Capex Watch: Telecom Italia Plans Cuts
But behind that headline news was a pasta fagioli of other details that came as part of the Italian incumbent's new three-year industrial plan.
One of those snippets concerned the operator's overall capital expenditure (capex) plans. And, not surprisingly, it involves a fairly significant group-wide reduction.
Presenting his new three-years strategy to investors and analysts this week, CEO Franco Bernabè said Telecom Italia's annual capex would fall by more than 11 percent -- from €5.4 billion (US$6.8 billion) in 2008 to €4.8 billion ($6.06 billion) in 2009.
Breaking that down further, domestic capex will drop from €3.5 billion ($4.4 billion) this year to €3.3 billion ($4.16 billion) in 2009, while capex in Brazil, the carrier's other main market, will drop from 3.7 billion Brazilian Reais ($1.48 billion) to BRL2.8 billion ($1.18 billion).
That news puts extra pressure on the telecom sector's vendors to find new growth markets that can offset such spending reductions. (See More Russian Capex Cuts, Capex Watch: VimpelCom Cuts Back, Capex Watch: Expect Shrinkage in 2009, Russian Altnet Makes FTTx Plans, and Emerging Markets Offer Capex Hope.)
— Ray Le Maistre, International News Editor, Light Reading