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Eurobites: Telecom Italia Issues Profits Warning

Also in today's EMEA regional roundup: Telefónica plots asset sales in Central America; Oxford University says no to more Huawei cash; Telia board change; no-deal Brexit will curb BBC channel distribution.

  • Telecom Italia (TIM) has warned investors that underlying profits are likely to have fallen sharply in 2018. In a brief statement issued in advance of its forthcoming earnings report, the Italian incumbent said it was expecting full-year earnings (before interest, tax, depreciation and amortization) of about €8.1 billion (US$9.2 billion), compared with a figure of €8.7 billion ($9.7 billion) in 2017. With a net debt of about €25.2 billion ($28.7 billion), that would leave Telecom Italia with a net-debt-to-EBITDA ratio of about 3.1, exceeding the levels reported by most other big European telcos. While Telecom Italia flagged the "improved" performance of its Brazilian business, it has been hit by aggressive competition from new mobile entrant Iliad in the Italian market and spent heavily to acquire new 5G spectrum during a recent auction. Reporting third-quarter results last year, Telecom Italia had also drawn attention to risks including the emergence of a new broadband rival in the shape of Open Fiber, a state-backed entity investing in wholesale networks throughout Italy. (See Telecom Italia Caught in Clash of Clans While Rome Burns.)

  • Telefónica is seeking to sell all or some of its operations in Central America, with its businesses in Guatemala and El Salvador most likely to be sold soon, according to El Economista. The sale of those two operations would raise about €530 million ($605 million), with América Móvil S.A. de C.V. (known in the region by its Claro brand) seen as the most likely buyer.

  • It seems the University of Oxford has taken to heart the UK government's warning about the dangers of accepting money from Huawei Technologies Co. Ltd , and has suspended new donations and sponsorships from the beleaguered Chinese vendor. As the BBC reports, the university says the decision has been taken "in the light of public concerns raised in recent months surrounding UK partnerships with Huawei." Two existing contracts with Huawei, worth £692,000 ($896,000) combined, will remain in place, the university added.

  • Susanna Campbell is to leave Telia Company 's board of directors with immediate effect, following her nomination to the board of Kinnevik, a tech investment firm. Former McKinsey exec Campbell still has plenty of other roles to keep her busy, though, being chairman of Röhnisch Sportswear, Ljung & Sjöberg and Babyshop Group, and holding board positions at a number of other companies.

  • A "no deal" Brexit -- the increasingly likely scenario of the UK leaving the European Union without first having negotiated a withdrawal agreement -- will mean that the BBC will lose the distribution of its five domestic channels in Ireland, The Netherlands and Belgium, Broadband TV News reports. As things stand, BBC One, BBC Two, BBC Four, CBeebies and CBBC get distributed via cable and IPTV networks in these countries under European law under the terms of so-called "overspill" reception, where neighboring countries are able to pick up the BBC signals from terrestrial transmitters.

  • The northern English city of Manchester is to play host to trials of self-driving cars, specifically the Westfield POD (Pods on Demand). As the Manchester Evening News reports, the chunky little vehicles will be tested both within the bounds of the city's airport and, in convoy, on some of the region's public roads. The PODs are already in use at London's Heathrow airport, where, their makers claim, they have achieved carbon dioxide savings of 70% when compared to bog-standard buses.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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