UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the six-month period ended June 30, 2011

Commission File Number 001-31894

ALESTRA, S. de R.L. de C.V.

(Translation of Registrant’s name into English)

Ave. Lázaro Cárdenas No. 2321, 9th Floor

Col. Residencial San Agustín

San Pedro Garza García N.L. 66260 México

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

Table Of Contents


Cautionary Statement on Forward-Looking Statements			3
Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations			4
Item 2. Unaudited Condensed Consolidated Financial Statements as of June 30, 2011 and for the six-month period ended June 30, 2010 and 2011			F-1

This Form 6-K consists of a Management’s Discussion and Analysis of Financial Condition and Results of Operations and unaudited condensed consolidated financial statements for Alestra, S. de R.L. de C.V. (“Alestra”) and its subsidiaries, Servicios Alestra, S.A. de C.V. (“Servicios Alestra”) and Alestra Telecomunicaciones Inalámbricas, S. de R.L. de C.V. (“Alestra Telecomunicaciones Inalámbricas”), as of June 30, 2011 and for the six-month periods ended June 30, 2010 and 2011.

Mexican Financial Reporting Standards (“Mexican FRS”) requires that financial information starting from January 1, 2008 be presented in nominal Mexican Pesos (“Pesos” or “Ps.”), unless otherwise noted for the convenience of the reader. Please note that some figures in this Form 6-K may not sum due to rounding.

In this report, unless the context otherwise requires, the terms “we,” “us,” “our,” “our company” and “ourselves” mean Alestra and its subsidiaries, Servicios Alestra and Alestra Telecomunicaciones Inalámbricas.

Cautionary Statement on Forward-Looking Statements

This report includes or incorporates forward-looking statements, which include statements with respect to our plans, strategies, beliefs and other statements that are not historical facts. These statements are based on our management’s assumptions and beliefs in light of the information currently available to them. These assumptions and beliefs include information concerning us, as well as the Mexican economy and telecommunications industry.

The assumptions also involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Potential risks and uncertainties include, without limitation:

•

general economic conditions in Mexico and the United States, and any significant economic or political developments in those countries;

•

the competitive nature of providing long distance, data, internet and local services;

•

changes in our regulatory environment, particularly changes in the regulation of the telecommunications industry;

•

the risks associated with our ability to implement our strategy;

•

customer turnover;

•

technological innovations;

•

our need for substantial capital;

•

interest rate levels;

•

performance of financial markets and our ability to refinance our financial obligations when they become due;

•

our ability to service our debt;

•

limitations on our access to sources of financing on competitive terms;

•

currency exchange rates, including the Peso/U.S. dollar exchange rate;

•

changes in our costs of doing business, including but not limited to costs associated with billing and collection, marketing and sales, and personnel training and travel expenses; and

•

changes in the policies of central banks and/or foreign governments.

Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. In any event, these statements are applicable only as of the date of this Form 6-K, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. See Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements as of June 30, 2011 and for the six-month periods ended June 30, 2011 and 2010 and the notes thereto contained elsewhere herein.

Six-month period ended June 30, 2011 compared to the six-month period ended June 30, 2010

Revenues

Total revenue during the six-month period ended June 30, 2011 was Ps. 2,302.6 million, a 2.7%, or Ps. 59.8 million, increase from the Ps. 2,242.8 million for the six-month period ended June 30, 2010. This increase was primarily the result of an increase in our data, internet and local services revenues.

Data, Internet and Local Services. During the six-month period ended June 30, 2011, data, internet and local service revenues reached Ps. 1,818.3 million, a 7.8%, or Ps. 132.0 million, increase from Ps. 1,686.2 million for the six-month period ended June 30, 2010. The increase in data, internet and local services revenues was primarily due to an increase in revenues from internet-related services, such as virtual private network (“VPN”) and managed services. Our data, internet and local services represented 79.0% of our total revenues during the six-month period ended June 30, 2011, compared to 75.2% during the same period in 2010.

Long Distance Services. Revenues from our long distance services for the six-month period ended June 30, 2011 decreased 13.0%, or Ps. 72.3 million, to Ps. 484.3 million from Ps. 556.6 million for the six-month period ended June 30, 2010. The decrease in long distance revenues was primarily due to lower traffic partially offset by an increase in revenue per minute. The average long distance revenue per minute increased to Ps. 0.72 for the six-month period ended June 30, 2011 from Ps. 0.62 recorded during the six-month period ended June 30, 2010. Total volume of minutes handled decreased 24.8%, to 672 million in the six-month period ended June 30, 2011 from 893 million minutes for the six-month period ended June 30, 2010. The decrease in volume is primarily attributable to less international long distance traffic. As a percentage of total revenues, long distance services revenues represented 21.0% of our total revenues during the six-month period ended June 30, 2011, compared to 24.8% during the same period in 2010.

Cost of services (excluding depreciation and amortization)

Cost of services consists primarily of:

•

fees for leased lines, typically paid on a per-circuit per-month basis primarily to Teléfonos de México S.A.B. de C.V. (“Telmex”) and other last mile access providers;

•

interconnection costs, including local access charges and resale expenses, paid on a per-minute basis primarily to Telmex; and

•

international settlement payments to foreign carriers on a per-minute basis for the completion of international calls originated in Mexico by us.

Cost of services decreased 5.1%, or Ps. 38.7 million, to Ps. 713.8 million for the six-month period ended June 30, 2011 from Ps. 752.6 million for the six-month period ended June 30, 2010. The reduction in cost of services was primarily the result of a decrease in cost of long distance services.

Data, Internet and Local Services. Cost of data, internet and local services increased 8.8%, or Ps. 36.4 million, to Ps. 449.7 million for the six-month period ended June 30, 2011 from Ps. 413.3 million for the six-month period ended June 30, 2010. This was primarily due to an increase in revenues from internet-related services, such as VPN and managed services.

Long Distance Services. Cost of long distance services decreased 22.1%, or Ps. 75.1 million, to Ps. 264.2 million for the six-month period ended June 30, 2011 from Ps. 339.3 million for the six-month period ended June 30, 2010. This decrease in cost of long distance services was primarily due to lower interconnection costs resulting from a decrease in the volume of international long distance traffic.

Gross profit

Gross profit is defined as revenues minus cost of services (excluding depreciation and amortization). Gross profit is a non-GAAP financial measure that is not defined under Mexican FRS.

We believe that gross profit can be useful in facilitating comparisons of operating performance between periods and with other companies. However, our computation of gross profit is not necessarily comparable to gross profit as reported by other companies because it excludes depreciation and amortization expenses. Though gross profit is a relevant measure of operating performance, it should not be considered as an alternative to operating income (determined in accordance with Mexican FRS, as an indication of our financial performance), or an indication of resources generated from operating activities (determined in accordance with Mexican FRS, as a measure of our liquidity), nor is it indicative of funds available to meet our cash needs.

Gross profit increased 6.6%, to Ps. 1,588.8 million for the six-month period ended June 30, 2011 from Ps. 1,490.3 million for the six-month period ended June 30, 2010. Our gross profit increased primarily due to the increase in data, internet and local services gross profit.

Data, Internet and Local Services. Our data, internet and local services gross profit increased 7.5%, or Ps. 95.6 million, to Ps. 1,368.6 million for the six-month period ended June 30, 2011 from Ps. 1,273.0 million for the six-month period ended June 30, 2010. This increase was primarily due to the 7.8% increase in data, internet and local services revenues.

Long Distance Services. Our long distance gross profit increased 1.3%, or Ps. 2.8 million, to Ps. 220.2 million for the six-month period ended June 30, 2011 from Ps. 217.3 million for the six-month period ended June, 2010. This increase was primarily due to the 15.7% increase in revenue per minute.

Our gross margin, defined as gross profit as a percentage of total revenues, was 69.0% for the six-month period ended June 30, 2011 as compared to 66.4% for the six-month period ended June 30, 2010.

A reconciliation of our operating income to gross profit is provided below as of June 30, 2010 and 2011.


	Six-month period ended June 30,
	(in millions of nominal Pesos)
	2010			2011
Gross Profit		1,490.3			1,588.8
Administration, selling and other operating expenses		(784.2	)		(801.3	)
Depreciation and amortization		(425.7	)		(422.1	)

Operating Income		280.4			365.4

Administration, selling and other operating expenses

Administration, selling and other operating expenses increased 2.2%, or Ps. 17.1 million, to Ps. 801.3 million for the six-month period ended June 30, 2011 from Ps. 784.2 million for the six-month period ended June 30, 2010, primarily as a result of higher personnel expenses. For the six-month periods ended June 30, 2011 and 2010, administration, selling and other operating expenses represented 34.8% and 35.0% of total revenues, respectively.

Depreciation and amortization

Depreciation and amortization amounted to Ps. 422.1 million for the six-month period ended June 30, 2011, compared to Ps. 425.7 million for the six-month period ended June 30, 2010.

Operating income

Operating income increased 30.3%, or Ps. 84.9 million, to Ps. 365.4 million in the six-month period ended June 30, 2011 from Ps. 280.4 million for the six-month period ended June 30, 2010. This increase was primarily due to a Ps. 98.5 million increase in gross profit.

Comprehensive financial result

During the six-month period ended June 30, 2011, our comprehensive financial loss was Ps. 43.0 million compared to a Ps. 88.8 million loss for the six-month period ended June 30, 2010. The following table sets forth our comprehensive financial results for the periods under review:


	Six-month period ended June 30,
	(in millions of nominal Pesos)
	2010			2011
Interest expense		(192.1	)		(166.2	)
Interest income		3.2			3.2
Exchange gain, net		99.6			124.5
Gain/(loss) on derivative financial instruments		0.6			(4.5	)

Comprehensive financial result, net		(88.8	)		(43.0	)

Our interest expense decreased by Ps. 26.0 million, to Ps. 166.2 million, for the six-month period ended June 30, 2011 from Ps. 192.1 million for the six-month period ended June 30, 2010. This decrease was driven by the appreciation of the Peso against the U.S. dollar during the last twelve months, since our total debt is U.S. dollar-denominated, coupled with a decrease in our total debt outstanding during the six-months period ended June 30, 2011 compared to the same period of 2010.

Interest income amounted to Ps. 3.2 million for the six-month period ended June 30, 2011, and for the six-month period ended June 30, 2010.

Exchange gain for the six-month period ended June 30, 2011 was Ps. 124.5 million compared to an exchange gain of Ps. 99.6 million for the six-month period ended June 30, 2010. We record a foreign exchange gain or loss with respect to U.S. dollar-denominated net monetary position of assets and liabilities when the Peso appreciates or depreciates in relation to the U.S. dollar. Our U.S. dollar-denominated monetary liabilities exceeded our U.S. dollar-denominated monetary assets during the six-month periods ended June 30, 2011 and 2010. We recorded a foreign exchange gain during the six-month period ended June 30, 2011 as a result of a 4.2% appreciation of the Peso against the U.S. dollar, while during the six-month period ended June 30, 2010 the Peso appreciated 3.1% against the U.S. dollar.

Our principal foreign currency fluctuation risk involves changes in the value of the Peso relative to the U.S. dollar. In past years, we have considered alternatives to manage this risk, including the use of hedging instruments, in order to minimize the impact on our cash flow due to the exchange rate fluctuation of the Peso to the U.S. dollar. In October 2010, we entered into a currency hedge to minimize the effects of the Peso to U.S. dollar exchange rate fluctuation. We sought to hedge the interest payment of our senior notes due 2014 through two foreign exchange forward contracts. Each of these forward contracts was in an amount of U.S.$11.75 million at an exchange rate of Ps. 12.463 per U.S.$1.00 and Ps. 12.611 per U.S.$1.00 in February 2011 and August 2011, respectively. The effect of the forward contract that matured in February 2011 was negative, and for the six-month period ended June 30, 2011 amounted to Ps. 5.0 million. In addition, we have a U.S. dollar-denominated lease contract in which the dollar currency embedded in the host lease contract is considered an embedded derivative for accounting purposes. For the six-month period ended June 30, 2011, the effect of this embedded derivative was positive and amounted to Ps. 0.5 million. This contract is evaluated on a monthly basis.

Other Expense, Net

Other expense, net increased Ps. 15.3 million, to Ps. 23.8 million in the six-month period ended June 30, 2011 from Ps. 8.6 million during the six-month period ended June 30, 2010. This increase was primarily due to the disposal of obsolete fixed assets.

Income and IETU

We and our subsidiaries, Servicios Alestra and Alestra Telecomunicaciones Inalámbricas, are required to pay the greater of the income tax or the flat tax (Impuesto Empresarial a Tasa Única, or “IETU”), which are computed separately for each entity. We participate in the tax consolidation of ALFA, S.A.B. de C.V. (“Alfa”), our holding

company. For the six-month period ended June 30, 2011, we recorded an income tax provision using an income tax effective rate of 22.7%, compared to an income tax effective rate of (2.2)% for the six-month period ended June 30, 2010.

For the six-month period ended June 30, 2011, our income tax is higher than our IETU tax; accordingly, we have not recognized any IETU in our consolidated income statements.

In accordance with the interpretation published by the Mexican Board of Research and Development of Financial Reporting Standards (“CINIF”) on December 21, 2007, with respect to the accounting effects of the IETU, and based on financial and tax projections, we have determined that we will continue to pay regular income tax in the foreseeable future. As a result, we did not record any deferred IETU taxes as of June 30, 2011.

Net Income

During the six-month period ended June 30, 2011, we recorded a net income of Ps. 231.5 million compared to a net income of Ps. 187.2 million during the six-month period ended June 30, 2010, an increase of Ps. 44.3 million, or 23.6%. The increase in net income was primarily explained by an increase in operating income of Ps. 84.9 million coupled with an increase in exchange gain of Ps. 24.9 million in the six-month period ended June 30, 2011 when compared to the six-month period ended June 30, 2010; partially offset by an income tax expense of Ps. 67.1 million during the six-month period ended June 30, 2011 compared to an income tax benefit of Ps. 4.0 million during the six-month period ended June 30, 2010.

Current Liquidity

As of June 30, 2011, December 31, 2010 and June 30, 2010, we had Ps. 417.7 million, Ps. 486.2 million and Ps. 375.9 million of unrestricted cash available, respectively. The reduction in cash balance during the first six-months of 2011 is mainly explained by US$ 18.6 million debt pre-payment with internally generated funds.

Our unrestricted cash balance consists of cash and temporary investments with original maturities of three months or less.

Our treasury policy is to invest in highly liquid temporary cash investments issued by the U.S. and Mexican governments, major U.S. and Mexican banks and corporations with high credit ratings. As of June 30, 2011, we had cash of Ps. 35.5 million and temporary investments of Ps. 382.2 million, of which Ps. 272.9 million were in Peso-denominated instruments and Ps. 109.3 million in U.S. dollar-denominated instruments. In our opinion, our cash and cash equivalents balance is sufficient for our present requirements.

As of June 30, 2011, December 31, 2010 and June 30, 2010, our ratio of current assets to current liabilities was 1.01x, 0.97x and 0.93x, respectively. Our ratio of current assets to current liabilities as of June 30, 2011 includes the corresponding amortization of our bank facility and our vendor facilities, which is described below.

As of
June 30,
2011

As of
December 31,
2010

As of
June 30,
2010

(in millions of nominal Pesos, excluding ratios)

Unrestricted cash balance

417.7

486.2

375.9

Current ratios (times)

1.01x

0.97x

0.93x

On September 8, 2009, a trust was created by us, Telmex, and BBVA Bancomer as a trustee, to guarantee the payment of interconnection services. As of June 30, 2011, the trust balance was US$ 33.9 million, registered as cash and cash equivalents in our financial statements.

Capital expenditures during the six-month period ended June 30, 2011 amounted to Ps. 297.9 million, compared to Ps. 310.7 million invested in the six-month period ended June 30, 2010. Our capital expenditure program includes investments to expand our network, develop new services to customers, increase data center capacity, and also to provide last mile and direct access to connect customers to our network. As of the date of this report, our capital expenditure program is proceeding according to schedule.

Indebtedness

As of June 30, 2011, December 31, 2010 and June 30, 2010, our total debt amounted to US$ 217.9 million, US$ 242.6 million and US$ 245.8 million, respectively. Total debt as of June 30, 2011 includes:

•

11.750% senior unsecured notes due 2014 in an amount of US$ 200.0 million;

•

a bank facility in an amount of US$ 10.0 million; and

•

vendor facilities in an aggregate amount of US$ 7.9 million.

As of June 30, 2011, we had outstanding US$ 200.0 million aggregate principal amount of our 11.750% senior notes due 2014 (the “senior notes”), which pay interest semiannually in cash in arrears on February 11 and August 11. The principal amortization is payable at maturity on August 11, 2014.

On September 27, 2010, we signed a committed revolving facility and a term loan agreement with Comerica Bank for US$ 20 million and US$ 10 million, respectively (together, the “Comerica Bank credit facility”). The committed revolving facility bears interest at a three-month adjusted LIBOR rate plus 3.50%, payable on a quarterly basis, and is effective until December 31, 2012. As of June 30, 2011, the committed revolving facility remained unused. The term loan bears interest at a three-month adjusted LIBOR rate plus 3.75%, payable on a quarterly basis. The principal is payable in four equal installments in March 2012, June 2012, September 2012 and December 2012.

As of June 30, 2011, we had a vendor facility with an outstanding balance of US$ 4.0 million with Cisco Systems Capital Corporation (“Cisco”), which pays principal and interest on a monthly basis. This loan matures on July 6, 2013.

As of June 30, 2011, we had a vendor facility with an outstanding balance of US$ 2.1 million with Hewlett-Packard Operations México S. de R.L. de C.V. (“HP”), which pays principal and interest on a monthly basis. This loan matures on February 28, 2014.

As of June 30, 2011, we had a vendor facility with an outstanding balance of US$ 1.8 million with Huawei Technologies de México, S.A de C.V, which pays principal and interest on a quarterly basis and matures in December 2012.

The senior notes and Comerica Bank credit facility contain customary covenants with which, as of June 30, 2011, we are in full compliance.

Subsequent Events

AT&T Transactions

On July 12, 2011, Alfa terminated the joint venture agreement entered into between AT&T Telecom México, Inc. (“AT&T México”), Alfa and us, as amended on November 30, 2005, and the equity purchase agreement entered into between AT&T Corp. (“AT&T”), AT&T México, Alfa and us on April 14, 2011 and completed the acquisition of AT&T México’s 49% equity interest in us after receiving approval from regulatory authorities in Mexico. Following the closing of these transactions, which were originally announced in April 2011, Alfa is now the sole shareholder of Alestra.

In addition, on July 12, 2011, the Company entered into the nodes purchase agreement with AT&T, AT&T México and Alfa, pursuant to which AT&T México purchased from us the telecommunications nodes and customer equipment (the “Nodes”) required for the provision of AT&T Global Services in Mexico (the “Nodes Purchase Agreement”).

On July 12, 2011, we entered into an Equipment Lease Agreement with AT&T México pursuant to which we lease from AT&T México the Nodes required for the provision of AT&T Global Services in Mexico (the “Equipment Lease Agreement”) until December 31, 2012. The Equipment Lease Agreement is subject to early termination if AT&T acquires the necessary licenses and regulatory approvals to offer, directly and independently from us, AT&T Global Services within Mexico, with AT&T México.

Upon the termination of the Equipment Lease Agreement, (i) we and AT&T México will terminate the brand name use agreement between AT&T and us, the AT&T Global Network Cooperation Agreement (the “AGN Agreement”) prior to its June 30, 2013 expiration date and (ii) we will enter into several commercial agreements pursuant to which we will provide certain telecommunication services to AT&T México.

After the termination of the AGN Agreement, we will no longer provide AT&T Global Services in Mexico and will be required to cease using any of AT&T’s intellectual property.

Dividends

On July 6, 2011 and July 8, 2011, we paid a US$ 10 million dividend, the second installment of a US$ 15 million dividend declared in a shareholders meeting held on December 21, 2009. In addition, in a general ordinary meeting held on July 19, 2011 the shareholders declared and we paid a dividend of US$9 million.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2011 and for the six months ended June 30, 2010 and 2011



Unaudited Consolidated Balance Sheets as of December 31, 2010 and June 30, 2011			F-2

Unaudited Consolidated Statements of Income for the Periods of Six-Months and Three-Months Ended June 30, 2010 and 2011			F-3

Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Six-Months Ended June 2010 and 2011			F-4

Unaudited Consolidated Statements of Cash Flow for the Six Months Ended June 30, 2010 and 2011			F-5

Notes to Unaudited Condensed Consolidated Financial Statements			F-6

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)


	December 31, 2010			Unaudited June 30, 2011
Assets
CURRENT ASSETS:
Cash and cash equivalents	Ps	864,431		Ps	818,449
Trade receivables, net of allowance for doubtful accounts of Ps 39,351 in December 31, 2010 and Ps 45,731 in June 30, 2011		493,030			566,299
Due from affiliates and other related parties		7,974			8,574
Other receivables		104,924			82,791
Prepaid expenses		41,213			81,334
Other current assets		28,397			12,446

Total current assets		1,539,969			1,569,893
NON CURRENT ASSETS:
Property and equipment, net (Note 3)		5,077,968			4,958,536
Deferred charges and other assets, net		276,189			245,547
Deferred income tax (Note 7)		198,853			213,585
Prepaid expenses		49,210			42,500

Total non current assets		5,602,220			5,460,168

Total assets	Ps	7,142,189		Ps	7,030,061


Liabilities and stockholders’ equity
CURRENT LIABILITIES:
Accounts payable to Teléfonos de México, S.A.B de C.V. and other carriers	Ps	496,646		Ps	533,505
Other suppliers		265,816			200,063
Bank loans, notes payable and capital leases (Note 4)		216,957			104,169
Due to affiliates and other related parties		9,790			20,013
Dividends payable		123,571			118,389
Interest payable		118,842			113,289
Other accounts payable and accrued expenses		354,670			463,560

Total current liabilities		1,586,292			1,552,988
LONG-TERM LIABILITIES:
11.750% Senior notes due 2014 (Note 5)		2,471,420			2,367,780
Bank loans, notes payable and capital leases (Note 4)		309,937			107,537
Employee’s benefits		106,746			108,948

Total liabilities		4,474,395			4,137,253

STOCKHOLDERS’ EQUITY:
Contributed stock		1,394,971			1,394,971
Retained earnings		1,272,865			1,497,880

Total shareholders’ equity of Alestra		2,667,836			2,892,851
Non controlling interest		(42	)		(43	)

Total stockholders’ equity		2,667,794			2,892,808

CONTINGENCIES AND COMMITMENTS (Note 8)
Total liabilities and stockholders’ equity	Ps	7,142,189		Ps	7,030,061

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)


	Three months ended June 30						Six months ended June 30,
	2010			2011			2010			2011
REVENUES
Long distance services	Ps	275,321		Ps	237,968		Ps	556,611		Ps	484,342
Data, internet and local services		851,178			903,559			1,686,232			1,818,291

		1,126,499			1,141,527			2,242,843			2,302,633

OPERATING EXPENSES :
Cost of services (excluding depreciation and amortization):
Long distance services		(168,493	)		(127,615	)		(339,287	)		(264,182	)
Data, internet and local services		(210,222	)		(214,128	)		(413,265	)		(449,665	)

		(378,715	)		(341,743	)		(752,552	)		(713,847	)

Gross profit		747,784			799,784			1,490,291			1,588,786
Administration, selling and other operating expenses		(392,848	)		(404,823	)		(784,163	)		(801,271	)
Depreciation and amortization		(213,503	)		(210,319	)		(425,687	)		(422,143	)

Operating income		141,433			184,642			280,441			365,372

COMPREHENSIVE FINANCIAL RESULT:
Interest expense		(100,042	)		(83,208	)		(192,142	)		(166,184	)
Interest income		1,781			1,949			3,166			3,231
Exchange gain		(46,025	)		37,283			99,616			124,482
Gain (loss) on derivative financial instruments		261			242			605			(4,473	)

		(144,025	)		(43,734	)		(88,755	)		(42,944	)

OTHER EXPENSE, NET		(1,504	)		(10,713	)		(8,552	)		(23,845	)

Gain before the following provisions for income tax		(4,096	)		130,195			183,134			298,583
Consolidated Income tax		(28,689	)		(29,694	)		4,064			(67,130	)

Consolidated net income	(Ps	32,785	)	Ps	100,501		Ps	187,198		Ps	231,453

Net loss attributable to non controlling interest		(1	)		(1	)		(1	)		(1	)

Net income attributable to total stockholders of Alestra	(Ps	32,786	)	Ps	100,500		Ps	187,197		Ps	231,452

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)


					Accumulated (deficit) income
	Capital stock				Restatement of Capital Stock		Effects of derivative financial instruments			Retained earnings		Stockholder equity of Alestra			Non controlling interest			Total Stockholders’ Equity
	Fixed		Variable		Restatement of Capital Stock		Effects of derivative financial instruments			Retained earnings		Stockholder equity of Alestra			Non controlling interest			Total Stockholders’ Equity
Balance at January 1, 2010	Ps	300	Ps	1,181,046	Ps	213,625	Ps	—		Ps	918,749	Ps	2,313,720		Ps	1		Ps	2,313,721
Changes in 2010:
Net income											187,198		187,198			—			187,198
Other											4,020		4,020			—			4,020

Comprehensiva income		—		—		—		—			191,218		191,218			—			191,218

Balance at June, 30, 2010	Ps	300	Ps	1,181,046	Ps	213,625	Ps	—		Ps	1,109,967	Ps	2,504,938		Ps	1		Ps	2,504,939

Balance at January 1, 2011		300		1,181,046		213,625		(829	)		1,273,694		2,667,836			(42	)		2,667,794
Changes in 2011:
Net income											231,452		231,452			(1	)		231,451
Effect of derivative financial instruments								(6,437	)				(6,437	)		—			(6,437	)

Comprehensive income		—		—		—		(6,437	)		231,452		225,015			(1	)		225,014

Balance at June 30, 2011	Ps	300	Ps	1,181,046	Ps	213,625		(Ps 7,266	)	Ps	1,505,146	Ps	2,892,851			(Ps 43	)	Ps	2,892,808

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARY

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)


	Six months ended June 30,
	2010			2011
Operation activities:
Income before income tax	Ps	183,134			298,583
Items relating to investing activities:
Depreciation and amortization		425,687			422,143
Cost related to seniority premiums and pension plans		9,533			8,320
Interest income		(3,166	)		(3,231	)
Derivative financial instruments		(605	)		4,473
Gain on sale of equipment		413			3,003
Items relating to financing activities:
Interest expense		192,142			166,184
Exchange gain		(99,616	)		(124,482	)
Other, net		8,026			11,657

Subtotal		715,548			786,650
Increase in accounts receivable and other current assets		(111,784	)		(45,889	)
Increase in suppliers, accounts payable and other current liabilities		57,089			60,813
Income tax paid		(106,895	)		(106,822	)

Operating activities net cash flows		553,958			694,752

Investing activities:
Interest received		2,906			3,658
Acquisition of property and equipment		(266,114	)		(264,226	)
Acquisition of deferred charges and other assets		(23,136	)		(12,602	)

Investing activities		(286,344	)		(273,170	)

Excess in cash to be applied in financing activities net cash flows		267,614			421,582

Financing activities:
Proceeds from bank loans, notes payable and capital leases		85,749			—
Interest paid		(196,419	)		(159,906	)
Payments of bank loans, notes payable and capital leases		(88,947	)		(293,478	)
Payments relating to settlements of derivative financial instruments		—			(4,979	)

Financing activities net cash flows		(199,617	)		(458,363	)

Net cash increasing cash and cash equivalents		67,997			(36,781	)
Adjustments to cash flow as a result of changes in exchange rates		(17	)		(9,201	)
Cash, cash equivalents and restricted cash at beginning of year		635,631			864,431

Cash and cash equivalents and restricted cash at year end	Ps	703,611		Ps	818,449

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-5

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARY

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

1. INCORPORATION AND ACTIVITY OF THE COMPANY

Alestra, S. de R. L. de C. V. (“Alestra”), is a Mexican company with limited liability and variable capital, incorporated on October 13, 1995, as a joint venture between Onexa, S. A. de C. V. (“Onexa”) (51%) and AT&T Telecom México, Inc. (“AT&T”) (49%).

Alestra’s business consists of the installation and operation of a public telecommunications network in Mexico, offering long distance telephone services and data, internet and local services.

In a general extraordinary meeting held on October 2, 2007, the stockholders approved the merger of Onexa into Alfa, S. A. B. de C. V., which became effective as of March 31, 2008. As a result of this merger, Alfa owns directly 51% of the shares of Alestra.

Alestra and its subsidiaries Servicios Alestra, S. A. de C. V. (“Servicios Alestra”) and Alestra Telecomunicaciones Inalámbricas, S. de R. L. de C. V. (“ATI”) are collectively referred to as the “Company.”

Alestra does not have any direct employees and all services required are provided by Servicios Alestra.

2. PREPARATION OF INTERIM FINANCIAL STATEMENTS

Basis of presentation and disclosures

The unaudited condensed consolidated financial statements of Alestra have been prepared in accordance with Financial Reporting Standards applicable in Mexico (“Mexican FRS”) as promulgated by the Mexican Financial Reporting Standards Board (“CINIF”).

The unaudited condensed consolidated financial statements are expressed in Mexican Pesos (functional and reporting currency) denoted by the symbol “Ps.”. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by Mexican FRS.

The information included in the condensed consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of these interim periods are not necessarily indicative of results for the entire year. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of December 31, 2010.

The unaudited condensed consolidated financial statements include those of Alestra and its subsidiaries, Servicios Alestra and ATI, of which Alestra holds 99% and 91% of their capital stock, respectively. All significant balances and transactions have been eliminated.

F-6

Estimates

The preparation of financial statements in conformity with Mexican FRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions include certain international long distance services revenues and expenses, the allowance for doubtful accounts, deferred income tax, provisions and employees benefits.

Recognition of the effects of inflation

The provisions of the Mexican FRS B-10 specify that as of 2008, the Mexican economy is not considered an inflationary environment, since there has been a cumulative inflation below 26% in the last three years (which is the established limit to define an economy as inflationary). Therefore, as of January 1, 2008, the Company was required to discontinue the recognition of the inflation effects in the financial information. Consequently, the financial statements as of March 31, 2010 and 2011 are stated in adjusted nominal Mexican pesos as they include cumulative inflation effects on the financial information recognized up to December 31, 2007.

New Financial Reporting Standards

During December 2010 and 2009, the CINIF issued a series of Mexican FRS, which became effective as of January 1, 2011. The adoption of these Mexican FRS and interpretation did not have any significant impact on the financial information presented.

Mexican FRS B-5 “Financial Information by Segments”. It establishes the general standards to disclose financial information by segments. Additionally, it allows the users of such information to analyze the entity from the same point of view as management do and requires to present financial information by segment consistently with its financial statements. With this standard, Bulletin B-5 “Financial Information by Segment” will be effective up to December 31, 2010.

Mexican FRS B-9 “Financial Information at Interim Dates”. It establishes the guidance for the determination and presentation of financial information at interim dates which, among other things requires the presentation of the statement of changes in stockholders’ equity and of cash flows which were not required by former Bulletin B-9 “Financial Information at interim dates” (effective up to December 31, 2010).

Mexican FRS C-4 “Inventory”. Of retrospective application and establishes the particular standards of valuation, presentation and disclosure for the initial and subsequent recognition of inventory. Additionally it removes the direct cost method as an allowed valuation system and the inventory cost allocation formula denominated as Last In First Out (LIFO). With this standard, Bulletin C-4 “Inventory” remains effective up to December 31, 2010.

Mexican FRS C-5 “Advanced payments”. Requires retrospective application and establishes, among other things, the particular standards of valuation, presentation and disclosure related to advanced payments line item. It also establishes that advanced payments for the purchase of inventory, real estate, machinery and equipment should be presented in the advanced payments line item and not in inventory or property, machinery and equipment as previously required. Additionally it establishes that advanced payments related to the acquisition of goods should be presented in the balance sheet in attention to the intended item classification, either in current or non-current assets. With this standard, Bulletin C-5 “Advanced payments” remains effective up to December 31, 2010.

F-7

Mexican FRS C-6 “Property, plant and equipment”. Requires prospective application (except on disclosure aspects), and establishes, among other things, the particular standards of valuation, presentation and disclosure related to property, plant and equipment. It also establishes: a) that property, plant and equipment used to develop or maintain biological and extractive industries assets be under its scope, and b) the mandatory depreciation of representative components of property, plant and equipment, as opposed to depreciating the remaining asset as a single component. This Mexican FRS became effective as of January 1, 2011, with exception of the changes arising from the segregation of its components and which have a useful life clearly different to the main asset. In this case, and for entities which have not performed such segregation, the applicable disposition will become effective for periods beginning January 1, 2012. With this standard, Bulletin C-6 “Property, plant and equipment” remains effective up to December 31, 2010.

Mexican FRS C-18 “Liabilities associated to assets retirement and environmental restoration”. Requires retrospective application and establishes, among other things, the particular standards for initial and subsequent recognition of a provision relative to liabilities associated to property, plant and equipment component retirements as well as the requirements to be considered for valuation of a liability associated to a component retirement and the disclosures that should be presented by an entity when it has a liability associated to a component retirement.

Reclassifications

Certain reclassifications of amounts previously reported have been made to the consolidated statement of cash flow for the period ended June 30, 2010 to maintain consistency and comparability between periods presented, as shown below:


	Originally reported			Reclassification			June 30, 2010
Operating activities net cash flows
Other, net	Ps	2,995		Ps	5,031		Ps	8,026
Exchange gain		(94,585	)		(5,031	)		(99,616	)
Increase in accounts receivable and other current assets		(218,679	)		106,985			(111,785	)
Income tax paid		—			106,985			(106,985	)

Operating activities net cash flows	(Ps	310,269	)	Ps	—		(Ps	310,269	)
Financing activities net cash flows
Proceeds from bank loans, notes payable and capital leases	Ps	—		Ps	85,749		Ps	85,749
Payments of bank loans, notes payables and capital leases		(3,198	)		(85,749	)		(88,947	)

	(Ps	3,198	)	Ps	—		(Ps	3,198	)

3. PROPERTY AND EQUIPMENT, NET

As of December 31, 2010 and June 30, 2011, property and equipment net, consists of the following:


	2010			2011
Buildings	Ps	224,817		Ps	236,049
Furniture, fixtures and other		233,114			225,966
Hardware equipment		354,437			356,900
Transportation equipment		33,044			30,816
Telephone network		10,243,017			10,359,953
Leasehold improvements		67,583			67,888
Billing and customer care software		562,253			562,253

		11,718,265			11,839,825
Accumulated depreciation and amortization		(7,101,556	)		(7,372,404	)

		4,616,709			4,467,421
Land		165,039			165,039
Constructions in progress		296,220			326,076

Total	Ps	5,077,968		Ps	4,958,536

Amortization of billing and customer care software charged to income amounted to Ps3,566 and Ps2,722 for the periods ended June 30, 2010 and 2011, respectively.

Depreciation charged to income, not including amortization of the billing and customer care software mentioned above, was Ps380,675 and Ps372,189 for the periods ended June 31, 2010 and 2011, respectively.

F-8

4. BANK LOANS, NOTES PAYABLE AND CAPITAL LEASES

As of December 31, 2010 and June 30, 2011, bank loans, notes payable and capital leases consist of the following:


	2010			2011
Bank loan obtained from Comerica Bank for an amount of US$10 million (1)	Ps	123,571		Ps	118,389
Promissory notes to Cisco Systems Capital Corporation for an amount of US$37.2 million (2)		238,243			47,475
Promissory notes to Hewlett Packard Operations de México, S. de R. L. de C. V., for an amount of US$18.8 million. (3)		136,282			25,149
Promissory notes to Huawei Tecnologies de México, S. A. de C. V. for an amount of US$3.5 million. (4)		28,798			20,693

		526,894			211,706
Current portion of bank loans, notes payable and capital leases		(216,957	)		(104,169	)

Long term debt	Ps	309,937		Ps	107,537

(1)

On September 27, 2010 the Company signed a new loan agreement with Comerica Bank (“Comerica”) for US$10 million bearing interest at 3-month adjusted LIBOR rate plus 3.75%. Interest are payable quarterly and principal is payable in four equal installments of US$2.5 million in March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012. This loan agreement contains various covenants which, as of June 30, 2011, and the date of the issuance of the financial statements, the Company is in full compliance.

(2)

The Company issued ten promissory notes for a total amount of US$37.2 million to acquire goods with its supplier Cisco Systems Capital Corporation. Each note has a maturity of 36 months at an annual interest rates between 5.15% and 5.67%. However, as of May 30, 2011, 9 promissory notes were paid in full, the remaining balance amount US$4.0 million with a maturity on July 6, 2013, bearing interest at an annual interest rate of 5.15%.

(3)

From October 1, 2008 to March 31, 2010, the Company signed five promissory notes with Hewlett Packard Operations de México, S. de R. L. de C. V. (“HP”), for the acquisition of goods for a total amount of US$18.8 million. The payments will be made on a monthly basis in 48 installments and annual interest rates between 5.21% and 7.082%. However, as of June 14, 2011, 9 promissory notes were paid in full, the remaining balance amount US$2.1 million with a maturity on February 28, 2014, bearing interest at an annual interest rate of 5.21%.

(4)

On January 1st, 2010, the Company signed a promissory note with Huawei Technologies de México S. A. de C. V. (“Huawei”), for the acquisition of goods for a total amount of US$3.5 million. The payments will be made quarterly at an annual interest rate of 5.50%. As of June 30, 2011, the amount outstanding was US$1.8 million.

5. SENIOR NOTES

On August 11, 2009 the Company performed a debt offering by issuing unsecured senior notes for a total amount of US$200 million. The senior notes bear interest at annual rate of 11.750% payable semi-annually in cash on February and August of each year with a maturity on August 11, 2014 (“11.750% Senior Notes”). The 11.750% Senior Notes principal will be paid at maturity and is presented as long-term in the balance sheet.

The proceeds obtained in the issuance of the 11.750% Senior Notes were used to refinance the Company’s 8% Senior Notes due June 2010 (“8% Senior Notes”).

On October 7, 2009, the Company filed a registration statement on Form F-4 in order to register its offer to exchange its outstanding 11.750% Senior Notes due 2014 with new notes that have been registered under the U.S. Securities Act of 1933, as amended. This registration statement became effective on January 6, 2010.

F-9

The costs and expenses, including the placing of premiums and discounts of this new issuance, which at December 31, 2009 amounted to Ps66,166 (US$5.1 million), will be amortized over the life of the 11.750% Senior Notes. The unamortized costs and expenses of the 8% Senior Notes due 2010, amounting to Ps19,229 at December 31, 2009, were charged to income for the year and are presented in the statement of operations as other income (expense).

The Company may redeem, at any time, the 11.750% Senior Notes, in whole but not in part, by paying the greater of 100% of the principal amount of such notes and the sum of the present value of each remaining scheduled payment of principal and interest discounted to the redemption date on a semi-annual basis at the Treasury Rate (as defined in the indenture for the 11.750% Senior Notes) plus 50 basis points, in each case plus accrued and unpaid interest. In addition, prior to or on August 11, 2012, the Company may redeem up to 35% of the original principal amount of the 11.750% Senior Notes with the net proceeds from certain equity offerings by the Company, at a price of 111.75% of the aggregate principal amount thereof, plus accrued and unpaid interest.

In the event of a change in the Company’s control structure, for example in the case of change of the interest ownership partners of the Company and with certain exceptions, the holders of the 11.750% Senior Notes are entitled to demand that the Company repurchase the notes in cash, at a price equal to 101% of the principal amount plus unpaid accrued interest.

The indenture for the 11.750% Senior Notes and other credit agreements contain various debt covenants including limitations on the sale of assets and affiliate transactions, among others. In addition, these covenants require the Company to have a certain leverage ratio prior to being able to enter into additional debt transactions. As of June 30, 2010 and 2011 the Company is in compliance with all required covenants.

6. EMPLOYEES’ BENEFITS

An analysis of the net periodic pension cost by plan type is presented as follows:


	Pension Plan June 30,						Seniority Premium June 30,				Indemnities June 30,				Other retirement benefits June 30,				Total June 30
	2010			2011			2010		2011		2010		2011		2010		2011		2010		2011
Net cost of the period:
Labor cost of the current service	Ps	1,143		Ps	923		Ps	83	Ps	91	Ps	1,636	Ps	1,698	Ps	6	Ps	47	Ps	2,868	Ps	2,759
Financial cost		3,484			2,494			76		71		1,734		1,458		19		143		5,313		4,166
Net actuarial earning or loss		77			—			71		59		—		—		—		123		148		182
Labor cost of past service		(329	)		(320	)		22		22		1,511		1,511				—		1,204		1,213

Total	Ps	4,375		Ps	3,097		Ps	252	Ps	243	Ps	4,881	Ps	4,667	Ps	25	Ps	313	Ps	9,533	Ps	8,320

F-10

7. INCOME TAX

The reconciliation between the statutory and effective income tax rates is shown below:


	Six months ended June 30,
	2010			2011
Income before income tax	Ps	183,134		Ps	298,583
Statutory tax rate		30	%		30	%

Income tax at statutory rate		(54,940	)		(89,575	)
Add (deduct) effect of income tax on:
Inflationary tax adjustment		(8,034	)		(7,333	)
Other permanent items:
Tax effect from indexing of non-deductible fixed assets		—			39,337
Others		67,038			(16,486	)

Subtotal					(74,057	)
Effect in the current income tax provision due to amortization of tax loss carry forwards reserved in prior years		—			6,927

Total provision of income tax	Ps	4,064		Ps	(67,130	)

For the six months ended June 30, 2010, the company recognized its income tax provision using an income tax effective rate of
-2.2% compared to an income tax effective rate of 22.7% for the six months ended June 30, 2011.

8. CONTINGENCIES AND COMMITMENTS

In August 2006, ABA Seguros, S. A. de C. V. (“ABA Seguros”) and 7 ELEVEN, Inc. (“7-Eleven”) filed a claim against Servicios Alestra in the amount of Ps 50,000, for damages from a fire that began in the building leased by Servicios Alestra to Casa Chapa, S. A. de C. V. under the theory of subrogation of rights. Servicios Alestra filed a response with the support of ACE Seguros (insurance carrier of Servicios Alestra), since ACE Seguros is the party that would pay should Servicios Alestra be found liable. In order to examine Servicios Alestra’s responsibility, ABA Seguros, 7-Eleven and Servicios Alestra sought the opinions of five experts in the following areas: (i) damages valuation, (ii) insurance settlement, (iii) fires, (iv) accounting, and (v) electrical installation. On July 27, 2010, a civil federal judge decided to acquit Servicios Alestra of any responsibility; however, on August 11, 2010, ABA Seguros and 7-Eleven appealed such resolution. Although the outcome of the appeal has not yet been decided, Servicios Alestra does not believe it would have a substantial effect on its finances. In the Company’s opinion, although the outcomes of these proceedings are uncertain, they should not have a material adverse affect on its financial position, results of operations or cash flows.

The Company is involved in a dispute with Teléfonos de México, S.A.B. de C.V. (“Telmex”) regarding to fixed interconnection services rates applicable for 2008, 2009, 2010 and 2011. The Company is also in disputes with Radiomóvil Dipsa, S.A de C.V (Telcel) and mobile companies from Grupo Telefonica (Telefonica) regarding to mobile interconnection services rates for 2011. As of the date of issuance of these financial statements, management continues its negotiations with Telmex, Telcel and Telefonica and it is expected that the Company may reach an agreement in the near future. In the Company’s opinion, although the outcomes of the mentioned proceedings are uncertain, they should not have a material adverse effect on its financial results; however, as of the date of issuance of these financial statements, the Company believes that it has recognized sufficient provisions to address such contingencies.

9. SEGMENTS

The reported segments of the Company represent the specific types of telecommunications services and products that the Company offers and internally analyzes.

The Company operates in two segments: long distance services (domestic and international), and data, internet and local services.

F-11

The Company’s management uses the information as to income and costs of services (excluding depreciation) by segment to evaluate performance, make general operations decisions and assign resources. Telecommunications services are generally offered using networks owned by the Company and leased (interconnection) networks that make no distinction between the different kinds of services. As a result, the Company does not assign total assets, administration selling and other operating expenses, depreciation and amortization per segment.

Accounting policies of the segments are the same as those described in the summary of significant accounting policies in our financial statements as of and for the year ended December 31, 2010. The information on the Company’s segments for the six months ended June 30, 2010 and 2011 is as follows:


Six months ended	Long distance			Data, Internet and Local services			Total
June 30, 2010
Revenues	Ps	556,622		Ps	1,686,232		Ps	2,242,843
Costs of services (excluding depreciation and amortization)		(339,287	)		(413,265	)		(752,552	)

Gross profit	Ps	217,324		Ps	1,272,967			1,490,291

Operating expenses (including depreciation and amortization)								(1,209,850	)

Operating income								280,441
Comprehensive financial result								(88,755	)
Other expense, net								(8,552	)

Income before income tax								183,134
Income tax								4,064

Consolidated net income								187,198
Net loss attributable to total stockholders of Alestra								(1	)

Net income attributable to total stockholders of Alestra							Ps	187,197


Six months ended	Long distance			Data, Internet and Local services			Total
June 30, 2011
Revenues	Ps	484,342		Ps	1,818,291		Ps	2,302,633
Costs of services (excluding depreciation and amortization)		(264,182	)		(449,665	)		(713,847	)

Gross profit	Ps	220,160		Ps	1,368,626			1,588,786

Operating expenses (including depreciation and amortization)								(1,223,414	)

Operating income								365,372
Comprehensive financial result								(42,944	)
Other expense, net								(23,845	)

Income before income tax								298,583
Income tax								(67,130	)

Net income								231,453
Net loss attributable to total stockholders of Alestra								(1	)

Net income attributable to total stockholders of Alestra							Ps	231,452

F-12

10.	SUBSEQUENT EVENT

AT&T Transactions

On July 12, 2011, Alfa terminated the joint venture agreement entered into between AT&T Telecom México, Inc. (“AT&T México”), Alfa and the Company, as amended on November 30, 2005, and the equity purchase agreement entered into between AT&T Corp. (“AT&T”), AT&T México, Alfa and the Company on April 14, 2011 and completed the acquisition of AT&T Mexico’s 49% equity interest in the Company after receiving approval from regulatory authorities in Mexico. Following the closing of these transactions, which were originally announced in April 2011, Alfa is now the sole shareholder of Alestra.

In addition, on July 12, 2011, the Company entered into the nodes purchase agreement with AT&T, AT&T México and Alfa, pursuant to which AT&T México purchased from the Company the telecommunications nodes and customer equipment (the “Nodes”) required for the provision of AT&T Global Services in Mexico (the “Nodes Purchase Agreement”).

On July 12, 2011, the Company also entered into an Equipment Lease Agreement with AT&T México pursuant to which the Company lease from AT&T México the Nodes required for the provision of AT&T Global Services in Mexico (the “Equipment Lease Agreement”) until December 31, 2012. The Equipment Lease Agreement is subject to early termination if AT&T acquires the necessary licenses and regulatory approvals to offer, directly and independently from the Company, AT&T Global Services within Mexico, with AT&T México.

Upon the termination of the Equipment Lease Agreement, (i) the Company and AT&T México will terminate the brand name use agreement between AT&T and us, the AT&T Global Network Cooperation Agreement (the “AGN Agreement”) prior to its June 30, 2013 expiration date and (ii) the Company will enter into several commercial agreements pursuant to which the Company will provide certain telecommunication services to AT&T México.

After the termination of the AGN Agreement, Alestra will no longer provide AT&T Global Services in Mexico and will be required to cease using any of AT&T’s intellectual property.

Dividends

On July 6, 2011 and July 8, 2011, the Company paid a US$ 10 million dividend, the second installment of a US$ 15 million dividend declared in a shareholders meeting held on December 21, 2009. In addition, in a general ordinary meeting held on July 19, 2011 the shareholders declared and the Company paid a dividend of US$ 9 million.

F-13

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Alestra, S. de R.L. de C.V.

		/s/ Bernardo García Reynoso
		Bernardo García Reynoso Chief Financial and Administrative Officer

Date: August 30, 2011

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ALESTRA 6-K