Italian telco says domestic business results are its best since 2007.

Telecom Italia on Friday published a set of full-year and fourth quarter financial results that showed ongoing improvement in earnings, in no small part due to a solid performance from its domestic operation.

The Italian incumbent said its domestic business unit turned in its best annual results since 2007, with stable revenues and organic EBITDA growth in excess of 4%.

At group level the operator posted EBITDA of €8.02 billion last year, up 14.4% in absolute terms and an increase of 15.4% on an organic basis. In Q4, EBITDA came in at €2.14 billion, an increase of €756 million on the year-ago period.

"The sustained recovery in EBITDA, both in absolute terms and in terms of the margin of profitability on revenues, benefited from the cost recovery plan actions launched in the second quarter of 2016 by the domestic business unit and in the third quarter in the Brazil business unit," the company said in its results announcement.

Italy accounted for 83.7% of EBITDA last year, bringing in €6.71 billion, up from €5.57 billion in 2015, while Brazil generated €1.33 billion, down 4.5% organically.

The group recorded an EBITDA margin of 42.1%, up from 35.5% a year earlier.

Revenues in Italy reached €15.02 billion in 2016, up by 0.1% on the previous year, with growth coming in Q3 and Q4 following declines in the first half of the year. The top line was aided by growth in mobile service revenues, which increased by 1.4% to €4.58 billion with the strongest growth – 3.1% – coming in Q4.

The operator’s fixed line service revenues declined by 4.1% to €9.95 billion, but again Q4 gave the strongest showing with a fall of 3.6%. The reduction in revenue from traditional fixed voice services was not fully offset by broadband growth, the telco said. It was keen to point out that it added 125,000 fibre connections in the fourth quarter and now claims a next-generation network customer base of more than 1 million.