Telecom Italia outlines new thrifty approach

13 Apr 2005

Telecom Italia chairman Marco Tronchetti Provera has announced plans to save his company EUR1.5 billion in expenditure by delivering fixed and mobile services more efficiently in the coming three years. Around two-thirds of the savings will come from a revised capex plan, with the remainder set to be accumulated by reductions in operational spending. Telecom Italia brought its mobile arm back into the main group in a EUR20 billion deal last year and has forecast hefty synergies from its newly integrated wireless operations. The group is also looking to boost revenues abroad by expanding into Brazil and Turkey, and upgrading existing broadband operations in France and Germany. Telecom Italia says it expects group revenues and EBIT to grow by about 5% and 8% by the end of 2007, with free cash flow expected to have more than doubled by that time.

In a separate announcement, Telecom Italia revealed that it is to start offering IP TV in June, initially launching the service in Rome, Milan, Palermo and Bologna, before expanding to 17 other cities by year end. The company expects non-voice activities to account for 35% of revenues by end 2007, up from 20% at the end of last year.

Italy, Telecom Italia (TIM)