Italian regulator Agcom has published an overview of the domestic telecoms market in 2021 that illustrates how tightly fought the market is, especially in the field of mobile communications services.
According to the figures, CK Hutchison-owned WindTre is just ahead of Telecom Italia (TIM) with 26.5% of the mobile market excluding M2M. TIM is a close second with 25.5%, followed by Vodafone Italia with 23.1%.
Iliad Italia, which sparked an ongoing price war following its market entry in 2018, is slowly picking up market share, gaining 1.6 percentage points in 2021 to reach close to 11%.
TIM, meanwhile, remains dominant in the field of broadband and ultra-high-speed broadband services, with a 41.4% share of the market.
The operator, which has just published its results for the first quarter (Q1) of 2022, is now working feverishly on a plan that will preserve its standing in its domestic market, centered on the aim to split its services businesses from its wholesale network operation.
TIM has broadly walked away from a takeover approach from US investor KKR, and started talks with state lender CDP to revive a project to combine its fixed network assets with those of Open Fiber.
More should be revealed about this plan on July 7, at TIM's capital markets day. In the meantime, the operator is fighting to keep its head above water as the domestic market continues to weigh heavily on its results.
In the red
TIM said domestic demand had weakened this year after a pandemic-related increase in 2021, but indicated that figures were in line with guidance.
In Q1 2022, TIM nevertheless remained firmly in the red, posting a net loss of €204 million (US$216 million) at parent group level, although this was an improvement on the €228 million ($241 million) loss reported for Q1 2021.
Domestic sales, which account for about 80% of group revenue, fell 7.7% to €2.85 billion ($3.01 billion). Group service revenues fell by 2.5% to €3.4 billion ($3.6 billion). Organic earnings before interest, tax, depreciation and amortization (EBITDA) after lease declined 16.3% to €1.17 billion ($1.23 billion).
The operator remains burdened by debt, meanwhile. At the end of March 2022, the net financial debt stood at €22.6 billion ($23.9 billion), up a further €1.5 billion ($1.58 billion) year-on-year.
There were some bright spots, such as strong growth in enterprise cloud services that drove up total ICT revenue by 19% year-on-year.
TIM Brasil also performed well, increasing revenue by 8.4%. The Brazilian unit, together with Telefônica Brasil (Vivo) and Claro Americas, the Brazilian operation owned by América Móvil, recently completed the acquisition of mobile assets from Oi.
In Italy, TIM was able to increase the number of high-speed broadband lines to 10.2 million. The number of mobile lines was stable at 30.4 million, or 18.8 million excluding M2M.
The operator observed that ARPU was also broadly unchanged, while the rate of churn was lower, reflecting what it described as "a partial return to rationality in the market".
TIM has maintained its guidance for 2022 as whole, including a "mid to high teens" drop in EBITDAal. Since the end of the first quarter, the operator has also raised €1.3 billion ($1.37 billion) from the sale of its stake in tower company INWIT.
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— Anne Morris, contributing editor, special to Light Reading