Competition at home and in Brazil hits Telecom Italia profits

12 May 2008

Telecom Italia (TI) has seen its first quarter profits hit by increased competition in its domestic market and in Brazil, where its TIM Brasil subsidiary is the country’s second largest cellular operator. Net earnings for the three months to the end of March fell 35% year-on-year to EUR501 million (USD774 million), slightly below the average estimate of EUR510 million of 15 analysts polled by Dow Jones. Losses widened at TIM Brasil and at TI’s domestic broadband business, which is coming under increasing pressure from alternative providers and has also been hit by regulations which have brought in lower tariffs. Revenues for the quarter fell 2.4% year-on-year to EUR7.30 billion.