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Telecom Italia Mobile 3G Subscribers Pass 5 Million
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Telecom Italia (TI) has released preliminary figures for the first half of 2007 and the operational numbers are typically light on much useful detail. However, they show that domestic mobile unit TIM had a 3G customer base of over 5.1m at the end of June, overall customer numbers rising to 34.3m from 33.6m at the end of March. Mobile service revenues increased by 6.5% year on year between Q2 2006 and Q2 2007, the biggest increase recorded in some while, although this statistic excludes "discontinuities" which have impacted the way revenues are accounted for in the last year. The elements accounted for as discontinuities by TI include a change in the way roaming traffic is accounted for (following EU guidelines), a termination rate cut for fixed-to-mobile calls and the so called "Bersani Decree" - a recent piece of government legislation affecting all Italian companies. However unfortunate it may be, domestic and European regulation and legislation is a fact of life for all Europe's telcos. Of course we understand why TI shows us figures excluding "discontinuities" - to demonstrate that the underlying business is performing well - but take out termination and roaming rate cuts and the like and many peers would also have a very much better story to tell. As it was, on an actual basis, stated mobile service revenues at TI fell by 1.3% or €30m year on year from €2.351bn in Q2 2006 to €2.321bn in Q2 2007.
Looking at the detail of the first half performance, we see that the Bersani Decree (the details of which we shall not delve into here) has turned an organic 3.9% increase in outgoing voice revenues between H1 2006 and H1 2007 into a 2.2% decrease, whilst termination rate cuts have precipitated a 7.8% decline in revenues from incoming voice calls. Overall voice minute volumes rose by 8.6% between Q1 2007 and Q2 2007, and by 3.3% between H1 2006 and H1 2007, which implies that there was a continued drop in TIM's voice ARPU, although as ever no details are given by the company. What is more, new roaming rules led to a 5.7% decline in revenue from visitors and other sources, whilst equipment revenues from handset sales were also off, by 12.8% year on year. After all this the only way TI managed to limit the decrease in stated half-year revenues to 1.3% was by virtue of a 15.5% increase in revenues due to value added services. This increase was driven mainly by internet (or "interactive") usage, where revenues were up almost 30% half-year on half-year, pushing the proportion of total revenues accounted for by VAS from 17.2% to 19.9%.
A few days ago Telecom Italia finally sold its interest in Brasil Telecom (which was being held in trust on its behalf) after also disposing of its stake in Oger Telecom (which owns Turk Telecom and Avea in Turkey and CellC in South Africa) to majority owner Saudi Oger. As far as international mobile assets are concerned it is now left with its main Brazilian business, TIM Brasil (discussed in detail elsewhere in this issue), Entel in Bolivia (which seems to be in some considerable trouble and may even be the subject of a Venezuelan-style renationalisation), Telecom Personal in Argentina (through Telecom Argentina) and a small stake in Etecsa in Cuba. The Brazilian business is the only one of these assets which we see with any long term future as part of the TI group, but new investor Telefonica - also the main shareholder in Brazilian arch-rival Vivo - now has the right to veto the TI group's acquisitions and disposals, which makes this future far from clear.
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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Tags: [avea] [telecom italia] [vas] [tim] [eu] [entel] [tim brasil] [brasil telecom] [oger telecom] [vivo] [turk telecom] [etecsa] [termination] [termination rate]
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