Personal which was amended in August 2010, October 2010 and March 2011. See Shareholders Agreement below.

On August 5, 2010, the Shareholders Agreement was amended by the parties. As a result of the commitment of the shareholders of
Sofora Telecomunicaciones S.A. before the CNDC, on October 13, 2010 further modifications were introduced. On March 9, 2011, in connection with the transfer of 10% of the share capital of Sofora Telecomunicaciones SA in favor of Telecom
Italia International NV held on that date, further amendments to the Shareholders Agreement were introduced in order to preserve the government rights that parties had until then, clarifying that even though W de ArgentinaInversiones SL
would have 32% of the share capital of Sofora Telecomunicaciones SA, W de ArgentinaInversiones SL kept the same government rights that it had under the Shareholders Agreement, as it if continued to hold 42% of the share capital of Sofora
Telecomunicaciones SA (hereinafter the Shareholders Agreement and its modifications, the New Shareholders Agreement). For additional information about the New Shareholders Agreement, see Shareholders
Agreement.



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On November 14, 2013 Telecom Italia S.p.A and Telecom Italia International N.V.
(collectively, the Sellers) and Tierra Argentea S.A. (Tierra Argentea, a company controlled by the Sellers) announced their acceptance of the offer made by Fintech to acquire Telecom Italias controlling stake in Telecom
Argentina owned by the Sellers through their subsidiaries Sofora, Nortel, and Tierra Argentea. The purchase offer was for a total amount of US$960 million, of which US$859.5 million will be paid as consideration for the sale of:



| |  |  | 68% of the ordinary shares of Sofora held by Telecom Italia and Telecom Italia International (US$750.8 million);
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | 15,533,834 Class B Shares of Telecom Argentina, representing 1.58% of the share capital, held by Tierra Argentea (US$61.2 million);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | 2,351,752 American Depositary Shares, representing 117,588 Preferred B Shares of Nortel, equal to 8% of the Preferred B Shares held by Tierra Argentea (US$47.5 million).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The remaining US$100.5 million will be paid pursuant to additional agreements related to the transaction, including an agreement to continue
providing the Telecom Argentina companies technical support and other services for up to three years, the waiver and amendment of certain rights under the current Shareholders Agreement relating to Telecom Argentina, in favor of the Werthein
Group, which will retain 32% of the voting shares of Sofora, and the commitment by Fintech to pay amounts already reserved for dividends by Telecom Argentina, if such dividends are not declared and paid by the Telecom Argentina group prior to
closing.

In implementing the above-mentioned agreements, on December 10, 2013, the Class B Shares of Telecom Argentina and the Class
B Shares of Nortel owned by Tierra Argentea were transferred to Fintech for a total amount of US$108.7 million. As a result, the Telecom Italia Groups economic interest in Telecom Argentina is now reduced to 19.3%.

The transfer of the shares held by the Telecom Italia Group in Sofora is conditional upon prior approval by regulatory authorities.

If the transaction is consummated, Fintech will have the ability to exert significant control over us, including the right to nominate,
through our parent companies, Sofora and Nortel, the majority of our directors pursuant to the terms of the Shareholders Agreement.

The Telecom Italia Group

The Telecom Italia Group operates mainly in Europe, the Mediterranean Basin and South America.

The Telecom Italia Group is engaged principally in the communications sector and, particularly, the fixed and mobile national (Italy) and
international telecommunications sector.

As of December 31, 2013, the Telecom Italia Group had approximately 13.2 million
physical accesses (retail) in Italy, a decrease of 0.8 million compared to December 31, 2012. The Wholesale customer portfolio in Italy reached approximately 7.2 million accesses for telephone services at December 31, 2013
(stable compared to December 31, 2012).

The Broadband portfolio in Italy reached 8.7 million accesses at December 31, 2013
(consisting of approximately 6.9 million retail accesses corresponding to a market share of approximately 50% and 1.8 million wholesale accesses), a decrease of approximately 0.2 million compared to December 31, 2012.

In addition, the Telecom Italia Group had approximately 31.2 million mobile telephone lines in Italy at December 31, 2013, a
decrease of approximately 0.9 million compared to December 31, 2012.

As of December 31, 2013, the Telecom Italia Group had
73.4 million mobile telephone lines in Brazil (70.4 million at December 31, 2012).



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W de Argentina  Inversiones S.L.

W de Argentina  Inversiones, a company of the Werthein Group, is a company owned by Daniel Werthein, Adrián Werthein, Gerardo
Werthein and Darío Werthein. The Werthein Groups main lines of business include farming and oil operations, insurance and real estate activities, as described below:



| |  |  | Farming and Oil Operations. Gregorio, Numo y Noel Werthein S.A.A.G.C. e I. (GNNW) is the name of the company that handles the businesses of the Werthein Group, mainly related to agribusiness
activities and food products. The company owns more than 196,453 acres in the primary farming areas of Argentina, harvesting more than 43,144 tons of different crops and with more than 23,820 heads of cattle dedicated to meat production. It is also
involved in the manufacturing of processed fruits as well as teas and other infusions. Most of its products are aimed at the international markets with important exports worldwide. GNNW is also carrying out, through joint ventures, studies,
exploration and exploitation of hydrocarbon in Province of La Pampa, Argentina.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Insurance Activities. The Werthein Group controls Los W S.A., which has an interest in Caja de Ahorro y Seguro S.A., or CAYSSA, a leading insurance company in Argentina. CAYSSA controls, directly or indirectly,
several subsidiaries that offer general, personal, life, accident, work risk insurance products and retirement insurance and life insurance products that complement retirement insurance. CAYSSA also has shareholdings in companies that provide
marketing services and travelers assistance services.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Real Estate Activities. The Werthein Group conducts real estate, construction, consulting, public works and other real estate-related activities through its interests in other companies.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Ownership of Telecom Argentina Common Stock

The following table sets forth, as of March 31, 2014, based upon information available to us, each beneficial owner of 5% or more of each
class of Telecom Argentinas shares. However, current holdings may be different.



|                                                  |  |                       |             |  |                 |  |        |                                  |  |  |       |  
|------------------------------------------------- |  | --------------------- | ----------- |  | --------------- |  | ------ | -------------------------------- |  |  | ----- | -
|                                                  |  | Number ofShares Owned |             |  | Percentof Class |  |        | Percent ofTotal CapitalStock (1) | 
|Class A Ordinary Shares:                          |  |                       |             |  |                 |  |        |                                  |  |  |       |  
|Nortel                                            |  |                       | 502,034,299 |  |                 |  | 100.00 | %                                |  |  | 51.00 | %
|Class B Ordinary Shares(listed in NYSE and BCBA): |  |                       |             |  |                 |  |        |                                  |  |  |       |  
|ANSES                                             |  |                       | 246,018,839 |  |                 |  | 51.03  | %                                |  |  | 24.99 | %
|Nortel                                            |  |                       | 36,832,408  |  |                 |  | 7.64   | %                                |  |  | 3.74  | %
|Treasury Shares                                   |  |                       | 15,221,373  |  |                 |  | 3.16   | %                                |  |  | 1.55  | %
|Others                                            |  |                       | 184,006,621 |  |                 |  | 38.17  | %                                |  |  | 18.69 | %
|Class C Ordinary Shares:                          |  |                       |             |  |                 |  |        |                                  |  |  |       |  
|Others                                            |  |                       | 267,438     |  |                 |  | 100.00 | %                                |  |  | 0.03  | %



|(1) | Represents percentage of total of all our ordinary shares, regardless of class.
|--- | -------------------------------------------------------------------------------

As of
March 31, 2014, there were approximately 28.9 million American Depositary Shares outstanding (representing 144.6 million Class B Shares or 33.6% of total Class B Shares, excluding those held by Nortel and Treasury Shares). Moreover,
as of that date, there were approximately 90 registered holders of Class B Shares represented by American Depositary Shares in the United States and approximately 21,000 depositaries of Class B Shares in Argentina. Because some Class B Shares are
held by representatives, the number and domicile of registered shareholders may not exactly reflect the number and domicile of beneficial shareholders.

All shares have equal voting rights. Nevertheless, pursuant to Section 221 of the LSC, the rights of treasury shares shall be suspended
(including voting rights) until the shareholders in a Shareholders ́ Meeting determine the allocation of such shares.

On
November 14, 2013 Telecom Italia S.p.A and Telecom Italia International N.V. (collectively, the Sellers) and Tierra Argentea S.A. (Tierra Argentea, a company controlled by the Sellers) announced their acceptance of the
offer made by Fintech to acquire Telecom Italias controlling stake in Telecom Argentina owned by the Sellers through their subsidiaries Sofora, Nortel, and Tierra Argentea.

On December 10, 2013 Tierra Argentea completed the transfer to Fintech of (i) Class B shares of Telecom Argentina, representing
1.58% of the capital stock of such company, and (ii) Nortels ADRs representing 8% of the aggregate Series B Preferred Shares of Nortel.



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The transfer of the shares held by the Telecom Italia Group in Sofora is conditional upon prior
approval by regulatory authorities. See Shareholders of Nortel.

As of December 31, 2013, indirect economic
interest of Telecom Italia in Telecom Argentina totaled 19.3%.

Telco and TI-W Commitments

On October 25, 2007, a consortium made up of Assicurazioni Generali S.p.A., Intesa Sanpaolo S.p.A., Mediobanca S.p.A., Sintonia S.A.
(Benetton) and Telefónica, S.A. (of Spain) bought Olimpia S.p.A.s entire stock through the Italian company Telco S.p.A., which held approximately 23.6% of Telecom Italia S.p.A.s voting shares (the Telco Transaction).
On December 22, 2009, Sintonia S.A. (Benetton) left the consortium and its participation was assumed by the remaining shareholders of Telco S.p.A. on a pro rata basis. As of December 31, 2013, Telco holds 22.4% of Telecom Italia
S.p.A.s voting shares.

The Telco Transaction has generated different opinions with respect to its impact on Argentinas
telecommunications market in light of the Argentine Antitrust Act and the existing regulatory framework.

Consequently, the Telco
Transaction led to the intervention of various administrative bodies whose decisions have been subject to various presentations and complaints before administrative and judicial courts.

On August 5, 2010, Telecom Italia S.p.A., Telecom Italia Internacional N.V. and W de Argentina agreed to:

 A settlement agreement to end all legal proceedings existing between the parties as direct shareholders of Sofora and
indirect shareholders of the remaining companies of the Telecom Argentina Group (Sofora, Nortel, Telecom Argentina and its subsidiaries and Personal and its subsidiaries), which had been originated as a result of the Telco Transaction.

 Amend the 2003 Shareholders ́ Agreement. The amendment includes, among other things, certain measures to guarantee
a more efficient corporate governance of the Telecom Argentina Group companies. As part of the agreement, a Telecom Argentina and Personals Regulatory Compliance Committee was created and will remain in place for as long as Telefónica,
S.A. (of Spain) owns any subsidiaries in Argentina and concurrently maintains any direct or indirect participation in the Telecom Italia Group and maintains corporate rights similar to those provided by the Telco Transaction.

 The transfer of 8% of the capital stock of Sofora from W de Argentina to Telecom Italia International N.V., subject to
the applicable authorizations. This increased Telecom Italia Groups participation to 58% of the capital stock of Sofora (the TI-W Transaction).

On October 6, 2010, Telefónica, S.A. (of Spain), Assicurazioni Generali S.p.A., Intesa Sanpaolo S.p.A., Mediobanca S.p.A., Telco
S.p.A, and, as intervening parties, Telecom Italia S.p.A., Telecom Italia International N.V., Sofora, Nortel, Telecom Argentina, Personal, Telefónica de Argentina S.A. and Telefónica Móviles Argentina S.A., submitted before the
CNDC an agreement (the Telco Commitment). The Telco Commitment ensures the separation and independence of the activities in the Argentine telecommunications market, of Telefónica, S.A. (of Spain) and its controlled subsidiaries,
on one hand, and Telecom Italia S.p.A., Telecom Italia International N.V., Sofora, Telecom Argentina and Personal, on the other, preserving and encouraging the competition conditions of such companies activities in the national market.

In addition, in connection with the TI-W Transaction, Soforas shareholders submitted before the CNDC an agreement with respect to the
administration and governance of the Telecom Argentina Group (the TI-W Commitment).

On October 12, 2010, the CNDC issued
Opinions No. 835 and 836 in connection with the Telco Transaction and the TI-W Transaction, respectively. In Opinion No. 835, the CNDC advised, among other things, the Secretary of Economic Policy of the Economy Ministry to accept the
Telco Commitment with the clarifications and specifications made in Title XIV of such Opinion, and, consequently, subject the approval of the Telco Transaction, pursuant to Section 13, paragraph b) of the Argentine Antitrust Act to the
irrevocable and effective fulfilling of the Telco Commitment with the clarifications and specifications as mentioned. In addition, the CNDC made some pro-competition recommendations to the SC and to the CNC, which are included as Annex I to such
Opinion.



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The terms and conditions of the Telco Commitment offered by the abovementioned companies are
detailed in Title XIV of the abovementioned Opinion, together with the clarifications and specifications made by the CNDC.

In Opinion
No. 836, the CNDC advised, among other things, to accept the TI-W Commitment, with the clarifications and specifications made in Title V.2 of the same Opinion and, consequently, to authorize the TI-W Transaction, pursuant to Section 13,
paragraph b) of the Argentina Antitrust Act. The terms and conditions of the TI-W Commitment are described in Title V of the Opinion, together with the observations made by the CNDC.

On October 13, 2010, the Secretary of Economic Policy of the Economy Ministry issued Resolution No. 148/10 which, in its operative
part, among other issues, authorizes the Telco Transaction subject to the irrevocable and effective fulfillment of the Telco Commitment with the clarifications and specifications made in Title XIV of CNDC Opinion No. 835/10. On the
same date, the Secretary of Economic Policy of the Economy Ministry issued its Resolution No. 149/10, in which it accepted the TI-W Commitment and approved the TI-W Transaction in the terms of Section 13 paragraph b) of the Argentine
Antitrust Act.

On October 13, 2010, the SC issued Resolution No. 136/10 which, among other issues, in its operative part
authorizes the change of control that happened at Telecom Argentina and Personal as a consequence of the TI-W Transaction. On the same resolution, the legal figure of the Operator included in the List of Conditions, Decree No. 62/90 as amended,
was left without effect with respect to Telecom Argentina.

On October 13, 2010, the transfer of 8% of the shares of Sofora in favor
of Telecom Italia International N.V. was perfected. Based on information provided by Soforas shareholders, the consideration was (i) US$1 (one U.S. dollar w/o cents) and (ii) the execution of certain agreements dated as of
August 5, 2010, between the Telecom Italia Group and the Werthein Group. Thus, the Telecom Italia Group reached a participation of 58% of the shares and possible votes in Sofora while W de Argentina reached the remaining 42% of such shares and
votes.

On October 26, 2010, Telecom Argentinas Board of Directors ratified the execution by Telecom Argentina of the Telco
Commitment, accepted all the obligations and commitments that Telecom Argentina has assumed in the Telco Commitment, with the clarifications and specifications relating to them, made by the CNDC in Chapter XIV of its Opinion No. 835, and
adopted a number of measures for its effective implementation, including the creation of a Regulatory Compliance Committee. In addition, it accepted Telecom Argentinas obligations arising from the TI-W Commitment submitted to the CNDC, in the
file referring to the TI-W Transaction, with the clarifications and specifications that are referred to them, made by the CNDC in Paragraph V.2 of its Opinion No. 836 dated October 12, 2010, and adopted a series of measures for their
effective implementation.

The Telco Commitment and the TI-W Commitment are available to the public in Spanish at
www.telecom.com.ar/compromisos and a summary of them is available in English at the SEC website (www.sec.gov).

On
March 9, 2011, Telecom Italia International NV, Telecom Italia S.p.A and certain entities of the Werthein Group entered into a share purchase agreement under which the Werthein Group agreed to sell common shares of Sofora representing 10% of
Soforas share capital, to Telecom Italia International NV. Following this share transfer, Telecom Italia S.p.A and Telecom Italia International N.V. hold an aggregate of 68% of the Sofora shares. The Werthein Group owns the remaining 32% of
the Sofora shares.

Shareholders Agreement

On August 5, 2010, Telecom Italia S.p.A. and Telecom Italia International N.V. (jointly, the Telecom Italia Group) and W de
Argentina Inversiones (jointly with the Telecom Italia Group, the Parties) entered into the 2010 Amended and Restated Shareholders Agreement, as amended on October 13, 2010  as a consequence of the TI-W Commitment
 and on March 9, 2011 (the New Shareholders Agreement) that amended the provisions and terms of the 2003 Amended and Restated Shareholders Agreement (the 2003 Shareholders Agreement).



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Below is a brief summary of the main terms and conditions of the New Shareholders Agreement
and the principal amendments to the 2003 Shareholders Agreement, considering the new composition of capital stock of Sofora (68% for Telecom Italia Group and 32% for W de Argentina Inversiones):

With respect to Sofora:



| |  |  | W de Argentina shall have the right to appoint four out of nine Board members and the Telecom Italia Group shall have the right to appoint the remaining five Board members. Decisions will be made by the majority of
directors present at each meeting.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | W de Argentina shall have the right to nominate the Chairman of the Supervisory Committee.
| | - |  | ------------------------------------------------------------------------------------------

With respect to Nortel:



| |  |  | W de Argentina shall have the right to appoint two out of seven Board members and the Telecom Italia Group shall have the right to appoint four Board members. The seventh director will be nominated by the Preferred
Series A and Preferred Series B Shareholders of Nortel, as long as they have such rights in accordance with the terms and conditions of issuance of the preferred shares (as of December 31, 2013 there were no outstanding Preferred Series A
shares). In the event that Preferred Series A shares and / or Preferred Series B shares lose their right to appoint a director, the Telecom Italia Group and W de Argentina acquire the right to jointly appoint a director. As of December 31, 2012
there were no outstanding Preferred Series A shares. Decisions will be made by the majority of directors present at each meeting. In case of a tie, the chairman shall cast the deciding vote.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | W de Argentina shall be entitled to nominate the Chairman of the Audit Committee of Nortel.
| | - |  | -------------------------------------------------------------------------------------------

With respect to Telecom Argentina:



| |  |  | As a general rule, Nortel shall have the right to nominate six directors and the minority shareholders shall have the right to nominate one director. Four of the abovementioned six Board members to be nominated by
Nortel shall be nominated by the Telecom Italia Group and the remaining two shall be nominated by W de Argentina. In the event that other shareholders of Telecom Argentina had the right to appoint more than one director, the composition of the Board
of Directors of Telecom Argentina shall be modified so that the Telecom Italia Group shall nominate the majority of the members appointed by Nortel. Decisions will be made by the majority of directors present at each meeting. In case of a tie, the
Chairman shall cast the deciding vote.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | W de Argentina shall be entitled to nominate the Chairman of the Audit Committee of Telecom Argentina. The New Shareholders Agreement also provides that the resolutions of the Audit Committee shall be taken by the
unanimous vote of its members.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Chairman of Telecom Argentinas Board of Directors shall meet the following requirements: (i) be an Argentine professional of recognized reputation and (ii) shall not have served as member of the
Board of Directors or officer at any direct or indirect competitor of any company of the Telecom Argentina Group in the Argentine telecommunications market within the previous twelve months from his appointment.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The New Shareholders Agreement provides for the establishment of a Regulatory Compliance Committee for Telecom Argentina, composed of
three members to be selected among the members of Telecom Argentinas and Personals Boards of Directors, other than those members nominated exclusively by the Telecom Italia Group or jointly with W de Argentina.

The New Shareholders Agreement also provides for the establishment of a Steering Committee for Telecom Argentina, which shall be
composed of two members appointed by the Telecom Italia Group and two members appointed by W de Argentina. The Steering Committee shall be in charge of resolving matters concerning Telecom Argentinas business plan, annual budget and general
employee compensation policy for Telecom Argentina and Personal, among others. The Steering Committee shall meet with the majority of its members and resolve any matter by unanimous vote of the members attending the meeting. In case any matter is
not approved by the unanimous vote of its members, the Board of Directors shall resolve such matter.



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The New Shareholders Agreement still provides for meetings between the Telecom Italia Group
and W de Argentina (set forth in Section 4 of the New Shareholders Agreement) before Shareholders or Board of Directors meetings of Sofora, Nortel, Telecom Argentina or its subsidiaries regarding matters that must be treated
at shareholders meetings or those related to preferred Shareholders of Nortel, but it excludes resolutions to be adopted by certain non-executive committees. Therefore, the resolutions to be adopted at the Audit Committee, the Supervisory
Committee and the Regulatory Compliance Committee will not be dealt with in such prior meetings, but following the rules of the majority of each of those committees.

Similar to the 2003 Shareholders Agreement, two members of the Telecom Italia Group and one member of W de Argentina shall attend the
meetings and the decisions will be taken through the affirmative vote of the majority of its members.

W de Argentina shall maintain
substantially similar veto rights as provided for in the 2003 Shareholders Agreement, upon the following matters:



| |  |  | the approval of any amendment to the bylaws, other than the amendments expressly set forth in the New Shareholders Agreement;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | dividend policy;
| | - |  | ----------------



| |  |  | any capital increase or decrease, except for any capital increase or decrease connected to any possible debt restructuring;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | changing the location of the headquarter offices;
| | - |  | -------------------------------------------------



| |  |  | any acquisition of subsidiaries and/or creation of subsidiaries;
| | - |  | ----------------------------------------------------------------



| |  |  | the sale, transfer, assignment or any other disposition of all or substantially all of the assets or any of its subsidiaries;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | decisions relating to the establishment of joint ventures;
| | - |  | ----------------------------------------------------------



| |  |  | constitution of any charges, liens, encumbrance, pledge or mortgage over assets, exceeding the amount of US$20,000,000 (twenty million U.S. dollars);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any change of external auditors, to be chosen among auditors of international reputation;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | any related party transaction which is not carried out according to usual market conditions, exceeding the amount of US$5,000,000, with the exception of (i) any correspondent relationships, traffic agreement and/or
roaming agreements with any national and/or international telecommunications carriers/operators, including the establishment, expansion or amendment of such correspondent relationships with any new telecommunications carriers; and (ii) any
transaction connected with the debt restructuring;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any extraordinary transaction involving the Telecom Argentina Group, exceeding the amount of US$30,000,000, except for any operation connected with the debt restructuring of the Telecom Argentina Group; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any change to the rules of the Steering Committee, the Regulatory Compliance Committee or the Audit Committee; and the creation, changes or dissolution of any committee of the Telecom Argentina Group with similar
functions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On November 14, 2013 Telecom Italia S.p.A and Telecom Italia International N.V. (collectively, the
Sellers) and Tierra Argentea S.A. (Tierra Argentea, a company controlled by the Sellers) announced their acceptance of the offer made by Fintech to acquire Telecom Italias controlling stake in Telecom Argentina owned by
the Sellers through their subsidiaries Sofora, Nortel, and Tierra Argentea. See Item 7Major Shareholder and Related Party TransactionsShareholders of Nortel.

Pursuant to the Mutual Shareholder Release and the Deed of Adherence each dated as of November 13, 2013, upon the closing of the Fintech
transaction, all of the Sellers rights, liabilities and obligations under the Shareholders Agreement will be terminated, and Fintech will irrevocably and unconditionally adhere to the Shareholders Agreement as a party thereto.



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Changes in Telco S.p.A. ́s ownership

As disclosed by Telecom Italia S.p.A. hereinafter TI in its latest Annual Report on Form 20-F, the Italian company
Telco is one of its main shareholders, with a participation of the 22.39% of the voting shares of TI, the company that indirectly controls Telecom Argentina S.A.

On September 24, 2013, the Companys Management became aware that Telefónica, S.A. (de España), hereinafter
Telefónica, publicly disclosed that it had reached an agreement with the other Telco shareholders with respect to their ownership of Telco. On the same day, the Company issued a Relevant Fact notification pursuant to the CNV
rules, reproducing the information published by Telefónica. The pertinent portion of Telefónicas notification states as follows:

Telefónica and the remaining shareholders of the Italian company Telco, S.p.A. (which holds a capital stake of 22.4% of the
voting share capital of Telecom Italia S.p.A.) have reached an agreement by virtue of which:

As of today, Telefónica has
subscribed for and paid out a capital increase in Telco, S.p.A., through the contribution of 323,772,468 euros in cash, receiving in return non-voting shares of Telco, S.p.A. As a result of this capital increase, the interest held by
Telefónica in the voting share capital of Telco, S.p.A. remains unchanged (i.e. 46.18%, as Telefónica currently holds), although its interest in the total share capital of Telco, S.p.A. is increased to 66%. The current governance at
Telco, S.p.A.s level remains unaffected, including the obligation by Telefónica of abstaining from participating or influencing in any decisions which could affect the markets in which both Telefónica and Telecom Italia S.p.A.
are present.

Telco, S.p.A. will use the proceeds received from the capital increase to reduce its banking debt.

Subject to receiving any required anti-trust and telecommunications approvals (including in Brazil and Argentina), Telefónica will
subscribe for and pay out a second capital increase in Telco, S.p.A., through the contribution of 117,227,532 euros in cash and receiving in return non-voting shares of Telco, S.p.A. As a result of this second capital increase, the interest of
Telefónica in the voting share capital of Telco, S.p.A. will remain unchanged (i.e. 46.18%, as Telefónica currently holds), although its interest in the total share capital will be then increased to 70%.

Telco, S.p.A. will use the proceeds received from the second capital increase to partially repay its notes.

Starting from January 1, 2014, subject to receiving any required relevant antitrust and telecommunications approvals (including in
Brazil and Argentina), Telefónica may convert all or a portion of the non-voting shares in Telco, S.p.A. held by Telefónica, reaching a maximum of 64.9% of the voting share capital of Telco, S.p.A.

The Italian shareholders of Telco, S.p.A. have granted to Telefonica a call option to acquire all of their shares in Telco, S.p.A., whose
exercise is subject to receiving any required anti-trust and telecommunications approvals (including in Brazil and Argentina). The call option may be exercised by Telefonica starting from January 1, 2014 while the Shareholders ́ Agreement
remains in effect, except (i) between June 1,2014 and June 30, 2014 and between January 15, 2015 and February 15, 2015, and (ii) during certain periods, in case the Italian shareholders Telco, S.p.A. request the
demerger of Telco, S.p.A.

The purchase price of the shares, payable in cash, will be based on the equity of Telco, S.p.A. at the
end of the month prior to the closing. For this purpose, the value of the shares in Telecom Italia S.p.A. held by Telco, S.p.A. will be valued at the higher of: (i) 1.10 euros per share of TI, and (ii) the average closing trading price of
the 30 days prior to the call option exercise notice.

As of today, Telefónica will acquire from the remaining Telco,
S.p.A.s shareholders 23.8% of the non-convertible notes issued by Telco, S.p.A., in exchange of 39,021,411 Telefónicas treasury shares, which represent 0.9% of its share capital. In this respect, the remaining Telco, S.p.A.s
shareholders have committed: i) to refrain from selling the aforementioned shares during the next 15th business days, and ii) to assume some restrictions that, in case of sale, ensure an orderly sale of such shares.

Telefónica has assumed a standstill obligation under which Telefónica commits not to buy shares in Telecom Italia S.p.A.
except if a third party acquires a relevant stake (10% or higher) in the aforementioned company.

Madrid, September 24,
2013.



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Related Party Transactions

We have been involved in a number of transactions with our related parties since the Transfer Date.

Our policy is to make transactions with related parties on arms-length basis. In addition, Section 72 of Law No. 26,831
provides that before a publicly-listed company may enter into an act or contract involving a relevant amount with a related party or parties, the publicly-listed company must obtain approval from its Board of Directors and obtain a
valuation report from its Audit Committee or two independent valuation firms that demonstrates that the terms of the transaction are consistent with those that could be obtained at an arms-length basis. For the period that Telecom
Argentinas Audit Committee was not yet operational, the valuation report from two independent firms was optional. If the Audit Committee or two independent valuation firms do not find that the terms of the contract are consistent with those
that could be obtained on an arms-length basis, approval must be obtained from the shareholders. Relevant amount means an amount which exceeds 1% of the issuers equity as contained in the latest approved financial statements.

Transactions with related parties of Sofora (including Telecom Italia and W de ArgentinaInversiones and/or their respective
affiliates) resulted in expenses or purchases of approximately P$479 million for the year ended December 31, 2013. Of that amount, P$405 million was incurred with Telecom Italia and its affiliates for telecommunications services received by
Telecom, international capacity hiring, purchases of equipment and materials and other services provided to Telecom, and P$74 million incurred with W de ArgentinaInversiones affiliates for insurance and labor costs.

Transactions with related parties of Sofora resulted in income for services rendered by us of approximately P$266 million for the year ended
December 31, 2013, corresponding to payments from Telecom Italia and its affiliates of P$35 million and from W de ArgentinaInversiones of P$231 million for telecommunications services provided by Telecom.

In addition, there were no financial transactions with related parties of Sofora for the year.

See Note 27 to our Consolidated Financial Statements for more detail regarding related parties transactions for the year ended
December 31, 2013.

During 2012, Telecom Argentina and Personal entered into technical services agreements with Telecom Italia. The
technical service agreement of Telecom Argentina expired in December 2012 and the technical service agreement of Personal expired in March 2014. These agreements were submitted to an independent firm for evaluation, which found them to be
reasonable and in accordance with market practice in all material respects and in accordance with the procedure established by Law No. 26,831 for contracts with related parties. These were also submitted and approved by
Telecom Argentinas Audit Committee and its Board of Directors. Under the Personal agreement, P$14.3 million were incurred in expenses for the year ended December 31, 2013.

As of the date of this Annual Report, Telecom Argentina and Personal new technical services agreements with Telecom Italia are pending
renegotiation.

As of December 31, 2013, we had no loans outstanding to the executive officers of Telecom Argentina.

Interests of Experts and Counsel

Not
applicable.



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ITEM 8. FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

See Item 18 for the Companys Financial Statements. For a description of events that have occurred since the date of the
Companys Financial Statements, see Item 4Information on the CompanyIntroductionRecent Developments.

Legal
Proceedings

Civil, commercial, labor, regulatory, tax and other matters proceedings

We are parties to several civil, tax, commercial, labor and regulatory proceedings and other claims that have arisen in the ordinary course of
business. As of December 31, 2013, Telecom has established provisions, excluding asset retirement obligations and restructuring provision, in an aggregate amount of P$1,236 million to cover potential losses related to these claims and
proceedings in its Consolidated Financial Statements (P$85 million for regulatory deducted from assets and P$1,151 million included under liabilities). In addition, as of December 31, 2013, P$63 million deposited in the Companys bank
account have been restricted to be used due to some judicial proceedings.

See Note 17 to our Consolidated Financial Statements for
additional information.

Labor Claims

Labor Claims for which ENTel is Liable

The Transfer Agreement provides that ENTel, and not Telecom Argentina, is liable for all amounts owing in connection with claims based upon
ENTels contractual and statutory obligations to former ENTel employees, whether or not these claims are made prior to the Transfer Date, if the events giving rise to these claims occurred prior to the Transfer Date. Certain former employees of
ENTel have brought claims against Telecom Argentina, arguing that notwithstanding what the Transfer Agreement or an executive act of the Argentine government stipulate, Telecom Argentina should be held jointly and severally liable for claims made
prior to the Transfer Date. The Supreme Court concluded that transferees under privatizations may be held jointly and severally liable for obligations arising from employment contracts prior to the Transfer Date.

As of December 31, 2013, the total amount of these labor claims filed against Telecom Argentina, including accrued interest and expenses,
was approximately P$2 million. Interest and expenses will continue to accrue on any pending amount until it is paid in full. Telecom Argentina believes that the pending claims will not have a significant effect on our results of operations or
financial position for two reasons: (1) under the Transfer Agreement, ENTel has expressly agreed to indemnify Telecom Argentina in respect of these claims and (2) the Argentine government has agreed to be jointly and severally liable with
ENTel in respect of these indemnity obligations and has authorized Telecom Argentina to debit an account of the Argentine government at Banco de la Nación Argentina for any amounts payable by the Argentine government under this indemnity.
Under the Debt Consolidation Act, ENTel and the Argentine government may discharge their above-described obligations to Telecom Argentina by issuing 16-year bonds to Telecom Argentina. In its ruling, the Supreme Court recognized the right of
licensees to demand that the Argentine government comply with its Transfer Agreement obligations.

Although we cannot guarantee the
outcome of these proceedings, in the opinion of Telecom Argentinas Management and its internal legal counsel, the final outcome will not have a material effect on our financial position, results of operations and cash flows. Moreover, over the
years, evolution of these claims resulted in proceedings that individually and in the aggregate are not material.

Profit Sharing
Bonuses

Various legal actions were brought, mainly by former employees of Telecom Argentina, against the Argentine government and
Telecom Argentina, requesting that Decree No. 395/92  which expressly exempts Telecom Argentina from issuing the profit sharing bonuses provided in Law No. 23,696  be struck down as unconstitutional. The plaintiffs also
claim compensation for damages they suffered because such bonuses have not been issued. In August 2008, the Argentine Supreme Court of Justice found Decree No. 395/92 unconstitutional when resolving a similar case against Telefónica
and ordered that the proceedings be remanded back to the court of origin so that such court could



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decide which defendant was compelled to pay the licensee and/or the Argentine government- and the parameters that were to be taken into account in order to quantify the remedies requested
(percent of profit sharing, dismissals of claims due to expiration of the applicable statute of limitations, and distribution method between the program beneficiaries). The Supreme Court of Justice has deemed that the resolution against
Telefónica ́s case is applicable to Telecom Argentina when resolving the appeals filed by Telecom Argentina. That criterion has been followed by lower courts.

The Supreme Court has left the determination of incidental issues to the lower courts and asked to take into account that it was the Argentine
government who issued the legal rule found to be unconstitutional. On that basis, most of the appellate courts have also found the Argentine government liable and established different methods to calculate the compensation.

Telecom Argentina has filed motions in support of its rights, regarding for example the statute of limitations and the method to calculate the
compensation.

In December 2013, the Argentine Supreme Court ruled on a similar case, Domínguez c/ Telefónica de
Argentina S.A., overturning a lower court ruling that had barred the claim as having exceeded the applicable statute of limitations since ten years had passed since the issuance of Decree 395/92.

The Argentine Supreme Court ruling states that the Civil and Commercial Proceedings Court must hear the case again to consider statute of
limitations arguments raised by the appellants that, in the opinion of the Argentine Supreme Court, were not considered by the lower court and are relevant to the resolution of the case.

At the date of issuance of this Annual Report, there is no assurance as to how such similar case may be resolved, either by a new ruling at
the lower court or by any further appeal.

If the expiration of the statute of limitations is not computed as from the date of issuance of
Decree No. 395/92 as a result of future jurisprudential interpretation, the estimated increase in Telecom Argentina provisions could range between P$30 million and P$35 million.

As of December 31, 2013, Telecom Argentinas Management, with the advice of its legal counsel, has recorded provisions for
contingencies that it estimates are sufficient to cover the risks associated with these claims, having considered the legal background.

Additionally, on June 3, 2013 Telecom Argentina was notified of a lawsuit filed by four unions claiming the issuance of a profit sharing
bonus (hereinafter the bonus) for future periods and for periods for which the statute of limitations is not expired. In order that this claim will be sustained, the plaintiffs require that Decree No. 395/92 should be declared
unconstitutional.

Telecom Argentina, based on the advice of its legal counsel, believes that there are strong arguments to defend its
rights based on the expiration of the statute of limitations of the claim for the unconstitutionality of Decree No. 395/92 and the lack of active legal standing for collective claim for bonus issuance due to the existence of individual claims,
among other reasons.

This collective lawsuit is for an unspecified amount. The plaintiffs presented the criteria that should be applied
for the determination of the percentage of participation in the Companys profit. The lawsuit requiring the issuance of a profit sharing bonus represents an obligation with potential future economic impacts for Telecom Argentina.

In June 2013, Telecom Argentina filed its answer to the claim, arguing that the labor courts lack jurisdiction. On October 30, 2013, the
judge rejected the lack of jurisdiction plea and deferred ruling on the defenses of res judicata, lis pendens and on the third party citation required until after a hearing is held by the court. Telecom Argentina has appealed the judges
ruling.

On December 12, 2013 this hearing took place and the intervening court deferred the defense of statute of limitations filed
by Telecom Argentina to the moment of the final ruling. It also ordered the plaintiff to establish that they have permission to bring the case of behalf of the Companys employees included in the claim; meanwhile the trial proceeding will be
suspended. The plaintiff appealed the decision and the judge deferred this issue to the time of sentencing.

In addition, on
February 27, 2014, the Civil and Commercial Appeals Court issued its decision in a Telefónica de Argentina case, ruling that the amount of a profit sharing bonus should be calculated based on the revenues earned in each period deducting
all ordinary and extraordinary expenses before income tax obtained by Telefónica de Argentina S.A. Telecom Argentina is analyzing the impact that this rule could have in the following civil and commercial judicial decisions in which Telecom
Argentina is a party.



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As of the date of Annual Report, Telecom Argentinas appeal is pending until the
documentation requested by the Court of the plaintiffs is resolved.

Contractors and Subcontractors Employees Labor Claims

In recent years, certain contractors and subcontractors employees have brought lawsuits against subcontractors and Telecom
Argentina claiming for direct or indirect responsibility based on a broad interpretation of the rules of labor law. The plaintiffs claimed for the application of the telecommunication bargain collective agreement instead of the telecommunication
section of construction collective agreement, resulting in wage differences. As of the date of this Annual Report, Telecom Argentinas Management, based on the advice of its legal counsel, has recorded provisions that it estimates are adequate
to hedge the risks associated with these claims.

Wage differences by food vouchers and non-remunerative sums

The Company is subject to various lawsuits initiated by some employees and former employees who claim wage differences caused by the impact of
the concepts of non-remunerative sums (amounts not subject to social security contributions) and food vouchers over the settlement of items such as overtime, productivity, vacation, supplementary annual salary and other
additional benefits provided by the Collective Bargaining Agreement. In this regard, the Supreme Court of Justice has recognized that food vouchers are remunerative and are part of the employees compensation, declaring the unconstitutionality
of Sect. 103 bis, inc. C of the Argentine Employment Contract Act (which gives them the character of social benefits). In addition, the Supreme Court of Justice in a case against Cervecería y Maltería Quilmes ruled that
non-remunerative items resulting from collective bargaining agreements should be considered salaries for all purposes. Considering the judicial precedents, as of December 31, 2013, the Companys Management, based on the advice
of its legal counsel, has recorded a provision that it estimates is sufficient to cover the risks associated with these claims.

Sales
representative claims

Former sales representatives of Personal have brought legal actions for alleged untimely termination of their
contracts and have submitted claims for payment of different items such as commission differences, seniority bonuses and lost profit. Personal believes, based on the advice of its legal counsel, that certain items included in the claims would not be
sustained while other items, if sustained, would result in significantly lower amounts. As of the date of this Annual Report, Personals Management, based on the advice of legal counsel, has recorded provisions that it estimates are sufficient
to cover the risks associated with these claims. However, we cannot guarantee the outcome of these proceedings.

Tax Matters

Tax Matters Relating to Telecom Argentina

In December 2008, the National Congress approved Law No. 26,476, the Law on Tax Regularization and Repatriation of Capital
establishing a regime for the regularization of tax liabilities, the repatriation of funds and the registration of employees. Title I of the law provides taxpayers with a complete exemption for penal responsibilities in tax matters, for fines and a
partial exemption for interest arising out of tax or social security liabilities prior to December 31, 2007.

As discussed in
previous Annual Reports, Telecom Argentina was party to various legal proceedings arising from claims by AFIP with regards to:

(a)
AFIPs claim for income tax for fiscal years 1993 to 1999 arising from its disagreement with Telecom Argentinas calculation of the depreciation of its fiber optic network;

(b) AFIPs claims for income tax for fiscal years 1997 to 2000 challenging Telecom Argentinas certain deductions it made for bad
debt expenses; and

(c) AFIPs claims regarding invoices for certain kinds of services.

Upon detailed analysis of the Regularization Regime, on April 30, 2009 Telecom Argentina decided to settle the AFIPs claims in the
time frame established by Title I of the above-mentioned law. The settlement for the above-mentioned tax claims was complete except for item (b), which was partially settled.



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In order to qualify for the Regularization Regime, Telecom Argentina had to voluntarily dismiss
legal proceedings previously initiated against AFIPs claims. As a result of the Regularization Regime, regarding the matter mentioned in (c) above, Telecom Argentina has requested the Court to suspend the penal proceedings and dismiss the
claims against officers and employees who had been called to give testimony, since the law provides for the suspension of penal proceedings upon adoption of the Regularization Regime, and complete extinguishment of a penal case upon cancellation of
all amounts due under the payment plan pursuant to this Regime. As of the date of this Annual Report, a decision of the Court on this matter is still pending.

Telecom Argentinas compliance with the Regularization Regime generated recognition of a debt owed to AFIP in the amount of P$38 million
(nominal value) payable in 120 monthly installments at an annual interest rate of 9%. The Company also recognized a debt for legal fees in connection with these regularized processes in the amount of P$14 million (nominal value). The value of both
liabilities has been set forth under the captions Income Tax Payables and Other Liabilities classified by the nature and due date of each liability. As of December 31, 2013 such liabilities amounted to P$13 million
and P$13 million, respectively.

Tax Matters Relating to Personal

In December 2006, the AFIP assessed an additional income tax and tax on minimum presumed income for the 2000 and 2001 tax years claiming that
Personal incorrectly deducted certain uncollectible receivables. Personal appealed this assessment before the National Fiscal Tribunal. The AFIPs claim is contrary to certain legal precedents issued by the National Fiscal Tribunal. On
February 4, 2014, the National Fiscal Tribunal rejected the AFIPs claim. Personal and its legal counsel believe that the matter would be resolved in its favor unless additional proceedings are filed, if any.

Provincial Taxes

Some
provincial tax authorities have filed claims regarding turnover tax and stamp tax. As of the date of this Annual Report, the Companys Management has recorded provisions that it estimates are adequate to hedge the risks.

Municipal Fees

Since
2005, the Company has seen a noticeable increase in legal and extrajudicial claims seeking the collection of various municipal fees in the City of Buenos Aires and various municipalities. As of the date of this Annual Report the Company has recorded
provisions that estimate sufficient to cover these claims.

Regulatory Proceedings

There are several penalty procedures that have been initiated against Telecom Argentina with respect to alleged regulatory violations between
2000 and 2013. Most of those procedures are related to delays in repairing defective fixed lines and/or installing new fixed lines.

Although generally a penalty considered on an individual basis does not have a material effect on Telecom Argentinas equity, there is a
significant disproportion between the amounts of the penalty imposed by the Regulatory Authority and the revenue that the affected customer generates to Telecom Argentina.

In 2013, the CNC significantly increased its penalty activities, increasing the amount of accusations and penalties, as well as the individual
amount of each penalty. In several cases the penalties imposed during 2013 have doubled the economic value of the penalties imposed to Telecom Argentina in previous fiscal years for similar alleged regulatory violations.

As a result, and notwithstanding the defense arguments submitted by Telecom Argentina at the administrative level, losses recorded during the
year ended on December 31, 2013 for regulatory contingencies have significantly increased, reaching P$117 million (P$51 million in 2012). In determining the provisions for regulatory sanctions, Telecom Argentinas Management, with the
assistance of its legal counsel, has determined the likelihood of such sanctions being imposed and the amount thereof based on historical information and contemplating various probable scenarios of statute of limitations of charges and penalties
received at the end of fiscal year 2013.



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For a description of certain administrative appeals filed by the Telecom Argentina with respect
to certain regulatory actions, see Item 4Information on the CompanyRegulatory Framework. In addition, see Note 17 to our Consolidated Financial Statements for a breakdown of provisions as of December 31, 2013.

General Proceedings

Environmental Proceedings

In 1999, the Argentine national environmental agency (Secretaría de Medio Ambiente y Desarrollo Sustentable) initiated an administrative
proceeding against us in connection with our waste management. This agency alleged problems with our liquid drainage at an underground chamber in violation of Argentine environmental law. The agency sought to require Telecom Argentinas
registration with the National Register of Generators and Operators of Hazardous Waste. This registration would require Telecom Argentina to pay an annual fee calculated in accordance with a formula that takes into consideration the hazards
extent and the waste quantity. Telecom Argentina believes that its activities did not generate this waste, and that the waste in the underground chamber was generated by other parties. Telecom Argentina nonetheless removed the liquid drainage in
accordance with environmental law. We have filed the requisite official responses and we believe that we will not have to register with any environmental agency as a result of this liquid drainage.

In February 2009, Telecom Argentina received a notification from the environmental agency once again requesting that Telecom Argentina be
registered in the National Registry of Generators and Operators of Hazardous Waste. In March 2009, Telecom Argentina filed a request for administrative review seeking to obtain rejection of the environmental agencys ordinance. As of the date
of this Annual Report, there has yet to be a resolution on the matter.

Considering the evolution and development of environmental
legislation and related agencies, Telecom Argentina is in the process of reviewing its interpretation in relation to the registration as a Hazardous Waste Generator that in any case will refer to a reduced number of materials that we use in our
operations. Based on the information available to us, the possibility that environmental proceedings will have a significant impact on our financial position and cash flows is remote.

Consumer Trade Union Proceedings



| |  |  | Proceedings other than remote
| | - |  | -----------------------------

The Company has been notified of the following complaints filed
by Consumer Trade Unions for which although Personal believes there are strong defense arguments for which the claims should not succeed, in the absence of jurisprudence on the matter, Personals Management (with the assistance of its legal
counsel) has classified the claims as possible until a judgment is rendered.

In November 2011, Personal was notified of a lawsuit filed
by Consumidores Financieros Asociación Civil para su Defensa claiming that Personal made allegedly abusive charges to its customers by implementing per-minute billing and setting an expiration date for prepaid telecommunication
cards.

The plaintiff is seeking damages for unspecified amounts and requests that Personal (i) cease such practices and bill its
customers only for the exact time of telecommunication services used; (ii) reimburse the amounts collected in excess in the ten years preceding the date of the lawsuit; (iii) credit its customers for unused minutes on expired prepaid cards
in the ten years preceding the date of the lawsuit; (iv) pay an interest equal to the lending rate charged by the Banco de la Nación Argentina; and (v) pay punitive damages provided by section 52 bis of Law No. 24,240.

Personal responded in a timely manner, arguing the grounds by which the lawsuit should be dismissed, with particular emphasis on the
regulatory framework that explicitly endorses Personals practices, now challenged by the plaintiff in disregard of such regulations.

Although Personal believes there are strong defenses to the claim, in the absence of jurisprudence on the matter, Personals Management
(with the assistance of its legal counsel) has classified the claim as possible until a judgment is rendered. As of the date of this Annual Report, the case is in the discovery phase.

In June 2012 Asociación Protección Consumidores Del Mercado Común Del SurProconsumer filed a lawsuit
against Personal claiming that the company did not provide the clients with enough information regarding the new prices for the services provided by Personal between May 2008 and



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May 2011. It demands the reimbursement of the increase in the price billed to customers for a period of two months. The plaintiff is seeking damages for unspecified amounts. In August 2012
Personal answered the complaint arguing that the company adequately informed its clients the modifications of the terms and conditions in which the service would be provided. It also filed a jurisdictional plea and a motion alleging the lack of
active legal standing of the plaintiff. Such defenses were admitted by the court of first instance In June 2013; the plaintiff appealed the resolution.



| |  |  | Remote Proceedings
| | - |  | ------------------

Additionally, Consumer Trade Unions have filed several proceedings against
the Company. Although we cannot guarantee the outcome of these proceedings, in our opinion, based on the information available to us and the opinion of our legal counsel, the Company has classified those consumer trade unions proceedings as remote.
Among others, the most significant proceedings filed against the Company include the following:

In November 1995, Telecom Argentina was
served with notice of a complaint filed by a consumer trade union, Consumidores Libres Cooperativa Limitada de Provisión de Servicios Comunitarios, against Telecom Argentina, Telefónica, Telintar and the Argentine
government. The suit seeks to declare null, illegal and unconstitutional all rate rules and agreements related to the Transfer Agreement and to reduce the rates of the licensees so as to obtain a rate of return not in excess of an annual 16% on
fixed assets as described in the List of Conditions. Furthermore, the complaint seeks reimbursement of sums allegedly received in excess of the 16% rate of return as well as sums resulting from the reduction in the rate of turnover tax for the city
of Buenos Aires. The case is currently in the discovery phase.

In October 2001, the Federal Court of Appeals for Contentious and
Administrative Matters issued a precautionary measure suspending the ability of telecommunications companies to increase rates by reference to the U.S. consumer price index. However, the Public Emergency Law and the reformation of the exchange
regime have had an analogous result to that proposed by the precautionary measure, since they have prohibited, as of January 6, 2002, contracts with the public administration, including public works and services contracts, from being adjusted
to dollars or other foreign currencies. The Public Emergency Law was subsequently extended through December 31, 2015. (See Item 4Information on the CompanyRegulatory FrameworkRegulatory EnvironmentRates).

Additionally, upon the extension of the exclusivity period for the provision of telecommunication services, Consumidores Libres
Cooperativa Limitada de Provisión de Servicios Comunitarios filed a new lawsuit in Argentine federal courts against the service providers and the Argentine government. Plaintiffs are seeking damages, an injunction revoking the licenses
granted to telecommunication service providers and termination of the exclusivity period. This case is currently in discovery.

In
December 2005, the entity Asociación Protección Consumidores Del Mercado Común Del SurProconsumer brought an action against the mobile companies, including Personal. The plaintiffs seek to obtain reimbursement
for any amounts billed to Personal customers in connection with an investment contribution to the Universal Service Fiduciary Fund. In March 2011, Personal was notified of the first instance resolution, which rejected Proconsumers claim. The
resolution considered the claim to be an unnecessary and an excessive use of judicial time and resources because the reimbursement identified in the complaint had already been made by the defendants. The full reimbursement of the amounts received by
Personal in connection with the investment contribution and corresponding interest were listed separately in customer bills and furnished in accordance with the CNCs report dated December 2006. The report also specified the applicable interest
rate. In October 2011, the Civil and Commercial Federal Court, Chamber No. II confirmed the rejection of the legal action against Personal. The plaintiff filed an extraordinary appeal which was also rejected. Subsequently, the plaintiffs last
legal recourse (Recurso de Queja) was submitted to the Supreme Court and in May 2013 the Supreme Court rejected it. This judgment is final.

Dividend Policy

The
declaration, amount and payment of dividends are determined by a majority vote at an ordinary meeting of all shareholders of Telecom Argentinas capital stock. Under the Argentine Corporations Law, dividends may only be declared out of liquid
and realized profits determined based on non-consolidated financial statements prepared in accordance with GAAP effective in Argentina (IFRS in the case of listed companies as Telecom Argentina) and other applicable regulations issued by the CNV and
other regulatory bodies. Furthermore, liquid and realized profits can only be distributed when all accumulated losses from past periods have been absorbed and the legal reserve has been constituted (or reconstituted).



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According to CNV rules (New Text 2013) approved by CNV Resolution 622/2013, Shareholders
Meetings that approve financial statements in which retained earnings are positive must make a specific determination on the use of such earnings in accordance with the Law No. 19,550 and, as a result, must resolve on its distribution as cash
dividends, capitalization with issuance of paid-in shares, use to create reserves other than statutory reserves, or a combination of such alternatives. As a result of this rule the balance of retained earnings after the allocation approved by the
Annual Shareholders Meeting should be zero.

Under the above-described restrictions, the legal ability of shareholders at any annual
meeting of Telecom Argentina to vote to distribute dividends depends on: (i) the existence of liquid and realized profits and (ii) satisfaction of the financial conditions necessary to distribute dividends without negatively affecting the
interests of Telecom Argentina.

In preparing the Annual Report in compliance with Argentine requirements, at the end of each fiscal year,
the Board of Directors analyzes Telecom Argentinas economic and financial position and its compliance with the abovementioned restrictions. The Board of Directors also takes into account the funds needed for operative purposes for the
following fiscal year. The Board of Directors then proposes a course of action with respect to retained earnings, which may or may not include a dividend distribution. The decision with regards to the Boards proposal is made by the Telecom
Argentinas shareholders at the Shareholders Meeting.

Telecom Argentina shareholders meeting held on April 23, 2013,
approved, among other proposals, the allocation of Telecom Argentinas retained earnings as of December 31, 2012, resolving to allocate P$1,000 million as a Reserve for Future Dividends in Cash and authorizing the Board of Directors to
approve the reduction of such Reserve for the purpose of distributing dividends in cash taking into account the economic and financial condition of Telecom Argentina. The Board of Directors at its meeting held on December 13, 2013, approved the
reduction of the Reserve in the amount of P$1,000 million (equivalent to P$1.03 per outstanding share). The above mentioned dividends were available on December 27, 2013.

Telecom Argentinas Board of Directors, at their meeting held on March 14, 2014, called a shareholders meeting to be held on
April 29, 2014, to consider among other issues: (i) the allocation of Telecom Argentinas retained earnings as of December 31, 2013 suggested by the Board of Directors as follows: P$9 million to the legal reserve; P$1,202 million
(P$1.24 per outstanding share) for distribution of cash dividends in two equal installments of P$601 million each, the first one to be paid on May 8, 2014 and the second one during September 2014, and P$1,991 million to a Voluntary Reserve for
Capital Investments; and (ii) the delegation of authority in Telecom Argentina ́s Board of Directors to determine the allocation of the Voluntary Reserve for Capital Investments.

Significant Changes

No undisclosed
significant changes have occurred since the date of the Consolidated Financial Statements.



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ITEM 9. THE OFFER AND LISTING

On May 22, 2013, Telecom Argentinas Board of Directors, based on the authority delegated by the Ordinary Shareholders meeting
held on May 21, 2013 to disaffect the Voluntary Reserve for Capital Investments, approved the terms and conditions of the Telecom Argentinas Treasury Shares Acquisition Process. Such acquisition process has to be made in pesos in the
market in order to avoid any possible damages to Telecom Argentina and its shareholders derived from fluctuations and imbalances between the shares price and Telecom Argentinas solvency.

The main terms and conditions of the Treasury Shares acquisition process are:



| |  |  | Date of announcement: May 22, 2013
| | - |  | ----------------------------------



| |  |  | Maximum amount to be invested: P$1,200 million.
| | - |  | -----------------------------------------------



| |  |  | Maximum amount of shares subject to the acquisition: the amount of Class B ordinary shares of the Company, P$1 of nominal value and with one vote each, that may be acquired with the maximum amount to be
invested, which amount may never exceed a limit of 10% of the capital stock.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Price to be paid by share: between a minimum of P$1 and a maximum of P$32.50 per share. On August 29, 2013 the maximum price was raised by Telecom Argentinas Board of Directors up to P$40 per share.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Deadline for the acquisition process: April 30, 2014.
| | - |  | -----------------------------------------------------

By virtue of the offer made by
Fintech on November 7, 2013 for the acquisition of the controlling interest of Telecom Italia Group in Telecom Argentina, Telecom Argentina suspended the acquisition of treasury shares. In addition, Telecom Argentinas Board of Directors
considered appropriate requiring the opinion of the CNV regarding the interpretation of the provisions of the CNV rules on this matter. As of the date of this Annual Report the CNV response is still pending.

The last acquisition made by Telecom Argentina was on November 5, 2013. The total treasury shares acquired were 15,221,373 by a total
amount of P$461 million (P$30.29 average per share). Such acquisitions were recorded at the acquisition cost and deducted from equity under the caption Treasury shares acquisition cost. No profit or loss resulting from holding the
treasury shares has been recognized in the income statement. See note 19 d) and Note 3 s) to the Consolidated Financial Statements.

As of
December 31, 2013, the capital stock of Telecom Argentina was divided into three classes: Class A Ordinary Shares, nominal value P$1.00 each (Class A Shares), representing 51.00% of the outstanding capital stock of Telecom
Argentina, Class B Ordinary Shares, nominal value P$1.00 each (Class B Shares), representing approximately 48.97% of the outstanding capital stock of Telecom Argentina, and Class C Ordinary Shares, nominal value P$1.00 each (Class
C Shares), representing approximately 0.03% of Telecom Argentinas outstanding capital stock.

The number of shares as of
December 31, 2013 was as follows:



|                |  |                   |             |  |                |  |            |                    |  |  |             | 
|--------------- |  | ----------------- | ----------- |  | -------------- |  | ---------- | ------------------ |  |  | ----------- | 
|Class of shares |  | Outstandingshares |             |  | Treasuryshares |  |            | Totalcapital stock | 
|Class A Shares  |  |                   | 502,034,299 |  |                |  |           |                    |  |  | 502,034,299 | 
|Class B Shares  |  |                   | 466,857,868 |  |                |  | 15,221,373 |                    |  |  | 482,079,241 | 
|Class C Shares  |  |                   | 267,438     |  |                |  |           |                    |  |  | 267,438     | 
|                |  |                   |             |  |                |  |            |                    |  |  |             | 
|Total           |  |                   | 969,159,605 |  |                |  | 15,221,373 |                    |  |  | 984,380,978 | 
|                |  |                   |             |  |                |  |            |                    |  |  |             | 

The Class B Shares are currently listed on the Buenos Aires Stock Exchange. The ADSs representing Class B
Shares are currently listed on the New York Stock Exchange under the symbol TEO. Each ADS currently represents 5 Class B Shares.



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The table below shows the high and low closing prices of the Class B Shares in pesos for the
periods indicated on the Mercado de Valores de Buenos Aires (the Buenos Aires Stock Market or BASM), the current principal non-U.S. trading market for such securities. See The Argentine Securities
Market. See Item 3Key InformationExchange Rates for the exchange rates applicable during the periods set forth below.



|                               |  |                                    |       |  |     |  |       | 
|------------------------------ |  | ---------------------------------- | ----- |  | --- |  | ----- | 
|                               |  | Pesos per Class B Shareon BASM (1) |      
|                               |  | High                               |       |  | Low | 
|Annual                         |  |                                    |       |  |     |  |       | 
|2009                           |  |                                    | 13.65 |  |     |  | 4.90  | 
|2010                           |  |                                    | 20.80 |  |     |  | 11.90 | 
|2011                           |  |                                    | 22.70 |  |     |  | 16.10 | 
|2012                           |  |                                    | 20.40 |  |     |  | 12.30 | 
|2013                           |  |                                    | 39.50 |  |     |  | 16.40 | 
|                               |  |                                   
|Quarterly                      |  |                                    |       |  |     |  |       | 
|2012                           |  |                                    |       |  |     |  |       | 
|First Quarter                  |  |                                    | 20.40 |  |     |  | 17.45 | 
|Second Quarter                 |  |                                    | 18.55 |  |     |  | 14.30 | 
|Third Quarter                  |  |                                    | 16.10 |  |     |  | 12.30 | 
|Fourth Quarter                 |  |                                    | 16.10 |  |     |  | 12.40 | 
|2013                           |  |                                    |       |  |     |  |       | 
|First Quarter                  |  |                                    | 25.95 |  |     |  | 16.40 | 
|Second Quarter                 |  |                                    | 31.00 |  |     |  | 22.50 | 
|Third Quarter                  |  |                                    | 37.00 |  |     |  | 22.80 | 
|Fourth Quarter                 |  |                                    | 39.50 |  |     |  | 28.50 | 
|                               |  |                                   
|Monthly                        |  |                                    |       |  |     |  |       | 
|2013                           |  |                                    |       |  |     |  |       | 
|October                        |  |                                    | 37.70 |  |     |  | 31.70 | 
|November                       |  |                                    | 39.50 |  |     |  | 33.00 | 
|December                       |  |                                    | 32.75 |  |     |  | 28.50 | 
|2014                           |  |                                    |       |  |     |  |       | 
|January                        |  |                                    | 36.50 |  |     |  | 28.00 | 
|February                       |  |                                    | 38.40 |  |     |  | 32.00 | 
|March                          |  |                                    | 37.25 |  |     |  | 32.60 | 
|April (through April 11, 2014) |  |                                    | 36.90 |  |     |  | 34.50 | 



|(1) | Reflects peso nominal amounts as of that date.
|--- | ----------------------------------------------

Source: Bolsa de Comercio de Buenos Aires.

The Class B Shares trade on the New York Stock Exchange in the form of ADSs issued by the Depositary under the Deposit Agreement
dated as of November 8, 1994, among Telecom Argentina, the Depositary and the registered Holders from time to time of the ADSs issued there under (the Deposit Agreement). Each ADS represents 5 Class B Shares.

The table below shows the high and low closing prices of the ADSs in U.S. dollars on the New York Stock Exchange for the periods indicated.



|               |  |             |       |  |     |  |       | 
|-------------- |  | ----------- | ----- |  | --- |  | ----- | 
|               |  | US$ per ADS |      
|               |  | High        |       |  | Low | 
|Annual         |  |             |       |  |     |  |       | 
|2009           |  |             | 18.05 |  |     |  | 6.55  | 
|2010           |  |             | 25.78 |  |     |  | 15.02 | 
|2011           |  |             | 26.92 |  |     |  | 17.28 | 
|2012           |  |             | 21.94 |  |     |  | 9.37  | 
|2013           |  |             | 21.19 |  |     |  | 12.13 | 
|               |  |            
|Quarterly      |  |             |       |  |     |  |       | 
|2012           |  |             |       |  |     |  |       | 
|First Quarter  |  |             | 21.94 |  |     |  | 17.51 | 
|Second Quarter |  |             | 17.55 |  |     |  | 10.00 | 
|Third Quarter  |  |             | 12.31 |  |     |  | 9.39  | 
|Fourth Quarter |  |             | 12.17 |  |     |  | 9.37  | 



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|                               |  |             |       |  |     |  |       | 
|------------------------------ |  | ----------- | ----- |  | --- |  | ----- | 
|                               |  | US$ per ADS |      
|                               |  | High        |       |  | Low | 
|2013                           |  |             |       |  |     |  |       | 
|First Quarter                  |  |             | 15.92 |  |     |  | 12.13 | 
|Second Quarter                 |  |             | 16.73 |  |     |  | 13.40 | 
|Third Quarter                  |  |             | 20.11 |  |     |  | 13.93 | 
|Fourth Quarter                 |  |             | 21.19 |  |     |  | 17.10 | 
|                               |  |            
|Monthly                        |  |             |       |  |     |  |       | 
|2013                           |  |             |       |  |     |  |       | 
|October                        |  |             | 20.20 |  |     |  | 17.24 | 
|November                       |  |             | 21.19 |  |     |  | 19.12 | 
|December                       |  |             | 19.37 |  |     |  | 17.10 | 
|2014                           |  |             |       |  |     |  |       | 
|January                        |  |             | 17.85 |  |     |  | 14.78 | 
|February                       |  |             | 17.38 |  |     |  | 15.03 | 
|March                          |  |             | 19.07 |  |     |  | 15.83 | 
|April (through April 11, 2014) |  |             | 18.99 |  |     |  | 17.77 | 



On April 11, 2014, the reported last sale price of the ADSs on the New York Stock Exchange was US$ 18.90.

Plan of Distribution

Not applicable.

The Argentine Securities Market

As
of March 2014 twelve securities exchanges exist in Argentina, of which six (including the Buenos Aires Stock Exchange) have affiliated stock markets and are authorized to quote publicly-offered securities. The oldest and largest of these exchanges
is the Buenos Aires Stock Exchange, founded in 1854. For the year ended December 31, 2013, the ten most actively traded equity issues represented approximately 84% of the total volume of equity traded on the market. Trading in securities listed
on an exchange is conducted through a Mercado de Valores (Stock Market) affiliated with such exchange.

Securities may
also be listed and traded on the Mercado Abierto Electrónico S.A. (the MAE), an electronic over-the-counter market trading system that functions independently from the Buenos Aires Stock Exchange and the Buenos Aires Stock
Market. However, in March 1992, the Buenos Aires Stock Exchange, the Buenos Aires Stock Market and representatives of the dealers on the MAE implemented an agreement that causes trading in equity and equity-related securities to be conducted
exclusively on the Buenos Aires Stock Market, while all corporate debt securities listed on the Buenos Aires Stock Exchange may also be traded on the MAE. Trading in Argentine government securities, which are not covered by the agreement, is
expected to be conducted principally on the MAE. The agreement does not extend to other Argentine stock exchanges.

The CNV is responsible
for the regulation and supervision to ensure the correct application of the rules governing the Argentine Securities Market, which will continue under the new regulatory framework described as follows.

New Capital Market Act  Law No. 26,831

On December 28, 2012, the new Capital Market Law (Law No. 26,831) was published in the Official Bulletin. This Law eliminates capital
markets self-regulation and grants new powers to the CNV, including the ability to request reports and documents, conduct investigations and inspections of natural and legal persons under its control, call to testify and take informative and
testimonial declaration. Likewise, if as a result of investigations performed, it is determined that non-controlling interests or the interests of holders of securities subject to public offering have been harmed, the CNV, according to the severity
of the harm determined, may appoint overseers with the power to veto resolutions adopted by the Board of Directors and/or discontinue the Board of Directors for a maximum period of 180 days until deficiencies found are remedied.



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Law No. 26,831 supersedes Law No. 17,811 and Decree No. 677/01, among other rules,
and became effective on January 28, 2013.

In August 2013, the Executive Branch issued Decree No. 1,023/13 regulating certain
sections of Law No. 26,831, and in September 2013, the CNV issued the Resolution No. 622/13 which established the new comprehensive rules of the CNV and also implements regulation related to certain sections of Law No. 26,831.

The Buenos Aires Stock Market

The Buenos
Aires Stock Market, which is affiliated with the Buenos Aires Stock Exchange, is the largest stock market in Argentina. The Buenos Aires Stock Market is a corporation, whose approximately 130 shareholder members are the only individuals and entities
authorized to trade in the securities listed on the Buenos Aires Stock Exchange. Trading on the Buenos Aires Stock Market is conducted by continuous open bidding, from 11:00 a.m. to 5:00 p.m. each business day. The Buenos Aires Stock Market also
operates a continuous electronic market system each business day, on which privately arranged trades are registered and made public.

Although the Buenos Aires Stock Exchange is one of Latin Americas largest securities exchanges in terms of market capitalization, it
remains relatively small and illiquid compared to major world markets, and therefore, is subject to greater volatility. To control price volatility, the Buenos Aires Stock Market operates a system which suspends dealing in a particular issuers
shares for fifteen minutes when the price changes 10% with respect to that days opening price. Once trading resumes, the trading is then suspended for another fifteen minutes if the price changes more than 15% with respect to that days
opening price. If the price then changes 20% with respect to that days opening price, and for every 5% fluctuation in price thereafter, the trading of such shares is interrupted for an additional ten minutes. Investors in the Argentine
securities market are mostly individuals, mutual funds and companies. Institutional investors that trade securities on the Buenos Aires Stock Market, which represent a relatively small percentage of trading activity, consist of a limited number of
investment funds.

Certain historical information regarding the Buenos Aires Stock Exchange is set forth in the table below.



|                                               |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|---------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | ---- | ------- |  |  |  | ------- | 
|                                               |  | 2013 |         |  | 2012 |  |         | 2011 |  |  | 2010    |  |  | 2009 |        
|Market capitalization (P$ billions)(1)         |  |      | 3,356   |  |      |  | 2,314   |      |  |  | 1,611   |  |  |      | 1,900   |  |  |  | 2,175   | 
|As percent of GDP(1)                           |  |      | 124     |  |      |  | 106     |      |  |  | 87      |  |  |      | 132     |  |  |  | 190     | 
|Volume (P$ million)(1)                         |  |      | 367,830 |  |      |  | 242,324 |      |  |  | 207,805 |  |  |      | 177,614 |  |  |  | 133,207 | 
|Average daily trading volume (P$ million)(1)   |  |      | 1,526   |  |      |  | 1,006   |      |  |  | 848     |  |  |      | 722     |  |  |  | 546     | 
|Number of traded companies (including Cedears) |  |      | 256     |  |      |  | 267     |      |  |  | 241     |  |  |      | 275     |  |  |  | 254     | 



|(1) | End-of-period figures for trading on the Buenos Aires Stock Exchange (includes domestic and non-domestic public companies).
|--- | ---------------------------------------------------------------------------------------------------------------------------

Sources: Yearbook 2013Instituto Argentino de Mercado de Capitales.

Selling Shareholders

Not applicable.

Dilution

Not applicable.

Expenses of the Issue

Not applicable.



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ITEM 10. ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

Register

Telecom Argentinas bylaws
were registered in the Inspección General de Justicia (General Board of Corporations) on July 13, 1990 under number 4,570, book 108, volume A of Corporations. The bylaws with all amendments thereto were registered in
the General Board of Corporations on March 31, 2011 under number 5,982, book 53 of Corporations.

Objects and Purposes

Article I, Section 3 of the bylaws states that the object of Telecom Argentina is to render, either on its own account or on account of,
or in association with, third parties, telecommunications public services, except for radio broadcasting, under the terms, if any, of the licenses granted by relevant authorities. The bylaws authorize Telecom Argentina to take all actions permitted
by law to fulfill its aforementioned objects.

On March 1, 2001, the SC authorized Telecom Argentina to expand its corporate purpose,
to include the marketing of equipment, infrastructure and goods of any type related or complementary to telecommunications, and the performance of works and provision of all types of services, including consulting and security related to
telecommunications, as well as the development of telecommunications technology and information processing systems. This expansion of the corporate purpose has been approved by the CNV. As a result, the bylaws which reflect this change have been
approved and registered in their final form.

On April 30, 2003, Telecom Argentinas shareholders voted not to adhere to the
regime established by Decree No. 677/01 (the Statutory Regime of Public Offer of Mandatory Acquisition) and approved the consequent modification of Article 1° of Telecom Argentinas bylaws.

However, since January 28, 2013, when Law No. 26,831 became effective, the universal scope of the Statutory Regime of Public Offer
of Mandatory Acquisition governs, as provided in the Law, which states: Article 90.  Universal scope. The Statutory Regime of Public Offer of Mandatory Acquisition regulated in this chapter and the residual participation regime regulated
in the following chapter includes all listed companies, even those that, under the previous regime, have opted to be excluded of its application.

On February 18, 2004, Telecom Argentinas shareholders voted to change the companys name to Telecom Argentina S.A.

Telecom Argentinas capital stock

The following is a summary of the rights of the holders of Telecom Argentina shares. These rights are set out in Telecom Argentinas
estatutos sociales (bylaws) or are provided for by applicable Argentine law, and may differ from those typically provided to shareholders of U.S. companies under the corporations laws of some states of the United States.

Limited Liability of Shareholders

Under Argentine law, a shareholders liability for losses of a company is generally limited to the value of his or her shareholdings in
the company. Under Argentine law, however, a shareholder who votes in favor of a resolution that is subsequently declared void by a court as contrary to Argentine law or a companys bylaws (or regulations, if any) may be held jointly and
severally liable for damages to such company, to other shareholders or to third parties resulting from such resolution. In connection with recommending certain actions for approval by shareholders, the Board of Directors of Telecom Argentina
obtained opinions of internal and/or external counsel concerning the compliance of the actions with Argentine law and our bylaws (or regulations, if any). We currently intend to obtain similar opinions in the future as the circumstances require it.
Although the issue is not free from doubt, based on advice of counsel, we believe that a court in Argentina in which a case has been properly presented would hold that a noncontrolling shareholder voting in good faith and without a conflict of
interest in favor of such a resolution based on the advice of counsel that such resolution is not contrary to Argentine law or our bylaws or regulations, would not be liable under this provision.



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Voting Rights

In accordance with the bylaws, each share entitles the holder thereof to one vote at meetings of the shareholders of Telecom Argentina. All of
Telecom Argentinas directors are appointed jointly by shareholders in an Ordinary General Shareholders Meeting.

Under
Argentine law, shareholders are entitled to cumulative voting procedures for the election of up to one-third of the vacancies to be filled on the Board of Directors and the Supervisory Committee. If any shareholder notifies a corporation of its
decision to exercise its cumulative voting rights not later than three business days prior to the date of a Shareholders Meeting, all shareholders are entitled, but not required, to exercise their cumulative voting rights. Under cumulative
voting, the aggregate number of votes that a shareholder may cast is multiplied by the number of vacancies to be filled in the election, and each shareholder may allocate the total number of its votes among a number of candidates not exceeding
one-third of the number of vacancies to be filled. Shareholders not exercising cumulative voting rights are entitled to cast the number of votes represented by their shares for each candidate. The candidates receiving the most votes are elected to
the vacancies filled by cumulative and noncumulative voting. If no candidate for a particular vacancy receives an absolute majority of votes, the two candidates that received the most votes will participate in a run-off election, and the candidate
receiving the most votes in the run-off election will be deemed elected.

In addition, any person who enters into a voting agreement with
other shareholders in a public company must inform the CNV of that voting agreement and must file a copy of that voting agreement with the CNV.

Meetings of Shareholders

Shareholders Meetings may be ordinary meetings or extraordinary meetings. Telecom Argentina is required to hold an Annual Ordinary
Meeting of shareholders in each fiscal year to consider the matters outlined in Article 234 of the Argentine Corporations Law, Article 71 of Law No. 26,831 and CNV rules, including but not limited to:



| |  |  | approval of Telecom Argentinas financial statements and general performance of the directors and members of the Supervisory Committee for the preceding fiscal year;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | election, removal and remuneration of directors and members of the Supervisory Committee;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | allocation of profits; and
| | - |  | --------------------------



| |  |  | appointment of external auditors.
| | - |  | ---------------------------------

Matters which may be considered at these or other ordinary
meetings include consideration of the responsibility of directors and members of the Supervisory Committee, as well as capital increases and the issuance of negotiable obligations. Extraordinary Shareholders Meetings may be called at any time
to consider matters beyond the scope of the ordinary meeting, including amendments to the bylaws, issuances of certain securities that permit profit sharing, anticipated dissolution, merger and transformation from one type of company to another,
etc. Shareholders Meetings may be convened by the Board of Directors or the members of the Supervisory Committee. The Board of Directors or the members of the Supervisory Committee are also required to convene Shareholders Meetings upon
the request of any shareholder or group of shareholders holding at least 5% in the aggregate of Telecom Argentinas capital stock. If the Board of Directors or the members of the Supervisory Committee fail to do so, the meeting may be called by
the CNV or by the courts.

Notice of the Shareholders Meeting must be published in the Official Bulletin of the Republic of
Argentina and in a widely circulated newspaper in Argentina at least twenty days before the meeting. In order to attend a meeting, shareholders must submit proper evidence of their ownership of shares via book-entry account held at the Caja de
Valores S.A. If so entitled to attend the meeting, a shareholder may be represented by proxy.

Class B Shares represented by ADSs will be
voted by the Depositary in accordance with instructions of the holders of the ADSs. In order for voting instructions to be valid, the Depositary must receive them on or before the date specified in the relevant notice. There is no guarantee that an
ADS holder will receive voting materials in time to instruct the Depositary to vote.

The quorum for ordinary meetings consists of a
majority of the stock entitled to vote and resolutions may be adopted by the affirmative vote of a majority of the shareholders present that have issued a valid vote, without counting voluntary abstentions. If no quorum is present at the meeting, a



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second meeting may be called at which shareholders present, whatever their number, shall constitute a quorum and resolutions may be adopted by a majority of the shareholders present. The quorum
for extraordinary meetings is 60% of the stock entitled to vote. However, if a quorum is not present at the first meeting, the quorum requirement for the second meeting will be 30% of the stock entitled to vote. In both cases, decisions are adopted
by a majority of valid votes, except for certain fundamental matters such as:



| |  |  | mergers and spin-offs, when Telecom Argentina is not the surviving entity and the surviving entity is not listed on any stock exchange;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | anticipated liquidation;
| | - |  | ------------------------



| |  |  | change of our domicile to outside Argentina;
| | - |  | --------------------------------------------



| |  |  | total or partial repayment of capital; or
| | - |  | -----------------------------------------



| |  |  | a substantial change in the corporate purpose.
| | - |  | ----------------------------------------------

Each of these actions requires a favorable
vote of more than 50% of all the stock entitled to vote.

In some of these cases, a dissenting shareholder is entitled to appraisal
rights.

Any resolution adopted by the shareholders at Ordinary or Extraordinary Shareholders Meetings that affects the rights of
one particular class of stock must also be ratified by a special meeting of that class of shareholders governed by the rules for ordinary meetings.

Dividends

Dividends can
be lawfully paid and declared only out of our realized and liquid profit.

The Board of Directors submits to the shareholders for approval
at an ordinary meeting of shareholders our financial statements for the previous fiscal year, together with a report thereon by the Board of Directors. The shareholders, upon approving the financial statements, determine the allocation of Telecom
Argentinas net profits (if any). Under CNV Rules a Shareholders Meeting convened to approve the financial statements in which retained earnings are positive must make a specific decision on the use of such earnings in accordance with Law
No. 19,550 and, as a result, must resolve on its distribution as cash dividends, capitalization with issuance of paid-in shares, use to create reserves other than statutory reserves, or a combination of such alternatives. In addition, the
Argentine Corporations Law requires Argentine companies to allocate 5% of any net profits to legal reserve, until the amount of this reserve equals 20% of our capital stock. The legal reserve is not available for distribution. The remainder of net
profits may be paid as dividends on common stock or retained as a voluntary reserve or other account, or a combination thereof, all as determined by the shareholders. As provided by CNV Resolution No. 609/12, positive retained earnings
generated by the mandatory adoption of IFRS as from January 1, 2012, should be assigned to a Special Reserve that can only be utilized for its capitalization or to absorb negative retained earnings.

Dividends may not be paid if the legal reserve has been impaired, nor until it has been fully rebuilt. Notwithstanding, the obligation to pay
declared dividends expires three years after the distribution date pursuant to Section 17 of Telecom Argentinas bylaws, as amended by the Shareholders Meeting held on April 24, 2002.

Argentine law permits the Board of Directors of certain companies (such as Telecom Argentina) to approve the distribution of anticipated
dividends on the basis of a quarter balance or a balance sheet especially prepared for the purpose of paying such dividends, provided that both the external auditors and the Supervisory Committee have issued an opinion report. The actual payment of
these dividends is made on an interim basis, and they are paid on account of the dividends to determine in the shareholders annual meeting on the basis of the financial statements for the year.

See Note 30 to our Consolidated Financial Statements regarding restrictions on distributions of profits and dividends.

Capital Increase and Reductions

Telecom Argentina may increase its capital upon authorization of the shareholders at an ordinary meeting. All capital increases must be
registered with the CNV, published in the Official Bulletin and registered with the Public Registry of Commerce. Capital reductions may be voluntary or mandatory. Shares issued in connection with any increase in capital must be divided among the
various classes in



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proportion to the number of shares of each class outstanding at the date of the issuance, provided that the number of shares of each class actually issued may vary based on the exercise of
preemptive rights and additional preemptive rights in accordance with the procedure described under Preemptive Rights.

A
voluntary reduction of capital must be approved by an Extraordinary Meeting of the shareholders and may take place only after notice thereof is published and creditors are given an opportunity to obtain payment or collateralization of their claims,
or attachment, except in redemption cases (with liquid and realized profits).

In accordance with Article 206 of the Argentine
Corporations Law, suspended by successive decrees until December 10, 2005, reduction of a companys capital stock is mandatory when losses have exceeded reserves and at least 50% of the stated capital (capital stock plus inflation
adjustment).

Currently, Telecom Argentina is not required to reduce its capital stock.

Preemptive Rights

Under
Argentine law, holders of a companys common shares of any given class have preferential or preemptive rights, proportional to the number of shares owned by each holder, to subscribe for any shares of capital stock of the same class as the
shares owned by the shareholder or for any securities convertible into such shares issued by the company.

In the event of an increase in
capital, shareholders of Telecom Argentina of any given class have a preemptive right to purchase any issue of shares of such class in an amount sufficient to maintain their proportionate ownership of Telecom Argentinas capital stock. For any
shares of a class not preempted by any holder of that class, the remaining holders of the class will assume pro rata the non-preempting shareholders preemptive rights. Pursuant to the bylaws, if any Class B or Class C Shares are not preempted
by the existing holders of each such class, the other classes may preempt such class. However, if any shares of Class A are not preempted by the existing holders of such class, holders of Class B or Class C Shares shall have no preemptive
rights with respect to such shares of Class A unless otherwise approved by the regulatory authorities. Preemptive rights must be exercised within 30 days following the time when notices to the shareholders of their opportunity to preempt the
capital increase are published for three days in the Official Bulletin of the Republic of Argentina and a widely circulated newspaper in Argentina.

Pursuant to the Argentine Corporations Law, preemptive rights may only be restricted or suspended in certain particular and exceptional cases
by a resolution of an Extraordinary Meeting of shareholders when required by the interest of the company.

Conflicts of Interest

A shareholder that votes on a business transaction in which its interest conflicts with that of Telecom Argentina may be liable for
damages under Argentine law, but only if the transaction would not have been approved without its vote. See Item 3Key InformationRisk FactorsRisks Relating to ArgentinaShareholders may be liable under Argentine law for
actions that are determined to be illegal or ultra vires. See also Powers of the Directors below for a description of conflict of interest regarding Directors.

Redemption or Repurchase

Telecom Argentinas stock is subject to redemption in connection with a reduction of capital by a majority vote of shareholders at an
extraordinary shareholders meeting. Pursuant to the Argentine Corporations Law, Telecom Argentina may repurchase the stock with liquid and realized profits or available reserves, upon a determination of the Board of Directors that the
repurchase is necessary in order to avoid severe damage to our business (subject to shareholder consideration) or in connection with a merger or acquisition. In addition, Telecom Argentina can purchase up to 10% of its capital stock in the Buenos
Aires stock exchange pursuant to Law No. 26,831, complying with the requirements and procedures stated therein. If the purchase is made pursuant to Law No. 26,831, Telecom Argentina must resell the repurchased shares within three years and
must give shareholders a preemptive right to purchase the shares, except in case of an employee compensation program or plan or in case the shares are distributed among all the shareholders proportionately or regarding the sale of an amount of
shares that in any period of 12 months does not exceed 1% of the Companys capital. In such cases previous approval by a shareholders meeting is needed.



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Appraisal Rights

Whenever certain extraordinary resolutions are adopted at Shareholders Meetings such as a merger of Telecom Argentina into another
entity, a change of corporate purpose, transformation from one type of corporate form to another, or Telecom Argentinas shares cease to be traded publicly, any shareholder dissenting from the adoption of any resolution may withdraw from
Telecom Argentina and receive the book value per share determined on the basis of Telecom Argentinas annual financial statements (as approved by the Annual Ordinary Shareholders Meeting), provided that the shareholder exercises its
appraisal rights within five days following the meeting at which the resolution was adopted in the case of a dissenting shareholder. This right may be exercised within 15 days following the meeting if the dissenting shareholder was absent and can
prove that he was a shareholder on the day of the meeting. In the case of a merger of Telecom Argentina or a spin-off of Telecom Argentina, no appraisal rights may be exercised if Telecom Argentina is the surviving company.

Appraisal rights are extinguished if the resolution is subsequently overturned at another Shareholders Meeting held within sixty days of
the expiration of the time period during which absent shareholders may exercise their appraisal rights.

Payment on the appraisal rights
must be made within one year of the date of the Shareholders Meeting at which the resolution was adopted. If the resolution was to cease to publicly offer Telecom Argentinas stock, the payment period is reduced to sixty days from the
date of the resolution.

Notwithstanding the foregoing, should Telecom Argentina decide to cease trading its shares publicly, pursuant to
Article 97 of the Law No. 26,831, a tender offer by Telecom Argentina must be conducted before the exercise of appraisal rights by any shareholder. According to Article 98 of the Law No. 26,831 redemption value is not the book value but is
determined based on market value of shares.

Liquidation

Upon liquidation of Telecom Argentina, one or more liquidators may be appointed to wind up its affairs. All outstanding shares of common stock
will be entitled to participate equally in any distribution upon liquidation.

In the event of liquidation, the assets of Telecom
Argentina shall be applied to satisfy its debts and liabilities. If any surplus remains, it shall be distributed to the holders of shares in proportion to their holdings.

Acquisitions of 5% or More of the Voting Stock of a Public Company

Under Argentine law, any person acquiring 5% or more of the voting stock of a public company must inform the CNV in writing of the acquisition
of such voting stock. Additionally, such person must inform the CNV in writing of each additional acquisition of 5% of the voting stock of that particular company, until such person acquires control of that company.

Powers of the Directors

The bylaws of
Telecom Argentina do not contain any provision regarding the ability to vote on a proposal, arrangement or contract where a director is an interested party. Under Argentine law, a director may sign contracts with the company that are related to the
companys activities so long as the conditions are on an arms-length basis. If such contract does not meet such conditions, the agreement may only be subscribed with the prior approval of the Board of Directors or, in absence of quorum,
with the approval of the Supervisory Committee. Such transactions must be dealt with at the following Shareholders Meeting, and if such meeting does not approve them, the Board of Directors or the Supervisory Committee (as the case may be) are
jointly responsible for any damages caused to the company. Argentine law also requires that if a director has a personal interest contrary to Telecom Argentinas, this must be noted to the Board of Directors and to the Supervisory Committee.
The director must refrain from participating in any deliberations or risk becoming jointly and severally liable for all damages caused to Telecom Argentina as a result of the conflict.

Additionally, Law No. 26,831 dictates that the contracts between a company and a director (that qualifies as a related party)
when they exceed 1% of the shareholders equity of the company, must be submitted to prior approval of the Audit Committee or of two independent evaluation firms to ensure that the transaction is in accordance with market conditions. Such
transactions must also be approved



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by the Board of Directors and reported to the CNV and the exchanges on which the shares of the company are listed. If the Audit Committee or the independent evaluation firms have not determined
the terms of the transaction to be according to market conditions, then the contract in question must be submitted for consideration at a Shareholders Meeting.

Section 10 of the bylaws of Telecom Argentina establishes that the remuneration of the members of the Board of Directors is to be
determined by the shareholders at their annual meeting. The Audit Committee is to issue a prior opinion on the reasonability of the proposed remuneration, which the Board of Directors submits for approval to the shareholders. Therefore, the
Directors do not have the ability to vote on compensation for themselves nor for any other director.

The bylaws of Telecom Argentina do
not contain any provision regarding the possibility of granting loans to members of the Board of Directors or Company executives.

Members
of the Board of Directors of Telecom Argentina or its subsidiaries or parent company cannot be appointed as members of the Supervisory Committee.

The bylaws of Telecom Argentina do not establish a maximum age to be member of the Board of Directors.

Neither the bylaws of Telecom Argentina nor any Argentine law require the members of the Board of Directors to be shareholders.

Limitations on Foreign Investment in Argentina

Under the Argentine Foreign Investment Law, as amended (the FIL), the purchase of stock by an individual or legal entity domiciled
abroad or by a local company of foreign capital (as defined in the FIL) constitutes a foreign investment subject to the FIL. Foreign investments generally are unrestricted. However, foreign investments in certain industries, such as broadcasting,
are restricted as to percentage. No approval is necessary to purchase the Class B Shares. The FIL does not limit the right of nonresident or foreign owners to hold or vote the Class B Shares, and there are no restrictions in Telecom Argentinas
bylaws limiting the rights of nonresidents or non-Argentines to hold or to vote Telecom Argentinas Class B Shares. Notwithstanding the foregoing, regulations implemented by the CNV require that all shareholders that are companies who register
to participate at a Shareholders Meeting should provide details of their registration in the Republic of Argentina. To acquire participation in a company in Argentina, non-Argentine companies are required to comply with the share ownership
registration requirements as provided for under Section 123 of the Argentine Corporations Law.

Change of Control

There are no provisions in the bylaws of Telecom Argentina which may have the effect of delaying, deferring or preventing a change in control
of Telecom Argentina and that would only operate with respect to a merger, acquisition or corporate restructuring involving Telecom Argentina or any of its subsidiaries, except for the regulatory authorization required for the transfer of
Nortels Class A Shares discussed below. Moreover, the Privatization Regulations and the List of Conditions as modified by Resolutions SC No. 111/03 and No. 29/04 prohibit, without prior SC approval, (i) any transfer of our
capital stock that reduces Nortels ownership of Telecom Argentina to less than 51%, or (ii) any transfer of shares of Nortel that reduces the shareholding of the actual ordinary shareholders to less than 51% of the voting stock of Nortel,
except with prior authorization of the SC.

Under Law 26,831 a party that wishes to obtain either a majority or a significant equity
ownership interest (with the intention of acquriring control) in a publicly traded corporation must offer a precio equitativo as defined in the law to all of the corporations shareholders. Until the enactment of Law 26,831,
this regulation applied to all Argentine corporations with listed securities unless the corporations shareholders specifically voted not to adopt the regime. On January 28, 2013, Law No. 26,831 became effective. This law states in
its Article 90, Universal scope. The Statutory Regime of Public Offer of Mandatory Acquisition regulated in this chapter and the residual participation regime regulated in the following chapter includes all listed companies, even those that,
under the previous regime, have opted to be excluded of its application.



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MATERIAL CONTRACTS

For information regarding the Shareholders Agreement, see Item 7Major Shareholders and Related Party
TransactionsShareholders Agreement. We are not a party to the Shareholders Agreement.

FOREIGN INVESTMENT AND
EXCHANGE CONTROLS IN ARGENTINA

Due to the deterioration of the economic and financial situation in Argentina throughout 2001, the
difficulties in dealing with the servicing of the public foreign debt and the decrease of the total level of deposits in the financial system, the Argentine government issued Decree No. 1,570/01, which, as of December 3, 2001, established
a number of monetary and currency exchange control measures that included restrictions on the free disposition of funds with banks and restrictions on transferring funds abroad, with certain exceptions for transfers related to foreign trade and
certain other transfers subject to the prior authorization of the BCRA.

On February 8, 2002, the BCRA issued tight restrictions on
the transfer of funds abroad in order to make payments of principal and/or interest by requiring prior authorization from the BCRA. Since 2003, these restrictions have been progressively curbed. However, there can be no assurances that the BCRA or
other governmental agencies will not increase restrictions for making transfers of funds abroad.

Having completed its debt restructuring
as of August 2005, Telecom Argentina is no longer subject to certain significant BCRA restrictions. However, restrictions imposed by the BCRA or other government agencies will not increase restrictions for making transfers of funds abroad:



| | (i) | the ability to acquire foreign currency as an investment or to apply it to foreign portfolio investments is subject to prior approval of the BCRA;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the acquisition of foreign currency to pay principal maturities on foreign debt obligations can be made on the day of such maturities or:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------



| | 1. | within the 10 business days preceding the maturity date, provided that the acquirer complies with the Minimum Holding Term (as defined below);
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | within a certain period of time before the maturity date, as a result of the occurrence of specific conditions established under foreign refinancing agreements executed after February 11, 2002; or
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | before the 10 business day period immediately preceding the maturity date provided that the acquirer complies with the Minimum Holding Term and the payment is entirely financed with (i) foreign funds
destined to capital contributions; or (ii) new financings granted by international financial institutions and agencies, official foreign credit agencies, and foreign banks, and to the extent that: (a) such prepayment were expressly
established as a condition to grant new credits, and (b) such prepayment does not imply an increase in the present value of the outstanding debt.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In June 2005, the Argentine government imposed certain restrictions on inflows and outflows of foreign currency to the local foreign exchange
market that remain in effect. New indebtedness entered into the foreign exchange market and debt renewals with non-Argentine residents from the private sector entered in the local foreign exchange market shall be agreed upon and canceled in terms
not shorter than 365 calendar days (the Minimum Holding Term), whatever the form of cancellation thereof (i.e. with or without access to the local foreign exchange market). The following transactions, among others, are exempted from this
restriction: (i) foreign trade financings (i.e., exports advance payments, prefinancing of exports and imports financing); (ii) balances of foreign exchange transactions with correspondent exchange entities (which are not credit lines);
and (iii) primary debt security issuances with a public offering and listing.

Any inflow of funds to the local foreign exchange
market arising from, but not limited to, (i) foreign indebtedness, other than the cases described in the following paragraph; (ii) primary stock issuances of companies residing in Argentina not under a public offering and that are not
listed in self-governed markets, to the extent they do not create direct investment funds; (iii) portfolio investments of nonresidents intended to hold local currency and assets and liabilities of the financial sector and nonfinancial private
sector, to the extent they are not arising from the primary subscription of debt securities under a public offering and listed in self-governed markets and/or the primary subscription of



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stock of companies residing in Argentina under a public offering and listed in self-governed markets; and (iv) portfolio investments of nonresidents intended for the purchase of any right in
secondary markets regarding securities issued by the public sector; shall be subject to the creation of a nominative, nontransferable and noncompensated deposit, for 30% of the amount involved in the relevant transaction (the Mandatory
Deposit), for a term of 365 calendar days, pursuant to the terms and conditions established in the regulations.

Any inflow of funds
to the local foreign exchange market arising from, but not limited to, the following transactions are not subject to the 30% mandatory deposit: (a) foreign indebtedness of Argentine residents under foreign trade financings; (b) primary
debt security issuances with a public offering and listed; (c) foreign indebtedness with Multilateral and Bilateral Credit Institutions and Official Credit Agencies, directly or through their related agencies; (d) investments of
non-Argentine residents in Argentina under (i) primary subscription of securities issued by the public sector (except for securities issued by the BCRA); and (ii) direct investments, including capital contributions to local companies of
direct investment (namely, a company set up or not as legal entity in which the foreign direct investor holds at least 10% of common shares or voting rights or its equivalent), and foreign funds transferred into Argentina by non-Argentine residents
for the purpose of purchasing local assets that qualify as direct investment (such as real estate located in Argentina); and (e) foreign financial indebtedness provided: (i) the proceeds from the exchange settlement, net of taxes and
expenses, are applied to the purchase of foreign currencies to cancel foreign debt principal and/or to the creation of long-term foreign assets; or (ii) they are incurred and canceled in an average life of not less than two years, including
payments of principal and interest in the calculation, and to the extent they are applied to investments in nonfinancial assets. In this context, nonfinancial assets investments mean, among others, investments of assets
capable of being registered in the financial statements of the borrower either as fixed assets or as inventory.

Recently, the Ministry of
Economy and Public Finance included the following exemptions from the Mandatory Deposit: (i) the inflow of own funds through the foreign exchange market to the extent that such funds are used to purchase local currency for the subsequent
payment of tax obligations; and (ii) the inflow of funds from foreign entities financings to be applied to the installation of industrial and technology equipment into local companies, through the acquisition and subsequent delivery in
leasing of: (x) equipment that falls within the category of machinery and technology, and (y) certain vehicles within an exhaustive list.

There can be no assurance that the BCRA will not once again require its prior authorization for, or restrict in some other way, the transfer
of funds abroad for principal and/or interest payments by Telecom to its foreign creditors or for dividend payments by Telecom to its foreign shareholders.

Argentine companies may keep and spend outside Argentina any capital contributions that they have received abroad. Conversely, if a
non-Argentine resident sends its capital contribution to the Argentine company in Argentina or the Argentine company repatriates a contribution received abroad, that transfer will be subject to certain requirements under foreign exchange
regulations. Those requirements will vary depending on whether the capital contribution is classified as a portfolio or a direct investment. Direct investments are participations in Argentine companies reaching at
least a holding of 10% of their common stock or voting rights (and subsequent contributions of a foreign investor who has already reached that level), and portfolio investments are participations that fall below that minimum. Portfolio
investments also include holdings of cash and bank deposits on local currency, as well as debt securities, among others.

Funds of direct
investments transferred to Argentina as capital contributions are not subject to the Mandatory Deposit, provided that certain requirements are met and the Argentine company receiving such funds completes and registers with the Public Registry of
Commerce the related capital increase by the applicable deadline. The applicable deadline was recently extended and the Argentine company must register with the Public Registry of Commerce within 540 calendar days of the day of its initial filing.
Portfolio investments are subject to the Mandatory Deposit.

The impact of foreign exchange regulations on the repatriation rights of
non-Argentine resident investors (i.e., the right to use Argentine Pesos received in Argentina by a nonresident due to a sale, liquidation or capital reduction to buy foreign currency and transfer it abroad) also varies depending on whether the
investment is a direct or a portfolio investment.



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In any case, both types of investment must be maintained in Argentina for at least 365 days
before repatriation.

Communication A 5,237 of the BCRA, effective from October 28, 2011, added a new requirement for
non-Argentine direct investors to repatriate Argentine Pesos collected in Argentina as a consequence of a sale or liquidation of the direct investment, capital reduction and reimbursement of capital contributions in Argentina (the
Communication). As from the effective date of Communication A 5,237, for such purpose, the funds originally paid for such investment or disbursement for the capital contribution, as applicable, must be transferred to
Argentina and sold for pesos in the local foreign exchange market (the Transfer Requirement). Prior to the Communication, non-Argentine investors were not obliged to demonstrate that the funds paid for its investments or disbursements
for its capital contributions had been transferred and sold in the exchange market in order to be allowed to repatriate its investment.

The Communication applies to all the direct investments made on and since October 28, 2011. Therefore, all direct investments made before
that date are exempt from the Transfer Requirement.

In addition, repatriation of a portfolio investment requires evidence that the
original investment involved the transfer of funds to Argentina and is subject to an aggregate maximum limit of US$500,000 per calendar month.

TAXATION

Argentine Taxes

The following summary of certain Argentine tax matters is based upon the tax laws of Argentina, and regulations thereunder, in effect as of the
date of this Annual Report on Form 20-F and is subject to any subsequent change in Argentine laws and regulations which may come into effect after such date. This summary does not purport to be a comprehensive description of all of the tax
considerations that may be relevant to a holder of such securities.

Recent amendments to the Income Tax Law

On September 23, 2013, Law No. 26,893 was published in the Official Bulletin, incorporating amendments to the Argentine Income Tax
Laws in connection with, among others, the taxation of gains derived from transfers of stocks and dividend distributions. On February 7, 2014, the Executive Branch issued Decree No. 2,334/13 which regulates Law 26,893. Law No. 26,893
became effective on September 23, 2013, and applies to taxable events on or after that date.

Taxation of Dividends

Prior to September 23, 2013, pursuant to Argentine Law No. 25,063 passed by the Argentine Congress on December 7, 1998,
dividends of cash, property or capital stock of Telecom Argentina on the Class A, B and C Shares or ADSs were, in general, exempt from Argentine withholding tax and other taxes (other than the Equalization Tax described below). But,
as of Law No 26,893s effective date, dividends and other profits paid in cash or in kind except for stock dividends or quota dividends, by companies and other entities incorporated in Argentina referred to in Argentine Income
Tax Law Sections 69 (a) (1), (2), (3), (6) and (7), and Section 69 (b), are subject to income tax at a 10% rate, except for dividends received by Argentine companies and other Argentine entities, which continue to not be subject to
income tax. Dividends distributed to nonresidents shall be subject to a 10% withholding tax, as a unique and definitive payment. Consequently, any dividend distribution made by the Company to its shareholders shall be subject to this broadened tax,
except for those beneficiaries that are domestic corporate taxpayers, referred to as sujetos empresa (such as, for instance, distributions made from Telecom Argentina to Nortel and those from Personal to Telecom Argentina and Nortel) and
in addition to withholding, if applicable, of the so called Equalization Tax (as described below).

Under Argentine income tax
law, a corporation that makes a distribution of dividends to its shareholders in excess of the amount of its accumulated taxable net income at the close of the previous taxable year, as determined by application of the Argentine Income Tax Law (the
Income Tax Law), must withhold a 35% tax from such excess (the Equalization Tax). For purposes of this rule, the amount of income to be considered shall be determined by (1) deducting from taxable income (calculated
under the general rules of the Income Tax Law) the income tax paid by the company and



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(2) adding the dividends and profits not subject to tax received as distributions from other corporations. If the distribution is in kind, then the corporation must pay the tax to the tax
authorities and will be entitled to seek reimbursement from the shareholders.

Taxation of Capital Gains

Prior to September 23, 2013, gains earned by non-resident individuals or foreign companies from the sale, exchange or other disposition of
ADSs or Class A, B and C Shares were not subject to tax in Argentina. As of September 23, 2013, gains derived from the transfer of shares , quotas and other equity interests, titles, bonds and other securities, are subject to Argentine
income tax, regardless of the type of beneficiary who realizes the gain. The effective tax rate applicable is 15%.

However, gains from
the transfer of such securities are exempt from such income tax when the securities are listed on a stock exchange and the gains are realized by Argentine individuals or undivided estates.

Capital gains obtained by nonresidents from the transfer of shares, quotas and other equity interests, titles, bonds and other securities are
subject to this new tax on capital gains. The tax is to be assessed at the nonresident sellers option by either (i) applying the 15% tax rate on 90% of the sales price or (ii) the excess of the sale price over the acquisition cost
net of the other expenses incurred in Argentina necessary to obtain, maintain and preserve this gain. There is currently no guidance under Argentine law with respect to how this election is made. When both the seller and the buyer are nonresidents,
the person liable to pay the tax shall be the buyer of the shares, quotas, equity interests and other securities transferred.

Holders are
encouraged to consult a tax advisor as to the particular Argentine income tax consequences of holding and disposing of ADSs or Class A, B and C Shares.

Tax on Personal Property

Argentine Law No. 25,585, as amended by Law No. 26,317, imposes a Tax on Personal Property. According to this tax, the following
persons are subject to an annual tax on certain assets, which is levied at rates ranging from 0.50% to 1.25% depending on the value of such assets as of December 31 of each year: (i) individuals domiciled in Argentina for assets located in
Argentina and abroad and (ii) individuals domiciled outside of Argentina for assets located in Argentina. For purposes of this tax, shares of stock of Argentine corporations, such as Telecom Argentinas ADSs and Class A, B and C
Shares are considered assets located in Argentina.

Although the Tax on Personal Property does not explicitly apply to individuals or
entities domiciled outside Argentina, pursuant to Argentine Law No. 25,585, shares of stock corporations or other equity interests in companies regulated by Argentine Corporations Law 19,550, as amended, such as the ADSs (held in book entry
form or evidenced by ADRs) and Class A, B and C Shares, and whose holders are individuals and/or undivided estates domiciled in Argentina or in a foreign country, shall be subject to the Tax on Personal Property.

The tax rate to be applied is 0.50% and the taxable base is the value of the shareholders equity as stated in the most recent balance
sheet of the company as of December 31 of each year. Such tax shall be assessed on and paid by the corresponding Argentine company issuer of the shares, such as Telecom Argentina. The tax so paid shall be considered as a definite payment.

The abovementioned rules include an irrebuttable presumption that shares of stock corporations and other equity interests of companies
regulated by Argentine Corporations Law 19,550, as amended, such as the ADSs (held in book entry form or evidenced by ADRs) and the Class A, B and C Shares, whose holders are companies, any other legal entities, enterprises, permanent
establishments and trusts, domiciled, settled or located in a foreign country, belong indirectly to individuals or individual estates domiciled in a foreign country.

Although Telecom Argentina is required to pay this tax on behalf of the holders of the ADSs and Class A, B and C Shares, it has the right
to obtain reimbursement of the amounts paid from its shareholders even if this requires holding and/or foreclosing the property on which the tax is due.

Therefore, Telecom Argentinas ADSs (held in book entry form or evidenced by ADRs) and Class A, B and C Shares held by individuals,
irrespective of their place of residence, and legal entities domiciled outside of Argentina are subject to the Tax on Personal Property, which, as mentioned above, shall be paid by Telecom Argentina on behalf of such holders of ADSs (held in book
entry form or evidenced by ADRs) and Class A, B and C Shares.



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Telecom Argentina has, from time to time, requested that its shareholders reimburse the amounts
of tax on personal property paid on their behalf and has received partial reimbursement of such taxes, however no assurances can be made that Telecom Argentina will be successful in seeking reimbursement of all such taxes paid from holders of ADSs
and Class A, B, and C shares. Therefore, as of December 31, 2013, Telecom Argentina has recorded an allowance of P$18 million for the amounts pending collection. Whenever applicable, tax on personal property paid on behalf of Telecom
Argentinas shareholders is deducted from the cash dividend payment.

Value Added Tax

The sale or disposition of ADSs or Class A, B and C Shares is not subject to value added tax.

Other Taxes

There are no
national Argentine inheritance or succession taxes applicable to the ownership, transfer or disposition of ADSs or Class A, B and C Shares. There are no Argentine stamp, issue, registration or similar taxes or duties payable by holders of ADSs
or Class A, B and C Shares.

Deposit and Withdrawal of Class B Shares in Exchange for ADSs

No Argentine tax is imposed on the deposit or withdrawal of Class A, B and C Shares in exchange for ADSs.

Tax Treaties

Argentina
has entered into tax treaties with several countries. There is currently no income tax treaty or convention in effect between Argentina and the United States.

United States Federal Income Taxes

The
following discussion is a summary of the material U.S. federal income tax consequences to the U.S. Holders described below of the ownership and disposition of ADSs or Class B Shares, but it does not purport to be a comprehensive description of all
of the tax considerations that may be relevant to a holder of such securities. This summary applies only to U.S. Holders (as defined below) that hold ADSs or Class B Shares as capital assets for U.S. federal income tax purposes and does not address
all of the tax consequences applicable to all categories of investors, some of which may be subject to special rules, such as:



| |  | certain financial institutions;
|- |  | -------------------------------



| |  | dealers and traders in securities who use a mark-to-market method of tax accounting;
|- |  | ------------------------------------------------------------------------------------



| |  | persons holding ADSs or Class B Shares as part of a hedging transaction, straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the ADSs or
Class B Shares;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
|- |  | ----------------------------------------------------------------------------------------------



| |  | persons liable for the alternative minimum tax;
|- |  | -----------------------------------------------



| |  | persons liable for tax under the provisions of the Internal Revenue Code of 1986, as amended (the Code) known as the Medicare contribution tax;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  | tax-exempt entities, including an individual retirement account or Roth IRA;
|- |  | --------------------------------------------------------------------------------



| |  | entities classified as partnerships for U.S. federal income tax purposes;
|- |  | -------------------------------------------------------------------------



| |  | persons that own or are deemed to own 10% or more of any class of Telecom Argentina stock;
|- |  | ------------------------------------------------------------------------------------------



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| |  | persons who acquired Telecom Argentinas ADSs or Class B Shares pursuant to the exercise of an employee stock option or otherwise as compensation; or
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | persons holding ADSs or Class B shares in connection with a trade or business conducted outside of the United States.
|- |  | ---------------------------------------------------------------------------------------------------------------------

If an entity that is classified as a partnership for U.S. federal income tax purposes holds ADSs or Class B Shares, the U.S. federal income
tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ADSs or Class B Shares and partners in such partnerships should consult their tax advisers as to the particular
U.S. federal income tax consequences of holding and disposing of the ADSs or Class B Shares.

This summary is based on the Code,
administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof, changes to any of which may affect the tax consequences described herein, possibly with retroactive effect. As
mentioned above, there is currently no income tax treaty or convention in effect between Argentina and the United States. U.S. Holders should consult their tax advisers regarding the U.S., Argentine or other tax consequences of the acquisition,
ownership and disposition of ADSs or Class B Shares in their particular circumstances, including the effect of any state or local tax laws.

In addition, this summary is based in part on representations of the Depositary and assumes that each obligation provided for in, or otherwise
contemplated by, the Deposit Agreement or any other related document will be performed in accordance with its terms.

As used herein, the
term U.S. Holder means a holder that, for U.S. federal income tax purposes, is a beneficial owner of ADSs or Class B Shares and is:



| |  | a citizen or individual resident of the United States;
|- |  | ------------------------------------------------------



| |  | a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
|- |  | -----------------------------------------------------------------------------------------------------------

In general, for U.S. federal income tax purposes, holders of ADSs will be treated as the owners of the underlying Class B Shares represented
by those ADSs. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying Class B Shares represented by those ADSs.

The U.S. Treasury has expressed concerns that parties to whom American depositary shares are released before delivery of shares to the
depositary (pre-release), or intermediaries in the chain of ownership between holders and the issuer of the security underlying the American depositary shares, may be taking actions that are inconsistent with the claiming of foreign tax
credits by holders of American depositary shares. Such actions would also be inconsistent with claiming the preferential rates of tax, described below, applicable to dividends received by certain non-corporate holders. Accordingly, the creditability
of Argentine taxes, and the availability of the preferential rates of tax for dividends received by certain non-corporate holders, each described below, could be affected by actions taken by such parties or intermediaries.

This discussion assumes that Telecom Argentina is not, and will not become, a passive foreign investment company, as described below.

Taxation of Distributions

To the extent paid out of current or accumulated earnings and profits of Telecom Argentina (as determined in accordance with U.S. federal
income tax principles), distributions made with respect to ADSs or Class B Shares will generally be included in the income of a U.S. Holder as ordinary dividend income. Because Telecom Argentina does not maintain calculations of its earnings and
profits under U.S. federal income tax principles, it is expected that distributions will generally be reported to U.S. Holders as dividends. Subject to applicable limitations and the discussion above regarding concerns expressed by the U.S.
Treasury, dividends paid to certain non-corporate U.S. Holders will be taxable at the preferential rates applicable to long-term capital gain if the dividends represent qualified dividend income. Qualified dividend income
means dividends received from a qualified foreign corporation, and a foreign corporation is generally treated as a qualified foreign corporation with respect to dividends paid on stock which is readily tradable on a
securities market in the United States (such as the New York Stock Exchange, where our ADSs are traded). U.S. Holders should consult



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their tax advisers regarding the availability of the preferential dividend tax rates in light of their particular circumstances. The amount of a dividend will include any amounts withheld by
Telecom Argentina or its paying agent in respect of Argentine income taxes. Dividends will generally be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally
allowed to U.S. corporations under the Code. Dividends will be included in a U.S. Holders income on the date of the U.S. Holders (or in the case of ADSs, the Depositarys) receipt of the dividend. See TaxationArgentine
Taxes. The amount of the distribution will equal the U.S. dollar value of the pesos received, calculated by reference to the exchange rate in effect on the date such distribution is received (which, for holders of ADSs, will be the date such
distribution is received by the Depositary), whether or not the Depositary or U.S. Holder in fact converts any pesos received into U.S. dollars. If the distribution is converted into U.S. dollars on the date of receipt, U.S. Holders should not be
required to recognize foreign currency gain or loss in respect of the dividend income. Any gains or losses resulting from the conversion of pesos into U.S. dollars after the date on which the distribution is received will be treated as ordinary
income or loss, as the case may be, of the U.S. Holder and will be U.S.-source income or loss.

Subject to applicable limitations and
conditions that may vary depending upon the circumstances and subject to the discussion above regarding concerns expressed by the U.S. Treasury, Argentine income taxes withheld from dividends on ADSs or Class B Shares will be creditable against a
U.S. Holders U.S. federal income tax liability. However, amounts paid on account of the Tax on Personal Property will not be eligible for credit against a U.S. Holders federal income tax liability. See TaxationArgentine
Taxes. The rules governing foreign tax credits are complex, and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances and to determine the tax consequences applicable to
them as a result of amounts paid on account of the Argentine Tax on Personal Property, including whether such amounts are includible in income or deductible for U.S. federal income tax purposes. Instead of claiming a credit, U.S. Holders may elect
to deduct otherwise creditable Argentine taxes in computing taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued
in the taxable year to foreign countries and possessions of the United States.

Sale, Exchange or Other Disposition of ADSs or Class B
Shares

Gain or loss realized by a U.S. Holder on the sale, exchange or other disposition of ADSs or Class B Shares will be subject to
U.S. federal income tax as capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder has held the ADSs or Class B Shares for more than one year. The amount of the gain or loss will be equal to the difference between the
U.S. Holders tax basis in the ADSs or Class B Shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. If an Argentine tax is withheld on the sale or disposition of ADSs or Class B Shares, a
U.S. Holders amount realized will include the gross amount of the proceeds of the sale or disposition before deduction of the Argentine tax. See Argentine TaxesTaxation of Capital Gains for a description of when a
disposition may be subject to taxation by Argentina. Such gain or loss, if any, will generally be U.S.-source gain or loss for foreign tax credit purposes. U.S. Holders should consult their tax advisors as to whether the Argentine tax on gains may
be creditable against the U.S. Holders U.S. federal income tax on foreign source income from other sources. Long-term capital gains recognized by non-corporate taxpayers are subject to reduced tax rates. The deductibility of capital losses is
subject to limitations.

Deposits and withdrawals of Class B Shares in exchange for ADSs will not result in taxable gain or loss for U.S.
federal income tax purposes.

Passive Foreign Investment Company Rules

Telecom Argentina believes that it was not a passive foreign investment company (PFIC) for U.S. federal income tax
purposes for the taxable year 2013. However, because PFIC status depends upon the composition of a companys income and assets and the market value of its assets from time to time, there can be no assurance that Telecom Argentina will not be a
PFIC for any taxable year.

If Telecom Argentina were a PFIC for any taxable year during which a U.S. Holder held an ADS or a Class B
Share, gain recognized by a U.S. Holder on a sale, exchange or other disposition (including certain pledges) of the ADS or Class B Share would be allocated ratably over the U.S. Holders holding period for the ADS or Class B Share sold,
exchanged or disposed of. The amounts allocated to the taxable year of the sale, exchange or other disposition and to any year before Telecom Argentina became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year
would be subject to tax at the highest rate in effect for individuals or corporations, as



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appropriate, for that taxable year, and an interest charge would be imposed on the amount allocated to such taxable year. Further, any distribution in respect of the ADS or Class B Share, to the
extent it exceeds 125 percent of the average of the annual distributions on the ADS or Class B Share received by the U.S. Holder during the preceding three years or the U.S. Holders holding period, whichever is shorter, would be subject to
taxation in the same manner as gain, described immediately above. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ADS or Class B Share. U.S. Holders should consult their tax
advisers to determine whether any of these elections would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances.

If Telecom Argentina were a PFIC for any year during which a U.S. Holder held ADSs or Class B Shares, it generally would continue to be
treated as a PFIC with respect to that holder for all succeeding years during which the U.S. Holder held ADSs or Class B Shares, even if Telecom Argentina ceased to meet the threshold requirements for PFIC status.

In addition, if Telecom Argentina were a PFIC or, with respect to a particular U.S. Holder, were treated as a PFIC in a taxable year in which
Telecom Argentina pays a dividend or for the prior taxable year, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate holders would not apply.

If a U.S. Holder owns ADSs or Class B Shares during any taxable year in which Telecom Argentina is a PFIC, the U.S. Holder will generally be
required to file IRS Form 8621 with their annual U.S. federal income tax return, subject to certain exceptions.

Information Reporting
and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related
financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is an exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a
correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to
a U.S. Holder will be allowed as a credit against the U.S. Holders U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

DOCUMENTS ON DISPLAY

Telecom Argentina files annual and special reports and other information with the SEC. You may read and copy any document that Telecom
Argentina files at the Public Reference Room of the SEC at 100 F Street NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an
Internet site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.

You may request a copy of these filings by writing or telephoning the offices of Telecom Argentina, Alicia Moreau de Justo 50, (C1107AAB)
Buenos Aires, Argentina. Telecom Argentinas telephone number is 011-54-11-4968-4000.

Telecom Argentina maintains a website at
www.telecom.com.ar. The contents of the website are not part of this Annual Report.



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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Summarized below are the financial instruments we held as of December 31, 2013 that are sensitive to changes in foreign exchange rates and
interest rate, if any. As a matter of policy, we may enter into forward exchange contracts, foreign currency swaps or other derivatives to manage the exposure attributed to foreign exchange rate and interest rate fluctuations associated with the
principal amount of our liabilities in foreign currencies. We use these instruments to reduce risk by creating offsetting market exposures. The instruments we hold are not held for financial trading purposes. No foreign exchange forward or other
derivatives for speculative purposes were outstanding during the reporting periods covered by this Annual Report.

We do not have any
other material market risk exposure.

(a) Foreign Exchange Rate Risk

Foreign exchange exposure arises from our funding operations and, to a lesser extent, our capital expenditures and expenses denominated in
foreign currencies. Since the Convertibility Law pegged the peso at a value of P$1.00 per US$1.00, exchange rate risks before 2002 were mainly related to changes in the value of the U.S. dollar in comparison with currencies other than the Argentine
peso. In January 2002, the Argentine government devalued the Argentine peso and currently the peso/U.S. dollar exchange rate is determined by a free market with certain controls. See Item 10Additional InformationForeign Investment
and Exchange Controls in Argentina.

Our results of operations are sensitive to changes in the peso/dollar exchange rates because
our primary assets are in Argentina and most of our revenues are denominated in pesos (our functional currency) while some part of our liabilities are denominated in foreign currencies. As of December 31, 2013, Telecom Argentina and Personal
have no financial debt outstanding. However, Núcleos debt obligations are denominated in guaraníes, Paraguays local currency and Telecom Argentina, Personal and Núcleo have commercial debt nominated in U.S. dollars.

Additionally the Company has cash and cash equivalents, and investments denominated in U.S. dollars and in Euro (approximately 29% of
total cash and equivalents and investments) that are also sensitive to changes in pesos/dollar exchange rates and contribute to reduce the exposure to trade payables in foreign currency. As of December 31, 2013, the Company had, NDF contracts,
investments in pesos linked to the fluctuation of pesos/dollar rate (Dollar Linked), and investments in funds where the main asset are financial assets with Dollar Linked clause, in order to hedge its exposure to U.S. dollar fluctuations
related to accounts payable. The investments in NDF contracts, Dollar Linked Bonds, and investments in funds where the main asset are financial assets with Dollar Linked clause totaled 11% of the cash, cash and equivalents and investments.

Actions taken by the Argentine government could cause future exchange rates to vary significantly from current or historical exchange rates.
Fluctuations in exchange rates may adversely affect the value, translated or converted into U.S. dollars, of our net assets, earnings and any declared dividends. We cannot give any assurance that any future movements in the exchange rate of the
Argentine peso against the U.S. dollar and other foreign currencies will not adversely affect our results of operations, financial condition and cash flows. However, we believe that a significant depreciation in the Argentine peso against major
foreign currencies may have a material adverse impact on our capital expenditure program and in our operating expenses denominated in foreign currencies.

(b) Interest Rate Risk

As of
December 31, 2013 the Company had no outstanding floating rate borrowings. Therefore, the Company is not currently exposed to significant cash flow fluctuations in this connection.

(c) Sensitivity to Exchange Rates

We estimate, based on the composition of the statement of financial position as of December 31, 2013, that every variation in the
exchange rate of P$0.10 against the U.S. dollar and proportional variations in other foreign currencies against the Argentine peso, plus or minus, would result in an variation of approximately P$24 million of the net foreign currency liabilities.
This analysis is based on the assumption that this variation of the Argentine peso occurred at the same time against all other currencies.

If we consider only the portion not covered by derivative financial instruments and other assets adjusted by the variation of the U.S. dollar,
the net liability position amounts to P$328 million equivalent to US$50 million, and a variation of the exchange rate of P$0.10 as described in the previous paragraph, would generate a variation of approximately P$5 million in the net foreign
currency liabilities.



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This sensitivity analysis provides only a limited, point-in-time view of the market risk
sensitivity of certain of our financial instruments. During the first three months of 2014, the exchange rate of the Argentine peso suffered a devaluation of approximately 23% against the U.S. dollar from P$6.52 = US$1.00 to P$8.00 = US$1.00.
Consequently the actual impact of market foreign exchange rate changes on our financial instruments may differ significantly from the impact shown in the sensitivity analysis.

See Note 26 to our Consolidated Financial Statements for a description of financial risk management.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Depositary Fees and Charges

JPMorgan
Chase Bank, N.A. (formerly Morgan Guaranty Trust Company of New York), as depositary for the ADSs (the depositary) collects its fees for delivery directly from investors depositing shares or surrendering ADSs for the purpose of
withdrawal. The depositary also collects taxes and governmental charges from the holders of ADSs. The depositary collects these fees and charges by deducting those fees from the amounts distributed or by selling a portion of distributable property
to pay the fees (after attempting by reasonable means to notify the holder prior to such sale).

Persons depositing or withdrawing shares
must pay US$5.00 for each 100 ADSs or portion thereof for issuances of ADSs, including issuances resulting from a distribution, sale or exercise of shares or rights or other property. Investors depositing shares or holders withdrawing deposited
securities are charged fees and expenses in connection with stock transfers, taxes and other governmental charges, cable, telex and facsimile transmission and delivery charges imposed at such persons request, transfer or registration fees for
the registration of transfer of ADSs on any applicable register in connection with the deposit or withdrawal of ADSs and the depositarys expenses in connection with the conversion of foreign currency.

The depositary reimburses Telecom Argentina for certain expenses we incur in connection with the ADR program, subject to the agreement between
us and the depositary from time to time. These reimbursable expenses currently include listing fees, investor relations expenses and fees payable to service providers for the distribution of material to ADR holders. For the year ended
December 31, 2013, the depositary reimbursed Telecom Argentina approximately US$158.3 thousand (gross amount of withholding tax) in connection with the ADR program.



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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None of Telecom Argentina, Personal, Núcleo or Telecom Argentina USA are currently in default on any outstanding indebtedness.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Telecoms Management, with the participation of our chief executive and financial officers, evaluated the effectiveness of the
Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2013 (the Evaluation Date). Based upon that evaluation, our chief executive and financial
officers have concluded that as of the Evaluation Date, the Companys disclosure controls and procedures were effective.

Managements Report
on Internal Control Over Financial Reporting

Telecoms Management is responsible for establishing and maintaining adequate
internal control over financial reporting for Telecom as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with IFRS.

Management conducted an evaluation
of the effectiveness of Telecoms internal control over financial reporting based on the framework in Internal Control  Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on this evaluation and as set forth in its report dated February 27, 2014, and included in Item 18, Management concluded that Telecoms internal control over financial reporting was effective as of
December 31, 2013. The effectiveness of Telecoms internal control over financial reporting as of December 31, 2013 has been audited by PriceWaterhouse & Co. S.R.L., an independent registered public accounting firm, as
stated in their report which is included herein. See the complete Managements Report on Internal Control Over Financial Reporting in Item 18.

Changes in Internal Control Over Financial Reporting

There were no changes in the Companys internal control over financial reporting that occurred during the period covered by this Annual
Report on Form 20-F that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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|PART II  ITEM 15 CONTROLS AND
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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

On April 23, 2013, the Board of Directors of Telecom Argentina appointed the members of the Audit Committee for fiscal year 2013 and
determined that Esteban Gabriel Macek qualifies as an Audit Committee financial expert. In conducting this evaluation, the Board took into account that Mr. Macek is an accountant from the Universidad de Buenos Aires (1982). He was a partner at
Coopers & Lybrand/PriceWaterhouseCoopers until 2002, where he was an auditor and tax consultant. He assisted companies in the private (domestic and international) and public sector in tax matters related to company restructuring and
business development. He participated in many professional training activities and attended graduate courses at the Universidad Austral and the West Ontario University Business School (Canada), among others. He was an accounting and law professor at
the Universidad de Buenos Aires and at the Universidad Católica Argentina. He is Chairman of Fiduciaria Internacional Argentina S.A. He was a member of the Board of Directors and of the Supervisory Committee of several domestic corporations.
He served as an alternate director of Telecom Argentina during 2007 and since 2008 he has been serving as a director of Telecom Argentina.

Based on Mr. Maceks professional background and training, the Board of Directors of Telecom Argentina has determined for the year
2013 that he meets the criteria for an Audit Committee financial expert. Mr. Macek is an independent director under CNV and SEC rules and under the New York Stock Exchange listing standards.

The Board of Directors meeting appointing the Audit Committee members for year 2014 has not yet been held. As a result, the members of
the Audit Committee appointed at the Board of Directors meeting of April 23, 2013 continue to hold their positions.

ITEM 16B. CODE OF ETHICS

The Board of Directors of Telecom Argentina has approved a Code of Business Conduct and Ethics which applies to directors, members of the
Supervisory Committee, officers and employees of the Telecom Group. No waivers, express or implicit, have been granted to any senior officer or member of the Board of Directors of Telecom Argentina with respect to any provision of the Code.

It is also encouraged that suppliers, contractors, advisers and consultants of the Telecom Group, accept the ethical principles of the Code.

The Boards of Directors of Telecom Argentina and Personal, at the meetings held by each on October 26, 2010, decided to include an
additional chapter to the Code of Business Conduct and Ethics, which includes the general duties and responsibilities of directors, members of the Supervisory Committee and all personnel of either company, which arise from the Telco Commitment and
the TI-W Commitment, pursuant to Resolutions No. 148/10 and No. 149/10 issued by the Secretary of Economic Policy of the Economy Ministry, with certain clarifications and details made by CNDC. The Code of Business Conduct and Ethics is
available on our website at www.telecom.com.ar.



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COMMITTEE FINANCIAL EXPERT / ITEM 16B CODE OF ETHICS |  | TELECOM ARGENTINA S.A.



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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table provides information on the aggregate fees for services rendered by our principal accountants (in million of pesos) for the
years ended December 31, 2013 and 2012.



|                       |  |      |      |  |      |  |      | 
|---------------------- |  | ---- | ---- |  | ---- |  | ---- | 
|Services Rendered      |  | 2013 |      |  | 2012 | 
|Audit Fees (1)         |  |      | 10.9 |  |      |  | 8.7  | 
|Audit-Related Fees (2) |  |      |     |  |      |  | 0.1  | 
|Tax Fees (3)           |  |      | 0.8  |  |      |  | 0.7  | 
|All Other Fees (4)     |  |      | 1.1  |  |      |  | 0.5  | 
|                       |  |      |      |  |      |  |      | 
|Total                  |  |      | 12.8 |  |      |  | 10.0 | 
|                       |  |      |      |  |      |  |      | 



|(1) | Includes fees related to the integrated audit of the Consolidated Financial Statements as of December 31, 2013 and 2012, limited reviews of interim financial statements presented during 2013 and 2012, SEC filing
reviews and other attestation services.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes fees for permitted internal control advice.
|--- | ----------------------------------------------------

|(3) | Includes fees for permitted tax compliance and tax advisory services.
|--- | ---------------------------------------------------------------------

|(4) | Includes fees for subscription to business publications and other permitted internal control advice.
|--- | ----------------------------------------------------------------------------------------------------

Audit Committee Pre-Approval Policies and Procedures

On March 22, 2004, Telecom Argentinas Board of Directors approved policies and procedures relating to the pre-approval of
auditors services and other permitted services (collectively, Pre-Approval Procedures) for the engagement of any service provided by external auditors to Telecom Argentina and its subsidiaries. Telecom Argentinas Board of
Directors performed Pre-Approval Procedures until April 2004 (the date on which the Audit Committee came into effect), after which Pre-Approval Procedures were performed by the Audit Committee. Consequently, since that date, all auditors
services were pre-approved by the Audit Committee.

The Pre-Approval Procedures provide for services that require:



| |  |  | specific pre-approvalto be approved on a case-by-case basis; and
| | - |  | -----------------------------------------------------------------



| |  |  | general pre-approvalany category or general kind of service that come within the guidelines established to safeguard auditor independence and come within the maximum amounts set by the Audit Committee.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Pre-Approval Procedures also provide for the following categorization of services:

Prohibited services are those services that external auditors are not allowed to provide based on prohibitions contained in the
statutory rules of Argentina and the United States (i.e., bookkeeping; financial information system design and implementation; appraisal or valuation services, fairness opinions or contribution-in-kind reports; actuarial services; internal audit
outsourcing services; management functions; broker/dealer, investment adviser, or investment banking services; expert services unrelated to the audit).

Permitted Services include (a) audit services; (b) audit-related services; (c) tax services, and (d) other
services. Moreover, the services included in each category were also detailed, and, were appropriate, any limits imposed on the provision thereof to ensure external auditors independence.

The Pre-Approval Procedures also require pre-approval for the following services:



| |  |  | Annual audit and quarterly reviews of Telecom Argentinas financial statements: the Audit Committee is required to approve the terms for the engagement and remuneration of such services.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other Audit Services: the Audit Committee is required to define the services that will be subject to general pre-approval on an annual basis, setting the annual service fee amount, or the annual amount
allocated to each individual service category, or to each service, within which fee caps the provision shall receive general pre-approval.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Audit-related Services and Tax Services: the Audit Committee is required to define the categories or types of services that will receive general pre-approval, provided that they fall within the
annual fee cap set for that service, and establish the guidelines for prior engagement of these services.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Other Permitted Services: are not subject to general pre-approval, and any other services require specific pre-approval by the Audit Committee for each service.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Delegation: the Audit Committee may solely delegate the specific pre-approval of services with any of its members that qualify as an Independent Director. An Independent Director must immediately report to
the Audit Committee after engaging any service by delegation. Under no circumstances may the authority to either approve or pre-approve services be delegated to Telecom Argentinas Management.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Disclosure of overall billed fees: external auditors shall include in their audit reports the information about the relationship between the overall fees paid in respect of Audit Services and of services other than
audit services. In addition, the Audit Committee shall, on a yearly basis, prepare a report to the Board of Directors, which will be included in Form 20-F, providing a detailed account of all fees invoiced by external auditors to Telecom Argentina
and to its subsidiaries, grouped into four categories, namely, audit fees, audit related fees, tax consultation fees and all other fees described in the first three bullet points above.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Additional Requirements: the Audit Committee is required to adopt additional measures to fulfill its supervisory obligations related to external auditors duties, in order to ensure the independence from Telecom
Argentina, such as the review of a formal written statement by the external auditors outlining all relations existing between them and Telecom Argentina, in accordance with Rule No. 1 of the Independence Standards Board, and discussions with
the external auditors and the methods and procedures that have been designed to ensure their independence.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amendments: the Audit Committee has authority to amend the Pre-Approval Procedures, rendering an account of any such amendment to the Board of Directors during the first meeting of the Board of Directors held after
making the amendments.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If Telecoms external auditors are to provide any service, the service must either be granted
general pre-approval or specific pre-approval under the Pre-Approval Procedures. The Pre-Approval Procedures require the Audit Committee to consider whether the services to be provided are consistent with the legal and professional rules in effect
in Argentina and the United States relating to external auditors independence.

ITEM 16D. EXEMPTIONS FROM THE
LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED PURCHASERS

Throughout 2013, Telecom Argentina has acquired the following treasury shares:



|                     |  |                                     |  |                                                    |  |                                                                   |  |                                                  
|-------------------- |  | ----------------------------------- |  | -------------------------------------------------- |  | ----------------------------------------------------------------- |  | -------------------------------------------------
|Acquisition Period   |  | Total number of sharespurchased (a) |  | Average price paid per sharein Argentine pesos (b) |  | Total number of sharespurchased as part of publiclyannounced plan |  | Maximum number of Sharesthat may yet be purchased
|                    
|May 22-31, 2013      |  | 105,800                             |  | 26.49                                              |  | 105,800                                                           |  | 98,332,298                                       
|June 1-30, 2013      |  | 3,167,382                           |  | 25.29                                              |  | 3,167,382                                                         |  | 95,164,916                                       
|July 1-31, 2013      |  | 3,013,883                           |  | 24.99                                              |  | 3,013,883                                                         |  | 92,151,033                                       
|August 1-31, 2013    |  | 1,361,547                           |  | 29.24                                              |  | 1,361,547                                                         |  | 90,789,486                                       
|September 1-30, 2013 |  | 3,135,542                           |  | 35.56                                              |  | 3,135,542                                                         |  | 87,653,944                                       
|October 1-31, 2013   |  | 3,587,756                           |  | 33.62                                              |  | 3,587,756                                                         |  | 84,066,188                                       
|November 1-7, 2013   |  | 849,463                             |  | 36.29                                              |  | 849,463                                                           |  | 83,216,725                                       
|                    
|Total                |  | 15,221,373                          |  | 30.29                                              |  | 15,221,373                                                        |  | 83,216,725                                       
|                    



|(a) | Every share acquired was an ordinary Class B share, $1 Argentine peso of nominal value. Every share was acquired through our publicly announced Treasury Shares Acquisition Process. This process was announced
on May 22, 2013. The maximum amount to be invested under the plan is P$1,200 million. The deadline for the acquisition process is April 30, 2014. By virtue of the offer made by Fintech on November 7, 2013 for the acquisition of the
controlling interest of Telecom Italia Group in Telecom Argentina, Telecom Argentina suspended the acquisition of treasury shares.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(b) | Includes commissions and duties necessary for the acquisition of the shares. Acquisitions were made in pesos in the market in order to avoid any possible damages to Telecom Argentina and its shareholders derived from
fluctuations and imbalances between the shares price and Telecom Argentinas solvency.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For further detail see
Item 9The Offer and Listing.

ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT

Not applicable.



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ITEM 16G. CORPORATE GOVERNANCE

Telecom Argentinas corporate governance practices differ from corporate governance practices of U.S. companies. Telecom Argentina maintains a detailed
description of the significant differences in corporate governance practices on its website at www.telecom.com.ar, last updated in June 2013.

The
following is a summary of the material aspects in which Telecom Argentinas corporate governance policies differ from those followed by U.S. companies under New York Stock Exchange listing standards.



| |  |  | Composition of the Board of Directors: The NYSE requires each Board of Directors to be composed of a majority of independent directors. Although this is not required under Argentine law, as of the date of this summary,
the eleven-member Board of Directors of Telecom Argentina has six directors who qualify as independent according to SEC Rules.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Board of Directors Annual Self-Evaluation: The NYSE requires Boards of Directors of listed companies to conduct a self-evaluation at least annually, and report thereon, determining whether it and its committees are
functioning effectively. Under Argentine law, the Board of Directors performance is evaluated at the Annual Ordinary Shareholders Meeting.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Nominating/Corporate Governance Committee: NYSE listed companies are required to have a nominating/corporate governance committee. Neither Argentine law nor Telecom Argentinas Bylaws require the creation of a
nominating/corporate governance committee. In Argentina, it is unusual (though possible) for the Board of Directors to nominate new directors and the Board of Directors of Telecom Argentina refrains from making such proposals. The right to nominate
and appoint directors is vested in the shareholders who nominate and appoint regular and alternate directors at the Shareholders Meetings. On certain occasions, the Argentine Corporations Law delegates the right to designate directors to the
Supervisory Committee.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Compensation Committee: NYSE listed companies are required to have a compensation committee composed entirely of independent directors. Neither Argentine law nor Telecom Argentinas Bylaws require the creation of a
compensation committee. Telecom Argentinas executive compensation matters are undertaken by the Board of Directors and the Steering Committee. The compensation of the members of Telecom Argentinas Board of Directors is
determined by the shareholders at the Annual Shareholders Meeting.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Audit Committee Hiring Policies: The NYSE requires listed companies to have an Audit Committee which sets clear hiring policies for employees or former employees of the independent auditors. There is no such provision
regarding the hiring of external auditors employees contained in Argentine law or Telecom Argentinas bylaws.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

According to the provisions of Annex IV, Title IV of CNV rules (New Text 2013) Telecom Argentina prepares and submits to the CNV, on an annual
basis, a report which indicates and details the CNVs recommended corporate governance practices as set forth in the CNV Public Offer Regime, explains the practices followed by Telecom Argentina, and the reasons for any variation from practices
recommended by the CNV. Telecom Argentinas 2013 Corporate Governance Report was submitted to the CNV as part of the Statutory Annual Report dated February 27, 2014. Telecom Argentinas Corporate Governance Reports submitted to the
CNV can be accessed through the CNVs website, www.cnv.gob.ar and Telecom Argentinas website, www.telecom.com.ar.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.



|                                        |  |                       
|--------------------------------------- |  | ----------------------
|PART II  ITEM 16G CORPORATE
GOVERNANCE |  | TELECOM ARGENTINA
S.A.



171



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PART III

ITEM 17. FINANCIAL STATEMENTS

The Registrant has responded to Item 18 in lieu of responding to this Item.

ITEM 18. FINANCIAL STATEMENTS

Reference is made to pages F-1 through F- 77.

The following financial statements are filed as part of this Form 20-F:



|                                                                 |  |      |      | 
|---------------------------------------------------------------- |  | ---- | ---- | 
|                                                                 |  | Page |     
|Telecom Argentina S.A.:                                          |  |      |      | 
|Report of Independent Registered Public Accounting Firm          |  |      | F-1  | 
|Managements Report on Internal Control over Financial Reporting |  |      | F-2  | 
|Consolidated Statements of Financial Position                    |  |      | F-4  | 
|Consolidated Income Statements                                   |  |      | F-5  | 
|Consolidated Statements of Comprehensive Income                  |  |      | F-6  | 
|Consolidated Statements of Changes in Equity                     |  |      | F-7  | 
|Consolidated Statements of Cash Flows                            |  |      | F-9  | 
|Glossary of terms                                                |  |      | F-10 | 
|Notes to the Consolidated Financial Statements                   |  |      | F-12 | 

ITEM 19. EXHIBITS

Exhibits:



|     |  |                                                                                                                                                                                                                                                                                                                 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|1.1  |  | Estatutos (bylaws) of Telecom Argentina, as amended (English translation) (incorporated by reference to Exhibit 1.1 to Telecom Argentinas Annual Report on Form 20-F for year ended December 31, 2010 dated June 29,
2011).                                                                                    
|     | 
|4.1  |  | Deposit Agreement, dated November 8, 1994 (incorporated by reference to Telecoms registration statement on Form F-6 (No. 333-07452)).                                                                                                                                                                          
|     | 
|4.2  |  | Form of Amendment No. 1 to Deposit Agreement, dated August 28, 1997 (incorporated by reference to Telecoms registration statement on Form F-6 (No. 333-07452)).                                                                                                                                                
|     | 
|8.1  |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                           
|     | 
|12.1 |  | Certification of Stefano De Angelis of Telecom Argentina S.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                        
|     | 
|12.2 |  | Certification of Adrián Calaza of Telecom Argentina S.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                             
|     | 
|13.1 |  | Certification of Stefano De Angelis and Adrián Calaza pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                    
|     | 
|15.1 |  | Amended and Restated Shareholders Agreement between Telecom Italia S.p.A., Telecom Italia International N.V. and W de Argentina  Inversiones S.L. dated August 5, 2010 (Shareholders Agreement)
(incorporated by reference to Exhibit 3 to Telecom Italia S.p.A.s Schedule 13D filed on October 22, 2010).
|     | 
|15.2 |  | First Amendment to the Shareholders Agreement dated October 13, 2010 (incorporated by reference to Exhibit 4 to Telecom Italia S.p.A.s Schedule 13D filed on October 22, 2010).                                                                                                                               
|     | 
|15.3 |  | Second Amendment to the Shareholders Agreement dated March 9, 2011 (incorporated by reference to Exhibit 3 to Telecom Italia S.p.A.s Schedule 13D/A filed on March 10,
2011).                                                                                                                                 



|         |  |                       
|-------- |  | ----------------------
|PART III |  | TELECOM ARGENTINA
S.A.



172



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|     |  |                                                                                                                                                                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|15.4 |  | Third Amendment to the Shareholders Agreement dated November 13, 2013 (incorporated by reference to Exhibit 6 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).           
|     | 
|15.5 |  | Mutual Shareholder Release to the Shareholders Agreement dated November 13, 2013 (incorporated by reference to Exhibit 7 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).
|     | 
|15.6 |  | Deed of Adherence to the Shareholders Agreement dated November 13, 2013 ((incorporated by reference to Exhibit 8 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).        



|         |  |                       
|-------- |  | ----------------------
|PART III |  | TELECOM ARGENTINA
S.A.



173



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##### Table of Contents

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this Annual Report on its behalf.



Telecom Argentina S.A.By:

/s/ Adrián CalazaName:

Adrián CalazaTitle:

Chief Financial Officer


Date: April 14, 2014



|         |  |                       
|-------- |  | ----------------------
|PART III |  | TELECOM ARGENTINA
S.A.



174



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##### Table of Contents

TELECOM ARGENTINA S.A.



Consolidated Financial
Statements as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011

Alicia Moreau de Justo 50

(1107) Ciudad Autónoma de Buenos Aires

Argentina

$: Argentine peso

US$ : US dollar

$6.521 = US$1 as of December 31,
2013



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Telecom Argentina S.A.

In our opinion, the accompanying consolidated statements of financial position, the related consolidated statements of income, comprehensive income, changes
in equity and cash flows present fairly, in all material respects, the financial position of Telecom Argentina S.A. and its subsidiaries (the Company) at December 31, 2013 and 2012, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2013 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). The Companys management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Managements Report on Internal Control Over Financial Reporting appearing on page F-2. Our responsibility is to express opinions on these financial statements and on the Companys internal
control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Buenos Aires, Argentina

February 27, 2014



|                              |  |                          |  |          
|----------------------------- |  | ------------------------ |  | ---------
|PRICE WATERHOUSE & CO. S.R.L.
|                              |  |                         
|By                            |  | /s/ Alejandro P. Frechou |  | (Partner)
|Alejandro P. Frechou         



F-1



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##### Table of Contents

TELECOM ARGENTINA S.A.



Managements Report on Internal Control Over
Financial Reporting

Telecom Groups Management is responsible for establishing and maintaining adequate internal control over
financial reporting for Telecom Group as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (IFRS). Internal control over financial reporting includes
those policies and procedures that:



| |  |  | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Telecom Group;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that receipts and expenditures of Telecom Group are being made only in
accordance with authorizations of Management and directors of Telecom Group; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Telecom Groups assets that could have a material effect on the financial statements.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of Telecom Groups internal control over financial reporting based on the
framework in Internal Control  Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation, Management concluded that the Telecom Groups
internal control over financial reporting was effective as of December 31, 2013. The effectiveness of Telecom Groups internal control over financial reporting as of December 31, 2013 has been audited by Price Waterhouse & Co
S.R.L., an independent registered public accounting firm, as stated in their report which is included herein.

Buenos Aires, Argentina

February 27, 2014



|                          |  |                        
|------------------------- |  | -----------------------
|/s/    Stefano De Angelis |  | /s/    Adrián Calaza   
|Chief Executive Officer   |  | Chief Financial Officer



F-2



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##### Table of Contents

TELECOM ARGENTINA S.A.





CONTENTS



|                                                                                                                         |  |      |      | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | 
|                                                                                                                         |  | Page |     
|                                                                                                                         | 
|Consolidated Statements of Financial Position                                                                            |  |      | F-4  | 
|                                                                                                                         | 
|Consolidated Income Statements                                                                                           |  |      | F-5  | 
|                                                                                                                         | 
|Consolidated Statements of Comprehensive Income                                                                          |  |      | F-6  | 
|                                                                                                                         | 
|Consolidated Statements of Changes in Equity                                                                             |  |      | F-7  | 
|                                                                                                                         | 
|Consolidated Statements of Cash Flows                                                                                    |  |      | F-9  | 
|                                                                                                                         | 
|Glossary of terms                                                                                                        |  |      | F-10 | 
|                                                                                                                         | 
|Note 1  Description of business and basis of preparation of the consolidated financial
statements                       |  |      | F-12 | 
|                                                                                                                         | 
|Note 2  Regulatory framework                                                                                            |  |      | F-13 | 
|                                                                                                                         | 
|Note 3  Significant accounting policies                                                                                 |  |      | F-25 | 
|                                                                                                                         | 
|Note 4  Cash and cash equivalents and Investments. Additional information on the consolidated statements of
 cash flows |  |      | F-39 | 
|                                                                                                                         | 
|Note 5  Trade receivables                                                                                               |  |      | F-42 | 
|                                                                                                                         | 
|Note 6  Other receivables                                                                                               |  |      | F-42 | 
|                                                                                                                         | 
|Note 7  Inventories                                                                                                     |  |      | F-43 | 
|                                                                                                                         | 
|Note 8  Property, plant and equipment                                                                                   |  |      | F-44 | 
|                                                                                                                         | 
|Note 9  Intangible assets                                                                                               |  |      | F-47 | 
|                                                                                                                         | 
|Note 10  Trade payables                                                                                                 |  |      | F-48 | 
|                                                                                                                         | 
|Note 11  Deferred revenues                                                                                              |  |      | F-48 | 
|                                                                                                                         | 
|Note 12  Financial debt                                                                                                 |  |      | F-48 | 
|                                                                                                                         | 
|Note 13  Salaries and social security payables                                                                          |  |      | F-49 | 
|                                                                                                                         | 
|Note 14  Income tax payables and deferred income tax                                                                    |  |      | F-49 | 
|                                                                                                                         | 
|Note 15  Other taxes payables                                                                                           |  |      | F-51 | 
|                                                                                                                         | 
|Note 16  Other liabilities                                                                                              |  |      | F-51 | 
|                                                                                                                         | 
|Note 17  Provisions                                                                                                     |  |      | F-51 | 
|                                                                                                                         | 
|Note 18  Commitments                                                                                                    |  |      | F-54 | 
|                                                                                                                         | 
|Note 19  Equity                                                                                                         |  |      | F-55 | 
|                                                                                                                         | 
|Note 20  Financial instruments                                                                                          |  |      | F-57 | 
|                                                                                                                         | 
|Note 21  Revenues                                                                                                       |  |      | F-61 | 
|                                                                                                                         | 
|Note 22  Operating expenses                                                                                             |  |      | F-62 | 
|                                                                                                                         | 
|Note 23  Operating income                                                                                               |  |      | F-64 | 
|                                                                                                                         | 
|Note 24  Finance income and expenses                                                                                    |  |      | F-65 | 
|                                                                                                                         | 
|Note 25  Earnings per share                                                                                             |  |      | F-66 | 
|                                                                                                                         | 
|Note 26  Financial risk management                                                                                      |  |      | F-66 | 
|                                                                                                                         | 
|Note 27  Related party balances and transactions                                                                        |  |      | F-69 | 
|                                                                                                                         | 
|Note 28  Segment information                                                                                            |  |      | F-72 | 
|                                                                                                                         | 
|Note 29  Sale of the equity interest on Springville                                                                     |  |      | F-75 | 
|                                                                                                                         | 
|Note 30  Quarterly consolidated information                                                                             |  |      | F-76 | 
|                                                                                                                         | 
|Note 31  Restrictions on distribution of profits                                                                        |  |      | F-77 | 
|                                                                                                                         | 
|Note 32  Events subsequent to December, 31 2013                                                                         |  |      | F-77 | 



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TELECOM ARGENTINA S.A.





CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Argentine pesos)



|                                                               |  |      |  |                    |        |  |      |  |        | 
|-------------------------------------------------------------- |  | ---- |  | ------------------ | ------ |  | ---- |  | ------ | 
|                                                               |  |      |  | As of December 31, |       
|                                                               |  | Note |  | 2013               |        |  | 2012 | 
|ASSETS                                                         |  |      |  |                    |        |  |      |  |        | 
|Current Assets                                                 |  |      |  |                    |        |  |      |  |        | 
|Cash and cash equivalents                                      |  | 4    |  |                    | 5,224  |  |      |  | 3,160  | 
|Investments                                                    |  | 4    |  |                    | 123    |  |      |  | 563    | 
|Trade receivables                                              |  | 5    |  |                    | 2,986  |  |      |  | 2,181  | 
|Other receivables                                              |  | 6    |  |                    | 646    |  |      |  | 449    | 
|Inventories                                                    |  | 7    |  |                    | 772    |  |      |  | 633    | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Total current assets                                           |  |      |  |                    | 9,751  |  |      |  | 6,986  | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Non-Current Assets                                             |  |      |  |                    |        |  |      |  |        | 
|Trade receivables                                              |  | 5    |  |                    | 21     |  |      |  | 23     | 
|Deferred income tax asset                                      |  | 14   |  |                    | 128    |  |      |  | 62     | 
|Other receivables                                              |  | 6    |  |                    | 242    |  |      |  | 119    | 
|Investments                                                    |  | 4    |  |                    | 243    |  |      |  | 70     | 
|Property, plant and equipment                                  |  | 8    |  |                    | 11,226 |  |      |  | 9,035  | 
|Intangible assets                                              |  | 9    |  |                    | 1,519  |  |      |  | 1,514  | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Total non-current assets                                       |  |      |  |                    | 13,379 |  |      |  | 10,823 | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|TOTAL ASSETS                                                   |  |      |  |                    | 23,130 |  |      |  | 17,809 | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|LIABILITIES                                                    |  |      |  |                    |        |  |      |  |        | 
|Current Liabilities                                            |  |      |  |                    |        |  |      |  |        | 
|Trade payables                                                 |  | 10   |  |                    | 6,130  |  |      |  | 3.659  | 
|Deferred revenues                                              |  | 11   |  |                    | 423    |  |      |  | 362    | 
|Financial debt                                                 |  | 12   |  |                    | 15     |  |      |  | 43     | 
|Salaries and social security payables                          |  | 13   |  |                    | 741    |  |      |  | 635    | 
|Income tax payables                                            |  | 14   |  |                    | 801    |  |      |  | 458    | 
|Other taxes payables                                           |  | 15   |  |                    | 667    |  |      |  | 552    | 
|Other liabilities                                              |  | 16   |  |                    | 49     |  |      |  | 40     | 
|Provisions                                                     |  | 17   |  |                    | 224    |  |      |  | 134    | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Total current liabilities                                      |  |      |  |                    | 9,050  |  |      |  | 5,883  | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Non-Current Liabilities                                        |  |      |  |                    |        |  |      |  |        | 
|Trade payables                                                 |  | 10   |  |                    | 1      |  |      |  | 20     | 
|Deferred revenues                                              |  | 11   |  |                    | 453    |  |      |  | 329    | 
|Financial debt                                                 |  | 12   |  |                    | 220    |  |      |  | 101    | 
|Salaries and social security payables                          |  | 13   |  |                    | 118    |  |      |  | 128    | 
|Deferred income tax liabilities                                |  | 14   |  |                    | 126    |  |      |  | 220    | 
|Income tax payables                                            |  | 14   |  |                    | 10     |  |      |  | 12     | 
|Other liabilities                                              |  | 16   |  |                    | 68     |  |      |  | 51     | 
|Provisions                                                     |  | 17   |  |                    | 1,033  |  |      |  | 907    | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|Total non-current liabilities                                  |  |      |  |                    | 2,029  |  |      |  | 1,768  | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|TOTAL LIABILITIES                                              |  |      |  |                    | 11,079 |  |      |  | 7,651  | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|EQUITY                                                         |  |      |  |                    |        |  |      |  |        | 
|Equity attributable to Telecom Argentina (Controlling Company) |  |      |  |                    | 11,783 |  |      |  | 9,959  | 
|Equity attributable to non-controlling interest                |  |      |  |                    | 268    |  |      |  | 199    | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|TOTAL EQUITY(See Consolidated Statements of Changes in Equity) |  | 19   |  |                    | 12,051 |  |      |  | 10,158 | 
|                                                               |  |      |  |                    |        |  |      |  |        | 
|TOTAL LIABILITIES AND EQUITY                                   |  |      |  |                    | 23,130 |  |      |  | 17,809 | 
|                                                               |  |      |  |                    |        |  |      |  |        | 

The accompanying notes are an integral part of these consolidated financial statements.



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TELECOM ARGENTINA S.A.





CONSOLIDATED INCOME STATEMENTS

(In millions of Argentine pesos, except per share data in Argentine pesos)



|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|--------------------------------------------------------- |  | ---- |  | ------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                          |  |      |  | For the years endedDecember 31, |       
|                                                          |  | Note |  | 2013                            |        |   | 2012 |  |        | 2011 | 
|Revenues                                                  |  | 21   |  |                                 | 27,287 |   |      |  | 22,117 |      |  |  | 18,498 |  
|Other income                                              |  | 21   |  |                                 | 63     |   |      |  | 79     |      |  |  | 30     |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total revenues and other income                           |  |      |  |                                 | 27,350 |   |      |  | 22,196 |      |  |  | 18,528 |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Employee benefit expenses and severance payments          |  | 22   |  |                                 | (4,152 | ) |      |  | (3,269 | )    |  |  | (2,609 | )
|Interconnection costs and other telecommunication charges |  | 22   |  |                                 | (1,829 | ) |      |  | (1,707 | )    |  |  | (1,497 | )
|Fees for services, maintenance, materials and supplies    |  | 22   |  |                                 | (2,641 | ) |      |  | (2,109 | )    |  |  | (1,719 | )
|Taxes and fees with the Regulatory Authority              |  | 22   |  |                                 | (2,689 | ) |      |  | (2,018 | )    |  |  | (1,595 | )
|Commissions                                               |  | 22   |  |                                 | (2,203 | ) |      |  | (1,949 | )    |  |  | (1,515 | )
|Cost of equipments and handsets                           |  | 22   |  |                                 | (3,111 | ) |      |  | (2,043 | )    |  |  | (1,640 | )
|Advertising                                               |  | 22   |  |                                 | (656   | ) |      |  | (660   | )    |  |  | (599   | )
|Cost of VAS                                               |  | 22   |  |                                 | (708   | ) |      |  | (326   | )    |  |  | (182   | )
|Provisions                                                |  | 17   |  |                                 | (270   | ) |      |  | (153   | )    |  |  | (225   | )
|Bad debt expenses                                         |  | 5    |  |                                 | (283   | ) |      |  | (275   | )    |  |  | (169   | )
|Recovery of restructuring costs / (restructuring costs)   |  | 22   |  |                                 | 8      |   |      |  | (90    | )    |  |  |       |  
|Other operating expenses                                  |  | 22   |  |                                 | (1,252 | ) |      |  | (1,027 | )    |  |  | (785   | )
|Depreciation and amortization                             |  | 22   |  |                                 | (2,873 | ) |      |  | (2,612 | )    |  |  | (2,158 | )
|Gain on disposal of PP&E and impairment of PP&E           |  | 22   |  |                                 | (173   | ) |      |  | 8      |      |  |  | 22     |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Operating income                                          |  | 23   |  |                                 | 4,518  |   |      |  | 3,966  |      |  |  | 3,857  |  
|Finance income                                            |  | 24   |  |                                 | 1,416  |   |      |  | 570    |      |  |  | 316    |  
|Finance expenses                                          |  | 24   |  |                                 | (888   | ) |      |  | (341   | )    |  |  | (236   | )
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Income before income tax expense                          |  |      |  |                                 | 5,046  |   |      |  | 4,195  |      |  |  | 3,937  |  
|Income tax expense                                        |  | 14   |  |                                 | (1,792 | ) |      |  | (1,463 | )    |  |  | (1,395 | )
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Net income for the year                                   |  |      |  |                                 | 3,254  |   |      |  | 2,732  |      |  |  | 2,542  |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                          |  |      |  |                                
|Attributable to:                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Telecom Argentina (Controlling Company)                   |  |      |  |                                 | 3,202  |   |      |  | 2,685  |      |  |  | 2,513  |  
|Non-controlling interest                                  |  |      |  |                                 | 52     |   |      |  | 47     |      |  |  | 29     |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                          |  |      |  |                                 | 3,254  |   |      |  | 2,732  |      |  |  | 2,542  |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                          |  |      |  |                                
|Earnings per share attributable to Telecom Argentina      |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Basic and diluted                                         |  | 25   |  |                                 | 3.27   |   |      |  | 2.73   |      |  |  | 2.55   |  
|                                                          |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  

The accompanying notes are an integral part of these consolidated financial statements.



F-5



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##### Table of Contents

TELECOM ARGENTINA S.A.





CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of Argentine pesos)



|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|---------------------------------------------------------- |  | -------------------------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | 
|                                                           |  | For the years ended December 31, |      
|                                                           |  | 2013                             |       |   | 2012 |  |       | 2011 | 
|                                                           |  |                                  |      
|Net income for the year                                    |  |                                  | 3,254 |   |      |  | 2,732 |      |  |  | 2,542 | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|                                                           |  |                                  |      
|Other components of the Statements of Comprehensive Income |  |                                  |       |   |      |  |       |      |  |  |       | 
|Will be reclassified subsequently to profit or loss        |  |                                  |       |   |      |  |       |      |  |  |       | 
|Currency translation adjustments (non-taxable)             |  |                                  | 140   |   |      |  | 91    |      |  |  | 27    | 
|Will not be reclassified subsequently to profit or loss    |  |                                  |       |   |      |  |       |      |  |  |       | 
|Actuarial results (Notes 3. l and 16)                      |  |                                  | (10   | ) |      |  |      |      |  |  |      | 
|Tax effect                                                 |  |                                  | 3     |   |      |  |      |      |  |  |      | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|Other components of the comprehensive income, net of tax   |  |                                  | 133   |   |      |  | 91    |      |  |  | 27    | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|                                                           |  |                                  |      
|Total comprehensive income for the year                    |  |                                  | 3,387 |   |      |  | 2,823 |      |  |  | 2,569 | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|                                                           |  |                                  |      
|Attributable to:                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|Telecom Argentina (Controlling Company)                    |  |                                  | 3,285 |   |      |  | 2,745 |      |  |  | 2,532 | 
|Non-controlling interest                                   |  |                                  | 102   |   |      |  | 78    |      |  |  | 37    | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 
|                                                           |  |                                  | 3,387 |   |      |  | 2,823 |      |  |  | 2,569 | 
|                                                           |  |                                  |       |   |      |  |       |      |  |  |       | 

The accompanying notes are an integral part of these consolidated financial statements.



F-6



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##### Table of Contents

TELECOM ARGENTINA S.A.





CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Argentine pesos)



|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|-------------------------------------------- |  | -------------------------------------------------------------- | --- |  | -------------------- |  | ----- | ------------------- |  |  | -------------------- |  |  | ----------------------------- | - |  | ------------ |  | - | ------------------------------------- |  |  | ------------------------------------------- |  |  | -------------------------------------- | - |  | ------------------------------------- |  | - | --------------- |  |  | ---------------- |  |  | ----- | ----- |  | -------------------------------------------- |  | --- | ----------- |  |  | ------ | - |  |  | ----- | - |  |  | --- | - |  |  | ------ | -
|                                             |  | Equity attributable to Telecom Argentina (Controlling Company) |     |  |                      |  |       |                     | 
|                                             |  | Owners contribution                                            |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 | 
|                                             |  | Outstandingshares                                              |     |  | Treasury shares      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |      
|                                             |  | Capitalnominalvalue(1)                                         |     |  | Inflationadjust-ment |  |       | Capitalnominalvalue |  |  | Inflationadjust-ment |  |  | Treasurysharesacquisitioncost |   |  | Legalreserve |  |   | Specialreservefor IFRSimplemen-tation |  |  | Voluntaryreservefor futuredividendspayments |  |  | Voluntaryreserve forcapitalinvestments |   |  | Voluntaryreserve forfutureinvestments |  |   | Deferredresults |  |  | Retainedearnings |  |  | Total |       |  | Equityattributableto non-controllinginterest |  |     | TotalEquity | 
|Balances as of January 1, 2011               |  |                                                                | 984 |  |                      |  | 2,688 |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  | 359                                         |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 28  |             |  |  | 2,345  |   |  |  | 6,404 |   |  |  | 107 |   |  |  | 6,511  |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|Legal Reserve (2)                            |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  | 91                                          |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (91    | ) |  |  |      |   |  |  |    |   |  |  |       |  
|Dividends (2)                                |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (915   | ) |  |  | (915  | ) |  |  |    |   |  |  | (915   | )
|Comprehensive income:                        |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |  
|Net income for the year                      |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | 2,513  |   |  |  | 2,513 |   |  |  | 29  |   |  |  | 2,542  |  
|Other comprehensive income                   |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 19  |             |  |  |       |   |  |  | 19    |   |  |  | 8   |   |  |  | 27     |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|Total Comprehensive Income                   |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 19  |             |  |  | 2,513  |   |  |  | 2,532 |   |  |  | 37  |   |  |  | 2,569  |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |  
|Balances as of December 31, 2011             |  |                                                                | 984 |  |                      |  | 2,688 |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  | 450                                         |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 47  |             |  |  | 3,852  |   |  |  | 8,021 |   |  |  | 144 |   |  |  | 8,165  |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|Dividends from Núcleo (3)                    |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  |       |   |  |  |      |   |  |  | (23 | ) |  |  | (23    | )
|Legal Reserve (4)                            |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  | 122                                         |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (122   | ) |  |  |      |   |  |  |    |   |  |  |       |  
|Voluntary reserve for future investments (4) |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       | 2,553 |  |                                              |  |    |             |  |  | (2,553 | ) |  |  |      |   |  |  |    |   |  |  |       |  
|Dividends (4)                                |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (807   | ) |  |  | (807  | ) |  |  |    |   |  |  | (807   | )
|Comprehensive income:                        |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |  
|Net income for the year                      |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | 2,685  |   |  |  | 2,685 |   |  |  | 47  |   |  |  | 2,732  |  
|Other comprehensive income                   |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 60  |             |  |  |       |   |  |  | 60    |   |  |  | 31  |   |  |  | 91     |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|Total Comprehensive Income                   |  |                                                                |    |  |                      |  |      |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  |                                            |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       |      |  |                                              |  | 60  |             |  |  | 2,685  |   |  |  | 2,745 |   |  |  | 78  |   |  |  | 2,823  |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |  
|Balances as of December 31, 2012             |  |                                                                | 984 |  |                      |  | 2,688 |                     |  |  |                     |  |  |                               |  |  |              |  |  |                                       |  |  | 572                                         |  |  |                                        |  |  |                                       |  |  |                 |  |  |                 |  |  |       | 2,553 |  |                                              |  | 107 |             |  |  | 3,055  |   |  |  | 9,959 |   |  |  | 199 |   |  |  | 10,158 |  
|                                             |  |                                                                |     |  |                      |  |       |                     |  |  |                      |  |  |                               |   |  |              |  |   |                                       |  |  |                                             |  |  |                                        |   |  |                                       |  |   |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |       |   |  |  |     |   |  |  |        |  



|(1) | As of December 31, 2012 and 2011, there were 984,380,978 shares issued and fully paid.
|--- | --------------------------------------------------------------------------------------

|(2) | As approved by the Ordinary and Extraordinary Shareholders Meeting held on April 7, 2011.
|--- | ------------------------------------------------------------------------------------------

|(3) | As approved by the Núcleos Ordinary Shareholders Meeting held on March 16, 2012.
|--- | ----------------------------------------------------------------------------------

|(4) | As approved by the Ordinary Shareholders Meeting held on April 27, 2012.
|--- | -------------------------------------------------------------------------

The accompanying notes
are an integral part of these consolidated financial statements.



F-7



---

##### Table of Contents

TELECOM ARGENTINA S.A.





CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Cont.)

(In millions of Argentine pesos)



|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  
|--------------------------------------------------- |  | -------------------------------------------------------------- | --- | - | -------------------- |  | ----- | -------------------------- |  |  | ----------------------- |  |  | -------------------------------- | -- |  | ------------ |  | ---- | ------------------------------------- |  |  | ------------------------------------------- |  |  | ----------------------------------------- | --- |  | ------------------------------------- |  | ------ | --------------- |  |  | ---------------- |  |  | ----- | ----- |  | -------------------------------------------- |  | --- | ----------- |  |  | ------ | - |  |  | ------ | - |  |  | --- | - |  |  | ------ | -
|                                                    |  | Equity attributable to Telecom Argentina (Controlling Company) |     |   |                      |  |       |                            | 
|                                                    |  | Owners Contribution                                            |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 | 
|                                                    |  | Outstandingshares                                              |     |   | Treasury shares      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |      
|                                                    |  | Capitalnominalvalue(1)                                         |     |   | Inflationadjust-ment |  |       | Capitalnominalvalue(1) (2) |  |  | Inflationadjust-ment(2) |  |  | Treasurysharesacquisitioncost(2) |    |  | Legalreserve |  |      | Specialreservefor IFRSimplemen-tation |  |  | Voluntaryreservefor futuredividendspayments |  |  | Voluntaryreserve forcapitalinvestments(2) |     |  | Voluntaryreserve forfutureinvestments |  |        | Deferredresults |  |  | Retainedearnings |  |  | Total |       |  | Equityattributableto non-controllinginterest |  |     | TotalEquity | 
|Balances as of January 1, 2013                      |  |                                                                | 984 |   |                      |  | 2,688 |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  | 572                                         |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       | 2,553 |  |                                              |  | 107 |             |  |  | 3,055  |   |  |  | 9,959  |   |  |  | 199 |   |  |  | 10,158 |  
|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  
|Dividends from Núcleo (3)                           |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  |       |   |  |  |       |   |  |  | (33 | ) |  |  | (33    | )
|Legal Reserve (4)                                   |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  | 134                                         |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (134   | ) |  |  |       |   |  |  |    |   |  |  |       |  
|Special reserve for IFRS implementation (4)         |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  | 19                                          |  |  |                                           | 351 |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (370   | ) |  |  |       |   |  |  |    |   |  |  |       |  
|Voluntary reserve for future dividends payments (4) |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  | 1,000  |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | (1,000 | ) |  |  |       |   |  |  |    |   |  |  |       |  
|Voluntary reserve for capital investments (4)       |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  | 1,200            |  |  |       |      |  |                                              |  |    |             |  |  | (1,200 | ) |  |  |       |   |  |  |    |   |  |  |       |  
|Voluntary reserve for future investments (4)        |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       | 351   |  |                                              |  |    |             |  |  | (351   | ) |  |  |       |   |  |  |    |   |  |  |       |  
|Treasury Shares Acquisition (2)                     |  |                                                                | (15 | ) |                      |  | (42   | )                          |  |  | 15                      |  |  |                                  | 42 |  |              |  | (461 | )                                     |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  |        |   |  |  | (461   | ) |  |  |    |   |  |  | (461   | )
|Dividends (5)                                       |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  | (1,000 | )               |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  |       |   |  |  | (1,000 | ) |  |  |    |   |  |  | (1,000 | )
|Comprehensive income:                               |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  
|Net income for the year                             |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  |    |             |  |  | 3,202  |   |  |  | 3,202  |   |  |  | 52  |   |  |  | 3,254  |  
|Other comprehensive income                          |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  | 83  |             |  |  |       |   |  |  | 83     |   |  |  | 50  |   |  |  | 133    |  
|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  
|Total Comprehensive Income                          |  |                                                                |    |   |                      |  |      |                            |  |  |                        |  |  |                                  |   |  |              |  |     |                                       |  |  |                                            |  |  |                                           |    |  |                                       |  |       |                 |  |  |                 |  |  |       |      |  |                                              |  | 83  |             |  |  | 3,202  |   |  |  | 3,285  |   |  |  | 102 |   |  |  | 3,387  |  
|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  
|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |   
|Balances as of December 31, 2013                    |  |                                                                | 969 |   |                      |  | 2,646 |                            |  |  | 15                      |  |  |                                  | 42 |  |              |  | (461 | )                                     |  |  | 725                                         |  |  |                                           | 351 |  |                                       |  |       |                 |  |  | 1,200            |  |  |       | 2,904 |  |                                              |  | 190 |             |  |  | 3,202  |   |  |  | 11,783 |   |  |  | 268 |   |  |  | 12,051 |  
|                                                    |  |                                                                |     |   |                      |  |       |                            |  |  |                         |  |  |                                  |    |  |              |  |      |                                       |  |  |                                             |  |  |                                           |     |  |                                       |  |        |                 |  |  |                  |  |  |       |       |  |                                              |  |     |             |  |  |        |   |  |  |        |   |  |  |     |   |  |  |        |  



|(1) | As of December 31, 2013, total shares (984,380,978), of $1 argentine peso of nominal value each, were issued and fully paid. As of December 31, 2013; 15,221,373 were treasury shares.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Corresponds to 15,221,373 shares of $1 argentine peso of nominal value each, equivalent to 1.55% of total capital. The treasury shares acquisition costs amounted to 461. See Note 19  Equity to the
consolidated financial statements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | As approved by the Ordinary Shareholders Meeting of Núcleo held on March 22, 2013.
|--- | -----------------------------------------------------------------------------------

|(4) | As approved by the Ordinary Shareholders Meeting held on May 21, 2013 (second tranche).
|--- | ----------------------------------------------------------------------------------------

|(5) | As approved by the Board of Directors meeting held on December 13, 2013 (second tranche).
|--- | ------------------------------------------------------------------------------------------

The
accompanying notes are an integral part of these consolidated financial statements.



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TELECOM ARGENTINA S.A.





CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Argentine pesos)



|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|-------------------------------------------------------------------------------------- |  | ---- |  | ------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                                       |  | Note |  | For the years endedDecember 31, |       
|                                                                                       |  |      |  | 2013                            |        |   | 2012 |  |        | 2011 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                   |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Net income for the year                                                                |  |      |  |                                 | 3,254  |   |      |  | 2,732  |      |  |  | 2,542  |  
|Adjustments to reconcile net income to net cash flows provided by operating activities |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Bad debt expenses and other allowances                                                 |  |      |  |                                 | 396    |   |      |  | 297    |      |  |  | 187    |  
|Depreciation of property, plant and equipment                                          |  | 8    |  |                                 | 1,983  |   |      |  | 1,792  |      |  |  | 1,538  |  
|Amortization of intangible assets                                                      |  | 9    |  |                                 | 890    |   |      |  | 820    |      |  |  | 620    |  
|Consumption of materials                                                               |  | 8    |  |                                 | 147    |   |      |  | 125    |      |  |  | 104    |  
|Gain on disposal of property, plant and equipment                                      |  | 22   |  |                                 | (14    | ) |      |  | (8     | )    |  |  | (22    | )
|Impairment of property, plant and equipment                                            |  | 22   |  |                                 | 187    |   |      |  |       |      |  |  |       |  
|Recovery of restructuring costs/(restructuring costs)                                  |  | 22   |  |                                 | (8     | ) |      |  | 54     |      |  |  |       |  
|Provisions                                                                             |  | 17   |  |                                 | 345    |   |      |  | 235    |      |  |  | 341    |  
|Interest and other financial results                                                   |  |      |  |                                 | (199   | ) |      |  | (104   | )    |  |  | 6      |  
|Income tax expense                                                                     |  | 14   |  |                                 | 1,792  |   |      |  | 1,463  |      |  |  | 1,395  |  
|Income tax paid                                                                        |  | 4.b  |  |                                 | (1,609 | ) |      |  | (1,647 | )    |  |  | (1,316 | )
|Net increase in assets                                                                 |  | 4.b  |  |                                 | (1,661 | ) |      |  | (925   | )    |  |  | (732   | )
|Net increase in liabilities                                                            |  | 4.b  |  |                                 | 1,636  |   |      |  | 195    |      |  |  | 654    |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total cash flows provided by operating activities                                      |  |      |  |                                 | 7,139  |   |      |  | 5,029  |      |  |  | 5,317  |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                   |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Property, plant and equipment acquisitions                                             |  | 4.b  |  |                                 | (3,352 | ) |      |  | (2,465 | )    |  |  | (2,193 | )
|Intangible asset acquisitions                                                          |  | 4.b  |  |                                 | (846   | ) |      |  | (861   | )    |  |  | (807   | )
|Proceeds from the sale of property, plant and equipment                                |  |      |  |                                 | 21     |   |      |  | 13     |      |  |  | 39     |  
|Investments not considered as cash and cash equivalents                                |  | 4.b  |  |                                 | 283    |   |      |  | (632   | )    |  |  | 20     |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total cash flows used in investing activities                                          |  |      |  |                                 | (3,894 | ) |      |  | (3,945 | )    |  |  | (2,941 | )
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                   |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Proceeds from financial debt                                                           |  | 4.b  |  |                                 | 208    |   |      |  | 47     |      |  |  |       |  
|Payment of financial debt                                                              |  | 4.b  |  |                                 | (157   | ) |      |  | (63    | )    |  |  | (36    | )
|Payment of interest                                                                    |  | 4.b  |  |                                 | (16    | ) |      |  | (13    | )    |  |  | (14    | )
|Payment of cash dividends                                                              |  | 4.b  |  |                                 | (981   | ) |      |  | (830   | )    |  |  | (915   | )
|Treasury shares acquisition                                                            |  | 4.b  |  |                                 | (461   | ) |      |  |       |      |  |  |       |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total cash flows used in financing activities                                          |  |      |  |                                 | (1,407 | ) |      |  | (859   | )    |  |  | (965   | )
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|NET FOREIGN EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS                          |  |      |  |                                 | 226    |   |      |  | 117    |      |  |  | 31     |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|                                                                                       |  |      |  |                                
|INCREASE IN CASH AND CASH EQUIVALENTS                                                  |  |      |  |                                 | 2,064  |   |      |  | 342    |      |  |  | 1,442  |  
|CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR                                 |  | 4.b  |  |                                 | 3,160  |   |      |  | 2,818  |      |  |  | 1,376  |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  
|CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR                                       |  | 4.b  |  |                                 | 5,224  |   |      |  | 3,160  |      |  |  | 2,818  |  
|                                                                                       |  |      |  |                                 |        |   |      |  |        |      |  |  |        |  

See Note 4.b for additional information on the consolidated statements of cash flows.

The accompanying notes are an integral part of these consolidated financial statements.



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TELECOM ARGENTINA S.A.





Glossary of terms

The following explanations are not intended as technical definitions, but to assist the general reader to understand certain terms as used in
these consolidated financial statements.

ADS: Telecom Argentinas American Depositary Share, listed on the New York Stock
Exchange, each representing 5 Class B Shares.

ADSL(Asymmetric Digital Subscriber Line): A modem technology that converts existing
twisted-pair telephone lines into access paths for multimedia and high-speed data communications.

ARSAT: Argentine Satellite
Solutions Corporation whose shares belong entirely to the Argentine state.

BCBA (Bolsa de Comercio de Buenos Aires):The Buenos
Aires Stock Exchange.

CNC (Comisión Nacional de Comunicaciones): The Argentine National Communications Commission.

CNDC (Comisión Nacional de Defensa de la Competencia):Argentine Antitrust Commission.

CNV (Comisión Nacional de Valores): The Argentine National Securities Commission.

CPCECABA (Consejo Profesional de Ciencias Económicas de la Ciudad Autónoma de Buenos Aires):The Professional Council of
Economic Sciences of the City of Buenos Aires.

Company: Telecom Argentina S.A. and its consolidated subsidiaries.

CPP (Calling Party Pays): The system whereby the party placing a call to a wireless phone rather than the wireless subscriber pays for
the air time charges for the call.

Cuentas Claras: Under the Cuentas Claras plans, a subscriber pays a set
monthly bill and, once the contract minutes per month have been used, the subscriber can obtain additional credit by recharging the phone card through the prepaid system.

D&A:Depreciation and amortization.

ENTel (Empresa Nacional de Telecomunicaciones): Argentine State Telecommunication Company, which was privatized in November, 1990.

FACPCE (Federación Argentina de Consejos Profesionales en Ciencias Económicas): Argentine Federation of
Professional Councils of Economic Sciences.

FFSU (Fondo Fiduciario del Servicio Universal):Universal Service Fiduciary
Fund

IAS: International Accounting Standards.

IASB: International Accounting Standards Board.

IDC (Impuesto a los débitos y créditos bancarios): Tax on deposits to and withdrawals from bank accounts.

IFRS: International Financial Reporting Standards, as issued by the International Accounting Standards Board.

LSC (Ley de Sociedad Comerciales): Argentine Corporations Law.

Micro Sistemas: Micro Sistemas S.A.

NDF (Non Deliverable Forward): A generic term for a set of derivatives which cover national currency transactions including foreign
exchange forward swaps, cross currency swaps and coupon swaps in non-convertible or highly restricted currencies. The common characteristics of these contracts are that they involve no exchange of principal, are fixed at a pre-determined price and
are typically settled in US dollars (or sometimes in Euros) at the prevailing spot exchange rate taken from an agreed source, time, and future date.

Nortel: Nortel Inversora S.A., the parent company of the Company.

NP:Number Portability Regime, for mobile services in Argentina.

Núcleo: Núcleo S.A.

NYSE: Ney York Stock Exchange.

OCI: Other Comprehensive Income.



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TELECOM ARGENTINA S.A.





PCS (Personal Communications Service): A wireless communications service with systems
that operate in a manner similar to cellular systems.

PEN (Poder Ejecutivo Nacional):Argentine National Government.

Personal: Telecom Personal S.A.

PP&E: Property, plant and equipment.

Price Cap: rate regulation mechanism applied to determine rate discounts based on a formula made up by the U.S. Consumer Price Index
and an efficiency factor. The mentioned factor was established initially in the List of Conditions and afterwards in different regulations by the SC.

Publicom: Publicom S.A.

Regulatory Bodies: Collectively, the SC and the CNC.

Roaming: a function that enables mobile subscribers to use the service on networks of operators other than the one with which they
signed their initial contract. The roaming service is active when a mobile device is used in a foreign country (included in the GSM network).

RT: Technical resolutions issued by the FACPCE.

SAC:Subscriber Acquisition Costs. See Note 3.i).

SC (Secretaría de Comunicaciones): The Argentine Secretary of Communications.

SEC:Securities and Exchange Commission of the United States of America.

SMS: Short message systems.

Sofora: Sofora Telecomunicaciones S.A.

Springville: Springville S.A.

SRMC (Servicios de Radiocomunicaciones Móviles Celular): Mobile Cellular Radiocommunications Service.

STM (Servicio Telefónico Móvil): Mobile Telephone Service.

Telco S.p.A.: A joint company made up of Assicurazioni Generali S.p.A., Intesa San Paolo S.p.A., Mediobanca S.p.A., Sintonia S.A. and
Telefónica, S.A. (of Spain).

Telecom Group: Telecom Argentina and its consolidated subsidiaries.

Telecom Argentina: Telecom Argentina S.A.

Telecom Italia Group: Telecom Italia S.p.A. and its consolidated subsidiaries, except where referring to the Telecom Italia Group as
Telecom Argentinas operator in which case it means Telecom Italia S.p.A. and Telecom Italia International, N.V.

Telecom USA:
Telecom Argentina USA Inc.

Telefónica: Telefónica de Argentina S.A.

TLRD (Terminación Llamada Red Destino): Termination charges from third parties wireless networks.

UNIREN (Unidad de Renegociación y Análisis de Contratos de Servicios Públicos): Renegotiation and Analysis of
Contracts of Public Services Division.

Universal Service or SU: The availability of Basic telephone service, or access to
the public telephone network via different alternatives, at an affordable price to all persons within a country or specified area.

Value-Added Services (VAS): Services that provide additional functionality to the basic transmission services offered by a
telecommunications network such as SMS, Video streaming, Personal Video, Personal Cloud, M2M (Communication Machine to Machine), Social networks, Personal Messenger, Contents and Entertainment (content and text subscriptions, games, music ringtones,
wallpaper, screensavers, etc), MMS (Mobile Multimedia Services) and Voice Mail, among others.

VPP (Valor Patrimonial
Proporcional): Equity method.



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TELECOM ARGENTINA S.A.





Note 1  Description of business and basis of preparation of the
consolidated financial statements



| | a) | The Company and its operations
| | -- | ------------------------------

Telecom Argentina was created through the
privatization of ENTel, the state-owned company that provided telecommunication services in Argentina.

Telecom Argentinas license,
as originally granted, was exclusive to provide telephone services in the northern region of Argentina since November 8, 1990 through October 10, 1999. As from such date, the Company also began providing telephone services in the southern
region of Argentina and competing in the previously exclusive northern region.

The Company provides fixed-line public telecommunication
services, international long-distance service, data transmission and Internet services in Argentina and through its subsidiaries, mobile telecommunications services in Argentina and Paraguay and international wholesale services in the United States
of America. Information on the Telecom Groups licenses and the regulatory framework is described in Note 2.

Entities included in
consolidation and the respective equity interest owned by Telecom Argentina is presented as follows:



|                    |  |                                                        |        |   |                          |          |                    |  |          | 
|------------------- |  | ------------------------------------------------------ | ------ | - | ------------------------ | -------- | ------------------ |  | -------- | 
|Subsidiaries        |  | Percentage of capital stock owned andvoting rights (i) |        |   | Indirect control through |          | Date ofacquisition | 
|Telecom USA         |  |                                                        | 100.00 | % |                          |          |                    |  | 09.12.00 | 
|Micro Sistemas (ii) |  |                                                        | 99.99  | % |                          |          |                    |  | 12.31.97 | 
|Personal            |  |                                                        | 99.99  | % |                          |          |                    |  | 07.06.94 | 
|Springville (iii)   |  |                                                        | 100.00 | % |                          | Personal |                    |  | 04.07.09 | 
|Núcleo (iv)         |  |                                                        | 67.50  | % |                          | Personal |                    |  | 02.03.98 | 



|(i) | Percentage of equity interest owned has been rounded.
|--- | -----------------------------------------------------

|(ii) | Dormant entity as of and for the fiscal years ended December 31, 2013, 2012 and 2011.
|---- | -------------------------------------------------------------------------------------

|(iii) | On February 10, 2014 Personal ́s Board of Directors approved the sale of its equity interest in Springville, which was completed on February 19, 2014 (as described in Notes 29 and 32 to these consolidated
financial statements). Dormant entity as of and for the fiscal years ended December 31, 2013, 2012 and 2011.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | Non-controlling interest of 32.50% is owned by the Paraguayan company ABC Telecomunicaciones S.A.
|---- | -------------------------------------------------------------------------------------------------



| | b) | Segment reporting
| | -- | -----------------

An operating segment is defined as a component of an entity
that engages in business activities from which it may earn revenues and incur expenses, and whose financial information is available, held separately, and evaluated regularly by the Telecom Group ́s Chief Executive Officer (CEO).

Operating segments are reported in a consistent manner with the internal reporting provided to the CEO, who is responsible for
allocating resources and assessing performance of the operating segments at the net income (loss) level and under the accounting principles effective (IFRS) at each time for reporting to the Regulatory Bodies. The accounting policies applied for
segment information are the same for all operating segments.

Information regarding segment reporting is included in Note 28.



| | c) | Basis of preparation
| | -- | --------------------

These consolidated financial statements have been prepared
in accordance with IFRS as issued by the IASB and in accordance with RT 26 (as amended by RT 29) of FACPCE as adopted by the CPCECABA, and as required by the CNV in Argentina for most of public companies.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
Management to exercise its judgment in the process of applying the Telecom Groups accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 3.



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TELECOM ARGENTINA S.A.





The financial statements (except for cash flow information) are prepared on an accrual basis
of accounting. Under this basis, the effects of transactions and other events are recognized when they occur. Therefore income and expenses are recognized at fair value on an accrual basis regardless of when they are received or paid. When
significant, the difference between the fair value and the nominal amount of income and expenses is recognized as finance income or expense using the effective interest method over the relevant period.

The accompanying consolidated financial statements have also been prepared on a going concern basis (further details are provided in Note
3.a) and the figures are expressed in millions of pesos, otherwise indicated.

Publication of these consolidated financial statements for
the year ended December 31, 2013 was approved by resolution of the Board of Directors meeting held on February 27, 2014.



| | d) | Financial statement formats
| | -- | ---------------------------

The financial statement formats adopted are
consistent with IAS 1. In particular:



| |  |  | the consolidated statements of financial position have been prepared by classifying assets and liabilities according to current and non-current criterion. Current assets and liabilities are those that
are expected to be realized/settled within twelve months after the year-end;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the consolidated income statements have been prepared by classifying operating expenses by nature of expense as this form of presentation is considered more appropriate and represents the way that the business of
the Group is monitored by the Management, and, additionally, are in line with the usual presentation of expenses in the telecommunication industry;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the consolidated statements of comprehensive income include the profit or loss for the year as shown in the consolidated income statement and all components of other comprehensive income;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the consolidated statements of changes in equity have been prepared showing separately (i) profit (loss) for the year, (ii) other comprehensive income (loss) for the year, and (iii) transactions
with shareholders (owners and non-controlling interest);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the consolidated statements of cash flows have been prepared by presenting cash flows from operating activities according to the indirect method, as permitted by IAS 7.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These consolidated financial statements contain all material disclosures required under IFRS. Some additional disclosures required by the LSC
and/or by the CNV have been also included, among them, complementary information required in the last paragraph of Article 1 Chapter III Title IV of the CNV General Resolution No. 622/13. Such information is disclosed in Notes 7, 8, 9, 17, 20,
22 and 26 to these consolidated financial statements, as admitted by IFRS.

Note 2 - Regulatory framework

(a) Regulatory bodies and general legal framework

Telecom Argentina and Personal operate in a regulated industry. Regulation not only covers rates and service terms, but also the terms on
which various licensing and technical requirements are imposed.

The provision of telecommunication services is regulated by the SC and
supervised by the CNC. The CNC is in charge of general oversight and supervision of telecommunications services. The SC has the power to develop, suggest and implement policies which are applicable to telecommunications services; to ensure that
these policies are applied; to review the applicable legal regulatory framework; to act as the enforcing authority with respect to the laws governing the relevant activities; to approve major technical plans and to resolve administrative appeals
filed against CNC resolutions.

The principal features of the regulatory framework in Argentina have been created by:



| |  | The Privatization Regulations, including the List of Conditions;
|- |  | ----------------------------------------------------------------



| |  | The Transfer Agreement;
|- |  | -----------------------



| |  | The Licenses granted to Telecom Argentina and its subsidiaries;
|- |  | ---------------------------------------------------------------



| |  | The Tariff Agreements; and
|- |  | --------------------------



| |  | Various governmental Decrees, including Decree No. 764/00, establishing the regulatory framework for licenses, interconnection, universal service and radio spectrum management.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Núcleo, Personals Paraguayan controlled company, is supervised by the Comisión Nacional de Telecomunicaciones de
Paraguay, the National Communications Commission of Paraguay (CONATEL). Telecom USA, Telecom Argentinas subsidiary, is supervised by the Federal Communications Commission (the FCC).



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TELECOM ARGENTINA S.A.





(b) Licenses granted as of December 31, 2013

As of December 31, 2013, Telecom Argentina has been granted the following non-expiring licenses to provide the following services in
Argentina:



| |  |  | Local fixed telephony;
| | - |  | ----------------------



| |  |  | Public telephony;
| | - |  | -----------------



| |  |  | Domestic and international long-distance telephony;
| | - |  | ---------------------------------------------------



| |  |  | Domestic and international point-to-point link services;
| | - |  | --------------------------------------------------------



| |  |  | Domestic and international telex services;
| | - |  | ------------------------------------------



| |  |  | VAS, data transmission, videoconferencing and transportation of audio and video signals; and
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Internet access.
| | - |  | ----------------

As of December 31, 2013, the Companys subsidiaries have been
granted the following licenses:



| |  |  | Personal has been granted non-exclusive, non-expiring licenses to provide mobile telecommunication services (STM) in the northern region of Argentina, data transmission and VAS throughout the country, mobile radio
communication services (SRMC) in the Federal District and Greater Buenos Aires areas, PCS services throughout the country and it is registered to provide national and international long-distance telephone services; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Núcleo has been granted a renewable five-year period license to provide mobile telecommunication services in Paraguay as well as PCS services, data transmission and videoconferences services and Internet access
in certain areas of that country.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Radio electric spectrum auction

In May 2011, the SC through Resolution No. 57/11 launched an auction to reassign the 850 MHz and 1900 MHz frequency bands returned by
Telefónica Móviles de Argentina S.A. because this company had exceeded its 50 MHz spectrum cap. This auction was discontinued by SC Resolution No. 71/12 for reasons of opportunity, merit and convenience of the Argentine
Government.

On December 13, 2012, the PEN, through Decree No. 2,426/12, amended the Regulation on Management and Control
Spectrum, incorporating paragraph 8.5 to Article 8 of that Regulation, establishing: Notwithstanding the provisions of Article 8.1., the Regulatory Authority may assign frequencies directly to National Organizations, State Agencies and
Entities majority-owned by the Argentine Government.

Also, the mentioned Decree conferred to ARSAT the authorization for the use
of the frequencies involved in the auction approved by Resolution SC No. 57/11.

The mentioned Decree also amended Article 8 of the
Regulation for Telecommunications Services Licenses in force, incorporating the following provision: Article 8 bis - Mobile Virtual Network Operator. Those interested in offering mobile services that not have radio spectrum frequencies
assigned for the provision of these services must have the license for telecommunications services and the registration as Mobile Virtual Network Operator. Mobile services operators will be responsible for the services rendered to its customers, and
are liable for the application of the respective sanction system. The Regulatory Authority may issue the application and interpretation acts that deems appropriate.

The same Decree instructs the SC to implement the appropriate measures in order to attribute the bands between 1,710-1,755 MHz; 2,110-2,155
MHz and 698-806 MHz exclusively for terrestrial mobile telecommunications services.

On December 13, 2012, the PEN, through Decree
No. 2,427/12, declared of public interest the development, implementation and operation of the Federal Wireless Network, in charge of the Ministry of Federal Planning, Public Investment and Services, to be executed through ARSAT,
under the National Telecommunications Plan Argentina Conectada, which provides the infrastructure necessary for this purpose, according to the general guidelines established in the Decrees Annex.

In addition, by Article 2 of that Decree, the PEN instructed the Ministry of Federal Planning, Public Investment and Services, as major
shareholder of ARSAT, to take the necessary corporate actions and decisions, that allow the execution of works and services required as a result of the implementation of the Federal Wireless Network.



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Also, on December 21, 2012, the SC Resolution No. 222/09 was published in the Official
Bulletin, which assigned ARSAT the telecommunication services license that authorizes the state company to provide any kind of telecommunication services with or without owned infrastructure. It also provided the authorization for the provision of
value-added services, data transmission and transportation of audio and video signals.

By Resolution No. 9/13, published on
February 7, 2013, the SC granted ARSAT the registration of Mobile Services and National and International Long Distance Services and the Provision of Telecommunication Facilities.

(c) Revocation of the licenses

Telecom Argentinas license is revocable in the case of non-compliance with certain obligations, including but not limited to:



| |  |  | an interruption of all or a substantial portion of the service;
| | - |  | ---------------------------------------------------------------



| |  |  | a modification of its corporate purpose or change of domicile to a jurisdiction outside Argentina;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | a sale or transfer of the license to third parties without prior approval of the Regulatory Bodies;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | any sale, encumbrance or transfer of assets which has the effect of reducing services provided, without the prior approval of the Regulatory Bodies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a reduction of Nortels interest in Telecom Argentina to less than 51%, or the reduction of Nortels common shareholders interest in Nortel to less than 51% of its voting right capital, in either case
without prior approval of the Regulatory Bodies (as of December 31, 2013, all Nortels ordinary shares belong to Sofora. Additional information in Note 27);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any transfer of shares resulting in a direct or indirect loss of control in Telecom Argentina without prior approval of the Regulatory Bodies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Companys bankruptcy.
| | - |  | -------------------------

If the license of the Company was revoked, Nortel must
transfer its stake in the Company to the Regulatory Authority in trust for subsequent sale through public auction.

After the sale of the
shares to a new management group, the Regulatory Authority may renew the license to the Company under terms to be determined.

Personals licenses are revocable in the case of non-compliance with certain obligations, including but not limited to:



| |  |  | repeated interruptions of the services;
| | - |  | ---------------------------------------



| |  |  | any transfer of the license and/or the related rights and obligations, without the prior approval of the Regulatory Authority;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | any encumbrance of the license;
| | - |  | -------------------------------



| |  |  | any voluntary insolvency proceedings or bankruptcy of Personal;
| | - |  | ---------------------------------------------------------------



| |  |  | a liquidation or dissolution of Personal, without the prior approval of the Regulatory Authority.
| | - |  | -------------------------------------------------------------------------------------------------

Núcleos licenses are revocable mainly in the case of:



| |  |  | repeated interruptions of the services;
| | - |  | ---------------------------------------



| |  |  | any voluntary insolvency proceedings or bankruptcy of Núcleo;
| | - |  | -------------------------------------------------------------



| |  |  | non-compliance with certain obligations.
| | - |  | ----------------------------------------

(d) Decree No. 764/00

Decree No. 764/00 substantially modified three regulations:





| |  |  | General Regulation of Licenses
| | - |  | ------------------------------

This regulation establishes a single nationwide
license for the provision of all telecommunication services to the public, including fixed-line, mobile, national and international, irrespective of whether these services are provided through telecommunications infrastructure owned by the service
provider. Under the regulation, a licensees corporate purpose does not need to be exclusively the provision of telecommunications services. In addition, the regulation does not establish any minimum investment or coverage requirements.
Broadcasting service companies may also apply for a license to provide telecommunications services. The regulation further authorizes the resale of telecommunications services subject to the receipt of a license, and there are no restrictions on
participation by foreign companies.



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| |  |  | Interconnection Regulation
| | - |  | --------------------------

This regulation provides for an important reduction
in the reference interconnection prices in effect at the time. The regulation also increases the number of infrastructure elements and services that the dominant operator is required to provide, including interconnection at the local exchange level,
billing services and unbundling of local loops. This regulation also introduces interconnection for number translation services (NTS) such as Internet, audio text, collect calling and the implementation of number portability, all of which shall be
subject to future regulations.

Related to the Regulation for the call by call selection of the providers of long-distance services, the
former Ministry of Infrastructure and Housing issued General Resolution No. 613/01 which approved this Regulation, subsequently modified by Resolution No. 75/03 of the Ministry of Economy, which introduced several changes related to the
obligation of service provision and habilitation and blockage modality and the availability of the service on December 6, 2003. Nevertheless and having the Company fulfilled with all its obligations, as of the date of issuance of these
consolidated financial statements, this long-distance service modality is not implemented.

Related to the number portability, on
January 22, 2009, the SC issued Resolution No. 08/09 pursuant to which an ad hoc Working Commission was created with representatives of the SC and the CNC, for the purpose of preparing a draft of the NP.

On August 19, 2010, through SC Resolution No. 98/10, the SC approved the NP, covering the STM, SRMC, PCS and SRCE (trunking) mobile
services, defined in the resolution as portable services.

On June 14, 2011, the SC issued Resolution No. 67/11 replacing
several sections of the NP regime. It also approved the Processes and Technical and Operational Specifications relating to the implementation and correct application of the NP, the Bidding Specifications for the selection of the Database
Administrator and the model contract, and the Network Technical Specification for the implementation of the NP in the Networks Mobile Communications.

On October 12, 2011, and under the provisions of SC Resolution No. 98/10 and No. 67/11, the contract for the integration and
management of the Database, between the four service providers and the Administrator of the Portability, was formalized, resulting selected the company Telcordia Technologies Inc. together with his argentine partner Telmark S.A.

Personal and the other mobile service providers finalized the adjustments of their respective networks as well as developments and testing of
the necessary information technology applications, implementing the NP during March 2012.

On November 4, 2013, the SC, through its
Resolution No. 21/13, modified the NP Process approved by SC Resolution No. 98/10, providing among other things that the period for the same cannot be more than five business days starting from the receipt of the application by the
Database Administrator.



| |  |  | Universal Service Regulation (RGSU)
| | - |  | -------------------------------------

The RGSU required entities that
receive revenues from telecommunications services to contribute 1% of these revenues (net of taxes) to the Universal Service Fiduciary Fund (the SU fund). The regulation adopted a pay or play mechanism for compliance with the
mandatory contribution to the SU fund. The regulation established a formula for calculating the subsidy for the SU liability which takes into account the cost of providing this service and any foregone revenues. Additionally, the regulation created
a committee responsible for the administration of the SU fund and the development of specific SU programs.

The SC issued Resolution
No. 80/07 which stipulated that until the SU Fund was effectively implemented, telecommunication service providers, such as Telecom Argentina and Personal, were required to deposit any contributions accrued since the issuance of such Resolution
into a special individual account held in their name at the Banco de la Nación Argentina. CNC Resolution No. 2,713/07, issued in August 2007, established how these contributions are to be calculated.



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New SU Regulation

Decree No. 558/08, published on April 4, 2008, caused certain changes to the SU regime.

The Decree established that the SC will assess the value of service providers direct program contributions in compliance with obligations
promulgated by Decree No. 764/00. It will also determine the level of funding required in the SU Fund for programs pending implementation. In the same manner, in order to guarantee the continuity of certain projects, the SC was given the choice
to consider as SU contributions certain other undertakings made by telecommunication services providers and compensate providers for these undertakings.

The new regulation established two SU categories: a) areas with uncovered or unsatisfied needs; and b) customer groups with unsatisfied
needs. It also determined that the SC would have exclusive responsibility for the issuance of general and specific resolutions regarding the new regulation, as well as for its interpretation and application.

It also established that the SC will review SU programs which were established under the previous regulation, guaranteeing the continuity of
those already being administered and implementing those that had been under review. The financing of SU ongoing programs which were recognized as such will be determined by the SC, whereas telecommunications providers appointed to participate in
future SU Programs will be selected by competitive bidding.

The Decree requires Telecom Argentina and Telefónica to extend the
coverage of their fixed line networks, within their respective original region of activity, within 60 months from the effective date of publication of the Decree. The SC will determine on a case by case basis if the providers will be compensated
with funds from the SU Fund.

The Decree requires telecommunications service providers to contribute 1% of their revenues (from
telecommunication services, net of taxes) to the SU Fund and keeps the pay or play mechanism for compliance with the mandatory monthly contribution to the SU Fund or, to claim the correspondent receivable, as the case may be.

Providers of telecommunications services shall rely on the assistance of a Technical Committee made up of seven members (two members shall be
appointed by the SC, one member shall be appointed by the CNC, three members shall be appointed by the telecommunication services providers  two of which shall be appointed by Telecom Argentina and Telefónica and one by the rest of the
providers  and another member will be appointed by independent local operators). This Technical Committee is informed by the SC of the programs to be financed and is responsible for managing and controlling the SU Fund, carrying out
technical-economic evaluations of existing projects and supervising the process of competitive bidding and adjudication of new SU programs, with the prior approval by the SC.

The Technical Committee has been created and it is fully operative. Additionally, telecommunications service providers had already sent the
proposed Fiduciary agreement to the SC. The SC approved it in January 2009 through Resolution No. 7/09.

On December 9, 2008,
the SC issued Resolution No. 405/08 which was objected by the Company and Personal. These objections were resolved by the SC through its Resolution No.154/10.

On April 4, 2009, by means of SC Resolution No. 88/09, the SC created a program denominated Telephony and Internet for towns
without provision of basic Telephone services that will be subsidized with funds from the SU Fund. The program seeks to provide local telephony, domestic long distance, international long distance and Internet in towns that did not provide
basic telephone services. The proposed projects approved by the SC would be sent to the Technical Committee of the SU Fund so that availability of funds can be evaluated and they can be included in a bidding process provided for in Decree
No. 558/08.

On December 1, 2010, the SC issued Resolutions No. 147/10 and 148/10, approving Internet for
educational institutions and Internet for public libraries programs, respectively. These programs aim to reclaim the Broadband Internet service to state-run educational institutions and public libraries, respectively, and would be
implemented through the use of the FFSU resources. As of the date of issuance of these consolidated financial statements, the first auction of the Internet for educational institutions program has been conducted and the bidding of the
Internet for public libraries program is being developed. Telecom Argentina was awarded and is finishing the last project facilities which will reach 1,540 schools involved and a billing to the FFSU of approximately $5 per year for a
period of 5 years. On the other hand, the auction Internet for public libraries program was cancelled by the Regulatory Authority for its redefinition. Also, during 2012, the auction Telephony and Internet for towns without
provision of Basic Telephone Service took place according to Resolution No. 88/09, which involved the service provision in 430 locations. Personal presented its offer to the action. As of the date of issuance of these consolidated
financial statements, the auction is in pre-award stage.



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On November 11, 2010, the SC issued Resolution No. 154/10 adopting the methodology
for the deposit of the SU contributions to the trustees escrow account. The resolution includes several provisions related to the determination of the contributions that correspond to previous and posterior periods to the dictation of the
Decree No. 558/08. It also provides that until the SC determines the existence of programs, the amounts that may correspond to their implementation may be discounted by the telecommunication providers when determining their contribution to the
SU Fund. If completed the verification from the SC there were unrecognized amounts, they must be contributed into the FFSU or for the development of new works of the SU, with the approval of the SC.

On December 30, 2010, the trustee notified Telecom Argentina and Personal the trustees escrow account number in which they shall
deposit the SU contributions under the provisions of SC Resolution No. 154/10.

On January 26, 2011 the SC issued Resolution
No. 9/11 determining the Infrastructure and Facilities Program. The resolution provided that telecommunications services providers would affect to investment projects under this program, exclusively the amounts corresponding to
their pending obligations of investment contributions born under Annex III of Decree No. 764/00, prior to Decree No. 558/08.

In Telecom Argentina

By the end of 2002, the SC formed a working group responsible for analyzing the method to be applied for measuring the net costs of SU
performance particularly, the application of the Hybrid Cost Proxy Model (the HCPM Model), based on the incremental cost of a theoretical network. The working group was also tasked with defining non-monetary benefits
and determining the methodology for its calculation, in order to assess the costs that would be offset due to performance of SU obligations. The working group decided that, given the complexity of this methodology, efforts should be made to continue
the initial programs independently from application of the HCPM Model, and that there was a need to carry out a comprehensive review of the present general regulations relating to SU to ensure that these regulations were operative in the near term
considering the existing social needs.

Several years after the markets liberalization and the effectiveness of the first SU
regulations, service providers affected by these regulations have not received set-offs for providing services as required by the SU regime.

As of the date of issuance of these consolidated financial statements and in compliance with SC Resolution No. 80/07 and No. 154/10
and CNC Resolution No. 2,713 /07, Telecom Argentina has filed its monthly calculations since July 2007 for the review of the Regulatory Authority and estimated a receivable of $1,457 (unaudited). This receivable has not yet been recorded as of
December 31, 2013 since it is subject to the approval of the SU programs, the review of the SC and the availability of funds in the SU Trust.

On April 8, 2011, the SC issued Resolution No. 43/11 notifying Telecom Argentina that investments associated with High-Cost
Areas  amounting approximately to $1,220 since July 2007 to date and which are included in the abovementioned receivable - did not qualify as an Initial Indicative Program. Telecom Argentina filed a claim on this resolution. As of the
date of issuance of these consolidated financial statements, the resolution of this appeal is still pending.

On July 12, 2012,
Telecom Argentina was notified of SC Resolutions No. 53 and 54/12 and on July 25, 2012, it was notified of SC Resolutions No. 59, 60, 61 and 62/12, pursuant to which the Special Service of Information 110, the
Discounts for Retired People, Pensioners and Low Consumption Households, the services of Social Public Telephony and Loss-Making Public Telephony, the Services and Discounts relating to the Information Society Program
argentin@internet.todos, the Services for Deaf-Mute People and the Free Access to Special Emergency Services and Special Community Services, provided by Telecom Argentina did not qualify as an Initial Indicative
Program, pursuant to the terms of Article 26 of Annex III of Decree No. 764/00, and that, taking into account the conditions and legal framework within which such services were developed by Telecom Argentina, they did not constitute different
services involving a SU provision, and therefore cannot be financed with SU funds, pursuant to the terms of Article 2 of Decree No. 558/08.

On August 21, 2012, the Company was notified of SC Resolutions No. 69 and 70/12, pursuant to which the Value Added Service
0611 and 0612 and the Long Distance Semipublic Service provided by Telecom Argentina did not qualify as an Initial Indicative Program, pursuant to the terms of Article 26 of Annex III of Decree No. 764/00, and that, taking
into account the conditions and legal framework within which such services were developed by Telecom Argentina, they did not constitute different services involving a SU provision, and therefore cannot be financed with SU funds, pursuant to the
terms of Article 2 of Decree No. 558/08.



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The Companys Management, with the advice of its legal counsels, has filed appeals
against SC Resolutions Nos. 53, 54, 59, 60, 61, 62, 69 and 70 presenting the legal arguments based on which such resolutions should be revoked. The deductions that were objected by the SC Resolutions amount to approximately $534 and are included in
the credit balance mentioned in the third paragraph.

On September 13, 2012, the CNC required Telecom Argentina to deposit
approximately $208. The Company has filed a recourse refusing the CNCs request on the grounds that various appeals against SC Resolutions are still pending. However, it cannot be assured that these issues will be favorably resolved at the
administrative stage.

In Personal

Since January 2001, Personal recorded a provision related to its obligation to make contributions to the SU fund. In addition, since July 2007
and in compliance with SC Resolution No. 80/07 and No. 154/10 and CNC Resolution No. 2,713/07, Personal deposited the correspondent contributions of approximately $112 into an account held under their name at the Banco de la
Nación Argentina in January 2011.

During the first quarter of 2011, the above mentioned funds were transferred to the
trustees escrow account, in compliance with the provisions of SC Resolution No. 154/10 previously described. Since January 2011, FFSU contributions are now being made into such escrow account.

In March 2011, Personal submitted to the SC a $70 investment project, pursuant to SC Resolution No. 9/11, for the development of a
network infrastructure in locations in the Northern Region of Argentina with no mobile coverage. Personal submitted its calculations from 2001/2007 related to the mentioned project to be financed through its own SU contribution of such periods as
required by the SC.

On July 5, 2012, the SC issued Resolution No. 50/12 pursuant to which it notified that the services
referred to by the Mobile Communications Services Providers, which were filed as High Cost Areas or services provided in non-profitable areas, services provided to clients with physical limitations (deaf-mute and blind people), rural schools, and
the request relating to the installation of radio-bases and/or investment in the infrastructure development in various localities, do not constitute items that may be discounted from the amount of contributions to the SU pursuant to Article 3, last
part, of Resolution No. 80/07, or Article 2 of Decree No. 558/08. It also provides that certain amounts already deducted may be used for investment projects within the framework of the Program of SC Resolution No. 9/11, or deposited
in the SU Fund, as applicable.

Personal has filed an administrative resource against the SC Resolution No. 50/12, requesting its
nullity. As of the date of issuance of these consolidated financial statements, the resolution of this matter is still pending.

On
October 1, 2012, responding to an SCs requirement, Personal deposited under protest approximately $23 in the SU Fund, corresponding to the assessment of the SU services provided by Personal since the issuance of Decree No. 558/08,
reserving its right to take all actions it may deem appropriate to claim its reimbursement, as informed to the SC and the CNC on October 15, 2012. Since August 2012, Personal is paying under claim of those concepts in their monthly
calculations.

The Management of Personal could not assure that this issue would be favorably resolved at the administrative stage.

(e) Administrative complaint in connection with the service cuts affecting Telecom Argentina and Personals customers

In the normal course of business, telecommunications service providers face the possibility of having incidents in their networks or other
assets with different impacts on services provided. The Regulatory Framework that regulates the service provision of Telecom Argentina and Personal provides for the possibility of interruptions in the provision of the service and also contemplates
exemptions of responsibility in case of unforeseen circumstances or force majeure. In particular, the List of conditions of the Mobile Telephony Service (approved by Decree No. 1,461/93) and the General Regulation of Individual Communications
Service (approved by Resolution SC No. 60/96) provide for a penalty regime taking into account the period of the service interruption and releasing of any sanction for total service provision interruption for no more than 24 hours and for
partial service provision interruptions for periods of less than 7 days. The Telecom Group companies seek the necessary actions to prevent such incidents, and, in case of any occurrence, ensure their resolution as soon as possible.

However, the CNC has recently initiated different administrative procedures against Telecom Argentina and Personal related to different
network incidents, including some originated by cases of unforeseen circumstances or force majeure, imposing penalties of different amounts for the companies of the Telecom Group.



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The more relevant administrative sanctions are as follow:



|                     |  |                   |  |                                                              |  |                                                                                                                                                                                                   
|-------------------- |  | ----------------- |  | ------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date of the
incident |  | Company           |  | Approximate duration of the incident                         |  | Sanctions                                                                                                                                                                                         
|06/12/2012           |  | Telecom Argentina |  | 21⁄2 hours                                                   |  | Fine of approximately $0.6.                                                                                                                                                                       
|                     |  |                   | 
|06/12/2012           |  | Personal          |  | 21⁄2 hours                                                   |  | Fine of approximately $0.6 and $10 argentine pesos of reimbursement to each customer affected, with a penalty of $4,690 argentine pesos for each day of delay in complying with the reimbursement.
|                     |  |                   | 
|03/08/2013           |  | Personal          |  | 2 hours                                                      |  | Fine of $6 and $30 argentine pesos of reimbursement to each customer affected, with a penalty of $140,700 argentine pesos for each day of delay in complying with the reimbursement.              
|                     |  |                   | 
|04/02/2013           |  | Personal          |  | Service provision affected by the flooding of La Plata city. |  | Fine of approximately $2 and $60 argentine pesos of reimbursement to each customer affected, with a penalty of $140,700 argentine pesos for each day of delay in complying with the reimbursement.
|                     |  |                   | 
|05/10/2013           |  | Personal          |  | 10 hours                                                     |  | Fine of approximately $0.6 and a penalty of $1,407 argentine pesos per day of delay in complying with reporting required by the CNC with respect to the incident.                                 

Telecom Argentina and Personal have filed their defenses against such penalty procedures in the
administrative stage, exposing their arguments, based on which such procedures should be released. As of the date of issuance of these financial statements, these penalty procedures are not final. However, it cannot be assured that a favorable
result will be obtained at the administrative stage.

(f) Resolution SC No. 1/13

On April 8, 2013, Resolution SC No. 1/13 was published in the Official Bulletin, establishing that all mobile operators should
guarantee the service provision, even in emergency situation or catastrophe, in which case the normal service provision must be restored in a maximum period of one hour. Mobile operators must, in all cases, prioritize the access to emergency
services in the affected areas.

In addition, Resolution SC No. 1/13 established that mobile operators provide within 45 days a
Contingency Plan for emergency situations, for purposes of guaranteeing the continuity of services in such circumstances.

As of the date
of issuance of these financial statements, Personal has appealed Resolution SC N° 1/13 exposing the arguments by which the mentioned resolution should be released. However, Personal has met its commitment to present a Contingency Plan for
emergency situations.

(g) Resolution SC No. 5/13

On July 2, 2013, SC Resolution No. 5/13 was published in the Official Bulletin. This Resolution approved a Telecommunication
service quality regulation, establishing, among others, new quality parameters required for telecommunication services provided through mobile and fixed public networks, for all the operators in Argentina and the obligation to provide periodic
information to the CNC.

CNC Resolution No. 3.797/13 was published in the Official Bulletin on November 13, 2013, supplementing
SC Resolution No. 5/13 and approving the Audit Procedures and Technical Verification of Service Quality Regulation of Telecommunications Services Manual.



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As of the date of issuance of these financial statements, the Company and Personal are
analyzing the operational aspects required by the new regulations as well as its economic impact and applicable actions to be taken. The enforceability of this Resolution is subject to compliance with certain steps for its implementation with prior
approval by the CNC.

(h) Regulation of Users of Mobile Communication Services

On September 9, 2013, the SC issued Resolution No. 12/13, establishing a procedure for public participation to express opinions and
proposals on the Draft Regulation for Users of Mobile Communication Services (attached as Annex I of such resolution). As of the date of issuance of these financial statements, the period for such public comment has expired. The draft regulation
contemplates, among other matters, the submission and maintenance of all service contracts electronically and on paper and also modifies the way changes in service plan business and marketing are submitted. As part of that process, Personal has
submitted comments to the project stating the effects the provisions proposed in the published project, if approved, would have on the Argentine mobile communications industry.

(i) Change in the valuation method of mobile services and information on the conditions of commercial mobile plans

Resolution No. 26/13 issued on December 17, 2013 changed the valuation method of calls originating on mobile services and the
mechanism for informing the CNC of the conditions of existing commercial plans. The new resolution establishes that calls originated by users of mobile communications will be charged per second and the pricing of each call will consist of a fixed
value corresponding to the Initial Communication Block (including up to 30 seconds), plus additional charges per second after the 30th second of communication has elapsed.

The resolution requires providers of mobile communications services to adopt appropriate measures for the implementation of the new valuation
method within sixty (60) calendar days from the publication of the Resolution for current users, and within fifteen (15) calendar days from publication for new users.

The resolution also establishes that the prices for each type of service plan, as well as the commercial conditions for all service plans,
must be reasonable and non-discriminatory, and shall be submitted to the Enforcement Authority no less than (60) calendar days prior to their becoming effective.

As of the date of issuance of these financial statements, Personals Management has filed a request for extension of the time limits
required by the resolution. However, Personals Management has made the necessary implementations to comply with the new provisions.

(j) Increase in the Regulators Penalty Activities

Telecom Argentina is subject to various penalty procedures, in most cases promoted by the Regulatory Authority, for delays in the reparation
and installation of service to fix-line customers. Although generally a penalty considered on an individual basis does not have a material effect on Telecom Argentinas equity, there is a significant disproportion between the amounts of the
penalty imposed by the Regulatory Authority and the revenue that the affected customer generates to Telecom Argentina.

During 2013, the
CNC significantly increased its penalty activities, increasing the amount of accusations and penalties, as well as the individual amount of each of the latter. In several cases the penalties imposed during 2013 have had twice the economic value of
the penalties imposed to Telecom Argentina in previous fiscal years for the same alleged offences.

As a result of the above, and
notwithstanding the defense arguments submitted by Telecom Argentina at the administrative level, losses recorded during the year ended on December 31, 2013 for contingencies of regulatory nature in Telecom Argentina have significantly
increased, reaching an amount of $117 (vs. $51 in FY12 or +129%), which is included in item Provisions in the Income Statement. In determining the provisions for regulatory sanctions, the Companys Management, with the assistance of
its legal counsel, has determined the likelihood of such sanctions being imposed and the amount thereof based on historical information and contemplating various probable scenarios of prescription of charges and penalties received at the end of
fiscal year 2013.



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(k) Tax Stability principle: impact of variations in Social Security contributions

On March 23, 2007, the SC issued Resolution No. 41/07 relating to the impact of variations in Social Security contributions
occurring over the past several years.

Subsequent to November 8, 1990, there were several increases in the rates of Social Security
Contributions, which were duly paid by Telecom Argentina. At the same time, and under the framework of the argentina@internet.todos Program, the Company paid, mostly during fiscal year 2000, reduced social security contribution rates.

Pursuant to Resolution No. 41/07, Telecom Argentina may offset the impact of costs borne as a result of increases in Social security
contribution rates.

The Company made the required presentations to the SC of the net receivable under Resolution No. 41/07, which
were subject to audits by the Regulatory Authority.

During the third quarter of 2007, the CNC performed the audits on the information
given by the Company. The Company had access to documentation of the CNCs audits, which resulted in no significant differences from the net amounts it had determined. Consequently, the Company recorded a receivable from increases in social
security contributions and cancelled payables from reduction in social security contribution rates and other fines due by the Company.

As of December 31, 2013, the Company has a net receivable of $62 which, in addition with the receivable of $23 corresponding to the tax
on deposits to and withdrawals from bank accounts (IDC), is included in the non-current caption Other receivables.

Since the resolution allows the Company to offset the receivables with existing and/or future regulatory duties and the intention of the
Company is to exercise its offsetting rights, the receivable was recorded net of reserves. As of December 31, 2013, the reserves corresponding to these regulatory duties amounted to $85.

Since December 2008, the Company has begun the billing to the customers of the increases in the rates of its social security contributions
accrued from October 2008, applying the same mechanism used to bill the IDC.

(l) Tariff structure of the national and international
regulated fixed line services

Rate Rebalancing

On December 1, 1999, SC Resolution No. 4,269/99 approved results arising from the application of the methodology outlined by SC
Resolution No. 1,801/97, through which experts from the Buenos Aires National University verified the income variation of Telecom Argentina and Telefónica, for a term of two years, resulting from rate rebalancing of February 1997. The
mentioned institution determined an increase in the income of the Company as a result of the rate rebalancing of approximately $9.5 during the two years observed.

In December 2007, the Regulatory Authority notified the Company that it will offset this difference with the Resolution No. 41/07
receivables. As a consequence, during fiscal year 2007, the Company recorded a reserve on this matter on behalf of the CNC final results. In April 2009, the CNC notified the offsetting of the $9.5 Rate Rebalancing amount with the Resolution
No. 41/07 receivables. So, the Company has reduced the receivable with the corresponding reserve.

Price Cap

The Price Cap was a regulation mechanism applied in order to calculate changes in Telecom Argentina tariffs, based on changes in the U.S.
Consumer Price Index (U.S. C.P.I.) and an efficiency factor.

In August 2009, the Regulatory Bodies finalized the 1999 Price
Cap audit resulting in a payable by the Company of $3.1 plus interest. The Company has offset this balance with the credit resulting from SC Resolution No. 41/07, described in (k) above.

On April 6, 2000, the Argentine Government, Telefónica and Telecom Argentina signed an agreement (Price Cap 2000)
that set the price cap efficiency factor at 6.75% (6% set by the SC and 0.75% set by Telecom Argentina and Telefónica) for the period from November 2000 to October 2001.

The 2000 Price cap audit results are still pending. Should the outcome is a payable by the Company it can be offset with the Resolution
No. 41/07 receivables.



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In April 2001, the Argentine Government, Telefónica and Telecom Argentina signed an
agreement (2001 Price Cap) that set the efficiency factor for reduction of tariffs at 5.6% for the period from November 2001 to October 2002.

However, a preliminary injunction against Telecom Argentina disallowed Telecom Argentina to apply tariff increases by reference to the U.S.
C.P.I. Telecom Argentina appealed this injunction arguing that if one part of the formula cannot be applied, the Price Cap system should be nullified. Finally, Public Emergency Law No. 25,561 explicitly prohibited tariff adjustments, so, at the
date of these consolidated financial statements, the pesification and the freeze of the regulated tariffs are still in force.

Tax
on deposits to and withdrawals from bank accounts charged to customers

On February 6, 2003, the Ministry of Economy, through
Resolution No. 72/03, defined the mechanism to allow, going forward, tariff increases on basic telephony services reflecting the impact of the IDC. The amount of tax charged must be shown separately in customers bills. The Company has
determined the existence of a remaining unrecovered amount of approximately $23 that arose before the issuance of Resolution No. 72/03, which will be claimed within the tariff renegotiation process (see (m) below).

In April 2007, the Company provided the CNC with supporting documentation on this amount for its audit. The Company had access to
documentation of the Regulatory Authoritys audits that corroborates the amounts claimed by the Company and the application of a similar offsetting mechanism pursuant to Resolution No. 41/07. Therefore, the Company has recorded as
Non-current Other receivable a total of $23. This receivable is also included in the reserves above mentioned in k).

(m)
Renegotiation of agreements with the Argentine Government

Telecom Argentinas tariff scheme and procedures are detailed in the
Tariff Agreement entered into by Telecom Argentina and the Argentine Government in November 1991, as amended in February 1992. Pursuant to the Tariff Agreement, all rates were to be calculated in US dollars and converted into Argentine pesos at the
time the customer was billed using the exchange rate prevailing at that time. Under the Convertibility law that was effective until January 2002, the applicable exchange rate was $1 to US$1. Rates were to be adjusted twice a year in April and
October based on the variation of the U.S. C.P.I. These adjustments were not applied since 2000 according to a resolution of the SC.

However, in January 2002, the Argentine Government enacted Law No. 25,561, Ley de Emergencia Pública y Reforma del
Régimen Cambiario(the Public Emergency Law), which provided, among other aspects, for the following:



| |  |  | The pesification of rates;
| | - |  | --------------------------



| |  |  | The elimination of dollar or other foreign-currency adjustments and indexing provisions for rates;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | The establishment of an exchange rate for dollar-denominated prices and rates of $1 =US$1; and
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | The renegotiation of the conditions of the contractual agreements entered into between privatized companies and the Argentine Government.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

The Argentine Government is entitled to renegotiate these agreements based on the following criteria:



| |  |  | The overall impact of rates for public services on the economy and income levels;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | Service quality and investment plans, as contractually agreed;
| | - |  | --------------------------------------------------------------



| |  |  | The customers interests and access to the services;
| | - |  | ----------------------------------------------------



| |  |  | The security of the systems; and
| | - |  | --------------------------------



| |  |  | The profitability of the service providers.
| | - |  | -------------------------------------------

Decree No. 293/02, dated February 12,
2002, entrusted the Ministry of Economy with the renegotiation of the agreements. Initially, the contractual renegotiation proposals were to be submitted to the Argentine Government within 120 days after the effective date of the Decree, although
this term was further extended for an additional 180-day period. Telecom Argentina filed all information as required by the Argentine Government, which included information on the impact caused by the economic crisis on the Companys financial
position and its revenues, the pre-existing mechanisms for tariff adjustments, operating costs, indebtedness, payment commitments with the Argentine Government and future and on-going investment commitments.

Furthermore, in July 2003, Decree No. 311/03 created the Unidad de Renegociación y Análisis de Contratos de Servicios
Públicos (UNIREN), (Division for the Renegotiation and Analysis of Contracts of Public Utilities Services), a special division within the Ministry of Economy and the Ministry of Federal Planning, Public Investments
and Services, pursuant to which the contractual relationships between the Argentine Government and the service providers were to be revised and renegotiated. In October 2003, the Argentine Government enacted Law No. 25,790 pursuant to which the
original term to renegotiate the contracts was extended through December 31, 2004. As from that date, the Argentine Government enacted subsequent laws pursuant to which this term was extended through December 31, 2013.



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In May 2004, the Company signed a Letter of Understanding (LOU) with the
Argentine Government pursuant to which the Company committed not to modify the current rate structure through December 31, 2004 and to continue with the tariff renegotiation process, which the Company expected to have concluded before
December 31, 2004. The Company also committed to offer phone services to beneficiaries of governmental welfare programs and to extend internet services in the interior of the country at reduced prices.

Even though the Company fulfilled its commitments under the LOU, the Argentine Government did not make a specific offer related to the
renegotiation of the rates at the date set in the LOU.

New Letter of Understanding with the UNIREN

On March 6, 2006, Telecom Argentina signed a new LOU (the Letter) with the UNIREN, within the framework of the renegotiation
of its license, begun in 2004. Upon the fulfillment of the procedures set forth in the rules and regulations presently in effect, the Letter provides the framework for the signing of the Acta Acuerdo de Renegociación del Contrato de
Transferencia de Acciones or Minutes of Agreement of the Renegotiation of the Transfer Agreement (the Minutes of Agreement of the Renegotiation) approved by Decree No. 2,332/90, as stated in Article 9 of the Public Emergency
Law.

The main terms and conditions of the Letter include:



| |  |  | The CNC and UNIREN have determined that Telecom Argentina satisfactorily complied with most of the requirements contemplated in the Transfer Agreement and by the regulatory framework. Isolated violations were
satisfactorily remedied through fines and/or sanctions. Other matters arising in the normal course of business are still pending resolution, which was originally expected by June 30, 2006 (some of these matters are described below). Despite
such expectation, the Regulatory Authority continues to analyze such open issues, the outcome of which will be disclosed when the analysis is completed;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Telecom Argentinas commitments to invest in the technological development and updating of its network;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | Telecom Argentinas commitment to the achievement of its long-term service quality goals;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | The signing parties commitment to comply with and maintain the terms set forth in the Transfer Agreement, and in the regulatory framework in effect;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Argentine Governments commitment to create an appropriate and standardized regulatory framework for telecommunications services and to give Telecom Argentina fair and equivalent treatment to that given to
other telecommunications providers that shall take part in the process;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Telecom Argentinas commitment and the commitment of its indirect shareholders Telecom Italia S.p.A. and W de Argentina - Inversiones S.L., to suspend for a period of 210 working days any and all claims, appeals
and petitions already filed or in the process of being filed, in administrative, arbitral or judicial offices, in Argentina or in any other country, that are founded in or related to any act or measure taken after the issuance of the Public
Emergency Law with respect to the Transfer Agreement and the License. The suspension will take effect after the 30th day from the end of the public hearing convened to deal with the Letter. Once
the Minutes of Agreement of the Renegotiation is ratified, any and all claims, appeals and/or proceedings will be disregarded;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An adjustment shall be made to increase the termination charge of international incoming calls to a local area to be equivalent to international values, which are at present strongly depreciated;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Off-peak telephone hours corresponding to reduced rates shall be unified with regards to local calls, long distance domestic and international calls.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

On May 18, 2006, the Letter was subject to a public hearing procedure, with the purpose of encouraging the participation of the users
and the community in general, taking into consideration that the Letters terms and conditions will provide the framework for the signing of the Minutes of Agreement of the Renegotiation. These Minutes of Agreement of Renegotiation shall be in
effect once all the requirements stipulated in the regulatory framework are complied with, which among other things, requires that a Telecom Argentina Shareholders Meeting be held to approve said Minutes. Both Telecom Argentina and its
indirect stockholders Telecom Italia S.p.A. and W de Argentina - Inversiones S.L. have timely fulfilled the Agreements commitments.

As of the date of issuance of these financial statements, the Company continues to await completion of the administrative steps required for
the National Executive to submit to the National Congress a proposed Memorandum of Agreement for Renegotiation.

Although there can be no
assurance as to the ultimate outcome of these matters, it is the opinion of the Management of the Company that the renegotiation agreement process will be satisfactorily completed.



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(n) Buy Argentine Act

In December 2001, the Argentine Government passed Public Law No. 25,551 (Compre Trabajo Argentino or the Buy
Argentine Act) and in August 2002, passed Decree No. 1,600/02 which approved and brought into effect the Compre Trabajo Argentino. The law requires Telecom Argentina to give preference to national goods and services, as defined in Public
Laws No. 25,551 and No. 18,875, in any procurement related to the rendering of public telephony services (sect.1 & 2).

Preference must be given so long as the price of such goods is equal to or lesser than the price of a foreign good (including customs duties,
taxes and other expenses that are linked to the nationality of goods) increased by 7% (when the Argentine offeror is a small or medium size company) or 5% (when the Argentine offeror is any other company) (sect.3).

Compre Trabajo Argentino also mandates that Telecom Argentina publish any bid for services in the Official Bulletin in order to provide any
and all prospective offerors with the information necessary for them to participate. This mandatory publication requires considerable lead-time prior to the issuance of the purchase order and has had the result of extending the period needed to
complete certain purchases. Non-compliance with Compre Trabajo Argentino is subject to criminal sanctions.

Public Law No. 18,875
establishes the obligation to exclusively contract services with local companies and professionals, as defined in such law. Any exception must receive the prior approval of the relevant Ministry.

In August 2004, CNC Resolution No. 2,350/04 enacted the Procedure for the fulfillment of the Buy Argentine Act, including
the obligation for the Company to present half-year affidavits addressing the fulfillment of these rules. Non-compliance with this obligation is subject to administrative sanctions.

This regulation, thus, reduces the operating flexibility of Telecom Argentina due to the time required to request bids for services and/or to
obtain an approval of the relevant authority when necessary, and the higher administrative expenses derived from the obligation to present half-year affidavits.

Note 3  Significant accounting policies



| | a) | Going concern
| | -- | -------------

The consolidated financial statements for the years ended
December 31, 2013, 2012 and 2011 have been prepared on a going concern basis as there is a reasonable expectation that Telecom Argentina and its subsidiaries will continue its operational activities in the foreseeable future (and in any event
with a time horizon of more than twelve months).



| | b) | Foreign currency translation
| | -- | ----------------------------

Items included in the financial statements of each of the
Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Argentine pesos ($), which is the
functional currency of all Telecom Groups companies located in Argentina. The functional currency for the foreign subsidiaries of the Telecom Group is the respective legal currency of each country.

The financial statements of the Companys foreign subsidiaries (Núcleo, Telecom USA and Springville) are translated using the
exchange rates in effect at the reporting date (the current method); income and expenses are translated at the average exchange rates for the year. Exchange differences resulting from the application of this method are recognized in Other
Comprehensive Income. The cash flows of foreign consolidated subsidiaries expressed in foreign currencies included in the consolidated statement of cash flows are translated at the average exchange rates for the year.



| | c) | Foreign currency transactions
| | -- | -----------------------------

Transactions in foreign currencies are translated into
the functional currency using the foreign exchange rate prevailing at the date of the transaction or valuation where items are re-measured. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the foreign exchange rate prevailing at the reporting date. Exchange differences arising from the settlement of monetary items or from their conversion at rates different from those at which they were initially recorded during the year or at the
end of the prior year, are recognized in the consolidated income statement and are included in Financial income/expenses as Foreign currency exchange gains or losses.



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| | d) | Consolidation
| | -- | -------------

These consolidated financial statements include the accounts of Telecom
Argentina and its subsidiaries over which it has effective control (Personal, Núcleo, Springville, Micro Sistemas and Telecom USA) as of December 31, 2013, 2012 and 2011.

Control exists when the investor (Telecom Argentina) has power over the investee; exposure, or rights, to variable returns from its
involvement with the investee and has the ability to use its power to affect the amount of the returns. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that
control ceases.

In the preparation of the consolidated financial statements, assets, liabilities, revenues and expenses of the
consolidated companies are consolidated on a line-by-line basis and non-controlling interests in the equity and in the profit (loss) for the year are disclosed separately under appropriate captions, respectively, in the consolidated statement of
financial position, in the consolidated income statement and in the consolidated statement of comprehensive income.

All intercompany
accounts and transactions have been eliminated in the preparation of the consolidated financial statements.

Financial year-end of all
the subsidiaries financial statements coincides with that of the Parent and have been prepared in accordance with the same accounting policies.



| | e) | Revenues
| | -- | --------

Revenues are recognized to the extent that it is considered probable that
economic benefits will flow to the Company and their amount can be measured reliably. Final outcome may differ from those estimates.

Revenues are stated net of discounts and returns.

The Company discloses its revenues into two groups: services and equipment. Service revenues are the main source of income for the Company
and are disclosed by nature: Voice services, Internet services and Data transmission services. This classification of revenues is given by different commercial offers and products, type of contracts and kind of customers. Equipment sales represent a
precursor of the mentioned service revenues; therefore, from time to time, the Management of Personal and Núcleo decide to sell mobile handsets at prices lower than their respective costs in order to acquire new contracts with a minimum
non-cancelable period of permanence.

Other income mainly includes penalties collected from suppliers which are realized in the ordinary
course of business but are not the main business objective.

The Companys principal sources of revenues are:

Fixed telecommunication services and products

Domestic services revenues consist of monthly basic fees, measured service, long-distance calls and monthly fees for additional services,
including call forwarding, call waiting, three-way calling, itemized billing and voicemail.

Revenues are recognized when services are
rendered. Unbilled revenues from the billing cycle dating to the end of each month are calculated based on traffic and are accrued at the end of the month.

Basic fees are generally billed monthly in advance and are recognized when services are provided. Billed basic fees for which the related
service has not yet been provided are deducted from corresponding accounts receivable. Revenues derived from other telecommunications services, principally network access, long distance and airtime usage, are recognized on a monthly basis as
services are provided.

Revenues from the sale of prepaid calling cards are recognized on the basis of the minutes used, at the contract
price per minute, or when the card expires, whichever happens first. Remaining unused traffic for unexpired calling cards is shown as Deferred revenue on prepaid calling cards under Deferred revenues line item in the statement of
financial position.



Interconnection charges represent amounts
received by the Company from other local service providers and long-distance carriers for calls that are originated on their networks and transit and/or terminate on the Companys network. Revenue is recognized as services when they are
provided.

Traffic revenues from interconnection and roaming are reported gross of the amounts due to other telecommunication operators.



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Non-refundable up-front connection fees for fixed telephony, data and Internet services that
are non-separable from the service are accounted for as a single transaction and deferred (as well as the related costs not in excess of the amount of revenues) over the term of the contract or, in the case of indefinite period contracts, over the
average period of the customer relationship (approximately 9 years in the case of fixed telephony).

Reconnection fees charged to
customers when resuming service after suspension are deferred and recognized ratably over the average life for those customers who are assessed a reconnection fee. Associated direct expenses are also deferred over the estimated customer relationship
period up to an amount equal to or less than the amount of deferred revenues. Generally, reconnection revenues are higher than its associated direct expenses.

Revenues from sales of goods, such as telephone and other equipment, are recognized when the significant risks and rewards of ownership are
transferred to the buyer.

Revenues on construction contracts are recognized based on the stage of completion (percentage of completion
method). When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses respectively by reference to the stage of completion
of the contract activity at the end of the reporting period. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately. When the outcome of a construction contract
cannot be estimated reliably, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable.

Revenue on construction contracts recognized in year ended December 31, 2013 amounted to $19, of which $12 are receivables. The
agreement provides finance within 48 months from April 2014, the date when the implementation of the project is estimated. No revenue on construction contracts were recorded for year 2012. Revenue on construction contracts recognized in year ended
December 31, 2011 amounted to $25.

Cost on construction contracts recognized in year ended December 31, 2013 amounted to $16.
No cost on construction contracts were recorded for year 2012. Cost on construction contracts recognized in year ended December 31, 2011 amounted to $14.

Revenue from international telecommunications services mainly includes voice and data services and international point-to-point leased
circuits. Revenues from international long-distance service reflect payments under bilateral agreements between the Company and foreign telecommunications carriers, covering inbound international long-distance calls. Revenues are recognized as
services when they are provided.

Data and Internet revenues mainly consist of fixed monthly fees received from residential and corporate
customers for data transmission (including private networks, dedicated lines, broadcasting signal transport and videoconferencing services) and Internet connectivity services (dial-up and broadband). These revenues are recognized as services when
they are rendered.

Mobile telecommunication services and products

Telecom Group provides mobile services throughout Argentina via cellular and PCS networks. Cellular fees consist of monthly basic fees,
airtime usage charges, roaming, charges for TLRD, CPP charges and additional charges for VAS, including call waiting, call forwarding, three-way calling, voicemail, SMS, GPRS, Mobile Internet and for other miscellaneous cellular services. These
revenues are recognized as services when they are rendered.

Basic fees are generally billed monthly in advance and are recognized when
services are provided. Billed basic fees for which the related service has not yet been provided are deducted from the corresponding accounts receivable.

Revenues from the sale of prepaid calling cards are recognized on the basis of the minutes used, at the contract price per minute, or when
the card expires, whichever happens first. Remaining unused traffic for unexpired calling cards is shown as Deferred revenue on prepaid calling cards under Deferred revenues line item in the statement of financial position.

Revenues from sales of goods, such as handsets, sim cards, tablets, smartphones and other equipment are recognized when the significant risks
and rewards of ownership are transferred to the buyer.



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Personal and Núcleo offer to their subscribers a customer loyalty program. Under such
program Personal and Núcleo grant award credits as part of the sales transactions which can be subsequently redeemed for goods or services provided by Personal and Núcleo or third parties. The fair value of the award credits is
accounted for as deferred revenue, and recognized as revenue when the award credits are redeemed or expire, whichever occurs first. Those revenues are classified as service or goods revenues depending on the goods or services redeemed by the
customers.

Applicable to both fixed telephony and mobile telephony, for offerings including separately identifiable components (as
equipment and service), the Company and its subsidiaries recognize revenues related to the sale of the equipment when it is delivered to the final customer whereas service revenues are recorded when rendered. The total revenue generated by this type
of transactions is assigned to the separately identifiable units of accounting based on their fair values, provided that the total amount of revenue to be recognized does not exceed the contract revenue. IFRS does not prescribe a specific method for
such assignation of revenue. However, telecommunications industry practice generally applies the method known as residual method, which was used in the preparation of the present consolidated financial statements. The residual
method requires identifying all the components that comprise a transaction and allocating its fair value on an individual basis to each of them. Under this method, the fair value of a delivered item (which could not be individually determined)
is determined as the difference between the total arrangement consideration and the sum of the fair values of those elements for which fair value can be estimated on a stand-alone basis.



| | f) | Financial instruments
| | -- | ---------------------

f.1) Financial assets

Telecom Group early adopted IFRS 9 in its first consolidated financial statements prepared in accordance with IFRS as issued by the IASB
(thus, in its consolidated financial statements as of December 31, 2010).

Financial assets and liabilities, on initial recognition,
are measured at transaction price as of the acquisition date. Financial assets are derecognized in the financial statement when the rights to receive cash flows from them have expired or have been transferred and the Company has transferred
substantially all the risks and benefits of ownership.

Upon acquisition, in accordance with IFRS 9, financial assets are subsequently
measured at eitheramortized cost, or fair value, on the basis of both:

(a) the entitys business model for managing the financial
assets; and

(b) the contractual cash flow characteristics of the financial asset.

A financial asset shall be measured at amortized cost if both of the following conditions are met:

(a) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and

(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

Additionally, for assets that met the abovementioned conditions, IFRS provides for an option to designate,
at inception, those assets as measured at fair value if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an accounting mismatch) that would otherwise arise from
measuring assets or liabilities or recognizing the gains and losses on them on different bases.

A financial asset that is not measured
at amortized cost according to the paragraphs above is measured at fair value.

Financial assets include:

Cash and cash equivalents

Cash
equivalents are short-term and highly liquid investments that are readily convertible to known amounts of cash, subject to an insignificant risk of changes in value and their original maturity or the remaining maturity at the date of purchase does
not exceed three months.

Cash and cash equivalents are recorded, according to their nature, at fair value or amortized cost.

Time deposits are valued at their amortized cost.

Investments in mutual funds are carried at fair value. Unrealized gains and losses are included in financial income/expenses in the
consolidated statements of income. During 2013, Personal acquired mutual funds whose main underlying asset is adjustable to the variation of the US$/$ exchange rate (dollar linked).



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Trade and other receivables

Trade and other receivables classified as either current or non-current assets are initially recognized at fair value and subsequently
measured at amortized cost using the effective interest method, less allowances for doubtful accounts.

Investments

Investments over 90 days maturity are recorded at amortized cost.

Argentine companies notes and Government bonds (where in both cases the intention of Personal is held to maturity) are recorded at
amortized cost. During 2013 Personal acquired Government bonds denominated in US Dollars (Bonar VII  which have reached the maturity date and have been collected as of the date of these consolidated financial statements  and Boden 2015),
which bear an annual interest of 7%, also in US Dollars. These Government bonds are measured at amortized cost. However, since they are denominated in US Dollars and bear an interest in this foreign currency, for purposes of calculating the internal
rate of return (IRR), Management estimated the US Dollar denominated cash flows to be generated until maturity and compared that amount to the fair value of the instrument in US Dollars at the acquisition date (being the IRR the rate that equates
both amounts). The acquisition cost in US Dollars has been adjusted by applying the IRR and the resulting value was converted to Argentine pesos using the exchange rate as of the date of measurement. The exchange differences generated by these
Government bonds are included in Financial expenses as Foreign currency exchange gains or losses.

The 2003 Telecommunications Fund is
recorded at fair value.

Impairment of financial assets

At every annual or interim closing date, assessments are made as to whether there is any objective evidence that a financial asset or a group
of financial assets may be impaired. If any such evidence exists, an impairment loss is recognized in the consolidated income statement for financial assets measured at cost or amortized cost.

Certain circumstances of impairment of financial assets that the Group assesses to determine whether there is objective evidence of an
impairment loss could include: delay in the payments received from customers; customers that enter bankruptcy; the disappearance of an active market for that financial asset because of financial difficulties; observable data indicating that there is
a measurable decrease in the estimated future cash flows from a portfolio of financial assets, significant financial difficulty of the obligor, among others.

f.2) Financial liabilities

Financial liabilities comprise trade payables, financial debt (excluding Derivatives), salaries and social security payables (see n) below)
and certain other liabilities.

Financial liabilities other than derivatives are initially recognized at fair value and subsequently
measured at amortized cost. Amortized cost represents the initial amount net of principal repayments made, adjusted by the amortization of any differences between the initial amount and the maturity amount using the effective interest method.

f.3) Derivatives

Derivatives are used by Telecom Group to manage its exposure to exchange rate and sometimes interest rate risks and to diversify the
parameters of debt so that costs and volatility can be reduced to pre-established operational limits.

All derivative financial
instruments are measured at fair value in accordance with IFRS 9, when they do not qualify for hedge accounting or in accordance with IFRS 9 when they meet the conditions for hedge accounting.

In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when:

a) The hedging relation consists only on hedging instruments and hedged items eligible;

b) Since its inception the hedging relation and the purpose and risk management strategy, are formally designated and documented;

c) the hedge is expected to fulfill the efficacy requirements mentioned in Note 20.

When a derivative financial instrument is designated as a cash flow hedge (the hedge of the exposure to variability in cash flows of an asset
or liability or a highly probable forecasted transaction) the effective portion of any gain or loss on the derivative financial instrument is recognized directly in OCI. The cumulative gain or loss is removed from OCI and recognized in the
consolidated income statement at the same time as the hedged transaction affects the consolidated income statement. The gain or loss associated with the ineffective portion of a hedge is recognized in the consolidated income statement immediately.
If the hedged transaction is no longer probable, the cumulative gains or losses included in OCI are immediately recognized in the consolidated income statement.



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If hedge accounting is not appropriate, gains or losses arising from the fair value
measurement of derivative financial instruments are directly recognized in the consolidated income statement.

For additional information
about derivatives operations during 2013 and 2012, see Note 20.



| | g) | Inventories
| | -- | -----------

Inventories are measured at the lower of cost and estimated net realizable
value. Cost is determined on a weighted average cost basis. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Allowances are made for obsolete and slow-moving
inventories.

From time to time, the Management of Personal and Núcleo decide to sell mobile handsets at prices lower than their
respective costs. This strategy is aimed at achieving higher service revenues or at retention of high value customers by reducing customer access costs while maintaining the companies overall mobile business profitability since the customer
subscribes a monthly service contract for a minimum non-cancelable period. For the estimation of the net realizable value in these cases the Company considers the estimated selling price less applicable variable selling expenses plus the expected
margin from the service contract signed during its minimum non-cancelable term.



| | h) | PP&E
| | -- | ----

PP&E is stated at acquisition or construction cost. Subsequent
expenditures are capitalized only when they represent an improvement, it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

All other subsequent costs are recognized as expense in the period in which they are incurred. When a tangible fixed asset comprises major
components having different useful lives, these components are accounted for as separate items if they are significant.

PP&E cost
also includes the expected costs of dismantling the asset and restoring the site if a legal or constructive obligation exists. The corresponding liability is recognized in the statement of financial position under Provisions line item at its present
value. These capitalized costs are depreciated and charged to the consolidated income statement over the useful life of the related tangible assets in the Depreciation and amortization item line.

The accounting estimates for dismantling costs, including discount rates, and the dates in which such costs are expected to be incurred are
annually reviewed. Changes in the above liability are recognized as an increase or decrease of the cost of the relative asset and are depreciated prospectively.

Depreciation of PP&E owned is calculated on a straight-line basis over the ranges of estimated useful lives of the assets; the ranges of
the estimated useful lives of the main PP&E are the following:



|                                         |  |                                
|---------------------------------------- |  | -------------------------------
|Asset                                    |  | Estimated usefullife (in years)
|Buildings received from ENTel            |  | 35                             
|Buildings acquired subsequent to 11/8/90 |  | 50                             
|Tower and pole                           |  | 15                             
|Transmission equipment                   |  | 3-20                           
|Wireless network access                  |  | 5-10                           
|Switching equipment                      |  | 5-13                           
|Power equipment                          |  | 7-15                           
|External wiring                          |  | 10-20                          
|Computer equipment and software          |  | 3-5                            
|Telephony equipment and instruments      |  | 5-10                           
|Installations                            |  | 3-10                           

The depreciation rates are reviewed annually and revised if the current estimated useful life is different
from that estimated previously taking into account, among others, technological obsolescence, maintenance and condition of the assets and different intended use from previous estimates. The effect of such changes is recognized prospectively in the
consolidated income statement.



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| | i) | Intangible assets
| | -- | -----------------

Intangible assets are recognized when the following conditions are
met: the asset is separately identifiable, it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably.

Intangible assets with a finite useful life are stated at cost, less accumulated amortization and impairment losses, if any.

Intangible assets with an indefinite useful life are stated at cost, less accumulated impairment losses, if any.

Intangible assets comprise the following:

- Subscriber acquisition costs (SAC)

Direct and incremental costs incurred for the acquisition of new subscribers with a minimum contractual period are capitalized when the
conditions for the recognition of an intangible asset are met. The cost of acquiring postpaid and cuentas claras subscribers in mobile telephony and broadband customers in fixed telephony meet the conditions established by IFRS for its
recognition as intangible asset, since these contracts establish a minimum contractual period, include an enforceable termination penalty and provide for fixed monthly billing for services. SAC are mainly related to the mobile services; and are
mainly comprised of upfront commissions paid to third parties and subsidies granted to customers on the sale of handsets.

In all other
cases, subscriber acquisition costs are expensed when incurred.

Capitalized SAC are amortized on a straight-line basis over the term of
the contract with the customer acquired.

- Service connection or habilitation costs

Direct costs incurred for connecting customers to the network are accounted for as intangible assets and then amortized over the term of the
contract with the customer if required conditions are met. For indefinite period contracts, the deferral of these costs is limited to the amount of non contingent revenue from the customer and expensed over the average period life of the customer
relationship. Costs exceeding that amount are expensed as incurred. Connection costs are generated mainly for the installation of fixed lines and amortized over an average period of 9 years.

- PCS license (Argentina)

The Company,
based on an analysis of all of the relevant factors, has considered the license having an indefinite useful life since there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity.

- PCS and Band B licenses (Paraguay)

Initial acquisition costs of Núcleos PCS and Band B licenses were amortized under the straight-line method over 120 months. These
licenses were successively renewed for a period of 5 years, estimating the finalization of its amortization during year 2017.

- Internet and data
transmission license (Paraguay)

Núcleos license is amortized over 60 months through fiscal year 2016.

- Rights of use

The Company purchases
network capacity under agreements which grant the exclusive right to use a specified amount of capacity for a specified period of time. Acquisition costs are capitalized as intangible assets and amortized over the terms of the respective capacity
agreements, generally 180 months.

- Exclusivity agreements

Exclusivity agreements were entered into with certain retailers and third parties relating to the promotion of the Companys services and
products. Amounts capitalized are being amortized over the life of the agreements, with expiration ranging from financial year 2009 to financial year 2028.

- Customer relationships

Customer
relationships identified as part of the purchase price allocation performed upon the acquisition of Cubecorp Argentina S.A. (a company engaged in data center business) in financial year 2008, are being amortized over the estimated duration of the
relationship for customers in the data center business (180 months).



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| | j) | Leases
| | -- | ------

Finance leases

Leases that transfer substantially all the risks and benefits incidental to ownership of the leased asset are classified as finance leases.
The Company recognizes finance leases as assets and liabilities in its statements of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the
inception of the lease. Subsequently, minimum lease payments are apportioned between a finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

The depreciation policy for depreciable leased assets is consistent with that for depreciable assets that are owned.

As of December 31, 2013 the Telecom Group holds finance leases which represent current commercial liabilities in the amount of $28 and
non-current commercial liabilities of $1. The total payment for these capital leases upon maturity amounts to $31.

A summary by major
class of fixed assets covered by finance leases as of December 31, 2013 is as follows:



|                              |  |            |     |   |             |         |                     |        
|----------------------------- |  | ---------- | --- | - | ----------- | ------- | ------------------- | -------
|                              |  | Book value |     |   | Lease terms |         | Amortization period
|PP&E - Computer equipment     |  |            | 53  |   |             | 3 years |                     | 3 years
|Accumulated depreciation      |  |            | (26 | ) |             |         |                     |        
|                              |  |            |     |   |             |         |                     |        
|Net value                     |  |            | 27  |   |             |         |                     |        
|                              |  |            |     |   |             |         |                     |        
|                              |  |            |    
|                              |  | Book value |     |   | Lease terms |         | Amortization period
|PP&E - Transmission equipment |  |            | 3   |   |             | 2 years |                     | 5 years
|Accumulated depreciation      |  |            | (1  | ) |             |         |                     |        
|                              |  |            |     |   |             |         |                     |        
|Net value                     |  |            | 2   |   |             |         |                     |        
|                              |  |            |     |   |             |         |                     |        

Operating leases

Lease payments under an operating lease are recognized as an expense on a straight-line basis over the lease term unless another systematic
basis is more representative.

In the normal course of business, the Company leases cell sites, switch sites, satellite capacity and
circuits under various non-cancellable operating leases that expire on various dates through 2028. Rental expenses are included under Interconnection costs and other telecommunication charges and Other operating expenses items lines in the
consolidated income statements.



| | k) | Impairment of intangible assets and PP&E
| | -- | ----------------------------------------

At every annual or interim closing date,
the Company assesses whether there are any indicators of impairment of assets that are subject to amortization. Both internal and external sources of information are used for this purpose. Internal sources include obsolescence or physical damage,
and significant changes in the use of the asset and the economic performance of the asset compared to estimated performance. External sources include the market value of the asset, changes in technology, markets or laws, increases in market interest
rates and the cost of capital used to evaluate investments, and an excess of the carrying amount of the net assets of the Group over market capitalization.

The carrying value of an asset is considered impaired by the Company when it is higher than its recoverable amount. In that event, a loss
would be recognized in the statement of income.

The recoverable value of an asset is the higher of its fair value less costs to sell and
its value in use. In calculating the value in use, the estimated future cash flows are discounted to present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the evaluated
asset.

Where it is not possible to estimate the recoverable value of an individual asset, the Company estimates the recoverable value of
the cash-generating unit to which the asset belongs. The Company considers each legal entity of the Group as a cash-generating unit.

When the conditions that gave rise to an impairment loss no longer exist, the carrying amount of the asset or cash-generating unit is
increased to the revised estimate of its recoverable amount, up to the carrying amount that would have been recorded if no impairment loss had been recognized. The reversal of an impairment loss is recognized as income in the consolidated income
statement.



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Intangible assets with an indefinite useful life (including intangible assets not ready to
use) are not subject to amortization and are tested at least annually for impairment. The only intangible asset with an indefinite useful life held by the Company as of December 31, 2013 and 2012 is the PCS license (Argentina), which is
entirely allocated to the Personal Mobile Service operating segment. Its recoverable amount is determined based on the value in use, which is estimated using discounted net cash flows projections.

For the year presented, the Company estimates that does not exist indicators of impairment of assets that are subject to amortization, with
the exception of those referred to in the following paragraphs.

During 2013, Personal has assessed the recoverable value of a group of
assets recorded in PP&E related to pricing and billing systems related to prepaid and postpaid subscribers. Because of the low performance and for the reason that the system does not meet the objectives established for its implementation,
Personal ́s Management decided the discontinuation of the system. As a whole, Personal has recorded an impairment for a total amount of $65 equivalent to the carrying value of these assets.

Additionally, Telecom Argentina assessed the recoverable value of certain assets related to projects entered into with the public sector and
the private sector, and given the current uncertainties regarding the future development and the future cash flows associated to this group of assets; the Companys Management recorded an impairment loss of approximately $122. The amount of
this impairment loss will be re-assessed periodically.

These impairments are included in operating expenses under the item line
Impairment of PP&E.



| | l) | Other liabilities
| | -- | -----------------



| |  | Pension benefits
|- |  | ----------------

Argentine laws provide for pension benefits to be paid to
retired employees from government pension plans and/or privately managed fund plans to which employees may elect to contribute. Amounts payable to such plans are accounted for on an accrual basis. The Company does not sponsor any stock option plan.

Pension benefits shown under Other liabilities represent benefits under collective bargaining agreements for employees who retire upon
reaching normal retirement age, or earlier due to disability in Telecom Argentina. Benefits consist of the payment of a single lump sum equal to the salary of one month for each five years of service. There is no vested benefit obligation until the
occurrence of those conditions. The collective bargaining agreements do not provide for other post-retirement benefits such as life insurance, health care, and other welfare benefits.

The net periodic pension costs are recognized in the income statement as employees render the services necessary to earn pension benefits.
However, actuarial gains and losses should be presented in the statements of comprehensive income. Actuarial assumptions and demographic data, as applicable, were used to measure the benefit obligation as required by IAS 19 revised. The Company does
not make plan contributions or maintain separate assets to fund the benefits at retirement.

The actuarial assumptions used are based on
market interest rates, past experience and Managements best estimate of future economic conditions. Changes in these assumptions may impact future benefit costs and obligations. The main assumptions used in determining expense and benefit
obligations are the following rates and salary ranges:



|                                            |  |               |  |               |  |              
|------------------------------------------- |  | ------------- |  | ------------- |  | -------------
|                                            |  | 2013          |  | 2012          |  | 2011         
|Discount rate (1)                           |  | 8.0% - 10.8%  |  | 4.1%  13.1%  |  | 5.6%  12.1% 
|Projected increase rate in compensation (2) |  | 15.0% - 25.0% |  | 15.0%  25.2% |  | 15.0%  25.7%



|(1) | Represents estimates of real rate of interest rather than nominal rate in $.
|--- | ----------------------------------------------------------------------------

|(2) | In line with an estimated inflationary environment for the next three financial years.
|--- | --------------------------------------------------------------------------------------

In
accounting for these pension benefits, IAS 19 revised (Employee benefits) issued by the IASB in June 2011 has been applied. IAS 19 revised introduced changes related to the recognition of actuarial gains and losses, the disclosure of re-measurements
of net defined benefit liability / asset (requiring its recognition in Other comprehensive income), as well as additional disclosure requirements for defined benefit plans. IAS 19 revised is mandatory for periods beginning on or after
January 1, 2013. The adoption of such standard would result in a reduction of $0.2 in Retained Earnings at the beginning of the fiscal year 2013 with counter entry in Other Comprehensive Income. Given the immateriality of this change Telecom
Group beginning balances have not been modified, and this IAS 19 revised has been applied starting from fiscal year 2013.

Additional
information on pension benefits is provided in Note 16.



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| |  | Legal fee
|- |  | ---------

Pursuant to Law No. 26,476 - Tax Regularization Regime
(Régimen de Regularización Impositiva Ley No 26,476), the Company is subject to a legal fee which shall be paid in twelve monthly consecutive installments without interest as from final judgment. It is carried at
amortized cost.



| | m) | Deferred revenues
| | -- | -----------------

Deferred revenues include:



| | - | Deferred revenues on prepaid calling cards
| | - | ------------------------------------------

Revenues from unused traffic
and data packs for unexpired calling cards are deferred and recognized as revenue when the minutes and the data are used by customers or when the card expires, whichever happens first. See Note 3.e. Revenues  Fixed telecommunication services
and products.



| | - | Deferred revenues on connection fees
| | - | ------------------------------------

Non-refundable up-front connection
fees for fixed telephony, data and Internet services that are non-separable from the service are accounted for as a single transaction and deferred over the term of the contract, or in the case of indefinite period contracts, over the average period
of customer relationship. See Note 3.e. Revenues  Fixed telecommunication services and products and Mobile telecommunication services and products.



| | - | Customer Loyalty Programs
| | - | -------------------------

The fair value of the award credits regarding
Personal and Núcleos customer loyalty program is accounted for as deferred revenue, and recognized as revenue when the award credits are redeemed or expire, whichever occurs first. See Note 3.e. Revenues  Mobile telecommunication
services.



| | - | Deferred revenue on sale of capacity and related services
| | - | ---------------------------------------------------------

Under certain
network capacity purchase agreements, the Company sells excess purchased capacity to other carriers. Revenues are deferred and recognized as services are provided. Those revenues are recorded under Data item line in the Fixed services
segment.



| | - | Deferred income for CONATELs government grants
| | - | -----------------------------------------------

During 2010 and
2011, the CONATEL awarded to Núcleo public tenders for the expansion of the network infrastructure that provides a platform for access to mobile services and basic services in social interest areas in Paraguay.

Government grants shall be recognized on a systematic basis over the periods in which the entity recognizes as expenses the related costs for
which the grants are intended to compensate. In accordance with IAS 20 the government grants related to assets can be presented either in the statement of financial position as deferred income or as a reduction of the carrying amount of related
asset. The Company opted the first alternative provided by the standard considering that recognition as deferred income adequately reflects the business purpose of the transaction. Therefore, the related assets were recognized at the cost incurred
by Núcleo in the construction of the engaged infrastructure and the government grant was accounted for as deferred income and recognized in profit or loss starting at the time the infrastructure becomes operative and throughout its useful
life.



| | n) | Salaries and social security payables
| | -- | -------------------------------------

Include unpaid salaries, vacation and bonuses
and its related social security contributions, as well as termination benefits and restructuring indemnities. See f.2) above for a description of the accounting policy regarding the measurement of financial liabilities.

Termination benefits represent severance indemnities that are payable when employment is terminated in accordance with labor regulations and
current practices, or whenever an employee accepts voluntary redundancy in exchange for these benefits. In the case of severance compensations resulting from agreements with employees leaving the Company upon acceptance of voluntary redundancy, the
compensation is usually comprised of a special cash bonus paid upon signing the severance agreement, and in certain cases may include a deferred compensation, which is payable in monthly installments calculated as a percentage of the prevailing wage
at the date of each payment (prejubilaciones). The employees right to receive the monthly installments mentioned above starts on the date they leave the Company and ends either when they reach the legal mandatory retirement
age or upon the decease of the beneficiary, whichever occurs first.



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As of December 31, 2012, restructuring debt represented the indemnities that were
payable for the layoffs related to the restructuring plan that the Telecom Group began by the end of 2012 which was finished on June 2013. Further information on the restructuring plan is provided in Note 17 to the consolidated financial statements.



| | o) | Taxes payables
| | -- | --------------

The Company is subject to different taxes and levies such as municipal
taxes, tax on deposits to and withdrawals from bank accounts, turnover taxes, regulatory fees (including SU) and income taxes, among others, that represent an expense for the Group. It is also subject to other taxes over its activities that
generally do not represent an expense (internal taxes, VAT, ENARD tax).

The principal taxes that represent an expense for the Company
are the following:

- Income taxes

Income taxes are recognized in the consolidated income statement, except to the extent that they relate to items directly recognized in Other
comprehensive income or directly in equity. In this case, the tax is also recognized in Other comprehensive income or directly in equity, respectively. The income tax expense for the period comprises current and deferred tax.

As per Argentinean Tax Law, income taxes payables have been computed on a separate return basis (i.e., the Company is not allowed to prepare
a consolidated income tax return). All income tax payments are made by each of the subsidiaries as required by the tax laws of the countries in which they operate. The Company records income taxes in accordance with IAS 12.

Deferred taxes are recognized using the liability method. Temporary differences arise when the tax base of an asset or liability
differs from their carrying amounts in the consolidated financial statements. A deferred income tax asset or liability is recognized on those differences, except for those differences related to investments in subsidiaries that generate a deferred
income tax liability, where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets relating to unused tax loss carry forwards are recognized to the extent that it is probable that future taxable income
will be available against which they can be utilized. Deferred tax assets arising from investment in subsidiaries are recognized when it is probable that the temporary differences will be reversed in the foreseeable future and when future taxable
income would be sufficient to apply those temporary differences. The statutory income tax rate in Argentina was 35% for all years presented. Cash dividends received from a foreign subsidiary are computed on the statutory income tax rate. As per
Argentinean Tax Law, income taxes paid abroad may be recognized as tax credits.

Amendments to the Income Tax Law

On September 23, 2013, Law No. 26,893 was published in the Official Bulletin, incorporating amendments to the
Income Tax in connection with, among others, the taxation of results derived from transfers of stocks and dividend distributions. On February 7, 2014, the PEN set out regulatory clarifications in this matter through the Decree N 2,334/13



| |  |  | Results derived from transfers of stocks
| | - |  | ----------------------------------------

As from the amendments effective
date, results derived from the transfer of shares, quotas and other equity interests, titles, bonds and other securities, are subject to Argentine income tax, regardless of the kind of beneficiary who realizes the gain. The effective tax rate
applicable is 15%. Negative results arising from such operations will have the character of specific and can only be offset against future earnings from operations of the same nature.

However, results from the transfer of such securities are exempt from such income tax when the latter are listed on stock exchange markets
(as in the case of Telecom Argentinas shares) and the gains are realized by individual or undivided estates residents in Argentina.

Gains obtained by nonresidents from the transfer of shares, quotas and other equity interests, titles, bonds and other securities are also
subject to income tax. When both the seller and the buyer are nonresidents, the person liable to pay the tax shall be the buyer of the shares, quotas, equity interests and other securities transferred.



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| |  |  | Dividend distributions
| | - |  | ----------------------

Dividends and other profits paid in cash or in kind
except for stock dividends or quota dividends, by companies and other entities incorporated in Argentina referred to in Argentine Income Tax Law Sections 69 (a) (1), (2), (3), (6) and (7), and Section 69 (b), are subject
to income tax at a 10% rate, except for dividends received by domestic companies and other domestic entities, which continue to be not subject to income tax Dividends distributed to nonresidents shall be subject to a 10% withholding tax, as a unique
and definitive payment. Consequently, any dividend distribution made by the Company to its shareholders shall be subject to this broadened tax, except for those beneficiaries that are domestic corporate taxpayers sujetos empresa (such
as, for instance, distributions made from Telecom Argentina to Nortel and those from Personal to Telecom Argentina and Nortel) and regardless of, if applicable, the so called Equalization Tax.

The statutory income tax rate in Paraguay was 10% for all years presented. As per Paraguayan Tax Law, dividends paid are computed with an
additional income tax rate of 5% (this is the criterion used by Núcleo for the recording of its deferred tax assets and liabilities, representing an effective tax rate of 15%). However, the effect of the additional income tax rate according
to the Argentine tax law in force on the undistributed profits of Núcleo is fully recognized as it is considered probable that those results will flow to Personal in the form of dividends.

The statutory income tax rate in Uruguay was 25% for all years presented.

The statutory income tax rate in the United States was 39.50% for the years ended December 31, 2013, 2012 and 2011, respectively.

- Turnover tax

Under Argentine tax law,
the Company is subject to a tax levied on revenues and other income, net of certain deductible expenses. Rates differ depending on the jurisdiction where revenues are earned for tax purposes and on the nature of revenues (services and equipment).
Average rates resulting from the turnover tax charge over the total revenues were approximately 5.3%, 4.7% and 4.4% for the years ended December 31, 2013, 2012 and 2011, respectively.

- Other taxes and levies

Since the
beginning of 2001, telecommunication services companies have been required to make a SU contribution to fund SU requirements (Note 2.d). The SU tax is calculated as a percentage of the total revenues received from the rendering of telecommunication
services, net of taxes and levies applied on such revenues, excluding the SU tax and other deductions stated by regulations. The rate is 1% of total billed revenues and adopts the pay or play mechanism for compliance with the mandatory
contribution to the SU fund.

Congress passed Law No. 26,539 which amends the excise tax and establishes that the importation and
sale of technological and computer goods, including mobile phones, will be subject to the excise tax at a rate of 17%, resulting in an effective tax rate of up to 20.48%, applicable beginning on December 1, 2009. The Company has the right to
transfer this tax to its customers but this is not always possible. Such incremental cost is included in the item line Cost of equipments and handsets.



| | p) | Provisions
| | -- | ----------

The Group records provisions for risks and charges when it has a present
obligation, legal or constructive, to a third party, as a result of a past event, when it is probable that an outflow of resources will be required to satisfy the obligation and when the amount of the obligation can be estimated reliably.

If the effect of the time value of money is material, and the payment date of the obligations can be reasonably estimated, provisions to be
accrued are the present value of the expected cash flows, taking into account the risks associated with the obligation. The increase in the provision due to the passage of time is recognized as Finance expenses. Additional information is
given in Note 17.

Provisions also include the expected costs of dismantling assets and restoring the corresponding site if a legal or
constructive obligation exists, as mentioned in h) above. The accounting estimates for dismantling costs, including discount rates, and the dates in which such costs are expected to be incurred are reviewed annually, at each financial year-end.



| | q) | Dividends
| | -- | ---------

Dividends payable are reported as a change in equity in the year in which
they are approved by the Shareholders Meeting.



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| | r) | Finance income and expenses
| | -- | ---------------------------

Finance income and expenses include:



| |  |  | interest accrued on the related financial assets and liabilities using the effective interest rate method;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | changes in fair value of derivatives and other financial instruments measured at fair value through profit or loss;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | gains and losses on foreign exchange and financial instruments (including derivatives);
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | other financial results.
| | - |  | ------------------------



| | s) | Treasury Share Acquisition
| | -- | --------------------------

In connection with the Treasury Shares Acquisition Process
described in Note 19 d) to the consolidated financial statements, the Company has applied the guidance set forth in IAS 32, which provides, consistently with the CNV Regulations, that any instruments of its own equity acquired by the Company must be
recorded at the acquisition cost and must be deducted from Equity under the caption Treasury shares acquisition cost. No profit or loss resulting from holding such instruments of own Equity shall be recognized in the income statement. If
the treasury shares are sold, the account Treasury shares acquisition cost shall be recorded within Equity under the Treasury shares negotiation premium caption. If such difference is negative, the resulting amount shall be
recorded within Equity under the Treasury shares negotiation discount caption.



| | t) | Earnings per share
| | -- | ------------------

Basic earnings per share are calculated by dividing the net income
or loss attributable to owners of the Parent by the weighted average number of ordinary shares outstanding during the year (see Note 25).



| | u) | Use of estimates
| | -- | ----------------

The preparation of consolidated financial statements and related
disclosures in conformity with IFRS requires Management to make estimates and assumptions based also on subjective judgments, past experience and hypotheses considered reasonable and realistic in relation to the information known at the time of the
estimate.

Such estimates have an effect on the reported amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements as well as the amount of revenues and costs during the year. Actual results could differ, even significantly, from those estimates owing to possible changes in the factors considered in the
determination of such estimates. Estimates are reviewed periodically.

The most important accounting estimates which require a high
degree of subjective assumptions and judgments are addressed below:



|                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                        |                     
|-------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | --------------------
|Financial statement item / area                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                        | Accounting estimates
|Revenues                                                             |   | Revenue recognition is influenced by:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | the expected duration of the relationship with the customer for revenues from upfront connection fees;
|                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | the estimation of traffic measures.                                                                   
|                                                                     |  
|Useful lives and residual value of PP&E and Intangible assets        |   | PP&E and intangible assets, except for indefinite useful life intangibles, are depreciated or amortized on a straight-line basis over their estimated useful lives. The
determination of the depreciable amount of the assets and their useful lives involves significant judgment. The Company periodically reviews, at least at each financial year-end, the estimated useful lives of its PP&E and amortizable intangible
assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                     |  
|Recoverability of PP&E and intangible assets with finite useful life |   | At least at every annual closing date, an assessment is made regarding whenever events or
changes in circumstances indicate that PP&E and amortizing intangible assets may be impaired. 
The recoverable amount is the higher of the fair value (less costs to sell) and its value in use. The identification of impairment indicators and the
estimation of the value in use for assets (or groups of assets or cash generating units) require management to make significant judgments concerning the validation of impairment indicators, expected cash flows and applicable discount rates Estimated
cash flows are based on significant Managements assumptions about the key factors that could affect future business performance such as the future market share, competition level, capital expenditures, salary increases, foreign exchange rates
evolution, capital structure, capital cost, etc.  For the years presented the Company
estimated that there are no indicators of impairment of assets that are subject to amortization, with the exception of those mentioned in the point k) of this note for a total amount of $187. However, changes in our current expectations and
operating assumptions, including changes in our business strategy, technology, competition and/or changes in market conditions, and the outcome of the rates negotiations for regulated fixed services with the Argentine government, could significantly
impact these judgments and could require future adjustments to the recorded assets. 
Although no indicators of impairment are verified the Companys Management, prudentially, has assessed the recoverability of PP&E and intangible
assets for Telecom Argentina assuming different scenarios of probability which contemplates rate adjustments for regulated services. Considering these assumptions, the Companys Management believes that its fixed assets are
recoverable.



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|                                                                  |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----------------------------------------------------------------- |  |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Financial statement item / area                                   |  |  |  | Accounting estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Intangible assets with indefinite useful lifePCS license         |  |  |  | The Telecom Group determined that Personals PCS license met the definition of an
indefinite-lived intangible asset for the years presented and tests it annually for impairment. The recoverability assessment of an indefinite-lived intangible asset such as the PCS license requires our Management to make assumptions about the
future cash flows expected to be derived from such asset.  Such estimated cash flows
are based on significant Managements assumptions about the key factors that could affect future business performance such as the future market share, competition level, capital expenditures, salary increases, foreign exchange rates evolution,
capital structure, discount rate, etc. The discount rate used to determine the discounted cash flow is an annual US dollar rate of approximately 13%. 
Our judgments regarding future cash flows may change due to future market conditions, business strategy, the evolution of technology and other factors. These
changes, if any, may require adjustments to the carrying amount of the PCS license.
|                                                                  |  | 
|Income taxes and recoverability assessment of deferred tax assets |  |  |  | Income taxes (current and deferred) are calculated in each company of the Telecom Group according to a reasonable interpretation of the tax laws in effect in each jurisdiction where the
companies operate. The recoverability assessment of deferred tax assets sometimes involves complex estimates to determine taxable income and deductible and taxable temporary differences between the carrying amounts and the taxable amounts. In
particular, deferred tax assets are recognized to the extent that future taxable income will be available against which they can be utilized. The measurement of the recoverability of deferred tax assets takes into account the estimate of future
taxable income based on the Companys projections and on conservative tax planning.                                                                                                                                                                                                                                                                                                  
|                                                                  |  | 
|Receivables and payables valued at amortized cost                 |  |  |  | Receivables and payables valued at amortized cost are initially recorded at their fair value, which is generally determined by using a discounted cash flow valuation method. The fair value
under this method is estimated as the present value of all future cash flows discounted using an estimated discount rate, especially for long term receivables and payables. The estimated discount rate used to determine the discounted cash flow of
non-current receivables and payables is an annual rate in pesos ranging between 20% and 32% for year 2013 and 19% and 28% for year 2012. Additionally, an annual U.S. dollars rate of approximately 8% was used for discounting long term receivables
denominated in U.S. dollars during 2013 and 2012.                                                                                                                                                                                                                                                                                                                            
|                                                                  |  | 
|Provisions                                                        |  |  |  | The Company is subject to proceedings, lawsuits and other claims related to labor, civil, tax, regulatory and other matters. In order to determine the proper level of provisions, Management
assesses the likelihood of any adverse judgments or outcomes related to these matters as well as the range of probable losses that may result from the potential outcomes. Internal and external legal counsels are consulted on these matters. A
determination of the amount of provisions required, if any, is made after careful analysis of each individual issue. The determination of the required provisions may change in the future due to new developments in each matter, changes in
jurisprudential precedents and tribunal decisions or changes in its method of resolving such matters, such as changes in settlement strategy.                                                                                                                                                                                                                                            
|                                                                  |  | 
|Allowance for Doubtful Accounts                                   |  |  |  | The recoverability of receivables is measured by considering the aging of the accounts receivable balances, historical write-offs, customer creditworthiness and changes in the customer payment
terms when evaluating the adequacy of the allowance for doubtful accounts. If the financial condition of the customers were to deteriorate, the actual write-offs could be higher than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

In the absence of a Standard or an Interpretation that specifically applies to a particular transaction,
Management carefully considers the IFRS general framework and valuation techniques generally applied in the telecommunication industry and uses its judgment to evaluate the accounting methods to adopt with a view to providing financial statements
which faithfully represent the financial position, the results of operations and the cash flows of the Group, reflect the economic substance of the transactions, be neutral, be prepared on a prudent basis and be completed in all material respects.

New Standards and Interpretations issued by the IASB not in force

As required by IAS 8, the IFRS issued by the IASB not in force as of the date of these consolidated financial statements are reported below
and briefly summarized. These standards have not been adopted by the Company.

Amendments to IAS 32 (Requirements for offsetting financial instruments)

In December 2011 the IASB issued amendments to IAS 32.

The amendments clarify the meaning of currently has a legally enforceable right of set-off and also clarify the application of the IAS 32
offsetting criteria to settlement systems which apply gross settlement mechanisms that are not simultaneous.

These amendments are
effective for financial years beginning on or after January 1, 2014 and are required to be applied retrospectively. Early application is permitted. The Company is currently analyzing the impact that the adoption of these amendments will have on
the Companys financial position.

IFRIC 21 (Levies)

In May 2013, the IASB issued IFRIC 21 Levies. This interpretation addresses the principle that the obligating event that gives
rise to a liability to pay a levy is the activity that triggers the payment of the levy, as identified by the legislation. An entity does not have a constructive obligation to pay a levy that will be triggered by operating in a future period as a
result of the entity being economically compelled to continue to operate in that future period. If an obligation to pay a levy is triggered when a minimum threshold is reached, the accounting for the liability that arises from that obligation shall
be recognized when that threshold is reached.



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This interpretation is effective for annual periods beginning on or after January 1, 2014.
Early application is permitted. The adoption of this interpretation will not have significant impacts on the Company ́s financial position or results of operations.

Amendments to IAS 36 (Information disclosure regarding the impairment of non-financial assets)

In May 2013 the IASB issued amendments to IAS 36. The amendments require the disclosure of information about the recoverable amount of assets
that were impaired, when its estimated recoverable amount is based on fair value less costs to sell. In addition, in those cases in which recoverable amount based on fair value less costs of disposal is calculated using discounted cash flows, it is
required to disclose the discount rate that has been used in the present value technique. This requirement shall be applied for assets which have been impaired or a reversal of impairment has been accounted during the annual period.

These amendments are effective for annual periods beginning on or after January 1, 2014, retrospectively. Early application is
permitted. The adoption of this interpretation will not have significant impacts on the Company ́s disclosures.

Amendments to IAS 19 (Employee
contributions to Defined Benefit Plans)

In November 2013 the IASB issued amendments to IAS 19. These amendments clarify the
recognition of those contributions made by third parties or by employees to defined benefit plans.

These amendments are effective for
annual periods beginning on or after July 1, 2014, retrospectively. Early application is permitted. The adoption of these amendments will not have significant impacts on the Company ́s financial position or results of operations.

Annual Improvements to IFRSs (2010-2012 Cycle)

In December 2013 the IASB published the Annual Improvements to IFRSs (2010-2012 Cycle), which introduced amendments to IFRS 2, IFRS 3, IFRS 8,
IFRS 13, IAS 16, IAS 24 and IAS 38. These amendments address clarifications that the IASB considered necessary because there were diversity or confusion in the interpretation of certain requirements. However, the amendments do not substantially
modify the related standards. The adoption of these amendments will not have significant impacts on the Company ́s financial position or results of operations.

The amendments are effective for annual periods beginning on or after July 1, 2014.

Annual Improvements to IFRSs (2011-2013 Cycle)

In May 2012 the IASB published the Annual Improvements to IFRSs (2011-2013 Cycle), which introduced amendments to IFRS 3, IFRS 13 and IAS 40.
These amendments address clarifications the IASB considered necessary because there were diversity or confusion in the interpretation of certain requirements. However the amendments do not substantially modify the related standards. The adoption of
these amendments will not have significant impacts on the Company ́s financial position or results of operations.

The amendments
are effective for annual periods beginning on or after July 1, 2014.

Note 4  Cash and cash equivalents and
Investments. Additional information on the consolidated statements of cash flows



| | a) | Cash and cash equivalents and Investments
| | -- | -----------------------------------------

Cash and cash equivalents and
investments consist of the following:



|                                  |  |                    |       |  |      |  |       | 
|--------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | 
|                                  |  | As of December 31, |      
|Cash and cash equivalents         |  | 2013               |       |  | 2012 | 
|Cash                              |  |                    | 12    |  |      |  | 12    | 
|Banks                             |  |                    | 336   |  |      |  | 120   | 
|Time deposits                     |  |                    | 3,949 |  |      |  | 2,624 | 
|Mutual funds                      |  |                    | 927   |  |      |  | 404   | 
|                                  |  |                    |       |  |      |  |       | 
|Total cash and cash equivalents   |  |                    | 5,224 |  |      |  | 3,160 | 
|                                  |  |                    |       |  |      |  |       | 
|                                  | 
|Investments                       |  | As of December 31, |      
|Current investments               |  | 2013               |       |  | 2012 | 
|Investments over 90 days maturity |  |                    |      |  |      |  | 540   | 
|Argentine companies notes         |  |                    | 86    |  |      |  | 1     | 
|Provincial government bonds       |  |                    | 35    |  |      |  | 20    | 
|Government bonds                  |  |                    | 2     |  |      |  |      | 
|Loan to Nortel (Note 27.b)        |  |                    |      |  |      |  | 2     | 
|                                  |  |                    |       |  |      |  |       | 
|Total current investments         |  |                    | 123   |  |      |  | 563   | 
|                                  |  |                    |       |  |      |  |       | 



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|                              |  |                    |     |  |      |  |    | 
|----------------------------- |  | ------------------ | --- |  | ---- |  | -- | 
|                              |  | As of December 31, |    
|Non-current investments       |  | 2013               |     |  | 2012 | 
|Government bonds              |  |                    | 219 |  |      |  |   | 
|Provincial government bonds   |  |                    | 13  |  |      |  |   | 
|Argentine companies notes     |  |                    | 10  |  |      |  | 69 | 
|2003 Telecommunications Fund  |  |                    | 1   |  |      |  | 1  | 
|                              |  |                    |     |  |      |  |    | 
|Total non-current investments |  |                    | 243 |  |      |  | 70 | 
|                              |  |                    |     |  |      |  |    | 



| | b) | Additional information on the consolidated statements of cash flows
| | -- | -------------------------------------------------------------------

The Company applies the
indirect method to reconcile the net income for the year with the cash flows generated by its operations:



| |  |  | Changes in assets/liabilities components:
| | - |  | -----------------------------------------



|                                                       |  |                          |        |   |      |  |      |      |  |  |      |  
|------------------------------------------------------ |  | ------------------------ | ------ | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                                       |  | Years ended December 31, |       
|                                                       |  | 2013                     |        |   | 2012 |  |      | 2011 | 
|Net (increase) decrease in assets                      |  |                          |        |   |      |  |      |      |  |  |      |  
|Investments not considered as cash or cash equivalents |  |                          | (16    | ) |      |  |     |      |  |  | 3    |  
|Trade receivables, net                                 |  |                          | (1,065 | ) |      |  | (654 | )    |  |  | (534 | )
|Other receivables, net                                 |  |                          | (329   | ) |      |  | (163 | )    |  |  | (108 | )
|Inventories, net                                       |  |                          | (251   | ) |      |  | (108 | )    |  |  | (93  | )
|                                                       |  |                          |        |   |      |  |      |      |  |  |      |  
|                                                       |  |                          | (1,661 | ) |      |  | (925 | )    |  |  | (732 | )
|                                                       |  |                          |        |   |      |  |      |      |  |  |      |  
|Net (decrease) increase in liabilities                 |  |                          |        |   |      |  |      |      |  |  |      |  
|Trade payables                                         |  |                          | 1,411  |   |      |  | 169  |      |  |  | 293  |  
|Deferred revenues                                      |  |                          | 178    |   |      |  | 90   |      |  |  | 178  |  
|Salaries and social security payables                  |  |                          | 50     |   |      |  | 8    |      |  |  | 172  |  
|Other taxes payables                                   |  |                          | 67     |   |      |  | 84   |      |  |  | 38   |  
|Other liabilities                                      |  |                          | 27     |   |      |  | (35  | )    |  |  | 29   |  
|Provisions                                             |  |                          | (97    | ) |      |  | (121 | )    |  |  | (56  | )
|                                                       |  |                          |        |   |      |  |      |      |  |  |      |  
|                                                       |  |                          | 1,636  |   |      |  | 195  |      |  |  | 654  |  
|                                                       |  |                          |        |   |      |  |      |      |  |  |      |  

Income tax paid consists of the following:



|                                    |  |                          |        |   |      |  |        |      |  |  |        |  
|----------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                    |  | Years ended December 31, |       
|                                    |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Tax returns and payments in advance |  |                          | (1,460 | ) |      |  | (1,557 | )    |  |  | (1,232 | )
|Other payments                      |  |                          | (149   | ) |      |  | (90    | )    |  |  | (84    | )
|                                    |  |                          |        |   |      |  |        |      |  |  |        |  
|Total payments of income tax        |  |                          | (1,609 | ) |      |  | (1,647 | )    |  |  | (1,316 | )
|                                    |  |                          |        |   |      |  |        |      |  |  |        |  



| |  |  | Main non-cash operating transactions:
| | - |  | -------------------------------------



|                                                                                |  |                          |     |  |      |  |     |      |  |  |     | 
|------------------------------------------------------------------------------- |  | ------------------------ | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                                                                |  | Years ended December 31, |    
|                                                                                |  | 2013                     |     |  | 2012 |  |     | 2011 | 
|Income tax withholding for dividends paid                                       |  |                          | 44  |  |      |  |    |      |  |  |    | 
|Compensation of tax on personal property  on behalf of Shareholders            |  |                          | 8   |  |      |  |    |      |  |  |    | 
|VAT offset with income tax payments                                             |  |                          | 8   |  |      |  | 23  |      |  |  |    | 
|Compensation Fund contribution reclassified between:                            |  |                          |     |  |      |  |     |      |  |  |     | 
|Provisions and other receivables and salaries and social security contributions |  |                          |    |  |      |  | 39  |      |  |  |    | 
|Provisions and other liabilities                                                |  |                          |    |  |      |  | 27  |      |  |  |    | 
|SAC acquisitions offset with trade receivables                                  |  |                          | 239 |  |      |  | 161 |      |  |  | 95  | 
|SU receivables offset with taxes payable                                        |  |                          |    |  |      |  |    |      |  |  | 112 | 



| |  |  | Most significant investing activities:
| | - |  | --------------------------------------

Fixed assets acquisitions
include:



|                                                                  |  |                          |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                  |  | Years ended December 31, |       
|                                                                  |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|CAPEX (Note 8)                                                    |  |                          | (3,964 | ) |      |  | (2,415 | )    |  |  | (2,318 | )
|Acquisition of Materials (net transfers to CAPEX, Note 8)         |  |                          | (363   | ) |      |  | (159   | )    |  |  | (167   | )
|                                                                  |  |                          |        |   |      |  |        |      |  |  |        |  
|Subtotal                                                          |  |                          | (4,327 | ) |      |  | (2,574 | )    |  |  | (2,485 | )
|Plus:                                                             |  |                          |        |   |      |  |        |      |  |  |        |  
|Payments of trade payables originated in prior years acquisitions |  |                          | (829   | ) |      |  | (1,223 | )    |  |  | (1,065 | )
|Less:                                                             |  |                          |        |   |      |  |        |      |  |  |        |  
|Acquisition of fixed assets through incurrence of trade payables  |  |                          | 1,766  |   |      |  | 1,309  |      |  |  | 1,339  |  
|Assets retirement obligations                                     |  |                          | 21     |   |      |  | 8      |      |  |  | 12     |  
|Mobile handsets lent to customers at no cost (i)                  |  |                          | 17     |   |      |  | 15     |      |  |  | 6      |  
|                                                                  |  |                          |        |   |      |  |        |      |  |  |        |  
|                                                                  |  |                          | (3,352 | ) |      |  | (2,465 | )    |  |  | (2,193 | )
|                                                                  |  |                          |        |   |      |  |        |      |  |  |        |  



|(i) | Under certain circumstances, Personal and Núcleo lend handsets to customers at no cost pursuant to term agreements. Handsets remain the property of the companies and customers are generally obligated to return
them at the end of the respective agreements.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Intangible assets acquisitions include:



|                                                                      |  |                          |      |   |      |  |      |      |  |  |      |  
|--------------------------------------------------------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                                                      |  | Years ended December 31, |     
|                                                                      |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|Intangible assets acquisitions (Note 9)                               |  |                          | (887 | ) |      |  | (842 | )    |  |  | (874 | )
|Plus:                                                                 |  |                          |      |   |      |  |      |      |  |  |      |  
|Payments of trade payables originated in prior years acquisitions     |  |                          | (81  | ) |      |  | (92  | )    |  |  | (105 | )
|SAC acquisition offset with trade receivables                         |  |                          | (239 | ) |      |  | (161 | )    |  |  | (95  | )
|Less:                                                                 |  |                          |      |   |      |  |      |      |  |  |      |  
|Acquisition of intangible assets through incurrence of trade payables |  |                          | 361  |   |      |  | 234  |      |  |  | 267  |  
|                                                                      |  |                          |      |   |      |  |      |      |  |  |      |  
|                                                                      |  |                          | (846 | ) |      |  | (861 | )    |  |  | (807 | )
|                                                                      |  |                          |      |   |      |  |      |      |  |  |      |  

The following table presents the cash flows from purchases, sales and maturities of securities which were not
considered cash equivalents in the statement of cash flows:



|                                    |  |                          |      |   |      |  |      |      |  |  |    | 
|----------------------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | -- | 
|                                    |  | Years ended December 31, |     
|                                    |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|Investments over 90 days maturity   |  |                          | 540  |   |      |  | (540 | )    |  |  | 20 | 
|Argentine companies notes and bonds |  |                          | (259 | ) |      |  | (90  | )    |  |  |   | 
|Loan to Nortel                      |  |                          | 2    |   |      |  | (2   | )    |  |  |   | 
|                                    |  |                          |      |   |      |  |      |      |  |  |    | 
|                                    |  |                          | 283  |   |      |  | (632 | )    |  |  | 20 | 
|                                    |  |                          |      |   |      |  |      |      |  |  |    | 



| |  |  | Financing activities components:
| | - |  | --------------------------------

The following table presents the
financing activities components of the consolidated statements of cash flows:



|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|--------------------------------------------------------------- |  | ------------------------ | ---- | - | ---- |  | --- | ---- |  |  | --- | -
|                                                                |  | Years ended December 31, |     
|                                                                |  | 2013                     |      |   | 2012 |  |     | 2011 | 
|Debt proceeds  Núcleo                                          |  |                          | 208  |   |      |  | 47  |      |  |  |    |  
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Total financial debt proceeds (*)                               |  |                          | 208  |   |      |  | 47  |      |  |  |    |  
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Payment of bank loans  Núcleo                                  |  |                          | (157 | ) |      |  | (63 | )    |  |  | (36 | )
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Total payment of debt (*)                                       |  |                          | (157 | ) |      |  | (63 | )    |  |  | (36 | )
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Payment of interest on bank loans  Núcleo                      |  |                          | (16  | ) |      |  | (13 | )    |  |  | (14 | )
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Total payment of interest                                       |  |                          | (16  | ) |      |  | (13 | )    |  |  | (14 | )
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  
|Acquisition of Treasury Shares (Telecom Argentina)  Note 19 d) |  |                          | (461 | ) |      |  |    |      |  |  |    |  
|                                                                |  |                          |      |   |      |  |     |      |  |  |     |  



|(*) | In September 2013, 160 (equivalent to 130,000 millions of Guaraníes) were taken mainly to be pre-cancel financial debt by 127 (equivalent to 103,000 millions of Guaraníes).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Reversal of Voluntary reserve for future dividend payments and dividend distribution of Telecom Argentina

The Companys Board of Directors Meeting held on December 13, 2013, resolved to disaffect the Reserve for future cash
dividends for distribution of cash dividends in the amount of $1,000 (equivalent to $1.03 argentine pesos per share) among the shareholders of the outstanding shares. The above mentioned dividends were available on December 27, 2013. Cash
dividends were paid before December 31, 2013, prior compensation with credits related to tax on personal property  on behalf of shareholders, for an amount of $8, and income tax withholding on dividends paid estimated in $44. Thereby, the
total amount paid on cash dividends amounted to $948 as of December 31, 2013. After the year end were paid to the tax authority the finals figures related to withholding tax for a total amount of $17 and therefore was completed the shareholders
payment for an amount of $27. Cash dividends in 2013 include $33 paid to the non-controlling shares holders of Núcleo as detailed below.

The Annual General Ordinary Shareholders Meeting of the Company held on April 27, 2012 approved a cash dividend distribution in
the amount of $807 (equivalent to $0.82 argentine pesos per share), which was paid on May 10, 2012. Cash dividends in 2012 include $23 paid to the non-controlling shareholders of Núcleo as detailed below.

The Annual General Ordinary Shareholders Meeting of the Company held on April 7, 2011 approved a cash dividend distribution in the
amount of $915 (equivalent to $0.93 argentine pesos per share), which was paid on April 19, 2011.



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Núcleos Dividends Distribution

The Ordinary Shareholders Meeting of Núcleo held on March 22, 2013 approved the following cash dividend payment:



|                       |  |                                  |  |                                                  |  |                     
|---------------------- |  | -------------------------------- |  | ------------------------------------------------ |  | --------------------
|Dividend payment month |  | Dividendsattributable toPersonal |  | Dividends attributableto non-controllinginterest |  | Total dividends paid
|May 2013               |  | 34                               |  | 16                                               |  | 50                  
|October 2013           |  | 34                               |  | 17                                               |  | 51                  
|                       |  |                                  |  |                                                  |  |                     
|Total (*)              |  | 68                               |  | 33                                               |  | 101                 
|                       |  |                                  |  |                                                  |  |                     



|(*) | Correspond to 80,000 million of Guaraníes approved by the Ordinary Shareholders Meeting of Núcleo, translated to argentine pesos at the exchange rate of the date of its approval.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Núcleos Annual General Ordinary Shareholders Meeting held on March 16, 2012 approved the following cash dividends
distribution to its shareholders:



|                       |  |                                  |  |                                                  |  |                     
|---------------------- |  | -------------------------------- |  | ------------------------------------------------ |  | --------------------
|Dividend payment month |  | Dividendsattributable toPersonal |  | Dividends attributableto non-controllinginterest |  | Total dividends paid
|April 2012             |  | 27                               |  | 13                                               |  | 40                  
|October 2012           |  | 20                               |  | 10                                               |  | 30                  
|                       |  |                                  |  |                                                  |  |                     
|Total (*)              |  | 47                               |  | 23                                               |  | 70                  
|                       |  |                                  |  |                                                  |  |                     



|(*) | Correspond to 70,000 million of Guaraníes approved by the Ordinary Shareholders Meeting of Núcleo, translated to argentine pesos at the exchange rate of the date of its approval.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 5  Trade receivables

Trade receivables consist of the following:



|                                |  |                    |       |   |      |  |       |  
|------------------------------- |  | ------------------ | ----- | - | ---- |  | ----- | -
|                                |  | As of December 31, |      
|Current trade receivables       |  | 2013               |       |   | 2012 | 
|Fixed services                  |  |                    | 950   |   |      |  | 853   |  
|Personal mobile services        |  |                    | 2,170 |   |      |  | 1,469 |  
|Núcleo mobile services          |  |                    | 105   |   |      |  | 61    |  
|                                |  |                    |       |   |      |  |       |  
|Subtotal                        |  |                    | 3,225 |   |      |  | 2,383 |  
|Allowance for doubtful accounts |  |                    | (239  | ) |      |  | (202  | )
|                                |  |                    |       |   |      |  |       |  
|                                |  |                    | 2,986 |   |      |  | 2,181 |  
|                                |  |                    |       |   |      |  |       |  
|Non-current trade receivables   |  |                    |       |   |      | 
|Fixed services                  |  |                    | 19    |   |      |  | 23    |  
|Núcleo mobile services          |  |                    | 2     |   |      |  |      |  
|                                |  |                    |       |   |      |  |       |  
|                                |  |                    | 21    |   |      |  | 23    |  
|                                |  |                    |       |   |      |  |       |  
|Total trade receivables         |  |                    | 3,007 |   |      |  | 2,204 |  
|                                |  |                    |       |   |      |  |       |  

Movements in the allowance for current doubtful accounts are as follows:



|                                        |  |                          |      |   |      |  |      |  
|--------------------------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | -
|                                        |  | Years ended December 31, |     
|Current allowance for doubtful accounts |  | 2013                     |      |   | 2012 | 
|At the beginning of the fiscal year     |  |                          | (202 | ) |      |  | (170 | )
|Additions  bad debt expenses           |  |                          | (283 | ) |      |  | (275 | )
|Uses                                    |  |                          | 249  |   |      |  | 243  |  
|Currency translation adjustments        |  |                          | (3   | ) |      |  |     |  
|                                        |  |                          |      |   |      |  |      |  
|At the end of the year                  |  |                          | (239 | ) |      |  | (202 | )
|                                        |  |                          |      |   |      |  |      |  

Note 6  Other receivables

Other receivables consist of the following:



|                                                  |  |                    |     |   |      |  |     |  
|------------------------------------------------- |  | ------------------ | --- | - | ---- |  | --- | -
|                                                  |  | As of December 31, |    
|Current other receivables                         |  | 2013               |     |   | 2012 | 
|Prepaid expenses                                  |  |                    | 276 |   |      |  | 218 |  
|Expenditure reimbursement                         |  |                    | 91  |   |      |  | 38  |  
|Prepaid expenses related parties (Note 27.b)      |  |                    | 76  |   |      |  |    |  
|Tax credits                                       |  |                    | 50  |   |      |  | 54  |  
|Non deliverable forward (Note 20)                 |  |                    | 42  |   |      |  |    |  
|Restricted funds                                  |  |                    | 26  |   |      |  | 13  |  
|Receivables for return of handsets under warranty |  |                    | 9   |   |      |  |    |  
|Receivables for suppliers indemnities             |  |                    | 6   |   |      |  | 61  |  
|Guarantee deposits                                |  |                    | 5   |   |      |  |    |  
|Compensation Fund                                 |  |                    |    |   |      |  | 19  |  
|Other                                             |  |                    | 83  |   |      |  | 61  |  
|                                                  |  |                    |     |   |      |  |     |  
|Subtotal                                          |  |                    | 664 |   |      |  | 464 |  
|Allowance for doubtful accounts                   |  |                    | (18 | ) |      |  | (15 | )
|                                                  |  |                    |     |   |      |  |     |  
|                                                  |  |                    | 646 |   |      |  | 449 |  
|                                                  |  |                    |     |   |      |  |     |  



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TELECOM ARGENTINA S.A.





|                                                           |  |                    |     |   |      |  |     |  
|---------------------------------------------------------- |  | ------------------ | --- | - | ---- |  | --- | -
|                                                           |  | As of December 31, |    
|Non-current other receivables                              |  | 2013               |     |   | 2012 | 
|Prepaid expenses                                           |  |                    | 100 |   |      |  | 86  |  
|Prepaid expenses related parties (Note 27.b)               |  |                    | 88  |   |      |  |    |  
|Credit on SC Resolution No. 41/07 and IDC (Note 2.k and l) |  |                    | 85  |   |      |  | 85  |  
|Restricted funds                                           |  |                    | 37  |   |      |  | 22  |  
|Tax credits                                                |  |                    | 20  |   |      |  | 17  |  
|Credit on minimum presumed income tax                      |  |                    |    |   |      |  | 4   |  
|Other                                                      |  |                    | 14  |   |      |  | 7   |  
|                                                           |  |                    |     |   |      |  |     |  
|Subtotal                                                   |  |                    | 344 |   |      |  | 221 |  
|Allowance for regulatory matters (Note 2 k. and l)         |  |                    | (85 | ) |      |  | (85 | )
|Allowance for doubtful accounts (tax on personal property) |  |                    | (17 | ) |      |  | (17 | )
|                                                           |  |                    |     |   |      |  |     |  
|                                                           |  |                    | 242 |   |      |  | 119 |  
|                                                           |  |                    |     |   |      |  |     |  
|Total other receivables                                    |  |                    | 888 |   |      |  | 568 |  
|                                                           |  |                    |     |   |      |  |     |  

Movements in the allowances are as follows:



|                                        |  |                          |     |   |      |  |     |  
|--------------------------------------- |  | ------------------------ | --- | - | ---- |  | --- | -
|                                        |  | Years ended December 31, |    
|                                        |  | 2013                     |     |   | 2012 | 
|Current allowance for doubtful accounts |  |                          |     |   |      |  |     |  
|At the beginning of the year            |  |                          | (15 | ) |      |  | (12 | )
|Additions                               |  |                          | (3  | ) |      |  | (3  | )
|                                        |  |                          |     |   |      |  |     |  
|At the end of the year                  |  |                          | (18 | ) |      |  | (15 | )
|                                        |  |                          |     |   |      |  |     |  



|                                             |  |                          |     |   |      |  |     |  
|-------------------------------------------- |  | ------------------------ | --- | - | ---- |  | --- | -
|                                             |  | Years ended December 31, |    
|                                             |  | 2013                     |     |   | 2012 | 
|Non-current allowance for regulatory matters |  |                          |     |   |      |  |     |  
|At the beginning of the year                 |  |                          | (85 | ) |      |  | (90 | )
|Uses                                         |  |                          |    |   |      |  | 5   |  
|                                             |  |                          |     |   |      |  |     |  
|At the end of the year                       |  |                          | (85 | ) |      |  | (85 | )
|                                             |  |                          |     |   |      |  |     |  



|                                                                       |  |                          |     |   |      |  |     |  
|---------------------------------------------------------------------- |  | ------------------------ | --- | - | ---- |  | --- | -
|                                                                       |  | Years ended December 31, |    
|                                                                       |  | 2013                     |     |   | 2012 | 
|Non-current allowance for doubtful accounts (tax on personal property) |  |                          |     |   |      |  |     |  
|At the beginning of the year                                           |  |                          | (17 | ) |      |  | (17 | )
|Additions                                                              |  |                          |    |   |      |  |    |  
|                                                                       |  |                          |     |   |      |  |     |  
|At the end of the year                                                 |  |                          | (17 | ) |      |  | (17 | )
|                                                                       |  |                          |     |   |      |  |     |  

Note 7  Inventories

Inventories consist of the following:



|                                          |  |                    |     |   |      |  |     |  
|----------------------------------------- |  | ------------------ | --- | - | ---- |  | --- | -
|                                          |  | As of December 31, |    
|                                          |  | 2013               |     |   | 2012 | 
|Mobile handsets and equipment             |  |                    | 849 |   |      |  | 626 |  
|Fixed telephones and equipment            |  |                    | 8   |   |      |  | 15  |  
|                                          |  |                    |     |   |      |  |     |  
|Subtotal                                  |  |                    | 857 |   |      |  | 641 |  
|Allowance for obsolescence of inventories |  |                    | (85 | ) |      |  | (8  | )
|                                          |  |                    |     |   |      |  |     |  
|                                          |  |                    | 772 |   |      |  | 633 |  
|                                          |  |                    |     |   |      |  |     |  



Movements in the allowance for
obsolescence of inventories are as follows:



|                                                                   |  |                          |      |   |      |  |     |  
|------------------------------------------------------------------ |  | ------------------------ | ---- | - | ---- |  | --- | -
|                                                                   |  | Years ended December 31, |     
|                                                                   |  | 2013                     |      |   | 2012 | 
|Allowance for obsolescence of inventories                          |  |                          |      |   |      |  |     |  
|At the beginning of the year                                       |  |                          | (8   | ) |      |  | (19 | )
|Additions  Fees for services, maintenance and materials (Note 22) |  |                          | (109 | ) |      |  | (12 | )
|Uses                                                               |  |                          | 32   |   |      |  | 23  |  
|                                                                   |  |                          |      |   |      |  |     |  
|At the end of the year                                             |  |                          | (85  | ) |      |  | (8  | )
|                                                                   |  |                          |      |   |      |  |     |  



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Sale and cost of equipment and handsets by business segment is as follows:



|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|---------------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                           |  | Years ended December 31, |       
|                                                           |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Fixed services - excluding network construction contracts  |  |                          | 61     |   |      |  | 81     |      |  |  | 64     |  
|Fixed services - network construction contracts            |  |                          | 19     |   |      |  |       |      |  |  | 25     |  
|Cost of equipment and handsets  fixed services            |  |                          | (74    | ) |      |  | (44    | )    |  |  | (59    | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Total equipment income  fixed services                    |  |                          | 6      |   |      |  | 37     |      |  |  | 30     |  
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Mobile services  Personal                                 |  |                          | 3,126  |   |      |  | 1,915  |      |  |  | 1,472  |  
|Cost of equipment and handsets  mobile services Personal  |  |                          | (2,956 | ) |      |  | (1,964 | )    |  |  | (1,568 | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Total equipment income (loss)  mobile services  Personal |  |                          | 170    |   |      |  | (49    | )    |  |  | (96    | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Mobiles services  Núcleo                                  |  |                          | 69     |   |      |  | 32     |      |  |  | 26     |  
|Cost of equipment and handsets  mobile services Núcleo    |  |                          | (81    | ) |      |  | (35    | )    |  |  | (13    | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Total equipment income (loss)  mobile services  Núcleo   |  |                          | (12    | ) |      |  | (3     | )    |  |  | 13     |  
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Total equipment and handsets sale                          |  |                          | 3,275  |   |      |  | 2,028  |      |  |  | 1,587  |  
|Total cost of equipment and handsets                       |  |                          | (3,111 | ) |      |  | (2,043 | )    |  |  | (1,640 | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  
|Total income (loss) for sale of equipment and handsets     |  |                          | 164    |   |      |  | (15    | )    |  |  | (53    | )
|                                                           |  |                          |        |   |      |  |        |      |  |  |        |  

Note 8  Property, plant and equipment

PP&E consist of the following:



|                                          |  |                    |        |   |      |  |       |  
|----------------------------------------- |  | ------------------ | ------ | - | ---- |  | ----- | -
|                                          |  | As of December 31, |       
|                                          |  | 2013               |        |   | 2012 | 
|Land, buildings and installations         |  |                    | 963    |   |      |  | 900   |  
|Computer equipment and software           |  |                    | 1,476  |   |      |  | 1,196 |  
|Switching and transmission equipment (i)  |  |                    | 2,558  |   |      |  | 2,286 |  
|Mobile network access and external wiring |  |                    | 3,091  |   |      |  | 2,531 |  
|Construction in progress                  |  |                    | 2,436  |   |      |  | 1,534 |  
|Other tangible assets                     |  |                    | 377    |   |      |  | 322   |  
|                                          |  |                    |        |   |      |  |       |  
|Subtotal                                  |  |                    | 10,901 |   |      |  | 8,769 |  
|Materials                                 |  |                    | 502    |   |      |  | 280   |  
|Valuation allowance for materials         |  |                    | (21    | ) |      |  | (14   | )
|Impairment of PP&E                        |  |                    | (156   | ) |      |  |      |  
|                                          |  |                    |        |   |      |  |       |  
|Total PP&E                                |  |                    | 11,226 |   |      |  | 9,035 |  
|                                          |  |                    |        |   |      |  |       |  



|(i) | Includes tower and pole, transmission equipment, switching equipment, power equipment, equipment lent to customers at no cost and handsets lent to customers at no cost.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Movements in Materials are as follows:



|                                      |  |                    |      |   |      |  |      |  
|------------------------------------- |  | ------------------ | ---- | - | ---- |  | ---- | -
|                                      |  | As of December 31, |     
|                                      |  | 2013               |      |   | 2012 | 
|At the beginning of the year          |  |                    | 280  |   |      |  | 240  |  
|Plus:                                 |  |                    |      |   |      |  |      |  
|Purchases                             |  |                    | 813  |   |      |  | 368  |  
|Less:                                 |  |                    |      |   |      |  |      |  
|Transfers to CAPEX                    |  |                    | (450 | ) |      |  | (209 | )
|Disposal for maintenance/installation |  |                    | (147 | ) |      |  | (125 | )
|Currency translation adjustments      |  |                    | 6    |   |      |  | 6    |  
|                                      |  |                    |      |   |      |  |      |  
|At the end of the year                |  |                    | 502  |   |      |  | 280  |  
|                                      |  |                    |      |   |      |  |      |  



Movements in the valuation
allowance for materials are as follows:



|                                                         |  |                    |     |   |      |  |     |  
|-------------------------------------------------------- |  | ------------------ | --- | - | ---- |  | --- | -
|                                                         |  | As of December 31, |    
|                                                         |  | 2013               |     |   | 2012 | 
|At the beginning of the year                             |  |                    | (14 | ) |      |  | (15 | )
|Additions  Fees for services, maintenance and materials |  |                    | (7  | ) |      |  | (5  | )
|Uses                                                     |  |                    |    |   |      |  | 6   |  
|                                                         |  |                    |     |   |      |  |     |  
|At the end of the year                                   |  |                    | (21 | ) |      |  | (14 | )
|                                                         |  |                    |     |   |      |  |     |  

Movements in the impairment of PP&E are as follows:



|                             |  |                    |      |   |      |  |   | 
|---------------------------- |  | ------------------ | ---- | - | ---- |  | - | 
|                             |  | As of December 31, |     
|                             |  | 2013               |      |   | 2012 | 
|At the beginning of the year |  |                    |     |   |      |  |  | 
|Additions (i)                |  |                    | (172 | ) |      |  |   | 
|Uses (ii)                    |  |                    | 16   |   |      |  |  | 
|                             |  |                    |      |   |      |  |   | 
|At the end of the year       |  |                    | (156 | ) |      |  |  | 
|                             |  |                    |      |   |      |  |   | 



|(i) | Included in gain on disposal and impairment of PP&E.
|--- | ----------------------------------------------------

|(ii) | Included 1 in gain on disposal and impairment of PP&E. and 15 in depreciation of PP&E.
|---- | --------------------------------------------------------------------------------------



F-44



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Details on the nature and movements during the years ended December 31, 2013 and 2012 are as
follows:



|                                                    |  |                                  |        |  |       |  |       |                                |  |  |                                |  |  |           |        |   |                                  |  |         |   |  |  |        | 
|--------------------------------------------------- |  | -------------------------------- | ------ |  | ----- |  | ----- | ------------------------------ |  |  | ------------------------------ |  |  | --------- | ------ | - | -------------------------------- |  | ------- | - |  |  | ------ | 
|                                                    |  | Gross valueas ofDecember 31,2012 |        |  | CAPEX |  |       | Currencytranslationadjustments |  |  | Transfers andreclassifications |  |  | Decreases |        |   | Gross valueas ofDecember 31,2013 | 
|Land                                                |  |                                  | 137    |  |       |  |      |                                |  |  | 1                              |  |  |           | 8      |   |                                  |  |        |   |  |  | 146    | 
|Building                                            |  |                                  | 1,637  |  |       |  | 1     |                                |  |  | 6                              |  |  |           | 32     |   |                                  |  |        |   |  |  | 1,676  | 
|Tower and pole                                      |  |                                  | 665    |  |       |  |      |                                |  |  | 34                             |  |  |           | 84     |   |                                  |  |        |   |  |  | 783    | 
|Transmission equipment                              |  |                                  | 5,181  |  |       |  | 27    |                                |  |  | 60                             |  |  |           | 177    |   |                                  |  | (13     | ) |  |  | 5,432  | 
|Mobile network access                               |  |                                  | 2,660  |  |       |  | 6     |                                |  |  | 85                             |  |  |           | 423    |   |                                  |  | (9      | ) |  |  | 3,165  | 
|Switching equipment                                 |  |                                  | 5,636  |  |       |  | 31    |                                |  |  | 112                            |  |  |           | 339    |   |                                  |  | (6      | ) |  |  | 6,112  | 
|Power equipment                                     |  |                                  | 957    |  |       |  | 1     |                                |  |  | 23                             |  |  |           | 113    |   |                                  |  |        |   |  |  | 1,094  | 
|External wiring                                     |  |                                  | 7,450  |  |       |  |      |                                |  |  |                               |  |  |           | 599    |   |                                  |  | (11     | ) |  |  | 8,038  | 
|Computer equipment and systems                      |  |                                  | 6,224  |  |       |  | 41    |                                |  |  | 189                            |  |  |           | 847    |   |                                  |  | (6      | ) |  |  | 7,295  | 
|Telephony equipment and instruments                 |  |                                  | 763    |  |       |  |      |                                |  |  | 1                              |  |  |           | 4      |   |                                  |  |        |   |  |  | 768    | 
|Equipment and handsets lent to customers at no cost |  |                                  | 433    |  |       |  | 96    |                                |  |  | 64                             |  |  |           | 2      |   |                                  |  | (108    | ) |  |  | 487    | 
|Vehicles                                            |  |                                  | 223    |  |       |  | 47    |                                |  |  | 3                              |  |  |           |       |   |                                  |  | (19     | ) |  |  | 254    | 
|Furniture                                           |  |                                  | 121    |  |       |  | 1     |                                |  |  | 4                              |  |  |           | 6      |   |                                  |  |        |   |  |  | 132    | 
|Installations                                       |  |                                  | 548    |  |       |  |      |                                |  |  | 8                              |  |  |           | 92     |   |                                  |  |        |   |  |  | 648    | 
|Improvements in third parties buildings             |  |                                  | 294    |  |       |  | 3     |                                |  |  | 13                             |  |  |           | 53     |   |                                  |  |        |   |  |  | 363    | 
|Special projects                                    |  |                                  | 48     |  |       |  |      |                                |  |  |                               |  |  |           | 5      |   |                                  |  |        |   |  |  | 53     | 
|Construction in progress                            |  |                                  | 1,534  |  |       |  | 3,689 |                                |  |  | 12                             |  |  |           | (2,784 | ) |                                  |  | (*) (15 | ) |  |  | 2,436  | 
|Asset retirement obligations                        |  |                                  | 57     |  |       |  | 21    |                                |  |  | 1                              |  |  |           |       |   |                                  |  |        |   |  |  | 79     | 
|                                                    |  |                                  |        |  |       |  |       |                                |  |  |                                |  |  |           |        |   |                                  |  |         |   |  |  |        | 
|Total                                               |  |                                  | 34,568 |  |       |  | 3,964 |                                |  |  | 616                            |  |  |           |       |   |                                  |  | (187    | ) |  |  | 38,961 | 
|                                                    |  |                                  |        |  |       |  |       |                                |  |  |                                |  |  |           |        |   |                                  |  |         |   |  |  |        | 



|(*) | Corresponds to the impairment of commercial systems of Personal recorded in impairment of PP&E.
|--- | -----------------------------------------------------------------------------------------------



|                                                    |  |                                              |         |   |              |  |        |                                |  |  |                       |   |  |                                              |     |  |                                        |  |         |   |  |  |        | 
|--------------------------------------------------- |  | -------------------------------------------- | ------- | - | ------------ |  | ------ | ------------------------------ |  |  | --------------------- | - |  | -------------------------------------------- | --- |  | -------------------------------------- |  | ------- | - |  |  | ------ | 
|                                                    |  | Accumulateddepreciationas ofDecember 31,2012 |         |   | Depreciation |  |        | Currencytranslationadjustments |  |  | Decreasesandtransfers |   |  | Accumulateddepreciationas ofDecember 31,2013 |     |  | Netcarryingvalue as ofDecember 31,2013 | 
|Land                                                |  |                                              |        |   |              |  |       |                                |  |  |                      |   |  |                                              |    |  |                                        |  |        |   |  |  | 146    | 
|Building                                            |  |                                              | (1,029  | ) |              |  | (29    | )                              |  |  | (4                    | ) |  |                                              |    |  |                                        |  | (1,062  | ) |  |  | 614    | 
|Tower and pole                                      |  |                                              | (391    | ) |              |  | (40    | )                              |  |  | (15                   | ) |  |                                              |    |  |                                        |  | (446    | ) |  |  | 337    | 
|Transmission equipment                              |  |                                              | (4,378  | ) |              |  | (193   | )                              |  |  | (33                   | ) |  |                                              | 13  |  |                                        |  | (4,591  | ) |  |  | 841    | 
|Mobile network access                               |  |                                              | (1,915  | ) |              |  | (242   | )                              |  |  | (46                   | ) |  |                                              | 5   |  |                                        |  | (2,198  | ) |  |  | 967    | 
|Switching equipment                                 |  |                                              | (4,784  | ) |              |  | (320   | )                              |  |  | (77                   | ) |  |                                              | 6   |  |                                        |  | (5,175  | ) |  |  | 937    | 
|Power equipment                                     |  |                                              | (673    | ) |              |  | (51    | )                              |  |  | (13                   | ) |  |                                              |    |  |                                        |  | (737    | ) |  |  | 357    | 
|External wiring                                     |  |                                              | (5,664  | ) |              |  | (259   | )                              |  |  |                      |   |  |                                              | 9   |  |                                        |  | (5,914  | ) |  |  | 2,124  | 
|Computer equipment and systems                      |  |                                              | (5,028  | ) |              |  | (641   | )                              |  |  | (156                  | ) |  |                                              | 6   |  |                                        |  | (5,819  | ) |  |  | 1,476  | 
|Telephony equipment and instruments                 |  |                                              | (738    | ) |              |  | (9     | )                              |  |  | (1                    | ) |  |                                              |    |  |                                        |  | (748    | ) |  |  | 20     | 
|Equipment and handsets lent to customers at no cost |  |                                              | (360    | ) |              |  | (87    | )                              |  |  | (62                   | ) |  |                                              | 108 |  |                                        |  | (401    | ) |  |  | 86     | 
|Vehicles                                            |  |                                              | (138    | ) |              |  | (21    | )                              |  |  | (3                    | ) |  |                                              | 18  |  |                                        |  | (144    | ) |  |  | 110    | 
|Furniture                                           |  |                                              | (90     | ) |              |  | (6     | )                              |  |  | (3                    | ) |  |                                              |    |  |                                        |  | (99     | ) |  |  | 33     | 
|Installations                                       |  |                                              | (393    | ) |              |  | (45    | )                              |  |  | (7                    | ) |  |                                              |    |  |                                        |  | (445    | ) |  |  | 203    | 
|Improvements in third parties buildings             |  |                                              | (177    | ) |              |  | (45    | )                              |  |  | (7                    | ) |  |                                              |    |  |                                        |  | (229    | ) |  |  | 134    | 
|Special projects                                    |  |                                              | (7      | ) |              |  | (7     | )                              |  |  |                      |   |  |                                              |    |  |                                        |  | (14     | ) |  |  | 39     | 
|Construction in progress                            |  |                                              |        |   |              |  |       |                                |  |  |                      |   |  |                                              |    |  |                                        |  |        |   |  |  | 2,436  | 
|Asset retirement obligations                        |  |                                              | (34     | ) |              |  | (3     | )                              |  |  | (1                    | ) |  |                                              |    |  |                                        |  | (38     | ) |  |  | 41     | 
|                                                    |  |                                              |         |   |              |  |        |                                |  |  |                       |   |  |                                              |     |  |                                        |  |         |   |  |  |        | 
|Total                                               |  |                                              | (25,799 | ) |              |  | (1,998 | )                              |  |  | (428                  | ) |  |                                              | 165 |  |                                        |  | (28,060 | ) |  |  | 10,901 | 
|                                                    |  |                                              |         |   |              |  |        |                                |  |  |                       |   |  |                                              |     |  |                                        |  |         |   |  |  |        | 



F-45



---

##### Table of Contents

TELECOM ARGENTINA S.A.





|                                                |  |                                  |        |  |       |  |       |                                    |  |  |                                |   |  |           |        |   |                                  |  |     |   |  |  |        | 
|----------------------------------------------- |  | -------------------------------- | ------ |  | ----- |  | ----- | ---------------------------------- |  |  | ------------------------------ | - |  | --------- | ------ | - | -------------------------------- |  | --- | - |  |  | ------ | 
|                                                |  | Gross valueas ofDecember 31,2011 |        |  | CAPEX |  |       | Currencytranslationadjustments (*) |  |  | Transfers andreclassifications |   |  | Decreases |        |   | Gross valueas ofDecember 31,2012 | 
|Land                                            |  |                                  | 137    |  |       |  |      |                                    |  |  | (3                             | ) |  |           | 3      |   |                                  |  |    |   |  |  | 137    | 
|Building                                        |  |                                  | 1,582  |  |       |  | 1     |                                    |  |  | 20                             |   |  |           | 34     |   |                                  |  |    |   |  |  | 1,637  | 
|Tower and pole                                  |  |                                  | 548    |  |       |  |      |                                    |  |  | 50                             |   |  |           | 67     |   |                                  |  |    |   |  |  | 665    | 
|Transmission equipment                          |  |                                  | 5,167  |  |       |  | 13    |                                    |  |  | (196                           | ) |  |           | 198    |   |                                  |  | (1  | ) |  |  | 5,181  | 
|Mobile network access                           |  |                                  | 2,359  |  |       |  | 1     |                                    |  |  | 120                            |   |  |           | 181    |   |                                  |  | (1  | ) |  |  | 2,660  | 
|Switching equipment                             |  |                                  | 5,156  |  |       |  | 1     |                                    |  |  | 169                            |   |  |           | 311    |   |                                  |  | (1  | ) |  |  | 5,636  | 
|Power equipment                                 |  |                                  | 880    |  |       |  |      |                                    |  |  | (5                             | ) |  |           | 82     |   |                                  |  |    |   |  |  | 957    | 
|External wiring                                 |  |                                  | 6,975  |  |       |  |      |                                    |  |  |                               |   |  |           | 483    |   |                                  |  | (8  | ) |  |  | 7,450  | 
|Computer equipment and systems                  |  |                                  | 5,291  |  |       |  | 18    |                                    |  |  | 344                            |   |  |           | 576    |   |                                  |  | (5  | ) |  |  | 6,224  | 
|Telephony equipment and instruments             |  |                                  | 943    |  |       |  |      |                                    |  |  | (194                           | ) |  |           | 14     |   |                                  |  |    |   |  |  | 763    | 
|Equipment/Handsets lent to customers at no cost |  |                                  | 300    |  |       |  | 84    |                                    |  |  | 68                             |   |  |           |       |   |                                  |  | (19 | ) |  |  | 433    | 
|Vehicles                                        |  |                                  | 191    |  |       |  | 40    |                                    |  |  |                               |   |  |           | 1      |   |                                  |  | (9  | ) |  |  | 223    | 
|Furniture                                       |  |                                  | 108    |  |       |  | 1     |                                    |  |  | (3                             | ) |  |           | 15     |   |                                  |  |    |   |  |  | 121    | 
|Installations                                   |  |                                  | 503    |  |       |  |      |                                    |  |  | (18                            | ) |  |           | 63     |   |                                  |  |    |   |  |  | 548    | 
|Improvements in third parties buildings         |  |                                  | 174    |  |       |  | 4     |                                    |  |  | 39                             |   |  |           | 77     |   |                                  |  |    |   |  |  | 294    | 
|Special projects                                |  |                                  | 7      |  |       |  |      |                                    |  |  |                               |   |  |           | 41     |   |                                  |  |    |   |  |  | 48     | 
|Construction in progress                        |  |                                  | 1,420  |  |       |  | 2,239 |                                    |  |  | 16                             |   |  |           | (2,141 | ) |                                  |  |    |   |  |  | 1,534  | 
|Asset retirement obligations                    |  |                                  | 47     |  |       |  | 8     |                                    |  |  | 2                              |   |  |           |       |   |                                  |  |    |   |  |  | 57     | 
|                                                |  |                                  |        |  |       |  |       |                                    |  |  |                                |   |  |           |        |   |                                  |  |     |   |  |  |        | 
|Total                                           |  |                                  | 31,788 |  |       |  | 2,410 |                                    |  |  | 409                            |   |  |           | 5      |   |                                  |  | (44 | ) |  |  | 34,568 | 
|                                                |  |                                  |        |  |       |  |       |                                    |  |  |                                |   |  |           |        |   |                                  |  |     |   |  |  |        | 



|                                                |  |                                              |         |   |              |  |        |                                    |  |  |                       |   |  |                                              |    |  |                                        |  |         |   |  |  |       | 
|----------------------------------------------- |  | -------------------------------------------- | ------- | - | ------------ |  | ------ | ---------------------------------- |  |  | --------------------- | - |  | -------------------------------------------- | -- |  | -------------------------------------- |  | ------- | - |  |  | ----- | 
|                                                |  | Accumulateddepreciationas ofDecember 31,2011 |         |   | Depreciation |  |        | Currencytranslationadjustments (*) |  |  | Decreasesandtransfers |   |  | Accumulateddepreciationas ofDecember 31,2012 |    |  | Netcarryingvalue as ofDecember 31,2012 | 
|Land                                            |  |                                              |        |   |              |  |       |                                    |  |  |                      |   |  |                                              |   |  |                                        |  |        |   |  |  | 137   | 
|Building                                        |  |                                              | (985    | ) |              |  | (29    | )                                  |  |  | (15                   | ) |  |                                              |   |  |                                        |  | (1,029  | ) |  |  | 608   | 
|Tower and pole                                  |  |                                              | (364    | ) |              |  | (24    | )                                  |  |  | (3                    | ) |  |                                              |   |  |                                        |  | (391    | ) |  |  | 274   | 
|Transmission equipment                          |  |                                              | (4,280  | ) |              |  | (198   | )                                  |  |  | 99                    |   |  |                                              | 1  |  |                                        |  | (4,378  | ) |  |  | 803   | 
|Mobile network access                           |  |                                              | (1,681  | ) |              |  | (211   | )                                  |  |  | (24                   | ) |  |                                              | 1  |  |                                        |  | (1,915  | ) |  |  | 745   | 
|Switching equipment                             |  |                                              | (4,333  | ) |              |  | (289   | )                                  |  |  | (163                  | ) |  |                                              | 1  |  |                                        |  | (4,784  | ) |  |  | 852   | 
|Power equipment                                 |  |                                              | (656    | ) |              |  | (39    | )                                  |  |  | 22                    |   |  |                                              |   |  |                                        |  | (673    | ) |  |  | 284   | 
|External wiring                                 |  |                                              | (5,444  | ) |              |  | (228   | )                                  |  |  |                      |   |  |                                              | 8  |  |                                        |  | (5,664  | ) |  |  | 1,786 | 
|Computer equipment and systems                  |  |                                              | (4,129  | ) |              |  | (603   | )                                  |  |  | (300                  | ) |  |                                              | 4  |  |                                        |  | (5,028  | ) |  |  | 1,196 | 
|Telephony equipment and instruments             |  |                                              | (908    | ) |              |  | (10    | )                                  |  |  | 180                   |   |  |                                              |   |  |                                        |  | (738    | ) |  |  | 25    | 
|Equipment/Handsets lent to customers at no cost |  |                                              | (246    | ) |              |  | (64    | )                                  |  |  | (69                   | ) |  |                                              | 19 |  |                                        |  | (360    | ) |  |  | 73    | 
|Vehicles                                        |  |                                              | (128    | ) |              |  | (18    | )                                  |  |  | (1                    | ) |  |                                              | 9  |  |                                        |  | (138    | ) |  |  | 85    | 
|Furniture                                       |  |                                              | (88     | ) |              |  | (5     | )                                  |  |  | 3                     |   |  |                                              |   |  |                                        |  | (90     | ) |  |  | 31    | 
|Installations                                   |  |                                              | (364    | ) |              |  | (37    | )                                  |  |  | 8                     |   |  |                                              |   |  |                                        |  | (393    | ) |  |  | 155   | 
|Improvements in third parties buildings         |  |                                              | (129    | ) |              |  | (30    | )                                  |  |  | (18                   | ) |  |                                              |   |  |                                        |  | (177    | ) |  |  | 117   | 
|Special projects                                |  |                                              | (3      | ) |              |  | (4     | )                                  |  |  |                      |   |  |                                              |   |  |                                        |  | (7      | ) |  |  | 41    | 
|Construction in progress                        |  |                                              |        |   |              |  |       |                                    |  |  |                      |   |  |                                              |   |  |                                        |  |        |   |  |  | 1,534 | 
|Asset retirement obligations                    |  |                                              | (28     | ) |              |  | (3     | )                                  |  |  | (3                    | ) |  |                                              |   |  |                                        |  | (34     | ) |  |  | 23    | 
|                                                |  |                                              |         |   |              |  |        |                                    |  |  |                       |   |  |                                              |    |  |                                        |  |         |   |  |  |       | 
|Total                                           |  |                                              | (23,766 | ) |              |  | (1,792 | )                                  |  |  | (284                  | ) |  |                                              | 43 |  |                                        |  | (25,799 | ) |  |  | 8,769 | 
|                                                |  |                                              |         |   |              |  |        |                                    |  |  |                       |   |  |                                              |    |  |                                        |  |         |   |  |  |       | 



|(*) | Includes certain reclassifications between items.
|--- | -------------------------------------------------



F-46



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##### Table of Contents

TELECOM ARGENTINA S.A.





Note 9  Intangible assets

Intangible assets consist of the following:



|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 
|---------------------------------------- |  | -------------------------------- | ----- |  | ----- |  | --- | ------------------------------ |  |  | --------- |  |  | -------------------------------- | ---- | - |  |  | ----- | 
|                                         |  | Gross valueas ofDecember 31,2012 |       |  | CAPEX |  |     | Currencytranslationadjustments |  |  | Decreases |  |  | Gross valueas ofDecember 31,2013 |     
|SAC fixed services                       |  |                                  | 61    |  |       |  | 88  |                                |  |  |          |  |  |                                  | (28  | ) |  |  | 121   | 
|SAC mobile services                      |  |                                  | 1,217 |  |       |  | 764 |                                |  |  | 17        |  |  |                                  | (858 | ) |  |  | 1,140 | 
|Service connection or habilitation costs |  |                                  | 220   |  |       |  | 30  |                                |  |  |          |  |  |                                  | (33  | ) |  |  | 217   | 
|PCS license (Argentina)                  |  |                                  | 658   |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 658   | 
|PCS and Band B (Paraguay)                |  |                                  | 395   |  |       |  | 1   |                                |  |  | 93        |  |  |                                  |     |   |  |  | 489   | 
|Rights of use                            |  |                                  | 351   |  |       |  | 4   |                                |  |  | 2         |  |  |                                  |     |   |  |  | 357   | 
|Exclusivity agreements                   |  |                                  | 41    |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 41    | 
|Customer relationship                    |  |                                  | 2     |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 2     | 
|Software developed for internal use      |  |                                  | 489   |  |       |  |    |                                |  |  | 19        |  |  |                                  |     |   |  |  | 508   | 
|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 
|Total                                    |  |                                  | 3,434 |  |       |  | 887 |                                |  |  | 131       |  |  |                                  | (919 | ) |  |  | 3,533 | 
|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 



|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 
|---------------------------------------- |  | -------------------------------------------- | ------ | - | ------------ |  | ---- | ------------------------------ |  |  | --------- | - |  | -------------------------------------------- | --- |  | -------------------------------------- |  | ------ | - |  |  | ----- | 
|                                         |  | Accumulatedamortizationas ofDecember 31,2012 |        |   | Amortization |  |      | Currencytranslationadjustments |  |  | Decreases |   |  | Accumulatedamortizationas ofDecember 31,2013 |     |  | Netcarryingvalue as ofDecember 31,2013 | 
|SAC fixed services                       |  |                                              | (21    | ) |              |  | (64  | )                              |  |  |          |   |  |                                              | 28  |  |                                        |  | (57    | ) |  |  | 64    | 
|SAC mobile services                      |  |                                              | (671   | ) |              |  | (775 | )                              |  |  | (11       | ) |  |                                              | 858 |  |                                        |  | (599   | ) |  |  | 541   | 
|Service connection or habilitation costs |  |                                              | (126   | ) |              |  | (28  | )                              |  |  |          |   |  |                                              | 33  |  |                                        |  | (121   | ) |  |  | 96    | 
|PCS license (Argentina)                  |  |                                              | (70    | ) |              |  |     |                                |  |  |          |   |  |                                              |    |  |                                        |  | (70    | ) |  |  | 588   | 
|PCS and Band B (Paraguay)                |  |                                              | (395   | ) |              |  |     |                                |  |  | (93       | ) |  |                                              |    |  |                                        |  | (488   | ) |  |  | 1     | 
|Rights of use                            |  |                                              | (124   | ) |              |  | (21  | )                              |  |  |          |   |  |                                              |    |  |                                        |  | (145   | ) |  |  | 212   | 
|Exclusivity agreements                   |  |                                              | (24    | ) |              |  | (2   | )                              |  |  |          |   |  |                                              |    |  |                                        |  | (26    | ) |  |  | 15    | 
|Customer relationship                    |  |                                              |       |   |              |  |     |                                |  |  |          |   |  |                                              |    |  |                                        |  |       |   |  |  | 2     | 
|Software developed for internal use      |  |                                              | (489   | ) |              |  |     |                                |  |  | (19       | ) |  |                                              |    |  |                                        |  | (508   | ) |  |  |      | 
|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 
|Total                                    |  |                                              | (1,920 | ) |              |  | (890 | )                              |  |  | (123      | ) |  |                                              | 919 |  |                                        |  | (2,014 | ) |  |  | 1,519 | 
|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 



|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 
|---------------------------------------- |  | -------------------------------- | ----- |  | ----- |  | --- | ------------------------------ |  |  | --------- |  |  | -------------------------------- | ---- | - |  |  | ----- | 
|                                         |  | Gross valueas ofDecember 31,2011 |       |  | CAPEX |  |     | Currencytranslationadjustments |  |  | Decreases |  |  | Gross valueas ofDecember 31,2012 |     
|SAC fixed services                       |  |                                  | 49    |  |       |  | 61  |                                |  |  |          |  |  |                                  | (49  | ) |  |  | 61    | 
|SAC mobile services                      |  |                                  | 968   |  |       |  | 760 |                                |  |  | 17        |  |  |                                  | (528 | ) |  |  | 1,217 | 
|Service connection or habilitation costs |  |                                  | 230   |  |       |  | 21  |                                |  |  |          |  |  |                                  | (31  | ) |  |  | 220   | 
|PCS license (Argentina)                  |  |                                  | 658   |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 658   | 
|PCS and Band B (Paraguay)                |  |                                  | 320   |  |       |  |    |                                |  |  | 75        |  |  |                                  |     |   |  |  | 395   | 
|Rights of use                            |  |                                  | 350   |  |       |  |    |                                |  |  | 1         |  |  |                                  |     |   |  |  | 351   | 
|Exclusivity agreements                   |  |                                  | 41    |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 41    | 
|Customer relationship                    |  |                                  | 2     |  |       |  |    |                                |  |  |          |  |  |                                  |     |   |  |  | 2     | 
|Software developed for internal use      |  |                                  | 464   |  |       |  |     |                                |  |  | 25        |  |  |                                  |     |   |  |  | 489   | 
|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 
|Total                                    |  |                                  | 3,082 |  |       |  | 842 |                                |  |  | 118       |  |  |                                  | (608 | ) |  |  | 3,434 | 
|                                         |  |                                  |       |  |       |  |     |                                |  |  |           |  |  |                                  |      |   |  |  |       | 





|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 
|---------------------------------------- |  | -------------------------------------------- | ------ | - | ------------ |  | ---- | ------------------------------ |  |  | --------- | - |  | -------------------------------------------- | --- |  | -------------------------------------- |  | ------ | - |  |  | ----- | 
|                                         |  | Accumulatedamortizationas ofDecember 31,2011 |        |   | Amortization |  |      | Currencytranslationadjustments |  |  | Decreases |   |  | Accumulatedamortizationas ofDecember 31,2012 |     |  | Netcarryingvalue as ofDecember 31,2012 | 
|SAC fixed services                       |  |                                              | (24    | ) |              |  | (46  | )                              |  |  |          |   |  |                                              | 49  |  |                                        |  | (21    | ) |  |  | 40    | 
|SAC mobile services                      |  |                                              | (464   | ) |              |  | (723 | )                              |  |  | (12       | ) |  |                                              | 528 |  |                                        |  | (671   | ) |  |  | 546   | 
|Service connection or habilitation costs |  |                                              | (129   | ) |              |  | (28  | )                              |  |  |          |   |  |                                              | 31  |  |                                        |  | (126   | ) |  |  | 94    | 
|PCS license (Argentina)                  |  |                                              | (70    | ) |              |  |     |                                |  |  |          |   |  |                                              |    |  |                                        |  | (70    | ) |  |  | 588   | 
|PCS and Band B (Paraguay)                |  |                                              | (318   | ) |              |  |     |                                |  |  | (77       | ) |  |                                              |    |  |                                        |  | (395   | ) |  |  |      | 
|Rights of use                            |  |                                              | (102   | ) |              |  | (22  | )                              |  |  |          |   |  |                                              |    |  |                                        |  | (124   | ) |  |  | 227   | 
|Exclusivity agreements                   |  |                                              | (23    | ) |              |  | (1   | )                              |  |  |          |   |  |                                              |    |  |                                        |  | (24    | ) |  |  | 17    | 
|Customer relationship                    |  |                                              |       |   |              |  |     |                                |  |  |          |   |  |                                              |    |  |                                        |  |       |   |  |  | 2     | 
|Software developed for internal use      |  |                                              | (464   | ) |              |  |     |                                |  |  | (25       | ) |  |                                              |    |  |                                        |  | (489   | ) |  |  |      | 
|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 
|Total                                    |  |                                              | (1,594 | ) |              |  | (820 | )                              |  |  | (114      | ) |  |                                              | 608 |  |                                        |  | (1,920 | ) |  |  | 1,514 | 
|                                         |  |                                              |        |   |              |  |      |                                |  |  |           |   |  |                                              |     |  |                                        |  |        |   |  |  |       | 



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Note 10  Trade payables

Trade payables consist of the following:



|                           |  |                    |       |  |      |  |       | 
|-------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | 
|                           |  | As of December 31, |      
|                           |  | 2013               |       |  | 2012 | 
|Current trade payables     |  |                    |       |  |      |  |       | 
|PP&E                       |  |                    | 2,271 |  |      |  | 1,427 | 
|Other assets and services  |  |                    | 2,236 |  |      |  | 1,588 | 
|Inventory                  |  |                    | 1,399 |  |      |  | 584   | 
|                           |  |                    |       |  |      |  |       | 
|                           |  |                    | 5,906 |  |      |  | 3,599 | 
|Agent commissions          |  |                    | 224   |  |      |  | 49    | 
|SU reimbursement           |  |                    |      |  |      |  | 11    | 
|                           |  |                    |       |  |      |  |       | 
|                           |  |                    | 6,130 |  |      |  | 3,659 | 
|                           |  |                   
|Non-current trade payables |  |                    |       |  |      |  |       | 
|PP&E                       |  |                    | 1     |  |      |  | 20    | 
|                           |  |                    |       |  |      |  |       | 
|                           |  |                    | 1     |  |      |  | 20    | 
|                           |  |                    |       |  |      |  |       | 
|Total trade payables       |  |                    | 6,131 |  |      |  | 3,679 | 
|                           |  |                    |       |  |      |  |       | 

Note 11  Deferred revenues

Deferred revenues consist of the following:



|                                                                   |  |                    |     |  |      |  |     | 
|------------------------------------------------------------------ |  | ------------------ | --- |  | ---- |  | --- | 
|                                                                   |  | As of December 31, |    
|                                                                   |  | 2013               |     |  | 2012 | 
|Current deferred revenues                                          |  |                    |     |  |      |  |     | 
|Deferred revenue on prepaid calling cards                          |  |                    | 293 |  |      |  | 270 | 
|Deferred revenue on connection fees  fixed services               |  |                    | 34  |  |      |  | 30  | 
|Deferred revenue on capacity rental                                |  |                    | 42  |  |      |  | 34  | 
|Deferred revenue on customer loyalty programs                      |  |                    | 51  |  |      |  | 26  | 
|Deferred revenue from CONATEL  mobile services Núcleo (Note 18 d) |  |                    | 3   |  |      |  | 2   | 
|                                                                   |  |                    |     |  |      |  |     | 
|                                                                   |  |                    | 423 |  |      |  | 362 | 
|                                                                   |  |                    |     |  |      |  |     | 
|                                                                   |  |                   
|Non-current deferred revenues                                      |  |                    |     |  |      |  |     | 
|Deferred revenue on capacity rental                                |  |                    | 301 |  |      |  | 217 | 
|Deferred revenue on connection fees  fixed services               |  |                    | 66  |  |      |  | 64  | 
|Deferred revenue on customer loyalty programs                      |  |                    | 75  |  |      |  | 39  | 
|Deferred revenue from CONATEL - mobile services Núcleo (Note 18 d) |  |                    | 11  |  |      |  | 9   | 
|                                                                   |  |                    |     |  |      |  |     | 
|                                                                   |  |                    | 453 |  |      |  | 329 | 
|                                                                   |  |                    |     |  |      |  |     | 
|Total deferred revenues                                            |  |                    | 876 |  |      |  | 691 | 
|                                                                   |  |                    |     |  |      |  |     | 

Note 12  Financial Debt

Financial debt consists of the following:



|                           |  |                    |     |  |      |  |     | 
|-------------------------- |  | ------------------ | --- |  | ---- |  | --- | 
|                           |  | As of December 31, |    
|                           |  | 2013               |     |  | 2012 | 
|Current financial debt     |  |                    |     |  |      |  |     | 
|Bank loans (Núcleo)        |  |                    | 10  |  |      |  | 40  | 
|Accrued interest (Núcleo)  |  |                    | 5   |  |      |  | 3   | 
|                           |  |                    |     |  |      |  |     | 
|                           |  |                    | 15  |  |      |  | 43  | 
|                           |  |                    |     |  |      |  |     | 
|                           |  |                   
|Non-current financial debt |  |                    |     |  |      |  |     | 
|Bank loans (Núcleo)        |  |                    | 220 |  |      |  | 101 | 
|                           |  |                    |     |  |      |  |     | 
|                           |  |                    | 220 |  |      |  | 101 | 
|                           |  |                    |     |  |      |  |     | 
|Total financial debt       |  |                    | 235 |  |      |  | 144 | 
|                           |  |                    |     |  |      |  |     | 

Bank loans

The following table shows the outstanding loans with local banks in Paraguay and their main terms as of December 31, 2013:



|                                                |         |  |                  |           |            |  |    |             |  |  |     | 
|----------------------------------------------- | ------- |  | ---------------- | --------- | ---------- |  | -- | ----------- |  |  | --- | 
|Principal nominalvalue (in million ofGuaraníes) |         |  | Amortizationterm |           | Book value | 
|                                                |         |  |                  |           | Current    |  |    | Non-current | 
|                                                | 130,000 |  |                  | 4.5 years |            |  | 6  |             |  |  | 176 | 
|                                                | 34,000  |  |                  | 3.7 years |            |  | 4  |             |  |  | 44  | 
|                                                |         |  |                  |           |            |  |    |             |  |  |     | 
|                                                | 164,000 |  |                  |           |            |  | 10 |             |  |  | 220 | 
|                                                |         |  |                  |           |            |  |    |             |  |  |     | 

The weighted average annual rate of these loans is 9.30% in Guaraníes and the weighted average
amortization term of these loans is approximately 3.8 years.



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The terms and conditions of Núcleos loans provide for certain events of default
which are considered standard for these kinds of operations.

Global Programs for the issuance of Notes

Telecom Argentina

The Ordinary and Extraordinary Shareholders Meeting of Telecom Argentina held on December 15, 2011, approved the creation of a
Medium Term Notes Global Program for a maximum outstanding amount of US$ 500 million or its equivalent in other currencies for a term of five years.

Personal

The Ordinary and Extraordinary Shareholders Meeting of Personal held on December 2, 2010, approved the creation of a Medium Term
Notes Global Program for a maximum outstanding amount of US$ 500 million or its equivalent in other currencies for a term of five years. On October 13, 2011, the CNV has approved this program.

Note 13  Salaries and social security payables

Salaries and social security payables include unpaid salaries, vacation and bonuses and its related social security contributions, termination
benefits and restructuring indemnities.

As of December 31, 2013, the total number of employees was 16,581, of which approximately
77% were unionized. All Management and senior positions are held by non-unionized employees.

In the field of compensation policy for
Directors and Managers, the Company and its subsidiaries have a scheme that includes fixed and variable components. While fixed compensation is dependent upon the level of responsibility required for the position and its market competitiveness,
variable compensation is comprised of compensation driven by the goals established on an annual basis and also by compensation regarding the fulfillment of long term goals.

The Company and its subsidiaries have no stock option plans for their employees.

Salaries and social security payables consist of the following:



|                                            |  |                    |     |  |      |  |     | 
|------------------------------------------- |  | ------------------ | --- |  | ---- |  | --- | 
|                                            |  | As of December 31, |    
|                                            |  | 2013               |     |  | 2012 | 
|Current                                     |  |                    |     |  |      |  |     | 
|Vacation and bonuses                        |  |                    | 483 |  |      |  | 391 | 
|Social security payables                    |  |                    | 191 |  |      |  | 144 | 
|Termination benefits                        |  |                    | 67  |  |      |  | 60  | 
|Restructuring debt                          |  |                    |    |  |      |  | 14  | 
|Compensation Fund debt                      |  |                    |    |  |      |  | 26  | 
|                                            |  |                    |     |  |      |  |     | 
|                                            |  |                    | 741 |  |      |  | 635 | 
|                                            |  |                    |     |  |      |  |     | 
|                                            |  |                   
|Non-current                                 |  |                    |     |  |      |  |     | 
|Termination benefits                        |  |                    | 111 |  |      |  | 128 | 
|Bonuses                                     |  |                    | 7   |  |      |  |    | 
|                                            |  |                    |     |  |      |  |     | 
|                                            |  |                    | 118 |  |      |  | 128 | 
|                                            |  |                    |     |  |      |  |     | 
|Total salaries and social security payables |  |                    | 859 |  |      |  | 763 | 
|                                            |  |                    |     |  |      |  |     | 

Compensation for the Key Managers for the years ended December 31, 2013, 2012 and 2011 is shown in Note
27.c).



Note 14  Income tax
payables and deferred income tax

Income tax asset and liability, net as of December 31, 2013 and 2012 consist of the following:



|                                               |  |                         |      |   |                       |  |       |        |  |  |            |   |  |       |    |   |  |  |        |   |  |  |        |  
|---------------------------------------------- |  | ----------------------- | ---- | - | --------------------- |  | ----- | ------ |  |  | ---------- | - |  | ----- | -- | - |  |  | ------ | - |  |  | ------ | -
|                                               |  | As of December 31, 2013 |      |   | As ofDecember 31,2012 | 
|                                               |  | TelecomArgentina        |      |   | Personal              |  |       | Núcleo |  |  | TelecomUSA |   |  | Total |    |  
|                                               |  |                         |      |   |                       | 
|Income tax payables                            |  |                         | 341  |   |                       |  | 1,599 |        |  |  | 40         |   |  |       | 7  |   |  |  | 1,987  |   |  |  | 1.520  |  
|Payments in advance of income taxes            |  |                         | (261 | ) |                       |  | (901  | )      |  |  | (21        | ) |  |       | (6 | ) |  |  | (1,189 | ) |  |  | (1,065 | )
|Law No. 26,476 Tax Regularization Regime       |  |                         | 3    |   |                       |  |      |        |  |  |           |   |  |       |   |   |  |  | 3      |   |  |  | 3      |  
|                                               |  |                         |      |   |                       |  |       |        |  |  |            |   |  |       |    |   |  |  |        |   |  |  |        |  
|Current income tax liability, net              |  |                         | 83   |   |                       |  | 698   |        |  |  | 19         |   |  |       | 1  |   |  |  | 801    |   |  |  | 458    |  
|                                               |  |                         |      |   |                       |  |       |        |  |  |            |   |  |       |    |   |  |  |        |   |  |  |        |  
|                                               |  |                         |      |   |                       | 
|Non-current deferred income tax liabilities    |  |                         |     |   |                       |  | 126   |        |  |  |           |   |  |       |   |   |  |  | 126    |   |  |  | 220    |  
|Non-current deferred income tax (asset)        |  |                         | (116 | ) |                       |  |      |        |  |  | (12        | ) |  |       |   |   |  |  | (128   | ) |  |  | (62    | )
|Law No. 26,476 Tax Regularization Regime       |  |                         | 10   |   |                       |  |      |        |  |  |            |   |  |       |   |   |  |  | 10     |   |  |  | 12     |  
|                                               |  |                         |      |   |                       |  |       |        |  |  |            |   |  |       |    |   |  |  |        |   |  |  |        |  
|Non-current Income tax liability /(asset), net |  |                         | (106 | ) |                       |  | 126   |        |  |  | (12        | ) |  |       |   |   |  |  | 8      |   |  |  | 170    |  
|                                               |  |                         |      |   |                       |  |       |        |  |  |            |   |  |       |    |   |  |  |        |   |  |  |        |  



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The tax effects of temporary differences that give rise to significant portions of the
Companys deferred tax assets and liabilities are presented below:



|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|------------------------------------------------------------- |  | ----------------------- | ---- | - | ---------------------- |  | ---- | ----------- |  |  | ------ | - |  | ---------- | --- | - | ----- |  | - | --------- |  |  | ------ | - |  |  | ---- | - |  |  | --- | -
|                                                              |  | As of December 31, 2013 |      |   | As of December 31,2012 | 
|                                                              |  | TelecomArgentina        |      |   | Personal               |  |      | Springville |  |  | Núcleo |   |  | TelecomUSA |     |   | Total |  |   | Argentina |  |  | Abroad |  
|Tax loss carry forwards                                       |  |                         |     |   |                        |  |     |             |  |  | (1     | ) |  |            |    |   |       |  |  |           |  |  | (1     | ) |  |  |     |   |  |  | (1  | )
|Allowance for doubtful accounts                               |  |                         | (43  | ) |                        |  | (55  | )           |  |  |       |   |  |            | (4  | ) |       |  |  |           |  |  | (102   | ) |  |  | (94  | ) |  |  | (2  | )
|Provisions                                                    |  |                         | (280 | ) |                        |  | (153 | )           |  |  |       |   |  |            |    |   |       |  |  |           |  |  | (433   | ) |  |  | (368 | ) |  |  |    |  
|PP&E                                                          |  |                         |     |   |                        |  |     |             |  |  |       |   |  |            | (12 | ) |       |  |  |           |  |  | (12    | ) |  |  |     |   |  |  | (11 | )
|Inventory                                                     |  |                         |     |   |                        |  | (48  | )           |  |  |       |   |  |            |    |   |       |  |  |           |  |  | (48    | ) |  |  | (19  | ) |  |  |    |  
|Termination benefits                                          |  |                         | (58  | ) |                        |  |     |             |  |  |       |   |  |            |    |   |       |  |  |           |  |  | (58    | ) |  |  | (63  | ) |  |  |    |  
|Other deferred tax assets, net                                |  |                         | (131 | ) |                        |  | (31  | )           |  |  |       |   |  |            |    |   |       |  |  |           |  |  | (162   | ) |  |  | (111 | ) |  |  |    |  
|Allowance for deferred tax assets                             |  |                         |     |   |                        |  | 27   |             |  |  | 1      |   |  |            |    |   |       |  |  |           |  |  | 28     |   |  |  | 23   |   |  |  | 1   |  
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|Total deferred tax assets                                     |  |                         | (512 | ) |                        |  | (260 | )           |  |  |       |   |  |            | (16 | ) |       |  |  |           |  |  | (788   | ) |  |  | (632 | ) |  |  | (13 | )
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|PP&E and intangible assets                                    |  |                         | 396  |   |                        |  | 320  |             |  |  |       |   |  |            |    |   |       |  |  |           |  |  | 716    |   |  |  | 753  |   |  |  |    |  
|Cash dividends from foreign companies                         |  |                         |     |   |                        |  | 66   |             |  |  |       |   |  |            | 4   |   |       |  |  |           |  |  | 70     |   |  |  | 45   |   |  |  | 5   |  
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|Total deferred tax liabilities                                |  |                         | 396  |   |                        |  | 386  |             |  |  |       |   |  |            | 4   |   |       |  |  |           |  |  | 786    |   |  |  | 798  |   |  |  | 5   |  
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|Net deferred tax liabilities/(assets)                         |  |                         | (116 | ) |                        |  | 126  |             |  |  |       |   |  |            | (12 | ) |       |  |  |           |  |  | (2     | ) |  |  | 166  |   |  |  | (8  | )
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  
|Net deferred tax liabilities/(assets) as of December 31, 2012 |  |                         | (54  | ) |                        |  | 220  |             |  |  |       |   |  |            | (8  | ) |       |  |   |           |  |  | 158    |   |  |  |      |   |  |  |     |  
|                                                              |  |                         |      |   |                        |  |      |             |  |  |        |   |  |            |     |   |       |  |   |           |  |  |        |   |  |  |      |   |  |  |     |  

Income tax expense for the years ended December 31, 2013, 2012 and 2011 consists of the following:



|                                   |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  
|---------------------------------- |  | ---------------------------- | ---- | - | -------- |  | ------ | ------ |  |  | ---------- | - |  | ----- | -- | - |  |  | ------ | -
|                                   |  | Year ended December 31, 2013 |     
|                                   |  | TelecomArgentina             |      |   | Personal |  |        | Núcleo |  |  | TelecomUSA |   |  | Total |   
|                                   |  |                              |      |   |         
|Current tax expense                |  |                              | (341 | ) |          |  | (1,585 | )      |  |  | (24        | ) |  |       | (3 | ) |  |  | (1,953 | )
|Fiscal year 2012 return adjustment |  |                              |     |   |          |  | (3     | )      |  |  |           |   |  |       |   |   |  |  | (3     | )
|Deferred tax benefit               |  |                              | 47   |   |          |  | 120    |        |  |  | 1          |   |  |       |   |   |  |  | 168    |  
|Valuation allowance                |  |                              |     |   |          |  | (4     | )      |  |  |           |   |  |       |   |   |  |  | (4     | )
|                                   |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  
|Income tax expense                 |  |                              | (294 | ) |          |  | (1,472 | )      |  |  | (23        | ) |  |       | (3 | ) |  |  | (1,792 | )
|                                   |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  



|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  
|-------------------- |  | ---------------------------- | ---- | - | -------- |  | ------ | ------ |  |  | ---------- | - |  | ----- | -- | - |  |  | ------ | -
|                     |  | Year ended December 31, 2012 |     
|                     |  | TelecomArgentina             |      |   | Personal |  |        | Núcleo |  |  | TelecomUSA |   |  | Total |   
|                     |  |                              |      |   |         
|Current tax expense  |  |                              | (310 | ) |          |  | (1,187 | )      |  |  | (23        | ) |  |       | (2 | ) |  |  | (1,522 | )
|Deferred tax benefit |  |                              | 38   |   |          |  | 20     |        |  |  | 3          |   |  |       | 1  |   |  |  | 62     |  
|Valuation allowance  |  |                              |     |   |          |  | (3     | )      |  |  |           |   |  |       |   |   |  |  | (3     | )
|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  
|Income tax expense   |  |                              | (272 | ) |          |  | (1,170 | )      |  |  | (20        | ) |  |       | (1 | ) |  |  | (1,463 | )
|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |    |   |  |  |        |  



|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |   |  |  |  |        |  
|-------------------- |  | ---------------------------- | ---- | - | -------- |  | ------ | ------ |  |  | ---------- | - |  | ----- | - |  |  |  | ------ | -
|                     |  | Year ended December 31, 2011 |     
|                     |  | TelecomArgentina             |      |   | Personal |  |        | Núcleo |  |  | TelecomUSA |   |  | Total |  
|                     |  |                              |      |   |         
|Current tax expense  |  |                              | (379 | ) |          |  | (1,039 | )      |  |  | (16        | ) |  |       |  |  |  |  | (1,434 | )
|Deferred tax benefit |  |                              | 101  |   |          |  | (59    | )      |  |  | 2          |   |  |       |  |  |  |  | 44     |  
|Valuation allowance  |  |                              |     |   |          |  | (5     | )      |  |  |           |   |  |       |  |  |  |  | (5     | )
|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |   |  |  |  |        |  
|Income tax expense   |  |                              | (278 | ) |          |  | (1,103 | )      |  |  | (14        | ) |  |       |  |  |  |  | (1,395 | )
|                     |  |                              |      |   |          |  |        |        |  |  |            |   |  |       |   |  |  |  |        |  



Income tax expense for the years
ended December 31, 2013, 2012 and 2011 differed from the amounts computed by applying the Companys statutory income tax rate to pre-tax income as a result of the following:



|                                                  |  |                                  |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------- |  | -------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                  |  | For the years ended December 31, |       
|                                                  |  | 2013                             |        |   | 2012 |  |        | 2011 | 
|Pre-tax income                                    |  |                                  | 5,046  |   |      |  | 4,195  |      |  |  | 3,937  |  
|Non taxable items                                 |  |                                  | (23    | ) |      |  | (25    | )    |  |  | 3      |  
|                                                  |  |                                  |        |   |      |  |        |      |  |  |        |  
|Subtotal                                          |  |                                  | 5,023  |   |      |  | 4,170  |      |  |  | 3,940  |  
|Weighted statutory income tax rate (*)            |  |                                  | 34,4   | % |      |  | 34,4   | %    |  |  | 34,2   | %
|Income tax expense at weighted statutory tax rate |  |                                  | (1,727 | ) |      |  | (1,434 | )    |  |  | (1,346 | )
|Income tax on cash dividends of foreign companies |  |                                  | (26    | ) |      |  | (22    | )    |  |  | (27    | )
|Other changes in tax assets and liabilities       |  |                                  | (32    | ) |      |  | (4     | )    |  |  | (17    | )
|Fiscal year 2012 return adjustment                |  |                                  | (3     | ) |      |  |       |      |  |  |       |  
|Changes in valuation allowance                    |  |                                  | (4     | ) |      |  | (3     | )    |  |  | (5     | )
|                                                  |  |                                  |        |   |      |  |        |      |  |  |        |  
|                                                  |  |                                  | (1,792 | ) |      |  | (1,463 | )    |  |  | (1,395 | )
|                                                  |  |                                  |        |   |      |  |        |      |  |  |        |  



|(*) | Effective income tax rate based on weighted statutory income tax rate in the different countries where the Company has operations. The statutory tax rate in Argentina was 35% for all the years presented, in Paraguay was
10% plus an additional rate of 5% in case of payment of dividends for all the years presented, in Uruguay the statutory tax rate was 25% for all the years presented and in the USA the effective tax rate was 39.5% for all the years presented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Note 15  Other taxes payables

Other taxes payables consist of the following:



|                                                       |  |                    |     |  |      |  |     | 
|------------------------------------------------------ |  | ------------------ | --- |  | ---- |  | --- | 
|                                                       |  | As of December 31, |    
|                                                       |  | 2013               |     |  | 2012 | 
|Current                                                |  |                    |     |  |      |  |     | 
|Tax withholdings                                       |  |                    | 130 |  |      |  | 91  | 
|VAT, net                                               |  |                    | 143 |  |      |  | 180 | 
|Tax on SU (Note 2.d)                                   |  |                    | 91  |  |      |  | 88  | 
|Turnover tax                                           |  |                    | 81  |  |      |  | 54  | 
|Internal taxes                                         |  |                    | 73  |  |      |  | 55  | 
|Regulatory fees                                        |  |                    | 56  |  |      |  | 48  | 
|Municipal taxes                                        |  |                    | 24  |  |      |  | 17  | 
|Tax withholdings on dividends paid (Note 4)            |  |                    | 44  |  |      |  |    | 
|Retention Decree No.583/10 ENARD                       |  |                    | 12  |  |      |  | 9   | 
|Tax on personal property  on behalf of shares holders |  |                    | 13  |  |      |  | 10  | 
|                                                       |  |                    |     |  |      |  |     | 
|                                                       |  |                    | 667 |  |      |  | 552 | 
|                                                       |  |                    |     |  |      |  |     | 

Note 16  Other liabilities

Other liabilities consist of the following:



|                                                                    |  |                    |     |  |      |  |    | 
|------------------------------------------------------------------- |  | ------------------ | --- |  | ---- |  | -- | 
|                                                                    |  | As of December 31, |    
|                                                                    |  | 2013               |     |  | 2012 | 
|Current                                                             |  |                    |     |  |      |  |    | 
|Legal fees                                                          |  |                    | 13  |  |      |  | 12 | 
|Guarantees received                                                 |  |                    | 13  |  |      |  | 7  | 
|Compensation for directors and members of the Supervisory Committee |  |                    | 20  |  |      |  | 8  | 
|Other                                                               |  |                    | 3   |  |      |  | 13 | 
|                                                                    |  |                    |     |  |      |  |    | 
|                                                                    |  |                    | 49  |  |      |  | 40 | 
|                                                                    |  |                    |     |  |      |  |    | 
|Non-current                                                         |  |                    |     |  |      |  |    | 
|Pension benefits (Note 3.l)                                         |  |                    | 64  |  |      |  | 38 | 
|Suppliers guarantees on third parties claims                        |  |                    | 4   |  |      |  | 12 | 
|Other                                                               |  |                    |    |  |      |  | 1  | 
|                                                                    |  |                    |     |  |      |  |    | 
|                                                                    |  |                    | 68  |  |      |  | 51 | 
|                                                                    |  |                    |     |  |      |  |    | 
|Total other liabilities                                             |  |                    | 117 |  |      |  | 91 | 
|                                                                    |  |                    |     |  |      |  |    | 

Movements in the pension benefits are as follows:



|                             |  |                    |    |   |      |  |    | 
|---------------------------- |  | ------------------ | -- | - | ---- |  | -- | 
|                             |  | As of December 31, |   
|                             |  | 2013               |    |   | 2012 | 
|At the beginning of the year |  |                    | 38 |   |      |  | 23 | 
|Service cost (*)             |  |                    | 5  |   |      |  | 5  | 
|Interest cost (*)            |  |                    | 12 |   |      |  | 10 | 
|Payments                     |  |                    | (1 | ) |      |  |   | 
|Actuarial loss (**)          |  |                    | 10 |   |      |  |   | 
|                             |  |                    |    |   |      |  |    | 
|At the end of the year       |  |                    | 64 |   |      |  | 38 | 
|                             |  |                    |    |   |      |  |    | 



|(*) | Included in Employee benefit expenses and severance payments.
|--- | -------------------------------------------------------------

|(**) | Included in Other comprehensive income.
|---- | ---------------------------------------



Note 17  Provisions

The Company is a party to several civil, tax, commercial, labor and regulatory proceedings and claims that have arisen in the ordinary course
of business. In order to determine the proper level of provisions, Management of the Company, based on the opinion of its internal and external legal counsel, assesses the likelihood of any adverse judgments or outcomes related to these matters as
well as the range of probable losses that may result from the potential outcomes. A determination of the amount of provisions required, if any, is made after careful analysis of each individual case.

The determination of the required provisions may change in the future due to new developments or unknown facts at the time of the evaluation
of the claims or changes as a matter of law or legal interpretation. Consequently, as of December 31, 2013, the Company has established provisions in an aggregate amount of $1,342 to cover potential losses under these claims ($85 for regulatory
contingencies deducted from assets and $1,257 included under provisions) and certain amounts deposited in the Companys bank accounts have been restricted as to their use due to some judicial proceedings. As of December 31, 2013, these
restricted funds totaled $63 (included under Other receivables, net item line in the consolidated statement of financial position).



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Provisions consist of the following:



|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|------------------------------------------------------ |  | --------------------- | --- |  | --------- |  | --------- | ----------------- |  |  | ---- | --------------- |  | ----------------------------- | -------- | - | --------------------- |  | ------- | ----------------- |  | ----------- | ---- | - |  | --------------- | ----- |  | -------- |  | -------- | --------------------- |  |  | -- |  |  |  | ---- | - |  |  | --- | - |  |  | --- | - |  |  | ----- | 
|                                                       |  | Balances              |     |  | Additions |  |           | Reclassifications |  |  | Uses |                 |  | Balances asofDecember 31,2012 |          |   | Additions(recoveries) |  |         | Reclassifications |  |             | Uses |   |  | Balances        |      
|                                                       |  | as ofDecember 31,2011 |     |  | Capital   |  |           | Interest(i)       |  |  |      | Debtrecognition |  |                               | Payments |   |                       |  | Capital |                   |  | Interest(i) |      |   |  | Debtrecognition |       |  | Payments |  |          | as ofDecember 31,2013 | 
|Current                                                |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|Provision for civil and commercial proceedings         |  |                       | 16  |  |           |  |          |                   |  |  |     |                 |  |                               | 24       |   |                       |  |        |                   |  |             | (7   | ) |  |                 | 33    |  |          |  |         |                       |  |  |   |  |  |  | 120  |   |  |  |    |   |  |  | (20 | ) |  |  | 133   | 
|Provision for labor claims                             |  |                       | 128 |  |           |  |          |                   |  |  |     |                 |  |                               | 54       |   |                       |  | (57     | )                 |  |             | (93  | ) |  |                 | 32    |  |          |  |         |                       |  |  |   |  |  |  | 54   |   |  |  |    |   |  |  | (42 | ) |  |  | 44    | 
|Restructuring                                          |  |                       |    |  |           |  | (ii) 54   |                   |  |  |     |                 |  |                               |         |   |                       |  |        |                   |  |             |     |   |  |                 | 54    |  |          |  | (ii)(8)  |                       |  |  |   |  |  |  |     |   |  |  | (46 | ) |  |  |    |   |  |  |      | 
|Provision for regulatory, tax and other matters claims |  |                       | 29  |  |           |  |          |                   |  |  |     |                 |  |                               | 31       |   |                       |  | (24     | )                 |  |             | (21  | ) |  |                 | 15    |  |          |  |         |                       |  |  |   |  |  |  | 67   |   |  |  |    |   |  |  | (35 | ) |  |  | 47    | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|Total current provisions                               |  |                       | 173 |  |           |  | 54        |                   |  |  |     |                 |  |                               | 109      |   |                       |  | (81     | )                 |  |             | (121 | ) |  |                 | 134   |  |          |  | (8       | )                     |  |  |   |  |  |  | 241  |   |  |  | (46 | ) |  |  | (97 | ) |  |  | 224   | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|Non-current                                            |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|Provision for civil and commercial proceedings         |  |                       | 117 |  |           |  | 33        |                   |  |  | 19   |                 |  |                               | (24      | ) |                       |  |        |                   |  |             |     |   |  |                 | 145   |  |          |  | 95       |                       |  |  | 19 |  |  |  | (120 | ) |  |  |    |   |  |  |    |   |  |  | 139   | 
|Provision for labor claims                             |  |                       | 220 |  |           |  | 60        |                   |  |  | 39   |                 |  |                               | (54      | ) |                       |  | (10     | )                 |  |             |     |   |  |                 | 255   |  |          |  | 31       |                       |  |  | 31 |  |  |  | (54  | ) |  |  |    |   |  |  |    |   |  |  | 263   | 
|Provision for regulatory, tax and other matters claims |  |                       | 384 |  |           |  | 60        |                   |  |  | 19   |                 |  |                               | (31      | ) |                       |  |        |                   |  |             |     |   |  |                 | 432   |  |          |  | 144      |                       |  |  | 16 |  |  |  | (67  | ) |  |  |    |   |  |  |    |   |  |  | 525   | 
|Asset retirement obligations                           |  |                       | 61  |  |           |  | 9         |                   |  |  | 5    |                 |  |                               |         |   |                       |  |        |                   |  |             |     |   |  |                 | 75    |  |          |  | 22       |                       |  |  | 9  |  |  |  |     |   |  |  |    |   |  |  |    |   |  |  | 106   | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|Total non-current provisions                           |  |                       | 782 |  |           |  | (iii) 162 |                   |  |  | 82   |                 |  |                               | (109     | ) |                       |  | (10     | )                 |  |             |     |   |  |                 | 907   |  |          |  | (iv) 292 |                       |  |  | 75 |  |  |  | (241 | ) |  |  |    |   |  |  |    |   |  |  | 1,033 | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 | 
|Total provisions                                       |  |                       | 955 |  |           |  | 216       |                   |  |  | 82   |                 |  |                               |         |   |                       |  | (91     | )                 |  |             | (121 | ) |  |                 | 1,041 |  |          |  | 284      |                       |  |  | 75 |  |  |  |     |   |  |  | (46 | ) |  |  | (97 | ) |  |  | 1,257 | 
|                                                       |  |                       |     |  |           |  |           |                   |  |  |      |                 |  |                               |          |   |                       |  |         |                   |  |             |      |   |  |                 |       |  |          |  |          |                       |  |  |    |  |  |  |      |   |  |  |     |   |  |  |     |   |  |  |       | 



|(i) | Charged to finance costs, interest on provision item line.
|--- | ----------------------------------------------------------

|(ii) | Charged to restructuring costs
|---- | ------------------------------

|(iii) | Charged 153 to Provisions, 8 to PP&E (CAPEX) and 1 to currency translation adjustments.
|----- | ---------------------------------------------------------------------------------------

|(iv) | Charged 270 to Provisions, 21 to PP&E (CAPEX) and 1 to currency translation adjustment.
|---- | ---------------------------------------------------------------------------------------

Restructuring Plan

In the last
quarter of 2012 the Companys Management decided to implement a restructuring plan aimed to improve the efficiency of the Telecom Groups organizational structure. This plan contemplated the removal and / or merger of management structures
in various areas of Telecom Argentina and Personal. The plan involved the dismissal of about 90 members of middle and upper management with a total cost of $82. The restructuring plan finished in June 2013.

Probable Contingent liabilities

Below is a summary of the most significant claims and legal actions for which provisions have been established:



| |  |  | Profit sharing bonds
| | - |  | --------------------

Different legal actions were brought, mainly by former
employees of the Company against the National Government and Telecom Argentina, requesting that Decree No. 395/92  which expressly exempted Telefónica and the Company from issuing the profit sharing bonds provided in Law
No. 23,696  be struck down as unconstitutional and, therefore, claiming compensation for the damages they had suffered because such bonds had not been issued.

In August 2008, the Supreme Court of Justice, when resolving a case against Telefónica, found the Decree No. 395/92
unconstitutional.

Since the National Supreme Court of Justices judgment on this matter, the Divisions of the Courts of Appeal
ruled that Decree No. 395/92 was unconstitutional. As a result, in the opinion of the legal counsel of the Company, there is an increased probability that the Company has to face certain contingencies, notwithstanding the right of reimbursement
that attends Telecom Argentina against the National State.

Said Court decision found the abovementioned Decree unconstitutional and
ordered to send the proceedings back to the court of origin so that said court could decide on which was the subject compelled to pay licensee and/or National Government- and the parameters that were to be taken into account in order to
quantify the remedies requested (percent of profit sharing, expiration criteria of the statute of limitations, distribution method between the program beneficiaries, etc). It should be mentioned that there is no uniformity of opinion in the Courts
in relation to each of those concepts. However, in connection with the claims brought by employees and former employees that were not part of the Share Ownership Plan (or SOP) at the time of ENTel privatization, the jurisprudence has rejected the
claims.

As of December 31, 2013, the Companys Management, with the advice of its legal counsel, has recorded provisions for
contingencies that it estimates are sufficient to cover the risks associated with these claims, having considered the legal background as of the date of these consolidated financial statements.



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Additionally, on June 3, 2013 Telecom Argentina has been notified of a lawsuit filed by four
unions claiming the issuance of a profit sharing bond (hereinafter the bond) for future periods and for periods for which the statute of limitations is not expired. In order that this claim will be sustained, the plaintiffs require that
Decree No. 395/92 should be declared unconstitutional.

The Company, based on the advice of its legal counsel, believes that there are
strong arguments to defend its rights based, among other things, in the expiration of the statute of limitations of the claim for the unconstitutionality of Decree No. 395/92, the lack of active legal standing for collective claim for bond
issuance -due to the existence of individual claims-, among other reasons regarding lack of active legal standing.

This collective
lawsuit is for an unspecified amount. However, the plaintiffs presented the criteria that should be applied for the determination of the percentage of participation in the Companys profit. On the other hand, the lawsuit requiring the issuance
of a profit sharing bond represents an obligation with potential future economic impacts for Telecom Argentina.

In June 2013, the
Company filed its answer to the claim, arguing that the labor courts lack jurisdiction. On October 30, 2013, the judge rejected the lack of jurisdiction claim, established a statute of limitations of ten years applicable to the case and
deferred ruling on the defenses of res judicata, lis pendens and on the third party complaint until after a hearing is held by the court. Telecom Argentina has appealed the judges ruling.

On December 12, 2013 the mentioned hearing took place and the intervening court ordered, amount other, to differ the defense of
prescription filed by the Company to the moment of sentencing. At the same time the court ordered to the plaintiff to accompany the sufficient mandates of employees included in the claim; meanwhile the trial proceedings will be suspended. The
plaintiff appealed the decision and the judge deferred this resource to the time of sentencing.

As of the date of issuance of these
financial statements, is pending the appeal of incompetence raised by the Company, once the documentation requested by the court to the plaintiffs was resolved.



| |  |  | Argentine Supreme Court Ruling on Dominguez c/ Telefónica de Argentina S.A.
| | - |  | -----------------------------------------------------------------------------

In December 2013, the Argentine Supreme Court ruled on a similar case, Domínguez c/ Telefónica de Argentina S.A.,
overturning a lower court ruling that had barred the claim as having exceeded the applicable statute of limitations since ten years had passed since the issuance of Decree No. 395/92.

The Argentine Supreme Court ruling states that the Civil and Commercial Proceedings Court must hear the case again to consider statute of
limitations arguments raised by the appellants that, in the opinion of the Argentine Supreme Court, were not considered by the lower court and are relevant to the resolution of the case.

At the date of issuance of these financial statements, there is no assurance as to how such similar case may be resolved, either by a new
ruling at the lower court or by any further appeal.

If the expiration of the statute of limitation should not be computed as from the
date of issuance of Decree No. 395/92 as of result of future new jurisprudential interpretation, the estimated increase in Telecom Argentina provisions could range between P$30 million and P$35 million.



| |  |  | Wage differences by food vouchers and non-remunerative lump sum
| | - |  | ---------------------------------------------------------------

The
Company is subject to various lawsuits initiated by some employees and former employees who claim wage differences caused by the impact of the concepts non-remunerative lump sum and food vouchers over the settlement of items
such as overtime, productivity, vacation, supplementary annual salary and other additional benefits provided by the Collective Bargaining Agreement.

In this regard, the Supreme Court of Justice has recognized that food vouchers are remunerative and are part of the employees
compensations, declaring the unconstitutionality of Sect. 103 bis, inc. C of the Employment Contract Act (which gives them the character of social benefits). Considering these judicial precedents, at December 31, 2013, the Management of the
Company, with the advice of its legal counsel, has recorded a provision for contingencies that it estimates is sufficient to cover the risks associated with these claims at the date of issue of these consolidated financial statements.



Possible Contingencies



| |  |  | Consumidores Financieros Asociación Civil para su defensa demand
| | - |  | ------------------------------------------------------------------

In November 2011, Personal was notified of a lawsuit filed by the Financial Consumers Defense Association (Consumidores Financieros
Asociación Civil para su defensa) claiming that Personal made allegedly abusive charges to its customers by implementing per-minute billing and setting an expiration date for prepaid telecommunication cards.



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The lawsuit demands: Personal to i) cease such practices and bill its customers only for the
exact time of telecommunication services used; ii) reimburse the amounts collected in excess in the ten years preceding the date of the lawsuit; iii) credit its customers for unused minutes on expired prepaid cards in the ten years preceding the
date of the lawsuit; iv) pay interest equal to the lending rate charged by the Banco de la Nación Argentina in addition to the claims mentioned in i) and ii); and v) pay punitive damages provided by article 52 bis of Law No. 24,240.

Personal responded in a timely manner, arguing the grounds by which the lawsuit should be dismissed, with particular emphasis on the
regulatory framework that explicitly endorse Personals practices, now challenged by the plaintiff in disregard of such regulations.

The plaintiffs are seeking damages for unspecified amounts. Although Personal believes there are strong defense arguments for which the claim
should not succeed, in the absence of jurisprudence on the matter, Personals Management (with the assistance of its legal counsel) has classified the claim as possible until a judgment is rendered.

As of the date of issuance of these financial statements, these judicial claims are in discovery phase.



| |  |  | Lawsuit against Personal on changes in services prices
| | - |  | ------------------------------------------------------

In June 2012,
Personal was notified of a lawsuit from the Consumer Association Proconsumer, which claims alleged insufficiencies in the information disclosed to Personals clients when changes in the prices conditions took place during the period
May 2008 - May 2011. The remedy requested in the lawsuit is that certain clients those who are charged by a fixed monthly fee- be reimbursed amounts of money for a period of two months as from the moment in which the inconsistencies of
information alleged by the claimant took place. The complaint is for an undetermined amount and Personal was evaluating the possible amounts involved. Although the lawsuit amount is uncertain, as a consequence of an internal review of
Personals financial statements the possible amount related to the lawsuit succeed could be calculated and amounts to $3 of capital. The Management of Personal considered that it had adequately disclosed and given publicity of the changes in
contractual conditions, and therefore believed that this complaint should not be successful.

On September 5, 2012 the Court
considered as formally answered by Personal the lawsuit filed by the Consumers Association Proconsumer. Before continuing with the trial, the Court will have to make a decision on some preliminary defenses presented by Personal
(incompetence and lack of legitimacy of the claimant).

While Management of Personal considers that there are solid arguments for the
favorable resolution of this lawsuit, in case it was resolved unfavorably, it would not have a significant impact on the financial position and results of Personal.

Remote Contingencies

The Group faces other legal proceedings, fiscal and regulatory considered normal in the development of its activities. The Company Directors
and its legal advisors estimate it will not generate an adverse impact on their financial position and the result of its operations, or its liquidity. In accordance with IAS 37 provisions, not any provision has been constituted related to the
resolution of these issues

Note 18  Commitments

(a) Purchase commitments

The Company has entered into various purchase orders amounting in the aggregate to approximately $5,357 as of December 31, 2013 (of which
$2,105 corresponds to PP&E commitments), primarily related to the supply of switching equipment, external wiring, infrastructure agreements, inventory and other service agreements. This amount also includes the commitments mentioned in c) and
the commitments described in Note 27 b).



(b) Investment
commitments

In August 2003, Telecom Argentina was notified by the SC of a proposal for the creation of a $70- fund (the
Complejo Industrial de las Telecomunicaciones 2003 or 2003 Telecommunications Fund) to be funded by the major telecommunication companies and aimed at developing the telecommunications sector in Argentina. Banco de Inversion
y Comercio Exterior (BICE) was designated as Trustee of the Fund.

In November 2003, the Company contributed $1.5 at the
inception of the Fund. In addition, Management announced that it is the Companys intention to promote agreements with local suppliers which would facilitate their access to financing.



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(c) Commitments assumed by Telecom Argentina from the sale of Publicom

On March 29, 2007, Telecom Argentinas Board of Directors approved the sale of its equity interest in Publicom (a company engaged in
directories publishing business) to Yell Publicidad S.A. (a company incorporated in Spain, member of the Yell Group- Grupo Yell), which was executed on April 12, 2007 (the Closing Date).

On Closing Date and after the stock transfer was actually performed, Publicom accepted a proposal from Telecom Argentina. According to said
proposal, Telecom Argentina:



| |  | engages Publicom to publish Telecom Argentinas directories (white pages) for a 5-year period, which was extended annually until 2014;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | engages Publicom to distribute Telecom Argentinas white pages for a 20-year period, which may be extended upon expiry date;
|- |  | ----------------------------------------------------------------------------------------------------------------------------



| |  | engages Publicom to maintain the Internet portal, which allows to access the white pages through the web, for a 20-year period, term which may be extended upon expiry date;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | grants Publicom the right to lease advertising spaces on the white pages for a 20-year period, which may be extended upon expiry date; and
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  | authorizes the use of certain trademarks for the distribution and/or consultation on the Internet and/or advertising spaces agreements for the same specified period.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

Telecom Argentina reserves the right to supervise certain matters associated with white pages publishing and distribution activities that
allow Telecom Argentina to assure the fulfillment of its regulatory obligations during the term of the proposal. The terms and conditions of the proposal include usual provisions that allow Telecom Argentina to apply economic sanctions in the case
of non-compliance, and in the case of serious non-compliance, allow Telecom Argentina to require an early termination. In the latter case, the Company could enter into an agreement with other providers.

The proposal set prices for the publishing, printing and distribution of the 2007 directories, and provided clauses for the subsequent
editions in order to ensure Telecom Argentina that said services will be contracted at market price.

Telecom Argentina shall continue to
include in its own invoices the amounts to be paid by its customers to Publicom for the contracted services or those that may be contracted in the future, and subsequently collect the amounts for said services on behalf and to the order of Publicom,
without absorbing any delinquency.

(d) Commitments assumed by Núcleo

During 2010, the CONATEL awarded Núcleo a public bidding for the implementation of the expansion of the infrastructure of networks used
as platform for the mobile telephony access services and the basic service in areas of public or social interest in Paraguay. The total investment was approximately of $17, of which $12 were subsidized by CONATEL.

As of the date of these financial statements, Núcleo has timely fulfilled its investments obligations and the total assets and
services have been installed and are satisfactorily functioning. The CONATEL has disbursed approximately $11 related to this bidding.

Additionally, in August 2011, the CONATEL awarded Núcleo a new public bidding for the implementation of the expansion of the
infrastructure of networks as a platform for the mobile telephony access services and the basic service in the Department of Caaguazú. Núcleo committed to install and render satisfactorily functioning all the assets and services
covered by the bidding within six months from the date of signing of the contract, by means of an approximate investment of $6 of which $5 were subsidized by the CONATEL. As of the date of these financial statements, the work is finished. The
CONATEL has disbursed approximately $4 related to this bidding.

CONATELs total differed disbursements as of December 31, 2013 amounted to $15
and were included under Deferred revenues item line, corresponding $3 and $11 to current and non-current deferred revenues, respectively, having accrued gains for $1 since fiscal year 2011.



Note 19  Equity

Equity includes:



|                                                                                        |  |                    |        |  |      |  |        | 
|--------------------------------------------------------------------------------------- |  | ------------------ | ------ |  | ---- |  | ------ | 
|                                                                                        |  | As of December 31, |       
|                                                                                        |  | 2013               |        |  | 2012 | 
|Equity attributable to Telecom Argentina (Controlling Company)                          |  |                    | 11,783 |  |      |  | 9,959  | 
|Equity attributable to non-controlling interest(ABC Telecomunicaciones S.A.  Note 1.a) |  |                    | 268    |  |      |  | 199    | 
|                                                                                        |  |                    |        |  |      |  |        | 
|Total equity (*)                                                                        |  |                    | 12,051 |  |      |  | 10,158 | 
|                                                                                        |  |                    |        |  |      |  |        | 



|(*) | Additional information is given in the consolidated statements of changes in equity.
|--- | ------------------------------------------------------------------------------------



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(a) Capital information

The capital stock of Telecom Argentina amounted to $984,380,978, represented by an equal number of ordinary shares, of $1 argentine peso of
nominal value and entitled to one vote per share. The capital stock is fully integrated and registered with the Public Registry of Commerce.

The Companys shares are authorized by the CNV, the Buenos Aires Stock Exchange (the BCBA) and the New York Stock Exchange
(the NYSE) for public trading. Only Class B shares are traded since Nortel owns all of the outstanding Class A shares; and Class C shares are dedicated to the employee stock ownership program, as
described below.

Telecom Argentinas breakdown of capital stock as of December 31, 2013 is as following:



|                                                         |  |                                                           |             |  |                 |  |            |                     |  |  |             | 
|-------------------------------------------------------- |  | --------------------------------------------------------- | ----------- |  | --------------- |  | ---------- | ------------------- |  |  | ----------- | 
|                                                         |  | Registered, subscribed and authorized for public offering |            
|Shares                                                   |  | Outstanding shares                                        |             |  | Treasury shares |  |            | Total capital stock | 
|Ordinary shares, $1 argentine peso of nominal value each |  |                                                           |             |  |                 |  |            |                     |  |  |             | 
|Class A                                                |  |                                                           | 502,034,299 |  |                 |  |           |                     |  |  | 502,034,299 | 
|Class B                                                |  |                                                           | 466,857,868 |  |                 |  | 15,221,373 |                     |  |  | 482,079,241 | 
|Class C                                                |  |                                                           | 267,438     |  |                 |  |           |                     |  |  | 267,438     | 
|                                                         |  |                                                           |             |  |                 |  |            |                     |  |  |             | 
|Total                                                    |  |                                                           | 969,159,605 |  |                 |  | 15,221,373 |                     |  |  | 984,380,978 | 
|                                                         |  |                                                           |             |  |                 |  |            |                     |  |  |             | 

Each ADS represents 5 Class B shares and are traded on the NYSE under the ticker symbol TEO.

(b) Share ownership program

In 1992, a Decree from the Argentine Government, which provided for the creation of the Company upon the privatization of ENTel, established
that 10% of the capital stock then represented by 98,438,098 Class C shares was to be included in thePrograma de Propiedad Participada or PPP (an employee share ownership program sponsored by the Argentine
Government). Pursuant to the PPP, the Class C shares were held by a trustee for the benefit of former employees of the state-owned company who remained employed by the Company and who elected to participate in the plan.

In 1999, Decree No. 1,623/99 of the Argentine Government eliminated the restrictions on some of the Class C shares held by
the PPP, although it excluded Class C shares of the Fund of Guarantee and Repurchase subject to an injunction against their use. In March 2000, the shareholders meeting of the Company approved the conversion of up to unrestricted
52,505,360 Class C shares into Class B shares (these shares didnt belong to the Fund of Guarantee and Repurchase), most of which was sold in a secondary public offering in May 2000.

The Annual General and Extraordinary Meetings held on April 27, 2006, approved that the power for the additional conversion of up to
41,339,464 Class C ordinary shares into the same amount of Class B ordinary shares, be delegated to the Board of Directors. As granted by the Meetings, the Board transferred the powers to convert the shares to some of the
Boards members and/or the Companys executive officers. As of December 31, 2011, all the 41,339,464 shares were converted into Class B ordinary shares in eleven tranches.

The remaining 4,593,274 Class C shares were affected by an injunction measure recorded in file Garcías de Vicchi,
Amerinda y otros c/ Sindicación de Accionistas Clase C del Programa de Propiedad Participada s/nulidad de acto jurídico, which was released. The General Ordinary and Extraordinary and Special Class C Shares
Meetings held on December 15, 2011, approved that the power for the additional conversion of up to 4,593,274 Class C shares into the same amount of Class B shares in one or more tranches, be delegated to the Board of
Directors. Of such amount, 4,325,836 Class C shares have already been converted into Class B shares in 7 tranches. As of the date of issuance of these consolidated financial statements, 267,438 Class C shares are
still pending to be converted into Class B shares.

(c) New Capital Market Act - Law No. 26,831

On December 28, 2012 the new Capital Market Law (Law No. 26,831) was published in the Official Bulletin. This Law eliminates
self-regulation of the capital market; grants new powers to the CNV and supersedes Law No. 17,811 and Decree No. 677/01, among other rules. The Law became effective on January 28, 2013. Since that date, governs the universal scope of
the Statutory Regime of Public Offer of Mandatory Acquisition, as provided the Law, which states: Article 90.  Universal scope. The Statutory Regime of Public Offer of Mandatory Acquisition regulated in this chapter and the residual
rules of participation regulated in the following chapter includes all listed companies, even those that, under the previous regime, have opted to be excluded of its application.



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(d) Acquisition of Treasury Shares

The Companys Ordinary Shareholders Meeting held on April 23, 2013, which was adjourned until May 21, 2013, approved at
its second session of deliberations, the creation of a Voluntary Reserve for Capital Investments of $1,200, granting powers to the Companys Board of Directors to decide its total or partial use, and to approve the methodology,
terms and conditions of such investments.

In connection with the above mentioned, on May 22, 2013, the Board of Directors approved
the following terms and conditions of the Companys Treasury Shares Acquisition Process in the market in Argentine pesos so as to avoid any possible damages to the Company and its shareholders derived from fluctuations and unbalances between
the shares price and the Companys solvency:



| |  |  | Maximum amount to be invested: $1,200.
| | - |  | --------------------------------------



| |  |  | Maximum amount of shares subject to the acquisition: the amount of Class B ordinary shares of the Company, $1 argentine peso of nominal value and with one vote each, that may be acquired with the
maximum amount to be invested, which amount may never exceed a limit of 10% of the capital stock.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Price to be paid by share: between a minimum of $1 argentine peso and a maximum of $32.50 argentine pesos by share. The maximum price to be paid by share may be modified by the Companys Board of Directors.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Deadline for the acquisitions: until April 30, 2014.
| | - |  | ----------------------------------------------------

The Companys Board of
Directors, on its meeting held on August 29, 2013, modified the terms and conditions only regards the price to be paid by share, which resulted to be between a minimum of $1 argentine peso and a maximum of $40 argentine pesos per
share.

Pursuant to Section 67 of Law No. 26,831, the Company must sell its treasury shares within three years of the date of
acquisition. Pursuant to Section 221 of the LSC, the rights of treasury shares shall be suspended until such shares are sold, and shall not be taken into account to determine the quorum or the majority of votes at the Shareholders
Meetings. No restrictions apply to Retained Earnings as a result of the creation of a specific reserve for such purposes named Voluntary Reserve for Capital Investments.

As of December 31, 2013 the following treasury shares were acquired:



|                  |  |                              |  |                          |  |                                             
|----------------- |  | ---------------------------- |  | ------------------------ |  | --------------------------------------------
|Acquisition month |  | Treasury shares acquired (a) |  | Total cost (in millions) |  | Average cost per share inargentine pesos (b)
|May 2013          |  | 105,800                      |  | 3                        |  | $26.49                                      
|June 2013         |  | 3,167,382                    |  | 80                       |  | $25.29                                      
|July 2013         |  | 3,013,883                    |  | 75                       |  | $24.99                                      
|August 2013       |  | 1,361,547                    |  | 40                       |  | $29.24                                      
|September 2013    |  | 3,135,542                    |  | 112                      |  | $35.56                                      
|October 2013      |  | 3,587,756                    |  | 121                      |  | $33.62                                      
|November 2013     |  | 849,463                      |  | 30                       |  | $36.29                                      
|                  |  |                              |  |                          |  |                                             
|Total             |  | 15,221,373                   |  | 461                      |  | $30.29                                      
|                  |  |                              |  |                          |  |                                             



|(a) | Every share acquired was an ordinary Class B share, $1 argentine peso of nominal value.
|--- | -----------------------------------------------------------------------------------------

|(b) | Includes commissions and duties necessary for the acquisition of the shares.
|--- | ----------------------------------------------------------------------------

The accounting
treatment of the above described transactions is disclosed in Note 3 s) to these consolidated financial statements.



According to the offer made in November 7, 2013 by the Fintech Group for the acquisition of controlling interest of Telecom Italia Group
in Telecom Argentina (see Note 27.a) to the consolidated financial statements), Telecom Argentina suspended the acquisition of treasury shares and considered appropriate to request the opinion of the CNV on the scope of the new provisions in the
rules of that entity (Title II, Chapter I, Art.13 and concurring) with respect to the continuation of the process acquisition of treasury shares of the Company in the market. As of the date of issuance of these financial statements, the Company is
awaiting the response of the CNV. So, the last acquisition made by the Company was on November 5, 2013.

Note 20  Financial instruments

Categories of financial assets and financial liabilities

The following tables set out, for financial assets and liabilities as of December 31, 2013 and 2012, in accordance with the categories
established by IFRS 9, the supplementary disclosures on financial instruments required by IFRS 7 and the schedules of gains and losses.



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|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|------------------------------------- |  | ------------- | ----- |  | ------------------------------ |  | --- | ----------------------------------------- |  |  | ----- |  |  |  | ----- | 
|                                      |  |               |       |  | Fair value                     |  |     |                                           | 
|As of December 31, 2013               |  | Amortizedcost |       |  | accountedthrough profitor loss |  |     | accountedthrough othercomprehensiveIncome |  |  | Total | 
|Assets                                |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Cash and cash equivalents (1)         |  |               | 4,297 |  |                                |  | 927 |                                           |  |  |      |  |  |  | 5,224 | 
|Investments                           |  |               | 365   |  |                                |  | 1   |                                           |  |  |      |  |  |  | 366   | 
|Trade receivables, net                |  |               | 3,007 |  |                                |  |    |                                           |  |  |      |  |  |  | 3,007 | 
|Other receivables, net (2)            |  |               | 202   |  |                                |  | 42  |                                           |  |  |      |  |  |  | 244   | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Total                                 |  |               | 7,871 |  |                                |  | 970 |                                           |  |  |      |  |  |  | 8,841 | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|                                      |  |               |       | 
|Liabilities                           |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Trade payables                        |  |               | 6,131 |  |                                |  |    |                                           |  |  |      |  |  |  | 6,131 | 
|Loans                                 |  |               | 235   |  |                                |  |    |                                           |  |  |      |  |  |  | 235   | 
|Salaries and social security payables |  |               | 859   |  |                                |  |    |                                           |  |  |      |  |  |  | 859   | 
|Other liabilities (2)                 |  |               | 53    |  |                                |  |    |                                           |  |  |      |  |  |  | 53    | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Total                                 |  |               | 7,278 |  |                                |  |    |                                           |  |  |      |  |  |  | 7,278 | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 



|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|------------------------------------- |  | ------------- | ----- |  | ------------------------------ |  | --- | ----------------------------------------- |  |  | ----- |  |  |  | ----- | 
|                                      |  |               |       |  | Fair value                     |  |     |                                           | 
|As of December 31, 2012               |  | Amortizedcost |       |  | accountedthrough profitor loss |  |     | accountedthrough othercomprehensiveIncome |  |  | Total | 
|Assets                                |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Cash and cash equivalents (1)         |  |               | 2,756 |  |                                |  | 404 |                                           |  |  |      |  |  |  | 3,160 | 
|Investments                           |  |               | 632   |  |                                |  | 1   |                                           |  |  |      |  |  |  | 633   | 
|Trade receivables, net                |  |               | 2,204 |  |                                |  |    |                                           |  |  |      |  |  |  | 2,204 | 
|Other receivables, net (2)            |  |               | 112   |  |                                |  |    |                                           |  |  |      |  |  |  | 112   | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Total                                 |  |               | 5,704 |  |                                |  | 405 |                                           |  |  |      |  |  |  | 6,109 | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|                                      |  |               |       | 
|Liabilities                           |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Trade payables                        |  |               | 3,679 |  |                                |  |    |                                           |  |  |      |  |  |  | 3,679 | 
|Loans                                 |  |               | 144   |  |                                |  |    |                                           |  |  |      |  |  |  | 144   | 
|Salaries and social security payables |  |               | 763   |  |                                |  |    |                                           |  |  |      |  |  |  | 763   | 
|Other liabilities (2)                 |  |               | 53    |  |                                |  |    |                                           |  |  |      |  |  |  | 53    | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 
|Total                                 |  |               | 4,639 |  |                                |  |    |                                           |  |  |      |  |  |  | 4,639 | 
|                                      |  |               |       |  |                                |  |     |                                           |  |  |       |  |  |  |       | 



|(1) | Includes 348 and 132 as of December 31, 2013 and 2012, respectively, corresponding to Cash and banks, which were measured as financial assets at amortized cost by the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Only includes financial assets and liabilities according to the scope of IFRS 7
|--- | -------------------------------------------------------------------------------

Gains and losses by
category  Year 2013



|                                                          |  |                 |       |   |                   |  |     |  
|--------------------------------------------------------- |  | --------------- | ----- | - | ----------------- |  | --- | -
|                                                          |  | Net gain/(loss) |       |   | Of which interest | 
|Financial assets at amortized cost                        |  |                 | 1,276 |   |                   |  | 764 |  
|Financial liabilities at amortized cost                   |  |                 | (813  | ) |                   |  | (44 | )
|Financial assets at fair value through profit or loss (a) |  |                 | 140   |   |                   |  |    |  
|                                                          |  |                 |       |   |                   |  |     |  
|Total                                                     |  |                 | 603   |   |                   |  | 720 |  
|                                                          |  |                 |       |   |                   |  |     |  



|(a) | Includes 85 corresponding to mutual and 55 corresponding to non deliverable forwards.
|--- | -------------------------------------------------------------------------------------



Gains and losses by category  Year 2012



|                                                           |  |                 |      |   |                   |  |     |  
|---------------------------------------------------------- |  | --------------- | ---- | - | ----------------- |  | --- | -
|                                                           |  | Net gain/(loss) |      |   | Of which interest | 
|Financial assets at amortized cost                         |  |                 | 554  |   |                   |  | 391 |  
|Financial liabilities at amortized cost                    |  |                 | (257 | ) |                   |  | (49 | )
|Financial assets at fair value through profit or loss      |  |                 | 16   |   |                   |  |    |  
|Financial liabilities at fair value through profit or loss |  |                 | (2   | ) |                   |  |    |  
|                                                           |  |                 |      |   |                   |  |     |  
|Total                                                      |  |                 | 311  |   |                   |  | 342 |  
|                                                           |  |                 |      |   |                   |  |     |  

Fair value hierarchy and other disclosures

IFRS 7 establishes a hierarchy of fair value, based on the information used to measure the financial assets and liabilities and also
establishes different valuation techniques. According to IFRS 7, valuation techniques used to measure fair value shall maximize the use of observable inputs.

The measurement at fair value of the financial instruments of the Group is classified according to the three levels set out in IFRS 7. The
fair value hierarchy introduces three levels of input:



| |  |  | Level 1: Fair value determined by quoted prices (unadjusted) in active markets for identical assets or liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2: Fair value determined based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3: Fair value determined by unobservable inputs where the reporting entity is required to develop its own assumptions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



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Financial assets and liabilities recognized at fair value as of December 31, 2013 and
2012, their inputs, valuation techniques and the level of hierarchy are listed below:

Mutual Funds: These funds are included in
Cash and cash equivalents. The Group had mutual funds amounting to $927 and $404 as of December 31, 2013 and 2012, respectively. The fair value is based on information obtained from active markets and corresponds to quoted market prices as of
year-end; therefore its valuation is classified as Level 1.

Other receivables - Derivative financial instruments (Forward contracts
to purchase US dollars at fixed exchange rates): The fair value of the Telecom Groups NDF contracts, disclosed below in the chapter Hedge Accounting was determined by information obtained in the most representative financial
institutions in Argentina, the derivative financial instruments valuation was classified as Level 2.

During 2013 and 2012 there
were no transfers between Level 1 and Level 2 of the fair value hierarchy.

According to IFRS 7, it is also required to disclose fair
value information about financial instruments whether or not recognized at fair value in the balance sheet, for which it is practicable to estimate fair value. The financial instruments which are discussed in this section include, among others, cash
and cash equivalents, accounts receivable, accounts payable and other instruments.

Derived fair value estimates cannot be substantiated
by comparison to independent markets and, in many cases, could not be realized in an immediate sale of the instrument. Also, because of differences in methodologies and assumptions used to estimate fair value, the Companys fair values should
not be compared to those of other companies.

The methods and assumptions used to estimate the fair values of each class of financial
instrument falling under the scope of IFRS 7 as of December 31, 2013 and 2012 are as follows:

Cash and banks

Carrying amounts approximate its fair value.

Time deposits (included in Cash and cash equivalents and Investments)

The Telecom Group considers as cash and cash equivalents all short-term and highly liquid investments that are readily convertible to known
amounts of cash, subject to an insignificant risk of changes in value and their original maturity or the remaining maturity at the date of purchase does not exceed 3 months, and those which their original maturity or remaining maturity at the date
of purchase exceed 3 months, as investments. The carrying amount reported in the statement of financial position approximates fair value.

Investments

Investments in Government bonds and Argentine companies notes valued at amortized cost with its fair value at December 31, 2013 and
2012 are as follows:



|                                            |  |                         |     |  |                         |  |     |            |  |  |                |  |  |  |    | 
|------------------------------------------- |  | ----------------------- | --- |  | ----------------------- |  | --- | ---------- |  |  | -------------- |  |  |  | -- | 
|                                            |  | As of December 31, 2013 |     |  | As of December 31, 2012 | 
|Investments                                 |  | Book value              |     |  | Fair value (*)          |  |     | Book value |  |  | Fair value (*) | 
|Government bonds                            |  |                         | 221 |  |                         |  | 313 |            |  |  |               |  |  |  |   | 
|Provincial government bonds in pesos        |  |                         | 35  |  |                         |  | 35  |            |  |  | 10             |  |  |  | 10 | 
|Provincial government bonds (dollar linked) |  |                         | 13  |  |                         |  | 15  |            |  |  | 10             |  |  |  | 10 | 
|Argentine companies notes in pesos          |  |                         | 31  |  |                         |  | 31  |            |  |  | 21             |  |  |  | 20 | 
|Argentine companies notes (dollar linked)   |  |                         | 65  |  |                         |  | 71  |            |  |  | 49             |  |  |  | 50 | 
|                                            |  |                         |     |  |                         |  |     |            |  |  |                |  |  |  |    | 
|Total                                       |  |                         | 365 |  |                         |  | 465 |            |  |  | 90             |  |  |  | 90 | 
|                                            |  |                         |     |  |                         |  |     |            |  |  |                |  |  |  |    | 



|(*) | According to IFRS selling costs are not deducted.
|--- | -------------------------------------------------

For other investments (investments over 90
days maturity amounting $540 at December 31, 2012), the carrying amount approximates fair value.

Trade receivables, net

Carrying amounts are considered to approximate fair value due to the short term nature of these accounts receivables. Noncurrent trade receivables
have been recognized at their amortization cost, using the effective interest method and are not significant. All amounts that are assumed to be uncollectible within a reasonable period are written off and/or reserved.

Trade payables

The carrying
amount of accounts payable reported in the consolidated statement of financial position approximates its fair value due to the short term nature of these accounts payable. Noncurrent trade payables have been discounted and are not significant.

Loans

As of
December 31, 2013 and 2012, the fair value of the Companys loans approximates its fair value and it was $235 and $144, respectively.



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Salaries and social security payables

The carrying amount of Salaries and social security payables reported in the consolidated statement of financial position approximates its
fair value.

Other receivables, net and other liabilities (except for NDF)

The carrying amount of other receivables, net and other liabilities reported in the consolidated statement of financial position approximates
its fair value.

Hedge accounting

In November 2013, a new chapter was introduced in IFRS 9 on Hedge Accounting replacing the provisions contained in IAS 39. This amendment
represents a major review of hedge accounting, introducing significant improvements over the previous model, basically aligning accounting and risk management as well as related disclosures. The Telecom Group believes that a hedging relationship
qualifies for hedge accounting if exist all of the following conditions in the rule:



| | a) | The hedging relationship consists only of eligible hedging instruments and hedged items;
| | -- | ----------------------------------------------------------------------------------------



| | b) | At the beginning of the hedge relationship, there is a formal designation and documentation of the hedging relationship and objective and strategy for risk management of the Company for undertaking the hedge. That
documentation shall include identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the entity assesses whether the hedging relationship meets the requirements of hedge effectiveness (including analysis
of sources of hedge ineffectiveness and how to determine the hedge ratio) and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | The hedging relationship satisfies the following requirements of hedge effectiveness:
| | -- | -------------------------------------------------------------------------------------

(i) the
economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk is not predominant in
respect of changes of value coming from this economic relationship, and

(iii) the coverage ratio of the hedging relationship is the
same as that provided by the amount of the hedged item that really covers the entity and the amount of the hedging instrument that the entity actually used to cover that amount of the hedged item.



|- | During 2013
|- | -----------

Considering the fluctuations of the exchange rate between
the US Dollar and the Argentine Peso during fiscal year 2013 (+33%), and due to the existence of commercial commitments denominated in US Dollars, during 2013 Personal entered into several NDF agreements to purchase a total amount of US$
182 million maturing December 2013 and in the first quarter of 2014. The purpose of these NDF is to eliminate the risks associated to the fluctuation of the future exchange rate and to align the payment currency of Personals commercial
commitments (item covered) to its functional currency. These NDF agreements were regarded as cash flows hedge, but these did not comply with the effectiveness requirements. As of December 31, 2013, changes in fair value of these instruments
represented a gain of approximately $55, which was recognized in Financial results. As of December 31, 2013, about $13 were collected and $42 were included in other receivables.



|- | During 2012
|- | -----------

During 2012, Telecom Argentina and Personal entered into
several NDF agreements to purchase a total amount of US$ 20 million and US$ 26.3 million, respectively, maturing in September and December 2012 in order to hedge its exposure to US Dollar fluctuations related to accounts payable. These NDF
agreements were regarded as cash flows hedge, but these did not comply with the effectiveness requirements. As of December 31, 2012, the changes in the fair value of these NDF resulted into a loss of approximately $1 for Telecom Argentina and
$0.5 for Personal, which were recognized in Financial results and Trade Payables.

Also during 2012, Personal
entered into several NDF agreements to purchase a total amount of US$ 6.4 million maturing in September 2012 in order to hedge its exposure to US dollar fluctuations related to accounts payable. These NDF agreements were regarded as cash flows
hedge, but the effectiveness requirements are not complied.

As of December 31, 2012 all NDF contracts were cancelled.



|- | Offsetting of financial assets and financial liabilities
|- | --------------------------------------------------------

On December,
the IASB issued amendments to IFRS 7. These changes require the disclosure of information in order to assess the effects or the potential effects of offsetting agreements, including offsetting rights associated with the assets and liabilities
recognized in the statement of financial position of the Telecom Group. These amendments are effective from January 1, 2013 and should be applied retrospectively.



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The information required by the amendment to NIIF 7 as of December 31, 2013 and 2012 is
as follows:



|                                                           |  |                         |        |   |                     |  |     |               |  |  |                     |   |  |                                    |     |   |  |  |      |  
|---------------------------------------------------------- |  | ----------------------- | ------ | - | ------------------- |  | --- | ------------- |  |  | ------------------- | - |  | ---------------------------------- | --- | - |  |  | ---- | -
|                                                           |  | As of December 31, 2013 |       
|                                                           |  | Tradereceivables        |        |   | Otherreceivables(1) |  |     | Tradepayables |  |  | Otherliabilities(1) |   |  | Salariesand socialsecuritypayables |    
|Current and noncurrent assets (liabilities) - Gross value  |  |                         | 4,697  |   |                     |  | 281 |               |  |  | (7,850              | ) |  |                                    | (60 | ) |  |  | (860 | )
|Compensation                                               |  |                         | (1,690 | ) |                     |  | (37 | )             |  |  | 1,719               |   |  |                                    | 7   |   |  |  | 1    |  
|Current and noncurrent assets (liabilities)  Booked value |  |                         | 3,007  |   |                     |  | 244 |               |  |  | (6,131              | ) |  |                                    | (53 | ) |  |  | (859 | )



|                                                           |  |                  |       |   |                         |  |     |               |  |  |                     |   |  |  |     |  
|---------------------------------------------------------- |  | ---------------- | ----- | - | ----------------------- |  | --- | ------------- |  |  | ------------------- | - |  |  | --- | -
|                                                           |  |                  |       |   | As of December 31, 2012 | 
|                                                           |  | Tradereceivables |       |   | Otherreceivables(1)     |  |     | Tradepayables |  |  | Otherliabilities(1) |  
|Current and noncurrent assets (liabilities) - Gross value  |  |                  | 3,197 |   |                         |  | 118 |               |  |  | (4,672              | ) |  |  | (59 | )
|Compensation                                               |  |                  | (993  | ) |                         |  | (6  | )             |  |  | 993                 |   |  |  | 6   |  
|Current and noncurrent assets (liabilities)  Booked value |  |                  | 2,204 |   |                         |  | 112 |               |  |  | (3,679              | ) |  |  | (53 | )



|(1) | Includes financial assets and financial liabilities according to IFRS 7.
|--- | ------------------------------------------------------------------------

The Telecom Group
offsets the financial assets and liabilities to the extent that such offsetting is provided by offsetting agreements and provided that the Group has the intention to make such offsetting, in accordance with established in IAS 32. The main financial
assets and liabilities offset correspond to TLRD, interconnection and Roaming with other national and foreign operators, being offsetting a standard practice in the telecommunications industry at the international level that the Telecom Group
applies regularly.

Note 21  Revenues

The Company discloses its service revenues in three groups by nature: Voice, Data and Internet. At December 31, 2013,
2012 and 2011, the customers by segment and other significant operational information (unaudited) were the following:



|                                                           |  |              |        |  |      |  |        |      |  |  |        | 
|---------------------------------------------------------- |  | ------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                           |  | December 31, |       
|                                                           |  | 2013         |        |  | 2012 |  |        | 2011 | 
|Fixed services lines (in thousands)                        |  |              | 4,124  |  |      |  | 4,128  |      |  |  | 4,141  | 
|ADSL subscribers (in thousands)                            |  |              | 1,707  |  |      |  | 1,629  |      |  |  | 1,550  | 
|Personal mobile services customers (in thousands)          |  |              | 20,088 |  |      |  | 18,975 |      |  |  | 18,193 | 
|Núcleo mobile services customers (in thousands)            |  |              | 2,420  |  |      |  | 2,301  |      |  |  | 2,149  | 
|Local Measured Service (million of minutes)                |  |              | 12,896 |  |      |  | 13,783 |      |  |  | 14,701 | 
|International Long distance telephony (million of minutes) |  |              | 801    |  |      |  | 887    |      |  |  | 925    | 
|Minutes used  mobile service (in thousands of million)    |  |              | 22     |  |      |  | 22     |      |  |  | 21     | 
|Equipment and handsets sale  Personal (in thousands)      |  |              | 3,761  |  |      |  | 3,962  |      |  |  | 3,936  | 
|Equipment and handsets sale  Núcleo (in thousands)        |  |              | 106    |  |      |  | 70     |      |  |  | 53     | 

Revenues and other income include:



|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|--------------------------------------------------------- |  | ------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                          |  | Years ended December 31, |       
|Services                                                  |  | 2013                     |        |  | 2012 |  |        | 2011 | 
|Voice - Retail                                            |  |                          | 2,656  |  |      |  | 2,475  |      |  |  | 2,357  | 
|Voice - Wholesale                                         |  |                          | 786    |  |      |  | 739    |      |  |  | 747    | 
|Internet                                                  |  |                          | 2,521  |  |      |  | 1,993  |      |  |  | 1,553  | 
|Data                                                      |  |                          | 963    |  |      |  | 735    |      |  |  | 583    | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total Fixed services                                      |  |                          | 6,926  |  |      |  | 5,942  |      |  |  | 5,240  | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Voice - Retail                                            |  |                          | 4,773  |  |      |  | 4,461  |      |  |  | 4,001  | 
|Voice - Wholesale                                         |  |                          | 1,930  |  |      |  | 1,838  |      |  |  | 1,726  | 
|Internet                                                  |  |                          | 2,088  |  |      |  | 1,248  |      |  |  | 774    | 
|Data                                                      |  |                          | 7,212  |  |      |  | 5,765  |      |  |  | 4,482  | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total Personal mobile services                            |  |                          | 16,003 |  |      |  | 13,312 |      |  |  | 10,983 | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Voice - Retail                                            |  |                          | 388    |  |      |  | 329    |      |  |  | 286    | 
|Voice - Wholesale                                         |  |                          | 112    |  |      |  | 85     |      |  |  | 67     | 
|Internet                                                  |  |                          | 270    |  |      |  | 154    |      |  |  | 84     | 
|Data                                                      |  |                          | 313    |  |      |  | 267    |      |  |  | 251    | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total Núcleo mobile services                              |  |                          | 1,083  |  |      |  | 835    |      |  |  | 688    | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total services revenues (a)                               |  |                          | 24,012 |  |      |  | 20,089 |      |  |  | 16,911 | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|                                                          |  |                          |       
|Equipment                                                 |  |                          |        |  |      |  |        |      | 
|Fixed services - excluding network construction contracts |  |                          | 61     |  |      |  | 81     |      |  |  | 64     | 
|Fixed services - network construction contracts           |  |                          | 19     |  |      |  |       |      |  |  | 25     | 
|Mobile services  Personal                                |  |                          | 3,126  |  |      |  | 1,915  |      |  |  | 1,472  | 
|Mobiles services  Núcleo                                 |  |                          | 69     |  |      |  | 32     |      |  |  | 26     | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total equipment revenues (b)                              |  |                          | 3,275  |  |      |  | 2,028  |      |  |  | 1,587  | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 
|Total revenues (a)+(b)                                    |  |                          | 27,287 |  |      |  | 22,117 |      |  |  | 18,498 | 
|                                                          |  |                          |        |  |      |  |        |      |  |  |        | 



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|                                            |  |                          |        |  |      |  |        |      |  |  |        | 
|------------------------------------------- |  | ------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                            |  | Years ended December 31, |       
|Other income                                |  | 2013                     |        |  | 2012 |  |        | 2011 | 
|Fixed services (i)                          |  |                          | 33     |  |      |  | 75     |      |  |  | 20     | 
|Mobile services  Personal                  |  |                          | 24     |  |      |  | 4      |      |  |  | 10     | 
|Mobile services  Núcleo                    |  |                          | 6      |  |      |  |       |      |  |  |       | 
|                                            |  |                          |        |  |      |  |        |      |  |  |        | 
|Total other income (c)                      |  |                          | 63     |  |      |  | 79     |      |  |  | 30     | 
|                                            |  |                          |        |  |      |  |        |      |  |  |        | 
|                                            |  |                          |       
|Total revenues and other income (a)+(b)+(c) |  |                          | 27,350 |  |      |  | 22,196 |      |  |  | 18,528 | 
|                                            |  |                          |        |  |      |  |        |      |  |  |        | 



|(i) | Includes 6 and 57 of suppliers indemnities as of December 31, 2013 and 2012, respectively.
|--- | -------------------------------------------------------------------------------------------

Service revenues by type of service (regardless of the segment which originate them) is:



|                        |  |                          |        |  |   |  |     |      |  |  |        |  |  |      |     |  |   |  |        |  |  |  |     | 
|----------------------- |  | ------------------------ | ------ |  | - |  | --- | ---- |  |  | ------ |  |  | ---- | --- |  | - |  | ------ |  |  |  | --- | 
|                        |  | Years ended December 31, |       
|                        |  | 2013                     |        |  | % |  |     | 2012 |  |  | %      |  |  | 2011 |     |  | % | 
|Voice - Retail          |  |                          | 7,817  |  |   |  | 32  |      |  |  | 7,265  |  |  |      | 36  |  |   |  | 6,644  |  |  |  | 39  | 
|Voice - Wholesale       |  |                          | 2,828  |  |   |  | 12  |      |  |  | 2,662  |  |  |      | 13  |  |   |  | 2,540  |  |  |  | 15  | 
|Total Voice             |  |                          | 10,645 |  |   |  | 44  |      |  |  | 9,927  |  |  |      | 49  |  |   |  | 9,184  |  |  |  | 54  | 
|Internet                |  |                          | 4,879  |  |   |  | 20  |      |  |  | 3,395  |  |  |      | 17  |  |   |  | 2,411  |  |  |  | 14  | 
|Data                    |  |                          | 8,488  |  |   |  | 36  |      |  |  | 6,767  |  |  |      | 34  |  |   |  | 5,316  |  |  |  | 32  | 
|Total services revenues |  |                          | 24,012 |  |   |  | 100 |      |  |  | 20,089 |  |  |      | 100 |  |   |  | 16,911 |  |  |  | 100 | 
|                        |  |                          |        |  |   |  |     |      |  |  |        |  |  |      |     |  |   |  |        |  |  |  |     | 

Note 22  Operating expenses

Operating expenses disclosed by nature of expense amounted to $22,832, $18,230 and $14,671 for the years ended December 31, 2013, 2012
and 2011, respectively.

The main components of the operating expenses are the following:

Employee benefit expenses and severance payments



|                                               |  |                          |        |   |      |  |        |      |  |  |        |  
|---------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                               |  | Years ended December 31, |       
|                                               |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Salaries                                       |  |                          | (3,010 | ) |      |  | (2,390 | )    |  |  | (1,870 | )
|Social security expenses                       |  |                          | (914   | ) |      |  | (713   | )    |  |  | (539   | )
|Severance indemnities and termination benefits |  |                          | (149   | ) |      |  | (106   | )    |  |  | (153   | )
|Other employee benefits                        |  |                          | (79    | ) |      |  | (60    | )    |  |  | (47    | )
|                                               |  |                          |        |   |      |  |        |      |  |  |        |  
|                                               |  |                          | (4,152 | ) |      |  | (3,269 | )    |  |  | (2,609 | )
|                                               |  |                          |        |   |      |  |        |      |  |  |        |  

Interconnection costs and other telecommunication charges



|                                            |  |                          |        |   |      |  |        |      |  |  |        |  
|------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                            |  | Years ended December 31, |       
|                                            |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Fixed telephony interconnection costs       |  |                          | (237   | ) |      |  | (217   | )    |  |  | (216   | )
|Cost of international outbound calls        |  |                          | (133   | ) |      |  | (135   | )    |  |  | (150   | )
|Lease of circuits and use of public network |  |                          | (208   | ) |      |  | (164   | )    |  |  | (133   | )
|Mobile services - charges for roaming       |  |                          | (425   | ) |      |  | (366   | )    |  |  | (245   | )
|Mobile services - charges for TLRD          |  |                          | (826   | ) |      |  | (825   | )    |  |  | (753   | )
|                                            |  |                          |        |   |      |  |        |      |  |  |        |  
|                                            |  |                          | (1,829 | ) |      |  | (1,707 | )    |  |  | (1,497 | )
|                                            |  |                          |        |   |      |  |        |      |  |  |        |  



Fees for services, maintenance, materials and
supplies



|                                                                    |  |                          |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                    |  | Years ended December 31, |       
|                                                                    |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Maintenance of hardware and software                                |  |                          | (337   | ) |      |  | (297   | )    |  |  | (238   | )
|Technical maintenance                                               |  |                          | (486   | ) |      |  | (373   | )    |  |  | (327   | )
|Service connection fees for fixed lines and Internet lines          |  |                          | (193   | ) |      |  | (130   | )    |  |  | (116   | )
|Service connection fees capitalized as SAC (Note 3 i)               |  |                          | 6      |   |      |  | 11     |      |  |  | 11     |  
|Service connection fees capitalized as Intangible assets (Note 3 i) |  |                          | 30     |   |      |  | 21     |      |  |  | 22     |  
|Other maintenance costs                                             |  |                          | (260   | ) |      |  | (203   | )    |  |  | (185   | )
|Obsolescence of inventories  Mobile services Personal              |  |                          | (109   | ) |      |  | (12    | )    |  |  | (17    | )
|Call center fees                                                    |  |                          | (763   | ) |      |  | (665   | )    |  |  | (492   | )
|Other fees for services                                             |  |                          | (501   | ) |      |  | (447   | )    |  |  | (365   | )
|Directors and Supervisory Committees fees                          |  |                          | (28    | ) |      |  | (14    | )    |  |  | (12    | )
|                                                                    |  |                          |        |   |      |  |        |      |  |  |        |  
|                                                                    |  |                          | (2,641 | ) |      |  | (2,109 | )    |  |  | (1,719 | )
|                                                                    |  |                          |        |   |      |  |        |      |  |  |        |  

Taxes and fees with the Regulatory Authority



|                                                      |  |                          |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                      |  | Years ended December 31, |       
|                                                      |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Turnover tax                                          |  |                          | (1,458 | ) |      |  | (1,045 | )    |  |  | (823   | )
|Taxes with the Regulatory Authority                   |  |                          | (637   | ) |      |  | (517   | )    |  |  | (425   | )
|Tax on deposits to and withdrawals from bank accounts |  |                          | (258   | ) |      |  | (216   | )    |  |  | (166   | )
|Municipal taxes                                       |  |                          | (175   | ) |      |  | (128   | )    |  |  | (100   | )
|Other taxes                                           |  |                          | (161   | ) |      |  | (112   | )    |  |  | (81    | )
|                                                      |  |                          |        |   |      |  |        |      |  |  |        |  
|                                                      |  |                          | (2,689 | ) |      |  | (2,018 | )    |  |  | (1,595 | )
|                                                      |  |                          |        |   |      |  |        |      |  |  |        |  



F-62



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TELECOM ARGENTINA S.A.





Commissions



|                                                |  |                          |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                |  | Years ended December 31, |       
|                                                |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Agent commissions                               |  |                          | (1,641 | ) |      |  | (1,365 | )    |  |  | (1,014 | )
|Agent commissions capitalized as SAC (Note 3.i) |  |                          | 551    |   |      |  | 314    |      |  |  | 248    |  
|Distribution of prepaid cards commissions       |  |                          | (593   | ) |      |  | (509   | )    |  |  | (449   | )
|Collection commissions                          |  |                          | (434   | ) |      |  | (317   | )    |  |  | (230   | )
|Other commissions                               |  |                          | (86    | ) |      |  | (72    | )    |  |  | (70    | )
|                                                |  |                          |        |   |      |  |        |      |  |  |        |  
|                                                |  |                          | (2,203 | ) |      |  | (1,949 | )    |  |  | (1,515 | )
|                                                |  |                          |        |   |      |  |        |      |  |  |        |  

Cost of equipment and handsets



|                                               |  |                          |        |   |      |  |        |      |  |  |        |  
|---------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                               |  | Years ended December 31, |       
|                                               |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Inventories at the beginning of the year       |  |                          | (641   | ) |      |  | (555   | )    |  |  | (475   | )
|Plus:                                          |  |                          |        |   |      |  |        |      |  |  |        |  
|Equipment acquisitions                         |  |                          | (3,628 | ) |      |  | (2,625 | )    |  |  | (2,223 | )
|SAC deferred costs (Note 3.i)                  |  |                          | 255    |   |      |  | 463    |      |  |  | 470    |  
|Currency translation effect                    |  |                          |       |   |      |  | (2     | )    |  |  | (1     | )
|Decreases net of allowance of obsolescence     |  |                          | 9      |   |      |  | 6      |      |  |  | 21     |  
|Handsets lent to customers at no cost - Núcleo |  |                          | 17     |   |      |  | 15     |      |  |  | 6      |  
|Decreases not charged to material cost         |  |                          | 20     |   |      |  | 14     |      |  |  | 7      |  
|Less:                                          |  |                          |        |   |      |  |        |      |  |  |        |  
|Inventories as of December 31                  |  |                          | 857    |   |      |  | 641    |      |  |  | 555    |  
|                                               |  |                          |        |   |      |  |        |      |  |  |        |  
|Cost of equipment and handsets (i)             |  |                          | (3,111 | ) |      |  | (2,043 | )    |  |  | (1,640 | )
|                                               |  |                          |        |   |      |  |        |      |  |  |        |  



|(i) | Includes 16 and 14 related to equipment construction contracts costs as of December 31, 2013 and 2011. No costs were recorded for this concept as of December 31, 2012.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Advertising



|                        |  |                          |      |   |      |  |      |      |  |  |      |  
|----------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                        |  | Years ended December 31, |     
|                        |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|Media advertising       |  |                          | (370 | ) |      |  | (378 | )    |  |  | (366 | )
|Fairs and exhibitions   |  |                          | (139 | ) |      |  | (142 | )    |  |  | (120 | )
|Other advertising costs |  |                          | (147 | ) |      |  | (140 | )    |  |  | (113 | )
|                        |  |                          |      |   |      |  |      |      |  |  |      |  
|                        |  |                          | (656 | ) |      |  | (660 | )    |  |  | (599 | )
|                        |  |                          |      |   |      |  |      |      |  |  |      |  

Cost of VAS



|                                    |  |                          |      |   |      |  |      |      |  |  |      |  
|----------------------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                    |  | Years ended December 31, |     
|                                    |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|Cost of mobile value added services |  |                          | (697 | ) |      |  | (317 | )    |  |  | (177 | )
|Cost of fixed value added services  |  |                          | (11  | ) |      |  | (9   | )    |  |  | (5   | )
|                                    |  |                          |      |   |      |  |      |      |  |  |      |  
|                                    |  |                          | (708 | ) |      |  | (326 | )    |  |  | (182 | )
|                                    |  |                          |      |   |      |  |      |      |  |  |      |  



Recovery of restructuring costs/(restructuring
costs)



|                            |  |                          |   |  |      |  |     |      |  |  |   | 
|--------------------------- |  | ------------------------ | - |  | ---- |  | --- | ---- |  |  | - | 
|                            |  | Years ended December 31, |  
|                            |  | 2013                     |   |  | 2012 |  |     | 2011 | 
|Dismissals indemnities (ii) |  |                          | 8 |  |      |  | (90 | )    |  |  |  | 
|                            |  |                          |   |  |      |  |     |      |  |  |   | 
|                            |  |                          | 8 |  |      |  | (90 | )    |  |  |  | 
|                            |  |                          |   |  |      |  |     |      |  |  |   | 



|(ii) | As of December 31, 2012 includes (54) charged to provisions related to the pending restructuring plan. As of December 31, 2013, includes 8 corresponding to the recovery of the provision related to the
Restructuring Plan finished in June 2013.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other operating expenses



|                                            |  |                          |        |   |      |  |        |      |  |  |      |  
|------------------------------------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ---- | -
|                                            |  | Years ended December 31, |       
|                                            |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Transportation, freight and travel expenses |  |                          | (451   | ) |      |  | (364   | )    |  |  | (301 | )
|Delivery costs capitalized as SAC           |  |                          | 39     |   |      |  | 33     |      |  |  | 17   |  
|Rental expense                              |  |                          | (295   | ) |      |  | (214   | )    |  |  | (170 | )
|Energy, water and others                    |  |                          | (324   | ) |      |  | (294   | )    |  |  | (154 | )
|International and satellite connectivity    |  |                          | (136   | ) |      |  | (124   | )    |  |  | (109 | )
|Other                                       |  |                          | (85    | ) |      |  | (64    | )    |  |  | (68  | )
|                                            |  |                          |        |   |      |  |        |      |  |  |      |  
|                                            |  |                          | (1,252 | ) |      |  | (1,027 | )    |  |  | (785 | )
|                                            |  |                          |        |   |      |  |        |      |  |  |      |  

D&A



|                                                 |  |                          |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------ |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                 |  | Years ended December 31, |       
|                                                 |  | 2013                     |        |   | 2012 |  |        | 2011 | 
|Depreciation of PP&E                             |  |                          | (1,983 | ) |      |  | (1,792 | )    |  |  | (1,538 | )
|Amortization of SAC and service connection costs |  |                          | (867   | ) |      |  | (797   | )    |  |  | (602   | )
|Amortization of other intangible assets          |  |                          | (23    | ) |      |  | (23    | )    |  |  | (18    | )
|                                                 |  |                          |        |   |      |  |        |      |  |  |        |  
|                                                 |  |                          | (2,873 | ) |      |  | (2,612 | )    |  |  | (2,158 | )
|                                                 |  |                          |        |   |      |  |        |      |  |  |        |  



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Gain on disposal of PP&E and impairment of PP&E



|                         |  |                          |      |   |      |  |   |      |  |  |    | 
|------------------------ |  | ------------------------ | ---- | - | ---- |  | - | ---- |  |  | -- | 
|                         |  | Years ended December 31, |     
|                         |  | 2013                     |      |   | 2012 |  |   | 2011 | 
|Gain on disposal of PP&E |  |                          | 14   |   |      |  | 8 |      |  |  | 22 | 
|Impairment of PP&E (iii) |  |                          | (187 | ) |      |  |  |      |  |  |   | 
|                         |  |                          |      |   |      |  |   |      |  |  |    | 
|                         |  |                          | (173 | ) |      |  | 8 |      |  |  | 22 | 
|                         |  |                          |      |   |      |  |   |      |  |  |    | 



|(iii) | Includes 65 corresponding to the impairment of commercial systems of Personal and 122 corresponding to the impairment of PP&E (PP&E, construction in progress and materials) of Telecom Argentina as of
December 31, 2013.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating expenses, disclosed per function are as follows:



|                                                |  |                          |         |   |      |  |         |      |  |  |         |  
|----------------------------------------------- |  | ------------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                |  | Years ended December 31, |        
|                                                |  | 2013                     |         |   | 2012 |  |         | 2011 | 
|Operating costs                                 |  |                          | (13,700 | ) |      |  | (10,731 | )    |  |  | (9,107  | )
|Administration costs                            |  |                          | (1,072  | ) |      |  | (862    | )    |  |  | (695    | )
|Commercialization costs                         |  |                          | (7,617  | ) |      |  | (6,492  | )    |  |  | (4,666  | )
|Other expenses  provisions                     |  |                          | (270    | ) |      |  | (153    | )    |  |  | (225    | )
|Gain on disposal of PP&E and impairment of PP&E |  |                          | (173    | ) |      |  | 8       |      |  |  | 22      |  
|                                                |  |                          |         |   |      |  |         |      |  |  |         |  
|                                                |  |                          | (22,832 | ) |      |  | (18,230 | )    |  |  | (14,671 | )
|                                                |  |                          |         |   |      |  |         |      |  |  |         |  

Operating leases

Future minimum lease payments from of non cancellable operating lease agreements as of December 31, 2013, 2012 and 2011 are as follows:



|     |  |                 |     |  |           |  |     |                  |  |  |       |  |  |  |     | 
|---- |  | --------------- | --- |  | --------- |  | --- | ---------------- |  |  | ----- |  |  |  | --- | 
|     |  | Less than 1year |     |  | 1-5 years |  |     | More than 5years |  |  | Total | 
|2011 |  |                 | 214 |  |           |  | 409 |                  |  |  | 90    |  |  |  | 713 | 
|2012 |  |                 | 262 |  |           |  | 415 |                  |  |  | 77    |  |  |  | 754 | 
|2013 |  |                 | 372 |  |           |  | 524 |                  |  |  | 71    |  |  |  | 967 | 

Further information is provided in Note 3 j) to these consolidated financial statements.

Note 23  Operating income



|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|----------------------------------------------------------- |  | ------------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                            |  | Years ended December 31, |        
|                                                            |  | 2013                     |         |   | 2012 |  |         | 2011 | 
|Operating income from services and other income             |  |                          |         |   |      |  |         |      |  |  |         |  
|Revenues and other income                                   |  |                          | 24,075  |   |      |  | 20,168  |      |  |  | 16,941  |  
|Operating expenses                                          |  |                          | (16,675 | ) |      |  | (13,583 | )    |  |  | (10,895 | )
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|Operating income before D&A (a)                             |  |                          | 7,400   |   |      |  | 6,585   |      |  |  | 6,046   |  
|D&A                                                         |  |                          | (2,873  | ) |      |  | (2,612  | )    |  |  | (2,158  | )
|Gain on disposal and impairment of PP&E                     |  |                          | (173    | ) |      |  | 8       |      |  |  | 22      |  
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|Operating income from services and other income             |  |                          | 4,354   |   |      |  | 3,981   |      |  |  | 3,910   |  
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|                                                            |  |                          |        
|Operating income (loss) from equipment sales                |  |                          |         |   |      |  |         |      |  |  |         |  
|Revenues                                                    |  |                          | 3,275   |   |      |  | 2,028   |      |  |  | 1,587   |  
|Cost of equipments and handsets                             |  |                          | (3,111  | ) |      |  | (2,043  | )    |  |  | (1,640  | )
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|Operating income (loss) before D&A from equipment sales (b) |  |                          | 164     |   |      |  | (15     | )    |  |  | (53     | )
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|                                                            |  |                          |        
|Total operating income                                      |  |                          | 4,518   |   |      |  | 3,966   |      |  |  | 3,857   |  
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|                                                            |  |                          |        
|Consolidated operating income                               |  |                          |         |   |      |  |         |      |  |  |         |  
|Operating income before D&A (a)+(b)                         |  |                          | 7,564   |   |      |  | 6,570   |      |  |  | 5,993   |  
|D&A                                                         |  |                          | (2,873  | ) |      |  | (2,612  | )    |  |  | (2,158  | )
|Gain on disposal and impairment of PP&E                     |  |                          | (173    | ) |      |  | 8       |      |  |  | 22      |  
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  
|Total operating income                                      |  |                          | 4,518   |   |      |  | 3,966   |      |  |  | 3,857   |  
|                                                            |  |                          |         |   |      |  |         |      |  |  |         |  

The breakdown of Operating income by segment is as follows:



|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|----------------------------------------------------------------------- |  | ------------- | ------ | - | -------------- |  | ------- | ----------------- |  |  | ------- | -
|Year ended December 31, 2013                                            |  | Fixedservices |        |   | Mobileservices |  |         | Totalconsolidated | 
|Services revenues and other income                                      |  |               |        |   |                |  |         |                   |  |  |         |  
|Third party revenues                                                    |  |               | 6,959  |   |                |  | 17,116  |                   |  |  | 24,075  |  
|Intersegment revenues                                                   |  |               | 1,258  |   |                |  | 124     |                   |  |  | 1,382   |  
|Third party operating expenses                                          |  |               | (6,352 | ) |                |  | (10,323 | )                 |  |  | (16,675 | )
|Intersegment operating expenses                                         |  |               | (124   | ) |                |  | (1,258  | )                 |  |  | (1,382  | )
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Operating income before D&A from services and other income (1)          |  |               | 1,741  |   |                |  | 5,659   |                   |  |  | 7,400   |  
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Equipments revenues                                                     |  |               |        |   |                |  |         |                   |  |  |         |  
|Third party revenues                                                    |  |               | 80     |   |                |  | 3,195   |                   |  |  | 3,275   |  
|Third party operating expenses                                          |  |               | (74    | ) |                |  | (3,037  | )                 |  |  | (3,111  | )
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Operating income before D&A from equipments revenues (2)                |  |               | 6      |   |                |  | 158     |                   |  |  | 164     |  
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Total operating income before D&A (3)=(1)+(2)                           |  |               | 1,747  |   |                |  | 5,817   |                   |  |  | 7,564   |  
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|D&A (4)                                                                 |  |               | (1,019 | ) |                |  | (1,854  | )                 |  |  | (2,873  | )
|Gain on disposal and impairment of PP&E (5)                             |  |               | (106   | ) |                |  | (67     | )                 |  |  | (173    | )
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Operating income (6)=(3)-(4)+(5)                                        |  |               | 622    |   |                |  | 3,896   |                   |  |  | 4,518   |  
|                                                                        |  |               |        |   |                |  |         |                   |  |  |         |  
|Net effect of the intersegment eliminations (7)                         |  |               | (1,134 | ) |                |  | 1,134   |                   |  |  |        |  
|Net segment contribution to the Operating income before D&A (8)=(3)+(7) |  |               | 613    |   |                |  | 6,951   |                   |  |  | 7,564   |  
|Net segment contribution to the Operating income (9)=(6)+(7)            |  |               | (512   | ) |                |  | 5,030   |                   |  |  | 4,518   |  



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|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|----------------------------------------------------------------------- |  | ------------- | ------ | - | -------------- |  | ------ | ----------------- |  |  | ------- | -
|Year ended December 31, 2012                                            |  | Fixedservices |        |   | Mobileservices |  |        | Totalconsolidated | 
|Services revenues and other income                                      |  |               |        |   |                |  |        |                   |  |  |         |  
|Third party revenues                                                    |  |               | 6,017  |   |                |  | 14,151 |                   |  |  | 20,168  |  
|Intersegment revenues                                                   |  |               | 1,047  |   |                |  | 129    |                   |  |  | 1,176   |  
|Third party operating expenses                                          |  |               | (5,327 | ) |                |  | (8,256 | )                 |  |  | (13,583 | )
|Intersegment operating expenses                                         |  |               | (129   | ) |                |  | (1,047 | )                 |  |  | (1,176  | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income before D&A from services and other income (1)          |  |               | 1,608  |   |                |  | 4,977  |                   |  |  | 6,585   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|Equipments revenues                                                     |  |               |        |   |                |  |        |                   |  |  |         |  
|Third party revenues                                                    |  |               | 81     |   |                |  | 1,947  |                   |  |  | 2,028   |  
|Third party operating expenses                                          |  |               | (44    | ) |                |  | (1,999 | )                 |  |  | (2,043  | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income (loss) before D&A from equipments revenues (2)         |  |               | 37     |   |                |  | (52    | )                 |  |  | (15     | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Total operating income before D&A (3)=(1)+(2)                           |  |               | 1,645  |   |                |  | 4,925  |                   |  |  | 6,570   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|D&A (4)                                                                 |  |               | (929   | ) |                |  | (1,683 | )                 |  |  | (2,612  | )
|Gain on disposal of PP&E (5)                                            |  |               | 7      |   |                |  | 1      |                   |  |  | 8       |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income (6)=(3)-(4)+(5)                                        |  |               | 723    |   |                |  | 3,243  |                   |  |  | 3,966   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|Net effect of the intersegment eliminations (7)                         |  |               | (918   | ) |                |  | 918    |                   |  |  |        |  
|                                                                        |  |               |       
|Net segment contribution to the Operating income before D&A (8)=(3)+(7) |  |               | 727    |   |                |  | 5,843  |                   |  |  | 6,570   |  
|Net segment contribution to the Operating income (9)=(6)+(7)            |  |               | (195   | ) |                |  | 4,161  |                   |  |  | 3,966   |  
|                                                                        |  |               |       
|Year ended December 31, 2011                                            |  | Fixedservices |        |   | Mobileservices |  |        | Totalconsolidated | 
|Services revenues and other income                                      |  |               |        |   |                |  |        |                   |  |  |         |  
|Third party revenues                                                    |  |               | 5,260  |   |                |  | 11,681 |                   |  |  | 16,941  |  
|Intersegment revenues                                                   |  |               | 885    |   |                |  | 97     |                   |  |  | 982     |  
|Third party operating expenses                                          |  |               | (4,458 | ) |                |  | (6.437 | )                 |  |  | (10,895 | )
|Intersegment operating expenses                                         |  |               | (97    | ) |                |  | (885   | )                 |  |  | (982    | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income before D&A from services and other income (1)          |  |               | 1,590  |   |                |  | 4,456  |                   |  |  | 6,046   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|Equipments revenues                                                     |  |               |        |   |                |  |        |                   |  |  |         |  
|Third party revenues                                                    |  |               | 89     |   |                |  | 1,498  |                   |  |  | 1,587   |  
|Third party operating expenses                                          |  |               | (59    | ) |                |  | (1,581 | )                 |  |  | (1,640  | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income (loss) before D&A from equipments revenues (2)         |  |               | 30     |   |                |  | (83    | )                 |  |  | (53     | )
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Total operating income before D&A (3)=(1)+(2)                           |  |               | 1,620  |   |                |  | 4,373  |                   |  |  | 5,993   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|D&A (4)                                                                 |  |               | (818   | ) |                |  | (1,340 | )                 |  |  | (2,158  | )
|Gain on disposal of PP&E (5)                                            |  |               | 20     |   |                |  | 2      |                   |  |  | 22      |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Operating income (6)=(3)-(4)+(5)                                        |  |               | 822    |   |                |  | 3,035  |                   |  |  | 3,857   |  
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|                                                                        |  |               |       
|Net effect of the intersegment eliminations (7)                         |  |               | (788   | ) |                |  | 788    |                   |  |  |        |  
|                                                                        |  |               |       
|                                                                        |  |               |        |   |                |  |        |                   |  |  |         |  
|Net segment contribution to the Operating income before D&A (8)=(3)+(7) |  |               | 832    |   |                |  | 5,161  |                   |  |  | 5,993   |  
|Net segment contribution to the Operating income (9)=(6)+(7)            |  |               | 34     |   |                |  | 3,823  |                   |  |  | 3,857   |  



Note 24  Finance
income and expenses



|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  
|------------------------------------------------------------------------------------------------------- |  | ------------------------ | ----- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                                                                                        |  | Years ended December 31, |      
|                                                                                                        |  | 2013                     |       |   | 2012 |  |      | 2011 | 
|Interest on cash equivalents                                                                            |  |                          | 614   |   |      |  | 291  |      |  |  | 170  |  
|Gains on investments (Argentine companies notes and governments bonds)                                  |  |                          | 39    |   |      |  | 3    |      |  |  |     |  
|Interest on receivables                                                                                 |  |                          | 124   |   |      |  | 89   |      |  |  | 67   |  
|Gains on Mutual Funds                                                                                   |  |                          | 85    |   |      |  | 16   |      |  |  | 8    |  
|Foreign currency exchange gains                                                                         |  |                          | 489   |   |      |  | 161  |      |  |  | 69   |  
|Interest on related parties (Nota 27.b)                                                                 |  |                          | 5     |   |      |  |     |      |  |  |     |  
|Gain on NDF (Note 20)                                                                                   |  |                          | 55    |   |      |  |     |      |  |  |     |  
|Other                                                                                                   |  |                          | 5     |   |      |  | 10   |      |  |  | 2    |  
|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  
|Total finance income                                                                                    |  |                          | 1,416 |   |      |  | 570  |      |  |  | 316  |  
|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  
|Interest on loans - Núcleo                                                                              |  |                          | (17   | ) |      |  | (13  | )    |  |  | (16  | )
|Interest on salaries and social security payable, other taxes payables and accounts payable             |  |                          | (19   | ) |      |  | (16  | )    |  |  | (13  | )
|Interest on provisions (Note 17)                                                                        |  |                          | (75   | ) |      |  | (82  | )    |  |  | (116 | )
|Loss on discounting of salaries and social security payables, other taxes payable and other liabilities |  |                          | (8    | ) |      |  | (19  | )    |  |  | (4   | )
|Foreign currency exchange losses (*)                                                                    |  |                          | (768  | ) |      |  | (207 | )    |  |  | (84  | )
|Loss on NDF (Note 20)                                                                                   |  |                          |      |   |      |  | (1   | )    |  |  | (1   | )
|Other                                                                                                   |  |                          | (1    | ) |      |  | (3   | )    |  |  | (2   | )
|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  
|Total finance expenses                                                                                  |  |                          | (888  | ) |      |  | (341 | )    |  |  | (236 | )
|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  
|Total finance income, net                                                                               |  |                          | 528   |   |      |  | 229  |      |  |  | 80   |  
|                                                                                                        |  |                          |       |   |      |  |      |      |  |  |      |  



|(*) | Include 151 of foreign currency exchange losses generated by government bonds as of December 31, 2013.
|--- | ------------------------------------------------------------------------------------------------------



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Note 25  Earnings per share

The Company computes net income per common share by dividing net income for the year attributable to Telecom Argentina
(Controlling Company) by the weighted average number of common shares outstanding during the year. Diluted net income per share is computed by dividing the net income for the year by the weighted average number of common and dilutive potential
common shares then outstanding during the year. Since the Company has no dilutive potential common stock outstanding, there are no dilutive earnings per share amounts.

For financial years 2012 and 2011, the weighted average of shares outstanding totaled 984,380,978 shares, coincident with total shares
subscribed. For financial year ended December 31, 2013 the weighted average number of shares outstanding decrease to 978.939.079 shares, due to the changes caused by the Treasury Shares Acquisition Process that began in May 2013, as described
in Note 19 d) to these consolidated financial statements

Note 26  Financial risk management

Financial risk factors

Telecom Group is exposed to the following financial risks in the ordinary course of its business operations:



| |  |  | market risk: stemming from changes in exchange rates and interest rates in connection with financial assets that have been originated and financial liabilities that have been assumed.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | credit risk: representing the risk of the non-fulfillment of the obligations undertaken by the counterpart with regard to the liquidity investments of the Group;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | liquidity risk: connected with the need to meet short-term financial commitments.
| | - |  | ---------------------------------------------------------------------------------

These
financial risks are managed by:



| |  |  | the definition of guidelines for directing operations;
| | - |  | ------------------------------------------------------



| |  |  | the activity of the Board of Directors and Management which monitors the level of exposure to market risks consistently with prefixed general objectives;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the identification of the most suitable financial instruments, including derivatives, to reach prefixed objectives;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | the monitoring of the results achieved;
| | - |  | ---------------------------------------



| |  |  | the exclusion of the use of financial instruments for speculative purposes.
| | - |  | ---------------------------------------------------------------------------

The policies to
manage and the sensitivity analyses of the above financial risks by Telecom Group are described below.



| |  |  | Market risk
| | - |  | -----------

The main Telecom Groups market risks are its exposure to changes in
foreign currency exchange rates in the markets in which it operates principally Argentina and Paraguay. As regards to changes in interest rates, as of December 31, 2013 the Telecom Group had no outstanding floating rate borrowings. Therefore,
the Telecom Group is not currently exposed to significant fluctuations in the cash flows of its debt obligations.

Foreign currency risk
is the risk that the future fair values or cash flows of a financial instrument may fluctuate due to exchange rate changes. Telecom Groups exposure to exchange variation risks is related mainly to its operating activities (when income,
expenses and investments are denominated in a currency other than the Telecom Groups functional currency).

The financial risk
management policies of the Group are directed towards diversifying market risks by the acquisition of goods and services in the functional currency and minimizing interest rate exposure by an appropriate diversification of the portfolio. This may
also be achieved by using carefully selected derivative financial instruments to mitigate long-term positions in foreign currency and adjustable by variable interest rates.

As of December 31, 2013 and 2012, Telecom Argentina and Personal have no financial debt outstanding during the fiscal years ended to
those dates and to their closing date. However, both companies and Núcleo have part of its commercial debt nominated in USD and euros. Additionally, Núcleos financial debt is denominated in guaraníes, its functional
currency and accrued interests at fixed rates.



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Additionally the Telecom Group has cash and cash equivalents and investments denominated in
USD and euros (approximately 29% of total cash and cash equivalents and investments) that are also sensitive to changes in peso/dollar exchange rates and contribute to reduce the exposure to trade payables in foreign currency. On the other hand the
Telecom Group has entered into several NDF contracts in US Dollar and holds investments adjustable to the variation of the US$/$ exchange rate (dollar linked), and mutual funds whose main underlying asset is also dollar linked. They are also
sensitive to variations in exchange rates and contribute to reduce the exposure of the commercial commitments in foreign currency. Dollar linked investments, dollar linked mutual funds and NDFs in dollars represent approximately 11% of total cash
and cash equivalent and investments of Telecom Group as of December 31, 2013.

The following table shows a breakdown of Telecom
Argentinas net assessed financial position exposure to currency risk as of December 31, 2013 and 2012.



|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|------------------------------ |  |  | ------------- | - |  | ----------------------------- | ----- |  |  |  | ------ | -
|12.31.13                       | 
|Amount of foreign currency (i) |  |  | Exchange rate |   |  | Amount in local currency (ii) |      
|Assets                         |  |  |               |   |  |                               |       |  |  |  |        |  
|US$                            |  |  | 315           |   |  |                               | 6.481 |  |  |  | 2,038  |  
|G                              |  |  | 114,349       |   |  |                               | 0.002 |  |  |  | 160    |  
|EURO                           |  |  | 1             |   |  |                               | 8.939 |  |  |  | 13     |  
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Total assets                   |  |  |               |   |  |                               |       |  |  |  | 2,211  |  
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Liabilities                    |  |  |               |   |  |                               |       |  |  |  |        |  
|US$                            |  |  | (500          | ) |  |                               | 6.521 |  |  |  | (3,262 | )
|G                              |  |  | (281,392      | ) |  |                               | 0.002 |  |  |  | (396   | )
|EURO                           |  |  | (17           | ) |  |                               | 9.011 |  |  |  | (153   | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Total liabilities              |  |  |               |   |  |                               |       |  |  |  | (3,811 | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Net liabilities                |  |  |               |   |  |                               |       |  |  |  | (1,600 | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  



|(i) | US$ = United States dollar; G= Guaraníes.
|--- | -----------------------------------------

|(ii) | As foreign currency figures and their amount in argentine pesos are in millions, the calculation of the amount of the foreign currency by its exchange rate could not be exact.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In order to partially reduce this net liability position in foreign currency, the Telecom Group, as of December 31, 2013, entered into
several NDF contracts to purchase a total amount of US$138 million and holds investments adjustable to the variation of the US$/$ exchange rate (dollar linked) by $78 as of December 31, 2013 (See Note 20  Financial Instruments) and mutual
funds whose main underlying asset are financial assets dollar linked for a total amount of $300 as of December 31, 2013. The portion of the net liability position in foreign currency not covered by these instruments amounted to $328 as of
December 31, 2013.



|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|------------------------------ |  |  | ------------- | - |  | ----------------------------- | ----- |  |  |  | ------ | -
|12.31.12                       | 
|Amount of foreign currency (i) |  |  | Exchange rate |   |  | Amount in local currency (ii) |      
|Assets                         |  |  |               |   |  |                               |       |  |  |  |        |  
|US$                            |  |  | 219           |   |  |                               | 4.878 |  |  |  | 1,056  |  
|G                              |  |  | 84,896        |   |  |                               | 0.001 |  |  |  | 131    |  
|EURO                           |  |  | 10            |   |  |                               | 6.439 |  |  |  | 68     |  
|SDR                            |  |  | 3             |   |  |                               | 7.411 |  |  |  | 23     |  
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Total assets                   |  |  |               |   |  |                               |       |  |  |  | 1,278  |  
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Liabilities                    |  |  |               |   |  |                               |       |  |  |  |        |  
|US$                            |  |  | (361          | ) |  |                               | 4.918 |  |  |  | (1,742 | )
|G                              |  |  | (203,687      | ) |  |                               | 0.001 |  |  |  | (267   | )
|EURO                           |  |  | (20           | ) |  |                               | 6.504 |  |  |  | (131   | )
|SDR                            |  |  |              |   |  |                               | 7.558 |  |  |  | (1     | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Total liabilities              |  |  |               |   |  |                               |       |  |  |  | (2,141 | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  
|Net liabilities                |  |  |               |   |  |                               |       |  |  |  | (863   | )
|                               |  |  |               |   |  |                               |       |  |  |  |        |  



|(i) | US$ = United States dollar; G= Guaraníes; SDR= Special Drawing Rights.
|--- | ----------------------------------------------------------------------

|(ii) | As foreign currency figures and their amount in argentine pesos are in millions, the calculation of the amount of the foreign currency by its exchange rate could not be exact.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In order to partially reduce this net liability position in foreign currency, the Telecom Group, as of December 31, 2012, holds
investments adjustable to the variation of the US$/$ exchange rate (dollar linked) by 59 (See Note 20  Financial Instruments). The portion of the net liability position in foreign currency not covered by these instruments amounted to $804 as
of December 31, 2012.



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The exposure to the various market risks can be measured by sensitivity analyses, as set
forth in IFRS 7. These analyses illustrate the effects produced by a given and assumed change in the levels of the relevant variables in the various markets (exchange rates, interest rates and prices) on finance income and expenses and, at times,
directly on Other comprehensive income. A description on the sensitivity analysis of exchange rate and interest rate risks is given below:

Exchange
rate risk  Sensitivity analysis

Based on the composition of the consolidated statement of financial position as of
December 31, 2013, which is a net liability position of $1,600 equivalent to US$ 245 million, Management estimates that every variation in the exchange rate of $0.10 peso against the U.S. dollar and proportional variations for Euros and
guaraníes against the Argentine peso, plus or minus, would result in a variation of approximately $24 of the consolidated amounts of foreign currency position.

If we consider only the portion not covered by derivative financial instruments and other assets adjusted by the variation of the U.S.
dollar, the net liability position totaled $328 equivalent to US$ 50 million, and a variation of the exchange rate of $ 0.10 as described in the previous paragraph, would generate a variation of $5 in the consolidated financial position in
foreign currency.

This analysis is based on the assumption that this variation of the Argentine peso occurred at the same time against
all other currencies.

This sensitivity analysis provides only a limited, point-in-time view of the market risk sensitivity of certain of
the financial instruments. The actual impact of market foreign exchange rate changes on the financial instruments may differ significantly from the impact shown in the sensitivity analysis.

Interest rate risk  Sensitivity analysis

As of December 31, 2013 and 2012, the Company had no outstanding floating rate borrowings neither during fiscal years ended in those
dates. Therefore, the Telecom Group is not currently exposed to significant cash flow risk in this connection.



| |  |  | Credit risk
| | - |  | -----------

Credit risk represents Telecom Groups exposure to possible losses
arising from the failure of commercial or financial counterparts to fulfill their assumed obligations. Such risk stems principally from economic and financial factors, or from the possibility that a default situation of a counterpart could arise or
from factors more strictly technical, commercial or administrative.

Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions.

Telecom Groups maximum theoretical exposure to credit risk is represented by the carrying amount of the financial assets and trade
receivables, net recorded in the consolidated financial statements.



|                              |  |                           |       |  |             |  |     |                       |  |  |                       |  |  |       |     |  |  |  |       | 
|----------------------------- |  | ------------------------- | ----- |  | ----------- |  | --- | --------------------- |  |  | --------------------- |  |  | ----- | --- |  |  |  | ----- | 
|Date due                      |  | Banks and cashequivalents |       |  | Investments |  |     | Tradereceivables, net |  |  | Otherreceivables, net |  |  | Total |    
|Total due                     |  |                           |      |  |             |  |    |                       |  |  | 972                   |  |  |       |    |  |  |  | 972   | 
|Total not due                 |  |                           | 5,224 |  |             |  | 366 |                       |  |  | 2,035                 |  |  |       | 238 |  |  |  | 7,863 | 
|                              |  |                           |       |  |             |  |     |                       |  |  |                       |  |  |       |     |  |  |  |       | 
|Total as of December 31, 2013 |  |                           | 5,224 |  |             |  | 366 |                       |  |  | 3,007                 |  |  |       | 238 |  |  |  | 8,835 | 
|                              |  |                           |       |  |             |  |     |                       |  |  |                       |  |  |       |     |  |  |  |       | 

The accruals to the allowance for doubtful accounts are recorded: (i) for an exact amount on credit
positions that present an element of individual risk (bankruptcy, customers under legal proceedings with the Company); (ii) on credit positions that do not present such characteristics, by customer segment considering the aging of the accounts
receivable balances, customer creditworthiness and changes in the customer payment terms. Total overdue balances not covered by the allowance for doubtful accounts amount to $972 as of December 31, 2013 ($767 as of December 31, 2012).

Regarding the credit risk relating to the asset included in the Net financial debt or asset, it should be noted that the Telecom
Group evaluates the outstanding credit of the counterparty and the levels of investment, based, amount others, on their credit rating and the equity size of the counterparty. Deposits are made with leading high-credit-quality banking and financial
institutions and generally for periods of less than three months.

The Telecom Group serves a wide range of customers, including
residential customers, businesses and governmental agencies. As such, the Telecom Groups account receivables are not subject to significant concentration of credit risk.

In order to minimize credit risk, the Group also pursues a diversification policy for its investments of liquidity and allocation of its
credit positions among different first-class financial entities. Consequently, there are no significant positions with any one single counterpart.



| |  |  | Liquidity risk
| | - |  | --------------

Liquidity risk represents the risk that the Telecom Group has no funds
to meet its obligations of any nature (financial, labor, commercial).



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The Telecom Group manages its cash and cash equivalents and its financial assets, matching
the term of investments with those of its obligations. The average term of its investments may not exceed the average term of its obligations. This cash and cash equivalents position is invested in highly-liquid short-term instruments through
first-class financial entities.

The Telecom Group maintains a liquidity policy that translates into a significant volume of available
cash through its normal course of business as it is shown in the consolidated statement of cash flows. The Telecom Group has consolidated cash and cash equivalents amounting to $5,224 (equivalent to US$ 806 million) as of December 31, 2013 (in
2012, $3,160 equivalent to US$ 734).

The table below contains a breakdown of financial liabilities into relevant maturity groups
based on the remaining period at the date of the consolidated statement of financial position to the contractual maturity date.

The
amounts disclosed in the table are the contractual undiscounted cash flows.



|                                |  |               |         |  |      |  |     |                                     |  |  |                   |  |  |       |    |  |  |  |       | 
|------------------------------- |  | ------------- | ------- |  | ---- |  | --- | ----------------------------------- |  |  | ----------------- |  |  | ----- | -- |  |  |  | ----- | 
|Maturity Date                   |  | Tradepayables |         |  | Debt |  |     | Salaries andsocial securitypayables |  |  | Other liabilities |  |  | Total |   
|Due                             |  |               | (*) 123 |  |      |  |    |                                     |  |  |                  |  |  |       |   |  |  |  | 123   | 
|First quarter 2014              |  |               | 5,969   |  |      |  | 12  |                                     |  |  | 450               |  |  |       | 15 |  |  |  | 6,446 | 
|Second quarter 2014             |  |               | 38      |  |      |  | 4   |                                     |  |  | 159               |  |  |       | 20 |  |  |  | 221   | 
|Third quarter 2014              |  |               |        |  |      |  | 11  |                                     |  |  | 114               |  |  |       | 1  |  |  |  | 126   | 
|Fourth quarter 2014             |  |               |        |  |      |  | 4   |                                     |  |  | 20                |  |  |       | 13 |  |  |  | 37    | 
|January 2015 thru December 2015 |  |               |        |  |      |  | 44  |                                     |  |  | 2                 |  |  |       | 2  |  |  |  | 48    | 
|January 2016 thru December 2016 |  |               | 1       |  |      |  | 69  |                                     |  |  | 53                |  |  |       | 2  |  |  |  | 125   | 
|January 2017 and thereafter     |  |               |        |  |      |  | 159 |                                     |  |  | 33                |  |  |       |   |  |  |  | 192   | 
|                                |  |               |         |  |      |  |     |                                     |  |  |                   |  |  |       |    |  |  |  |       | 
|                                |  |               | 6,131   |  |      |  | 303 |                                     |  |  | 831               |  |  |       | 53 |  |  |  | 7,318 | 
|                                |  |               |         |  |      |  |     |                                     |  |  |                   |  |  |       |    |  |  |  |       | 



|(*) | As of the date of issuance of these consolidated financial statements, $55 were paid.
|--- | -------------------------------------------------------------------------------------

Capital management

The primary objective of the Groups capital management is to ensure that it maintains a strong credit rating and healthy capital ratios
in order to support its business and maximize shareholder value.

The Group manages its capital structure and makes adjustments to it in
light of changes in economic conditions.

To maintain or adjust the capital structure, the Group may adjust the dividend payment to
shareholders and the level of indebtedness.

No changes were made in the objectives, policies or processes for managing capital during
the years ended December 31, 2013 and 2012.

The Telecom Group does not have to comply with regulatory capital adequacy
requirements.

Note 27 Related party balances and transactions

(a) Controlling group

Nortel, residing in A. Moreau de Justo 50 - 11th floor  Ciudad Autónoma de Buenos Aires, holds 54.74% stake in the Company,
meaning that exercises control of the Company in the terms of Art. 33 of Law No. 19,550. As of December 31, 2013, Nortel owns all of the Class A Preferred shares (51% of total shares of the Company) and 7.64% of the Class
B Preferred shares (3.74% of total shares of the Company).

As a result of the Companys Treasury Shares Acquisition
Process described in Note 19.d)  Acquisition of Treasury Shares, as of December 31, 2013, Nortels equity interest in Telecom Argentina amounts to 55.60% of the outstanding shares. Pursuant to Section 221 of the LSC, the rights
of treasury shares shall be suspended until such shares are sold, and shall not be taken into account to determine the quorum or the majority of votes at the Shareholders Meetings.

All of the common shares of Nortel belong to Sofora. As of December 31, 2013 these shares represent 78.38% of the capital stock of
Nortel.

Soforas shares belong to Telecom Italia S.p.A, (32.5%), to Telecom Italia International N.V. (35.5%), (Telecom Italia
S.p.A. y Telecom Italia International N.V., jointly, the Telecom Italia Group) and to W de Argentina - Inversiones S.L. (32%).

During 2011, Telecom Italia International N.V. acquired 8% of all Nortel Preferred Class B Shares and Telecom Argentina Class
B shares, representing 1.58 % of Telecom Argentinas capital stock, through Tierra Argentea S.A. (Tierra Argentea), its controlled company incorporated in Argentina.

The economic rights of Telecom Italia Group in Telecom Argentina amounted to 19.30% as of December 31, 2013.



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On November 14, 2013, the Telecom Italia Group and Tierra Argentea announced the
acceptance of an offer by the Fintech Group to acquire the controlling stake held by the Telecom Italia Group in Telecom Argentina owned through its subsidiaries Sofora, Nortel and Tierra Argentea.

On December 10, 2013, Tierra Argentea transferred to the Fintech Group Telecom Argentina Class B shares representing 1.58% of the
capital stock of such company and Nortel ADRs representing 8% of the total Nortel Preferred Class B Shares.

The closing of
the sale of the shares held by the Telecom Italia Group in Sofora is conditional upon obtaining certain required regulatory approvals.

More information is available in Relevant Facts section of the CNV at www.cnv.gob.ar, and in Company filings search
section (Telecom Italia S.p.A) of the SEC in www.sec.gov.

(b) Balances and transactions with related parties

Related parties (as described in IAS 24) are those legal entities or individuals which are related to the entity that is preparing its
financial statements. Related party transactions and balances are disclosed in an entitys financial statements. The transactions between the companies controlled by Telecom Argentina (Telecom USA, Micro Sistemas, Personal, Núcleo and
Springville) are eliminated in the preparation of the consolidated financial statements of the Group.

Under IAS 24, Telefónica,
S.A. (of Spain) and its controlled companies, including Telefónica and Telefónica Móviles de Argentina S.A. are not considered related parties. As of the date of these consolidated financial statements, such situation has been
confirmed by the commitments assumed before the CNDC to ensure the separation and independence between the Telecom Italia Group and the Telecom Group, on one hand, and Telefónica S.A. (of Spain) and its controlled companies, on the other,
with respect to their activities in the Argentine telecommunications market, such as it has been corroborated by the applicable authorities.

The Telecom Group has transactions in the normal course of business with certain related parties. For the years presented, the Company has
not conducted any transactions with executive officers and/or persons related to them.

The following is a summary of the balances and
transactions with related parties as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011, respectively:



|                                                            |  |                       |  |      |     |  |      |  |     | 
|----------------------------------------------------------- |  | --------------------- |  | ---- | --- |  | ---- |  | --- | 
|                                                            |  | As of December 31,    | 
|                                                            |  | Type of related party |  | 2013 |     |  | 2012 | 
|CURRENT ASSETS                                              |  |                       |  |      |     |  |      |  |     | 
|Investments                                                 |  |                       |  |      |     |  |      |  |     | 
|Nortel                                                      |  | Direct parent Company |  |      |    |  |      |  | 2   | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Total cash and cash equivalents                             |  |                       |  |      |    |  |      |  | 2   | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Trade receivables, net                                      |  |                       |  |      |     |  |      |  |     | 
|Telecom Italia Sparkle S.p.A. (a)                           |  | Other related party   |  |      | 1   |  |      |  | 9   | 
|Telecom Italia S.p.A. (a)                                   |  | Parent company        |  |      |    |  |      |  | 1   | 
|Latin American Nautilus Argentina S.A. (a)                  |  | Other related party   |  |      | 1   |  |      |  | 1   | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Total trade receivables, net                                |  |                       |  |      | 2   |  |      |  | 11  | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Other receivables, net                                      |  |                       |  |      |     |  |      |  |     | 
|Latin American Nautilus Ltd. (a) (d)                        |  | Other related party   |  |      | 76  |  |      |  |    | 
|Caja de Seguros S.A. (a) (b)                                |  | Other related party   |  |      | 27  |  |      |  | 21  | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Total other receivables, net                                |  |                       |  |      | 103 |  |      |  | 21  | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|                                                            |  |                       | 
|NON CURRENT ASSETS                                          |  |                       |  |      |     |  |      |  |     | 
|Other receivables, net                                      |  |                       |  |      |     |  |      |  |     | 
|Latin American Nautilus Ltd. (a) (b)                        |  | Other related party   |  |      | 88  |  |      |  |    | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Total other receivables, net                                |  |                       |  |      | 88  |  |      |  |    | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|                                                            |  |                       | 
|CURRENT LIABILITIES                                         |  |                       |  |      |     |  |      |  |     | 
|Trade payables                                              |  |                       |  |      |     |  |      |  |     | 
|Italtel Group (a)                                           |  | Other related party   |  |      | 176 |  |      |  | 97  | 
|Latin American Nautilus Ltd. (a)                            |  | Other related party   |  |      | 3   |  |      |  | 30  | 
|Telecom Italia S.p.A. (a)                                   |  | Parent company        |  |      | 12  |  |      |  | 22  | 
|Telecom Italia Sparkle S.p.A. (a)                           |  | Other related party   |  |      | 9   |  |      |  | 10  | 
|Latin American Nautilus USA Inc. (a)                        |  | Other related party   |  |      | 2   |  |      |  | 2   | 
|Latin American Nautilus Argentina S.A. (a)                  |  | Other related party   |  |      |    |  |      |  | 1   | 
|TIM Participacoes S.A. (a)                                  |  | Other related party   |  |      | 1   |  |      |  | 2   | 
|Caja de Seguros S.A. (a) (b)                                |  | Other related party   |  |      | 38  |  |      |  | 23  | 
|La Caja Aseguradora de Riesgos del Trabajo ART S.A. (a) (b) |  | Other related party   |  |      | 6   |  |      |  | 5   | 
|                                                            |  |                       |  |      |     |  |      |  |     | 
|Total trade payables                                        |  |                       |  |      | 247 |  |      |  | 192 | 
|                                                            |  |                       |  |      |     |  |      |  |     | 



|                                           |  |                                         |  |                       |     |                          |     |  |      |  |     |      |     |  |    | 
|------------------------------------------ |  | --------------------------------------- |  | --------------------- | --- | ------------------------ | --- |  | ---- |  | --- | ---- | --- |  | -- | 
|                                           |  | Transaction                             |  |                       |     | Years ended December 31, |    
|Services rendered                          |  | description                             |  | Type of related party |     | 2013                     |     |  | 2012 |  |     | 2011 |    
|Caja de Seguros S.A. (a) (b)               |  | Recovery of insurance                   |  | Other related party   |     |                          | 231 |  |      |  | 148 |      |     |  | 57 | 
|Standard Bank (b) (c)                      |  | Equipment and handsets                  |  | Other related party   |     |                          |    |  |      |  | 24  |      |     |  | 22 | 
|Telecom Italia Sparkle S.p.A. (a)          |  | International inbound calls             |  | Other related party   |     |                          | 17  |  |      |  | 12  |      |     |  | 19 | 
|TIM Participacoes S.A. (a)                 |  | Roaming                                 |  | Other related party   |     |                          | 13  |  |      |  | 13  |      |     |  | 10 | 
|Telecom Italia S.p.A. (a)                  |  | Roaming                                 |  | Parent company        |     |                          | 3   |  |      |  | 3   |      |     |  | 2  | 
|Latin American Nautilus Argentina S.A. (a) |  | International inbound calls and roaming |  | Other related party   |     |                          | 2   |  |      |  | 3   |      |     |  | 1  | 
|                                           |  |                                         |  |                       |     |                          |     |  |      |  |     |      |     |  |    | 
|Total services rendered                    |  |                                         |  |                       | 266 |                          |     |  | 203  |  |     |      | 111 | 
|                                           |  |                                         |  |                       |     |                          |     |  |      |  |     |      |     |  |    | 



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|                                                            |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  
|----------------------------------------------------------- |  | ---------------------------------------- |  | --------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                                            |  | Transaction                              |  |                       |  | Years ended December 31, |     
|Services received                                           |  | description                              |  | Type of related party |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|La Caja Aseguradora de Riesgos del Trabajo ART S.A. (a) (b) |  | Salaries and social security - Insurance |  | Other related party   |  |                          | (47  | ) |      |  | (36  | )    |  |  | (26  | )
|Caja de Seguros S.A. (a) (b)                                |  | Insurance                                |  | Other related party   |  |                          | (18  | ) |      |  | (14  | )    |  |  | (11  | )
|La Estrella Seguros de Retiro S.A. (a) (b)                  |  | Insurance                                |  | Other related party   |  |                          | (9   | ) |      |  | (6   | )    |  |  | (4   | )
|Latin American Nautilus Ltd. (a).                           |  | International inbound calls and data     |  | Other related party   |  |                          | (104 | ) |      |  | (101 | )    |  |  | (84  | )
|Italtel Group (a)                                           |  | Maintenance, materials and supplies      |  | Other related party   |  |                          | (65  | ) |      |  | (75  | )    |  |  | (55  | )
|Telecom Italia Sparkle S.p.A. (a)                           |  | International outbound calls and others  |  | Other related party   |  |                          | (31  | ) |      |  | (29  | )    |  |  | (32  | )
|Telecom Italia S.p.A. (a)                                   |  | Fees for services and roaming            |  | Parent company        |  |                          | (23  | ) |      |  | (28  | )    |  |  | (30  | )
|Latin American Nautilus USA Inc. (a)                        |  | International outbound calls             |  | Other related party   |  |                          | (7   | ) |      |  | (3   | )    |  |  | (9   | )
|TIM Participacoes S.A. (a)                                  |  | Roaming                                  |  | Other related party   |  |                          | (13  | ) |      |  | (12  | )    |  |  | (7   | )
|Latin American Nautilus Argentina S.A. (a)                  |  | International outbound calls             |  | Other related party   |  |                          | (9   | ) |      |  | (8   | )    |  |  | (6   | )
|                                                            |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  
|Total services received                                     |  |                                          |  |                       |  |                          | (326 | ) |      |  | (312 | )    |  |  | (264 | )
|                                                            |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  
|                                                            |  |                                          | 
|                                                            |  | Transaction                              |  |                       |  | Years ended December 31, |     
|                                                            |  | description                              |  | Type of related party |  | 2013                     |      |   | 2012 |  |      | 2011 | 
|Finance income                                              |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  
|Nortel                                                      |  | Interest                                 |  | Direct parent Company |  |                          | 5    |   |      |  |     |      |  |  |     |  
|Standard Bank (b) (c)                                       |  | Interest                                 |  | Other related party   |  |                          |     |   |      |  | 5    |      |  |  | 4    |  
|                                                            |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  
|Total finance increase                                      |  |                                          |  |                       |  |                          | 5    |   |      |  | 5    |      |  |  | 4    |  
|                                                            |  |                                          |  |                       |  |                          |      |   |      |  |      |      |  |  |      |  



|                                              |  |                       |  |                          |     |  |      |  |    |      |  |  |    | 
|--------------------------------------------- |  | --------------------- |  | ------------------------ | --- |  | ---- |  | -- | ---- |  |  | -- | 
|                                              |  |                       |  | Years ended December 31, |    
|                                              |  | Type of related party |  | 2013                     |     |  | 2012 |  |    | 2011 | 
|Purchases of PP&E and intangible assets       |  |                       |  |                          |     |  |      |  |    |      |  |  |    | 
|Italtel Group (a)                             |  | Other related party   |  |                          | 153 |  |      |  | 69 |      |  |  | 66 | 
|Telecom Italia S.p.A. (a)                     |  | Parent company        |  |                          |    |  |      |  | 4  |      |  |  |   | 
|                                              |  |                       |  |                          |     |  |      |  |    |      |  |  |    | 
|Total purchases of PP&E and intangible assets |  |                       |  |                          | 153 |  |      |  | 73 |      |  |  | 66 | 
|                                              |  |                       |  |                          |     |  |      |  |    |      |  |  |    | 



|            |  |                       |  |      |     |  |      |  |     | 
|----------- |  | --------------------- |  | ---- | --- |  | ---- |  | --- | 
|            |  | As of December 31,    | 
|            |  | Type of related party |  | 2013 |     |  | 2012 | 
|Commitments |  | Other related parties |  |      | 363 |  |      |  | 384 | 
|            |  |                       |  |      |     |  |      |  |     | 
|            |  |                       |  |      | 363 |  |      |  | 384 | 
|            |  |                       |  |      |     |  |      |  |     | 



|(a) | Such companies relate to Telecom Italia Group.
|--- | ----------------------------------------------

|(b) | Such companies relate to W de Argentina - Inversiones S.L.
|--- | ----------------------------------------------------------

|(c) | This entity is no longer related party as from November 2012.
|--- | -------------------------------------------------------------

|(d) | Corresponds to an agreement of lease-mode IP international capacity until December 2016. The Company paid approximately $267.6 on February 2013 for this agreement.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

The transactions discussed above were made on terms no less favorable to the Company than would have been obtained from unaffiliated third
parties. The Board of Directors approved transactions representing more than 1% of the total shareholders equity of the Company, after being approved by the Audit Committee in compliance with Decree No. 677/01 and Law No. 26,831.

(c) Key Managers

Compensation for the Key Managers, including social security contribution, amounted to $70, $52 and $58 for the years ended December 31,
2013, 2012 and 2011, respectively, and were recorded as expenses under the item line Employee benefits expenses and severance payments. The total expense remuneration is comprised as follows:



|                                  |  |                          |    |  |      |  |    |      |  |  |    | 
|--------------------------------- |  | ------------------------ | -- |  | ---- |  | -- | ---- |  |  | -- | 
|                                  |  | Years ended December 31, |   
|                                  |  | 2013                     |    |  | 2012 |  |    | 2011 | 
|Salaries (1)                      |  |                          | 34 |  |      |  | 22 |      |  |  | 19 | 
|Variable compensation (1) (2)     |  |                          | 21 |  |      |  | 18 |      |  |  | 25 | 
|Social security contributions (2) |  |                          | 12 |  |      |  | 10 |      |  |  | 12 | 
|Termination benefits              |  |                          | 3  |  |      |  | 2  |      |  |  | 2  | 
|                                  |  |                          |    |  |      |  |    |      |  |  |    | 
|                                  |  |                          | 70 |  |      |  | 52 |      |  |  | 58 | 
|                                  |  |                          |    |  |      |  |    |      |  |  |    | 



|(1) | Gross compensation. Social security and income tax retentions are in charge of the employee.
|--- | --------------------------------------------------------------------------------------------

|(2) | During year 2013, was recorded an adjustment on the variable compensation of Key Managers of the Telecom Group and its social security contributions for an amount of 1 and 4 as of December 31, 2012 and 2011,
respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2013, 2012 and 2011, respectively, an amount of $25, $20 and $32 remained unpaid.

The estimated compensation of the members of the Telecom Argentinas Board of Directors for fiscal year 2013 is approximately of
$13. The compensation for the members of the Telecom Argentinas Board of Directors approved by the Ordinary Annual Shareholders Meeting for fiscal years 2012 and 2011 were approximately of $9 and $7, respectively. The members and
alternate members of the Board of Directors do not hold executive positions in the Company or Companys subsidiaries.



F-71



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##### Table of Contents

TELECOM ARGENTINA S.A.





Note 28  Segment information

The Telecom Group conducts its business through six legal entities each one has been identified as an operating segment.

The Company has combined the operating segments into three reportable segments: Fixed services, Personal Mobile
Services and Núcleo Mobile Services based on the nature of products provided by the entities and taking into account the regulatory and economic framework in which each entity operates.

Since fiscal year 2012, the Companys Management has changed the calculating method of the Operating income before D&A
by not considering within it the Gain on disposal of PP&E previously disclosed within the line Revenues and other income and from this fiscal year are shown below Operating income before D&A, as part of
Operating income. According to this, comparative figures for the year ended December 31, 2011 have been adapted in the consolidated income statements.

Segment financial information for the years 2013, 2012 and 2011 was as follows:

For the year ended December 31, 2013



| |  ̈ | Income statement information
| | - | ----------------------------



|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|------------------------------------------------------------------ |  | -------- | ------ | - | --------------- |  | ------ | ------ |  |  | -------- | - |  | ------------ | ------ | - | ----- |  | ------ | - |  |  | ------ | -
|                                                                   |  | Fixed    |        |   | Mobile services |  |        |        |  |  |          |  
|                                                                   |  | services |        |   | Personal        |  |        | Núcleo |  |  | Subtotal |   |  | Eliminations |        |   | Total | 
|Total revenues and other income (1)                                |  |          | 8,297  |   |                 |  | 19,269 |        |  |  | 1,166    |   |  |              | 20,435 |   |       |  | (1,382 | ) |  |  | 27,350 |  
|Employee benefit expenses and severance payments                   |  |          | (2,991 | ) |                 |  | (1,077 | )      |  |  | (84      | ) |  |              | (1,161 | ) |       |  |       |   |  |  | (4,152 | )
|Interconnection costs and other telecommunication charges          |  |          | (525   | ) |                 |  | (2,148 | )      |  |  | (171     | ) |  |              | (2,319 | ) |       |  | 1,015  |   |  |  | (1,829 | )
|Fees for services, maintenance, materials and supplies             |  |          | (1,126 | ) |                 |  | (1,634 | )      |  |  | (101     | ) |  |              | (1,735 | ) |       |  | 220    |   |  |  | (2,641 | )
|Taxes and fees with the Regulatory Authority                       |  |          | (578   | ) |                 |  | (2,076 | )      |  |  | (35      | ) |  |              | (2,111 | ) |       |  |       |   |  |  | (2,689 | )
|Commissions                                                        |  |          | (177   | ) |                 |  | (1,970 | )      |  |  | (112     | ) |  |              | (2,082 | ) |       |  | 56     |   |  |  | (2,203 | )
|Cost of equipments and handsets                                    |  |          | (74    | ) |                 |  | (2,956 | )      |  |  | (81      | ) |  |              | (3,037 | ) |       |  |       |   |  |  | (3,111 | )
|Advertising                                                        |  |          | (159   | ) |                 |  | (442   | )      |  |  | (55      | ) |  |              | (497   | ) |       |  |       |   |  |  | (656   | )
|Cost of VAS                                                        |  |          | (11    | ) |                 |  | (663   | )      |  |  | (34      | ) |  |              | (697   | ) |       |  |       |   |  |  | (708   | )
|Provisions                                                         |  |          | (169   | ) |                 |  | (101   | )      |  |  |         |   |  |              | (101   | ) |       |  |       |   |  |  | (270   | )
|Bad debt expenses                                                  |  |          | (58    | ) |                 |  | (214   | )      |  |  | (11      | ) |  |              | (225   | ) |       |  |       |   |  |  | (283   | )
|Recovery of restructuring costs / restructuring costs              |  |          | 8      |   |                 |  |       |        |  |  |         |   |  |              |       |   |       |  |       |   |  |  | 8      |  
|Other operating expenses                                           |  |          | (690   | ) |                 |  | (598   | )      |  |  | (55      | ) |  |              | (653   | ) |       |  | 91     |   |  |  | (1,252 | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Operating income before D&A                                        |  |          | 1,747  |   |                 |  | 5,390  |        |  |  | 427      |   |  |              | 5,817  |   |       |  |       |   |  |  | 7,564  |  
|Depreciation of PP&E                                               |  |          | (905   | ) |                 |  | (888   | )      |  |  | (190     | ) |  |              | (1,078 | ) |       |  |       |   |  |  | (1,983 | )
|Amortization of intangible assets                                  |  |          | (114   | ) |                 |  | (740   | )      |  |  | (36      | ) |  |              | (776   | ) |       |  |       |   |  |  | (890   | )
|Gain on disposal of PP&E and impairment of PP&E                    |  |          | (106   | ) |                 |  | (68    | )      |  |  | 1        |   |  |              | (67    | ) |       |  |       |   |  |  | (173   | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Operating income                                                   |  |          | 622    |   |                 |  | 3,694  |        |  |  | 202      |   |  |              | 3,896  |   |       |  |       |   |  |  | 4,518  |  
|Financial results, net                                             |  |          | 213    |   |                 |  | 334    |        |  |  | (19      | ) |  |              | 315    |   |       |  |       |   |  |  | 528    |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Income before income tax expense                                   |  |          | 835    |   |                 |  | 4,028  |        |  |  | 183      |   |  |              | 4,211  |   |       |  |       |   |  |  | 5,046  |  
|Income tax expense, net                                            |  |          | (297   | ) |                 |  | (1,472 | )      |  |  | (23      | ) |  |              | (1,495 | ) |       |  |       |   |  |  | (1,792 | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Net income                                                         |  |          | 538    |   |                 |  | 2,556  |        |  |  | 160      |   |  |              | 2,716  |   |       |  |       |   |  |  | 3,254  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|Net income attributable to Telecom Argentina (Controlling Company) |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 3,202  |  
|Net income attributable to non-controlling interest                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 52     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 3,254  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|(1)                                                                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Service revenues                                                   |  |          | 6,926  |   |                 |  | 16,003 |        |  |  | 1,083    |   |  |              | 17,086 |   |       |  |       |   |  |  | 24,012 |  
|Equipment sales                                                    |  |          | 80     |   |                 |  | 3,126  |        |  |  | 69       |   |  |              | 3,195  |   |       |  |       |   |  |  | 3,275  |  
|Other income                                                       |  |          | 33     |   |                 |  | 24     |        |  |  | 6        |   |  |              | 30     |   |       |  |       |   |  |  | 63     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Subtotal third party revenues                                      |  |          | 7,039  |   |                 |  | 19,153 |        |  |  | 1,158    |   |  |              | 20,311 |   |       |  |        |   |  |  | 27,350 |  
|Intersegment revenues                                              |  |          | 1,258  |   |                 |  | 116    |        |  |  | 8        |   |  |              | 124    |   |       |  | (1,382 | ) |  |  |       |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Total revenues and other income                                    |  |          | 8,297  |   |                 |  | 19,269 |        |  |  | 1,166    |   |  |              | 20,435 |   |       |  | (1,382 | ) |  |  | 27,350 |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
| ̈      Balance sheet
information                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|PP&E, net                                                          |  |          | 6,557  |   |                 |  | 3,604  |        |  |  | 1,065    |   |  |              | 4,669  |   |       |  |       |   |  |  | 11,226 |  
|Intangible assets, net                                             |  |          | 376    |   |                 |  | 1,098  |        |  |  | 46       |   |  |              | 1,144  |   |       |  | (1     | ) |  |  | 1,519  |  
|Capital expenditures on PP&E (a)                                   |  |          | 2,037  |   |                 |  | 1,646  |        |  |  | 281      |   |  |              | 1,927  |   |       |  |       |   |  |  | 3,964  |  
|Capital expenditures on intangible assets (b)                      |  |          | 118    |   |                 |  | 723    |        |  |  | 46       |   |  |              | 769    |   |       |  |       |   |  |  | 887    |  
|Total capital expenditures (a)+ (b)                                |  |          | 2,155  |   |                 |  | 2,369  |        |  |  | 327      |   |  |              | 2,696  |   |       |  |       |   |  |  | 4,851  |  
|Total additions on PP&E and intangible assets                      |  |          | 2,453  |   |                 |  | 2,437  |        |  |  | 324      |   |  |              | 2,761  |   |       |  |       |   |  |  | 5,214  |  
|Net financial asset (debt)                                         |  |          | 1,669  |   |                 |  | 3,896  |        |  |  | (211     | ) |  |              | 3,685  |   |       |  |       |   |  |  | 5,354  |  
| ̈      Geographic information                                      |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  



|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 
|--------- |  | --------------------------------- | ------ |  | -------------------------------------------- |  | ------ | ---------------------------------- |  |  | ------ | 
|          |  | Total revenues and other income   |        |  | Total non-currentassets                      | 
|          |  | Breakdown bylocation ofoperations |        |  | Breakdown bylocation of theGroups customers |  |        | Breakdown bylocation of operations | 
|Argentina |  |                                   | 26,118 |  |                                              |  | 25,937 |                                    |  |  | 12,233 | 
|Abroad    |  |                                   | 1,232  |  |                                              |  | 1,413  |                                    |  |  | 1,146  | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 
|Total     |  |                                   | 27,350 |  |                                              |  | 27,350 |                                    |  |  | 13,379 | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 



F-72



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##### Table of Contents

TELECOM ARGENTINA S.A.





For the year ended December 31, 2012



| |  ̈ | Income statement information
| | - | ----------------------------



|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|------------------------------------------------------------------ |  | -------- | ------ | - | --------------- |  | ------ | ------ |  |  | -------- | - |  | ------------ | ------ | - | ----- |  | ------ | - |  |  | ------ | -
|                                                                   |  | Fixed    |        |   | Mobile services |  |        |        |  |  |          |  
|                                                                   |  | services |        |   | Personal        |  |        | Núcleo |  |  | Subtotal |   |  | Eliminations |        |   | Total | 
|Total revenues and other income (1)                                |  |          | 7,145  |   |                 |  | 15,354 |        |  |  | 873      |   |  |              | 16,227 |   |       |  | (1,176 | ) |  |  | 22,196 |  
|Employee benefit expenses and severance payments                   |  |          | (2,380 | ) |                 |  | (825   | )      |  |  | (64      | ) |  |              | (889   | ) |       |  |       |   |  |  | (3,269 | )
|Interconnection costs and other telecommunication charges          |  |          | (507   | ) |                 |  | (1,947 | )      |  |  | (128     | ) |  |              | (2,075 | ) |       |  | 875    |   |  |  | (1,707 | )
|Fees for services, maintenance, materials and supplies             |  |          | (950   | ) |                 |  | (1,242 | )      |  |  | (76      | ) |  |              | (1,318 | ) |       |  | 159    |   |  |  | (2,109 | )
|Taxes and fees with the Regulatory Authority                       |  |          | (449   | ) |                 |  | (1,542 | )      |  |  | (27      | ) |  |              | (1,569 | ) |       |  |       |   |  |  | (2,018 | )
|Commissions                                                        |  |          | (169   | ) |                 |  | (1,745 | )      |  |  | (92      | ) |  |              | (1,837 | ) |       |  | 57     |   |  |  | (1,949 | )
|Cost of equipments and handsets                                    |  |          | (44    | ) |                 |  | (1,964 | )      |  |  | (35      | ) |  |              | (1,999 | ) |       |  |       |   |  |  | (2,043 | )
|Advertising                                                        |  |          | (171   | ) |                 |  | (436   | )      |  |  | (53      | ) |  |              | (489   | ) |       |  |       |   |  |  | (660   | )
|Cost of VAS                                                        |  |          | (9     | ) |                 |  | (292   | )      |  |  | (25      | ) |  |              | (317   | ) |       |  |       |   |  |  | (326   | )
|Provisions                                                         |  |          | (89    | ) |                 |  | (65    | )      |  |  | 1        |   |  |              | (64    | ) |       |  |       |   |  |  | (153   | )
|Bad debt expenses                                                  |  |          | (56    | ) |                 |  | (211   | )      |  |  | (8       | ) |  |              | (219   | ) |       |  |       |   |  |  | (275   | )
|Restructuring costs                                                |  |          | (83    | ) |                 |  | (7     | )      |  |  |         |   |  |              | (7     | ) |       |  |       |   |  |  | (90    | )
|Other operating expenses                                           |  |          | (593   | ) |                 |  | (484   | )      |  |  | (35      | ) |  |              | (519   | ) |       |  | 85     |   |  |  | (1,027 | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Operating income before D&A                                        |  |          | 1,645  |   |                 |  | 4,594  |        |  |  | 331      |   |  |              | 4,925  |   |       |  |       |   |  |  | 6.570  |  
|Depreciation of PP&E                                               |  |          | (833   | ) |                 |  | (830   | )      |  |  | (129     | ) |  |              | (959   | ) |       |  |       |   |  |  | (1,792 | )
|Amortization of intangible assets                                  |  |          | (96    | ) |                 |  | (696   | )      |  |  | (28      | ) |  |              | (724   | ) |       |  |       |   |  |  | (820   | )
|Gain on disposal of PP&E                                           |  |          | 7      |   |                 |  | 1      |        |  |  |         |   |  |              | 1      |   |       |  |       |   |  |  | 8      |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Operating income                                                   |  |          | 723    |   |                 |  | 3,069  |        |  |  | 174      |   |  |              | 3,243  |   |       |  |       |   |  |  | 3,966  |  
|Financial results, net                                             |  |          | 52     |   |                 |  | 186    |        |  |  | (9       | ) |  |              | 177    |   |       |  |       |   |  |  | 229    |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Income before income tax expense                                   |  |          | 775    |   |                 |  | 3,255  |        |  |  | 165      |   |  |              | 3,420  |   |       |  |       |   |  |  | 4,195  |  
|Income tax expense, net                                            |  |          | (273   | ) |                 |  | (1.170 | )      |  |  | (20      | ) |  |              | (1.190 | ) |       |  |       |   |  |  | (1,463 | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Net income                                                         |  |          | 502    |   |                 |  | 2,085  |        |  |  | 145      |   |  |              | 2,230  |   |       |  |       |   |  |  | 2,732  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|Net income attributable to Telecom Argentina (Controlling Company) |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 2,685  |  
|Net income attributable to non-controlling interest                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 47     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  | 2,732  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|(1)                                                                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Service revenues                                                   |  |          | 5,942  |   |                 |  | 13,312 |        |  |  | 835      |   |  |              | 14,147 |   |       |  |       |   |  |  | 20,089 |  
|Equipment sales                                                    |  |          | 81     |   |                 |  | 1,915  |        |  |  | 32       |   |  |              | 1,947  |   |       |  |       |   |  |  | 2,028  |  
|Other income                                                       |  |          | 75     |   |                 |  | 4      |        |  |  |         |   |  |              | 4      |   |       |  |       |   |  |  | 79     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Subtotal third party revenues                                      |  |          | 6,098  |   |                 |  | 15,231 |        |  |  | 867      |   |  |              | 16,098 |   |       |  |       |   |  |  | 22,196 |  
|Intersegment revenues                                              |  |          | 1,047  |   |                 |  | 123    |        |  |  | 6        |   |  |              | 129    |   |       |  | (1,176 | ) |  |  |       |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|Total revenues and other income                                    |  |          | 7,145  |   |                 |  | 15,354 |        |  |  | 873      |   |  |              | 16,227 |   |       |  | (1,176 | ) |  |  | 22,196 |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
| ̈      Balance sheet
information                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|PP&E, net                                                          |  |          | 5,399  |   |                 |  | 2,851  |        |  |  | 785      |   |  |              | 3,636  |   |       |  |       |   |  |  | 9,035  |  
|Intangible assets, net                                             |  |          | 372    |   |                 |  | 1,115  |        |  |  | 28       |   |  |              | 1,143  |   |       |  | (1     | ) |  |  | 1,514  |  
|Capital expenditures on PP&E (a)                                   |  |          | 1,347  |   |                 |  | 902    |        |  |  | 166      |   |  |              | 1,068  |   |       |  |       |   |  |  | 2,415  |  
|Capital expenditures on intangible assets (b)                      |  |          | 83     |   |                 |  | 733    |        |  |  | 27       |   |  |              | 760    |   |       |  | (1     | ) |  |  | 842    |  
|Total capital expenditures (a)+ (b)                                |  |          | 1,430  |   |                 |  | 1,635  |        |  |  | 193      |   |  |              | 1,828  |   |       |  | (1     | ) |  |  | 3,257  |  
|Total additions on PP&E and intangible assets                      |  |          | 1,548  |   |                 |  | 1,679  |        |  |  | 190      |   |  |              | 1,869  |   |       |  | (1     | ) |  |  | 3,416  |  
|Net financial asset (debt)                                         |  |          | 1,454  |   |                 |  | 2,295  |        |  |  | (101     | ) |  |              | 2,194  |   |       |  |       |   |  |  | 3,648  |  
| ̈      Geographic information                                      |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |        |   |  |  |        |  



|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 
|--------- |  | --------------------------------- | ------ |  | -------------------------------------------- |  | ------ | ---------------------------------- |  |  | ------ | 
|          |  | Total revenues and other income   |        |  | Total non-currentassets                      | 
|          |  | Breakdown bylocation ofoperations |        |  | Breakdown bylocation of theGroups customers |  |        | Breakdown bylocation of operations | 
|Argentina |  |                                   | 21,286 |  |                                              |  | 21,030 |                                    |  |  | 9,991  | 
|Abroad    |  |                                   | 910    |  |                                              |  | 1,166  |                                    |  |  | 832    | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 
|Total     |  |                                   | 22,196 |  |                                              |  | 22,196 |                                    |  |  | 10,823 | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |        | 



F-73



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##### Table of Contents

TELECOM ARGENTINA S.A.





For the year ended December 31, 2011



| |  ̈ | Income statement information
| | - | ----------------------------



|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|------------------------------------------------------------------ |  | -------- | ------ | - | --------------- |  | ------ | ------ |  |  | -------- | - |  | ------------ | ------ | - | ----- |  | ---- | - |  |  | ------ | -
|                                                                   |  | Fixed    |        |   | Mobile services |  |        |        |  |  |          |  
|                                                                   |  | services |        |   | Personal        |  |        | Núcleo |  |  | Subtotal |   |  | Eliminations |        |   | Total | 
|Total revenues and other income (1)                                |  |          | 6,234  |   |                 |  | 12,558 |        |  |  | 718      |   |  |              | 13,276 |   |       |  | (982 | ) |  |  | 18,528 |  
|Employee benefit expenses and severance payments                   |  |          | (1,949 | ) |                 |  | (605   | )      |  |  | (55      | ) |  |              | (660   | ) |       |  |     |   |  |  | (2,609 | )
|Interconnection costs and other telecommunication charges          |  |          | (491   | ) |                 |  | (1,621 | )      |  |  | (110     | ) |  |              | (1,731 | ) |       |  | 725  |   |  |  | (1,497 | )
|Fees for services, maintenance, materials and supplies             |  |          | (815   | ) |                 |  | (966   | )      |  |  | (64      | ) |  |              | (1,030 | ) |       |  | 126  |   |  |  | (1,719 | )
|Taxes and fees with the Regulatory Authority                       |  |          | (367   | ) |                 |  | (1,205 | )      |  |  | (23      | ) |  |              | (1,228 | ) |       |  |     |   |  |  | (1,595 | )
|Commissions                                                        |  |          | (139   | ) |                 |  | (1,353 | )      |  |  | (84      | ) |  |              | (1,437 | ) |       |  | 61   |   |  |  | (1,515 | )
|Cost of equipments and handsets                                    |  |          | (59    | ) |                 |  | (1,568 | )      |  |  | (13      | ) |  |              | (1,581 | ) |       |  |     |   |  |  | (1,640 | )
|Advertising                                                        |  |          | (154   | ) |                 |  | (400   | )      |  |  | (45      | ) |  |              | (445   | ) |       |  |     |   |  |  | (599   | )
|Cost of VAS                                                        |  |          | (5     | ) |                 |  | (157   | )      |  |  | (20      | ) |  |              | (177   | ) |       |  |     |   |  |  | (182   | )
|Provisions                                                         |  |          | (164   | ) |                 |  | (61    | )      |  |  |         |   |  |              | (61    | ) |       |  |     |   |  |  | (225   | )
|Bad debt expenses                                                  |  |          | (28    | ) |                 |  | (134   | )      |  |  | (7       | ) |  |              | (141   | ) |       |  |     |   |  |  | (169   | )
|Other operating expenses                                           |  |          | (443   | ) |                 |  | (379   | )      |  |  | (33      | ) |  |              | (412   | ) |       |  | 70   |   |  |  | (785   | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Operating income before D&A                                        |  |          | 1,620  |   |                 |  | 4,109  |        |  |  | 264      |   |  |              | 4,373  |   |       |  |     |   |  |  | 5,993  |  
|Depreciation of PP&E                                               |  |          | (731   | ) |                 |  | (686   | )      |  |  | (121     | ) |  |              | (807   | ) |       |  |     |   |  |  | (1,538 | )
|Amortization of intangible assets                                  |  |          | (87    | ) |                 |  | (504   | )      |  |  | (29      | ) |  |              | (533   | ) |       |  |     |   |  |  | (620   | )
|Gain on disposal of PP&E                                           |  |          | 20     |   |                 |  | 2      |        |  |  |         |   |  |              | 2      |   |       |  |      |   |  |  | 22     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Operating income                                                   |  |          | 822    |   |                 |  | 2,921  |        |  |  | 114      |   |  |              | 3,035  |   |       |  |     |   |  |  | 3,857  |  
|Financial results, net                                             |  |          | (27    | ) |                 |  | 118    |        |  |  | (11      | ) |  |              | 107    |   |       |  |     |   |  |  | 80     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Income before income tax expense                                   |  |          | 795    |   |                 |  | 3,039  |        |  |  | 103      |   |  |              | 3,142  |   |       |  |     |   |  |  | 3,937  |  
|Income tax expense, net                                            |  |          | (278   | ) |                 |  | (1,103 | )      |  |  | (14      | ) |  |              | (1,117 | ) |       |  |     |   |  |  | (1,395 | )
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Net income                                                         |  |          | 517    |   |                 |  | 1,936  |        |  |  | 89       |   |  |              | 2,025  |   |       |  |     |   |  |  | 2,542  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|Net income attributable to Telecom Argentina (Controlling Company) |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  | 2,513  |  
|Net income attributable to non-controlling interest                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  | 29     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  | 2,542  |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|(1)                                                                |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Service revenues                                                   |  |          | 5,240  |   |                 |  | 10,983 |        |  |  | 688      |   |  |              | 11,671 |   |       |  |     |   |  |  | 16,911 |  
|Equipment sales                                                    |  |          | 89     |   |                 |  | 1,472  |        |  |  | 26       |   |  |              | 1,498  |   |       |  |     |   |  |  | 1,587  |  
|Other income                                                       |  |          | 20     |   |                 |  | 10     |        |  |  |         |   |  |              | 10     |   |       |  |     |   |  |  | 30     |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Subtotal third party revenues                                      |  |          | 5,349  |   |                 |  | 12,465 |        |  |  | 714      |   |  |              | 13,179 |   |       |  |     |   |  |  | 18,528 |  
|Intersegment revenues                                              |  |          | 885    |   |                 |  | 93     |        |  |  | 4        |   |  |              | 97     |   |       |  | (982 | ) |  |  |       |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|Total revenues and other income                                    |  |          | 6,234  |   |                 |  | 12,558 |        |  |  | 718      |   |  |              | 13,276 |   |       |  | (982 | ) |  |  | 18,528 |  
|                                                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
| ̈      Balance sheet
information                                   |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  
|                                                                   |  |          |        |   |                 | 
|PP&E, net                                                          |  |          | 4,886  |   |                 |  | 2,740  |        |  |  | 621      |   |  |              | 3,361  |   |       |  |     |   |  |  | 8,247  |  
|Intangible assets, net                                             |  |          | 385    |   |                 |  | 1,078  |        |  |  | 25       |   |  |              | 1,103  |   |       |  |     |   |  |  | 1,488  |  
|Capital expenditures on PP&E (a)                                   |  |          | 1,187  |   |                 |  | 997    |        |  |  | 134      |   |  |              | 1,131  |   |       |  |     |   |  |  | 2,318  |  
|Capital expenditures on intangible assets (b)                      |  |          | 176    |   |                 |  | 661    |        |  |  | 37       |   |  |              | 698    |   |       |  |     |   |  |  | 874    |  
|Total capital expenditures (a)+ (b)                                |  |          | 1,363  |   |                 |  | 1,658  |        |  |  | 171      |   |  |              | 1,829  |   |       |  |     |   |  |  | 3,192  |  
|Total additions on PP&E and intangible assets                      |  |          | 1,530  |   |                 |  | 1,658  |        |  |  | 171      |   |  |              | 1,829  |   |       |  |     |   |  |  | 3,359  |  
|Net financial asset (debt)                                         |  |          | 833    |   |                 |  | 1,969  |        |  |  | (118     | ) |  |              | 1,851  |   |       |  |     |   |  |  | 2,684  |  
| ̈      Geographic information                                      |  |          |        |   |                 |  |        |        |  |  |          |   |  |              |        |   |       |  |      |   |  |  |        |  



|          |  |                                   |        |  |                                              |  |        |                                    |  |  |       | 
|--------- |  | --------------------------------- | ------ |  | -------------------------------------------- |  | ------ | ---------------------------------- |  |  | ----- | 
|          |  | Total revenues and other income   |        |  | Total non-currentassets                      | 
|          |  | Breakdown bylocation ofoperations |        |  | Breakdown bylocation of theGroups customers |  |        | Breakdown bylocation of operations | 
|Argentina |  |                                   | 17,769 |  |                                              |  | 17,488 |                                    |  |  | 9,208 | 
|Abroad    |  |                                   | 759    |  |                                              |  | 1,040  |                                    |  |  | 661   | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |       | 
|Total     |  |                                   | 18,528 |  |                                              |  | 18,528 |                                    |  |  | 9,869 | 
|          |  |                                   |        |  |                                              |  |        |                                    |  |  |       | 



F-74



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##### Table of Contents

TELECOM ARGENTINA S.A.





Note 29  Sale of the Equity Interest in Springville

Description of the operation

In
November 2013, Personal received a binding and irrevocable offer for the sale of its total equity interest in Springville, a company incorporated in Montevideo, República Oriental del Uruguay.

On February 10, 2014 Personals Board of Directors decided to approve the sale of such equity interest (representative of 100% of
Springville capital stock) for a total amount of US$ 27,223.

On February 19, 2014 the transfer of the shares was concluded and
Personal collected the mentioned price, equivalent to $0.2. In addition, the agreement includes a series of declarations and guarantees standards for this type of operations made by Personal and the counterpart in respect to Springville, and made by
Personal on itself, and others ones made by the buyers in respect to themselves.

Accounting treatment

In accordance with IFRS 5, investment in Springville was classified as Asset available for sale of December 31, 2013. This
asset was valued at the lower amount between the booked value and the fair value less costs of sale.

The results were presented as
results in discontinuation. Assets, liabilities, operating expenses and cash flows considered by Telecom Group accounts related to Springville, are not material, and in any case reach the minimum magnitude to be segregated in the statement of
financial position, income statement, statement of comprehensive income or statement of cash flow of the Group.

Below are detailed
assets, liabilities, net results and cash flows in discontinuation - net of eliminations- related to Springville.

Assets and liabilities -
discontinued operations



|                                            |  |                         |      |  
|------------------------------------------- |  | ----------------------- | ---- | -
|                                            |  | As ofDecember 31,2013   |     
|                                            |  | (in thousands ofpesos ) |     
|ASSETS                                      |  |                         |      |  
|Current Assets                              |  |                         |      |  
|Cash and cash equivalents                   |  |                         | 3    |  
|Other receivables, net                      |  |                         | 433  |  
|                                            |  |                         |      |  
|Total current assets                        |  |                         | 436  |  
|                                            |  |                         |      |  
|Impairment of assets available for sale     |  |                         | (250 | )
|                                            |  |                         |      |  
|TOTAL ASSETS  DISCONTINUED OPERATIONS      |  |                         | 186  |  
|                                            |  |                         |      |  
|                                            | 
|LIABILITIES                                 |  |                         |      |  
|Current Liabilities                         |  |                         |      |  
|Trade payables                              |  |                         | 143  |  
|Other liabilities                           |  |                         | 57   |  
|                                            |  |                         |      |  
|Total current liabilities                   |  |                         | 200  |  
|                                            |  |                         |      |  
|TOTAL LIABILITIES  DISCONTINUED OPERATIONS |  |                         | 200  |  
|                                            |  |                         |      |  



F-75



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##### Table of Contents

TELECOM ARGENTINA S.A.





Net results - discontinued operations

Income statements



|                                                     |  |                                 |      |   |      |  |      |  
|---------------------------------------------------- |  | ------------------------------- | ---- | - | ---- |  | ---- | -
|                                                     |  | For the years endedDecember 31, |     
|                                                     |  | (in thousands of pesos)         |     
|                                                     |  | 2013                            |      |   | 2012 | 
|Fees for services                                    |  |                                 | (157 | ) |      |  | (162 | )
|Rental and maintenance expenses                      |  |                                 | (166 | ) |      |  | (282 | )
|Taxes                                                |  |                                 | (3   | ) |      |  | (19  | )
|Energy, water and others                             |  |                                 | (15  | ) |      |  | (43  | )
|Other operating expenses                             |  |                                 | (14  | ) |      |  | (19  | )
|                                                     |  |                                 |      |   |      |  |      |  
|Operating losses before depreciation                 |  |                                 | (355 | ) |      |  | (525 | )
|Depreciation of PP&E                                 |  |                                 |     |   |      |  | (98  | )
|                                                     |  |                                 |      |   |      |  |      |  
|Operating losses                                     |  |                                 | (355 | ) |      |  | (623 | )
|Finance income  Exchange differences                |  |                                 | 38   |   |      |  | 17   |  
|Finance expenses  Exchange differences              |  |                                 | (17  | ) |      |  | (6   | )
|                                                     |  |                                 |      |   |      |  |      |  
|Losses before income tax expense                     |  |                                 | (334 | ) |      |  | (612 | )
|Income tax expense                                   |  |                                 | (2   | ) |      |  | (7   | )
|                                                     |  |                                 |      |   |      |  |      |  
|Net losses for the year                              |  |                                 | (336 | ) |      |  | (619 | )
|                                                     |  |                                 |      |   |      |  |      |  
|Impairment of assets available for sale              |  |                                 | (250 | ) |      |  |     |  
|                                                     |  |                                 |      |   |      |  |      |  
|Net losses  discontinued operations                 |  |                                 | (586 | ) |      |  | (619 | )
|                                                     |  |                                 |      |   |      |  |      |  
|Currency translation adjustments (non-taxable)       |  |                                 | 89   |   |      |  | 115  |  
|                                                     |  |                                 |      |   |      |  |      |  
|Total comprehensive income  discontinued operations |  |                                 | (497 | ) |      |  | (504 | )
|                                                     |  |                                 |      |   |      |  |      |  

Cash Flows - discontinued operations



|                                                                                       |  |                                 |     |   |      |  |      |  
|-------------------------------------------------------------------------------------- |  | ------------------------------- | --- | - | ---- |  | ---- | -
|                                                                                       |  | For the years endedDecember 31, |    
|                                                                                       |  | (in thousands of pesos)         |    
|                                                                                       |  | 2013                            |     |   | 2012 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                   |  |                                 |     |   |      |  |      |  
|                                                                                       |  |                                 |     |   |      |  |      |  
|Total cash flows used by operating activities                                          |  |                                 | (90 | ) |      |  | (523 | )
|                                                                                       |  |                                 |     |   |      |  |      |  
|                                                                                       |  |                                 |     |   |      |  |      |  
|                                                                                       |  |                                 |     |   |      |  |      |  
|NET FOREIGN EXCHANGE DIFFERENCES AND CURRENCY TRANSLATION ON CASH AND CASH EQUIVALENTS |  |                                 | 16  |   |      |  | 89   |  
|                                                                                       |  |                                 |     |   |      |  |      |  
|                                                                                       |  |                                
|DECREASE IN CASH AND CASH EQUIVALENTS                                                  |  |                                 | (74 | ) |      |  | (434 | )
|CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR                                 |  |                                 | 77  |   |      |  | 511  |  
|                                                                                       |  |                                 |     |   |      |  |      |  
|CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR                                       |  |                                 | 3   |   |      |  | 77   |  
|                                                                                       |  |                                 |     |   |      |  |      |  

Note 30  Quarterly consolidated information (unaudited information)



|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|----------------- |  | -------- | ------ |  | ------------------------- |  | ----- | --------------- |  |  | --------------------------------- |  |  | --------- | --- | - | ----------------------------------------- |  | ----- |  |  |  | ----- | 
|Quarter           |  | Revenues |        |  | Operatingincome beforeD&A |  |       | Operatingincome |  |  | Financial Results,net (loss) gain |  |  | Netincome |     |   | Net incomeattributableto TelecomArgentina | 
|Fiscal year 2013: |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|March 31          |  |          | 6,064  |  |                           |  | 1,799 |                 |  |  | 1,115                             |  |  |           | 135 |   |                                           |  | 813   |  |  |  | 802   | 
|June 30           |  |          | 6,649  |  |                           |  | 1,825 |                 |  |  | 945                               |  |  |           | 79  |   |                                           |  | 662   |  |  |  | 652   | 
|September 30      |  |          | 7,114  |  |                           |  | 1,930 |                 |  |  | 1,203                             |  |  |           | 163 |   |                                           |  | 886   |  |  |  | 870   | 
|December 31       |  |          | 7,460  |  |                           |  | 2,010 |                 |  |  | 1,255                             |  |  |           | 151 |   |                                           |  | 893   |  |  |  | 878   | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|                  |  |          | 27,287 |  |                           |  | 7,564 |                 |  |  | 4,518                             |  |  |           | 528 |   |                                           |  | 3,254 |  |  |  | 3,202 | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|Fiscal year 2012: |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|March 31          |  |          | 5,126  |  |                           |  | 1,647 |                 |  |  | 1,033                             |  |  |           | 61  |   |                                           |  | 708   |  |  |  | 698   | 
|June 30           |  |          | 5,254  |  |                           |  | 1,492 |                 |  |  | 849                               |  |  |           | 51  |   |                                           |  | 586   |  |  |  | 577   | 
|September 30      |  |          | 5,645  |  |                           |  | 1,587 |                 |  |  | 921                               |  |  |           | 47  |   |                                           |  | 629   |  |  |  | 616   | 
|December 31       |  |          | 6,092  |  |                           |  | 1,844 |                 |  |  | 1,163                             |  |  |           | 70  |   |                                           |  | 809   |  |  |  | 794   | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|                  |  |          | 22,117 |  |                           |  | 6,570 |                 |  |  | 3,966                             |  |  |           | 229 |   |                                           |  | 2,732 |  |  |  | 2,685 | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|Fiscal year 2011: |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|March 31          |  |          | 4,134  |  |                           |  | 1,431 |                 |  |  | 958                               |  |  |           | 19  |   |                                           |  | 640   |  |  |  | 634   | 
|June 30           |  |          | 4,450  |  |                           |  | 1,474 |                 |  |  | 971                               |  |  |           | (2  | ) |                                           |  | 636   |  |  |  | 627   | 
|September 30      |  |          | 4,775  |  |                           |  | 1,496 |                 |  |  | 934                               |  |  |           | 21  |   |                                           |  | 616   |  |  |  | 609   | 
|December 31       |  |          | 5,139  |  |                           |  | 1,592 |                 |  |  | 994                               |  |  |           | 42  |   |                                           |  | 650   |  |  |  | 643   | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 
|                  |  |          | 18,498 |  |                           |  | 5,993 |                 |  |  | 3,857                             |  |  |           | 80  |   |                                           |  | 2,542 |  |  |  | 2,513 | 
|                  |  |          |        |  |                           |  |       |                 |  |  |                                   |  |  |           |     |   |                                           |  |       |  |  |  |       | 



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##### Table of Contents

TELECOM ARGENTINA S.A.





Note 31  Restrictions on distribution of profits and dividends

(a) Restrictions on distribution of profits

Under the LSC, the by-laws of the Company and rules and regulations of the CNV, a minimum of 5% of net income for the year in accordance with
the statutory books, plus/less previous years adjustments and accumulated losses, if any, must be appropriated by resolution of the shareholders to a legal reserve until such reserve reaches 20% of the outstanding capital (common stock plus
inflation adjustment of common stock).

As provided RG No. 609/12 of the CNV, since the fiscal year 2012, positive retained earnings
generated by the adoption of IFRS ($370 for Telecom Argentina), will be reassigned to a Special Reserve that can only be unaffected for its capitalization or to absorb negative retained earnings. The constitution of the Special Reserve was approved
by the Ordinary Annual Shareholders Meeting that considered the consolidated financial statements for fiscal year 2012 for a total amount of $351.

(b) Dividends

The
Company is able to distribute dividends up to the limit of retained earnings determined under the LSC, and earlier Constitution of the Legal reserve. The retained earnings as of 31 December, 2013 are positive and amounted to $3,202.



|                                                                                                                       |  |      |           |  |      |  |     |      |  |  |     | 
|---------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- |  | ---- |  | --- | ---- |  |  | --- | 
|                                                                                                                       |  | 2013 |           |  | 2012 |  |     | 2011 | 
|                                                                                                                       |  |      |          
|Dividends declared and paid by Telecom Argentina during the year ($1.03, $0.82 and $0.93 peso per share, respectively) |  |      | (*) 1,000 |  |      |  | 807 |      |  |  | 915 | 
|                                                                                                                       |  |      |           |  |      |  |     |      |  |  |     | 
|                                                                                                                       |  |      |          
|Proposed for approval at the Annual General Meeting (not recognized as a liability as at December 31)                  |  |      | (**)      |  |      |  |    |      |  |  | 807 | 
|                                                                                                                       |  |      |           |  |      |  |     |      |  |  |     | 



|(*) | By reversal of the reserve for future cash dividends
|--- | ----------------------------------------------------

|(**) | As of the date of the issuance of these consolidated financial statements the Board of Directors of the Company has resolved to defer the proposal of allocation of the retained earnings to the Annual Shareholders
meeting.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 32  Subsequent events as of December 31, 2013

Sale of the equity interest on Springville

On February 10, 2014 Personals Board of Directors decided to approve the sale of such equity interest (representative of 100% of
Springville capital stock) for a total amount of US$ 27,223.

According to the terms and conditions of the offer accepted by Personal, on
February 19, 2014 the transfer of the shares was concluded and Personal collected the mentioned price, equivalent to $0.2. Further information about this operation and its accounting effects is described in Note 29 to these consolidated
financial statements.



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##### Table of Contents

EXHIBIT INDEX



|     |  |                                                                                                                                                                                                                                                                                                                 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|1.1  |  | Estatutos (bylaws) of Telecom Argentina, as amended (English translation). (incorporated by reference to Exhibit 1.1 to Telecom Argentinas Annual Report on Form 20-F for year ended December 31, 2010 dated
June 29, 2011).                                                                                   
|     | 
|4.1  |  | Deposit Agreement, dated November 8, 1994 (incorporated by reference to Telecoms registration statement on Form F-6 (No. 333-07452)).                                                                                                                                                                          
|     | 
|4.2  |  | Form of Amendment No. 1 to Deposit Agreement, dated August 28, 1997 (incorporated by reference to Telecoms registration statement on Form F-6 (No. 333-07452)).                                                                                                                                                
|     | 
|8.1  |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                           
|     | 
|12.1 |  | Certification of Stefano De Angelis of Telecom Argentina S.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                        
|     | 
|12.2 |  | Certification of Adrián Calaza of Telecom Argentina S.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                             
|     | 
|13.1 |  | Certification of Stefano De Angelis and Adrián Calaza pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                    
|     | 
|15.1 |  | Amended and Restated Shareholders Agreement between Telecom Italia S.p.A., Telecom Italia International N.V. and W de Argentina  Inversiones S.L. dated August 5, 2010 (Shareholders Agreement)
(incorporated by reference to Exhibit 3 to Telecom Italia S.p.A.s Schedule 13D filed on October 22, 2010).
|     | 
|15.2 |  | First Amendment to the Shareholders Agreement dated October 13, 2010 (incorporated by reference to Exhibit 4 to Telecom Italia S.p.A.s Schedule 13D filed on October 22, 2010).                                                                                                                               
|     | 
|15.3 |  | Second Amendment to the Shareholders Agreement dated March 9, 2011 (incorporated by reference to Exhibit 3 to Telecom Italia S.p.A.s Schedule 13D/A filed on March 10, 2011).                                                                                                                                 
|     | 
|15.4 |  | Third Amendment to the Shareholders Agreement dated November 13, 2013 (incorporated by reference to Exhibit 6 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).                                                                                                                             
|     | 
|15.5 |  | Mutual Shareholder Release to the Shareholders Agreement dated November 13, 2013 (incorporated by reference to Exhibit 7 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).                                                                                                                  
|     | 
|15.6 |  | Deed of Adherence to the Shareholders Agreement dated November 13, 2013 ((incorporated by reference to Exhibit 8 to Telecom Italia S.p.A.s Schedule 13D filed on November 14, 2013).