Nortel Inversora S.A. Announces the Payment of Provisional Cash Dividends

BUENOS AIRES, Argentina, Oct. 24, 2016

The following amounts will be distributed:

a) to the Class B preferred shares, pursuant to the terms of issuance of such shares, an aggregate provisional dividend of AR$ 264,379,755.60, which amounts to AR$ 179.7945231918 for each Class B preferred share, representing 1,797.945231918 % of its par value (AR$10), and AR$ 8.9897261596 per ADR; and

b) to the shares of common stock, an aggregate provisional dividend of AR$ 275,620,244.40, which amounts to AR$ 51.707234804 for each share of common stock, representing 517.07234804 % of its par value (AR$10).

Pursuant to the terms and conditions of issuance of the "Class B" Preferred Shares, the provisional dividend approved for the holders of "Class B" Preferred Shares represents 48.959214% on the provisional dividend referred to in paragraphs (a) and (b) of this notice, considered in the aggregate, while the provisional dividend approved for the holders of shares of common stock represents the remaining 51.040786%

For stockholders, Record Date is November 4, 2016 and Payment Date is as from November 7, 2016.

For holders of American Depositary Receipts (ADRs), the Record Date is also November 4, 2016 and Payment Date is as from November 7, 2016.