The Latest Economic News & Updates

The Lincoln Report, together with hundreds of professional finance writers, is building a trusted ecosystem fueled by important ideas and the people who think about them.

  • The Telecom Industry’s Concern Is About Choices
    telecom industry
    The real knot of telecommunications? 
    Large investments and falling turnover.

    There is concern among Tim’s competitors. “If Athens cries, Sparta does not laugh” is an abused proverb, but more than ever valid for a context such as that of the Tlc of our home where, at least this is the reasoning that circulates among the “alternative operators”, any element of tension in the ranks of the incumbent can only exacerbate the price war considered the capital error that has precipitated the Italian telecommunications sector.

    The data presented by Asstel and trade unions (Slc Cgil, Fistel cisl, Uilcom Uil) in the latest “Report on the Telecommunications Sector in Italy” prepared by the Digital Innovation Observatories of the School of Management of the Politecnico di Milano, indicate a sector whose revenues from the 2008 at 44.8 billion fell at the end of 2020 to 28.5 (-16.3) with 1.5 billion lost in the last year alone (-5%).

    All this in the face of investments, in 2020, of 7.4 billion. An important commitment, this, inserted in the context of a drop in revenues of 32% between 2010 and 2020: worse than in Spain (-26% to 25.6 billion in revenues in the sector); France (-16% to 44.7 billion) or Germany (-8% to 51.1 billion). And it was the mobile sector – which fell to the lowest value in the last 12 years with -7% and 900 million lost in 2020 – and the fixed sector (-4% with revenues of 15.5 billion euros) at the expense.

    Rather than being pleased with Tim’s turmoil, the concern is instead about uncertainty, the enemy of long-term strategies and a close relative, instead, of choices that could push towards commercial competition with reductions. This is something that Tim’s competitors have also recently repeatedly accused the former monopolist, battling in particular on the offers of Timvision advanced on the basis of the agreement with Dazn on Serie A. Which in the end is not giving results. hoped, but – yes – it is causing the competitors to breathe a few sighs of relief, including Sky which is slowly advancing with its Sky Wi-Fi that “runs” on Open Fiber and Fastweb networks.

    Iliad’s role

    All while waiting for another jolt on the fixed market with the arrival of Iliad, announced within the year but which at the moment seems to be suffering some delay (although it must always be borne in mind that the telco headed by Xavier Niel is easy to the twists).

    And after all, it is in Iliad – which in mid-November announced that it had exceeded the threshold of 8 million users in Italy, with a market share of 10.5% – which always comes back when discussing the stability of the sector, given his role as operator entered Italy by the will of the EU Commission following the merger between Wind (then controlled by the Russian-Norwegian Vimpelcom) and 3 Italia (Ck Hutchison). The expectation of sector analysts is for one or more consolidation operations, especially after the delisting of Iliad in France. But all this can only make sense with a different EU approach. And the lobbies from are in great motion.

    A Wind Tre was born from the latest merger and is now 100% owned by the Hong Kong conglomerate. Here the only public data are those of the deposited balance sheet and the Agcom Observatory on the number of active lines. In the first case we read, for 2020, of revenues of 4.95 billion (-5.5%) and profits of 865 million, but essentially linked to two extraordinary transactions: the sale of the towers and the restructuring of the debt. The Agcom Observatory attributes to Wind Tre a share of 14% (+0.8 percentage points) in fixed and 27% in mobile (sim “human”), down by 1.8 percentage points.

    How is Vodafone doing

    On the other hand, the numbers of the Vodafone group are communicated to the market on a quarterly basis. Which in Italy in the semester of its fiscal year 2021-22 recorded on an organic basis revenues from services “decreased by 2.5% (Q1: -3.6% *, Q2: -1.4% *) due to the constant price pressure. The improvement in quarterly trends was supported by the migration of PostePay MVNO customers to our network, which ended at the beginning of August ». And public are also the data of Fastweb, controlled by Swisscom: 1.76 billion (+ 5%) revenues in the first nine months of the year and growth for the 33rd consecutive quarter, was announced.

    From the Chinese, to the British, to the Swiss, to the French first shareholders in Tim, the Italian spirit in Tlc is a memory. The focus, throughout Europe, is in any case on consolidation: the only way to growth was ruled by the CEO of Vodafone Group, Nick Read. And in the UK, where Three has in the past rejected the merger with O2, obtaining a “posthumous” recognition, the sensors are all activated.

Thanks for reading.

Want more? Be sure to check out the articles below!

I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared.

Thomas Jefferson

I would rather have people laugh at my economies than weep for my extravagance.

King Oscar II of Sweden