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FastWeb Picks Up Business

Italian operator Fastweb SpA (Milan: FWB) is known as a consumer triple-play pioneer, but it's also emerging as a player in the enterprise services market, a shift reflected in its first-quarter results. (See FastWeb Reports Q1.)

The operator saw a 49 percent year-over-year increase in revenues to €289 million (US$370.4 million) during the quarter, and the business sector now accounts for 59 percent of revenues, up from 51 percent last year. Net loss of €28.8 million ($36.9 million) was down from a net loss of €31.9 million ($40.9 million) in the first quarter of 2005.

The company has recently been awarded contracts to two government IT agencies, CONSIP and CNIPA, to provide voice and data services, which it expects will bring in more than €300 million annually. (See FastWeb Lands State Deal.)

At a meeting with investors yesterday, FastWeb CEO Stefano Parisi said that the operator has snagged the lion's share of the tender -- 60 percent, with the remaining 40 percent divided between rivals such as Albacom SpA and incumbent Telecom Italia (TIM) . The company now views the corporate and public administration market as its number one "core opportunity."

On the residential side, FastWeb completed the buildout of its network ahead of schedule during the quarter, and the carrier now covers 45 percent of Italian households -- 9.5 million homes. That helped it reach record customer growth so that FastWeb ended the quarter with 793,700 customers, up 46 percent from 542,000 at the end of March 2005.

EBIT loss increased by 27 percent year-over-year to €29 million ($31.2 million), mainly due to higher depreciation charges stemming from the network expansion. With the network rollout complete, Parisi says investments will focus on customer-driven capex with returns expected in less than a year from a range of self-install services.

As part of that strategy, FastWeb has added a range of pay-as-you-go and single-play broadband offerings, and Parisi announced the operator is launching a new pay-as-you-go broadband and voice service aimed at light usage, particularly for consumers who have substituted a mobile phone for their landline. In doing so it's targeting customers who are less likely to sign up for its triple-play packages. (See FastWeb Offers Prepay.)

Customers buy a wireless modem and cordless phone package that connects to the PC, giving them a WiFi connection with speeds up to 6 Mbit/s. They top up credit for the service with rechargeable cards in €25, €50, or €100 denominations.

FastWeb also announced yesterday that the Milan Court of Appeal has upheld its ruling in a case against Telecom Italia "to abstain from continuation of the anticompetitive business practices" in trying to win back customers who have switched to FastWeb. It also rejected a complaint from Telecom Italia alleging that FastWeb is charging excessively high call termination rates.

— Nicole Willing, Reporter, Light Reading

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