Telecom Italia Cuts 2021 Forecast for a Third Time

Telecom Italia cut its earnings forecast for the third time in a year. The main reason is its fixed-line business and lower-than-expected revenue from a streaming partnership with Dazn.

The operator expects a low-teens decrease in 2021 organic EBITDA-AL for its Italian business. Telecom Italia agreed to a €1 billion streaming deal with Dazn covering Italian football earlier this year, however, it is now trying to cut the cost of the agreement. Any non-recurring provisions will be determined based on its renegotiation and would be booked in its 2021 financial statements, it explained.

The warning comes two months after it forecast a high single-digit decrease for the year and a previous expectation of a mid-single-digit drop. When issuing the cut forecast in October, Telecom Italia’s largest shareholder Vivendi ordered an extraordinary meeting to discuss the operator’s strategy. Shortly after, US private equity company KKR launched a €10.7 billion takeover offer and the bid was followed by the resignation of CEO Luigi Gubitosi. Telecom Italia’s board is due to meet to discuss the takeover offer.