In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Telecom Italia SpA (TIIAY) reported strong operational delivery and solid fundamentals in Q1 2025, with results on track both at group and domestic levels.
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The company extended its revolving credit facility to 2030 and reduced its size from 4 to 3 billion, reflecting a stronger financial profile.
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Telecom Italia SpA (TIIAY) saw a 2.7% increase in revenues from Brazil, with EBITDA after lease increasing by 5.4%.
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The company maintained a stable consumer market with a marginal decline in churn, indicating strong customer retention.
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Telecom Italia SpA (TIIAY) achieved a strategic milestone with cloud services becoming the largest business line in its enterprise segment, marking a significant growth area.
Negative Points
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Equity free cash flow was negative by around 0.2 billion due to the usual seasonality of working capital absorption at the beginning of the year.
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Net debt after lease increased slightly to 7.5 billion, with a leverage ratio of 2.05 times, up from 7.3 billion in December.
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The competitive environment remains challenging, with ongoing discussions about market consolidation and potential mergers.
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Telecom Italia SpA (TIIAY) faces potential risks from the competitive landscape, particularly in the consumer segment where price adjustments are ongoing.
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The company is still awaiting antitrust clearance for the acquisition of a 15% stake by Poste Italiane, which could impact governance and strategic initiatives.
Q & A Highlights
Q: What is Telecom Italia's stance on market consolidation in Italy, and how do they view the competitive environment? A: Telecom Italia is in favor of market consolidation in Italy and is open to potential deals, including with Iliad or Wind. They believe that consolidation is necessary for market sustainability. The competitive environment has shown signs of stabilization, with some competitors raising prices, which Telecom Italia views positively as it aligns with their strategy of shifting from volume to value. (Respondent: CEO, Pietro Labriola)
Q: Can you provide an update on the concession fee hearing and its potential impact? A: The hearing for the concession fee is scheduled for May 27th. Telecom Italia expects a judgment soon after, which could accelerate their strategic plans if the outcome is favorable. The company is optimistic about a resolution and the potential financial benefits it could bring. (Respondent: CEO, Pietro Labriola)