EBITDA was down 10.6 percent to EUR 5.236 billion, hurt by price pressure in the Italian market as the company tried in Q2 to win back some of its mobile customers. Telecom Italia said it now expects a "mid single-digit" decline for the full year in group EBITDA, versus its previous outlook of a low single-digit drop, due mainly to the poor results in Italy.
Capex for H1 was down slightly to EUR 2.193 billion, and operating cash flow dropped by almost half to EUR 1.277 billion due to timing of procurement. Adjusted net debt totaled EUR 28.813 billion at the end of June, little changed from three months earlier. The company still expects debt of less than EUR 27 billion by year-end and also reiterated its target for stable revenues over the full year.
Telecom Italia said it has also decided to go ahead with the proposed spin-off of its fixed network into a separate company. The plans were earlier stalled after the Italian regulator Agcom lowered the cost of wholesale network access. After assessing the impact of recent regulatory changes and getting Agcom's preliminary approval for the spin-off, Telecom said it has decided to move forward with the plans.
The fixed-line activities recorded second-quarter revenues down 8 percent from a year earlier to EUR 2.985 billion, hurt by regulatory price cuts and continued line loss. Fixed lines fell by 222,000 in the three months to 13.555 million, and the operator also lost 52,000 retail broadband customers, for a total 6.933 million.
Quarterly revenues at mobile unit TIM fell 17.8 percent year-on-year, with service revenues down 18.3 percent to EUR 1.312 billion on the sharp cut in termination rates and price pressure. The operator said it gave up part of its margin with new offers in the quarter in order to maintain and win over new customers given the tough competitive environment. It still lost 153,000 customers in the quarter, for a total 31.705 million at end-June. ARPU was down from a year earlier but improved slightly versus Q1 to EUR 13.31.
