Telecom Italia reported an 8.5 percent year-on-year rise in revenues to EUR 4.82 billion in the first quarter, driven by 230,000 net broadband additions in the group’s domestic market and a return to growth in Brazil. On an organic basis, excluding exchange rate effects, revenues rose 2.6 percent in the first three months of the year, an improvement on the 0.8 percent year on year rise in Q4 and the 1.2 percent fall in Q3. The company’s EBITDA for the quarter soared by 16.2 percent year on year on a consolidated basis to EUR 1.99 billion, some EUR 278 million higher than a year earlier, again attributed above all to the cost recovery plan launched in the second quarter in Italy and in the third quarter at its TIM Brasil unit. The group’s adjusted net debt came to EUR 25.24 billion at the end of Q1, some EUR 1.9 billion lower than the year-earlier figure but EUR 116 million higher than the Q4 result due to TIM Brasil’s EUR 257 million payment to the consortium that’s cleaning up the 700 MHz spectrum.
In its domestic market, Telecom Italia’s first-quarter revenues rose 2.8 percent year on year to EUR 3.65 billion, compared to increases of 2.5 percent, 1.0 percent and a 1.2 percent loss in the previous three quarters. Mobile service revenues climbed 3.2 percent to EUR 1.08 billion, an improvement on growths of 3.0 percent, 1.1 percent and 0.7 percent in the previous three quarters, helped by a rise in ARPU to EUR 12.0 from EUR 11.6 in Q1 2016. Device sales came to EUR 305 million in the first three months of the year, some EUR 109 million more than the year-earlier quarter. However, TIM’s customer base continued its gradual decline, falling 1.4 percent year on year to 29.42 million lines at the end of March, with 68 percent using mobile broadband.
In the fixed segment, the company’s first quarter service revenues fell 2.4 percent to EUR 2.42 billion, another improvement on the contraction of 3.0 percent, 3.6 percent and 4.8 percent posted in the previous three quarters. The company said the decline was almost exclusively due to the fall in voice revenues, down EUR 100 million year on year, added to the reduction in regulated prices for some wholesale services, partially offset by a steady growth in broadband revenues, with ARPU rising 7.1 percent year on year to EUR 23. The company’s fixed line base stood at 11.23 million on 31 March, down 3.2 percent year on year, although broadband accesses were up 5.4 percent to 9.44 million.
Separately, the company announced that it would need to invest around EUR 600-650 million in renewing spectrum licences. It added that it expected to further reduce the fall in domestic fixed customer numbers to zero losses by the end of 2018 thanks to the acceleration in the availability and adoption of fibre, which is set to reach 95 percent of Italian homes in 2018 and 99 percent in 2019. In the mobile market TIM said its 4G network would cover more than 99 percent of the Italian population in 2019 and its Kena no-frills brand launched in April would allow the company to compete in the more price-sensitive segments before France’s Iliad enters the Italian market at the end of the year.
