The company confirmed that it had met its debt target of EUR 27 billion, having cut debt by EUR 1.48 billion to EUR 26.81 billion, after selling assets including its stake in Telecom Argentina. It also scrapped its dividend for ordinary shares for the first time in its history as a public company but confirmed that it will pay a dividend of EUR 0.0275 on its saving shares. Telecom Italia CEO Marco Patuano said that the company had proposed to drop its 2013 dividend to further strengthen its asset structure and continue to invest in networks. He added that the operator is seeing the first signs of a recovery in its business and expects to return to paying a dividend on ordinary shares out of its full-year 2014 earnings.
In Italy revenues fell by 9.6 percent to EUR 16.18 billion, affected by cuts to mobile termination rates that came into force in July 2013, intense competition and a worsening economic outlook. EBITDA dropped 10.7 percent to EUR 7.74 billion, while EBITDA margin came in at 47.9 percent, 0.6 percent down on 2012. However, there were signs of recovery in the fourth quarter of 2013, with revenues dropping 7.7 percent to EUR 4.11 billion, compared to drops of 9.1 percent in the third quarter and 10.5 percent in the first quarter of 2013. Fourth-quarter revenues of Telecom Italia’s mobile unit TIM were down 11.2 percent year-on-year to EUR 1.47 billion, a slight improvement on the previous quarter’s 13.6 percent fall. Wireline revenues dropped 7.8 percent to EUR 2.94 billion compared to the fourth quarter of 2012.
TIM ended the year with a total customer base of 31.221 million, down 2.9 percent on 2012. Fourth-quarter handset sales remained strong, however, improving by 9.3 percent from a year earlier to 1.87 million. ARPU fell 12.7 percent to EUR 13.0 from EUR 14.9 at the end of 2012. The operator said that its mobile customer base was turning towards bundle offers that would allow greater stabilisation of expenditure and churn in the medium to long term at the expense of a short-term reduction in profitability.
In the fixed-line segment, Telecom Italia added 23,000 retail broadband subscribers in the quarter to end the year with 6.92 million (down 1.5 percent year-on-year), while the fixed-line telephony base fell by 162,000 to 13.21 million at the end of December, 5.5 percent down on the previous year. Broadband ARPU was up 1.6 percent, at EUR 19.2 per month, supported by the company’s continued FTTC deployment, which had covered 42 Italian cities by year-end.
In addition to approving the accounts, Telecom Italia also launched a EUR 500 million buyback on bonds and confirmed that the annual general meeting on 16 April would consider Patuano’s proposals to give more influence to minority shareholders on the operator’s board, which is due for renewal.
