Lockdown Disrupts Telecom Italia Performance
COVID-19 pandemic struck Telecom Italia's performance in the secon quarter of 2020. Italian telecommunications company reported a revenue decline due to reductions in store footfall and roaming traffic.
Aside from the Covid-19 impact, in its earnings statement it explained the downward trend also reflected rationalisation of the product portfolio and greater discipline in commercial processes, launched in 2019. Revenue dropped 10.1% year-on-year to €3.8 billion, but the company did not provide a net profit figure. Net debt amounted to €26 billion, down from €26.7 billion. It ended June 2020 with 30.5 million domestic mobile lines, down 3.7%.
However, the company pointed to the addition of 87,000 active lines in its home market, mainly driven by retention and loyalty actions involving converging customers, along with a slowdown in commercial operations in the lockdown period. In Brazil, the company is currently trying to acquire the mobile assets of rival Oi, together with Telefonica and Claro. It said it made a binding offer of BRL16.5 billion (€2.6 billion), and it is awaiting a decision. Revenue in Brazil fell 32% to €658 million.
In other updates, the operator said its board favoured a €1.8 billion bid from financial company KKR to acquire a 37.5% stake in its network entity FiberCorp, and it will discuss the move with the government before making a decision. Authorities asked Telecom Italia to also negotiate a deal with rival Open Fiber, which is controlled by government entity Enel and state lender GDP. Such a move would combine operations and see the formation of a single wholesale-only broadband network in the country.