Telecom Italia warned that earnings for 2018 in its domestic business are expected to be lower compared with the previous year, based on preliminary figures.

In a statement announcing the full year 2018 preliminary results and 2019 preliminary budget, the operator said organic EBITDA of its domestic business unit is projected to be a mid-single digit lower compared with 2017.

Telecom Italia’s domestic business faced issues in 2018 due to a boardroom battle between its largest shareholder, Vivendi, and activist shareholder Elliott Management, which are both wrangling for power. The issue led to the departure of CEO Amos Genish in November 2018.

The company also said it would outlay €2.4 billion on spectrum for 5G-suitable frequencies in Italy, a figure significantly larger than it was expected to spend.

Brazil strength
In the preliminary statement, the company also said it expects to report an overall consolidated organic revenue figure of approximately €8.1 billion, on the back of “improved performance of the Brazilian business unit”.

Reuters reported the figure is less than 5 per cent lower than 2017. The company did not provide any comparison figures.

Adjusted consolidated net financial debt is expected to be approximately €25.2 billion at the end of the year, taking into account €513 million for licences.

Telecom Italia’s board of directors also said it discussed the preliminary 2019 budget.

“The initial outlook of the domestic business unit shows an operating performance that reflects the competitive dynamics that impacted 2018 and are expected to influence also 2019, especially the first semester,” the company added.

The board is expected to approve its final 2018 results and its 2019-2021 plan on 21 February.