Fastweb says energy business exceeding expectations

The operator presented a solid set of first half results that yielded little in the way of surprises: single-digit growth in turnover, earnings and – in most segments – customers. It also disclosed the identity of the executive who will lead the combined Fastweb/Vodafone business in Italy, should it pass muster with regulators; hint: he has been running Fastweb for the past nine months.

But arguably the most interesting aspect of the results announcement is Fastweb's upbeat commentary on its energy unit, although without any hard data we are left guessing as to how many customers it has signed up since the launch of Fastweb Energia in early April.

"The diversification strategy pursued through the launch of the energy service also contributes to the result and the customer growth," Fastweb said, as it presented the aforementioned financial and operational growth stats.

"Subscriptions to the new energy service exceeded expectations," it also said, sadly without giving any more away.

In fairness to the telco, it is still early days. Fastweb Energia has been up and running for just under four months, which is not a huge amount of time in which to persuade customers to switch supplier. That being the case, we can presume that customer numbers – and any related revenue impact – are limited, but heading in the right direction.

Fastweb Energia aims to sign up 100,000 customers and generate €150 million in revenues within three years, Il Corriere della Sera reported back in April. The paper noted that last year 6 million Italian energy users switched supplier, out of a market of 30 million, and explained that due to the end of certain regulations around 9 million energy customers are there for the taking, so clearly it is a good time for Fastweb to enter the market.

It also has an interesting proposition. Fastweb Energia offers three fixed rate plans, geared towards light, standard and heavy users, with prices ranging from €45 per month for up to 1,500 kWh per year to €95 per month for annual consumption of 4,000 kWh. The thinking behind this is, amongst other things, that it gives customers clarity and more certainty over the size of their bills, although there is of course an additional charge of €0.45 per kWh for exceeding usage limits.

Given the oft-cited cost-of-living crisis in Europe, this could be a successful strategy when it comes to persuading consumers to switch energy provider. Fastweb dangled an additional carrot in the form of a five-year price freeze for customers who signed up in the first few weeks, and it offers a discount of €5 per month for existing Fastweb fixed or mobile customers.

Speaking of whom, Fastweb played it a little fast and loose in the way it reported customer growth in 1H, claiming the addition of 301,000 customers across its wireline, mobile and wholesale access segments, up 4% on the start of the year, and reported 5% growth in wireline customers specifically, including both retail and wholesale.

You need to look at parent company's Swisscom's first-half report to see that sizeable growth in the wholesale fixed broadband segment offset a 2.8% decline at the retail level.

The firm was, understandably, more transparent in reporting 11% growth in the mobile segment to reach 3.7 million customers. As MobileMondoWeb points out though, since the end of February Fastweb has included SIMs distributed via a deal with Sky Italia in its total.

Nonetheless, the telco turned in a decent performance, as evidenced by 7% revenue growth to €1.34 billion and EBITDAaL of €392 million, up 6%.

Separately, Fastweb announced that its current CEO Walter Renna has been appointed by Swisscom as the new chief executive of the business that will result if Fastweb and Vodafone get the green light to merge. Renna has been at the helm of Fastweb for a short time, acceding to the post in October last year, but joined the company as long ago as 2008 and has held a number of leadership positions, including COO and Chief Product Officer.

In announcing his appointment to head up what is still being dubbed NewCo, Fastweb reiterated that it and Vodafone expect to gain clearance for their tie-up by the first quarter of next year.

Assuming that goes ahead, that's another swathe of existing telecoms customers that could be persuaded to make the move to Fastweb Energia.