Telecom Italia CEO sees faster drop in revs for sector due to coronavirus
The coronavirus emergency that forced Rome to impose a nationwide lockdown to curb the spread of the disease will lead to a steeper fall in revenues in the telecoms sector, the head of Telecom Italia (TIM) said on Wednesday.
Telecoms were seen by analysts as one of the sectors most resilient to the coronavirus crisis given the sharp rise in internet traffic after millions of people were forced to stay home and businesses embraced smart-working.
But speaking at a teleconferenced parliamentary hearing, Luigi Gubitosi, head of Italy’s biggest phone group, warned that revenues would be hit by the closures of shops selling phones and as companies, whose own operations were halted, are postponing investments or delaying payments to phone carriers.
Another reason was the drop in roaming intake due to a curb on tourism in Italy, the first Western country to impose a nationwide shutdown on March 9.
TIM’s domestic revenues last year fell 6.3% to 14.1 billion euros and were forecast to drop by a low to mid-single digit figure this year, according to a forecast given on March 10.
With the lockdown due to remain in place at least until April 13 and only a gradual opening is being considered after that, business lobby Confindustria has forecast Italy’s gross domestic product falling by 6% this year as a result of the health crisis.
During the hearing, Gubitosi reiterated his call for a much debated tie-up of TIM’s network assets with that of smaller, rival Open Fiber to avoid costly duplication of investments in challenging times.
“Building another network makes no sense, especially during such a crisis,” he said. “It would be like building another railway”.
TIM has been in talks for months over a merger with Open Fiber, controlled by utility Enel and state lender Cassa Depositi e Prestiti (CDP).
Talks with Open Fiber have proved fruitless so far with Enel reluctant to part with it and questions over regulation complicating matters.
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