1Q08

1Q08).Data Transmission and InternetData transmission revenues amounted to P$60 million (+11% vs. 1Q08), generatedby the offering of new solutions to the corporate market geared towardsaddressing internal necessities related to infrastructure. This has enhancedits position as an integrated provider of innovative ICT solutions(connectivity, housing and hosting).Revenues related to Internet reached P$235 million (+77 million or 49% vs.1Q08), mainly due to the substantial expansion of broadband service, driven bybetter network coverage, commercial promotions and innovation of the serviceportfolio.As of March 31, 2009, Telecom reached 1.1 million ADSL customers (+27% vs.1Q08). Lines with these types of connections represent approximately 25% ofTelecom's fixed-lines in service.Data Transmission and Internet both increased their contribution to netconsolidated revenues reaching 10% participation and representing 30% of thefixed telephony segment revenues.Mobile ServicesDuring the quarter, clients have significantly increased reaching 15 millionsubscribers as of the end of March 2009 representing an increase of 0.6million since December 2008 and 2.4 million since March 2008.During 1Q09, net revenues reached P$1,850 million (+14% vs. 1Q08).Telecom Personal in ArgentinaAs of the end of March 2009, Personal reached 13.2 million subscribers inArgentina (+2.3 million, or +21% vs. 1Q08) that allowed the Company to enhanceits market position and strengthens its potential for future revenues growth.The strong increase in net additions (+0.6 million subscribers since December2008) was sustained (vs.

+0.2 million net additions in 1Q08).Approximately 67% of the overall subscriber base is prepaid and 33% ispostpaid (including "cuentas claras" plans).Revenues totaled P$1,757 million (+P$247 million or +16% vs. 1Q08), sustainedby the increase in overall voice traffic minutes by 22% vs 1Q08 and invalue-added services (VAS) The VAS increased 28% vs. 1Q08 and represented 31%of service revenues that reached P$1,596 million (17% vs 1Q08). Inparticular, SMS traffic rose to a monthly average of 990 million messages in1Q08 to 2,470 million (+149% vs. 1Q08) preserving service quality levels.As a consequence of traffic and the higher usage of value-added services, theAverage Monthly Revenue per User ("ARPU") was stable around P$40 in 1Q09, thesame level as 1Q08.Personal´s contribution to consolidated margins has improved since 1Q08despite its commercial activity centered in the expansion of its subscriberbase and the retention efforts to the high-value segment.Furthermore, the first Mobile WI-FI service with 3G technology was launched,as well as together with Microsoft and Gemalto, the SIM Messenger, allowingclients the access to Windows Live Messenger from their handsets,independently of which mobile device or plan they have. All these actions werefocused on the strategy of enabling services to leverage the increase in VAS.Telecom Personal in ParaguayBy the end of March 2009, Nucleo´s subscriber base reached approximately 1.8million customers (+8% vs 1Q08).

Prepaid and Postpaid customers represented90% and 10%, respectively.Personal's controlled subsidiary generated revenues equivalent to P$93 millionduring 1Q09 (-13% vs. 1Q08).The global crisis affected the Paraguayan economy, where the lower level ofactivity and depreciation of its currency affected Nucleo´s operations.Consolidated Operating CostsThe Cost of Services Provided, Administrative Expenses and Selling Expensestotaled P$2,204 million in 1Q09, which represents an increase of P$258million, or +13%, vs 1Q08. This increase in costs is a consequence of theincrease in revenues, inflationary effects on the costs structure, and higherexpenses related to the competition in the Mobile and internet businesses.The cost breakdown is as follows:- Salaries and Social Security Contributions totaled P$317 million (+17% vs.1Q08), affected by increases in salaries agreed in 2008 and social securityimposed by law. Regarding personnel, the decrease in fixed segment (-379employees vs. 1Q08) was compensated by the incorporation of 269 employees inthe same period in the mobile segment. The total headcount at the end of 1Q09reached 15.309 employees.- Taxes reached P$228 million (+15% vs. 1Q08), influenced mainly by higherrates in turnover taxes and higher volume of revenues.- Network access costs (includes TLRD, Roaming, Interconnection, internationalsettlement charges and lease of circuits) amounted to P$365 million (+14% vs.1Q08) generated by higher traffic between mobile operators that accompany theincrease in revenues.- Agents, prepaid card commissions and other commissions were P$240 million(+14% vs.

1Q08), mainly due to the increase in commissions paid to commercialagents and card distribution costs, as a higher volume of revenues wasregistered.- Advertising amounted to P$78 million (+7% vs. 1Q08) oriented towardssupporting the commercial activity in mobile services and Internet, and tostrengthen the brand position of the Telecom Group.- Cost of handsets sold totaled P$263 million (+31% vs. 1Q08) mainly due to anincrease in net additions and in the number of upgraded terminals.- Depreciation of Fixed and Intangible Assets reached P$292 million (-15% vs.1Q08) Fixed-line telephony totaled P$189 million (-2% vs 1Q08) and mobileservices P$103 million (-33% vs. 1Q08), as TDMA technology depreciationcharges ended in March 2008.- Others Costs (includes maintenance, materials and supplies, fees forservices, bad debt expense, cost of directories publishing, transportation andfreight, insurance, energy, water and others, rental expense and internationaland satellite connectivity) totaled P$421 million (+28% vs 1Q08). Thisincrease was due to the inflationary effects on related services and highercontingencies for bad debt expenses.Consolidated Financial and Holding ResultsFinancial and Holding Results resulted in a loss of P$94 million, an increaseof P$34 million vs 1Q08.