Telecom Italia talked up a “positive domestic performance and strong growth in Brazil”, as its Q1 numbers shifted the focus back to its operations rather than management machinations.

The company touted service revenue growth on an organic basis of 2 per cent in Italy and 6.4 per cent in Brazil. “In Italy, both the mobile and fixed ultra-broadband customer base, together with ARPU, are steadily growing, rewarding TIM’s continuous coverage upgrading and focus on quality,” said Amos Genish, CEO (pictured).

Its operating results were impacted by a €74.3 million fine levied for infringement of Italy’s Golden Power rule, which is being contested and the company will appeal against “shortly”. Telecom Italia has already made an appeal against a decision stating it had failed to notify the government that Vivendi had assumed control of the company: it will now appeal the order imposing the fine, stating it has “solid legal arguments” against the decisions.

Profit attributable to shareholders of €216 million was up from €200 million reported in Q1 2017, on revenue which decreased to €4.7 billion from €4.8 billion. On an operating level, profit decreased to €764 million from €865 million.

The numbers were also impacted by a change in accounting standards: on a comparable basis, net profit was increased to €250 million from €200 million, with operating profit decreasing to €806 million from €865 million.

Revenue was impacted by the Brazil business, “entirely related to a negative exchange rate effect”.

Reorganisation woes
Separately, Telecom Italia said discussions with trade unions over its strategic plans have failed. It said that its moves are “unavoidable in order to respond effectively to the technological and manufacturing changes imposed by the market”.

It said it is now “inevitable” it will submit a proposal for an “Extraordinary Redundancy Fund” with the Ministry of Labour and trade union officials. “This project will be analysed and discussed with the trade union organisations with the desirable prospect of swiftly reaching an agreement,” it said.

The operator has touted its DigiTIM plan as a way to transition to an “agile organisation [with] performance-based and data driven culture”.