Telecom Argentina Posts ARS 56.6 Billion Loss Despite Operating Gains

Telecom Argentina (TEO ) reported a consolidated net loss of 56.6 billion Argentine pesos (ARS) for the third quarter ended September 30, 2026, in results released on November 12, 2026. Operating income before depreciation, amortization and impairment rose 12.5% in real terms to ARS 974.3 billion, but higher impairment charges tied to the Telefónica Móviles Argentina (TMA) acquisition approval process helped produce the bottom-line loss.

Under IAS 29 inflation accounting, which restates the September 2025 comparison for inflation through September 2026, consolidated revenue fell 2.3% to ARS 2.70 trillion. Service revenue declined 1.7% to ARS 2.60 trillion after TMA granted approximately ARS 39.9 billion of extraordinary discounts connected to billing-cycle changes. Excluding those discounts, service revenue would have decreased 0.2%.

Mobile service revenue increased 5.1% to ARS 1.45 trillion and accounted for 56% of service revenue. The margin on operating income before depreciation, amortization and impairment reached 36.1%, up 4.8 percentage points from the prior-year quarter. Operating costs excluding those items fell 9.1% to ARS 1.72 trillion, while labor and severance expense declined 12.8%, providing the cost reduction behind the improved operating profitability.

Impairments and Tax Weigh on Net Results

Depreciation, amortization and impairment increased 57.2% to ARS 1.01 trillion. The rise principally reflected ARS 383.9 billion of impairments related to assets to be divested and licenses to be returned in the TMA approval process, plus ARS 10.8 billion for real estate held for sale. The company said those impairment results did not affect EBITDA or cash flow for the quarter.

Net financial results provided an offset, swinging to an ARS 78.8 billion gain from an ARS 609.4 billion loss a year earlier, mainly because of a larger foreign-exchange gain and lower net interest. Income tax was an ARS 89.5 billion expense, compared with an ARS 134.6 billion benefit in the prior-year quarter, adding to the pressure on net earnings.

Cash generation also moved differently from accounting earnings. Equity free cash flow, based on operating and investing cash flows with specified adjustments, increased 61.6% to ARS 351.0 billion. The company attributed the rise mainly to higher EBITDA and lower interest payments. Capital expenditure climbed 18.6% to ARS 536.7 billion, equivalent to 19.9% of consolidated revenue.

Metrotel Divestiture Advances TMA Approval Process

Telecom Argentina separately disclosed that its board accepted Metrotel’s offer on October 14, 2026. Telecom Argentina and TMA agreed to transfer 6,005,425 mobile customers and 211,566 residential internet customers, together with spectrum-use rights and specified access-network and fiber-to-the-home infrastructure in the Autonomous City of Buenos Aires.

The stated US$450 million consideration combines installment payments for the divested assets with a guaranteed minimum commitment for five years of services under a framework sharing agreement. The companies began transferring the identified assets after October 14. Final approval of the TMA acquisition remains subject to the Argentine Antitrust Tribunal verifying completion of the divestitures and compliance with behavioral obligations.

The quarter separates improved operating profitability and cash generation from the accounting charges and tax expense behind the reported loss. Completion and verification of the Metrotel transaction are now central to resolving the final TMA approval process.