Telecom Argentina 4Q25: Results Support Credit Despite Integration Pressures
Revenue growth and refinancing strengthen the credit profile, though TMA EBITDA contracted sequentially and regulatory risk remains
We maintain our Overweight recommendation on Telecom Argentina (B2/B-/B), but with a revised preference across the curve following the January 2026 refinancing and the repricing of the front end. We continue to view the acquisition of Telefónica Móviles Argentina as strategically positive for the credit over the medium term, as it expands Telecom’s scale across mobile and broadband services, strengthens its competitive position in Argentina, and should support operating efficiencies as the integration progresses. At the same time, the 4Q25 results also show that margin normalization is likely to remain gradual rather than immediate, particularly at the acquired operations.
Operational performance in 4Q25 remained broadly resilient. Revenue growth was supported by the consolidation of TMA and higher ARPU across mobile, broadband, and Pay TV services, while leverage improved and free cash flow was healthy. Profitability softened sequentially, reflecting higher operating costs and integration-related pressures, but the underlying trajectory remains constructive. TMA’s EBITDA margin improved materially to 22.2% in 2025 from 11.0% in 2024, suggesting that the efficiency plan is beginning to gain traction even if quarterly progress is not linear.
From a credit perspective, the most important development is the improvement in the maturity profile. The US$600 million issuance of 2036 notes in January 2026, together with the repayment of acquisition-related loans and the redemption of the July 2026 notes, materially reduced near-term refinancing pressure. We view this as a meaningful credit positive, given that weak liquidity had been one of the main constraints in the Telecom story. While the transaction does not eliminate liquidity risk entirely, as short-term debt remains elevated and the company continues to operate without committed revolving credit facilities, the maturity profile is now more manageable. We also note that a significant portion of the remaining near-term obligations is denominated in local currency or dollar-linked instruments, which tend to be easier to refinance than hard-currency bonds.
