Telecom Italia

2008 Year in Review: Telecom nuclear winter, Take 2

Dan O'Shea — Tue, 23 Dec 2008 11:23:42 -0500

Snow is swirling around the FierceTelecom Chicago outpost as I write this. The dog is curled up in a ball to stave off a draft coming from... somewhere. The temperature is dropping. Visions of sugar plums, but also, unfortunately, of telecom nuclear winters, are dancing in my head.

Telecom economic metrics remained reasonably robust for most of the year while other industries were crashing. For the most part, company executives around the telecom world put on a happy face as the quarters progressed, though by the third quarter, many of them were put in the position of celebrating still-solid numbers, while being sure not to be too celebratory. Fourth quarter numbers, of course, will not become clear for a few weeks, but it did become clear early in Q4 that the industry's mood had changed.

While the industry debated whether or not TelcoTV services are recession-proof, telcos and their vendors began to cut back on most other fronts. AT&T announced major job cuts, as did Telecom Italia and BT, among others. Verizon Communications and Qwest Communications have taken their turn cutting back, and numerous vendors announced layoffs and other moves as capex forecasts dwindled. For most of 2008, the economy was a major story, because bad times weren't hitting the industry hard, but as the year closes, it's becoming a bigger story because the downturn has reached us. The snow drifts are piling up, and it's getting colder.

Of course, the "nuclear winter" is the part that comes after the big explosion, so to be clear: While 2008 got dicey near the end, we may have yet to experience the worst that the downturn will offer.

Telecom Italia to cut 4,000 more jobs

Dan O'Shea — Wed, 03 Dec 2008 21:17:00 -0500

The other shoe dropped in Telecom Italia's attempt at financial recovery, as the company announced 4,000 more job cuts on top of about 5,000 announced last summer. The cuts will take the telco's total payroll down to 55,000 employees. Telecom Italia CEO Franco Bernabè also indicated the company will pursue asset sales that may bring it as much as $3.8 billion. He said the telco will attempt to focus on its core Italian market and operations in the burgeoning market of Brazil, which suggests properties such as Germany-based Hansenet are on the block.

Telecom Italia has been a busy company the last few years, expanding into new markets and engaging in acquisitions. It's name still comes up in the rumor mill connected with potential deals, though Bernabe has been talking up cost-cutting for much of this year. It was also reported earlier this year that the telco's largest shareholder, Spain's Telefonica, was urged by another investor to acquire Telecom Italia, though no such deal appears imminent.

For more:
- The Wall Street Journal has this report

Investor urges Telefonica takeover of Telecom Italia

Dan O'Shea — Mon, 21 Jul 2008 09:58:27 -0400

The head of a company that owns 4.5 percent of Telecom Italia wants Spain's Telefonica to acquire the company, according to report in Italian newspaper La Repubblica. The story does not provide a source for this information, and suggests such a deal also is unlikely to happen. However, it is worth noting that Telefonica within the last year became Telecom Italia's largest shareholder, with 10 percent ownership of the carrier through an investment Telefonica and three banks made in Telecom Italia's holding company.

Telecom Italia officials have said before that they are not interested in pursuing such a deal. Meanwhile, Telecom Italia's stock value has been down about 42 percent this year as the company has looked to restructure and recover from difficult times.

For more:
- see this Thomson Financial story at Forbes

Related articles:
Telecom Italia's chairman said in April that the telco didn't want to merge. Telecom Italia report
Telecom Italia's CEO said not to expect fireworks during the telco's recovery. Telecom Italia report

Telecom Italia to cut 5,000 jobs in next two years

Dan O'Shea — Thu, 05 Jun 2008 09:12:41 -0400

Telecom Italia, which is looking to cut around $370 million through an ongoing restructuring, said it will eliminate 5000 jobs by 2010 to help reach its cost-cutting goals. The carrier has been in a recovery mode since late last year, when it gained Spain's Telefonica as a new controlling shareholder. Franco Bernabe, the former Telecom Italia CEO whom Telefonica put back in charge, said (somewhat famously, if we have anything to do with it) earlier this year that company watchers should expect "no miracles, no fireworks" during the restructuring.

The incumbent telco also been under a lot of competitive pressure from the likes of FastWeb and Tiscali, companies whose competitive threat may only increase under foreign ownership with deeper resources--FastWeb is now owned by Swisscom, and Tiscali has been up for sale and could end up in Vodafone's arms. Telecom Italia also has been considered a possible buyer for Tiscali.

For more:
- read this story in the Wall Street Journal

Related articles:
Telecom Italia awaits new leader Telecom Italia report
Telecom Italia's Bernabe is not a miracle worker, or a firework, uh, worker Telecom Italia report

Telefonica posts Q1 IPTV, net income gains

Thu, 15 May 2008 06:59:54 -0400

Spain's Telefoncia reported a 22.4 percent increase in first quarter net income to $2.38 billion, and posted a big rise in IPTV subscribers. The telco landed 43,000 new IPTV customers in the first quarter, giving it a total of 554,045. The IPTV penetration rate among the company's existing broadband customers is now more than 11 percent. Telefonica also saw revenue rise just over 1 percent to $21.5 billion.

For more:
- see this story at Light Reading Europe

Related articles:
- Telefonica has been busy internationally, recently pledging to invest in Ecuador. Telefonica report
- France Telecom, Telefonica to bid on Telecom Italia? Telefonica report

Tiscali losses narrow; short list of bidders emerges

Tue, 13 May 2008 06:59:54 -0400

Italian telecom Tiscali said it lost $58.5 million in the first quarter, down 12 percent from $66.3 million a year ago, on sales that topped $431 million, up 43 percent from $301 million. Tiscali said strong voice revenue and solid growth in its ADSL sector--it added roughly 500,000 ADSL users on the year--spurred the growth.

Bu the story of the day may have been the emergence of a short-list of bidders for the telecom, one that didn't include Carphone Warehouse. Telecom giants BskyB and Vodaphone are thought to be among the half dozen companies who will get a chance to examine Tiscali's books.

A Carphone/Tiscali marriage would have made Carphone Warehouse the largest broadband provider in the U.K., surpassing BT and Virgin Media.

For more:
- See the Times story on who's in … and out ... of the bidding
- Read the Forbes story on Tiscali's tough quarter

Global telecoms see mixed quarterly results

Fri, 09 May 2008 06:59:53 -0400

Swisscom reports 1Q net profit down: Switzerland's biggest telco, Swisscom, said its first quarter net fell 7.2 percent to $407.5 million primarily due to costs associated with last year's purchase of Italy's Fastweb SpA. Analysts had predicted the company would earn $428.4 million. Revenues-helped by Fastweb-rose 23 percent to $2.79 billion. Read the International Herald Tribune story

Telecom Italia 1Q net down 35%: Italy's biggest phone company, Telecom Italia, said regulator-enforced domestic price cuts and slowed demand in Brazil caused first-quarter profit to plummet 35 percent to $774 million. Telecom Italia is focusing on expansion abroad and debt reduction to make up for increased competition, regulatory pressure on prices and lower profit margins at home. Check out the Easy Bourse story

Telecom Argentina doubles Q1 profit: Telecom Argentina saw first quarter profit double to $85 million on the strength of a 60 percent increase in broadband subscribers to 841,000 and an 18 percent jump in mobile subscribers to 12.6 million, the company said today. See the RTT News story

Doing business in Bolivia ... ah, nope

Fri, 02 May 2008 06:59:53 -0400

Bolivian soldiers and police seized the offices and installations of the national telephone company, Euro Telecom International (Entel), as well as several energy companies this week, proclaiming the firms were being nationalized and returned "to the hands of the Bolivian people."

Ouch. Entel operator Telecom Italia said it's waiting for official word of the takeover before commenting. Perhaps they need to get out to the branch office more often.

Bolivia's president warned Entel against resistance. The company was privatized in 1996.

For more:
- Read the AFP story

ALSO NOTED: Yahoo vs. Skype in VoIP war?; Telecom Italia pulls back; and much more...

Fri, 02 May 2008 06:59:51 -0400

> Yahoo to battle Skype in bid to conquer VoIP market Report

> 72 percent Of Telco Vendors Believe SS7 Is Still Alive And Kicking Release

> BT profit dips Article

> Telecom Italia slashes cable-laying plans in German city Story

Telefonica will invest $400 million in Ecuador

Tue, 22 Apr 2008 06:59:53 -0400

Spain's Telefonica is looking east to Ecuador as it plans new business expansion, reports Dow Jones. The company-which has invested more than $1.2 billion in the country since 2004--said it will invest another $400 million in the Central American country over the next few years.

Telefonica operates in Ecuador under the Movistar brand, and this month tentatively was grated charter to continue, allowing it to expand into mobile and 3G services for the next 15 years.

For more:
- read the Dow Jones article in Easy Bourse

Related articles:
France Telecom, Telefonica to bid on Telecom Italia? Telefonica report
Movistar named one of world's top brands Movistar report

Telecom Italia chief says telco isn't looking to merge

Tue, 15 Apr 2008 06:59:54 -0400

"No," and "no." That's what Telecom Italia Chairman Gabriele Galateri had to say about rumors Italy's largest phone company was issuing new shares and considering a merger with Telefonica. "There are no projects to merge with Telefonica, and there are no projects for a capital hike," he said in a speech for the firm's annual shareholder meeting.

TI's been hurt by competition (what telco hasn't) and has seen its share price plummet 41 percent in the past 12 months as its earnings for 2007 gassed 19 percent compared to a year earlier. At least one major investor--whose family owns a 4.5 percent stake-has been campaigning for TI to push Internet and wireless sales harder, then look at a Telefonica deal.

For more:
Read the Forbes story

Telecom Italia considering Tiscali buy?

Mon, 07 Apr 2008 06:59:54 -0400

Leading up to Italian service provider Tiscali's annual meeting on April 29, there is increasing speculation that Italy's incumbent telco, Telecom Italia, could launch a bid to acquire its rival, or at least part of it. The Italian newspaper Borsa and Finanza reported that Telecom Italia could make an acquisition bid before the meeting, without naming sources for that information. The speculation is nothing new: last month, it was reported that several companies, including Telecom Italia and Vodafone, could be in the running to buy Tiscali. Also, there have been reports that Telecom Italia could use income from the planned sale of its France-based broadband firm Alice to help pay for Tiscali.

However, the deal rumors also came shortly after Telecom Italia's CEO told investors that the company is in the midst of a difficult period, and they should not expect any "fireworks."

For more:
- read this Thomson Financial story at Forbes

Related articles:
- Telecom Italia CEO Bernabe cautioned investors about their expectations

Microsoft preps Mediaroom enhancements

Mon, 17 Mar 2008 07:59:54 -0400

Microsoft reportedly is readying the next-generation version of its Mediaroom IPTV system, currently code-named Milwaukee (the city what made famous by that beer), for availability this summer. The new version includes personalization enhancements, as well as the ability to run real-time data feeds from Web sites on-screen with video streams, according to a story at Light Reading.

For more:
- see this report at Light Reading

Related articles:
- Telecom Italia reportedly may not use Mediaroom software

ALSO NOTED: Microsoft out at Telecom Italia?; NeoNova targets rurals; and much more...

Fri, 14 Mar 2008 07:59:51 -0400

> After years of working together, Telecom Italia reportedly may not use Microsoft's Mediaroom IPTV software. Article

> Venture capital firms invest in, spin off rural ISP hosting firm NeoNova Network Services. Article

> Rural telcos complain about middleware delays at vendor Myrio. Article

Telecom Italia: 'No miracles, no fireworks'

Fri, 07 Mar 2008 06:59:56 -0500

New Telecom Italia CEO Franco Bernabe did not sugar-coat the company's future outlook, saying, "There will be no miracles, no fireworks' to change the situation in the short-term." That situation is one in which Telecom Italia has been hit hard by competition and burdened with debt. Bernabe, who had led Telecom Italia during the 1990s, was brought back into the fold by Telecom Italia's new controlling shareholder, Spain's Telefonica. Bernabe is now launching a debt reduction program, which includes slashing the company's dividend to shareholders from 14 Euro cents to 8 Euro cents. He added that revenue will grow only one percent to two percent per year through 2010.

For more:
- read this story at The Wall Street Journal
- see this Thomson Financial report at Forbes

Related articles:
- Here's a bunch more news about Telecom Italia

ALSO NOTED: Telecom Italia tries Open Access; Sprint to consolidate HQ; and much more...

Thu, 14 Feb 2008 06:59:51 -0500

> Telecom Italia moves toward structural separation with launch of Open Access unit. Article

> Sprint Nextel will consolidate its headquarters at the long-standing Sprint office in Overland Park, Kan. Article

> Transferring of unused IPv4 addresses between providers could delay IPv6 adoption. Article

ALSO NOTED: Embarq won't build new HQ; Telecom Italia eyeing spin-off?; and much more...

Mon, 14 Jan 2008 06:59:51 -0500

> Embarq said it will remain on Sprint Nextel's campus in Kansas City rather than build its own headquarters, as previously planned. Article

> An Italian newspaper says Telecom Italia may look to spin-off its network unit this year. Article

> Germany's Deutsche Telekom continues massive corporate restructuring. Brief

Belgacom fights open access

Fri, 14 Dec 2007 06:59:55 -0500

Belgacom, the incumbent wireline operator in Belgium, is disputing a regulatory ruling calling for the carrier to open access to its broadband VDSL network to competitors. The telco says regulators failed to notice markets where other players are the dominating carrier, and also says it took the business risk to invest in its network and that other carriers who didn't take that risk shouldn't be allowed access to the facilities--a quaint, but valid argument. The tide is definitely shifting worldwide toward structural separation and open access.

In Italy, for example, regulators are close to concluding a review that may force Telecom Italia's structural separation. Can any telco be successful in fighting the trend?

For more:
- check out this article about Belgacom from TeleGeography
- read this piece about Telecom Italia in The International Herald Tribune

Telecom Italia takes a SIP of FMC

Thu, 06 Dec 2007 06:59:56 -0500

Telecom Italia, which had been one of a handful of carrier supporters of Unlicensed Mobile Access Technology for fixed-mobile convergence services, reportedly has dumped UMA in favor of using an FMC offering based on the session initiation protocol.

Regulatory issues helped drive Telecom Italia to this decision-Regulators wanted the carrier to offer its UMA service wholesale to competitors-but the Italian ILEC also noted that there are more SIP-enabled handsets now than UMA-enabled handsets. Telcos pursuing FMC services have at least multiple technology options, with UMA being the best one for an early market mover, and the Voice Call Continuity specification within the IP Multimedia Subsystem standard being the natural long-term choice (also the one requiring the longest description). Using SIP handsets doesn't give a carrier a network-based Wi-Fi/cellular hand-off, but a SIP client does allow call set-up in either environment.

UMA has fought for and won respectability with numerous carrier launches in recent years, and what Mark Twain would say -- if he had any idea what we're talking about -- is that reports of UMA's death have been prematurely exaggerated before. Could Telecom Italia's actions convince others to do the same?

For more:
- read this story in Light Reading's Unstrung

Related articles:
- UMA was a recently in our innovation spotlight

Telecom Italia awaits new leaders

Mon, 26 Nov 2007 06:59:54 -0500

The controlling investors of Telecom Italia have nominated a new chairman and a new CEO to lead the telco, and their choices will be up for board of directors approval later this week. The nominations committee of Mediobanca SpA, one of the four Italian financial firms that teamed with Spain telco Telefonica to buy a 24% controlling stake in Telecom Italia's holding company, has nominated former Mediobanca chairman Gabriele Galateri as chairman of Telecom Italia and Franco Bernabe, who headed Telecom Italia briefly years ago, as the new CEO. The investment deal, by the way, gives Telefonica a direct 10% stake in the Italian ILEC.

For more:
- read this story in BusinessWeek

Related articles:
- Brazilian regulators had some say on Telefonica's Telecom Italia investment