News
Italian incumbent says litigation, regulation and severance costs impacted on its third-quarter EBITDA, shares plans to shore up fixed business
TIM posted solid headline figures for the first nine months of 2017 but the numbers masked a relatively weak performance in the third quarter.
The Italian incumbent reported EBITDA of €1.69 billion for the three months to the end of September, down by 2.5% on Q3 last year, while revenues crept up by 1.3% to €4.91 billion.
For the first nine months of the year the telco’s earnings grew by 5.7% to €6.21 billion, while turnover increased by 5.3% to €14.68 billion.
Third-quarter earnings were impacted by a €127 million one-off charge for litigation and regulatory procedures, as well as severance costs, the telco said.
Since the end of the reporting period,the government has exercised its so-called golden power, giving it greater control of TIM with a view to protecting national interests now the telco is in the hands of major shareholder, France’s Vivendi,
Returning the figures, TIM’s domestic business also weighed on Q3.
In Italy the telco generated revenues of €3.82 billion, virtually flat on the year-ago quarter, as 2.6% mobile revenue growth only just offset a slight decline at its fixed-line business. Domestic earnings fell by 6.5% to €1.69 billion.
Fixed-line accesses fell by 2% year-on-year to 11.14 million, but retail broadband accesses grew by 6.1% to 7.56 million, driven by the consumer space. TIM’s total number of mobile lines grew by 2.5% to 30.29 million, while ARPU slid by 0,4% to €12.7.
TIM said it expects to continue to lose customers in the fixed-line space through to the end of 2018, at which point line losses will cease "thanks to the acceleration in the availability and consequent adoption of fibre." The operator also expects to retain and increase its fixed customer base by selling devices for the smart home, and other initiatives.
In September TIM brokered a deal with a federation of Italian utility companies that will enable it to roll out fibre alongside their infrastructure, better positioning it to compete with rival wholesale fibre operator Open Fiber.
And last month TIM formally announced plans to create a joint venture with sister company Canal+, through which the pair aim to create compelling content that will stimulate demand for fibre broadband.
TIM is now less vocal than it once was about its Brazilian business, but TIM Brasil still contributes 22% of group revenues and the telco insists it is pushing ahead with a revamp of the Brazilian unit.
TIM generated turnover of €1.1 billion in Brazil, up 3%, while earnings grew by 18.6% to €408 million. In local currency terms, TIM Brasil’s reported revenues grew by 4.7%, while EBITDA increased by 19.1%.
The telco confirmed its guidance for full-year 2017 and for the duration of its 2017-2019 strategic plan.
