Telecom Italia Sets '06-'08 Revenue Target Growth At 3%-4%

MILAN -(Dow Jones)- Telecom Italia said Wednesday it has set its target for annual revenue growth to 3%-4% for the period 2006-2008, slightly less than its previous target of an annual 4%-6% from 2005-2007.

As a percentage of revenue, it sees its 2006-2008 margin for earnings before interest, taxes, depreciation and amortization, or EBITDA, stable at the same level as for 2005.

Telecom Italia said Tuesday its EBITDA margin fell to 41.8% in 2005 from 45% the year before.

Many analysts had expected Telecom Italia to lower its revenue targets Wednesday, since telecom companies across Europe are facing tougher business conditions.

Telecom Italia said its margin for earnings before interest and taxes, or EBIT, in relation to revenue would be stable at the 2005 level of 25.1% in 2006-2008. In 2004 the margin was 26.9%.

The company said it will keep its 2006-2008 dividend in line with its 2005 payout, which surprised the market Tuesday by showing a 28% increase to EUR0.14 a share.

The company said it plans to cut net debt to EUR33.5 billion by the end of 2007 from EUR39.8 billion at the end of 2005.

Telecom's previous debt target for 2007 was EUR33 billion.

Looking at its individual units, Telecom said it sees revenue at Telecom Italia Mobile up 2%-3% in 2006, and revenue at its fixed-line Wireline division up 1% in 2006.

At 0835 GMT, Telecom Italia shares were down EUR0.01 at EUR2.42.

-By Jennifer Clark, Dow Jones Newswires; 39 02 58 21 9904; jennifer.clark@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 8th March 2006