Domestic mobile market drags down Telecom Italia
Reported to have fired mobile chief after 10% revenue drop, but Brazil redresses balance
Published: 8 November, 2010
READ MORE: Financial | Italy | Telecom Italia
Telecom Italia is reported to have fired its mobile chief, Fabrizio Bona, after the telco's shares suffered their largest decline in three months after disappointing financial results. Unlike most European incumbents, whose flagging wireline businesses are sustained by improved mobile performance, TI also reported mobile weakness, mainly in its home market.
Revenues for the first nine months of the year in Italy - which accounts for around 75% of the total - fell to €15bn, down 7.4% year-on-year, and domestic mobile revenues fell even more sharply, down 10.4% to €5.8bn. On an international basis, TI did better, seeing just a 0.5% revenue decline to €19.9bn, and a healthy profit increase of 57%, turning in €1.8bn. In particular, growth in Brazil offset problems at home, but the firm remains heavily over-reliant on its domestic market, unlike larger peers such as Orange, which is expanding in Africa, and its own shareholder Telefonica, which has far bigger operations in Latin America.
"The results for the nine months confirm that our strategy to reposition in core markets has been fully accomplished in Brazil, and that it is delivering concrete results in Italy in the fixed line segment, while it will require more time in the mobile one," said CEO Franco Bernabè in his statement. A bright spot in the current fourth quarter will be consolidation of the results of Telecom Argentina, over which TI took control last month. This will add a one-off gain of €280m to the income statement in Q4.
The departure of Bona was reported by the newspaper La Repubblica on Friday. He was appointed in July 2009 to revamp consumer mobile activities and is a former director of rival Italian cellco Wind.
More FINANCIAL News
More ITALY News
More TELECOM ITALIA News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
