In telecommunications risk, Tiscali is conquering a front row seat. The Board of Directors of the “small” but fierce telecommunications company – among the first to bet on the Internet revolution – examined the August 27 agreement with Tim and the possible developments of the Fiber Cop dossier. It is worth remembering the boom in shares on the Stock Exchange, after the announcement of the agreement with the former monopolist and the go-ahead for the Fiber Cop-Rete unica project arrived on Monday 31 August from Tim and Cdp. In a few days Tiscali conquered raise exhibitions, two-digit percentage. In the morning, the stock benefits from the attention to the sector with a rise of 6,8% at 11:21 on Friday.
The Board has done the math. The agreement "determines an epochal transformation for Tiscali which positions itself, first in Italy, as a smart telco and digital service operator, focused on the supply of digital services and applications on optical technology and 5G", writes the note released by the company. The company foresees a strong reduction in connection and traffic management costs, the almost total elimination of investments in the network. Furthermore, a strong reduction in investments is expected to connect new users and to migrate existing copper customers to fiber technology, a 50% increase in the user base that can be reached directly by fiber, acceleration of the fiber migration process and consequent improvement of the quality of the service and of the 'churn rate', an acceleration on products with high added value and the optimization of the working capital.
The estimate of the economic effects deriving from these improvements shows, on a like-for-like basis (and assuming that the binding contracts reflect the content of the agreement reached) a improvement of the Ebitda already starting from the last quarter of 2020, and an increase when fully operational in 2022 of about 12 million euros per year (due to the fact that the economic conditions set out in the agreement apply from 2020 September XNUMX).
The Board also expects a additional cash generation, in the two-year period 2021-2022, by over 35 million and when fully operational, starting from 2023, by around 20 million. The greater financial resources will also be used to support initiatives aimed at increasing the customer base. Lastly, as already communicated on 27 August, Tiscali reiterates that the possible entry into the capital of FiberCop by Tiscali will be evaluated in good faith by the parties involved at a later stage. According to Tiscali, this agreement is among the first in Europe according to the co-investment principle as defined by the European Commission. The definitive contents of the agreement, concludes the note from the company, will be governed by binding contracts that the parties will negotiate and sign by 31 October 2020.
