Telecom Italia set to buy out broadcasting division

Telecom Italia has announced it is planning to buy out its media division of which it already owns 78%. The telco said the incorporation of Telecom Italia Media (TI Media), which has been publicly traded for over a decade, has been approved by board members on the basis of simplifying and rationalising the group structure.

The Italian ex-monopoly telco has offered to exchange 0.66 ordinary shares and 0.47 saving shares for each TI Media share of the same category. According to Reuters it will cost the operator approximately €25 million to acquire the remaining TI Media shares. Telecom Italia said it expects the transaction to be finalised by the end of the third quarter of 2015.

This news seems to fit in with the telco’s newly announced strategic plan for the next three years, under which it said it will invest around €14.5 billion. The operator said €10 billion will be invested in Italy and €4 billion in Brazil.

The company also said one of its aims is to accelerate growth through the opportunity presented by quad-play. “The aim of this acceleration of investments is to create the foundations for growth in turnover based increasingly on the spread of innovative services with digital content,” the telco said in a statement.

“In particular, Telecom [Italia] aims to grasp the opportunities deriving from the so-called quadruple play, namely the joint offer of fixed and mobile telephony, broadband/ultrabroadband connectivity and premium content that can be accessed anytime, anywhere on any device.”

Meanwhile, Telecom Italia has also reported its fourth quarter and full year results for 2014, which showed slowing down of sales decline. The operator posted a 4.1% drop in revenues for the final quarter, compared to 9.1% decrease in the first nine months of the year. Total annual preliminary revenues came to €21.8 billion, down 7.8% from 2013. Full year EBITDA was down 7.9% year-on-year.

However, the telco said it achieved its cost efficiency targets, and that its domestic customer base was stabilising. “Having achieved 104% of the objective of domestic cost efficiency for the year 2014 Telecom Italia is confirmed as top of the class among its European peers in terms of margins, thanks to efficiency dynamics obtained through the selective control and containment of costs,” the firm said in a statement.