40857 - Telecom Argentina II

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Summary of Investment Information

Project Number

40857

Company Name

TELECOM ARGENTINA S.A.

Date SPI Disclosed

Dec 7, 2018

Country

Argentina

Region

Latin America and the Caribbean

Projected Board Date

Jan 10, 2019

Environmental Category

B - Limited

Status

Completed

Last Updated Date

Jan 31, 2025

Department

Regional Industry - INF LAC

Industry

Telecommunications and Technology

Previous Events

Approved : Feb 15, 2019
Signed : Mar 4, 2019
Invested : Mar 18, 2019

Sector

Mobile Telephony

Project Description

Telecom Argentina S.A. (“Telecom” or the “Company”) is a leading mobile, cable TV, fixed & wireless broadband and telephony services provider in Argentina. The Company also operates mobile, fixed & wireless broadband businesses in Paraguay and provides cable TV services in Uruguay. Telecom is listed in New York Stock Exchange (“NYSE”) and Buenos Aires Stock Exchange (“BCBA”) with a market capitalization of over US$7.0 billion (as of November 2018).

The project aims to support the Company’s 2019 capex plan, including the continued rollout of its 4G mobile network and further expansion of its fixed broadband services.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	110.0
Equity

Development Impact

Project Outcomes - Availability: This Project will increase the availability of 4G services across Argentina. The increase on the sponsor's 4G Coverage by 28.5% by 2020 suggests a Strong impact if small cities are targeted. Uptake: The Project has the potential to increase the mobile broadband penetration especially in remote/rural areas. More analysis will be conducted to measure the extent of the potential 4G uptake associated with this project. Quality, robustness and capacity: The Project expects to install roughly 4,000 sites providing 4G connectivity across the country by 2022, which represents an increase of 25% (More analysis on the location of these towers will be required). Contribution to Market Creation: Competitiveness - The project can have an impact on competitiveness by introducing the latest technology (4G services) in areas previously unserved/underserved, which others will have to match to remain competitive. Integration - This Project has the potential to increase the online interactions between people, businesses, governments, machines, and processes - More analysis will be required to understand to what extent the size of the digital economy in Argentina will increase as a result of this project.

Financial Additionality: Financing structure: IFC is providing long-term financing to enable Telecom to continue deploying its network and investing in connectivity despite a volatile macroenvironment in the country. IFC's proposed financing is valuable for the Company given the current macro situation which prevents them to get long term financing, which is needed given the long pay-back period (more than 3 years) for the capex investment. Resources Mobilization: IFC will enable the mobilization of financing in commercial terms, enabling the Company to secure enough financing to fund its capex plan and avoid a liquidity crunch to pay off the bridge loan, despite a volatile macro environment. Non-Financial Additionality: Non-commercial risk mitigation: Through its investment, IFC will provide an important validation to other lenders of the long-term sustainability of the Company post-merger with Cablevision, despite short term volatility.

E&S Category Rationale / Risks and Mitigation

The key E&S issues associated with the project are in the potential impacts associated with future mergers or acquisitions, construction of telecommunications infrastructure; labor and working conditions (including employees’ and contractor workers’ occupational health and safety); and pollution prevention and abatement. As E&S risks and impacts are expected to be limited, site-specific, and relatively few, and it is possible to avoid or mitigate any limited adverse impacts that might result, the proposed investment has been classified as a Category B project according to IFC’s Policy on Social and Environmental Sustainability.

Contacts

For Inquiries About the Project, Contact

Telecom Argentina S.A.
Marcelo Iribarne
Head of Capital Markets
+541149683304
miribarne@teco.com.ar
Avenida Alicia Moreau de Justo 50 - Ciudad de Bs. As. - Argentina
https://institucional.telecom.com.ar

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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