Telecom Italia S.p.A. · MIL:TIT
Telecom Italia — H1 2010 Earnings Presentation
22 slides from Telecom Italia's earnings presentation, Aug 5, 2010
Slide 1: Telecom Italia 1H 2010 Results
TELECOM ITALIA GROUP 1H 2010 Results Milan, August 5th, 2010 Telecom Italia 1H 2010 Results MARCO PATUANO
Slide 2: Safe Harbour
TELECOM ITALIA GROUP 1H 2010 Results Safe Harbour These presentations contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements re
Slide 3: Agenda
TELECOM ITALIA GROUP 1H 2010 Results Agenda 2Q 2010 Main Achievements Market & Revenues Trend: Mobile Business Fixed Business Progress on Cash Cost Rationalization MARCO PATUANO 2
Slide 4: Domestic Market - 2Q 2010 Main Achievements
TELECOM ITALIA GROUP 1H 2010 Results Domestic Market - 2Q 2010 Main Achievements Euro mln, Organic data, % Domestic Revenues by Customer Segment Domestic 5,539 -7.5% 5,117 TI Sparkle & Nat. Wholesale 942 -1.4% 929 Top 923 -4.8% 879 Focus on Domestic Services Revenues Business 945 -5.4% 894 -7.5% Dom
Slide 5: Agenda
TELECOM ITALIA GROUP 1H 2010 Results Agenda 2Q 2010 Main Achievements Market & Revenues Trend: Mobile Business Fixed Business Progress on Cash Cost Rationalization MARCO PATUANO 4
Slide 6: Mobile: Update on Competitive Dynamics
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile: Update on Competitive Dynamics Price Positioning Evolution TIM Positioning From unsustainable to appropriate price positioning, ensuring a good trade-off between price & value 2010 2005-07 Premium* 3rd player TIM Price 2nd player Quality & Caring
Slide 7: Mobile: Back to a Healthy Customer Base Growth
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile: Back to a Healthy Customer Base Growth… Gross Adds (‘000) Churn % Change yoy Change yoy ~1,900 +25% ~5% ~-3pp 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Customer Base evolution (mln) Net Adds positive +152K 34.2 32.6 31.9 30.9 30
Slide 8: Mobile: Protecting ARPU
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile: …Protecting ARPU ARPU Net of Visitors (€/line/month) ARPU Voice (€/line/month) 14.2 15.2 15.2 14.7 14.1 15.0 +1.8% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 18.7 20.2 20.7 20.3 19.7 20.6 ARPU VAS (€/line/month) 5.0 5.5 5.6 5.6 5.6 4.6 1Q09 2Q09 3Q09 4Q09 1Q1
Slide 9: Mobile: Focus on Consumer Segment
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile: Focus on Consumer Segment Community Concept to Stimulate ARPU and… …Deliver Value to the Customer Community Users* Brand Awareness (spontaneous) 100 3.2 mln 2.9 mln 2.5 mln 75 50 Dec09 Mar10 Jun10 25 Tutto Compreso Customers Vodafone Wind H3G Sou
Slide 10: Mobile Broadband: Small Screen & Big Screen Right Formula
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile Broadband: Small Screen & Big Screen Right Formula Small Screen Big Screen Smartphones enable higher ARPU and Transparent and competitive portfolio offer decrease churn including Internet Pack: the concept that changed the market TIM Smartphone Ad
Slide 11: Domestic Mobile Revenues
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile Revenues Euro mln, Organic data, % 2Q09 2Q10 Δ % YoY Δ % QoQ Service Revenues Total 2,253 2,001 (11.2) +4.6% Services 2,092 1,936 (7.5) 1Q10 2Q10 o/w Outgoing Voice 1,186 1,057 (10.9) Business Generated +4.5% o/w VAS 498 512 +2.8 1Q10 2Q10 o/w Inc
Slide 12: Mobile 2H10 Action Plan
TELECOM ITALIA GROUP 1H 2010 Results Domestic Mobile 2H10 Action Plan Market Share Recovery Push on CB Loyalty, Up-selling & Pre-retention Continuing push on TIMx proposition to keep on Upselling of flat and semi-flat offerings on developing the TIM Community (high loyalty, high customer base reduci
Slide 13: Agenda
TELECOM ITALIA GROUP 1H 2010 Results Agenda 2Q 2010 Main Achievements Market & Revenues Trend: Mobile Business Fixed Business Progress on Cash Cost Rationalization MARCO PATUANO 12
Slide 14: Fixed: TI Access Performance
TELECOM ITALIA GROUP 1H 2010 Results Domestic Fixed: TI Access Performance Telecom Italia Retail Access Evolution & Line Losses Key Highlights ‘000 Confirming a very solid market share on 16,621 16,358 16,097 15,901 15,741 fixed accesses: 70% as of 1H10 TI Access Continuous improvement of line losse
Slide 15: Fixed: Line Losses Reduction Key Drivers
TELECOM ITALIA GROUP 1H 2010 Results Domestic Fixed: Line Losses Reduction Key Drivers Flat Offers & Churn Reduction More Win back mln Win Win Back Back process process Why Why Back Back in in TI? TI? Voice Flat over CB TI Customer Base Churn % Telecom Italia has most % Flat& ~9.6 Before 2010 2010 a
Slide 16: Fixed: Focus on Broadband
TELECOM ITALIA GROUP 1H 2010 Results Domestic Fixed: Focus on Broadband TI Retail Broadband Accesses Key Highlights ‘000 +4.0% Continued good TI performance +63 TI retail Improved TI net adds trend reflecting both accesses 6,859 6,921 7,000 7,071 7,134 higher gross adds and lower churn: symmetry on
Slide 17: Fixed: Focus on ICT & Public Sector Exposure
TELECOM ITALIA GROUP 1H 2010 Results Domestic Fixed: Focus on ICT & Public Sector Exposure Telecom Italia ICT Revenues Highlights Euro mln Launch of IT Smart services to support PA in -5.1% rationalizing spending (energy and public lighting) and offering new services (info mobility, video surveillan
Slide 18: Wireline Revenues
TELECOM ITALIA GROUP 1H 2010 Results Domestic Wireline Revenues Euro mln, Organic data, % 2Q09 2Q10 Δ% YoY Δ% QoQ Total 3,728 3,560 (4.5) Services 3,569 3,410 (4.5) +0.1 o/w Voice 1,704 1,530 (10.2) (1.4) o/w Internet 403 423 +5.0 o/w Business Data 307 297 (3.3) +1.0 o/w Wholesale 1,039 1,057 +1.7 N
Slide 19: Fixed 2H10 Action Plan
TELECOM ITALIA GROUP 1H 2010 Results Domestic Fixed 2H10 Action Plan Consumer Business “Back to School” campaign pushing on ADSL, Push the adoption of free and flat BB leveraging on increasing PC penetration offers through 2play bundle Push new simplified portfolio Product bundled with ICT Increase
Slide 20: Agenda
TELECOM ITALIA GROUP 1H 2010 Results Agenda 2Q 2010 Main Achievements Market & Revenues Trend: Mobile Business Fixed Business Progress on Cash Cost Rationalization MARCO PATUANO 19
Slide 21: Domestic: EBITDA Analysis
TELECOM ITALIA GROUP 1H 2010 Results Domestic: EBITDA Analysis Euro mln, Organic data, % 1 2 3 4 5,086 -802 +163 +50 -12 +253 +198 4,936 -150€ mln, -2.9% 1H09 Revenues Intercon Handsets Cust. Care Advertising Fixed 1H10 -nection & Other Comm* & Acq. Cost* Costs** 1 3 Increasing expenses on Advertisi
Slide 22: Progress on Domestic Efficiency Plan
TELECOM ITALIA GROUP 1H 2010 Results Progress on Domestic Efficiency Plan Euro mln, Organic data, % Delta Cash Cost Δ Δ Δ 1H10 vs 1H09 ITX Vol. Driven Efficiency Δ Abs 1H10 ’10 vs ‘09 61% of FY10 Target Total Opex 5,155 -652 -198 -166 -288 ITX 1,416 -198 -198 - - Mktg & Sales 1,266 -201 - -121 -80 I