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TIM fixed the fixed in Q4

TIM reported growth in retail fixed lines in the fourth quarter of last year for the first time in 20 years.

This growth was not enough to lift the Italian incumbent’s numbers; full-year revenues were down more than 12% to €15.8 billion – the fixed-line revenue decline was lower at 5.9% – and EBITDA dropped 17.3% to €6.7 billion. However, analysts were broadly positive not only on the figures themselves, but on TIM’s prospects for the coming year.

TIM added 5,000 retail fixed lines in the three months to the end of December to take its total to 8.77 million. That’s still 399,000 below its figure for the same quarter a year earlier, but it’s certainly a start. In its full-year results presentation the telco declared that it had delivered in its 2020 plan to “fix the fixed,” reporting not only positive net adds but also an acceleration in ultra-broadband (UBB) take-up.

The telco had 4.4 million retail UBB lines at the end of 2020, up by 20% year-on-year. Migration of the customer base to UBB is growing thanks, in no small part, to increased availability in white areas – or rural locations and those with low population densities – where it has opened 18,000 new cabinets since March 2020, making FTTx available to 91% of households with fixed lines, it explained.

TIM activated 437,000 new wholesale and retail UBB lines in Q4, taking its total to 8.6 million, an increase of 24% over 12 months.

The wholesale side of the business is of particular importance to TIM at present, with work ongoing to launch its FiberCop access networks unit, a joint venture between the telco, investment group KKR and rival operator Fastweb; TIM recently published the conditions for new investors interested in taking part in the project, with a view to extending its wholesale fibre-to-the-home (FTTH) network coverage.

Meanwhile, Italian utility company Enel is in the process of extricating itself from wholesale fibre operator Open Fiber, having agreed to sell its stake to Australia’s Macquarie. The ultimate aim is to merge the two companies and create a single high-speed network provider in Italy.

It’s not too long since TIM was opposed to such a move. Now, having brokered a deal to ensure it has control of the new entity, it is keen to push on with the merger.

Indeed, Reuters this week quoted TIM chief executive Luigi Gubitosi as saying that he wants the two entities to combine as soon as possible in order for the potentially huge synergies the project offers to be realised.

When it published its full-year results, TIM also reported that its outgoing board of directors has proposed reappointing Gubitosi for another term. The telco also shared a list of nominees for its new board.

Although Covid-19 hit the Italian telco’s 2020 numbers, the future looks fairly bright for Gubitosi et al.

“Telecom Italia ticked a number of boxes with its FY results,” noted Deutsche Bank analyst Keval Khiroya. He highlighted a growth recovery in Q4 “with robust KPIs” and said TIM’s 2021 guidance points to the stabilisation of domestic EBITDA, amongst other things.

Things are looking up in Italy.


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