Telecoms: Italy

Telecom Italia announced its Q3 2009 results.

The following highlights the performance of individual market segments of the domestic operations of Telecom Italia in Q3 2009 as compared to the same period of 2008:

Consumer

Revenues were down by €674 million (-7.5%) as a consequence of:

• lower revenues from fixed-line telecommunications (-€156 million, or - 8%) and outgoing mobile traffic (-€147 million, or -12%), resulting mainly from a reduction in the customer base
• the impact of new pricing policies for regulated interconnection rates, with special emphasis on mobile termination revenues (-€124 million, of which €92 million resulting from a reduction in rates)
• lower revenues from traditional value-added services (messaging was down by €51 million, or -8%) and contents (-€50 million, or -25 %);
• lower product sales volumes (-€220 million, of which €192 million from mobile devices).

The performance of traditional business segments was partially offset by a growth

• in the customer base and by revenues from broadband services on both fixed-line (+€86 million, or +13%) and mobile communications (+€51 million, or +21%)

Business

Revenues were down by €289 million (-9.3%), mainly as a consequence of the prolonged crisis that is hitting SMEs and causing their consumption to decline.

Both business segments posted a significant drop.

Fixed-line telecommunications were down 11% from the same period of 2008 but remained in line with previous quarters, whereas mobile communications were down 8%.

However, revenues from fixed-line Internet use remained stable and revenues from mobile browsing grew (+26% in Q3 2009 compared to the same period of 2008);

Top customers

Revenues were down by €112 million (-4.0%) as a result of three different trends:

• a strong growth of the ICT solutions and offerings business (+15.2%), where market share rose from approx. 7% in September 2008 to 11% in September 2009
• an improved performance of the mobile business (which experienced a 1.4% growth in Q3 2009)
• a physiological decline of the fixed-line business, partially as a result of the current economic scenario and of the associated decreased consumption in the corporate world;

National Wholesale

Revenues were up by €224 million, or +17.8% (+17.4% in organic terms), driven by the growth of OLOs’ (Other Licensed Operators’) Local Loop Unbundling, Wholesale Line Rental and Bitstream customers.