Telecom Italia Outlines French Plan

Telecom Italia outlines its plans for Liberty Surf

April 15, 2005

3 Min Read

MILAN, Italy -- Telecom Italia’s Managing Director Riccardo Ruggiero today presented the development plan for French activities managed by Telecom Italia Group.

The new reality in figures

In consideration of the high growth rates of the French telecommunications market, where it is estimated that ADSL accesses could top 10 million by the end of 2007, Telecom Italia has chosen, through the acquisition of Liberty Surf, to consolidate its presence and accelerate its own growth, becoming one of the leading telecommunications operators in France (fourth broadband operator with a market share of 7%, and third narrowband operator), with an estimated total revenue of 265 million euros in 2004; about one million clients (40% of whom are broadband uses); a telecommunications network that extends nationwide; and an integrated multichannel sales network.

Liberty Surf brings to the Group its experience as a leading player on the French market of Internet access and value-added services, with 792,000 clients in 2004 (344,000 ADSL and 448,000 dial up users), and a vast sales network with 500 retail outlets and consolidated customer care skills. In addition, it boasts a network infrastructure based on unbundling of local loop that extends nationwide with 146 exchanges (approx.15% of total coverage) in the 10 most important French cities.

This infrastructure flanks the one already developed by Telecom Italia France, which has a 4,000-kilometer fiber optic backbone with 211 unbundled exchanges in 8 cities, with a total of 7.5 million lines, which equals about 22% of total coverage (presently corresponding to about 33.6 million lines – source IDC).

In just under a year of activity, the Telecom Italia France customer base has increased from 45,000 to 205,000 units at the end of March 2005, due to the offer of the Alice service and to the commercialization of highly innovative terminals such as ”Telefono di Alice”.

Considering the assets of Liberty Surf and Telecom Italia France, the Group now has a cutting-edge IP network infrastructure with nationwide capillary distribution.

Furthermore, the unbundled service will cover about 650 exchanges in over 100 cities, for a total of approximately 15.5 million lines equal to 46% of total coverage of the French market.

The technical and commercial integration of the assets belonging to the two companies will enable the Group to add new value-added services (such as IPTV and VoIP) to its Internet broadband access portfolio. At the same time, sales networks and customer care services will be enhanced, while unifying information systems, call centers and portals belonging to both Liberty Surf and Alice. Current operations based in Marseilles, Amiens and Bordeaux will be maintained, while the headcount will not be reduced.

Investments planned for the 2005-2007 three-year period, and earmarked for the development of network infrastructures and information systems amount to approximately 350 million euros. This sum is part of the Telecom Italia Wireline investment plan for European broadband projects (approx. 800 million in the aforementioned period). An additional 150 million euros of costs are destined for the development of marketing and communication activities.

Telecom Italia is already a European leader in the broadband market. The acquisition of Liberty Surf raises the overall total of broadband accesses to approximately 5.2 million.

Telecom Italia SpA

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