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Telecom Italia says content convergence is paying off

Telecom Italia (TIM) said that its “content convergence strategy” contributed to a 6.5% quarter-on-quarter increase in IPTV service TIMVision’s fixed customer base in the three months to March.

Telecom italia’s added a total of 314,000 retail fixed subscribers year-on-year, in addition to 319,000 wholesale fixed customers. TIM now has 3.8 million fixed retail and wholesale fixed customers in total.

The company said that its premium position had been enhanced by further coverage improvements, new simplified and flexible offers, optimized acquisitions via a mix of channels – online, direct and stores – and a reinforced convergent proposition.

TIM posted net group revenues of €4.7 billion for the quarter, up 2.7% on an organic basis, and EBITDA of €2 billion, up 1.8% excluding non-recurring charges. However, the company was hit by the €74.3 million fine levied on it by the Italian government for alleged infringement of the Golden Power rule whereby it should have notified the authorities earlier about Vivendi’s controlling interest. TIM is contesting this fine.

The fine meant that EBITDA was under analysts’ expectations. EBITDA growth was also slowed by increased labour costs.

Analysts at Jefferies said that the “robust domestic revenue trends suggest TIM is managing the return to 30-day billing more smoothly” than rivals Vodafone or Wind. The note refers to a fine levied by regulator AGCOM late last year that sanctioned Italian telcos for levying 28-day bills, which had been ruled to be overcharging customers.

TIM has separately announced that Vivendi no longer exercises control or coordination of the company following the recent changes to the board after activist investor Elliott Advisors secured victory in the vote at the company’s shareholders meeting.