Telecom Italia (TIM) reported an organic 5.0 percent year-on-year decline in revenues to EUR 3.90 billion in the third quarter of 2020, an improvement on the previous quarter’s 10.1 percent fall, attributed in part to Italy's strong recovery from the first Covid-19 lockdown and higher fibre demand. Underlying service revenues also improved somewhat to EUR 3.5 billion, down 6.4 percent year on year compared to an 8.2 percent decline in the second quarter. Organic earnings before interest, tax, depreciation and amortisation (EBITDA) after lease costs came to EUR 1.76 billion, down 7.9 percent year on year, due to negative Covid-19 impact that was in part offset by a 1.3 percent rise in service revenues at TIM Brasil.
In its domestic market, Telecom Italia’s third-quarter revenues declined 6.4 percent year on year on an organic basis to EUR 3.21 billion, hurt by a combination of ongoing competition in the mobile market, reduced footfall due to Covid-19 and regulatory impact. The result was a 14.2 percent reduction in handset sales and ARPU, although churn in the third quarter fell to its lowest level in two years, with the company losing just 43,000 mobile lines to rivals. According to preliminary results, TIM said its mobile customer base stood at 30.2 million at the end of September, slightly down due to the impact of the lockdown on M2M lines above all. Human SIMs fell to just under 20 million (19.9 million) compared to 21.4 million a year earlier.
High-speed fixed broadband lines top 8 mln
In the fixed line segment, TIM benefited from the migration of customers to fibre-optic plans and the greater availability of lines in underserved ‘white’ areas, where the company has opened 10,000 new cabinets with a view to reaching 90 percent of Italian households by the end of the year. New fibre activations increased by 320,000, with the number of customers on high-speed broadband lines (FTTC and FTTH) rising 23 percent year on year to 8.2 million, including both retail and wholesale.
Data centre newco to launch in Q1
TIM also revealed that its board of directors had agreed to spin off its data centre business into an unnamed NewCo that would launch operations in the first quarter of 2021 after authorisations have been obtained. It said the unit would develop under the strategic partnership with Google and that 2020 proforma turnover is set to be around EUR 500 million, with an expected growth of over 20 percent per year.
