Il telecommunications market traveling at two speeds. THE Asian groups are growing strongly, while those in Europe and America are stagnant or contracting. In Europe the ranking is led by Germany with revenues of 59,1 billion euros (+1,3% on 2021), followed by France (36,7 billion; +1,8%), UK (36 billion, net of the sale of devices whose amounts are not available; +2,7%). L'Italy occupies fifth position with 26,9 billion euros, down by 3,3% on 2021 and by 13,8% in the last five years. In both cases this is the largest downsizing in the Old Continent.
This is what emerges from thesurvey annual report on the major global and Italian groups in the telecommunications sector carried out byMediobanca Studies Area which analyzes the data for the first six months of 2023 and the five-year period 2018-2022 of the 32 largest international telcos with revenues exceeding 9 billion euros, of which 13 are based in the EMEA area, 12 in Asia & Pacific and the remaining 7 in America.
The world ranking: American Verizon first
In the first half of 2023, globally, telco groups recorded an aggregate turnover growth of 2,4%. With an increase of 5,9%, Asian companies led the growth of the sector thanks to Chinese players (+7,1%) strengthened by the strengthening of the market share in 5G and the "premiumization" strategies, the search for top of the range. EMEA operators also increased (+1,4%), but with Europe almost stationary (+0,6%) and America bucking the trend with a contraction of 1,3%.
The centrality of Asian players is confirmed by the presence of five of them in the top 10 operators by revenue China Mobile which approaches Verizon in terms of revenues (127,4 billion euros compared to 128,3 billion for the American group. On the lowest step of the podium Deutsche Telekom thanks to the US subsidiary T-Mobile. Tim it is 20th, overtaken by the Indian Bharti Airtel, "but it would fall to 22nd position with revenues estimated at 13,5 billion excluding the activities of NetCo, the company destined to receive the fixed network and wholesale services of the Italian incumbent - we read in the report -. Thanks to the sale of NetCo, a reduction in financial debt of 14,2 billion euros is estimated for Tim, with a reduction in financial leverage below 100%. This structure would allow the Italian incumbent to be aligned with European best practices, removing the constraints that limit its growth potential, both in terms of non-organic operations and strategic developments that require huge investments".
The European ranking: the German Deutsche Telekom dominates the podium
Regarding the European ranking in the first six months of 2023 Deutsche Telekom dominates the ranking with 55 billion (-0,9% on the first half of 2022), followed by Vodafone (22 billion, -2% on 2022), Orange (21,5 billion; +1,2%), Telephone (20,2 billion +3,7%), IT Group (10,3 billion; +2,4%), Altice (8 billion; +0,9% on a pro-forma basis) e Tim (7,8 billion +3,8%). In the survey, our country's market is defined as "among the most fragmented and competitive in the Old Continent".
A positive note for our country is that it has partially recovered the infrastructural gap it had with Europe. Not comparable to what can be observed at a European level, investments are still needed. In comparison with Europe, for example, the coverage of very high speed networks has improved which in Italy rose to 2022% of resident families in 53,7 (it was 33,7% in 2020), compared to 73,4 % of the European average. The diffusion of fixed broadband >100 Mbps, equal to 59,6%, is now higher than the European average (55,1%) and the state of the art in Germany (38,5%) and France (51,4% ).
Focus on Italian telcos: Tim first in Italy in terms of revenues, followed by Vodafone
In the first half of 2023 i revenues servants of the principals Italian operators were stationary (-0,1%), with the mobile sector continuing its declining trend (-3,9%), while fixed telephony recorded a positive trend (+3%). In detail, for 2022 Tim (Italian activities) is first with 11,9 billion in turnover (-5,2% on 2021), ahead of Vodafone (4,8 billion; -4,3%), Wind Tre (4,2 billion; -5,6%) e Fastweb (2,5 billion; +3,7%), with Iliad in fifth position (0,9 billion; +15,9%). Excluding start-ups (Iliad and Open Fiber) and smaller companies, in the five-year period 2018-2022 Fastweb is the only one to grow (+17,4%), while the Big 3 show contractions of around 20%, with the greatest difficulties concentrated in the consumer segment.
The contraction in turnover remains concentrated in divisions furnishings of the top three operators: Tim (-6,4%), Wind Tre (-6,1%) and Vodafone (-5,7%) while the growth of Iliad Italia continues (+12,2% on the first half of 2022) . Also on the rise Poste Mobile (+4,5%) and Fastweb (+4,3%).
Extending our gaze to 2010, the panorama becomes even more gloomy: in Italy the turnover of the sector has decreased by around 15 billion, with the mobile network in greater difficulty (-5,1%) compared to the fixed line (-2,4 %). Among other things, regulatory effects and competitive pressures weigh heavily.
The consolidation of the sector
The union between Tiscali e Linkem (Now Tessellis) in August 2022 represented a first sign of consolidation of the sector "although still not comparable to what can be observed at a European level" explains the report which notes "the need to reach scale to address long-term infrastructure investments, combined with a profitability that is not always adequate, is effectively redefining the contours of the sector".
In Italy the risk has not yet started, but the reorganization operation of Tim with the sale of Netco it could have a domino effect and already Vodafone confirmed that it is studying several options for its Italian operations.
