Surprise: after years of slimming treatments, investments and revenues are growing again in the TLCs in Italy. The former, driven by the broadband and ultra-broadband infrastructure of fixed and mobile operators, increased by 9% in 2015 over the previous year; the latter rose by 1% against the 5% drop recorded in 2014. These are the most significant data to emerge from the Asstel Report, elaborated by the Digital Innovation Observatories of the School of Management of the Milan Polytechnic based on the indications of the social partners and data provided by companies associated with Asstel, presented on Monday in Rome by the president of the Confindustria association Dina Ravera together with the general secretaries of Slc-Cgil, Massimo Cestaro, Fistel-Cisl, Vito Vitale, Uilcom-Uil, Salvatore Ugliarolo.
“After years of sharp decline, the TLC sector recorded a stabilization of revenues in 2015, which went from -5% in 2014 to +1%, accompanied by a great investment effort by Operators in the development of ultra-broadband which has reached its highest value since 2008 – he said Ravera – Among the main factors that are contributing to producing this new scenario, an important role is played by the Government's growing attention to the subject, which has also led to the introduction of measures for the simplification of regulations for the installation of optical fiber, which operators have been waiting for a long time. Proof that a framework of regulatory certainty is essential to stimulate investments".
Of course, the TLC supply chain has paid a heavy price for the crisis with the loss of almost 11 billion in revenues between 2008 and 2015, equal to 20% of the initial value. But the signal that arrived last year is very encouraging. The framework that outlines the Report highlights "the strategic nature of pursuing the objectives of the Industry 4.0 Plan which is aimed at providing the country with a plan for the digital transformation of Italian companies, as well as the Telecommunications chain has been requesting for some time".
Revenues
The Italian telecommunications supply chain, which includes fixed and mobile network operators, suppliers of terminals, equipment and network services, telecommunications software companies, network infrastructures and Contact Center companies, in 2015 , after years of decline, grew by 1% compared to the previous year, settling around a value of 42,7 billion euro. It is a positive sign, considering that from 2008 to 2014 the sign had always been negative and a total of over 11 billion euros (21% of the initial value) were "burned".
The result of 2015 is achieved mainly thanks to a limited reduction (-2,5%) of fixed TLC revenues and to an sessentially stable mobile TLC revenues (+0,7%). All other categories are growing of players in the supply chain: +2,5% revenues from Contact Centers from TLC customers, +8% those from equipment suppliers, +8% sales of terminals, +5% revenues linked to infrastructure and +6% of the IT sector.
Specifically, the revenues of TLC Operators after years of sharp contraction are approaching stabilization: in 2015 they fell by 0,9%, losing around 300 million euros. The drop is attributable to the fixed line market (-0,4 billion €) and in particular to fixed telephony. For operators, the years from 2007 to 2015 resulted in a loss of over 14 billion euros, equal to 31% of the initial value. Mobile has lost 33% equal to almost 8 billion euros; the fixed 29% equal to 6,4 billion euros.
As far as the 'use of the mobile network, it is interesting to note that in the last two years the expenditure component relating to bundles has grown steadily - the offer packages including voice, data and any services - which in 2015 alone accounted for more than half of total revenues.
investments
In this scenario, the investments (Capex) of TLC Operators have continued to grow: in 2015 they mark a +9% (600 million more than 2014) for a total of 6,6 billion euros. Therefore, the impact of investments on revenues is also growing, reaching 2015% in 21, the highest value reached in 8 years now. In 2015, these investments were supplemented by around 600 million euros linked to the purchase and renewal of network licenses. Adding this item together, the share of investments increases by 19% and accounts for 23% of revenues.
Basic fixed broadband
According to data from the European Commission, the coverage of basic fixed broadband on total homes in mid-2015 is equal to 99,3%, a figure higher than the European average; the first objective of the European Digital Agenda has therefore been effectively achieved.
Use, on the other hand, estimated as the number of subscriptions out of the total population, is equal to 24,1% against a European average of 31,6%, while if one considers the percentage of subscriptions for homes, Italy is last in the EU28 with a value equal to 53%, compared to a European average of 72%. It should be noted that this is also due to the phenomenon of replacing fixed with mobile which is particularly relevant in our country.
Fixed ultra-broadband > 30 Mbps
Operators invested significantly in 2014 and 2015, making it possible to reach 44% of homes with ultra-broadband exceeding 30 Mbps in June 2015. From December 2013 to June 2015 coverage increased by a whopping 23 points percentages, marking a faster growth rate than the EU28 average (+9 pp). We are now trailing France, whose coverage is equal to 45% of homes, while the coverage gap remains with respect to the EU28 average (71%) and towards the main countries: United Kingdom (91%), Germany (81%), Spain (77%).
Usage, on the other hand, is at the bottom of the EU ranking: in July 2015 subscriptions concerned just 1,3% of the population and marked a growth rate of just 0,8 pp compared to the previous year. This compares with an EU28 average which sees the percentage of use at 9,5% with a growth rate of 2,6 pp.
Mobile ultra-broadband (4G, Lte)
According to GSMA Intelligence data, coverage of the population with LTE networks reached 2016% of the Italian population in the first quarter of 95, when the value was 84% the previous year. Making a comparison with the main European countries, it emerges that Italy has a coverage rate in the EU5 lower only than the UK (which has reached 98%), while it exceeds that of Germany (91%), Spain (90%) and France (81%). This Italian excellence suffers a total setback in the case of the penetration of 4G SIMs which for Italy is the lowest among the EU5 countries (11% against an EU5 average of 23%).
Traffic and prices: the former increases, the latter fall
Traffic – In 2015, the growth (+27%) of data traffic volumes from the fixed network continued. The volumes of data traffic from landlines are worth more than 10 times the volumes of mobile data traffic, which in any case shows a steep upward trend, exceeding 2015 Petabytes in 750 (+44% compared to 2014). From 2010 to today, mobile data traffic has grown by almost 500%. Data traffic that is also used to take advantage of communication services via the Internet, with a consequent dramatic drop in the number of text messages sent from mobile devices (-27%).
Rates – Telecommunications are the only utilities to present a lower price level than in 2010. Istat data show a price collapse between 2010 and 2015: -13% for the prices of fixed telecommunications and as much as -37% for mobile telecommunications. With regard to the dynamics of mobile telecommunications consumer prices, Asstel conducted an analysis with the V. Volterra Center of the University of Rome Tor Vergata during 2015, which made it possible to reconstruct the historical series for the period 2011-14 including in the price index also the options that allow the customer to purchase a predefined package of voice and data services at a fixed price (formulas not included in the Istat surveys until 2013 and only introduced in the last two years in the price index) and also including the tariffs of the fourth mobile operator (which Istat has only recently included). According to this analysis between 2011 and 2014 the prices of mobile telecommunications fell by 49%.
Outsourced Contact Centers
As far as revenues from outsourced Contact Centers are concerned, considering all clients and not just the TLC sector, these recorded growth in 2015, albeit very modest. The sector of TLC Operators in 2015 accounted for approximately 39% of the total market. In 2015, the investments of the main Contact Center operators who work for TLC clients increased significantly (+17% compared to 2014) demonstrating the willingness of companies to invest in hardware and software solutions that increase the productivity of the workforce (e.g. example with automation technologies) and the customer experience (for example through the integration of new contact channels) and guarantee high quality standards. Moreover, against this, for these operators the margins are declining sharply (-22% on 2014) and are worth 5% of total revenues.
Occupation
Progress – Employment in the TLC supply chain in Italy in 2015 grew by 0,5% for a total of approximately 123.000 employees (the rate was -1% in 2014). In particular, there was stable employment (-0,1%) in the sector of TLC operators which, with just over 66 thousand employees covers just over half of the employees in the sector, an increase in Contact Center employees (+5,6 .23.600%, 4,5 employees), also linked to consolidation phenomena that have characterized some large companies that operate for Telcos, and a reduction instead of the employees of equipment suppliers (-9.900%, XNUMX employees).
Chronological age – The chronological age of employees in the TLC chain continues to grow: more than 60% are over 40 years old (against 49% in 2010). On the other hand, the share of under 30s is reduced: from 13% to 6% in 5 years. The same goes for company seniority: 64% of employees have more than 10 years of seniority (in 2010 it was 53%), against only 13% who have been with the company for less than 5 years (it was 21% in 2010 ).
Smart Working – Smart Working not only represents a business opportunity for TLC Operators, as providers of technological services that enable this new way of working, but it is also an opportunity for companies to achieve higher levels of productivity, competitiveness, efficiency and quality and at the same time for workers to improve working conditions, also through the diffusion of Work-life Balance measures. In fact, the most extensive Smart Working projects, in terms of people involved, are today among Tlc operators. Ads Group, Cellnex Group, Ericsson, Fastweb, Vodafone, Wind, Sielte, Telecom Italia are among the leading companies with their own Smart Working projects that already involve thousands of workers, to which other operators in the supply chain are gradually adding.
