Telecom 3Q25: Stronger Margins and a More Constructive Outlook

Good results and improving expectations underpin our view, while regulatory hurdles around the acquisition remain a central risk

We continue to view Telecom’s acquisition of TMA as a potentially transformative transaction for the local telecom landscape, with clear synergies in mobile and broadband services. We think operating performance is set to improve as the Telefónica integration progresses and cost-reduction initiatives continue to support margins, reinforced by quarterly ARPU increases across the businesses in real terms as inflation becomes more manageable. We also view the recent political results in the October mid-term elections as having significantly reduced near-term political risk, which should incentivize investment and improve access to international capital markets. This in turn supports broader currency stability, helping to mitigate, to some degree, Telecom’s currency mismatch, bolstering macroeconomic confidence, and reducing refinancing risk, which remains a critical consideration given the company’s weak liquidity profile.