Specialist
Former executive at TIM SpA (Telecom Italia)
Agenda
- Retail fixed and mobile growth outlook
- TIM (Telecom Italia Mobile; TAA: TIT) NetCo and ServCo separation – impacts and opportunities
- Restructuring opportunities, cost-cutting and revenue growth plans
- Telecom Italia's FiberCop and Open Fiber (TAA: ENEL) deal hurdles
Questions
1.
Could you discuss the key industry headwinds and tailwinds in the Italian telecoms market? There have been some concerns around high energy costs and how that could impact the gross margins for TIM [Telecom Italia Mobile] and other European operators.
2.
You’ve mentioned telco is not going to grow and will stay the same, or even actually decrease. When we’re thinking about some of the measures Telecom Italia is taking to overcome this, one of the big things is obviously the Open Fiber deal it’s hoping will go through. What are the key hurdles of the TIM, NetCo and Open Fiber deal, and when will we know whether the deal is going through?
3.
We’ll find out by October 2022 if the TIM-Open Fiber deal is going through. This is quite a highly regulated market. Would the EU Commission or Italian antitrust authorities be the ones approving this deal?
4.
Would the trade unions’ main objection be to the reduction in FTEs [full-time employees] that TIM is proposing as part of this restructuring?
5.
Could you give a percentage of how likely the TIM-Open Fiber deal is to go through? You highlighted some of the hurdles, looking at trade unions, regulators and shareholders.
6.
What are Telecom Italia’s options for the NetCo if the deal with Open Fiber doesn’t go through?
7.
Do you feel both parties need this deal to happen equally, or does Open Fiber needs this deal to happen more than Telecom Italia or vice versa? It sounded as if Open Fiber needs this deal more than Telecom Italia.
8.
If the final result is that TIM and the Open Fiber deal goes through, and it all happens within 24 months of full integration, I would expect the overall CAPEX on the Italian fibre rollout coming from that entity to come down, given the duplications and pooling of resources and procurement. How much less would a TIM-Open Fiber entity be spending on the fibre rollout?
9.
In TIM’s most recent capital markets day, the company talks about 35% of revenue going on CAPEX in 2022, and about 40% when it peaks in 2023-25. Do those figures still make sense, considering the increase in energy and costs caused by resource scarcity?
10.
Another feature of the separation of the service and network companies could be to provide regulatory relief for Telecom Italia. To what extent do you think that’s true? How likely is it that a broken-up Telecom Italia would have less monopoly power and no longer have to prove that its pricing is matchable?
11.
Could the regulatory relief mean better pricing on copper or more aggressive pricing on fibre?
12.
What benefits does the separation of the ServCo and the NetCo, plus the regulatory relief, give the NetCo that it doesn’t currently have?
13.
Would being separated give the NetCo greater freedom over raising or lowering pricing? Could we see the NetCo lower wholesale pricing for the ServCo, but maybe raise it for competing internet service providers?
14.
On the ServCo side, in terms of the competition from Iliad entering the marketplace in the fixed area, what are your thoughts on the negative impact of that not being as great as originally thought? When could we start to see an impact?