Telecom Italia reported today that its net profit for 2004 was EUR781 million, a drop of 34% over the previous year. The company claims the fall was a result of not repeating a huge tax advantage from 2003, and that pre-tax operating profit for 2004 actually rose 20% on the back of strong results from its mobile phone and internet units.
Annual revenues for the group were up 1% at EUR31 billion with Telecom Italia Mobile (TIM) contributing 41%. Profit from TIM’s domestic subsidiary was, however, offset by losses at foreign units, mostly in Latin America where heavy network investment continued in 2004. Telecom Italia is in the middle of fully integrating its mobile arm into the company in a EUR20 billion deal announced in November 2004.
While TIM remains the Italian telco’s cash cow, Telecom Italia’s internet business contributed a small but growing part of its total revenue. Sales from internet and other data services rose 12% to EUR2.5 billion. The company claimed two million broadband customers at the end of 2003 but double that many at the end of 2004. It has also begun expanding its internet presence abroad and sells services in Germany and France under the Alice brand name. It had 430,000 broadband customers outside of Italy at the end of last year, up from approximately 200,000 twelve months previously.