Telecom Argentina Stet – France Telecom (NYSE:TEO) reported higher revenue, expanded profitability and improved leverage for the first half of 2026, supported by the full-period consolidation of Telefónica Móviles Argentina (TMA), operational efficiency measures and continued investment in fiber and 5G infrastructure.
During the earnings call, executives said the company’s reported results include TMA, which was acquired on Feb. 24, 2025. As a result, first-half 2026 includes six months of TMA’s contribution, compared with four months in the year-earlier period.
Revenue Growth and Margin Expansion
Service revenue increased 16% year over year in constant pesos. Excluding TMA, Telecom said service revenue rose nearly 2% in real terms, while its mobile, broadband and pay-TV service revenue grew at a weighted average rate of more than 5%.
Consolidated EBITDA margin reached 35.8% in the first half, up more than 580 basis points from the prior-year period. The improvement included a 1.4-percentage-point benefit from the deconsolidation of Microsistemas following its joint venture with Banco Macro, according to Financial Director Federico Pra.
For Telecom excluding TMA, EBITDA margin was 39.7% for the first half and would have been slightly above 40% excluding higher severance charges. TMA’s standalone EBITDA margin improved to 29.3%, from 22.9% a year earlier. In the second quarter, when both comparison periods included a full quarter of TMA contribution, consolidated EBITDA margin rose to 36.8% from 27.7%.
Pra attributed margin gains in part to lower labor costs from efforts to right-size operations, as well as lower maintenance, materials and supplies costs and call-center automation. Lower commissions, advertising expense and handset costs also contributed.
Subscriber Trends and Digital Services
Telecom’s prepaid mobile base declined 10.1% year over year to 11.4 million accesses, which management attributed to a shorter period before inactive prepaid lines are disconnected. The company said the reduction was concentrated in low-traffic lines and did not affect mobile service revenue.
Postpaid mobile accesses declined 2.5% year over year but increased 1% sequentially to slightly more than 8 million. Postpaid customers accounted for 41% of Telecom’s mobile base, compared with 39% a year earlier.
- Telecom broadband accesses rose 2.7% year over year to about 4.2 million, with fiber-to-the-home accounting for 36% of its fiber broadband base, or more than 1.5 million accesses.
- Personal Flow pay-TV accesses in Argentina increased 6.6% to 3.4 million. Management said demand for sports content during the World Cup supported subscriptions and engagement.
- Personal Flow unique customers reached 1.9 million, an increase of more than 270,000 customers, or 17%, from a year earlier.
- Personal Pay reached 6.1 million onboarded clients, up 20% year over year.
At TMA, postpaid mobile customers rose 2.8% to nearly 9.6 million accesses, while broadband accesses increased 4.6% to more than 1.6 million. Approximately 97% of TMA’s broadband customer base used FTTH technology. Its pay-TV base grew 6.5% to more than 435,000 subscribers.
Capital Spending, Cash Flow and Debt
Capital expenditures totaled nearly ARS 950 billion, or more than $600 million, during the first half, representing 18.6% of revenue. CapEx increased 47% year over year in constant pesos, primarily reflecting fiber expansion and 5G deployment.
Technical investments accounted for 60% of first-half CapEx. The company said it upgraded nearly 1,040 existing sites during the period and expanded its 5G footprint to more than 1,500 sites as of June 30. Installations and customer-premise equipment represented 32% of capital spending, while international operations accounted for 8%.
Free cash flow before dividends and interest payments was about $400 million, an increase of more than $200 million from the first half of 2025, according to the company.
Consolidated operating income was ARS 674 billion, producing an operating margin of 13%, up 800 basis points year over year. Telecom reported consolidated net income of approximately ARS 870 million, compared with a net loss of ARS 100 billion in the prior-year period. Management said the swing was driven largely by exchange-rate effects, as real peso appreciation in the first half of 2026 produced exchange gains on foreign-currency-denominated debt, while peso depreciation had created losses in the prior-year period.
As of June, gross debt was nearly $3.8 billion and cash and equivalents exceeded $600 million, resulting in net debt of $3.1 billion. Net debt to EBITDA improved to 1.36 times from 1.74 times at the end of 2025. The company said liability-management actions extended the average life of its debt to almost five years and that most refinancing efforts planned for the year had already been completed.
About Telecom Argentina Stet – France Telecom (NYSE:TEO)
Telecom Argentina Stet – France Telecom (NYSE:TEO) is an integrated telecommunications provider based in Buenos Aires, Argentina. Originally formed through the 1990 privatization of the state-owned Empresa Nacional de Telecomunicaciones (ENTel), the company was initially backed by Italian state carrier STET and French operator France Télécom. Since its listing on the New York Stock Exchange under the ticker TEO, Telecom Argentina has evolved into one of the country’s principal communications groups, offering a comprehensive portfolio of voice and data services.
The company’s core business activities span fixed-line telephony, mobile services, broadband internet and digital television.
