Telecom Italia (TIM) reported revenues down 2.1 percent year on year to EUR 3.82 billion in the third quarter of 2021, compared to the 1.0 percent growth posted in the previous quarter. The company attributed the drop to worsening market conditions in its domestic market above all (sales down -3.2% to EUR 3.11 billion), partly offset by a 2.8 percent year on year rise at its TIM Brasil unit to EUR 731 million. EBITDA fell 5.9 percent year on year to EUR 1.7 billion in the third quarter, due in part to the startup costs of its joint offer with streaming service DAZN to air Italy’s top-tier Serie A football matches over the next three seasons.
As a result, TIM now expects a “low to mid single digit” drop in organic EBITDA this year compared to an earlier guidance of “stable to low single digit” growth, and it pushed back a goal to stabilise domestic service revenues in 2021, forecasting a low single digit decline instead. It also expects cumulative free cash flow over the 2021-2023 period of around EUR 3.5 billion compared to the earlier estimate of around EUR 4.0 billion.
However, TIM said its performance in the domestic market is already seeing the first positive effects of the TIMvision-led football and entertainment convergent offer launched in July, which led to a further improvement in the growth of the company’s fibre lines and a very strong reduction in the churn rate in both fixed and mobile. The latter fell to the lowest level in the last 14 years (3.6%, compared to 5.2% the previous year), reversing the typical trend of the summer season.
FTTH footprint up 22% in 2021 on TIMvision boost
Total mobile lines (human SIMs and M2M lines) came to 30.5 million on 30 September, up from 30.2 million a year earlier and 155,000 higher than in Q2. In fixed, the company’s customer base stabilised thanks to the combined effect of its football offer and its ongoing 'FiberCop' rollout, which saw the number of FTTH homes rising 22 percent in 9 months, in addition to bringing broadband to almost 94 percent of fixed lines. As a result, “ultrabroadband” lines grew to to 9.7 million, up 1.05 million this year alone including wholesale.
TIM added that it expected its fibre-to-the-home uptake to grow yet further, driven by a football offer intended for a potential viewer base of around 5 million families, which until the end of the 2020-21 season primarily used satellite.
