Telecom Italia reported first-half revenues down 11.2 percent to EUR 10.55 billion, hurt by divestments and continued weakness in its home market. EBITDA dropped 7.6 percent to EUR 4.345 billion, while the margin improved to 41.2 percent from 39.5 a year ago thanks to cost reductions. On an organic basis, excluding currency effects and changes in scope, revenues fell 6.5 percent and EBITDA was down 5.6 percent.
The Italian operator's net result improved to EUR 543 million profit from a loss of EUR 1.407 billion a year ago when the company wrote down the value of some assets. Capex fell slightly to EUR 1.707 billion or 16.2 percent of revenue. Net debt was down by EUR 171 million in the second quarter to EUR 27.358 billion at the end of June.
The company said results were in line with its mid-term outlook and the Italian market is expected to contract less this year than in 2013. Profitability will be under pressure in the near term from the ongoing shift to bundled plans, as well as competition and price pressure on the fixed market. Telecom Italia also acknowledged indirectly Telefonica's proposed bid for GVT in Brazil and said it continues to evaluate strategic options for its own activities in Brazil.
In Italy, the operator reported second-quarter wireline revenues of EUR 2.737 billion, down 8.3 percent from a year earlier. Mobile revenues fell 10.0 percent to EUR 1.264 billion, as growth in handset sales offset somewhat a 13.3 percent fall in services revenue. EBITDA in Italy dropped to 1.709 billion from EUR 1.847 billion over the same period. Capex was reduced to EUR 1.177 billion in the first half, with savings on process simplification and obsolete platforms shifted in part to the LTE and FTTC roll-outs. The latter accounted for 34 percent of investment in the period. The operator also stopped counting handset subsidies under intangible investments.
TIM lost 336,000 customers in the three months to June, for a mobile base of 30.660 million at the end of June. Churn slowed to 5.9 percent from 6.1 in Q1. Mobile broadband users were up 28 percent from a year ago to 9.2 million, of which around 600,000 on LTE. This drove an 11.5 percent increase in mobile internet revenues to EUR 271 million, while voice and SMS revenues continued to fall in double digit percentages from the ongoing price pressure in Italy. TIM reported a strong increase in usage of 15.8 percent year-on-year to an average 200 minutes per line per month, but ARPU fell 10.6 percent over the same period to EUR 11.9.
At the wireline unit, Telecom Italia lost 199,000 fixed lines in the three months to finish June with a total 12.828 million. Wholesale unbundled lines grew by 47,000 to 7.258 million. On the retail broadband market, it added 6,000 customers to reach 6.939 million, with small increases in both business and consumer. The number of customers on the FTTC network more than doubled compared to Q1, to 103,000 from 45,000. This helped broadband ARPU increase 2.3 percent year-on-year to EUR 19.6.
