Note 28 – Segment information
Until 2016, the Telecom Group carried out its activities through six companies grouped in operating segments. While the segment information as of December 31, 2017, includes additionally Tuves Paraguay’s operations corresponding to 2°semester of 2017, which were included in “Mobile Services – Núcleo”.
On January 1, 2018, the Corporate Reorganization described in Note 31 was effective. Although Personal’s operations were absorbed by Telecom, since that date the Management keeps a separate assessment of the operations carried out by Personal. As a consequence, the segment information for year 2017 shows the operations of Mobile Services – Personal as an independent reportable segment.
The Telecom Group 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.
Segment financial information for the years 2017, 2016 and 2015 was as follows:
|
For the year ended December 31, 2017 |
|
q |
Income statement information |
|
|
Fixed |
Mobile Services |
|
|
||
|
|
Services |
Personal |
Núcleo |
Subtotal |
Eliminations |
Total |
|
Total revenues and other income (1) |
22,952 | 42,128 | 2,997 | 45,125 | (2,758) | 65,319 |
|
Employee benefit expenses and severance payments |
(9,625) | (2,876) | (217) | (3,093) |
- |
(12,718) |
|
Interconnection costs and other telecommunication charges |
(1,200) | (3,537) | (220) | (3,757) | 1,809 | (3,148) |
|
Fees for services, maintenance, materials and supplies |
(3,546) | (3,384) | (280) | (3,664) | 610 | (6,600) |
|
Taxes and fees with the Regulatory Authority |
(1,581) | (4,413) | (113) | (4,526) |
- |
(6,107) |
|
Commissions |
(417) | (2,965) | (344) | (3,309) | 95 | (3,631) |
|
Cost of equipments and handsets |
(524) | (6,035) | (125) | (6,160) |
- |
(6,684) |
|
Advertising |
(194) | (915) | (109) | (1,024) |
- |
(1,218) |
|
Cost of VAS |
(45) | (614) | (215) | (829) |
- |
(874) |
|
Provisions |
(183) | (406) | (1) | (407) |
- |
(590) |
|
Bad debt expenses |
(193) | (844) | (76) | (920) |
- |
(1,113) |
|
|
|
|
|
|
|
|
|
Other operating expenses |
(1,594) | (1,740) | (190) | (1,930) | 244 | (3,280) |
|
|
|
|
|
|
|
|
|
Operating income before D&A |
3,850 | 14,399 | 1,107 | 15,506 |
- |
19,356 |
|
Depreciation of PP&E |
(2,072) | (2,325) | (642) | (2,967) |
- |
(5,039) |
|
Amortization of intangible assets |
(164) | (1,636) | (89) | (1,725) |
- |
(1,889) |
|
|
|
|
|
|
|
|
|
Disposals and impairment of PP&E |
(21) | (295) |
- |
(295) |
- |
(316) |
|
|
|
|
|
|
|
|
|
Operating income |
1,593 | 10,143 | 376 | 10,519 |
- |
12,112 |
|
|
|
|
|
|
|
|
|
Financial results, net |
|
|
|
|
|
(486) |
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
|
|
|
11,626 |
|
|
|
|
|
|
|
|
|
Income tax expense, net |
|
|
|
|
|
(3,902) |
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
7,724 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|||||
|
Net income attributable to Telecom Argentina |
7,630 | |||||
|
|
|
|||||
|
Net income attributable to non-controlling interest |
94 | |||||
|
|
|
|||||
|
|
7,724 | |||||
|
|
|
|||||
|
|
||||||
|
(1) |
||||||
|
|
||||||
|
Service revenues |
19,797 | 34,289 | 2,885 | 37,174 |
- |
56,971 |
|
|
|
|
|
|
|
|
|
Equipment sales |
663 | 7,446 | 106 | 7,552 |
- |
8,215 |
|
|
|
|
|
|
|
|
|
Other income |
71 | 62 |
- |
62 |
- |
133 |
|
|
|
|
|
|
|
|
|
Subtotal third party revenues and other income |
20,531 | 41,797 | 2,991 | 44,788 |
- |
65,319 |
|
|
|
|
|
|
|
|
|
Intersegment revenues |
2,421 | 331 | 6 | 337 | (2,758) |
- |
|
|
|
|
|
|
|
|
|
Total revenues and other income |
22,952 | 42,128 | 2,997 | 45,125 | (2,758) | 65,319 |
|
|
|
|
|
|
|
|
|
|
||||||
|
q |
Balance sheet information |
|
|
||||||
|
PP&E, net |
15,039 | 10,901 | 2,598 | 13,499 |
- |
28,538 |
|
Intangible assets, net |
406 | 6,482 | 211 | 6,693 | (1) | 7,098 |
|
Capital expenditures on PP&E (a) |
5,254 | 4,161 | 490 | 4,651 |
- |
9,905 |
|
Capital expenditures on intangible assets (b) |
153 | 1,032 | 53 | 1,085 |
- |
1,238 |
|
Total capital expenditures in PP&E and intangible assets (a)+ (b) |
5,407 | 5,193 | 543 | 5,736 |
- |
11,143 |
|
Total additions on PP&E and intangible assets |
6,886 | 5,173 | 517 | 5,690 |
- |
12,576 |
|
Net financial debt |
|
|
|
|
|
(3,260) |
|
q |
Geographic information |
|
|
Total revenues and other income |
Total non-current assets |
|
|
|
Breakdown by |
Breakdown by |
Breakdown by location of operations |
|
Argentina |
62,012 | 61,696 | 36,429 |
|
|
|
|
|
|
Abroad |
3,307 | 3,623 | 2,921 |
|
|
|
|
|
|
Total |
65,319 | 65,319 | 39,350 |
|
|
|
|
|
|
|
|
For the year ended December 31, 2016 |
|
q |
Income statement information |
|
|
Fixed |
Mobile Services |
|
|
||
|
|
Services |
Personal |
Núcleo |
Subtotal |
Eliminations |
Total |
|
Total revenues and other income (1) |
17,027 | 35,766 | 2,649 | 38,415 | (2,119) | 53,323 |
|
Employee benefit expenses and severance payments |
(7,220) | (2,381) | (199) | (2,580) |
- |
(9,800) |
|
Interconnection costs and other telecommunication charges |
(961) | (2,721) | (200) | (2,921) | 1,329 | (2,553) |
|
Fees for services, maintenance, materials and supplies |
(2,311) | (2,975) | (229) | (3,204) | 509 | (5,006) |
|
Taxes and fees with the Regulatory Authority |
(1,118) | (3,925) | (82) | (4,007) |
- |
(5,125) |
|
Commissions |
(327) | (3,286) | (295) | (3,581) | 59 | (3,849) |
|
Cost of equipments and handsets |
(136) | (5,749) | (303) | (6,052) |
- |
(6,188) |
|
Advertising |
(126) | (644) | (104) | (748) |
- |
(874) |
|
Cost of VAS |
(53) | (1,329) | (117) | (1,446) |
- |
(1,499) |
|
Provisions |
(78) | (109) |
- |
(109) |
- |
(187) |
|
Bad debt expenses |
(152) | (951) | (125) | (1,076) |
- |
(1,228) |
|
|
|
|
|
|
|
|
|
Other operating expenses |
(1,276) | (1,378) | (158) | (1,536) | 222 | (2,590) |
|
|
|
|
|
|
|
|
|
Operating income before D&A |
3,269 | 10,318 | 837 | 11,155 |
- |
14,424 |
|
Depreciation of PP&E |
(1,686) | (2,088) | (584) | (2,672) |
- |
(4,358) |
|
Amortization of intangible assets |
(211) | (1,526) | (103) | (1,629) |
- |
(1,840) |
|
|
|
|
|
|
|
|
|
Disposals and impairment of PP&E |
1 | (384) |
- |
(384) |
- |
(383) |
|
|
|
|
|
|
|
|
|
Operating income |
1,373 | 6,320 | 150 | 6,470 |
- |
7,843 |
|
|
|
|
|
|
|
|
|
Financial results, net |
|
|
|
|
|
(2,244) |
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
|
|
|
5,599 |
|
|
|
|
|
|
|
|
|
Income tax expense, net |
|
|
|
|
|
(1,594) |
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
4,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Telecom Argentina |
|
|
|
|
|
3,975 |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest |
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,005 |
|
|
|
|
|
|
|
|
(1)
|
Service revenues |
14,923 | 28,049 | 2,382 | 30,431 |
- |
45,354 |
|
Equipment sales |
91 | 7,535 | 260 | 7,795 |
- |
7,886 |
|
|
|
|
|
|
|
|
|
Other income |
66 | 16 | 1 | 17 |
- |
83 |
|
|
|
|
|
|
|
|
|
Subtotal third party revenues and other income |
15,080 | 35,600 | 2,643 | 38,243 |
- |
53,323 |
|
|
|
|
|
|
|
|
|
Intersegment revenues |
1,947 | 166 | 6 | 172 | (2,119) |
- |
|
|
|
|
|
|
|
|
|
Total revenues and other income |
17,027 | 35,766 | 2,649 | 38,415 | (2,119) | 53,323 |
|
q |
Balance sheet information |
|
PP&E, net |
11,468 | 9,541 | 2,156 | 11,697 |
- |
23,165 |
|
Intangible assets, net |
429 | 7,086 | 78 | 7,164 | (1) | 7,592 |
|
Capital expenditures on PP&E (a) |
3,820 | 5,249 | 563 | 5,812 |
- |
9,632 |
|
Capital expenditures on intangible assets (b) |
197 | 1,481 | 76 | 1,557 |
- |
1,754 |
|
Total capital expenditures in PP&E and intangible assets (a)+ (b) |
4,017 | 6,730 | 639 | 7,369 |
- |
11,386 |
|
Total additions on PP&E and intangible assets |
4,525 | 6,708 | 627 | 7,335 |
- |
11,860 |
|
Net financial debt |
|
|
|
|
- |
(5,892) |
|
q |
Geographic information |
|
|
Total revenues and other income |
Total non-current assets |
|
|
|
Breakdown by |
Breakdown by |
Breakdown by |
|
Argentina |
50,406 | 49,958 | 29,832 |
|
|
|
|
|
|
Abroad |
2,917 | 3,365 | 2,520 |
|
|
|
|
|
|
Total |
53,323 | 53,323 | 32,352 |
|
|
|
|
|
|
|
|
For the year ended December 31, 2015 |
|
q |
Income statement information |
|
|
Fixed |
Mobile Services |
|
|
||
|
|
Services |
Personal |
Núcleo |
Subtotal |
Eliminations |
Total |
|
Total revenues and other income (1) |
12,609 | 28,203 | 1,717 | 29,920 | (1,989) | 40,540 |
|
Employee benefit expenses and severance payments |
(5,268) | (1,856) | (129) | (1,985) |
- |
(7,253) |
|
Interconnection costs and other telecommunication charges |
(719) | (2,686) | (154) | (2,840) | 1,389 | (2,170) |
|
Fees for services, maintenance, materials and supplies |
(1,769) | (2,417) | (152) | (2,569) | 419 | (3,919) |
|
Taxes and fees with the Regulatory Authority |
(818) | (3,071) | (54) | (3,125) |
- |
(3,943) |
|
Commissions |
(268) | (2,774) | (199) | (2,973) | 48 | (3,193) |
|
Cost of equipments and handsets |
(82) | (4,328) | (185) | (4,513) |
- |
(4,595) |
|
Advertising |
(108) | (628) | (78) | (706) |
- |
(814) |
|
Cost of VAS |
(38) | (1,136) | (82) | (1,218) |
- |
(1,256) |
|
Provisions |
(17) | (96) |
- |
(96) |
- |
(113) |
|
Bad debt expenses |
(79) | (462) | (23) | (485) |
- |
(564) |
|
|
|
|
|
|
|
|
|
Other operating expenses |
(934) | (960) | (93) | (1,053) | 133 | (1,854) |
|
|
|
|
|
|
|
|
|
Operating income before D&A |
2,509 | 7,789 | 568 | 8,357 |
- |
10,866 |
|
Depreciation of PP&E |
(1,341) | (1,379) | (326) | (1,705) |
- |
(3,046) |
|
Amortization of intangible assets |
(185) | (1,141) | (66) | (1,207) |
- |
(1,392) |
|
|
|
|
|
|
|
|
|
Disposals and impairment of PP&E |
(91) | (109) | 1 | (108) |
- |
(199) |
|
|
|
|
|
|
|
|
|
Operating income |
892 | 5,160 | 177 | 5,337 |
- |
6,229 |
|
|
|
|
|
|
|
|
|
Financial results, net |
|
|
|
|
|
(1,102) |
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
|
|
|
5,127 |
|
|
|
|
|
|
|
|
|
Income tax expense, net |
|
|
|
|
|
(1,692) |
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
3,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Telecom Argentina |
|
|
|
|
|
3,403 |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest |
|
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,435 |
|
|
|
|
|
|
|
|
(1)
|
Service revenues |
10,675 | 22,258 | 1,547 | 23,805 |
- |
34,480 |
|
Equipment sales |
61 | 5,796 | 159 | 5,955 |
- |
6,016 |
|
|
|
|
|
|
|
|
|
Other income |
39 | 5 |
- |
5 |
- |
44 |
|
|
|
|
|
|
|
|
|
Subtotal third party revenues and other income |
10,775 | 28,059 | 1,706 | 29,765 |
- |
40,540 |
|
|
|
|
|
|
|
|
|
Intersegment revenues |
1,834 | 144 | 11 | 155 | (1,989) |
- |
|
|
|
|
|
|
|
|
|
Total revenues and other income |
12,609 | 28,203 | 1,717 | 29,920 | (1,989) | 40,540 |
|
|
|
|
|
|
|
|
|
q |
Balance sheet information |
|
PP&E, net |
9,280 | 6,899 | 1,784 | 8,683 |
- |
17,963 |
|
Intangible assets, net |
443 | 7,131 | 86 | 7,217 | (1) | 7,659 |
|
Capital expenditures on PP&E (a) |
2,846 | 3,157 | 393 | 3,550 |
- |
6,396 |
|
Capital expenditures on intangible assets (b) |
233 | 3,395 | 76 | 3,471 |
- |
3,704 |
|
Total capital expenditures in PP&E and intangible assets (a)+ (b) |
3,079 | 6,552 | 469 | 7,021 |
- |
10,100 |
|
Total additions on PP&E and intangible assets |
3,514 | 7,158 | 490 | 7,648 |
- |
11,162 |
|
Net financial asset (debt) |
|
|
|
|
|
(2,277) |
|
q |
Geographic information |
|
|
Total revenues and other income |
Total non-current assets |
|
|
|
Breakdown by |
Breakdown by |
Breakdown by |
|
Argentina |
38,677 | 38,388 | 24,844 |
|
|
|
|
|
|
Abroad |
1,863 | 2,152 | 2,129 |
|
|
|
|
|
|
Total |
40,540 | 40,540 | 26,973 |
|
|
|
|
|