FastWeb Q4 Boosts Purchase Appeal

Italian triple-play operator Fastweb SpA (Milan: FWB) continues to grow apace, according to its preliminary fourth -quarter and full-year results announced this morning. (See FastWeb Reports Q4 Prelims.)

The alternative carrier reported quarterly revenues of €287 million (US$347.09 million), a 45 percent increase on the €197 million ($238.25 million) recorded in the fourth quarter 2004. EBITDA (earnings before interest, tax, depreciation and amortization), grew by 57 percent to €97 million ($117.31 million).

Revenues for 2005 were up 34 percent year-on-year to €967 million ($1.17 billion), while full-year EBITDA increased by 43 percent to €305 million ($368.86 million).

The results, released before the Italian market opened, were in line with analysts' expectations, and FastWeb stock was up 1.1 percent in morning trading to €41.25, likely on the back of continued takeover speculation, analysts say.

FastWeb hired Deutsche Bank AG in November to "explore strategic alternatives" for growth, and chairman Silvio Scaglia has said he wants to sell off most, if not all, of his 25 percent holding in the company to free up some resources for other business. (See Eurobites: A Private Affair.)

According to Italian press reports, several private equity funds, including Apax Partners , Permira , The Carlyle Group LLC , and Providence Equity Partners , are buying up shares in the company in preparation for the sale. FastWeb has also attracted interest from European incumbents -- including BT Group plc (NYSE: BT; London: BTA) -- looking for a foothold in the Italian market, and these latest figures have only enhanced its appeal.

With its network now passing 8.5 million homes, or 40 percent of the Italian population, FastWeb saw record growth of 70,000 net customer additions during the fourth quarter -- taking its total subscriber base to 714,000.

The carrier is facing increasing competition from both its main rivals, incumbent Telecom Italia (TIM) and Wind Telecomunicazioni SpA , which are investing big in broadband rollouts and converged services. (See DT, TI Set to Spend Big on Broadband and Wind Plans $4B Investment.)

In December, FastWeb CEO Stefano Parisi said the company is looking into offering mobile services, and it's in the early stages of talks with several operators to explore a converged fixed/mobile offering, one of which is said to be Vodafone Group plc (NYSE: VOD).

— Nicole Willing, Reporter, Light Reading

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