Telecom and Fastweb have entered into a strategic partnership to build an FTTH network (Fiber to the Home) capable of guaranteeing speeds of at least 1 Gigabit per second. This was communicated by the two companies, specifying that the infrastructure construction and fiber laying works will be carried out through a joint venture co-owned by the two companies respectively for 80% and 20%, with the aim of connecting by fiber optics three million housing units in the top 29 cities already covered under the FTTC (Fiber to the Cabinet) by 2020, for an expected total investment of 1,2 billion euros.
The joint venture will be financed by debt and equity. Tim's share is already included in the investment plans for 2016-18, while Fastweb's will be limited to 55 million for the next 4 years. "Tim and Fastweb - explains Telecom - will study the possibility of extending the partnership to other sectors of collaboration for the joint development of passive infrastructures and technologies for the rapid diffusion of ultra-broadband".
Meanwhile, Telecom Italia has closed the first semester with a net profit of 1,02 billion euro, a marked increase compared to the 33 million of the same period of 2015. The result was positively impacted by some accounting items, however "in the absence of these impacts, the profit for the first half 2016 attributable to the shareholders of the parent would have been around 650 million, in line with the same period of 2015 restated on a like-for-like basis”.
Operating profit fell by 5,6% to 1,7 billion with the incidence on revenues rising, however, by 0,8 percentage points to 18,5%. Ebitda improved by 2,4% to 3,7 billion while revenues fell by 9,9% (organic variation -4,9%) falling below 10 billion to 9,1 billion. “The reduction of 1.005 million euros – underlines the group in a note – is mainly attributable to the Brazil business unit for 833 million euros and to the Domestic business unit for 128 million euros”. Adjusted net financial debt shows an increase of 236 million compared to the end of December, reaching 27,5 billion euros.
Telecom Italia also lifted estimates for the current year. If, previously, domestic Ebitda was expected to stabilize at 2015 levels, now the new estimates speak of growth, albeit "low single digit", therefore less than 5%. The strategy on the mobile market plans to push more and more on 4G while the diffusion of fiber should make it possible to reduce the contraction of fixed telephony.
Particular attention will be paid to Brazil, which is going through a deep economic crisis which has already led to the bankruptcy of the fourth operator, Oi, in June. Telecom explains that "Tim Brasil aims to defend and increase its market share of revenues and to improve profitability (Ebitda Margin)".
In the first part of the year, Brazil recorded the most difficult trend even if the results were above market estimates. Revenues showed a contraction of 13,9% to 1,9 billion with an Ebitda down by 12,3%. Telecom Italia is reacting to the changed Brazilian economic context with greater attention paid to costs and a reduction in investments which in the first part of the year amounted to 229 million euros compared to an increase of 69 million (for a total of 1,6 .XNUMX billion) for the domestic business unit.
In Italyrevenues, on the other hand, fell by 1,7% to 7,2 billion, but the slowdown in the second quarter (-1,2%) was less marked than in the first (-2,3%). In particular, the turnover of the mobile segment resumed, which showed an acceleration (+0,7%) in the second quarter compared to the first (+0,6%). Margins also improved with an Ebitda that grew by 11,9% to 3,2 billion thanks to a sharper reduction in personnel expenses (67 million against 24 million) but above all to the cut in the component for disputes and fines (16 million compared to 370 million a year ago).
“Telecom registers in Italy the best quarter since 2009 demonstrating that the actions taken so far are bringing important results – commented the CEO of Telecom Italia, Flavio Cattaneo –. Organic Ebitda returned to growth both on a quarterly and half-yearly basis, the turnover of the mobile segment improved its development trend and the fixed segment showed important signs of recovery, driven by investments in ultra-broadband”.
Satisfaction was also expressed by the president, Joseph Recchi: “We are very pleased with this quarter's results. It is the first important step in the turnaround long desired by the board of directors after years of declining revenues and margins. I believe it is the beginning of a growth path that will allow Telecom Italia to fully unleash its potential”.
