Telecom Italia Earnings: Growth in Brazil Compensates for Pressure on Italian Business

We are maintaining our EUR 0.25 fair value estimate after Telecom Italia reported its fourth-quarter 2023 results. Group revenue reached EUR 16.3 billion, a 3.1% year-over-year increase. Brazil was the main growth engine with a 10.7% organic increase for the full year. The Italian business grew by a meager 0.6% as the Italian mobile business continued to drag on the group with a 4% organic decline for the full year. Top-line pressure comes from a loss of market share as average revenue per user has remained stable for the past year at around EUR 11 per month. Telecom Italia’s mobile market share decreased to 24.2% in September 2023 compared with 24.9% in September 2022, according to the Italian regulator Agcom, with Iliad and mobile virtual network operators gaining share. Group EBITDA after leases grew by 6.1% organically to EUR 5.3 billion for the full year, aided by strong EBITDAaL growth in Brazil of 19%.